SECOND AMENDMENT
TO OPERATING AGREEMENT 


 


This Second
Amendment (this “Amendment”) to the Operating Agreement dated as of August 2, 2011 as amended by that First
Amendment to Operating Agreement dated April 3, 2011 (as it has been amended, the “Agreement”) is entered into
effective as of March 14, 2013 (“Effective Date”), by and between INDEPENDENCE DRILLING, LLC, a Nevada limited
liability company (“Independence”), DESERT DISCOVERIES, LLC, a Nevada limited liability company (“Desert
Discoveries”), EDWARD TRAUB, an individual (“Traub”), and AMERICAN LIBERTY PETROLEUM CORP, a Nevada
corporation (“ALP”). Independence, Desert Discoveries, Traub and ALP are at times referred to herein singly
as a “Party” and collectively as the “Parties”. 


 


BACKGROUND:


 


A.           The
Parties entered into the Agreement relating to, amongst other things, joint operations of BLM Lease Serial No. NVN085029, BLM
Lease Serial No. NVN084761, BLM Lease Serial No. NVN083825, BLM Lease Serial No. NVN084762, BLM Lease Serial No. NVN086972, and
BLM Lease NVN090504.


 


B.           ALP
has agreed to assign to Desert Discoveries all of ALP’s rights, titles and interests in and to BLM Lease Serial No. NVN086972
and BLM Lease NVN090504, but reserving unto ALP, and excepting from said assignment, a two percent (2%) overriding royalty
interest in and to said leases. 


 


C.           The
Parties have agreed to amend the Agreement to remove and exclude BLM Lease Serial No. NVN086972 and BLM Lease NVN090504 from the
Agreement.


 


D.           Except
as otherwise expressly defined in this Amendment, capitalized terms used herein shall have the same meaning as set forth in the
Agreement.


 


AGREEMENT


 


For good
and valuable consideration, including the mutual covenants and agreements contained herein, the receipt and sufficiency of which
are hereby acknowledged by the Parties, the Parties agree as follows: 


 


1.           Exhibit
A. Exhibit A of the Agreement is hereby amended to delete items 1.e, which references the acres leased under Bureau of Land
Management (“BLM”) Lease NVN086972, and item 1.f, which references the acres leased under BLM Lease NVN090504.



 


2.           Effect
of Amendment. Except as expressly amended hereby, all terms, covenants and provisions of the Agreement are and shall remain
in full force and effect, and all, for avoidance of doubt, all references therein to the “Agreement” shall henceforth
refer to the Agreement as amended by this Amendment. This Amendment is hereby deemed incorporated into, and made a part of, the
Agreement. 


 




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3.          Asset
Purchase Agreement.     This Second Amendment is executed in connection with an Asset Purchase and Sale
Agreement dated as of March 14, 2013 (the “APA”) executed by and between Desert Discoveries and ALP, whereby
among other things, ALP is assigning to Desert Discoveries all of ALP’s rights, titles and interests in and to BLM Lease
Serial No. NVN086972 and BLM Lease NVN090504, but reserving unto ALP, and excepting from said assignment, a two percent
(2%) overriding royalty interest in and to said leases. The execution of this Second Amendment is
a condition to closing under the APA. By executing this Second Amendment, Desert Discoveries, Independence and Traub consent to
the transfer of ALP’s interest in the above-described leases to Desert Discoveries, as well as the above-described reservation
of overriding royalty interests, and waive any rights of first refusal or similar rights to purchase or acquire said interests.



 


4.          Release.
 The Parties confirm that all obligations have been satisfied under the Agreement with respect to the Leases. Each of the Parties
hereby release, discharge and covenant not to sue or file any charges or claims against any of the other Parties, their respective
legal representatives, successor and assigns under any common or statutory local, state, or federal law, for any type of claim,
demand or action whatsoever arising out of or connected with the Agreement, the Leases, or any transactions connected with the
Agreement or the Leases, including but not limited to any Party’s obligations for its proportionate share of the costs of
developing and operating the Contract Area under Article VI, Paragraph A of the Agreement; provided, however, that none of the
Parties release any claims against any other Party for fraud. The Parties agree not to amend the indemnification provisions that
are set forth in the Agreement, except as required by applicable law or with the prior written consent of all of the Parties.



 


5.          Binding
Effect. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors
and assigns.


 


6.          Applicable
Law. THIS AMENDMENT, AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE SUBSTANTIVE LAWS OF THE STATE OF NEVADA, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.


 


7.          Descriptive
Headings; Language Interpretation. The descriptive headings of this Amendment are inserted for convenience only and do not
constitute a part of this Amendment. In the interpretation of this Amendment, unless the context otherwise requires, (a) words
importing the singular shall be deemed to import the plural and vice versa, (b) words denoting gender shall include all genders,
and (c) references to parties, articles, sections, schedules, paragraphs and exhibits shall mean the parties, articles, sections,
schedules, paragraphs and exhibits of and to this Amendment.


 


8.          Integration.
This Amendment, the APA and the documents referred to herein contain the entire understanding of the parties with respect to the
subject matter hereof. There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings
with respect to the subject matter hereof other than those expressly set forth or referred to herein. This Amendment supersedes
all prior agreements and understandings between the parties with respect to the subject matter hereof.


 


9.          Counterparts.
This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument, and it shall not be necessary in making proof of this Amendment to produce or account
for more than one such counterpart.


 


(Signature Page Follows)


 




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The undersigned have executed this Amendment
as of the Effective Date.


 


	INDEPENDENCE DRILLING, LLC	 	DESERT DISCOVERIES, LLC
	 	 	 	 	 
	By:	/s/ Patrick Fagen	 	By:	/s/ Patrick Fagen
	Name:	  Patrick Fagen	 	Name:	 Patrick Fagen
	Title:	  Manager	 	Title: Manager, High Sierra Exploration,
	 	 	 	LLC, Manager of Desert Discovery, LLC
	 	 	 	 	 
	EDWARD TRAUB	 	AMERICAN LIBERTY PETROLEUM CORP.
	 	 	 	 	 
	/s/ Edward Traub	 	By:	/s/ Alvaro Vollmers
	 	 	 	Name:	Alvaro Vollmers
	 	 	 	Title:	President





 








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