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2.02 Overriding Royalty Amount. On all coal mined by surface mining methods <br />and sold from the Seneca Leases, during the first five (5) years of this agreement the <br />Overriding Royalty shall be an amount equal to two percent (2%) of the gross realization <br />(as defined in Section 1.05 above with the addition that the gross realization shall not be <br />construed -to include this Overriding Royalty), during the next eight (8) years the Over- <br />riding Royalty shall be an amount equal to one percent (I%) of said gross realization and <br />during the remaining term of this agreement the Overriding Royalty shall be an amount <br />equal to one-half of one percent (0.5%) of said gross realization. On all coal mined by <br />underground mining methods and 'sold from the Seneca Leases, during the first five (5) <br />years of this agreement the Overriding Royalty shall be an amount equal to one percent <br />(1%) of said gross realization and thereafter the Overriding Royalty shall-be an amount <br />equal to one-half of one percent (0.5%) of said gross realization. Peabody shall pay to <br />Morgan on or before the 25th day of each calendar month the amount due as Overriding <br />Royalty for all coal mined and sold by Peabody during the preceding calendar month, and <br />concurrently shall furnish to Morgan a written statement showing the number of tons <br />produced and sold, the leases from which produced and the gross realization.. Notwith- <br />standing any provision to the contrary herein, the amount of the Overriding Royalty for <br />coal mined and sold from any particular one of ,the Seneca Leases shall not exceed the <br />amount of overriding royalty permitted by law or exceed limitations on overriding <br />royalties contained in that particular one of.the Seneca Leases. <br />2.03 Term: The Overriding Royalty granted herein shall terminate on September <br />30, 2011 or upon termination of the Coal Supply Agreement, whichever occurs earlier. <br />2.04 No Implied Covenants. Nothing in this Agreement shall be construed to <br />impose on Peabody any obligation to commence or continue, diligently or otherwise, <br />mining operations on any of the Seneca Leases, to continue to hold or maintain any of <br />Seneca Leases or to renew or extend any of the Seneca Leases. Peabody may commingle <br />coal mined from the Seneca Leases with coal mined from other lands. <br />-5-