Document:

Exhibit 4.7

Execution Version

 

 

 

 

 

ASSET REPRESENTATIONS REVIEW AGREEMENT

among

TOYOTA AUTO RECEIVABLES 2018-B OWNER TRUST,

 as Issuer,

TOYOTA MOTOR CREDIT CORPORATION,

 as Servicer and Administrator,

and

CLAYTON FIXED INCOME SERVICES LLC,

 as Asset Representations Reviewer

Dated as of May 16, 2018

 

 

TABLE OF CONTENTS

	
ARTICLE I

 

	
USAGE AND DEFINITIONS

 

	
1

	
Section 1.1.

	
Usage and Definitions

	
1

	
Section 1.2.

	
Additional Definitions

	
1

	
ARTICLE II

 

	
ENGAGEMENT OF ASSET REPRESENTATIONS REVIEWER

 

	
2

	
Section 2.1.

	
Engagement; Acceptance

	
2

	
Section 2.2.

	
Confirmation of Status

	
2

	
ARTICLE III

 

	
ASSET REPRESENTATIONS REVIEW PROCESS

 

	
3

	
Section 3.1.

	
Review Notice and Identification of Review Receivables

	
3

	
Section 3.2.

	
Review Materials

	
3

	
Section 3.3.

	
Performance of Reviews

	
3

	
Section 3.4.

	
Review Reports

	
4

	
Section 3.5.

	
Review Representatives

	
5

	
Section 3.6.

	
Dispute Resolution

	
5

	
Section 3.7.

	
Limitations on Review Obligations

	
5

	
ARTICLE IV

 

	
ASSET REPRESENTATIONS REVIEWER

 

	
6

	
Section 4.1.

	
Representations and Warranties

	
6

	
Section 4.2.

	
Covenants

	
7

	
Section 4.3.

	
Fees and Expenses

	
7

	
Section 4.4.

	
Limitation on Liability

	
8

	
Section 4.5.

	
Indemnification by Asset Representations Reviewer

	
9

	
Section 4.6.

	
Indemnification of Asset Representations Reviewer

	
9

	
Section 4.7.

	
Inspections of Asset Representations Reviewer

	
10

	
Section 4.8.

	
Delegation of Obligations

	
10

	
Section 4.9.

	
Confidential Information

	
10

	
Section 4.10.

	
Personally Identifiable Information

	
12

	
ARTICLE V

 

	
RESIGNATION AND REMOVAL; SUCCESSOR ASSET REPRESENTATIONS REVIEWER

 

	
14

	
Section 5.1.

	
Eligibility Requirements for Asset Representations Reviewer

	
14

	
Section 5.2.

	
Resignation and Removal of Asset Representations Reviewer

	
14

	
Section 5.3.

	
Successor Asset Representations Reviewer

	
15

	
Section 5.4.

	
Merger, Consolidation or Succession

	
15

	
ARTICLE VI

 

	
OTHER AGREEMENTS

 

	
15

	
Section 6.1.

	
Independence of Asset Representations Reviewer

	
15

	
Section 6.2.

	
No Petition

	
16

	
Section 6.3.

	
Limitation of Liability of Owner Trustee

	
16

	
Section 6.4.

	
Termination of Agreement

	
16

	
ARTICLE VII

 

	
MISCELLANEOUS PROVISIONS

 

	
16

	
Section 7.1.

	
Amendments

	
16

	
Section 7.2.

	
Assignment; Benefit of Agreement; Third Party Beneficiaries

	
17

 

i

	
Section 7.3.

	
Notices

	
17

	
Section 7.4.

	
GOVERNING LAW

	
17

	
Section 7.5.

	
WAIVER OF JURY TRIAL

	
17

	
Section 7.6.

	
No Waiver; Remedies

	
18

	
Section 7.7.

	
Severability

	
18

	
Section 7.8.

	
Headings

	
18

	
Section 7.9.

	
Counterparts

	
18

	
 

Schedule A – Review Materials 

	 
	
Schedule B – Representations, Warranties and Tests

 	 

ii

ASSET REPRESENTATIONS REVIEW AGREEMENT, dated as of May 16, 2018 (this “Agreement”), among TOYOTA AUTO RECEIVABLES 2018-B OWNER TRUST, a Delaware statutory trust (the “Issuer”), TOYOTA MOTOR CREDIT CORPORATION, a California corporation (“TMCC”), as servicer (in such capacity, the “Servicer”) and administrator (in such capacity, the “Administrator”), and CLAYTON FIXED INCOME SERVICES LLC, a Delaware limited liability company (the “Asset Representations Reviewer”).

WITNESSETH

WHEREAS, the Issuer desires to engage the Asset Representations Reviewer to perform reviews of certain Receivables for compliance with certain representations and warranties made with respect thereto; and

WHEREAS, the Asset Representations Reviewer desires to perform such reviews of Receivables in accordance with the terms of this Agreement.

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

ARTICLE I

 USAGE AND DEFINITIONS

Section 1.1.      Usage and Definitions.  Capitalized terms used but not defined in this Agreement shall have the meanings ascribed to such terms in the Sale and Servicing Agreement.

Section 1.2.      Additional Definitions.  The following terms have the meanings given below:

“Annual Fee” has the meaning stated in Section 4.3(a).

“Annual Period” has the meaning stated in Section 4.3(e).

“Confidential Information” has the meaning stated in Section 4.9(b).

“Contract” means, with respect to any Receivable, the original tangible record constituting or forming a part of such Receivable, or a copy or image of such original tangible record, together with (and as modified by) any correction notice issued by the Servicer to the related Obligor with respect thereto.

“Information Recipients” has the meaning stated in Section 4.9(a).

“Indemnified Parties” has the meaning stated in Section 4.6(a).

“Indenture” means the Indenture, dated as of May 16, 2018, between the Issuer and the Indenture Trustee, as the same may be amended, supplemented or modified from time to time.

“Indenture Trustee” means U.S. Bank National Association, as indenture trustee under the Indenture, and any successor thereto.

“Issuer PII” has the meaning stated in Section 4.10(a).

“PII” has the meaning stated in Section 4.10(a).

“Review” means the performance by the Asset Representations Reviewer of the testing procedures for each Test and each Review Receivable according to Section 3.3.

“Review Fee” has the meaning stated in Section 4.3(b).

“Review Materials” means, for a Review and a Review Receivable, the documents and other materials listed in Schedule A.

“Review Notice” means a notice delivered to the Asset Representations Reviewer by the Indenture Trustee pursuant to 12.02 of the Indenture.

“Review Receivables” means those certain Receivables identified by the Servicer to the Asset Representations Reviewer following receipt of a Review Notice as not having been paid in full by the Obligor or purchased from the Issuer in accordance with the terms of the Basic Documents at or prior to the date of such Review Notice.

“Review Report” means, for a Review, the report of the Asset Representations Reviewer as described in Section 3.4.

“Sale and Servicing Agreement” means the Sale and Servicing Agreement, dated as of May 16, 2018, among the Issuer, the Seller and TMCC.

“Test” has the meaning stated in Section 3.3(a).

“Test Complete” has the meaning stated in Section 3.3(c).

“Test Fail” has the meaning stated in Section 3.3(a).

“Test Pass” has the meaning stated in Section 3.3(a).

ARTICLE II

 ENGAGEMENT OF ASSET REPRESENTATIONS REVIEWER

Section 2.1.      Engagement; Acceptance.  The Issuer hereby engages Clayton Fixed Income Services LLC to act as the Asset Representations Reviewer for the Issuer.  Clayton Fixed Income Services LLC hereby accepts the engagement and agrees to perform the obligations of the Asset Representations Reviewer on the terms set forth in this Agreement.

Section 2.2.      Confirmation of Status.  The parties confirm that the Asset Representations Reviewer is not responsible for (a) reviewing the Receivables for compliance with the representations and warranties under the Basic Documents, except as described in this

2

Agreement, or (b) determining whether noncompliance with the representations or warranties constitutes a breach of the Basic Documents.

ARTICLE III

 ASSET REPRESENTATIONS REVIEW PROCESS

Section 3.1.      Review Notice and Identification of Review Receivables.  Within ten (10) Business Days after delivery of a Review Notice to the Asset Representations Reviewer, the Servicer will deliver a list of the Review Receivables to the Asset Representations Reviewer.  Upon receipt of a Review Notice and the related list of Review Receivables from the Servicer, the Asset Representations Reviewer will start a Review.  Delivery of any Review Notice shall be made pursuant to Section 10.03 of the Sale and Servicing Agreement.

Section 3.2.      Review Materials.

(a)            Access to Review Materials.  Within sixty (60) days of the delivery of a Review Notice to the Asset Representations Reviewer, the Servicer will give the Asset Representations Reviewer access to the Review Materials for all of the Review Receivables in one or more of the following ways, to be determined in the sole discretion of the Servicer: (i) by providing access to the Servicer’s receivables systems, either remotely or at an office of the Servicer, (ii) by electronic posting to a password-protected website to which the Asset Representations Reviewer has access, (iii) by providing scanned copies at an office of the Servicer where the Review Materials are located or (iv) in another manner agreed to between the Servicer and the Asset Representations Reviewer.  The Servicer may redact or remove PII from the Review Materials, but will use commercially reasonable efforts not to change the meaning or usefulness of the Review Materials for the Review.

(b)            Missing or Insufficient Review Materials.  The Asset Representations Reviewer will review the Review Materials to determine if any Review Materials are missing or insufficient for the Asset Representations Reviewer to perform any Test.  If the Asset Representations Reviewer determines that there are missing or insufficient Review Materials, the Asset Representations Reviewer will notify the Servicer and the Administrator promptly, and in any event no less than twenty (20) Business Days before completing the Review.  The Servicer will have fifteen (15) Business Days to give the Asset Representations Reviewer access to the missing Review Materials or other documents or information to correct any such insufficiency.  If the missing or insufficient Review Materials or other documents or information have not been provided by the Servicer within such fifteen (15) Business Day period, the related Review Report will report a Test Fail for each Test in respect of which such missing or insufficient Review Materials is necessary to determine whether a Test Pass result is appropriate.

Section 3.3.      Performance of Reviews.

(a)            Test Procedures.  For a Review, the Asset Representations Reviewer will perform, for each Review Receivable, the procedures listed under “Tests” in Schedule B for each representation and warranty (each, a “Test”), using the Review Materials necessary to perform the procedures described for such Test in Schedule B.  For each Test and Review Receivable, the

3

Asset Representations Reviewer will determine if the Test has been satisfied (a “Test Pass”) or if the Test has not been satisfied (a “Test Fail”).

(b)            Review Period.  The Asset Representations Reviewer will complete the Review of all of the Review Receivables within sixty (60) days after having received access to the Review Materials pursuant to Section 3.2(a).  However, if additional Review Materials are provided to the Asset Representations Reviewer in respect of any Review Receivables pursuant to Section 3.2(b), the Review period will be extended for an additional thirty (30) days in respect of any such Review Receivables.

(c)            Completion of Review for Certain Review Receivables.  Following the delivery of the list of the Review Receivables and before the delivery of the Review Report by the Asset Representations Reviewer, the Servicer may notify the Asset Representations Reviewer if a Review Receivable is paid in full by the Obligor or purchased from the Issuer in accordance with the terms of the Basic Documents.  On receipt of such notice, the Asset Representations Reviewer will immediately terminate all Tests of the related Review Receivable, and the Review of such Review Receivables will be considered complete (a “Test Complete”).  In this case, the related Review Report will indicate a Test Complete for such Review Receivable and the related reason.

(d)            Previously Reviewed Receivable; Duplicative Tests.  If any Review Receivable was included in a prior Review, the Asset Representations Reviewer will not conduct additional Tests on such Review Receivable, but will include the previously reported Test results in the Review Report for the current Review.  If the same Test is required for more than one representation and warranty, the Asset Representations Reviewer will only perform the Test once for each Review Receivable, but will report the results of the Test for each applicable representation and warranty on the Review Report.

(e)            Termination of Review.  If a Review is in process and the Notes will be paid in full on the next Payment Date, the Servicer or the Administrator will notify the Asset Representations Reviewer no less than ten (10) days before that Payment Date.  On receipt of such notice, the Asset Representations Reviewer will terminate the Review immediately and will not be obligated to deliver a Review Report.

Section 3.4.      Review Reports.  Within five (5) days after the end of the applicable Review period under Section 3.3(b), the Asset Representations Reviewer will deliver to the Issuer, the Servicer, the Depositor, the Administrator and the Indenture Trustee a Review Report indicating for each Review Receivable whether there was a Test Pass, Test Fail or Test Complete for each related Test.  For each Test Fail or Test Complete, the Review Report will indicate the related reason, including (for example) whether the Review Receivable was a Test Fail as a result of missing or incomplete Review Materials.  The Review Report will contain a summary of the Review results to be included in the Issuer’s Form 10-D report for the Collection Period in which the Review Report is received.  The Asset Representations Reviewer will ensure that the Review Report does not contain any PII.  On reasonable request of the Servicer or the Administrator, the Asset Representations Reviewer will provide additional details on the Test results.

4

Section 3.5.      Review Representatives.

(a)            Servicer Representative.  The Servicer will designate one or more representatives who will be available to assist the Asset Representations Reviewer in performing the Review, including responding to requests and answering questions from the Asset Representations Reviewer about access to Review Materials on the Servicer’s originations, receivables or other systems, obtaining missing or insufficient Review Materials and/or providing clarification of any Review Materials or Tests.

(b)            Asset Representations Reviewer Representative.  The Asset Representations Reviewer will designate one or more representatives who will be available to the Issuer, the Servicer and the Administrator during the performance of a Review.

(c)            Questions About Review.  The Asset Representations Reviewer will make appropriate personnel available to respond in writing to written questions or requests for clarification of any Review Report from the Indenture Trustee, the Servicer or the Administrator until the earlier of (i) the payment in full of the Notes and (ii) two years after the delivery of the Review Report.  The Asset Representations Reviewer will not be obligated to respond to questions or requests for clarification from Noteholders or any other Person and will direct such Persons, and the Indenture Trustee will direct the Noteholders, to submit written questions or requests to the Servicer.

Section 3.6.      Dispute Resolution.  If a Review Receivable that was the subject of a Review becomes the subject of a dispute resolution proceeding under Section 11.02 of the Sale and Servicing Agreement, the Asset Representations Reviewer will participate in the dispute resolution proceeding on request of a party to the proceeding.  The reasonable out-of-pocket expenses of the Asset Representations Reviewer for its participation in any dispute resolution proceeding will be considered expenses of the requesting party for the dispute resolution and will be paid by a party to the dispute resolution as determined by the mediator or arbitrator for the dispute resolution according to Section 11.02 of the Sale and Servicing Agreement.  If not paid by a party to the dispute resolution, the expenses will be reimbursed by the Issuer according to Section 4.3(d) of this Agreement.

Section 3.7.      Limitations on Review Obligations.

(a)            Review Process Limitations.  The Asset Representations Reviewer will have no obligation: (i) to determine whether a Delinquency Trigger has occurred or whether the required percentage of Noteholders has voted to direct a Review under the Indenture; (ii) to determine which Receivables are the subject of a Review; (iii) to obtain or confirm the validity of the Review Materials; (iv) to obtain missing or insufficient Review Materials; (v) to take any action or cause any other party to take any action under any of the Basic Documents to enforce any remedies for breaches of representations or warranties; or (vi) to establish cause, materiality or recourse for any Test Fail as described in Section 3.3.

(b)            Testing Procedure Limitations.  The Asset Representations Reviewer will only be required to perform the “Tests” described in Schedule B, and will not be obligated to perform additional procedures on any Review Receivable other than as specified in this Agreement.

5

However, the Asset Representations Reviewer may, in its discretion, (i) perform other tests that it deems reasonable and appropriate in determining whether the Review Receivables were in compliance with the representations and warranties made by TMCC and the Seller about the Review Receivables in the Basic Documents as of the Cutoff Date or Closing Date, as applicable, and (ii) provide additional information about any Review Receivable that it determines in good faith to be material to the related Review.

ARTICLE IV

 ASSET REPRESENTATIONS REVIEWER

Section 4.1.      Representations and Warranties.  The Asset Representations Reviewer represents and warrants to the Issuer as of the Closing Date:

(a)            Organization and Qualification.  The Asset Representations Reviewer is duly organized and validly existing as a limited liability company in good standing under the laws of State of Delaware.  The Asset Representations Reviewer is qualified as a foreign limited liability company in good standing and has obtained all necessary licenses and approvals in all jurisdictions in which the ownership or lease of its properties or the conduct of its activities requires the qualification, license or approval, unless the failure to obtain the qualifications, licenses or approvals would not reasonably be expected to have a material adverse effect on the Asset Representations Reviewer’s ability to perform its obligations under this Agreement.

(b)            Power, Authority and Enforceability.  The Asset Representations Reviewer has the power and authority to execute, deliver and perform its obligations under this Agreement.  The Asset Representations Reviewer has authorized the execution, delivery and performance of this Agreement.  This Agreement is the legal, valid and binding obligation of the Asset Representations Reviewer enforceable against the Asset Representations Reviewer, except as may be limited by insolvency, bankruptcy, reorganization or other laws relating to the enforcement of creditors’ rights or by general equitable principles.

(c)            No Conflicts and No Violation.  The completion of the transactions  contemplated by this Agreement and the performance of the Asset Representations Reviewer’s obligations under this Agreement will not (i) conflict with, or be a breach or default under, any indenture, mortgage, deed of trust, loan agreement, guarantee or similar document under which the Asset Representations Reviewer is a debtor or guarantor, (ii) result in the creation or imposition of a Lien on the properties or assets of the Asset Representations Reviewer under the terms of any indenture, mortgage, deed of trust, loan agreement, guarantee or similar document, (iii) violate the organizational documents of the Asset Representations Reviewer or (iv) violate a law or, to the Asset Representations Reviewer’s knowledge, an order, rule or regulation of a federal or State court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Asset Representations Reviewer or its properties that applies to the Asset Representations Reviewer, which, in each case, would reasonably be expected to have a material adverse effect on the Asset Representations Reviewer’s ability to perform its obligations under this Agreement.

(d)            No Proceedings.  To the Asset Representations Reviewer’s knowledge, there are no proceedings or investigations pending or threatened in writing before a federal or State court,

6

regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Asset Representations Reviewer or its properties (i) asserting the invalidity of this Agreement, (ii) seeking to prevent the completion of the transactions contemplated by this Agreement or (iii) seeking any determination or ruling that would reasonably be expected to have a material adverse effect on the Asset Representations Reviewer’s ability to perform its obligations under, or the validity or enforceability of, this Agreement.

(e)            Eligibility.  The Asset Representations Reviewer meets the eligibility requirements in Section 5.1.

Section 4.2.      Covenants.  The Asset Representations Reviewer covenants and agrees that:

(a)            Eligibility.  It will notify the Issuer, the Servicer and the Administrator promptly if it no longer meets, or reasonably expects that it will no longer meet, the eligibility requirements in Section 5.1.

(b)            Review Systems; Personnel.  It will maintain business process management and/or other systems necessary to ensure that it can perform each Test and, on execution of this Agreement, will load each Test into these systems. The Asset Representations Reviewer will ensure that these systems allow for each Review Receivable and the related Review Materials to be individually tracked and stored as contemplated by this Agreement.  The Asset Representations Reviewer will maintain adequate staff that is properly trained to conduct Reviews as required by this Agreement.

(c)            Maintenance of Review Materials.  It will maintain copies of any Review Materials, Review Reports and other documents relating to a Review, including internal correspondence and work papers, for a period of at least two years after any termination of this Agreement.

(d)            Compliance with Applicable Law.  The Asset Representations Reviewer will act in accordance with all requirements applicable to an asset representations reviewer under applicable law (as amended from time to time) and other state or federal securities law applicable to asset representations reviewers in effect during the term of this Agreement.

Section 4.3.      Fees and Expenses.

(a)            Annual Fee.  As compensation for its activities hereunder, the Asset Representations Reviewer shall be entitled to receive an annual fee (the “Annual Fee”) with respect to each Annual Period prior to the termination of the Issuer, in an amount equal to $5,000.

(b)            Review Fee.  Following the completion of a Review and the delivery of the related Review Report pursuant to Section 3.4, or the termination of a Review according to Section 3.3(e), and the delivery to the Issuer, the Indenture Trustee, the Servicer and the Administrator of a detailed invoice in respect thereof, the Asset Representations Reviewer will be entitled to a fee of $200 for each Review Receivable for which the Review was started (the “Review Fee”).  However, no Review Fee will be charged for any Review Receivable which was

7

included in a prior Review or for which no Tests were completed prior to the Asset Representations Reviewer being notified of a termination of the Review according to Section 3.3(e) or due to missing or insufficient Review Materials under Section 3.2(b).

(c)            Reimbursement of Travel Expenses.  If the Servicer provides access to the Review Materials at one of its properties, the Issuer will reimburse the Asset Representations Reviewer for its reasonable travel expenses incurred in connection with the Review, following the delivery to the Issuer, the Indenture Trustee, the Servicer and the Administrator of a detailed invoice in respect of such expenses; provided that such reimbursable expenses may not exceed $20,000.

(d)            Dispute Resolution Expenses.  If the Asset Representations Reviewer participates in a dispute resolution proceeding under Section 3.6 of this Agreement and its reasonable out-of-pocket expenses for participating in the proceeding are not paid by a party to the dispute resolution within ninety (90) days after the end of the proceeding, the Issuer will reimburse the Asset Representations Reviewer for such expenses after receipt of a detailed invoice in respect thereof.

(e)            Method of Payment.  The initial Annual Fee will become due and payable by TMCC within thirty (30) days of receipt by TMCC of an invoice in respect thereof.  Each other Annual Fee, and the amount of any properly invoiced fees, expenses or claims (including any Review Fee) to be reimbursed or paid by the Issuer pursuant to the terms of this Agreement, will become due and payable by the Issuer on the next Payment Date occurring at least five (5) Business Days after receipt by the Servicer of the related invoice from the Asset Representations Reviewer, in each case in accordance with the priority of payments set forth in Section 5.06(b) or (c) of the Sale and Servicing Agreement, as applicable; provided that, (i) Annual Fees (other than the initial Annual Fee) will not be payable by the Issuer prior to the Payment Date immediately following the end of each annual period occurring on the anniversary of the Closing Date (each such period, an “Annual Period”), and (ii) the Asset Representations Reviewer must submit its invoice for any outstanding fees, expenses or claims not later than ten (10) Business Days before the final Payment Date.  The Servicer shall provide notice to the Asset Representations Reviewer of the final Payment Date at least fifteen (15) Business Days prior to such Payment Date.  In the event that any such properly invoiced fees, expenses or claims are not paid or reimbursed in full by the Issuer on the related Payment Date, TMCC shall promptly pay the Asset Representations Reviewer for any such unpaid amounts.  If, subsequent to any such payment by TMCC to the Asset Representations Reviewer described in the immediately preceding sentence, the Asset Representations Reviewer receives payment or reimbursement in respect of the related fee, expense or claim, in part or in full, from the Issuer, then the Asset Representations Reviewer shall promptly refund TMCC for the amount of such payment or reimbursement received from the Issuer on such subsequent date.

Section 4.4.      Limitation on Liability.  The Asset Representations Reviewer will not be liable to any Person for any action taken, or not taken, in good faith under this Agreement or for errors in judgment.  However, the Asset Representations Reviewer will be liable for its willful misconduct, bad faith or negligence in performing its obligations under this Agreement.  In no event will the Asset Representations Reviewer be liable for special, indirect or consequential

8

losses or damages (including lost profit), even if the Asset Representations Reviewer has been advised of the likelihood of the loss or damage and regardless of the form of action.

Section 4.5.      Indemnification by Asset Representations Reviewer .  The Asset Representations Reviewer will indemnify each of the Issuer, the Seller, the Servicer, the Administrator, the Owner Trustee and the Indenture Trustee and their respective directors, officers, employees and agents for all fees, expenses, losses, damages and liabilities (including, but not limited to, reasonable legal fees, costs and expenses, and including any such reasonable fees, costs and expenses incurred in connection with any enforcement (including any action, claim, or suit brought by such indemnified parties) of any indemnification or other obligation of the Asset Representations Reviewer) resulting from (a) the willful misconduct, bad faith or negligence of the Asset Representations Reviewer in performing its obligations under this Agreement and (b) the Asset Representations Reviewer’s breach of any of its representations or warranties in this Agreement.  The Asset Representations Reviewer’s obligations under this Section 4.5 will survive the termination of this Agreement, the termination of the Issuer and the resignation or removal of the Asset Representations Reviewer.

Section 4.6.      Indemnification of Asset Representations Reviewer.

(a)            Indemnification.  The Issuer will indemnify the Asset Representations Reviewer and its officers, directors, employees and agents (each, an “Indemnified Person”), for all costs, expenses, losses, damages and liabilities resulting from the performance of its obligations under this Agreement (including the fees and expenses of defending itself against any loss, damage or liability), but excluding any cost, expense, loss, damage or liability resulting from (i) the Asset Representations Reviewer’s willful misconduct, bad faith or negligence or (ii) the Asset Representations Reviewer’s breach of any of its representations or warranties in this Agreement.

(b)            Proceedings.  Promptly on receipt by an Indemnified Person of notice of a Proceeding against it, the Indemnified Person will, if a claim is to be made under Section 4.6(a), notify the Issuer, the Servicer and the Administrator of the Proceeding.  The Issuer, the Servicer and the Administrator may participate in and assume the defense and settlement of a Proceeding at its expense.  If the Issuer, the Servicer or the Administrator notifies the Indemnified Person of its intention to assume the defense of the Proceeding with counsel reasonably satisfactory to the Indemnified Person, and so long as the Issuer, the Servicer or the Administrator assumes the defense of the Proceeding in a manner reasonably satisfactory to the Indemnified Person, the Issuer, the Servicer and the Administrator will not be liable for fees and expenses of counsel to the Indemnified Person unless there is a conflict between the interests of the Issuer, the Servicer or the Administrator, as applicable, and an Indemnified Person.  If there is a conflict, the Issuer, the Servicer or the Administrator will pay for the reasonable fees and expenses of separate counsel to the Indemnified Person.  No settlement of a Proceeding may be made without the approval of the Issuer, the Servicer and the Administrator and the Indemnified Person, which approval will not be unreasonably withheld, conditioned or delayed.

(c)            Survival of Obligations.  The Issuer’s, the Servicer’s and the Administrator’s obligations under this Section 4.6 will survive the resignation or removal of the Asset Representations Reviewer and the termination of this Agreement.

9

(d)            Repayment.  If the Issuer, the Servicer or the Administrator makes any payment under this Section 4.6 and the Indemnified Person later collects any of the amounts for which the payments were made to it from others, the Indemnified Person will promptly repay the amounts to the Issuer, the Servicer or the Administrator, as applicable.

Section 4.7.      Inspections of Asset Representations Reviewer.  The Asset Representations Reviewer agrees that, with reasonable prior notice not more than once during any year, it will permit authorized representatives of the Issuer, the Servicer and the Administrator, during the Asset Representations Reviewer’s normal business hours, to examine and review the books of account, records, reports and other documents and materials of the Asset Representations Reviewer relating to (a) the performance of the Asset Representations Reviewer’s obligations under this Agreement, (b) payments of fees and expenses of the Asset Representations Reviewer for its performance and (c) a claim made by the Asset Representations Reviewer under this Agreement.  In addition, the Asset Representations Reviewer will permit the Issuer’s, the Servicer’s and the Administrator’s representatives to make copies and extracts of any of those documents and to discuss them with the Asset Representations Reviewer’s officers and employees.  Each of the Issuer, the Servicer and the Administrator will, and will cause its authorized representatives to, hold in confidence the information except if disclosure may be required by law or if the Issuer, the Servicer or the Administrator reasonably determines that it is required to make the disclosure under this Agreement or the other Basic Documents.  The Asset Representations Reviewer will maintain all relevant books, records, reports and other documents and materials for a period of at least two years after the termination of its obligations under this Agreement.

Section 4.8.      Delegation of Obligations.  The Asset Representations Reviewer may not delegate or subcontract its obligations under this Agreement to any Person without the consent of the Issuer, the Servicer and the Administrator.

Section 4.9.      Confidential Information.

(a)            Treatment.  The Asset Representations Reviewer agrees to hold and treat Confidential Information given to it under this Agreement in confidence and under the terms and conditions of this Section 4.9, and will implement and maintain safeguards to further assure the confidentiality of the Confidential Information.  The Confidential Information will not, without the prior consent of the Issuer, the Servicer and the Administrator, be disclosed or used by the Asset Representations Reviewer, or its officers, directors, employees, agents, representatives or affiliates, including legal counsel (collectively, the “Information Recipients”) other than for the purposes of performing Reviews of Review Receivables or performing its obligations under this Agreement.  The Asset Representations Reviewer agrees that it will not, and will cause its Affiliates to not (i) purchase or sell securities issued by TMCC, the Issuer or any of their respective Affiliates or special purpose entities formed by any of the foregoing Persons on the basis of Confidential Information or (ii) use the Confidential Information for the preparation of research reports, newsletters or other publications or similar communications.

(b)            Definition.  “Confidential Information” means oral, written and electronic materials (irrespective of its source or form of communication) furnished before, on or after the

10

date of this Agreement to the Asset Representations Reviewer for the purposes contemplated by this Agreement, including:

(i)    lists of Review Receivables and any related Review Materials;

(ii)    origination and servicing guidelines, policies and procedures, and form contracts; and

(iii)                  notes, analyses, compilations, studies or other documents or records prepared by the Servicer or the Administrator, which contain information supplied by or on behalf of the Servicer, the Administrator or their respective representatives.

However, Confidential Information will not include information that (A) is or becomes generally available to the public other than as a result of disclosure by the Information Recipients, (B) was available to, or becomes available to, the Information Recipients on a non-confidential basis from a Person or entity other than the Issuer, the Servicer or the Administrator before its disclosure to the Information Recipients who, to the knowledge of the Information Recipient is not bound by a confidentiality agreement with the Issuer, the Servicer or the Administrator and is not prohibited from transmitting the information to the Information Recipients, (C) is independently developed by the Information Recipients without the use of the Confidential Information, as shown by the Information Recipients’ files and records or other evidence in the Information Recipients’ possession or (D) the Issuer, the Servicer or the Administrator provides permission to the applicable Information Recipients to release.

(c)            Protection.  The Asset Representations Reviewer will take reasonable measures to protect the secrecy of and avoid disclosure and unauthorized use of Confidential Information, including those measures that it takes to protect its own confidential information and not less than a reasonable standard of care.  The Asset Representations Reviewer acknowledges that PII is also subject to the additional requirements in Section 4.10.

(d)            Disclosure.  If the Asset Representations Reviewer is required by applicable law, regulation, rule or order issued by an administrative, governmental, regulatory or judicial authority to disclose part of the Confidential Information, it may disclose the Confidential Information.  However, before a required disclosure, the Asset Representations Reviewer, if permitted by law, regulation, rule or order, will use its reasonable efforts to provide the Issuer, the Servicer and the Administrator with notice of the requirement and will cooperate, at the Issuer’s or the Servicer’s expense, as applicable, in the Issuer’s or the Servicer’s pursuit of a proper protective order or other relief for the disclosure of the Confidential Information.  If the Issuer or the Servicer is unable to obtain a protective order or other proper remedy by the date that the information is required to be disclosed, the Asset Representations Reviewer will disclose only that part of the Confidential Information that it is advised by its legal counsel it is legally required to disclose.

(e)            Responsibility for Information Recipients.  The Asset Representations Reviewer will be responsible for a breach of this Section 4.9 by its Information Recipients.

(f)            Violation.  The Asset Representations Reviewer agrees that a violation of this Agreement may cause irreparable injury to the Issuer, the Servicer and the Administrator, and the

11

Issuer, the Servicer and the Administrator may seek injunctive relief in addition to legal remedies.  If an action is initiated by the Issuer, the Servicer or the Administrator to enforce this Section 4.9, the prevailing party will be reimbursed for its fees and expenses, including reasonable attorney’s fees, incurred for the enforcement.

Section 4.10.      Personally Identifiable Information.

(a)            Definitions.  “PII” means information in any format about an identifiable individual, including, name, address, phone number, e-mail address, account number(s), identification number(s), any other actual or assigned attribute associated with or identifiable to an individual and any information that when used separately or in combination with other information could identify an individual.  “Issuer PII” means PII furnished by the Issuer, the Servicer, the Administrator or their respective Affiliates to the Asset Representations Reviewer and PII developed or otherwise collected or acquired by the Asset Representations Reviewer in performing its obligations under this Agreement.

(b)            Use of Issuer PII.  The Issuer does not grant the Asset Representations Reviewer any rights to Issuer PII except as provided in this Agreement.  The Asset Representations Reviewer will use Issuer PII only to perform its obligations under this Agreement or as specifically directed in writing by the Issuer and will only reproduce Issuer PII to the extent necessary for these purposes.  The Asset Representations Reviewer must comply with all laws applicable to PII, Issuer PII and the Asset Representations Reviewer’s business, including any legally required codes of conduct, including those relating to privacy, security and data protection.  The Asset Representations Reviewer will protect and secure Issuer PII.  The Asset Representations Reviewer will implement privacy or data protection policies and procedures that comply with applicable law and this Agreement.  The Asset Representations Reviewer will implement and maintain reasonable and appropriate practices, procedures and systems, including administrative, technical and physical safeguards to (i) protect the security, confidentiality and integrity of Issuer PII, (ii) ensure against anticipated threats or hazards to the security or integrity of Issuer PII, (iii) protect against unauthorized access to or use of Issuer PII and (iv) otherwise comply with its obligations under this Agreement.  These safeguards include a written data security plan, employee training, information access controls, restricted disclosures, systems protections (e.g., intrusion protection, data storage protection and data transmission protection) and physical security measures.

(c)            Additional Limitations.  In addition to the use and protection requirements described in Section 4.10(b), the Asset Representations Reviewer’s disclosure of Issuer PII is also subject to the following requirements:

(i)    The Asset Representations Reviewer will not disclose Issuer PII to its personnel or allow its personnel access to Issuer PII except (A) for the Asset Representations Reviewer personnel who require Issuer PII to perform a Review, (B) with the prior consent of the Issuer or (C) as required by applicable law.  When permitted, the disclosure of or access to Issuer PII will be limited to the specific information necessary for the individual to complete the assigned task.  The Asset Representations Reviewer will inform personnel with access to Issuer PII of the

12

confidentiality requirements in this Agreement and train its personnel with access to Issuer PII on the proper use and protection of Issuer PII.

(ii)    The Asset Representations Reviewer will not sell, disclose, provide or exchange Issuer PII with or to any third party without the prior consent of the Issuer.

(iii)                  Notwithstanding anything to the contrary contained in this Agreement, the Asset Representations Reviewer’s use and handling of Issuer PII shall also be subject to the terms and limitations described in that separate letter agreement between TMCC and the Asset Representations Reviewer dated October 22, 2015 (the “Letter Agreement”) and, in the event of any conflict between the terms of the Letter Agreement and the terms of this Agreement related to the Asset Representations Reviewer’s use and handling of Issuer PII, the most restrictive of such terms shall govern.

(d)            Notice of Breach.  The Asset Representations Reviewer will notify the Issuer, the Servicer and the Administrator promptly in the event of an actual or reasonably suspected security breach, unauthorized access, misappropriation or other compromise of the security, confidentiality or integrity of Issuer PII and, where applicable, immediately take action to prevent any further breach.

(e)            Return or Disposal of Issuer PII.  Except where return or disposal is prohibited by applicable law, promptly on the earlier of the completion of the Review or the request of the Issuer, all Issuer PII in any medium in the Asset Representations Reviewer’s possession or under its control will be (i) destroyed in a manner that prevents its recovery or restoration or (ii) if so directed by the Issuer, returned to the Issuer without the Asset Representations Reviewer retaining any actual or recoverable copies, in both cases, without charge to the Issuer.  Where the Asset Representations Reviewer retains Issuer PII, the Asset Representations Reviewer will limit the Asset Representations Reviewer’s further use or disclosure of Issuer PII to that required by applicable law.

(f)            Compliance; Modification.  The Asset Representations Reviewer will cooperate with and provide information to the Issuer, the Servicer and the Administrator regarding the Asset Representations Reviewer’s compliance with this Section 4.10.  The Asset Representations Reviewer, the Issuer, the Servicer and the Administrator agree to modify this Section 4.10 as necessary for any party to comply with applicable law.

(g)            Audit of Asset Representations Reviewer.  The Asset Representations Reviewer will permit the Issuer, the Servicer and the Administrator and their authorized representatives to audit the Asset Representations Reviewer’s compliance with this Section 4.10 during the Asset Representations Reviewer’s normal business hours on reasonable advance notice to the Asset Representations Reviewer, and not more than once during any year unless circumstances necessitate additional audits.  The Issuer, the Servicer and the Administrator agree to make reasonable efforts to schedule any audit described in this Section 4.10 with the inspections described in Section 4.7.  The Asset Representations Reviewer will also permit the Issuer, the Servicer and the Administrator, during normal business hours on reasonable advance written notice, to audit any service providers used by the Asset Representations Reviewer to fulfill the Asset Representations Reviewer’s obligations under this Agreement.

13

(h)            Affiliates and Third Parties.  If the Asset Representations Reviewer processes the PII of the Issuer’s, the Servicer’s or the Administrator’s Affiliates or a third party when performing a Review, and if such Affiliate or third party is identified to the Asset Representations Reviewer, such Affiliate or third party is an intended third-party beneficiary of this Section 4.10, and this Agreement is intended to benefit the Affiliate or third party.  The Affiliate or third party may enforce the PII-related terms of this Section 4.10 against the Asset Representations Reviewer as if each were a signatory to this Agreement.

ARTICLE V

RESIGNATION AND REMOVAL;

 SUCCESSOR ASSET REPRESENTATIONS REVIEWER

Section 5.1.      Eligibility Requirements for Asset Representations Reviewer.  The Asset Representations Reviewer must be a Person who (a) is not an Affiliate of TMCC, the Seller, the Issuer, the Servicer, the Administrator, the Indenture Trustee or the Owner Trustee and (b) is not an Affiliate of any Person that was engaged by TMCC or any underwriter of the Notes to perform any due diligence on the Receivables prior to the Closing Date.

Section 5.2.      Resignation and Removal of Asset Representations Reviewer.

(a)            No Resignation.  The Asset Representations Reviewer will not resign as Asset Representations Reviewer unless it determines it is legally unable to perform its obligations under this Agreement and there is no reasonable action that it could take to make the performance of its obligations under this Agreement permitted under applicable law.  In such event, the Asset Representations Reviewer will deliver a notice of its resignation to the Issuer, the Servicer and the Administrator, together with an Opinion of Counsel supporting its determination.

(b)            Removal.  If any of the following events occur, the Issuer, by notice to the Asset Representations Reviewer, may remove the Asset Representations Reviewer and terminate its rights and obligations under this Agreement:

(i)    the Asset Representations Reviewer no longer meets the eligibility requirements in Section 5.1;

(ii)    the Asset Representations Reviewer breaches of any of its representations, warranties, covenants or obligations in this Agreement; or

(iii)                  an Insolvency Event of the Asset Representations Reviewer occurs.

(c)            Notice of Resignation or Removal.  The Issuer will notify the Servicer, the Administrator, the Owner Trustee and the Indenture Trustee of any resignation or removal of the Asset Representations Reviewer.

(d)            Continue to Perform After Resignation or Removal.  No resignation or removal of the Asset Representations Reviewer will be effective, and the Asset Representations Reviewer will continue to perform its obligations under this Agreement, until a successor Asset Representations Reviewer has accepted its engagement according to Section 5.3(b).

14

Section 5.3.      Successor Asset Representations Reviewer .

(a)            Engagement of Successor Asset Representations Reviewer.  Following the resignation or removal of the Asset Representations Reviewer, the Issuer will engage a successor Asset Representations Reviewer who meets the eligibility requirements of Section 5.1.

(b)            Effectiveness of Resignation or Removal.  No resignation or removal of the Asset Representations Reviewer will be effective until the successor Asset Representations Reviewer has executed and delivered to the Issuer, the Servicer and the Administrator an agreement accepting its engagement and agreeing to perform the obligations of the Asset Representations Reviewer under this Agreement or entering into a new agreement with the Issuer on substantially the same terms as this Agreement.

(c)            Transition and Expenses.  If the Asset Representations Reviewer resigns or is removed, the Asset Representations Reviewer will cooperate with the Issuer, the Servicer and the Administrator and take all actions reasonably requested to assist the Issuer in making an orderly transition of the Asset Representations Reviewer’s rights and obligations under this Agreement to the successor Asset Representations Reviewer.  The Asset Representations Reviewer will pay the reasonable expenses of transitioning the Asset Representations Reviewer’s obligations under this Agreement and preparing the successor Asset Representations Reviewer to take on the obligations on receipt of an invoice with reasonable detail of the expenses from the Issuer, the Servicer, the Administrator or the successor Asset Representations Reviewer. To the extent expenses incurred by the Asset Representations Reviewer in connection with the replacement of the Asset Representations Reviewer are not paid by the Asset Representations Reviewer that is being replaced, the Issuer will pay such expenses in accordance with the priority of payments set forth in Section 5.06(b) or (c) of the Sale and Servicing Agreement, as applicable.

Section 5.4.      Merger, Consolidation or Succession.  Any Person (a) into which the Asset Representations Reviewer is merged or consolidated, (b) resulting from any merger or consolidation to which the Asset Representations Reviewer is a party or (c) succeeding to the business of the Asset Representations Reviewer, if that Person meets the eligibility requirements in Section 5.1, will be the successor to the Asset Representations Reviewer under this Agreement.  Such Person will execute and deliver to the Issuer, the Servicer and the Administrator an agreement to assume the Asset Representations Reviewer’s obligations under this Agreement (unless the assumption happens by operation of law).

ARTICLE VI

 OTHER AGREEMENTS

Section 6.1.      Independence of Asset Representations Reviewer.  The Asset Representations Reviewer will be an independent contractor and will not be subject to the supervision of the Issuer for the manner in which it accomplishes the performance of its obligations under this Agreement.  Unless authorized by the Issuer, the Servicer or the Administrator, the Asset Representations Reviewer will have no authority to act for or represent the Issuer, the Servicer or the Administrator, respectively, and will not be considered an agent of any such Person.  Nothing in this Agreement will make the Asset Representations Reviewer and

15

the Issuer, the Servicer or the Administrator members of any partnership, joint venture or other separate entity or impose any liability as such on any of them.

Section 6.2.      No Petition.  Each of the parties agrees that, before the date that is one year and one day (or, if longer, any applicable preference period) after payment in full of all securities issued by the Seller, the Issuer or by a trust for which the Seller was a depositor, it will not start or pursue against, or join any other Person in starting or pursuing against the Seller or the Issuer, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other proceedings under any bankruptcy or similar law.  This Section 6.2 will survive the termination of this Agreement.

Section 6.3.      Limitation of Liability of Owner Trustee.  This Agreement has been signed on behalf of the Issuer by Wells Fargo Delaware Trust Company, National Association, not in its individual capacity but solely in its capacity as Owner Trustee of the Issuer.  In no event will Wells Fargo Delaware Trust Company, National Association in its individual capacity or a beneficial owner of the Issuer be liable for the Issuer’s obligations under this Agreement.  For all purposes under this Agreement, the Owner Trustee will be subject to, and entitled to the benefits of, the Trust Agreement.

Section 6.4.      Termination of Agreement.  This Agreement will terminate, except for the obligations under Section 4.6, on the earlier of (a) the payment in full of all outstanding Notes and the satisfaction and discharge of the Indenture and (b) the date the Issuer is terminated under the Trust Agreement.

ARTICLE VII

 MISCELLANEOUS PROVISIONS

Section 7.1.      Amendments.  The parties may amend this Agreement:

(i)    to clarify an ambiguity, correct an error or correct or supplement any term of this Agreement that may be defective or inconsistent with the other terms of this Agreement or to provide for, or facilitate the acceptance of this Agreement by, a successor Asset Representations Reviewer, in each case without the consent of the Noteholders or any other Person;

(ii)    to add, change or eliminate terms of this Agreement, in each case without the consent of the Noteholders or any other Person, if the Administrator delivers an Officer’s Certificate to the Issuer, the Owner Trustee and the Indenture Trustee stating that the amendment will not have a material adverse effect on the Noteholders; or

(iii)                  to add, change or eliminate terms of this Agreement for which an Officer’s Certificate is not or cannot be delivered under Section 7.1(ii), with the consent of a majority of the principal amount of the Notes of the Controlling Class then outstanding, acting together as a single class.

16

Section 7.2.      Assignment; Benefit of Agreement; Third Party Beneficiaries.

(a)            Assignment.  Except as stated in Section 5.4, this Agreement may not be assigned by the Asset Representations Reviewer without the consent of the Issuer, the Servicer and the Administrator.

(b)            Benefit of Agreement; Third-Party Beneficiaries.  This Agreement is for the benefit of and will be binding on the parties and their permitted successors and assigns.  The Owner Trustee and the Indenture Trustee, for the benefit of the Noteholders, will be third-party beneficiaries of this Agreement and may enforce this Agreement against the Asset Representations Reviewer, the Servicer and the Administrator.  No other Person will have any right or obligation under this Agreement.

Section 7.3.      Notices.

(a)            Notices to Parties.  All notices, requests, demands, consents, waivers or other communications to or from the parties must be in writing and will be considered given:

(i)    for overnight mail, on delivery or, for registered first class mail, postage prepaid, three (3) days after deposit in the mail;

(ii)    for a fax, when receipt is confirmed by telephone, reply email or reply fax from the recipient;

(iii)                  for an email, when receipt is confirmed by telephone or reply email from the recipient; and

(iv)                  for an electronic posting to a password-protected website to which the recipient has access, on delivery of an email (without the requirement of confirmation of receipt) stating that the electronic posting has occurred.

(b)            Notice Addresses.  Any notice, request, demand, consent, waiver or other communication will be addressed as stated in the Sale and Servicing Agreement or the Administration Agreement, as applicable, or to another address as a party may give by notice to the other parties.

Section 7.4.      GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

Section 7.5.      WAIVER OF JURY TRIAL.  EACH PARTY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN LEGAL PROCEEDING RELATING TO THIS AGREEMENT.

17

Section 7.6.      No Waiver; Remedies.  No party’s failure or delay in exercising a power, right or remedy under this Agreement will operate as a waiver.  No single or partial exercise of a power, right or remedy will preclude any other or further exercise of the power, right or remedy or the exercise of any other power, right or remedy.  The powers, rights and remedies under this Agreement are in addition to any powers, rights and remedies under law.

Section 7.7.      Severability.  If a part of this Agreement is held invalid, illegal or unenforceable, then it will be deemed severable from the remaining Agreement and will not affect the validity, legality or enforceability of the remaining Agreement.

Section 7.8.      Headings.  The headings in this Agreement are included for convenience and will not affect the meaning or interpretation of this Agreement.

Section 7.9.      Counterparts.  This Agreement may be executed in multiple counterparts. Each counterpart will be an original and all counterparts will together be one document.

[Remainder of Page Left Blank]

18

IN WITNESS WHEREOF, the Issuer, the Servicer, the Administrator and the Asset Representations Reviewer have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the date first above written.

	 	
TOYOTA AUTO RECEIVABLES 2018-B OWNER TRUST, as Issuer

	 	 	 
	 	
By:

	
Wells Fargo Delaware Trust Company, National Association, not in its individual capacity, but solely as Owner Trustee

	 	 	 
	 	 	 
	 	
By:

	
/s/ Rosemary Kennard                                  

	 	 	
Name:  Rosemary Kennard

	 	 	
Title:    Vice President

	 	 	 
	 	 	 
	 	
TOYOTA MOTOR CREDIT CORPORATION,

	 	
        as Servicer and Administrator

	 	 	 
	 	 	 
	 	
By:

	
/s/ Cindy Wang                                             

	 	 	
Name:  Cindy Wang

	 	 	
Title:    Group Vice President – Treasury

	 	 	 
	 	 	 
	 	
CLAYTON FIXED INCOME SERVICES LLC,

	 	
         as Asset Representations Reviewer

	 	 	 
	 	 	 
	 	
By:

	
/s/ Robert A. Harris                                       

	 	 	
Name:  Robert A. Harris

	 	 	
Title:    Secretary

 

 

Schedule A

Review Materials

“Review Materials” means, with respect to each Receivable:

		(a)	
the Contract;

		(b)	
the original credit application executed by the related Obligor (or a photocopy or other image or electronic record thereof;

		(c)	
the original certificate of title (or evidence that such certificate of title has been applied for), or a photocopy or other image thereof, and of such documents that the Servicer shall keep on file evidencing the security interest in the related Financed Vehicle;

		(d)	
an electronic data tape describing certain characteristics of the Receivables as of the Cutoff Date or such other applicable date of determination (the “Data Tape”);

		(e)	
a list of approved contract forms for the Review Receivables, as provided by TMCC; and

		(f)	
such other documentation or information (whether tangible or electronic, and including, without limitation, screen prints or reports of the Servicer’s receivables and securitization systems) as the Servicer, as the case may be, may maintain and which the Servicer shall have determined to be relevant to any Test with respect to such Receivable.

Sch. A-1

Schedule B

Representations, Warranties and Tests

	
Representations and Warranties

Made as of the Cutoff Date and the Closing Date (unless otherwise specified)

 

	
Tests

 

	
1.      Origination.  Each Receivable was originated in the United States by a Dealer for the retail sale of the related Financed Vehicle in the ordinary course of such Dealer’s business, has been fully and properly executed or electronically authenticated by the parties thereto, has been purchased by TMCC from such Dealer under an existing agreement with TMCC and has been validly assigned by such Dealer to TMCC.

 

	
Test 1-1: Dealer Address

Confirm the Dealer address on the Contract is a United States address.

Test 1-2: Contract Signed

Confirm the Obligor(s) and Dealer signed the Contract.

Test 1-3: Valid Assignee

Confirm TMCC, or a name included in the list of acceptable name variations, is identified as the assignee in either the Assignment section of the Contract or separate assignment document.

Test 1-4: Valid Assignor Signature

Confirm the Contract was completed electronically or if completed on paper, confirm the Dealer signature is present as assignor on the Contract or separate assignment document.

 

	
2.      Security Interest.  With respect to each Receivable, as of the Closing Date, TMCC has, or has started procedures that will result in TMCC having, a perfected, first priority security interest in the related Financed Vehicle, which security interest was validly created and is assignable by the Seller to the Purchaser, and by the Purchaser to the Issuer.

 

	
Test 2-1: Lienholder

Confirm the title documents identify either TMCC, or a name included in the list of acceptable name variations, as the first lienholder.

Test 2-2:  Obligor Name

Confirm the Obligor name(s) on the Contract, taking into account any amendments or correction notices, match(es) the name(s) on the title documents.

Test 2-3:  Valid VIN

Confirm the vehicle identification number on the Contract, taking into account any amendments or correction notices, matches the vehicle identification number on the title documents.

 

	
3.      Simple Interest.  Each Receivable provides for scheduled monthly payments that fully amortize the Amount Financed by maturity (except for minimally different payments in the first or last month in the life of the Receivable) and provide for a finance charge or yield interest at its APR, in either case calculated based on the Simple Interest Method.

 

	
Test 3-1: Payments

Review the Contract and confirm it reflects a level monthly payment except for the first and final payment, if any.  Sum the first payment (if any), the product of the number of payments (or the number of regular payments, if there is a first or final payment) and the Payment Amount and the final payment (if any) and confirm that this amount is equal to the Total of Payments in the Truth in Lending section of the Contract.

Test 3-2: Simple Interest

Observe the Contact and confirm it is a Simple Interest Method Contract.

 

 

 

Sch. B-1

	
Representations and Warranties

Made as of the Cutoff Date and the Closing Date (unless otherwise specified)

 

	
Tests

	
4.      Prepayment.  Each Receivable allows for prepayment without penalty.

 

	
Test 4-1: Prepayment

Confirm the Contract provides a prepayment disclosure that does not require a penalty.

 

	
5.       Compliance with Law.  To the Seller’s knowledge, each Receivable complied in all material respects at the time it was originated with all requirements of applicable federal, state and local laws, and regulations thereunder.

 

	
Test 5-1: Complete Contract

Confirm the Contract was completed electronically or if completed on paper, confirm the Contract form number and revision date are approved for use according to TMCC internal documentation.

 

	
6.       Binding Obligation.  Each Receivable is on a form contract containing customary and enforceable provisions that includes rights and remedies allowing the holder to enforce the obligation and realize on the related Financed Vehicle and represents the legal, valid and binding payment obligation in writing of the related Obligor, enforceable by the holder thereof in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the enforcement of creditors’ rights in general and by general principles of equity and consumer protection laws, regardless of whether such enforceability is considered in a proceeding in equity or at law.

 

	
Test 6-1:  Valid Contract Form

Confirm the Contract was completed electronically or if completed on paper, confirm the Contract form number and revision date are approved for use according to TMCC internal documentation.

Test 6-2: Contract Executed

Confirm the Obligor(s) signed the Contract.

 

	
7.       No Government Obligors.  None of the Receivables is due from the United States or any state or local government, or from any agency, department or instrumentality of the United States or any state or local government.

 

	
Test 7-1: Personal Use

Review the Obligor section on the Contract and confirm the Obligor name(s)  is that of a natural person.

Test 7-2: No Government Obligor

If the Obligor section on the Contract does not report a natural person’s name or an obvious non-governmental business, confirm internet search results show no indication of the Obligor(s) to be a government agency, department, political subdivision or instrumentality.

 

	
8.       Receivables in Force.  As of the Cutoff Date, no Receivable has been satisfied, nor has any Financed Vehicle been released in whole or in part from the lien granted by the related Receivable.

 

	
Test 8-1: Active Account

Observe the Receivable in TMCC’s Data Tape, and confirm it was an active account on the Cutoff Date.

 

 

Sch. B-2

 

	
Representations and Warranties

Made as of the Cutoff Date and the Closing Date (unless otherwise specified)

 

	
Tests

	
9.       No Amendments or Waivers.  As of the Cutoff Date, no material provision of a Receivable has been amended, modified or waived in a manner that is prohibited by the provisions of the Sale and Servicing Agreement.

 

	
Test 9-1: Contract Form

Confirm the Contract was completed electronically or if completed on paper, confirm the Contract form number and revision date are approved for use according to TMCC internal documentation.

Test 9-2: Modification

Review the Data Tape and the Contract (as amended by any related correction notice, if any) and confirm that, as of the Cutoff Date,  there is no revision to the following terms:

i.            APR

ii.           Original Contract Term

iii.          Monthly Payment

iv.          Total Amount Financed

v.            Make / Model / Model Year

vi.           Simple Interest Method Loan

 

 

	
10.    No Defenses.  To the Seller’s knowledge, as of the Closing Date, no Receivable is subject to any right of rescission, setoff, counterclaim or defense, nor has any such right been asserted or threatened with respect to any Receivable.

 

	
Test 10-1: No Litigation

Review the Review Materials and confirm there is no evidence of litigation or other attorney involvement as of the Closing Date.

 

	
11.    No Payment Default.  Except for payment delinquencies that have been continuing for a period of not more than 29 days, no payment default under the terms of any Receivable exists as of the Cutoff Date.

 

	
Test 11-1: Delinquency

Observe TMCC’s Data Tape and confirm the Receivable was not more than 29 days delinquent as of the Cutoff Date.

 

 

	
12.    No Repossession.  No Financed Vehicle has been repossessed without reinstatement as of the Cutoff Date.

 

	
Test 12-1: Repossession Inventory

Observe TMCC’s receivables systems and confirm the Receivable was not held in repossession inventory as of the Cutoff Date.

 

	
13.    Insurance.  The terms of each Receivable require the related Obligor to obtain and maintain physical damage insurance covering the related Financed Vehicle in accordance with TMCC’s normal requirements.  No Financed Vehicle was subject to force-placed insurance.

 

	
Test 13-1: Physical Damage Covered

Confirm the Contract contains language that required the Obligor to obtain and maintain insurance against physical damage to the Financed Vehicle.

Test 13-2: No Force-Placed Insurance

Confirm the Review Materials contain no evidence the Financed Vehicle was subject to force-placed insurance.

 

 

 

 

Sch. B-3

	
Representations and Warranties

Made as of the Cutoff Date and the Closing Date (unless otherwise specified)

 

	
Tests

	
14.    Good Title.  Immediately prior to the transfer and assignment herein contemplated, the Seller had good and marketable title to each Receivable free and clear of all Liens and rights of others (other than pursuant to the Basic Documents) and, immediately upon the transfer and assignment thereof, the Purchaser will have good and marketable title to each Receivable, free and clear of all Liens and rights of others (other than pursuant to the Basic Documents).

 

	
Test 14-1: Sole Lienholder

Confirm the title documents designate TMCC, or a name included in the list of acceptable name variations as the sole lien holder and that no other lien holder is listed.

Test 14-2: No Transfer of Title

Confirm the title documents indicate the Receivable has not been sold, assigned, or transferred to any other entity.

 

	
15.    Lawful Assignment.  No Receivable has been originated in, or is subject to the laws of, any jurisdiction under which the sale, transfer and assignment of such Receivable under this Agreement, or pursuant to the Sale and Servicing Agreement or the pledge of such Receivable under the Indenture are unlawful, void or voidable.  The terms of each Receivable do not limit the right of the owner of such Receivable to sell such Receivable.

 

	
Test 15-1: Contract Form

Confirm the Contract was completed electronically or if completed on paper, confirm the Contract form number and revision date are approved for use according to TMCC internal documentation.

Test 15-2: Assignability

Confirm the Contract does not contain language that limits the sale or transfer of the Receivable.

 

	
16.    Additional Representations and Warranties.  (A) Each Receivable is being serviced by TMCC as of the Closing Date; (B) each Receivable is secured by a new or used passenger car, minivan, light-duty truck or sport utility vehicle; (C) no Receivable was more than 29 days past due as of the Cutoff Date; and (D) as of the Cutoff Date, no Receivable was noted in the records of TMCC or the Servicer as being the subject of a bankruptcy proceeding or insolvency proceeding.

 

	
Test 16(A):  Servicing

Confirm the Review Materials show the Receivable was being serviced by TMCC as of the Closing Date.

Test 16(B):  Financed Vehicle

Review the Contract and confirm the Financed Vehicle is a new or used passenger car, minivan, light-duty truck or sport utility vehicle.

Test 16(C):  Delinquency

Confirm the Data Tape shows the Receivable is not more than 29 days past due as of the Cut-off Date.

Test 16(D):  No Bankruptcy

Confirm the Data Tape shows the Obligor was not noted as being the subject of any bankruptcy or insolvency proceeding as of the Cutoff Date.

 

Sch. B-4EX-4.1

 Exhibit 4.1 

STOCKHOLDERS’ AGREEMENT 

dated as of 
 May 10, 2018

 among 
 TALOS ENERGY INC.,

 AP TALOS ENERGY LLC, 
 AP
TALOS ENERGY DEBTCO LLC, 
 AP OVERSEAS TALOS HOLDINGS PARTNERSHIP, LLC, 

AIF VII (AIV), L.P., 
 ANRP DE
HOLDINGS, L.P., 
 RIVERSTONE TALOS ENERGY EQUITYCO LLC, 

RIVERSTONE TALOS ENERGY DEBTCO LLC, 

and 
 RIVERSTONE V FT CORP
HOLDINGS, L.P. 
  

 TABLE OF CONTENTS 

 

							
	 	  	 	  	Page	 
	 Article I DEFINITIONS
	  	 	2	 
	 Section 1.1
	  	Certain Definitions	  	 	2	 
		
	 Article II TERM
	  	 	7	 
	 Section 2.1
	  	Term and Termination	  	 	7	 
		
	 Article III CORPORATE GOVERNANCE MATTERS
	  	 	7	 
	 Section 3.1
	  	Board Composition	  	 	7	 
	 Section 3.2
	  	Director Nomination Rights	  	 	8	 
	 Section 3.3
	  	Committees of the Company Board	  	 	12	 
	 Section 3.4
	  	Nominating Stockholders Agreement to Vote	  	 	13	 
	 Section 3.5
	  	Meeting of Stockholders	  	 	13	 
	 Section 3.6
	  	Related Party Transactions	  	 	13	 
		
	 Article IV OTHER AGREEMENTS
	  	 	14	 
	 Section 4.1
	  	Sharing of Information; Confidentiality	  	 	14	 
	 Section 4.2
	  	Restrictions on Transferability and Acquisitions	  	 	15	 
	 Section 4.3
	  	Bylaws	  	 	17	 
		
	 Article V DISPUTE RESOLUTION
	  	 	17	 
	 Section 5.1
	  	General Provisions	  	 	17	 
		
	 Article VI MISCELLANEOUS
	  	 	18	 
	 Section 6.1
	  	Corporate Power	  	 	18	 
	 Section 6.2
	  	Governing Law	  	 	18	 
	 Section 6.3
	  	Notices	  	 	19	 
	 Section 6.4
	  	Severability	  	 	21	 
	 Section 6.5
	  	Entire Agreement	  	 	21	 
	 Section 6.6
	  	Assignment; No Third-Party Beneficiaries	  	 	21	 
	 Section 6.7
	  	Amendment; Waiver	  	 	21	 
	 Section 6.8
	  	Interpretations	  	 	22	 
	 Section 6.9
	  	Counterparts; Electronic Transmission of Signatures	  	 	22	 
	 Section 6.10
	  	Enforceable by the Company Independent Directors	  	 	22	 
	 Section 6.11
	  	Apollo Representative	  	 	23	 
	 Section 6.12
	  	Riverstone Representative	  	 	23	 

  

 STOCKHOLDERS’ AGREEMENT 

This STOCKHOLDERS’ AGREEMENT (this “Agreement”) is entered into on May 10, 2018, by and among AP Talos Energy LLC,
a Delaware limited liability company, AP Talos Energy Debtco LLC, a Delaware limited liability company (together, the “Apollo Feeders”), AP Overseas Talos Holdings Partnership, LLC, a Delaware limited liability company, AIF VII
(AIV), L.P., a Delaware limited partnership, ANRP DE Holdings, L.P., a Delaware limited partnership (collectively, the “Apollo Blocker Holding Companies” and, together with the Apollo Feeders and any other member of the Apollo Group
executing a joinder, the “Apollo Parties”), Riverstone Talos Energy Equityco LLC, a Delaware limited liability company, Riverstone Talos Energy Debtco LLC, a Delaware limited liability company (together, the “Riverstone
Feeders”), Riverstone V FT Corp Holdings, L.P., a Delaware limited partnership (the “Riverstone Blocker Holding Company” and, together with the Riverstone Feeders and any other member of the Riverstone Group executing a
joinder, the “Riverstone Parties”), on the one hand, and Talos Energy Inc., a Delaware corporation (the “Company”), on the other hand. The Apollo Parties and the Riverstone Parties are sometimes referred to
herein as the “Stockholders” and the Stockholders and the Company are sometimes referred to herein individually as a “Party” and collectively as the “Parties”. 

WITNESSETH: 
 WHEREAS, on
November 21, 2017 (the “Signing Date”), (i) Stone Energy Corporation, a Delaware corporation (“Stone Energy”), Sailfish Merger Sub Corporation, a Delaware corporation, the Company, Talos Energy LLC, a
Delaware limited liability company (“Talos Energy LLC”), and Talos Production LLC, a Delaware limited liability company (“Talos Production”), entered into that certain Transaction Agreement (as may be
amended from time to time, the “Transaction Agreement”), (ii) Apollo Management VII, L.P., a Delaware limited partnership and Apollo Commodities Management, L.P., with respect to Series I, a Delaware limited partnership,
Riverstone Energy Partners V, L.P., a Delaware limited partnership and Stone Energy entered into that certain Support Agreement (as may be amended from time to time, the “Support Agreement”), and (iii) Stone Energy, the
Company, Talos Production, Talos Production Finance Inc., and the lenders and noteholders listed on the signature pages and Schedules A through D thereof entered into that certain Debt Exchange Agreement (the “Debt Exchange
Agreement” and collectively with the Support Agreement and the Transaction Agreement, the “Relevant Agreements”); 

WHEREAS, pursuant to the transactions contemplated by the Relevant Agreements, as of the date hereof the Stockholders were issued an aggregate
of 34,118,134 shares of Company Common Stock (as defined herein), consisting of an aggregate of 14,926,683 shares of Company Common Stock issued to the Apollo Parties (the “Initial Apollo Group Shares”) and 19,191,451 shares of
Company Common Stock issued to the Riverstone Parties (the “Initial Riverstone Group Shares” and, together with the Initial Apollo Group Shares, the “Initial Stockholder Shares”); and 

WHEREAS, the Stockholders and the Company desire to enter into this Agreement in order to, inter alia, (i) set forth certain of
their rights, duties and obligations as a result of the transactions contemplated by the Relevant Agreements; (ii) provide for the management, operation and governance of the Company; and (iii) set forth restrictions on certain activities
in respect of the Company Common Stock, corporate governance, and other related corporate matters. 

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

ARTICLE I 

DEFINITIONS 

Section 1.1 Certain Definitions. For purposes of this Agreement, the following terms shall have the meanings specified in this
Section 1.1: 
 “Action” means any demand, action, claim, dispute, suit, countersuit,
arbitration, inquiry, proceeding or investigation by or before any federal, state, local, foreign or international Governmental Entity or any arbitration or mediation tribunal. 

“Affiliate” means, as to any Person, any other Person which, directly or indirectly, controls, or is controlled by, or is
under common control with, such Person; provided, however, that neither the Apollo Parties nor the Riverstone Parties shall be deemed to be Affiliates of the Company or any of its Subsidiaries for purposes of this Agreement and neither
the Company nor any of its Subsidiaries shall be deemed to be Affiliates of the Apollo Parties or the Riverstone Parties for purposes of this Agreement. 

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

“Apollo Blocker Holding Companies” has the meaning set forth in the introduction. 

“Apollo Designee” has the meaning set forth in Section 3.2. 

“Apollo Director” has the meaning set forth in Section 3.2. 

“Apollo Feeders” has the meaning set forth in the introduction. 

“Apollo Group” means the Apollo Parties and their respective Affiliates. For the avoidance of doubt, for the purposes of this
Agreement no member of the Company Group shall be a member of the Apollo Group. 
 “Apollo Parties” has the meaning set
forth in the introduction. 
 “beneficial ownership,” including the correlative terms “beneficially
own,” “beneficial owner,” “own,” and “beneficially owning,” has the meaning ascribed to such term in Section 13(d) of the Exchange Act. 

  
 2 

 “Business Day” means any day that is not a Saturday, Sunday or other day on
which the principal offices of the SEC in Washington, D.C., or banks in the City of Houston in the United States of America are authorized or required by Law to be closed. 

“Bylaws” means the Bylaws of the Company, as amended from time to time. 

“Chancery Court” shall have the meaning set forth in Section 5.1(a). 

“Charter” means the Amended and Restated Certificate of Incorporation of the Company, as amended from time to time. 

“Closing” has the meaning given such term in the Transaction Agreement. 

“Company” has the meaning set forth in the introduction. 

“Company Board” means the board of directors of the Company. 

“Company Common Stock” means the common stock, par value $0. 01 per share, of the Company. 

“Company Confidential Information” has the meaning set forth in Section 4.1(b). 

“Company Group” means the Company, each Subsidiary of the Company from and after the Closing (in each case so long as such
Subsidiary remains a Subsidiary of the Company) and each other Person that is controlled either directly or indirectly by the Company immediately after the Closing (in each case for so long as such Person continues to be controlled either directly
or indirectly by the Company). 
 “Company Independent Director” means each director of the Company who
(i) is an Independent Director and (ii) without limiting (i), (A) is not an Apollo Director or a Riverstone Director, (B) for so long as this Agreement has not terminated with respect to the Apollo Parties, is not a current director,
officer or employee of, any member of the Apollo Group, (C) for so long as this Agreement has not terminated with respect to the Riverstone Parties, is not a current director, officer or employee of, any member of the Riverstone Group,
(D) for so long as this Agreement has not terminated with respect to the Apollo Parties, has been determined by the Governance & Nominating Committee in good faith not to have any relationship with any member of the Apollo Group that
would be material to the director’s ability to be independent from the Apollo Parties, (E) for so long as this Agreement has not terminated with respect to the Riverstone Parties, has been determined by the Governing & Nominating
Committee in good faith not to have any relationship with any member of the Riverstone Group that would be material to the director’s ability to be independent from the Riverstone Parties and (F) is designated by the Governance &
Nominating Committee as a Company Independent Director. 
 “Debt Exchange Agreement” has the meaning set forth in the
preamble. 

  
 3 

 “Disinterested Director” means, with respect to any Related Party Transaction,
each Independent Director of the Company other than any of the following: (i) with respect to any Related Party Transaction in which the Apollo Parties or any member of the Apollo Group has a direct or indirect material interest, each Apollo
Director, (ii) with respect to any Related Party Transaction in which the Riverstone Parties or any member of the Riverstone Group has a direct or indirect material interest, each Riverstone Director, and (iii) with respect to any Related
Party Transaction in which one or more individual directors has a direct or indirect material interest, each such director; provided, however, that (1) with respect to any Related Party Transaction involving any member of the Apollo Group, the
Audit Committee may request that the Riverstone Directors confirm that the Riverstone Group has no direct or indirect material interest and, if the Audit Committee so requests, no Riverstone Director shall be a Disinterested Director unless the
Riverstone Directors have provided such confirmation to the Audit Committee and (2) with respect to any Related Party Transaction involving any member of the Riverstone Group, the Audit Committee may request that the Apollo Directors confirm
that the Apollo Group has no direct or indirect material interest and, if the Audit Committee so requests, no Apollo Director shall be a Disinterested Director unless the Apollo Directors have provided such confirmation to the Audit Committee. 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated
thereunder. 
 “Final Termination Date” has the meaning set forth in Section 2.1. 

“GAAP” means United States generally accepted accounting principles. 

“Governance & Nominating Committee” has the meaning set forth in
Section 3.3(c). 
 “Governmental Entity” means any United States federal, state or local, or
foreign, international or supranational, government, court or tribunal, or administrative, executive, governmental or regulatory or self-regulatory body, agency or authority thereof. 

“Group” means the Apollo Group, the Riverstone Group, the Stockholder Group, or the Company Group, as the context requires.

 “Independent Director” means a director who is independent under the NYSE listing rules. 

“Information” means information, whether or not patentable or copyrightable, in written, oral, electronic or other tangible
or intangible forms, stored in any medium, including studies, reports, records, books, contracts, instruments, surveys, discoveries, ideas, concepts, know-how, techniques, designs, specifications, drawings,
blueprints, diagrams, models, prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes, computer programs or other object and source code versions of computer programs and associated documentation, training materials and
configurations to use and modify such programs, including programmer, administrator, end user and other documentation, marketing plans, customer names, communications by or to attorneys (including attorney-client privileged communications),
memoranda and other materials prepared by attorneys or under their direction (including attorney work product), and other technical, financial, employee or business information or data. 

“Initial Apollo Group Shares” has the meaning set forth in the preamble. 

  
 4 

 “Initial Riverstone Group Shares” has the meaning set forth in the preamble.

 “Initial Stockholder Shares” has the meaning set forth in the preamble. 

“Law” means any federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance,
code, rule, regulation, order, injunction, judgment, decree, ruling or other similar legally enforceable requirement enacted, adopted, promulgated or applied by a Governmental Entity. 

“Necessary Action” means, with respect to any party and a specified result, all actions (to the extent such actions are
permitted by Law and within such party’s control) necessary to cause such result, including (i) voting or providing a written consent or proxy with respect to the Company Common Stock owned by such party, (ii) causing the adoption of
stockholders’ resolutions and amendments to the organizational documents of the Company, (iii) executing agreements and instruments, and (iv) making, or causing to be made, with governmental, administrative or regulatory authorities,
all filings, registrations or similar actions that are required to achieve such result. 
 “Nominating Stockholders” means
the Apollo Parties and the Riverstone Parties. 
 “Non-Talos Designee” has the meaning set forth in
Section 3.2(f). 
 “Non-Talos Director” has the meaning set forth in
Section 3.2(f). 
 “NYSE” means the New York Stock Exchange. 

“Other Stockholder” means a holder of Company Common Stock that is not a member of the Stockholder Group. 

“Party” and collectively, “Parties”, has the meaning set forth in the introduction. 

“Person” means an individual, corporation, partnership, joint venture, association, trust, unincorporated organization,
limited liability company or governmental or other entity. 
 “Related Party Transaction” means any transaction (including
any merger or consolidation of the Company with any other entity or association) or series of related transactions in which the Company or any member of the Company Group is a participant and any Stockholder or member of any Stockholder Group (in
each case, with respect to which this Agreement has not terminated) or any director has a direct or indirect material interest (other than an interest as a stockholder in the Company proportionate to its Company Stock ownership) other than a
transaction or series of related transactions that involves goods, services, property or other consideration valued at less than $120,000 or that is otherwise de minimis in nature. 

“Relevant Agreements” has the meaning set forth in the preamble. 

“Representatives” has the meaning set forth in Section 4.1(b). 

“Riverstone Blocker Holding Company” has the meaning set forth in the introduction. 

  
 5 

 “Riverstone Designee” has the meaning set forth in
Section 3.2(b). 
 “Riverstone Director” has the meaning set forth in
Section 3.2(b). 
 “Riverstone Feeders” has the meaning set forth in the introduction. 

“Riverstone Group” means the Riverstone Parties and their respective Affiliates. For the avoidance of doubt, for the purposes
of this Agreement no member of the Company Group shall be a member of the Riverstone Group. 
 “Riverstone Parties” has the
meaning set forth in the introduction. 
 “SEC” means the Securities and Exchange Commission. 

“Signing Date” has the meaning set forth in the preamble. 

“Standstill Period” has the meaning set forth in Section 4.2(c)(i). 

“Stockholder Group” means the Apollo Group and the Riverstone Group. 

“Stockholders” has the meaning set forth in the introduction. 

“Stone Energy” has the meaning set forth in the preamble. 

“Subsidiary” means, with respect to a subject Person, any other Person of which (i) at least 50% of the securities or
ownership interests having by their terms ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions, (ii) a general partner interest, or (iii) a managing member interest, is directly
or indirectly owned or controlled by the subject Person or by one or more of its Subsidiaries. 
 “Support Agreement” has
the meaning set forth in the preamble. 
 “Talos Designees” has the meaning set forth in
Section 3.2(c). 
 “Talos Directors” has the meaning set forth in
Section 3.2(c). 
 “Talos Energy LLC” has the meaning set forth in the preamble. 

“Talos Non-Aligned Designee” has the meaning set forth in
Section 3.2(c). 
 “Talos Non-Aligned Director” has the
meaning set forth in Section 3.2(c). 
 “Talos Production” has the meaning set forth in the
preamble. 
 “Termination Date” has the meaning set forth in Section 2.1. 

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

  
 6 

 “Transaction Documents” means, collectively, this Agreement, the Relevant
Agreements and the other Ancillary Agreements (as defined in the Transaction Agreement). 
 “Transactions” has the meaning
given such term in the Transaction Agreement. 
 “Transfer” means, directly or indirectly (whether by merger, operation of
Law or otherwise), to sell, transfer, assign, pledge, hypothecate or otherwise dispose of or encumber any direct or indirect economic, voting or other rights in or to any Company Common Stock, including by means of (i) the Transfer of an
interest in a Person that directly or indirectly holds such Company Common Stock or (ii) a hedge, swap or other derivative. “Transferred” and “Transferring” shall have correlative meanings. 

ARTICLE II 
 TERM

 Section 2.1 Term and Termination. This Agreement is effective as of the date hereof and shall terminate automatically
(a) with respect to the Apollo Parties, on the first date that the Apollo Parties, based on their collective ownership of Company Common Stock, would no longer have the right to nominate an Apollo Designee pursuant to
Section 3.2(a) and (b) with respect to the Riverstone Parties, on the first date that the Riverstone Parties, based on their collective ownership of Company Common Stock, would no longer have the right to nominate a
Riverstone Designee pursuant to Section 3.2(b). Notwithstanding the foregoing, the provisions of Section 4.1, Article V and Article VI, and any
claim for breach of the covenants set forth in this Agreement, shall survive the termination of this Agreement. The date that this Agreement terminates with respect to the Apollo Parties or the Riverstone Parties, as applicable, is referred to
herein as such Parties’ “Termination Date.” The first date that this Agreement has terminated with respect to both the Apollo Parties and the Riverstone Parties is referred to herein as the “Final Termination
Date.” 
 ARTICLE III 

CORPORATE GOVERNANCE MATTERS 

Section 3.1 Board Composition. 

(a) The Company Board shall initially consist of ten members comprised of (i) two directors designated by the Apollo Parties,
(ii) two directors designated by the Riverstone Parties, (iii) one Independent Director jointly designated by the Nominating Stockholders, (iv) the Chief Executive Officer of the Company and (v) four directors, including the
chairman of the Company Board, that are Company Independent Directors, initially designated by Stone Energy in accordance with the Transaction Agreement. Until the second annual meeting of stockholders held after the date of this Agreement, the
Company and each Stockholder shall take all Necessary Action to cause the Chairman of the Company Board to be a Company Independent Director. 

(b) The Company and each Stockholder shall take all Necessary Action to cause the directors contemplated by
Section 3.1(a) to be divided into three classes of directors, each of which directors shall serve for staggered three-year terms as follows: 

  
 7 

 (i) the class I directors shall include: one Apollo Director specified by the
Apollo Parties, one Riverstone Director specified by the Riverstone Parties and one Company Independent Director designated by the Company in accordance with the Transaction Agreement; 

(ii) the class II directors shall include: one Company Independent Director designated by the Company in accordance with the
Transaction Agreement, the Chief Executive Officer of the Company and the one Independent Director jointly designated by the Nominating Stockholders pursuant to Section 3.1(a)(iii); and 

(iii) the class III directors shall include: one Apollo Director specified by the Apollo Parties, one Riverstone Director
specified by the Riverstone Parties and two Company Independent Directors designated by the Company in accordance with the Transaction Agreement. 

Notwithstanding the foregoing, the initial term of the class I directors shall expire at the first annual meeting of stockholders of the Company held
following the date of this Agreement. The initial term of the class II directors shall expire at the second annual meeting of stockholders of the Company held following the date of this Agreement. The initial term of the class III directors shall
expire at the third annual meeting of stockholders of the Company held following the date of this Agreement. 
 (c) The Company and each
Stockholder shall take all Necessary Action to cause the Company Board to be comprised of a total of ten authorized directorships. 
 (d) In
the event the Nominating Stockholders have not jointly designated an Independent Director to serve on the Company Board pursuant to Section 3.1(a) prior to the Closing, from and after the Closing, there shall be deemed a
vacancy on the Company Board and the Nominating Stockholders shall, as promptly as practicable, jointly designate an Independent Director to fill such vacancy, as if such vacancy had resulted due to the death, resignation, retirement or
disqualification of a Green Non-Aligned Director pursuant to Section 3.2(h). 

Section 3.2 Director Nomination Rights. 

(a) In connection with any annual or special meeting of the stockholders of the Company at which directors shall be elected (or any action by
stockholder consent to elect directors in lieu of a stockholder meeting), but subject to the allocation of designees among the classes of directors pursuant to Section 3.1, (i) for so long as the Apollo Group collectively owns Company Common
Stock representing at least one of the following: (A) 15% of the outstanding shares of Company Common Stock or (B) 50% of the Initial Apollo Group Shares (as appropriately adjusted for any stock split, subdivision, combination or reclassification of
any shares), the Apollo Parties shall have the right to designate two persons for nomination by the Company Board for election to the Company Board, (ii) upon the Apollo Group ceasing to collectively own Company Common Stock representing at
least one of the following (A) 15% of the outstanding shares of Company Common Stock or (B) 50% of the Initial Apollo Group Shares (as appropriately adjusted for any stock split, subdivision, combination or reclassification of any shares), the
Apollo Parties shall have the right to designate one person for nomination by 

  
 8 

 
the Company Board for election to the Company Board for so long as the Apollo Group collectively owns Company Common Stock representing at least one of the following (x) 5% of the outstanding
shares of Company Common Stock or (y) 50% of the Initial Apollo Group Shares (as appropriately adjusted for any stock split, subdivision, combination or reclassification of any shares) (each person designated pursuant to (i) or (ii), an
“Apollo Designee”), and (iii) upon the Apollo Group ceasing to collectively own Company Common Stock representing at least one of the following (A) 5% of the outstanding shares of Company Common Stock or (B) 50% of the Initial
Apollo Group Shares (as appropriately adjusted for any stock split, subdivision, combination or reclassification of any shares), the Apollo Parties shall thereafter not have the right to designate any Apollo Designee pursuant to this Agreement. Any
Apollo Designee that is serving on the Company Board, together with any director designated in accordance with Section 3.1(a)(i), is an “Apollo Director.” 

(b) In connection with any annual or special meeting of the stockholders of the Company at which directors shall be elected (or any action by
stockholder consent to elect directors in lieu of a stockholder meeting), but subject to the allocation of designees among the classes of directors pursuant to Section 3.1, (i) for so long as the Riverstone Group collectively owns Company
Common Stock representing at least one of the following (A) 15% of the outstanding shares of Company Common Stock or (B) 50% of the Initial Riverstone Group Shares (as appropriately adjusted for any stock split, subdivision, combination or
reclassification of any shares), the Riverstone Parties shall have the right to designate two persons for nomination by the Company Board for election to the Company Board, (ii) upon the Riverstone Group ceasing to collectively own Company
Common Stock representing at least one of the following (A) 15% of the outstanding shares of Company Common Stock or (B) 50% of the Initial Riverstone Group Shares (as appropriately adjusted for any stock split, subdivision, combination or
reclassification of any shares), the Riverstone Parties shall have the right to designate one person for nomination by the Company Board for election to the Company Board for so long as the Riverstone Group collectively owns Company Common Stock
representing at least one of the following (x) 5% of the outstanding shares of Company Common Stock or (y) 50% of the Initial Riverstone Group Shares (as appropriately adjusted for any stock split, subdivision, combination or reclassification of any
shares) (each person designated pursuant to (i) or (ii), a “Riverstone Designee”), and (iii) upon the Riverstone Group ceasing to collectively own Company Common Stock representing at least one of the following (A)
5% of the outstanding shares of Company Common Stock or (B) 50% of the Initial Riverstone Group Shares (as appropriately adjusted for any stock split, subdivision, combination or reclassification of any shares), the Riverstone Parties shall
thereafter not have the right to designate any Riverstone Designee pursuant to this Agreement. Any Riverstone Designee that is serving on the Company Board, together with any director designated in accordance with
Section 3.1(a)(ii), is a “Riverstone Director.” 
 (c) In connection with any
annual or special meeting of the stockholders of the Company at which directors shall be elected (or any action by stockholder consent to elect directors in lieu of a stockholder meeting), but subject to the allocation of designees among the classes
of directors pursuant to Section 3.1, (i) for so long as the Stockholders collectively own Company Common Stock representing at least one of the following: (A) 50% of the outstanding shares of Company Common Stock or (B) at least 80% of
the Initial Stockholder Shares (as appropriately adjusted for any stock split, subdivision, combination or reclassification of any 

  
 9 

 
shares), the Nominating Stockholders shall have the collective right to designate two additional persons for nomination by the Company Board for election to the Company Board, one of which shall
qualify as an Independent Director and the other of whom shall either be the Chief Executive Officer of the Company or shall also qualify as an Independent Director and (ii) upon the Stockholders ceasing to collectively own Company Common Stock
representing at least one of the following: (A) 50% of the outstanding shares of Company Common Stock or (B) at least 80% of the Initial Stockholder Shares (as appropriately adjusted for any stock split, subdivision, combination or
reclassification of any shares), the Nominating Stockholders shall have the collective right to designate one additional person for nomination by the Company Board for election to the Company Board, whom shall either be the Chief Executive Officer
of the Company or qualify as an Independent Director, for so long as the Nominating Stockholders collectively own Company Common Stock representing at least one of the following (x) 40% of the outstanding shares of Company Common Stock or
(y) at least 60% of the Initial Stockholder Shares (as appropriately adjusted for any stock split, subdivision, combination or reclassification of any shares) (each person designated pursuant to this Section 3.2(c), a
“Talos Non-Aligned Designee” and, together with the Apollo Designees and Riverstone Designees, the “Talos Designees”). Upon the Nominating Stockholders ceasing
to collectively own Company Common Stock representing at least one of the following (x) 40% of the outstanding shares of Company Common Stock or (y) at least 60% of the Initial Stockholder Shares (as appropriately adjusted for any stock split,
subdivision, combination or reclassification of any shares), the Nominating Stockholders shall thereafter not have the right to designate any Talos Non-Aligned Designee pursuant to this Agreement. Any Talos Non-Aligned Designee that is serving on the Company Board is a “Talos Non-Aligned Director”, and the Apollo Director(s), Riverstone Director(s) and
Talos Non-Aligned Director(s) are sometimes referred to herein as the “Talos Directors.” 

(d) If at any time, the number of outstanding shares of Company Common Stock owned by the Apollo Group is less than the number necessary to
designate the number of Apollo Designees then on the Company Board, then the applicable number of Apollo Directors then on the Company Board shall, and the Apollo Parties shall take all Necessary Action to cause such Apollo Directors to, immediately
offer to resign from their directorships, effective as of the Company’s next annual meeting of stockholders. If such resignation is then accepted by the vote of a majority of the Company Independent Directors, the Apollo Parties shall take all
Necessary Action to cooperate with the other directors and the Company in removing such Apollo Director(s) as of such time. If at any time, the number of outstanding shares of Company Common Stock owned by the Riverstone Group is less than the
number necessary to designate the number of Riverstone Designees then on the Company Board, then the applicable number of Riverstone Directors then on the Company Board shall, and the Riverstone Parties shall take all Necessary Action to cause such
Riverstone Directors to, immediately offer to resign from their directorships, effective as of the Company’s next annual meeting of stockholders. If such resignation is then accepted by the vote of a majority of the Company Independent
Directors, the Riverstone Parties shall take all Necessary Action to cooperate with the other directors and the Company in removing such Riverstone Director(s) as of such time. Following such resignation of any Apollo Designee or Riverstone Designee
in accordance with this Section 3.2(d), the Governance & Nominating Committee shall have the exclusive right to fill the resulting vacant directorships with persons who qualify as Company Independent Directors to
replace such resigned directors. 

  
 10 

 (e) No Nominating Stockholder shall designate any Talos Designee who it believes does not satisfy
the requirements for service on the Company Board set forth in Section 2.13(e) of the Bylaws or the rules and regulations of the NYSE or applicable Law. Upon the identification of any Talos Designee by a Nominating Stockholder, the
Governance & Nominating Committee shall promptly and in good faith consider each Talos Designee. In the event that the Governance & Nominating Committee determines that the Talos Designee fails to meet such requirements, such Talos
Designee shall not be nominated for election to the Company Board, and the applicable Nominating Stockholder(s) shall have the right to designate an alternative applicable Talos Designee for consideration. Upon their nomination to the Company Board
and from time to time thereafter if reasonably requested by any Nominating Stockholder, the Governance & Nominating Committee shall in good faith consider whether any Talos Designee qualifies as a Company Independent Director. 

(f) In connection with any annual or special meeting of the stockholders of the Company at which directors shall be elected (or any action by
stockholder consent to elect directors in lieu of a stockholder meeting), but subject to the allocation of designees among the classes of directors pursuant to Section 3.1, the Governance & Nominating Committee shall have the right to
designate persons who qualify as Company Independent Directors as nominees of the Company Board for election to each directorship for which a Nominating Stockholder is not entitled to designate a Talos Designee (each such designee, a
“Non-Talos Designee” and each such designee serving on the Company Board and each of the Company Independent Directors initially designated to serve on the Company Board by the Company in accordance with the
Transaction Agreement, a “Non-Talos Director”). 
 (g) The Company shall cause each Talos Designee and
Non-Talos Designee to be included in the Company’s proxy materials and form of proxy disseminated to stockholders in connection with the election of directors (including at any special meeting of stockholders held for the election of
directors), and the Company Board shall recommend such designees for election by the holders of Company Common Stock. The Company shall use its reasonable best efforts to cause the election of each such Talos Designee and Non-Talos Designee,
including soliciting proxies in favor of the election of such persons. 
 (h) Subject to Section 3.2(e), in the
event that any Talos Director shall cease to serve as a director for any reason, so long as the nominee for such person’s position is subject to nomination pursuant to Section 3.2(a), (b) or (c), the
vacancy resulting therefrom shall be filled by the Company Board with a substitute individual, to be designated and appointed by the same Person(s) who designated such Talos Director who has ceased serving as a director on the Company Board. 

(i) From and after the date hereof, in the event of a vacancy on the Company Board upon the death, resignation, retirement, disqualification,
removal from office or other cause of a Non-Talos Director, the Governance & Nominating Committee shall have the sole right to fill such vacancy or designate an individual for nomination for election to the Company Board to fill such
vacancy. 
 (j) So long as the Stockholder Group owns at least a majority of the outstanding shares of Company Common Stock, the Company
shall avail itself of all available “controlled company” exceptions to the corporate governance listing standards of the NYSE, and, thereafter, the Company shall comply with the corporate governance listing standards of the NYSE, including
those relating to the composition of the committees of the Company Board. 

  
 11 

 (k) For the avoidance of doubt, each Nominating Stockholder shall have the right, in its sole
discretion, to waive any and all of the rights granted to it under this Section 3.2, by delivery of written notice to the Company. 

Section 3.3 Committees of the Company Board. The Company and each Stockholder shall take all Necessary Action to cause the
following committees of the Board of Directors to be comprised as set forth in this Section 3.3. 
 (a) Audit
Committee. The Company shall cause the Audit Committee of the Company Board to consist solely of Company Independent Directors. Each of the Nominating Stockholders shall have the right to have a director designated by such Nominating Stockholder
serve as an observer on the Audit Committee (with the right to attend meetings and receive materials provided to members of such committee) for so long as such Nominating Stockholder has the right to designate at least one (1) director for
election to the Company Board. Notwithstanding the foregoing, a director designated as an observer may be excluded from any Audit Committee meeting or portion thereof, and the Company may withhold information from such director, if the Audit
Committee determines in good faith, after consulting with counsel, that the director’s attendance or access to such information would be reasonably likely to result in the loss of privilege with respect to legal advice or if the matter
considered by the Audit Committee involves a Related Party Transaction and the director is not a Disinterested Director with respect thereto. 

(b) Compensation Committee. The Company shall cause the Compensation Committee of the Company Board to consist of three directors,
including at least one Non-Talos Director. Each of the Nominating Stockholders shall have the right to have a director designated by such Nominating Stockholder appointed to serve on the Compensation Committee for so long as such Nominating
Stockholder has the right to designate at least one (1) director for election to the Company Board. 
 (c)
Governance & Nominating Committee. The Company shall cause the Governance & Nominating Committee of the Company Board (“Governance & Nominating Committee”) to consist of
three directors, including at least two Company Independent Directors. Any Nominating Stockholder who does not have a director designated by such Nominating Stockholders serving as a member of the Governance & Nominating Committee
shall have the right to have a director designated by such Nominating Stockholder serve as an observer on the Governance & Nominating Committee (with the right to attend meetings and receive materials provided to members of such committee)
for so long as such Nominating Stockholder has the right to designate at least one (1) director for election to the Company Board. Notwithstanding the foregoing, a director designated as an observer may be excluded from any
Governance & Nominating Committee meeting or portion thereof, and the Company may withhold information from such director, if the Governance & Nominating Committee Committee determines in good faith, after consulting with counsel,
that the director’s attendance or access to such information would be reasonably likely to result in the loss of privilege with respect to legal advice or if the matter considered by the Governance & Nominating Committee involves a
Related Party Transaction and the director is not a Disinterested Director with respect thereto. 

  
 12 

 Section 3.4 Nominating Stockholders Agreement to Vote. From and after the date
hereof, each Stockholder shall: 
 (a) cause their respective shares of Company Common Stock to be present for quorum purposes at any Company
stockholder meeting at which directors shall be elected; 
 (b) cause their respective shares to be voted in favor of the election of each
Talos Designee designated and nominated for election at such meeting in accordance with this Agreement; 
 (c) with respect to each nominee
for election other than a Talos Designee, cause their respective shares to be voted, to the fullest extent practicable, in the respective Stockholder’s sole discretion either (A) in a manner that is proportionate to the manner in which all
shares of Company Common Stock owned by Other Stockholders are voted with respect to such nominees, so that, for any such nominee, the shares of Company Common Stock owned by a Stockholder (or its Affiliates) shall reflect voting results with
respect to “shares voted for” “shares voted against” “shares abstained” “shares withheld” and “broker non-votes” proportionate to the aggregate voting results
for shares of Company Common Stock that are owned by Other Stockholders and that are deemed present in person or by proxy at such stockholder meeting, or (B) in a manner that is consistent with the recommendation of the Governance &
Nominating Committee; and 
 (d) cause their respective shares to be voted against any amendment to the following provisions of the Charter
or Bylaws that has not been approved by a majority of the Company Independent Directors: Sections 5.1, 5.2, 5.3, 5.4, 5.5, 5.6, 5.7 and 13.1 of the Charter and Sections 3.1(b), 3.2, 4.4, 4.5 and 5.6 of the Bylaws. 

Section 3.5 Meeting of Stockholders. Except with respect to the filling of vacancies on the Company Board in accordance with
Section 3.2, the Company and each Stockholder shall take all Necessary Action to conduct the election or removal of Company Independent Directors only at a meeting of stockholders and not by consent in lieu of a stockholder
meeting. Except with respect to the filling of vacancies on the Company Board in accordance with Section 3.2, each Stockholder shall refrain from, and shall cause its Affiliates to refrain from, executing a consent in lieu
of a stockholder meeting for the purpose of electing or removing Company Independent Directors. 
 Section 3.6 Related Party
Transactions. The Company shall not enter into or effect any Related Party Transaction unless such transaction has been approved by a majority of the Disinterested Directors or a majority of the Audit Committee. The Stockholders shall
not, and shall cause their respective controlled Affiliates not to, take any action to cause the Company to enter into or effect a Related Party Transaction unless such transaction has been approved by a majority of the Disinterested Directors or a
majority of the Audit Committee. 

  
 13 

 ARTICLE IV 

OTHER AGREEMENTS 

Section 4.1 Sharing of Information; Confidentiality. 

(a) To the extent permitted by antitrust, competition or any other applicable Law, each Stockholder and the Company agrees and acknowledges
that the Apollo Directors and Riverstone Directors may share Company Confidential Information with the Apollo Parties and the Riverstone Parties, respectively, subject to the provisions of Section 4.1(b) and
Section 4.1(c), and except to the extent sharing such information would reasonably be expected to in a loss of privilege with respect to legal advice. 

(b) For a period of one year following the Termination Date for any Party or such longer period pursuant to the last sentence of this
Section 4.1(a), subject to Section 4.1(d) and except as contemplated by this Agreement or any Transaction Document, such Party shall not, and shall cause its Affiliates and its and their respective
officers, directors, employees, and other agents and representatives (collectively, “Representatives”) not to, directly or indirectly, disclose, reveal, divulge or communicate to any Person, other than its Representatives or its
Affiliates who reasonably need to know such information in providing services to such Party or its Affiliates, or its limited partners, members or shareholders, any Company Confidential Information. Each Party shall, and shall cause its Affiliates
to, use the same degree of care to prevent and restrain the unauthorized disclosure of the Company Confidential Information by any of their Representatives as they currently use for their own confidential information of a like nature. For purposes
of this Section 4.1(a), any Information, material or documents relating to the business currently or formerly conducted, or proposed to be conducted, by any member of the Company Group furnished to or in possession of any
member of the Apollo Group or the Riverstone Group, irrespective of the form of communication, and all notes, analyses, compilations, forecasts, data, translations, studies, memoranda or other documents prepared by any member of either such Group or
their respective officers, directors and Affiliates, that contain or otherwise reflect such information, material or documents is hereinafter referred to as “Company Confidential Information.” “Company Confidential
Information” does not include, and there shall be no obligation hereunder with respect to, information that (i) is or becomes generally available to the public, other than as a result of a use or disclosure by any member of such Group
not otherwise permissible hereunder, (ii) such Party can demonstrate was or became available to any member of such Group from a source other than the Company or its Affiliates or (iii) is developed independently by a member of such Group
without reference to the Company Confidential Information; provided, however, that, in the case of clause (ii), the source of such information was not known by such member of such Group to be bound by a confidentiality agreement with,
or other contractual, legal or fiduciary obligation of confidentiality to, any member of the Company Group with respect to such information. 

(c) Without limiting Section 4.1(a), from the date hereof until the applicable Termination Date, the Stockholders
shall, and shall cause their Affiliates to, use the same degree of care to prevent and restrain the unauthorized disclosure of the Company Confidential Information by them and their Representatives, limited partners, members or shareholders as they
currently use for their own confidential information of a like nature; provided that, for the avoidance of doubt, following the Termination Date the disclosure and use of Company Confidential Information shall be governed by
Section 4.1(a). 

  
 14 

 (d) If any Stockholder or its Affiliate is requested or required (by oral question,
interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) by any Governmental Entity or pursuant to applicable Law or stock exchange requirements to disclose or provide any Company Confidential
Information (other than with respect to any such information furnished pursuant to the provisions of Article V of this Agreement), the Person receiving such request or demand, or so required by applicable Law or stock
exchange requirements, shall use all reasonable efforts to provide the Company with written notice of such request, demand or requirement as promptly as practicable under the circumstances so that the Company shall have an opportunity to seek an
appropriate protective order. The Stockholders agree to take, and cause their Representatives to take, at the Company’s expense, all other reasonable steps necessary to obtain confidential treatment by the Stockholders. Subject to the
foregoing, the Stockholders may thereafter disclose or provide any Company Confidential Information to the extent required by such Law or stock exchange requirement (as so advised by counsel) or by lawful process or such Governmental Entity. 

Section 4.2 Restrictions on Transferability and Acquisitions. 

(a) Apollo Lockup. For a period of 12 months beginning on the date hereof, the Apollo Parties shall not, and shall not permit any member
of the Apollo Group to, Transfer or agree to Transfer any shares of Company Common Stock to any Person that is not an Affiliate of the Apollo Group (other than to a member of the Riverstone Group), unless approved by a majority of the Company
Independent Directors; provided, however, that the Transfer restrictions in this Section 4.2(a) shall cease to apply to 50% of the Initial Apollo Group Shares (as appropriately adjusted for any stock split, subdivision,
combination or reclassification of any shares and as designated by the Apollo Parties) on the six-month anniversary of the date hereof and shall cease to apply to an additional 25% of the Initial Apollo Group
Shares as appropriately adjusted for any stock split, subdivision, combination or reclassification of any shares and as designated by the Apollo Parties) on the nine-month anniversary of the date hereof. 

(b) Riverstone Lockup. For a period of 12 months beginning on the date hereof, the Riverstone Parties shall not, and shall not
permit any member of the Riverstone Group to, Transfer or agree to Transfer any shares of Company Common Stock to any Person that is not an Affiliate of the Riverstone Group (other than to a member of the Apollo Group), unless approved by a majority
of the Company Independent Directors; provided, however, that the Transfer restrictions in this Section 4.2(a) shall cease to apply to 50% of the Initial Riverstone Group Shares (as appropriately adjusted for any stock
split, subdivision, combination or reclassification of any shares and as designated by the Riverstone Parties) on the six-month anniversary of the date hereof and shall cease to apply to an additional 25% of
the Initial Riverstone Group Shares as appropriately adjusted for any stock split, subdivision, combination or reclassification of any shares and as designated by the Riverstone Parties) on the nine-month anniversary of the date hereof. 

  
 15 

 (c) Standstill. 

(i) For a period of two years beginning on the date hereof (the “Standstill Period”), the Stockholders shall
not, and shall cause their Representatives and controlled Affiliates not to, directly or indirectly, in any manner, (A) effect or seek, offer or propose (whether publicly or otherwise) to effect, or announce any intention to effect or otherwise
participate in, any “solicitation” of “proxies” (as such terms are used in the proxy rules of the SEC) to vote any Company Common Stock in connection with the election of the Non-Talos Directors or the removal of any Non-Talos
Director, (B) solicit, knowingly encourage or knowingly facilitate, directly or indirectly, any third party to engage in any such solicitation, (C) make any public statement (or statement to an Other Stockholder) in support of any such
third-party solicitation or against any of the Company’s director nominees, (D) form, join or in any way participate in a “group” (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to any Company
Common Stock or (E) call, request the calling of, or otherwise seek or assist in the calling of a special meeting of the stockholders of the Company; provided that subclauses (D) and (E) shall only apply if taken in furtherance
of the actions described in subclauses (A), (B) and (C) of this subsection (i). 
 (d) None of the Stockholders or any member of a
Stockholder Group shall Transfer any shares of Company Common Stock to any other Stockholder or member of a Stockholder Group unless such transferee executes a joinder to this Agreement, in form and substance reasonably acceptable to the Company, to
become a party to this Agreement and be subject to the restrictions and obligations applicable to the Person effecting the Transfer (or, in the case of a Transfer of Company Common Stock between members of the Apollo Group and the Riverstone Group,
to be subject to the restrictions and obligations applicable to the other members of the receiving party’s Group) and otherwise become a party for all purposes of this Agreement; provided that no such Transfer shall relieve the
Stockholders or any Person effecting the Transfer from its obligations under this Agreement. Any Transfer in violation of this Agreement shall be void ab initio and of no force or effect. 

(e) Until the first anniversary of the date of this Agreement, none of the Stockholders or any member of a Stockholder Group shall, without the
prior approval of a majority of the Company Independent Directors, Transfer any shares of Company Common Stock pursuant to a block sale, market transaction or private sale in which, to the knowledge of any of the Nominating Stockholders or any
member of a Stockholder Group, would result in a single purchaser (together with its Affiliates and associates) acquiring beneficial ownership of such number of shares of Company Common Stock which, when combined with the number of shares
beneficially owned thereby immediately prior to such sale or transaction, will cause such purchaser to beneficially own in excess of 35% of the Company Common Stock at such time, unless such purchaser agrees in writing to be bound by substantially
the same provisions as the Stockholders are bound by pursuant to this Agreement. 
 (f) Each certificate representing shares of Company
Common Stock held of record by the Stockholders or any member of a Stockholder Group shall bear the following legend on the face thereof: 

  
 16 

 “THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON VOTING AND TRANSFER AND
CERTAIN OTHER LIMITATIONS SET FORTH IN THE STOCKHOLDERS’ AGREEMENT DATED AS OF MAY 10, 2018 AMONG TALOS ENERGY INC., AP TALOS ENERGY LLC, AP TALOS ENERGY DEBTCO LLC, AP OVERSEAS TALOS HOLDINGS PARTNERSHIP, LLC, AIF VII (AIV), L.P., ANRP DE
HOLDINGS, L.P., RIVERSTONE TALOS ENERGY EQUITYCO LLC, RIVERSTONE TALOS ENERGY DEBTCO LLC, AND RIVERSTONE V FT CORP HOLDINGS, L.P., COPIES OF WHICH ARE ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY AND SHALL BE PROVIDED TO A STOCKHOLDER OF THE
COMPANY FREE OF CHARGE UPON A REQUEST THEREFOR.” 
 The legend set forth herein shall remain on all certificates representing such
shares until the applicable Termination Date. 
 Section 4.3 Bylaws. The Company and each Stockholder shall take all Necessary
Action to cause the Bylaws to include provisions requiring that: (A) the Governance & Nominating Committee shall have the full power and authority of the Company Board to take any actions required or permitted to be taken by such
committee pursuant to this Agreement; (B) a majority of the members of the Governance & Nominating Committee shall qualify as Company Independent Directors; (C) any action of the Governance & Nominating Committee may be
approved by a simple majority of the persons then serving as members of such committee, and no greater vote shall be imposed by the Company Board or the Bylaws; (D) all members of the Audit Committee must qualify as Company Independent
Directors; (E) each Related Party Transaction that is not approved by the Audit Committee or a majority of the Disinterested Directors shall require the approval of all of the directors then in office; and (F) in addition to any vote
required by the governing documents of the Company, the Company Board shall not approve or adopt any Bylaw contrary to the foregoing without the approval of either all of the directors then in office or a majority of the Company Independent
Directors. 
 ARTICLE V 

DISPUTE RESOLUTION 

Section 5.1 General Provisions. 

(a) Each of the Parties (i) irrevocably consents to submit itself to the personal jurisdiction of the Court of Chancery of the State of
Delaware (the “Chancery Court”) or, if, but only if, the Chancery Court lacks subject matter jurisdiction, any federal court located in the State of Delaware with respect to any dispute arising out of, relating to or in connection
with this Agreement or any of the transactions contemplated by this Agreement, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (iii) agrees that it
will not bring any action arising out of, relating to or in connection with this Agreement or any of the transactions contemplated by this Agreement in any court other than the courts of the State of Delaware, as described above, and
(iv) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION RELATED TO OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. Nothing in this Section 5.1 shall prevent any Party from
bringing an action or proceeding in any jurisdiction to enforce any judgment of the Chancery Court or any federal court located in the State of Delaware, as applicable. The Parties hereby agree that mailing of process or other papers in connection
with such action, suit, or proceeding in the manner provided by Section 6.3 or in such other manner as may be permitted by Law shall be valid and sufficient service thereof. 

  
 17 

 (b) The Parties agree that irreparable damage would occur and that the Parties would not have any
adequate remedy at Law in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Each Party accordingly agrees that, in the event of any breach or threatened
breach by any other Party of any covenant or obligation contained in this Agreement, the non-breaching Party shall be entitled (in addition to any other remedy that may be available to it whether in Law or
equity, including monetary damages) to (i) a decree or order of specific performance to enforce the observance and performance of such covenant or obligation, and (ii) an injunction restraining such breach or threatened breach. In
circumstances where a Party is obligated to take action under this Agreement and such Party fails to take such action each of the Parties expressly acknowledges and agrees that the other Party shall have suffered irreparable harm, that monetary
damages will be inadequate to compensate such other Party, and that such other Party shall be entitled to enforce specifically the breaching Party’s obligations under this Agreement. Each Party accordingly agrees not to raise any objection to
the availability of the equitable remedy of specific performance to prevent or restrain breaches or threatened breaches of, or to enforce compliance with, the covenants and obligations of such Party under this Agreement all in accordance with the
terms of this Section 5.1(b). Each Party further agrees that no other Party and no other Person shall be required to obtain, furnish, or post any bond or similar instrument in connection with or as a condition to obtaining
any remedy referred to in this Section 5.1(b), and each Party irrevocably waives any right it may have to require the obtaining, furnishing, or posting of any such bond or similar instrument. 

ARTICLE VI 

MISCELLANEOUS 

Section 6.1 Corporate Power. 

(a) Each Stockholder represents on behalf of itself and the Company represents on behalf of itself, as follows: 

(i) each such Person has the requisite corporate or other power and authority and has taken all corporate or other action
necessary in order to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby; and 

(ii) this Agreement has been duly executed and delivered by it and constitutes a valid and binding agreement of it enforceable
in accordance with the terms thereof. 
 Section 6.2 Governing Law. This Agreement shall be governed by and construed and
interpreted in accordance with the Laws of the State of Delaware, regardless of any Laws or legal principles that might otherwise govern under the applicable principles of conflicts of law thereof. 

  
 18 

 Section 6.3 Notices. All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be given (and, in the case of delivery in person or by overnight mail, shall be deemed to have been duly given upon receipt) by delivery in person or overnight mail to the respective parties or delivery by
electronic mail transmission (providing confirmation of transmission) to the respective Parties. Any notice sent by electronic mail transmission shall be deemed to have been given and received at the time of confirmation of transmission. Any notice
sent by electronic mail transmission shall be followed reasonably promptly with a copy delivered by overnight mail. All notices, requests, claims, demands and other communications hereunder shall be addressed as follows, or to such other address or
email address for a Party as shall be specified in a notice given in accordance with this Section 6.3: 
 If to the
Apollo Parties, to: 
 AP Talos Energy LLC 

9 West 57th Street 

New York, NY 10019 
 Attention:
Gregory Beard 
 Facsimile: (646) 514-5668 

Email: gbeard@apollolp.com 
 and

 AP Talos Energy Debtco LLC 

9 West 57th Street 

New York, NY 10019 
 Attention:
Gregory Beard 
 Facsimile: (646) 514-5668 

Email: gbeard@apollolp.com 
 With
a copy to: 
 Apollo Management VII, L.P. 

9 West 57th Street 
 New York, NY
10019 
 Attention: Laurie Medley 

Facsimile: (646) 607-0528 

Email: lmedley@apollolp.com 
 and

 Apollo Commodities Management, L.P. with respect to Series I 

9 West 57th Street 
 New York, NY
10019 
 Attention: Laurie Medley 

Facsimile: (646) 607-0528 

Email: lmedley@apollolp.com 

  
 19 

 with a further copy to (which shall not constitute notice): 

Vinson & Elkins LLP 
 666
Fifth Avenue, 26th Floor 
 New York, NY 10103 

Attention:         James Fox 

                        
 Dan Komarek 
 Facsimile: (917) 849-5366 

Email:              jfox@velaw.com 

                        
dkomarek@velaw.com 
 If to the Riverstone Parties, to: 

Riverstone Talos Energy Equityco LLC 

c/o Riverstone Holdings LLC 
 712
Fifth Avenue, 36th Floor 
 New York, NY 10019 

Attention: General Counsel 

Facsimile: (888) 801-9301 

Email: legal@riverstonellc.com 

and 
 Riverstone Talos Energy
Debtco LLC 
 c/o Riverstone Holdings LLC 

712 Fifth Avenue, 36th Floor 
 New
York, NY 10019 
 Attention: General Counsel 

Facsimile: (888) 801-9301 

Email: legal@riverstonellc.com 

with a further copy to (which shall not constitute notice): 

Vinson & Elkins LLP 
 666
Fifth Avenue, 26th Floor 
 New York, NY 10103 

Attention:         James Fox 

                        
 Dan Komarek 
 Facsimile: (917) 849-5366 

Email:              jfox@velaw.com 

                        
dkomarek@velaw.com 

  
 20 

 If to the Company, to: 

Talos Energy Inc. 
 500 Dallas
St., Suite 2000 
 Houston, Texas 77002 

Attention: General Counsel 

Facsimile: (713) 351-4100 

Email: bmoss@talosenergyllc.com 

with a copy to (which copy shall not constitute notice): 

Vinson & Elkins L.L.P. 

1001 Fannin St., Suite 2500 

Houston, Texas 77002 
 Attention:
        Stephen M. Gill 

                        
 Lande A. Spottswood 
 Facsimile: (713) 615-5956 

Email: sgill@velaw.com 

            lspottswood@velaw.com 

Section 6.4 Severability. If any provision of this Agreement shall be held to be illegal, invalid or unenforceable under any
applicable Law, then such contravention or invalidity shall not invalidate the entire Agreement. Such provision shall be deemed to be modified to the extent necessary to render it legal, valid and enforceable, and if no such modification shall
render it legal, valid and enforceable, then this Agreement shall be construed as if not containing the provision held to be invalid, and the rights and obligations of the Parties shall be construed and enforced accordingly. 

Section 6.5 Entire Agreement. This Agreement (including the annexes, exhibits and letters hereto) and the other Relevant
Agreements constitute the entire agreement, and supersede all other prior agreements and understandings (both written and oral), among the Parties with respect to the subject matter hereof and thereof. 

Section 6.6 Assignment; No Third-Party Beneficiaries. This Agreement shall not be assigned by any Party without the prior written
consent of the other Party. This Agreement is for the sole benefit of the Parties to this Agreement and the members of their respective Group and their permitted successors and assigns and nothing in this Agreement, express or implied, is intended
to or shall confer upon any other Person or entity (other than the Company Independent Directors pursuant to Section 6.7 or Section 6.10) any legal or equitable right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement. 
 Section 6.7 Amendment; Waiver. No provision of this Agreement may be
amended or modified except by a written instrument signed by all the Parties to this Agreement; provided that any amendment or modification of this Agreement shall require the prior written approval of the Company Independent Directors. Either Party
may, in its sole discretion, waive any and all rights granted to it in this Agreement; provided, that no waiver by any Party of any provision 

  
 21 

 
hereof shall be effective unless explicitly set forth in writing and executed by the Party so waiving; provided, further, that any waiver of any or all of the Company’s rights granted under
this Agreement shall require the prior written approval of the Company Independent Directors. The waiver by any Party of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other subsequent breach. 

Section 6.8 Interpretations. When a reference is made in this Agreement to an Article, Section or Schedule, such reference shall
be to an Article, Section or Schedule to this Agreement unless otherwise indicated. The words “include,” “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without
limitation.” Any references in this Agreement to “the date hereof” refers to the date of execution of this Agreement. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. References to “this Agreement,” “hereof,” “herein,” and “hereunder” refer to this Agreement as a whole and not to any particular provision of this
Agreement and include any schedules, annexes, exhibits or other attachments to this Agreement. The word “or” shall be deemed to mean “and/or.” All terms defined in this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to
the feminine and neuter genders of such term. Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended,
modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated
therein. References to a Person are also to its permitted successors and assigns. The Parties have participated jointly in the negotiation and drafting of this Agreement with the assistance of counsel and other advisors and, in the event an
ambiguity or question of intent or interpretation arises, this Agreement shall be construed as jointly drafted by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any
provision of this Agreement or interim drafts of this Agreement. 
 Section 6.9 Counterparts; Electronic Transmission of
Signatures. This Agreement may be executed in any number of counterparts and by different Parties in separate counterparts, and delivered by means of electronic mail transmission or otherwise, each of which when so executed and delivered shall
be deemed to be an original and all of which when taken together shall constitute one and the same agreement. 
 Section 6.10
Enforceable by the Company Independent Directors. All of the Company’s rights under this Agreement and the other Transaction Documents may be enforced exclusively by the Company Independent Directors; provided that nothing in this
Agreement shall require the Company Independent Directors to act on behalf of, or enforce any rights of, the Company. Any recovery in connection with an Action brought by the Company Independent Directors hereunder or thereunder shall be for the
proportionate benefit of all Other Stockholders. 

  
 22 

 Section 6.11 Apollo Representative. Each Apollo Party, by executing and delivering
this Agreement or a joinder hereto, hereby appoints each Apollo Feeder as the representative to act on behalf of the Apollo Parties for all purposes under this Agreement (the “Apollo Representative”), including the exercise of all
rights of the Apollo Parties hereunder and the making of all elections and decisions to be made by the Apollo Parties pursuant to this Agreement. The Company hereby acknowledges and agrees that the Apollo Representative shall have the power and
authority to act on behalf of the Apollo Parties pursuant to this Agreement and that the act of the Apollo Representative shall constitute the act of each Apollo Party for all purposes under this Agreement. The Apollo Representative may assign the
power and authority granted to the Apollo Representative pursuant to this Section 6.11 to any other Apollo Party, who shall thereafter serve as the Apollo Representative. The Company shall be entitled to rely on any act or
writing executed by the Apollo Representative. 
 Section 6.12 Riverstone Representative. Each Riverstone Party, by
executing and delivering this Agreement or a joinder hereto, hereby appoints each Riverstone Feeder as the representative to act on behalf of the Riverstone Parties for all purposes under this Agreement (the “Riverstone
Representative”), including the exercise of all rights of the Riverstone Parties hereunder and the making of all elections and decisions to be made by the Riverstone Parties pursuant to this Agreement. The Company hereby acknowledges and
agrees that the Riverstone Representative shall have the power and authority to act on behalf of the Riverstone Parties pursuant to this Agreement and that the act of the Riverstone Representative shall constitute the act of each Riverstone Party
for all purposes under this Agreement. The Riverstone Representative may assign the power and authority granted to the Riverstone Representative pursuant to this Section 6.12 to any other Riverstone Party, who shall
thereafter serve as the Riverstone Representative. The Company shall be entitled to rely on any act or writing executed by the Riverstone Representative. 

[The remainder of this page has been intentionally left blank; the next page is the signature page.] 

 

  
 23 

 IN WITNESS WHEREOF, each party hereto has caused this Agreement to be executed as of the date
first written above by its respective officer thereunto duly authorized, all as of the date first written above. 
  

			
	TALOS ENERGY INC.
		
	By:	 	 /s/ Timothy S. Duncan

	Name:	 	Timothy S. Duncan
	Title:	 	President and Chief Executive Officer
	
	AP TALOS ENERGY LLC
	a Delaware limited liability company
		
	By:	 	 /s/ Christopher R. Gruszczynski

	Name:	 	Christopher R. Gruszczynski
	Title:	 	Vice President
	
	AP TALOS ENERGY DEBTCO LLC
	a Delaware limited liability company
		
	By:	 	 /s/ Christopher R. Gruszczynski

	Name:	 	Christopher R. Gruszczynski
	Title:	 	Vice President

 [Signature Page to Stockholders’ Agreement] 

 
			
	AP OVERSEAS TALOS HOLDINGS PARTNERSHIP, LLC
	a Delaware limited liability company
		
	By:	 	Apollo Management VII, L.P.,
		 	its manager
		
	By:	 	AIF VII Management, LLC,
		 	its general partner
		
	By:	 	 /s/ Laurie D. Medley

	Name:	 	Laurie D. Medley
	Title:	 	Vice President and Assistant Secretary
		
	By:	 	Apollo Commodities Management, L.P.,
with respect to Series I,
		 	its manager
		
	By:	 	Apollo Commodities Management GP, LLC, its general partner
		
	By:	 	 /s/ Laurie D. Medley

	Name:	 	Laurie D. Medley
	Title:	 	Vice President and Assistant Secretary

 [Signature Page to Stockholders’ Agreement] 

 
			
	
	AIF VII (AIV), L.P.
	a Delaware limited partnership
		
	By:	 	Apollo Advisors VII (APO DC), L.P.,
		 	its general partner
		
	By:	 	Apollo Advisors VII (APO DC-GP), LLC,
		 	its general partner
		
	By:	 	 /s/ Laurie D. Medley

	Name:	 	Laurie D. Medley
	Title:	 	Vice President and Assistant Secretary

 [Signature Page to Stockholders’ Agreement] 

 
			
	ANRP DE HOLDINGS, L.P.
	a Delaware limited partnership
		
	By:	 	Apollo ANRP Advisors (APO DC), L.P.,
		 	its general partner
		
	By:	 	Apollo Advisors VII (APO DC-GP), LLC,
		 	its general partner
		
	By:	 	 /s/ Laurie D. Medley

	Name:	 	Laurie D. Medley
	Title:	 	Vice President and Assistant Secretary

 [Signature Page to Stockholders’ Agreement] 

 
			
	RIVERSTONE TALOS ENERGY EQUITYCO LLC
		
	By:	 	 /s/ Peter Haskopoulos

	Name:	 	Peter Haskopoulos
	Title:	 	Managing Director
	
	RIVERSTONE TALOS ENERGY DEBTCO LLC
		
	By:	 	 /s/ Peter Haskopoulos

	Name:	 	Peter Haskopoulos
	Title:	 	Managing Director
	
	RIVERSTONE V FT CORP HOLDINGS, L.P.
	a Delaware limited partnership
		
	By:	 	Riverstone Energy Partners V, L.P.,
		 	its general partner
		
	By:	 	Riverstone Energy GP V, LLC
		 	its general partner
		
	By:	 	 /s/ Peter Haskopoulos

	Name:	 	Peter Haskopoulos
	Title:	 	Managing Director

 [Signature Page to Stockholders’ Agreement]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00283-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00283-of-00352.parquet"}]]