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• • <br />2.2.prescribed in paragraph 15 of the Lease. Such notice shall be accompanied by a payment <br />of; <br />2.3. Lessee shall, within the three (3) year option period aforesaid, (i) have commenced <br />exploratory and development operations on the Leased Premises, and (ii) have obtained <br />the performance of substantial engineering services incident to, and necessary for, the <br />performance of such mining operations. <br />2.4. In the event Lessee shall, within the three (3) year option period mentioned in paragraph <br />1, above, fail to comply with the provisions of paragraph 2.2, above, then subject to the <br />exception made in paragraph 3, following, the option herein granted shall, upon written <br />notice by Lessor, be forfeited and at an end, and all rights and obligations of Lessee <br />hereunder shall terminate. <br />3. EXPLORATORY RIGHTS. During the option period, Lessee, at its expense, shall, without <br />compensation to the Lessor, enter upon the Leased Premises and perform such exploratory <br />and development operations as shall be necessary adequately to determine the quantity, <br />quality and accessibility of the coal therein, including without limitation or obligation, the <br />right to core drill and to remove coal from the Leased Premises. <br />4. COMPLIANCE WITH LAWS. Lessee shall, prior to the commencement of any operations <br />under the authority of this Option Agreement or of the Lease, obtain such licenses and <br />permits as may be required b~• the State of Colorado. the United States, or any other <br />governmental authoritti~ having jurisdiction thereof and will, in its conduct of any such <br />operations, conduct the same materially in accordance with all such licenses and permits and <br />with all applicable lativs, statutes and rules and regulations of governmental authorities. <br />Lessee shall indemnifi- the Lessor against and save the Lessor harmless from any and all <br />claims, demands, loss, liability and judicial actions of whatsoever nature, including attorneys' <br />2 <br />f. <br />`~l:T~ } <br />46 <br />