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~U131L <br />coal interest leased herein, wl+etl+er mining occurs by underground, surface or other <br />mining methods. <br />(a) Wilh respect to bona fide arm's length transactions for the ale of coal, <br />Gross Proceeds shall mean the aggregate amount of consideration recxtved or receivable <br />by the Lessee, directly or indirectly, for the sale of coal f.o.b. the +~pple or the mouth of <br />the mine, without deduction for any sales commissions, scl~ing exp~~ses or preparation <br />costs; provided that, if the coal is sold f.o.b. some other delivery point with the Lesset <br />bearing transportation expenses from the mouth of the mine to that delivery point, then <br />those transportation expenses shall be deducted from the Gross Proceeds before <br />computation of the myahv. <br />(b) If coal mined from the Leased Premises under the terms of Ibis Lease <br />is sold by the Lessee other than by a bona fide arm's length transaction or i~ used or <br />otherwise disposal of by the Lessee, including by gasification, slurrification or co.:+!+uslion, <br />then Gross Prtxccds shall mean tl;e prevailing fair market value of the coal at '!+c tipple <br />or the mouth of tltc mine. The prevailing fair market value shall be determined with <br />reference to boon fide arm's length coal sale transactions by others which arc most <br />contparahte to the prevailing circumstances related to this Lease, giving consideration to <br />quantity, size and quality of the coal, length of term and delivery of commilm:nt of <br />contracts, availability and ~usl of transportation, and otter pertinent market conditions. <br />(c) ProcJttction royalty payments shall be free of any expense of <br />exl~!~,ration, mine development or operation. <br />(d) Prcxluction royalty payments are due and payable on or before the <br />Twentieth (20th) day of each calendar month for tlu coal mined and removed, and sold, <br />used or otltcrwise disposed of from the Leased Premises during the preceding calendar <br />month. The I.cssee shall ftcrnislt to the Lessors a statement of production and sale or <br />other dispc+siliun to accompany each royahy payment showing the amount of coal mined, <br />removed and sold or otltcrwise disposed of from the !.eased Premises during the <br />prccetling calendar month. <br />5. No ~I'arranlics of l'illc. This Lease is executed by Lessors solely in their <br />cal+acities as C'o-Succ~ssor Trustees by Virtue of Appointment by the bislrict Court in <br />3 <br />