For each $1,000 principal amount of outstanding senior notes tendered in accordance with the terms and conditions of the exchange offer, each tendering holder of senior notes will receive $750 principal amount of 13 percent senior secured notes due 2016, 20.625 shares of common stock and 1.6875 shares of convertible preferred stock. Each share of convertible preferred stock would be automatically convertible by the company into 10 shares of common stock following shareholder approval and the filing of an amendment to the company’s charter increasing the number of authorized shares of common stock as necessary to accommodate such conversion.
In connection with the exchange offer, Callon is soliciting consents to amend the indenture governing the senior notes. Holders tendering their senior notes will be required to consent to certain proposed amendments to the indenture governing the senior notes, which will eliminate substantially all of the indenture’s restrictive covenants.
Holders of approximately 73.5 percent of the senior notes have committed to tender their notes in the exchange offer. The exchange offer is conditioned upon the valid tender of at least 80 percent of the aggregate principal amount of the outstanding senior notes.
Callon will accept for exchange any and all senior notes that are validly tendered and not withdrawn on or before 5 p.m., EST on Nov. 18, 2009, unless the exchange offer is extended or terminated.