Document:

nine-ex104_12.htm

Exhibit 10.4

NONSTATUTORY STOCK OPTION AGREEMENT 

This Nonstatutory Stock Option Agreement (this “Agreement”) is made as of                                  ,              (the “Date of Grant”), between Nine Energy Service, Inc., a Delaware corporation (the “Company”), and ____________________ (the “Director”).

To carry out the purposes of the Amended and Restated Nine Energy Service, Inc. 2011 Stock Incentive Plan (the “Plan”), by affording Director the opportunity to purchase shares of Common Stock, and in consideration of the mutual agreements and other matters set forth herein and in the Plan, the Company and Director hereby agree as follows:

1.Grant of Option.  The Company hereby grants to Director the right and option (this “Option”) to purchase all or any part of an aggregate of ____________ shares of Common Stock on the terms and conditions set forth herein and in the Plan, which Plan is incorporated herein by reference as a part of this Agreement.  In the event of any conflict between the terms of this Agreement and the Plan, this Agreement shall control.  Capitalized terms used but not defined in this Agreement shall have the meanings assigned to such terms in the Plan.  This Option shall not be treated as an incentive stock option within the meaning of section 422(b) of the Code.

2.Purchase Price.  The purchase price of Common Stock purchased pursuant to the exercise of this Option shall be $              per share (the “Purchase Price”), which has been determined to be not less than the Fair Market Value of a share of Common Stock at the Date of Grant.  For all purposes of this Agreement, the Fair Market Value of a share of Common Stock shall be determined in accordance with the provisions of the Plan.

3.Exercise of Option.  Subject to the earlier expiration of this Option as herein provided, this Option may be exercised, by written notice to the Company at its principal executive office addressed to the attention of its Corporate Secretary (or such other officer or employee of the Company as the Company may designate from time to time), at any time and from time to time after the Date of Grant, but this Option shall not be exercisable for more than the percentage of the aggregate number of shares of Common Stock offered by this Option, determined by the number of full years from the Date of Grant to the date of such exercise, in accordance with the following schedule:

	
Number of Full Years
	
Percentage of Shares

That May Be Purchased

	
 
	
 

	
 
	
 

	
 
	
 

	
 
	
 

	
 
	
 

This Option may be exercised only while Director remains a member of the Board and will terminate and cease to be exercisable upon the termination of Director’s membership on the Board, except that:

 

 

(a)If Director’s membership on the Board terminates by reason of disability (within the meaning of section 22(e)(3) of the Code), this Option may be exercised by Director (or Director’s estate or the person who acquires this Option by will or the laws of descent and distribution or otherwise by reason of the death of Director) at any time during the one-year period following such termination, but only as to the number of shares Director was entitled to purchase hereunder as of the date of such termination.

(b)If Director’s membership on the Board terminates by reason of Director’s death, this Option may be exercised by Director’s estate, or the person who acquires this Option by will or the laws of descent and distribution or otherwise by reason of the death of Director, at any time during the one-year period following the date of Director’s death, but only as to the number of shares Director was entitled to purchase hereunder as of the date of Director’s death.

(c)If Director’s membership on the Board terminates for any reason other than those described in the foregoing clauses (a) or (b), then this Option may be exercised by Director at any time during the period of 30 days following such termination, or, if Director dies during such 30-day period, by Director’s estate (or the person who acquires this Option by will or the laws of descent and distribution or otherwise by reason of the death of Director) during the 30-day period following Director’s death, but in each case only as to the number of shares Director was entitled to purchase hereunder as of the date Director’s membership on the Board so terminates. 

Notwithstanding the foregoing or anything to the contrary herein, this Option shall not be exercisable in any event following the date that is 10 years from the Date of Grant.  The Purchase Price of shares as to which this Option is exercised shall be paid in full at the time of exercise (a) in cash (including check, bank draft or money order payable to the order of the Company), (b) if permitted by the Committee in its sole discretion and if Director is not resident in Canada for purposes of the Income Tax Act (Canada), by delivering or constructively tendering to the Company shares of Common Stock having a Fair Market Value equal to the Purchase Price (provided such shares used for this purpose must have been held by Director for such minimum period of time as may be established from time to time by the Committee), (c) if the Common Stock is readily tradable on a national securities exchange, through a “cashless exercise” in accordance with a Company-established policy or program for the same or (d) any combination of the foregoing.  No fraction of a share of Common Stock shall be issued by the Company upon exercise of this Option or accepted by the Company in payment of the Purchase Price thereof; rather, Director shall provide a cash payment for such amount as is necessary to effect the issuance and acceptance of only whole shares of Common Stock.  Unless and until a certificate or certificates representing such shares shall have been issued by the Company to Director, Director (or the person permitted to exercise this Option in the event of Director’s death) shall not be or have any of the rights or privileges of a stockholder of the Company with respect to shares acquirable upon an exercise of this Option.

4.Withholding of Tax.  To the extent that the grant or exercise of this Option or the disposition of shares of Common Stock acquired by exercise of this Option results in compensation income or wages to Director for federal, state, foreign and/or local tax purposes, Director shall deliver to the Company or to any Affiliate nominated by the Company at the time of such grant, exercise or disposition such amount of money or, if permitted by the Committee in 

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its sole discretion and if Director is not resident in Canada for purposes of the Income Tax Act (Canada), such number of shares of Common Stock as the Company or any Affiliate nominated by the Company may require to meet its obligation under applicable tax or social security laws or regulations.  If Common Stock is used to pay all or part of such withholding tax obligation, the Fair Market Value of the Common Shares surrendered, withheld or reduced shall be determined as of the date of surrender, withholding or reduction and the maximum number of shares of Common Stock which may be withheld, surrendered or reduced shall be the number of shares of Common Stock which have a Fair Market Value on the date of surrender, withholding, or reduction equal to the aggregate amount of such tax liabilities determined based on the greatest withholding rates for federal, state, foreign and/or local tax purposes, including payroll taxes, that may be utilized (and which may be limited to flat rate withholding) without creating adverse accounting, tax or other consequences to the Company or any of its Affiliates, as determined by the Committee in its sole discretion.  No exercise of this Option shall be effective until Director (or the person entitled to exercise this Option, as applicable) has made arrangements approved by the Company to satisfy all applicable tax withholding requirements of the Company or, if applicable, any Affiliate of the Company.

5.Compliance with Applicable Law.  Notwithstanding any provision of this Agreement to the contrary, this Option, including the shares of Common Stock to be issued upon exercise of this Option, will be subject to compliance with all requirements of applicable law with respect to such securities and with the requirements of any stock exchange or market system upon which the Common Stock may then be listed.  No shares of Common Stock will be issued pursuant to the exercise of the this Option if such issuance would constitute a violation of any applicable law or regulation or the requirements of any stock exchange or market system upon which the Common Stock may then be listed.  In addition, no shares of Common Stock will be issued pursuant to the exercise of this Option unless (a) a registration statement under the Securities Act is in effect at the time of such issuance with respect to the shares to be issued or (b) in the opinion of legal counsel to the Company, the shares to be issued are permitted to be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act.  The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary for the lawful issuance and sale of any shares of Common Stock hereunder will relieve the Company of any liability in respect of the failure to issue such shares as to which such requisite authority has not been obtained.  As a condition to any issuance hereunder, the Company may require the Director to satisfy any requirements that may be necessary or appropriate to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect to such compliance as may be requested by the Company.  The Director agrees to furnish to the Company all information requested by the Company to enable it to comply with any reporting or other requirements imposed upon the Company by or under any applicable law.

In addition, Director agrees that (i) the certificates representing the shares of Common Stock purchased under this Option may bear such legend or legends as the Committee deems appropriate in order to assure compliance with the terms and provisions applicable law or any other agreement to which Director is a party, (ii) the Company may refuse to register the transfer of the shares of Common Stock purchased under this Option on the stock transfer records of the Company if such proposed transfer would in the opinion of counsel satisfactory to the Company 

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constitute a violation of the terms and provisions of any applicable law, and (iii) the Company may give related instructions to its transfer agent, if any, to stop registration of the transfer of the shares of Common Stock purchased under this Option.

6.Membership on the Board.  Nothing in the adoption of the Plan, nor the award of this Option thereunder pursuant to this Agreement, shall affect in any way the right of Director or the Company or any such Affiliate or other entity to terminate Director’s membership on the Board at any time.  Any question as to whether and when there has been a termination of Director’s membership on the Board and the cause of such termination, shall be determined by the Board, and its determination shall be final and binding on all parties. 

7.Headings; References; Interpretation.  All Section headings in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any of the provisions hereof.  The words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  All references herein to Sections shall, unless the context requires a different construction, be deemed to be references to the Sections of this Agreement.  The word “or” as used herein is not exclusive and is deemed to have the meaning “and/or.”  Any and all Exhibits referred to in this Agreement are, by such reference, incorporated herein and made a part hereof for all purposes.  All references to “including” shall be construed as meaning “including without limitation.”  Unless the context requires otherwise, all references herein to a law, agreement, instrument or other document shall be deemed to refer to such law, agreement, instrument or other document as amended, supplemented, modified and restated from time to time to the extent permitted by the provisions thereof.  All references to “dollars” or “$” in this Agreement refer to United States dollars.  Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural and vice versa.  Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved against any party hereto, whether under any rule of construction or otherwise.  On the contrary, this Agreement has been reviewed by each of the parties hereto and shall be construed and interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes and intentions of the parties hereto.

8.Acknowledgements Regarding Section 409A of the Code.  Director understands that if the purchase price of the Common Stock under this Option is less than the fair market value of such Common Stock on the date of grant of this Option, then Director may incur adverse tax consequences under section 409A of the Code.  Director acknowledges and agrees that (a) Director is not relying upon any determination by the Company, any Affiliate, or any of their respective employees, directors, managers, officers, attorneys or agents (collectively, the “Company Parties”) of the fair market value of the Common Stock on the date of grant of this Option, (b) Director is not relying upon any written or oral statement or representation of the Company Parties regarding the tax effects associated with Director’s execution of this Agreement and Director’s receipt, holding and exercise of this Option, and (c) in deciding to enter into this Agreement, Director is relying on Director’s own judgment and the judgment of the professionals of Director’s choice with whom Director has consulted.  Director hereby releases, acquits and forever discharges the Company Parties from all actions, causes of actions, suits, debts, obligations, liabilities, claims, damages, losses, costs and expenses of any nature 

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whatsoever, known or unknown, on account of, arising out of, or in any way related to the tax effects associated with Director’s execution of this Agreement and the receipt, holding and exercise of this Option.

9.Notices.  Any notices or other communications provided for in this Agreement shall be in writing.  In the case of Director, such notices or communications shall be effectively delivered if hand delivered to Director or if sent by certified mail, return receipt requested, to Director at Director’s last known address on file with the Company.  In the case of the Company, such notices or communications shall be effectively delivered if sent by certified mail, return receipt requested, to the Company at its principal executive offices.

10.Binding Effect.  This Agreement shall be binding upon and inure to the benefit of any successors to the Company and all persons lawfully claiming under Director.

11.Entire Agreement; Amendment.  This Agreement constitutes the entire agreement of the parties with regard to the subject matter hereof, and contains all the covenants, promises, representations, warranties and agreements between the parties with respect to this Option granted hereby; provided, however, that if Director has entered into any written agreement with the Company, Nine Energy Service, LLC or any other Affiliate regarding the arbitration of disputes (such agreement, an “Arbitration Agreement”), then this Agreement shall be subject to the dispute resolution procedures set forth in the Arbitration Agreement.  Without limiting the scope of the preceding sentence, except as provided therein, all prior understandings and agreements, if any, among the parties hereto relating to the subject matter hereof are hereby null and void and of no further force and effect.  The Board may, in its sole discretion, amend this Agreement from time to time in any manner that is not inconsistent with the Plan; provided, however, that except as otherwise provided in the Plan or this Agreement, any such amendment that materially reduces the rights of Director shall be effective only if it is in writing and signed by both Director and an authorized officer of the Company.

12.Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to conflicts of law principles thereof.  

[Signature Page Follows]

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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an officer thereunto duly authorized, and Director has executed this Agreement, all as of the date first above written.

 

	
NINE ENERGY SERVICE, INC.

	
 
	
 
	
 

	
 
	
 
	
 

	
By:
	
 
	
 

	
 
	
 
	
Ernie L. Danner

	
 
	
 
	
Chairman of the Board

	
 
	
 
	
 

	
DIRECTOR

	
 
	
 
	
 

	
 

	
[●]

 

Signature Page to

Nonstatutory Stock Option AgreementEX-10.1

 Exhibit 10.1 

AMENDMENT NO. 1 TO WARRANT AGREEMENT 

This Amendment No. 1 to Warrant Agreement (this “Amendment”), dated as of May 10, 2018, is among Stone
Energy Corporation, a Delaware corporation (“Stone Energy”), Sailfish Energy Holdings Corporation, a Delaware corporation and a direct, wholly owned subsidiary of Stone Energy (“New Talos”),
Computershare Inc., a Delaware corporation (“Computershare”), and its wholly owned subsidiary Computershare Trust Company, N.A., a federally chartered trust company (collectively, with Computershare,
the “Warrant Agent”). 
 RECITALS 

WHEREAS, Stone Energy and the Warrant Agent are parties to that certain Warrant Agreement (the “Warrant
Agreement”), dated as of February 28, 2017; 
 WHEREAS, Stone Energy, New Talos, Sailfish Merger Sub Corporation, a
Delaware corporation and a direct, wholly owned subsidiary of New Talos (“Merger Sub”), Talos Energy LLC, a Delaware limited liability company, and Talos Production LLC, a Delaware limited liability company, are parties to
that certain Transaction Agreement, dated as of November 21, 2017 (the “Transaction Agreement”), pursuant to which, among other things, Merger Sub will merge with and into Stone Energy
(the “Merger”), with Stone Energy surviving the Merger as a direct, wholly owned subsidiary of New Talos; 

WHEREAS, pursuant to Section 2.03(a)(i) of the Transaction Agreement, at the time the Merger becomes effective as set forth in a
certificate of merger to be filed with the Delaware Secretary of State (the “Merger Effective Time”), by virtue of the Merger and without any other action on the part of Stone Energy or any holder of any capital stock of
Stone Energy, each share of common stock of Stone Energy (“Stone Energy Common Stock”), par value $0.01 per share, outstanding immediately prior to the Merger Effective Time shall be automatically cancelled and shall cease to
exist and will be converted into the right to receive one fully paid and non-assessable share of common stock of New Talos (“New Talos Common Stock”), par value $0.01 per share (the
“Merger Consideration”); 
 WHEREAS, after the completion of the Merger, New Talos’s name will be
changed to Talos Energy Inc.; 
 WHEREAS, pursuant to Section 4.06(b) of the Warrant Agreement, in the case of any Fundamental
Equity Change other than an Excepted Combination, the successor entity shall succeed to and be substituted for Stone Energy with the same effect as if it had been named in the Warrant Agreement as Stone Energy; 

WHEREAS, pursuant to Section 4.07(a) of the Warrant Agreement, if any Reorganization Event occurs as a result of which Stone
Energy Common Stock is exchanged for stock, among other things, then following the effective time of the Reorganization Event, the right to receive shares of Stone Energy Common Stock upon exercise of a Warrant shall be changed to a right to
receive, upon exercise of such Warrant, the kind and amount of shares of stock that a holder of one share of Stone Energy Common Stock would have owned or been entitled to receive in connection with such Reorganization Event; 

 WHEREAS, pursuant to Section 4.07(c) of the Warrant Agreement, on or prior to the
effective time of any Reorganization Event (other than an Excepted Combination), Stone Energy or the successor shall execute an amendment to the Warrant Agreement providing that the Warrants shall be exercisable for Units of Reference Property in
accordance with the terms of Section 4.07 of the Warrant Agreement; and 
 WHEREAS, the parties have agreed to enter into this
Amendment. 
 NOW, THEREFORE, in consideration of the premises and the respective agreements set forth in this Amendment, and
intending to be legally bound, the parties hereto agree as follows: 
 ARTICLE 1 

DEFINITIONS 
 1.1
Defined Terms. 
 (a) Capitalized terms that are defined in this Amendment shall have the meanings ascribed in this Amendment to such
terms. All other capitalized terms shall have the meanings ascribed to such terms in the Warrant Agreement as amended by this Amendment. Unless the context of this Amendment clearly requires otherwise, references to the plural include the singular;
references to the singular include the plural; the words “include,” “includes,” and “including” will be deemed to be followed by “without limitation”; and the term “or” has, except where otherwise
indicated, the inclusive meaning represented by the phrase “and/or.” 
 (b) Each reference to “hereof,”
“hereunder,” “herein” and “hereby” and each other similar reference contained in the Warrant Agreement, each reference to “this Agreement,” “the Warrant Agreement” and each other similar reference
contained in the Warrant Agreement and each reference contained in this Amendment to the “Warrant Agreement” shall on and after the Amendment Effective Date (as defined below) refer to the Warrant Agreement as amended by this Amendment.
Any notices, requests, certificates and other instruments executed and delivered on or after the Amendment Effective Date may refer to the Warrant Agreement without making specific reference to this Amendment but nevertheless all such references
shall mean the Warrant Agreement as amended by this Amendment unless the context otherwise requires. 
 ARTICLE 2 

AMENDMENTS; ASSUMPTION, SUCCESSION AND RELIEF 

2.1 Amendments to the Warrant Agreement. 

(a) References in the Warrant Agreement (i) to the “Company” shall refer to Talos Energy Inc. and (ii) to the “Common
Stock” shall refer to the common stock, par value $0.01 per share, of Talos Energy Inc. 

  
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 (b) Pursuant to Section 4.07(c) of the Warrant Agreement, following the Merger Effective
Time, the Warrants shall be, and the Warrant Agreement and the Warrants are hereby amended to provide that the Warrants thenceforth shall be, exercisable for one share of New Talos Common Stock (such one share of New Talos Common Stock comprising,
for purposes of the Warrant Agreement and the Warrants, the “Unit of Reference Property” deliverable upon exercise of Warrants, in lieu of each share of Stone Energy Common Stock theretofore so deliverable, after, and as a result of, the
Reorganization Event constituting the Merger) in lieu of each share of Stone Energy Common Stock theretofore receivable upon exercise of such Warrants, at the Exercise Price of $42.04 per share of New Talos Common Stock, with such adjustments as to
future transactions, if any, as provided in Article 4 of the Warrant Agreement. 
 (c) The first paragraph of Section 6.15 of the
Warrant Agreement is hereby deleted in its entirety and replaced as follows: 
 “Any notice or demand authorized by this Warrant
Agreement to be given or made by the Warrant Agent or by the Global Warrant Holder to or on the Company shall be sufficiently given or made if in writing and sent by mail first-class, postage prepaid, addressed (until another address is filed in
writing by the Company with the Warrant Agent), as follows: 
 Talos Energy Inc. 

500 Dallas Street, Suite 2000 

Houston, TX 77002 
 Attention:
General Counsel 
 Facsimile: (713) 328-3000 

with a copy to: 

Vinson & Elkins L.L.P. 

1001 Fannin Street, Suite 2500 

Houston, TX 77002 
 Attention:
Stephen M. Gill 
 Lande A. Spottswood 

Facsimile: (713) 615-5956 

(d) Exhibit A of the Warrant Agreement is hereby deleted in its entirety and replaced by a new Exhibit A in the form of Annex A to this
Amendment. 
 (e) Section 5.04 of the Warrant Agreement is hereby amended by adding to the end thereof a new subsection (d) to read
as follows: 
 “Any Global Warrant Certificate executed and issued after the effectiveness of any modification or amendment pursuant to
this Section 5.04 may, and shall if required by the Warrant Agent, bear a notation in form approved by the Warrant Agent as to any matter provided for in such modification or amendment. If the Company shall so determine, a
new Global Warrant Certificate in the form of Exhibit A attached hereto as then in effect upon the effectiveness of any modification or amendment to this Warrant Agreement and evidencing the same number of Warrants as any outstanding Global Warrant
Certificate may be prepared 

  
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and executed by the Company and authenticated and delivered by the Warrant Agent in replacement of and exchange for such outstanding Global Warrant Certificate; and the Warrant Agent shall
thereupon make appropriate notations in the Warrant Register to reflect the issuance of such new Global Warrant Certificate and the cancellation of the Global Warrant Certificate so replaced.” 

(f) Section 2.05 of the Warrant Agreement is hereby amended by deleting the phrase “the replacement of the Global Warrant Certificate
as described in Section 5.02” in clause (ii) thereof and substituting therefor the phrase “the exchange or replacement of the Global Warrant Certificate as described in Section 5.02
or Section 5.04(d).” 
 (g) Section 4.12 of the Warrant Agreement is hereby amended by deleting the word
“Other” in the beginning thereof and substituting therefor the phrase “Except as otherwise provided in Section 5.04(d), other.” 

2.2 Assumption of Obligations. Pursuant to Sections 4.07 and 6.14 of the Warrant Agreement, New Talos hereby expressly assumes the due
and punctual delivery of the Units of Reference Property deliverable upon exercise pursuant to the Warrants and the Warrant Agreement, each as hereby amended, and the due and punctual performance and observance of all other obligations and covenants
to the Global Warrant Holder and the Warrant Agent to be performed or observed by the Company under the Warrant Agreement and the Warrants, each as hereby amended. 

2.3 Succession to Rights and Powers. Pursuant to Sections 4.07 and 6.14 of the Warrant Agreement, New Talos shall hereby succeed to, and
be substituted for, and may exercise every right and power of, the Company under the Warrants and the Warrant Agreement, each as hereby amended, with the same effect as if New Talos had been named as the Company therein. 

2.4 Relief of Obligations. At the Amendment Effective Date, except with respect to clause (a) of Section 6.04 and the
indemnification provisions contained in Section 6.10 of the Warrant Agreement, Stone Energy shall hereby be relieved of all obligations and covenants of the Company under the Warrant Agreement and the Warrants, each as hereby amended. 

ARTICLE 3 
 EFFECTIVENESS

 3.1 Effectiveness . Upon the execution and delivery of a counterpart hereof by each of the parties hereto, this Amendment shall
become effective at the Merger Effective Time (the “Amendment Effective Date”). 

  
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 ARTICLE 4 

MISCELLANEOUS 
 4.1
Ratification and Confirmation. Except as expressly set forth in this Amendment, the terms, provisions and conditions of the Warrant Agreement are hereby ratified and confirmed and shall remain unchanged and in full force and effect without
interruption or impairment of any kind. 
 4.1 Benefit of this Amendment. Nothing in this Amendment expressed and nothing that may be
implied from any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any Person or corporation other than the parties hereto and the Global Warrant Holder any right, remedy or claim under or by reason of this
Amendment or of any covenant, condition, stipulation, promise or agreement hereof, and all covenants, conditions, stipulations, promises and agreements in this Amendment contained shall be for the sole and exclusive benefit of the parties hereto and
their successors and of the Global Warrant Holder. 
 4.2 Applicable Law. The validity, interpretation and performance of this
Amendment shall be governed in accordance with the laws of the State of New York, without giving effect to any conflict of law principles thereof that would result in the application of the laws of any other jurisdiction. 

4.3 Headings. The Article and Section headings contained in this Amendment are for convenience only and are not a part of this Amendment
and shall not affect the interpretation of this Amendment. 
 4.4 Counterparts. This Amendment may be executed in any number of
counterparts on separate counterparts, each of which so executed shall be be deemed an original, but all such counterparts shall together constitute one and the same instrument. A signature to this Amendment transmitted/executed electronically or by
facsimile shall have the same authority, effect and enforceability as an original signature. 
 4.5 Severability. Wherever possible,
each provision of this Amendment shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Amendment shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Amendment. 

4.6 Amendment. This Amendment may not be amended or modified except in the manner specified for an amendment of or modification to the
Warrant Agreement in the Warrant Agreement. 
 4.7 Authority. Each of Stone Energy and New Talos represents and warrants that:
(a) it is a corporation, duly organized and validly existing under the laws of the State of Delaware; (b) it has all requisite power and authority to execute, deliver and perform its obligations under this Amendment; and (c) this
Amendment has been duly authorized, executed and delivered by the each of Stone Energy and New Talos and constitutes each of its legal, valid and binding obligation, enforceable against it in accordance with its terms, except to the extent the
enforceability hereof is subject to applicable bankruptcy, insolvency, reorganization and other laws affecting the enforcement of creditors’ rights generally and to equitable principles. 

[signature page follows] 

  
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 IN WITNESS WHEREOF, the parties have executed this Amendment, or caused this Amendment to
be executed by their authorized representatives, as of the date stated in the introductory paragraph of this Amendment. 
  

			
	STONE ENERGY CORPORATION
		
	By:	 	 /s/ Kenneth H. Beer

	Name:	 	Kenneth H. Beer
	Title:	 	Chief Financial Officer
	
	SAILFISH ENERGY HOLDINGS CORPORATION
		
	By:	 	 /s/ Kenneth H. Beer

	Name:	 	Kenneth H. Beer
	Title:	 	Chief Financial Officer

 [Signature Page to Amendment No. 1 to Warrant Agreement] 

 
			
	COMPUTERSHARE INC. and
	COMPUTERSHARE TRUST COMPANY, N.A., collectively as Warrant Agent
		
	By:	 	 /s/ Thomas Borbely

	Name:	 	Thomas Borbely
	Title:	 	Manager, Corporate Actions

 [Signature Page to Amendment No. 1 to Warrant Agreement] 

 ANNEX A 

Exhibit A 
 FORM OF GLOBAL
WARRANT CERTIFICATE 
 [FACE] 
  

			
	 No.
[                     ]
	  	CUSIP No. 87484T116

 UNLESS THIS GLOBAL WARRANT IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION (“DTC”), TO TALOS ENERGY INC. (THE “COMPANY”), THE CUSTODIAN OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 
 TRANSFER OF
THIS GLOBAL WARRANT SHALL BE LIMITED TO TRANSFERS IN WHOLE, AND NOT IN PART, TO THE COMPANY, DTC, THEIR SUCCESSORS AND THEIR RESPECTIVE NOMINEES. 

  
 A-1 

 TALOS ENERGY INC. 

May 10, 2018 
 NUMBER OF WARRANTS: 3,528,381
Warrants, subject to adjustment as described in the Warrant Agreement (as amended, the “Warrant Agreement”), dated as of February 28, 2017, among Stone Energy Corporation (“Stone Energy”), Computershare
Inc. (“Computershare”), a Delaware corporation, and its wholly owned subsidiary, Computershare Trust Company, N.A., a federally chartered trust company (collectively, with Computershare, the “Warrant Agent”), as
amended by Amendment No. 1 to the Warrant Agreement, dated as of May 10, 2018, among Stone Energy, Sailfish Energy Holdings Corporation, a Delaware corporation that has been renamed Talos Energy Inc., and the Warrant Agent, each of which
is exercisable for one share of the common stock, par value $0.01 per share, of Talos Energy Inc. (“Common Stock”). 
 EXERCISE PRICE:
$42.04 per Warrant, subject to adjustment as described in the Warrant Agreement. 
 FORM OF PAYMENT OF EXERCISE PRICE: Cash, if Full Physical Settlement is
applicable, or Net Share Settlement. 
 FORM OF SETTLEMENT: Upon exercise of any Warrants represented hereby, the Beneficial Owner shall be entitled to
receive, at the Beneficial Owner’s election, either (a) upon payment to the Warrant Agent of the Exercise Price (determined as of the relevant Exercise Date), one share of Common Stock per Warrant exercised, together with Cash in lieu of
any fractional Warrants, or (b) without any payment therefor, a number of shares of Common Stock equal to the Net Share Amount, together with Cash in lieu of any fractional shares or fractional Warrants, in each case, as described in the
Warrant Agreement. 
 DATES OF EXERCISE: At any time, and from time to time, prior to 5:00 p.m., New York City time, on the Expiration Date, each Beneficial
Owner shall be entitled to exercise all Warrants then represented hereby and outstanding (which may include fractional Warrants) or any portion thereof (which shall not include any fractional Warrants). 

PROCEDURE FOR EXERCISE: Warrants may be exercised by surrendering the Warrant Certificate evidencing such Warrant at the principal office of the Warrant Agent
(or successor warrant agent), with the Exercise Notice set forth on the reverse of the Warrant Certificate duly completed and executed. 
 EXPIRATION DATE:
The earlier of (i) February 28, 2021 and (ii) the date of consummation of (A) any Qualified Asset Sale, (B) the sale, lease, conveyance or other transfer of all or substantially all of the consolidated assets of the Company
and its Subsidiaries in one transaction or a series of related transactions to any Person that is not a Qualified Asset Buyer or (C) any Excepted Combination. 

This Global Warrant Certificate certifies that: 

  
 A-2 

 Cede & Co., or its registered assigns, is the Global Warrant Holder of the Number of Warrants (the
“Warrants”) specified above (such number subject to adjustment from time to time as described in the Warrant Agreement). 
 In connection
with the exercise of any Warrants, (a) the Company shall determine the Full Physical Share Amount or Net Share Amount, as applicable, for each Warrant, and (b) the Company shall, or shall cause the Warrant Agent to, deliver to the
exercising Beneficial Owner, on the applicable Settlement Date, for each Warrant exercised, a number of shares of Common Stock equal to the relevant Full Physical Share Amount or Net Share Amount, as applicable, together with Cash in lieu of any
fractional shares or fractional Warrants as described in the Warrant Agreement. 
 Prior to the relevant Exercise Date as described more fully in the
Warrant Agreement, subject to Section 5.01 of the Warrant Agreement, Warrants will not entitle the Global Warrant Holder to any of the rights of the holders of shares of Common Stock. 

Reference is hereby made to the further provisions of this Global Warrant Certificate set forth on the reverse hereof, and such further provisions shall for
all purposes have the same effect as though fully set forth in this place. 
 This Global Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent. 
 In the event of any inconsistency between the Warrant Agreement and this Global Warrant Certificate, the Warrant Agreement shall govern.

  
 A-3 

 IN WITNESS WHEREOF, Talos Energy Inc. has caused this instrument to be duly executed. 

Dated:        , 2018 
  

			
	TALOS ENERGY INC.
		
	By: 	 	  

	Name:	 	
	Title:	 	

  
 A-4 

 Certificate of Authentication 

These are the Warrants referred to in the above-mentioned Warrant Agreement. 

Countersigned as of the date above written: 
 Computershare Inc.
and Computershare Trust Company, N.A., collectively, as Warrant Agent 
  

			
	By:	 	  

		 	Authorized Officer

  
 A-5 

 [FORM OF REVERSE OF GLOBAL WARRANT CERTIFICATE] 

Talos Energy Inc. 
 The Warrants evidenced by
this Global Warrant Certificate are part of a duly authorized issue of Warrants issued by the Company pursuant to the Warrant Agreement, dated as of February 28, 2017 (as amended, the “Warrant Agreement”), among Stone Energy
Corporation (“Stone Energy”), Computershare Inc. (“Computershare”), a Delaware corporation, and its wholly owned subsidiary, Computershare Trust Company, N.A., a federally chartered trust company (collectively, with
Computershare, the “Warrant Agent”), as amended by Amendment No. 1 to the Warrant Agreement, dated as of May 10, 2018, among Stone Energy, Sailfish Energy Holdings Corporation, a Delaware corporation that has been renamed
Talos Energy Inc., and the Warrant Agent, and are subject to the terms and provisions contained in the Warrant Agreement, to all of which terms and provisions the Global Warrant Holder consents by acceptance of this Global Warrant Certificate.
Without limiting the foregoing, all capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Warrant Agreement. A copy of the Warrant Agreement is on file at the Warrant Agent’s Office. 

The Warrant Agreement and the terms of the Warrants are subject to amendment as provided in the Warrant Agreement. 

This Global Warrant Certificate shall be governed by, and interpreted in accordance with, the laws of the State of New York without regard to the conflicts of
laws principles thereof. 

  
 A-6 

 FORM OF ASSIGNMENT 

FOR VALUE RECEIVED, the undersigned assigns and Transfers the Warrant(s) represented by this Certificate to: 

 

			
	  
 Name, Address and Zip
Code of Assignee

		
	 and irrevocably appoints
	 	  

		 	 Name of Agent

 as its agent to Transfer this Warrant Certificate on the books of the Warrant Agent. 

[Signature page follows] 

  
 A-7 

 Date:
[                     ] 
  

			
	  
 Name of
Transferee

		
	By:	 	  

	Name:	 	
	Title:	 	

 (Sign exactly as your name appears on the other side of this Certificate) 

NOTICE: The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to S.E.C. Rule 17Ad-15. 

  
 A-8

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