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11. Tonnage Royalties. Lessee shall pay to Lessor for each ton of 2,000 <br /> pounds of coal mined from the Leased Premises and sold a tonnage royalty of six percent <br /> (6%) of the gross sales price received from the sale of coal. The term "gross sales price" <br /> shall mean the gross price at which Lessee sells coal mined and removed from Leased <br /> Premises f.o.b. Lessee's preparation plant or other local point of shipment from the { <br /> Leased Premises (whether such coal is sold raw or has been cleaned) without any <br /> deductions for sales commissions, selling costs, advertising or credit losses or other <br /> expenses or deductions whatsoever; provided, however, that in the event any sale of such <br /> coal by Lessee shall not be at arm's length, then the gross sales price for such sales shall <br /> be the greater of(i) the actual price paid for such sale or(ii) gross sales price received by <br /> Lessee for coal of a similar kind and quality in the area of the Leased Premises which is <br /> sold at arm's length. The tonnage royalty on all coal mined in each calendar month shall <br /> be paid on or before the 25`h day of the month following the end of the calendar month in <br /> which such coal was mined, and shall be recoupable against the annual minimum royalty <br /> set forth in Section 10 above. <br /> 12. Methane Royalty. With respect to the coalbed methane in the coal <br /> mined by Lessee, Lessee shall have the right, in connection with its operations in the <br /> coal, to vent such methane or permit it to escape without payment to Lessor therefor. <br /> However, if Lessee or others on its behalf recover any such methane that is owned and <br /> controlled by Lessor and use or sell it, Lessee shall pay Lessor a royalty of twelve and <br /> one-half percent (12 1/21/o) of the greater of (i) the then fair market price for such <br /> methane or (ii) the gross proceeds realized in the first arm's length transaction, without 1 <br /> i <br /> (L0406980-10) 8 <br />