Exhibit 10.4


    
      
        

      

    

    Exhibit
      10.4


    SECOND
      AMENDED AND RESTATED INTERCREDITOR AND
      SUBORDINATION AGREEMENT

    


    THIS
      SECOND AMENDED AND RESTATED INTERCREDITOR AND SUBORDINATION
      AGREEMENT (this "Agreement") is made as of January 21, 2005, by and between
      The Royal Bank of Scotland plc, as agent (in such capacity, and together with
      any successor
      in such capacity, the "Subordinated Agent") for each of the lenders that is
      signatory to, or
      which
      becomes a signatory to, the Subordinated Credit Agreement (as defined below)
      (collectively, the "Subordinated Lenders"), and Société Générale, as agent (in
      such capacity as agent,
      and together with any successor in such capacity, the "Senior Agent") for each
      of the lenders
      that is signatory to, or which becomes a signatory to the Senior Credit
      Agreement (as defined
      below) (collectively, the "Senior Lenders").

    


    BRIGHAM
      EXPLORATION COMPANY, a Delaware corporation (the "Parent"). BRIGHAM
      OIL &
      GAS,
      L.P., a Delaware limited partnership ("BOG"), and BRIGHAM, INC., a
      Nevada
      corporation ("BI") are signatories
      hereto solely for the purpose of evidencing their acknowledgment
      and consent to the terms and conditions of this Agreement and their agreement
      to
      make
      payment of the Senior Indebtedness and Subordinated Indebtedness (as such terms
      are defined
      below) in accordance with Section 2.2 of this Agreement.

    


    RECITALS

    


    A.     BOG,
      as
      the borrower, the Senior Lenders and the Senior Agent are parties to that
certain
      Third Amended and Restated Credit Agreement dated as of January 21, 2005 (such
      agreement,
      as the same may be from time to time amended, modified, supplemented, restated,
      refinanced or replaced, the "Senior Credit Agreement"), pursuant to which the
      Senior Lenders have
      made
      certain credit available to and on behalf of BOG.

    


    B.     BOG
      has
      executed one or more Mortgages (as such term is defined in the Senior
Credit
      Agreement) and delivered financing statements (such mortgages and financing
      statements, as
      the
      same may have heretofore been or may hereafter be from time to time amended,
      supplemented
      or replaced, the "Senior Mortgages") in favor of the Senior Agent to secure,
      inter
      alia,
      the
      obligations outstanding under the Senior Credit Agreement.

    


    C.     Each
      of
      the Parent and BI has guaranteed the Obligations under the Senior Credit
Agreement
      pursuant to Article VIII thereof (as the same may be from time to time further
      amended,
      supplemented or replaced, being referred to herein as the "Senior Guaranty
      Agreements"),
      in favor of the Senior Agent, for the benefit of the Senior Agent and the Senior
      Lenders.

    


    D.     Each
      of
      the Parent, BI and BOG has executed a Second Amended and Restated Pledge
      Agreement dated as of January 21, 2005 (as the same may be from time to time
      further amended, supplemented or replaced, the "Senior Pledge Agreements")
      to
      secure, inter
      alia, the
      obligations
      of BOG under the Senior Credit Agreement and the obligations of the Parent
      and
      BI under
      their respective Senior Guaranty Agreements.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    E.     Of
      even
      date herewith, BOG has entered into that certain Second Amended andRestated
      Subordinated Credit Agreement with the Subordinated Agent and the Subordinated
      Lenders
      (the "Subordinated Credit Agreement") pursuant to which the Subordinated Lenders
      will
      make
      loans to BOG, such advances to be evidenced by a promissory note executed and
      delivered
      by BOG in accordance with the Subordinated Credit Agreement (the "Subordinated
      Note").

    


    F.     In
      connection with the execution and delivery of the Subordinated Credit
Agreement,
      BOG has executed, or will execute, one or more Second Mortgages (as such term
      is
defined
      in the Subordinated Credit Agreement) and delivered financing statements (as
      the
      same may
      be
      from time to time amended, modified, supplemented or replaced, the "Second
      Mortgages")
      in favor of the Subordinated Agent to secure, inter
      alia, the
      obligations outstanding under the Subordinated Loan Documents (as hereinafter
      defined).

    


    G.     In
      connection with the execution and delivery of the Subordinated Credit
Agreement,
      each of the Parent and BI has guaranteed the Obligations under the Subordinated
      Credit
      Agreement pursuant to Article VIII thereof (as the same may be from time to
      time
      further amended,
      supplemented or replaced, being referred to herein as the "Subordinated Guaranty
      Agreements"),
      in favor of the Subordinated Agent, for the benefit of the Subordinated Agent
      and the Subordinated Lenders.

    


    H.    
Each
      of the
      Parent, BI and BOG has executed a Second Amended and Restated Second
      Pledge Agreement dated as of January 21, 2005 (as the same may be from time
      to
      time further amended, supplemented or replaced, the "Second Pledge Agreements")
      to secure, inter
      alia,
      the
      obligations of BOG under the Subordinated Credit Agreement and the obligations
      of the Parent
      and BI under their respective Subordinated Guaranty Agreements.

    


    I.    
The
      Subordinated Credit Agreement, the Subordinated Note, the Second Mortgages,
      the Subordinated Guaranty Agreements, the Second Pledge Agreements, and those
      other
      documents or instruments now or hereafter given in connection therewith, and
      including those
      identified on Exhibit "A" attached hereto, as any of such documents or
      instruments may be amended, supplemented or replaced as permitted herein
      are collectively referred to herein as the "Subordinated
      Loan Documents".

    


    M.    
Therefore,
      (i) in order to comply with the terms and conditions of the Subordinated
      Credit Agreement, (ii) at the special insistence and request of the Senior
      Agent
      and the
      Senior Lenders, and (iii) for other good and valuable consideration, the receipt
      and sufficiency
      of which are hereby acknowledged, the Subordinated Agent, for itself and on
      behalf of
      the
      Subordinated Lenders, the Senior Agent, for itself and on behalf of the Senior
      Lenders, and
      the
      Parent (for itself and on behalf of the other Credit Parties), BOG and BI agree
      as follows:

    


    ARTICLE
      I

    Definitions

    


    Section
      1.1    Terms
      Defined Above.  
      As used in this Agreement, the terms defined above
      shall have the meanings respectively assigned to them.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    Section
      1.2    Certain
      Definitions.  
      As used in this Agreement the following terms shall have
      the
      following meanings, unless the context otherwise requires:

    


    "Affiliate"
      of any Person shall mean (i) any Person directly or indirectly controlled by,
      controlling or under common control with such first Person, (ii) any director
      or
      officer of such first Person or of any Person referred to in clause (i) above
      and (iii) if any Person in clause (i) above is an individual, any member of
      the
      immediate family (including parents, spouse and children) of such individual
      and
      any trust whose principal beneficiary is such individual or one or
      more
      members of such immediate family and any Person who is controlled by any such
      member or trust. For purposes of this definition, any Person which owns directly
      or indirectly 20%
      or
      more of the securities having ordinary voting power for the election of
      directors or other governing
      body of a corporation or 20% or more of the partnership or other ownership
      interests of any other Person (other than as a limited partner of such other
      Person) will be deemed to "control"
      (including, with its correlative meanings, "controlled by" and "under common
      control with")
      such corporation or other Person.

    


    "Credit
      Party" or "Credit Parties" means BOG, the Parent, BI and each other Guarantor
      (as
      defined in the Senior Credit Agreement).

    


    "Hedging
      Agreement" shall mean any commodity, interest rate or currency swap, cap,
floor,
      collar, forward agreement or other exchange or protection agreements or any
      option with respect
      to any such transaction permitted by the terms of the Senior Credit Agreement,
      now or hereafter
      existing between BOG and any Senior Lender, or any of its Affiliates, successors
      or assigns
      (''Senior Hedge Party") entered into while such Senior Hedge Party is a Senior
      Lender or an Affiliate of a Senior Lender.

    


    "Lien"
      shall mean any interest in Property securing an obligation owed to, or a claim
      by, a
      Person
      other than the owner of the Property, whether such interest is based on the
      common law,
      statute or contract, and whether such obligation or claim is fixed or
      contingent, and including
      but not limited to the lien or security interest arising from a mortgage,
      encumbrance, pledged, security agreement, conditional sale or trust receipt
      or a
      lease, consignment or bailment for
      security purposes.

    


    "Oil
      and
      Gas Properties" shall have the meaning attributed to such term in the Senior
      Credit
      Agreement.

    


    "Payment
      Blockage Period" means the period commencing on (i) the date on which a
default
      in the payment of any principal of or interest on the Senior Indebtedness occurs
      and expiring
      on the date on which such default is cured or waived as provided in Section
      2.2(a)(iii)(A)
      or (ii) the date on which a Payment Blockage Notice (as defined below) is given
      by the
      Senior Agent or any Senior Lender, and expiring on the date which is 60 days
      following the first day of the Payment Blockage Period.

    


    "Person"
      shall mean any individual, corporation, company, voluntary association,
partnership,
      joint venture, trust, limited liability company, unincorporated organization
      or
government
      or any agency, instrumentality or political subdivision thereof, or any other
      form of entity.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    "Property"
      shall mean any interest in any kind of property or asset, whether real, personal
      or
      mixed,
      or tangible or intangible.

    


    "Senior
      Creditor" shall mean any of the Senior Agent, any Senior Lender or any Senior
      Hedge Party.

    


    "Senior
      Indebtedness" shall mean the principal balance of all loans from time to time
      advanced
      to or letters of credit issued for the account of BOG pursuant to the terms
      and
conditions
      of the Senior Loan Documents, and accrued but unpaid interest thereon, all
      fees,
expenses,
      reimbursement obligations, liabilities, indemnities or other monetary
      obligations of any
      Credit Party under any Senior Loan Document, and all swap settlement amounts
      or
      other amounts due and payable under any Hedging Agreements with a Senior Hedge
      Party, whether any
      of
      the foregoing is (i) absolute or contingent, direct or indirect, joint, several
      or independent, (ii)
      now
      outstanding or owing or which may hereafter be existing or incurred, (iii)
      due
      or to become
      due, or (iv) held or to be held by any Senior Creditor, and all renewals,
      extensions, rearrangements,
      refundings and modifications thereof permitted by the terms hereof.

    


    "Subordinated
      Indebtedness" shall mean the principal balance of all loans from time to
time
      advanced to BOG and/or rearranged pursuant to the terms and conditions of the
      Subordinated
      Loan Documents, and accrued but unpaid interest thereon, and all fees, expenses,
      reimbursement obligations, liabilities, indemnities or other monetary
      obligations of any Credit Party under any Subordinated Loan Document, whether
      any of the foregoing is (i) absolute or contingent, direct or indirect,
      joint, several or independent, (ii) now outstanding or owing or which
      may
      hereafter be existing or incurred, (iii) due or to become due, or (iv) held
      or
      to be held by
      the
      Subordinated Agent or any Subordinated Lender, and all renewals, extensions,
      rearrangements,
      refundings and modifications thereof permitted by the terms hereof.

     

    ARTICLE
      II

    Subordination

    


    Section
      2.1   Agreement
      to Subordinate.
      The
      payment of any and all Subordinated Indebtedness
      and the Subordinated Loan Documents is expressly subordinated to the extent
      and
in
      the
      manner set forth in Sections 2.2 through 2.8 hereof to the Senior Indebtedness
      and the Senior
      Loan Documents.

    


    
      	 	
              Section
                2.2

            	
              Payment
                Subordination upon Default.

            


    

    


    (a)     
       The
      Subordinated Agent (for itself and on behalf of the Subordinated Lenders)
      agrees, that:

    


    (i)   
       the Subordinated Indebtedness is subordinate in right of payment,
to
      the
      extent and in the manner provided in this Agreement, to the prior payment
in
      full
      of all Senior Indebtedness (whether outstanding on the date hereof or
hereafter
      created, incurred, assumed or guaranteed);

    


    (ii)   
       no Credit Party or any of its Subsidiaries may make any payment
(whether
      by redemption, purchase, retirement, defeasance, set-off or otherwise) upon
      or
      in respect of the Subordinated Indebtedness, until all principal and other
      obligations
      with respect to the Senior Indebtedness have been paid in full, if:

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (A)  
       a
      default
      in the payment of any principal of or interest on the
      Senior Indebtedness occurs; or

    


    (B)  
       the
      payment of the Subordinated Indebtedness would result in
      a
      default or event of default under the Senior Loan Documents or any other
      default has occurred and is continuing with respect to the Senior Indebtedness
      that permits, or with the giving of notice or passage of time or
      both
      (unless cured or waived) would permit, any Senior Creditor to accelerate
      its maturity and the Subordinated Agent receives a notice of the default
      (a "Payment Blockage Notice") from any Credit Party or any Senior
      Creditor with regard to the foregoing;


    (iii)  
       the Credit Parties may resume payments on and distributions in
respect
      of the Subordinated Indebtedness upon:

    


    (A)  
       in
      the
      case of a default referred to in Section 2.2(a)(ii)(A), the
      date
      upon which the default is cured or waived; or

    


    (B)  
       in
      the
      case of a default referred to in Section 2.2(a)(ii)(B), the earliest of (1)
      the
      date on which such nonpayment default or event of default
      is cured or waived or (2) the expiration of the applicable Payment Blockage
      Period unless the maturity of the Senior Indebtedness has been accelerated;
      and

    


    (iv)  
       upon any payment or distribution of property or securities to creditors
      of any Credit Party in a liquidation or dissolution of such person or its
property,
      or in an assignment for the benefit of creditors or any marshaling of its
assets
      and liabilities:

    


    (A)  
       the
      Senior Creditors shall be entitled to receive payment in full
      of
      all Senior Indebtedness (including interest after the commencement of
      any
      such proceeding at the rate specified in the Senior Loan Documents,
      whether or not a claim for such interest would be allowed in such
      proceeding) before the Subordinated Agent or any Subordinated Lender
      shall be entitled to receive any payment with respect to the Subordinated
      Indebtedness;

    


    (B)  
       until
      the
      Senior Indebtedness is paid in full, any payment or distribution
      to which the Subordinated Agent or any Subordinated Lender would
      be
      entitled shall be made to the Senior Agent for its benefit and the benefit
      of
      the Senior Creditors; and

    


    (C)  
       under
      the
      circumstances described in this clause (iv), any Credit
      Party, or any receiver, trustee in bankruptcy, liquidating trustee, agent
      or
      other similar Person making any payment or distribution of cash or
      other
      property or securities is authorized or instructed to make any payment
      or distribution to which the Subordinated Agent or any Subordinated
      Lender would otherwise be entitled (other than securities that
      are
      subordinated at least to the same extent as the Subordinated Indebtedness)
      directly to the Senior Agent for its benefit and the benefit of the Senior
      Creditors to the extent necessary to pay all Senior Indebtedness in
      full,
      after giving effect to any concurrent payment, distribution or provision
      thereof to or for any Senior Creditor.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    (b)    
        The Senior Agent and the Senior Lenders shall have the right, in
      their sole and
      absolute discretion, to waive the conditions of Section 2.2(a) prohibiting
      the
      payment of
      the
      Subordinated Indebtedness whether in an enforcement action brought by the Senior
      Agent
      or
      any Senior Lender on the Senior Indebtedness or otherwise.

    


    (c)    
        The foregoing provisions of Section 2.2
      shall
      not
      impair or prohibit the rights
      of
      any Subordinated Lender to receive payments in the form of equity securities
      or
additional
      subordinated debt that is subordinated to the Senior Indebtedness in
accordance
      with the terms of this Agreement. Nothing in this Agreement shall Limit or
      restrict
      the accrual or charging of default interest on any of the Subordinated
Indebtedness
      not paid when due. In addition, the foregoing provisions of this Section 2.2
      shall
      not
      prevent the Subordinated Agent or any Subordinated Lender from exercising its
      available
      remedies upon a default or event of default under the Subordinated Loan
Documents,
      subject to (y) the rights of the Senior Creditors to receive distributions
      and
      payments otherwise payable to the Subordinated Lenders, and (z) the expiration
      of any then
      applicable Payment Blockage Period.

    


    
      	
              Section
                2.3

            	
              Payments
                Received or Made in Violation of this
                Agreement.

            


    

    


    (a)     
       In
      the
      event the Subordinated Agent or any Subordinated Lender shall receive
      any payment or distribution on account of the Subordinated Indebtedness which
      it
is
      not
      entitled to receive under the provisions of Section 2.2. the Subordinated Agent
      or such
      Subordinated Lender will hold any amount so received in trust for the Senior
      Creditors
      and will forthwith turn over such payment to the Senior Agent in the form
      received by it (together with any necessary endorsement) to be applied to the
      Senior Indebtedness.
      In the event of any failure by the Subordinated Agent or any Subordinated
Lender
      to
      make any such endorsement, the Senior Agent is hereby irrevocably authorized
      and
      granted a power of attorney (which is irrevocable and coupled with interest)
      to
      make the
      same.

    


    (b)  
          If
      any
      Credit Party shall become aware that a "Default" or an "Event of Default"
      has occurred under the Senior Credit Agreement then such Person shall give
      the
Senior
      Agent, the other Senior Creditors and the Subordinated Agent prompt written
      notice
      thereof.

    


    (c)    
        This Agreement defines the relative rights of the Senior Agent and the
other
      Senior Creditors and the Subordinated Agent and the Subordinated Lenders.
      Nothing in this Agreement shall: (i) impair, as between or among any of the
      Credit Parties,
      the Subordinated Agent and the Subordinated Lenders, the obligations of any
      of
the
      Credit Parties, which are absolute and unconditional, to pay the Subordinated
      Indebtedness
      in accordance with the terms of the Subordinated Loan Documents, or (ii)
prevent
      the Subordinated Agent or any Subordinated Lender from exercising its available
      remedies
      while no Payment Blockage Period exists.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              Section
                2.4

            	
              Liens
                Subordinate.

            


    

    


    (a)     
       Any
      Liens
      upon the Property of any Credit Party securing payments of the Subordinated
      Indebtedness are and shall be and remain inferior and subordinated to any
Liens
      securing payments of the Senior Indebtedness in such Property regardless of
      whether
      such encumbrances in favor of the Subordinated Agent or any Subordinated
Lender
      or
      the Senior Agent or any other Senior Creditor presently exist or are hereafter
      created
      or attached and regardless of the date of execution and delivery or the date
      of
filing
      or
      recording. Any obligation of any Credit Party under the Subordinated Loan
Documents
      to deliver possession of any Property to the Subordinated Agent or any
Subordinated
      Lender, whether for purposes of perfection or realization of any rights
thereunder
      shall be subordinate in all respects to any Credit Party's obligation to deliver
      possession of any such Property to the Senior Agent or any other Senior Creditor
      under the
      Senior Loan Documents for such purposes.

    


    (b)    
        The
      Subordinated Agent (for itself and on behalf of the Subordinated Lenders)
      covenants and agrees not to contest or dispute, whether in any proceeding or
      otherwise,
      the validity, enforceability, attachment, priority or perfected status of any
      Lien granted
      in favor of the Senior Agent or any other Senior Creditor or take any steps
      or
actions,
      including the institution of any proceedings, to enjoin or restrain the Senior
      Agent
      or
      any other Senior Creditor from the exercise of the remedies afforded them under
      the
      Senior Loan Documents or applicable law in and to any of the Senior Lender
      Collateral.

    


    
      	
              Section
                2.5

            	
              Agreement
                Not to Pursue Action.

            


    

    


    (a)        
        Following the commencement of any Payment Blockage Period, the
Subordinated
      Agent and each Subordinated Lender covenants that it will not, until the earlier
      of the date (1) of expiration of the applicable Payment Blockage Period, (2)
      the
Senior
      Indebtedness is paid in full or the event which gave rise to the Payment
      Blockage Period
      is
      cured or waived, (3) there occurs an event which would cause an automatic
acceleration
      of the Subordinated Indebtedness under Section 7.0l(e) of the Subordinated
      Credit
      Agreement, or (4) the Senior Indebtedness is accelerated and the Senior Agent
      or
any
      Senior Lender takes any action to enforce any of their respective rights under
      the Senior Loan Documents, do any of the following unless the Senior Agent
      or
      any other Senior
      Lender shall also join in such action or commence a similar action: (i) commence
      any
      action or proceeding against any Credit Party to recover all or any part of
      the
Subordinated
      Indebtedness or join with any other creditor in bringing any proceedings
against
      such Person under any bankruptcy, reorganization, readjustment of debt,
arrangement
      of debt, receivership, liquidation or insolvency law or statute of the Federal
      or
      any
      state government, (ii) accelerate the maturity of any Subordinated Indebtedness,
      or (iii)
      foreclose, repossess, sequester or otherwise take steps or institute any action
      or proceeding to enforce any Lien, collateral right, judgment or other
      encumbrances on any Property
      of any Credit Party held by the Subordinated Agent or any Subordinated Lender,
      or
      to
      take possession of any such Property; provided the foregoing will not prohibit
      (A) such
      presentment as may be necessary to prevent the discharge of any liable parties
      on any
      instrument, (B) the filing of claims or notices to prevent the running of any
      applicable
      statute of limitations, or (C) similar actions necessary to preserve the legal
      rights
      of
      any Subordinated Lender or the Subordinated Agent.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    (b)    
       Notwithstanding
      anything contained in this Agreement to the contrary, the Subordinated
      Agent and the Subordinated Lenders shall not be prohibited at any time, whether
      during a Payment Blockage Period or otherwise, from delivering any notice of
      default
      to any Credit Party, and the existence of any Payment Blockage Period shall
      not
prevent,
      abate or delay the running of any applicable cure period under the Subordinated
      Loan
      Documents following any default or notice of any default under the Subordinated
      Loan
      Documents.

    


    (c)    
       The
      Senior Lenders and the Senior Agent may enforce no more than two (2)
      Payment Blockage Periods during any 365 day period.

    


    Section
      2.6.   Rights
      of the Senior Agent and the Senior Lenders.   The
      Senior Agent and the
      Senior Lenders may, at any time, and from time to time, without the consent
      of
      or notice to the
      Subordinated Agent or any Subordinated Lender, without incurring responsibility
      to the Subordinated Agent and/or any Subordinated Lender, without impairing
      or
      releasing any of the Senior
      Agent's or any Senior Lender's rights or any of the obligations of the
      Subordinated Agent and the Subordinated Lenders under this
      Agreement:

    


    (a)   
      change the amount, manner, place or terms of payment, or change or extend
      for any period the time of payment of, or renew, increase or otherwise alter
      the
Senior
      Indebtedness or any Senior Loan Document or any other instrument or agreement
      now
      or
      hereafter executed or evidencing any of the Senior Indebtedness in any manner,
      or
      enter
      into or amend in any manner any other agreement relating to the Senior
Indebtedness,
      except as follows:

    


    (i)  
        to increase any rate of interest except with respect to imposing the
default
      rate as provided for in the Senior Credit Agreement on the date hereof;
      or

    


    (ii)  
       to further restrict (beyond those restrictions in the Senior Credit
Agreement
      as in effect on the date hereof) any payment of dividends or similar
distributions
      by any subsidiary of the Parent to the Parent or the granting of any
Lien
      or
      other security interest securing payment of the Subordinated Indebtedness or
      any
      guarantees of the Subordinated Indebtedness; or

    


    (iii)  
       to restrict any payments of the Subordinated Indebtedness except
as
      provided in Section 2.2 above;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

    

    (b)            
        sell,
      exchange, release or otherwise deal with all or any part of any Property
      by whomsoever at any time pledged or mortgaged to secure, howsoever securing,
      the Senior Indebtedness;

    


    (c)            
         release
      any Person liable in any manner for payment or collection of the Senior
      Indebtedness;

    


    (d)            
        exercise
      or refrain from exercising any rights against any Credit Party or others,
      including the Subordinated Agent and the Subordinated Lenders; and

    


    (e)            apply
      any
      sums received by any Senior Creditor, paid by any Person and however
      realized, to payment of the Senior Indebtedness in such a manner as the Senior
      Agent
      or
      any other Senior Creditor, in their sole discretion, may deem
      appropriate.

    


    Section
      2.7              
Subordination
      May Not Be Impaired by the Parent, BOG or any Credit Parties.
      No right
      of any present or future Senior Creditor to enforce the subordination as
provided
      in this Agreement will at any time or in any way be prejudiced or impaired
      by
      any act or
      failure to act on the part of any Credit Party or by any act or failure to
      act,
      in good faith, by the Senior
      Agent or any other Senior Creditor, or by any noncompliance by any Credit Party
      with the terms of any Subordinated Loan Document, regardless of any knowledge
      thereof that the Senior
      Agent or any other Senior Creditor may have or otherwise be charged with. The
      provisions
      of this Section 2.7 are intended to be for the benefit of, and shall be
      enforceable directly
      by, any Senior Creditor.

    


    Section
      2.8.             
Authorization
      to File Proof of Claim.
      If the
      Subordinated Agent or any Subordinated
      Lender does not file a proper proof of claim or proof of debt in the form
      required in any
      proceeding referred to in Section 2.2(a)(iv) hereof at least 30 days before
      the
      expiration of the
      time
      to file such claim, the Senior Agent is hereby authorized to file an appropriate
      claim for and on behalf of the Subordinated Agent and the Subordinated
      Lenders.

    


    ARTICLE
      III

    Representations,
      Warranties and Covenant

    


    Section
      3.1.               
Representations
      of Subordinated Agent.
      The
      Subordinated Agent represents and
      warrants that:

    


    (a)               
      neither
      the execution nor delivery of this Agreement nor fulfillment of or compliance
      with the terms and provisions hereof will conflict with, or result in a breach
      of the terms, conditions or provisions of, or constitute a default under, any
      agreement or instrument
      to which it is now subject;

    


    (b)               
      it
      has
      all requisite authority (for itself and as agent acting on behalf of the
Subordinated
      Lenders) to execute, deliver and perform its obligations under this Agreement;
      and

    


    (c)               
      this
      Agreement constitutes the legal, valid, and binding obligation of the
Senior
      Agent and the Subordinated Agent, enforceable in accordance with its terms,
      subject to applicable bankruptcy, insolvency or similar laws and general
      principles of equity.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      3.2.           
Representations
      of Senior Agent.
      The
      Senior Agent represents and warrants
      that:

    


    (a)           
      neither
      the execution nor delivery of this Agreement nor fulfillment of or compliance
      with the terms and provisions hereof will conflict with, or result in a breach
      of the terms, conditions or provisions of, or constitute a default under, any
      of
      the Senior Loan
      Documents or any other agreement or instrument to which it is now
      subject;

    


    (b)           
      it
      has
      all requisite authority for itself and as agent acting on behalf of the Senior
      Lenders to execute, deliver and perform its and the Senior Lenders' obligations
      under
      this Agreement; and

    


    (c)           
      this
      Agreement constitutes the legal, valid, and binding obligation of the
Senior
      Agent, enforceable in accordance with its terms, subject to applicable
      bankruptcy, insolvency or similar laws and general principles of
      equity.

    


    Section
      3.3            Subordinated
      Agent, Subordinated Lender Covenants.
      The
      Subordinated Agent
      (for itself and on behalf of each Subordinated Lender) covenants that so long
      as
      any of the Senior
      Indebtedness remains outstanding and until the termination of the "Commitments"
      (as defined
      in the Senior Credit Agreement), it will:

    


    (a)           
      cause
      any
      note, debenture, or instrument evidencing or securing the Subordinated
      Indebtedness to contain a statement or legend to the effect that such note,
      debenture, of other instrument is subordinated to the Senior Indebtedness in
      the
      manner and
      to
      the extent set forth in this Agreement;

    


    (b)           
      not
      assign or transfer to others the Subordinated Indebtedness or any claim
it
      has or
      may have against any Credit Party as long as any of the Senior Indebtedness
      remains
      outstanding, unless such assignment or transfer is expressly made subject to
      this Agreement;

    


    (c)           
      not
      amend, supplement or otherwise modify the terms of the Subordinated
      Indebtedness, (including, without limitation, the Subordinated Loan Documents)
      without the
      express written consent of the Senior Agent, which consent will not be
      unreasonably withheld,
      which has the effect of (i) increasing the outstanding principal amount of
      the
Subordinated
      Indebtedness above $20,000,000, and (ii) increasing the rate of interest or
      any
      fees
      charged on the Subordinated Indebtedness.

    


    (d)            not
      ask
      for, sue for, take, or demand any payment on such indebtedness, except
      as
      permitted hereby; and

    


    (e)           
      execute
      any and all other instruments necessary as reasonably required by the
      Senior Agent or the Senior Lenders to effect the subordinations intended
      hereby.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    ARTICLE
      IV

    Miscellaneous

    


    Section
      4.1           
Acceptance
      by the Senior Creditors.
      The
      foregoing subordination provisions
      are, and are intended to be, an inducement and a consideration to each Senior
      Creditor,
      whether such Senior Creditor's Senior Indebtedness is created or acquired before
      or after
      the
      issuance of Subordinated Indebtedness, to acquire and hold, or continue to
      hold,
      such Senior Indebtedness and each such Senior Creditor shall be deemed
      conclusively to have relied on
      such
      subordination provisions in acquiring and continuing to hold, or in continuing
      to hold, such
      Senior Indebtedness. Notice of acceptance of this Agreement is waived,
      acceptance on the part
      of
      the Senior Creditors being conclusively presumed by their request for this
      Agreement and delivery
      of the same to them.

    


    Section
      4.2           
Assignment
      by any Senior Creditor. This Agreement may be assigned by any
      Senior Creditor in connection with any assignment or transfer of the Senior
      Indebtedness or any replacement or refinancing of the Senior Loan
      Documents.

    


    Section
      4.3           
Notice.
      All
      notices and other communications provided for herein shall be given
      or
      made by telecopy, courier or U.S. Mail or in writing and telecopied, mailed
      or
      delivered to the intended recipient at the "Address for Notices" specified
      below
      its name on the signature pages
      hereof or at such other address as shall be designated by such party in a notice
      to each other
      party; and in the case of any Senior Creditor in care of the Senior Agent
      at the
      following address:

    


    Société
      Générale, as Agent

    560
      Lexington Avenue

    New
      York,
      New York 10022

    Telecopier
      No.: (212) 278-5525

    Telephone
      No.: (212) 278-6765

    Attention:
      Nadira Tiwari

    


    or
      at
      such other address as shall be designated by the Senior Agent in a notice to
      each other parry.
      Except as otherwise provided in this Agreement, all such communications shall
      be
      deemed to
      have
      been duly given when transmitted by telecopier or personally delivered or,
      in
      the case of a
      mailed
      notice, five (5) days after the date deposited in the mails, postage prepaid,
      in
      each case given or addressed as aforesaid.

    


    Section
      4.4           Amendments
      and Waivers.
      The
      Senior Agent's, the Subordinated Agent's,
      any other Senior Creditor's or any Subordinated Lender's acceptance of partial
      or delinquent payments or any forbearance, failure or delay by any of the
      foregoing in exercising any right, power or remedy hereunder shall not be deemed
      a waiver of any obligation of any Credit
      Party or any Senior Creditor, Subordinated Agent or any Subordinated Lender,
      or
      of any right,
      power or remedy of any Senior Creditor, the Subordinated Agent or any
      Subordinated Lender;
      and no partial exercise of any right, power or remedy shall preclude any other
      or further exercise
      thereof. The Subordinated Agent and the Subordinated Lenders hereby agree that
      if the Senior
      Agent or any Senior Lender agrees to a waiver of any provision hereunder, or
      an
exchange
      of or release of collateral, or the addition or release of any Person as a
      Credit Party, any
      such
      action shall not constitute a waiver of any of the Senior Creditor's other
      rights or of the Subordinated Agent's or any Subordinated Lender's obligations
      hereunder. This Agreement may be
      amended only by an instrument in writing executed jointly by the Subordinated
      Agent and the Senior
      Agent and may be supplemented only by documents delivered or to be delivered
      in
accordance
      with the express terms hereof.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    Section
      4.5           
Parties
      to the Agreement.
      The
      provisions of this Agreement are and are intended solely for the purpose of
      defining the relative rights of the Subordinated Agent, the Subordinated
      Lenders and the Senior Creditors, and are solely for the benefit of the Senior
      Creditors,
      the Subordinated Agent and the Subordinated Lenders (including their respective
      assignees
      and successors) and may not be relied upon or enforced by any other Person
      except as otherwise
      provided in Section 4.11 below. Each Credit Party has joined herein solely
      for
      the purpose
      of evidencing its acknowledgment and consent to the terms and conditions of
      this
Agreement
      and their agreement to make payments of the Senior Indebtedness and Subordinated
      Indebtedness in accordance with the terms of Section 2.2. The Parent shall
      cause
      any Person that becomes
      a
      Credit Party after the date hereof to execute and deliver a joinder to this
      Agreement (a "Joinder
      Agreement") and shall promptly deliver to the Senior Agent and the Subordinated
      Agent
      an
      original executed copy of such Joinder Agreement, together with evidence of
      corporate authority
      to enter into and such legal opinions in relation to such Joinder Agreement
      as
      the Senior
      Agent or Subordinated Agent may reasonably request.

    


    Section
      4.6           
Reinstatement.
      To the
      extent that any payments on the Senior Indebtedness
      or proceeds of any collateral are subsequently invalidated, declared to be
      fraudulent or
      preferential, set aside or required to be repaid by any Senior Creditor to
      a
      trustee, debtor in possession,
      receiver or other Person under any bankruptcy law, common law or equitable
      cause, then
      to
      such extent, obligations hereunder with respect to the Senior Indebtedness
      so
      satisfied shall
      be
      revived and continue as if such payment or proceeds had not been received and
      the Senior
      Creditors' Liens, interests, rights, powers and remedies under the Senior Loan
      Documents and
      this
      Agreement shall continue in full force and effect. In such event, each Senior
      Loan Document
      and this Agreement shall be automatically reinstated and the Credit Parties,
      the
      Subordinated Agent and the Subordinated Lenders shall take such action as may
      be
      reasonably requested
      by the Senior Creditors to effect such reinstatement. Any Senior Creditor which
      has assigned
      its rights hereunder shall continue to be entitled to the benefits of this
      Section notwithstanding
      such assignment.

    


    Section
      4.7           
Governing
      Law.
      THIS
      AGREEMENT SHALL BE GOVERNED BY, AND
      CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE
      OF
      NEW YORK.

    


    Section
      4.8           
ENTIRE
      AGREEMENT.
      THIS
      WRITTEN AGREEMENT EMBODIES THE
      ENTIRE AGREEMENT AND UNDERSTANDING AMONG THE SENIOR AGENT AND
      THE
      SENIOR CREDITORS, THE SUBORDINATED AGENT AND THE SUBORDINATED
      LENDERS AND SUPERSEDES ALL OTHER AGREEMENTS AND UNDERSTANDINGS
      BETWEEN SUCH PARTIES RELATING TO THE SUBJECT MATTER
      HEREOF AND THEREOF. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL
      AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
      EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS
      OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
      THE PARTIES.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    Section
      4.9           
References
      and Title.
      All
      references in this Agreement to articles, sections,
      subsections and other subdivisions refer to the articles, sections, subsections
      and other subdivisions of this Agreement unless expressly provided otherwise.
      Titles appearing at the beginning
      of any subdivisions are for convenience only and do not constitute any part
      of
      such subdivisions
      and shall be disregarded in construing the language contained in such
      subdivisions.

    


    Section
      4.10           Severability.
      All
      rights, remedies and powers provided herein may be exercised
      only to the extent that the exercise thereof does not violate any applicable
      provision of law;
      and
      all the provisions hereof are intended (a) to be subject to all applicable
      mandatory provisions
      of law which, may be controlling and (b) to be limited to the extent necessary
      so that they
      will
      not render this Agreement invalid under the provisions of any applicable law.
      If
      any term
      or
      provision of this Agreement shall be determined to be illegal or unenforceable,
      all other terms and provisions of this Agreement shall nevertheless remain
      effective and shall be enforced to
      the
      fullest extent permitted by applicable law and the parties agree to promptly
      meet and negotiate
      in good faith to establish new arrangements which have the effect of preserving
      the economic
      and commercial benefits established by this Agreement.

    


    Section
      4.11           Subrogation.
      Subject
      to the terms of Section 4.6, after all Senior Indebtedness
      is paid in full and until the Subordinated Indebtedness has been paid in full,
      the Subordinated
      Lender shall be subrogated to the rights of the Senior Creditors to receive
      distributions
      and payments applicable to the Senior Indebtedness to the extent that
      distributions and payments otherwise payable to the Subordinated Lenders have
      been applied to the payment of Senior Indebtedness. A payment or distribution
      made under this Agreement to any Senior Creditor that otherwise would have
      been
      made to the Subordinated Agent or any Subordinated Lender is not, as between
      or
      among any of the Credit Parties and the Subordinated Agent and Subordinated
      Lenders, a payment on the Subordinated Indebtedness.

    


    Section
      4.10           Hedging
      Agreements.
      Notwithstanding anything to the contrary herein, no
      Senior
      Hedge Party shall have any voting rights under this Agreement as a result of
      the
existence
      of obligations owed to it under any such Hedging Agreements.

    


    Section
      4.11          Conflicts
      between the Senior Loan Documents and the Subordinated Loan Documents.
      Notwithstanding the terms and conditions of the Subordinated Loan Documents,
      whenever
      any Credit Party is required to take a specific action under the Senior Loan
      Documents with
      respect to particular Collateral and is at tie same time required to take a
      different and conflicting
      action under the Subordinated Loan Documents with respect to the same Collateral
      and
      it is
      not possible to take both actions, then the Credit Party will take the action
      required under
      the
      Senior Loan Documents rather than the action required under the Subordinated
      Loan Documents
      (unless the Senior Agent and the Subordinated Agent both instruct the Credit
      Party to take
      the
      action required under the Subordinated Loan Documents). No Credit Party shall
      be
deemed
      in
      default under the Subordinated Loan Documents as a result of complying with
      this
      Section 4.11, and each of the Credit Parties is an express third-party
      beneficiary of this Section 4.11.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              WITNESS
                THE EXECUTION HEREOF, as of this the 21st day of January,
                2005.

            	 
	 	 	 
	 	
              SENIOR
                AGENT: 

            	 
	 	 	 
	 	
              SOCIÉTÉ
                GÉNÉRALÉ, 

            	 
	 	
              as
                the Senior Agent and the Collateral Agent 

            	 
	 	 	 
	 	
              By:

            	
              /s/
                Graeme Bullen 

            	 
	 	 	
              Graeme
                Bullen 

            	 
	 	 	
              Vice
                President 

            	 
	 	 	 
	 	 	 
	 	
              SUBORDINATED
                AGENT: 

            	 
	 	 	 
	 	
              THE
                ROYAL BANK OF SCOTLAND plc, 

            	 
	 	
              as
                the Subordinated Agent, 

            	 
	 	 	 
	 	
              By:

            	
              /s/
                Phillip Ballard 

            	 
	 	 	
              Phillip
                Ballard 

            	 
	
               

            	 	
              Senior
                Vice President 

            	 
	 	 	 
	 	 	 
	 	
              Address
                for the Subordinated Agent 

            	 
	 	
              and
                Subordinated Lender: 

            	 
	 	 	 
	 	
              101
                Park Avenue 

            	 
	 	
              New
                York, New York 10178 

            	 
	 	
              Attention:
                Sheila Shaw 

            	 
	 	
              Fax:
                (212) 401-1494 

            	 
	 	
              Phone:
                (212) 401-1406 

            	 
	 	 	 
	 	
              with
                a copy to: 

            	 
	 	 	 
	 	
              Phillip
                Ballard, Senior Vice President 

            	 
	 	
              600
                Travis Street, Suite 6500 

            	 
	 	
              Houston,
                Texas 77002 

            	 
	 	
              Phone:
                (713) 221-2418 

            	 
	 	
              Fax:
                (713) 221-2430 

            	 


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              BRIGHAM
                EXPLORATION COMPANY,

              a
                Delaware corporation 

            	 
	 	 	 	 
	 	
              By:

            	
              /s/
                Eugene B. Shepard, Jr.

            	 
	
               

            	 	
              Eugene
                B. Shepard, Jr.

            	 
	 	 	
              Executive
                Vice President and Chief Financial Officer 

            	 
	 	 	 	 
	 	 	 	 
	 	
              BRIGHAM
                OIL & GAS, L.P.,

              a
                Delaware limited partnership 

            	 
	 	 	 	 
	 	
              By:
                

            	
              Brigham,
                Inc., its General Partner 

            	 
	 	 	 	 
	 	
              By:

            	
              /s/
                Eugene B. Shepard, Jr.

            	 
	 	 	
              Eugene
                B. Shepard, Jr. 

            	 
	 	 	
              Executive
                Vice President and Chief Financial Officer 

            	 
	 	 	 	 
	 	 	 	 
	 	
              BRIGHAM,
                INC.,

              a
                Nevada corporation

            	 
	 	 	 	 
	 	
              By:

            	
              /s/
                Eugene B. Shepard, Jr. 

            	 
	 	 	
              Eugene
                B. Shepard, Jr.

            	 
	 	 	
              Executive
                Vice President and Chief Financial Officer 

            	 


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    EXHIBIT
      A

    


    Subordinated
      Loan Documents

     

    
      
        	
                1.

              	
                The
                  Subordinated Credit Agreement.

              


      

      


      
        	
                2.

              	
                Subordinated
                  Note in the aggregate face amount of $20,000,000 issued by BOG
                  in favor
                  of
                  the Subordinated Lender.

              


      

      


      
        	
                3.

              	
                Second
                  Mortgage, Deed of Trust, Assignment of Production, Security Agreement
                  and
                  Financing
                  Statement agreements dated as of March 21, 2003 and thereafter
                  executed by
                  BOG in favor of the Subordinated Agent, for the benefit of the
                  Subordinated Agent and the
                  Subordinated Lenders, as amended by the First Amendment to Second
                  Mortgage, Deed
                  of Trust, Assignment of Production, Security Agreement and Financing
                  Statement dated
                  as of January__,
                  2005.

              


      

      


      
        	
                4.

              	
                Second
                  Amended and Restated Second Pledge Agreement dated as of January
                  21, 2005
                  executed
                  by the Parent in favor of the Subordinated Agent for the benefit
                  of the
                  Subordinated
                  Agent and the Subordinated Lenders.

              


      

      


      
        	
                5.

              	
                Second
                  Amended and Restated Second Pledge Agreement dated as of January
                  21, 2005
                  executed
                  by BI in favor of the Subordinated Agent for the benefit of the
                  Subordinated Agent
                  and the Subordinated Lenders.

              


      

      


      
        	
                6.

              	
                Financing
                  Statements in connection with any of the items
                  above.

              


      

      


      
        	
                7.

              	
                Any
                  guaranty agreements, pledges, security agreements or financing
                  statements
                  that may hereafter
                  be executed by any subsidiaries of the Parent in favor of the Subordinated
                  Agent
                  or any Subordinated Lender.