Exhibit 10.1

Execution Version

REGISTRATION RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into
as of May 26, 2016, by and among Callon Petroleum Company, a Delaware
corporation (the “Company”), and each of the Persons set forth on Schedule A to
this Agreement.

WHEREAS, this Agreement is entered into in connection with the closing of the
transactions contemplated by the Purchase and Sale Agreement, dated as of April
19, 2016 (the “Purchase and Sale Agreement”), by and among the Company, Callon
Petroleum Operating Company, a Delaware corporation, BSM Energy LP, a Texas
limited partnership (“BSM”), Crux Energy, LP, a Texas limited partnership
(“Crux”), Zaniah Energy, LP, a Texas limited partnership (“Zaniah” and, together
with BSM and Crux, collectively, the “Sellers” and each individually, a
“Seller”) pursuant to which the Company will acquire certain oil and gas
property interests from the Sellers in exchange for: (i) $220,000,000.00,
subject to adjustment, and (ii) 9,333,333 shares of the Company’s Common Stock
(the “Shares”);

WHEREAS, the Company has agreed to provide the registration and other rights set
forth in this Agreement for the Shares held by the Holders (as defined herein)
pursuant to the Purchase and Sale Agreement;

WHEREAS, it is a condition to the obligations of each Seller and the Company
under the Purchase and Sale Agreement that this Agreement be executed and
delivered; and

NOW THEREFORE, in consideration of the 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. Capitalized terms used herein without definition shall
have the meanings given to them in the Purchase and Sale Agreement. The terms
set forth below are used herein as so defined:

“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly through one or more intermediaries controls, is controlled by or is
under common control with, the Person in question. As used herein, the term
“control” means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership of voting securities, by contract or otherwise. For the avoidance of
doubt, for purposes of this Agreement, no Holder shall be considered to be an
Affiliate of the Company.

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

“Board” means the Board of Directors of the Company.

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“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 May 26, 2016.

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

“Common Stock Price” means the per share price set forth on Schedule B hereto.

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

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

“Effectiveness Deadline” has the meaning specified therefor in Section 2.01 of
this Agreement.

“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 from time
to time, and the rules and regulations of the SEC promulgated thereunder.

“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 (i) BSM unless and until BSM ceases to hold any Registrable
Securities; (ii) Bradley Cross unless and until Bradley Cross ceases to hold any
Registrable Securities; (iii) Stella Swanson unless and until Stella Swanson
ceases to hold any Registrable Securities; (iv) Grella Oil & Gas, LLC unless and
until Grella Oil & Gas, LLC ceases to hold any Registrable Securities, (v)
Creede Energy LLC, a Texas limited liability company, unless and until Creede
Energy LLC ceases to hold any Registrable Securities and (vi) any holder of
Registrable Securities to whom registration rights conferred by this Agreement
have been transferred in compliance with Section 2.11 of this Agreement. For the
avoidance of doubt, in accordance with Section 3.05 of this Agreement, for
purposes of determining the availability of any rights and applicability of any
obligations under this Agreement, including, calculating the amount of
Registrable Securities held by a Holder, a Holder’s Registrable Securities shall
be aggregated together with all Registrable Securities held by other Holders who
are Affiliates of such Holder.

“Included Registrable Securities” has the meaning specified therefor in Section
2.02(a) 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 2.09(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.

“Opt-Out Notice” has the meaning specified therefor in Section 2.02(a).

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

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

“Registrable Securities” means the Shares issued to the Holders by the Company
pursuant to the Purchase and Sale Agreement, including the Escrow Equity
Consideration, and includes any type of ownership interest issued to a Holder as
a result of Section 3.04 of this Agreement, all of which are subject to the
rights provided herein until such time as such securities cease to be
Registrable Securities pursuant to Section 1.02 hereof.

“Registration Expenses” has the meaning specified therefor in Section 2.08(b) of
this Agreement.

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

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

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

“Selling Expenses” has the meaning specified therefor in Section 2.08(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.

“Selling Holder Indemnified Persons” has the meaning specified therefor in
Section 2.09(a) of this Agreement.

 

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“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.

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); (c) when such
Registrable Security is held by the Company or one of its Affiliates; (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 2.11 hereof; (e) the date on
which such Registrable Security may be sold pursuant to any section of Rule 144
under the Securities Act (or any successor or similar provision adopted by the
SEC then in effect) without any restriction (including, if the Holder is an
Affiliate of Company, restrictions that apply to sales by Affiliates) or (f) two
years from the date of the Agreement.

ARTICLE II

REGISTRATION RIGHTS

Section 2.01 Shelf Registration. The Company shall use its reasonable best
efforts to prepare and file a Shelf Registration Statement with the SEC to
permit the public resale of all Registrable Securities by the Holders on the
terms and conditions specified in this Section 2.01 (a “Registration Statement”)
and to cause such Registration Statement to be declared effective no later than
30 days after the Closing Date (the “Effectiveness Deadline”). The Registration
Statement filed with the SEC pursuant to this Section 2.01 shall be on Form S-3
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. A Registration Statement shall provide for the resale
pursuant to any method or combination of methods legally available to, and
requested by, the Selling Holders. 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 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 by the Holders until all
Registrable Securities have ceased to be Registrable Securities. As soon as

 

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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
Selling 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 such statement is
made).

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, (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, or (iii) a registration statement, other than a
shelf registration statement, 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 as soon as practicable following the engagement of the Managing Underwriter
for such Underwritten Offering, the Company shall give notice of such
Underwritten Offering to each Holder, and such notice shall offer such Holders
the opportunity to include in such Underwritten Offering such number of
Registrable Securities (the “Included Registrable Securities”) as each such
Holder may request in writing; provided, however, that (A) the Company shall not
be required to provide such opportunity if the Holders do not offer in the
aggregate a minimum of $10.0 million of Registrable Securities (based on the
Common Share Price), and (B) if the Company has been advised by the Managing
Underwriter that the inclusion of Registrable Securities for sale for the
benefit of the Holders will 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, 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, 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). Any notice required to be provided in this Section 2.02(a) to Holders
shall be provided on a Business Day pursuant to Section 3.01 hereof and
confirmation of receipt of such notice shall be requested in the notice. Each
such Holder 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 a Holder 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 terminated Underwritten Offering,
and (2) in the case of a determination to

 

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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 or prior to the time of
pricing of such Underwritten Offering, after which time such Selling Holders
shall have no right to withdraw their request. No such withdrawal or abandonment
shall affect the parties’ obligation to pay Registration Expenses pursuant to
Section 2.08. Any Holder 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. 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 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 included in a Registration Statement involving Included
Registrable Securities 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 or other Person or Persons requesting or
initiating such registration and (ii) second, to the Selling Holders who have
requested participation in such Underwritten Offering and to the other holders
of Common Stock (other than holders of Registrable Securities) with registration
rights entitling them to participate in such Underwritten Offering, allocated
among such Selling Holders and other holders pro rata on the basis of the number
of Registrable Securities or shares of Common Stock requested to be included by
each applicable Selling Holder or other holder or in such manner as they may
agree.

Section 2.03 Delay Rights.

Notwithstanding anything to the contrary contained herein, the Company may, upon
written notice to any Selling Holder whose Registrable Securities are included
in a Registration Statement, suspend such Selling Holder’s use of any prospectus
which is a part of such Registration Statement (in which event the Selling
Holder shall suspend sales of the Registrable Securities pursuant to such
Registration Statement) if (i) the Company is pursuing an acquisition, merger,
reorganization, disposition or other similar transaction and the Board
determines in good faith that the Company’s ability to pursue or consummate such
a transaction would be materially and adversely affected by any required
disclosure of such transaction in such Registration Statement or (ii) the
Company has experienced some other material non-public event, the disclosure of
which at such time, in the good faith judgment of the Board, would materially
and adversely affect the Company; provided, however, that in no event shall the
Selling Holders be suspended from selling Registrable Securities arising from an
event described in clauses (i) or

 

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(ii) above for a period that exceeds an aggregate of ninety (90) 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 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 actions necessary or appropriate to permit
registered sales of Registrable Securities as contemplated in this Agreement.

Section 2.04 General Procedures.

In connection with any Underwritten Offering under this Agreement, the Company
shall be entitled to select the Managing Underwriter or Underwriters. In
connection with an Underwritten Offering contemplated by this Agreement in which
a Selling Holder participates, each Selling Holder and the Company shall be
obligated to enter into an underwriting agreement with the Managing Underwriter
or Underwriters that contains such representations, covenants, indemnities and
other rights and obligations as are customary in underwriting agreements for
firm commitment offerings of equity securities. No Selling Holder may
participate in such Underwritten Offering unless such Selling Holder agrees to
sell its Registrable Securities on the basis provided in such underwriting
agreement and completes and executes all questionnaires, powers of attorney,
indemnities and other documents reasonably required under the terms of such
underwriting agreement. Each Selling Holder may, at its option, require that any
or all of the representations and warranties by, and the other agreements on the
part of, the Company to and for the benefit of such underwriters also be made to
and for such Selling Holder’s benefit and that any or all of the conditions
precedent to the obligations of such underwriters under such underwriting
agreement also be conditions precedent to its obligations. 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 such Selling Holder, its authority to enter into such
underwriting agreement and to sell, and its ownership of, the securities whose
offer and resale will be registered, on its behalf, its intended method of
distribution and any other representation required by Law or as may be
reasonably requested by the underwriters.

Section 2.05 Sale Procedures.

In connection with its obligations under this Article II, the Company shall:

(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 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 to the extent then
required by the rules and regulations of the SEC), 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;

(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) immediately 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 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 reasonably practicable amend or supplement the prospectus or
prospectus supplement or take

 

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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) in the case of an Underwritten Offering, use its commercially reasonable
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
are 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 may reasonably request;

(h) otherwise use its commercially reasonable efforts to comply with all
applicable rules and regulations of the SEC, and make available to its security
holders, 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;

(i) 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 in a form reasonably satisfactory to the Company;

(j) use its commercially reasonable 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 is
then listed or quoted;

(k) 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;

(l) 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, 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 in the event the Company,
using commercially reasonable efforts, is unable to make such appropriate
officers of the Company

 

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available to participate in connection with any “road show” presentations and
other customary marketing activities (whether in person or otherwise), the
Company shall make such appropriate officers available to participate via
conference call or other means of communication in connection with no more than
one “road show” presentation per Underwritten Offering; and

(m) if reasonably requested by a Selling Holder, (i) 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) 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.

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. If the staff of the SEC requires the Company to name any
Holder as an underwriter as defined in Section 2(a)(11) of the Securities Act,
and such Holder does not consent thereto, then such Holder’s Registrable
Securities shall not be included on such Registration Statement and the Company
shall have no further obligations hereunder with respect to Registrable
Securities held by such Holder, unless such Holder has not had an opportunity to
conduct customary underwriter’s due diligence (including receipt of comfort
letters and opinions of counsel) with respect to the Company at the time such
Holder’s consent is sought.

Each Selling Holder, upon receipt of notice from the Company of the happening of
any event of the kind described in Section 2.05(e), 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 2.05(e) 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.

Section 2.06 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 to
Section 2.02(a) who has failed to timely furnish 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 2.07 Restrictions on Public Sale by Holders of Registrable Securities.

 

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For a period of one year following the Effective Date, during the 45 calendar
day period beginning on the date of a prospectus supplement filed with the SEC
with respect to the pricing of an Underwritten Offering, or other prospectus
(including any free writing prospectus) containing the terms of the pricing of
such Underwritten Offering, each Holder of Registrable Securities included in
the Shelf Registration Statement and participating in an Underwritten Offering
and that is permitted to include in such Underwritten Offering all Registrable
Securities requested to be included in such Underwritten Offering in accordance
with the terms of this Agreement agrees not to effect any public sale or
distribution of Registrable Securities, provided that (i) the duration of the
foregoing restrictions shall be no longer than the duration of the shortest
restriction generally imposed by the underwriters on the officers or directors
or any other stockholder of the Company on whom a restriction is imposed and
(ii) the restrictions set forth in this Section 2.07 shall not apply to any
Registrable Securities that are included in such Underwritten Offering by such
Holder.

Section 2.08 Expenses

(a) Expenses. The Company shall pay all reasonable Registration Expenses as
determined in good faith by the Board, including, in the case of an Underwritten
Offering, the reasonable 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 2.09 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 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, and fees and disbursements
of counsel allocable to the Selling Holders.

Section 2.09 Indemnification.

(a) By the Company. In the event of a registration of any Registrable Securities
under the Securities Act pursuant to this Agreement, the Company shall (i)
indemnify and hold harmless each Selling Holder thereunder, its directors,
officers, managers, employees and agents

 

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and each Person, if any, who controls such Selling Holder within the meaning of
the Securities Act and the Exchange Act, and its directors, officers, employees
or agents (collectively, the “Selling Holder Indemnified Persons”), against any
losses, claims, damages, expenses or liabilities (including reasonable
attorneys’ fees and expenses) (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 (ii)
shall reimburse each such Selling Holder Indemnified Person for any legal or
other expenses reasonably incurred by them 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 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 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 so to notify the
indemnifying party shall not relieve it from any liability that it may have to
any indemnified party other than under this Section 2.09 except to the extent
that the indemnifying party is materially prejudiced by such failure. In any
action brought against an

 

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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 to so assume and
undertake the defense thereof, the indemnifying party shall not be liable to
such indemnified party under this Section 2.09 for any legal 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 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, the indemnified party.

(d) Contribution. If the indemnification provided for in this Section 2.09 is
held by a court or government agency of competent jurisdiction to be unavailable
to any indemnified party or is insufficient to hold such indemnified party
harmless in respect of any Losses, then each applicable 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 hand, 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 a 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 one hand,
and the indemnified party, on the other hand, 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 and
other expenses reasonably incurred by such indemnified party in connection with
investigating, defending or resolving any Loss that is the subject of this
paragraph. Notwithstanding anything to the contrary herein, 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.

 

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(e) Other Indemnification. The provisions of this Section 2.09 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.

Section 2.10 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 commercially reasonable
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), so long as a
Holder owns any Registrable Securities;

(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 so long as
a Holder owns any Registrable Securities; and

(c) so long as a Holder owns any Registrable Securities, furnish, 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.

Section 2.11 Transfer or Assignment of Registration Rights.

The rights to cause the Company to register Registrable Securities granted to
the Holders by the Company under this Article II may be transferred or assigned
by any Holder (a) if the Registrable Securities transferred or assigned by such
Holder represent at least $5 million (based on the Common Share Price) or (b) to
one or more transferees or assignees of Registrable Securities who are
Affiliates of the Holder; provided, however, that (i) the Company is given
written notice prior to any such transfer or assignment, stating the name and
address of each of the transferee or assignee and identifying the Registrable
Securities with respect to which such registration rights are being transferred
or assigned and (ii) each such transferee or assignee assumes in writing
responsibility for its portion of the obligations of such Holder under this
Agreement.

Section 2.12 Legend Removal.

The legend on any Equity Consideration (including the legend described in
Section 4.14 of the Purchase and Sale Agreement) shall be removed, if, unless
otherwise required by state securities Laws, (a) such Equity Consideration is
sold pursuant to an effective registration statement, (b) a registration
statement covering the resale of such Equity Consideration is

 

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effective under the Securities Act and the applicable Holder of such Equity
Consideration delivers to the Company a representation letter agreeing that such
Equity Consideration will be sold under such effective registration statement,
(c) if such Equity Consideration may be sold by the Holder thereof free of
restrictions pursuant to Rule 144(b) under the Securities Act, or (d) the Equity
Consideration is being sold, assigned or otherwise transferred pursuant to Rule
144 under the Securities Act; provided, that with respect to clause (c) or (d)
above, (i) the Holder provides to the Company a representation letter providing
any information the Company deems necessary to determine that the sale of the
Equity Consideration is made in compliance with Rule 144, (ii) legal counsel to
the Company agrees that the legend may be removed under applicable securities
laws, (iii) the Holder of the Equity Consideration has provided an opinion of
counsel and all other necessary documentation and evidence as may reasonably be
required by the Company to confirm that the legend may be removed under
applicable securities law. The Company shall reasonably cooperate with the
applicable Holder to effect removal of such legend. The Company shall bear all
direct costs and expenses associated with the removal of a legend pursuant to
this Section 2.12; provided, that the applicable Holder shall be responsible for
all legal fees and expenses of counsel incurred by such Holder with respect to
delivering the legal opinion to the Company or such other matters addressed in
this Section 2.12.

ARTICLE III

MISCELLANEOUS

Section 3.01 Communications.

All notices and other communications provided for or permitted hereunder shall
be made in writing by facsimile, electronic mail, courier service or personal
delivery to the facsimile numbers, electronic mail addresses or addresses listed
below (or to such other facsimile numbers or addresses provided by the Parties
from time to time by written notice to the other Parties pursuant to this
Section 3.01):

(a) if to a Holder, to the respective address listed on Schedule A hereof;

(b) if to a transferee of a Holder, to such Holder at the address provided
pursuant to Section 2.11 above; and

(c) if to the Company:

Callon Petroleum Company

200 North Canal St.

Natchez, Mississippi 39120

Attention: Joseph C. Gatto, Jr., Chief Financial Officer

Email: jgatto@callon.com

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

Haynes and Boone, LLP

1221 McKinney Street

Attention: Bill Nelson

Facsimile: 713-236-5557

Email: bill.nelson@haynesboone.com

 

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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 facsimile or sent via Internet electronic mail; and when actually
received, if sent by courier service or any other means.

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.

Except as provided in Section 2.11, neither this Agreement, nor any of the
rights, benefits or obligations hereunder may be assigned or transferred, by
operation of law or otherwise, by any party hereto without the prior written
consent of each other party.

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 shares of capital stock of the Company or any
successor or assign of the Company (whether by merger, consolidation, 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, stock splits, recapitalizations, pro rata distributions of
stock 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 and applicability of any obligations 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.

 

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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.

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 Delaware.

Section 3.10 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 3.11 Entire Agreement.

This Agreement is 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. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein with respect to
the rights granted by the Company set forth herein. This Agreement and the
Purchase and Sale Agreement supersede all prior agreements and understandings
between the parties with respect to such subject matter.

Section 3.12 Amendment.

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

Section 3.13 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.

 

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Section 3.14 Obligations Limited to Parties to Agreement.

Each of the parties hereto covenants, agrees and acknowledges that no Person
other than the parties hereto (and their permitted transferees and assignees)
shall have any obligation hereunder. Notwithstanding that one or more of the
Holders may be a corporation, partnership or limited liability company, 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 any 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 any 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 Holder hereunder.

Section 3.15 Independent Nature of Holder’s Obligations.

The obligations of each Holder under this Agreement are several and not joint
with the obligations of any other Holder, and no Holder shall be responsible in
any way for the performance of the obligations of any other Holder under this
Agreement. Nothing contained herein, and no action taken by any Holder pursuant
thereto, shall be deemed to constitute the Holders as a partnership, an
association, a joint venture or any other kind of group or entity, or create a
presumption that the Holders are in any way acting in concert or as a group with
respect to such obligations or the transactions contemplated by this Agreement.
Each Holder shall be entitled to independently protect and enforce its rights,
including, the rights arising out of this Agreement, and it shall not be
necessary for any other Holder to be joined as an additional party in any
proceeding for such purpose.

Section 3.16 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.” Whenever any determination, consent or approval is to be made or
given by a Holder under this Agreement, such action shall be in such Holder’s
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.

Section 3.17 Consent to Jurisdiction; Venue.

 

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(a) The parties hereby irrevocably and unconditionally agree that federal or
state courts located in Delaware shall have exclusive jurisdiction over all
disputes between the parties with respect to this Agreement. The parties hereto
agree that a final judgment in any such claim shall be conclusive and may be
enforced in any other jurisdiction by suit on the judgment or in any other
manner provided by law.

(b) Each of the parties hereto irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any related matter in any court
described in paragraph (a) above and the defense of an inconvenient forum to the
maintenance of such claim in any such court.

(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:   Chief Financial Officer, Senior Vice  
President and Treasurer

 

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BSM ENERGY LP By: Creede Energy LLC, its general partner By:  

/s/ Stella M. Swanson

Name:   Stella M. Swanson Title:   Manager By:  

/s/ Bradley Cross

Name:   Bradley Cross Title:   Manager

 

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CREEDE ENERGY LLC By:  

/s/ Stella M. Swanson

Name:   Stella M. Swanson Title:   Manager By:  

/s/ Bradley Cross

Name:   Bradley Cross Title:   Manager

 

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/s/ Bradley Cross

Bradley Cross

 

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/s/ Stella Swanson

Stella Swanson

 

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GRELLA OIL & GAS, LLC By:  

/s/ Michael J. Grella

Name:   Michael J. Grella Title:   Manager

 

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Schedule B

Common Stock Price Per Share: $7.50