--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

Exhibit 10.5
 
FIRST AMENDMENT TO OPTION AGREEMENT
 
THIS FIRST AMENDMENT TO OPTION AGREEMENT (this “Amendment”) is made effective as
of September 19, 2011 (the “Effective Date”), by and between RANGE MICHIGAN LLC,
a Wyoming limited liability company with a mailing address of P.O. Box 726, 504
Fremont, Thermopolis, WY 82443-2913 (“Range”), and AMERICAN ENERGY DEVELOPMENT
CORP. (F/K/A LJM ENERGY CORP.), a Nevada corporation with a mailing address of
9190 Double Diamond Parkway, Reno NV 89521 (“AED”).
 
RECITALS:
 
WHEREAS, Range and AED entered into that certain Option Agreement dated
effective as of June 14, 2011 (the “Option Agreement”) regarding the option in
favor of AED to participate in the development of certain oil and gas wells and
prospects located in Washtenaw, Jackson and Ingham Counties, Michigan;
 
WHEREAS, Range and AED are also parties that certain Participation Agreement
dated effective June 14, 2011 (the “Participation Agreement”) which governs,
among other things, the development of the oil well known by the parties as the
Brown #2-12 Well located in the Dansville Prospect located in Ingham County,
Michigan (the “Brown #2-12 Well”); and
 
WHEREAS, Range and AED now desire to amend the Option Agreement as set forth
herein.
 
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements
contained herein and in the Option Agreement, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Parties hereto agree as follows:
 
1. References to LJM.  All references to LJM in the Option Agreement are hereby
deleted and replaced with AED.
 
2. Amendment to Section 4.1.  Section 4.1 of the Option Agreement is hereby
deleted in its entirety and replaced with the following provisions:
 
4.1           Option Fee.  In consideration of the grant of the Option, AED
shall pay Range the sum of One Hundred Thousand Dollars ($100,000) (the “Option
Fee”) as follows:
 
i.  
4.1.1           AED shall pay Range TWENTY FIVE THOUSAND DOLLARS ($25,000) for
the Option on the Trenton One Prospect;

 
ii.  
4.1.2           AED shall pay Range TWENTY FIVE THOUSAND DOLLARS ($25,000) for
the Option on the Trenton Two Prospect;

 
iii.  
4.1.3           AED shall pay Range FIFTY THOUSAND DOLLARS ($50,000) for the
Option on the Kinneville Option Prospect.

 
iv.  
4.1.4           The Option Fee shall be paid as follows: (a) in the event the
Brown #2 Well is a producing well, Range has been authorized in the
Participation Agreement to withhold the first ONE HUNDRED THOUSAND DOLLARS
($100,000) of AED’s share of the proceeds from the production of the Brown #2-12
Well for payment of the Option Fee; provided, however, if AED’s share of the
proceeds from the Brown #2-12 Well withheld by Range is less than the full
amount of the Option Fee on February 1, 2012, AED shall pay to Range the
remaining balance of the Option Fee on or before February 5, 2012; or (b) in the
event that Brown #2-12 Well is, in Range’s sole discretion, not capable of
production, the Option Fee shall be due on January 1, 2012. Each portion of the
Option Fee as listed above as compensation for the grant by Range of this
Option, regardless of whether AED exercises the Option as to any Option
Prospect.

 
 
1

--------------------------------------------------------------------------------

 
3. Remaining Provisions Unchanged.  The Option Agreement, as amended by this
Amendment, is and shall remain in full force and effect.  Except as amended
hereby, the provisions of the Option Agreement are unchanged.
 
4. Counterparts.  This Amendment may be executed in one or more counterparts,
which when executed shall constitute but one and the same instrument.
 
5. Authority to Execute.  The person executing this Amendment on behalf of each
of the Parties warrants and represents that such person is duly authorized and
empowered to execute this Agreement on behalf of such Party.
 
6. Severability.  This Amendment and the Option Agreement are intended to be
performed in accordance with and only to the extent permitted by all legal
requirements.  If any provision of this Amendment or the Option Agreement or the
application thereof to any person or circumstance shall, for any reason and to
any extent, be invalid or unenforceable, but the extent of the invalidity or
unenforceability does not destroy the basis of the bargain between the Parties
as contained herein, the remainder of the Option Agreement, as amended, and the
application of such provision to other persons and circumstances shall not be
affected thereby, but rather shall be enforced to the greatest extent permitted
by law.
 
[End of Text; Signature Pages Follow]
 

 
2

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF the parties hereby execute and deliver this Amendment
effective as of the Effective Date.

 
 
 

 
RANGE MICHIGAN LLC
 
By its Manager: Range Exploration Partners LLC
           
By:
/s/ Frode Aschim      
Frode Aschim
   
Its:
Manager
 

 

 
3

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF the parties hereby execute and deliver this Amendment
effective as of the Effective Date.
 

 
 

 
AED
 
American Energy Development Corp.
           
By:
/s/ Herold Ribsskog      
Herold Ribsskog
   
Its:
Chief Executive Officer
 

 

 
 4

--------------------------------------------------------------------------------