ERHC Energy Inc (ERHE)

[Strategyone]

Krombacher,

It means the first option available to all remaining parties is their pro-rata share under the terms of the exiting party. In other words, if a small player left (other than ERHE with a carry), for let's say 10% interest and ERHE chose to keep their pro-rata share of let's say 2.2% in addition, ERHE would be then on the hook for 2.2% of the NEXT phase of expenses. They could also renegotiate this portion back to Addax/Sinopec for further carry but I am guessing Sinopec would say no. If ERHE couldn't pay their way on the new 2.2%, it would default back to Sinopec without having to carry that portion further so why would they.

Common sense here.