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interpreted) whether or not compensation is being paid For <br />Federal Leases or Private Leases {and notwithstanding the <br />nature of royalties provided in applicable Private Leases). <br />(b) Further, for purposes of this Assignment "the value <br />of the coal produced" shall have the same meaning as defined <br />in applicable federal regulations for federal coal leases (or <br />as judicially interpreted) whether or not compensation is <br />being determined for Federal leases or private leases (and <br />notwithstanding the manner of royalty payments provided for <br />in subject Private Leases). . <br />(c) Further, for purposes of this Assignment, the <br />Overriding Production Royalty shall be due and payable for <br />any coal mined from the lands described in the Federal Leases <br />or Private Leases, regardless of whether the coal is mined <br />from the existing leases or whether any or all of the leases <br />or parts thereof are relinquished and subsequently reaccuired <br />by Peabody by lease, purchase or otherwise. <br />(d) Payment of the foregoing Overriding Prcduction <br />Royalty shall be made on a quarterly basis by Peabody to <br />Freeman and payable by the last day of the month following <br />the quartet in which there has been production of coal on any <br />of the leased premises. <br />~~ (e) This Overriding Production Royalty shall continue <br />in force so long as Peabody, its successors and assigns, <br />retains an interest in the coal covered by the Federal Leases <br />or Private Leases and shall continue in force if Peabody <br />relinquishes any or all of the leases or any parts thereo` <br />and subsequently reacquires control of the properties by <br />lease, purchase or otherwise. <br />3. Compensation/Advance Royalty. Peabody agrees to pay as an <br />annual Advance Royalty the sum of twenty-five thousand <br />dollars ($25,000) pee year, with the first paymenk to , <br />commence on the date of signing and thereafter additional <br />payments of a like amount on each following anniversary date <br />until there are payments of ten (10) such annual Advance <br />Royalty payments. Advance Royalty payments hereunder shall <br />be recouped by Peabody by means of a credit applied by <br />Freeman towards payment of Overriding Production Royalty <br />becoming due and payable from Peabody with respect to any cF <br />the Premises now subject to the Federal Leases and Private <br />Leases. <br />Such advances paid by Peabody r.o Frr.eman shill constitute .~ <br />fund against which all Overriding Production Royalty shall <br />first be credited or charged until the @und is exhausted, ~~ <br />that Overriding Production Royalty shall not be due and <br />payable at any time except to the extent that Overriding <br />l~ <br />i- <br />