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body shall pay to Morgan on or before the 25th day of each calendar month the amount <br />due as Morgan Royalty for all coal mined and sold by Peabody during the calendar month <br />immediately preceding, and concurrently with such payment Peabody shall furnish to <br />Morgan a written statement showing the number of tons produced and the gross realiza- <br />tion. Notwithstanding any provision herein to the contrary, the Morgan Royalty shall not <br />exceed the limitations, if any, by law or by the terms of the State Lease on the amount <br />of overriding royalty. <br />1.05 Gross Realization. The term "gross realization" shall mean:. (i) those com- <br />ponents of the invoice sales price of the coal delivered by Peabody to the Hayden Station <br />Power Plant pursuant to the Amended Revised Coal Supply Agreement, dated December <br />1, 1971, as amended, between Seneca, as seller, and Colorado-Ute Electric Association, <br />Inc., and Salt River Project Agricultural Improvement and Power District, as buyers, <br />("Coal Supply Agreement"); or (ii) in the case of sales other than those made pursuant to <br />the Coal Supply Agreement, the sales price, f.o.b. railroad cars (or if not shipped by rail, <br />f.o.b. trucks at the mine). in either case of W or (ii), however, gross realization shall not <br />include sales, use, severance, excise or other taxes or governmental exactions or assess- <br />ments which are imposed on, or computed by reference to, the quantity of coal mined or <br />the realization from the coal, including (by way of example only) severance taxes <br />imposed by the State of Colorado, fees imposed by the Surface Mining Control and Recl- <br />amation Act and the tax imposed by the Federal Mine Safety and Health Act, and shall <br />not include State Royalty, Morgan Royalty or others rents or royalties paid under this <br />sublease or the State Lease. <br />1.06 Other Rights. Peabody shall have no obligation hereunder to.commence or <br />continue, diligently or otherwise, actual mining operations on the Property. Peabody <br />may commingle coal mined from the Property with coal mined from other lands. Pea- <br />body may use the Property in connection with coal mining by Peabody, or an affiliate of <br />Peabody, on other lands situated in Routt County, Colorado. <br />-3-