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EXHIBIT 10.38 FIRST AMENDMENT TO
AMENDED AND RESTATED SUBORDINATED CREDIT AGREEMENT THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (herein
called this Amendment) is made as of the 9th day of December, 2003, by and
among BRIGHAM OIL & GAS, L.P., a Delaware limited partnership (the
Borrower), BRIGHAM EXPLORATION COMPANY, a Delaware corporation (Brigham
Exploration), BRIGHAM, INC., a Nevada corporation (the General Partner), the
lenders party to the Agreement from time to time (the Lenders), and THE ROYAL
BANK OF SCOTLAND plc, as Agent (in such capacity, the Agent). W I T N E S S E T H: WHEREAS, Borrower, Brigham Exploration and General Partner (collectively,
the Credit Parties), Agent, and Lenders have entered into that certain
Amended and Restated Subordinated Credit Agreement dated as of March 21, 2003
(as amended, restated, or supplemented to the date hereof, the Original
Agreement), for the purposes and consideration therein expressed, pursuant to
which Lenders made and became obligated to make loans to Borrower, which loans
are unconditionally and irrevocably guaranteed by Brigham Exploration and
General Partner (collectively, the Guarantors), all as therein provided; WHEREAS, Credit Parties, Agent, and Lenders desire to amend the Original
Agreement for the purposes described herein; NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein and in the Original Agreement, in consideration
of the loans which may hereafter be made by Lenders to Borrower, and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto do hereby agree as follows: ARTICLE I.
DEFINITIONS AND REFERENCES Section 1.1. Defined Terms. Unless the context otherwise requires or
unless otherwise expressly defined herein, the terms defined in the Original
Agreement shall have the same meanings whenever used in this Amendment. As
used herein, the following terms shall have the following meanings: Amendment means this First Amendment to Amended and Restated
Subordinated Credit Agreement. Credit Agreement means the Original Agreement as amended by this
Amendment. ARTICLE II.
AMENDMENTS AND CONSENT Section 2.1. Definitions. (a) The definitions of Business Day, Maturity Date and Proved
Reserves contained in Section 1.1 of the Original Agreement are hereby amended
in their entirety to read as follows: Business Day means a day of the year on which banks are not required or
authorized to close in New York, New York and, if the applicable Business Day
relates to any Eurodollar Rate Advance, a day of the year on which dealings are
carried out by banks in the London interbank market. Maturity Date means March 21, 2009.




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Proved Reserves means Proved Reserves as defined in the Definitions
for Oil and Gas Reserves (in this paragraph, the Definitions) promulgated by
the Society of Petroleum Engineers (or any generally recognized successor) as
in effect at the time in question; Proved Developed Producing Reserves means
Proved Reserves which are categorized as both Developed and Producing in
the Definitions; Proved
Developed Nonproducing Reserves means Proved Reserves which are categorized as
both Developed and Nonproducing in the Definitions; and Proved Undeveloped
Reserves means Proved Reserves which are categorized as Undeveloped in the
Definitions. (b) Section 1.1 of the Original Agreement is hereby amended to add certain
new definitions which shall read as follows: Base Rate means, for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the higher of (a) the Prime Rate in
effect on such day and (b) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1%. Any change in the Base Rate due to a change in the Prime
Rate or the Federal Funds Effective Rate shall be effective as at the opening
of business on the effective day of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively. Calculated Total NPV means at any time the Total NPV then most recently
determined as of the date of an Engineering Report, provided that (a) in making
any determination of Calculated Total NPV prior to and including December 31,
2004, any aggregate PDNP NPV and PUD NPV in excess of two-thirds of PDP NPV
shall be excluded, so that at least 60% of Calculated Total NPV is comprised of
PDP NPV, (b) in making any determination of Calculated Total NPV on and after
December 31, 2004, any aggregate PDNP NPV and PUD NPV in excess of 53.85% of
PDP NPV shall be excluded, so that at least 65% of Calculated Total NPV is
comprised of PDP NPV, and (c) whenever, and for so long as, the Borrower fails
to timely deliver an Engineering Report as required under Section 5.15, the
Calculated Total NPV shall be deemed to be the Agents estimate of such amount
made pursuant to Section 6.25(d). Engineering Reports means either an Independent Engineering Report or an
Internal Engineering Report delivered by the Borrower pursuant to Section
5.15(a) or Section 5.15(b) as applicable, provided that each such report
hereafter delivered must (a) separately report on Proved Developed Producing
Reserves, Proved Developed Nonproducing Reserves and Proved Undeveloped
Reserves and separately calculate the NPV of each such category of Proved
Reserves for the Borrowers interest, (b) use a 9% discount rate and a price
deck for each calendar year as described below in the definition of NPV, (c)
take into account the Borrowers actual experiences with leasehold operating
expenses and other costs in determining projected leasehold operating expenses
and other costs, (d) identify and take into account any over-produced or
under-produced status under gas balancing arrangements, (e) contain
information and analysis comparable in scope to that contained in the initial
Engineering Report, and (f) otherwise be in form and substance reasonably
satisfactory to the Agent. Eurocurrency Liabilities has the meaning assigned to that term in
Regulation D of the Federal Reserve Board (or any successor), as in effect from
time to time. Eurodollar Lending Office means, with respect to any Lender, the office
of such Lender specified as its Eurodollar Lending Office opposite its name
on Schedule 1 (or, if no such office is specified, its Domestic Lending
Office), or such other office of such Lender as such Lender may from time to
time specify to the Borrower and the Agent. Eurodollar Rate means, for each Interest Period, the interest rate per
annum (rounded upward to the nearest whole multiple of 1/100 of 1% per annum)
set forth on Telerate Page 3750 (or any replacement page) as the London
Interbank Offered Rate, for deposits in Dollars at 11:00 a.m. (London, England
time) two Business Days before the first day of the applicable Interest Period
and for a period equal to such Interest Period; provided that, if no such
quotation appears on Telerate Page 3750 (or any replacement page), the
Eurodollar Rate shall be an interest rate per annum equal to the rate per annum
at which deposits in Dollars are offered by the principal office of The Royal
Bank of Scotland plc in London, England to prime banks in the London interbank
market at 11:00 a.m. (London, England time) two Business Days before the first
day of such Interest Period in an amount substantially 2




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equal to the Eurodollar
Rate Advance to be maintained by the Lender that is the Agent in respect of
such Borrowing and for a period equal to such Interest Period. Eurodollar Rate Advance means an Advance which bears interest as
provided in Section 2.09(a). Eurodollar Rate Reserve Percentage of any Lender for the Interest Period
for any Eurodollar Rate Advance means the reserve percentage applicable during
such Interest Period (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those days in such
Interest Period during which any such percentage shall be so applicable) under
regulations issued from time to time by the Federal Reserve Board for
determining the maximum reserve requirement (including, without limitation, any
emergency, supplemental, or other marginal reserve requirement) for such Lender
with respect to liabilities or assets consisting of or including Eurocurrency
Liabilities having a term equal to such Interest Period. Federal Funds Effective Rate means, with respect to each day, the rate
per annum (rounded upward, if necessary, to the nearest 1/100th of 1%) equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that if no such rate is so published on such
next succeeding Business Day, the Federal Funds Effective Rate for such day
shall be the average rate quoted to the Agent on such day from three Federal
funds brokers of recognized standing selected by it. Federal Reserve Board means the Board of Governors of the Federal
Reserve System or any of its successors. Independent Engineer means Cawley, Gillespie & Associates or any other
engineering firm reasonably acceptable to either the Agent or the Majority
Lenders. Independent Engineering Report means a report, in form and substance
satisfactory to the Agent and each of the Lenders, prepared by an Independent
Engineer, addressed to the Agent and the Lenders with respect to the Oil and
Gas Properties owned by the Borrower or its Subsidiaries (or to be acquired by
the Borrower or any of its Subsidiaries, as applicable) which are or are to be
included in the calculation of Total NPV hereunder, which report shall (a)
specify the location, quantity, and type of the estimated Proved Reserves
attributable to such Oil and Gas Properties, (b) contain a projection of the
rate of production of such Oil and Gas Properties, (c) contain an estimate of
the associated capital expenditures and net operating revenues to be derived
from the production and sale of Hydrocarbons from such Proved Reserves based on
product price and cost escalation assumptions specified by the Agent and the
Lenders, and (d) contain such other information as is customarily obtained from
and provided in such reports or is otherwise reasonably requested by the Agent
or any Lender. Interest Period means (a) the period beginning on the date on which this
Amendment becomes effective and ending on the first Business Day of January
2004, and (b) each three-month period thereafter beginning on the first
Business Day of a calendar quarter (i.e., a three month period consisting of
(i) January, February and March, (ii) April, May and June, (iii) July, August
and September, or (iv) October, November and December) and ending on but not
including the first Business Day of the succeeding calendar quarter. Interim Redetermination is defined in Section 6.25(c). Internal Engineering Report means a report, in form and substance
reasonably satisfactory to the Agent and each Lender, prepared by the Borrower
and certified by a Responsible Officer of the General Partner, addressed to the
Agent and the Lenders with respect to the Oil and Gas Properties owned by the
Borrower or any of its Subsidiaries (or to be acquired by the Borrower or any
of its Subsidiaries, as applicable) which are or are to be included in the
calculation of Total NPV hereunder, which report shall (a) specify the
location, quantity, and type of the estimated Proved Reserves attributable to
such Oil and Gas Properties, (b) contain a projection of the rate of production
of such Oil and Gas Properties, (c) contain an estimate of the associated
capital expenditures and net operating revenues to be derived from the
production and sale of Hydrocarbons from such Proved Reserves based on product
price and cost escalation assumptions specified by the Agent and the Lenders,
and (d) contain such other 3




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information as is customarily obtained from and
provided in such reports or is otherwise reasonably requested by the Agent or
any Lender. Margin means a rate per annum equal to 5.05%; provided however, that for
the purpose of Advances made to Borrower pursuant to Section 2.05(d)(ii), the
term Margin means a rate per annum equal to 4.05%. NPV means, with respect to any Proved Reserves expected to be produced
from any Oil and Gas Properties, the net present value, discounted at 9% per
annum, of the future net revenues expected to accrue to the Borrowers and its
Subsidiaries collective interests in such reserves during the remaining
expected economic lives of such reserves. Each calculation of such expected
future net revenues shall be made in accordance with the then existing
standards of the Society of Petroleum Engineers, provided that in any event: (a) appropriate deductions shall be made for severance and ad
valorem taxes, and for operating, gathering, transportation and marketing
costs required for the production and sale of such reserves, (b) appropriate adjustments shall be made for hedging operations;
provided that: (i) Hydrocarbon Hedge Agreements with counterparties other
than those which at the time such Hydrocarbon Hedge Agreement is made are
either (A) a Lender or an Affiliate of a Lender, or (B) a counterparty
rated at least A- or better by Standard & Poors or A3 or better by
Moodys Investor Services, shall not be taken into account to the extent
that such Hydrocarbon Hedge Agreements improve the position of or
otherwise benefit the Borrower or any of its Subsidiaries; and (ii)
Hydrocarbon Hedge Agreements with counterparties which at the time such
Hydrocarbon Hedge Agreement is made are either (A) a Lender or an
Affiliate of a Lender, or (B) a counterparty rated at least A- or better
by Standard & Poors or A3 or better by Moodys Investor Services, shall
not be subject to the limits in clause (c) immediately following, (c) the pricing assumptions used in determining NPV for any
particular reserves shall be based upon the following price decks: (i)
for natural gas, the Gas Strip Price, provided that if any Gas Strip
Price is greater than $3.50 per MMBtu, the price shall be capped at $3.50
per MMBtu, and (ii) for crude oil, the Oil Strip Price, provided that if
any Oil Strip Price is greater than $22 per barrel, the price shall be
capped at $22 per barrel, and (d) the cash-flows derived from the pricing assumptions set forth in
clause (c) above shall be further adjusted to account for the historical
basis differentials for each month during the preceding 12-month period
calculated by comparing realized crude oil and natural gas prices to
Cushing, Oklahoma and Henry Hub NYMEX prices for each month during such
period. As used in this definition, Gas Strip Price means, for any calendar year
following the effective date of an Engineering Report (or, with respect to the
initial partial calendar year following the effective date of any Internal
Engineering Report, for such partial year), the unweighted average of the
quotations for deliveries of natural gas at Henry Hub, Louisiana for each
future month during such year (or partial year) for which a futures price is
quoted on the New York Mercantile Exchange (provided that for years after the
last December for which such a futures price is quoted, the price used shall be
the Gas Strip Price for the year ending with such December), and Oil Strip
Price means, for any calendar year following the effective date of an
Engineering Report (or, with respect to the initial partial calendar year
following the effective date of any Internal Engineering Report, for such
partial year), the unweighted average of the quotations for deliveries of
light, sweet crude oil at Cushing, Oklahoma for each future month during such
year (or partial year) for which a futures price is quoted on the New York
Mercantile Exchange (provided that for years after the last December for which
such a futures price is quoted, the price used shall be the Oil Strip Price for
the year ending with such December). Each Gas Strip Price and Oil Strip Price
shall be determined as of the effective date of the Engineering Report in which
such price is to be used, provided that if such effective date is not a
Business Day such determination shall be made on the first Business Day
thereafter. PDNP NPV means the NPV of the Proved Developed Nonproducing Reserves of
the Borrower and its Subsidiaries as calculated in the most recently delivered
Engineering Report; provided however,
that the 4




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Agent may use its own appropriate engineering judgment to assess the
reserve-related information furnished by Borrower pursuant to Section 5.15, and
may recalculate the PDNP NPV accordingly. PDP NPV means the NPV of Proved Developed Producing Reserves of the
Borrower and its Subsidiaries as calculated in the most recently delivered
Engineering Report; provided however, that the Agent may use its own
appropriate engineering judgment to assess the reserve-related information
furnished by Borrower pursuant to Section 5.15, and may recalculate the PDP NPV
accordingly. PUD NPV means the NPV of any Proved Undeveloped Reserves of the Borrower
and its Subsidiaries as calculated in the most recently delivered Engineering
Report; provided however, that the Agent may use its own appropriate
engineering judgment to assess the reserve-related information furnished by
Borrower pursuant to Section 5.15, and may recalculate the PUD NPV accordingly. Prime Rate means the rate of interest per annum publicly announced from
time to time by the Agent as its prime rate in effect at its principal office
in New York City (the Prime Rate not intending to be the lowest rate of
interest charged by the Agent in connection with extensions of credit to
debtors). Scheduled Redetermination is defined in Section 6.25(c). Total Debt means all Debt of the Borrower and its consolidated
Subsidiaries. Total NPV means, as of the date of any determination, the sum of (a)
100% of PDP NPV, plus (b) 100% of PDNP NPV, plus (c) 100% of PUD NPV, as each
has been most recently determined (including any recalculations of PDP NPV,
PDNP NPV and/or PUD NPV made by the Agent in accordance herewith). No category
of reserves other than Proved Reserves shall be taken into account in
determining Total NPV. Wells is defined in Section 5.15(d). Section 2.2. Illegality. Section 2.05 of the Original Agreement is
amended to add a new Section 2.05(d), which reads as follows: (d) Illegality. If any Lender shall notify the Agent and the Borrower
that the introduction of or any change in or in the interpretation of any law
or regulation makes it unlawful, or that any central bank or other Governmental
Authority asserts that it is unlawful for such Lender or its Eurodollar Lending
Office to perform its obligations under this Agreement to maintain any
Eurodollar Rate Advances of such Lender then outstanding hereunder, (i) the
Borrower shall, no later than 12:00 p.m. (New York time) (A) if not prohibited
by law, on the last day of the Interest Period for each outstanding Eurodollar
Rate Advance made or maintained by such Lender or (B) if required by such
notice, on the second Business Day following its receipt of such notice, prepay
all of the Eurodollar Rate Advances made or maintained by such Lender then
outstanding, together with accrued interest on the principal amount prepaid to
the date of such prepayment and amounts, if any, required to be paid pursuant
to Section 2.12 as a result of such prepayment being made on such date, and
(ii) such Lender shall simultaneously make an Advance to the Borrower on such
date in an amount equal to the aggregate principal amount of the Eurodollar
Rate Advances prepaid to such Lender, with such Advance to accrue interest at a
rate equal to the sum of the Base Rate from time to time in effect thereafter
plus the Margin. Section 2.3. Interest. Section 2.09 of the Original Agreement is hereby
deleted in its entirety and replaced by the following: Section 2.09 Interest. (a) The Borrower shall pay interest on the unpaid principal amount of each
Advance made by each Lender from the date of such Advance until such principal
amount shall be paid in full, at a rate per annum equal at all times during the
Interest Period for such Advance to the Eurodollar Rate (or in the case of
Section 2.05(d), the Base Rate) for such Interest Period plus the Margin in
effect from time to time, payable on the ending day of such Interest Period
(each, an Interest Payment Date), provided that: 5




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(i) upon the occurrence and continuance of an Event of Default, such
Advance shall bear interest from the date on which such Event of Default
occurred until such Event of Default has been cured or waived, payable on
demand, at a rate per annum equal at all times to the rate required to be
paid on such Advance immediately prior to the occurrence of such Event of
Default plus 2.00%, (ii) any amount of principal, interest, fees or any other amount
which is not paid when due (whether at stated maturity, by acceleration,
or otherwise) shall bear interest from the date on which such amount is
due until such amount is paid in full, payable on demand, at a rate per
annum equal at all times to the Eurodollar Rate (or in the case of
Section 2.05(d), the Base Rate) in effect from time to time plus the
Margin plus 2.00%, and (iii) any rate charged pursuant to this Section 2.09(b) shall never
exceed the Maximum Rate. (b) The Borrower shall pay to each Lender, so long as any such Lender
shall be required under regulations of the Federal Reserve Board to maintain
reserves with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities, additional interest on the unpaid principal amount of
each Eurodollar Rate Advance of such Lender, from the effective date of such
Advance until such principal amount is paid in full, at an interest rate per
annum equal at all times to the remainder obtained by subtracting (i) the
Eurodollar Rate for the Interest Period for such Advance from (ii) the rate
obtained by dividing such Eurodollar Rate by a percentage equal to 100% minus
the Eurodollar Rate Reserve Percentage of such Lender for such Interest Period,
payable on each date on which interest is payable on such Advance. Such
additional interest payable to any Lender shall be determined by such Lender
and notified to the Borrower through the Agent (such notice to include the
calculation of such additional interest, which calculation shall be conclusive
in the absence of manifest error). Section 2.4. Breakage Costs. Section 2.12 of the Original Agreement is
hereby deleted in its entirety and replaced by the following: Section 2.12 Breakage Costs. If (a) any default by the Borrower in
making any borrowing or continuation of any Eurodollar Rate Advance in
accordance with the provisions of this Agreement, (b) any payment of any
Eurodollar Rate Advance is made prior to the last day of the Interest Period
for such Advance, whether as a result of any payment pursuant to Section 2.05,
the acceleration of the maturity of the Subordinated Notes pursuant to Article
VII, or otherwise, or (c) any default by the Borrower in making any prepayment
of any Eurodollar Rate Advance after the Borrower has given notice thereof in
accordance with the provisions of this Agreement, the Borrower shall, within 10
days of any written demand sent by any Lender to the Borrower through the
Agent, pay to the Agent for the account of such Lender any amounts required to
compensate such Lender for any additional losses, out-of-pocket costs or
expenses which it may reasonably incur as a result of such payment or
nonpayment, including, without limitation, any loss, cost, or expense incurred
by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund or maintain such Advance. Section 2.5. Increased Costs. Section 2.13 of the Original Agreement is
hereby deleted in its entirety and replaced by the following: Section 2.13 Increased Costs. (a) Eurodollar Rate Advances. If, due to either (i) the introduction of
or any change (other than any change by way of imposition or increase of
reserve requirements included in the Eurodollar Rate Reserve Percentage) in or
in the interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any increase in the
cost to any Lender of agreeing to make or making, funding, or maintaining
Eurodollar Rate Advances, then the Borrower shall from time to time, upon
demand by such Lender (with a copy of such demand to the Agent), immediately
pay to the Agent for the account of such Lender additional amounts sufficient
to compensate such Lender for such increased cost. A certificate as to the
amount of such increased cost and
detailing the calculation of such cost submitted to the Borrower and the
Agent by such Lender shall be conclusive and binding for all purposes, absent
manifest error. 6




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(b) Capital Adequacy. If any Lender or the Agent determines in good faith
that compliance with any law or regulation or any guideline or request from any
central bank or other Governmental Authority (whether or not having the force
of law) affects or would affect the amount of capital required or expected to
be maintained by such Lender or any corporation controlling such Lender and
that the amount of such capital is increased by or based upon the existence of
such Lenders commitment to lend and other commitments of this type, then, upon
30 days prior written notice by such Lender (with a copy of any such demand to
the Agent), the Borrower shall immediately pay to the Agent for the account of
such Lender, from time to time as specified by such Lender, additional amounts
sufficient to compensate such Lender for the reduced rate of return on that
capital of such Lender (but without duplication of amounts, if any, paid by the
Borrower pursuant to Section 2.13(a) above), in light of such circumstances, to
the extent that such Lender reasonably determines such increase in capital to
be allocable to the existence of such Lenders commitment to lend under this
Agreement. A certificate as to such amounts and detailing the calculation of
such amounts submitted to the Borrower by such Lender shall be conclusive and
binding for all purposes, absent manifest error. Section 2.6. Delivery of Engineering Reports. Article V of the Original
Agreement is amended to add a new Section 5.15, which reads as follows: Section 5.15 Delivery of Engineering Reports. (a) The Borrower shall deliver to the Agent and each of the Lenders on or
before each February 15, beginning February 15, 2004, an Independent
Engineering Report dated effective as of the immediately preceding December 31,
together with such other reports, data and supplemental information as may be
reasonably requested by the Agent with respect to the Oil and Gas Properties
included or to be included in the calculation of Total NPV hereunder. (b) The Borrower shall deliver to the Agent and each Lender on or before
each August 15, beginning August 15, 2004, an Internal Engineering Report dated
effective as of the immediately preceding June 30, together with such other
reports, data and supplemental information as may be reasonably requested by
the Agent with respect to the Oil and Gas Properties included or to be included
in the calculation of Total NPV hereunder. (c) If any Interim Redetermination is ever requested, the Borrower shall
deliver to the Agent and each Lender on or before the 30th day after such
request, an Internal Engineering Report dated effective as of the calendar
month most recently ended prior to the delivery of such report, and such
supporting information with respect thereto as may be reasonably requested by
the Agent with respect to the Oil and Gas Properties included or to be included
in the calculation of Total NPV hereunder. (d) With the delivery of each Engineering Report, the Borrower shall
furnish to the Agent and the Banks a certificate from a Responsible Officer
certifying that: (i) the information contained in the Engineering Report and
any other information delivered in connection therewith is true and correct in
all material respects, (ii) the Borrower and its Subsidiaries, as applicable,
own the Oil and Gas Properties specified therein free and clear of any Liens
(except Permitted Liens), (iii) none of the Borrowers or its Subsidiaries Oil
and Gas Properties have been sold since the date of the most recently delivered
Engineering Report except as set forth on an exhibit to the certificate, which
certificate shall list all of such Oil and Gas Properties sold and in such
detail as reasonably required by the Agent, and (iv) on and as of the date of
such Engineering Report each Oil and Gas Property described as proved
developed therein was developed for oil and gas, and the wells pertaining to
such Oil and Gas Properties that are described therein as producing wells
(Wells) were each producing oil and gas in paying quantities, except for
Wells that were utilized as water or gas injection wells or as water disposal
wells. Section 2.7. Calculated Total NPV to Total Debt Ratio. Article V of the
Original Agreement is amended to add a new Section 6.25, which reads as
follows: Section 6.25 Calculated Total NPV to Total Debt Ratio. (a) The Borrower will not at any time on or after December 31, 2003 permit
the ratio of Calculated Total NPV to Total Debt to be less than 1.5 to 1.0. 7




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(b) Upon (i) any change to Calculated Total NPV pursuant to a Scheduled
Redetermination or an Interim Redetermination or (ii) the incurrence of any
Debt by the Borrower or any of its consolidated Subsidiaries, the Borrower will
promptly, but in any event within fifteen (15) days after any such event,
deliver a certificate of the chief financial officer of the General Partner
setting forth the Total Debt of the Borrower and the Calculated Total NPV, both
prior to and after giving effect to such event, and demonstrating compliance
with Section 6.25(a), provided that no such certificate need be delivered in
connection with any borrowing under the Senior Credit Agreement if immediately
following such borrowing the Borrower remains in compliance with the covenant
set out in Section 6.25(a). (c) Calculated Total NPV shall be calculated semi-annually in accordance
with this Section 6.25, promptly following the delivery of each Engineering
Report pursuant to Section 5.15(a) and (b), but in any event not later than
April 30th of each year in the case of Engineering Reports delivered pursuant
to Section 5.15(a) and October 31st of each year in the case of Engineering
Reports delivered pursuant to Section 5.15(b), commencing April 30, 2004 (a
Scheduled Redetermination). In addition, the Borrower may, by notifying the
Agent thereof, and the Agent may, at the direction of the Majority Lenders, by
notifying the Borrower thereof, one time during any 12-month period, each elect
to cause the Calculated Total NPV to be calculated between Scheduled
Redeterminations (an Interim Redetermination) in accordance with this Section
6.25. Promptly after receiving each Engineering Report delivered in connection
with a Scheduled Redetermination or Interim Redetermination, and using the
calculations of PDP NPV, PDNP NPV and PUD NPV contained therein (as well as any
recalculations thereof made by Agent as provided for in the definitions of PDP
NPV, PDNP NPV and PUD NPV) the Agent shall make any exclusions required
pursuant to clauses (a) and (b) of the above definition of Calculated Total NPV
and shall notify the Borrower and each Lender of the resulting Calculated Total
NPV. Such Calculated Total NPV shall thereupon be used for the purposes of
Section 6.25(a) until a new Calculated Total NPV is calculated or estimated
pursuant to this Agreement. Each determination of Calculated Total NPV shall
be made as of the date of the applicable Engineering Report. (d) In the event that the Borrower does not furnish to the Agent and the
Lenders the Independent Engineering Report, Internal Engineering Report or
other information specified in clauses (a), (b) or (c) of Section 5.15, as
applicable, by the date specified in such clause, the Agent may, based on the
information available to it, estimate the Total NPV and the resulting
Calculated Total NPV from time to time thereafter until the Agent and the
Lenders receive the relevant Independent Engineering Report, Internal
Engineering Report, as applicable, or other information. Such estimated
Calculated Total NPV shall thereupon be used for the purposes of Section
6.25(a) until a new Calculated Total NPV is calculated or estimated pursuant to
this Agreement. ARTICLE III.
CONDITIONS TO EFFECTIVENESS OF THE AMENDMENT Section 3.1. Effective Date. This Amendment shall become effective as of
the date first above written when Agent shall have received all of the
following: (a) this Amendment, duly authorized, executed and delivered by the
Credit Parties, Agent, and each Lender, and in form and substance
     satisfactory to Agent; (b) payment of the amount that is necessary to reduce the principal amount
of all Advances outstanding under the Original Agreement to US$20,000,000, in
accordance with the procedures set out in Section 2.10(a), in satisfaction of
Borrowers obligations to the Lenders in respect of Borrowers prior election
to pay interest in kind pursuant to Section 2.09(a) of the Original Agreement; (c) copies of current insurance policies or certificates thereof that name
the Senior Agent as loss payee or additional insured, as applicable, and the
Agent as additional insured, certified by the Borrowers insurance broker as
true and correct copies thereof, and which are otherwise satisfactory to the
Agent; (d) a favorable opinion dated as of the Closing Date of Thompson & Knight
L.L.P., counsel to the Credit Parties, in form and substance satisfactory to
the Agent; 8




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(e) copies, certified as of the date of this Agreement by a Responsible
Officer or the secretary or an assistant secretary of the Borrower of (A) the
resolutions of the applicable governing body of the Borrower approving this
Amendment, (B) the organizational documents of the Borrower (to the extent the
same have changed since copies thereof were delivered in connection with the
Original Agreement), and (C) all other documents evidencing other necessary
corporate action and governmental approvals, if any, with respect to this
Amendment; (f) certificates of a Responsible Officer or the secretary or an assistant
secretary of the Borrower certifying the names and true signatures of the
officers of the Borrower authorized to sign this Amendment; (g) copies, certified as of the date of this Agreement by a Responsible
Officer or the secretary or an assistant secretary of each Guarantor of (A) the
resolutions of the applicable governing body of such Guarantor approving the
Amendment, (B) the organizational documents of such Guarantor (to the extent
the same have changed since copies thereof were delivered in connection with
the Original Agreement), and (C) all other documents evidencing other necessary
corporate action and governmental approvals, if any, with respect to this
Amendment; (h) a certificate of the secretary or an assistant secretary of each
Guarantor certifying the names and true signatures of officers of such
Guarantor authorized to sign this Amendment, the Security Instruments and the
other Loan Documents to which such Guarantor is a party; (i) certificates from appropriate Governmental Authorities in Delaware,
Texas and Oklahoma with respect to the good standing, existence and authority
of the Borrower, certificates from appropriate Governmental Authorities in
Delaware and Texas with respect to the good standing, existence and authority
of Brigham Exploration and certificates from appropriate Governmental
Authorities in Nevada and Texas with respect to the good standing, existence
and authority of Brigham, Inc.; (j) a certificate dated as of the date of this Agreement from the
Responsible Officer of the Borrower stating that (A) all representations and
warranties of the Borrower set forth in this Amendment are true and correct in
all material respects; (B) no Default has occurred and is continuing; and (C)
the conditions in this Section 3.01 have been met; (k) an amendment fee in the amount of 0.35% of the aggregate Commitments
for distribution to Lenders in accordance with their pro rata shares; (l) payment of the reasonable fees and disbursements of Chadbourne &
Parke, LLP relating to this Amendment as provided in Section 10.04 of the
Credit Agreement (provided that if such fees and disbursements have not been
invoiced to the Borrower at least one day prior to the delivery of this
Amendment, such payment will not be a condition to the effectiveness hereof and
the Borrower will pay such fees and disbursements promptly after receipt of
such an invoice); (m) a consent agreement, duly authorized, executed and delivered by Senior
Agent, and in form and substance satisfactory to Agent, setting out Senior
Agents acknowledgment of and consent to the amendments and modifications of
the Original Agreement provided for in this Amendment as required pursuant to
Section 3.3(c) of the Intercreditor and Subordination Agreement; and (n) such other documents as Agent may reasonably request. 9




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ARTICLE IV.
REPRESENTATIONS AND WARRANTIES Section 4.1. Representations and Warranties of the Credit Parties. In
order to induce each Lender to enter into this Amendment, each Credit Party
jointly and severally represents and warrants on the date hereof and as of the
Effective Date to each Lender that: (a) The representations and warranties contained in Article IV of
the Original Agreement are true and correct (except as such
representations and warranties have been modified by the transactions
contemplated herein) and no Event of Default under the Original Agreement
has occurred which remains uncured. (b) Borrower is duly authorized to execute and deliver this
Amendment and Borrower is and will continue to be duly authorized to
borrow monies and to perform its obligations under the Credit Agreement.
Borrower has duly taken all corporate action necessary to authorize the
execution and delivery of this Amendment. (c) The execution and delivery by Borrower of this Amendment, the
performance of its obligations hereunder and the consummation of the
transactions contemplated hereby do not and will not conflict with any
provision of law, statute, rule or regulation or of the certificate of
incorporation and bylaws of Borrower or of any material agreement,
judgment, license, order or permit applicable to or binding upon Borrower
or result in the creation of any lien, charge or encumbrance upon any
assets or properties of Borrower. Except for those which have been
obtained, no consent, approval, authorization or order of any court or
governmental authority or third party is required in connection with the
execution and delivery by Borrower of this Amendment. (d) When duly executed and delivered, this Amendment, the Credit
Agreement, and each other Subordinated Loan Document, as affected hereby,
will be a legal and binding obligation of each Credit Party that is a
party hereto and thereto enforceable against such Credit Party in
accordance with its terms, except as limited by bankruptcy, insolvency or
similar laws of general application relating to the enforcement of
creditors rights and by equitable principles of general application. (e) The consolidated Financial Statements dated as of September 30,
2003 fairly present the consolidated financial position at such date of
Brigham Exploration and its subsidiaries and their consolidated income
and cash flow for the period ending on such date. Copies of such
Financial Statements have heretofore been delivered to Agent. Since
September 30, 2003, no Material Adverse Change has occurred. (f) Each Credit Party is Solvent. ARTICLE V.
MISCELLANEOUS Section 5.1. Ratification of Agreements. The Original Agreement as hereby
amended is hereby ratified and confirmed in all respects. Without in any way
modifying or limiting the foregoing, each of the undersigned Guarantors hereby
(a) consents to the provisions of this Amendment and the transactions
contemplated herein, and (b) ratifies and confirms its guaranty obligations
made by it in favor of Agent for the benefit of each Lender pursuant to and in
accordance with Article VIII of the Credit Agreement, and agrees that its
obligations and covenants thereunder are unimpaired hereby and shall remain in
full force and effect. Any reference to the Credit Agreement in any
Subordinated Loan Document shall be deemed to be a reference to the Original
Agreement as hereby amended. The Subordinated Loan Documents, as they may be
amended or affected by this Amendment, are hereby ratified and confirmed in all
respects. The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of Lenders under the Credit 10




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Agreement, the Subordinated Note,
or any other Subordinated Loan Document nor constitute a waiver of any
provision of the Credit Agreement, the Subordinated Note, or any other
Subordinated Loan Document. Section 5.2. Survival of Agreements. All representations, warranties,
covenants and agreements of the Credit Parties herein shall survive the
execution and delivery of this Amendment and the performance hereof, including
without limitation the making, granting or maintenance of the Advances, and
shall further survive until all of the Subordinated Obligations are paid in
full. All statements and agreements contained in any certificate or instrument
delivered by any Credit Party hereunder or under the Credit Agreement to any
Lender shall be deemed to constitute representations and warranties by, and/or
agreements and covenants of, such Credit Party under this Amendment and under
the Credit Agreement. Section 5.3. Subordinated Loan Documents. This Amendment is a
Subordinated Loan Document, and all provisions in the Credit Agreement
pertaining to Subordinated Loan Documents apply hereto. Section 5.4. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. Section 5.5. Counterparts. This Amendment may be separately executed in
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed shall be deemed to constitute one and the same
Amendment. THIS AMENDMENT AND THE OTHER SUBORDINATED LOAN DOCUMENTS REPRESENT 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 AMONG THE PARTIES HERETO. 11




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IN WITNESS WHEREOF, this Amendment is executed as of the date first above
written. BRIGHAM OIL & GAS, L.P.By:
    /s/ Warren J. LudlowWarren J. LudlowSecretary BRIGHAM EXPLORATION COMPANYBy:
    /s/ Warren J. LudlowWarren J. LudlowSecretary BRIGHAM, INC.By:
    /s/ Warren J. LudlowWarren J. LudlowSecretary THE ROYAL BANK OF SCOTLAND plc,
as Agent and LenderBy:
    /s/ P. R.  BallardP. R. BallardSenior Vice President 12