UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No.    )*

 

 

CALLON PETROLEUM COMPANY

(Name of Issuer)

Common Stock, par value $0.01 per share

(Title of Class of Securities)

13123X508

(CUSIP Number)

John G. Finley

Blackstone Inc.

345 Park Avenue

New York, New York 10154

Tel: (212) 583-5000

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

October 1, 2021

(Date of Event Which Requires Filing of this Statement)

 

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.  ☐

 

 

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

 

 

*

The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

 


CUSIP No. 13123X508

 

  1    

  NAMES OF REPORTING PERSONS

 

  Primexx Energy Partners, Ltd.

  2    

  CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)

  (a)  ☐        (b)  ☒

 

  3    

  SEC USE ONLY

 

  4    

  SOURCE OF FUNDS (SEE INSTRUCTIONS)

 

  OO

  5    

  CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)

 

  ☐

  6    

  CITIZENSHIP OR PLACE OF ORGANIZATION

 

  Texas

NUMBER OF

SHARES

  BENEFICIALLY  

OWNED BY

EACH

REPORTING

PERSON

WITH

    7     

  SOLE VOTING POWER

 

  4,440,934

  8     

  SHARED VOTING POWER

 

  0

  9     

  SOLE DISPOSITIVE POWER

 

  6,424,341

  10     

  SHARED DISPOSITIVE POWER

 

  0

11    

  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

  6,424,341

12    

  CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)

 

  ☐

13    

  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

  11.7%

14    

  TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)

 

  PN


CUSIP No. 13123X508

 

  1    

  NAMES OF REPORTING PERSONS

 

  Primexx Energy Corporation

  2    

  CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)

  (a)  ☐        (b)  ☒

 

  3    

  SEC USE ONLY

 

  4    

  SOURCE OF FUNDS (SEE INSTRUCTIONS)

 

  OO

  5    

  CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)

 

  ☐

  6    

  CITIZENSHIP OR PLACE OF ORGANIZATION

 

  Texas

NUMBER OF

SHARES

  BENEFICIALLY  

OWNED BY

EACH

REPORTING

PERSON

WITH

    7     

  SOLE VOTING POWER

 

  4,440,934

  8     

  SHARED VOTING POWER

 

  0

  9     

  SOLE DISPOSITIVE POWER

 

  6,424,341

  10     

  SHARED DISPOSITIVE POWER

 

  0

11    

  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

  6,424,341

12    

  CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)

 

  ☐

13    

  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

  11.7%

14    

  TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)

 

  CO


CUSIP No. 13123X508

 

  1    

  NAMES OF REPORTING PERSONS

 

  BPP Energy Partners LLC

  2    

  CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)

  (a)  ☐        (b)  ☒

 

  3    

  SEC USE ONLY

 

  4    

  SOURCE OF FUNDS (SEE INSTRUCTIONS)

 

  OO

  5    

  CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)

 

  ☐

  6    

  CITIZENSHIP OR PLACE OF ORGANIZATION

 

  Delaware

NUMBER OF

SHARES

  BENEFICIALLY  

OWNED BY

EACH

REPORTING

PERSON

WITH

    7     

  SOLE VOTING POWER

 

  1,813,307

  8     

  SHARED VOTING POWER

 

  0

  9     

  SOLE DISPOSITIVE POWER

 

  2,417,198

  10     

  SHARED DISPOSITIVE POWER

 

  0

11    

  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

  2,417,198

12    

  CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)

 

  ☐

13    

  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

  4.4%

14    

  TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)

 

  OO


CUSIP No. 13123X508

 

  1    

  NAMES OF REPORTING PERSONS

 

  BPP HoldCo LLC

  2    

  CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)

  (a)  ☐        (b)  ☒

 

  3    

  SEC USE ONLY

 

  4    

  SOURCE OF FUNDS (SEE INSTRUCTIONS)

 

  OO

  5    

  CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)

 

  ☐

  6    

  CITIZENSHIP OR PLACE OF ORGANIZATION

 

  Delaware

NUMBER OF

SHARES

  BENEFICIALLY  

OWNED BY

EACH

REPORTING

PERSON

WITH

    7     

  SOLE VOTING POWER

 

  6,254,241

  8     

  SHARED VOTING POWER

 

  0

  9     

  SOLE DISPOSITIVE POWER

 

  8,841,539

  10     

  SHARED DISPOSITIVE POWER

 

  0

11    

  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

  8,841,539

12    

  CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)

 

  ☐

13    

  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

  16.0%

14    

  TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)

 

  OO


CUSIP No. 13123X508

 

  1    

  NAMES OF REPORTING PERSONS

 

  BX Primexx Topco LLC

  2    

  CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)

  (a)  ☐        (b)  ☒

 

  3    

  SEC USE ONLY

 

  4    

  SOURCE OF FUNDS (SEE INSTRUCTIONS)

 

  OO

  5    

  CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)

 

  ☐

  6    

  CITIZENSHIP OR PLACE OF ORGANIZATION

 

  Delaware

NUMBER OF

SHARES

  BENEFICIALLY  

OWNED BY

EACH

REPORTING

PERSON

WITH

    7     

  SOLE VOTING POWER

 

  6,254,241

  8     

  SHARED VOTING POWER

 

  0

  9     

  SOLE DISPOSITIVE POWER

 

  8,841,539

  10     

  SHARED DISPOSITIVE POWER

 

  0

11    

  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

  8,841,539

12    

  CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)

 

  ☐

13    

  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

  16.0%

14    

  TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)

 

  OO


CUSIP No. 13123X508

 

  1    

  NAMES OF REPORTING PERSONS

 

  BCP VII/BEP II Holdings Manager L.L.C.

  2    

  CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)

  (a)  ☐        (b)  ☒

 

  3    

  SEC USE ONLY

 

  4    

  SOURCE OF FUNDS (SEE INSTRUCTIONS)

 

  OO

  5    

  CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)

 

  ☐

  6    

  CITIZENSHIP OR PLACE OF ORGANIZATION

 

  Delaware

NUMBER OF

SHARES

  BENEFICIALLY  

OWNED BY

EACH

REPORTING

PERSON

WITH

    7     

  SOLE VOTING POWER

 

  6,254,241

  8     

  SHARED VOTING POWER

 

  0

  9     

  SOLE DISPOSITIVE POWER

 

  8,841,539

  10     

  SHARED DISPOSITIVE POWER

 

  0

11    

  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

  8,841,539

12    

  CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)

 

  ☐

13    

  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

  16.0%

14    

  TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)

 

  OO


CUSIP No. 13123X508

 

  1    

  NAMES OF REPORTING PERSONS

 

  Blackstone Energy Management Associates II L.L.C.

  2    

  CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)

  (a)  ☐        (b)  ☒

 

  3    

  SEC USE ONLY

 

  4    

  SOURCE OF FUNDS (SEE INSTRUCTIONS)

 

  OO

  5    

  CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)

 

  ☐

  6    

  CITIZENSHIP OR PLACE OF ORGANIZATION

 

  Delaware

NUMBER OF

SHARES

  BENEFICIALLY  

OWNED BY

EACH

REPORTING

PERSON

WITH

    7     

  SOLE VOTING POWER

 

  0

  8     

  SHARED VOTING POWER

 

  6,254,241

  9     

  SOLE DISPOSITIVE POWER

 

  0

  10     

  SHARED DISPOSITIVE POWER

 

  8,841,539

11    

  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

  8,841,539

12    

  CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)

 

  ☐

13    

  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

  16.0%

14    

  TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)

 

  OO


CUSIP No. 13123X508

 

  1    

  NAMES OF REPORTING PERSONS

 

  Blackstone Management Associates VII L.L.C.

  2    

  CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)

  (a)  ☐        (b)  ☒

 

  3    

  SEC USE ONLY

 

  4    

  SOURCE OF FUNDS (SEE INSTRUCTIONS)

 

  OO

  5    

  CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)

 

  ☐

  6    

  CITIZENSHIP OR PLACE OF ORGANIZATION

 

  Delaware

NUMBER OF

SHARES

  BENEFICIALLY  

OWNED BY

EACH

REPORTING

PERSON

WITH

    7     

  SOLE VOTING POWER

 

  0

  8     

  SHARED VOTING POWER

 

  6,254,241

  9     

  SOLE DISPOSITIVE POWER

 

  0

  10     

  SHARED DISPOSITIVE POWER

 

  8,841,539

11    

  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

  8,841,539

12    

  CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)

 

  ☐

13    

  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

  16.0%

14    

  TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)

 

  OO


CUSIP No. 13123X508

 

  1    

  NAMES OF REPORTING PERSONS

 

  BMA VII L.L.C.

  2    

  CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)

  (a)  ☐        (b)  ☒

 

  3    

  SEC USE ONLY

 

  4    

  SOURCE OF FUNDS (SEE INSTRUCTIONS)

 

  OO

  5    

  CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)

 

  ☐

  6    

  CITIZENSHIP OR PLACE OF ORGANIZATION

 

  Delaware

NUMBER OF

SHARES

  BENEFICIALLY  

OWNED BY

EACH

REPORTING

PERSON

WITH

    7     

  SOLE VOTING POWER

 

  0

  8     

  SHARED VOTING POWER

 

  6,254,241

  9     

  SOLE DISPOSITIVE POWER

 

  0

  10     

  SHARED DISPOSITIVE POWER

 

  8,841,539

11    

  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

  8,841,539

12    

  CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)

 

  ☐

13    

  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

  16.0%

14    

  TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)

 

  OO


CUSIP No. 13123X508

 

  1    

  NAMES OF REPORTING PERSONS

 

  Blackstone EMA II L.L.C.

  2    

  CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)

  (a)  ☐        (b)  ☒

 

  3    

  SEC USE ONLY

 

  4    

  SOURCE OF FUNDS (SEE INSTRUCTIONS)

 

  OO

  5    

  CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)

 

  ☐

  6    

  CITIZENSHIP OR PLACE OF ORGANIZATION

 

  Delaware

NUMBER OF

SHARES

  BENEFICIALLY  

OWNED BY

EACH

REPORTING

PERSON

WITH

    7     

  SOLE VOTING POWER

 

  0

  8     

  SHARED VOTING POWER

 

  6,254,241

  9     

  SOLE DISPOSITIVE POWER

 

  0

  10     

  SHARED DISPOSITIVE POWER

 

  8,841,539

11    

  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

  8,841,539

12    

  CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)

 

  ☐

13    

  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

  16.0%

14    

  TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)

 

  OO


CUSIP No. 13123X508

 

  1    

  NAMES OF REPORTING PERSONS

 

  Blackstone Holdings III L.P.

  2    

  CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)

  (a)  ☐        (b)  ☒

 

  3    

  SEC USE ONLY

 

  4    

  SOURCE OF FUNDS (SEE INSTRUCTIONS)

 

  OO

  5    

  CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)

 

  ☐

  6    

  CITIZENSHIP OR PLACE OF ORGANIZATION

 

  Quebec, Canada

NUMBER OF

SHARES

  BENEFICIALLY  

OWNED BY

EACH

REPORTING

PERSON

WITH

    7     

  SOLE VOTING POWER

 

  6,254,241

  8     

  SHARED VOTING POWER

 

  0

  9     

  SOLE DISPOSITIVE POWER

 

  8,841,539

  10     

  SHARED DISPOSITIVE POWER

 

  0

11    

  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

  8,841,539

12    

  CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)

 

  ☐

13    

  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

  16.0%

14    

  TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)

 

  PN


CUSIP No. 13123X508

 

  1    

  NAMES OF REPORTING PERSONS

 

  Blackstone Holdings III GP L.P.

  2    

  CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)

  (a)  ☐        (b)  ☒

 

  3    

  SEC USE ONLY

 

  4    

  SOURCE OF FUNDS (SEE INSTRUCTIONS)

 

  OO

  5    

  CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)

 

  ☐

  6    

  CITIZENSHIP OR PLACE OF ORGANIZATION

 

  Delaware

NUMBER OF

SHARES

  BENEFICIALLY  

OWNED BY

EACH

REPORTING

PERSON

WITH

    7     

  SOLE VOTING POWER

 

  6,254,241

  8     

  SHARED VOTING POWER

 

  0

  9     

  SOLE DISPOSITIVE POWER

 

  8,841,539

  10     

  SHARED DISPOSITIVE POWER

 

  0

11    

  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

  8,841,539

12    

  CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)

 

  ☐

13    

  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

  16.0%

14    

  TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)

 

  PN


CUSIP No. 13123X508

 

  1    

  NAMES OF REPORTING PERSONS

 

  Blackstone Holdings III GP Management L.L.C.

  2    

  CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)

  (a)  ☐        (b)  ☒

 

  3    

  SEC USE ONLY

 

  4    

  SOURCE OF FUNDS (SEE INSTRUCTIONS)

 

  OO

  5    

  CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)

 

  ☐

  6    

  CITIZENSHIP OR PLACE OF ORGANIZATION

 

  Delaware

NUMBER OF

SHARES

  BENEFICIALLY  

OWNED BY

EACH

REPORTING

PERSON

WITH

    7     

  SOLE VOTING POWER

 

  6,254,241

  8     

  SHARED VOTING POWER

 

  0

  9     

  SOLE DISPOSITIVE POWER

 

  8,841,539

  10     

  SHARED DISPOSITIVE POWER

 

  0

11    

  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

  8,841,539

12    

  CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)

 

  ☐

13    

  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

  16.0%

14    

  TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)

 

  OO


CUSIP No. 13123X508

 

  1    

  NAMES OF REPORTING PERSONS

 

  Blackstone Inc.

  2    

  CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)

  (a)  ☐        (b)  ☒

 

  3    

  SEC USE ONLY

 

  4    

  SOURCE OF FUNDS (SEE INSTRUCTIONS)

 

  OO

  5    

  CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)

 

  ☐

  6    

  CITIZENSHIP OR PLACE OF ORGANIZATION

 

  Delaware

NUMBER OF

SHARES

  BENEFICIALLY  

OWNED BY

EACH

REPORTING

PERSON

WITH

    7     

  SOLE VOTING POWER

 

  6,254,241

  8     

  SHARED VOTING POWER

 

  0

  9     

  SOLE DISPOSITIVE POWER

 

  8,841,539

  10     

  SHARED DISPOSITIVE POWER

 

  0

11    

  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

  8,841,539

12    

  CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)

 

  ☐

13    

  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

  16.0%

14    

  TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)

 

  CO


CUSIP No. 13123X508

 

  1    

  NAMES OF REPORTING PERSONS

 

  Blackstone Group Management L.L.C.

  2    

  CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)

  (a)  ☐        (b)  ☒

 

  3    

  SEC USE ONLY

 

  4    

  SOURCE OF FUNDS (SEE INSTRUCTIONS)

 

  OO

  5    

  CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)

 

  ☐

  6    

  CITIZENSHIP OR PLACE OF ORGANIZATION

 

  Delaware

NUMBER OF

SHARES

  BENEFICIALLY  

OWNED BY

EACH

REPORTING

PERSON

WITH

    7     

  SOLE VOTING POWER

 

  6,254,241

  8     

  SHARED VOTING POWER

 

  0

  9     

  SOLE DISPOSITIVE POWER

 

  8,841,539

  10     

  SHARED DISPOSITIVE POWER

 

  0

11    

  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

  8,841,539

12    

  CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)

 

  ☐

13    

  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

  16.0%

14    

  TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)

 

  OO


CUSIP No. 13123X508

 

  1    

  NAMES OF REPORTING PERSONS

 

  Stephen A. Schwarzman

  2    

  CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)

  (a)  ☐        (b)  ☒

 

  3    

  SEC USE ONLY

 

  4    

  SOURCE OF FUNDS (SEE INSTRUCTIONS)

 

  OO

  5    

  CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)

 

  ☐

  6    

  CITIZENSHIP OR PLACE OF ORGANIZATION

 

  United States

NUMBER OF

SHARES

  BENEFICIALLY  

OWNED BY

EACH

REPORTING

PERSON

WITH

    7     

  SOLE VOTING POWER

 

  6,254,241

  8     

  SHARED VOTING POWER

 

  0

  9     

  SOLE DISPOSITIVE POWER

 

  8,841,539

  10     

  SHARED DISPOSITIVE POWER

 

  0

11    

  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

  8,841,539

12    

  CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)

 

  ☐

13    

  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

  16.0%

14    

  TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)

 

  IN

 


Item 1.

Security and Issuer

This statement on Schedule 13D (this “Schedule 13D”) relates to the common stock, par value $0.01 per share (“Common Stock”), of Callon Petroleum Company, a Delaware corporation (the “Issuer”). The principal executive offices of the Issuer are located at One Briarlake Plaza, 2000 W. Sam Houston Parkway S., Suite 2000, Houston, Texas 77042.

 

Item 2.

Identity and Background

(a)-(b) Each of the following is hereinafter individually referred to as a “Reporting Person” and collectively as the “Reporting Persons”. This statement is filed on behalf of:

 

   

(i) Primexx Energy Partners, Ltd., a Texas limited partnership, (ii) Primexx Energy Corporation, a Texas corporation, (iii) BPP Energy Partners LLC, a Delaware limited liability company, (iv) BPP HoldCo LLC, a Delaware limited liability company, (v) BX Primexx Topco LLC, a Delaware limited liability company, (vi) BCP VII/BEP II Holdings Manager L.L.C., a Delaware limited liability company, (vii) Blackstone Energy Management Associates II L.L.C., a Delaware limited liability company, (viii) Blackstone Management Associates VII L.L.C., a Delaware limited liability company, (ix) Blackstone EMA II L.L.C., a Delaware limited liability company, (x) BMA VII L.L.C., a Delaware limited liability company, (xi) Blackstone Holdings III L.P., a Québec société en commandite, (xii) Blackstone Holdings III GP L.P., a Delaware limited partnership, (xiii) Blackstone Holdings III GP Management L.L.C., a Delaware limited liability company, (xiv) Blackstone Inc., a Delaware corporation (“Blackstone”) and (xv) Blackstone Group Management L.L.C., a Delaware limited liability company (collectively, the “Blackstone Entities”); and

 

   

Stephen A. Schwarzman, a United States citizen.

The address of the principal business office of each of the Reporting Persons is c/o Blackstone Inc., 345 Park Avenue, New York, NY 10154.

Information regarding each director and executive officer of Blackstone Inc. is set forth on Schedule I attached hereto.

(c) Prior to the transactions contemplated by the Purchase Agreements, the primary business purpose of Primexx Energy Partners, Ltd. was to acquire, explore, drill, develop, operate and dispose of oil and gas properties; and to produce, collect, store, treat, deliver, market, sell or otherwise dispose of oil, gas and related minerals from Prospects. In connection with the consummation of the transactions contemplated by the Purchase Agreement, Primexx Energy Partners, Ltd. disposed of all of its oil and gas properties and currently holds consideration paid for such properties in connection with the Purchase Agreements.

Prior to the transactions contemplated by the Purchase Agreements, the primary business purpose of BPP Energy Partners LLC was (i) the acquisition, ownership, operation and finance of the acquisitions and administration of such acquisitions of certain hydrocarbon interests and the development thereof, (ii) the sale or other disposition of such interests and (iii) any other activities related or incidental thereto or in anticipation thereof and (iv) additional activities related to certain hydrocarbon interests. In connection with the consummation of the transactions contemplated by the Purchase Agreement, Primexx Energy Partners, Ltd. disposed of all of its hydrocarbon interests and currently holds consideration paid for such interests in connection with the Purchase Agreements.

The principal business of BPP HoldCo LLC is investing in securities.

The principal business of Primexx Energy Corporation is performing the functions of, and serving as, the managing general partner of Primexx Energy Partners, Ltd.

The principal business of BX Primexx Topco LLC is performing the functions of, and serving as, sole member of BPP HoldCo LLC.

The principal business of BCP VII/BEP II Holdings Manager L.L.C. is performing the functions of, and serving as, managing member (or similar position) of BX Primexx Topco LLC and of other affiliated Blackstone entities.

The principal business of Blackstone Energy Management Associates II L.L.C. is performing the functions of, and serving as, a managing member (or similar position) of BCP VII/BEP II Holdings Manager L.L.C. and of other affiliated Blackstone entities. The principal business of Blackstone EMA II L.L.C. is performing the functions of, and serving as, sole member (or similar position) of Blackstone Energy Management Associates II L.L.C. and of other affiliated Blackstone entities.

The principal business of Blackstone Management Associates VII L.L.C. is performing the functions of, and serving as, a managing member (or similar position) of BCP VII/BEP II Holdings Manager L.L.C. and of other affiliated Blackstone entities. The principal business of BMA VII L.L.C. is performing the functions of, and serving as, sole member (or similar position) of Blackstone Management Associates VII L.L.C. and of other affiliated Blackstone entities.


The principal business of Blackstone Holdings III L.P. is performing the functions of, and serving as, managing member (or similar position) of Blackstone EMA II L.L.C., BMA VII L.L.C. and of other affiliated Blackstone entities. The principal business of Blackstone Holdings III GP L.P. is performing the functions of, and serving as, the general partner of Blackstone Holdings III L.P. and of other affiliated Blackstone entities. The principal business of Blackstone Holdings III GP Management L.L.C. is performing the functions of, and serving as, the general partner of Blackstone Holdings III GP L.P. and of other affiliated Blackstone entities.

The principal business of Blackstone Inc. is performing the functions of, and serving as, the sole member of Blackstone Holdings III GP Management L.L.C., and in a similar capacity for other affiliated Blackstone entities. The principal business of Blackstone Group Management L.L.C. is performing the functions of, and serving as, the sole holder of the Series II preferred stock of Blackstone Inc.

The principal occupation of Mr. Schwarzman is serving as an executive of Blackstone and Blackstone Group Management L.L.C.

(d) During the last five years, none of the Reporting Persons or, to the best knowledge of the Reporting Persons, any of the other persons set forth on Schedule I attached hereto, has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e) During the last five years, none of the Reporting Persons or, to the best knowledge of the Reporting Persons, any of the other persons set forth on Schedule I attached hereto, has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and, as a result of such proceeding, was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f) See Item 2(a)-(b) above for citizenship or place of organization, as applicable, of each of the Reporting Persons.

 

Item 3.

Source and Amount of Funds or Other Consideration

The information in Item 6 of this Schedule 13D is incorporated herein by reference.

The description of the Purchase Agreements (as defined below) contained in this Item 3 is not intended to be complete and is qualified in its entirety by reference to such agreements, which are filed as exhibits hereto and incorporated by reference herein.

 

Item 4.

Purpose of Transaction

The Reporting Persons acquired the securities reported herein for investment purposes, subject to the following:

The information in Item 6 of this Schedule 13D is incorporated herein by reference.

The Reporting Persons intend to review their investment in the Issuer on an ongoing basis and, in the course of their review, may take actions (including through their affiliates) with respect to their investment or the Issuer, including communicating with the board of directors of the Issuer (the “Board”), members of management or other security-holders of the Issuer, or other third parties from time to time, taking steps to implement a course of action, including, without limitation, engaging advisors, including legal, financial, regulatory, technical and/or industry advisors, to assist in any review, and evaluating strategic alternatives as they may become available. Such discussions and other actions may relate to, subject to the terms and conditions of the documents described herein to which the Reporting Persons are a party, various alternative courses of action, including, without limitation, those related to an extraordinary corporate transaction (including, but not limited to a merger, reorganization or liquidation) involving the Issuer or any of its subsidiaries; business combinations involving the Issuer or any of its subsidiaries, a sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries; material asset purchases; the formation of joint ventures with the Issuer or any of its subsidiaries or the entry into other material projects; changes in the present business, operations, strategy, future plans or prospects of the Issuer, financial or governance matters; changes to the Board (including board composition) or management of the Issuer; acting as a participant in debt financings of the Issuer or any of its subsidiaries, changes to the capitalization, ownership structure, dividend policy, business or corporate structure or governance documents of the Issuer; de-listing or de-registration of the Issuer’s securities, or any action similar to those enumerated above.


Such discussions and actions may be preliminary and exploratory in nature, and not rise to the level of a plan or proposal. Subject to the terms and conditions of the documents described herein to which the Reporting Persons are a party, the Reporting Persons or their affiliates may seek to acquire securities of the Issuer, including Common Stock and/or other equity, debt, notes or other financial instruments related to the Issuer or the Common Stock (which may include rights or securities exercisable or convertible into securities of the Issuer), and/or sell or otherwise dispose of some or all of such Issuer securities or financial instruments (which may include distributing some or all of such securities to such Reporting Person’s respective partners or beneficiaries, as applicable) from time to time, in each case, in open market or private transactions, block sales or otherwise. Any transaction that any of the Reporting Persons or their affiliates may pursue, subject to the terms and conditions of the documents described herein to which the Reporting Persons are a party, may be made at any time and from time to time without prior notice and will depend on a variety of factors, including, without limitation, the price and availability of the Issuer’s securities or other financial instruments, the Reporting Persons’ or such affiliates’ trading and investment strategies, subsequent developments affecting the Issuer, the Issuer’s business and the Issuer’s prospects, other investment and business opportunities available to such Reporting Persons and their affiliates, general industry and economic conditions, the securities markets in general, tax considerations and other factors deemed relevant by such Reporting Persons and such affiliates.

Except as described in this Schedule 13D, the Reporting Persons do not have any present plans or proposals that relate to or would result in any of the actions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D, although, subject to the agreements described herein, the Reporting Persons, at any time and from time to time, may review, reconsider and change their position and/or change their purpose and/or develop such plans and may seek to influence management or the Board with respect to the business and affairs of the Issuer and may from time to time consider pursuing or proposing such matters with advisors, the Issuer or other persons.

 

Item 5.

Interest in Securities of the Issuer

(a) and (b) Calculations of the percentage of the shares of Common Stock beneficially owned assumes that there were 55,132,150 shares of Common Stock outstanding as of October 4, 2021, as reported in the Issuer’s Definitive Proxy Statement filed on October 5, 2021.

The aggregate number and percentage of the Common Stock beneficially owned by each Reporting Person and, for each Reporting Person, the number of shares as to which there is sole power to vote or to direct the vote, shared power to vote or to direct the vote, sole power to dispose or to direct the disposition, or shared power to dispose or to direct the disposition are set forth on rows 7 through 11 and row 13 of the cover pages of this Schedule 13D and are incorporated herein by reference.

As of the date hereof,

(i) Primexx Energy Partners, Ltd. directly holds 4,440,934 shares of Common Stock; and

(ii) BPP Energy Partners LLC directly holds 1,813,307 shares of Common Stock.

An additional 1,983,407 Escrow Shares (as defined below) were deposited into an Escrow Account (as defined below) for the benefit of the Issuer and Primexx Energy Partners, Ltd. and 603,891 Escrow Shares (as defined below) were deposited into an Escrow Account (as defined below) for the benefit of the Issuer and BPP Energy Partners LLC. See “Escrow Agreements” below.

The securities reported herein as beneficially owned by the Reporting Persons do not include an aggregate of 481,250 shares of Common Stock underlying warrants to purchase common stock held by certain investment funds affiliated with the Reporting Persons, which may be issued upon net-share settlement of such warrants. Based on the closing price of Common Stock on the date of this filing, such warrants cannot be settled for shares of Common Stock pursuant to the terms thereof, and as a result, the shares of Common Stock underlying such warrants are excluded from the Reporting Person’s beneficial ownership of Common Stock reported herein.

Primexx Energy Corporation is the managing general partner of Primexx Energy Partners, Ltd.

BPP HoldCo LLC is the majority shareholder and has the power to appoint the majority of the members of the board of directors of Primexx Energy Corporation and has the power to appoint the majority of the members of the board of managers of BPP Energy Partners LLC. BX Primexx Topco LLC is the sole member of BPP HoldCo LLC. BCP VII/BEP II Holdings Manager L.L.C. is the managing member of BX Primexx Topco LLC.


Blackstone Energy Management Associates II L.L.C. and Blackstone Management Associates VII L.L.C. are the managing members of BCP VII/BEP II Holdings Manager L.L.C. Blackstone EMA II L.L.C. is the sole member of Blackstone Energy Management Associates II L.L.C. BMA VII L.L.C. is the sole member of Blackstone Management Associates VII L.L.C.

Blackstone Holdings III L.P. is the managing member of each of BMA VII L.L.C. and Blackstone EMA II L.L.C. Blackstone Holdings III GP L.P. is the general partner of Blackstone Holdings III L.P. Blackstone Holdings III GP Management L.L.C. is the general partner of Blackstone Holdings III GP L.P.

Blackstone Inc. is the sole member of Blackstone Holdings III GP Management L.L.C. The sole holder of the Series II preferred stock of Blackstone Inc. is Blackstone Group Management L.L.C. Blackstone Group Management L.L.C. is wholly-owned by Blackstone’s senior managing directors and controlled by its founder, Stephen A. Schwarzman.

Neither the filing of this Schedule 13D nor any of its contents shall be deemed to constitute an admission that any Reporting Person is the beneficial owner of the Common Stock referred to herein for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or for any other purpose and each of the Reporting Persons expressly disclaims beneficial ownership of such shares of Common Stock.

Any beneficial ownership of Common Stock by any of the persons listed on Schedule I is set forth on Schedule I attached hereto.

(c) Except as set forth in Item 6 of this Schedule 13D, none of the Reporting Persons or, to the best knowledge of the Reporting Persons, any other person named in Schedule I, has effected any transaction in Common Stock in the past 60 days.

(d) To the best knowledge of the Reporting Persons, no one other than the Reporting Persons, or the partners, members, affiliates or shareholders of the Reporting Persons, has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Common Stock reported herein as beneficially owned by the Reporting Persons.

(e) Not applicable.

 

Item 6.

Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

The information provided or incorporated by reference in Items 3, 4 and 5 is hereby incorporated by reference herein.

Purchase Agreements

The securities reported herein as beneficially owned by the Reporting Persons were acquired on October 1, 2021 (the “Closing Date”), in connection with the consummation of the transactions contemplated by the purchase and sale agreements entered into between the Issuer and Callon Petroleum Operating Company (“Buyer”), and Primexx Resource Development, LLC (“PRD”) and BPP Acquisition LLC (“BPP Acquisition”), respectively, each dated as of August 3, 2021 (the “Purchase Agreements”), for the purchase of certain producing oil and gas properties, undeveloped acreage and associated infrastructure assets in the Delaware Basin (the “Assets”). PRD is an indirect wholly-owned subsidiary of Primexx Energy Partners, Ltd. and BPP Acquisition is an indirect wholly-owned subsidiary of BPP Energy Partners LLC. Pursuant to the Purchase Agreements, as consideration for the Assets, the Issuer issued the securities reported herein as beneficially owned by the Reporting Persons in addition to certain cash consideration paid by the Buyer.


The securities reported herein issued to the Reporting Persons on the Closing Date include an aggregate of 2,587,298 shares of Common Stock (the “Escrow Shares”) that were deposited into escrow accounts (the “Escrow Accounts”) for the benefit of the Issuer, on the one hand, and PRD and BPP Acquisition, on the other hand, respectively. Of the 2,587,298 Escrow Shares, 603,891 Escrow Shares were deposited into an Escrow Account for the benefit of the Issuer and BPP Energy Partners LLC, and 1,983,407 Escrow Shares were deposited into an Escrow Account for the benefit of the Issuer and Primexx Energy Partners, Ltd. Pursuant to the Purchase Agreements, promptly after the six-month anniversary of the Closing Date, 50% of the Escrow Shares, minus a number of shares with the value (as agreed by the parties to the Purchase Agreements) equal to the amount of any unresolved claims to satisfy the respective indemnification obligations of PRD and BPP Acquisition under the Purchase Agreements, shall be released at the direction of the Issuer, on the one hand, and PRD and BPP Acquisition, on the other hand, respectively. Promptly after the twelve-month anniversary of the Closing Date, the remainder of the Escrow Shares, minus a number of shares with the value (as agreed by the parties to the Purchase Agreements) equal to the amount of any unresolved claims to satisfy the respective indemnification obligations of PRD and BPP Acquisition under the Purchase Agreements, shall be released at the direction of the Issuer, on the one hand, and PRD and BPP Acquisition, on the other hand, respectively. Pursuant to the Purchase Agreements, at any time from and after (i) the registration of the shares of Common Stock issued pursuant to the Purchase Agreements and (ii) the expiration of the Lock-Up Period (as defined below), PRD and BPP Acquisition may (in their sole discretion) cause the the Issuer’s transfer agent to sell Escrow Shares in accordance with the terms of the Escrow Agreements (as defined below). See “Escrow Agreements” below.

Pursuant to the Purchase Agreements, the Reporting Persons have agreed not to, without the prior written consent of the Issuer and except as set forth in the Purchase Agreements, during the period commencing on the Closing Date and ending on the date that is sixty (60) days after the Closing Date (the “Lock-Up Period”) (a) offer, pledge, gift, donate, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any of the Common Stock issued pursuant to the Purchase Agreements, or (b) enter into any swap, option (including, without limitation, put or call options), short sale, future, forward or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Stock issued pursuant to the Purchase Agreements, whether any such transaction is to be settled by delivery of shares of the Common Stock or such other securities, in cash or otherwise. Upon the expiration of the Lock-Up Period, the Reporting Persons expect to distribute the securities reported herein to their stockholders or to such stockholders’ respective affiliates, subject to the terms of the terms of the Escrow Agreements.

Pursuant to the Purchase Agreements, each of PRD and BPP Acquisition irrevocably and unconditionally agreed that it shall, at any meeting of the stockholders of the Issuer called to present the transactions contemplated by that certain Exchange Agreement between the Issuer and Chambers Investments, LLC, a Delaware limited liability company (“Kimmeridge”), pursuant to which the Issuer agreed to issue and deliver to Kimmeridge, subject to the approval of the Issuer’s stockholders, Common Stock in exchange for $197.0 million aggregate principal amount of the Issuer’s 9.00% Second Lien Senior Secured Notes due 2025 held by Kimmeridge, including in respect of any accrued and unpaid interest (the “Exchange”), for a vote of the stockholders, however called, (x) appear at such meeting or otherwise cause any shares of Common Stock beneficially owned by PRD or BPP Acquisition, respectively, to be counted as present thereat for the purpose of establishing a quorum and (y) with respect to any meeting at which a vote of the Issuer’s stockholders is requested, vote, or cause to be voted at such meeting, all shares of Common Stock beneficially owned by PRD or BPP Acquisition or any of their respective affiliates (including by proxy or written consent, if applicable):

(i) in favor of the Exchange and in favor of any other matter presented or proposed that is related to the Exchange;

(ii) against any other proposal, transaction, agreement or other action inconsistent with or made in opposition to approval of the Exchange; and

(iii) in favor of any proposal to adjourn or postpone such stockholder meeting to a later date if there are not sufficient votes to approve the Exchange.

Escrow Agreements

Pursuant to escrow agreements, dated as of the Closing Date, between the Issuer, American Stock Transfer & Trust Company, LLC (the “Escrow Agent”) and Buyer, on the one hand, and PRD and BPP Acquisition, on the other hand, respectively (the “Escrow Agreements”), the Escrow Agent has agreed to vote the Escrow Shares in accordance with the written direction of the Buyer.


Registration Rights Agreements

On the Closing Date, the Issuer entered into registration rights agreements with each of Primexx Energy Partners, Ltd., and BPP Energy Partners LLC, respectively (collectively, the “Registration Rights Agreements”). Pursuant to the terms of the Registration Rights Agreements, the Issuer will register the sale of the Common Stock held by Primexx Energy Partners, Ltd., and BPP Energy Partners LLC under certain circumstances, and has agreed to provide such stockholders with certain customary demand and piggyback registration rights.

Warrant Agreement

Pursuant to that certain Warrant Agreement, dated December 20, 2019, among the Issuer and American Stock Transfer & Trust Company, LLC (the “Warrant Agreement”), certain investment funds affiliated with the Reporting Persons hold warrants to purchase an aggregate of 481,250 shares of Common Stock of the Issuer. Such warrants are exercisable at a price of $91.90 per share of Common Stock, subject to adjustment as set forth in the Warrant Agreement, and may only be settled on a “net settlement” basis.

The description of the Purchase Agreements, the Escrow Agreements, the Warrant Agreement and the Registration Rights Agreements contained in this Item 6 is not intended to be complete and is qualified in its entirety by reference to such agreements, which are filed as exhibits hereto and incorporated by reference herein.

 

Item 7.

Material to be Filed as Exhibits

 

Exhibit A    Joint Filing Agreement, by and among the Reporting Persons (filed herewith).
Exhibit B    Purchase and Sale Agreement by and among Callon Petroleum Company, Callon Petroleum Operating Company, and Primexx Resource Development, LLC dated August 3, 2021 (incorporated by reference to Exhibit 10.1 to the Issuer’s Current Report on Form 8-K filed on August 5, 2021).
Exhibit C    Purchase and Sale Agreement by and among Callon Petroleum Company, Callon Petroleum Operating Company, and BPP Acquisition, LLC dated August 3, 2021 (incorporated by reference to Exhibit 10.2 to the Issuer’s Current Report on Form 8-K filed on August 5, 2021).
Exhibit D    Registration Rights Agreement, dated October 1, 2021, by and between Callon Petroleum Company and Primexx Energy Partners, Ltd.
Exhibit E    Registration Rights Agreement, dated October 1, 2021, by and between Callon Petroleum Company and BPP Energy Partners LLC.
Exhibit F    Escrow Agreement, dated October 1, 2021, by and among Callon Petroleum Company, Callon Petroleum Operating Company, American Stock Transfer  & Trust Company and Primexx Resource Development, LLC.
Exhibit G    Escrow Agreement, dated October 1, 2021, by and among Callon Petroleum Company, Callon Petroleum Operating Company, American Stock Transfer & Trust Company and BPP Acquisition, LLC.
Exhibit H    Warrant Agreement, dated December 20, 2019, among Callon Petroleum Company and American Stock Transfer & Trust Company, LLC (incorporated by reference to Exhibit 4.5 to the Company’s Current Report on Form 8-K, filed on December 20, 2019, File No. 001-14039).

 


SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: October 12, 2021

 

PRIMEXX ENERGY PARTNERS, LTD.
By: Primexx Energy Corporation, its managing general partner
By:  

/s/ Michael Christopher Doyle

Name:   Michael Christopher Doyle
Title:   President and Chief Executive Officer

 

PRIMEXX ENERGY CORPORATION
By:  

/s/ Michael Christopher Doyle

Name:   Michael Christopher Doyle
Title:   President and Chief Executive Officer
BPP ENERGY PARTNERS LLC
By:  

/s/ Michael Christopher Doyle

Name:   Michael Christopher Doyle
Title:   President and Chief Executive Officer
BPP HOLDCO LLC
By:  

/s/ Angelo Acconcia

Name:   Angelo Acconcia
Title:   President
BX PRIMEXX TOPCO LLC
By:  

/s/ Angelo Acconcia

Name:   Angelo Acconcia
Title:   President

 

BCP VII/BEP II HOLDINGS MANAGER L.L.C.
By:  

/s/ Angelo Acconcia

Name:   Angelo Acconcia
Title:   Senior Managing Director
BLACKSTONE ENERGY MANAGEMENT ASSOCIATES II L.L.C.
By: Blackstone EMA II L.L.C., its sole member
By:  

/s/ Tabea Hsi

Name:   Tabea Hsi
Title:   Authorized Signatory
BLACKSTONE EMA II L.L.C.
By:  

/s/ Tabea Hsi

Name:   Tabea Hsi
Title:   Authorized Signatory

 

BLACKSTONE MANAGEMENT ASSOCIATES VII L.L.C.
By: BMA VII L.L.C., its sole member
By:  

/s/ Tabea Hsi

Name:   Tabea Hsi
Title:   Authorized Signatory


BMA VII L.L.C.
By:  

/s/ Tabea Hsi

Name:   Tabea Hsi
Title:   Authorized Signatory
BLACKSTONE HOLDINGS III L.P.

By: Blackstone Holdings III GP L.P., its general partner

By: Blackstone Holdings III GP Management L.L.C., its general partner

By:  

/s/ Tabea Hsi

Name:   Tabea Hsi
Title:   Senior Managing Director
BLACKSTONE HOLDINGS III GP L.P.
By: Blackstone Holdings III GP Management L.L.C., its general partner
By:  

/s/ Tabea Hsi

Name:   Tabea Hsi
Title:   Senior Managing Director
BLACKSTONE HOLDINGS III GP MANAGEMENT L.L.C.
By:  

/s/ Tabea Hsi

Name:   Tabea Hsi
Title:   Senior Managing Director
BLACKSTONE INC.
By:  

/s/ Tabea Hsi

Name:   Tabea Hsi
Title:   Senior Managing Director
BLACKSTONE GROUP MANAGEMENT L.L.C.
By:  

/s/ Tabea Hsi

Name:   Tabea Hsi
Title:   Senior Managing Director
STEPHEN A. SCHWARZMAN

/s/ Stephen A. Schwarzman

[Callon Petroleum Company – Schedule 13D]


SCHEDULE I

Executive Officers and Directors of Blackstone Inc.

The name and principal occupation of each director and executive officer of Blackstone Inc. are set forth below. The address for each person listed below is c/o Blackstone Inc., 345 Park Avenue, New York, New York 10154. All executive officers and directors listed are United States citizens other than The Honourable Brian Mulroney, who is a citizen of Canada, and Sir John Antony Hood, who is a citizen of New Zealand.

OFFICERS:

 

Name

  

Present Principal Occupation or Employment

Stephen A. Schwarzman    Founder, Chairman and Chief Executive Officer of Blackstone Inc.
Jonathan D. Gray    President, Chief Operating Officer of Blackstone Inc.
Hamilton E. James    Executive Vice Chairman of Blackstone Inc.
Michael S. Chae    Chief Financial Officer of Blackstone Inc.
John G. Finley    Chief Legal Officer of Blackstone Inc.

DIRECTORS:

 

Name

  

Present Principal Occupation or Employment

Stephen A. Schwarzman    Founder, Chairman and Chief Executive Officer of Blackstone Inc.
Jonathan D. Gray    President, Chief Operating Officer of Blackstone Inc.
Hamilton E. James    Executive Vice Chairman of Blackstone Inc.
Kelly A. Ayotte    Former United States Senator from New Hampshire
Joseph P. Baratta    Global Head of Private Equity at Blackstone Inc.
James W. Breyer    Founder and Chief Executive Officer of Breyer Capital
Reginald J. Brown    Partner for the law firm, Kirkland & Ellis
Sir John Antony Hood    Former President and Chief Executive Officer of the Robertson Foundation and Former Chair of the Rhodes Trust
Rochelle B. Lazarus    Chairman Emeritus & Former Chief Executive Officer, Ogilvy & Mather Worldwide
Jay O. Light    Dean Emeritus, Harvard Business School


The Right Honourable Brian Mulroney    Senior Partner for the Montreal law firm, Norton Rose Fulbright Canada LLP
William G. Parrett    Retired CEO and Senior Partner, Deloitte (Deloitte Touche Tohmatsu)
Ruth Porat    Chief Financial Officer of Alphabet Inc. and Google Inc.

Except as set forth in this Schedule 13D, to the best knowledge of the Reporting Persons, none of the individuals listed above beneficially owns any shares of Common Stock.

 

Exhibit A

JOINT FILING AGREEMENT

Pursuant to and in accordance with the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (the “Exchange Act”) the undersigned hereby agree to the joint filing on behalf of each of them of any filing required by such party under Section 13 of the Exchange Act or any rule or regulation thereunder (including any amendment, restatement, supplement, and/or exhibit thereto) with respect to securities of Callon Petroleum Company, a Delaware corporation, and further agree to the filing, furnishing, and/or incorporation by reference of this Agreement as an exhibit thereto. Each of them is responsible for the timely filing of such filings and any amendments thereto, and for the completeness and accuracy of the information concerning such person contained therein; but none of them is responsible for the completeness or accuracy of the information concerning the other persons making the filing, unless such person knows or has reason to believe that such information is inaccurate. This Agreement shall remain in full force and effect until revoked by any party hereto in a signed writing provided to each other party hereto, and then only with respect to such revoking party. This Agreement may be executed in any number of counterparts all of which taken together shall constitute one and the same instrument.

Dated: October 12, 2021

 

PRIMEXX ENERGY PARTNERS, LTD.
By: Primexx Energy Corporation, its managing general partner
By:  

/s/ Michael Christopher Doyle

Name:   Michael Christopher Doyle
Title:   President and Chief Executive Officer
PRIMEXX ENERGY CORPORATION
By:  

/s/ Michael Christopher Doyle

Name:   Michael Christopher Doyle
Title:   President and Chief Executive Officer
BPP ENERGY PARTNERS LLC
By:  

/s/ Michael Christopher Doyle

Name:   Michael Christopher Doyle
Title:   President and Chief Executive Officer
BPP HOLDCO LLC
By:  

/s/ Angelo Acconcia

Name:   Angelo Acconcia
Title:   President
BX PRIMEXX TOPCO LLC
By:  

/s/ Angelo Acconcia

Name:   Angelo Acconcia

Title:

 

President


BCP VII/BEP II HOLDINGS MANAGER L.L.C.
By:  

/s/ Angelo Acconcia

Name:   Angelo Acconcia
Title:   Senior Managing Director
BLACKSTONE ENERGY MANAGEMENT ASSOCIATES II L.L.C.
By: Blackstone EMA II L.L.C., its sole member
By:  

/s/ Tabea Hsi

Name:   Tabea Hsi
Title:   Authorized Signatory
BLACKSTONE EMA II L.L.C.
By:  

/s/ Tabea Hsi

Name:   Tabea Hsi
Title:   Authorized Signatory
BLACKSTONE MANAGEMENT ASSOCIATES VII L.L.C.
By: BMA VII L.L.C., its sole member
By:  

/s/ Tabea Hsi

Name:   Tabea Hsi
Title:   Authorized Signatory
BMA VII L.L.C.
By:  

/s/ Tabea Hsi

Name:   Tabea Hsi
Title:   Authorized Signatory
BLACKSTONE HOLDINGS III L.P.

By: Blackstone Holdings III GP L.P., its general partner

By: Blackstone Holdings III GP Management L.L.C., its general partner

By:  

/s/ Tabea Hsi

Name:   Tabea Hsi
Title:   Senior Managing Director
BLACKSTONE HOLDINGS III GP L.P.
By: Blackstone Holdings III GP Management L.L.C., its general partner

By:

 

/s/ Tabea Hsi

Name:

 

Tabea Hsi

Title:

 

Senior Managing Director


BLACKSTONE HOLDINGS III GP MANAGEMENT L.L.C.
By:  

/s/ Tabea Hsi

Name:   Tabea Hsi
Title:   Senior Managing Director
BLACKSTONE INC.
By:  

/s/ Tabea Hsi

Name:   Tabea Hsi
Title:   Senior Managing Director
BLACKSTONE GROUP MANAGEMENT L.L.C.
By:  

/s/ Tabea Hsi

Name:   Tabea Hsi
Title:   Senior Managing Director
STEPHEN A. SCHWARZMAN

/s/ Stephen A. Schwarzman

Exhibit D

Execution Version

REGISTRATION RIGHTS AGREEMENT

BY AND BETWEEN

CALLON PETROLEUM COMPANY

AND

PRIMEXX ENERGY PARTNERS, LTD.

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of October 1, 2021, by and between Callon Petroleum Company, a Delaware corporation (the “Company”), and Primexx Energy Partners, Ltd., a Texas limited partnership (the “Initial Holder”).

WHEREAS, the Company entered into a Purchase and Sale Agreement, dated as of August 3, 2021, by and among the Company, the Initial Holder and the other parties thereto (the “Purchase Agreement”);

WHEREAS, under the Purchase Agreement, the Initial Holder will receive shares of Common Stock;

WHEREAS, the Company has agreed to provide the registration and other rights set forth in this Agreement for the benefit of the Initial Holder pursuant to the Purchase Agreement; and

WHEREAS, it is a condition to the obligations of the Initial Holder and the Company under the Purchase Agreement that this Agreement be executed and delivered.

NOW THEREFORE, in consideration of the premises, mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each party hereto, the parties hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01 Definitions. The terms set forth below are used herein as so defined:

Affiliate” shall have the meaning ascribed to it, on the date hereof, in Rule 405 under the Securities Act.

Agreement” has the meaning specified therefor in the introductory paragraph of this Agreement.

Board” means the Board of Directors of the Company.

Beneficially Own” shall have the meaning assigned to such term in Rule 13d-3 under the Exchange Act, and any Person’s beneficial ownership of securities shall be calculated in accordance with the provisions of such Rule.


BPP Acquisition” means BPP Energy Partners LLC, a Delaware limited liability company.

Business Day” means any day other than a Saturday, Sunday, any federal legal holiday or day on which banking institutions in the State of New York or State of Texas are authorized or required by law or other governmental action to close.

Closing Date” means the date of consummation of the transactions contemplated by the Purchase Agreement.

Common Stock” means the shares of common stock, par value $0.01 per share, of the Company.

Company” has the meaning specified therefor in the introductory paragraph of this Agreement.

Control” means the possession, directly or indirectly, of the power to direct, or cause the direction of, the management and policies of a Person whether though the ownership of voting securities, by contract or otherwise. The terms “Controlled” and “Controlling” shall have correlative meanings.

Effective Date” means, with respect to a particular Shelf Registration Statement, the date of effectiveness of such Shelf Registration Statement.

Effectiveness Period” means the period beginning on the Effective Date for the Registration Statement and ending at the time all Registrable Securities covered by such Registration Statement have ceased to be Registrable Securities.

Exchange Act” means the Securities Exchange Act of 1934, as amended and the rules and regulations of the SEC promulgated thereunder.

Freely Tradable” means, with respect to any security, that such security, when held by the holder thereof, may legally be distributed to the public under Rule 144 under the Securities Act and is no longer subject to the restrictions on trading under the provisions of Rule 144 under the Securities Act (or any successor rule or regulation to Rule 144 then in force), including volume and manner of sale restrictions, and the current public information requirement of Rule 144(e) (or any successor rule or regulation to Rule 144 then in force) no longer applies; provided that if a Holder Beneficially Owns 10% or more of the Company’s then outstanding Common Stock, then such Holder’s Common Stock shall be deemed not to be Freely Tradable for so long as such Holder Beneficially Owns 10% or more of the Company’s outstanding Common Stock.

Governmental Authority” means any federal, state, local or foreign government, or other governmental, regulatory or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral body.

Holder” means the holder of any Registrable Securities.

 

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Initial Holder” has the meaning specified therefor in the introductory paragraph of this Agreement.

Law” means any statute, law, ordinance, regulation, rule, order, code, governmental restriction, decree, injunction or other requirement of law, or any judicial or administrative interpretation thereof, of any Governmental Authority.

Losses” has the meaning specified therefor in Section 2.08(a) of this Agreement.

Managing Underwriter” means, with respect to any Underwritten Offering, the book-running lead manager of such Underwritten Offering.

NYSE” means The New York Stock Exchange, Inc.

Person” means an individual or a corporation, limited liability company, joint venture, trust, unincorporated organization, association, government agency or political subdivision thereof or other entity.

Purchase Agreement” has the meaning specified therefor in the recitals of this Agreement.

Registrable Securities” means, subject to Section 1.02, the Common Stock to be issued the Initial Holder pursuant to the Purchase Agreement, including any shares of Common Stock which may be issued or distributed in respect of such shares of Common Stock by way of conversion, concession, stock dividend or stock split or other distribution, recapitalization or reclassification or similar transaction.

Registration Expenses” has the meaning specified therefor in Section 2.07(b) of this Agreement.

Registration Statement” has the meaning specified therefor in Section 2.01 of this Agreement.

Required Holders” means initially, the Initial Holder, and subsequent to a transfer by the Initial Holder of the Registrable Securities, the Holder or collective Holders of greater than 50% of the Registrable Securities.

Rule 405” means Rule 405 under the Securities Act (or any successor or similar provision adopted by the SEC then in effect).

SEC” means the U.S. Securities and Exchange Commission.

Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

Selling Expenses” has the meaning specified therefor in Section 2.07(b) of this Agreement.

 

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Selling Holder” means a Holder who is selling Registrable Securities under a Registration Statement pursuant to the terms of this Agreement.

Selling Holder Indemnified Persons” has the meaning specified therefor in Section 2.08(a) of this Agreement.

Shelf Registration Statement” means a registration statement under the Securities Act to permit the public resale of the Registrable Securities from time to time as permitted by Rule 415 under the Securities Act (or any successor or similar provision adopted by the SEC then in effect).

Underwritten Offering” means an offering (including an offering pursuant to a Shelf Registration Statement) in which Registrable Securities are sold to one or more underwriters on a firm commitment basis for reoffering to the public or an offering that is a “bought deal” with one or more investment banks.

WKSI” means a “well known seasoned issuer” as defined under Rule 405.

Section 1.02 Registrable Securities. Any Registrable Security shall cease to be a Registrable Security at the earliest of the following: (a) when a registration statement covering such Registrable Security becomes or has been declared effective by the SEC and such Registrable Security has been sold or disposed of pursuant to such effective registration statement; (b) when such Registrable Security has been sold or disposed of (excluding transfers or assignments by a Holder to an Affiliate) pursuant to Rule 144 under the Securities Act (or any successor or similar provision adopted by the SEC then in effect) under circumstances in which all of the applicable conditions of Rule 144 (as then in effect) are met; (c) when such Registrable Security is held by the Company; or (d) when such Registrable Security has been sold or disposed of in a private transaction in which the transferor’s rights under this Agreement are not assigned to the transferee of such securities pursuant to Section 2.10 hereof. In addition, any Registrable Security will cease to be a Registrable Security upon the date that such security is Freely Tradable; provided that, for the avoidance of doubt, Common Stock that is not a Registrable Security because it is Freely Tradable will become a Registrable Security to the extent it is subsequently not Freely Tradable.

ARTICLE II

REGISTRATION RIGHTS

Section 2.01 Shelf Registration.

(a) Shelf Registration. Within 60 days of the Closing Date, the Company shall prepare and file a Shelf Registration Statement with the SEC to permit the public resale of all Registrable Securities on the terms and conditions specified in this Section 2.01 (a “Registration Statement”). The Registration Statement filed with the SEC pursuant to this Section 2.01 shall be on Form S-3 and, if the Company is a WKSI as of the filing date thereof, shall be an Automatic Shelf Registration Statement, or, if Form S-3 is not then available to the Company, on Form S-1 or such other form of registration statement as is then available to effect a registration for resale of the Registrable Securities, covering the Registrable Securities, and shall contain a prospectus in such form as to permit any Selling Holder covered by such Registration Statement to sell such Registrable Securities pursuant to Rule 415 under the Securities Act (or any successor or similar

 

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provision adopted by the SEC then in effect) at any time beginning on the Effective Date for such Registration Statement. The Company shall use its reasonable best efforts to cause a Registration Statement filed pursuant to this Section 2.01 to be declared effective as soon as reasonably practicable thereafter. During the Effectiveness Period, the Company shall use its reasonable best efforts to cause a Registration Statement filed pursuant to this Section 2.01 to remain continuously effective, and to be supplemented and amended to the extent necessary to ensure that such Registration Statement is available or, if not available, that another registration statement is available for the resale of the Registrable Securities until all Registrable Securities have ceased to be Registrable Securities; provided, that the Company shall not be required to supplement or amend such Registration Statement more than once in any calendar quarterly period to name additional parties as the result of any transfer of registration rights. The Company shall prepare and file a supplemental listing application with the NYSE (or such other national securities exchange on which the Registrable Securities are then listed and traded) to list the Registrable Securities covered by a Registration Statement and shall use its reasonable best efforts to have such Registrable Securities approved for listing on the NYSE (or such other national securities exchange on which the Registrable Securities are then listed and traded) by the Effective Date of such Registration Statement, subject only to official notice of issuance. As soon as practicable following the Effective Date of a Registration Statement, but in any event within three Business Days of such date, the Company shall notify the Required Holders of the effectiveness of such Registration Statement. When effective, a Registration Statement (including the documents incorporated therein by reference) will comply as to form in all material respects with all applicable requirements of the Securities Act and the Exchange Act and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any prospectus contained in such Registration Statement, in the light of the circumstances under which a statement is made).

(b) Delay Rights. Notwithstanding anything to the contrary contained herein, the Company may, upon written notice to (i) the Holders, delay the filing of a Registration Statement required under Section 2.01, or (ii) any Selling Holder whose Registrable Securities are included in a Registration Statement or other registration statement contemplated by this Agreement, suspend such Selling Holder’s use of any prospectus that is a part of such Registration Statement or other registration statement (in which event the Selling Holder shall discontinue sales of the Registrable Securities pursuant to such Registration Statement or other registration statement contemplated by this Agreement but may settle any previously made sales of Registrable Securities) if the Company (x) is pursuing an acquisition, merger, tender offer, reorganization, disposition or other similar transaction and the Board determines reasonably and in good faith that (A) the Company’s ability to pursue or consummate such a transaction would be materially adversely affected by any required disclosure of such transaction in such Registration Statement or other registration statement or (B) such transaction renders the Company unable to comply with SEC requirements, in each case under circumstances that would make it impractical or inadvisable to cause the Registration Statement (or such filings) to become effective or to promptly amend or supplement the Registration Statement or other registration statement contemplated by this Agreement on a post effective basis, as applicable, or (y) has experienced some other material non-public event the disclosure of which at such time, in the reasonable and good faith judgment of the Board, would materially adversely affect the Company; provided, however, that in no event shall the Selling Holders be suspended from selling Registrable Securities pursuant to such Registration Statement for a period that exceeds an aggregate of 60 days in any 180-day period or 105 days in

 

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any 365-day period. Upon disclosure of such information or the termination of the condition described above, the Company shall provide prompt notice, but in any event within one Business Day of such disclosure or termination, to the Selling Holders whose Registrable Securities are included in such Registration Statement and shall promptly terminate any suspension of sales it has put into effect and shall take such other reasonable actions to permit registered sales of Registrable Securities as contemplated in this Agreement.

Section 2.02 Piggyback Rights.

(a) Participation. So long as a Holder has Registrable Securities, if the Company proposes to file (i) a shelf registration statement other than a Registration Statement contemplated by Section 2.01 and other than a registration statement on Forms S-4 or S-8 and any successor forms, (ii) a prospectus supplement to an effective shelf registration statement relating to the sale of equity securities of the Company, other than a Registration Statement contemplated by Section 2.01 and Holders may be included without the filing of a post-effective amendment thereto, or (iii) a registration statement, other than a shelf registration statement, and other than a registration statement on Forms S-4 or S-8 and any successor forms, in each case, for the sale of Common Stock in an Underwritten Offering for its own account or that of another Person, or both, then the Company shall give prompt written notice of its intention to effect such registration at least five Business Days before the proposed date of filing of the applicable Registration Statement or prospectus supplement, or at least two Business Days in connection with any overnight or bought Underwritten Offering, to the Holders and such notice shall (A) describe the intended method(s) of distribution, and the name of the proposed Managing Underwriter or Underwriters, if any, in such offering and (B) offer the Holders the opportunity to include in such registration statement, prospectus supplement or Underwritten Offering, as the case may be, such number of Registrable Securities (the “Included Registrable Securities”) as the Holders may request in writing (such request may include the Registrable Securities to be included on behalf of any other Holder, as specified by the Holders); provided, however, that if the Company has been advised by the Managing Underwriter of any such Underwritten Offering that the inclusion of all Registrable Securities that the Selling Holders intend to include in such offering exceeds the number that can be sold in such offering without being likely to have an adverse effect on the price, timing or distribution of the Common Stock in the Underwritten Offering, then (x) if no Registrable Securities can be included in the Underwritten Offering in the opinion of the Managing Underwriter without having such adverse effect, the Company shall not be required to offer such opportunity to the Holders or (y) if any Registrable Securities can be included in the Underwritten Offering in the opinion of the Managing Underwriter without having such adverse effect, then the amount of Registrable Securities to be offered for the accounts of Holders shall be determined based on the provisions of Section 2.02(b) or in such other manner as such Selling Holders may agree. Any notice required to be provided in this Section 2.02(a) to the Holders shall be provided on a Business Day and receipt of such notice shall be confirmed by the Holders. Holders shall then have two Business Days (or one Business Day in connection with any overnight or bought Underwritten Offering) after notice has been delivered to request in writing the inclusion of Registrable Securities in the Underwritten Offering. If no written request for inclusion from Holders is received within the specified time, each such Holder shall have no further right to participate in such Underwritten Offering. If, at any time after giving written notice of its intention to undertake an Underwritten Offering and prior to the closing of such Underwritten Offering, the Company shall determine for any reason not to undertake or to delay such Underwritten Offering,

 

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the Company may, at its election, give written notice of such determination to the Selling Holders and, (1) in the case of a determination not to undertake such Underwritten Offering, shall be relieved of its obligation to sell any Included Registrable Securities in connection with such terminated Underwritten Offering, and (2) in the case of a determination to delay such Underwritten Offering, shall be permitted to delay offering any Included Registrable Securities as part of such Underwritten Offering for the same period as the delay in the Underwritten Offering. Any Selling Holder shall have the right to withdraw such Selling Holder’s request for inclusion of such Selling Holder’s Registrable Securities in such Underwritten Offering by giving written notice to the Company of such withdrawal at least one Business Day before the time of pricing of such Underwritten Offering. Holders may deliver written notice (an “Opt-Out Notice”) to the Company requesting that such Holder not receive notice from the Company of any proposed Underwritten Offering; provided, however, that such Holder may later revoke any such Opt-Out Notice in writing prior to five Business Day before the time of pricing of such underwritten offering. Following receipt of an Opt-Out Notice from a Holder (unless subsequently revoked), the Company shall not be required to deliver any notice to such Holder pursuant to this Section 2.02(a) and such Holder (unless such Holder’s Opt-Out Notice is subsequently revoked) shall no longer be entitled to participate in Underwritten Offerings by the Company pursuant to this Section 2.02(a).

(b) Priority. If the Managing Underwriter of any proposed Underwritten Offering of Common Stock involving Included Registrable Securities pursuant to this Section 2.02 advises the Company that the total amount of Common Stock that the Selling Holders and any other Persons intend to include in such offering exceeds the number of shares of Common Stock that can be sold in such offering without being likely to have an adverse effect on the price, timing or distribution of the Common Stock offered or the market for the Common Stock, then the Common Stock to be included in such Underwritten Offering shall include the number of Registrable Securities that such Managing Underwriter advises the Company can be sold without having such adverse effect, with such number to be allocated (i) first, to the Company if initiating such registration, (ii) second, to the holders (the “Kimmeridge Holders”) under (A) the Registration Rights Agreement (the “2020 Kimmeridge Registration Rights Agreement”), dated September 30, 2020, by and between the Company and Chambers Investments, LLC (“Chambers”) and (B) the Registration Rights Agreement (the “2021 Kimmeridge Registration Rights Agreement” and together with the 2020 Kimmeridge Registration Rights Agreement, the “Kimmeridge Registration Rights Agreements”) to be made and entered into by and among the Company, Chambers, and the entities affiliated therewith in connection with the closing of that certain Exchange Agreement, dated August 3, 2021, by and between the Company and Chambers, to the extent the Kimmeridge Holders exercise their rights pursuant to the Kimmeridge Registration Rights Agreements entitling them to participate in such Underwritten Offering, allocated among such other holders pro rata on the basis of the number of shares of Common Stock held by each applicable other holder or in such manner as they may agree, (iii) third, to the Selling Holders who have requested participation in such Underwritten Offering, allocated among such Selling Holders pro rata on the basis of the number of Registrable Securities held by each Selling Holder or in such manner as they may agree, and (iv) fourth, by the other holders of Common Stock (other than Holders and as otherwise already allocated in this section) with registration rights entitling them to participate in such Underwritten Offering, allocated among such other holders pro rata on the basis of the number of shares of Common Stock held by each applicable other holder or in such manner as they may agree. For the avoidance of doubt, the priority set forth in this Section 2.02(b) shall not apply and shall have no effect in the event that a Holder exercises its rights pursuant to Section 2.03, which shall be governed exclusively by the provisions of Section 2.03.

 

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Section 2.03 Underwritten Offerings.

(a) Demand Offering. In the event that any Holder elects to dispose of Registrable Securities under a Registration Statement pursuant to an Underwritten Offering and reasonably expects gross proceeds of at least $25 million from such Underwritten Offering (together with any Registrable Securities to be disposed of by a Selling Holder who has elected to participate in such Underwritten Offering pursuant to this Section 2.03), the Company shall, at the written request of such Selling Holder(s), enter into an underwriting agreement in a form as is customary in Underwritten Offerings of securities by the Company with the Managing Underwriter or Underwriters selected by the Company (subject to the written consent of the Initiating Holder of such Underwritten Offering, which consent shall not be unreasonably withheld), which shall include, among other provisions, indemnities to the effect and to the extent provided in Section 2.08, and shall take all such other reasonable actions as are requested by the Managing Underwriter or Underwriters in order to expedite or facilitate the disposition of such Registrable Securities; provided, however, that the Company shall have no obligation to facilitate or participate in, including entering into any underwriting agreement, for more than two Underwritten Offering at the request of the Holders; provided, further, that if the Company is conducting or actively pursuing a securities offering of Common Stock (other than in connection with any at-the-market offering or similar continuous offering program), then the Company may suspend such Selling Holders’ rights to require the Company to conduct an Underwritten Offering pursuant to this Section 2.03 (for the avoidance of doubt, this proviso shall only apply to primary offerings by the Company of its Common Stock and not to any offerings requested by other stockholders of the Company); provided, however, that the Company may only suspend such Selling Holders’ rights to require the Company to conduct an Underwritten Offering pursuant to this Section 2.03 once in any six-month period and in no event for a period that exceeds an aggregate of 75 days in any 180-day period or 105 days in any 365-day period. For the avoidance of doubt, the Holders’ rights to elect to participate in an Underwritten Offering pursuant to this Section 2.03(a) shall not be limited in any way by the rights of other holders of Common Stock with registration rights to make similar elections to participate in underwritten offerings of Common Stock, except as expressly provided in this Agreement or, subject to Section 2.11, the applicable agreement with such other holders of Common Stock.

(b) General Procedures. In connection with any Underwritten Offering contemplated by Section 2.03(a), the underwriting agreement into which each Selling Holder and the Company shall enter shall contain such representations, covenants, indemnities (subject to Section 2.08) and other rights and obligations as are customary in Underwritten Offerings of securities by the Company. No Selling Holder shall be required to make any representations or warranties to, or agreements with, the Company or the Underwriters other than representations, warranties or agreements regarding (i) such Holder’s ownership of its Registrable Securities to be sold or transferred, (ii) such Selling Holder’s authority to enter into such underwriting agreement and to sell or transfer such securities, (iii) its intended method of distribution and (iv) any other such matters or representations pertaining to compliance with securities laws as may be reasonably requested. If any Selling Holder (which, for the avoidance of doubt, shall include the Initiating

 

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Holder (as defined below)) disapproves of the terms of an Underwritten Offering contemplated by this Section 2.03, such Selling Holder may elect to withdraw therefrom by notice to the Company and the Managing Underwriter; provided, however, that such withdrawal must be made at least one Business Day prior to the time of pricing of such Underwritten Offering to be effective. If, pursuant to the preceding sentence, the entire Demand Registration Request is revoked, then, at the option of the Holder or Holders who revoke such request, Holder or Holders shall reimburse the Company for all of its reasonable and documented incremental out-of-pocket expenses incurred in the preparation, filing and processing of the Registration Statement or prospectus supplement with respect to such requested Underwritten Offering, which incremental out-of-pocket expenses, for the avoidance of doubt, shall not include overhead expenses and which requested Underwritten Offering, whether or not completed, will not decrease the number of Underwritten Offerings the Holders shall have the right and option to request under this Section 2.03.

(c) Priority. If the Managing Underwriter of any proposed Underwritten Offering of Registrable Securities pursuant to this Section 2.03 advises the Company that the total amount of Common Stock that the Selling Holders and any other Persons intend to include in such offering exceeds the number of shares of Common Stock that can be sold in such offering without being likely to have an adverse effect on the price, timing or distribution of the Common Stock offered or the market for the Common Stock, then the Common Stock to be included in such Underwritten Offering shall include the number of Registrable Securities that such Managing Underwriter advises the Company can be sold without having such adverse effect, with such number to be allocated (i) first, to the Selling Holder who requested such Underwritten Offering, (ii) second, to any other Holders of Registrable Securities who have elected to participate in such Underwritten Offering, allocated among such other Selling Holders pro rata on the basis of the number of Registrable Securities held by each such Selling Holder or in such other manner as such Selling Holders may agree, and (iii) third, to the Company.

Section 2.04 Sale Procedures.

In connection with its obligations under this Article II, the Company shall, as expeditiously as possible, subject to confidentiality obligations and agreements:

(a) use its reasonable best efforts to prepare and file with the SEC such amendments and supplements to a Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Registration Statement effective for the Effectiveness Period and as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such Registration Statement;

(b) if a prospectus supplement will be used in connection with the marketing of an Underwritten Offering from a Registration Statement and the Managing Underwriter at any time shall notify the Company in writing that, in the sole judgment of such Managing Underwriter, inclusion of detailed information to be used in such prospectus supplement is of material importance to the success of the Underwritten Offering of such Registrable Securities, the Company shall use its reasonable best efforts to include such information in such prospectus supplement;

 

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(c) furnish to each Selling Holder (i) as far in advance as reasonably practicable before filing a Registration Statement or any other registration statement contemplated by this Agreement or any supplement or amendment thereto, upon request, copies of reasonably complete drafts of all such documents proposed to be filed (including exhibits and each document incorporated by reference therein to the extent then required by the rules and regulations of the SEC other than annual or quarterly reports on Form 10-K or 10-Q, respectively, current reports on Form 8-K or proxy statements; provided, however, that such reports or proxy statements shall be provided at least two Business Days prior to filing in connection with any Underwritten Offering), and provide each such Selling Holder the opportunity to object to any information pertaining to such Selling Holder and its plan of distribution that is contained therein and make the corrections reasonably requested by such Selling Holder with respect to such information prior to filing a Registration Statement or such other registration statement or supplement or amendment thereto, and (ii) such number of copies of such Registration Statement or such other registration statement and the prospectus included therein and any supplements and amendments thereto as such Selling Holder may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities covered by such Registration Statement or other registration statement;

(d) if applicable, use its reasonable best efforts to register or qualify the Registrable Securities covered by a Registration Statement or any other registration statement contemplated by this Agreement under the securities or blue sky laws of such jurisdictions as the Selling Holders or, in the case of an Underwritten Offering, the Managing Underwriter, shall reasonably request; provided, however, that the Company shall not be required to qualify generally to transact business in any jurisdiction where it is not then required to so qualify or to take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject;

(e) promptly notify each Selling Holder, at any time when a prospectus relating thereto is required to be delivered by any of them under the Securities Act, of (i) the filing of a Registration Statement or any other registration statement contemplated by this Agreement or any prospectus or prospectus supplement to be used in connection therewith, or any amendment or supplement thereto, and, with respect to such Registration Statement or any other registration statement or any post-effective amendment thereto, when the same has become effective; and (ii) the receipt of any written comments from the SEC with respect to any filing referred to in clause (i) and any written request by the SEC for amendments or supplements to such Registration Statement or any other registration statement or any prospectus or prospectus supplement thereto;

(f) promptly notify each Selling Holder, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of (i) the happening of any event as a result of which the prospectus or prospectus supplement contained in a Registration Statement or any other registration statement contemplated by this Agreement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any prospectus contained therein, in the light of the circumstances under which a statement is made); (ii) the issuance or express threat of issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement or any other registration statement contemplated by this Agreement, or the initiation of any proceedings for that purpose; or (iii) the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the applicable securities or blue sky laws of any jurisdiction. Following the provision

 

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of such notice, the Company agrees to as promptly as practicable amend or supplement the prospectus or prospectus supplement or take other appropriate action so that the prospectus or prospectus supplement does not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing and to take such other commercially reasonable action as is necessary to remove a stop order, suspension, threat thereof or proceedings related thereto;

(g) upon request, furnish to each Selling Holder copies of any and all transmittal letters or other correspondence with the SEC or any other governmental agency or self-regulatory body or other body having jurisdiction (including any domestic or foreign securities exchange) relating to such offering of Registrable Securities;

(h) in the case of an Underwritten Offering, use its reasonable best efforts to furnish to the underwriters upon request, (i) an opinion of counsel for the Company dated the date of the closing under the underwriting agreement and (ii) a “cold comfort” letter, dated the pricing date of such Underwritten Offering and a letter of like kind dated the date of the closing under the underwriting agreement, in each case, signed by the independent public accountants who have certified the Company’s financial statements included or incorporated by reference into the applicable registration statement, and each of the opinion and the “cold comfort” letter shall be in customary form and covering substantially the same matters with respect to such registration statement (and the prospectus and any prospectus supplement included therein) as have been customarily covered in opinions of issuer’s counsel and in accountants’ letters delivered to the underwriters in Underwritten Offerings of securities by the Company and such other matters as such underwriters and Selling Holders may reasonably request;

(i) otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the SEC, and make available to its security holders (which may be satisfied by making such information available on the SEC’s Electronic Data Gathering, Analysis and Retrieval system or any successor system known as “EDGAR”), as soon as reasonably practicable, an earnings statement, covering a period of twelve months beginning within three months after the Effective Date of such Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder;

(j) make available to the appropriate representatives of the Managing Underwriter and Selling Holders access to such information and Company personnel as is reasonable and customary to enable such parties to establish a due diligence defense under the Securities Act; provided, that the Company need not disclose any non-public information to any such representative unless and until such representative has entered into a confidentiality agreement with the Company;

(k) use its reasonable best efforts to cause all such Registrable Securities registered pursuant to this Agreement to be listed on each securities exchange or nationally recognized quotation system on which the Common Stock are then listed or quoted;

(l) use its reasonable best efforts to cause the Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Company to enable the Selling Holders to consummate the disposition of such Registrable Securities;

 

11


(m) provide a transfer agent and registrar for all Registrable Securities covered by such registration statement not later than the Effective Date of such registration statement;

(n) enter into customary agreements and take such other actions as are reasonably requested by the Selling Holders or the underwriters, if any, in order to expedite or facilitate the disposition of such Registrable Securities (including, in the case of an Underwritten Offering of $50 million or greater of Registrable Securities (calculated based on the Registrable Securities Amount), making appropriate officers of the Company available to participate in any “road show” presentations before analysts, and other customary marketing activities (including one-on-one meetings with prospective purchasers of the Registrable Securities)); provided, however, that the officers of the Company shall not be required to dedicate an unreasonably burdensome amount of time in connection with activities for any Underwritten Offering;

(o) if requested by a Selling Holder, (i) as soon as practicable incorporate in a prospectus supplement or post-effective amendment such information as such Selling Holder reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering, and (ii) as soon as practicable make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and

(p) if reasonably required by the Company’s transfer agent, use commercially reasonably efforts to promptly deliver any authorizations, certificates and directions required by the transfer agent which authorize and direct the transfer agent to transfer such Registrable Securities without legend, in accordance with applicable law, upon sale by the Holder of such Registrable Securities under the Registration Statement.

Notwithstanding anything to the contrary in this Section 2.04, the Company shall not name a Holder as an underwriter (as defined in Section 2(a)(11) of the Securities Act) in any Registration Statement without such Holder’s consent, except as required by law or request of the staff of the Commission.

Each Selling Holder, upon receipt of notice from the Company of the happening of any event of the kind described in Section 2.04(f), shall forthwith discontinue offers and sales of the Registrable Securities by means of a prospectus or prospectus supplement until such Selling Holder’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 2.04(f) or until it is advised in writing by the Company that the use of the prospectus may be resumed and has received copies of any additional or supplemental filings incorporated by reference in the prospectus, and, if so directed by the Company, such Selling Holder shall, or shall request the Managing Underwriter, if any, to deliver to the Company (at the Company’s expense) all copies in their possession or control, other than permanent file copies then in such Selling Holder’s possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice.

 

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Section 2.05 Cooperation by Holders.

The Company shall have no obligation to include Registrable Securities of a Holder in a Registration Statement or in an Underwritten Offering pursuant Section 2.03(a) who has failed to timely furnish after receipt of a written request from the Company such information that the Company determines, after consultation with its counsel, is reasonably required in order for the registration statement or prospectus supplement, as applicable, to comply with the Securities Act.

Section 2.06 Restrictions on Public Sale by Holders of Registrable Securities.

To the extent requested by the Managing Underwriter, each Holder of Registrable Securities that participates in an Underwritten Offering will enter into a customary letter agreement with underwriters providing such Holder will not effect any public sale or distribution of Registrable Securities during the 60 calendar-day period beginning on the date of a prospectus or prospectus supplement filed with the SEC with respect to the pricing of such Underwritten Offering, provided that, notwithstanding the foregoing, (i) the duration of the foregoing restrictions shall be no longer than the duration of the shortest restriction imposed by the Underwriters on the Company or the officers, directors or any other Affiliate of the Company on whom a restriction is imposed and (ii) that the restrictions set forth in this Section 2.06 shall not apply to any Registrable Securities that are included in such Underwritten Offering by such Holder. In addition, this Section 2.06 shall not apply to any Holder that is not entitled to participate in such Underwritten Offering because the Registrable Securities held by such Holder may be disposed of without restriction pursuant to Rule 144 under the Securities Act (or any successor or similar provision adopted by the SEC then in effect).

Section 2.07 Expenses.

(a) Expenses. The Company shall pay all reasonable Registration Expenses as determined reasonably and in good faith by the Board, including, in the case of an Underwritten Offering, the Registration Expenses of an Underwritten Offering, regardless of whether any sale is made pursuant to such Underwritten Offering. Each Selling Holder shall pay its pro rata share of all Selling Expenses in connection with any sale of its Registrable Securities hereunder. For the avoidance of doubt, each Selling Holder’s pro rata allocation of Selling Expenses shall be the percentage derived by dividing (i) the number of Registrable Securities sold by such Selling Holder in connection with such sale by (ii) the aggregate number of Registrable Securities sold by all Selling Holders in connection with such sale. In addition, except as otherwise provided in Sections 2.07 and 2.08 hereof, the Company shall not be responsible for legal fees incurred by Holders in connection with the exercise of such Holders’ rights hereunder.

(b) Certain Definitions. “Registration Expenses” means all expenses incident to the Company’s performance under or compliance with this Agreement to effect the registration of Registrable Securities on a Registration Statement pursuant to Section 2.01 or an Underwritten Offering covered under this Agreement, and the disposition of such Registrable Securities, including, without limitation, all registration, filing, securities exchange listing and NYSE fees, all registration, filing, qualification and other fees and expenses of complying with securities or blue sky laws, fees of the Financial Industry Regulatory Authority, Inc., fees of transfer agents and registrars, all word processing, duplicating and printing expenses, any transfer taxes, and the fees

 

13


and disbursements of counsel and independent public accountants for the Company, including the expenses of any special audits or “cold comfort” letters required by or incident to such performance and compliance. “Selling Expenses” means all underwriting discounts and selling commissions or similar fees or arrangements allocable to the sale of the Registrable Securities, transfer taxes and fees and disbursements of counsel to the Selling Holders, except for the reasonable fees and disbursements of counsel for the Selling Holders required to be paid by the Company pursuant to Sections 2.07 and 2.08.

Section 2.08 Indemnification.

(a) By the Company. In the event of a registration of any Registrable Securities under the Securities Act pursuant to this Agreement, to the extent permitted by applicable law, the Company shall indemnify and hold harmless each Selling Holder thereunder, its directors, officers, managers, members, partners, employees, agents and Affiliates and each Person, if any, who controls such Selling Holder or its Affiliates within the meaning of the Securities Act and the Exchange Act, and its directors, officers, members, partners, employees or agents (collectively, the “Selling Holder Indemnified Persons”), against any losses, claims, damages, third party expenses incurred by or on such Holder’s behalf or liabilities (including reasonable attorneys’ fees and third party expenses incurred by or on such Holder’s behalf) (collectively, “Losses”), joint or several, to which such Selling Holder Indemnified Person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such Losses (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact (in the case of any prospectus, in light of the circumstances under which such statement is made) contained in (which, for the avoidance of doubt, includes documents incorporated by reference in) such Registration Statement or any other registration statement contemplated by this Agreement, any preliminary prospectus, prospectus supplement or final prospectus contained therein, or any amendment or supplement thereof, or any free writing prospectus relating thereto or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in light of the circumstances under which they were made) not misleading, and shall reimburse each such Selling Holder Indemnified Person for any legal or other third party expenses reasonably incurred by or on such Holder’s behalf in connection with investigating, defending or resolving any such Loss or actions or proceedings; provided, however, that the Company shall not be liable in any such case if and to the extent that any such Loss arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by such Selling Holder Indemnified Person in writing specifically for use in such Registration Statement or such other registration statement, or prospectus supplement, as applicable. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Selling Holder Indemnified Person, and shall survive the transfer of such securities by such Selling Holder.

(b) By Each Selling Holder. Each Selling Holder agrees severally and not jointly to indemnify and hold harmless the Company, its directors, officers, employees and agents and each Person, if any, who controls the Company within the meaning of the Securities Act or of the Exchange Act, and its directors, officers, employees and agents, to the same extent as the foregoing indemnity from the Company to the Selling Holders, but only with respect to information regarding such Selling Holder furnished in writing by or on behalf of such Selling Holder expressly for

 

14


inclusion in such Registration Statement or any other registration statement contemplated by this Agreement, any preliminary prospectus, prospectus supplement or final prospectus contained therein, or any amendment or supplement thereof, or any free writing prospectus relating thereto; provided, however, that the liability of each Selling Holder shall not be greater in amount than the dollar amount of the proceeds (net of any Selling Expenses) received by such Selling Holder from the sale of the Registrable Securities giving rise to such indemnification.

(c) Notice. Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party in writing thereof, but the omission to so notify the indemnifying party shall not relieve it from any liability that it may have to any indemnified party other than under this Section 2.08. In any action brought against any indemnified party, it shall notify the indemnifying party of the commencement thereof. The indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel reasonably satisfactory to such indemnified party and, after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section 2.08 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so selected; provided, however, that, (i) if the indemnifying party has failed to assume the defense or employ counsel reasonably acceptable to the indemnified party or (ii) if the defendants in any such action include both the indemnified party and the indemnifying party and counsel to the indemnified party shall have concluded that there may be reasonable defenses available to the indemnified party that are different from or additional to those available to the indemnifying party, or if the interests of the indemnified party reasonably may be deemed to conflict with the interests of the indemnifying party, then the indemnified party shall have the right to select a separate counsel and to assume such legal defense and otherwise to participate in the defense of such action, with the reasonable expenses and fees of such separate counsel and other reasonable expenses related to such participation to be reimbursed by the indemnifying party as incurred. Notwithstanding any other provision of this Agreement, no indemnifying party shall settle any action brought against any indemnified party with respect to which such indemnified party is or may be entitled to indemnification hereunder without the consent of the indemnified party, unless the settlement thereof imposes no liability or obligation on, and includes a complete and unconditional release from all liability of, and does not contain any admission of wrongdoing by, the indemnified party.

(d) Contribution. If the indemnification provided for in this Section 2.08 is held by a court or government agency of competent jurisdiction to be unavailable to any indemnified party or is insufficient to hold them harmless in respect of any Losses, then each such indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such Loss in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of such indemnified party on the other in connection with the statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations; provided, however, that in no event shall such Selling Holder be required to contribute an aggregate amount in excess of the dollar amount of proceeds (net of Selling Expenses) received by such Selling Holder from the sale of Registrable Securities giving rise to such indemnification. The relative fault of the indemnifying party on the

 

15


one hand and the indemnified party on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact has been made by, or relates to, information supplied by such party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just and equitable if contributions pursuant to this paragraph were to be determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to herein. The amount paid by an indemnified party as a result of the Losses referred to in the first sentence of this paragraph shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating, defending or resolving any Loss that is the subject of this paragraph. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who is not guilty of such fraudulent misrepresentation.

(e) Other Indemnification. The provisions of this Section 2.08 shall be in addition to any other rights to indemnification or contribution that an indemnified party may have pursuant to law, equity, contract or otherwise. To the extent that any of the Holders is, or would be expected to be, deemed to be an underwriter of Registrable Securities pursuant to any SEC comments or policies or any court of law or otherwise, the Company agrees that (i) the indemnification and contribution provisions contained in this Section 2.08 shall be applicable to the benefit of such Holder in its role as deemed underwriter in addition to its capacity as a Holder (so long as the amount for which any other Holder is or becomes responsible does not exceed the amount for which such Holder would be responsible if the Holder were not deemed to be an underwriter of Registrable Securities) and (ii) such Holder and its representatives shall be entitled to conduct the due diligence which would normally be conducted in connection with an offering of securities registered under the Securities Act, including receipt of customary opinions and comfort letters.

Section 2.09 Rule 144 Reporting.

With a view to making available the benefits of certain rules and regulations of the SEC that may permit the sale of the Registrable Securities to the public without registration, the Company agrees to use its reasonable best efforts to:

(a) make and keep public information regarding the Company available, as those terms are understood and defined in Rule 144 under the Securities Act (or any successor or similar provision adopted by the SEC then in effect), at all times from and after the date hereof (which may be satisfied by making such information available on EDGAR);

(b) file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act at all times from and after the date hereof; and

(c) so long as a Holder owns any Registrable Securities, furnish, (i) to the extent accurate, forthwith upon request, a written statement of the Company that it has complied with the reporting requirements of Rule 144 under the Securities Act (or any similar provision then in effect) and (ii) unless otherwise available electronically at no additional charge via the SEC’s EDGAR system, to such Holder forthwith upon request a copy of the most recent annual or quarterly report of the Company, and such other reports and documents as such Holder may reasonably request in availing itself of any rule or regulation of the SEC allowing such Holder to sell any such securities without registration.

 

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Section 2.10 Transfer or Assignment of Registration Rights. The rights to cause the Company to register Registrable Securities under this Article II may not be transferred or assigned except pursuant to this Section 2.10,

(a) Notwithstanding any other provision of this Agreement, including Section 2.10(b) below, on or after the date hereof, the Initial Holder shall be entitled to transfer and assign its rights as follows:

(i) all of its rights pursuant to this Agreement to one (1) transferee or assignee jointly designated by the Initial Holder and BPP Acquisition (the “Majority Joint Transferee”), so long as the Initial Holder and BPP Acquisition transfer or assign not less than 80% of the Registrable Securities held by the Initial Holder and BPP Acquisition in the aggregate as of the Closing Date to such Majority Joint Transferee; and

(ii) all of its rights pursuant to this Agreement, except those contained in Section 2.03, to up to five (5) transferees or assignees (which number shall not include the Joint Transferee set forth in subjection (i) above) jointly designated by the Initial Holder and BPP Acquisition (collectively, the “Minority Joint Transferees”, and together with the Majority Joint Transferee, the “Joint Transferee”);

provided that, as a condition to the transfer or assignment of rights pursuant to Section 2.10(a)(i) or Section 2.10(a)(ii) above, the Initial Holder and BPP Acquisition shall be required to simultaneously transfer or assign all (and not less than all) of the Registrable Securities held by the Initial Holder and BPP Acquisition in the aggregate as of the Closing Date to the Joint Transferees; and provided further that the Initial Holder shall only be entitled to make each transfer described in this Section 2.10 (a) once during the term of this Agreement.

(b) Other than as set forth in Section 2.10(a) above, the rights to cause the Company to register Registrable Securities under this Article II may not be transferred or assigned except as follows:

(i) Subject to Section 2.10(b)(ii), if a Holder transfers or assigns all (and not less than all) of the Registerable Securities Beneficially Owned by such Holder, then such Holder may transfer or assign its rights pursuant to this Agreement to such transferee or assignee.

(ii) If a Holder transfers or assigns (A) 20% or more of the Registerable Securities issued on the Closing Date to the Initial Holder and BPP Acquisition in the aggregate but less than all of such Registerable Securities issued on the Closing Date, then the transferee or assignee thereof shall be entitled to the rights granted to a Holder pursuant to this Agreement except those contained in Section 2.03 and (B) less than 20% of the Registerable Securities issued on the Closing Date to the Initial Holder and BPP Acquisition in the aggregate, then the transferee or assignee thereof shall be entitled to the rights granted to a Holder pursuant to this Agreement except those contained in Sections 2.02 and 2.03.

 

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(c) In the case of any such transfer or assignment where the transferee or assignee shall have any rights of a Holder hereunder, the Holder making such transfer or assignment must provide the Company written notice of any said transfer or assignment, stating the name and address of each such transferee or assignee and identifying the Registerable Securities Beneficially Owned thereby.

Section 2.11 Limitation on Subsequent Registration Rights.

From and after the date hereof, the Company shall not, without the prior written consent of the Required Holders, enter into any agreement with any current or future holder of any equity securities of the Company that would allow such current or future holder to require the Company to include equity securities in any registration statement filed by the Company on a basis other than pari passu with, or expressly subordinated to the piggyback rights granted to the Holders pursuant to Section 2.02; provided, that in no event shall the Company enter into any agreement that would permit another holder of securities of the Company to participate on a superior or pari passu basis (in terms of priority of cut-back based on advice of Underwriters) with a Holder requesting registration or takedown in an Underwritten Offering pursuant to Section 2.03(a). Notwithstanding anything to the contrary herein, the parties hereto acknowledge that the Company’s entrance into the Kimmeridge Registration Rights Agreement and the Registration Rights Agreement with BPP Acquisition LLC of even date herewith shall not be deemed a violation of, and are expressly permitted under, this Section 2.11.

Section 2.12 Termination of Registration Rights.

The rights to cause the Company to register Registrable Securities granted to the Holders by the Company under this Article II shall terminate upon the date on which all Registrable Securities no longer constitute Registrable Securities in accordance with Section 1.02.

ARTICLE III

MISCELLANEOUS

Section 3.01 Communications.

All notices and other communications provided for or permitted hereunder shall be made in writing by electronic mail, courier service or personal delivery:

 

  (a)

if to the Initial Holder:

Primexx Energy Partners, Ltd.

4849 Greenville Avenue, Suite 1600

Dallas, Texas 75206

Attention: Chris Doyle

Email: [email protected]

 

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

Blackstone Management Partners L.L.C.

345 Park Avenue, 43rd Floor

New York, New York 10154

Attention: Angelo Acconcia; Erik Belz

Email: [email protected];

[email protected]

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

Kirkland & Ellis LLP

609 Main Street

Houston, Texas 77002

Attention: Rhett A. Van Syoc, P.C.

Email: [email protected]

Kirkland & Ellis LLP

1601 Elm Street

Dallas, Texas 75201

Attention: Thomas K. Laughlin, P.C.

Email: [email protected]

 

  (b)

if to a transferee of a Purchaser, to such Holder at the address provided pursuant to Section 2.10 above; and

 

  (c)

if to the Company:

Callon Petroleum Company

2000 W. Sam Houston Parkway S., Suite 2000

Houston, TX 77042

Attention: Michol L. Ecklund, Senior Vice President, General

Counsel and Corporate Secretary

Email: [email protected]

            [email protected]

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

c/o Gibson, Dunn & Crutcher

811 Main Street, Suite 3000

Houston, Texas 77002

Attention: Hillary H. Holmes

Facsimile: (346) 718-6902

E-mail: [email protected]

All such notices and communications shall be deemed to have been received at the time delivered by hand, if personally delivered; when receipt acknowledged, if sent via electronic mail; and when actually received, if sent by courier service or any other means.

 

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Section 3.02 Successor and Assigns.

This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties, including subsequent Holders of Registrable Securities to the extent permitted herein.

Section 3.03 Assignment of Rights.

The rights, interests or obligations of the Holders hereunder may not be transferred or assigned, by operation of law or otherwise, in whole or in part, by the Holders without the prior written consent of the Company, except in accordance with Section 2.10 hereof.

Section 3.04 Recapitalization, Exchanges, Etc. Affecting the Common Stock.

The provisions of this Agreement shall apply to the full extent set forth herein with respect to any and all equity interests of the Company or any successor or assign of the Company (whether by merger, acquisition, consolidation, reorganization, sale of assets or otherwise) that may be issued in respect of, in exchange for or in substitution of, the Registrable Securities, and shall be appropriately adjusted for combinations, share splits, recapitalizations, pro rata distributions of shares and the like occurring after the date of this Agreement.

Section 3.05 Aggregation of Registrable Securities. All Registrable Securities held or acquired by Persons who are Affiliates of one another shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.

Section 3.06 Specific Performance.

Damages in the event of breach of this Agreement by a party hereto may be difficult, if not impossible, to ascertain, and it is therefore agreed that each such Person, in addition to and without limiting any other remedy or right it may have, shall have the right to an injunction or other equitable relief in any court of competent jurisdiction, enjoining any such breach, and enforcing specifically the terms and provisions hereof, and each of the parties hereto hereby waives any and all defenses it may have on the ground of lack of jurisdiction or competence of the court to grant such an injunction or other equitable relief. The existence of this right shall not preclude any such Person from pursuing any other rights and remedies at law or in equity that such Person may have.

Section 3.07 Counterparts.

This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, including facsimile or ..pdf counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same Agreement.

Section 3.08 Headings.

The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

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Section 3.09 Governing Law.

This Agreement, including all issues and questions concerning its application, construction, validity, interpretation and enforcement, shall be construed in accordance with, and governed by, the laws of the State of New York without regard to the choice of law or conflicts of law.

Section 3.10 Waiver of Jury Trial. THE PARTIES TO THIS AGREEMENT EACH HEREBY WAIVE, AND AGREE TO CAUSE THEIR AFFILIATES TO WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. THE PARTIES TO THIS AGREEMENT EACH HEREBY AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

Section 3.12 Severability of Provisions.

Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting or impairing the validity or enforceability of such provision in any other jurisdiction.

Section 3.13 Entire Agreement.

This Agreement and the Purchase Agreement are intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein or in the Purchase Agreement with respect to the rights granted by the Company set forth herein. This Agreement and the Purchase Agreement supersede all prior agreements and understandings between the parties with respect to such subject matter.

Section 3.14 Amendment.

This Agreement may be amended only by means of a written amendment signed by the Company and the Required Holders; provided, however, that no such amendment shall materially and adversely affect the rights of any Holder hereunder without the prior written consent of such Holder.

 

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Section 3.15 No Presumption.

If any claim is made by a party relating to any conflict, omission or ambiguity in this Agreement, no presumption or burden of proof or persuasion shall be implied by virtue of the fact that this Agreement was prepared by or at the request of a particular party or its counsel.

Section 3.16 Obligations Limited to Parties to Agreement.

Each of the parties hereto covenants, agrees and acknowledges that no Person other than the Holders (and its permitted transferees and assignees) and the Company shall have any obligation hereunder. No recourse under this Agreement or under any documents or instruments delivered in connection herewith or therewith shall be had against any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of the Holders or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate thereof, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any applicable Law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of the Holders or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate thereof, as such, for any obligations of the Holders under this Agreement or any documents or instruments delivered in connection herewith or therewith or for any claim based on, in respect of or by reason of such obligation or its creation, except in each case for any transferee or assignee of a Holders hereunder.

Section 3.17 Interpretation.

Article and Section references are to this Agreement, unless otherwise specified. All references to instruments, documents, contracts and agreements are references to such instruments, documents, contracts and agreements as the same may be amended, supplemented and otherwise modified from time to time, unless otherwise specified. The words “include,” “includes” and “including” or words of similar import shall be deemed to be followed by the words “without limitation.” A term has the meaning assigned to it. Words in the singular include the plural, and words in the plural include the singular. The word “or” is not exclusive. The words “herein,” “hereof” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision. References to agreements or instruments, or to statutes or regulations, are to such agreements or instruments, or statutes or regulations, as amended from time to time (or to successor statutes and regulations). Whenever any determination, consent or approval is to be made or given by the Required Holders (and its transferees or assignees) under this Agreement, such action shall be in the Required Holder’s (and its transferees or assignees) sole discretion unless otherwise specified. Unless expressly set forth or qualified otherwise (e.g., by “Business” or “trading”), all references herein to a “day” are deemed to be a reference to a calendar day.

(Signature pages follow)

 

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

 

CALLON PETROLEUM COMPANY
By:  

/s/ Joseph C. Gatto Jr.

Name:   Joseph C. Gatto Jr.
Title:   President and CEO

Signature Page to Registration Rights Agreement


PRIMEXX ENERGY PARTNERS, LTD.
By:  

/s/ Chris Doyle

Name:   Chris Doyle
Title:   Chief Executive Officer and President

Signature Page to Registration Rights Agreement

Exhibit E

Execution Version

REGISTRATION RIGHTS AGREEMENT

BY AND BETWEEN

CALLON PETROLEUM COMPANY

AND

BPP ENERGY PARTNERS LLC

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of October 1, 2021, by and between Callon Petroleum Company, a Delaware corporation (the “Company”), and BPP Energy Partners LLC, a Texas limited liability company (the “Initial Holder”).

WHEREAS, the Company entered into a Purchase and Sale Agreement, dated as of August 3, 2021, by and among the Company, the Initial Holder and the other parties thereto (the “Purchase Agreement”);

WHEREAS, under the Purchase Agreement, the Initial Holder will receive shares of Common Stock;

WHEREAS, the Company has agreed to provide the registration and other rights set forth in this Agreement for the benefit of the Initial Holder pursuant to the Purchase Agreement; and

WHEREAS, it is a condition to the obligations of the Initial Holder and the Company under the Purchase Agreement that this Agreement be executed and delivered.

NOW THEREFORE, in consideration of the premises, mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each party hereto, the parties hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01 Definitions. The terms set forth below are used herein as so defined:

Affiliate” shall have the meaning ascribed to it, on the date hereof, in Rule 405 under the Securities Act.

Agreement” has the meaning specified therefor in the introductory paragraph of this Agreement.

Board” means the Board of Directors of the Company.

Beneficially Own” shall have the meaning assigned to such term in Rule 13d-3 under the Exchange Act, and any Person’s beneficial ownership of securities shall be calculated in accordance with the provisions of such Rule.


Business Day” means any day other than a Saturday, Sunday, any federal legal holiday or day on which banking institutions in the State of New York or State of Texas are authorized or required by law or other governmental action to close.

Closing Date” means the date of consummation of the transactions contemplated by the Purchase Agreement.

Common Stock” means the shares of common stock, par value $0.01 per share, of the Company.

Company” has the meaning specified therefor in the introductory paragraph of this Agreement.

Control” means the possession, directly or indirectly, of the power to direct, or cause the direction of, the management and policies of a Person whether though the ownership of voting securities, by contract or otherwise. The terms “Controlled” and “Controlling” shall have correlative meanings.

Effective Date” means, with respect to a particular Shelf Registration Statement, the date of effectiveness of such Shelf Registration Statement.

Effectiveness Period” means the period beginning on the Effective Date for the Registration Statement and ending at the time all Registrable Securities covered by such Registration Statement have ceased to be Registrable Securities.

Exchange Act” means the Securities Exchange Act of 1934, as amended and the rules and regulations of the SEC promulgated thereunder.

Freely Tradable” means, with respect to any security, that such security, when held by the holder thereof, may legally be distributed to the public under Rule 144 under the Securities Act and is no longer subject to the restrictions on trading under the provisions of Rule 144 under the Securities Act (or any successor rule or regulation to Rule 144 then in force), including volume and manner of sale restrictions, and the current public information requirement of Rule 144(e) (or any successor rule or regulation to Rule 144 then in force) no longer applies; provided that if a Holder Beneficially Owns 10% or more of the Company’s then outstanding Common Stock, then such Holder’s Common Stock shall be deemed not to be Freely Tradable for so long as such Holder Beneficially Owns 10% or more of the Company’s outstanding Common Stock.

Governmental Authority” means any federal, state, local or foreign government, or other governmental, regulatory or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral body.

Holder” means the holder of any Registrable Securities.

Initial Holder” has the meaning specified therefor in the introductory paragraph of this Agreement.

 

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Law” means any statute, law, ordinance, regulation, rule, order, code, governmental restriction, decree, injunction or other requirement of law, or any judicial or administrative interpretation thereof, of any Governmental Authority.

Losses” has the meaning specified therefor in Section 2.08(a) of this Agreement.

Managing Underwriter” means, with respect to any Underwritten Offering, the book-running lead manager of such Underwritten Offering.

NYSE” means The New York Stock Exchange, Inc.

Person” means an individual or a corporation, limited liability company, joint venture, trust, unincorporated organization, association, government agency or political subdivision thereof or other entity.

PRD” means Primexx Energy Partners, Ltd., a Texas limited partnership.

Purchase Agreement” has the meaning specified therefor in the recitals of this Agreement.

Registrable Securities” means, subject to Section 1.02, the Common Stock to be issued the Initial Holder pursuant to the Purchase Agreement, including any shares of Common Stock which may be issued or distributed in respect of such shares of Common Stock by way of conversion, concession, stock dividend or stock split or other distribution, recapitalization or reclassification or similar transaction.

Registration Expenses” has the meaning specified therefor in Section 2.07(b) of this Agreement.

Registration Statement” has the meaning specified therefor in Section 2.01 of this Agreement.

Required Holders” means initially, the Initial Holder, and subsequent to a transfer by the Initial Holder of the Registrable Securities, the Holder or collective Holders of greater than 50% of the Registrable Securities.

Rule 405” means Rule 405 under the Securities Act (or any successor or similar provision adopted by the SEC then in effect).

SEC” means the U.S. Securities and Exchange Commission.

Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

Selling Expenses” has the meaning specified therefor in Section 2.07(b) of this Agreement.

Selling Holder” means a Holder who is selling Registrable Securities under a Registration Statement pursuant to the terms of this Agreement.

 

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Selling Holder Indemnified Persons” has the meaning specified therefor in Section 2.08(a) of this Agreement.

Shelf Registration Statement” means a registration statement under the Securities Act to permit the public resale of the Registrable Securities from time to time as permitted by Rule 415 under the Securities Act (or any successor or similar provision adopted by the SEC then in effect).

Underwritten Offering” means an offering (including an offering pursuant to a Shelf Registration Statement) in which Registrable Securities are sold to one or more underwriters on a firm commitment basis for reoffering to the public or an offering that is a “bought deal” with one or more investment banks.

WKSI” means a “well known seasoned issuer” as defined under Rule 405.

Section 1.02 Registrable Securities. Any Registrable Security shall cease to be a Registrable Security at the earliest of the following: (a) when a registration statement covering such Registrable Security becomes or has been declared effective by the SEC and such Registrable Security has been sold or disposed of pursuant to such effective registration statement; (b) when such Registrable Security has been sold or disposed of (excluding transfers or assignments by a Holder to an Affiliate) pursuant to Rule 144 under the Securities Act (or any successor or similar provision adopted by the SEC then in effect) under circumstances in which all of the applicable conditions of Rule 144 (as then in effect) are met; (c) when such Registrable Security is held by the Company; or (d) when such Registrable Security has been sold or disposed of in a private transaction in which the transferor’s rights under this Agreement are not assigned to the transferee of such securities pursuant to Section 2.10 hereof. In addition, any Registrable Security will cease to be a Registrable Security upon the date that such security is Freely Tradable; provided that, for the avoidance of doubt, Common Stock that is not a Registrable Security because it is Freely Tradable will become a Registrable Security to the extent it is subsequently not Freely Tradable.

ARTICLE II

REGISTRATION RIGHTS

Section 2.01 Shelf Registration.

(a) Shelf Registration. Within 60 days of the Closing Date, the Company shall prepare and file a Shelf Registration Statement with the SEC to permit the public resale of all Registrable Securities on the terms and conditions specified in this Section 2.01 (a “Registration Statement”). The Registration Statement filed with the SEC pursuant to this Section 2.01 shall be on Form S-3 and, if the Company is a WKSI as of the filing date thereof, shall be an Automatic Shelf Registration Statement, or, if Form S-3 is not then available to the Company, on Form S-1 or such other form of registration statement as is then available to effect a registration for resale of the Registrable Securities, covering the Registrable Securities, and shall contain a prospectus in such form as to permit any Selling Holder covered by such Registration Statement to sell such Registrable Securities pursuant to Rule 415 under the Securities Act (or any successor or similar provision adopted by the SEC then in effect) at any time beginning on the Effective Date for such Registration Statement. The Company shall use its reasonable best efforts to cause a Registration Statement filed pursuant to this Section 2.01 to be declared effective as soon as reasonably

 

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practicable thereafter. During the Effectiveness Period, the Company shall use its reasonable best efforts to cause a Registration Statement filed pursuant to this Section 2.01 to remain continuously effective, and to be supplemented and amended to the extent necessary to ensure that such Registration Statement is available or, if not available, that another registration statement is available for the resale of the Registrable Securities until all Registrable Securities have ceased to be Registrable Securities; provided, that the Company shall not be required to supplement or amend such Registration Statement more than once in any calendar quarterly period to name additional parties as the result of any transfer of registration rights. The Company shall prepare and file a supplemental listing application with the NYSE (or such other national securities exchange on which the Registrable Securities are then listed and traded) to list the Registrable Securities covered by a Registration Statement and shall use its reasonable best efforts to have such Registrable Securities approved for listing on the NYSE (or such other national securities exchange on which the Registrable Securities are then listed and traded) by the Effective Date of such Registration Statement, subject only to official notice of issuance. As soon as practicable following the Effective Date of a Registration Statement, but in any event within three Business Days of such date, the Company shall notify the Required Holders of the effectiveness of such Registration Statement. When effective, a Registration Statement (including the documents incorporated therein by reference) will comply as to form in all material respects with all applicable requirements of the Securities Act and the Exchange Act and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any prospectus contained in such Registration Statement, in the light of the circumstances under which a statement is made).

(b) Delay Rights. Notwithstanding anything to the contrary contained herein, the Company may, upon written notice to (i) the Holders, delay the filing of a Registration Statement required under Section 2.01, or (ii) any Selling Holder whose Registrable Securities are included in a Registration Statement or other registration statement contemplated by this Agreement, suspend such Selling Holder’s use of any prospectus that is a part of such Registration Statement or other registration statement (in which event the Selling Holder shall discontinue sales of the Registrable Securities pursuant to such Registration Statement or other registration statement contemplated by this Agreement but may settle any previously made sales of Registrable Securities) if the Company (x) is pursuing an acquisition, merger, tender offer, reorganization, disposition or other similar transaction and the Board determines reasonably and in good faith that (A) the Company’s ability to pursue or consummate such a transaction would be materially adversely affected by any required disclosure of such transaction in such Registration Statement or other registration statement or (B) such transaction renders the Company unable to comply with SEC requirements, in each case under circumstances that would make it impractical or inadvisable to cause the Registration Statement (or such filings) to become effective or to promptly amend or supplement the Registration Statement or other registration statement contemplated by this Agreement on a post effective basis, as applicable, or (y) has experienced some other material non-public event the disclosure of which at such time, in the reasonable and good faith judgment of the Board, would materially adversely affect the Company; provided, however, that in no event shall the Selling Holders be suspended from selling Registrable Securities pursuant to such Registration Statement for a period that exceeds an aggregate of 60 days in any 180-day period or 105 days in any 365-day period. Upon disclosure of such information or the termination of the condition described above, the Company shall provide prompt notice, but in any event within one Business Day of such disclosure or termination, to the Selling Holders whose Registrable Securities are included in such Registration Statement and shall promptly terminate any suspension of sales it has put into effect and shall take such other reasonable actions to permit registered sales of Registrable Securities as contemplated in this Agreement.

 

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Section 2.02 Piggyback Rights.

(a) Participation. So long as a Holder has Registrable Securities, if the Company proposes to file (i) a shelf registration statement other than a Registration Statement contemplated by Section 2.01 and other than a registration statement on Forms S-4 or S-8 and any successor forms, (ii) a prospectus supplement to an effective shelf registration statement relating to the sale of equity securities of the Company, other than a Registration Statement contemplated by Section 2.01 and Holders may be included without the filing of a post-effective amendment thereto, or (iii) a registration statement, other than a shelf registration statement, and other than a registration statement on Forms S-4 or S-8 and any successor forms, in each case, for the sale of Common Stock in an Underwritten Offering for its own account or that of another Person, or both, then the Company shall give prompt written notice of its intention to effect such registration at least five Business Days before the proposed date of filing of the applicable Registration Statement or prospectus supplement, or at least two Business Days in connection with any overnight or bought Underwritten Offering, to the Holders and such notice shall (A) describe the intended method(s) of distribution, and the name of the proposed Managing Underwriter or Underwriters, if any, in such offering and (B) offer the Holders the opportunity to include in such registration statement, prospectus supplement or Underwritten Offering, as the case may be, such number of Registrable Securities (the “Included Registrable Securities”) as the Holders may request in writing (such request may include the Registrable Securities to be included on behalf of any other Holder, as specified by the Holders); provided, however, that if the Company has been advised by the Managing Underwriter of any such Underwritten Offering that the inclusion of all Registrable Securities that the Selling Holders intend to include in such offering exceeds the number that can be sold in such offering without being likely to have an adverse effect on the price, timing or distribution of the Common Stock in the Underwritten Offering, then (x) if no Registrable Securities can be included in the Underwritten Offering in the opinion of the Managing Underwriter without having such adverse effect, the Company shall not be required to offer such opportunity to the Holders or (y) if any Registrable Securities can be included in the Underwritten Offering in the opinion of the Managing Underwriter without having such adverse effect, then the amount of Registrable Securities to be offered for the accounts of Holders shall be determined based on the provisions of Section 2.02(b) or in such other manner as such Selling Holders may agree. Any notice required to be provided in this Section 2.02(a) to the Holders shall be provided on a Business Day and receipt of such notice shall be confirmed by the Holders. Holders shall then have two Business Days (or one Business Day in connection with any overnight or bought Underwritten Offering) after notice has been delivered to request in writing the inclusion of Registrable Securities in the Underwritten Offering. If no written request for inclusion from Holders is received within the specified time, each such Holder shall have no further right to participate in such Underwritten Offering. If, at any time after giving written notice of its intention to undertake an Underwritten Offering and prior to the closing of such Underwritten Offering, the Company shall determine for any reason not to undertake or to delay such Underwritten Offering, the Company may, at its election, give written notice of such determination to the Selling Holders and, (1) in the case of a determination not to undertake such Underwritten Offering, shall be relieved of its obligation to sell any Included Registrable Securities in connection with such

 

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terminated Underwritten Offering, and (2) in the case of a determination to delay such Underwritten Offering, shall be permitted to delay offering any Included Registrable Securities as part of such Underwritten Offering for the same period as the delay in the Underwritten Offering. Any Selling Holder shall have the right to withdraw such Selling Holder’s request for inclusion of such Selling Holder’s Registrable Securities in such Underwritten Offering by giving written notice to the Company of such withdrawal at least one Business Day before the time of pricing of such Underwritten Offering. Holders may deliver written notice (an “Opt-Out Notice”) to the Company requesting that such Holder not receive notice from the Company of any proposed Underwritten Offering; provided, however, that such Holder may later revoke any such Opt-Out Notice in writing prior to five Business Day before the time of pricing of such underwritten offering. Following receipt of an Opt-Out Notice from a Holder (unless subsequently revoked), the Company shall not be required to deliver any notice to such Holder pursuant to this Section 2.02(a) and such Holder (unless such Holder’s Opt-Out Notice is subsequently revoked) shall no longer be entitled to participate in Underwritten Offerings by the Company pursuant to this Section 2.02(a).

(b) Priority. If the Managing Underwriter of any proposed Underwritten Offering of Common Stock involving Included Registrable Securities pursuant to this Section 2.02 advises the Company that the total amount of Common Stock that the Selling Holders and any other Persons intend to include in such offering exceeds the number of shares of Common Stock that can be sold in such offering without being likely to have an adverse effect on the price, timing or distribution of the Common Stock offered or the market for the Common Stock, then the Common Stock to be included in such Underwritten Offering shall include the number of Registrable Securities that such Managing Underwriter advises the Company can be sold without having such adverse effect, with such number to be allocated (i) first, to the Company if initiating such registration, (ii) second, to the holders (the “Kimmeridge Holders”) under (A) the Registration Rights Agreement (the “2020 Kimmeridge Registration Rights Agreement”), dated September 30, 2020, by and between the Company and Chambers Investments, LLC (“Chambers”) and (B) the Registration Rights Agreement (the “2021 Kimmeridge Registration Rights Agreement” and together with the 2020 Kimmeridge Registration Rights Agreement, the “Kimmeridge Registration Rights Agreements”) to be made and entered into by and among the Company, Chambers, and the entities affiliated therewith in connection with the closing of that certain Exchange Agreement, dated August 3, 2021, by and between the Company and Chambers, to the extent the Kimmeridge Holders exercise their rights pursuant to the Kimmeridge Registration Rights Agreements entitling them to participate in such Underwritten Offering, allocated among such other holders pro rata on the basis of the number of shares of Common Stock held by each applicable other holder or in such manner as they may agree, (iii) third, to the Selling Holders who have requested participation in such Underwritten Offering, allocated among such Selling Holders pro rata on the basis of the number of Registrable Securities held by each Selling Holder or in such manner as they may agree, and (iv) fourth, by the other holders of Common Stock (other than Holders and as otherwise already allocated in this section) with registration rights entitling them to participate in such Underwritten Offering, allocated among such other holders pro rata on the basis of the number of shares of Common Stock held by each applicable other holder or in such manner as they may agree. For the avoidance of doubt, the priority set forth in this Section 2.02(b) shall not apply and shall have no effect in the event that a Holder exercises its rights pursuant to Section 2.03, which shall be governed exclusively by the provisions of Section 2.03.

 

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Section 2.03 Underwritten Offerings.

(a) Demand Offering. In the event that any Holder elects to dispose of Registrable Securities under a Registration Statement pursuant to an Underwritten Offering and reasonably expects gross proceeds of at least $25 million from such Underwritten Offering (together with any Registrable Securities to be disposed of by a Selling Holder who has elected to participate in such Underwritten Offering pursuant to this Section 2.03), the Company shall, at the written request of such Selling Holder(s), enter into an underwriting agreement in a form as is customary in Underwritten Offerings of securities by the Company with the Managing Underwriter or Underwriters selected by the Company (subject to the written consent of the Initiating Holder of such Underwritten Offering, which consent shall not be unreasonably withheld), which shall include, among other provisions, indemnities to the effect and to the extent provided in Section 2.08, and shall take all such other reasonable actions as are requested by the Managing Underwriter or Underwriters in order to expedite or facilitate the disposition of such Registrable Securities; provided, however, that the Company shall have no obligation to facilitate or participate in, including entering into any underwriting agreement, for more than two Underwritten Offering at the request of the Holders; provided, further, that if the Company is conducting or actively pursuing a securities offering of Common Stock (other than in connection with any at-the-market offering or similar continuous offering program), then the Company may suspend such Selling Holders’ rights to require the Company to conduct an Underwritten Offering pursuant to this Section 2.03 (for the avoidance of doubt, this proviso shall only apply to primary offerings by the Company of its Common Stock and not to any offerings requested by other stockholders of the Company); provided, however, that the Company may only suspend such Selling Holders’ rights to require the Company to conduct an Underwritten Offering pursuant to this Section 2.03 once in any six-month period and in no event for a period that exceeds an aggregate of 75 days in any 180-day period or 105 days in any 365-day period. For the avoidance of doubt, the Holders’ rights to elect to participate in an Underwritten Offering pursuant to this Section 2.03(a) shall not be limited in any way by the rights of other holders of Common Stock with registration rights to make similar elections to participate in underwritten offerings of Common Stock, except as expressly provided in this Agreement or, subject to Section 2.11, the applicable agreement with such other holders of Common Stock.

(b) General Procedures. In connection with any Underwritten Offering contemplated by Section 2.03(a), the underwriting agreement into which each Selling Holder and the Company shall enter shall contain such representations, covenants, indemnities (subject to Section 2.08) and other rights and obligations as are customary in Underwritten Offerings of securities by the Company. No Selling Holder shall be required to make any representations or warranties to, or agreements with, the Company or the Underwriters other than representations, warranties or agreements regarding (i) such Holder’s ownership of its Registrable Securities to be sold or transferred, (ii) such Selling Holder’s authority to enter into such underwriting agreement and to sell or transfer such securities, (iii) its intended method of distribution and (iv) any other such matters or representations pertaining to compliance with securities laws as may be reasonably requested. If any Selling Holder (which, for the avoidance of doubt, shall include the Initiating Holder (as defined below)) disapproves of the terms of an Underwritten Offering contemplated by this Section 2.03, such Selling Holder may elect to withdraw therefrom by notice to the Company and the Managing Underwriter; provided, however, that such withdrawal must be made at least

 

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one Business Day prior to the time of pricing of such Underwritten Offering to be effective. If, pursuant to the preceding sentence, the entire Demand Registration Request is revoked, then, at the option of the Holder or Holders who revoke such request, Holder or Holders shall reimburse the Company for all of its reasonable and documented incremental out-of-pocket expenses incurred in the preparation, filing and processing of the Registration Statement or prospectus supplement with respect to such requested Underwritten Offering, which incremental out-of-pocket expenses, for the avoidance of doubt, shall not include overhead expenses and which requested Underwritten Offering, whether or not completed, will not decrease the number of Underwritten Offerings the Holders shall have the right and option to request under this Section 2.03.

(c) Priority. If the Managing Underwriter of any proposed Underwritten Offering of Registrable Securities pursuant to this Section 2.03 advises the Company that the total amount of Common Stock that the Selling Holders and any other Persons intend to include in such offering exceeds the number of shares of Common Stock that can be sold in such offering without being likely to have an adverse effect on the price, timing or distribution of the Common Stock offered or the market for the Common Stock, then the Common Stock to be included in such Underwritten Offering shall include the number of Registrable Securities that such Managing Underwriter advises the Company can be sold without having such adverse effect, with such number to be allocated (i) first, to the Selling Holder who requested such Underwritten Offering, (ii) second, to any other Holders of Registrable Securities who have elected to participate in such Underwritten Offering, allocated among such other Selling Holders pro rata on the basis of the number of Registrable Securities held by each such Selling Holder or in such other manner as such Selling Holders may agree, and (iii) third, to the Company.

Section 2.04 Sale Procedures.

In connection with its obligations under this Article II, the Company shall, as expeditiously as possible, subject to confidentiality obligations and agreements:

(a) use its reasonable best efforts to prepare and file with the SEC such amendments and supplements to a Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Registration Statement effective for the Effectiveness Period and as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such Registration Statement;

(b) if a prospectus supplement will be used in connection with the marketing of an Underwritten Offering from a Registration Statement and the Managing Underwriter at any time shall notify the Company in writing that, in the sole judgment of such Managing Underwriter, inclusion of detailed information to be used in such prospectus supplement is of material importance to the success of the Underwritten Offering of such Registrable Securities, the Company shall use its reasonable best efforts to include such information in such prospectus supplement;

 

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(c) furnish to each Selling Holder (i) as far in advance as reasonably practicable before filing a Registration Statement or any other registration statement contemplated by this Agreement or any supplement or amendment thereto, upon request, copies of reasonably complete drafts of all such documents proposed to be filed (including exhibits and each document incorporated by reference therein to the extent then required by the rules and regulations of the SEC other than annual or quarterly reports on Form 10-K or 10-Q, respectively, current reports on Form 8-K or proxy statements; provided, however, that such reports or proxy statements shall be provided at least two Business Days prior to filing in connection with any Underwritten Offering), and provide each such Selling Holder the opportunity to object to any information pertaining to such Selling Holder and its plan of distribution that is contained therein and make the corrections reasonably requested by such Selling Holder with respect to such information prior to filing a Registration Statement or such other registration statement or supplement or amendment thereto, and (ii) such number of copies of such Registration Statement or such other registration statement and the prospectus included therein and any supplements and amendments thereto as such Selling Holder may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities covered by such Registration Statement or other registration statement;

(d) if applicable, use its reasonable best efforts to register or qualify the Registrable Securities covered by a Registration Statement or any other registration statement contemplated by this Agreement under the securities or blue sky laws of such jurisdictions as the Selling Holders or, in the case of an Underwritten Offering, the Managing Underwriter, shall reasonably request; provided, however, that the Company shall not be required to qualify generally to transact business in any jurisdiction where it is not then required to so qualify or to take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject;

(e) promptly notify each Selling Holder, at any time when a prospectus relating thereto is required to be delivered by any of them under the Securities Act, of (i) the filing of a Registration Statement or any other registration statement contemplated by this Agreement or any prospectus or prospectus supplement to be used in connection therewith, or any amendment or supplement thereto, and, with respect to such Registration Statement or any other registration statement or any post-effective amendment thereto, when the same has become effective; and (ii) the receipt of any written comments from the SEC with respect to any filing referred to in clause (i) and any written request by the SEC for amendments or supplements to such Registration Statement or any other registration statement or any prospectus or prospectus supplement thereto;

(f) promptly notify each Selling Holder, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of (i) the happening of any event as a result of which the prospectus or prospectus supplement contained in a Registration Statement or any other registration statement contemplated by this Agreement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any prospectus contained therein, in the light of the circumstances under which a statement is made); (ii) the issuance or express threat of issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement or any other registration statement contemplated by this Agreement, or the initiation of any proceedings for that purpose; or (iii) the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the applicable securities or blue sky laws of any jurisdiction. Following the provision of such notice, the Company agrees to as promptly as practicable amend or supplement the prospectus or prospectus supplement or take other appropriate action so that the prospectus or prospectus supplement does not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing and to take such other commercially reasonable action as is necessary to remove a stop order, suspension, threat thereof or proceedings related thereto;

 

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(g) upon request, furnish to each Selling Holder copies of any and all transmittal letters or other correspondence with the SEC or any other governmental agency or self-regulatory body or other body having jurisdiction (including any domestic or foreign securities exchange) relating to such offering of Registrable Securities;

(h) in the case of an Underwritten Offering, use its reasonable best efforts to furnish to the underwriters upon request, (i) an opinion of counsel for the Company dated the date of the closing under the underwriting agreement and (ii) a “cold comfort” letter, dated the pricing date of such Underwritten Offering and a letter of like kind dated the date of the closing under the underwriting agreement, in each case, signed by the independent public accountants who have certified the Company’s financial statements included or incorporated by reference into the applicable registration statement, and each of the opinion and the “cold comfort” letter shall be in customary form and covering substantially the same matters with respect to such registration statement (and the prospectus and any prospectus supplement included therein) as have been customarily covered in opinions of issuer’s counsel and in accountants’ letters delivered to the underwriters in Underwritten Offerings of securities by the Company and such other matters as such underwriters and Selling Holders may reasonably request;

(i) otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the SEC, and make available to its security holders (which may be satisfied by making such information available on the SEC’s Electronic Data Gathering, Analysis and Retrieval system or any successor system known as “EDGAR”), as soon as reasonably practicable, an earnings statement, covering a period of twelve months beginning within three months after the Effective Date of such Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder;

(j) make available to the appropriate representatives of the Managing Underwriter and Selling Holders access to such information and Company personnel as is reasonable and customary to enable such parties to establish a due diligence defense under the Securities Act; provided, that the Company need not disclose any non-public information to any such representative unless and until such representative has entered into a confidentiality agreement with the Company;

(k) use its reasonable best efforts to cause all such Registrable Securities registered pursuant to this Agreement to be listed on each securities exchange or nationally recognized quotation system on which the Common Stock are then listed or quoted;

(l) use its reasonable best efforts to cause the Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Company to enable the Selling Holders to consummate the disposition of such Registrable Securities;

 

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(m) provide a transfer agent and registrar for all Registrable Securities covered by such registration statement not later than the Effective Date of such registration statement;

(n) enter into customary agreements and take such other actions as are reasonably requested by the Selling Holders or the underwriters, if any, in order to expedite or facilitate the disposition of such Registrable Securities (including, in the case of an Underwritten Offering of $50 million or greater of Registrable Securities (calculated based on the Registrable Securities Amount), making appropriate officers of the Company available to participate in any “road show” presentations before analysts, and other customary marketing activities (including one-on-one meetings with prospective purchasers of the Registrable Securities)); provided, however, that the officers of the Company shall not be required to dedicate an unreasonably burdensome amount of time in connection with activities for any Underwritten Offering;

(o) if requested by a Selling Holder, (i) as soon as practicable incorporate in a prospectus supplement or post-effective amendment such information as such Selling Holder reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering, and (ii) as soon as practicable make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and

(p) if reasonably required by the Company’s transfer agent, use commercially reasonably efforts to promptly deliver any authorizations, certificates and directions required by the transfer agent which authorize and direct the transfer agent to transfer such Registrable Securities without legend, in accordance with applicable law, upon sale by the Holder of such Registrable Securities under the Registration Statement.

Notwithstanding anything to the contrary in this Section 2.04, the Company shall not name a Holder as an underwriter (as defined in Section 2(a)(11) of the Securities Act) in any Registration Statement without such Holder’s consent, except as required by law or request of the staff of the Commission.

Each Selling Holder, upon receipt of notice from the Company of the happening of any event of the kind described in Section 2.04(f), shall forthwith discontinue offers and sales of the Registrable Securities by means of a prospectus or prospectus supplement until such Selling Holder’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 2.04(f) or until it is advised in writing by the Company that the use of the prospectus may be resumed and has received copies of any additional or supplemental filings incorporated by reference in the prospectus, and, if so directed by the Company, such Selling Holder shall, or shall request the Managing Underwriter, if any, to deliver to the Company (at the Company’s expense) all copies in their possession or control, other than permanent file copies then in such Selling Holder’s possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice.

 

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Section 2.05 Cooperation by Holders.

The Company shall have no obligation to include Registrable Securities of a Holder in a Registration Statement or in an Underwritten Offering pursuant Section 2.03(a) who has failed to timely furnish after receipt of a written request from the Company such information that the Company determines, after consultation with its counsel, is reasonably required in order for the registration statement or prospectus supplement, as applicable, to comply with the Securities Act.

Section 2.06 Restrictions on Public Sale by Holders of Registrable Securities.

To the extent requested by the Managing Underwriter, each Holder of Registrable Securities that participates in an Underwritten Offering will enter into a customary letter agreement with underwriters providing such Holder will not effect any public sale or distribution of Registrable Securities during the 60 calendar-day period beginning on the date of a prospectus or prospectus supplement filed with the SEC with respect to the pricing of such Underwritten Offering, provided that, notwithstanding the foregoing, (i) the duration of the foregoing restrictions shall be no longer than the duration of the shortest restriction imposed by the Underwriters on the Company or the officers, directors or any other Affiliate of the Company on whom a restriction is imposed and (ii) that the restrictions set forth in this Section 2.06 shall not apply to any Registrable Securities that are included in such Underwritten Offering by such Holder. In addition, this Section 2.06 shall not apply to any Holder that is not entitled to participate in such Underwritten Offering because the Registrable Securities held by such Holder may be disposed of without restriction pursuant to Rule 144 under the Securities Act (or any successor or similar provision adopted by the SEC then in effect).

Section 2.07 Expenses.

(a) Expenses. The Company shall pay all reasonable Registration Expenses as determined reasonably and in good faith by the Board, including, in the case of an Underwritten Offering, the Registration Expenses of an Underwritten Offering, regardless of whether any sale is made pursuant to such Underwritten Offering. Each Selling Holder shall pay its pro rata share of all Selling Expenses in connection with any sale of its Registrable Securities hereunder. For the avoidance of doubt, each Selling Holder’s pro rata allocation of Selling Expenses shall be the percentage derived by dividing (i) the number of Registrable Securities sold by such Selling Holder in connection with such sale by (ii) the aggregate number of Registrable Securities sold by all Selling Holders in connection with such sale. In addition, except as otherwise provided in Sections 2.07 and 2.08 hereof, the Company shall not be responsible for legal fees incurred by Holders in connection with the exercise of such Holders’ rights hereunder.

(b) Certain Definitions. “Registration Expenses” means all expenses incident to the Company’s performance under or compliance with this Agreement to effect the registration of Registrable Securities on a Registration Statement pursuant to Section 2.01 or an Underwritten Offering covered under this Agreement, and the disposition of such Registrable Securities, including, without limitation, all registration, filing, securities exchange listing and NYSE fees, all registration, filing, qualification and other fees and expenses of complying with securities or blue sky laws, fees of the Financial Industry Regulatory Authority, Inc., fees of transfer agents and registrars, all word processing, duplicating and printing expenses, any transfer taxes, and the fees

 

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and disbursements of counsel and independent public accountants for the Company, including the expenses of any special audits or “cold comfort” letters required by or incident to such performance and compliance. “Selling Expenses” means all underwriting discounts and selling commissions or similar fees or arrangements allocable to the sale of the Registrable Securities, transfer taxes and fees and disbursements of counsel to the Selling Holders, except for the reasonable fees and disbursements of counsel for the Selling Holders required to be paid by the Company pursuant to Sections 2.07 and 2.08.

Section 2.08 Indemnification.

(a) By the Company. In the event of a registration of any Registrable Securities under the Securities Act pursuant to this Agreement, to the extent permitted by applicable law, the Company shall indemnify and hold harmless each Selling Holder thereunder, its directors, officers, managers, members, partners, employees, agents and Affiliates and each Person, if any, who controls such Selling Holder or its Affiliates within the meaning of the Securities Act and the Exchange Act, and its directors, officers, members, partners, employees or agents (collectively, the “Selling Holder Indemnified Persons”), against any losses, claims, damages, third party expenses incurred by or on such Holder’s behalf or liabilities (including reasonable attorneys’ fees and third party expenses incurred by or on such Holder’s behalf) (collectively, “Losses”), joint or several, to which such Selling Holder Indemnified Person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such Losses (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact (in the case of any prospectus, in light of the circumstances under which such statement is made) contained in (which, for the avoidance of doubt, includes documents incorporated by reference in) such Registration Statement or any other registration statement contemplated by this Agreement, any preliminary prospectus, prospectus supplement or final prospectus contained therein, or any amendment or supplement thereof, or any free writing prospectus relating thereto or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in light of the circumstances under which they were made) not misleading, and shall reimburse each such Selling Holder Indemnified Person for any legal or other third party expenses reasonably incurred by or on such Holder’s behalf in connection with investigating, defending or resolving any such Loss or actions or proceedings; provided, however, that the Company shall not be liable in any such case if and to the extent that any such Loss arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by such Selling Holder Indemnified Person in writing specifically for use in such Registration Statement or such other registration statement, or prospectus supplement, as applicable. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Selling Holder Indemnified Person, and shall survive the transfer of such securities by such Selling Holder.

(b) By Each Selling Holder. Each Selling Holder agrees severally and not jointly to indemnify and hold harmless the Company, its directors, officers, employees and agents and each Person, if any, who controls the Company within the meaning of the Securities Act or of the Exchange Act, and its directors, officers, employees and agents, to the same extent as the foregoing indemnity from the Company to the Selling Holders, but only with respect to information regarding such Selling Holder furnished in writing by or on behalf of such Selling Holder expressly for

 

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inclusion in such Registration Statement or any other registration statement contemplated by this Agreement, any preliminary prospectus, prospectus supplement or final prospectus contained therein, or any amendment or supplement thereof, or any free writing prospectus relating thereto; provided, however, that the liability of each Selling Holder shall not be greater in amount than the dollar amount of the proceeds (net of any Selling Expenses) received by such Selling Holder from the sale of the Registrable Securities giving rise to such indemnification.

(c) Notice. Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party in writing thereof, but the omission to so notify the indemnifying party shall not relieve it from any liability that it may have to any indemnified party other than under this Section 2.08. In any action brought against any indemnified party, it shall notify the indemnifying party of the commencement thereof. The indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel reasonably satisfactory to such indemnified party and, after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section 2.08 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so selected; provided, however, that, (i) if the indemnifying party has failed to assume the defense or employ counsel reasonably acceptable to the indemnified party or (ii) if the defendants in any such action include both the indemnified party and the indemnifying party and counsel to the indemnified party shall have concluded that there may be reasonable defenses available to the indemnified party that are different from or additional to those available to the indemnifying party, or if the interests of the indemnified party reasonably may be deemed to conflict with the interests of the indemnifying party, then the indemnified party shall have the right to select a separate counsel and to assume such legal defense and otherwise to participate in the defense of such action, with the reasonable expenses and fees of such separate counsel and other reasonable expenses related to such participation to be reimbursed by the indemnifying party as incurred. Notwithstanding any other provision of this Agreement, no indemnifying party shall settle any action brought against any indemnified party with respect to which such indemnified party is or may be entitled to indemnification hereunder without the consent of the indemnified party, unless the settlement thereof imposes no liability or obligation on, and includes a complete and unconditional release from all liability of, and does not contain any admission of wrongdoing by, the indemnified party.

(d) Contribution. If the indemnification provided for in this Section 2.08 is held by a court or government agency of competent jurisdiction to be unavailable to any indemnified party or is insufficient to hold them harmless in respect of any Losses, then each such indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such Loss in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of such indemnified party on the other in connection with the statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations; provided, however, that in no event shall such Selling Holder be required to contribute an aggregate amount in excess of the dollar amount of proceeds (net of Selling Expenses) received by such Selling Holder from the sale of Registrable Securities giving rise to such indemnification. The relative fault of the indemnifying party on the

 

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one hand and the indemnified party on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact has been made by, or relates to, information supplied by such party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just and equitable if contributions pursuant to this paragraph were to be determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to herein. The amount paid by an indemnified party as a result of the Losses referred to in the first sentence of this paragraph shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating, defending or resolving any Loss that is the subject of this paragraph. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who is not guilty of such fraudulent misrepresentation.

(e) Other Indemnification. The provisions of this Section 2.08 shall be in addition to any other rights to indemnification or contribution that an indemnified party may have pursuant to law, equity, contract or otherwise. To the extent that any of the Holders is, or would be expected to be, deemed to be an underwriter of Registrable Securities pursuant to any SEC comments or policies or any court of law or otherwise, the Company agrees that (i) the indemnification and contribution provisions contained in this Section 2.08 shall be applicable to the benefit of such Holder in its role as deemed underwriter in addition to its capacity as a Holder (so long as the amount for which any other Holder is or becomes responsible does not exceed the amount for which such Holder would be responsible if the Holder were not deemed to be an underwriter of Registrable Securities) and (ii) such Holder and its representatives shall be entitled to conduct the due diligence which would normally be conducted in connection with an offering of securities registered under the Securities Act, including receipt of customary opinions and comfort letters.

Section 2.09 Rule 144 Reporting.

With a view to making available the benefits of certain rules and regulations of the SEC that may permit the sale of the Registrable Securities to the public without registration, the Company agrees to use its reasonable best efforts to:

(a) make and keep public information regarding the Company available, as those terms are understood and defined in Rule 144 under the Securities Act (or any successor or similar provision adopted by the SEC then in effect), at all times from and after the date hereof (which may be satisfied by making such information available on EDGAR);

(b) file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act at all times from and after the date hereof; and

(c) so long as a Holder owns any Registrable Securities, furnish, (i) to the extent accurate, forthwith upon request, a written statement of the Company that it has complied with the reporting requirements of Rule 144 under the Securities Act (or any similar provision then in effect) and (ii) unless otherwise available electronically at no additional charge via the SEC’s EDGAR system, to such Holder forthwith upon request a copy of the most recent annual or quarterly report of the Company, and such other reports and documents as such Holder may reasonably request in availing itself of any rule or regulation of the SEC allowing such Holder to sell any such securities without registration.

 

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Section 2.10 Transfer or Assignment of Registration Rights. The rights to cause the Company to register Registrable Securities under this Article II may not be transferred or assigned except pursuant to this Section 2.10,

(a) Notwithstanding any other provision of this Agreement, including Section 2.10(b) below, on or after the date hereof, the Initial Holder shall be entitled to transfer and assign its rights as follows:

(i) all of its rights pursuant to this Agreement to one (1) transferee or assignee jointly designated by the Initial Holder and PRD (the “Majority Joint Transferee”), so long as the Initial Holder and PRD transfer or assign not less than 80% of the Registrable Securities held by the Initial Holder and PRD in the aggregate as of the Closing Date to such Majority Joint Transferee; and

(ii) all of its rights pursuant to this Agreement, except those contained in Section 2.03, to up to five (5) transferees or assignees (which number shall not include the Joint Transferee set forth in subjection (i) above) jointly designated by the Initial Holder and PRD (collectively, the “Minority Joint Transferees”, and together with the Majority Joint Transferee, the “Joint Transferee”);

provided that, as a condition to the transfer or assignment of rights pursuant to Section 2.10(a)(i) or Section 2.10(a)(ii) above, the Initial Holder and PRD shall be required to simultaneously transfer or assign all (and not less than all) of the Registrable Securities held by the Initial Holder and PRD in the aggregate as of the Closing Date to the Joint Transferees; and provided further that the Initial Holder shall only be entitled to make each transfer described in this Section 2.10 (a) once during the term of this Agreement.

(b) Other than as set forth in Section 2.10(a) above, the rights to cause the Company to register Registrable Securities under this Article II may not be transferred or assigned except as follows:

(i) Subject to Section 2.10(b)(ii), if a Holder transfers or assigns all (and not less than all) of the Registerable Securities Beneficially Owned by such Holder, then such Holder may transfer or assign its rights pursuant to this Agreement to such transferee or assignee.

(ii) If a Holder transfers or assigns (A) 20% or more of the Registerable Securities issued on the Closing Date to the Initial Holder and PRD in the aggregate but less than all of such Registerable Securities issued on the Closing Date, then the transferee or assignee thereof shall be entitled to the rights granted to a Holder pursuant to this Agreement except those contained in Section 2.03 and (B) less than 20% of the Registerable Securities issued on the Closing Date to the Initial Holder and PRD in the aggregate, then the transferee or assignee thereof shall be entitled to the rights granted to a Holder pursuant to this Agreement except those contained in Sections 2.02 and 2.03.

 

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(c) In the case of any such transfer or assignment where the transferee or assignee shall have any rights of a Holder hereunder, the Holder making such transfer or assignment must provide the Company written notice of any said transfer or assignment, stating the name and address of each such transferee or assignee and identifying the Registerable Securities Beneficially Owned thereby.

Section 2.11 Limitation on Subsequent Registration Rights.

From and after the date hereof, the Company shall not, without the prior written consent of the Required Holders, enter into any agreement with any current or future holder of any equity securities of the Company that would allow such current or future holder to require the Company to include equity securities in any registration statement filed by the Company on a basis other than pari passu with, or expressly subordinated to the piggyback rights granted to the Holders pursuant to Section 2.02; provided, that in no event shall the Company enter into any agreement that would permit another holder of securities of the Company to participate on a superior or pari passu basis (in terms of priority of cut-back based on advice of Underwriters) with a Holder requesting registration or takedown in an Underwritten Offering pursuant to Section 2.03(a). Notwithstanding anything to the contrary herein, the parties hereto acknowledge that the Company’s entrance into the Kimmeridge Registration Rights Agreement and the Registration Rights Agreement with PRD of even date herewith shall not be deemed a violation of, and are expressly permitted under, this Section 2.11.

Section 2.12 Termination of Registration Rights.

The rights to cause the Company to register Registrable Securities granted to the Holders by the Company under this Article II shall terminate upon the date on which all Registrable Securities no longer constitute Registrable Securities in accordance with Section 1.02.

ARTICLE III

MISCELLANEOUS

Section 3.01 Communications.

All notices and other communications provided for or permitted hereunder shall be made in writing by electronic mail, courier service or personal delivery:

(a) if to the Initial Holder:

BPP Energy Partners LLC

4849 Greenville Avenue, Suite 1600

Dallas, Texas 75206

Attention: Chris Doyle

Email: [email protected]

 

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

Blackstone Management Partners L.L.C.

345 Park Avenue, 43rd Floor

New York, New York 10154

Attention: Angelo Acconcia; Erik Belz

Email: [email protected];

[email protected]

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

Kirkland & Ellis LLP

609 Main Street

Houston, Texas 77002

Attention: Rhett A. Van Syoc, P.C.

Email: [email protected]

Kirkland & Ellis LLP

1601 Elm Street

Dallas, Texas 75201

Attention: Thomas K. Laughlin, P.C.

Email: [email protected]

(b) if to a transferee of a Purchaser, to such Holder at the address provided pursuant to Section 2.10 above; and

(c) if to the Company:

Callon Petroleum Company

2000 W. Sam Houston Parkway S., Suite 2000

Houston, TX 77042

Attention: Michol L. Ecklund, Senior Vice President, General Counsel and Corporate Secretary

Email: [email protected]

[email protected]

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

c/o Gibson, Dunn & Crutcher

811 Main Street, Suite 3000

Houston, Texas 77002

Attention: Hillary H. Holmes

Facsimile: (346) 718-6902

E-mail: [email protected]

All such notices and communications shall be deemed to have been received at the time delivered by hand, if personally delivered; when receipt acknowledged, if sent via electronic mail; and when actually received, if sent by courier service or any other means.

 

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Section 3.02 Successor and Assigns.

This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties, including subsequent Holders of Registrable Securities to the extent permitted herein.

Section 3.03 Assignment of Rights.

The rights, interests or obligations of the Holders hereunder may not be transferred or assigned, by operation of law or otherwise, in whole or in part, by the Holders without the prior written consent of the Company, except in accordance with Section 2.10 hereof.

Section 3.04 Recapitalization, Exchanges, Etc. Affecting the Common Stock.

The provisions of this Agreement shall apply to the full extent set forth herein with respect to any and all equity interests of the Company or any successor or assign of the Company (whether by merger, acquisition, consolidation, reorganization, sale of assets or otherwise) that may be issued in respect of, in exchange for or in substitution of, the Registrable Securities, and shall be appropriately adjusted for combinations, share splits, recapitalizations, pro rata distributions of shares and the like occurring after the date of this Agreement.

Section 3.05 Aggregation of Registrable Securities. All Registrable Securities held or acquired by Persons who are Affiliates of one another shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.

Section 3.06 Specific Performance.

Damages in the event of breach of this Agreement by a party hereto may be difficult, if not impossible, to ascertain, and it is therefore agreed that each such Person, in addition to and without limiting any other remedy or right it may have, shall have the right to an injunction or other equitable relief in any court of competent jurisdiction, enjoining any such breach, and enforcing specifically the terms and provisions hereof, and each of the parties hereto hereby waives any and all defenses it may have on the ground of lack of jurisdiction or competence of the court to grant such an injunction or other equitable relief. The existence of this right shall not preclude any such Person from pursuing any other rights and remedies at law or in equity that such Person may have.

Section 3.07 Counterparts.

This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, including facsimile or ..pdf counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same Agreement.

Section 3.08 Headings.

The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

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Section 3.09 Governing Law.

This Agreement, including all issues and questions concerning its application, construction, validity, interpretation and enforcement, shall be construed in accordance with, and governed by, the laws of the State of New York without regard to the choice of law or conflicts of law.

Section 3.10 Waiver of Jury Trial. THE PARTIES TO THIS AGREEMENT EACH HEREBY WAIVE, AND AGREE TO CAUSE THEIR AFFILIATES TO WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. THE PARTIES TO THIS AGREEMENT EACH HEREBY AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

Section 3.12 Severability of Provisions.

Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting or impairing the validity or enforceability of such provision in any other jurisdiction.

Section 3.13 Entire Agreement.

This Agreement and the Purchase Agreement are intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein or in the Purchase Agreement with respect to the rights granted by the Company set forth herein. This Agreement and the Purchase Agreement supersede all prior agreements and understandings between the parties with respect to such subject matter.

Section 3.14 Amendment.

This Agreement may be amended only by means of a written amendment signed by the Company and the Required Holders; provided, however, that no such amendment shall materially and adversely affect the rights of any Holder hereunder without the prior written consent of such Holder.

 

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Section 3.15 No Presumption.

If any claim is made by a party relating to any conflict, omission or ambiguity in this Agreement, no presumption or burden of proof or persuasion shall be implied by virtue of the fact that this Agreement was prepared by or at the request of a particular party or its counsel.

Section 3.16 Obligations Limited to Parties to Agreement.

Each of the parties hereto covenants, agrees and acknowledges that no Person other than the Holders (and its permitted transferees and assignees) and the Company shall have any obligation hereunder. No recourse under this Agreement or under any documents or instruments delivered in connection herewith or therewith shall be had against any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of the Holders or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate thereof, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any applicable Law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of the Holders or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate thereof, as such, for any obligations of the Holders under this Agreement or any documents or instruments delivered in connection herewith or therewith or for any claim based on, in respect of or by reason of such obligation or its creation, except in each case for any transferee or assignee of a Holders hereunder.

Section 3.17 Interpretation.

Article and Section references are to this Agreement, unless otherwise specified. All references to instruments, documents, contracts and agreements are references to such instruments, documents, contracts and agreements as the same may be amended, supplemented and otherwise modified from time to time, unless otherwise specified. The words “include,” “includes” and “including” or words of similar import shall be deemed to be followed by the words “without limitation.” A term has the meaning assigned to it. Words in the singular include the plural, and words in the plural include the singular. The word “or” is not exclusive. The words “herein,” “hereof” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision. References to agreements or instruments, or to statutes or regulations, are to such agreements or instruments, or statutes or regulations, as amended from time to time (or to successor statutes and regulations). Whenever any determination, consent or approval is to be made or given by the Required Holders (and its transferees or assignees) under this Agreement, such action shall be in the Required Holder’s (and its transferees or assignees) sole discretion unless otherwise specified. Unless expressly set forth or qualified otherwise (e.g., by “Business” or “trading”), all references herein to a “day” are deemed to be a reference to a calendar day.

(Signature pages follow)

 

22


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

 

CALLON PETROLEUM COMPANY
By:  

/s/ Joseph C. Gatto Jr.

Name:   Joseph C. Gatto Jr.
Title:   President and CEO

Signature Page to Registration Rights Agreement


BPP ENERGY PARTNERS LLC
By:  

/s/ Chris Doyle

Name:   Chris Doyle
Title:   Chief Executive Officer and President

Signature Page to Registration Rights Agreement

Exhibit F

EXECUTION VERSION

CLOSING ESCROW AGREEMENT

This CLOSING ESCROW AGREEMENT, dated as of October 1, 2021 (this “Agreement”), is by and among CALLON PETROLEUM OPERATING COMPANY, a Delaware corporation with principal offices located at 2000 W. Sam Houston Parkway S., Suite 2000, Houston, Texas 77042 (“Buyer”), CALLON PETROLEUM COMPANY, a Delaware corporation with principal offices located at 2000 W. Sam Houston Parkway S., Suite 2000, Houston, Texas 77042 (“Buyer Parent” and together with Buyer, the “Buyer Parties”), PRIMEXX RESOURCE DEVELOPMENT, LLC, a Texas limited liability company with principal offices located at 4849 Greenville Avenue, Suite 1600, Dallas, Texas 75206, (“Seller”), and AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, a New York limited liability trust company with principal offices located at 6201 15th Avenue, Brooklyn, New York, 11219 (“Escrow Agent”). Buyer, Buyer Parent, and Seller are referred to herein individually as a “Party” and collectively as the “Parties”.

WHEREAS, the Parties have entered into that certain Purchase and Sale Agreement (the “Underlying Agreement”) made and entered into as of August 3, 2021 pursuant to which the Buyer Parties will acquire certain oil and gas properties, undeveloped acreage and associated infrastructure assets in the Delaware Basin (the “Assets”) from Seller in exchange for cash and shares of Parent Common Stock;

WHEREAS, pursuant to the Underlying Agreement, at Closing, Buyer Parent shall deposit the Indemnity Holdback Shares (as defined below) into a segregated and restricted escrow account (the “Indemnity Escrow Account”) titled in the name of the Escrow Agent for the benefit of the Parties to be held by the Escrow Agent in accordance with this Agreement and the Underlying Agreement;

WHEREAS, the Escrow Agent has agreed to accept, hold, and disburse the Escrow Assets (as defined below) deposited with it in accordance with written direction from the Parties;

WHEREAS, the Escrow Agent has agreed to vote the Escrow Assets deposited with it in accordance with written direction from the Buyer Parties; and

WHEREAS, in order to establish the Indemnity Escrow Account and otherwise to effect the provisions of the Underlying Agreement, the parties hereto have entered into this Agreement.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties and the Escrow Agent, for themselves, their successors and assigns, hereby agree as follows:

 

1.

Definitions. The following terms shall have the meanings indicated or referred to below, inclusive of their singular and plural forms, except where the context requires otherwise. Unless the context requires otherwise, all references to “years,” “months,” or “days” shall mean “calendar years,” “calendar months,” and “calendar days.” References in this Agreement to “including” shall mean “including, without limitation,” whether or not so specified. Any term not defined in this Section 1 but is defined elsewhere in this Agreement shall have the meaning ascribed to such term in this Agreement. Any term used but not defined herein shall have the meaning ascribed to it in the Underlying Agreement.

 

1


Buyer Representative” shall mean the persons so designated on Schedule A or any other person designated in a writing signed and delivered by Buyer to Escrow Agent in accordance with the notice provisions of this Agreement.

Escrow Assets” shall mean the Indemnity Holdback Shares.

Escrow Period” shall mean the period commencing on the date hereof and ending on the Termination Date.

Final Determination” means a final non-appealable determination, order, judgment, decree or ruling of any arbitrator or court of competent jurisdiction directing the disposition of the Escrow Assets which may be issued, in each case, together with (a) a certificate of the prevailing Party executed by Buyer Representative or Seller Representative (as applicable) to the effect that such determination, order, judgment, decree or ruling is final and non-appealable and from the arbitrator or a court of competent jurisdiction and (b) the written distribution instructions by Buyer Representative or Seller Representative (as applicable) to effectuate such determination, order, judgment, decree or ruling.

Indemnity Holdback Shares” shall mean the shares of Parent Common Stock set forth on Schedule A and deposited with the Escrow Agent pursuant to Section 3.

Seller Representative” shall mean the persons so designated on Schedule A or any other person designated in a writing signed and delivered by Seller to Escrow Agent in accordance with the notice provisions of this Agreement.

Voting Direction” shall mean a written direction executed by the Buyer Representative directing the Escrow Agent to vote all or a portion of the Escrow Assets in accordance with the instructions set forth in the Voting Direction.

Written Direction” shall mean either (a) a written direction executed by the Buyer Representative and Seller Representative directing the Escrow Agent to disburse all or a portion of the Escrow Assets or to take or refrain from taking an action pursuant to this Agreement or (b) a Final Determination.

 

2.

Appointment of and Acceptance by Escrow Agent. The Parties hereby appoint the Escrow Agent to serve as escrow agent hereunder. The Escrow Agent hereby accepts such appointment and, upon receipt of the Escrow Assets, in accordance with Section 3, agrees to hold, upon receipt, the Escrow Assets in accordance with this Agreement.

 

3.

Deposit of Escrow Assets. Promptly after Closing and in accordance with the terms of the Underlying Agreement, Buyer Parent will cause the transfer of the Indemnity Holdback Shares in the amount set forth on Schedule A to the Escrow Agent, and the Escrow Agent shall deposit the Indemnity Holdback Shares in the Indemnity Escrow Account.

 

2


4.

Disbursements of Escrow Assets; Unclaimed Assets.

 

  (a)

The Escrow Agent shall disburse the Escrow Assets from time to time, upon receipt of, and in accordance with a Written Direction, which the Parties agree to deliver to the Escrow Agent at any time that any distribution is required to be made from the Escrow Assets pursuant to the terms and conditions of the Underlying Agreement. Such Written Direction shall contain issuance instructions containing name, address, Taxpayer Identification Number, and other pertinent information, in each case, to the extent not previously provided to the Escrow Agent. Any and all disbursements under this Section 4 shall be made within three (3) Business Days of Escrow Agent’s receipt of a Written Direction.

 

  (b)

If there is any amount of undisbursed or unclaimed Escrow Assets on the Termination Date, and if the Escrow Agent shall not have received a Written Direction no later than five (5) Business Days after the Termination Date, the Escrow Agent, in addition to its other rights herein, (i) (A) may maintain and manage such Escrow Assets for such period of time as it determines may be necessary or appropriate, including in accordance with applicable state escheatment and unclaimed property laws, as determined by Escrow Agent in its sole discretion and (B) shall have the right to escheat any such Escrow Assets pursuant to applicable state escheatment and unclaimed property laws and, in such case, shall remit such Escrow Assets (less any fees, costs, expenses or other amounts due to Escrow Agent or any other Indemnified Party (as defined below) in accordance with this Agreement (including Schedule A)) to any relevant competent authority and (ii) may take any other action permitted by this Agreement.

 

  (c)

All disbursements of Escrow Assets shall be subject to the fees, costs, expenses and other amounts due to Escrow Agent hereunder.

 

5.

Voting of Escrow Assets. During the Escrow Period, Escrow Agent shall (a) vote the Escrow Assets in accordance with any Voting Direction delivered by the Buyer Representative (provided that such Voting Direction shall be delivered to Escrow Agent no later than two (2) Business Days prior to any voting deadline specified in such Voting Direction) and (b) provide written confirmation to the Buyer Representative that Escrow Agent has voted the Escrow Assets in accordance with such Voting Direction no later than two (2) Business Days after any voting deadline specified in such Voting Direction. Notwithstanding anything to the contrary herein, in no event shall the Escrow Agent vote the Escrow Assets in the absence of a Voting Direction delivered by the Buyer Representative, and any such vote shall be void ab initio.

 

3


6.

Suspension of Performance; Disbursement into Court. If, at any time, (x) in the absence of a Written Direction, Escrow Agent is unable to determine, to Escrow Agent’s reasonable satisfaction, the proper disposition of all or any portion of the Escrow Assets or Escrow Agent’s proper actions with respect to its obligations hereunder, or (y) the Parties have not, within thirty (30) days of the furnishing by Escrow Agent of a notice of resignation pursuant to Section 7 hereof, appointed a successor escrow agent to act hereunder (which such successor escrow agent has accepted such appointment), then Escrow Agent may take either or both of the following actions:

 

  (a)

suspend the performance of any of its obligations (including any disbursement obligations) under this Agreement, in the case of clause (x) above, until (i) such dispute or uncertainty shall be resolved to the reasonable satisfaction of the Escrow Agent or (ii) a Written Direction is provided to Escrow Agent (provided that Escrow Agent shall be entitled to conclusively rely upon any such Written Direction, and, in the case of a Written Direction that is a Final Determination, shall have no responsibility to review the determination, order, judgment, decree or ruling to which such Final Determination refers or to make any determination as to whether such determination, order, judgment, decree or ruling is final), or, in the cause of clause (y) above, until a successor escrow agent shall have been appointed.

 

  (b)

petition (by means of an interpleader action or any other appropriate method) the United States District Court for the Southern District of the State of New York, or if such court lacks federal subject matter jurisdiction, the Supreme Court of the State of New York within New York County, for instructions with respect to such dispute or uncertainty, and to the extent required or permitted by law, pay into such court, for holding and disposition in accordance with the instructions of such court, all Escrow Assets, after any amount payable to the Escrow Agent in accordance with Section 10 hereof in connection with the performance of its duties and the exercise of its rights hereunder.

The Escrow Agent shall have no liability to the Parties, or to their respective shareholders, partners, or members, officers or directors, employees, Affiliates or any other person with respect to any such suspension of performance or disbursement into court (including any disbursement obligations hereunder), specifically including any liability or claimed liability that may arise, or be alleged to have arisen, out of or as a result of any delay in the disbursement of the Escrow Assets or any delay in or with respect to any other action required or requested of the Escrow Agent, absent fraud, willful misconduct, or gross negligence by the Escrow Agent.

 

7.

Resignation of Escrow Agent. The Escrow Agent may resign and be discharged from the performance of its duties hereunder at any time by giving thirty (30) days’ prior written notice to the Parties specifying the date when such resignation shall take effect. Upon any such notice of resignation, the Parties shall issue to the Escrow Agent a Written Direction authorizing redelivery of the Escrow Assets to a bank or trust company that has been retained as successor to the Escrow Agent hereunder prior to the effective date of such resignation. The retiring Escrow Agent shall transmit all records pertaining to the Escrow Assets and shall pay all Escrow Assets to the successor escrow agent, after making copies of such records as the retiring Escrow Agent deems advisable and after deduction and payment to the retiring Escrow Agent of any amount payable in accordance with Section 10 hereof by the retiring Escrow Agent in connection with the performance of its duties and the exercise of its rights hereunder.

 

4


After any retiring Escrow Agent’s resignation, the provisions of this Agreement shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Escrow Agent under this Agreement. Any corporation or other entity into which the Escrow Agent may be merged or converted or with which it may be merged or consolidated, or any other entity to which all or a majority of all of the Escrow Agent’s escrow business may be transferred by sale of assets or otherwise, shall be the Escrow Agent under this Agreement without further act or consent of any party hereto.

 

8.

Liability of Escrow Agent. The Escrow Agent undertakes to perform only the ministerial duties as are expressly set forth herein and in any Written Direction and no other duties and obligations (fiduciary or otherwise) shall be implied. The Escrow Agent shall have no duty to enforce any obligation of any other person to make any payment or delivery, or to direct or cause any payment or delivery to be made, or to enforce any obligation of any other person to perform any other act. The Escrow Agent shall have no liability under and no duty to inquire as to the provisions of any agreement (even though such agreement may be referenced in this Agreement) other than this Agreement. In the event of any conflict between the terms and provisions of this Agreement and any other agreement, as to the Escrow Agent, the terms and conditions of this Agreement shall control subject to Section 27. The Escrow Agent is not a party to the Underlying Agreement, is not bound by any of its terms, and has not undertaken in any way to effectuate, implement or comply with the Underlying Agreement. The Escrow Agent shall not be liable to the Parties or to anyone else for any action taken or omitted by it in good faith except to the extent that a court of competent jurisdiction determines that the Escrow Agent’s fraud, gross negligence or willful misconduct was the primary or contributing cause of any loss to such Party or any other Person. The Escrow Agent’s sole responsibility shall be for the safekeeping and disbursement of the Escrow Assets in accordance with the terms of this Agreement and any Written Direction. The Escrow Agent shall have no implied duties or obligations and shall not be charged with knowledge or notice of any fact or circumstance not specifically set forth herein or in any Written Direction. The Escrow Agent shall have no duty to solicit any payment which may be due to be paid in Escrow Assets or to confirm or verify the accuracy or correctness of any amounts deposited in accordance with this Agreement. The Escrow Agent may rely conclusively, and shall be protected in acting, upon any notice, instruction (including a Written Direction (such as a wire transfer instruction)), request, order, judgment, certification, opinion or advice of counsel (including counsel chosen by the Escrow Agent), statement, demand or other instrument or document, not only as to its due execution, validity (including the authority of the person signing or presenting the same) and effectiveness, but also as to the truth and accuracy of any information contained therein, which the Escrow Agent shall believe in good faith to be genuine and to have been signed or presented by the person or parties purporting to sign the same. In no event shall the Escrow Agent be liable for incidental, indirect, special, consequential or punitive damages of any kind whatsoever (including lost profits), even if the Escrow Agent has been advised of the likelihood of such loss or damage and regardless of the form of action, absent fraud, gross negligence, or willful misconduct by the Escrow Agent. The officers, directors, members, partners, trustees, employees, agents, attorneys or other representatives and Affiliates of the Escrow Agent owe no duty or obligation to any party hereunder and shall have no liability to any person by reason of any error of judgment, for any act done or not done, for any mistake of fact or law, or otherwise, absent fraud, gross negligence, or willful misconduct.

 

5


The Escrow Agent shall not be obligated to take any legal or other action or commence any proceeding in connection with the Escrow Assets, any account in which Escrow Assets are deposited, this Agreement or the Underlying Agreement, or to appear in, prosecute or defend any such legal action or proceeding (whether or not it shall have been furnished with acceptable indemnification and advancement). The Escrow Agent may consult legal counsel selected by it in the event of any dispute or question as to the construction of any of the provisions hereof or of any other agreement or of its duties hereunder, or relating to any dispute or question involving any party hereto, and, except to the extent caused by the Escrow Agent’s fraud, gross negligence, or willful misconduct, shall incur no liability and shall be fully indemnified from any liability whatsoever in acting in accordance with the written opinion of such counsel. Except as set forth in Section 5, the Escrow Agent shall have no responsibility with respect to the use or application of any the Escrow Assets paid by the Escrow Agent pursuant to the provisions hereof.

The Escrow Agent is authorized, in its sole reasonable discretion, to comply with orders issued or process entered by any court with respect to the Escrow Assets, without determination by the Escrow Agent of such court’s jurisdiction in the matter. If any portion of the Escrow Assets is at any time attached, garnished or levied upon under any court order, or in case the payment, assignment, transfer, conveyance or delivery of any such property shall be stayed or enjoined by any court order, or in case any order, judgment or decree shall be made or entered by any court affecting such property or any part thereof, then and in any such event, the Escrow Agent is authorized, in its sole reasonable discretion, to rely upon and comply with any such order, writ, judgment or decree which it is advised by legal counsel selected by it is binding upon it without the need for appeal or other action; and if the Escrow Agent complies with any such order, writ, judgment or decree, it shall not be liable to any of the parties hereto or to any other person or entity by reason of such compliance even though such order, writ, judgment or decree may be subsequently reversed, modified, annulled, set aside or vacated. In the event the Escrow Funds are subject to any such court order, Escrow Agent shall provide the Parties with prompt written notice of such court order.

 

9.

Indemnification of Escrow Agent. From and at all times after the date of this Agreement, the Parties severally, and not jointly, shall, to the fullest extent permitted by law, defend, indemnify and hold harmless the Escrow Agent and each director, officer, member, partner, trustee, employee, attorney, agent and Affiliate of the Escrow Agent (collectively, the “Indemnified Parties”) against any and all actions, claims, losses, damages, liabilities, costs, penalties, settlements, judgments and expenses of any kind or nature whatsoever (including costs and expenses and reasonable and documented outside attorneys’ fees) incurred by or asserted against any of the Indemnified Parties from and after the date hereof, as a result of, in connection with, or arising from or in any way relating to any claim, demand, suit, action or proceeding (including any inquiry or investigation) by any person, including the Parties, whether threatened or initiated, asserting a claim for any legal or equitable remedy against any person (whether it is an

 

6


  Indemnified Party or not) under any statute or regulation, including any federal or state securities laws, or under any common law or equitable cause or otherwise, arising from or in connection with the negotiation, preparation, execution, performance or failure of performance of this Agreement or any transactions contemplated herein or relating hereto (including tax reporting or withholding or the enforcement of any rights or remedies under or in connection with this Agreement), whether or not any such Indemnified Party is a party to any such action, proceeding, suit or the target of any such inquiry or investigation (without derogation of any other indemnity afforded to the Escrow Agent); provided, however, that no Indemnified Party shall have the right to be indemnified hereunder for any liability to the extent arising from or related to the fraud, gross negligence, or willful misconduct of any Indemnified Party. Any amounts paid by the Parties in respect of this paragraph shall be promptly repaid by the applicable Indemnified Party in the event of any fraud, gross negligence, or willful misconduct of any Indemnified Party relating to such amounts paid.

The Parties and the Escrow Agent agree that the payment by the Parties of any claim by the Escrow Agent for indemnification hereunder shall not impair, limit, modify, or affect, the respective rights and obligations of the Parties under the Underlying Agreement.

 

10.

Fees, Costs and Expenses of Escrow Agent. The Parties shall severally, and not jointly, compensate the Escrow Agent for its services hereunder in accordance with Schedule A. All of the compensation obligations set forth in this Section 10 shall be payable by the Parties upon execution of this Agreement and, in the future, upon written demand by the Escrow Agent. As between the Parties, Seller, on the one hand, and the Buyer Parties, on the other hand, shall each be responsible for fifty percent (50%) of such compensation.

 

11.

Patriot Act Disclosure; Taxpayer Certification and Reporting.

 

  (a)

Patriot Act Disclosure. The Parties acknowledge that a portion of the identifying information set forth on Schedule A is being requested by the Escrow Agent in connection with the USA Patriot Act, Pub.L.107-56 (the “Act”), and agree to provide any additional information requested by the Escrow Agent in connection with the Act or any similar law, rule, regulation, order, or other governmental act to which the Escrow Agent is subject, in a timely manner and consent to the Escrow Agent obtaining from third parties any such identifying information. The Parties represent that all identifying information set forth on Schedule A is true and complete on the date hereof and will be true and complete at the time of any disbursement of the Escrow Assets. For a non-individual person such as a charity, a trust, or other legal entity, the Escrow Agent may require documentation to verify formation and existence as a legal entity. The Escrow Agent may also require financial statements, licenses, identification and authorization documentation from any individual claiming authority to represent the entity or other relevant documentation.

 

7


  (b)

Certification and Tax Reporting. Each Party has provided the Escrow Agent with all documentation requested by the Escrow Agent, including any fully executed Internal Revenue Service (“IRS”) Form W-8, or W-9 and/or other required documentation, in each case, as requested by the Escrow Agent. The Parties acknowledge that solely for tax purposes, the Escrow Agent does not have any interest in the Escrow Assets or the Indemnity Escrow Account. All interest or other income earned under this Agreement shall be allocated to Seller and reported, as and to the extent required by law, by the Escrow Agent to the IRS, or any other taxing authority, on IRS Form 1099 or 1042S (or other appropriate form) as income earned from the Escrow Funds by Seller whether or not said income has been distributed during such year. Seller shall timely file all tax returns and pay all taxes due with respect to any income earned or losses generated with respect to the Escrow Funds. The Escrow Agent shall not have any liability for the payment of taxes with respect to the Escrow Funds, and the Parties shall indemnify and hold Escrow Agent harmless from and against all such taxes. The Escrow Agent shall withhold any taxes it deems appropriate in the absence of proper tax documentation or as required by law, and shall remit such taxes to the appropriate authorities. The Parties hereby represent and warrant to Escrow Agent that (i) there is no sale or transfer of a United States Real Property Interest as defined under Section 897(c) of the Internal Revenue Code of 1986, as amended, in the underlying transaction giving rise to this Agreement and (ii) such underlying transaction does not constitute an installment sale requiring any tax reporting or withholding of imputed interest or original issue discount to the IRS or other taxing authority.

 

12.

Consent to Jurisdiction and Venue. In the event that any party hereto commences a lawsuit or other proceeding relating to or arising from this Agreement, the parties hereto agree that the United States District Court for the Southern District of the State of New York shall have the sole and exclusive jurisdiction over any such proceeding. If such court lacks federal subject matter jurisdiction, the parties hereto agree that the Supreme Court of the State of New York within New York County shall have sole and exclusive jurisdiction. Any final judgment shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Any of these courts shall be proper venue for any such lawsuit or judicial proceeding and the parties hereto waive any objection to such venue and irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such suit or proceeding in any such court has been brought in an inconvenient forum.

The parties hereto consent to and agree to submit to the jurisdiction of any of the courts specified herein and agree to accept service of process to vest personal jurisdiction over them in any of these courts.

EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT TO A TRIAL BY JURY AND AGREES THAT ANY OF THEM MAY FILE A COPY OF THIS SECTION OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES HERETO IRREVOCABLY TO WAIVE THE RIGHT TO TRIAL BY JURY IN ANY LITIGATION RELATED TO OR ARISING UNDER THIS AGREEMENT.

 

8


13.

Notice. All notices, instructions (pursuant to a Written Direction, Voting Direction, or otherwise), approvals, consents, requests, and other communications hereunder shall be in writing and shall be deemed to have been given (a) when such writing is delivered by hand or overnight delivery service, or (b) upon telephone call-back in accordance with Section 14 below, after being sent by e-mail with PDF attachment from the designated e-mail account(s) of the sending person(s) as designated on Schedule A to the designated e-mail account(s) of the receiving person(s) as designated on Schedule A, or (c) three (3) Business Days after being mailed by first class mail (postage prepaid), in each case to the address set forth on Schedule A or to such other address as each party hereto may designate for itself by like notice.

 

14.

Security Procedures. If notices, instructions (pursuant to a Written Direction, Voting Direction, or otherwise), approvals, consents, requests, and other communications, are received by Escrow Agent by e-mail at its e-mail account(s) as designated on Schedule A, Escrow Agent is authorized, but not required, to seek prompt confirmation of such communications by telephone call-back to the sending person or persons’ telephone number(s) as designated on Schedule A, and Escrow Agent may rely upon the confirmation of anyone purporting to be the person or persons so designated in that call-back. Any e-mail by PDF attachment executed by more than one person shall be sent by each signatory. The persons and their telephone numbers authorized to receive call-backs as designated in Schedule A may be changed only in a writing actually received and acknowledged by Escrow Agent and delivered in accordance with Section 13 above and, if applicable, this Section 14. If the Escrow Agent is unable to contact any such designated person, the Escrow Agent is hereby authorized (but not required) both to receive written instructions from and seek confirmation of such instructions by telephone call-back to any one or more of the applicable Party’s executive officers (each, an “Executive Officer”), as the case may be, who shall include individuals holding titles of General Counsel, Chief Financial Officer or more senior thereto, as the Escrow Agent may select. Such Executive Officer(s) shall deliver to the Escrow Agent a fully executed incumbency certificate upon the Escrow Agent’s request, and the Escrow Agent may rely upon the confirmation of anyone purporting to be any such Executive Officer(s). The parties to this Agreement acknowledge and agree that the security procedures set forth above are commercially reasonable.

The Escrow Agent in any funds transfer may reasonably rely solely upon any account numbers or similar identifying numbers provided by the parties hereto to identify (a) a beneficiary, (b) a beneficiary’s bank, or (c) an intermediary bank. The Escrow Agent may apply any of the Escrow Assets for any payment order it executes using any such identifying number, even where its use may result in a person other than a beneficiary being paid, or the transfer of funds to a bank other than a beneficiary’s bank or an intermediary bank designated.

 

15.

Amendment or Waiver. This Agreement may be changed, waived, discharged or terminated only by a writing signed by the Parties and the Escrow Agent. No delay or omission by any Party or the Escrow Agent in exercising any right with respect hereto shall operate as a waiver. A waiver on any one occasion shall not be construed as a bar to, or waiver of, any right or remedy on any future occasion.

 

9


16.

Severability. To the extent any provision of this Agreement is prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

 

17.

Governing Law. This Agreement shall be construed and interpreted in accordance with the internal laws of the State of New York without giving effect to the conflict of laws principles thereof.

 

18.

Entire Agreement. This Agreement and any Written Direction or Voting Direction delivered hereunder collectively constitute the entire agreement between the Parties and the Escrow Agent relating to the holding, voting, and disbursement of the Escrow Assets and sets forth in their entirety the obligations and duties of the Escrow Agent with respect to the Escrow Assets.

 

19.

Binding Effect. All of the terms of this Agreement, as amended from time to time, shall be binding upon, inure to the benefit of and be enforceable by the respective successors and assigns of the Parties and the Escrow Agent.

 

20.

Execution in Counterparts. This Agreement and any Written Direction or Voting Direction may be executed in two or more counterparts, which when so executed shall constitute one and the same agreement or direction. Subject to Section 13 and Section 14 hereof, this Agreement and any Written Direction may be executed and delivered by e-mailing a PDF version of a signed signature page (which, for the avoidance of doubt, may be executed using electronic signatures such as “DocuSign”, “Adobe Sign”, or similar electronic signatures), which shall have the same force and effect as the delivery of an originally executed signature page.

 

21.

Termination of Escrow Agent. Upon the first to occur of (i) the termination of the Escrow Period (subject to the occurrence of the related distribution(s)), (ii) the disbursement of all amounts in the Indemnity Escrow Account or (iii) the resignation of the Escrow Agent, Escrow Agent shall be released from its obligations hereunder and the Escrow Agent shall have no further obligation or liability whatsoever with respect to this Agreement or the Escrow Assets except with respect to any liability in connection with Escrow Agent’s fraud, gross negligence, or willful misconduct. The obligations of the Parties continue to exist notwithstanding the termination or discharge of the Escrow Agent’s obligations or liabilities hereunder until the respective obligations of the Parties have been fully performed.

 

22.

Dealings. Nothing herein shall preclude the Escrow Agent from acting in any other capacity for any Party or for any other entity.

 

23.

Currency. The currency applicable to any amount payable or receivable under this Agreement is United States dollars.

 

24.

Force Majeure. Notwithstanding anything to the contrary hereunder, the Escrow Agent shall not be liable for any delay, failure to perform, or other act or non-act resulting from acts beyond its reasonable control, including acts of God, terrorism, shortage of supply, labor difficulties (including strikes), war, civil unrest, fire, floods, electrical outages, equipment or transmission failures, internet interruption, vendor failures (including information technology providers), and other similar causes.

 

10


25.

No Third Party Beneficiaries. This Agreement and all of its terms and conditions are for the sole and exclusive benefit of the parties hereto and their respective permitted successors and assigns. Nothing expressed or referred to in this Agreement will be construed to give any person or entity other than the parties to this Agreement any legal or equitable rights, remedy, or claim under or with respect to this Agreement or any term or condition of this Agreement.

 

26.

No Strict Construction. The parties hereto have participated jointly in the negotiation and draft of this Agreement. In the event any ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if it were drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party hereto by virtue of authorship of any provision of this Agreement.

 

27.

Priority.

 

  (a)

In the event of any conflict between the provisions of Schedule A and the remainder of this Agreement, this Agreement shall be construed in a manner prescribed by the Escrow Agent acting in good faith.

 

  (b)

Nothing contained in this Agreement shall amend, replace or supersede any agreement between any of the Parties and the Escrow Agent to act as such Party’s transfer agent, which agreement shall remain of full force and effect.

 

28.

Headings. The headings in this Agreement are for convenience purposes and shall be ignored for purposes of enforcing this Agreement, do not constitute a part of this Agreement, and may not be used by any party hereto to characterize, interpret, limit or affect otherwise any provision of this Agreement.

 

29.

Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement shall remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree shall remain in full force and effect to the extent not held invalid or unenforceable.

 

30.

Time is of the Essence. Time is of the essence in this Agreement. If the date specified in this Agreement for giving any notice or taking any action is not a Business Day (or if the period during which any notice is required to be given or any action taken expires on a date which is not a Business Day), then the date for giving such notice or taking such action (and the expiration date of such period during which notice is required to be given or action taken) shall be the next day which is a Business Day.

 

31.

Limitation of Damages. In no event shall any of the Parties be liable for incidental, indirect, special, consequential, or punitive damages of any kind whatsoever (including lost profits), even if such Party has been advised of the likelihood of such loss or damage and regardless of the form of action, absent fraud, gross negligence, or willful misconduct by such Party.

 

11


32.

Schedules. All of the Schedules referred to in this Agreement are incorporated into this Agreement by reference and constitute part of this Agreement.

[signature page follows]

 

12


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

 

CALLON PETROLEUM OPERATING COMPANY,
as Buyer
By:  

/s/ Joseph C. Gatto, Jr.

  Name: Joseph C. Gatto, Jr.
  Title:   President and CEO
CALLON PETROLEUM COMPANY,
as Buyer Parent
By:  

/s/ Joseph C. Gatto, Jr.

  Name: Joseph C. Gatto, Jr.
  Title:   President and CEO

[SIGNATURE PAGE TO CLOSING ESCROW AGREEMENT]


PRIMEXX RESOURCE DEVELOPMENT, LLC,
as Seller
By:  

/s/ Chris Doyle

  Name: Chris Doyle
  Title:   Chief Executive Officer and President

[SIGNATURE PAGE TO CLOSING ESCROW AGREEMENT]


AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, as Escrow Agent
By:  

/s/ Michael Legregin

  Name: Michael Legregin
  Title:   Senior Vice President

[SIGNATURE PAGE TO CLOSING ESCROW AGREEMENT]


SCHEDULE A

 

1.

Indemnity Escrow Account Funding.

Indemnity Holdback Shares:    

Shares of Parent Common Stock:    1,983,407                                                        

 

2.

Escrow Agent Fees.

 

Acceptance Fee:    $6,000                                
Annual Escrow Fee (including first year):    $1,200 per disbursement      

The Acceptance Fee and the Annual Escrow Fee for each year of the term of this Agreement are payable upon execution of this Agreement. In the event the Indemnity Escrow Account is not funded, the Acceptance Fee and all related expenses, including attorneys’ fees, costs and expenses remain due and payable, and if paid, will not be refunded. Annual fees cover a full year in advance, or any part thereof, and thus are not pro-rated in the year of termination.

The fees quoted in this schedule apply to services ordinarily rendered in the administration of an escrow account and are subject to reasonable adjustment based on final review of documents, or when Escrow Agent is called upon to undertake unusual or extraordinary duties or responsibilities, or as changes in law, procedures, or the cost of doing business demand. Services in addition to and not contemplated in this Agreement, including document amendments and revisions, non-standard cash and/or investment transactions, calculations, notices and reports, and legal fees, will be billed as expenses.

Unless otherwise indicated, the above fees relate to the establishment of one escrow account. Additional sub-accounts governed by this Agreement may incur an additional charge. Transaction costs include charges for wire transfers, checks, internal transfers and securities transactions.

The fees quoted in this schedule are subject to reasonable adjustment by Escrow Agent in accordance with its customary practices and if it is called upon to undertake further unusual or extraordinary duties or responsibilities, or as changes in law, procedures, or the cost of doing business demand.

 

3.

Termination and Disbursement. Unless earlier terminated by the provisions of this Agreement, the Escrow Period will terminate on the date that the Escrow Agent receives a Written Distribution directing the Escrow Agent to disburse all of the Indemnity Holdback Shares then remaining in the Indemnity Escrow Account (the “Termination Date”), subject to the distribution of all of the Indemnity Holdback Shares. Any Indemnity Holdback Shares remaining in the escrow account at such time shall be distributed in accordance with Section 3 of this Agreement and the Written Direction; provided, however, that any earnings thereon shall be distributed in accordance with Section 13(b) of this Agreement. Notwithstanding anything to the contrary herein, this Agreement shall continue in full force and effect so long as any Indemnity Holdback Shares remain deposited with the Escrow Agent and the Escrow Agent shall not distribute any Indemnity Holdback Shares that are the subject of any Escrow Claim Notice unless instructed to distribute such Indemnity Holdback Shares by Written Instruction.

 

B-1


4.

Buyer Representatives. Each of the following persons is hereby designated and appointed as Buyer Representatives:

 

                                                            

 

Joseph C. Gatto, Jr.    Specimen signature
President and CEO   
Callon Petroleum Company   
2000 W. Sam Houston Parkway S., Suite 2000   
Houston, Texas 77042   
[***]   
                                                            

 

Kevin Haggard    Specimen signature
Senior Vice President and   
Chief Financial Officer   
Callon Petroleum Company   
2000 W. Sam Houston Parkway S., Suite 2000   
Houston, Texas 77042   
[***]   

 

5.

Seller Representatives. Each of the following persons is hereby designated and appointed as Seller Representatives:

 

                                                

 

Chase White    Specimen signature
Executive Vice President of   
Business Development and Land   
Two Energy Square   
4849 Greenville Ave   
Dallas TX, 75206   
Office: [***]   
Cell: [***]   
[***]   
                                                

 

Phil Cook    Specimen signature
Chief Financial Officer and Treasurer   
Two Energy Square   
4849 Greenville Ave   
Dallas TX, 75206   

 

B-2


Office: [***]

Cell: [***]

[***]

 

6.

Notice Addresses.

If to the Buyer Parties:    

Callon Petroleum Company

2000 W. Sam Houston Parkway S., Suite 2000

Houston, Texas 77042

Attn: Michol L. Ecklund

Email: [***]

If to Seller:    

Primexx Resource Development, LLC

4849 Greenville Avenue, Suite 1600

Dallas, Texas 75206

Attn: Chris Doyle

Email: [***]

with copies to:

Primexx Resource Development, LLC

4849 Greenville Avenue, Suite 1600

Dallas, Texas 75206

Attn: Megan Davis

Email: [***]

Primexx Resource Development, LLC

4849 Greenville Avenue, Suite 1600

Dallas, Texas 75206

Attn: Phil Cooke

Email: [***]

If to Escrow Agent at:

American Stock Transfer & Trust Company, LLC

6201 15th Ave

Brooklyn NY 11219

Attn: Escrow Department

Tel: [***]

 

B-3


with copy to:

American Stock Transfer & Trust Company, LLC

6201 15th Avenue

Brooklyn, New York 11219

Attn: General Counsel

Tel: [***]

 

7.

Designated Email Accounts and Telephone Call-Back Numbers (for persons designated to send and receive notices by e-mail).

 

Buyer Parties:   

Name

  

Email Address

  

Phone

   Joseph C. Gatto, Jr.    [***]    [***]
   Kevin Haggard    [***]    [***]
Seller:   

Name

  

Email Address

  

Phone

   Chase White    [***]    [***]
   Phil Cook    [***]    [***]
Escrow Agent:   

Name

  

Email Address

  

Phone

   Keith Morales    [***]    [***]

 

B-4

Exhibit G

EXECUTION VERSION

CLOSING ESCROW AGREEMENT

This CLOSING ESCROW AGREEMENT, dated as of October 1, 2021 (this “Agreement”), is by and among CALLON PETROLEUM OPERATING COMPANY, a Delaware corporation with principal offices located at 2000 W. Sam Houston Parkway S., Suite 2000, Houston, Texas 77042 (“Buyer”), CALLON PETROLEUM COMPANY, a Delaware corporation with principal offices located at 2000 W. Sam Houston Parkway S., Suite 2000, Houston, Texas 77042 (“Buyer Parent” and together with Buyer, the “Buyer Parties”), BPP ACQUISITION LLC, a Delaware limited liability company with principal offices located at 4849 Greenville Avenue, Suite 1600, Dallas, Texas 75206, (“Seller”), and AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, a New York limited liability trust company with principal offices located at 6201 15th Avenue, Brooklyn, New York, 11219 (“Escrow Agent”). Buyer, Buyer Parent, and Seller are referred to herein individually as a “Party” and collectively as the “Parties”.

WHEREAS, the Parties have entered into that certain Purchase and Sale Agreement (the “Underlying Agreement”) made and entered into as of August 3, 2021 pursuant to which the Buyer Parties will acquire certain oil and gas properties, undeveloped acreage and associated infrastructure assets in the Delaware Basin (the “Assets”) from Seller in exchange for cash and shares of Parent Common Stock;

WHEREAS, pursuant to the Underlying Agreement, at Closing, Buyer Parent shall deposit the Indemnity Holdback Shares (as defined below) into a segregated and restricted escrow account (the “Indemnity Escrow Account”) titled in the name of the Escrow Agent for the benefit of the Parties to be held by the Escrow Agent in accordance with this Agreement and the Underlying Agreement;

WHEREAS, the Escrow Agent has agreed to accept, hold, and disburse the Escrow Assets (as defined below) deposited with it in accordance with written direction from the Parties;

WHEREAS, the Escrow Agent has agreed to vote the Escrow Assets deposited with it in accordance with written direction from the Buyer Parties; and

WHEREAS, in order to establish the Indemnity Escrow Account and otherwise to effect the provisions of the Underlying Agreement, the parties hereto have entered into this Agreement.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties and the Escrow Agent, for themselves, their successors and assigns, hereby agree as follows:

 

1.

Definitions. The following terms shall have the meanings indicated or referred to below, inclusive of their singular and plural forms, except where the context requires otherwise. Unless the context requires otherwise, all references to “years,” “months,” or “days” shall mean “calendar years,” “calendar months,” and “calendar days.” References in this Agreement to “including” shall mean “including, without limitation,” whether or not so specified. Any term not defined in this Section 1 but is defined elsewhere in this Agreement shall have the meaning ascribed to such term in this Agreement. Any term used but not defined herein shall have the meaning ascribed to it in the Underlying Agreement.

 

1


Buyer Representative” shall mean the persons so designated on Schedule A or any other person designated in a writing signed and delivered by Buyer to Escrow Agent in accordance with the notice provisions of this Agreement.

Escrow Assets” shall mean the Indemnity Holdback Shares.

Escrow Period” shall mean the period commencing on the date hereof and ending on the Termination Date.

Final Determination” means a final non-appealable determination, order, judgment, decree or ruling of any arbitrator or court of competent jurisdiction directing the disposition of the Escrow Assets which may be issued, in each case, together with (a) a certificate of the prevailing Party executed by Buyer Representative or Seller Representative (as applicable) to the effect that such determination, order, judgment, decree or ruling is final and non-appealable and from the arbitrator or a court of competent jurisdiction and (b) the written distribution instructions by Buyer Representative or Seller Representative (as applicable) to effectuate such determination, order, judgment, decree or ruling.

Indemnity Holdback Shares” shall mean the shares of Parent Common Stock set forth on Schedule A and deposited with the Escrow Agent pursuant to Section 3.

Seller Representative” shall mean the persons so designated on Schedule A or any other person designated in a writing signed and delivered by Seller to Escrow Agent in accordance with the notice provisions of this Agreement.

Voting Direction” shall mean a written direction executed by the Buyer Representative directing the Escrow Agent to vote all or a portion of the Escrow Assets in accordance with the instructions set forth in the Voting Direction.

Written Direction” shall mean either (a) a written direction executed by the Buyer Representative and Seller Representative directing the Escrow Agent to disburse all or a portion of the Escrow Assets or to take or refrain from taking an action pursuant to this Agreement or (b) a Final Determination.

 

2.

Appointment of and Acceptance by Escrow Agent. The Parties hereby appoint the Escrow Agent to serve as escrow agent hereunder. The Escrow Agent hereby accepts such appointment and, upon receipt of the Escrow Assets, in accordance with Section 3, agrees to hold, upon receipt, the Escrow Assets in accordance with this Agreement.

 

3.

Deposit of Escrow Assets. Promptly after Closing and in accordance with the terms of the Underlying Agreement, Buyer Parent will cause the transfer of the Indemnity Holdback Shares in the amount set forth on Schedule A to the Escrow Agent, and the Escrow Agent shall deposit the Indemnity Holdback Shares in the Indemnity Escrow Account.

 

2


4.

Disbursements of Escrow Assets; Unclaimed Assets.

 

  (a)

The Escrow Agent shall disburse the Escrow Assets from time to time, upon receipt of, and in accordance with a Written Direction, which the Parties agree to deliver to the Escrow Agent at any time that any distribution is required to be made from the Escrow Assets pursuant to the terms and conditions of the Underlying Agreement. Such Written Direction shall contain issuance instructions containing name, address, Taxpayer Identification Number, and other pertinent information, in each case, to the extent not previously provided to the Escrow Agent. Any and all disbursements under this Section 4 shall be made within three (3) Business Days of Escrow Agent’s receipt of a Written Direction.

 

  (b)

If there is any amount of undisbursed or unclaimed Escrow Assets on the Termination Date, and if the Escrow Agent shall not have received a Written Direction no later than five (5) Business Days after the Termination Date, the Escrow Agent, in addition to its other rights herein, (i) (A) may maintain and manage such Escrow Assets for such period of time as it determines may be necessary or appropriate, including in accordance with applicable state escheatment and unclaimed property laws, as determined by Escrow Agent in its sole discretion and (B) shall have the right to escheat any such Escrow Assets pursuant to applicable state escheatment and unclaimed property laws and, in such case, shall remit such Escrow Assets (less any fees, costs, expenses or other amounts due to Escrow Agent or any other Indemnified Party (as defined below) in accordance with this Agreement (including Schedule A)) to any relevant competent authority and (ii) may take any other action permitted by this Agreement.

 

  (c)

All disbursements of Escrow Assets shall be subject to the fees, costs, expenses and other amounts due to Escrow Agent hereunder.

 

5.

Voting of Escrow Assets. During the Escrow Period, Escrow Agent shall (a) vote the Escrow Assets in accordance with any Voting Direction delivered by the Buyer Representative (provided that such Voting Direction shall be delivered to Escrow Agent no later than two (2) Business Days prior to any voting deadline specified in such Voting Direction) and (b) provide written confirmation to the Buyer Representative that Escrow Agent has voted the Escrow Assets in accordance with such Voting Direction no later than two (2) Business Days after any voting deadline specified in such Voting Direction. Notwithstanding anything to the contrary herein, in no event shall the Escrow Agent vote the Escrow Assets in the absence of a Voting Direction delivered by the Buyer Representative, and any such vote shall be void ab initio.

 

3


6.

Suspension of Performance; Disbursement into Court. If, at any time, (x) in the absence of a Written Direction, Escrow Agent is unable to determine, to Escrow Agent’s reasonable satisfaction, the proper disposition of all or any portion of the Escrow Assets or Escrow Agent’s proper actions with respect to its obligations hereunder, or (y) the Parties have not, within thirty (30) days of the furnishing by Escrow Agent of a notice of resignation pursuant to Section 7 hereof, appointed a successor escrow agent to act hereunder (which such successor escrow agent has accepted such appointment), then Escrow Agent may take either or both of the following actions:

 

  (a)

suspend the performance of any of its obligations (including any disbursement obligations) under this Agreement, in the case of clause (x) above, until (i) such dispute or uncertainty shall be resolved to the reasonable satisfaction of the Escrow Agent or (ii) a Written Direction is provided to Escrow Agent (provided that Escrow Agent shall be entitled to conclusively rely upon any such Written Direction, and, in the case of a Written Direction that is a Final Determination, shall have no responsibility to review the determination, order, judgment, decree or ruling to which such Final Determination refers or to make any determination as to whether such determination, order, judgment, decree or ruling is final), or, in the cause of clause (y) above, until a successor escrow agent shall have been appointed.

 

  (b)

petition (by means of an interpleader action or any other appropriate method) the United States District Court for the Southern District of the State of New York, or if such court lacks federal subject matter jurisdiction, the Supreme Court of the State of New York within New York County, for instructions with respect to such dispute or uncertainty, and to the extent required or permitted by law, pay into such court, for holding and disposition in accordance with the instructions of such court, all Escrow Assets, after any amount payable to the Escrow Agent in accordance with Section 10 hereof in connection with the performance of its duties and the exercise of its rights hereunder.

The Escrow Agent shall have no liability to the Parties, or to their respective shareholders, partners, or members, officers or directors, employees, Affiliates or any other person with respect to any such suspension of performance or disbursement into court (including any disbursement obligations hereunder), specifically including any liability or claimed liability that may arise, or be alleged to have arisen, out of or as a result of any delay in the disbursement of the Escrow Assets or any delay in or with respect to any other action required or requested of the Escrow Agent, absent fraud, willful misconduct, or gross negligence by the Escrow Agent.

 

7.

Resignation of Escrow Agent. The Escrow Agent may resign and be discharged from the performance of its duties hereunder at any time by giving thirty (30) days’ prior written notice to the Parties specifying the date when such resignation shall take effect. Upon any such notice of resignation, the Parties shall issue to the Escrow Agent a Written Direction authorizing redelivery of the Escrow Assets to a bank or trust company that has been retained as successor to the Escrow Agent hereunder prior to the effective date of such resignation. The retiring Escrow Agent shall transmit all records pertaining to the Escrow Assets and shall pay all Escrow Assets to the successor escrow agent, after making copies of such records as the retiring Escrow Agent deems advisable and after deduction and payment to the retiring Escrow Agent of any amount payable in accordance with Section 10 hereof by the retiring Escrow Agent in connection with the performance of its duties and the exercise of its rights hereunder.

 

4


After any retiring Escrow Agent’s resignation, the provisions of this Agreement shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Escrow Agent under this Agreement. Any corporation or other entity into which the Escrow Agent may be merged or converted or with which it may be merged or consolidated, or any other entity to which all or a majority of all of the Escrow Agent’s escrow business may be transferred by sale of assets or otherwise, shall be the Escrow Agent under this Agreement without further act or consent of any party hereto.

 

8.

Liability of Escrow Agent. The Escrow Agent undertakes to perform only the ministerial duties as are expressly set forth herein and in any Written Direction and no other duties and obligations (fiduciary or otherwise) shall be implied. The Escrow Agent shall have no duty to enforce any obligation of any other person to make any payment or delivery, or to direct or cause any payment or delivery to be made, or to enforce any obligation of any other person to perform any other act. The Escrow Agent shall have no liability under and no duty to inquire as to the provisions of any agreement (even though such agreement may be referenced in this Agreement) other than this Agreement. In the event of any conflict between the terms and provisions of this Agreement and any other agreement, as to the Escrow Agent, the terms and conditions of this Agreement shall control subject to Section 27. The Escrow Agent is not a party to the Underlying Agreement, is not bound by any of its terms, and has not undertaken in any way to effectuate, implement or comply with the Underlying Agreement. The Escrow Agent shall not be liable to the Parties or to anyone else for any action taken or omitted by it in good faith except to the extent that a court of competent jurisdiction determines that the Escrow Agent’s fraud, gross negligence or willful misconduct was the primary or contributing cause of any loss to such Party or any other Person. The Escrow Agent’s sole responsibility shall be for the safekeeping and disbursement of the Escrow Assets in accordance with the terms of this Agreement and any Written Direction. The Escrow Agent shall have no implied duties or obligations and shall not be charged with knowledge or notice of any fact or circumstance not specifically set forth herein or in any Written Direction. The Escrow Agent shall have no duty to solicit any payment which may be due to be paid in Escrow Assets or to confirm or verify the accuracy or correctness of any amounts deposited in accordance with this Agreement. The Escrow Agent may rely conclusively, and shall be protected in acting, upon any notice, instruction (including a Written Direction (such as a wire transfer instruction)), request, order, judgment, certification, opinion or advice of counsel (including counsel chosen by the Escrow Agent), statement, demand or other instrument or document, not only as to its due execution, validity (including the authority of the person signing or presenting the same) and effectiveness, but also as to the truth and accuracy of any information contained therein, which the Escrow Agent shall believe in good faith to be genuine and to have been signed or presented by the person or parties purporting to sign the same. In no event shall the Escrow Agent be liable for incidental, indirect, special, consequential or punitive damages of any kind whatsoever (including lost profits), even if the Escrow Agent has been advised of the likelihood of such loss or damage and regardless of the form of action, absent fraud, gross negligence, or willful misconduct by the Escrow Agent. The officers, directors, members, partners, trustees, employees, agents, attorneys or other representatives and Affiliates of the Escrow Agent owe no duty or obligation to any party hereunder and shall have no liability to any person by reason of any error of judgment, for any act done or not done, for any mistake of fact or law, or otherwise, absent fraud, gross negligence, or willful misconduct.

 

5


The Escrow Agent shall not be obligated to take any legal or other action or commence any proceeding in connection with the Escrow Assets, any account in which Escrow Assets are deposited, this Agreement or the Underlying Agreement, or to appear in, prosecute or defend any such legal action or proceeding (whether or not it shall have been furnished with acceptable indemnification and advancement). The Escrow Agent may consult legal counsel selected by it in the event of any dispute or question as to the construction of any of the provisions hereof or of any other agreement or of its duties hereunder, or relating to any dispute or question involving any party hereto, and, except to the extent caused by the Escrow Agent’s fraud, gross negligence, or willful misconduct, shall incur no liability and shall be fully indemnified from any liability whatsoever in acting in accordance with the written opinion of such counsel. Except as set forth in Section 5, the Escrow Agent shall have no responsibility with respect to the use or application of any the Escrow Assets paid by the Escrow Agent pursuant to the provisions hereof.

The Escrow Agent is authorized, in its sole reasonable discretion, to comply with orders issued or process entered by any court with respect to the Escrow Assets, without determination by the Escrow Agent of such court’s jurisdiction in the matter. If any portion of the Escrow Assets is at any time attached, garnished or levied upon under any court order, or in case the payment, assignment, transfer, conveyance or delivery of any such property shall be stayed or enjoined by any court order, or in case any order, judgment or decree shall be made or entered by any court affecting such property or any part thereof, then and in any such event, the Escrow Agent is authorized, in its sole reasonable discretion, to rely upon and comply with any such order, writ, judgment or decree which it is advised by legal counsel selected by it is binding upon it without the need for appeal or other action; and if the Escrow Agent complies with any such order, writ, judgment or decree, it shall not be liable to any of the parties hereto or to any other person or entity by reason of such compliance even though such order, writ, judgment or decree may be subsequently reversed, modified, annulled, set aside or vacated. In the event the Escrow Funds are subject to any such court order, Escrow Agent shall provide the Parties with prompt written notice of such court order.

 

9.

Indemnification of Escrow Agent. From and at all times after the date of this Agreement, the Parties severally, and not jointly, shall, to the fullest extent permitted by law, defend, indemnify and hold harmless the Escrow Agent and each director, officer, member, partner, trustee, employee, attorney, agent and Affiliate of the Escrow Agent (collectively, the “Indemnified Parties”) against any and all actions, claims, losses, damages, liabilities, costs, penalties, settlements, judgments and expenses of any kind or nature whatsoever (including costs and expenses and reasonable and documented outside attorneys’ fees) incurred by or asserted against any of the Indemnified Parties from and after the date hereof, as a result of, in connection with, or arising from or in any way relating to any claim, demand, suit, action or proceeding (including any inquiry or investigation) by any person, including the Parties, whether threatened or initiated, asserting a claim for any legal or equitable remedy against any person (whether it is an

 

6


  Indemnified Party or not) under any statute or regulation, including any federal or state securities laws, or under any common law or equitable cause or otherwise, arising from or in connection with the negotiation, preparation, execution, performance or failure of performance of this Agreement or any transactions contemplated herein or relating hereto (including tax reporting or withholding or the enforcement of any rights or remedies under or in connection with this Agreement), whether or not any such Indemnified Party is a party to any such action, proceeding, suit or the target of any such inquiry or investigation (without derogation of any other indemnity afforded to the Escrow Agent); provided, however, that no Indemnified Party shall have the right to be indemnified hereunder for any liability to the extent arising from or related to the fraud, gross negligence, or willful misconduct of any Indemnified Party. Any amounts paid by the Parties in respect of this paragraph shall be promptly repaid by the applicable Indemnified Party in the event of any fraud, gross negligence, or willful misconduct of any Indemnified Party relating to such amounts paid.

The Parties and the Escrow Agent agree that the payment by the Parties of any claim by the Escrow Agent for indemnification hereunder shall not impair, limit, modify, or affect, the respective rights and obligations of the Parties under the Underlying Agreement.

 

10.

Fees, Costs and Expenses of Escrow Agent. The Parties shall severally, and not jointly, compensate the Escrow Agent for its services hereunder in accordance with Schedule A. All of the compensation obligations set forth in this Section 10 shall be payable by the Parties upon execution of this Agreement and, in the future, upon written demand by the Escrow Agent. As between the Parties, Seller, on the one hand, and the Buyer Parties, on the other hand, shall each be responsible for fifty percent (50%) of such compensation.

 

11.

Patriot Act Disclosure; Taxpayer Certification and Reporting.

 

  (a)

Patriot Act Disclosure. The Parties acknowledge that a portion of the identifying information set forth on Schedule A is being requested by the Escrow Agent in connection with the USA Patriot Act, Pub.L.107-56 (the “Act”), and agree to provide any additional information requested by the Escrow Agent in connection with the Act or any similar law, rule, regulation, order, or other governmental act to which the Escrow Agent is subject, in a timely manner and consent to the Escrow Agent obtaining from third parties any such identifying information. The Parties represent that all identifying information set forth on Schedule A is true and complete on the date hereof and will be true and complete at the time of any disbursement of the Escrow Assets. For a non-individual person such as a charity, a trust, or other legal entity, the Escrow Agent may require documentation to verify formation and existence as a legal entity. The Escrow Agent may also require financial statements, licenses, identification and authorization documentation from any individual claiming authority to represent the entity or other relevant documentation.

 

7


  (b)

Certification and Tax Reporting. Each Party has provided the Escrow Agent with all documentation requested by the Escrow Agent, including any fully executed Internal Revenue Service (“IRS”) Form W-8, or W-9 and/or other required documentation, in each case, as requested by the Escrow Agent. The Parties acknowledge that solely for tax purposes, the Escrow Agent does not have any interest in the Escrow Assets or the Indemnity Escrow Account. All interest or other income earned under this Agreement shall be allocated to Seller and reported, as and to the extent required by law, by the Escrow Agent to the IRS, or any other taxing authority, on IRS Form 1099 or 1042S (or other appropriate form) as income earned from the Escrow Funds by Seller whether or not said income has been distributed during such year. Seller shall timely file all tax returns and pay all taxes due with respect to any income earned or losses generated with respect to the Escrow Funds. The Escrow Agent shall not have any liability for the payment of taxes with respect to the Escrow Funds, and the Parties shall indemnify and hold Escrow Agent harmless from and against all such taxes. The Escrow Agent shall withhold any taxes it deems appropriate in the absence of proper tax documentation or as required by law, and shall remit such taxes to the appropriate authorities. The Parties hereby represent and warrant to Escrow Agent that (i) there is no sale or transfer of a United States Real Property Interest as defined under Section 897(c) of the Internal Revenue Code of 1986, as amended, in the underlying transaction giving rise to this Agreement and (ii) such underlying transaction does not constitute an installment sale requiring any tax reporting or withholding of imputed interest or original issue discount to the IRS or other taxing authority.

 

12.

Consent to Jurisdiction and Venue. In the event that any party hereto commences a lawsuit or other proceeding relating to or arising from this Agreement, the parties hereto agree that the United States District Court for the Southern District of the State of New York shall have the sole and exclusive jurisdiction over any such proceeding. If such court lacks federal subject matter jurisdiction, the parties hereto agree that the Supreme Court of the State of New York within New York County shall have sole and exclusive jurisdiction. Any final judgment shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Any of these courts shall be proper venue for any such lawsuit or judicial proceeding and the parties hereto waive any objection to such venue and irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such suit or proceeding in any such court has been brought in an inconvenient forum.

The parties hereto consent to and agree to submit to the jurisdiction of any of the courts specified herein and agree to accept service of process to vest personal jurisdiction over them in any of these courts.

EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT TO A TRIAL BY JURY AND AGREES THAT ANY OF THEM MAY FILE A COPY OF THIS SECTION OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES HERETO IRREVOCABLY TO WAIVE THE RIGHT TO TRIAL BY JURY IN ANY LITIGATION RELATED TO OR ARISING UNDER THIS AGREEMENT.

 

8


13.

Notice. All notices, instructions (pursuant to a Written Direction, Voting Direction, or otherwise), approvals, consents, requests, and other communications hereunder shall be in writing and shall be deemed to have been given (a) when such writing is delivered by hand or overnight delivery service, or (b) upon telephone call-back in accordance with Section 14 below, after being sent by e-mail with PDF attachment from the designated e-mail account(s) of the sending person(s) as designated on Schedule A to the designated e-mail account(s) of the receiving person(s) as designated on Schedule A, or (c) three (3) Business Days after being mailed by first class mail (postage prepaid), in each case to the address set forth on Schedule A or to such other address as each party hereto may designate for itself by like notice.

 

14.

Security Procedures. If notices, instructions (pursuant to a Written Direction, Voting Direction, or otherwise), approvals, consents, requests, and other communications, are received by Escrow Agent by e-mail at its e-mail account(s) as designated on Schedule A, Escrow Agent is authorized, but not required, to seek prompt confirmation of such communications by telephone call-back to the sending person or persons’ telephone number(s) as designated on Schedule A, and Escrow Agent may rely upon the confirmation of anyone purporting to be the person or persons so designated in that call-back. Any e-mail by PDF attachment executed by more than one person shall be sent by each signatory. The persons and their telephone numbers authorized to receive call-backs as designated in Schedule A may be changed only in a writing actually received and acknowledged by Escrow Agent and delivered in accordance with Section 13 above and, if applicable, this Section 14. If the Escrow Agent is unable to contact any such designated person, the Escrow Agent is hereby authorized (but not required) both to receive written instructions from and seek confirmation of such instructions by telephone call-back to any one or more of the applicable Party’s executive officers (each, an “Executive Officer”), as the case may be, who shall include individuals holding titles of General Counsel, Chief Financial Officer or more senior thereto, as the Escrow Agent may select. Such Executive Officer(s) shall deliver to the Escrow Agent a fully executed incumbency certificate upon the Escrow Agent’s request, and the Escrow Agent may rely upon the confirmation of anyone purporting to be any such Executive Officer(s). The parties to this Agreement acknowledge and agree that the security procedures set forth above are commercially reasonable.

The Escrow Agent in any funds transfer may reasonably rely solely upon any account numbers or similar identifying numbers provided by the parties hereto to identify (a) a beneficiary, (b) a beneficiary’s bank, or (c) an intermediary bank. The Escrow Agent may apply any of the Escrow Assets for any payment order it executes using any such identifying number, even where its use may result in a person other than a beneficiary being paid, or the transfer of funds to a bank other than a beneficiary’s bank or an intermediary bank designated.

 

15.

Amendment or Waiver. This Agreement may be changed, waived, discharged or terminated only by a writing signed by the Parties and the Escrow Agent. No delay or omission by any Party or the Escrow Agent in exercising any right with respect hereto shall operate as a waiver. A waiver on any one occasion shall not be construed as a bar to, or waiver of, any right or remedy on any future occasion.

 

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16.

Severability. To the extent any provision of this Agreement is prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

 

17.

Governing Law. This Agreement shall be construed and interpreted in accordance with the internal laws of the State of New York without giving effect to the conflict of laws principles thereof.

 

18.

Entire Agreement. This Agreement and any Written Direction or Voting Direction delivered hereunder collectively constitute the entire agreement between the Parties and the Escrow Agent relating to the holding, voting, and disbursement of the Escrow Assets and sets forth in their entirety the obligations and duties of the Escrow Agent with respect to the Escrow Assets.

 

19.

Binding Effect. All of the terms of this Agreement, as amended from time to time, shall be binding upon, inure to the benefit of and be enforceable by the respective successors and assigns of the Parties and the Escrow Agent.

 

20.

Execution in Counterparts. This Agreement and any Written Direction or Voting Direction may be executed in two or more counterparts, which when so executed shall constitute one and the same agreement or direction. Subject to Section 13 and Section 14 hereof, this Agreement and any Written Direction may be executed and delivered by e-mailing a PDF version of a signed signature page (which, for the avoidance of doubt, may be executed using electronic signatures such as “DocuSign”, “Adobe Sign”, or similar electronic signatures), which shall have the same force and effect as the delivery of an originally executed signature page.

 

21.

Termination of Escrow Agent. Upon the first to occur of (i) the termination of the Escrow Period (subject to the occurrence of the related distribution(s)), (ii) the disbursement of all amounts in the Indemnity Escrow Account or (iii) the resignation of the Escrow Agent, Escrow Agent shall be released from its obligations hereunder and the Escrow Agent shall have no further obligation or liability whatsoever with respect to this Agreement or the Escrow Assets except with respect to any liability in connection with Escrow Agent’s fraud, gross negligence, or willful misconduct. The obligations of the Parties continue to exist notwithstanding the termination or discharge of the Escrow Agent’s obligations or liabilities hereunder until the respective obligations of the Parties have been fully performed.

 

22.

Dealings. Nothing herein shall preclude the Escrow Agent from acting in any other capacity for any Party or for any other entity.

 

23.

Currency. The currency applicable to any amount payable or receivable under this Agreement is United States dollars.

 

24.

Force Majeure. Notwithstanding anything to the contrary hereunder, the Escrow Agent shall not be liable for any delay, failure to perform, or other act or non-act resulting from acts beyond its reasonable control, including acts of God, terrorism, shortage of supply, labor difficulties (including strikes), war, civil unrest, fire, floods, electrical outages, equipment or transmission failures, internet interruption, vendor failures (including information technology providers), and other similar causes.

 

10


25.

No Third Party Beneficiaries. This Agreement and all of its terms and conditions are for the sole and exclusive benefit of the parties hereto and their respective permitted successors and assigns. Nothing expressed or referred to in this Agreement will be construed to give any person or entity other than the parties to this Agreement any legal or equitable rights, remedy, or claim under or with respect to this Agreement or any term or condition of this Agreement.

 

26.

No Strict Construction. The parties hereto have participated jointly in the negotiation and draft of this Agreement. In the event any ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if it were drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party hereto by virtue of authorship of any provision of this Agreement.

 

27.

Priority.

 

  (a)

In the event of any conflict between the provisions of Schedule A and the remainder of this Agreement, this Agreement shall be construed in a manner prescribed by the Escrow Agent acting in good faith.

 

  (b)

Nothing contained in this Agreement shall amend, replace or supersede any agreement between any of the Parties and the Escrow Agent to act as such Party’s transfer agent, which agreement shall remain of full force and effect.

 

28.

Headings. The headings in this Agreement are for convenience purposes and shall be ignored for purposes of enforcing this Agreement, do not constitute a part of this Agreement, and may not be used by any party hereto to characterize, interpret, limit or affect otherwise any provision of this Agreement.

 

29.

Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement shall remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree shall remain in full force and effect to the extent not held invalid or unenforceable.

 

30.

Time is of the Essence. Time is of the essence in this Agreement. If the date specified in this Agreement for giving any notice or taking any action is not a Business Day (or if the period during which any notice is required to be given or any action taken expires on a date which is not a Business Day), then the date for giving such notice or taking such action (and the expiration date of such period during which notice is required to be given or action taken) shall be the next day which is a Business Day.

 

11


31.

Limitation of Damages. In no event shall any of the Parties be liable for incidental, indirect, special, consequential, or punitive damages of any kind whatsoever (including lost profits), even if such Party has been advised of the likelihood of such loss or damage and regardless of the form of action, absent fraud, gross negligence, or willful misconduct by such Party.

 

32.

Schedules. All of the Schedules referred to in this Agreement are incorporated into this Agreement by reference and constitute part of this Agreement.

[signature page follows]

 

12


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

 

CALLON PETROLEUM OPERATING COMPANY,
as Buyer
By:  

/s/ Joseph C. Gatto, Jr.

  Name: Joseph C. Gatto, Jr.
  Title: President and CEO
CALLON PETROLEUM COMPANY,
as Buyer Parent
By:  

/s/ Joseph C. Gatto, Jr.

  Name: Joseph C. Gatto, Jr.
  Title: President and CEO

[SIGNATURE PAGE TO CLOSING ESCROW AGREEMENT]


BPP ACQUISITION LLC,
as Seller
By:  

/s/ Chris Doyle

  Name: Chris Doyle
  Title: Chief Executive Officer and President

[SIGNATURE PAGE TO CLOSING ESCROW AGREEMENT]


AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, as Escrow Agent
By:  

/s/ Michael Legregin

  Name: Michael Legregin
  Title: Senior Vice President

[SIGNATURE PAGE TO CLOSING ESCROW AGREEMENT]


SCHEDULE A

 

1.

Indemnity Escrow Account Funding.

Indemnity Holdback Shares:    

Shares of Parent Common Stock:

   603,891
  

 

2.

Escrow Agent Fees.

 

Acceptance Fee:

   $6,000

Annual Escrow Fee (including first year):

   $1,200 per disbursement

The Acceptance Fee and the Annual Escrow Fee for each year of the term of this Agreement are payable upon execution of this Agreement. In the event the Indemnity Escrow Account is not funded, the Acceptance Fee and all related expenses, including attorneys’ fees, costs and expenses remain due and payable, and if paid, will not be refunded. Annual fees cover a full year in advance, or any part thereof, and thus are not pro-rated in the year of termination.

The fees quoted in this schedule apply to services ordinarily rendered in the administration of an escrow account and are subject to reasonable adjustment based on final review of documents, or when Escrow Agent is called upon to undertake unusual or extraordinary duties or responsibilities, or as changes in law, procedures, or the cost of doing business demand. Services in addition to and not contemplated in this Agreement, including document amendments and revisions, non-standard cash and/or investment transactions, calculations, notices and reports, and legal fees, will be billed as expenses.

Unless otherwise indicated, the above fees relate to the establishment of one escrow account. Additional sub-accounts governed by this Agreement may incur an additional charge. Transaction costs include charges for wire transfers, checks, internal transfers and securities transactions.

The fees quoted in this schedule are subject to reasonable adjustment by Escrow Agent in accordance with its customary practices and if it is called upon to undertake further unusual or extraordinary duties or responsibilities, or as changes in law, procedures, or the cost of doing business demand.

 

3.

Termination and Disbursement. Unless earlier terminated by the provisions of this Agreement, the Escrow Period will terminate on the date that the Escrow Agent receives a Written Distribution directing the Escrow Agent to disburse all of the Indemnity Holdback Shares then remaining in the Indemnity Escrow Account (the “Termination Date”), subject to the distribution of all of the Indemnity Holdback Shares. Any Indemnity Holdback Shares remaining in the escrow account at such time shall be distributed in accordance with Section 3 of this Agreement and the Written Direction; provided, however, that any earnings thereon shall be distributed in accordance with Section 13(b) of this Agreement. Notwithstanding anything to the contrary herein, this

 

B-1


  Agreement shall continue in full force and effect so long as any Indemnity Holdback Shares remain deposited with the Escrow Agent and the Escrow Agent shall not distribute any Indemnity Holdback Shares that are the subject of any Escrow Claim Notice unless instructed to distribute such Indemnity Holdback Shares by Written Instruction.

 

4.

Buyer Representatives. Each of the following persons is hereby designated and appointed as Buyer Representatives:

 

 

Joseph C. Gatto, Jr.

  

 

Specimen signature

  
President and CEO      

Callon Petroleum Company

2000 W. Sam Houston Parkway S., Suite 2000

     

Houston, Texas 77042

[***]

     

 

  

 

  
Kevin Haggard    Specimen signature   
Senior Vice President and      
Chief Financial Officer      

Callon Petroleum Company

2000 W. Sam Houston Parkway S., Suite 2000

     

Houston, Texas 77042

[***]

     

5.  Seller Representatives. Each of the following persons is hereby designated and appointed as Seller Representatives:

 

  

 

  
Chase White    Specimen signature   
Executive Vice President of      
Business Development and Land      

Two Energy Square

4849 Greenville Ave

     
Dallas TX, 75206      
Office: [***]      

Cell: [***]

[***]

     

 

  

 

  
Phil Cook    Specimen signature   
Chief Financial Officer and Treasurer      

Two Energy Square

4849 Greenville Ave

     
Dallas TX, 75206      

 

B-2


Office: [***]

Cell: [***]

[***]

 

6.

Notice Addresses.

If to the Buyer Parties:

Callon Petroleum Company

2000 W. Sam Houston Parkway S., Suite 2000

Houston, Texas 77042

Attn: Michol L. Ecklund

Email: [***]

If to Seller:

BPP Acquisition LLC

4849 Greenville Avenue, Suite 1600

Dallas, Texas 75206

Attn: Chris Doyle

Email: [***]

with copies to:

BPP Acquisition LLC

4849 Greenville Avenue, Suite 1600

Dallas, Texas 75206

Attn: Megan Davis

Email: [***]

BPP Acquisition LLC

4849 Greenville Avenue, Suite 1600

Dallas, Texas 75206

Attn: Phil Cooke

Email: [***]

If to Escrow Agent at:

American Stock Transfer & Trust Company, LLC

6201 15th Ave

Brooklyn NY 11219

Attn: Escrow Department

Tel: [***]

 

B-3


with copy to:

American Stock Transfer & Trust Company, LLC

6201 15th Avenue

Brooklyn, New York 11219

Attn: General Counsel

Tel: [***]

 

7.

Designated Email Accounts and Telephone Call-Back Numbers (for persons designated to send and receive notices by e-mail).

 

Buyer Parties:   

Name

  

Email Address

  

Phone

   Joseph C. Gatto, Jr.    [***]    [***]
   Kevin Haggard    [***]    [***]
Seller:   

Name

  

Email Address

  

Phone

   Chase White    [***]    [***]
   Phil Cook    [***]    [***]
Escrow Agent:   

Name

  

Email Address

  

Phone

   Keith Morales    [***]    [***]

 

B-4

Tags:

Legal Notice