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• • <br />2. EXERCISE OF OPTION: If the option granted in paragraph 1, above, is <br />exercised, such exercise shall be by Lessee in compliance, and only by its compliance, <br />with the requirements of the provisions of both of paragraphs 2.1 and 2.2 as follows,: <br />2.1 Lessee shall, within the three (3) year option period aforesaid, deliver to <br />the Lessor a written notice of the exercise of such option, such notice to be given in the <br />manner prescribed in paragraph 15 of the Lease. Such notice shall be accompanied by <br />a payment of <br />2.2 Lessee shall, within the three (3) year option period aforesaid, (i) have <br />commenced exploratory and development operations on the Leased Premises, and (ii) <br />have obtained the performance of substantial engineering services incident to, and <br />necessary for, the performance of such mining operations. <br />2.3 In the event Lessee shall, within the three (3) year option period <br />mentioned in paragraph 1, above, fail to comply with the provisions of paragraph 2.2, <br />above, then subject to the exception made in paragraph 3, following, the option herein <br />granted shall, upon written notice by Lessor, be forfeited and at an end, and all rights <br />and obligations of Lessee hereunder shall terminate. <br />TIME IS MADE OF THE ESSENCE OF THIS OPTION AGREEMENT. <br />3. EXPLORATORY RIGHTS: During the option period, Lessee, at its expense, <br />shall, without compensation to the Lessor, enter upon the .Leased Premises and <br />perform such exploratory and development operations as shall be necessary <br />adequately to determine the quantity, quality and accessibility of the coal therein, <br />including without limitation or obligation, the right to core drill and to remove coal from <br />the Leased Premises. <br />2 <br />.~ ~~ <br />..: •,. <br />