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~„~_ <br />~-; :%~ <br />~0~~02 <br />coal interest leased herein, whether mining occurs by underground, surface or other <br />mining methods. <br />(a) With respect to bona fide arm's length transactions for the sale of coal, <br />Gross Proceeds shall mean the aggregate amount of consideration received or receivable <br />by the Lessee, directly or indirectly, for the sale of opal f.o.b. the tipple or the mouth of <br />the mine, without deduction for any sales commissions, selling ezpens,_s or preparation <br />costs; provided that, if the coal is sold f.o.b. some other delivery point with the Lessee <br />bearing transpottarion expenses from the mouth of the mine to that delivery point, then <br />those transportation ezpens.s shall be deducted from the Gross Proceeds before <br />computation of the royalty. <br />(b) 1(coal mined from the Leased Premises under the terms of this Lease <br />is sold by the Lesser other than by a bow fidt arm's length transaction or is used or <br />otherwise disposed of by the Lessee, including by gasification, slurrification or combustion, <br />then Gross Proceeds shalt mean the prevailing fair market value of the coal at the tipple <br />or the monnh of the mine. The prevailing fair market value shall be determined with <br />reference to bow fide arm's length coal sale transactions by others which are most <br />comparable to the prevailing circumstancxs related to this Lease, giving consideration to <br />quantity, sin and quality of the coal, length of term and delivery of cort~mitment of <br />contracts, availability and cost of transportation, and other pertinent market conditions. <br />(c) Production royalty payments shall be free of any expense of <br />exploration, mine development or operation. <br />(d) Production royalty payments are due and payable en or before the <br />twentieth (20th) day of each calendar month for the coal mined and removed, and sold, <br />used or otherwise disposed of from the Leased Premises during the preceding calendar <br />month. The Lessee shall furnish to the Lessors a statement of production and sale ~r <br />other disposition to accompany each royalty payment showing the amount of coal mined, <br />removed and sold or otherwise disposed of from the Leased Premises during the <br />preceding calendar month. <br />S. No Warranties of Title. This Lease is executed by Lessors solely in their <br />capacities as Co-Successor Trustees by Virtue of Appointment by the District Court in <br />3 <br />