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Lessor shall pay all taxes that accrued before the date of this Lease. If any payment on <br /> account of any taxes is made by either Lessee or Lessor which should have been made in <br /> the first instance by the other, the same shall be repaid by the party having the obligation <br /> i <br /> to pay the same upon statement and demand by the party paying the same. It is not <br /> 1 <br /> intended that either party shall pay or be required to pay any business and occupation tax <br /> or income tax or severance tax properly assessed against the other. <br /> 10. Minimum Rpyalties. Lessee shall pay to Lessor during the Initial <br /> Term, as minimum royalty without regard to the quantity of coal mined,the sum of seven <br /> hundred thousand dollars ($700,000.00) per year. The annual minimum royalty for the <br /> first year shall be paid in advance on the Effective Date, and the annual minimum royalty <br /> for each subsequent year during the Initial Term shall be paid on the anniversary of the <br /> Effective Date. The annual minimum royalty shall be fully recoupable against tonnage <br /> royalties payable hereunder as set forth in Section 13. The payment of the annual <br /> minimum royalty is in lieu of any obligation to diligently mine the Leased Coal and any <br /> obligation to pay any wheelage charge. <br /> At any such time during the Initial Term of this Lease that the annual <br /> minimum royalties available for recoupment against tonnage royalties equals or exceeds <br /> the tonnage royalties estimated in good faith to be payable on the remaining mineable and <br /> merchantable coal in, on, or under the Leased Premises, then the requirement to pay the <br /> annual minimum royalty shall cease. No annual minimum royalty will be payable after <br /> the Initial Term of this Lease even if the Lease is extended beyond the Initial Term. <br /> (1.0406980.10) 7 <br />