Document:

Exhibit 10.3

    
      
        

      

      Exhibit
        10.3

      

      FIRST
        AMENDMENT TO

      SECOND
        AMENDED AND RESTATED SUBORDINATED CREDIT AGREEMENT

       

      THIS
        FIRST AMENDMENT TO SECOND AMENDED AND RESTATED SUBORDINATED CREDIT AGREEMENT
        (herein called this “Amendment”)
        is
        made as of the 29th day of June, 2005, 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 Second Amended and Restated
        Subordinated Credit Agreement dated as of January 21, 2005 (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: 

      

      “Credit
        Agreement”
        means
        the Original Agreement as amended by this Amendment. 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        II.

      AMENDMENTS
        

      

      Section
        2.1. 
        Definitions.

      

      (a) 
The
        definitions of “Commitment”,
        “Commitment
        Termination Date”,
        “Margin”,
        “Maturity
        Date”,
        and
“Senior
        Credit Agreement”
        contained in Section 1.01 of the Original Agreement are hereby deleted
        in
        their entirety and replaced by the following: 

      

      “Commitment”
        means,
        for any Lender, the amount set opposite such Lender's name on Schedule 1
        as its
“Commitment”, or if such Lender has entered into any Assignment and Acceptance,
        as set forth for such Lender as its Commitment in the Register maintained
        by the
        Agent pursuant to Section
        10.06(c),
        as such
        amount may be reduced or terminated pursuant to Section
        2.04
        or
Article
        VII
        or
        otherwise under this Agreement. The aggregate amount of the Commitments is
        $40,000,000. 

      

      “Commitment
        Termination Date”
        means
        the earlier of (a) December 29, 2006 and (b) the earlier termination in whole
        of
        the Commitments pursuant to Section
        2.04
        or
Article
        VII
        or
        otherwise under this Agreement.

      

      “Margin”
        means,
        as of any date of determination, the applicable percentage set forth below,
        determined as a function of the Senior Utilization Percentage and the aggregate
        outstanding principal amounts on such date (“Outstanding
        Advances”):

      

      
        	
                Senior

                Utilization

                Percentage

              	
                Outstanding

                Advances
                  ≤

                $30,000,000

              	
                Outstanding

                Advances
                  >

                $30,000,000
                  and ≤

                $35,000,000

                 

              	
                Outstanding

                Advances
                  >

                
                  $35,000,000

                

              
	
                ≥
                  90%

                 

              	
                3.90%

              	
                4.25%

              	
                4.50%

              
	
                ≥
                  75% and <90%

                 

              	
                3.90%

              	
                4.25%

              	
                4.50%

              
	
                ≥
                  50% and <75%

                 

              	
                3.90%

              	
                3.90%

              	
                3.90%

              
	
                <
                  50%

                 

              	
                3.90%

              	
                3.90%

              	
                3.90%

              

      

       

      “Maturity
        Date”
        means
        June 29, 2010.

      

      “Senior
        Credit Agreement”
        means
        the Fourth Amended and Restated Credit Agreement dated as of June 29, 2005,
        among the Borrower, Brigham Exploration, the General Partner, the lenders
        party
        thereto from time to time (the “Senior
        Lenders”),
        Bank
        of America, N.A., as administrative agent for the senior lenders (the
“Senior
        Agent”)
        and as
        issuing lender for the Senior Lenders (the “Issuing
        Lender”),
        Banc
        of America Securities LLC, as lead arranger, The Royal Bank of Scotland plc,
        as
        co-arranger and as documentation agent (the “Documentation
        Agent”),
        and
        BNP Paribas, as co-arranger (in such capacity together with the Royal Bank
        of
        Scotland plc in such capacity, the “Co-Arrangers”)
        and as
        Syndication Agent (the “Syndication
        Agent”).

       

      
        
          
          

        

        
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      (b) 
Clause
        (j) of the definition of “Debt”,
        contained in Section 1.01
        of the
        Original Agreement is hereby deleted in its entirety and replaced by the
        following: 

      

      “(j) 
any
        obligations in connection with any volumetric production payments;”

      

      (c) 
Clause
        (c) of the definition of “NPV”, contained in Section 1.01 of the Original
        Agreement is hereby deleted in its entirety and replaced by the
        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 $4.50 per MMBtu, the
        price
        shall be capped at $4.50 per MMBtu, and (ii) for crude oil, the Oil Strip
        Price,
        provided that if any Oil Strip Price is greater than $30 per barrel, the
        price
        shall be capped at $30 per barrel, and”

      

      (d) 
The
        following definitions are hereby added to Section
        1.01
        of the
        Original Agreement:

      

      “First
        Amendment”
        means
        the First Amendment to Second Amended and Restated Subordinated Credit Agreement
        dated as of June 29, 2005, among the Borrower, Brigham Exploration, the General
        Partner, the Lenders and the Agent. 

      

      “First
        Amendment Effective Date”
        means
        the first Business Day after all conditions to effectiveness set forth in
        Section
        3.1
        of the
        First Amendment have been satisfied in accordance with the terms
        thereof.

      

      “Notice
        of Borrowing”
        means a
        notice of borrowing in the form attached as Exhibit
        A
        to the
        First Amendment.

      

      “Senior
        Utilization Percentage”
        means
        the “Utilization Percentage” as defined and in effect at the time in question
        under the Senior Credit Agreement.

      

      “Unused
        Subordinated Commitment Amount”
        means,
        with respect to a Lender at any time, such Lender’s Commitment at such time as
        it may be reduced from time to time pursuant to Section
        2.04
        minus,
        the aggregate outstanding principal amount of all Advances owed to such Lender
        at such time. 

      

      (e) 
The
        definitions of “Augmenting
        Lenders”,
        “Increasing
        Lender”,
        “Incremental
        Lenders”,
        “Incremental
        Commitment Amount”
        are
        hereby deleted from Section
        1.01
        of the
        Original Agreement.

       

      
        
          
          

        

        
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      Section
        2.2.     Section
        2.01(a)
        of the
        Original Agreement is hereby deleted in its entirety and replaced by the
        following: 

      

      “(a) 
Advances.
        Each
        Lender severally agrees, on the terms and conditions set forth in this
        Agreement, to (i) make an Advance to the Borrower for a Borrowing in an
        aggregate amount of $10,000,000 on the First Amendment Effective Date and
        (ii)
        make Advances to the Borrower from time to time during the period from the
        date
        of the First Amendment Effective Date until the Commitment Termination Date
        in
        an amount for each Lender not to exceed such Lender’s Unused Subordinated
        Commitment Amount. Each Borrowing shall be in an aggregate amount not less
        than
        $5,000,000 and in integral multiples of $5,000,000 in excess thereof. Principal
        payments made after the Closing Date may not be reborrowed. Each Notice of
        Borrowing shall be irrevocable and binding on the Borrower.
        Any
        Advance made after the First Amendment Effective Date shall be made at least
        three Business Days after a Notice of Borrowing is received by the Agent.”

       

      Section
        2.3.        Section
        2.01(c)
        of the
        Original Agreement is hereby deleted in its entirety and replaced by the
        following: 

      

      “Intentionally
        Omitted.”

      

      Section
        2.4.       Section
        2.03
        of the
        Original Agreement is hereby deleted in its entirety and replaced by the
        following:

      

      “Section
        2.03.    Method
        of Borrowing.
        (a) Each
        Borrowing shall be made pursuant to a Notice of Borrowing (or by telephone
        notice promptly confirmed in writing by a Notice of Borrowing), given not
        later
        than 12:00 p.m. (New York time) by the Borrower to the Agent in accordance
        with
Section
        2.01(a),
        which
        shall in turn give to each applicable Lender prompt notice of such proposed
        Borrowing by telecopier or telex. Each Notice of a Borrowing shall be given
        by
        telecopier or telex, confirmed immediately in writing, specifying the
        information required therein. In the case of a proposed Borrowing comprised
        of
        Eurodollar Rate Advances, the Agent shall promptly notify each applicable
        Lender
        of the applicable interest rate under Section
        2.09(b).
        Each
        applicable Lender shall, before 2:00 p.m. (New York time) on the date of
        such
        Borrowing, make available for the account of its Applicable Lending Office
        to
        the Agent at its address referred to in Section
        10.02,
        or such
        other location as the Agent may specify by notice to the Lenders, in same
        day
        funds, in the case of a Borrowing, such Lender’s Pro Rata Share of such
        Borrowing. After the Agent’s receipt of such funds and upon fulfillment of the
        applicable conditions set forth in Article
        III,
        the
        Agent shall make such funds available to the Borrower at its account with
        the
        Agent.

       

      (b) 
Certain
        Limitations.
        Notwithstanding anything to the contrary contained in paragraph (a)
        above:

      

      (i) 
if
        any
        Lender shall, at least one Business Day before the date of any requested
        Borrowing, or continuation, notify the Agent 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 make Eurodollar Rate Advances or to fund
        or
        maintain Eurodollar Rate Advances, the right of the Borrower to select
        Eurodollar Rate Advances from such Lender shall be suspended until such Lender
        shall notify the Agent that the circumstances causing such suspension no
        longer
        exist, and the Advance made by such Lender in respect of such Borrowing or
        continuation shall be a Base Rate Advance;

       

      
        
          
          

        

        
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      (ii) 
if
        the
        Agent is unable to determine the Eurodollar Rate for Eurodollar Rate Advances
        comprising any requested Borrowing, the right of the Borrower to select
        Eurodollar Rate Advances for such Borrowing or for any subsequent Borrowing
        shall be suspended until the Agent shall notify the Borrower and the Lenders
        that the circumstances causing such suspension no longer exist, and each
        Advance
        comprising such Borrowing shall be a Base Rate Advance; and

      

      (c) 
Lender
        Obligations Several.
        The
        obligations of the Lenders hereunder to make Advances and to make payments
        pursuant to Section
        10.04(c)
        are
        several and not joint. The failure of any Lender to make any Advance or to
        make
        any payment under Section
        10.04(c)
        on any
        date required hereunder shall not relieve any other Lender of its corresponding
        obligation to do so on such date, and no Lender shall be responsible for
        the
        failure of any other Lender to so make its Advance, to purchase its
        participation or to make its payment under Section
        10.04(c).

      

      (d) 
Failure
        to Satisfy Conditions Precedent.
        If any
        Lender makes available to the Agent funds for any Advance to be made by such
        Lender as provided in the foregoing provisions of this Article II, and such
        funds are not made available to the Borrower by the Agent because the conditions
        to the applicable Borrowing set forth in Article
        III
        are not
        satisfied or waived in accordance with the terms hereof, the Agent shall
        return
        such funds (in like funds as received from such Lender) to such Lender, without
        interest.”

      

      Section
        2.5.       Section
        2.05
        of the
        Original Agreement is hereby amended by the following clause (e)
        thereto:

      

      “(e)    Accrued
        Interest.
        Each
        prepayment under this Section
        2.05
        shall be
        accompanied by accrued interest on the amount prepaid to the date of such
        prepayment and amounts, if any, required to be paid pursuant to Section
        2.10
        as a
        result of such prepayment.”

      

      Section
        2.6.      Section
        2.08
        of the
        Original Agreement is hereby deleted in its entirety and replaced by the
        following:

      

      “Section
        2.08    Fees.

      

      (a) 
Commitment
        Fees.
        The
        Borrower agrees to pay to the Agent for the account of each Lender a commitment
        fee at a per annum rate equal to 0.750% for commitment fees on the average
        daily
        Unused Subordinated Commitment Amount of such Lender, from the date of this
        Agreement until the Commitment Termination Date. The commitment fees shall
        be
        due and payable quarterly in arrears on the last day of each March, June,
        September, and December commencing on September 30, 2005 and continuing
        thereafter through and including the Commitment Termination Date.

      

      
        
          
          

        

        
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      (b)    
Advance
        Fees.
        The
        Borrower agrees to pay to the Agent for the account of the Lenders in connection
        with any Advances hereunder, a fee in an amount equal to 0.50% multiplied
        by the
        amount of such Advance. Such fee shall be due and payable on the date of
        any
        Advance after the Advance on the First Amendment Effective Date.”

      

      Section
        2.7.       Section
        2.09(c) of the Original Agreement is hereby deleted in its entirety and replaced
        by the following:

      

      “(c)    Usury
        Recapture.

      

      (i) 
If,
        with
        respect to any Lender, the effective rate of interest contracted for under
        the
        Subordinated Loan Documents, including the stated rates of interest and fees
        contracted for hereunder and any other amounts contracted for under the
        Subordinated Loan Documents which are deemed to be interest, at any time
        exceeds
        the Maximum Rate, then the outstanding principal amount of the loans made
        by
        such Lender hereunder shall bear interest at a rate which would make the
        effective rate of interest for such Lender under the Subordinated Loan Documents
        equal the Maximum Rate until the difference between the amounts which would
        have
        been due at the stated rates and the amounts which were due at the Maximum
        Rate
        (the “Lost
        Interest”)
        has
        been recaptured by such Lender.

      

      (ii) 
If,
        when
        the loans made hereunder are repaid in full, the Lost Interest has not been
        fully recaptured by such Lender pursuant to the preceding subsection (i),
        then,
        to the extent permitted by law, for the loans made hereunder by such Lender
        the
        interest rates charged under this Section 2.09 shall be retroactively increased
        such that the effective rate of interest under the Subordinated Loan Documents
        was at the Maximum Rate since the effectiveness of this Agreement to the
        extent
        necessary to recapture the Lost Interest not recaptured pursuant to the
        preceding sentence and, to the extent allowed by law, the Borrower shall
        pay to
        such Lender the amount of the Lost Interest remaining to be recaptured by
        such
        Lender.

      

      (iii) 
NOTWITHSTANDING
        THE FOREGOING OR ANY OTHER TERM IN THIS AGREEMENT AND THE SUBORDINATED LOAN
        DOCUMENTS TO THE CONTRARY, IT IS THE INTENTION OF EACH LENDER AND THE BORROWER
        TO CONFORM STRICTLY TO ANY APPLICABLE USURY LAWS. ACCORDINGLY, IF ANY LENDER
        CONTRACTS FOR, CHARGES, OR RECEIVES ANY CONSIDERATION WHICH CONSTITUTES INTEREST
        IN EXCESS OF THE MAXIMUM RATE, THEN ANY SUCH EXCESS SHALL BE CANCELED
        AUTOMATICALLY AND, IF PREVIOUSLY PAID, SHALL AT SUCH LENDER’S OPTION BE APPLIED
        TO THE OUTSTANDING AMOUNT OF THE ADVANCES MADE HEREUNDER BY SUCH LENDER OR
        BE
        REFUNDED TO THE BORROWER.”

       

      
        
          
          

        

        
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      Section
        2.8.   Section
        3.01 of the Original Agreement is hereby amended by adding the following
        new
        clause (k) at the end of such Section:

      

      “(k)     Notice
        of Borrowing.
        The
        Agent shall have received a Notice of Borrowing with the appropriate insertions
        and executed by a duly authorized Responsible Officer of the General
        Partner.”

      

      Section
        2.9. Section 5.06(g) of the Original Agreement is hereby deleted in its entirety
        and replaced by the following:

      

      “(g)    Annual
        Capital Expenditures Budget.
        As soon
        as available and in any event prior to February 28, a one-year capital
        expenditure projection for Brigham Exploration and its Subsidiaries in form
        and
        substance acceptable to the Agent for the following fiscal year;”

      

      Section
        2.10. Section 5.06(k) of the Original Agreement is hereby deleted in its
        entirety and replaced by the following:

      

      “(k)     Securities
        Law Filings and other Public Information.
        Promptly, upon its becoming available, each financial statement, notice,
        proxy
        material, reports and other information which any Credit Party sends to the
        holders of its respective public securities generally, files with the SEC
        (excluding routine correspondence and drafts of proposed filings, such as
        registration statements), or otherwise makes available to the public or the
        financial community generally;”

      

      Section
        2.11. Sections 5.15(a) and 5.15(b) of the Original Agreement are hereby deleted
        in their entirety and replaced by the following:

      

      “(a) 
The
        Borrower shall deliver to the Agent and each of the Lenders on or before
        each
        April 1, beginning April 1, 2006, 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 October
        1,
        beginning October 1, 2005, 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.”

      

      Section
        2.12.      Section
        6.18
        of the
        Original Agreement is hereby deleted in its entirety and replaced by the
        following:

      

      
        
          
          

        

        
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      “Section
        6.18 Current
        Ratio.
        Brigham
        Exploration shall not permit the ratio of (a) its consolidated current assets
        of
        Brigham Exploration and its consolidated Subsidiaries to (b) their consolidated
        current liabilities to be less than 1.00 to 1.00 at any time. For purposes
        of
        this Agreement, “consolidated current assets” and “consolidated current
        liabilities” shall be determined in accordance with GAAP, except that (x)
        consolidated current assets and consolidated current liabilities will be
        calculated without including any amounts resulting from the application of
        FASB
        Statements 133 or 143, (y) the Unused Commitment Amount (as defined in the
        Senior Credit Agreement) and the Unused Subordinated Commitment Amount shall
        be
        treated as a consolidated current assets, and (z) the consolidated current
        liabilities will exclude current maturities of long-term debt.”

      

      Section
        2.13.     Section
        10.04 of the Original Agreement is hereby deleted in its entirety and replaced
        by the following:

      

      “Section
        10.04 Expenses;
        Indemnity; Damage Waiver.

      

      (a) 
Costs
        and Expenses.
        The
        Borrower shall pay (i) all reasonable out of pocket expenses incurred by
        the
        Agent and its Affiliates (including the reasonable fees, charges and
        disbursements of counsel for the Agent), in connection with the preparation,
        negotiation, execution, delivery and administration of this Agreement and
        the
        other Subordinated Loan Documents or any amendments, modifications or waivers
        of
        the provisions hereof or thereof (whether or not the transactions contemplated
        hereby or thereby shall be consummated), (ii) all out of pocket expenses
        incurred by the Agent or any Lender (including the fees, charges and
        disbursements of any counsel for the Agent or any Lender), and shall pay
        all
        fees and time charges for attorneys who may be employees of the Agent or
        any
        Lender, in connection with the enforcement or protection of its rights (A)
        in
        connection with this Agreement and the other Subordinated Loan Documents,
        including its rights under this Section, or (B) in connection with the Advances
        made, including all such out of pocket expenses incurred during any workout,
        restructuring or negotiations in respect of such Advances.

      

      (b) 
Indemnification
        by the Borrower.
        The
        Borrower shall indemnify the Agent (and any sub-agent thereof) and each Lender,
        and each Related Party of any of the foregoing Persons (each such Person
        being
        called an “Indemnitee”)
        against, and hold each Indemnitee harmless from, any and all losses, claims,
        damages, liabilities and related expenses (including the fees, charges and
        disbursements of any counsel for any Indemnitee), and shall indemnify and
        hold
        harmless each Indemnitee from all fees and time charges and disbursements
        for
        attorneys who may be employees of any Indemnitee, incurred by any Indemnitee
        or
        asserted against any Indemnitee by any third party or by the Borrower or
        any
        other Credit Party arising out of, in connection with, or as a result of
        (i) the
        execution or delivery of this Agreement, any other Subordinated Loan Document
        or
        any agreement or instrument contemplated hereby or thereby, the performance
        by
        the parties hereto of their respective obligations hereunder or thereunder
        or
        the consummation of the transactions contemplated hereby or thereby, (ii)
        any
        Advance or the use or proposed use of the proceeds therefrom, (iii) any actual
        or alleged presence or release of Hazardous Materials on or from any property
        owned or operated by the Borrower or any of its Subsidiaries, or any
        Environmental Liability related in any way to the Borrower or any of its
        Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
        or proceeding relating to any of the foregoing, whether based on contract,
        tort
        or any other theory, whether brought by a third party or by the Borrower
        or any
        other Credit Party, and regardless of whether any Indemnitee is a party thereto,
        in all cases, whether or not caused by or arising, in whole or in part, out
        of
        the negligence of the Indemnitee; provided that such indemnity shall not,
        as to
        any Indemnitee, be available to the extent that such losses, claims, damages,
        liabilities or related expenses (x) are determined by a court of competent
        jurisdiction by final and nonappealable judgment to have resulted from the
        gross
        negligence or willful misconduct of such Indemnitee or (y) result from a
        claim
        brought by the Borrower or any other Credit Party against an Indemnitee for
        breach in bad faith of such Indemnitee’s obligations hereunder or under any
        other Subordinated Loan Document, if the Borrower or such Credit Party has
        obtained a final and nonappealable judgment in its favor on such claim as
        determined by a court of competent jurisdiction.

       

      
        
          
          

        

        
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      (c) 
Reimbursement
        by Lenders.
        To the
        extent that the Borrower for any reason fails to indefeasibly pay any amount
        required under subsection (a) or (b) of this Section to be paid by it to
        the
        Agent (or any sub-agent thereof) or any Related Party of any of the foregoing,
        each Lender severally agrees to pay to the Agent (or any such sub-agent)
        or such
        Related Party, as the case may be, such Lender’s Pro Rata Share (determined as
        of the time that the applicable unreimbursed expense or indemnity payment
        is
        sought) of such unpaid amount, provided that the unreimbursed expense or
        indemnified loss, claim, damage, liability or related expense, as the case
        may
        be, was incurred by or asserted against the Agent (or any such sub-agent)
        or
        against any Related Party of any of the foregoing acting for the Agent (or
        any
        such sub-agent) in connection with such capacity. The obligations of the
        Lenders
        under this subsection (c) are subject to the provisions of Section
        2.03(e).

      

      (d) 
Waiver
        of Consequential Damages, Etc.
        To the
        fullest extent permitted by applicable law, the Borrower shall not assert,
        and
        hereby waives, any claim against any Indemnitee, on any theory of liability,
        for
        special, indirect, consequential or punitive damages (as opposed to direct
        or
        actual damages) arising out of, in connection with, or as a result of, this
        Agreement, any other Subordinated Loan Document or any agreement or instrument
        contemplated hereby, the transactions contemplated hereby or thereby, any
        Advance or the use of the proceeds thereof. No Indemnitee referred to in
        subsection (b) above shall be liable for any damages arising from the use
        by
        unintended recipients of any information or other materials distributed by
        it
        through telecommunications, electronic or other information transmission
        systems
        in connection with this Agreement or the other Subordinated Loan Documents
        or
        the transactions contemplated hereby or thereby.

      

      (e) 
Payments.
        All
        amounts due under this Section shall be payable not later than ten Business
        Days
        after demand therefor.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      (f) 
Survival.
        The
        agreements in this Section shall survive the resignation of the Agent, the
        replacement of any Lender, the termination of the aggregate Commitments and
        the
        repayment, satisfaction or discharge of all the other Subordinated
        Obligations.”

      

      Section
        2.14.     Section
        10.06 of the Original Agreement is hereby amended by adding the following
        clauses (h) and (i) to the end of such Section:

      

      (h) 
Certain
        Pledges.
        Any
        Lender may at any time pledge or assign a security interest in all or any
        portion of its rights under this Agreement (including under its Subordinated
        Note, if any) to secure obligations of such Lender, including any pledge
        or
        assignment to secure obligations to a Federal Reserve Bank; provided that
        no
        such pledge or assignment shall release such Lender from any of its obligations
        hereunder or substitute any such pledgee or assignee for such Lender as a
        party
        hereto.

      

      (i) 
          Special
        Purpose Funding Vehicles.
        Notwithstanding anything to the contrary contained herein, any Lender (a
        “Granting
        Lender”)
        may
        grant to a special purpose funding vehicle identified as such in writing
        from
        time to time by the Granting Lender to the Agent and the Borrower (an
“SPC”)
        the
        option to provide all or any part of any Advance that such Granting Lender
        would
        otherwise be obligated to make pursuant to this Agreement; provided that
        (i)
        nothing herein shall constitute a commitment by any SPC to fund any Advance,
        and
        (ii) if an SPC elects not to exercise such option or otherwise fails to make
        all
        or any part of such Advance, the Granting Lender shall be obligated to make
        such
        Committed Loan pursuant to the terms hereof or, if it fails to do so, to
        make
        such payment to the Agent as is required under Section 2.10(b)(ii). Each
        party
        hereto hereby agrees that (i) neither the grant to any SPC nor the exercise
        by
        any SPC of such option shall increase the costs or expenses or otherwise
        increase or change the obligations of the Borrower under this Agreement
        (including its obligations under Sections 2.13 and 2.14), (ii) no SPC shall
        be
        liable for any indemnity or similar payment obligation under this Agreement
        for
        which a Lender would be liable, and (iii) the Granting Lender shall for all
        purposes, including the approval of any amendment, waiver or other modification
        of any provision of any Subordinated Loan Document, remain the lender of
        record
        hereunder. The making of an Advance by an SPC hereunder shall utilize the
        Commitment of the Granting Lender to the same extent, and as if, such Advance
        were made by such Granting Lender. In furtherance of the foregoing, each
        party
        hereto hereby agrees (which agreement shall survive the termination of this
        Agreement) that, prior to the date that is one year and one day after the
        payment in full of all outstanding commercial paper or other senior debt
        of any
        SPC, it will not institute against, or join any other Person in instituting
        against, such SPC any bankruptcy, reorganization, arrangement, insolvency,
        or
        liquidation proceeding under the laws of the United States or any State thereof.
        Notwithstanding anything to the contrary contained herein, any SPC may (i)
        with
        notice to, but without prior consent of the Borrower and the Agent and with
        the
        payment of a processing fee of $3500, assign all or any portion of its right
        to
        receive payment with respect to any Advance to the Granting Lender and (ii)
        disclose on a confidential basis any non-public information relating to its
        funding of Advances to any rating agency, commercial paper dealer or provider
        of
        any surety or Guarantee or credit or liquidity enhancement to such
        SPC.”

      

      

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      Section
        2.15.      Article
        X
        of the
        Original Agreement is hereby amended by adding the following Section 10.11and
        10.12:

      

      “Section
        10.11 Payments
        Set Aside.
        To the
        extent that any payment by or on behalf of the Borrower is made to the Agent
        or
        any Lender, or the Agent or any Lender exercises its right of setoff, and
        such
        payment or the proceeds of such setoff or any part thereof is subsequently
        invalidated, declared to be fraudulent or preferential, set aside or required
        (including pursuant to any settlement entered into by the Agent or such Lender
        in its discretion) to be repaid to a trustee, receiver or any other party,
        in
        connection with any proceeding under any applicable bankruptcy, insolvency,
        reorganization, moratorium, or similar law affecting creditors’ rights generally
        and by general principles of equity or otherwise, then (a) to the extent
        of such
        recovery, the obligation or part thereof originally intended to be satisfied
        shall be revived and continued in full force and effect as if such payment
        had
        not been made or such setoff had not occurred, and (b) each Lender severally
        agrees to pay to the Agent upon demand its applicable share (without
        duplication) of any amount so recovered from or repaid by the Agent, plus
        interest thereon from the date of such demand to the date such payment is
        made
        at a rate per annum equal to the Federal Funds Rate from time to time in
        effect.
        The obligations of the Lenders under clause (b) of the preceding sentence
        shall
        survive the payment in full of the Subordinated Obligations and the termination
        of this Agreement

       

      Section
        10.12 USA
        PATRIOT Act Notice.
        Each
        Lender that is subject to the Act (as hereinafter defined) and the Agent
        (for
        itself and not on behalf of any Lender) hereby notifies the Borrower that
        pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
        107-56
        (signed into law October 26, 2001)) (the “Act”),
        it is
        required to obtain, verify and record information that identifies the Borrower,
        which information includes the name and address of the Borrower and other
        information that will allow such Lender or the Agent, as applicable, to identify
        the Borrower in accordance with the Act.

      

      Section
        2.16.    Schedule
        1
        to the
        Original Agreement is hereby deleted in its entirety and replaced by
Schedule
        1
        attached
        to this Amendment.

      

      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) 
an
        Amended and Restated Subordinated Note payable to the order of each Lender
        in
        the amount of its Commitment; 

      

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      
      

       

      (c) 
a
        favorable opinion dated as of the date of this Amendment of Thompson &
        Knight L.L.P., counsel to the Credit Parties, in form and substance satisfactory
        to the Agent covering such matters as any Lender through the Agent may
        reasonably request;

      

      (d) 
copies
        of
        all amendments to the Senior Loan Documents and the Intercreditor and
        Subordination Agreement required to permit the execution, delivery and
        performance of the Credit Agreement, in form and substance satisfactory to
        Agent; 

      

      (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) 
payment
        of the reasonable fees and disbursements of Baker & McKenzie 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); 

      

      (j)  the
        pay
        to the Agent of the fees described the letter dated June 29, 2005 among the
        Borrower and the Agent; and

      

      (k) 
such
        other documents as Agent may reasonably request. 

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        IV.

      MISCELLANEOUS

      

      Section
        4.1.     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
        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
        4.2.     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
        4.3.      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
        4.4.      GOVERNING
        LAW.
        THIS
        AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
        WITH,
        THE LAWS OF THE STATE OF NEW YORK. 

      

      Section
        4.5.      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.

      

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      [Signatures
        on Following Page]

      

      

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, this Amendment is executed as of the date first above written.
        

      

      

      
        	 	 BRIGHAM
                OIL & GAS, L.P.	 
	 	 	
                /s/
                  Eugene B. Shepherd, Jr.

              	 
	 	 	
                Executive
                  Vice President &

              	 
	 	 	
                Chief
                  Financial Officer

              	 
	 	 	 	 
	 	 BRIGHAM
                EXPLORATION COMPANY	 
	 	 	
                /s/
                  Eugene B. Shepherd, Jr.

              	 
	 	 	
                Executive
                  Vice President &

              	 
	 	 	
                Chief
                  Financial Officer

              	 
	 	 	 	 
	 	 BRIGHAM,
                INC.	 
	 	 	
                /s/
                  Eugene B. Shepherd, Jr.

              	 
	 	 	
                Executive
                  Vice President &

              	 
	 	 	
                Chief
                  Financial Officer

              	 
	 	 	 	 
	 	 THE
                ROYAL BANK OF SCOTLAND plc,	 
	 	 as
                Agent and Lender	 
	 	 	
                /s/
                  Phillip R. Ballard

              	 
	 	 	
                Senior
                  Vice President

              	 

      

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

       

      EXHIBIT
        A

      

      NOTICE
        OF BORROWING

       

      

      [Date]

      

       

      The
        Royal
        Bank of Scotland plc, as Agent 

      101
        Park
        Avenue, 12th Floor

      New
        York,
        New York 10118

      

      Attention:
        ___________________

      

      Ladies
        and Gentlemen:

      

      The
        undersigned, Brigham Oil & Gas, L.P., a Delaware limited partnership
        (“Borrower”),
        refers to the Second Amended and Restated Credit Agreement dated as of January
        21, 2005, as amended by the First Amendment to Second Amended and Restated
        Credit Agreement dated as of June 29, 2005 (as the same may be amended or
        modified from time-to-time, the “Credit
        Agreement,”
        the
        defined terms of which are used in this Notice of Borrowing unless otherwise
        defined in this Notice of Borrowing) among the Borrower, Brigham Exploration
        Company, a Delaware corporation, Brigham, Inc., a Nevada corporation, the
        lenders party thereto (the “Lenders”),
        and
        The Royal Bank of Scotland plc, as agent (the “Agent”),
        and
        hereby gives you irrevocable notice pursuant to Section
        2.03(a)
        of the
        Credit Agreement that the undersigned hereby requests a Borrowing, and in
        connection with that request sets forth below the information relating to
        such
        Borrowing (the “Proposed
        Borrowing”)
        as
        required by Section
        2.03(a)
        of the
        Credit Agreement:

      

      
        	 	
                (a)

              	
                The
                  Business Day of the Proposed Borrowing is _____________,
                  _____.

              

      

      

      
        	 	
                (b)

              	
                The
                  aggregate amount of the Proposed Borrowing is
                  $____________.

              

      

      

      The
        Borrower hereby certifies that the following statements are true on the date
        hereof, and will be true on the date of the Proposed Borrowing:

      

      
        	 	
                (i)

              	
                the
                  representations and warranties contained in Article
                  IV
                  of
                  the Credit Agreement and each of the other Subordinated Loan Documents
                  are
                  true and correct in all material respects, on and as of the date
                  of the
                  Proposed Borrowing, before and after giving effect to such Proposed
                  Borrowing and to the application of the proceeds therefrom, as
                  though made
                  on the date of the Proposed Borrowing (unless such representations
                  and
                  warranties are stated to relate to a specific earlier date, in
                  which case
                  such representations and warranties shall be true and correct in
                  all
                  material respects as of such earlier
                  date);

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                 

              	
                (ii)

              	
                no
                  Default has occurred and is continuing, or would result from such
                  Proposed
                  Borrowing or from the application of the proceeds therefrom;
                  and

              

      

      

      
        	 	
                (iii)

              	
                after
                  giving effect to such Proposed Borrowing, the Borrower is in compliance
                  with Sections
                  6.18,
                  6.19
                  and 6.22
                  of
                  the Credit Agreement.

              

      

      

      
        	 	
                Very
                  truly yours,

              	 
	 	 	 	 	 
	 	 	 	 	 
	 	BRIGHAM
                OIL & GAS, L.P	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	BRIGHAM,
                Inc., its
                general partner	 
	 	 	 	
                /s/
                  Eugene B. Shepherd, Jr

              	 
	 	 	 	
                Executive
                  Vice President &

              	 
	 	 	 	
                Chief
                  Financial Officer

              	 

      

    

     

    2Exhibit 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.

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