10-K

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TABLE OF CONTENTS
INDEX TO FINANCIAL STATEMENTS

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2002
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 000-22433

Brigham Exploration Company
(Exact name of Registrant as Specified in its Charter)

Delaware (State or other jurisdiction of incorporation or organization)	75-2692967 (I.R.S. Employer Identification No.)
6300 Bridge Point Parkway, Building 2, Suite 500, Austin, Texas 78730 (Address of principal executive offices) (Zip Code)
(512) 427-3300 (Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class	Name of Each Exchange on Which Registered
None	None
Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.01 par value (Title of Class)

        Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

        Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

        Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12 b-2 of the Act). Yes o    No ý

        As of June 28, 2002, the registrant had 16,061,042 shares of voting common outstanding. The aggregate market value of the registrants outstanding shares of voting common stock held by non-affiliates, based on the closing price of these shares on June 28, 2002 of $4.25 per share as reported on The Nasdaq Stock Market^SM, was $34.2 million. Shares held by each executive officer and director and by each person who owns 10% or more of the outstanding common stock are considered affiliates. The determination of affiliate status is not necessarily a conclusive determination for other purposes.

        As of March 21, 2003, the registrant had 19,899,807 shares of voting common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

        Portions of the definitive proxy statement for the Registrant's 2003 Annual Meeting of Stockholders to be held on May 28, 2003, are incorporated by reference in Part III of this Form 10-K. Such definitive proxy statement will be filed with the Securities and Exchange Commission not later than 120 days subsequent to December 31, 2002.

TABLE OF CONTENTS

		Page
PART I
ITEM  1.	BUSINESS	1
ITEM  2.	PROPERTIES	9
ITEM  3.	LEGAL PROCEEDINGS	18
ITEM  4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS EXECUTIVE OFFICERS OF THE REGISTRANT	19
PART II
ITEM  5.	MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS	20
ITEM  6.	SELECTED FINANCIAL DATA	22
ITEM  7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	23
ITEM  7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	46
ITEM  8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	48
ITEM  9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	48
PART III
ITEM  10.	DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT	49
ITEM  11.	EXECUTIVE COMPENSATION	49
ITEM  12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	49
ITEM  13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	49
ITEM  14.	CONTROLS AND PROCEDURES	49
PART IV
ITEM  15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K	50
GLOSSARY OF OIL AND GAS TERMS		51
SIGNATURES		54
CERTIFICATIONS		55
INDEX TO FINANCIAL STATEMENTS		F-1

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BRIGHAM EXPLORATION COMPANY
2002 ANNUAL REPORT ON FORM 10-K

PART I

ITEM 1. BUSINESS

Overview

        We are an independent exploration, development and production company that utilizes 3-D seismic imaging and other advanced technologies to systematically explore for and develop domestic onshore oil and natural gas reserves. We focus our activity in provinces where we believe 3-D seismic technology can be used effectively to maximize our return on capital invested by reducing drilling risk and enhancing our ability to cost effectively grow reserves and production volumes. Our exploration and development activities are concentrated in the onshore Texas Gulf Coast, the Anadarko Basin of western Oklahoma and the Texas Panhandle, and West Texas. We believe that our focused approach of utilizing large scale 3-D seismic surveys and related technology in our core areas allows us to create and maintain a large inventory of high quality exploration and development prospects and provides us with the opportunity to enhance our exploration success and efficiently deploy our capital. The following is a brief summary of our assets at year-end 2002:

			For the Year Ended December 31, 2002			At December 31, 2002
												3D Seismic Data (Sq. Miles)
Province			Drilling CAPEX (Millions)		Production (MMcfe/d)	Proved Reserves (Bcfe)	SEC PV-10% (Millions)		% Gas	Net Wells	Net Acreage
	Texas Gulf Coast		$	13.3	14.7	65.3	$	181.3	84%	14.7	8,242	2,686
	Anadarko Basin			5.5	7.1	46.0		102.0	94%	27.2	32,713	2,197
	West Texas / Other			1.0	6.0	9.7		24.1	17%	26.6	9,608	3,971
		Total	$	19.8	27.8	121.0	$	307.4		68.5	50,563	8,854

Business Strategy

        Our business strategy is designed to create stockholder value by generating superior growth in reserves, production volumes and cash flow through the successful execution of high rate of return exploration and development drilling. Key elements of our business strategy include:

Focus on Core Areas.    We have accumulated an extensive inventory of 3-D seismic and geologic data and have developed a strong technical knowledge base in each of our core areas: the Vicksburg and Frio trends in the onshore Texas Gulf Coast, the Springer and Hunton trends in the Anadarko Basin, and the Horseshoe Atoll trend of West Texas. Since 1999, our drilling success in these core areas has resulted in five significant field discoveries and a resulting multi-year inventory of developmental drilling locations. We plan to focus a majority of our future capital expenditures in these core areas where we believe our accumulated data and knowledge base provide a substantial competitive advantage.

Internally Generate Inventory of High Quality Exploratory Prospects.    We utilize 3-D seismic and other advanced technologies, including computer-aided exploration ("CAEX"), to generate and maintain a large inventory of high quality exploratory prospects. Virtually all of these prospects are internally-generated by our highly-skilled staff of ten geophysicists and geologists. We believe that our five recent field discoveries and our ability to constantly achieve low all sources finding costs, which over the last three, five and seven years have averaged $1.31, $1.46 and $1.35 per Mcfe,

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respectively, reflect the quality and depth of our 3-D delineated prospect inventory, as well as the strength of our exploration staff to continue to generate such opportunities.

Enhance Returns through Operational Control.    Given that we originate the vast majority of our projects, we are generally able to retain operational control over all phases of our exploration and development activities. As of December 31, 2002, we operated approximately 61% of the PV-10% value of our proved developed producing reserves. Further, in 2002 we operated 75% of the wells we drilled, and expect to operate the majority of the wells planned for 2003. By operating, we can retain more control of the timing and selection of drilling projects, which enhances our ability to optimize our finding and development costs and maximizes our return on invested capital.

Capitalize on Exploration Successes Through Development of Recent Field Discoveries.    From 1990 to 1999, we grew our reserves and production volumes primarily through successful 3-D delineated exploration drilling. Due to our recent exploratory drilling success, and the resulting growth in our inventory of developmental drilling locations, over 60% of our drilling capital expenditures in 2002 were developmental. For 2003, we intend to allocate approximately 60% of our drilling expenditures to the development of our recent new field discoveries. Furthermore, we anticipate that these fields will continue to provide us with an ongoing, multi-year program of developmental drilling.

Accelerate Development of Prospect Inventory Through Increased Drilling Expenditures.    In order to capitalize on our deep inventory of exploration and developmental locations, we have a goal to increase our drilling expenditures in future periods. Consistent with this goal, in 2003 we have budgeted a 41% increase in drilling capital relative to drilling capital spent in 2002. We expect that the increased financial flexibility resulting from our recently completed private equity transaction, our recently completed new senior credit facility and our projected strong 2003 cash flow will enable us to significantly increase our developmental expenditures, while maintaining the pace of our exploration program.

Enhance Returns by Growing Production and Driving Down Unit Costs.    Over the last three years, we have grown our annual production volumes by a compound annual growth rate of 23%. Such growth has enabled us to reduce our discretionary cash costs from $2.63 per Mcfe to $1.96 in 2002. Combined with our improved realizations, our discretionary cash margins expanded over the same three-year period from 10% to 44% in 2002, providing our company with substantially enhanced return on capital. Given current and anticipated commodity prices, combined with our continued success in cost effectively growing reserves and production volumes, we believe we can further enhance our return on capital in 2003.

Core Exploration and Development Properties

        From our inception in 1990 through 1999, the vast majority of our drilling expenditures were allocated to exploration-oriented projects. Given our recent exploratory successes, we are benefiting from the allocation of a larger portion of our drilling expenditures toward the development of our recent discoveries.

        For the three-year period ended December 31, 2002, we completed 73 gross wells (26.4 net) in 84 attempts for a completion rate of 87% at an average drilling finding cost of $0.96 per Mcfe. In 2002, we completed 22 gross wells (7.1 net) in 24 attempts for a completion rate of 92%, adding approximately 20.6 Bcfe of proved reserves at an average drilling finding cost of $0.96 per Mcfe. Set forth below is a summary of our recent activity and expected future activity in our core areas.

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Texas Gulf Coast

        The onshore Texas Gulf Coast province is a high-potential, multi-pay region that is extremely well suited for 3-D seismic exploration due to its substantial structural and stratigraphic complexity. We believe our exploration approach and our staff's extensive experience in this area provides us with significant competitive advantages. At December 31, 2002, our proved reserves in our Texas Gulf Coast province were approximately 65.3 Bcfe, representing 54% of our total proved reserves. We had also accumulated approximately 2,686 square miles (1.7 million acres) of 3-D seismic data and approximately 20,339 gross leasehold acres in our Texas Gulf Coast province. Over the past three years we have completed 36 gross wells (11.8 net) in 40 attempts for a completion rate of 90% and have added an estimated 43.1 Bcfe in estimated proved reserves at an average drilling finding cost of $0.98 per Mcfe.

        During 2002, we completed 10 gross wells (2.9 net) in 10 attempts for a completion rate of 100%. We operated six of the 10 wells that we drilled in the onshore Gulf Coast in 2002. Four of the wells we drilled were exploratory and six were developmental. Our development drilling was focused on the Home Run and Providence Fields. In addition, we made a new field discovery adjacent to our Home Run and Triple Crown Fields with the successful completion of our Floyd Fault Block discovery well.

        For 2003, we intend to focus our drilling activity in this province on the development of our Home Run, Triple Crown and Floyd Fault Block field discoveries in the Vicksburg, the testing of high reserve potential fault blocks adjacent to these fields, the development of our Providence Field in the Frio and the continued drilling of our 3-D delineated exploration inventory in the Frio trend. We expect to spend approximately $17.7 million to drill 17 wells in the onshore Gulf Coast. Approximately 53% percent of these capital expenditures are budgeted for development drilling, with the remainder allocated towards exploration drilling.

Anadarko Basin

        The Anadarko Basin is a prolific natural gas province that we believe offers a combination of lower risk exploration and development opportunities in shallower horizons, as well as higher potential opportunities in the deeper section. At December 31, 2002, our proved reserves in the Anadarko Basin were 46.0 Bcfe, representing 38% of our total proved reserves. We had also accumulated approximately 2,197 square miles (1.4 million acres) of 3-D seismic data and approximately 70,130 gross leasehold acres in the Anadarko Basin. Over the past three years we have completed 26 gross wells (8.8 net) in 31 attempts for a completion rate of 84% and have added an estimated 19.2 Bcfe in proved reserves at an average drilling finding cost of $0.96 per Mcfe.

        During 2002, we completed five gross wells (1.8 net) in seven attempts for a completion rate of 71%. We operated six of the seven wells that we drilled in the Anadarko Basin in 2002. Two of the wells we drilled were exploratory and five were developmental.

        For 2003, we intend to continue to focus our drilling activity in this province on our 3-D delineated exploration and development inventory in the Springer and Hunton trends. We expect to spend approximately $7.6 million to drill 17 wells. Approximately 76% percent of these capital expenditures are budgeted for development drilling, with the remainder allocated towards exploration drilling.

West Texas

        In West Texas, we have explored various carbonate reservoirs, including the Canyon Reef and Fusselman formation of the Horseshoe Atoll trend, the Canyon Reef of the Eastern Shelf, and the Mississippian Reef of the Hardeman Basin. At December 31, 2002, our proved reserves in this area were 9.7 Bcfe, representing approximately 8% of our total proved reserves. We had also accumulated

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approximately 3,695 square miles (2.4 million acres) of 3-D seismic data and approximately 16,820 gross leasehold acres in our West Texas core province. Over the past three years we have completed 11 gross wells (5.8 net) in 13 attempts for a completion rate of 85% and have added an estimated 6.1 Bcfe in proved reserves at an average drilling finding cost of $0.78 per Mcfe.

        During 2002 we completed seven gross wells (2.4 net) in seven attempts for a completion rate of 100%. We operated six of the seven wells that we drilled in West Texas in 2002. Six of the wells we drilled were exploratory and one was developmental.

        For 2003, we intend to continue to focus our drilling activities on our 3-D delineated exploration inventory in the Canyon Reef and Fusselman formations of the Horseshoe Atoll trend. We expect to spend approximately $2.6 million to drill seven wells. Approximately 48% of these capital expenditures are budgeted for development drilling, with the remainder allocated towards exploration drilling.

3-D Seismic Exploration

        We have accumulated 3-D seismic data covering approximately 8,854 square miles (5.7 million acres) in over 28 geologic plays in seven basins and seven states. We typically acquire 3-D seismic data in and around existing producing fields where we can benefit from the imaging of producing analog wells. These 3-D defined analogs, combined with our experience in drilling over 550 wells in our 3-D project areas, provide us with a knowledge base to evaluate other potential geologic trends, 3-D seismic projects within these trends and prospective 3-D delineated drilling locations. Through our experience in the early and mid 1990's, we developed an expertise in the selection of geologic trends that are best suited for 3-D seismic exploration. As a result, in 1997 and 1998 we invested approximately $64 million in 3-D seismic and land in plays that we believed were providing optimal 3-D delineated drilling economics. We have used the experience that we have gained within our core trends to enhance the quality of subsequent projects in the same trend and other analogous trends, to lower finding and development costs, to compress project cycle times and to enhance our return on capital.

        Over the last twelve years we have accumulated substantial experience exploring with 3-D seismic in a wide range of reservoir types and geologic trapping mechanisms. In addition, we typically acquire digital data bases for integration on our CAEX workstations, including digital land grids, well information, log curves, production information, geologic studies, geologic top data bases and existing 2-D seismic data. We use our knowledge base, local geological expertise and digital data bases integrated with 3-D seismic data to create maps of producing and potentially productive reservoirs. As such, we believe our 3-D generated maps are more accurate than previous reservoir maps (which generally are based on subsurface geological information and 2-D seismic surveys), enabling us to more precisely evaluate recoverable reserves and the economic feasibility of projects and drilling locations.

        We have acquired most of our raw 3-D seismic data using seismic acquisition vendors on either a proprietary basis or through alliances affording the alliance members the exclusive right to interpret and use data for extended periods of time. In addition, we have participated in non-proprietary group shoots of 3-D seismic data (commonly referred to as "spec data") when we believe the expected full cycle project economics are justified, and we have exchanged certain interests in some of our non-core proprietary seismic data to gain access to additional 3-D seismic data. In most of our proprietary 3-D data acquisitions and alliances, we have selected the sites of projects, primarily guided by our knowledge and experience in the core provinces we explore; established and monitored the seismic parameters of each project for which data was shot; and typically selected the equipment that was used.

        Combining our geologic and geophysical expertise with a sophisticated land effort, we manage the majority of our projects from conception through 3-D acquisition, processing and interpretation and leasing. In addition, we manage the negotiation and drafting of most of our geophysical exploration agreements, resulting in reduced contract risk and more consistent deal terms. Because we generate most of our projects, we can often control the size of the working interest that we retain as well as the

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selection of the operator and the non-operating participants. Consistent with our business strategy, we have increased the working interest we retain in our projects, based upon capital availability and perceived risk. Our average working interest in our 3-D seismic projects acquired during 1996, 1997 and 1998 was 37%, 67% and 80%, respectively. The 3-D seismic we acquired during 1999, 2000, 2001 and 2002 was primarily through the exchange of certain rights in some of our non-core 3-D seismic projects. Most of these exchanges did not include an industry participant, therefore we retained potentially all interest in any prospects generated from the newly acquired 3-D seismic data. In early 2003, we acquired approximately 84 square miles of new proprietary 3-D seismic data in our General Patton Project located in the Frio Trend of the Upper Texas Gulf Coast. We sold a working interest in this project to an industry participant on a promoted basis and thus retained a 50% working interest in the project.

Exploration and Development Staff

        Our experienced exploration staff includes five geophysicists, five geologists, two computer applications specialists and two geophysical/geological/engineering technicians. Our geophysicists have different but complementary backgrounds, and their diversity of experience in varied geological and geophysical settings, combined with various technical specializations (from hardware and systems to software and seismic data processing), provides us with valuable technical intellectual resources. Our exploration staff of ten geophysicists and geologists has an average of more than 20 years of experience per person, most of which was acquired at both our company and various major and large independent oil companies. Our team was assembled according to the expertise that these individuals have within producing basins where we focus our exploration and development activities. By integrating both geologic and geophysical expertise within our project teams, we believe we possess a competitive advantage in our exploration approach. Occasionally, we will complement and leverage our exploration staff by seeking out alliances or retainer relationships with geologists and other technical professionals who have extensive experience in a particular area of interest.

        Our land department staff includes four landmen and three lease and division order analysts.

Operations and Operations Staff

        In an effort to retain better control of our project timing, drilling and operational costs and production volumes, we have significantly increased the percentage of the wells that we operate in the past several years. We operated 75% of the wells that we drilled during 2002, as compared with 10% of the wells we drilled during 1996. As a result of our increased operational control in recent years, wells operated by us constituted 61% of the PV-10% value of our proved developed producing reserves at year-end 2002, as compared to only 8% at year-end 1996.

        Our operations staff includes five engineers that have drilling, reservoir, environmental and operations engineering experience primarily within our three core provinces. These engineers work closely with our explorationists and are integrally involved in all phases of the exploration and development process, including preparation of pre- and post-drill reserve estimates, well design, production management and analysis of full cycle risked drilling economics. We conduct field operations for our operated oil and natural gas properties through our field production superintendent and third party contract personnel.

Oil and Natural Gas Marketing and Major Customers

        Most of our oil and natural gas production is sold under price sensitive or spot market contracts. The revenues generated by our operations are highly dependent upon the prices of and demand for oil and natural gas. The price we receive for our oil and natural gas production depends upon numerous factors beyond our control, including seasonality, weather, competition, the condition of the United

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States economy, foreign imports, political conditions in other oil-producing and natural gas-producing countries, the actions of the Organization of Petroleum Exporting Countries, and domestic government regulation, legislation and policies. Decreases in the prices of oil and natural gas could have an adverse effect on the carrying value of our proved reserves and our revenues, profitability and cash flow. Although we are not currently experiencing any significant involuntary curtailment of our oil or natural gas production, market, economic and regulatory factors may in the future materially affect our ability to sell our oil or natural gas production. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Factors—Volatility Of Oil And Gas Markets Affect Us; Oil And Natural Gas Prices Are Volatile" and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Factors—The Marketability Of Our Production Is Dependent On Facilities The Typically Do Not Own". For the year ended December 31, 2001, sales to Highland Energy Company and Lantern Petroleum Corporation represented approximately 60% of our oil revenue and 58% of our natural gas revenue. In 2002, in an effort to achieve better price realizations from the sale of our oil and natural gas, we decided to bring our commodities marketing activities in-house, enabling us to market and sell our oil and natural gas to a broader universe of potential purchasers. As a consequence, on March 1, 2002, we ended our oil purchase agreement with Lantern Petroleum and on July 1, 2002, we ended a similar gas sales and purchase arrangement with Highland Energy Company. Due to the availability of other markets and pipeline connections, we do not believe that the loss of any single oil or natural gas customer would have a material adverse effect on our results of operations.

Competition

        The oil and gas industry is highly competitive in all of its phases. We encounter competition from other oil and gas companies in all areas of our operations, including the acquisition of seismic and leasing options and oil and natural gas leases on properties to exploration and development of those properties. Our competitors include major integrated oil and natural gas companies and numerous independent oil and natural gas companies, individuals and drilling and income programs. Many of our competitors are large, well established companies with substantially larger operating staffs and greater capital resources than us. Such companies may be able to pay more for seismic and lease options on oil and natural gas properties and exploratory prospects and to define, evaluate, bid for and purchase a greater number of properties and prospects than our financial or human resources permit. Our ability to acquire additional properties and to discover reserves in the future will be dependent upon our ability to evaluate and select suitable properties and to consummate transactions in a highly competitive environment. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" "Risk Factors—We Face Significant Competition" and "Risk Factors—We Have Substantial Capital Requirements".

Operating Hazards and Uninsured Risks

        Drilling activities are subject to many risks, including the risk that no commercially productive reservoirs will be encountered. There can be no assurance that new wells we drill will be productive or that we will recover all or any portion of our investment. Drilling for oil and natural gas may involve unprofitable efforts, not only from dry wells, but also from wells that are productive but do not produce sufficient net revenues to return a profit after drilling, operating and other costs. The cost and timing of drilling, completing and operating wells is often uncertain. Our drilling operations may be curtailed, delayed or canceled as a result of numerous factors, many of which are beyond our control, including title problems, weather conditions, delays by project participants, compliance with governmental requirements and shortages or delays in the delivery of equipment and services. Our future drilling activities may not be successful and, if unsuccessful, such failure may have a material adverse effect on our business, financial condition or results of operations. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Factors—Exploratory

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Drilling Is A Speculative Activity Involving Numerous Risks And Uncertain Costs; We Are Dependent On Exploratory Drilling Activities". In addition, use of 3-D seismic technology requires greater pre-drilling expenditures than traditional drilling strategies. Although we believe that our use of 3-D seismic technology will increase the probability of drilling success, some unsuccessful wells are likely, and there can be no assurance that unsuccessful drilling efforts will not have a material adverse effect on our business, financial condition or results of operations.

        Our operations are subject to hazards and risks inherent in drilling for and producing and transporting oil and natural gas, such as fires, natural disasters, explosions, encountering formations with abnormal pressures, blowouts, cratering, pipeline ruptures and spills, any of which can result in the loss of hydrocarbons, environmental pollution, personal injury claims and other damage to our properties and others. We maintain insurance against some but not all of the risks described above. In particular, the insurance we maintain does not cover claims relating to failure of title to oil and natural gas leases, trespass during 3-D survey acquisition or surface change attributable to seismic operations, business interruption or loss of revenues due to well failure. Furthermore, in certain circumstances in which insurance is available, we may not purchase it. The occurrence of an event that is not covered, or not fully covered, by insurance could have a material adverse effect on our business, financial condition and results of operations. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Factors—We Are Subject To Various Casualty Risks" and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Factors—We May Not Have Enough Insurance To Cover Some Operating Risks".

Employees

        On March 21, 2003, we had 52 full-time employees. None is represented by any labor union and we believe relations with our employees are good.

Facilities

        Our principal executive offices are located in Austin, Texas, where we lease approximately 34,330 square feet of office space at 6300 Bridge Point Parkway, Building 2, Suite 500, Austin, Texas 78730.

Title to Properties

        We believe we have satisfactory title, in all material respects, to substantially all of our producing properties in accordance with standards generally accepted in the oil and gas industry. Our properties are subject to royalty interests, standard liens incident to operating agreements, liens for current taxes and other inchoate burdens, which we believe, do not materially interfere with the use of or affect the value of such properties. Our senior credit facility and subordinated notes are secured by first and second liens, respectively, against substantially all of our oil and natural gas properties and other tangible assets. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Senior Credit Facility" and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Senior Subordinated Notes".

Governmental Regulation

        Our oil and natural gas exploration, production and marketing activities are subject to extensive laws, rules and regulations promulgated by federal and state legislatures and agencies. Failure to comply with such laws, rules and regulations can result in substantial penalties. The legislative and regulatory burden on the oil and gas industry increases our cost of doing business and affects our profitability. Although we believe we are in substantial compliance with all applicable laws and

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regulations, we are unable to predict the future cost or impact of complying with such laws and regulations because they are frequently amended, interpreted and reinterpreted.

        The State of Texas and many other states require permits for drilling operations, drilling bonds and reports concerning operations and impose other requirements relating to the exploration and production of oil and natural gas. These states also have statutes or regulations addressing conservation matters, including provisions for the unitization or pooling of oil and natural gas properties, the establishment of maximum rates of production from wells and the regulation of spacing, plugging and abandonment of such wells.

Environmental Matters

        Our operations and properties are, like the oil and gas industry in general, subject to extensive and changing federal, state and local laws and regulations relating to environmental protection, including the generation, storage, handling, emission, transportation and discharge of materials into the environment, and relating to safety and health. The recent trend in environmental legislation and regulation generally is toward stricter standards, and this trend will likely continue. These laws and regulations may require the acquisition of a permit or other authorization before construction or drilling commences and for certain other activities; limit or prohibit seismic acquisition, construction, drilling and other activities on certain lands lying within wilderness and other protected areas; and impose substantial liabilities for pollution resulting from our operations. The permits required for many of our operations are subject to revocation, modification and renewal by issuing authorities. Governmental authorities have the power to enforce compliance with their regulations, and violations are subject to fines or injunction, or both. In the opinion of management, we are in substantial compliance with current applicable environmental laws and regulations, and we have no material commitments for capital expenditures to comply with existing environmental requirements. Nevertheless, changes in existing environmental laws and regulations or in interpretations thereof could have a significant impact on us, as well as the oil and gas industry in general. The Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") and comparable state statutes impose strict and arguably joint and several liability on owners and operators of certain sites and on persons who disposed of or arranged for the disposal of "hazardous substances" found at such sites. It is not uncommon for the neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by the hazardous substances released into the environment. The Resource Conservation and Recovery Act ("RCRA") and comparable state statutes govern the disposal of "solid waste" and "hazardous waste" and authorize imposition of substantial fines and penalties for noncompliance. Although CERCLA currently excludes petroleum from its definition of "hazardous substance," state laws affecting our operations impose clean-up liability relating to petroleum and petroleum related products. In addition, although RCRA classifies certain oil field wastes as "non-hazardous," such exploration and production wastes could be reclassified as hazardous wastes thereby making such wastes subject to more stringent handling and disposal requirements.

        Federal regulations require certain owners or operators of facilities that store or otherwise handle oil, such as us, to prepare and implement spill prevention, control countermeasure and response plans relating to the possible discharge of oil into surface waters. The Oil Pollution Act of 1990 ("OPA") contains numerous requirements relating to the prevention of and response to oil spills into waters of the United States. For onshore and offshore facilities that may affect waters of the United States, the OPA requires an operator to demonstrate financial responsibility. Regulations are currently being developed under federal and state laws concerning oil pollution prevention and other matters that may impose additional regulatory burdens on us. In addition, the Clean Water Act and analogous state laws require permits to be obtained to authorize discharge into surface waters or to construct facilities in wetland areas. The Clean Air Act of 1970 and its subsequent amendments in 1990 and 1997 also

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impose permit requirements and necessitate certain restrictions on point source emissions of volatile organic carbons (nitrogen oxides "NOX" and sulfur dioxide "SO₂") and particulates with respect to certain of our operations, we are required to maintain such permits or meet general permit requirements. The Environmental Protection Agency ("EPA") and designated state agencies have in place regulations concerning discharges of storm water runoff and stationary sources of air emissions. These programs require covered facilities to obtain individual permits, participate in a group or seek coverage under an EPA general permit. Most agencies recognize the unique qualities of oil and gas exploration and production operations. Both the EPA and Texas Commission on Environmental Quality ("TCEQ") have adopted regulatory guidance in consideration of the operational limitations on these types of facilities and their potential to emit air pollutants. We believe that we will be able to obtain, or be included under, such permits, where necessary, and to make minor modifications to existing facilities and operations that would not have a material effect on us.

ITEM 2. PROPERTIES

        Our exploration and development activities are focused primarily in the onshore Texas Gulf Coast, the Anadarko Basin of northwest Oklahoma and the Texas Panhandle and West Texas. We focus our activity in provinces where we believe 3-D seismic technology can be used effectively to maximize our return on capital invested by reducing drilling risk and enhancing our ability to cost effectively grow reserves and production volumes.

Texas Gulf Coast

        The onshore Texas Gulf Coast region is a high potential, multi-pay province that lends itself to 3-D seismic exploration due to its substantial structural and stratigraphic complexity. We believe our established 3-D seismic exploration approach and our exploration staff's extensive experience in the Texas Gulf Coast provide us with significant competitive advantages. We have assembled a digital database including geographical, production, geophysical and geological information of the Texas Gulf Coast that our staff evaluates on CAEX workstations. The majority of our Texas Gulf Coast activity is currently concentrated in the Vicksburg and Frio trends, where we completed eight wells in eight attempts in 2002.

Vicksburg Trend

        Our 3-D seismic inventory in the Vicksburg trend consists of approximately 179 square miles of 3-D seismic data (114,560 acres) located primarily in Brooks County in south Texas. The primary exploration targets within this area are structural features at depths ranging from 9,000 to 14,000 feet.

        Since late 1999, we have completed 13 wells in 13 attempts in the Vicksburg play in South Texas at a proved developed drilling finding cost of $1.55 per Mcfe. However, early in our Vicksburg drilling program we experienced operational problems, primarily due to poor cement jobs. A few years ago we modified our drilling and completion techniques and have had excellent results ever since. Excluding three of the early wells with the poor cement jobs, our average drilling finding cost for proved developed reserves for the other ten wells we have drilled in this play has been approximately $1.34 Mcfe. For 2003, we have budgeted approximately $9.2 million to drill approximately four developmental wells and three exploratory wells in this area.

        Since 1999, our exploration efforts in this trend have been focused in our Diablo Project. During 2002, we added to our exploration success in the Diablo project with our Floyd Fault Block discovery. Including this discovery, the Diablo project has provided three significant Vicksburg field discoveries. In 1999, we discovered the Home Run Field and in 2001 we discovered the Triple Crown Field. We own, along with a major integrated oil company participant, 10,000 gross and net acres of leasehold in the Diablo Project, and we acquired a 54 square mile proprietary 3-D program over the area in 1997 and

9

1998. We retain a 34% working interest in the project, but have increased our pre-payout working interest to 50% in select acreage that was subsequently drilled as our Triple Crown Field discovery.

        Floyd Fault Block Vicksburg Discovery.    We drilled our Floyd Fault Block discovery, the Sullivan #8, in December 2002. We retained a 34% working and 25% revenue interest in the Sullivan #8, which proves up reserves in one of several fault blocks adjacent to our Home Run and Triple Crown Fields. The Sullivan #8 encountered approximately 172 feet of apparent net pay in several Lower Vicksburg pay intervals at depths between 12,900 and 13,650 feet. The quantity of pay encountered is approximately triple that encountered in our typical Home Run Field Vicksburg wells.

        The Sullivan #8, began producing to sales in March 2003 at a rate of approximately 9.2 MMcf of natural gas and 580 barrels of condensate per day (12.7 MMcfed), or approximately 3.2 MMcfed net to our 25% revenue interest, with a flowing tubing pressure of approximately 8,900 psi. This flowing tubing pressure is approximately 4,000 psi higher than our typical Home Run Field Vicksburg wells at comparable production rates, indicating the higher deliverability of the Floyd Fault Block reservoirs. The current production rate is limited by the production facilities, and we expect the operator of the well to expand the facilities in order to produce the well at higher rates. We estimate that the Floyd Fault Block will require up to nine additional wells for full development, four of which are proved undeveloped. We expect to spud our first development well in the second quarter of 2003 and could drill up to three additional wells in 2003.

        Home Run Field & Triple Crown Vicksburg Field.    We discovered the Home Run Field in late 1999 and the Triple Crown Field in 2001. To date, we have drilled and completed 12 consecutive wells in these fields. During 2002, we drilled and completed three wells in the Home Run Field. These wells include:

•

The Palmer #5R, which began producing to sales in September 2002 at a rate of approximately 9.0 MMcf of natural gas and 520 barrels of condensate per day (12.1 MMcfed), or approximately 3.2 MMcfed net to Brigham's 26% revenue interest.



•

The Palmer #3ST began producing to sales in October 2002, at a rate of 5.6 MMcf of natural gas and 240 barrels of condensate per day (7.0 MMcfed), or 2.0 MMcfed net to Brigham's 29% revenue interest.



•

The Palmer State #6 began producing to sales in March 2003, at a rate of 12.2 MMcf of natural gas and 550 barrels of condensate per day (15.5 MMcfed), or 4.5 MMcfed net to Brigham's 29% revenue interest.

        We believe the fields could require up to 35 additional wells for full development.

        Adjacent Fault Blocks to Home Run and Triple Crown.    We also anticipate testing at least one of the other adjacent fault blocks during 2003. One of these fault blocks is adjacent to our Floyd Fault Block discovery, and we believe that a portion of this fault block is juxtaposed to pay intervals found in the Sullivan #8. This fault block, and other adjacent fault blocks, provide up to 15 additional locations. We believe that all of the adjacent fault blocks are located structurally high to the adjacent Triple Crown Field, and structurally low to the adjacent Home Run Field, providing us with significant probable and possible reserve potential.

Frio Trend

        In the Frio trend of the Upper Texas Gulf Coast, we have accumulated an inventory of over 1,172 square miles of predominantly non-proprietary 3-D seismic data (696,320 acres) located primarily in Matagorda and Brazoria Counties in south Texas. In early 2003, we added to our 3-D seismic inventory when we acquired 84 square miles of proprietary seismic data within our General Patton project in the Frio trend. We sold a 50% working interest in the General Patton project to a participant on a

10

promoted basis while retaining operations, and as a result we paid 33.3% of the seismic and pre-seismic land costs for a 50% working interest in the project. We are targeting both the shallow non-pressured and the deeper pressured Frio sands, analogous to our recent high rate discoveries in the trend. Our completions in this play are typically providing quick payouts of drilling and completion costs, and attractive rates of return on our drilling capital investments.

        Since late 2000, we have completed 10 Frio tests in 11 attempts, at an estimated average drilling finding cost for proved developed reserves of $0.89 per Mcfe. For 2003, we expect to spend approximately $6.3 million to drill approximately two developmental wells and five exploratory wells in this area.

        Providence Frio Field.    We discovered the Providence Field during the fourth quarter of 2001, when we drilled and completed the Staubach #1 well. Including the Staubach #1 discovery well in 2001, we have now successfully completed four wells in the Providence Field. These wells include:

•

The Staubach #1 (41% initial working interest) began producing to sales in February 2002 at a rate of 2,000 barrels of oil per day and 5.0 MMcf of natural gas per day (17.0 MMcfed), or approximately 5.4 Mmcfed to our initial 32% net revenue interest. The Staubach #1 paid out its drilling and completion costs in approximately three months. Upon payout, our net revenue interest in the Staubach #1 reverted to 27%.



•

The Burkhart #1R (41% initial working interest), the relief well for the Burkart #1, was completed in July 2002 and began producing to sales at a rate of 1,700 barrels of oil per day and 10.0 MMcf of natural gas per day (20.2 Mcfed), or 6.3 MMcfed net to our initial 31% revenue interest. The Burkhart #1R paid out its drilling and completion costs in approximately three months, at which time our net revenue interest reverted to 22%.



•

The Huebner #1 (34% working interest) was completed in November 2002 and began producing to sales at a rate of 2,230 barrels of oil per day and 6.1 MMcf of natural gas per day (19.5 MMcfed), or 4.9 MMcfed net to our 25% revenue interest. The Huebner #1 paid out its drilling and completion costs in approximately three months. The Huebner #1 is not subject to any reversionary interests.



•

The Matthes-Huebner #1 (initial 43% working interest) was completed in December 2002 and began producing to sales in January 2003 at a rate of 2,518 barrels of oil per day and 7.7 MMcf of natural gas per day (22.8 MMcfed), or 7.3 MMcfed net to our 32% revenue interest. The Matthes-Huebner #1 well found two prolific pay intervals unlike the one pay interval found in each of the three previously drilled wells, and its initial rate is the highest of the Providence Field wells completed to date. We estimate the well paid out its drilling and completion costs in less than two months, and upon payout our net revenue interest reverted to 28%.

        We are currently drilling the Huebner #3, our fifth Providence Field well, with a 40% working interest. The Huebner #3 is not subject to any reversionary interests. This well, like the recently completed Matthes-Huebner #1, has two potential pay intervals and we expect results in the second quarter 2003.

        Most of our production from the Providence Field in 2002 came from the first two wells drilled, the Staubach #1 and the Burkhart #1R. Gross production from the Providence Field averaged approximately 22 MMcfed during 2002. With the addition of the Huebner #1, average daily production from the Providence Field during the fourth quarter 2002 was approximately 38 MMcfed. In March 2003, we had four Providence Field wells on line producing approximately 50 MMcfed, or 13 MMcfed net to our revenue interest.

        Other Frio.    As part of our ongoing Frio exploration program, in October 2002 we completed the Carr #1, a Frio bright spot exploration discovery in Brazoria County. We operated and retained a 37%

11

working interest in the well, which began producing to sales in early December 2002 at an initial rate of approximately 1.8 MMcf of natural gas per day and 50 barrels of oil per day (2.1 MMcfed), or approximately 0.6 MMcfed net to our 29% revenue interest.

        In addition to our ongoing drilling program in the Frio, we continue to generate additional drilling inventory from our data base of more than 1,170 square miles of 3-D seismic date in the trend. Of this data, we are currently processing the 84 square miles of new proprietary 3-D seismic data that is our General Patton project. We acquired this data along the same trend that has provided most of our recent Frio discoveries, including the prolific Providence Field. We operate and retain a 50% working interest in this new project and have a strong land position of over 14,000 acres. Our staff began interpreting the data and defining drilling prospects during the first quarter of 2003, and we hope to commence our drilling program here during the second half of 2003. The company is assembling additional 3-D projects targeting the highly prolific Frio objective.

Dinn Ranch Wilcox Field

        The Dinn Ranch Field was reportedly producing over 100 MMcf of natural gas per day in early 2003. We have participated in two wells in the field thus far. The first well, the Lopez #1, has experienced operational difficulties and its completion has been delayed. The second well, the Lopez #3, was producing to sales in February 2003 at a rate of approximately 16.5 MMcf of natural gas per day. We retain an overriding royalty interest in the Lopez #1 and the Lopez #3 that converts into a 12.5% working interest at 100% payout of drilling and completion costs, and a 25% working interest after 200% payout. At current production rates and commodity prices, we could convert to a 12.5% and possibly a 25% working interest in the Lopez #3 by year-end 2003. We expect a third well to spud in 2003, in which we expect to retain a 25% ground floor working interest.

Anadarko Basin

        The Anadarko Basin is located in northwest Oklahoma and the Texas Panhandle. We believe this prolific natural gas province offers a combination of lower risk exploration and development opportunities in shallower horizons and deeper higher potential objectives that have been relatively under explored. The stratigraphic and structural objectives in the Anadarko Basin can provide excellent targets for 3-D seismic imaging. In addition, drilling economics in the Anadarko Basin are enhanced by the multi-pay nature of many of these prospects, with secondary or tertiary targets serving as either incremental value or as alternatives in the event the primary target zone is not productive. Our activity is currently focused in the Springer Channel and Hunton trends, where we completed four wells in six attempts in 2002.

Springer Trend

        Our 3-D inventory in the Springer trend consists of approximately 630 square miles (403,200 acres) of 3-D seismic data covering portions of Dewey, Blaine, Canadian and Caddo Counties, Oklahoma. Our activities in this area target buried sand channels at depths of 9,000 to 12,000 feet, as well as other secondary objectives. We began our operations in the Springer trend in 1991 and our interpretation and prospect generation efforts are still underway.

        Since 2000, we have completed nine Springer wells in 13 attempts, at an estimated average drilling finding cost for proved developed reserves of $1.03 per Mcfe. Approximately 50% of these completions perform at a very high level, and as a result our overall program has provided extremely strong rates of return. Recently we entered into a joint venture that encompasses approximately 14,000 gross acres, greatly expanding our acreage position in this competitive trend. We have budgeted approximately $4.1 million to drill six developmental wells and six exploratory wells in this area in 2003.

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Hunton Trend

        Our 3-D seismic inventory in the Hunton trend consists of approximately 763 square miles (488,320 acres) of 3-D seismic data covering portions of Wheeler, Hemphill and Roberts Counties, Texas and Beckham County, Oklahoma. The primary exploration targets within this area are high potential, structural features at depths ranging from 7,500 to 25,000 feet. The trend has historically provided longer life reserves relative to our typical Texas Gulf Coast wells, but with the same type of prolific recoveries.

        Since late 2000, we have completed two wells in the Hunton trend in two attempts. In late 2000, we drilled the discovery well for our Mills Ranch Field, the Mills Ranch #1, and in 2002 the first development well, the Mills Ranch #2, at an average estimated proved developed drilling finding cost of $0.58 per Mcfe. We have budgeted approximately $2.8 million to drill four developmental wells during 2003.

        Mills Ranch Field.    In July 2000, we spud the Mills Ranch #1, which was drilled directionally to a total depth of over 25,000 feet. We operated and retained a 64% working interest in the well, which encountered approximately 1,200 feet of gross pay and 340 feet of measured depth net pay (240 feet of calculated true vertical net pay) in three Hunton intervals. The Mills Ranch #1 began producing from one of the Hunton pay intervals in January 2001 at approximately 9.5 MMcf of natural gas and 90 barrels of condensate per day. The discovery well paid out its drilling and completion costs during its first year of production, and at year-end 2002 had produced 3.2 Bcfe and was producing approximately 3.2 MMcfed.

        In the third quarter 2002, we began drilling the first offset to this discovery, the Mills Ranch #2. We retained a 64% working interest in the Mills Ranch #2, which encountered the basal Hunton porosity zone approximately 400 feet high to the comparable zone in the discovery well. After running production casing to a depth of approximately 23,900 feet, we perforated and stimulated the lower Hunton intervals. The well began producing at an initial rate of approximately 6.7 MMcf of natural gas per day with associated condensate. The upper intervals were then stimulated and commingled into the producing stream. The recent production rate was approximately 1.8 MMcfed, or approximately 0.9 MMcfed net to our 50% revenue interest. Given what we have learned about the remaining reserve potential of the field, we plan to drill at least one additional development well in the Mills Ranch Field in 2003. We expect to operate and retain a 64% working interest in this well.

West Texas

        Our drilling activity in our West Texas province has been focused primarily in various carbonate and predominantly oil reservoirs, including the Canyon Reef and Fusselman formation of the Horseshoe Atoll trend, the Canyon Reef of the Eastern Shelf, and the Mississippian Reef of the Hardeman Basin, at depths ranging from 7,000 to 13,000 feet. We are currently focused on the Canyon Reef and Fusselman formations in the Horseshoe Atoll trend, where we completed seven wells in seven attempts in 2002.

Horseshoe Atoll Trend

        We have an inventory of approximately 778 square miles (497,920 acres) of 3-D seismic data primarily covering portions of Scurry, Howard, Dawson and Borden Counties in the Horseshoe Atoll trend, where we have accumulated substantial experience exploring with 3-D seismic over the last twelve years. In 2002, and in prior years, we frequently sold working interests in our West Texas drilling prospects to industry participants on a promoted basis, which has reduced our drilling risk while also contributing to lower finding costs and higher rates of return.

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        Since 2000, we have completed eight wells in eight attempts in the trend at an estimated average drilling finding cost for proved developed reserves of $0.52 per Mcfe. For 2003, we have budgeted approximately $2.6 million to drill two developmental wells and five exploratory wells.

        Our most significant completions in West Texas during 2002 were in the Fusselman formation in the Horseshoe Atoll trend. In May 2002 we completed the Casa Grande 2 #1 as the discovery well for the Conner Shea Fusselman Field in West Texas. We operated the Casa Grande 2 #1 with a 50% working interest, which began producing approximately 230 barrels of oil per day, or approximately 0.6 MMcfed net to our 43% revenue interest. In February 2003, we completed another well in the Conner Shea Fusselman Field, the Brigham operated Casa Grande 12 #1. The Casa Grande 12 #1 began producing at approximately 100 barrels of oil per day, or approximately 0.2 MMcfed net to our 41% revenue interest.

Oil and Natural Gas Reserves

        Our estimated total net proved reserves of oil and natural gas as of December 31, 2002, 2001 and 2000 and the present values attributable to these reserves as of those dates were as follows:

		As of December 31,
		2002		2001		2000
Estimated net proved reserves:
	Natural gas (MMcf)		99,428		88,594		78,167
	Oil (MBbls)		3,607		3,748		2,870
	Natural gas equivalent (MMcfe)		121,070		111,081		95,388
Proved developed reserves as a percentage of proved reserves			46%		49%		52%
Present value of future net revenues (in thousands)		$	307,374	$	146,807	$	497,666
Standardized measure (in thousands)		$	239,698	$	120,924	$	359,228
Base price used to calculate reserves (1):
	Natural gas ($ per Mcf)	$	4.74	$	2.57	$	10.42
	Oil ($ per Bbl)	$	31.25	$	19.84	$	26.83

(1)

These base prices were adjusted to reflect applicable transportation and quality differentials on a well-by-well basis to arrive at realized sales prices used to estimate our reserves at these dates.

        The reserve estimates reflected above were prepared by Cawley, Gillespie & Associates, Inc., our independent petroleum consultants, and are part of reports on our oil and natural gas properties prepared by Cawley Gillespie.

        In accordance with applicable requirements of the SEC, estimates of our net proved reserves and future net revenues are made using sales prices estimated to be in effect as of the date of such reserve estimates and are held constant throughout the life of the properties (except to the extent a contract specifically provides for escalation). Estimated quantities of net proved reserves and future net revenues therefrom are affected by oil and natural gas prices, which have fluctuated widely in recent years. There are numerous uncertainties inherent in estimating oil and natural gas reserves and their estimated values, including many factors beyond our control. The reserve data set forth in this Form 10-K represent only estimates. Reservoir engineering is a subjective process of estimating underground accumulations of oil and natural gas that cannot be measured in an exact manner. The accuracy of any reserve estimate is a function of the quality of available data and of engineering and geologic interpretation and judgment. As a result, estimates of different engineers, including those used by us, may vary. In addition, estimates of reserves are subject to revision based upon actual production, results of future development and exploration activities, prevailing oil and natural gas prices, operating

14

costs and other factors. The revisions may be material. Accordingly, reserve estimates are often different from the quantities of oil and natural gas that are ultimately recovered and are highly dependent upon the accuracy of the assumptions upon which they are based. Our estimated net proved reserves have not been filed with or included in reports to any federal agency. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Factors—We Are Subject To Uncertainties In Reserve Estimates And Future Net Cash Flows".

        Estimates with respect to net proved reserves that may be developed and produced in the future are often based upon volumetric calculations and upon analogy to similar types of reserves rather than actual production history. Estimates based on these methods are generally less reliable than those based on actual production history. Subsequent evaluation of the same reserves based upon production history will result in variations in the estimated reserves that may be substantial.

Drilling Activities

        We drilled, or participated in the drilling of, the following number of wells during the periods indicated:

		Year Ended December 31,
		2002		2001(1)		2000(2)
		Gross	Net	Gross	Net	Gross	Net
Exploratory wells(3):
Natural gas		3	0.8	5	1.6	6	1.9
Oil		8	2.7	5	3.7	3	0.9
Non-productive		1	0.7	4	1.1	2	1.0
	Total	12	4.2	14	6.4	11	3.8
Development wells(4):
Natural gas		8	2.4	15	4.6	15	5.8
Oil		2	0.9	1	0.1	1	0.7
Non-productive		2	0.6	2	0.2	1	0.8
	Total	12	3.9	18	4.9	17	7.3

(1)

Excludes one gross (0.3 net) development well that was temporarily abandoned during drilling due to operational difficulties encountered prior to reaching total depth. We re-entered and completed this temporarily abandoned well during 2002.

(2)

Excludes one gross (1.0 net) exploratory well that was temporarily abandoned during drilling due to operational difficulties encountered prior to reaching total depth. We re-entered and completed this temporarily abandoned well during 2001.

(3)

From January 1, 2003 through March 21, 2003, we drilled or participated in the drilling of one gross (0.3 net) exploratory well, which was non-productive.

(4)

From January 1, 2003 through March 21, 2003, we drilled or participated in the drilling of three gross (0.8 net) development wells which were in the process of drilling at March 21, 2003.

        We do not own drilling rigs and the majority of our drilling activities have been conducted by independent contractors or industry participant operators under standard drilling contracts. We operated 75% of the wells we participated in during 2002.

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Productive Wells and Acreage

Productive Wells

        The following table sets forth our ownership interest as of December 31, 2002 in productive oil and natural gas wells in the areas indicated.

		Natural Gas		Oil		Total
Province:		Gross	Net	Gross	Net	Gross	Net
Texas Gulf Coast		34	10.2	19	4.5	53	14.7
Anadarko Basin		92	22.7	18	4.5	110	27.2
West Texas		13	1.9	81	24.7	94	26.6
	Total	139	34.8	118	33.7	257	68.5

        Productive wells consist of producing wells and wells capable of production, including wells waiting on pipeline connection. Wells that are completed in more than one producing horizon are counted as one well. Of the gross wells reported above, two had multiple completions.

Acreage

        Undeveloped acreage includes leased acres on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of oil and natural gas, regardless of whether or not such acreage contains proved reserves. The following table sets forth the approximate developed and undeveloped acreage that we held a leasehold, mineral or other interest at December 31, 2002:

		Developed		Undeveloped		Total
Province:		Gross	Net	Gross	Net	Gross	Net
Texas Gulf Coast		9,825	3,582	10,514	4,660	20,339	8,242
Anadarko Basin		32,896	12,604	37,234	20,109	70,130	32,713
West Texas		6,894	1,986	9,926	5,040	16,820	7,026
Other		535	160	5,597	2,422	6,132	2,582
	Total	50,150	18,332	63,271	32,231	113,421	50,563

        All the leases for the undeveloped acreage summarized in the preceding table will expire at the end of their respective primary terms unless the existing leases are renewed, production has been obtained from the acreage subject to the lease prior to that date, or some other "savings clause" is implicated. The following table sets forth the minimum remaining terms of leases for the gross and net undeveloped acreage:

		Acres Expiring
Twelve Months Ending:		Gross	Net
December 31, 2003		9,014	6,324
December 31, 2004		27,449	16,001
December 31, 2005		5,366	5,333
Thereafter		—	—
	Total	41,829	27,658

        In addition, as of December 31, 2002 we had lease options to acquire an additional 18,316 gross and 12,656 net acres, all of which expire in 2003.

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Volumes, Prices and Production Costs

        The following table sets forth the production volumes, average prices received before hedging, average prices received after hedging and average production costs associated with our sale of oil and natural gas for the periods indicated.

			Year Ended December 31,
			2002			2001			2000
Production:
	Natural gas (MMcf)			5,791			6,766			4,431
	Oil (MBbls)			701			468			362
		Natural gas equivalent (MMcfe)		9,996			9,573			6,600
Average sales price per unit:
	Natural gas revenues (per Mcf)		$	3.33		$	4.29		$	4.06
	Effects of hedging activities (per Mcf)			(0.12	)		(1.18	)		(2.12	)
		Average price (per Mcf)	$	3.21		$	3.11		$	1.94
	Oil revenues (per Bbl)		$	25.17		$	24.38		$	29.47
	Effects of hedging activities (per Bbl)			(1.62	)		(0.33	)		(0.30	)
		Average price (per Bbl)	$	23.55		$	24.05		$	29.17
	Total natural gas and oil revenues (per Mcfe)		$	3.70		$	4.22		$	4.34
	Effects of hedging activities (per Mcfe)			(0.19	)		(0.85	)		(1.44	)
		Average price (per Mcfe)	$	3.51		$	3.37		$	2.90
Average production costs:
	Lease operating expenses (per Mcfe)		$	0.38		$	0.36		$	0.32
	Production taxes (per Mcfe)		$	0.20		$	0.16		$	0.27

Costs Incurred

        The costs incurred in oil and natural gas acquisition, exploration and development activities are as follows (in thousands):

		Year Ended December 31,
		2002(1)			2001(2)			2000(3)
		(in thousands)
Exploration		$	12,693		$	18,210		$	14,238
Property acquisition			3,213			3,437			2,540
Development			13,301			14,353			12,555
Proceeds from participants			(703	)		(135	)		(40	)
	Costs incurred	$	28,504		$	35,865		$	29,293

(1)

Excludes $821,000 of proceeds from the sale of interests in properties, projects and prospects in 2002.

(2)

Excludes $262,000 of proceeds from the sale of interests in properties, projects and prospects in 2001.

(3)

Excludes $3.9 million of proceeds from the sale of interests in properties, projects and prospects in 2000.

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        Costs incurred represent amounts we incurred for exploration, property acquisition and development activities. Periodically, we receive reimbursement of certain costs from participants in our projects subsequent to project initiation in return for an interest in the project. These payments are described as "Proceeds from participants" in the table above.

ITEM 3. LEGAL PROCEEDINGS

        We are, from time to time, party to certain lawsuits and claims arising in the ordinary course of business. While the outcome of lawsuits and claims cannot be predicted with certainty, we do not expect these matters to have a materially adverse effect on our financial condition, results of operations or cash flows.

        On June 1, 2001, Leonel Garcia, a landowner in Brooks County, Texas, filed suit against us claiming that we transported natural gas under his property through an existing pipeline without his consent. Mr. Garcia claimed $1.2 million in actual damages and $3 million in exemplary damages. In May 2002, we settled the case through mediation for a cash payment of $125,000. We are now using an alternate pipeline.

        On November 20, 2001, we filed a lawsuit in the District Court of Travis County, Texas against Steve Massey Company, Inc. for breach of contract. The Petition claims Massey furnished defective casing to us, which ultimately led to the casing failure of the Palmer "347" No. 5 well and the loss of the Palmer #5 as a producing well. We believe the amount of damages incurred due to the loss of the Palmer #5 may exceed $5 million. Massey joined as additional defendants to the lawsuit other parties that had responsibility for the manufacture, importation or fabrication of the casing for its use in the Palmer #5. The case is currently in discovery. A trial has been set for August 2003.

        On February 20, 2002, Massey filed an Original Petition to Foreclose Lien in Brooks County, Texas. Massey's Petition claims we breached our contract for failure to pay for the casing Massey has furnished us for the Palmer #5 (and that our claim forming the basis of the lawsuit described in the paragraph above is defective). Massey's Petition claims we owe Massey a total of $445,819. Our Motion to Transfer Venue to Travis County, Texas, and our Motion to Consolidate Massey's claim with our suit against Massey pending in Travis County, were recently granted. If Massey is successful in its claim, Massey would have the right to foreclose its lien against the well, associated equipment and our leasehold interest related to the well. At this point in time, we cannot predict the outcome of either our claim or Massey's claim.

        On July 11, 2002, an employee of a contractor on our Burkhart #1-R location, Matagorda County, Texas, was killed in an accident. The United States Department of Labor Occupational Safety & Health Administration investigated the accident, and issued three citations and imposed a total of $168,000 in fines. We are appealing the citations, but at this time, cannot predict the outcome of that appeal.

        On October 8, 2002, relatives of the contractor's employee filed, in the district court for Matagorda County, Texas, a wrongful death action against us and three of our contractors in connection with his accidental death on July 11, 2002, on our Burkhart #1-R location. Plaintiffs are seeking unspecified actual and punitive damages. At this point in time, we cannot predict the outcome of this case, but believe we have sufficient insurance to cover the claim.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS

        No matter was submitted to a vote of our security holders during the fourth quarter of 2002.

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EXECUTIVE OFFICERS OF THE REGISTRANT

        Pursuant to Instruction 3 to Item 401(b) of the Regulation S-K and General Instruction G(3) to Form 10-K, the following information is included in Part I of this report.

        The following table sets forth certain information concerning Brigham's executive officers as of March 21, 2003:

Name	Age	Position
Ben M. Brigham	43	Chief Executive Officer, President and Chairman
Eugene B. Shepherd, Jr.	44	Chief Financial Officer
David T. Brigham	42	Executive Vice President—Land and Administration
A. Lance Langford	40	Senior Vice President—Operations
Jeffery E. Larson	44	Senior Vice President—Exploration

Ben M. "Bud" Brigham has served as our Chief Executive Officer, President and Chairman of the Board since we were founded in 1990. From 1984 to 1990, Mr. Brigham served as an exploration geophysicist with Rosewood Resources, an independent oil and gas exploration and production company. Mr. Brigham began his career in Houston as a seismic data processing geophysicist for Western Geophysical, Inc. a provider of 3-D seismic services, after earning his B.S. in Geophysics from the University of Texas. Mr. Brigham is the husband of Anne L. Brigham, Director, and the brother of David T. Brigham, Executive Vice President—Land and Administration.

Eugene B. Shepherd, Jr., has served as Chief Financial Officer since June 2002. Mr. Shepherd has approximately 20 years of financial and operational experience in the energy industry. Prior to joining us, Mr. Shepherd served as Integrated Energy Managing Director at ABN AMRO Bank, a large European bank, where he executed merger and acquisition advisory, capital markets and syndicated loan transactions for energy companies. From 1998 to 2000, Mr. Shepherd was an investment banking Director for Prudential Securities Incorporated, where he executed a wide range of transactions for energy companies. Prior to joining Prudential Securities Incorporated, Mr. Shepherd served as an investment banker with Stephens Inc. for eight years and with Merrill Lynch Capital Markets for four years. Prior to joining Merrill Lynch Capital Markets, Mr. Shepherd worked for over four years as a petroleum engineer for both Amoco Production Company and the Railroad Commission of Texas. He has a B.S. in Petroleum Engineering and an MBA, both from the University of Texas at Austin.

David T. Brigham joined us in 1992 and has served as Executive Vice President—Land and Administration since June 2002 and Corporate Secretary from March 2001 to September 2002. Mr. Brigham served as Senior Vice President—Land and Administration from March 2001 to June 2002, Vice President—Land and Administration and Corporate Secretary from February 1998 to March 2001, and as Vice President—Land and Legal from 1994 until February 1998. From 1987 to 1992, Mr. Brigham was an oil and gas attorney with Worsham, Forsythe, Sampels & Wooldridge. Before attending law school, Mr. Brigham was a landman for Wagner & Brown Oil and Gas Producers, an independent oil and gas exploration and production company. Mr. Brigham holds a B.B.A. in Petroleum Land Management from the University of Texas and a J.D. from Texas Tech School of Law. Mr. Brigham is the brother of Ben M. Brigham, Chief Executive Officer, President and Chairman of the Board.

A. Lance Langford joined us in 1995 as Manager of Operations and served as Vice President—Operations from January 1997 to March 2001, and has served as Senior Vice President—Operations since March 2001. From 1987 to 1995, Mr. Langford served in various engineering capacities with Meridian Oil Inc., handling a variety of reservoir, production and drilling responsibilities. Mr. Langford holds a B.S. in Petroleum Engineering from Texas Tech University.

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Jeffrey E. Larson joined us in 1997 and was Vice President—Exploration from August 1999 to March 2001, and has been Senior Vice President—Exploration since March 2001. Mr. Larson joined us in October 1997 as Gulf Coast Exploration Manager in our Houston office where he co-managed our expansion into the onshore Gulf Coast province through the initiation and assemblage of 3-D seismic projects and drilling opportunities. In November 1998, Mr. Larson relocated to our corporate office in Austin where he assumed an expanded role in directing our exploration activities in the Anadarko Basin, in addition to the further advancement of our Gulf Coast activities. Prior to joining us, Mr. Larson was an explorationist in the Offshore Department of Burlington Resources, a large independent exploration company, where he was responsible for generating exploration and development drilling opportunities. Mr. Larson worked at Burlington for seven years in various roles of increasing responsibility within its exploration department. Prior to Burlington, Mr. Larson spent five years at Exxon as a Production Geologist and Research Scientist. He has a B.S. in Earth Science from St. Cloud State University in Minnesota and a M.S. in Geology from the University of Montana.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

        Our common stock has been publicly traded on The NASDAQ Stock Market^sm under the symbol "BEXP" since our initial public offering effective May 8, 1997. The following prices represent the range of high and low sales prices of our common stock on NASDAQ for the period indicated.

	2002				2001
	High		Low		High		Low
First Quarter	$	3.97	$	2.36	$	5.97	$	3.38
Second Quarter	$	5.35	$	3.42	$	4.62	$	3.25
Third Quarter	$	4.80	$	3.10	$	5.11	$	2.50
Fourth Quarter	$	5.00	$	3.30	$	3.48	$	2.28

        The closing market price of our common stock on March 21, 2003 was $4.69 per share. As of March 21, 2003, there were an estimated 114 record owners of our common stock.

        No dividends have been declared or paid on our common stock to date. We intend to retain all future earnings for the development of our business. Our senior credit facility and subordinated notes facility restrict our ability to pay dividends on our common stock.

        We are obligated to pay dividends on our Series A and Series B preferred stock. At our option, these dividends may be paid in cash at a rate of 6% per annum or paid in kind through the issuance of additional shares of preferred stock in lieu of cash at a rate of 8% per annum. Our option to pay dividends in kind on our Series A preferred stock expires in October 2005 and March 2006. Our option to pay dividends in kind on our Series B preferred stock expires in December 2007. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Series A Preferred Stock" and "—Liquidity and Capital Resources—Series B Preferred Stock".

20

Securities Authorized for Issuance under Equity Compensation Plans

        The following table includes information regarding our equity compensation plans as of the year ended December 31, 2002:

Plan category		Number of securities to be issued upon exercise of outstanding options	Weighted-average price of outstanding options		Number of securities remaining available for future issuance under equity compensation plans
Equity compensation plans approved by security holders		1,782,135	$	3.34	—
Equity compensation plans not approved by security holders		—		—	—
	Total	1,782,135	$	3.34	—

Recent Sales of Unregistered Securities

        In December 2002, in a transaction exempted from registration under section 4(2) of the Securities Act of 1933, we issued 550,000 unregistered shares of our common stock to Shell Capital in exchange for Shell Capital's warrant position, including 1,250,000 warrants associated with our senior subordinated notes facility, and to terminate Shell Capital's right to convert $30 million of our senior credit facility into 5,480,769 shares of our common stock. We are required to register these shares under certain conditions as outlined in a registration rights agreement with Shell Capital dated December 20, 2002.

        In December 2002, in a transaction exempted from registration under section 4(2) of the Securities Act of 1933, we issued CSFB Private Equity 500,000 shares of our Series B preferred stock with a stated value of $20.00 per share. Net proceeds from the offering were $9.4 million and were used to reduce borrowings under our senior credit facility and to fund our drilling program and working capital requirements. The Series B preferred stock has terms similar to our Series A preferred stock. We are required to pay dividends on our Series B preferred stock as discussed above. The Series B preferred stock can be redeemed at our option after December 2007 and is mandatorily redeemable in December 2012. In connection with the Series B preferred stock offering, we issued to CSFB Private Equity warrants to purchase 2,298,851 shares of our common stock at an exercise price of $4.35 per share. To exercise the warrants, CSFB Private Equity has the option to use either cash or shares of our Series B preferred stock with an aggregate value equal to the exercise price. In the event that our stock price averages at least $6.525 for 60 consecutive trading days, then the warrants must be exercised if we so require. For financial reporting purposes, the warrants issued with the Series B preferred stock were valued at approximately $4.6 using the Black Scholes Option Pricing model and were recorded as additional paid in capital in December 2002.

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ITEM 6. SELECTED FINANCIAL DATA

        The following selected consolidated financial data should be read in conjunction with "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and related notes included in "Item 8. Financial Statements and Supplementary Data."

			2002			2001			2000			1999			1998
			(in thousands, except per share data)
Statement of Operations Data:
Revenues:
	Oil and natural gas sales		$	35,100		$	32,293		$	19,143		$	14,992		$	13,799
	Other revenue			76			255			69			285			390
		Total revenues		35,176			32,548			19,212			15,277			14,189
Costs and expenses:
	Lease operating			3,759			3,486			2,139			2,259			2,172
	Production taxes			1,977			1,511			1,786			968			850
	General and administrative			4,971			3,638			3,100			3,481			4,672
	Depletion of oil and natural gas properties			14,594			13,211			7,920			7,792			8,483
	Depreciation and amortization			440			677			620			526			785
	Capitalized ceiling impairment			—			—			—			—			25,926
		Total costs and expenses		25,741			22,523			15,565			15,026			42,888
		Operating income (loss)		9,435			10,025			3,647			251			(28,699	)
Other income (expense):
	Interest expense			(6,238	)		(6,681	)		(9,906	)		(9,697	)		(5,968	)
	Interest income			119			264			108			176			136
	Debt conversion expense			(630	)		—			—			—			—
	Other income (expense)			(310	)		8,080			(9,504	)		(163	)		—
	Loss on sale of oil and natural gas properties			—			—			—			(12,195	)		—
		Total other income (expense)		(7,059	)		1,663			(19,302	)		(21,879	)		(5,832	)
Income (loss) before income taxes and extraordinary item				2,376			11,688			(15,655	)		(21,628	)		(34,531	)
Income tax benefit (expense)				—			—			—			—			1,186
	Income (loss) before extraordinary item			2,376			11,688			(15,655	)		(21,628	)		(33,345	)
Extraordinary item—gain on refinancing of debt, net of tax				—			—			32,267			—			—
	Net income (loss)			2,376			11,688			16,612			(21,628	)		(33,345	)
Preferred dividend and accretion				2,952			2,450			275			—			—
	Net income (loss) available to common stockholders		$	(576	)	$	9,238		$	16,337		$	(21,628	)	$	(33,345	)
Net income (loss) per share—basic			$	(0.04	)	$	0.58		$	1.01		$	(1.53	)	$	(2.64	)
							Restated(1)
Net income (loss) per share—diluted				(0.04	)		0.44			1.01			(1.53	)		(2.64	)
Weighted average shares outstanding—basic				16,138			15,988			16,241			14,152			12,626
Weighted average shares outstanding—diluted				16,138			28,205			16,241			14,152			12,626
Statement of Cash Flows Data:
Net cash provided (used) by operating activities			$	28,973		$	18,922		$	(4,635	)	$	2,578		$	14,774
Net cash provided (used) by investing activities				(27,206	)		(33,571	)		(26,071	)		1,644			(86,227	)
Net cash provided (used) by financing activities				8,439			18,924			28,801			(4,049	)		72,321
Other Financial Data:
Oil and natural gas capital expenditures			$	27,696		$	34,532		$	28,910		$	25,560		$	85,207
			As of December 31,
			2002			2001			2000			1999			1998
Balance Sheet Data:
Cash and cash equivalents			$	15,318		$	5,112		$	837		$	2,742		$	2,569
Oil and natural gas properties, net				164,980			151,891			129,490			112,066			134,317
Total assets				202,059			173,075			146,911			125,683			150,516
Long-term debt				81,797			91,721			82,000			97,341			94,786
Series A Preferred Stock				19,540			16,614			8,558			—			—
Series B Preferred Stock				4,777			—			—			—			—
Total stockholders' equity				61,749			49,601			34,757			8,998			24,681

(1)

Diluted net income per share for 2001 has been restated from that as previously reported. Refer to Note 10 of the Consolidated Financial Statements.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        Statements in the following discussion may be forward-looking and involve risk and uncertainty. The following discussion should be read in conjunction with our Consolidated Financial Statements and Notes hereto.

        From 1990 to 1996 we acquired 3-D seismic data in 28 plays, seven basins and seven states. In 1997 and 1998 we invested $64 million on 3-D seismic data and acreage in selected plays where we were experiencing attractive 3-D delineated drilling economics and repeatability. In 1999, we modified our business strategy to recognize the inherent value of our 3-D delineated prospect inventory and to provide significant improvement in our financial and operating results. This business strategy includes the following elements:

•

Focus the majority of capital resources in our five focus plays to generate growth in proved reserves, production volumes and cash flow.



•

Continue to grow our inventory of high potential exploration prospects through our technical staff's internal generation of such prospects.



•

Enhance our project returns by attempting to retain operational control over all phases of our exploration and development activities.



•

Allocate a higher percentage of drilling capital toward the development of our prior discoveries.



•

Accelerate the development of our exploration and development prospect inventory by increasing our drilling expenditures.



•

Enhance our return on capital and our cash margins by growing production, resulting in reduced per unit discretionary cash costs.

        As a result of this strategy, we have accomplished the following for the three-year period ended December 31, 2002:

•

An increase in our net proved reserves from 95 Bcfe to 121 Bcfe, a compound annual growth rate of 13%.



•

An increase in our average daily production volumes from 18.3 Mmcfed to 27.8 Mmcfed, a compound annual growth rate of 23%.



•

An increase in our EBITDA, from $12.0 million to $24.6 million, representing a compound annual growth rate of 43%. An increase in our revenues from $19.2 million to $35.2 million, a compound annual growth rate of 35%. See "—Other Matters—Reconciliation of Non-GAAP Measures".



•

An all sources finding cost for the three-year period ended December 31, 2002 of $1.31 per Mcfe.

Recent Developments

        In December 2002, we entered into a series of transactions whereby a number of warrants and convertible debt rights were extinguished or converted. We issued 550,000 unregistered shares of our common stock to Shell Capital in exchange for Shell Capital's warrant position and to terminate Shell Capital's right to convert $30 million of our senior credit facility into shares of our common stock. Also, DLJ Merchant Banking Partners III, L.P. in conjunction with GlobalEnergy Partners, both affiliates of CSFB Private Equity, purchased $10 million of our senior credit facility from Shall Capital and converted it into 2,564,102 shares of our common stock at an exercise price of $3.90 per share. We recorded $630,000 in debt conversion expenses associated with this conversion.

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        In December 2002, we issued CSFB Private Equity 500,000 shares of our Series B preferred stock with a stated value of $20.00 per share. Net proceeds from the offering were $9.4 million and were used to reduce borrowings under our senior credit facility and to fund our drilling program and working capital requirements. The Series B preferred stock has terms similar to our Series A preferred stock. We are required to pay dividends on our Series B preferred stock. At our option, these dividends may be paid in cash at a rate of 6% per annum or paid in kind through the issuance of additional shares of preferred stock in lieu of cash at a rate of 8% per annum. Our option to pay dividends in kind on our Series B preferred stock expires in December 2007. In connection with the Series B preferred stock offering, we issued to CSFB Private Equity warrants to purchase 2,298,851 shares of our common stock at an exercise price of $4.35 per share. To exercise the warrants, CSFB has the option to use either cash or shares of our Series B preferred stock with an aggregate value equal to the exercise price. In the event that our stock price averages at least $6.525 for 60 consecutive trading days, then the warrants must be exercised if we so require.

        In December 2002, we extended the maturity on our senior credit facility by one year to December 2004 and extended our option to pay interest in kind on our senior subordinated notes facility by one year to October 2003.

        In March 2003, we replaced our senior credit facility with a new senior credit facility. The new senior credit facility provides for a maximum commitment of $80 million in the form of a revolving bank credit facility, has an initial borrowing base of $70 million and matures in March 2006. As of the closing date of the facility, we had $56 million in outstanding borrowings under the new senior credit facility. See "—Liquidity and Capital Resources—Senior Credit Facility".

Critical Accounting Policies

        The selection and application of accounting policies is an important process that has developed as our business activities have evolved and as the accounting rules have developed. Accounting rules generally do not involve a selection among alternatives, but involve an implementation and interpretation of existing rules, and the use of judgment to the specific set of circumstances existing in our business. Compliance with the rules necessarily involves reducing a number of very subjective judgments to a quantifiable accounting entry or valuation. We make every effort to properly comply with all applicable rules on or before their adoption, and we believe the proper implementation and consistent application of the accounting rules is critical. Our critical accounting policies are discussed below.

Property and Equipment

        The method of accounting for oil and gas properties is a critical accounting policy because it determines what costs are capitalized, and how these costs are ultimately matched with revenues and expensed.

        We use the full cost method of accounting for oil and properties. Under this method substantially all costs associated with oil and gas exploration and development activities are capitalized, including costs for individual exploration projects that do not directly result in the discovery of hydrocarbon reserves that can be economically recovered. Payroll, interest, and other internal costs we incur for the purpose of finding hydrocarbon reserves are also capitalized.

        Full cost pool amounts associated with properties that have been evaluated through drilling or seismic analysis are depleted using the units of production method. The depletion expense per unit of production is the ratio of historical and estimated future development costs to hydrocarbon reserve volumes. Estimation of hydrocarbon reserves relies on professional judgment and use of factors that cannot be precisely determined. Reserve estimates materially different from those reported would change the depletion expense recognized during the reporting period. For the year ended December 31,

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2002, our depletion expense per unit of production was $1.46 per Mcfe. A change of 900,000 Mcfe in our estimated net proved reserves at December 31, 2002, would result in a $0.01 per Mcfe change in our per unit depletion expense and a $100,000 change in net income available to common shareholders.

        To the extent costs capitalized in the full-cost pool (net of depreciation, depletion and amortization and related deferred taxes) exceed the present value (using a 10% discount rate and based on period-end oil and natural gas prices) of estimated future net revenues from proved oil and natural gas reserves plus the capitalized cost of unproved properties, such costs are charged to operations as a reduction of the carrying value of oil and natural gas properties, or a "capitalized ceiling impairment" charge. The risk that we will be required to write down the carrying value of our oil and gas properties increases when oil and gas prices are depressed, even if the low prices are temporary. In addition, capitalized ceiling impairment charges may occur if we experience poor drilling results or estimations of proved reserves are substantially reduced.

        A capitalized ceiling impairment is a reduction in earnings that does not impact cash flows, but does impact operating income and stockholders' equity. Once recognized, a capitalized ceiling impairment charge to oil and natural gas properties cannot be reversed at a later date. No assurance can be given that we will not experience a capitalized ceiling impairment charge in future periods. In addition, capitalized ceiling impairment charges may occur if estimates of proved hydrocarbon reserves are substantially reduced or estimates of future development costs increase significantly. See "—Risk Factors—Exploratory Drilling Is A Speculative Activity Involving Numerous Risks And Uncertain Costs; We are Dependent On Exloratory Drilling Activities", "—Risk Factors—Maintaining Reserves And Revenues In The Future Depends On Successful Exploration And Development" and "—Risk Factors—We Are Subject To Uncertainties In Reserve Estimates and Futures Net Cash Flows".

Income Taxes

        Deferred tax assets are recognized for temporary differences in financial statement and tax basis amounts that will result in deductible amounts and carry-forwards in future years. Deferred tax liabilities are recognized for temporary differences that will result in taxable amounts in future years. Deferred tax assets and liabilities are measured using enacted tax law and tax rate(s) for the year in which we expect the temporary differences to be deducted or settled. The effect of a change in tax law or rates on the valuation of deferred tax assets and liabilities is recognized in income in the period of enactment. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

        Estimating the amount of the valuation allowance is dependent on estimates of future taxable income, alternative minimum tax income, and changes in shareholder ownership which would trigger limits on use of net operating losses under Internal Revenue Code Section 382.

Revenue Recognition

        Because revenue is a key component of our results of operations, and we derive revenue primarily from the sale of produced oil and gas, our revenue recognition for these sales is significant.

        We recognize crude oil revenue using the sales method of accounting. Under this method, we recognize revenue when oil is delivered and title transfers.

        We recognize natural gas revenue using the entitlements method of accounting. Under this method, revenue is recognized based on our entitled ownership percentage of sales of natural gas to purchasers. Gas imbalances occur when we sell more or less than our entitled ownership percentage of total natural gas production. When we receive less than our entitled share, a receivable is recorded. When we receive more than our entitled share, a liability is recorded.

25

        Settlements for hydrocarbon sales can occur up to two months after the end of the month in which the oil, gas or other hydrocarbon products were produced. We estimate and accrue for the value of these sales using information available at the time financial statements are generated. Differences are reflected in the accounting period that payments are received from the purchaser. For the month of December 2002 a $0.10 change in the price per Mcf of gas sold would change revenue by $50,000. A $0.70 change in the price per barrel of oil would change revenue by $50,000.

Derivative Instruments and Hedging Activities

        We use derivative instruments to manage market risks resulting from fluctuations in commodity prices of natural gas and crude oil. We periodically enter into commodity contracts, including price swaps, caps and floors, which require payments to (or receipts from) counterparties based on the differential between a fixed price and a variable price for a fixed quantity of natural gas or crude oil without the exchange of underlying volumes. The notional amounts of these financial instruments are based on expected production from existing wells.

        We adopted Statement of Financial Accounting Standards No. 133 on January 1, 2001 in accordance with Financial Accounting Standards Board requirements. SFAS No. 133, as amended, establishes accounting and reporting standards for derivative instruments and for hedging activities. All derivative instruments are recorded on the balance sheet at fair value and changes in the fair value of the derivatives are recorded each period in current earnings or other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction, and depending on the type of hedge transaction. Our derivative contracts consist primarily of cash flow hedge transactions in which we are hedging the variability of cash flow related to a forecasted transaction. Change in the fair value of these derivative instruments are reported in other comprehensive income and reclassified as earnings in the period(s) in which earnings are impacted by the variability of the cash flow of the hedged item. We assess the effectiveness of hedging transactions every three months, consistent with documented risk management strategy for the particular hedging relationship. Changes in fair value of ineffective hedges are included in earnings.

Use of Estimates

        The preparation of financial statements in accordance with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect reported assets, liabilities, revenues, expenses, and some narrative disclosures. Hydrocarbon reserve, future development costs, and certain hydrocarbon production expense and revenue estimates are the most critical to our financial statements.

New Accounting Pronouncements

        In June 2001, the Financial Accounting Standards Board issued Statement of Financial Standards No. 143, "Asset Retirement Obligations" which establishes accounting requirements for retirement obligations associated with tangible long-lived assets including the timing of the liability recognition, initial measurement of the liability, allocation of asset retirement cost to expense, subsequent measurement of the liability and financial statement disclosures. SFAS 143 requires that an asset retirement cost be capitalized as part of the cost of the related long-lived asset and subsequently allocated to expense using a systematic, rational method. We adopted this standard as required on January 1, 2003. We are currently evaluating the effect of this statement on our consolidated financial position, results of operations and cash flows.

        In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB statements No. 4, 44 and 64, Amendment of FASB Statement No. 13 and Technical Corrections". SFAS 145 requires, except in the case of events or transactions of a highly unusual and infrequent nature, gains or losses from the early

26

extinguishment of debt to be classified as components of a company's income or loss from continuing operations. Prior to the adoption of the provisions of SFAS 145, gains or losses on the early extinguishment of debt were required to be classified in a company's periodic consolidated statements of operations as extraordinary gains or losses, net of associated income taxes, after the determination of income or loss from continuing operations. SFAS No. 145 is effective for fiscal years beginning after May 15, 2002. Due to the requirements of SFAS No. 145, it is less likely that a gain or loss on extinguishment of debt would be classified as an extraordinary item in our results of operations.

Off Balance Sheet Arrangements

        We do not currently have any off-balance sheet arrangements or other such unrecorded obligations and we have not guaranteed the debt of any other party.

Commodity Pricing

        Changes in commodity prices significantly affect our capital resources, liquidity and expected operating results. Price changes directly affect revenues and can indirectly impact expected production by changing the amount of funds available to reinvest in exploration and development activities. The prices we receive for our crude oil production are based on global market conditions. The price we receive for our natural gas production is primarily driven by North American market forces. Oil and gas prices have fluctuated significantly in recent years in response to numerous economic, political and environmental factors. The year 2002 began with a weakened commodity environment and lower prices. However, prices were on an upward trend through the year. Prices are also affected by weather, factors of supply and demand, and commodity inventory levels. During 2002, the high and low settlement prices for oil on the NYMEX were $32.72 per Bbl and $17.97 per Bbl, and the high and low settlement prices for natural gas on the NYMEX were $5.34 per MMBtu and $1.91 per MMBtu. We expect that commodity prices will continue to fluctuate significantly in the future.

Results of Operations

        The following table sets forth certain operating data for the periods presented.

		Year Ended December 31,
		2002		2001		2000
Production (in thousands):
	Natural gas (MMcf)		5,791		6,766		4,431
	Oil (MBbls)		701		468		362
	Natural gas equivalent (MMcfe)		9,996		9,573		6,600
	% Natural gas		58%		71%		67%
Average sales prices per unit (After hedging)
	Natural gas (per Mcf)	$	3.21	$	3.11	$	1.94
	Oil (per Bbl)		23.55		24.05		29.17
	Natural gas equivalent (per Mcfe)		3.51		3.37		2.90
Costs and expenses per Mcfe:
	Lease operating	$	0.38	$	0.36	$	0.32
	Production taxes		0.20		0.16		0.27
	General and administrative		0.50		0.38		0.47
	Depletion of oil and natural gas properties		1.46		1.38		1.20

27

Overview

        For the year ended December 31, 2002, we had a net loss to common stockholders of $576,000, or $0.04 per diluted share, on total revenues of $35.2 million compared to net income of $9.2 million, or $0.44 per diluted share (as restated, refer to Note 10 to the Consolidated Financial Statements) on revenue of $32.5 million for the year ended December 31, 2001, and net income of $16.3 million, or $1.01 per diluted share, on revenue of $19.2 million for the year ended December 31, 2000. Net income in 2002 included $384,000 in non-cash gains related to changes in the fair-market value of derivative contracts that did not qualify for hedge accounting treatment. This non-cash gain was partially offset by a $121,000 non-cash loss for ineffective hedging transactions. Net income in 2001 was significantly enhanced by $9.7 million in non-cash gains related to changes in the fair-market value of derivative contracts that did not qualify for hedge accounting treatment. Net income in 2000 was significantly enhanced by a $32.3 million extraordinary gain on the refinancing of our senior subordinated debt and was partially offset by a non-cash loss of $8.9 million related to changes in the fair-market value of derivative contracts that did not qualify for hedge accounting treatment.

        Production.    Net equivalent production volumes for 2002 were 10.0 Bcfe compared to 9.6 Bcfe in 2001 and 6.6 Bcfe in 2000. Average net daily equivalent production volumes for 2002 were 27.8 MMcfed, compared to 26.6 MMcfed in 2001 and 18.3 MMcfed in 2000. The increase in production from 2000 through 2002 is due to organic production growth during the period. Additional production related to wells completed during the period was partially offset by the natural decline of existing production. Natural gas production represented 58% of our total production volume on an equivalent basis in 2002 compared to 71% in 2001 and 67% in 2000.

        Revenue from the sale of oil and natural gas.    Revenue from the sale of oil and natural gas for 2002 was $35.1 million compared to $32.3 million in 2001 and $19.1 million in 2000.

        For 2002 compared to 2001, revenue from the sale of oil and natural gas was up $2.8 million or 9%. A 4% increase in our total production volume accounted for $2.6 million of this change and a $0.14 per Mcfe increase in our average realized sales price for oil and natural gas accounted for $232,000 of this change. Revenue from the sale of oil and natural gas in 2002 included a loss of $1.8 million, or $0.19 per Mcfe, related to cash settlements on hedging transactions, compared to a loss of $8.2 million, or $0.85 per Mcfe, in 2001. Our average realized sales price for oil and natural gas in 2002 was $3.51 per Mcfe compared to $3.37 per Mcfe in 2001.

        For 2001 compared to 2000, revenue from the sale of oil and natural gas was up $13.2 million or 69%. A 45% increase in our total production volume accounted for $7.7 million of this change and a $0.47 per Mcfe increase in our average realized sales price for oil and natural gas accounted for $5.5 million of this change. Revenue from the sale of oil and natural gas in 2001 included a loss of $8.2 million, or $0.85 per Mcfe, related to cash settlements on hedging transactions, compared to a loss of $9.5 million, or $1.44 per Mcfe, in 2000. Our average realized sales price for oil and natural gas in 2001 was $3.37 per Mcfe compared to $2.90 per Mcfe in 2000.

        Other revenue.    Other revenue was $76,000 in 2002, compared to $255,000 in 2001 and $69,000 in 2000. This revenue relates to billings to other parties for gathering services.

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        Lease operating expenses.    Lease operating expenses, which includes lifting cost and ad valorem taxes, for 2002 were $3.8 million compared to $3.5 million in 2001 and $2.1 million in 2000.

		2002		2001		2000
		(in thousands)
Lease operating expense, excluding ad valorem taxes		$	3,148	$	3,015	$	1,886
Ad valorem taxes			611		471		253
	Total lease operating expenses	$	3,759	$	3,486	$	2,139
		($ per Mcfe)
Lease operating expense per unit of production:
Lease operating expense, excluding ad valorem taxes		$	0.32	$	0.31	$	0.28
Ad valorem taxes			0.06		0.05		0.04
	Total lease operating expenses	$	0.38	$	0.36	$	0.32

        For 2002 compared to 2001, total lease operating expenses increased 8%. On a per unit of equivalent production basis, lease operating expenses for 2002 were $0.38 per Mcfe, compared to $0.36 per Mcfe in 2001. The change in our lease operating expense was primarily the result of higher ad valorem taxes due to an increase in property valuations because of higher average commodity prices during 2001 and higher overall service cost.

        For 2001 compared to 2000, total lease operating expenses increased 63%. The change in lease operating expenses is primarily due to an increase in the number of producing wells. Lease operating expenses on a per unit of production in 2001 were $0.36 per Mcfe compared to $0.32 per Mcfe in 2000. The increase in our per unit lease operating expense was primarily due to higher overall service cost and higher ad valorem taxes due to an increase in property valuations because of higher average commodity prices during 2000.

        Production taxes.    Production taxes for 2002 were $2.0 million compared to $1.5 million in 2001 and $1.8 million in 2000.

        For 2002 compared to 2001, the increase in production taxes was primarily due to a reduction in the number of wells that qualify for severance tax refunds in 2002. Our effective production tax rate in 2002 was 5.4% of pre-hedge oil and natural gas sales revenue, compared to 3.7% in 2001.

        For 2001 compared to 2000, the decrease in production taxes was primarily related to production tax refunds on wells that qualify for reduced severance tax rates. Our effective production tax rate in 2001 was 3.7% of pre-hedge oil and natural gas sales revenue, compared to 6.2% in 2000.

        General and administrative expenses.    General and administrative expenses for 2002 were $5.0 million, compared to $3.6 million in 2001 and $3.1 million in 2000.

        For 2002 compared to 2001, the increase in general and administrative expenses included a non-recurring charge for non-cash compensation expense of $596,000 related to vesting of options by an officer who left the company. Excluding this non-cash charge, general and administrative expenses for 2002 increased 20% to $4.4 million. Other items contributing to the increase in general and administrative expenses include the cost associated with bringing our oil and natural gas marketing activities in house, increased payroll and benefit expense, higher office rent expense, higher other office expenses and an increase in corporate insurance expense.

        For 2001 compared to 2000, general and administrative expenses increased 17%. This increase was primarily due to an increase in employee payroll and benefit expense, office expense, public company expense and contract and professional expense.

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        Depletion of oil and natural gas properties.    Depletion of oil and natural gas properties in 2002 was $14.6 million compared to $13.2 million in 2001 and $7.9 million in 2000.

        For 2002 compared to 2001, a $0.08 increase in our depletion rate accounted for $800,000 of the change and higher production volumes accounted for $584,000 of the change. This increase in our per unit depletion expense was due to additional future development cost related to our Floyd Fault Block Field discovery.

        For 2001 compared to 2000, depletion expense increased $5.3 million. Increased production volumes accounted for $4.1 million of this increase and a $0.18 increase in our depletion rate accounted for a $1.2 million of the increase. The increase in the depletion rate per unit is primarily due to an increase in the estimated cost required to fully develop our Home Run Field.

        Net interest expense.    Net interest expense for 2002 was $6.2 million compared to $6.7 million in 2001 and $9.9 million in 2000.

		2002			2001			2000
		(in thousands)
Interest on outstanding indebtedness(1)		$	5,878		$	7,081		$	10,327
Commitment fees			3			29			43
Amortization of deferred loan and debt issuance cost			1,191			1,372			1,283
Amortization of debt discount			—			—			673
Other general interest expense			44			47			352
Capitalized interest expense			(878	)		(1,848	)		(2,772	)
	Net interest expense	$	6,238		$	6,681		$	9,906
Weighted average debt outstanding		$	95,562		$	90,646		$	97,424
Average interest rate on outstanding indebtedness(2)			6.2%			7.8%			10.6%

(1)

Includes $1.1 million, $721,000 and $4.6 million in interest expense on our subordinated notes that was paid in kind through the issuance of additional debt in lieu of cash, for 2002, 2001 and 2000, respectively.

(2)

Calculated as the sum of interest expense on outstanding indebtedness and commitment fees divided by weighted average debt outstanding for the period.

        For 2002 compared to 2001, the change in net interest expense was primarily due to a lower average interest rate on outstanding indebtedness during 2002 and to a lesser extent on a decrease in the amount of deferred loan fees amortized. The change in the average interest rate on our outstanding borrowings was due to a decrease in the London Interbank Offered Rate (LIBOR), which is used to determine the interest rate on borrowings outstanding under our senior credit facility. The average interest rate on borrowings outstanding under our senior credit facility during 2002 was 5.0% compared to 7.2% in 2001. At December 31, 2002, the interest rate on borrowings outstanding under our senior credit facility was 4.5%.

        For 2001 compared to 2000, the change in net interest expense was primarily due to a lower weighted average outstanding debt balance and a lower average interest rate on our outstanding borrowings during 2001. The repurchase of $51.2 million in subordinated notes in November 2000 that bore annual interest rates of 12% to 14% was the primary reason the for the decrease in our weighted average debt balance and lower average interest rate in 2001. A decrease in the average interest rate on borrowings outstanding under our senior credit facility due to a lower London Interbank Offered Rate (LIBOR) during also contributed to the decrease in our average interest rate.

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        Other income (expense).    Other income (expense) in 2002 was an expense of $310,000 compared to $8.1 million in income in 2001 and $9.5 million in expense in 2000. Other income (expense) consists primarily of items related to the change in the fair market value and the related cash flows of certain oil and natural gas derivative contracts that do not qualify for hedge accounting treatment. Other income (expense) in 2002 included (i) $384,000 in non-cash income related to the change in the fair market value of derivative contracts during the period that did not qualify for hedge accounting treatment, (ii) $121,000 in non-cash expense related to the ineffective portion of hedging transactions, and (iii) $559,000 of expenses related to cash settlements on derivative contracts that did not qualify for hedge accounting treatment. Other income (expense) in 2001 included (i) $9.7 million of non-cash income related to the change in the fair market value of derivative contracts during the period, and (ii) $1.5 million of expenses related to cash settlements on derivative contracts that did not qualify for hedge accounting treatment. Other income (expense) in 2000 included (i) $8.9 million of non-cash expense related to the change in the fair market value of derivative contracts during the period, and (ii) $620,000 of expenses related to cash settlements on derivative contracts that did not qualify for hedge accounting treatment.

        Debt Conversion expense.    Debt conversion expense of $630,000 represents the costs and fees we incurred to execute the conversion of $10 million of our senior debt to common stock. Our total outstanding indebtedness at December 31, 2002 was $81.8 million, compared to $91.7 million at December 31, 2001. There were no similar expenses in prior periods.

        Extraordinary gain on refinancing of senior subordinated notes.    In November 2000, we repurchased all of our debt and equity securities held by affiliates of Enron North America at a substantial discount. With a portion of the proceeds from two new financing transactions, we repurchased all of the Enron Affiliates' interests, which included (i) $51.2 million of senior subordinated notes due 2003 (which bore interest at annual rates of 12% to 14%) and associated accrued interest obligations, (ii) warrants to purchase an aggregate of one million shares of our common stock at $2.43 per share, and (iii) 1,052,632 shares of common stock, for total cash consideration of $20 million. As a result of the repurchase of the senior subordinated notes due 2003 at a discount to the principal amount outstanding, we recorded an extraordinary gain of $32.3 million in the fourth quarter of 2000. There were no similar items during 2002 or 2001.

Liquidity and Capital Resources

        Our primary sources of capital have been funds generated by operations, our senior credit and subordinated notes facility, public and private equity financings and the sale of interests in projects and properties. Our level of earnings and cash flows depends on market prices that we receive for our oil and natural gas production, our ability to find and produce hydrocarbons and our ability to control and reduce cost.

        Our primary sources of cash during 2002 were funds generated from operations, proceeds from the sale of our Series B preferred stock and borrowings under our subordinated notes facility. Funds were used primarily for costs associated with drilling, land acquisition and 3-D seismic acquisition, processing and interpretation and to reduce the level of borrowings under our senior credit facility.

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Cash Flows Provided (Used) By Operating Activities

	2002		2001		2000
	(in thousands)
Operating cash flow before changes in working capital	$	20,010	$	18,097	$	8,581
Changes in working capital		8,963		825	$	(13,216	)
Net cash flow provided (used) by operating activities	$	28,973	$	18,922	$	(4,635	)

        For 2002 compared to 2001, cash flows provided by operating activities increased by $10.0 million. This change included a $1.9 million increase in cash flow provided by operating activities before changes in working capital and an $8.1 million increase in cash flow from changes in working capital activities. The change in cash flow provided by operating activities (exclusive of changes in working capital) was due to an increase in revenue from the sale of oil and natural gas, a decrease in cash interest expense and a decrease in cash settlements on derivatives that do not qualify for hedging activities. These changes were partially offset by increases in our lease operating expense, production taxes, cash general and administrative expense and debt conversion cost.

        For 2001 compared to 2000, cash flows provided by operating activities increased by $23.6 million. This change included a $9.5 million (exclusive of changes in working capital) increase. This increase is due to an increase in revenue from the sale of oil and natural gas which was partially offset by an increase in lease operating expense, cash general and administrative expenses, cash interest expense and increase in cash losses on the settlement of derivative contracts that do not qualify for hedge accounting treatment.

Cash Flows Used By Investing Activities

	2002		2001		2000
	(in thousands)
Net cash flow used by investing activities	$	27,206	$	33,571	$	26,071

        Our primary capital requirements are for cost associated with drilling, land acquisition and 3-D seismic acquisition, processing and interpretation. Our initial capital budget at the start of 2002 was projected to be $23.7 million and was down 33% when compared to capital expenditures in 2001. Due to lower forecasted oil and natural gas prices at the time, the reduced capital expenditure program reflected our desire to fund our capital expenditure program with cash flow generated from operations, cash on hand at the start of the year and availability under our senior subordinated notes facility. As the year progressed, we increased our capital budget to partially account for the increase in commodity prices.

        For 2002 compared to 2001, cash flows used by investing activities decreased 19%. This change is primarily due to a reduction in capital spending on oil and gas properties.

        For 2001 compared to 2000, cash flows used by investing activities increased 29%. This change is primarily due to an increase in capital spending on oil and gas activities.

Cash Flows Provided By Financing Activities

	2002		2001		2000
	(in thousands)
Net cash flow provided by financing activities	$	8,439	$	18,924	$	28,801

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        Over the past three years, we have reduced our reliance on external sources to fund our capital expenditure programs. For 2002, net cash flow provided by financing activities decreased by $10.5 million compared to 2001 and by $20.4 million when compared to 2000. The decrease in our reliance on external sources to fund our capital expenditures has primarily been the result of an increase in the cash flow generated by our operating activities and reduced capital spending.

        In 2002, cash inflows from financing activities included $4.0 million of additional borrowing under subordinated notes facility, $9.4 million in net proceeds from the issuance of $10 million in Series B preferred stock and warrants to purchase our common stock and $921,000 in proceeds from the exercise of options and warrants that resulted in the issuance of 376,409 shares of our common stock. These inflows were partially offset by the repayment of $5.0 million of outstanding indebtedness under our senior credit facility and debt issue cost of $0.6 million. The remainder of the cash inflows will be used to fund our capital expenditures, fund working capital obligations and repay outstanding indebtedness under our senior credit facility.

        In 2001, cash inflows from financing activities included $9.0 million of additional borrowing under our subordinated notes facility, $9.8 million of net proceeds from the issuance of $10 million in Series A preferred stock and warrants to purchase of our common stock and $252,000 in proceeds from the exercise of options that resulted in the issuance of 97,474 shares of our common stock. These cash inflows were used to fund capital expenditures and working capital obligations.

        During 2000, cash inflows from financing activities included $19.0 million in additional borrowings under our senior credit facility, $7.0 million of borrowing under subordinated notes facility, $20.1 million in net proceeds from the issuance of $20.0 million in Series A preferred stock and warrants to purchase of our common stock, $4.2 million in net proceeds from the sale of 2.2 million shares of our common stock and the payment of $902,000 in loan cost. These inflows were partially offset by our purchase of $51.2 million of our outstanding subordinated notes and associated accrued interest, warrants to purchase one million shares of common stock at $2.43 per share and 1.1 million shares of our common stock, for total cash consideration of $20.0 million. The remainder of the net proceeds were used to fund capital expenditures and working capital obligations.

Senior Credit Facility

        At December 31, 2002, we had $60.0 million of indebtedness outstanding under our senior credit facility. In December 2002, DLJ Merchant Banking Partners III, L.P. in conjunction with GlobalEnergy Partners, affiliates of CSFB Private Equity, purchased $10 million of our senior credit from Shell Capital and converted it into 2,564,102 shares of our common stock, at an exercise price of $3.90 per share. We also used $5.0 million of the net proceeds from the issuance of Series B preferred stock and warrants to repay indebtedness outstanding under our senior credit facility. The credit facility agreement contains various covenants and restrictive provisions which limit our capital spending on land and seismic, ability to incur additional indebtedness, sell properties, pay dividends, purchase or redeem our capital stock, make investments or loans, create liens and make certain acquisitions. The senior credit facility requires us to maintain a current ratio (as defined) of at least 1 to 1 and an interest coverage ratio (as defined) of at least 2.5 to 1. Our current ratio at December 31, 2002 and interest coverage ratio for the twelve-month period ending December 31, 2002, were 1.3 to 1 and 3.4 to 1, respectively. In December 2002, the maturity on our senior credit facility was extended by one year to December 31, 2004.

        In March 2003, we replaced our senior credit facility with a new senior credit facility that provides for a maximum $80 million in commitments and an initial borrowing base of $70 million and matures in March 2006. Borrowings under the new credit facility are secured by substantially all of our oil and natural gas properties and other tangible assets and bear interest at either the base rate of Société Générale or London Interbank Offered Rate (LIBOR), at our option, plus a margin that varies

33

according to facility usage. Interest is paid quarterly. The collateral value and borrowing base are redetermined periodically. The unused portion of the committed borrowing base is subject to an annual commitment fee of 0.5%. As of March 21, 2003, we had $56 million of borrowings outstanding and $14 million in additional borrowing capacity under our new senior credit facility.

        The new senior credit facility agreement contains various covenants and restrictive provisions which limit our ability to incur additional indebtedness, sell properties, purchase or redeem our capital stock, make investments or loans, create liens and make certain acquisitions. The new senior credit facility requires us to maintain a current ratio (as defined) of at least 1 to 1 and an interest coverage ratio (as defined) of at least 3.25 to 1. Should we be unable to comply with these or other covenants, our senior lenders may be unwilling to waive compliance or amend the covenants in the future. In such instance, our liquidity may be adversely affected, which could in turn have an adverse impact on our future financial position and results of operations. If we should fail to perform our obligations under these and other covenants, the revolving credit commitment could be terminated and any outstanding borrowings under the facility could be declared immediately due and payable.

Senior Subordinated Notes

        As of December 31, 2002, we had $21.8 million of senior subordinated notes outstanding. The notes bear interest at 10.75% per annum, payable quarterly in arrears on the last day of January, April, July and October, are redeemable at our option for face value at any time and have no principal repayment obligations until maturity in October 2005. At our option, up to 50% of the interest payments on the senior subordinated notes can be satisfied by payment in kind through the issuance of additional senior subordinated notes in lieu of cash. In December 2002, as part of the exchange of our common stock for warrants and debt conversion rights held by Shell Capital, we extended our option to satisfy 50% of our interest obligation through the issuance of additional subordinated notes through October 2003. For the year ended December 31, 2002, we exercised this option and issued an additional $1.1 million in senior subordinated notes. As of March 21, 2003, we have exercised this option and have issued approximately $2.1 million in additional senior subordinated notes. As of March 21, 2003, we had $22.1 million of borrowings outstanding with no additional borrowing capacity under our senior subordinated notes facility.

        The senior subordinated notes are issued pursuant to a senior subordinated notes facility dated October 31, 2000, which was amended and restated on March 21, 2003. Under the facility, Shell Capital agreed to provide up to $20 million (plus any amount of interest paid in kind) in senior subordinated notes in borrowing increments of at least $1 million. Once borrowings under the subordinated notes facility have been repaid, they cannot be withdrawn. The senior subordinated notes are secured obligations ranking junior to our new senior credit facility and have covenants similar to the new senior credit facility. Our current ratio at December 31, 2002 and interest coverage ratio for the twelve-month period ending December 31, 2002, were 1.3 to 1 and 3.4 to 1, respectively.

        In October 2000, in connection with the senior subordinated notes facility, we issued warrants to purchase 1,250,000 shares of our common stock at an exercise price of $3.00 per share. Brigham valued the warrants using the Black-Scholes Option Pricing Model and recorded the estimated value of $2.9 million as deferred loan costs which are being amortized over the five-year term of the senior subordinated notes facility. In December 2002, as part of the exchange of our common stock for warrants and debt conversion rights held by Shell Capital, the warrants to purchase 1,250,000 shares of our common stock at $3.00 per share were extinguished.

Series A Preferred Stock

        We have issued two tranches of mandatorily redeemable Series A preferred stock to CSFB Private Equity. The first tranche, $20 million, was issued in November 2000 and the second tranche,

34

$10 million, was issued March 2001. We are required to pay dividends on our Series A preferred stock. At our option, these dividends may be paid in cash at a rate of 6% per annum or paid in kind through the issuance of additional shares of preferred stock in lieu of cash at a rate of 8% per annum. Our option to pay dividends in kind on the first tranche expires in October 2005 and the second tranche expires in March 2006. To date, we have satisfied all of the dividend payments with issuance of additional shares of Series A preferred stock. The Series A preferred stock has a ten-year maturity and is redeemable at our option at 100% or 101% of the stated value per share (depending upon certain conditions) at anytime prior to maturity. As of March 21, 2003 the liquidation value of the Series A preferred stock was $35.9 million including accrued but unpaid dividends. Approximately $5.9 million of the liquidation value represents additional Series A preferred stock issued and accrued to satisfy our dividend payments.

        In connection with the two tranches of Series A preferred stock, we issued to CSFB Private Equity warrants to purchase our common stock. With the first tranche we issued warrants to purchase 6,666,667 shares of our common stock at an exercise price of $3.00. With the second tranche we issued warrants to purchase 2,105,263 shares of our common stock at an exercise price of $4.75. In connection with the December 2002 Series B preferred stock and warrant offering (see Series B Preferred Stock below), the exercise price of the warrants originally issued with the second tranche of Series A preferred stock was reset to $4.35. To exercise the warrants, CSFB Private Equity has the option to use either cash or shares of our Series A preferred stock with an aggregate value equal to the exercise price.

Series B Preferred Stock

        In December 2002, we issued CSFB Private Equity 500,000 shares of our Series B preferred stock with a stated value of $20.00 per share. Net proceeds from the offering were $9.4 million and were used to reduce borrowings under our senior credit facility and fund our drilling program and working capital requirements. The Series B preferred stock has terms similar to our Series A preferred stock. We are required to pay dividends on our Series B preferred stock. At our option, these dividends may be paid in cash at a rate of 6% per annum or paid in kind through the issuance of additional shares of preferred stock in lieu of cash at a rate of 8% per annum. Our option to pay dividends in kind on our Series B preferred stock expires in December 2007. The Series B preferred stock can be redeemed at our option after December 2007 and is mandatorily redeemable in December 2012.

        As of March 21, 2003 the liquidation value of the Series B preferred stock was $10.2 million including accrued but unpaid dividends in kind. Approximately $0.2 million of the liquidation value represents additional Series B preferred stock issued and accrued to satisfy our dividend payments.

        In connection with the Series B preferred stock offering, we issued to CSFB Private Equity warrants to purchase 2,298,851 shares of our common stock at an exercise price of $4.35 per share. To exercise the warrants, CSFB has the option to use either cash or shares of our Series B preferred stock with an aggregate value equal to the exercise price. In the event that our stock price averages at least $6.525 for 60 sixty consecutive trading days, then the warrants must be exercised if we so require. For financial reporting purposes, the warrants issued with the Series B preferred stock were valued at approximately $4.6 million using the Black Scholes Option Pricing model and were recorded as additional paid in capital in December 2002.

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Capital Expenditures

		2002			2001			2000
		(in thousands)
Drilling		$	19,800		$	27,209		$	18,461
Land and G&G			3,751			2,750			4,585
Capitalized G&A and interest			5,657			6,050			6,300
Proceeds from participants and sales			(1,524	)		(397	)		(4,002	)
	Total capital expenditures on oil & gas properties	$	27,684		$	35,612		$	25,344
Other property and equipment			249			241			135
	Total capital expenditures	$	27,933		$	35,853		$	25,479

        Our capital-spending budget for 2003 is $39.3 million. The majority of our planned 2003 expenditures will be directed towards drilling our prospect inventory in a continued effort to focus resources on our primary objective of growing production volumes and cash flow. For 2003, we expect to spend approximately $27.9 million to drill 41 wells with an average working interest of 36%. Capitalizing on the prior exploration successes at the Home Run, Mills Ranch, Triple Crown, Floyd Fault Block and Providence Fields, approximately 60% of our 2003 drilling expenditures are dedicated to development drilling. Spending will be funded by our operating cash flow, cash on hand at the start of the year and available capacity under our new senior credit facility. Capital expenditures for 2003 are expected to be up approximately 42% over 2002. This increase is primarily attributable to a more robust current and forecasted commodity price environment and to lesser degree our additional financial flexibility resulting from the CSFB Private Equity Financings completed in December 2002.

        Actual capital spending may vary and is subject to changing market condition. The 2003 capital expenditure budget was developed using certain assumed price levels for the sales of crude oil and natural gas and forecasted production growth. Changes in commodity prices or variances from forecasted production growth could impact our cash flows from operations and funds available for reinvestment. For example, shortfalls in budgeted cash flows from operations could result in the reduction of the our capital spending program, increases in borrowing under our new senior credit facility, issuance of additional equity or debt securities or divestments of properties. We evaluate our level of capital spending throughout the year based upon drilling results, commodity prices and cash flows from operations.

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Contractual Obligations

        The following schedule summarizes our known contractual cash obligations at December 31, 2002 and the effect such obligations are expected to have on our liquidity and cash flow in future periods.

	Payments Due by Year
	Total Outstanding		2003		2004-2005		2006-2007		Thereafter
Senior credit facility	$	60,000	$	—	$	60,000	$	—	$	—
Subordinated notes facility		21,797		—		21,797		—		—
Non-cancelable operating leases		3,983		885		1,770		1,328		—
Manditorily redeemable, Series A preferred stock(a)		35,303		—		—		—		35,303
Manditorily redeemable, Series B preferred stock(b)		10,025		—		—		—		10,025
Total Contractual Cash Obligations	$	131,108	$	885	$	83,567	$	1,328	$	45,328

(a)

CSFB Private Equity can use $29.2 million of this Series A preferred stock to pay the warrant exercise price to purchase 6,666,667 shares of our common stock for $3.00 per share and 2,105,263 shares of our common stock for $4.35 per share. If the price of our common stock trades above $5.00 per share for 60 consecutive trading days, we can require CSFB Private Equity to exercise the warrants to purchase 6,666,667 shares of our common stock for $3.00 per share. If the price of our common stock averages above $6.525 for 60 consecutive trading days, we can require CSFB Private Equity to exercise the warrants to purchase 2,105,263 shares of our common stock for $4.35 per share. If we require CSFB Private Equity to exercise either of these warrants, we will be required to use the proceeds from the exercise to retire Series A preferred stock. The Series A preferred stock is redeemable at our option at 100% or 101% of the stated value (depending upon certain conditions) at anytime prior to maturity.

(b)

CSFB Private Equity can use $10.0 million of this Series B preferred stock to pay the warrant exercise price to purchase 2,298,851 shares of our common stock for for $4.35 per share. If the price of our common stock averages $6.525 for 60 consecutive trading days, we can require CSFB Private Equity to exercise the warrants to purchase 2,298,851 shares of our common stock for $4.35 per share. If we require CSFB Private Equity to exercise these warrants, we will be required to use the proceeds from the exercise to retire Series B preferred stock and we will be required to retire any Series B preferred that remains outstanding. The Series B preferred stock is redeemable at our option at 100% or 101% of the stated value (depending upon certain conditions) at anytime after December 2007.

        Some of our commodity price risk management arrangements have required us to deliver cash collateral or other assurances of performance to the counterparties in the event that our payment obligations with respect to our commodity price risk management transactions exceed certain levels. At December 31, 2002, we were required to post $1.9 million in collateral. It is not anticipated that we will be required to post cash collateral with the new senior credit facility. However, future requirements are uncertain and will depend on arrangements with our counterparities and highly volatile oil and natural gas prices.

Other Matters

Reconciliation of Non-GAAP Measures

        EBITDA is defined as net income (loss) plus interest expense, depletion, depreciation and amortization expenses, deferred income taxes and other non-cash items.

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        We believe that operating income is the financial measure calculated and presented in accordance with generally accepted accounting principles that is most directly comparable to EBITDA as defined. The following table reconciles EBITDA as defined with our operating income, as derived from our financial statements.

	2002			2001			2000
	(in thousands)
Operating Income	$	9,435		$	10,025		$	3,647
Depletion, depreciation and amortization		15,034			13,888			8,540
Non-cash compensation expense		596			—			—
Interest Income		119			264			108
Cash settlements on derivatives not qualifying for hedge accounting treatment		(559	)		(1,492	)		(620	)
Amortization of deferred loss on derivative instruments		—			—			280
Cash portion of other income/(expense)		(14	)		—			—
EBITDA	$	24,611		$	22,685		$	11,955

Derivative Instruments

        Our results of operations and operating cash flow are impacted by changes in market prices for oil and gas. We believe the use of derivative instruments, although not free of risk, allows us to reduce our exposure to oil and natural gas sales price fluctuations and thereby achieve a more predictable cash flow. While the use of derivative instruments limits the downside risk of adverse price movements, their use may also limit future revenues from favorable price movements. Moreover, our hedging arrangements generally do not apply to all of our production and thus provide only partial price protection against declines in commodity prices. We expect that the amount of our hedges will vary from time to time. See "—Risk Factors—Our Hedging Transactions May Not Prevent Losses" and "Item 7A. Quantitative and Qualitative Disclosures About Market Risk".

Effects of Inflation and Changes in Prices

        Our results of operations and cash flows are affected by changing oil and natural gas prices. If the price of oil and natural gas increases (decreases), there could be a corresponding increase (decrease) in revenues as well as the operating costs that we are required to bear for operations. Inflation has had a minimal effect on us.

Environmental and Other Regulatory Matters

        Our business is subject to certain federal, state and local laws and regulations relating to the exploration for and the development, production and marketing of oil and natural gas, as well as environmental and safety matters. Many of these laws and regulations have become more stringent in recent years, often imposing greater liability on a larger number of potentially responsible parties. Although we believe that we are in substantial compliance with all applicable laws and regulations, the requirements imposed by laws and regulations are frequently changed and subject to interpretation, and we cannot predict the ultimate cost of compliance with these requirements or their effect on our operations. Any suspensions, terminations or inability to meet applicable bonding requirements could materially adversely affect our financial condition and operations. Although significant expenditures may be required to comply with governmental laws and regulations applicable to us, compliance has not had a material adverse effect on our earnings or competitive position. Future regulations may add to the cost of, or significantly limit, drilling activity. See "—Risk Factors—We Are Subject To Various Governmental Regulations And Environmental Risks" and "Item 1. Business—Governmental Regulation" and "Item 1. Business—Environmental Matters".

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Forward Looking Information

        We or our representatives may make forward looking statements, oral or written, including statements in this report, press releases and filings with the SEC, regarding estimated future net revenues from oil and natural gas reserves and the present value thereof, planned capital expenditures (including the amount and nature thereof), increases in oil and gas production, the number of wells we anticipate drilling during 2003 and our financial position, business strategy and other plans and objectives for future operations. Although we believe that the expectations reflected in these forward looking statements are reasonable, there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected effects on our business or operations. Among the factors that could cause actual results to differ materially from our expectations are general economic conditions, inherent uncertainties in interpreting engineering data, operating hazards, delays or cancellations of drilling operations for a variety of reasons, competition, fluctuations in oil and gas prices, availability of sufficient capital resources to us or our project participants, government regulations and other factors set forth among the risk factors noted below or in the description of our business in Item 1 of this report. All subsequent oral and written forward looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these factors. We assume no obligation to update any of these statements.

Risk Factors

We Are Substantially Leveraged

        Our outstanding long-term debt was $81.8 million as of December 31, 2002, and $78.1 million as of March 21, 2003. The credit agreements related to our new senior credit facility and senior subordinated notes facility limit the amount of additional debt borrowings, including borrowings under these facilities or other senior or subordinated indebtedness. As of March 21, 2003, we had $14 million of additional borrowing capacity under our new senior credit facility and no additional borrowing availability under our senior subordinated notes facility.

        Our level of indebtedness will have several important effects on our operations, including those listed below.

•

We will dedicate a substantial portion of our cash flow from operations to the payment of interest on our indebtedness and to the payment of our other current obligations, and will not have these cash flows available for other purposes.



•

The covenants in our credit facilities limit our ability to borrow additional funds or dispose of assets and may affect our flexibility in planning for, and reacting to, changes in business conditions.



•

Our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, general corporate purposes or other purposes may be impaired.

        We may also be required to alter our capitalization significantly to accommodate future exploration, development or acquisition activities. These changes in capitalization may significantly alter our leverage and dilute the equity interests of existing stockholders. Our ability to meet our debt service obligations and to reduce our total indebtedness will be dependent upon our future performance, which will be subject to general economic conditions and to financial, business and other factors affecting our operations, many of which are beyond our control. We cannot assure you that our future performance will not be harmed by such economic conditions and financial, business and other factors. See "—Liquidity and Capital Resources".

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We Have Substantial Capital Requirements

        We make and will continue to make substantial capital expenditures in our exploration and development projects. While we believe that our cash flow from operations, remaining availability under our new senior credit facility and 2003 beginning cash balance should allow us to finance our planned operations through 2003 based on current conditions and expectations, additional financing could be required in the future to fund our exploration and development activities. We cannot assure you that we will be able to secure additional financing on reasonable terms or at all, or that financing will continue to be available to us under our existing or new financing arrangements. Without additional capital resources, our drilling and other activities may be limited and our business, financial condition and results of operations may suffer. See "—Liquidity and Capital Resources".

Volatility Of Oil And Gas Markets Affects Us; Oil And Natural Gas Prices Are Volatile

        Our revenues, operating results and future rate of growth depend highly upon the prices we receive for our oil and natural gas production. Historically, the markets for oil and natural gas have been volatile and are likely to continue to be volatile in the future. Market prices of oil and natural gas depend on many factors beyond our control, including:

•

worldwide and domestic supplies of oil and natural gas;



•

the ability of the members of the Organization of Petroleum Exporting Countries to agree to and maintain oil price and production controls;



•

political instability or armed conflict in oil-producing regions;



•

the price and level of foreign imports;



•

the level of consumer demand;



•

the price and availability of alternative fuels;



•

the availability of pipeline capacity;



•

weather conditions;



•

domestic and foreign governmental regulations and taxes; and



•

the overall economic environment.

        We cannot predict future oil and natural gas price movements with certainty. During 2002, the high and low settlement prices for oil on the NYMEX were $32.72 per Bbl and $17.97 per Bbl, and the high and low settlement prices for natural gas on the NYMEX were $5.34 per MMBtu and $1.91 per MMBtu. Significant declines in oil and natural gas prices for an extended period may have the following effects on our business:

•

limit our financial condition, liquidity, ability to finance planned capital expenditures and results of operations;



•

reduce the amount of oil and natural gas that we can produce economically;



•

cause us to delay or postpone some of our capital projects;



•

reduce our revenues, operating income and cash flow; and



•

reduce the carrying value of our oil and natural gas properties.

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Our Hedging Transactions May Not Prevent Losses

        In an attempt to reduce our sensitivity to energy price volatility, we use swap and collar hedging arrangements that generally result in a fixed price or a range of minimum and maximum price limits over a specified monthly time period. If we do not produce our oil and natural gas reserves at rates equivalent to our hedged position, we would be required to satisfy our obligations under hedging contracts on potentially unfavorable terms without the ability to hedge that risk through sales of comparable quantities of our own production. This situation occurred during portions of 2000, due in part to our sale of certain producing reserves in mid-1999. As a result, our cash flow was significantly reduced in 2000. Because the terms of our hedging contracts are based on assumptions and estimates of numerous factors such as cost of production and pipeline and other transportation and marketing costs to delivery points, substantial differences between the hedged prices and actual results could harm our anticipated profit margins and our ability to manage the risk associated with fluctuations in oil and natural gas prices. Hedging contracts limit the benefits we will realize if actual prices rise above the contract prices. We could be financially harmed if the other party to the hedging contracts proves unable or unwilling to perform its obligations under such contracts. See "—Other Matters—Derivative Instruments" and "Item 7A. Quantitative and Qualitative Disclosures About Market Risk".

Exploratory Drilling Is A Speculative Activity Involving Numerous Risks And Uncertain Costs; We Are Dependent On Exploratory Drilling Activities

        Our revenues, operating results and future rate of growth depend highly upon the success of our exploratory drilling program. Exploratory drilling involves numerous risks, including the risk that we will not encounter commercially productive natural gas or oil reservoirs. We cannot always predict the cost of drilling, and we may be forced to limit, delay or cancel drilling operations as a result of a variety of factors, including:

•

unexpected drilling conditions;



•

pressure or irregularities in formations;



•

equipment failures or accidents;



•

adverse weather conditions;



•

compliance with governmental requirements; and



•

shortages or delays in the availability of drilling rigs and the delivery of equipment.

        We may not be successful in our future drilling activities because even with the use of 3-D seismic and other advanced technologies, exploratory drilling is a speculative activity. We could incur losses because our use of 3-D seismic data and other advanced technologies requires greater predrilling expenditures than traditional drilling strategies. Even when fully utilized and properly interpreted, our 3-D seismic data and other advanced technologies only assist us in identifying subsurface structures and do not indicate whether hydrocarbons are in fact present in those structures. Because we interpret the areas desirable for drilling from 3-D seismic data gathered over large areas, we may not acquire option and lease rights until after the seismic data is available and, in some cases, until the drilling locations are also identified. Although we have identified numerous potential drilling locations, we cannot assure you that we will ever lease, drill or produce oil or natural gas oil from these or any other potential drilling locations. We cannot assure you that we will be successful in our drilling activities, that our overall drilling success rate for activity within a particular province will not decline, or that our completed wells will ultimately produce our estimated economically recoverable reserves. Unsuccessful drilling activities could materially harm our operations and financial condition.

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We Are Subject To Various Casualty Risks

        Our operations are subject to hazards and risks inherent in drilling for and producing and transporting oil and natural gas, such as:

•

fires;



•

natural disasters;



•

formations with abnormal pressures;



•

blowouts, cratering and explosions; and



•

pipeline ruptures and spills.

        Any of these hazards and risks can result in the loss of hydrocarbons, environmental pollution, personal injury claims and other damage to our properties and the property of others. See "Item 1. Business—Operating Hazards and Uninsured Risks".

We May Not Have Enough Insurance To Cover Some Operating Risks

        We maintain insurance coverage against some, but not all, potential losses in order to protect against operating hazards. We may elect to self-insure if our management believes that the cost of insurance, although available, is excessive relative to the risks presented. We generally maintain insurance for the hazards and risks inherent in drilling for and producing and transporting oil and natural gas and believe this insurance is adequate. If an event occurs that is not covered, or not fully covered, by insurance, it could harm our financial condition and results of operations. In addition, we cannot fully insure against pollution and environmental risks. See "Item 1. Business—Operating Hazards and Uninsured Risks".

The Marketability Of Our Production Is Dependent On Facilities That We Typically Do Not Own Or Control

        The marketability of our production depends in part upon the availability, proximity and capacity of natural gas gathering systems, pipelines and processing facilities. We generally deliver natural gas through gas gathering systems and gas pipelines that we do not own. Our ability to produce and market oil and natural gas could be harmed by any dramatic change in market factors or by:

•

federal and state regulation of oil and natural gas production and transportation;



•

tax and energy policies;



•

changes in supply and demand; and



•

general economic conditions.

We Have Historical Operating Losses And Our Future Results May Vary

        We cannot assure you that we will be profitable in the future. At December 31, 2002, we had an accumulated deficit of $24.4 million and total stockholders' equity of $61.7 million. We have recognized the following annual net losses before extraordinary items since 1995: $1.6 million in 1995, $450,000 in 1996, $1.1 million (including a net $1.2 million non-cash deferred income tax charge incurred in connection with our conversion from a partnership to a corporation) in 1997, $33.3 million (including a $25.9 million non-cash writedown in the carrying value of our oil and natural gas properties) in 1998, $21.6 million (including a $12.2 million non-cash loss on the sale of oil and natural gas properties) in 1999, and $15.7 million in 2000. See "Item 6. Selected Financial Data".

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Our Future Operating Results May Fluctuate

        Our future operating results may fluctuate significantly depending upon a number of factors, including:

•

industry conditions;



•

prices of oil and natural gas;



•

rates of drilling success;



•

capital availability;



•

rates of production from completed wells; and



•

the timing and amount of capital expenditures.

        This variability could cause our business, financial condition and results of operations to suffer. In addition, any failure or delay in the realization of expected cash flows from operating activities could limit our ability to invest and participate in economically attractive projects.

Maintaining Reserves And Revenues In The Future Depends On Successful Exploration And Development

        In general, production from oil and natural gas properties declines as reserves are depleted, with the rate of decline depending on reservoir characteristics. Except to the extent we conduct successful exploration and development activities or acquire properties containing proved reserves, or both, our proved reserves will decline as reserves are produced. Our future oil and natural gas production depends highly upon our ability to economically find, develop or acquire reserves in commercial quantities.

        The business of exploring for or developing reserves is capital intensive. Reductions in our cash flow from operations and limitations on or unavailability of external sources of capital may impair our ability to make the necessary capital investment to maintain or expand our asset base of oil and natural gas reserves. In addition, we cannot be certain that our future exploration and development activities will result in additional proved reserves or that we will be able to drill productive wells at acceptable costs. Furthermore, although significant increases in prevailing prices for oil and natural gas could cause increases in our revenues, our finding and development costs could also increase. Finally, we participate in a percentage of our wells as a non-operator. The failure of an operator of our wells to adequately perform operations, or an operator's breach of the applicable agreements, could harm us.

We Are Subject To Uncertainties In Reserve Estimates And Future Net Cash Flows

        There is substantial uncertainty in estimating quantities of proved reserves and projecting future production rates and the timing of development expenditures. No one can measure underground accumulations of oil and natural gas in an exact way. Accordingly, oil and natural gas reserve engineering requires subjective estimations of those accumulations. Estimates of other engineers might differ widely from those of our independent petroleum engineers. Accuracy of reserve estimates depends on the quality of available data and on engineering and geological interpretation and judgment. Our independent petroleum engineers may make material changes to reserve estimates based on the results of actual drilling, testing, and production. As a result, our reserve estimates often differ from the quantities of oil and natural gas we ultimately recover. Also, we make certain assumptions regarding future oil and natural gas prices, production levels, and operating and development costs that may prove incorrect. Any significant variance from these assumptions could greatly affect our estimates of reserves, the economically recoverable quantities of oil and natural gas attributable to any particular group of properties, the classifications of reserves based on risk of recovery, and estimates of the future net cash flows. See "Item 2. Properties—Oil and Natural Gas Reserves".

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        Actual future net cash flows from our oil and natural gas properties also will be affected by factors such as:

•

the amount and timing of actual production;



•

supply and demand for oil and natural gas;



•

limits or increases in consumption by gas purchasers; and



•

changes in governmental regulations or taxation.

        The timing of both our production and our incurrence of expenses in connection with the development and production of oil and natural gas properties will affect the timing of actual future net cash flows from proved reserves, and thus their actual present value. In addition, the 10% discount factor we use when calculating discounted future net cash flows in compliance with the SEC reporting requirements may not necessarily be the most appropriate discount factor based on interest rates in effect from time to time and risks associated with us or the oil and gas industry in general.

We Face Significant Competition

        We operate in the highly competitive areas of oil and natural gas exploration, exploitation, acquisition and production with other companies. We face intense competition from a large number of independent, technology-driven companies as well as both major and other independent oil and natural gas companies in a number of areas such as:

•

seeking to acquire desirable producing properties or new leases for future exploration;



•

marketing our oil and natural gas production; and



•

seeking to acquire the equipment and expertise necessary to operate and develop those properties.

        Many of our competitors have financial and other resources substantially in excess of those available to us. This highly competitive environment could harm our business. See "Item 1. Business—Competition".

We Are Subject To Various Governmental Regulations And Environmental Risks

        Our business is subject to federal, state and local laws and regulations relating to the exploration for, and the development, production and marketing of, oil and natural gas, as well as safety matters. Although we believe we are in substantial compliance with all applicable laws and regulations, legal requirements are frequently changed and subject to interpretation, and we are unable to predict the ultimate cost of compliance with these requirements or their effect on our operations. We may be required to make significant expenditures to comply with governmental laws and regulations.

        Our operations are subject to complex environmental laws and regulations adopted by federal, state and local governmental authorities. Environmental laws and regulations change frequently, and the implementation of new, or the modification of existing, laws or regulations could harm us. The discharge of natural gas, oil, or other pollutants into the air, soil or water may give rise to significant liabilities on our part to the government and third parties and may require us to incur substantial costs of remediation. We cannot be certain that existing environmental laws or regulations, as currently interpreted or reinterpreted in the future, or future laws or regulations will not harm our results of operations and financial condition. See "Item 1. Business—Governmental Regulation" and "Item 1. Business—Environmental Matters".

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Our Business May Suffer If We Lose Key Personnel

        We have assembled a team of geologists and geophysicists who have considerable experience in applying 3-D imaging technology to explore for and to develop oil and natural gas. We depend upon the knowledge, skills and experience of these experts to provide 3-D imaging and to assist us in reducing the risks associated with our participation in oil and natural gas exploration and development projects. In addition, the success of our business depends, to a significant extent, upon the abilities and continued efforts of our management, particularly Ben M. Brigham, our Chief Executive Officer, President and Chairman of the Board. We have an employment agreement with Ben M. Brigham, but do not have an employment agreement with any of our other employees. We have key man life insurance on Mr. Brigham in the amount of $2 million. If we lose the services of our key management personnel or technical experts, or are unable to attract additional qualified personnel, our business, financial condition, results of operations, development efforts and ability to grow could suffer. We cannot assure you that we will be successful in attracting and retaining such executives, geophysicists, geologists and engineers. See "Item 1. Business—Exploration and Development Staff" and "Executive Officers of the Registrant".

Control By Certain Stockholders And Certain Anti-Takeover Provisions May Affect You; Certain Of Our Affiliates Control A Majority Of The Outstanding Common Stock

        As of March 21, 2003, our directors, executive officers and 10% or greater stockholders, and certain of their affiliates, beneficially owned approximately 54% of our outstanding common stock. Accordingly, these stockholders, as a group, will be able to control the outcome of stockholder votes, including votes concerning the election of directors, the adoption or amendment of provisions in our certificate of incorporation or bylaws, and the approval of mergers and other significant corporate transactions. The existence of these levels of ownership concentrated in a few persons makes it unlikely that any other holder of common stock will be able to affect our management or direction. These factors may also have the effect of delaying or preventing a change in our management or voting control.

Certain Anti-Takeover Provisions May Affect Your Rights As A Stockholder

        Our certificate of incorporation authorizes our Board of Directors to issue up to 10 million shares of preferred stock without stockholder approval and to set the rights, preferences and other designations, including voting rights, of those shares as the Board of Directors may determine. These provisions, alone or in combination with the other matters described in the preceding paragraph may discourage transactions involving actual or potential changes in our control, including transactions that otherwise could involve payment of a premium over prevailing market prices to holders of our common stock. We are also subject to provisions of the Delaware General Corporation Law that may make some business combinations more difficult.

The Market Price Of Our Stock Is Volatile

        The trading price of our common stock and the price at which we may sell securities in the future is subject to large fluctuations in response to any of the following: limited trading volume in our stock, changes in government regulations, quarterly variations in operating results, our involvement in litigation, general market conditions, the prices of oil and natural gas, announcements by us and our competitors, our liquidity, our ability to raise additional funds and other events.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Management Opinion Concerning Derivative Instruments

        We limit our use of derivative instruments principally to commodity price hedging activities, whereby gains and losses are generally offset by price changes in the underlying commodity. Our use of derivative instruments for hedging activities could materially affect its results of operations in particular quarterly or annual periods since such instruments can limit our ability to benefit from favorable oil and natural gas price movements.

Commodity Price Risk

        Our primary commodity market risk exposure is to changes in the prices related to the sale of its oil and natural gas production. The market prices for oil and natural gas have been volatile and are likely to continue to be volatile in the future. As such, we employ established policies and procedures to manage our exposure to fluctuations in the sales prices we receives for its oil and natural gas production using derivative instruments.

        We believe the use of derivative instruments, although not free of risk, allows us to reduce our exposure to oil and natural gas sales price fluctuations and thereby achieve a more predictable cash flow. While the use of derivative instruments limits the downside risk of adverse price movements, their use may also limit future revenues from favorable price movements. Moreover, our hedging arrangements generally do not apply to all of its production and thus provide only partial price protection against declines in commodity prices. We expect that the amount of our hedges will vary from time to time.

        The gas derivative transactions are generally settled based upon the average of the reporting settlement prices on the NYMEX for the last three trading days of a particular contract month. The oil derivative transactions are generally settled based on the average reporting settlement prices on the NYMEX for each trading day of a particular calendar month.

        The table below summarizes our total natural gas production volumes subject to derivative transactions during 2002 and the weighted average NYMEX reference price for those volumes.

Natural gas swaps			Natural gas caps
Volumes (MMbtu)		3,358,500	Volumes (MMbtu)		1,810,000
Average price ($/MMbtu)	$	3.132	Average price ($/MMbtu)	$	2.633

        The table below summarizes our total crude oil production volumes subject to derivative transactions during 2002 and the weighted average NYMEX reference price for those volumes.

Crude oil swaps			Crude oil collars
Volumes (Bbls)		126,500	Volumes (Bbls)		204,500
Average price ($/Bbls)	$	25.96	Average price ($/Bbls)
			Floor	$	18.00
			Ceiling	$	22.36

        As of March 21, 2003, our oil and gas derivative instruments were comprised of swaps, collars and floors.

        For swap instruments, we receive a fixed price for the hedged commodity and pay a floating market price, as defined in each instrument, to the counterparty. These instruments are settled monthly. When the floating price exceeds the fixed price for a contract month, we pay the counterparty. When the fixed price exceeds the floating price, the counterparty is required to make a

46

payment to us. We have designated theses swap instruments as cash flow hedges designed to achieve a more predictable cash flow, as well as reduce our exposure to price volatility.

        For collar instruments, we establish a floor and ceiling price on future commodity production. These instruments are settled monthly. When the settlement price for a period is above the ceiling price the, we pay the counterparty. When the settlement price for a period is below the floor price, the counterparty is required to pay us. We have designated these collar instruments as cash flow hedges designed to achieve a more predictable cash flow, as well as reduce our exposure to price volatility.

        For floor instruments, we establish a floor price on future commodity production. When the settlement price for a period is below the floor price, the counterparty is required to pay us.

        The following tables reflect our natural gas derivative instruments, associated volumes and the corresponding weighted average NYMEX reference price by quarter.

	2003								2004
As of March 21, 2003	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		First Quarter		Second Quarter		Third Quarter		Fourth Quarter
Natural gas swaps:
Volumes (MMbtu)		832,500		819,000		598,000		414,000		295,750		227,500		138,000		92,000
Average price ($/MMBtu)	$	3.632	$	3.846	$	3.867	$	4.039	$	4.963	$	4.252	$	4.180	$	4.360
Natural gas floors:
Volumes (MMbtu)		—		150,000		460,000		460,000		—		—		—		—
Average price ($/MMBtu)	$	—	$	4.500	$	4.500	$	4.500	$	—	$	—	$	—	$	—

        The following tables reflect our crude oil derivative instruments, associated volumes and the corresponding weighted average NYMEX reference price by quarter.

	2003								2004
As of March 21, 2003	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		First Quarter		Second Quarter		Third Quarter		Fourth Quarter
Crude oil swaps:
Volumes (Bbls)		67,500		61,425		55,200		41,400		29,575		20,475		13,800		9,200
Average price ($/Bbl)	$	25.29	$	25.22	$	23.77	$	23.21	$	25.35	$	24.52	$	23.91	$	23.80
Crude oil collars:
Volumes (Bbls)		22,500		22,750		—		—		—		—		—		—
Average price ($/Bbl)
Floor	$	18.00	$	18.00	$	—	$	—	$	—	$	—	$	—	$	—
Ceiling		22.56		22.56		—		—		—		—		—		—

Interest Rate Risk

        We are subject to interest rate risk as borrowings under our senior credit facility ($60.0 million outstanding as of December 31, 2002) accrue interest at floating rates based on the lender's base rate or LIBOR. We do not utilize derivative instruments to protect against changes in interest rates on debt borrowings. Based on our outstanding borrowing under our senior credit facility at December 31, 2002, an adverse change (defined as a hypothetical 1% and 2% increase in interest rates on such borrowings) would reduce cash flow by approximately $600,000 and $1.2 million, respectively, from currently projected levels.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

        Our Consolidated Financial Statements required by this item are included on the pages immediately following the Index to Financial Statements appearing on page F-1.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

        None.

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PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

        The information required by this item is incorporated by reference to information under the caption "Proposal One—Election of Directors" and to the information under the caption "Section 16(a) Beneficial Ownership Reporting Compliance" in our definitive 2003 Proxy Statement for our annual meeting of stockholders to be held on Wednesday, May 28, 2003. The 2003 Proxy Statement will be filed with the Securities and Exchange Commission not later than 120 days subsequent to December 31, 2002.

        Pursuant to Item 401(b) of Regulation S-K, the information required by this item with respect to Brigham's executive officers is set forth in Part I of this report.

ITEM 11. EXECUTIVE COMPENSATION

        The information required by this item is incorporated herein by reference to the 2003 Proxy Statement, which will be filed with the Commission not later than 120 days subsequent to December 31, 2002.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The information required by this item is incorporated herein by reference to the 2003 Proxy Statement, which will be filed with the Securities and Exchange Commission not later than 120 days subsequent to December 31, 2002. See "Item 5. Market for Registrants Common Equity and Related Stockholder Matters", which sets forth certain information with respect to our equity compensation plans.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

        The information required by this item is incorporated herein by reference to the 2003 Proxy Statement, which will be filed with the Commission not later than 120 days subsequent to December 31, 2002.

ITEM 14. CONTROLS AND PROCEDURES

(a)    Evaluation of disclosure controls and procedures.    Within 90 days prior to the filing date of this Form 10-K, our principal executive officer (CEO) and principal financial officer (CFO) carried out an evaluation of the effectiveness of our disclosure controls and procedures. Based on this evaluation, the CEO and CFO believe that our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure; and that Brigham's disclosure controls and procedures are effective.

(b)    Changes in internal controls.    There have been no significant changes in our internal controls or in other factors that could significantly affect our internal controls subsequent to the evaluation referred to in Item 14. (a), above, nor have there been any corrective actions with regard to significant deficiencies or material weaknesses.

49

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)

1. Consolidated Financial Statements:

        See Index to Financial Statements on page F-1.

2.

No schedules are required



3.

Exhibits:

The exhibits listed in the accompanying Index to Exhibits are filed or incorporated by reference as part of the annual report.

(b)

The following reports on Form 8-K were filed by Brigham during the last quarter of the period covered by this Annual Report on Form 10-K:



(1)

Filed November 8, 2002 on Item 5. Other Events (Regarding third quarter 2002 operational and financial results)



(2)

Filed December 27, 2002 on Item 5. Other Events (Regarding adoption of Rule 10b 5-1 (c) plans by certain officers)

50

GLOSSARY OF OIL AND GAS TERMS

        The following are abbreviations and definitions of certain terms commonly used in the oil and gas industry and in this report.

        All Sources Finding Costs.    Net capitalized costs incurred in the acquisition, exploration and development of proved oil and natural gas reserves divided by total proved reserve additions. Total reserve additions includes extensions, discoveries, revisions of previous estimates and purchases of properties but excludes sales of properties.

        Bbl.    One stock tank barrel, or 42 U.S. gallons liquid volume, used herein in reference to oil or other liquid hydrocarbons.

        Bcf.    One billion cubic feet.

        Bcfe.    One billion cubic feet of natural gas equivalent. In reference to natural gas, natural gas equivalents are determined using the ratio of 6 Mcf of natural gas to 1 Bbl of oil, condensate of natural gas liquids.

        CAEX.    Computer-aided exploration.

        Completion.    The installation of permanent equipment for the production of oil or natural gas.

        Completion Rate.    The number of wells on which production casing has been run for a completion attempt as a percentage of the number of wells drilled.

        Developed Acreage.    The number of acres which are allocated or assignable to producing wells or wells capable of production.

        Development Well.    A well drilled within the proved area of an oil or natural gas reservoir to the depth of a stratigraphic horizon known to be productive.

        Drilling Finding Costs.    The costs associated with drilling and completing a well divided by total proved reserve additions. The costs do not include seismic and land acquisition costs for that well, future development costs associated with proved undeveloped reserves added by the well, capitalized general and administrative cost or capitalized interest.

        Dry Well.    A well found to be incapable of producing either oil or natural gas in sufficient quantities to justify completion of an oil or gas well.

        Exploratory Well.    A well drilled to find and produce oil or natural gas in an unproved area, to find a new reservoir in a field previously found to be productive of oil or gas in another reservoir, or to extend a known reservoir.

        Finding and Development Costs.    Capital costs incurred in the acquisition, exploration and development of proved oil and natural gas reserves divided by total proved reserve additions.

        Gross Acres or Gross Wells.    The total acres or wells, as the case may be, in which Brigham has a working interest.

        MBbl.    One thousand barrels of oil or other liquid hydrocarbons.

        Mcf.    One thousand cubic feet of natural gas.

        Mcfe.    One thousand cubic feet of natural gas equivalents.

        MMBbl.    One million barrels of oil or other liquid hydrocarbons.

51

        MMBtu.    One million Btu, or British Thermal Units. One British Thermal Unit is the quantity of heat required to raise the temperature of one pound of water by one degree Fahrenheit.

        MMcf.    One million cubic feet of natural gas.

        MMcfe.    One million cubic feet of natural gas equivalents.

        Net Acres or Net Wells.    Gross acres or wells multiplied, in each case, by the percentage working interest owned by Brigham.

        Net Production.    Production that is owned by Brigham less royalties and production due others.

        Oil.    Crude oil, condensate or other liquid hydrocarbons.

        Operator.    The individual or company responsible for the exploration, development, and production of an oil or gas well or lease.

        Present Value of Future Net Revenues or PV10%.    The pretax present value of estimated future revenues to be generated from the production of proved reserves calculated in accordance with SEC guidelines, net of estimated production and future development costs, using prices and costs as of the date of estimation without future escalation, without giving effect to non-property related expenses such as general and administrative expenses, debt service and depreciation, depletion and amortization, and discounted using an annual discount rate of 10%.

        Proved Developed Finding Costs.    The costs associated with drilling and completing a well divided by total proved developed reserve additions. The costs do not include seismic and land acquisition costs for that well, future development costs associated with proved undeveloped reserves added by the well, capitalized general and administrative cost or capitalized interest.

        Proved Developed Reserves.    Reserves that can be expected to be recovered through existing wells with existing equipment and operating methods.

        Proved Reserves.    The estimated quantities of crude oil, natural gas and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.

        Proved Undeveloped Reserves.    Reserves that are expected to be recovered from new wells on undrilled acreage or from existing wells where a relatively major expenditure is required for recompletion.

        Psi.    Pounds per square inch.

        Royalty.    An interest in an oil and gas lease that gives the owner of the interest the right to receive a portion of the production from the leased acreage (or of the proceeds of the sale thereof), but generally does not require the owner to pay any portion of the costs of drilling or operating the wells on the leased acreage. Royalties may be either landowner's royalties, which are reserved by the owner of the leased acreage at the time the lease is granted, or overriding royalties, which are usually reserved by an owner of the leasehold in connection with a transfer to a subsequent owner.

        Spud.    Start drilling a new well (or restart).

        Standardized Measure.    The aftertax present value of estimated future revenues to be generated from the production of proved reserves calculated in accordance with SEC guidelines, net of estimated production and future development costs, using prices and costs as of the date of estimation without future escalation, without giving effect to non-property related expenses such as general and

52

administrative expenses, debt service and depreciation, depletion and amortization, and discounted using an annual discount rate of 10%.

        2-D Seismic.    The method by which a cross-section of the earth's subsurface is created through the interpretation of reflecting seismic data collected along a single source profile.

        3-D Seismic.    The method by which a three dimensional image of the earth's subsurface is created through the interpretation of reflection seismic data collected over surface grid. 3-D seismic surveys allow for a more detailed understanding of the subsurface than do conventional surveys and contribute significantly to field appraisal, development and production.

        Working Interest.    An interest in an oil and gas lease that gives the owner of the interest the right to drill for and produce oil and natural gas on the leased acreage and requires the owner to pay a share of the costs of drilling and production operations.

53

SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunder duly authorized, as of March 31, 2003.

BRIGHAM EXPLORATION COMPANY
By:	/s/  BEN M. BRIGHAM Ben M. Brigham Chief Executive Officer, President and Chairman of the Board

        Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below as of March 31, 2003, by the following persons on behalf of the Registrant and in the capacity indicated.

/s/  BEN M. BRIGHAM Ben M. Brigham
Chief Executive Officer, President and
Chairman of the Board
(Principal Executive Officer)

/s/  EUGENE B. SHEPHERD, JR. Eugene B. Shepherd, Jr.
Chief Financial Officer
(Principal Financial and Accounting Officer)

/s/  ANNE L. BRIGHAM Anne L. Brigham
Director

/s/  HAROLD D. CARTER Harold D. Carter
Director

/s/  STEPHEN C. HURLEY Stephen C. Hurley
Director

/s/  STEPHEN P. REYNOLDS Stephen P. Reynolds
Director

/s/  HOBART. A. SMITH Hobart A. Smith
Director

/s/  STEVEN A. WEBSTER Steven A. Webster
Director

/s/  R GRAHAM WHALING R. Graham Whaling
Director

54

CERTIFICATIONS

        I, Bud M. Brigham, Chief Executive Officer of Brigham Exploration Company (the "Registrant"), certify that:

1.

I have reviewed this annual report on Form 10-K of Brigham Exploration Company;

2.

Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3.

Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15-d-14) for the registrant and we have:

a)

designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b)

evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and

c)

presented in this annual report our conclusions and about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

a)

all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6.

The registrant's other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: March 31, 2003

/s/  BEN M. BRIGHAM Bud M. Brigham
Chief Executive Officer, President and Chairman of the Board

55

CERTIFICATIONS

        I, Eugene B. Shepherd, Jr., Chief Financial Officer of Brigham Exploration Company, (the "Registrant"), certify that:

1.

I have reviewed this annual report on Form 10-K of Brigham Exploration Company;

2.

Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3.

Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15-d-14) for the registrant and we have:

a)

designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b)

evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and

c)

presented in this annual report our conclusions and about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

a)

all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6.

The registrant's other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: March 31, 2003

/s/  EUGENE B. SHEPHERD, JR. Eugene B. Shepherd, Jr.
Chief Financial Officer

56

BRIGHAM EXPLORATION COMPANY

INDEX TO FINANCIAL STATEMENTS

	Page
Report of Independent Accountants	F-2
Consolidated Balance Sheets as of December 31, 2002 and 2001	F-3
Consolidated Statements of Operations for the Years Ended December 31, 2002, 2001 and 2000	F-4
Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2002, 2001 and 2000	F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 2002, 2001 and 2000	F-7
Notes to the Consolidated Financial Statements	F-8

F-1

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors
and Stockholders of Brigham Exploration Company

        In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, of stockholders' equity and of cash flows present fairly, in all material respects, the financial position of Brigham Exploration Company (the "Company") and its subsidiaries at December 31, 2002 and 2001, and the results of their operations and their cash flows for the three years in the period ended December 31, 2002 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for derivative instruments and hedging activities effective January 1, 2001.

        As discussed in Note 10 to the consolidated financial statements, the Company has restated diluted earnings per share data for 2001.

PricewaterhouseCoopers LLP

March 27, 2003
Dallas, Texas

F-2

BRIGHAM EXPLORATION COMPANY
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)

				December 31,
				2002			2001
ASSETS
Current assets:
	Cash and cash equivalents			$	15,318		$	5,112
	Accounts receivable				11,361			9,113
	Other current assets				6,643			2,410
			Total current assets		33,322			16,635
Oil and natural gas properties, using the full cost method of accounting
	Unproved				37,403			35,908
	Proved				229,991			203,803
	Accumulated depletion				(102,414	)		(87,820	)
					164,980			151,891
Other property and equipment, net					1,234			1,331
Deferred loan fees					2,391			3,166
Other noncurrent assets					132			52
				$	202,059		$	173,075
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable			$	14,486		$	8,146
	Royalties payable				4,508			145
	Accrued drilling costs				2,727			1,969
	Participant advances received				1,955			158
	Other current liabilities				10,334			4,515
		Total current liabilities			34,010			14,933
Senior credit facility					60,000			75,000
Senior subordinated notes					21,797			16,721
Other noncurrent liabilities					186			206
Commitments and contingencies
Series A Preferred Stock, mandatorily redeemable, $.01 par value, $20 stated and redemption value, 2,250,000 shares authorized, 1,765,132 and 1,630,692 shares issued and outstanding at December 31, 2002 and 2001, respectively					19,540			16,614
Series B Preferred Stock, mandatorily redeemable, $.01 par value, $20 stated and redemption value, 1,000,000 shares authorized, 501,226 shares issued and outstanding at December 31, 2002					4,777			—
Stockholders' equity:
	Preferred stock, $.01 par value, 10 million shares authorized, of which 2,250,000 and 1,000,000 shares are designated as Series A and Series B, respectively				—			—
	Common stock, $.01 par value, 50 million shares authorized, 20,618,161 and 17,127,650 shares issued and 19,479,979 and 16,016,113 shares outstanding at December 31, 2002 and 2001, respectively				206			171
	Additional paid-in capital				93,436			80,466
	Treasury stock, at cost; 1,138,182 and 1,111,537 shares at December 31, 2002 and 2001, respectively				(4,282	)		(4,165	)
	Unearned stock compensation				(212	)		(494	)
	Accumulated other comprehensive (loss) income				(3,047	)		351
	Accumulated deficit				(24,352	)		(26,728	)
		Total stockholders' equity			61,749			49,601
				$	202,059		$	173,075

The accompanying notes are an integral part of these consolidated financial statements.

F-3

BRIGHAM EXPLORATION COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)

				Year Ended December 31,
				2002			2001			2000
Revenues:
	Oil and natural gas sales			$	35,100		$	32,293		$	19,143
	Other revenue				76			255			69
					35,176			32,548			19,212
Costs and expenses:
	Lease operating				3,759			3,486			2,139
	Production taxes				1,977			1,511			1,786
	General and administrative				4,971			3,638			3,100
	Depletion of oil and natural gas properties				14,594			13,211			7,920
	Depreciation and amortization				440			677			620
					25,741			22,523			15,565
			Operating income		9,435			10,025			3,647
Other income (expense):
	Interest income				119			264			108
	Interest expense				(6,238	)		(6,681	)		(9,906	)
	Debt conversion expense				(630	)		—			—
	Other income (expense)				(310	)		8,080			(9,504	)
					(7,059	)		1,663			(19,302	)
Income (loss) before income taxes and extraordinary item					2,376			11,688			(15,655	)
Income taxes					—			—			—
Income (loss) before extraordinary item					2,376			11,688			(15,655	)
Extraordinary item—gain on refinancing of senior subordinated notes, net of $0 tax					—			—			32,267
Net income					2,376			11,688			16,612
Less accretion and dividends on redeemable preferred stock					2,952			2,450			275
Net income (loss) available to common stockholders				$	(576	)	$	9,238		$	16,337
Net income (loss) per share available to common stockholders:
	Basic
		Income (loss) before extraordinary item		$	(0.04	)	$	0.58		$	(0.98	)
		Extraordinary item			—			—			1.99
				$	(0.04	)	$	0.58		$	1.01
	Diluted						Restated— Note 10
		Income (loss) before extraordinary item		$	(0.04	)	$	0.44		$	(0.98	)
		Extraordinary item			—			—			1.99
				$	(0.04	)	$	0.44		$	1.01

The accompanying notes are an integral part of these consolidated financial statements.

F-4

BRIGHAM EXPLORATION COMPANY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands)

		Common Stock												Accumulated Other Comprehensive Income
					Additional Paid In Capital			Treasury Stock			Unearned Stock Compensation						Accumulated Deficit			Total Stockholders' Equity
		Shares	Amounts
Balance, December 31, 1999		14,518	$	145	$	64,171		$	—		$	(290	)	$	—		$	(55,028	)	$	8,998
Net income		—		—		—			—			—			—			16,612			16,612
Exercise of employee stock options		8		—		19			—			—			—			—			19
Issuance of common stock		2,195		22		4,166			—			—			—			—			4,188
Issuance of restricted stock		309		3		1,137			—			(1,140	)		—			—			—
Issuance of stock options		—		—		185			—			(185	)		—			—			—
Forfeiture of stock options		—		—		(60	)		—			10			—			—			(50	)
Issuance of warrants		—		—		13,910			—			—			—			—			13,910
Cancellation of warrants		—		—		(4,979	)		—			—			—			—			(4,979	)
Amortization of unearned stock compensation		—		—		—			—			284			—			—			284
Purchase of treasury stock		—		—		—			(3,950	)		—			—			—			(3,950	)
In kind dividends on Series A mandatorily redeemable Preferred Stock		—		—		(267	)		—			—			—			—			(267	)
Accretion on Series A mandatorily redeemable Preferred Stock		—		—		(8	)		—			—			—			—			(8	)
Balance, December 31, 2000		17,030		170		78,274			(3,950	)		(1,321	)		—			(38,416	)		34,757
Comprehensive income (loss):
	Net income	—		—		—			—			—			—			11,688			11,688
	Cumulative effect (loss) on adoption of SFAS 133	—		—		—			—			—			(11,800	)		—			(11,800	)
	Unrealized gain on cash flow hedges	—		—		—			—			—			12,151			—			12,151
	Comprehensive income																				12,039
Exercise of employee stock options		97		1		251			—			—			—			—			252
Forfeitures of employee stock options		—		—		(115	)		—			31			—			—			(84	)
Forfeitures of restricted stock		—		—		6			(148	)		121			—			—			(21	)
Purchases of restricted stock		—		—		—			(67	)		—			—			—			(67	)
Issuance of warrants		—		—		4,500			—			—			—			—			4,500
In kind dividends on Series A mandatorily redeemable Preferred Stock		—		—		(2,347	)		—			—			—			—			(2,347	)
Accretion on Series A mandatorily redeemable Preferred Stock		—		—		(103	)		—			—			—			—			(103	)
Amortization of unearned stock compensation		—		—		—			—			675			—			—			675
Balance, December 31, 2001		17,127		171		80,466			(4,165	)		(494	)		351			(26,728	)		49,601

F-5

BRIGHAM EXPLORATION COMPANY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Continued)
(in thousands)

			Common Stock												Accumulated Other Comprehensive Income
						Additional Paid In Capital			Treasury Stock			Unearned Stock Compensation						Accumulated Deficit			Total Stockholders' Equity
			Shares	Amounts
Balance, December 31, 2001			17,127		171		80,466			(4,165	)		(494	)		351			(26,728	)		49,601
Comprehensive income (loss):
	Net income		—		—		—			—			—			—			2,376			2,376
	Unrealized loss on cash flow hedges		—		—		—			—			—			(3,519	)		—			(3,519	)
	Net losses included in net income		—		—		—			—			—			121			—			121
		Comprehensive income (loss)																				(1,022	)
Exercise of employee stock options			133		1		295			—			—			—			—			296
Expiration of employee stock options			—		—		(46	)		—			—			—			—			(46	)
Forfeitures of restricted stock			—		—		(1	)		(41	)		15			—			—			(27	)
Revision of terms of employee stock options			—		—		596			—			—			—			—			596
Repurchases of common stock			—		—		—			(76	)		—			—			—			(76	)
Issuance of warrants			—		—		4,605			—			—			—			—			4,605
Warrants exercised for common stock			244		2		623			—			—			—			—			625
Common stock issued in exchange for warrants and convertible debt rights			550		6		(56	)		—			—			—			—			(50	)
Debt converted to common stock			2,564		26		9,906			—			—			—			—			9,932
In kind dividends on Series A mandatorily redeemable preferred stock			—		—		(2,689	)		—			—			—			—			(2,689	)
Accretion on Series A mandatorily redeemable preferred stock			—		—		(238	)		—			—			—			—			(238	)
In kind dividends on Series B mandatorily redeemable preferred stock			—		—		(24	)		—			—			—			—			(24	)
Accretion on Series B mandatorily redeemable preferred stock			—		—		(1	)		—			—			—			—			(1	)
Amortization of unearned stock compensation			—		—		—			—			267			—			—			267
Balance, December 31, 2002			20,618	$	206	$	93,436		$	(4,282	)	$	(212	)	$	(3,047	)	$	(24,352	)	$	61,749

The accompanying notes are an integral part of these consolidated financial statements.

F-6

BRIGHAM EXPLORATION COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

					Year Ended December 31,
					2002			2001			2000
Cash flows from operating activities:
	Net income				$	2,376		$	11,688		$	16,612
	Adjustments to reconcile net income to cash provided (used) by operating activities:
		Depletion of oil and natural gas properties				14,594			13,211			7,920
		Depreciation and amortization				440			677			620
		Interest paid through issuance of additional senior subordinated notes				1,076			721			4,575
		Amortization of deferred loan fees				1,191			1,372			1,283
		Amortization of discount on senior subordinated notes				—			—			673
		Amortization of deferred loss on derivative instruments				—			—			280
		Market value adjustment for derivative instruments				(263	)		(9,666	)		8,885
		Extraordinary gain on refinancing of senior subordinated notes				—			—			(32,267	)
		Loss on investment in Brigham Duke LLC				—			94			—
		Stock option compensation expense				596			—			—
		Changes in working capital and other items:
			Accounts receivable			(2,248	)		(48	)		(4,332	)
			Other current assets			(4,534	)		(1,550	)		(262	)
			Accounts and royalties payable			10,703			(920	)		(7,290	)
			Other current liabilities			5,060			3,188			(1,354	)
			Noncurrent assets			2			13			54
			Noncurrent liabilities			(20	)		(70	)		(32	)
				Net cash provided (used) by operating activities		28,973			18,922			(4,635	)
Cash flows from investing activities:
	Additions to oil and natural gas properties					(27,696	)		(34,532	)		(28,910	)
	Proceeds from sale of oil and natural gas properties					871			397			3,938
	Additions to other property and equipment					(249	)		(396	)		(162	)
	(Increase) decrease in drilling advances paid					(132	)		960			(937	)
				Net cash used by investing activities		(27,206	)		(33,571	)		(26,071	)
Cash flows from financing activities:
	Proceeds from issuance of common stock					—			—			4,188
	Proceeds from issuance of preferred stock and warrants					9,356			9,838			20,060
	Proceeds from issuance of senior subordinated notes and warrants					4,000			9,000			7,000
	Proceeds from exercise of employee stock options					296			252			19
	Proceeds from exercise of warrants					625			—			—
	Fees paid due to common stock exchange for warrants					(50	)		—			—
	Repurchases of common stock					(76	)		(67	)		—
	Increase in senior credit facility					—			—			19,000
	Repayment of senior credit facility					(5,000	)		—			—
	Principal payments on senior subordinated notes					—			—			(20,354	)
	Principal payments on capital lease obligations					(28	)		(99	)		(210	)
	Deferred loan fees paid					(684	)		—			(902	)
				Net cash provided by financing activities		8,439			18,924			28,801
Net increase (decrease) in cash and cash equivalents						10,206			4,275			(1,905	)
Cash and cash equivalents, beginning of year						5,112			837			2,742
Cash and cash equivalents, end of year					$	15,318		$	5,112		$	837

The accompanying notes are an integral part of these consolidated financial statements.

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BRIGHAM EXPLORATION COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Nature of Operations

        Brigham Exploration Company is a Delaware corporation formed on February 25, 1997 for the purpose of exchanging its common stock for the common stock of Brigham, Inc. and the partnership interests of Brigham Oil & Gas, L.P. (the "Partnership"). Hereinafter, Brigham Exploration Company and the Partnership are collectively referred to as "Brigham." Brigham, Inc. is a Nevada corporation whose only asset is its ownership interest in the Partnership. The Partnership was formed in May 1992 to explore and develop onshore domestic oil and natural gas properties using 3-D seismic imaging and other advanced technologies. Since its inception, the Partnership has focused its exploration and development of oil and natural gas properties primarily in West Texas, the Anadarko Basin and the onshore Gulf Coast.

2. Summary of Significant Accounting Policies

Use of Estimates

        The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates relate to proved oil and natural gas reserve volumes and the future development costs as well as estimates relating to certain oil and natural gas revenues and expenses. Actual results may differ from those estimates.

Principles of Consolidation

        The accompanying financial statements include the accounts of Brigham and its wholly owned subsidiaries, and its proportionate share of assets, liabilities and income and expenses of the limited partnerships in which Brigham, or any of its subsidiaries has a participating interest. All significant intercompany accounts and transactions have been eliminated.

Cash and Cash Equivalents

        Brigham considers all highly liquid financial instruments with an original maturity of three months or less to be cash equivalents.

Property and Equipment

        Brigham uses the full cost method of accounting for oil and natural gas properties. Under this method, all acquisition, exploration and development costs, including payroll, other internal costs, and interest incurred for the purpose of finding oil and natural gas reserves, are capitalized. Internal costs capitalized are directly attributable to acquisition, exploration and development activities and do not include costs related to production, general corporate overhead or similar activities. Costs associated with production and general corporate activities are expensed in the period incurred.

        Proceeds from the sale of oil and natural gas properties are applied to reduce the capitalized costs of oil and natural gas properties unless the sale would significantly alter the relationship between capitalized costs and proved reserves, in which case a gain or loss is recognized.

        Capitalized costs associated with impaired properties and capitalized costs related to properties having proved reserves, plus the estimated costs of future development, dismantlement, restoration and abandonment costs, net of estimated salvage values, are amortized using the unit-of-production method

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based on proved reserves. Capitalized costs of oil and natural gas properties, net of accumulated amortization, are limited to the total of estimated future net cash flows from proved oil and natural gas reserves, discounted at ten percent, plus the cost of unevaluated properties. There are many factors, including global events that may influence the production, processing, marketing and valuation of oil and natural gas. A reduction in the valuation of oil and natural gas properties resulting from declining prices or production could adversely impact depletion rates and capitalized cost limitations.

        Capitalized costs associated with properties that have not been evaluated through drilling or seismic analysis are excluded from the unit-of-production amortization. Exclusions are adjusted annually based on drilling results and interpretative analysis.

        Other property and equipment, which primarily consists of 3-D seismic interpretation workstations, is depreciated on a straight-line basis over the estimated useful lives of the assets after considering salvage value. Estimated useful lives are as follows:

Furniture and fixtures	10 years
Machinery and equipment	5 years
3-D seismic interpretation workstations and software	3 years

        Betterments and major improvements that extend the useful lives are capitalized while expenditures for repairs and maintenance of a minor nature are expensed as incurred.

Revenue Recognition

        Brigham recognizes crude oil revenues using the sales method of accounting. Under this method, Brigham recognizes revenues when oil is delivered and title transfers.

        Brigham recognizes natural gas revenues using the entitlements method of accounting. Under this method, revenues are recognized based on Brigham's entitled ownership percentage of sales of natural gas to purchasers. Gas imbalances occur when Brigham sells more or less than its entitled ownership percentage of total natural gas production. When Brigham receives less than its entitled share, a receivable is recorded. When Brigham receives more than its entitled share, a liability is recorded. At December 31, 2002, Brigham had recorded a receivable of approximately 1,180 MMcf and $3.7 million and a liability of approximately 1,486 MMcf and $5.7 million associated with gas imbalances. At December 31, 2001, Brigham had recorded a receivable of approximately 441 MMcf and $1.5 million and a liability of approximately 758 MMcf and $2.7 million associated with gas imbalances.

Derivative Instruments and Hedging Activities

        Brigham uses derivative instruments to manage market risks resulting from fluctuations in commodity prices of natural gas and crude oil. Brigham periodically enters into commodity contracts, including price swaps, caps and floors, which require payments to (or receipts from) counterparties based on the differential between a fixed price and a variable price for a fixed quantity of natural gas or crude oil without the exchange of underlying volumes. The notional amounts of these financial instruments are based on expected production from existing wells.

        Prior to January 1, 2001, in order for a derivative instrument to qualify for hedge accounting, there must have been clear correlation between the derivative instrument and the forecasted transaction. Correlation of the commodity contracts was determined by evaluating whether the contract gains and

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losses would substantially offset the effects of price changes on the underlying natural gas and crude oil sales volumes. To the extent that correlation existed between the contracts and the underlying natural gas and crude oil sales volumes, realized gains or losses and related cash flows arising from the contracts were recognized as a component of oil and natural gas sales in the same period as the sale of the underlying volumes. To the extent that correlation did not exist between the contracts and the underlying natural gas and crude oil sales volumes, realized gains or losses and related cash flows arising from the contracts were recognized in the period incurred as a component of other income or loss. The fair market value of any contract that did not meet the correlation test outlined above was recorded as a deferred gain or loss on the balance sheet and was adjusted to current market value at each balance sheet date with any deferred gains or losses recognized as a component of other income.

        On January 1, 2001, Brigham adopted Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133"), as amended. Effective with the adoption of SFAS 133, all derivatives are recorded on the balance sheet at fair value and changes in the fair value of derivatives are recorded each period in current earnings or other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction and, if it is, depending on the type of hedge transaction. Brigham's derivatives consist primarily of cash flow hedge transactions in which Brigham is hedging the variability of cash flows related to a forecasted transaction. Changes in the fair value of these derivative instruments designated as cash flow hedges will be reported in other comprehensive income and will be reclassified as earnings in the periods in which earnings are impacted by the variability of the cash flows of the hedged item. The ineffective portion of the cash flow hedges will be recognized in current period earnings. Gains and losses on derivative instruments that do not qualify for hedge accounting are included in other income (expense) in the period in which they occur. The resulting cash flows from derivatives are reported as cash flows from operating activities.

        The adoption of SFAS 133 resulted in a January 1, 2001 transition adjustment to record a net of tax cumulative effect of $11.8 million to other comprehensive income to recognize the fair value (liability) of all derivative instruments that qualified for hedge accounting treatment. Gains and losses on derivatives that were previously deferred as adjustments to the carrying amount of hedged items were not adjusted.

        At the inception of a derivative contract, Brigham may designate the derivative as a cash flow hedge. For all derivatives designated as cash flow hedges, Brigham formally documents the relationship between the derivative contract and the hedged items, as well as the risk management objective for entering into the derivative contract. To be designated as a cash flow hedge transaction, the relationship between the derivative and the hedged items must be highly effective in achieving the offset of changes in cash flows attributable to the risk both at the inception of the derivative and on an ongoing basis. Brigham measures hedge effectiveness on a quarterly basis and hedge accounting is discontinued prospectively if it is determined that the derivative is no longer effective in offsetting changes in the cash flows of the hedged item. Gains and losses deferred in accumulated other comprehensive income related to cash flow hedge derivatives that become ineffective remain unchanged until the related production is delivered. If Brigham determines that it is probable that a hedged forecasted transaction will not occur, deferred gains or losses on the hedging instrument are recognized in earnings immediately. See Note 12 for a description of the derivative contracts in which Brigham participates.

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Other Comprehensive Income

        Brigham follows the provisions of Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income," which establishes standards for reporting comprehensive income. In addition to net income, comprehensive income includes all changes in equity during a period, except those resulting from investments and distributions to stockholders of Brigham. Brigham had no such changes prior to 2001. The components of other comprehensive income for the years ended December 31 follow (in thousands):

		2002			2001			2000
Balance, beginning of year		$	351		$	—		$	—
	Cumulative effect of adoption of SFAS No. 133		—			(11,800	)		—
	Current period settlements reclassified to earnings		1,847			(9,646	)		—
	Current period change in fair value of hedges		(5,366	)		21,797			—
	Net losses included in earnings		121			—			—
Balance, end of year		$	(3,047	)	$	351		$	—

Stock Based Compensation

        Brigham accounts for employee stock-based compensation using the intrinsic value method prescribed by Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees". Accordingly, Brigham has adopted the disclosure-only provisions of Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123").

        The weighted average fair value per share of stock compensation issued during 2002, 2001 and 2000 was $3.44, $2.19, and $1.92, respectively. The fair value for these options was estimated using the Black-Scholes model with the following weighted average assumptions for grants made in 2002, 2001 and 2000; risk free interest rate of 4.1%, 4.9% and 6.2%; volatility of the expected market prices of Brigham's common stock of 102%, 60% and 67%; expected dividend yield of zero and weighted average expected option lives of 7.0, 7.0 and 6.6 years, respectively.

        The Black-Scholes valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are transferable. Additionally, the assumptions required by the valuation model are highly subjective. Because Brigham's stock options have significantly different characteristics from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion the model does not necessarily provide a reliable single measure of the fair value of Brigham's stock options.

        Had compensation cost for Brigham's stock options been determined based on the fair market value at the grant dates of the awards consistent with the methodology prescribed by SFAS 123 as

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amended by SFAS 148, Brigham's net income (loss) and net income (loss) per share for the years ended December 31, 2002, 2001 and 2000 would have been the pro forma amounts indicated below:

			2002			2001			2000
Net income available to common stockholders (in thousands):
	As reported		$	(576	)	$	9,238		$	16,337
	Add back: Stock compensation expense previously included in net income			101			295			124
	Effect of total employee stock-based compensation expense, determined under fair value method for all awards			(513	)		(347	)		1,009
	Pro forma		$	(988	)	$	9,186		$	17,470
Net income per share:
	Basic:
		As reported	$	(0.04	)	$	0.58		$	1.01
		Pro forma		(0.06	)		0.57			1.08
	Diluted:
		As reported	$	(0.04	)	$	0.44		$	1.01
		Pro forma		(0.06	)		0.44			1.08

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Income Taxes

        Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the tax rate in effect for the year in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates of deferred tax assets and liabilities is recognized in income in the year of the enacted rate change. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Deferred Loan Fees

        Deferred loan fees are incurred in connection with the issuance of debt and are recorded on the balance sheet as deferred assets. The debt issue costs are amortized to interest expense over the life of the debt using the straight-line method. The results obtained using the straight-line method are not materially different than those that would result from using the effective interest method.

Segment Information

        All of Brigham's oil and natural gas properties and related operations are located in the United States and management has determined that Brigham has one reportable segment.

Treasury Stock

        Treasury stock purchases are recorded at cost. Upon reissuance, the cost of treasury shares held is reduced by the average purchase price per share of the aggregate treasury shares held.

New Pronouncements

        In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 143, "Accounting for Asset Retirement Obligations". SFAS No. 143 requires entities to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred and a corresponding increase in the carrying amount of the related long-lived asset. The liability is accreted to its present value each period, and the capitalized cost is depreciated over the useful life of the related asset. If the liability is settled for an amount other than the recorded amount, a gain or loss is recognized. Brigham will adopt this standard as required on January 1, 2003. Brigham is currently evaluating the effect of this statement on its consolidated financial position, results of operations and cash flows.

        In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB statements No. 4, 44 and 64, Amendment of FASB Statement No. 13 and Technical Corrections" ("SFAS 145"). SFAS 145 requires, except in the case of events or transactions of a highly unusual and infrequent nature, gains or losses from the early extinguishment of debt to be classified as components of a company's income or loss from continuing operations. Prior to the adoption of the provisions of SFAS 145, gains or losses on the early extinguishment of debt were required to be classified in a company's periodic consolidated statements of operations as extraordinary gains or losses, net of associated income taxes, after the determination of income or loss from continuing operations. SFAS No. 145 is effective for fiscal years

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beginning after May 15, 2002. Due to the requirements of SFAS No. 145, it is less likely that a gain or loss on extinguishment of debt would be classified as an extraordinary item in Brigham's results of operations.

Reclassifications

        Certain reclassifications have been made to the prior year balances to conform to current year presentation.

3. Asset Dispositions

        In February 1999, Brigham entered into a project financing arrangement with Duke Energy Financial Services, Inc. ("Duke") to fund the continued exploration of five projects covered by approximately 200 square miles of 3-D seismic data acquired in 1998. In this transaction, Brigham conveyed 100% of its working interest in land and seismic in these project areas to a newly formed limited liability company (the "Brigham-Duke LLC") for a total consideration of $10 million. Brigham was the managing member of the Brigham-Duke LLC with a 1% interest and Duke was the sole remaining member with a 99% interest. Pursuant to the terms of the Brigham-Duke LLC agreement, Brigham paid 100% of the drilling and completion costs for all wells drilled by the Brigham-Duke LLC in exchange for a 70% working interest in the wells and their associated drilling and spacing units and allocable seismic data. Upon 100% project payout, Brigham had certain rights to back-in for up to a 94% effective working interest in the Brigham-Duke LLC properties. In February 2001, Duke, as majority member of the Brigham-Duke LLC elected to dissolve the Brigham-Duke LLC. As a result of the dissolution of the Brigham-Duke LLC, the remaining undeveloped land and seismic data in the Brigham-Duke LLC project areas were unconditionally owned by Duke and, in December 2001, Brigham recorded a loss of approximately $94,000 on its investment in the Brigham-Duke LLC.

4. Property and Equipment

        Property and equipment, at cost, are summarized as follows (in thousands):

		December 31,
		2002			2001
Oil and natural gas properties		$	267,394		$	239,711
Accumulated depletion			(102,414	)		(87,820	)
			164,980			151,891
Other property and equipment:
	3-D seismic interpretation workstations and software		2,445			2,307
	Office furniture and equipment		2,337			2,225
	Accumulated depreciation		(3,548	)		(3,201	)
			1,234			1,331
		$	166,214		$	153,222

        Brigham capitalizes certain payroll and other internal costs directly attributable to acquisition, exploration and development activities as part of its investment in oil and natural gas properties over

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the periods benefited by these activities. During the years ended December 31, 2002, 2001 and 2000, these capitalized costs amounted to $4.2 million, $3.9 million and $3.4 million, respectively. Capitalized costs do not include any costs related to production, general corporate overhead, or similar activities. Interest costs of $0.9 million, $1.8 million and $2.8 million were capitalized in 2002, 2001 and 2000, respectively.

5. Senior Credit Facility and Senior Subordinated Notes

		December 31,
		2002		2001
Senior Credit Facility		$	60,000	$	75,000
Senior Subordinated Notes			21,797		16,721
Total Debt		$	81,797	$	91,721
	Less: Current Maturities		—		—
	Total Long-Term Debt	$	81,797	$	91,721

Senior Credit Facility

        As of December 31, 2002, Brigham had $60.0 million in borrowings outstanding under its senior credit facility. Principal outstanding under the senior credit facility is due at maturity with interest due monthly for base rate tranches or periodically as London Interbank Offered Rate (LIBOR) tranches mature. The annual interest rate for borrowings under the senior credit facility is either the lender's base rate or London Interbank Offered Rate (LIBOR) (1.5% on December 31, 2002) plus 3.00%, at Brigham's option. Obligations under the senior credit facility are secured by substantially all of Brigham's oil and natural gas properties and other tangible assets.

        The senior credit facility contains various restrictive covenants and compliance requirements, which include minimum current ratio, interest coverage ratio, limitations on capital expenditures related to seismic and land activities, and various other financial covenants. At December 31, 2002 and for the year then ended, Brigham was in compliance with all covenant requirements.

        In December 2002, the senior credit facility was amended to extend the maturity date to December 31, 2004 and to provide Brigham with $65 million in funding commitments under a revolving credit structure. In December 2001, the senior credit facility was amended to extend the maturity date to December 31, 2003. Brigham recognized $323,000 and $200,000 during 2002 and 2001, respectively, as additional deferred loan fees relating to these amendments. The additional deferred loan fees and the unamortized deferred loan fees will be amortized over the remaining life of the senior credit facility.

        The senior credit facility was amended in February 2000, to provide Brigham with $75 million in borrowing availability. As part of the amendment, $30 million of the senior credit facility held by Shell Capital was designated as convertible notes. To facilitate this conversion Brigham issued to Shell Capital warrants to be converted into shares of Brigham common stock in the following amounts and prices: (i) $10 million is convertible at $3.90 per share, (ii) $10 million is convertible at $6.00 per share and (iii) $10 million is convertible at $8.00 per share.

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        In addition, certain financial covenants of the senior credit facility were amended or added in the July 1999, February 2000 and October 2000 amendments. In connection with the February 2000 amendment, Brigham reset the price of the warrants previously issued to its existing senior lenders to purchase one million shares of Brigham common stock from the then current exercise price of $2.25 per share to $2.02 per share.

        In December 2002, Brigham entered into a series of transactions whereby a number of warrants and convertible debt rights were extinguished or converted. Brigham issued 550,000 unregistered shares of its common stock to Shell Capital in exchange for Shell Capital's warrant position (see Senior Subordinated Notes below), and to terminate Shell Capital's right to convert $30 million of Brigham's senior credit facility into shares of Brigham common stock. Also, DLJ Merchant Banking Partners III, L.P. in conjunction with GlobalEnergy Partners, both affiliates of CSFB Private Equity, purchased $10 million of Brigham's senior credit facility from Shell Capital and converted it into 2,564,102 shares of Brigham's common stock at an exercise price of $3.90 per share. Brigham recorded $0.6 million in debt conversion expenses associated with this conversion.

        The following table details the warrant position and convertible debt rights that were extinguished or converted as a result of the these transactions:

	Exercise Price		# Shares
$10 million of Convertible Notes	$	3.90	2,564,102
$10 million of Convertible Notes	$	6.00	1,666,667
$10 million of Convertible Notes	$	8.00	1,250,000
Warrants issued with Senior Subordinated Notes Facility	$	3.00	1,250,000
			6,730,769

        As further discussed in Note 6, Brigham issued 500,000 shares of Series B preferred stock and 2.3 million warrants to purchase Brigham's common stock for net proceeds of $9.4 million. In addition, Brigham used $5.0 million of the net proceeds from the Series B preferred offering to repay outstanding indebtedness under its senior credit facility.

        In March 2003, Brigham replaced its senior credit facility with a new senior credit facility that provides for a maximum $80 million in commitments, an initial borrowing base of $70 million and matures in March 2006. As of the closing date of the facility, Brigham had $56 million in outstanding borrowings under the new senior credit facility. Borrowings under the new senior credit facility are secured by substantially all of Brigham's oil and natural gas properties and other tangible assets and bear interest at either the base rate of Société Générale or LIBOR, at Brigham's option, plus a margin that varies according to facility usage. Interest is paid quarterly. The collateral value and borrowing base are redetermined periodically. The unused portion of the committed borrowing base is subject to an annual commitment fee of 0.50%.

        The new senior credit facility agreement contains various covenants and restrictive provisions, which limit Brigham's ability to incur additional indebtedness, sell properties, purchase or redeem capital stock, make investments or loans, create liens and make certain acquisitions. The new senior credit facility requires Brigham to maintain a current ratio (as defined) of at least 1 to 1 and an interest coverage ratio (as defined) of at least 3.25 to 1.

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Senior Subordinated Notes

        As of December 31, 2002, Brigham had $21.8 million of senior subordinated notes outstanding. The senior subordinated notes bear interest at 10.75% per annum, payable quarterly in arrears on the last day of January, April, July and October, are redeemable at Brigham's option for face value at any time and have no principal repayment obligations until maturity in October 2005. At Brigham's option, up to 50% of the interest payments on the senior subordinated notes can be satisfied by payment in kind through the issuance of additional senior subordinated notes in lieu of cash. In December 2002, Brigham extended its option to satisfy 50% of its interest obligation in this manner through October 2003. For the years ended December 31, 2002 and 2001, Brigham exercised this option and issued an additional $1.1 and $0.7 million, respectively, of senior subordinated notes.

        The senior subordinated notes are issued pursuant to the senior subordinated notes facility dated October 31, 2000. Under the senior subordinated notes facility, Shell Capital agreed to provide up to $20 million (plus any amount of interest paid in kind) in senior subordinated notes in borrowing increments of at least $1 million. Once borrowings under the senior subordinated notes facility have been repaid they cannot be withdrawn. The senior subordinated notes are secured obligations ranking junior to Brigham's senior credit facility and have covenants similar to the senior credit facility. In connection with the senior subordinated credit agreement in October 2000, Brigham issued warrants to purchase 1,250,000 shares of Brigham common stock at an exercise price of $3.00 per share. The warrants had a term of seven years and a cashless exercise feature. Brigham valued the warrants using the Black-Scholes Option Pricing Model and recorded the estimated value of $2.9 million as deferred loan costs which are being amortized over the five-year term of the senior subordinated notes. The warrants were extinguished in December 2002 (see Senior Credit Facility above).

        At January 1, 2000, Brigham had a subordinated notes agreement with $41.3 million total outstanding and warrants issued to the notes holders to purchase one million shares of common stock at an exercise price of $3.50 per share. In February 2000, in connection with an amendment to the agreement, the exercise price on the warrants was reduced to $2.43 per share. Brigham issued an additional $4.6 million in subordinated notes as payment in kind of interest for the year ended December 31, 2000. In November 2000, these subordinated notes and warrants were purchased by Brigham for $20 million resulting in an extraordinary gain of $32.3 million, net of transaction costs of $1.7 million.

6. Preferred Stock

        In October 2000, Brigham designated 1.5 million shares of preferred stock as Series A Preferred Stock, and in November 2000, issued 1.0 million shares of mandatorily redeemable preferred stock (the "Series A Preferred Stock") and warrants to purchase 6,666,667 shares of Brigham's common stock (the "Series A Warrants") for net proceeds of $19.8 million. The proceeds from the issuance of the Series A Preferred Stock and Series A Warrants were used to purchase the subordinated notes and warrants held by the holder of the subordinated notes as described in Note 5.

        The Series A Preferred Stock has a par value of $.01 per share and a stated value of $20 per share. The Series A Preferred Stock is cumulative and pays dividends quarterly at a rate of 6% per annum of the stated value if paid in cash or 8% per annum of the stated value if paid in kind ("PIK") through the issuance of additional Series A Preferred Stock in lieu of cash. At Brigham's option, up to 100% of the dividend payments on the Series A Preferred Stock can be paid by the issuance of PIK

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dividends for five years. The Series A Preferred Stock matures in ten years and is redeemable at Brigham's option at 100% or 101% of stated value (depending upon certain conditions) at anytime prior to maturity.

        The Series A Warrants have a term of ten years, an exercise price of $3.00 per share and must be exercised, if Brigham so requires, in the event Brigham's common stock trades above $5.00 per share for 60 consecutive trading days. The exercise price of the Series A Warrants is payable either in cash or in shares of the Series A Preferred Stock valued at liquidation value plus accrued dividends. If Brigham requires exercise of the Series A Warrants, proceeds will be used to fund the redemption of a similar value of then outstanding Series A Preferred Stock. The Series A Warrants were valued at $11.5 million using the Black-Scholes Option Pricing model and were recorded as additional paid-in capital in 2000. This discount accretes to the Series A Preferred Stock dividends during the life of the securities using the effective interest method.

        In March 2001, Brigham designated an additional 750,000 shares of preferred stock as Series A and issued 500,000 shares of Series A Preferred Stock and 2,105,263 warrants to purchase Brigham's common stock (the "Additional Series A Warrants") for net proceeds of $9.8 million.

        The Additional Series A Warrants have terms similar to the Series A Warrants described above except the Additional Series A Warrants have an exercise price of $4.75 per share and must be exercised, if Brigham so requires, in the event that Brigham's common stock trades at an average above 150% of the exercise price (currently $6.525 per share) for 60 consecutive trading days. The Additional Series A Warrants were valued at approximately $4.5 million using the Black-Scholes Option Pricing model and were recorded as additional paid-in capital in March 2001. This discount accretes to the Series A Preferred Stock dividends during the life of the securities using the effective interest method. In connection with the issuance of Series B Preferred Stock in December 2002, the exercise price of the Additional Series A warrants was reset from the then current exercise price of $4.75 per share to $4.35 per share.

        Brigham had 1,765,132 and 1,630,692 shares of Series A Preferred Stock issued and outstanding with a redemption value of $35.3 million and $32.6 million at December 31, 2002 and 2001, respectively. For the year ended December 31, 2002 and 2001, Brigham issued an additional 134,430 and 130,692 shares, respectively, of Series A Preferred Stock as PIK dividends.

        In December 2002, Brigham designated 1,000,000 shares of preferred stock as Series B and issued 500,000 shares of Series B Preferred Stock and warrants to purchase 2,298,851 shares of Brigham's common stock (the "Series B Warrants") for net proceeds of $9.4 million. A portion of the proceeds were used to reduce borrowings under the Senior Credit Facility by $5 million. The Series B Preferred Stock is cumulative and pays dividends quarterly at a rate of 6% per annum of the stated value if paid in cash or 8% per annum of the stated value if PIK through the issuance of additional Series B Preferred Stock in lieu of cash. At Brigham's option, up to 100% of the dividend payments on the Series B Preferred Stock can be paid by the issuance of PIK dividends for five years. The Series B Preferred Stock matures in ten years and is redeemable in whole at Brigham's option at 101% of the stated value five years after closing.

        The Series B Preferred Stock ranks in parity with the Series A Preferred Stock and senior as to dividend, redemption and liquidation rights to all other classes and series of capital stock of Brigham authorized on the date of issuance, or to any other class or series of capital stock issued while any

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shares of the Series B Preferred Stock remain outstanding. The Series B Preferred Stock does not generally have any voting rights, except for certain approval rights and as required by law.

        The Series B Warrants have terms similar to the Series A Warrants described above with an exercise price of $4.35 per share and must be exercised, if Brigham so requires, in the event that Brigham's common stock trades at an average of at least 150% of the exercise price ($6.525 per share) for 60 consecutive trading days. The Series B Warrants were valued at approximately $4.6 million using the Black-Scholes Option Pricing model and were recorded as additional paid-in capital in December 2002. This discount accretes to the Series B Preferred Stock dividends during the life of the securities using the effective interest method.

        Brigham had 501,226 shares of Series B Preferred Stock issued and outstanding with a redemption value of $10.0 million at December 31, 2002. For the year ended December 31, 2002, Brigham issued an additional 1,226 shares of Series B Preferred Stock as PIK dividends.

7. Issuance of Common Stock

        In December 2002, Brigham issued 550,000 shares of Brigham common stock to Shell Capital in exchange for Shell Capital's warrants and associated convertible debt rights. In addition, Brigham issued 2,564,102 shares of Brigham common stock upon the conversion of $10 million of the senior credit facility. See further discussion above in Note 5.

        In February 2000, Brigham issued 2,195,122 shares of common stock and 731,707 warrants to purchase Brigham's common stock for total net proceeds of approximately $4.2 million in a private placement to a group of institutional investors led by affiliates of two members of Brigham's board of directors. The equity sale consisted of units that included one share of common stock and one-third of a warrant to purchase Brigham's common stock at an exercise price of $2.5625 per share. In December 2002, 243,902 of these warrants were exercised for common stock resulting in net proceeds of approximately $625,000. In February 2003, the remaining 487,805 warrants were exercised under a cashless feature resulting in the issuance of 248,028 shares of Brigham common stock.

8. Capital Lease Obligations

        Property under capital leases consists of the following (in thousands):

	December 31,
	2002		2001
3-D seismic interpretation workstations and software	$	—	$	45
Office furniture and equipment		—		167
		—		212
Accumulated depreciation and amortization		—		(175	)
	$	—	$	37

        There are no obligations under capital leases as of December 31, 2002.

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9. Income Taxes

        The provision for income taxes consists of the following (in thousands):

		Year Ended December 31,
		2002		2001		2000
Current income taxes:
	Federal	$	—	$	—	$	—
	State		—		—		—
Deferred income taxes:
	Federal		—		—		—
	State		—		—		—
		$	—	$	—	$	—

        The differences in income taxes provided and the amounts determined by applying the federal statutory tax rate to income before income taxes result from the following (in thousands):

	Year Ended December 31,
	2002			2001			2000
Tax at statutory rate	$	832		$	4,091		$	5,814
Add the effect of:
Nondeductible expenses		223			4			12
Deductible stock compensation		(110	)		(9	)		—
Valuation allowance		(945	)		(4,086	)		(5,826	)
	$	—		$	—		$	—

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        The components of deferred income tax assets and liabilities are as follows (in thousands):

		December 31,
		2002			2001
Deferred tax assets:
	Net operating loss carryforwards	$	34,814		$	31,085
	Capital loss carryforwards		1,001			438
	Stock compensation		808			745
	Gas imbalances		698			445
	Unrealized hedging losses		1,066			—
	Other		32			7
			38,419			32,720
Deferred tax liability:
	Depreciable and depletable property		(29,544	)		(24,058	)
	Derivative liabilities		(325	)		(233	)
			(29,869	)		(24,291	)
	Net deferred tax asset		8,550			8,429
	Valuation allowance		(8,550	)		(8,429	)
		$	—		$	—

        Realization of deferred tax assets associated with net operating loss carryforwards ("NOLs") and other credit carryforwards is dependent upon generating sufficient taxable income prior to their expiration. At December 31, 2002, management believes it is more likely than not that these NOLs and other credit carryforwards may expire unused and, accordingly, has established a valuation allowance of $8.6 million against them. The valuation allowance was increased by $0.1 million in 2002 due to an increase of $5.6 million in deferred tax liabilities, partially offset by a $5.7 million increase in carryforward and other amounts. Deferred tax assets of $1.1 million related to unrealized hedging losses in other comprehensive income are included in this $5.7 million increase.

        At December 31, 2002, Brigham has regular tax NOLs of approximately $99.5 million. Additionally, Brigham has approximately $84.9 million of alternative minimum tax ("AMT") NOLs available as a deduction against future AMT income. The NOLs expire from 2012 through 2022. The

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value of these NOLs depends on the ability of Brigham to generate taxable income. A summary of our NOLs follows:

		Regular NOLs		AMT NOLs
Expiration Date:
	December 31, 2012	$	13,327	$	8,703
	December 31, 2018		26,411		23,170
	December 31, 2019		20,806		20,196
	December 31, 2020		12,512		7,587
	December 31, 2021		19,116		18,440
	December 31, 2022		7,298		6,799
		$	99,470	$	84,895

        In addition, at December 31, 2002, Brigham has capital loss carryforwards of approximately $2.9 million that expire in varying years through 2007.

        Brigham believes it has a $5 million limitation on its NOLs under Internal Revenue Code Section 382 due to a potential 50% change in ownership among its 5% shareholders over a three-year period.

10. Net Income (Loss) Per Share

        Basic earnings per share are computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. The computation of diluted net income (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that would then share in the earnings of Brigham.

			Year Ended December 31,
			2002			2001		2000
			Restated
Basic EPS:
	Income (loss) available to common stockholders before extraordinary item		$	(576	)	$	9,238	$	(15,930	)
	Extraordinary item			—			—		32,267
		Income (loss) available to common stockholders	$	(576	)	$	9,238	$	16,337
		Common shares outstanding		16,138			15,988		16,241
	Basic EPS
		Income (loss) available to common stockholders before extraordinary item	$	(0.04	)	$	0.58	$	(0.98	)
		Extraordinary item		—			—		1.99
			$	(0.04	)	$	0.58	$	1.01

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Diluted EPS:
	Income (loss) available to common stockholders before extraordinary item		$	(576	)	$	9,238	$	(15,930	)
	Extraordinary item			—			—		32,267
		Income (loss) available to common stockholders	$	(576	)	$	9,238	$	16,337
	Adjustments for assumed conversions:
		Interest on convertible debt		—			826		—
		Dividends and accretion on mandatorily redeemable preferred stock		—			2,364		—
				—			3,190		—
	Income (loss) available to common stockholders before extraordinary item—diluted		$	(576	)	$	12,428	$	(15,930	)
	Extraordinary item			—			—		32,267
		Income (loss) available to common stockholders—diluted	$	(576	)	$	12,428	$	16,337
	Common shares outstanding			16,138			15,988		16,241
	Effect of dilutive securities:
		Convertible debt		—			2,564		—
		Warrants		—			926		—
		Mandatorily redeemable preferred stock		—			8,426		—
		Stock options		—			301		—
	Potentially dilutive common shares			—			12,217		—
		Adjusted common shares outstanding—diluted		16,138			28,205		16,241
	Diluted EPS (as restated for 2001—see below)
		Income (loss) available to common stockholders before extraordinary item	$	(0.04	)	$	0.44	$	(0.98	)
		Extraordinary item		—			—		1.99
			$	(0.04	)	$	0.44	$	1.01

        At December 31, 2002, 2001, and 2000, potential dilution of approximately 14.3 million, 3.0 million and 11.1 million shares of common stock, respectively, related to mandatorily redeemable preferred stock, convertible debt, warrants and options were outstanding, but were not included in the computation of diluted income (loss) per share because the effect of these instruments would have been anti-dilutive.

Restatement—Diluted earnings per share for 2001 have been restated (downward) to appropriately reflect the impact of Brigham's convertible debt, mandatorily redeemable preferred stock and associated warrants. The revised calculations utilize the "if-converted" method, as the holders can

F-23

exercise the warrants either by paying cash or tendering the related convertible debt or mandatorily redeemable preferred stock.

	Quarter						Year to Date
	As Reported			Restated			As Reported		Restated
March 31, 2001	$	0.02		$	0.02		$	0.02	$	0.02
June 30, 2001	$	0.46		$	0.30		$	0.51	$	0.36
September 30, 2001	$	0.17		$	0.13		$	0.67	$	0.49
December 31, 2001	$	(0.15	)	$	(0.15	)	$	0.54	$	0.44

        There is no impact on previously reported diluted earnings per share data for 2002 or 2000.

11. Contingencies, Commitments and Factors Which May Affect Future Operations

Litigation

        Brigham is, from time to time, party to certain lawsuits and claims arising in the ordinary course of business. While the outcome of lawsuits and claims cannot be predicted with certainty, management does not expect these matters to have a materially adverse effect on the financial condition, results of operations or cash flows of Brigham.

        On June 1, 2001, Leonel Garcia, a landowner in Brooks County, Texas, filed suit against Brigham claiming that Brigham transported natural gas under his property through an existing pipeline without his consent. Mr. Garcia claimed $1.2 million in actual damages and $3 million in exemplary damages. In May 2002, Brigham settled the case through mediation for a cash payment of $125,000. Subsequently, Brigham began using an alternate pipeline.

        On November 20, 2001, Brigham filed a lawsuit in the District Court of Travis County, Texas against Steve Massey Company, Inc. ("Massey") for breach of contract. The Petition claims Massey furnished defective casing to Brigham, which ultimately led to the casing failure of the Palmer "347" No. 5 well (the "Palmer #5") and the loss of the Palmer #5 as a producing well. Brigham believes the amount of damages incurred due to the loss of the Palmer #5 may exceed $5 million. Massey joined as additional defendants to the lawsuit other parties that had responsibility for the manufacture, importation or fabrication of the casing for its use in the Palmer #5. The case is currently in discovery. A trial has been set for August 2003.

        On February 20, 2002, Massey filed an Original Petition to Foreclose Lien in Brooks County, Texas. Massey's Petition claims Brigham breached its contract for failure to pay for the casing it furnished Brigham for the Palmer #5 (and that Brigham's claim is defective, forming the basis of the lawsuit described in the paragraph above). Massey's Petition claims Brigham owes Massey a total of $445,819. Brigham's Motion to Transfer Venue to Travis County, Texas, and Motion to Consolidate Massey's claim with Brigham's suit against Massey pending in Travis County, were recently granted. If Massey is successful in its claim, Massey would have the right to foreclose its lien against the well, associated equipment and Brigham's leasehold interest. At this point in time, Brigham cannot predict the outcome of either its Travis County case or Massey's claim.

        On July 11, 2002, an employee of a contractor on Brigham's Burkhart #1-R location, Matagorda County, Texas, was involved in a fatal accident. The United States Department of Labor Occupational

F-24

Safety & Health Administration investigated the accident and issued three citations and imposed a total of $168,000 in fines. Brigham is appealing the citations, but at this time, cannot predict the outcome of that appeal.

        On October 8, 2002, relatives of the contractor's employee filed a wrongful death action in the district court for Matagorda County, Texas, against Brigham and three of Brigham's contractors in connection with his accidental death on July 11, 2002. Plaintiffs are seeking unspecified both actual and punitive damages. Brigham cannot predict the outcome of this case, however Brigham believes it has sufficient insurance to cover the claim.

        As of December 31, 2002, there were no known environmental or other regulatory matters related to Brigham's operations that are reasonably expected to result in a material liability to Brigham. Compliance with environmental laws and regulations has not had, and is not expected to have, a material adverse effect on Brigham's capital expenditures, earnings or competitive position.

Operating Lease Commitments

        Brigham leases office equipment and space under operating leases expiring at various dates. The noncancelable term of the lease for Brigham's office space expires in 2007 with an option to renew for an additional five years. The future minimum annual rental payments under the noncancelable terms of these leases at December 31, 2002 are as follows (in thousands):

2003	$	885
2004		885
2005		885
2006		885
2007		443
	$	3,983

        Future minimum rental payments are not reduced by minimum sublease rental income of approximately $13,000 due in 2003 under noncancelable subleases.

        Rental expense for the years ended December 31, 2002, 2001 and 2000 was approximately $868,000, $731,000 and $805,000, respectively.

Major Purchasers

        The following purchasers accounted for 10% or more of Brigham's oil and natural gas sales for the years ended December 31, 2002, 2001 and 2000:

	2002		2001		2000
Purchaser A	19	%	45	%	36	%
Purchaser B	—		15	%	20	%
Purchaser C	15	%	—		—
Purchaser D	11	%	—		—

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        Brigham believes that the loss of any individual purchaser would not have a long-term material adverse impact on its financial position or results of operations.

Factors Which May Affect Future Operations

        Since Brigham's major products are commodities, significant changes in the prices of oil and natural gas could have a significant impact on Brigham's results of operations for any particular year.

12. Derivative Instruments and Hedging Activities

        Brigham utilizes various commodity swap and option contracts to (i) reduce the effects of volatility in price changes on the oil and natural gas commodities it produces and sells, (ii) support its capital budgeting plans, and (iii) lock-in prices to protect the economics related to certain capital projects.

Natural Gas Derivative Contracts

        The following table sets forth Brigham's outstanding natural gas hedging contracts and the weighted average NYMEX prices for those contracts as of December 31, 2002:

		First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Outstanding Average
2003—Swap Contracts
	Volume (MMbtu)		832,500		591,500		460,000		322,000		549,851
	Price per MMBtu	$	3.63	$	3.32	$	3.50	$	3.73	$	3.54

        The following table sets forth the natural gas hedging contracts Brigham entered subsequent to December 31, 2002 and the weighted average NYMEX prices for those contracts:

		First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Outstanding Average
2003—Swap Contracts
	Volume (MMbtu)		—		227,500		138,000		92,000		114,692
	Price per MMBtu	$	—	$	5.21	$	5.08	$	5.12	$	5.15
2003—Floors
	Volume (MMbtu)		—		150,000		460,000		460,000		187,912
	Price per MMBtu	$	—	$	4.50	$	4.50	$	4.50	$	4.50
2004—Swap Contracts
	Volume (MMbtu)		295,750		227,500		138,000		92,000		187,912
	Price per MMBtu	$	4.96	$	4.25	$	4.18	$	4.36	$	4.53

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Oil Derivative Contracts

        The following table sets forth Brigham's outstanding oil hedging contracts and the weighted average NYMEX prices for those contracts as of December 31, 2002:

		First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Outstanding Average
2003—Swap Contracts
	Volume (Bbl)		67,500		50,050		55,200		41,400		53,471
	Price per Bbl	$	25.29	$	24.28	$	23.77	$	23.21	$	24.26
2003—Collars
	Volume (Bbl)		22,500		22,750		—		—
	Ceiling price per Bbl	$	22.56	$	22.56	$	—	$	—
	Floor price per Bbl	$	18.00	$	18.00	$	—	$	—

        The following table sets forth the oil hedging contracts Brigham entered subsequent to December 31, 2002 and the weighted average NYMEX prices for those contracts:

		First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Outstanding Average
2003—Swap Contracts
	Volume (Bbl)		—		11,375		—		—		2,836
	Price per Bbl	$	—	$	29.33	$	—	$	—	$	29.33
2004—Swap Contracts
	Volume (Bbl)		29,575		20,475		13,800		9,200		18,145
	Price per Bbl	$	25.35	$	24.52	$	23.91	$	23.80	$	24.65

        At December 31, 2002, the fair value of hedging contracts included in accumulated other comprehensive income and other current liabilities was approximately $3.2 million which is expected to be included in the results of operations for the year ended December 31, 2003. At December 31, 2001, the fair value of hedging contracts included in accumulated other comprehensive income and other current assets was approximately $351,000 of which approximately $50,000 was classified as noncurrent assets.

        Brigham reports average oil and natural gas prices and revenues including the net results of hedging activities. The following table sets forth Brigham's oil and natural gas prices including and

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excluding the hedging gains and losses and the increase or decrease in oil and natural gas revenues as a result of the hedging activities for the three year period ended December 31, 2002:

		Year Ended December 31,
		2002		2001		2000
Natural Gas
	Average price per Mcf as reported (including hedging results)	$	3.21	$	3.11	$	1.94
	Average price per Mcf realized (excluding hedging results)	$	3.33	$	4.29	$	4.06
	Decrease in revenue (in thousands)	$	712	$	8,001	$	9,400
Oil
	Average price per Bbl as reported (including hedging results)	$	23.55	$	24.05	$	29.17
	Average price per Bbl realized (excluding hedging results)	$	25.17	$	24.38	$	29.47
	Decrease in revenue (in thousands)	$	1,135	$	153	$	107

        Derivative instruments that do not qualify as hedging contracts are recorded at fair value on the balance sheet. At each balance sheet date, the value of these derivatives is adjusted to reflect current fair value and any gains or losses are recognized as other income or expense. At December 31, 2002 and 2001, the fair value of these derivatives included in other liabilities was $0 and $0.4 million, respectively. Brigham recognized $0.4 million, $9.7 million and $(8.9) million in non-cash gains (losses) related to changes in the fair values of these derivative contracts and $0.6 million, $1.5 million, and $0.6 million in losses related to the cash settlement payments made by Brigham to the counterparty for the years ended December 31, 2002, 2001 and 2000, respectively.

        For the year ended December 31, 2002, ineffectiveness associated with Brigham's derivative commodity instruments designated as cash flow hedges decreased earnings by approximately $0.1 million. These amounts are included in other income and expense. There was no ineffectiveness for the year ended December 31, 2001.

13. Financial Instruments

        Brigham's non-derivative financial instruments include cash and cash equivalents, accounts receivable, accounts payable and long-term debt. The carrying amount of cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of their immediate or short-term maturities. The carrying value of Brigham's Senior Credit Facility approximates its fair market value since it bears interest at floating market interest rates. The fair value of Brigham's Senior Subordinated Notes at December 31, 2002 and 2001 was $24.0 million and $13.9 million, respectively.

        Brigham's accounts receivable relate to oil and natural gas sold to various industry companies, and amounts due from industry participants for expenditures made by Brigham on their behalf. Credit terms, typical of industry standards, are of a short-term nature and Brigham does not require collateral. Brigham's accounts receivable at December 31, 2002 and 2001 do not represent significant credit risks as they are dispersed across many counterparties. Counterparties to the natural gas and crude oil price swaps are investment grade financial institutions.

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14. Employee Benefit Plans

        Brigham has adopted a defined contribution 401(k) plan for substantially all of its employees. The plan provides for Brigham matching of employee contributions to the plan, at Brigham's discretion. During 2002 and 2001, Brigham matched 25% of eligible employee contributions. Based on attainment of performance goals established at the beginning of 2002, Brigham matched an additional 62.5% and 17% of eligible employee contributions made during 2002 and 2001, respectively. Brigham contributed $260,000 and $102,000 to the 401(k) plan for the years ended December 31, 2002 and 2001, respectively, to match eligible contributions by employees. Brigham did not match employee contributions in 2000.

15. Stock Based Compensation

        Brigham provides an incentive plan for the issuance of stock options, stock appreciation rights, stock, restricted stock, cash or any combination of the foregoing. The objective of this plan is to reward key employees whose performance may have a significant effect on the success of Brigham. An aggregate of 1,588,170 shares of Brigham's common stock was reserved for issuance pursuant to this plan. By resolution of the stockholders in May 2001, the number of shares of common stock available under the plan was amended to equal the lesser of 13% of the shares of common stock of Brigham issued and outstanding at any time or 2,077,335 shares. The Compensation Committee of the Board of Directors determines the type of awards made to each participant and the terms, conditions and limitations applicable to each award. At December 31, 2002, Brigham has issued approximately 85,000 incentive awards in excess of the amount currently authorized by the plan. Brigham will ask stockholders to approve an increase in the total shares available for incentive awards at the next annual meeting in May 2003. The requested increase will be greater than 85,000 shares. Options granted subsequent to March 4, 1997 have an exercise price equal to the fair market value of Brigham's common stock on the date of grant and generally vest over three to five years.

        In May 2002, Brigham accelerated the vesting of certain employee stock options and extended the time limitation for exercising certain employee stock options following termination of employment. These revisions resulted in the immediate recognition of stock compensation cost as measured at the effective date of the changes. Accordingly, a non-cash charge to general and administrative expense in the amount of $596,000 was recorded.

        Brigham also maintains a plan under which it offers stock compensation to non-employee directors. Pursuant to the terms of the plan, non-employee directors are entitled to annual grants. Options granted under this plan have an exercise price equal to the fair market value of Brigham's common stock on the date of grant and generally vest over five years.

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        The following table summarizes activity under the incentive plan for each of the three years ended December 31, 2002:

		Shares		Weighted Average Exercise Price
Options outstanding December 31, 1999		1,519,726		$	4.47
	Options granted	793,500			2.83
	Options forfeited or cancelled	(898,112	)		(5.57	)
	Options exercised	(8,000	)		(5.11	)
Options outstanding December 31, 2000		1,407,114			2.89
	Options granted	546,500			3.44
	Options forfeited or cancelled	(239,369	)		(3.48	)
	Options exercised	(97,474	)		(2.59	)
Options outstanding December 31, 2001		1,616,771			3.00
	Options granted	475,000			4.12
	Options forfeited or cancelled	(177,129	)		(3.25	)
	Options exercised	(132,507	)		(2.23	)
Options outstanding December 31, 2002		1,782,135		$	3.34

        Brigham is required to use variable accounting for 252,500 of the stock options granted during 2000 of which 217,000 remain outstanding at December 31, 2002. This method of accounting requires recognition of noncash compensation expense for the difference between the option exercise price and the market price of Brigham's stock at the end of the accounting period of vested options. Since the market price for Brigham's stock is a component of the variable cost accounting calculation, it is not possible to determine the total noncash compensation expense that will be recognized during the vesting period of these options.

        The following table summarizes information about stock options outstanding at December 31, 2002:

	Options Outstanding				Options Exercisable
Exercise Price	Number Outstanding at December 31, 2002	Weighted- Average Remaining Contractual Life	Weighted- Average Exercise Price		Number Exercisable at December 31, 2002	Weighted- Average Exercise Price
$1.55 to $1.83	181,500	4.1 years	$	1.83	105,000	$	1.83
2.38 to 3.41	869,635	5.0 years		2.48	414,293		2.64
3.61 to 5.19	719,000	5.7 years		4.07	129,300		3.75
6.31 to 14.38	12,000	2.8 years		6.98	9,533		7.16
$1.55 to $14.38	1,782,135	5.2 years	$	3.34	658,126	$	2.79

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Exchange of Certain Options for Shares of Restricted Stock

        On October 25, 2000, the compensation committee of the Board of Directors approved a proposal to give its employees a one-time right to elect to cancel all or half of their outstanding employee stock options which were previously granted with exercise prices of $5.00 per share (the "$5 Options") or $6.31 per share (the "$6.31 Options") and to receive in exchange shares of restricted stock under Brigham's 1997 Incentive Plan. The exchange ratios were .643 shares of restricted stock for each share of common stock underlying a $5 Option and .4 shares of restricted stock for each share of common stock underlying a $6.31 Option.

        Pursuant to the option exchange offer, on October 27, 2000, a total of 244,794 of the $5 Options were canceled in exchange for 157,401 shares of restricted stock, and a total of 379,665 of the $6.31 Options were canceled in exchange for 151,866 shares of restricted stock. Regardless of whether the canceled options were vested or unvested, the shares of restricted stock vest 25% per year beginning October 27, 2000. The restricted stock agreements contain provisions for accelerated vesting in some circumstances, which provisions are similar to those in the agreements covering the canceled options. This exchange resulted in noncash compensation expense of approximately $1.1 million that is being recognized over the vesting period of the restricted stock.

16. Related Party Transactions

        During the years ended December 31, 2002, 2001 and 2000, Brigham incurred costs of approximately $1.1 million, $0.4 million and $0.1 million, respectively, in fees for land acquisition services performed by a company owned by a brother of Brigham's President and Chief Executive Officer and its Executive Vice President—Land and Administration. Other participants in Brigham's 3-D seismic projects reimbursed Brigham for a portion of these amounts. At December 31, 2002 and 2001, Brigham had recorded a liability in accounts payable of approximately $0 and $30,000, respectively, related to services performed by this company.

        A director of Brigham served as a consultant to Brigham on various aspects of its business and strategic issues. Fees paid for these services by Brigham were approximately $45,000, $44,000 and $33,000 for the years ended December 31, 2002, 2001 and 2000, respectively. Additional disbursements totaling approximately $12,000, $6,000 and $12,000 were made during 2002, 2001 and 2000, respectively, for the reimbursement of certain expenses. At December 31, 2002 and 2001, there were no payables related to these services recorded by Brigham.

        At December 31, 2002 Brigham had short-term accounts receivable of approximately $94,000 from a director of Brigham. These receivables represent the director's share of costs related to his working interest ownership in the Staubach No. 1, Burkhart #1R and Matthes-Huebner #1 wells that are operated by Brigham. The director obtained his interest in these wells through an exploration and production company that is not affiliated with Brigham. At December 31, 2002, $23,000 of the balance due was current and the remainder was over ninety days past due. Open short-term accounts receivable with the director are approximately $15,000 as of March 2003 and are thirty days past due.

        On March 1, 2002, Brigham ended an agreement to sell substantially all of its crude production to a single company, and began utilizing a broader range of purchasers. In April 2002, Brigham began selling a portion of its oil production to Citation Crude Marketing, Inc. based on an evaluation of terms and capabilities offered by several companies. Brigham's Executive Vice President and CFO and

F-31

board member through July 12, 2002 is the brother of the President of Citation Crude Marketing, Inc., and the son of the President and Chief Executive Officer of Citation Oil & Gas Corporation. Brigham sold approximately 212,000 barrels of oil with a value of $5.6 million to Citation Crude Marketing, Inc. during 2002.

        From time to time, in the normal course of business, Brigham has engaged a drilling company in which one of Brigham's current directors owns stock and serves on the board of directors. Total payments to the drilling company during 2002 and 2001 were $0.4 million and $3.9 million, respectively. At December 31, 2002, Brigham owed the drilling company approximately $0.4 million. At December 31, 2001 the drilling company was not performing work for Brigham and there were no amounts owed.

        From time to time during 2002, in the normal course of business, Brigham has engaged a service company in which one of Brigham's current directors owns stock and serves on the board of directors. Total payments to the service company during 2002 were $130,000. At December 31, 2002, Brigham owed the service company approximately $76,000. For the year ended December 31, 2001, the service company was not a related party.

        In October 2001, Brigham entered into a Joint Exploration Agreement with Carrizo Oil & Gas, Inc. ("Carrizo"). Under the terms of this agreement the parties (1) blended their existing oil and gas leasehold positions covering a South Texas prospect, (2) identified five separate areas of mutual interest within the prospect, and (3) agreed upon procedures for the future exploration and development of the prospect. In November and December of 2002, Brigham and Carrizo entered into agreements that increased Brigham's interest in some of the leasehold within the South Texas prospect. One of Brigham's current directors was a co-founder of Carrizo and is currently chairman of Carrizo's board of directors. At December 31, 2002 and 2001, Brigham was owed $413,000 and $158,000, respectively, by Carrizo for exploration and production activities. Brigham owed Carrizo $11,000 and $13,000 at December 31, 2002 and 2001, respectively.

        During 2001, Brigham entered into three agreements with Aspect Resources, LLC ("Aspect"). These agreements included: (1) a Joint Development Agreement extending the term of an area of mutual interest arrangement, and establishing cost sharing for potential expenditures within the project area; (2) an Agreement and Partial Assignment of Seismic Participation Agreement under which Aspect assigned Brigham an interest in an existing 3-D seismic project and Brigham must pay the assigned interest portion of future costs; (3) a Geophysical Exploration Agreement under which Brigham assigned Aspect an interest in an existing 3-D project area (with certain exclusion) and Aspect agreed to provide certain seismic data overlapping the project area and share in future costs. The President of Aspect was a director of Brigham and a member of the Compensation Committee for a portion of 2002 and all of 2001. Total amounts paid to Aspect during 2002 and 2001 for exploration, development and production operations were $189,000 and $588,000, respectively. Total amounts paid to Brigham by Aspect, or on their behalf, during 2002 and 2001 for exploration, development and production operations were $1,008,000 and $524,000, respectively. Brigham owed Aspect $0 and $174,000 at December 31, 2002 and 2001, respectively, for various exploration and production activities. Aspect owed Brigham $312,000 and $291,000 at December 31, 2002 and 2001, respectively, for various oil and gas exploration and production activities. Brigham was also owed $2,800 and $20,000 by Aspect Management Corp., an affiliate of Aspect, at December 31, 2002 and 2001, respectively, for joint venture operations.

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17. Supplemental Cash Flow Information

		Year Ended December 31,
		2002		2001		2000
Cash paid for interest		$	3,974	$	4,257	$	3,894
Noncash investing and financing activities:
	Increase in current liabilities for deferred loan fees to be paid in future		—		200		—
	Increase in deferred loan fees for issuance of warrants		—		—		2,400
	Dividends and accretion on mandatorily redeemable preferred stock		2,952		2,450		275
	Conversion of senior credit facility to common stock		10,000		—		—

18. Other Assets and Liabilities

        Other current assets consist of the following (in thousands):

	December 31,
	2002		2001
Gas imbalance receivables	$	3,656	$	1,537
Deposits		1,909		—
Other		1,078		873
	$	6,643	$	2,410

        Deposits are amounts held by Brigham's derivative counterparty.

        Other current liabilities consist of the following (in thousands):

	December 31,
	2002		2001
Gas imbalance liabilities	$	5,650	$	2,717
Derivative liabilities		3,168		384
Other		1,516		1,414
	$	10,334	$	4,515

19. Oil and Natural Gas Exploration and Production Activities

        Oil and natural gas sales reflect the market prices of net production sold or transferred with appropriate adjustments for royalties, net profits interest and other contractual provisions. Lease operating expenses include lifting costs incurred to operate and maintain productive wells and related equipment including such costs as operating labor, repairs and maintenance, materials, supplies and fuel consumed. Production taxes include production and severance taxes. Depletion of oil and natural gas properties relates to capitalized costs incurred in acquisition, exploration and development activities. Results of operations do not include interest expense and general corporate amounts.

F-33

Costs Incurred and Capitalized Costs

        The costs incurred in oil and natural gas acquisition, exploration and development activities follow (in thousands):

		December 31,
		2002			2001			2000
Costs incurred for the year:
	Exploration	$	12,693		$	18,210		$	14,238
	Property acquisition		3,213			3,437			2,540
	Development		13,301			14,353			12,555
	Proceeds from participants		(703	)		(135	)		(40	)
		$	28,504		$	35,865		$	29,293

        Costs incurred represent amounts incurred by Brigham for exploration, property acquisition and development activities. Periodically, Brigham will receive proceeds from participants subsequent to project initiation for an assignment of an interest in the project. These payments are represented by "Proceeds from participants" in the table above.

        Following is a summary of capitalized costs (in thousands) excluded from depletion at December 31, 2002 by year incurred. At this time, Brigham is unable to predict either the timing of the inclusion of these costs and the related natural gas and oil reserves in its depletion computation or their potential future impact on depletion rates.

		December 31,
								Prior Years
		2002		2001		2000				Total
Property acquisition		$	682	$	565	$	195	$	11,990	$	13,432
Exploration			1,406		418		77		19,838		21,739
Capitalized interest			516		405		15		1,296		2,232
	Total	$	2,604	$	1,388	$	287	$	33,124	$	37,403

20. Oil and Natural Gas Reserves and Related Financial Data (unaudited)

        Information with respect to Brigham's oil and natural gas producing activities is presented in the following tables. Reserve quantities, as well as certain information regarding future production and discounted cash flows, were determined by Brigham's independent petroleum consultants and internal petroleum reservoir engineers.

Oil and Natural Gas Reserve Data

        The following tables present Brigham's estimates of its proved oil and natural gas reserves. Brigham emphasizes reserves are approximates and are expected to change as additional information becomes available. Reservoir engineering is a subjective process of estimating underground accumulations of oil and natural gas that cannot be measured in an exact way, and the accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological interpretation and judgment. Accordingly, there can be no assurance that the reserves set forth herein

F-34

will ultimately be produced nor can there be assurance that the proved undeveloped reserves will be developed within the periods anticipated. A substantial portion of the reserve balances was estimated utilizing the volumetric method, as opposed to the production performance method.

		Natural Gas (MMcf)		Oil (MBbls)
Proved reserves at December 31, 1999		65,457		3,027
	Revisions of previous estimates	83		(554	)
	Extensions, discoveries and other additions	17,058		758
	Production	(4,431	)	(361	)
Proved reserves at December 31, 2000		78,167		2,870
	Revisions of previous estimates	(1,959	)	351
	Extensions, discoveries and other additions	22,554		1,101
	Sales of minerals-in-place	(3,402	)	(106	)
	Production	(6,766	)	(468	)
Proved reserves at December 31, 2001		88,594		3,748
	Revisions of previous estimates	(824	)	(31	)
	Extensions, discoveries and other additions	18,005		599
	Sales of minerals-in-place	(556	)	(8	)
	Production	(5,791	)	(701	)
Proved reserves at December 31, 2002		99,428		3,607
Proved developed reserves at December 31:
	2000	39,271		1,802
	2001	38,633		2,609
	2002	42,161		2,330

        Proved reserves are estimated quantities of natural gas and crude oil, which geological and engineering data indicate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Proved developed reserves are proved reserves that can be expected to be recovered through existing wells with existing equipment and operating methods.

Standardized Measure of Discounted Future Net Cash Inflows and Changes Therein

        The following table presents a standardized measure of discounted future net cash inflows (in thousands) relating to proved oil and natural gas reserves. Future cash flows were computed by applying year-end prices of oil and natural gas relating to Brigham's proved reserves to the estimated year-end quantities of those reserves. Future price changes were considered only to the extent provided by contractual agreements in existence at year-end. Future production and development costs were computed by estimating those expenditures expected to occur in developing and producing the proved oil and natural gas reserves at the end of the year, based on year-end costs. Actual future cash inflows

F-35

may vary considerably, and the standardized measure does not necessarily represent the fair value of Brigham's oil and natural gas reserves.

	December 31,
	2002			2001			2000
Future cash inflows	$	601,081		$	301,201		$	899,819
Future development and production costs		(131,357	)		(84,413	)		(154,295	)
Future income tax expense		(104,724	)		(34,062	)		(216,342	)
Future net cash inflows		365,000			182,726			529,182
10% annual discount for estimated timing of cash flows		(125,302	)		(61,802	)		(169,954	)
Standardized measure of discounted future net cash flows	$	239,698		$	120,924		$	359,228

        The base sales prices for Brigham's reserves were $4.74 per Mcf for natural gas and $31.25 per Bbl for oil as of December 31, 2002, $2.57 per Mcf for natural gas and $19.84 per Bbl for oil as of December 31, 2001, and $10.42 per Mcf for natural gas and $26.83 per Bbl for oil as of December 31, 2000. These base prices were adjusted to reflect applicable transportation and quality differentials on a well-by-well basis to arrive at realized sales prices used to estimate Brigham's reserves at these dates.

        Changes in the future net cash inflows discounted at 10% per annum follow (in thousands):

		December 31,
		2002			2001			2000
Beginning of period		$	120,924		$	359,228		$	113,546
	Sales of oil and natural gas produced, net of production costs		(31,475	)		(27,296	)		(15,218	)
	Development costs incurred		8,625			8,310			5,308
	Extensions and discoveries		60,872			41,278			295,239
	Sales of minerals-in-place		(1,064	)		(22,476	)		—
	Net change of prices and production costs		136,808			(322,047	)		175,018
	Change in future development costs		(8,000	)		(15,956	)		6,990
	Changes in production rates and other		(17,003	)		(29,545	)		(83,322	)
	Revisions of quantity estimates		(2,876	)		(22,676	)		(12,262	)
	Accretion of discount		14,681			49,766			11,447
	Change in income taxes		(41,794	)		102,338			(137,518	)
End of period		$	239,698		$	120,924		$	359,228

F-36

21. Quarterly Financial Data (Unaudited)

		Year Ended December 31, 2002
		Quarter 1			Quarter 2		Quarter 3		Quarter 4
Revenue		$	6,444		$	8,786	$	9,449	$	10,497
Operating income			1,016			2,278		3,424		2,717
Net income (loss)			(1,332	)		61		989		(294	)
Net income (loss) per share:
	Basic	$	(0.08	)	$	0.00	$	0.06	$	(0.02	)
	Diluted	$	(0.08	)	$	0.00	$	0.06	$	(0.02	)

		Year Ended December 31, 2001
		Quarter 1		Quarter 2		Quarter 3		Quarter 4
Revenue		$	7,043	$	10,504	$	8,871	$	6,130
Operating income (loss)			2,425		4,876		3,296		(572	)
Net income (loss)			424		8,327		2,947		(2,460	)
Net income (loss) per share:
	Basic	$	0.03	$	0.52	$	0.18	$	(0.15	)
	Diluted*	$	0.02	$	0.30	$	0.13	$	(0.15	)

*

As discussed further in Note 10, the diluted earnings per share data for 2001 Quarter 2 and 3 have been restated.

F-37

INDEX TO EXHIBITS

Number		Description
3.1	—	Certificate of Incorporation (filed as Exhibit 3.1 to Brigham's Registration Statement on Form S-1 (Registration No. 333-22491), and incorporated herein by reference).
3.2	—	Certificates of Amendment to Certificate of Incorporation (filed as Exhibit 3.1.1 to Brigham's Registration Statement on Form S-3 (Registration No. 333-37558), and incorporated herein by reference).
3.3	—	Bylaws (filed as Exhibit 3.2 to Brigham's Registration Statement on Form S-1 (Registration No. 333-22491), and incorporated herein by reference).
4.1	—	Form of Common Stock Certificate (filed as Exhibit 4.1 to Brigham's Registration Statement on Form S-1 (Registration No. 333-22491), and incorporated herein by reference).
4.2	—	Certificate of Designations of Series A Preferred Stock (Par Value $.01 Per Share) of Brigham Exploration Company filed October 31, 2000 (filed as Exhibit 4.1 to Brigham's Current Report on Form 8-K, as amended (filed November 8, 2000), and incorporated herein by reference).
4.3	—	Certificate of Amendment of Certificate of Designations of Series A Preferred Stock (Par Value $.01 Per Share) of Brigham Exploration Company, filed March 2, 2001 (filed as Exhibit 4.2.1 to Brigham's Annual Report on Form 10-K for the year ended December 31, 2000 (filed March 23, 2001), and incorporated herein by reference).
4.4 +	—	Certificate of Designations of Series B Preferred Stock (Par Value $.01 Per Share) of Brigham Exploration Company filed December 20, 2002.
10.1	—	Amended and Restated Agreement of Limited Partnership of Brigham Oil & Gas, L.P., dated December 30, 1997 by and among Brigham, Inc., Brigham Holdings I, L.L.C. and Brigham Holdings II,  L.L.C. (filed as Exhibit 10.1.4 to Brigham's Annual Report on Form 10-K for the year ended December 31, 1998, and incorporated herein by reference)
10.2*	—	Consulting Agreement, dated May 1, 1997, by and between Brigham Oil & Gas, L.P. and Harold D. Carter (filed as Exhibit 10.4 to Brigham's Registration Statement on Form S-1 (Registration No. 33-53873), and incorporated herein by reference).
10.3*	—	Letter agreement, dated as of March 20, 2000, setting forth amendments effective January 1, 2000, to the Consulting Agreement, dated May 1, 1997, by and between Brigham Oil & Gas, L.P. and Harold D. Carter (filed as Exhibit 10.5.1 to Brigham's Annual Report on Form 10-K for the year ended December 31, 1999, and incorporated herein by reference).
10.4*	—	Employment Agreement, by and between Brigham Exploration Company and Ben M. Brigham (filed as Exhibit 10.7 to Brigham's Registration Statement on Form S-1 (Registration No. 333-22491), and incorporated herein by reference).
10.5*	—	Form of Confidentiality and Noncompete Agreement between the Registrant and each of its executive officers (filed as Exhibit 10.8 to Brigham's Registration Statement on Form S-1 (Registration No. 333-22491), and incorporated herein by reference).
10.6*	—	1997 Incentive Plan of Brigham Exploration Company as amended through March 6, 2001 (filed as an amendment to Brigham's Quarterly Report on Form 10-Q for the quarter ended June 30, 2001, and incorporated herein by reference).
10.7*	—	Form of Option Agreement for certain executive officers (filed as Exhibit 10.9.1 to Brigham's Registration Statement on Form S-1 (Registration No. 333-22491), and incorporated herein by reference).
10.8*	—	Form of Restricted Stock Agreement for certain executive officers dated as of October 27, 2000 (filed as Exhibit 10.8.2 to Brigham's Annual Report on Form 10-K for the year ended December 31, 2000 (filed March 23, 2001), and incorporated herein by reference).

10.9*	—	Incentive Bonus Plan dated as of February 28, 1997 of Brigham, Inc. and Brigham Oil & Gas, L.P. (filed as Exhibit 10.10 to Brigham's Registration Statement on Form S-1 (Registration No. 333-22491), and incorporated herein by reference).
10.10	—	Two Bridgepoint Lease Agreement, dated September 30, 1996, by and between Investors Life Insurance Company of North America and Brigham Oil & Gas, L.P. (filed as Exhibit 10.14 to Brigham's Registration Statement on Form S-1 (Registration No. 333-22491), and incorporated herein by reference).
10.11	—	First Amendment to Two Bridge Point Lease Agreement dated April 11, 1997 between Investors Life Insurance Company of North America and Brigham Oil & Gas, L.P. (filed as Exhibit 10.9.1 to Brigham's Registration Statement on Form S-1 (Registration No. 333-53873), and incorporated herein by reference).
10.12	—	Second Amendment to Two Bridge Point Lease Agreement dated October 13, 1997 between Investors Life Insurance Company of North America and Brigham Oil & Gas, L.P. (filed as Exhibit 10.9.2 to Brigham's Registration Statement on Form S-1 (Registration No. 333-53873), and incorporated herein by reference).
10.13	—	Letter dated April 17, 1998 exercising Right of First Refusal to Lease "3rd Option Space" (filed as Exhibit 10.9.3 to Brigham's Registration Statement on Form S-1 (Registration No. 333-53873), and incorporated herein by reference).
10.14	—	Agreement and Assignment of Interest, West Bradley Project, dated September 1, 1995, by and between Aspect Resources Limited Liability Company and Brigham Oil & Gas, L.P. (filed as Exhibit 10.21 to Brigham's Registration Statement on Form S-1 (Registration No. 333-22491), and incorporated herein by reference).
10.15	—	Agreement and Assignment of Interests in lands located in Grady County, Oklahoma, West Bradley Project, dated December 1, 1995, by and between Aspect Resources Limited Liability Company, Brigham Oil & Gas,  L.P. and Venture Acquisitions, L.P. (filed as Exhibit 10.22 to Brigham's Registration Statement on Form S-1 (Registration No. 333-22491), and incorporated herein by reference).
10.16	—	Agreement and Assignment of Interests, West Bradley Project, dated December 1, 1995, by and between Aspect Resources Limited Liability Company and Brigham Oil & Gas, L.P. (filed as Exhibit 10.23 to Brigham's Registration Statement on Form S-1 (Registration No. 333-22491), and incorporated herein by reference).
10.17	—	Form of Indemnity Agreement between the Registrant and each of its executive officers (filed as Exhibit 10.28 to Brigham's Registration Statement on Form S-1 (Registration No. 333-22491), and incorporated herein by reference).
10.18	—	Registration Rights Agreement dated February 26, 1997 by and among Brigham Exploration Company, General Atlantic Partners III L.P., GAP-Brigham Partners, L.P., RIMCO Partners, L.P. II, RIMCO Partners L.P. III, and RIMCO Partners, L.P. IV, Ben M. Brigham, Anne L. Brigham, Harold D. Carter, Craig M. Fleming, David T. Brigham and Jon L. Glass (filed as Exhibit 10.29 to Brigham's Registration Statement on Form S-1 (Registration No. 333-22491), and incorporated herein by reference).
10.19	—	1997 Director Stock Option Plan (filed as Exhibit 10.30 to Brigham's Registration Statement on Form S-1 (Registration No. 333-22491), and incorporated herein by reference).
10.20	—	Form of Employee Stock Ownership Agreement (filed as Exhibit 10.31 to Brigham's Registration Statement on Form S-1 (Registration No. 333-22491), and incorporated herein by reference).
10.21	—	Agreement and Assignment of Interest in Geophysical Exploration Agreement, Esperson Dome Project, dated November 1, 1994, by and between Brigham Oil & Gas, L.P. and Vaquero Gas Company (filed as Exhibit 10.33 to Brigham's Registration Statement on Form S-1 (Registration No. 333-22491), and incorporated herein by reference).

10.22	—	Proposed Trade Structure, RIMCO/Tigre Project, Vermillion Parish, Louisiana, among Brigham Oil & Gas, L.P., Tigre Energy Corporation and Resource Investors Management Company (filed as Exhibit 10.36 to Brigham's Registration Statement on Form S-1 (Registration No. 333-22491), and incorporated herein by reference).
10.23	—	Letter relating to Proposed Trade Structure, RIMCO/Tigre Project, dated January 31, 1997, from Resource Investors Management Company to Brigham Oil & Gas, L.P. (filed as Exhibit 10.36 to Brigham's Registration Statement on Form S-1 (Registration No. 333-22491), and incorporated herein by reference).
10.24	—	Agreement dated March 6, 2000 by and between RIMCO Production Co., Tigre Energy Corporation and Brigham Oil & Gas, L.P. regarding modifications to the Proposed Trade Structure, RIMCO/Tigre Project, dated January 31, 1997.
10.25	—	Form Change of Control Agreement dated as of September 20, 1999 between Brigham Exploration Company and certain Officers (filed as Exhibit 10.3 to Brigham's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1999 and incorporated by reference herein).
10.26	—	Warrant Agreement for the Purchase of Common Stock dated as of July 19, 1999 by and between Brigham Exploration Company and Bank of Montreal (filed as Exhibit 10.4 to Brigham's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1999 and incorporated by reference herein).
10.27	—	Warrant Agreement for the Purchase of Common Stock dated as of July 19, 1999 by and between Brigham Exploration Company and Societe Generale, Southwest Agency (filed as Exhibit 10.5 to Brigham's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1999 and incorporated by reference herein).
10.28	—	First Amendment to Warrant Agreement dated as of February 17, 2000 between Brigham Exploration Company and Bank of Montreal (filed as Exhibit 10.4 to Brigham's Current Report on Form 8-K filed February 29, 2000 and incorporated herein by reference).
10.29	—	First Amendment to Warrant Agreement dated as of February 17, 2000 between Brigham Exploration Company and Societe Generale, Southwest Agency (filed as Exhibit 10.5 to Brigham's Current Report on Form 8-K filed February 29, 2000 and incorporated herein by reference).
10.30	—	Joint Development Agreement, dated as of February 10, 1999, by and between Brigham Oil & Gas, L.P. and Aspect Resources LLC. (filed as Exhibit 10.65 to Brigham's Annual Report on Form 10-K for the year ended December 31, 1999, and incorporated herein by reference).
10.31	—	First Amendment, dated as of May 10, 1999, to that certain Joint Development Agreement entered into effective as of February 10, 1999, by and between Brigham Oil & Gas, L.P. and Aspect Resources LLC. (filed as Exhibit 10.65.1 to Brigham's Annual Report on Form 10-K for the year ended December 31, 1999, and incorporated herein by reference).
10.32	—	Acquisition and Participation Agreement, dated October 21, 1999, by and between Brigham Oil & Gas, L.P. and Aspect Resources LLC. (filed as Exhibit 10.65.2 to Brigham's Annual Report on Form 10-K for the year ended December 31, 1999, and incorporated herein by reference).
10.33	—	Letter agreement, dated as of December 30, 1999, regarding amendments to Joint Development Agreement, dated as of February 10, 1999, as amended, by and between Brigham Oil & Gas, L.P. and Aspect Resources LLC. (filed as Exhibit 10.65.3 to Brigham's Annual Report on Form 10-K for the year ended December 31, 1999, and incorporated herein by reference).
10.34	—	Letter agreement dated as of September 6, 1999 between Brigham Oil & Gas, L.P. and Brigham Land Management Company, Inc. regarding work to be performed within Brigham's Angelton Project. (filed as Exhibit 10.66 to Brigham's Annual Report on Form 10-K for the year ended December 31, 1999, and incorporated herein by reference).

10.35	—	Securities Purchase Agreement dated as of November 1, 2000 between Brigham Exploration Company, DLJ MB Funding III, Inc., and DLJ ESC II, LP., (filed as Exhibit 10.9 to Brigham's Current Report on Form 8-K, as amended (filed November 8, 2000), and incorporated herein by reference).
10.36	—	Registration Rights Agreement dated November 1, 2000 by and between Brigham Exploration Company, DLJ MB Funding III, Inc., and DLJ ESC II, LP. (filed as Exhibit 10.10 to Brigham's Current Report on Form 8-K, as amended (filed November 8, 2000), and incorporated herein by reference).
10.37	—	Warrant Certificate dated as of November 1, 2000 by and between Brigham Exploration Company and DLJ MB Funding III, Inc. (filed as Exhibit 10.11 to Brigham's Current Report on Form 8-K, as amended (filed November 8, 2000), and incorporated herein by reference).
10.38	—	Warrant Certificate dated as of November 1, 2000 by and between Brigham Exploration Company and DLJ ESC II, LP. (filed as Exhibit 10.12 to Brigham's Current Report on Form 8-K, as amended (filed November 8, 2000), and incorporated herein by reference).
10.39	—	Stockholders Voting Agreement dated as of October 31, 2000 by and among Brigham Exploration Company, DLJ ESC II, L.P., DLJ MB Funding III, Inc., and certain shareholders of Brigham Exploration Company (filed as Exhibit 10.13 to Brigham's Current Report on Form 8-K, as amended (filed November 8, 2000), and incorporated herein by reference).
10.40	—	Securities Purchase Agreement dated as of March 5, 2001 among Brigham Exploration Company, DLJ MB Funding III, Inc., DLJ Merchant Banking Partners III, LP, DLJ ESC II, LP and DLJ Offshore Partners III, CV (filed as Exhibit 10.70 to Brigham's Annual Report on Form 10-K for the year ended December 31, 2000 (filed March 23, 2001), and incorporated herein by reference).
10.41	—	First Amendment to Registration Rights Agreement, dated March 5, 2001, by and among Brigham Exploration Company, DLJMB Funding III, Inc., DLJ Merchant Banking Partners III, LP, DLJ ESC II, LP and DLJ Offshore Partners III, CV (filed as Exhibit 10.71 to Brigham's Annual Report on Form 10-K for the year ended December 31, 2000 (filed March 23, 2001), and incorporated herein by reference).
10.42	—	Warrant Certificate dated as of March 5, 2001 by and between Brigham Exploration Company and DLJMB Funding III, Inc. (filed as Exhibit 10.72 to Brigham's Annual Report on Form 10-K for the year ended December 31, 2000 (filed March 23, 2001), and incorporated herein by reference).
10.43	—	Warrant Certificate dated as of March 5, 2001 by and between Brigham Exploration Company and DLJ ESC II, LP. (filed as Exhibit 10.73 to Brigham's Annual Report on Form 10-K for the year ended December 31, 2000 (filed March 23, 2001), and incorporated herein by reference).
10.44	—	Warrant Certificate dated as of March 5, 2001 by and between Brigham Exploration Company and DLJ Merchant Banking Partners III, LP. (filed as Exhibit 10.74 to Brigham's Annual Report on Form 10-K for the year ended December 31, 2000 (filed March 23, 2001), and incorporated herein by reference).
10.45	—	Warrant Certificate dated as of March 5, 2001 by and between Brigham Exploration Company and DLJ Offshore Partners III, CV(filed as Exhibit 10.75 to Brigham's Annual Report on Form 10-K for the year ended December 31, 2000 (filed March 23, 2001), and incorporated herein by reference).
10.46	—	Stockholders Voting Agreement dated as of March 5, 2001 by and among Brigham Exploration Company, DLJMB Funding III, Inc., DLJ Merchant Banking Partners III, LP, DLJ ESC II, LP, DLJ Offshore Partners III, CV and certain shareholders of Brigham Exploration Company (filed as Exhibit 10.76 to Brigham's Annual Report on Form 10-K for the year ended December 31, 2000 (filed March 23, 2001), and incorporated herein by reference).

10.47 +	—	Exchange Agreement, dated November 21, 2002 between Brigham Exploration Company, Brigham Oil & Gas, L.P. and Shell Capital Inc.
10.48 +	—	Omnibus Agreement, dated November 21, 2002 between Brigham Exploration Company, Brigham Oil & Gas, L.P. and certain Credit Suisse First Boston entities.
10.49 +	—	Securities Purchase Agreement dated December 20, 2002 between Brigham Exploration Company and certain Credit Suisse First Boston Entities.
10.50 +	—	Registration Rights Agreement dated December 20, 2002 between Brigham Exploration Company and Shell Capital Inc.
10.51 +	—	Second Amendment to Registration Rights Agreement dated December 21, 2002 between Brigham Exploration Company and Credit Suisse First Boston Entities.
10.52 +	—	Stockholders Voting Agreement, dated December 20, 2002 between Brigham Exploration Company, certain Credit Suisse First Boston entities, Ben M. and Anne L. Brigham, Harold D. Carter, General Atlantic Partners, III, L.P., GAP-Brigham Partners, L.P. GAP Co Investment Partners II, L.P., Aspect Resources, LLC and certain officers.
10.53 +	—	Second Amended and Restated Credit Agreement, dated March 21, 2003 between Brigham Oil & Gas, L.P., Société Générale, Societe Generale, The Royal Bank of Scotland plc and Bank of America, N.A.
10.54 +	—	Amended and Restated Subordinated Credit Agreement, dated March 21, 2003 between Brigham Oil & Gas, L.P., and The Royal Bank of Scotland plc.
21 +	—	Subsidiaries of the Registrant.
23.1 +	—	Consent of PricewaterhouseCoopers LLP, independent public accountants.
99.1 +	—	Section 906 Certification by Ben M. Brigham
99.2 +	—	Section 906 Certification by Eugene B. Shepherd

*

Management contract or compensatory plan.

+

Filed herewith.

EX-4.4

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Exhibit 4.4

CERTIFICATE OF DESIGNATIONS

of

SERIES B PREFERRED STOCK
(Par Value $.01 Per Share)

of

BRIGHAM EXPLORATION COMPANY

Pursuant to Section 151
of the General Corporation Law of the State of Delaware

        Brigham Exploration Company, a corporation organized and existing under the laws of the State of Delaware (the "Corporation"), DOES HEREBY CERTIFY that, pursuant to the authority conferred on the Board of Directors of the Corporation by the Certificate of Incorporation, as amended, of the Corporation and in accordance with Section 151 of the General Corporation Law of the State of Delaware, the Board of Directors of the Corporation on December 20, 2002, duly adopted the following preamble and resolution establishing and creating a series of 1,000,000 shares of Preferred Stock, par value $.01 per share, of the Corporation:

RESOLVED, that pursuant to the authority vested in the Board of Directors of the Corporation (the "Board of Directors") in accordance with the provisions of its Certificate of Incorporation, as amended, a series of Preferred Stock, par value $.01 per share, of the Corporation is hereby created, and that the designation and number of shares thereof and the preferences, limitations and relative rights thereof are as follows:

        Section 1.Designation and Number of Shares of Series B Preferred Stock. There is hereby authorized and established a series of Preferred Stock that shall be designated as "Series B Preferred Stock" (hereinafter referred to as "Series B Preferred"), and the number of shares constituting such series shall be 1,000,000. Such number of shares may be increased or decreased, but not to a number less than the number of shares of Series B Preferred then issued and outstanding, by resolution adopted by the full Board of Directors. The "Stated Value" per share of the Series B Preferred shall be equal to Twenty Dollars ($20.00).

        Section 2.Definitions. In addition to the definitions set forth elsewhere herein, the following terms shall have the meanings indicated:

        "Business Day" means any day other than a Saturday, Sunday or a day on which banking institutions in New York, New York are authorized or obligated by law or executive order to close.

        "Change of Control" means (i) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Corporation and its Subsidiaries; or (ii) the acquisition by any Person or group of related Persons for purposes of Section 13 (d) of the Exchange Act, of the power, directly or indirectly, to vote or direct the voting of securities having more than 50% of the ordinary voting power for the election of directors of the Corporation or of any direct or indirect holding company thereof; or (iii) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of

the Corporation cease for any reason to constitute a majority of the Board of Directors then in office; provided that any person becoming a director subsequent to the beginning of such two-year period whose election, or nomination for election by the stockholders of the Corporation, was approved by a vote of at least a majority of the directors then comprising the Board of Directors of the Corporation shall be, for purposes of this definition, considered as though such person were a member of such Board at the beginning of such two-year period.

        "Common Stock" means the common stock, par value $0.01 per share, of the Corporation.

        "Exchange Act" means the Securities Exchange Act of 1934, as amended.

        "Junior Securities" means the Common Stock or any other series of stock issued by the Corporation ranking junior as to the Series B Preferred upon liquidation, dissolution or winding up of the Corporation.

        "Original Issue Date" means the date on which shares of the Series B Preferred are first issued.

        "Parity Security" means the Corporation's Series A Preferred Stock and any other class or series of stock issued by the Corporation ranking on a parity with the Series B Preferred upon liquidation, dissolution or winding up of the Corporation.

        "Person" means any individual, corporation, association, partnership, joint venture, limited liability company, trust, estate, or other entity or organization, other than the Corporation, any subsidiary of the Corporation, any employee benefit plan of the Corporation or any subsidiary of the Corporation, or any entity holding shares of Common Stock for or pursuant to the terms of any such plan.

        "Redemption Date" means the date fixed for any redemption of the Series B Preferred as provided in Section 6 or 7.

        "Senior Securities" means any class or series of stock issued by the Corporation ranking senior to the Series B Preferred upon liquidation, dissolution or winding up of the Corporation.

        "Warrants" means the warrants to purchase Common Stock originally issued to DLJ Merchant Banking Partners III, LP; Millennium Partners II, L.P.; MBP III Plan Investors, L.P.; DLJ Merchant Banking III, Inc., as Advisory General Partner on behalf of DLJ Offshore Partners III, C.V.; DLJ Merchant Banking III, Inc., as Advisory General Partner on behalf of DLJ Offshore Partners III-1, C.V. and as attorney-in-fact for DLJ Merchant Banking III, L.P., as Associate General Partner of DLJ Offshore Partners III-1, C.V.; DLJ Merchant Banking III, Inc., as Advisory General Partner on behalf of DLJ Offshore Partners III-2, C.V. and as attorney-in-fact for DLJ Merchant Banking III, L.P., as Associate General Partner of DLJ Offshore Partners III-2, C.V.; and DLJ MB Partners III GmbH & Co. KG on the Original Issue Date, pursuant to Warrant Certificates in the form attached hereto as Exhibit A.

        "Warrant Certificates" means the Warrant Certificates representing the Warrants.

        Section 3.Dividends and Distributions.

        (a)      The holders of shares of the Series B Preferred shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available therefor, dividends at the times and at the rates provided in this Section 3. Subject to the provisions of Section 3(c) below, dividends shall accrue on each outstanding share of the Series B Preferred at the rate of six percent (6%) per annum of the Stated Value (the "Dividend Rate") of such share. Such dividends on shares of Series B Preferred shall be cumulative from the date such shares are issued, whether or not in any period there shall be funds of the Corporation legally available for the payment of such dividends and whether or not such dividends are declared, and shall be payable quarterly, when, as and if declared by the Board of Directors, on March 31, June 30, September 30 and December 31 in each year (each a "Dividend Payment Date"), except that if such Dividend Payment Date is not a Business Day, then such dividend shall be payable on the first Business Day immediately thereafter to the holders of the Series B Preferred. Such dividends shall accrue whether or not there shall be (at the time such dividend becomes payable or at any other time) profits, surplus or other funds of the Corporation legally

available for the payment of dividends. Except as provided below, the dividends shall be payable in cash.

        (b)      Dividends shall be calculated on the basis of the time elapsed from and including the date immediately following the most recent preceding Dividend Payment Date (or, if none, the date of issuance) to and including the Dividend Payment Date or the final distribution date relating to conversion or redemption or to a dissolution, liquidation or winding up of the Corporation. Dividends payable on the shares of Series B Preferred for any period that is not a full quarter shall be calculated at the Dividend Rate on the basis of a 360-day year of twelve 30-day months.

        (c)      Notwithstanding anything to the contrary in Section 3(a), on any Dividend Payment Date occurring on or before the fifth anniversary of the Original Issue Date, if the Corporation does not pay all or part of the cash dividend payable on such Dividend Payment Date (or, if applicable, the first Business Day immediately thereafter), then the Corporation shall pay such unpaid portion of the dividend payable on such Dividend Payment Date to the holders of Series B Preferred in shares (including fractional shares) of Series B Preferred (a "Payment in Kind"). Each Payment in Kind shall be payable as of such Dividend Payment Date, except that if such Dividend Payment Date is not a Business Day, then such Payment in Kind shall be on the first Business Day immediately thereafter to the holders of the Series B Preferred. The issuance of additional shares of Series B Preferred pursuant to subparagraphs (c) and (d) of this Section 3 shall constitute full payment of any dividend paid through Payment in Kind, and such dividends shall not accumulate.

        (d)      Each Payment in Kind shall be equal to that number of additional shares of Series B Preferred that is equal to A divided by B where:

        "A" = 133.33% of the aggregate dollar amount of the unpaid cash dividends payable on any such Dividend Payment Date; and

        "B" = the Stated Value.

        Certificates representing the shares of Series B Preferred issuable on payment of any Payment in Kind shall be delivered to each holder entitled to receive such Payment in Kind (in appropriate denominations) on or before the twentieth (20th) day following the Dividend Payment Date for which such Payment in Kind is elected to be paid hereunder. Shares of Series B Preferred issued on payment of any Payment in Kind shall be duly authorized, validly issued and nonassessable and, upon issuance, shall have rights (including without limitation, dividend, voting and redemption rights) and a Stated Value identical to the outstanding shares of Series B Preferred in respect of which they are issued.

        (e)      Except as provided in Section 8, no interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on the Series B Preferred which are in arrears.

        (f)        Dividends payable on each Dividend Payment Date shall be paid to record holders of the shares of Series B Preferred as they appear on the books of the Corporation at the close of business on the tenth Business Day immediately preceding the respective Dividend Payment Date or on such other record date as may be fixed by the Board of Directors of the Corporation in advance of a Dividend Payment Date, provided that no such record date shall be less than ten nor more than 60 calendar days preceding such Dividend Payment Date.

        (g)      So long as any shares of Series B Preferred are outstanding, the Corporation shall not issue any Senior Securities.

        (h)      No dividends (other than those payable solely in the common stock of the Corporation) shall be paid on any common stock unless and until all accrued and unpaid dividends on the Series B Preferred have been paid.

        Section 4.Liquidation Preference.

        (a)      In the event of any liquidation, dissolution or winding up of the Corporation (in connection with the bankruptcy or insolvency of the Corporation or otherwise), whether voluntary or involuntary, before any payment or distribution of the assets of the Corporation (whether capital or surplus) shall

be made to or set apart for the holders of shares of any Junior Securities, the holders of the shares of Series B Preferred shall be entitled to receive an amount per share equal to (i) the Stated Value per share held by them plus (ii) an amount equal to the aggregate dollar amount of all accrued and unpaid dividends through the final distribution date. To the extent the available assets are insufficient to fully satisfy such amounts, then the holders of the Series B Preferred shall share ratably in such distribution in the proportion that the number of each holder's Series B Preferred Shares bears to the total number of shares of Series B Preferred outstanding. No further payment on account of any such liquidation, dissolution or winding up of the Corporation shall be paid to the holders of the shares of Series B Preferred or the holders of any Parity Securities unless there shall be paid at the same time to the holders of the shares of Series B Preferred and the holders of any Parity Securities proportionate amounts determined ratably in proportion to the full amounts to which the holders of all outstanding shares of Series B Preferred and the holders of all such outstanding Parity Securities are respectively entitled with respect to such distribution. For purposes of this Section, neither a consolidation or merger of the Corporation with one or more partnerships, corporations or other entities nor a sale, lease, exchange or transfer of all or any substantial part of the Corporation's assets for cash, securities or other property shall be deemed to be a liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary.

        (b)      After the payment of the full amount to the holders of Series B Preferred pursuant to the preceding subparagraph (a), and subject to the rights of holders of Junior Securities other than the Common Stock, the holders of Common Stock shall share ratably in the distribution of the remaining available assets of the Corporation, in the proportion that each holder's shares of Common Stock bears to the total number of shares of Common Stock of the Corporation outstanding.

        (c)      Written notice of any liquidation, dissolution or winding up of the Corporation, stating the payment date or dates when and the place or places where the amounts distributable in such circumstances shall be payable, shall be given by first class mail, postage prepaid, not less than 15 days prior to any payment date stated therein, to the holders of record of the shares of Series B Preferred at their respective addresses as the same shall appear in the records of the Corporation.

        Section 5.Optional Redemption by the Corporation. The outstanding shares of Series B Preferred are subject to redemption in accordance with the following provisions:

        (a)      Subject to the terms hereof, the Corporation may at its option, so long as it has sufficient funds legally available therefor, elect to redeem, in whole or in part, the outstanding shares of Series B Preferred at any time after the five-year anniversary of the date of issuance of such shares.

        (b)      (i) The redemption price per share for Series B Preferred redeemed on any optional redemption date shall, subject to the provisions below in this Section 5(b), be an amount equal to 101% of the Stated Value of such share plus, without duplication, all accrued and unpaid dividends on such share to and including such Redemption Date (the "Optional Redemption Price"). The Optional Redemption Price shall be paid in cash from any source of funds legally available therefor.

        (ii)  In the event the holders of the Warrants exercise any or all of such Warrants for cash consideration (otherwise than pursuant to the mandatory exercise provisions in Section 5 of each Warrant Certificate), then the Optional Redemption Price for a number of shares of Series B Preferred equal to (A) the aggregate exercise price received by the Corporation pursuant to such exercise divided by (B) the Stated Value as of the exercise date, shall thereafter be deemed to be 100% of the Stated Value of such share plus, without duplication, all accrued and unpaid dividends on such share to and including such Redemption Date. If less than all of the outstanding Series B Preferred are to be redeemed pursuant to this Section 5(b) at the price specified in the preceding sentence, then the Corporation shall redeem a pro rata portion from each holder of Series B Preferred according to the respective number of shares of Series B Preferred held by such holder.

        (iii)  In the event the holders of the Warrants exercise any or all of such warrants for consideration consisting of shares of Series B Preferred, then (A) such exercise shall be deemed an optional redemption of such Series B Preferred, (B) the notice required by Section 5(c) shall not

be required, (C) the exercise date shall be the Redemption Date, (C) the Optional Redemption Price per share in such event shall be 100% of the Stated Value of such share as of the Redemption Date, plus, without duplication, all accrued and unpaid dividends on such share to and including such Redemption Date and (D) the Optional Redemption Price shall be paid as set forth in Section 1 of the Warrant Certificate.

        (c)      Not less than 30 nor more than 60 days prior to the date fixed for any redemption of any shares of Series B Preferred, a notice specifying the Redemption Date and place of such redemption and the number of shares to be redeemed shall be given by first class mail, postage prepaid, to the holders of record of the shares of Series B Preferred to be redeemed at their respective addresses as the same shall appear on the books of the Corporation (but no failure to mail such notice or any defect therein shall affect the validity of the proceedings for redemption except as to the holder to whom the Corporation has failed to mail such notice or except as to the holder whose notice was defective), calling upon each such holder of record to surrender to the Corporation on the Redemption Date at the place designated in such notice such holder's certificate or certificates representing the then outstanding shares of Series B Preferred held by such holder being redeemed by the Corporation. On or after the Redemption Date, each holder of shares of Series B Preferred called for redemption shall surrender such holder's certificate or certificates for such shares to the Corporation at the place designated in the redemption notice and shall thereupon be entitled to receive payment of the Optional Redemption Price. Unless there shall have occurred an Event of Noncompliance (as defined hereinafter) that is continuing, from and after the Redemption Date, dividends on the Series B Preferred called for redemption shall cease to accumulate and all rights of the holders of Series B Preferred designated for redemption (except the right to receive the Optional Redemption Price without interest upon surrender of their certificate or certificates) shall cease with respect to such shares, and such shares shall not thereafter be transferred on the books of the Corporation or be deemed to be outstanding for any purpose whatsoever. In the event that less than all of the shares represented by any such certificate are redeemed, a new certificate shall be issued representing such unredeemed shares.

        Section 6.Mandatory Redemption.

        (a)      As soon as possible following November 1, 2012, the Corporation shall redeem each outstanding Series B Preferred share for cash for an amount per share equal to the Stated Value of such share plus, without duplication, all accrued and unpaid dividends on such share to and including such Redemption Date (the "Redemption Price").

        (b)      In the event that (i) the Corporation gives a "Company Notice" (as defined in the Warrant Certificates) and (ii) the Warrants are thereafter exercised pursuant to the mandatory exercise provisions in Section 5 of each Warrant Certificate for cash consideration, then the Corporation shall redeem, for cash for an amount per share equal to the Redemption Price, a number of shares of Series B Preferred equal to (A) the aggregate exercise price received by the Corporation pursuant to such mandatory exercise divided by (B) the Redemption Price as of the Redemption Date, rounded down to the nearest whole share of Series B Preferred. Such redemption shall occur not more than ninety days after the date on which such Warrants are exercised. If less than all of the outstanding Series B Preferred are to be redeemed pursuant to this Section 6(b), then the Corporation shall redeem a pro rata portion from each holder of Series B Preferred according to the respective number of shares of Series B Preferred held by such holder.

        (c)      In the event that (i) the Corporation gives a "Company Notice" (as defined in the Warrant Certificates) and (ii) all of the outstanding Warrants are thereafter exercised pursuant to the mandatory exercise provisions in Section 5 of each Warrant Certificate for consideration consisting exclusively of Series B Preferred, then the Corporation shall redeem, for cash for an amount per share equal to the Redemption Price, all of the remaining shares of Series B Preferred. Such redemption shall occur simultaneously with the exercise of the Warrants by the holders.

        (d)      Not less than ten nor more than sixty days prior to the Redemption Date fixed for any redemption of any shares of Series B Preferred under Section 6(a), a notice specifying the mandatory

Redemption Date and place of such redemption and the number of shares to be redeemed shall be given by first class mail, postage prepaid, to the holders of record of the shares of Series B Preferred at their respective addresses as the same shall appear on the books of the Corporation, calling upon each such holder of record to surrender to the Corporation on the mandatory Redemption Date at the place designated in such notice the holder's certificate or certificates representing the number of shares of Series B Preferred owned by such holder and being redeemed on such mandatory Redemption Date. On or after the mandatory Redemption Date, each holder of shares of Series B Preferred shall surrender his certificate or certificates for such shares to the Corporation at the place and amount designated in the redemption notice and shall thereupon be entitled to receive payment of the aggregate Redemption Price for such shares. Unless there shall have occurred an Event of Noncompliance that is continuing, from and after the mandatory Redemption Date, dividends on the Series B Preferred called for redemption shall cease to accumulate and all rights of the shares of Series B Preferred being redeemed (except the right to receive the Redemption Price without interest upon surrender of the related certificate or certificates) shall cease, and such shares shall not thereafter be transferred on the books of the Corporation or be deemed to be outstanding for any purpose whatsoever. In the event that less than all of the shares represented by any such certificate are redeemed, a new certificate shall be issued representing such unredeemed shares.

        (e)      In connection with a redemption under this Section 6, if the Corporation has insufficient funds (whether by legal or contractual prohibition or otherwise) to initially redeem all shares required to be redeemed thereunder, then the Corporation shall from time to time whenever possible use the maximum amount of funds available (until all shares of Series B Preferred are redeemed), and in each partial redemption the number of shares redeemed and the redemption price therefor shall be allocated according to the relative number of Series B Preferred shares owned by each holder as compared to the total number of shares of Series B Preferred outstanding at such time.

        Section 7.Change of Control.

        (a)      Within 20 days of the occurrence of a Change of Control, the Corporation shall make an offer to purchase (the "Change of Control Offer") the outstanding Series B Preferred shares at an amount per share equal to (x) 101% of the Stated Value of such shares plus, without duplication, (y) all accrued and unpaid dividends on such shares to and including the Change of Control Payment Date (such applicable purchase price being hereinafter referred to as the "Change of Control Purchase Price") in accordance with the procedures set forth in this Section 7.

        (b)      Within 20 days of the occurrence of a Change of Control, the Corporation also shall send by first-class mail, postage prepaid, to each holder of Series B Preferred, at the address appearing on the stock books of the Corporation, a notice stating:

          (i)  that the Change of Control Offer is being made pursuant to this Section 7 and that all Series B Preferred tendered will be accepted for payment, and otherwise subject to the terms and conditions set forth herein;

        (ii)  the Change of Control Purchase Price and the purchase date (which shall be a Business Day no earlier than 20 Business Days from the date such notice is mailed (the "Change of Control Payment Date"));

        (iii)  that any Series B Preferred not tendered will continue to accumulate dividends;

        (iv)  that, unless the Corporation defaults in the payment of the Change of Control Purchase Price, any Series B Preferred accepted for payment pursuant to the Change of Control Offer shall cease to accumulate dividends after the Change of Control Payment Date;

        (v)  that holders accepting the offer to have their Series B Preferred purchased pursuant to a Change of Control Offer will be required to surrender their certificates representing Series B Preferred to the Corporation at the address specified in the notice prior to the close of business on the Business Day preceding the Change of Control Payment Date;

        (vi)  that holders will be entitled to withdraw their acceptance if the Corporation receives, not later than the close of business on the third Business Day preceding the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the holder, the number of shares of Series B Preferred delivered for purchase, and a statement that such holder is withdrawing his election to have such Series B Preferred purchased;

      (vii)  that holders whose Series B Preferred is being purchased only in part will be issued new certificates representing the number of shares of Series B Preferred equal to the unpurchased portion of the certificates surrendered; and

      (viii)  any other procedures that a holder must follow to accept a Change of Control Offer or effect withdrawal of such acceptance.

        (c)      In the event that a Change of Control occurs and the holders of Series B Preferred exercise their right to require the Corporation to purchase Series B Preferred, if such purchase constitutes a "tender offer" for purposes of Rule 14e-1 under the Exchange Act at that time, the Corporation will comply with the requirements of Rule 14e-1 as then in effect with respect to such repurchase and, in the event of a conflict between the requirements of the Exchange Act and this Certificate of Designation, the provisions of the Exchange Act shall govern.

        (d)      On the Change of Control Payment Date, the Corporation shall (A) accept for payment the shares of Series B Preferred validly tendered pursuant to the Change of Control Offer, (B) promptly mail to the holders of shares so accepted the Change of Control Purchase Price therefor and (C) cancel and retire each surrendered Certificate and execute a new Series B Preferred certificate equal to any unpurchased shares represented by a certificate surrendered. Unless the Corporation defaults in the payment for the shares of Series B Preferred tendered pursuant to the Change of Control Offer, dividends shall cease to accrue with respect to the shares of Series B Preferred tendered and all rights of holders of such tendered shares shall terminate, except for the right to receive payment therefor, on the Change of Control Payment Date.

        (e)      The Corporation will not be required to make a Change of Control Offer upon a Change of Control if a third party makes such Change of Control Offer contemporaneously with or upon a Change of Control in the manner, at the times and otherwise in compliance with the requirements of this Section 7 and purchases all Series B Preferred validly tendered and not withdrawn under such Change of Control Offer.

        (f)        Prior to the mailing of the notice referred to in Section 7(b), but in any event within 20 days following the date on which a Change of Control occurs, the Corporation covenants that, if the purchase of the Series B Preferred would violate or constitute a default or be prohibited under any instrument governing indebtedness outstanding at the time, then the Corporation will, to the extent needed to permit such purchase of Series B Preferred, either (i) repay in full all such indebtedness or (ii) obtain the requisite consents under such instruments to permit the redemption of the Series B Preferred as provided above. The Corporation will first comply with the covenant in the preceding sentence before it will be required to redeem Series B Preferred pursuant to the provisions described above.

        Section 8.Events of Noncompliance.

        (a)      Notwithstanding any provision to the contrary contained herein, an "Event of Noncompliance" shall have occurred if the Corporation:

          (i)  fails to pay on or before twenty days after any Dividend Payment Date the full amount of dividends then accrued on the Preferred Stock, whether or not such payments are legally permissible; or

        (ii)  the Corporation fails to pay the deemed Optional Redemption Price that is payable pursuant to Section 5(b)(iii) or the Redemption Price payable pursuant to Section 6 on the date that the certificates for the shares of Series B Preferred are properly presented to the Corporation for redemption, whether or not such payment is legally permissible; or

        (iii)  the Corporation fails to pay the Optional Redemption Price payable pursuant to Sections 5(b)(i) and (ii) on the date that the certificates for the shares of Series B Preferred are properly presented to the Corporation for redemption, whether or not such payment is legally permissible.

        (b)      Immediately upon an Event of Noncompliance pursuant to Section 8(a)(i), the Dividend Rate then in effect shall be increased to an amount equal to the Dividend Rate then in effect plus 2.0%, until such time as the dividends accrued but not paid on the applicable Dividend Payment Date are paid in full.

        (c)      Immediately upon an Event of Noncompliance pursuant to Section 8(a)(ii), the Dividend Rate then in effect shall be increased to an amount equal to the Dividend Rate then in effect plus 1.0% and, until such time as the Option Redemption Price, or the Redemption Price, as applicable, is paid in full, such Dividend Rate then in effect shall be further increased by 100 basis points on every 90th day after the date any prior adjustment is made pursuant to this Section 8(c).

        Section 9.Reacquired Shares. Any shares of Series B Preferred repurchased, redeemed, converted or otherwise acquired by the Corporation shall be retired and canceled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock, without designation as to series.

        Section 10.Voting Rights.

        (a)      Except as otherwise required by law and as specified in this Section, the holders of shares of Series B Preferred shall not have any right or power to vote on or consent with respect to any matter or in any proceeding or to be represented at any meeting of stockholders of the Corporation. In any action taken as a class, each holder of shares of Series B Preferred shall be entitled to one vote for each share held.

        (b)      So long as any shares of Series B Preferred remain outstanding, the affirmative vote or consent of the holders of 75% of the shares of Series B Preferred outstanding at the time, voting as a class, given in person or by proxy, either in writing or at a meeting, shall be necessary to permit, effect or validate (i) the issuance of any shares of Series B Preferred, other than as a Payment in Kind of dividends payable thereon (ii) the authorization, creation or issuance, or any increase in the authorized or issued amount, of any class or series of Parity Security, other than any Payment or Kind or any increase in the number of authorized shares of Series B Preferred in connection therewith, or (iii) the amendment, alteration or repeal of any of the provisions of the Certificate of Incorporation, as amended, of the Corporation which would adversely affect any right, preference, privilege or voting power of shares of Series B Preferred or of the holders thereof. The increase in the amount of authorized Preferred Stock of the Corporation or the creation and issuance, or increase in amount of authorized shares of other series of Parity Security or Junior Security shall not be deemed to affect materially and adversely such rights, preferences, privileges or voting power.

        Section 11.Certain Taxes. So long as any shares of Series B Preferred are outstanding the Corporation shall pay all taxes and other governmental charges (other than any income, franchise or similar taxes) that may be imposed with respect to the issue or delivery of shares of Common Stock upon conversion of Series B Preferred as provided herein. The Corporation shall not be required, however, to pay any tax or other charge imposed in connection with any transfer involved in the issue of any certificate for shares of Common Stock in any name other than that of the registered holder of the shares of the Series B Preferred surrendered in connection with the conversion thereof, and in such case the Corporation shall not be required to issue or deliver any stock certificate until such tax or other charge has been paid, or it has been established to the Corporation's satisfaction that no tax or other charge is due.

        Section 12.Ranking. For purposes of the distribution of assets upon liquidation, dissolution or winding up of the Corporation, (i) the Junior Securities shall rank junior to the Series B Preferred and (ii) the Parity Securities shall rank on a parity with the Series B Preferred.

        Section 13.Record Holders. The Corporation may deem and treat the record holder of any shares of Series B Preferred as the true and lawful owner thereof for all purposes, and the Corporation shall not be affected by any notice to the contrary.

        Section 14.Notice. Except as may otherwise be provided by law or provided for herein, all notices referred to herein shall be in writing, and all notices hereunder shall be deemed to have been given upon receipt, in the case of a notice of conversion given to the Corporation, or, in all other cases, upon the earlier of receipt of such notice or three Business Days after the mailing of such notices sent by Registered Mail (unless first-class mail shall be specifically permitted for such notice under the terms hereof) with postage prepaid, addressed: If to the Corporation, to its principal executive offices or to any agent of the Corporation designated as permitted hereby; or if to a holder of the Series B Preferred, to such holder at the address of such holder of the Series B Preferred as listed in the stock record books of the Corporation, or to such other address as the Corporation or holder, as the case may be, shall have designated by notice similarly given.

        Section 15.Successors and Transferees. The provisions applicable to shares of Series B Preferred shall bind and inure to the benefit of and be enforceable by the Corporation, the respective successors to the Corporation, and by any record holder of shares of Series B Preferred.

RESOLVED FURTHER, that the appropriate officers of the Corporation be, and they are hereby, authorized and directed from time to time to execute such certificates, instruments or other documents and do all such things as may be necessary or advisable in their discretion in order to carry out the terms hereof, including the filing with the Secretary of State for the State of Delaware of a copy of the foregoing resolution executed by an officer of the Corporation.

Dated: December 20, 2002

BRIGHAM EXPLORATION COMPANY
By:
	/s/  EUGENE B. SHEPHERD, JR.
	Name: Eugene B. Shepherd, Jr. Title: CFO

EXHIBIT A

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM. SUCH SECURITIES ARE SUBJECT TO THE RESTRICTIONS AND PRIVILEGES SPECIFIED IN THIS WARRANT CERTIFICATE AND IN A SECURITIES PURCHASE AGREEMENT, DATED AS OF DECEMBER    , 2002, BETWEEN BRIGHAM EXPLORATION COMPANY AND THE INITIAL HOLDER OF SECURITIES NAMED THEREIN, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF BRIGHAM EXPLORATION COMPANY AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER HEREOF UPON WRITTEN REQUEST, AND THE HOLDER OF THIS CERTIFICATE AGREES TO BE BOUND THEREBY.

WARRANT CERTIFICATE

Number of Warrants: ______________ Warrant No. ______________

        This Warrant certificate ("Warrant Certificate") certifies that, for value received,                        is the registered holder of the number of warrants (the "Warrants") set forth above. Each Warrant entitles the holder thereof, at any time or from time to time during the Exercise Period, to purchase from the Company one fully paid and nonassessable share of Common Stock at the Exercise Price, subject to adjustment as provided herein. Initially capitalized terms used but not defined herein shall have the meanings ascribed to them in the Securities Purchase Agreement.

        "Common Stock" means the common stock, $.01 par value per share, of the Company and such other class of securities as shall then represent the common equity of the Company.

        "Company" means Brigham Exploration Company, a Delaware corporation.

        "Exercise Deferral Period" means the period of time beginning on the Issuance Date and ending six months after the Issuance Date.

        "Exercise Period" means the period of time beginning six months after the Issuance Date and ending at 5:00 p.m. (New York City time) on the Expiration Date.

        "Exercise Price," subject in all circumstances to adjustment in accordance with Section 2, means $4.35 per share.

        "Expiration Date" means the tenth anniversary of the Issuance Date.

        "Issuance Date" means                        , 2002.

        "Person" means any individual, corporation, company, 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.

        "Preferred Stock" means shares of the Series B Preferred Stock, par value $0.01 per share, of the Company.

        "Preferred Value" per share of Preferred Stock means the Stated Value of such Share, plus, without duplication, all accrued and unpaid dividends on such share to and including the applicable date of Warrant exercise.

        "Price" means the average of the "high" and "low" prices as reported in The Wall Street Journal's listing for such day (corrected for obvious typographical errors) or if such shares are not reported in such listing, the average of the reported high and low sales prices on the largest national securities

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exchange (based on the aggregate dollar value of securities listed) on which such shares are listed or traded, or if such shares are not listed or traded on any national securities exchange, then the average of the reported high and low sales prices for such shares in the over-the-counter market, as reported on the National Association of Securities Dealers Automated Quotations System, or, if such prices shall not be reported thereon, the average of the closing bid and asked prices so reported, or, if such prices shall not be reported, then the average of the closing bid and asked prices reported by the National Quotations Bureau Incorporated. The "Average" Price per share for any period shall be determined by dividing the sum of the Prices determined for the individual trading days in such period by the number of trading days in such period.

        "Securities Purchase Agreement" means the Securities Purchase Agreement, dated as of December    , 2002, between the Company and the Credit Suisse First Boston entities listed in Schedule A thereto.

        "Stated Value" means the stated value per share of Preferred Stock, which is $20.00 per share.

        Section 1. Exercise of Warrants.    (a) The Warrants may be exercised in whole or in part, at any time or from time to time, during the Exercise Period, by (i) presentation and surrender to the Company at its address set forth in Section 10 of this Warrant Certificate with the Election To Exercise, attached hereto as Exhibit A, duly completed and executed, and (ii) payment of the Exercise Price, for the number of Warrants being exercised by either: (1) bank draft or cashiers check, or (2) provided that the Company receives at least 5 days prior notice and subject to Section 1(d), delivery to the Company of certificate(s) representing a number of shares of Preferred Stock having an aggregate Preferred Value equal to the aggregate Exercise Price for the number of Warrants being exercised. If the aggregate Preferred Value of the Preferred Stock delivered in payment of the aggregate Exercise Price exceeds (because of fractional shares) the aggregate Exercise Price for the number of Warrants being exercised; then (subject to Section 1(d)) the Company will promptly pay to the holder of the Warrants in cash such excess amount; provided that such excess amount shall in no event be more than the Preferred Value of one share of Preferred Stock. If the holder of this Warrant Certificate at any time exercises less than all the Warrants, the Company shall issue to such a holder a warrant certificate identical in form to this Warrant Certificate, but evidencing a number of Warrants equal to the number of Warrants originally represented by this Warrant Certificate less the number of Warrants previously exercised. Likewise, upon the presentation and surrender of this Warrant Certificate to the Company at its address set forth in Section 10 and at the request of the holder, the Company will, without expense, at the option of the holder, issue to the holder in substitution for this Warrant Certificate one or more warrant certificates in identical form and for an aggregate number of Warrants equal to the number of Warrants evidenced by this Warrant Certificate.

        (b)  To the extent that the Warrants have not been exercised at or prior to the Expiration Date, such Warrants shall expire and the rights of the holder shall become void and of no effect.

        (c)  Upon surrender of this Warrant Certificate in conformity with the foregoing provisions, the Company shall transfer to the holder of this Warrant Certificate appropriate evidence of ownership of the shares of Common Stock or other securities or property (including any money) to which the holder is entitled, registered or otherwise placed in, or payable to the order of, the name or names of the holder or such transferee as may be directed in writing by the holder, and shall deliver such evidence of ownership and any other securities or property (including any money) to the Person or Persons entitled to receive the same, together with an amount in cash in lieu of any fraction of a share.

        (d)  In connection with payment of the Exercise Price with shares of Preferred Stock, the Company may require that at the time of such exercise it receive representations and warranties from the applicable holder of the Warrants regarding such holder's title to the Preferred Stock and the lack of encumbrances thereon. If the Company is unable to consummate an exercise of Warrants through payment of the Exercise Price with shares of Preferred Stock because of any limitations contained or

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construed in the Delaware General Corporation Law, the Company shall use its best efforts to take all such action as may be necessary to place the Company in a position to do so. In the event the Company, after the taking of any action by it as contemplated above, is unable to consummate such exercise, the Company shall accept such number of shares of Preferred Stock in payment as it shall then be authorized to do so under the Delaware General Corporation Law.

        (e)  The Company shall not be required to issue a fractional share of Common Stock upon the exercise of Warrants. As to any fraction of a share which the Warrant holder would otherwise be entitled to purchase upon such exercise, the Company may pay a cash adjustment in respect of such fraction in an amount equal to the same fraction of the Price per share of Common Stock on the date of exercise.

        Section 2. Antidilution Adjustments.    The shares of Common Stock purchasable on exercise of the Warrants are shares of Common Stock as constituted as of the Issuance Date. The number and kind of securities purchasable upon the exercise of the Warrants, and the Exercise Price, shall be subject to adjustment from time to time upon the happening of certain events, as follows:

        (a)    Mergers, Consolidations and Reclassifications.    In case of any reclassification or change of outstanding securities issuable upon exercise of the Warrants at any time after the Issuance Date (other than a change in par value, or from par value to no par value, or from no par value to par value or as a result of a subdivision or combination to which Section 2(b) applies), or in case of any consolidation or merger of the Company with or into any entity or other person (other than a merger with another entity or other person in which the Company is the surviving corporation and which does not result in any reclassification or change in the securities issuable upon exercise of this Warrant Certificate), the holder of the Warrants shall have, and the Company, or such successor corporation or other entity, shall covenant in the constituent documents effecting any of the foregoing transactions that such holder does have the right to obtain, upon the exercise of the Warrants, in lieu of each share of Common Stock, other securities, money or other property theretofore issuable upon exercise of a Warrant, the kind and amount of shares of stock, other securities, money or other property receivable upon such reclassification, change, consolidation or merger by a holder of the shares of Common Stock, other securities, money or other property issuable upon exercise of a Warrant if the Warrants had been exercised immediately prior to such reclassification, change, consolidation or merger. The constituent documents effecting any such reclassification, change, consolidation or merger shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided in this Section 2(a). The provisions of this Section 2(a) shall similarly apply to successive reclassifications, changes, consolidations or mergers.

        (b)    Subdivisions and Combinations.    If the Company, at any time after the Issuance Date, shall subdivide its shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision shall be proportionately reduced, and the number of shares of Common Stock purchasable upon exercise of the Warrants shall be proportionately increased, as at the effective date of such subdivision, or if the Company shall take a record of holders of its Common Stock for such purpose, as at such record date, whichever is earlier. If the Company, at any time after the Issuance Date, shall combine its shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall be proportionately increased, and the number of shares of Common Stock purchasable upon exercise of the Warrants shall be proportionately reduced, as at the effective date of such combination, or if the Company shall take a record of holders of its Common Stock for purposes of such combination, as at such record date, whichever is earlier.

        (c)    Dividends and Distributions.    If the Company at any time after the Issuance Date shall declare a dividend on its Common Stock payable in stock or other securities of the Company to the holders of its Common Stock, the holder of this Warrant Certificate shall, without additional cost, be

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entitled to receive upon any exercise of a Warrant, in addition to the Common Stock to which such holder would otherwise be entitled upon such exercise, the number of shares of stock or other securities which such holder would have been entitled to receive if he had been a holder immediately prior to the record date for such dividend (or, if no record date shall have been established, the payment date for such dividend) of the number of shares of Common Stock purchasable on exercise of such Warrant immediately prior to such record date or payment date, as the case may be.

        (d)    Certain Issuances of Securities.    Subject to Section 2(f), if the Company at any time after the Issuance Date shall issue any additional shares of Common Stock (otherwise than as provided in subsections (a) through (c) of this Section 2) at a price per share less than the Average Price per share of Common Stock for the 20 trading days immediately preceding the date of the authorization of such issuance (the "Market Price") by the Board of Directors or its compensation committee (as applicable), then the Exercise Price upon each such issuance shall be adjusted to that price determined by multiplying the Exercise Price by a fraction:

        (i)    the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding immediately prior to the issuance of such additional shares of Common Stock multiplied by the Market Price, and (2) the consideration, if any, received by the Company upon the issuance of such additional shares of Common Stock, and

        (ii)  the denominator of which shall be the Market Price multiplied by the total number of shares of Common Stock outstanding immediately after the issuance of such additional shares of Common Stock.

        No adjustments of the Exercise Price shall be made under this Section 2(d) upon the issuance of any additional shares of Common Stock that (v) are issued pursuant to any grant or award made prior to the Issuance Date under any thrift plan, stock purchase plan, stock bonus plan, stock option plan, employee stock ownership plan, incentive or profit sharing arrangement or other benefit or compensation plan for the benefit of the Company's officers, directors and/or employees ("Employee Benefit Plans") that has been approved by the Board of Directors of the Company or its compensation committee and that otherwise would cause an adjustment under this Section 2(d); (w) are issued pursuant to any grant or award made on or after the Issuance Date under any Employee Benefit Plan if the "Market Price" of any such issuance is not less than the lesser of the Market Price as determined above and the "Fair Market Value", as defined under the applicable Employee Benefit Plan, on the date of Board or compensation committee authorization); (x) are issued pursuant to any Common Stock Equivalent (as hereinafter defined) (i) if upon the issuance of any such Common Stock Equivalent, any such adjustments shall previously have been made pursuant to Section 2(e), (ii) if no adjustment was required pursuant to Section 2(e) , or (iii) if such Common Stock Equivalent was issued prior to this Warrant Certificate; (y) are issued pursuant to a public offering by the Company; or (z) results in an adjustment pursuant to Section 2(f).

        (e)  Common Stock Equivalents.

        (i)    Subject to Section 2(f), if the Company shall, after the Issuance Date, issue any security or evidence of indebtedness which is convertible into or exchangeable for Common Stock ("Convertible Security"), or any warrant, option or other right to subscribe for or purchase Common Stock or any Convertible Security, other than pursuant to Employee Benefit Plans (together with Convertible Securities, "Common Stock Equivalent"), then the Exercise Price upon each such issuance shall be adjusted as provided in Section 2(d) on the basis that (i) the maximum number of additional shares of Common Stock issuable pursuant to all such Common Stock Equivalents shall be deemed to have been issued as of the date of issuance of such Common Stock Equivalent; and (ii) the aggregate consideration for such maximum number of additional shares of Common Stock shall be deemed to be the minimum

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consideration received and receivable by the Company for the issuance of such additional shares of Common Stock pursuant to such Common Stock Equivalent.

        (ii)  Notwithstanding the foregoing, no adjustment shall be made pursuant to this Section 2(e) unless the consideration received and receivable by the Company per share of Common Stock for the issuance of such additional shares of Common Stock pursuant to such Common Stock Equivalent is less than the Market Price. No adjustment of the Exercise Price shall be made under this Section 2(e) upon the issuance of any Convertible Security which is issued pursuant to the exercise of any warrants or other subscription or purchase rights therefor, if any adjustment shall previously have been made in the Exercise Price then in effect upon the issuance of such warrants or other rights pursuant to this Section 2(e). No adjustment shall be made under this Section 2(e) if an adjustment is to be made under Section 2(f). No adjustment shall be made as a result of adjustment in the exercise or conversion price of Common Stock Equivalents, if those adjustments occur by the terms of such Common Stock Equivalents.

        (f)    Special Adjustments of Exercise Price. Notwithstanding anything to the contrary in Section 2(d) or Section 2(e), this Section 2(f) shall govern adjustments to the Exercise Price for the transactions described in this Section 2(f).

        (i)    If the Company at any time after the Issuance Date and prior to the second anniversary of the Issuance Date shall issue any additional shares of Common Stock (otherwise than as provided in subsections (a) through (c) of Section 2; pursuant to any Employee Benefit Plan; pursuant to any Common Stock Equivalent outstanding as of the Issuance Date; or pursuant to a public offering) or upon the issuance of any such Common Stock for which any adjustments shall previously have been made pursuant to Section 2(e) or Section 2(f)(ii); and the New Stock Issue Price (defined below) of such additional shares is less than the Exercise Price then in effect, then the Exercise Price upon each such issuance shall be adjusted to the New Stock Issue Price of such additional shares. The "New Stock Issuance Price" shall be determined by dividing the total amount of consideration received by the Company for such issue or sale by the number of shares of Common Stock issued or sold.

        (ii)  If the Company at any time after the Issuance Date and prior to the second anniversary of the Issuance Date, issues any Common Stock Equivalent (which by definition excludes Employee Benefit Plan securities) (otherwise than as provided in subsections (a) through (c) of Section 2; or pursuant to any Common Stock Equivalent outstanding as of the Issuance Date) and the New CSE Exercise Price (defined below) of such Common Stock Equivalents is less than the Exercise Price then in effect, then the Exercise Price upon each such issuance shall be adjusted to the New CSE Exercise Price of such Common Stock Equivalents. The "New CSE Exercise Price" shall be determined by dividing (x) the total amount, if any, received or receivable by the Company as consideration for the issuance of such Common Stock Equivalents, plus the minimum aggregate amount of additional consideration payable to the Company upon the exercise, conversion or exchange of such Common Stock Equivalents, plus, in the case of any such Common Stock Equivalents which relate to Convertible Securities, the minimum aggregate amount of additional consideration, if any, payable to the Company upon the conversion or exchange of such Convertible Securities, by (y) the total maximum number of shares of Common Stock issuable upon the exercise, conversion or exchange of all such Common Stock Equivalents.

        (g)  Miscellaneous. The following provisions shall be applicable to the making of adjustments in the Exercise Price hereinbefore provided in this Section 2:

          (i)  The consideration received by the Company shall be deemed to be the following: (I) to the extent that any additional shares of Common Stock or any Common Stock

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Equivalent shall be issued for cash consideration, the consideration received by the Company therefor, or, if such additional shares of Common Stock or Common Stock Equivalent are offered by the Company for subscription, the subscription price, or, if such additional shares of Common Stock or Common Stock Equivalent are sold to underwriters or dealers for public offering without a subscription offering, the initial public offering price, in any such case excluding any amounts paid or receivable for accrued interest or accrued dividends and without deduction of any compensation, discounts, commissions or expenses paid or incurred by the Company for and in the underwriting of, or otherwise in connection with, the issue thereof; (II) to the extent that such issuance shall be for a consideration other than cash, then, except as herein otherwise expressly provided, the fair value of such consideration at the time of such issuance as determined in good faith by the Company's Board of Directors, as evidenced by a certified resolution of the Board of Directors delivered to the holder of this Warrant Certificate setting forth such determination. The consideration for any additional shares of Common Stock issuable pursuant to any Common Stock Equivalent shall be the consideration received by the Company for issuing such Common Stock Equivalent, plus the additional consideration payable to the Company upon the exercise, conversion or exchange of such Common Stock Equivalent. In case of the issuance at any time of any additional shares of Common Stock or Common Stock Equivalent in payment or satisfaction of any dividend upon any class of stock other than Common Stock, the Company shall be deemed to have received for such additional shares of Common Stock or Common Stock Equivalent (which shall not be deemed to be a dividend payable in, or other distribution of, Common Stock under Section 2(c) above) consideration equal to the amount of such dividend so paid or satisfied. In the event additional shares of Common Stock or Common Stock Equivalents are issued together with other shares or securities or other assets of the Company or its subsidiaries for consideration which covers both, the consideration for such shares of Common Stock and Common Stock Equivalents shall be computed based on the respective portions of such consideration so received, computed as provided in this Section 2(g) i., as determined and allocated in good faith by the Board of Directors of the Company.

        (ii)  Upon the expiration of the right to convert, exchange or exercise any Common Stock Equivalent the issuance of which effected an adjustment in the Exercise Price, if any such Common Stock Equivalent shall not have been converted, exercised or exchanged, the number of shares of Common Stock deemed to be issued and outstanding because they were issuable upon conversion, exchange or exercise of any such Common Stock Equivalent shall no longer be computed as set forth above, and the Exercise Price shall forthwith be readjusted and thereafter be the price which it would have been (but reflecting any other adjustments in the Exercise Price made pursuant to the provisions of Section 2(d) after the issuance of such Common Stock Equivalent) had the adjustment of the Exercise Price made upon the issuance or sale of such Common Stock Equivalent been made on the basis of the issuance only of the number of additional shares of Common Stock actually issued upon exercise, conversion or exchange of such Common Stock Equivalent and thereupon only the number of additional shares of Common Stock actually so issued shall be deemed to have been issued and only the consideration actually received by the Company (computed as in this Section 2(f)(i)) shall be deemed to have been received by the Company.

        (iii)  The number of shares of Common Stock at any time outstanding shall not include any shares thereof then directly or indirectly owned or held by or for the account of the Company or its wholly owned subsidiaries.

        (iv)  Upon each adjustment of the Exercise Price as a result of the calculations made in Section 2(d), (e) and (f) hereof, this Warrant shall thereafter evidence the right to purchase, at the adjusted Exercise Price, that number of shares of Common Stock obtained by

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(i) multiplying the number of shares covered by this Warrant immediately prior to such adjustment of the number of shares by the Exercise Price in effect immediately prior to such adjustment of the Exercise Price and (ii) dividing the product so obtained by the Exercise Price in effect immediately after such adjustment of the Exercise Price.

        (v)  For the purpose of this Section 2, the term "shares of Common Stock" shall mean shares of (i) the class of stock designated as the Common Stock at the date hereof or (ii) any other class of stock resulting from successive changes or reclassifications of such shares consisting solely of changes in par value, or from par value to no par value, or from no par value to par value. If at any time, because of an adjustment pursuant to Section 2(a), the Warrants shall entitle the holders to purchase any securities other than shares of Common Stock, thereafter the number of such other securities so purchasable upon exercise of each Warrant and the Exercise Price of such securities shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Common Stock contained in this Section 2.

        (h)  Calculation of Exercise Price. The Exercise Price in effect from time to time shall be calculated to four decimal places and rounded to the nearest thousandth.

        (i)    Shareholder Approval. Notwithstanding anything to the contrary herein, any provision hereof providing for adjustments to the Exercise Price that would require shareholder approval pursuant to the Nasdaq Market Rules shall be subject to the Company's obtaining such requisite approval.

        Section 3. Notice of Adjustments.    Whenever the Exercise Price or the number of shares of Common Stock is required to be adjusted as provided in Section 2, the Company shall forthwith compute the adjusted Exercise Price or the number of shares of Common Stock issuable and shall prepare and mail to the holder hereof a certificate setting forth such adjusted Exercise Price or such number of shares of Common Stock, showing in reasonable detail the facts upon which the adjustment is based.

        Section 4. Voluntary Reduction.    (a) The Company may at its option, but shall not be obligated to, at any time during the term of the Warrants, reduce the then current Exercise Price by any amount selected by the Board of Directors; provided that if the Company elects so to reduce the then current Exercise Price, such reduction shall be irrevocable during its effective period and remain in effect for a minimum of 30 days following the date of such election, after which time the Company may, at its option, reinstate the Exercise Price in effect prior to such reduction. Whenever the Exercise Price is reduced, the Company shall mail to the holder a notice of the reduction at least 30 days before the date the reduced Exercise Price takes effect, stating the reduced Exercise Price and the period for which such reduced Exercise Price will be in effect.

        (b)  The Company may make such decreases in the Exercise Price, in addition to those required or allowed by this Section 4, as shall be determined by it, as evidenced by a certified resolution of the Board of Directors delivered to the holders, to be advisable to avoid or diminish any income tax to the holder resulting from any dividend or distribution of stock or issuance of rights or warrants to purchase or subscribe for stock or from any event treated as such for income tax purposes.

Section 5. Mandatory Exercise.

        (a)  If (i) the Price of the Common Stock averages at least 150% of the Exercise Price (as adjusted to reflect any stock split, combination, reclassification, recapitalization, exchange, stock dividend or other distribution payable in Common Stock with respect to shares of Common Stock) for sixty (60) consecutive trading days in the principal market in which the Common Stock is traded and (ii) the Company gives written notice pursuant to Section 10 hereof (the "Company Notice") to the holder hereof of the satisfaction of the condition in clause (i) within thirty (30) days after the

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expiration of the relevant 60-day-trading period, then (x) within ten (10) days after the Company Notice, the holder shall notify the Company whether the holder will pay all of the Exercise Price by delivery of Preferred Stock in accordance with Section 1(a)(ii)(2), and (y) within fifteen (15) days after the Company Notice, the holder hereof shall exercise all of the Warrants. If the Company gives the Company Notice on a timely basis within the Exercise Deferral Period, and the exercise of the Warrants pursuant to the foregoing would otherwise occur during the Exercise Deferral Period, then the exercise of the Warrants shall be deferred until no later than the third Business Day (as defined in the Securities Purchase Agreement) following the expiration of the Exercise Deferral Period (the "Deferred Exercise Date"). If required by this Section 5, the holder hereof agrees to exercise the Warrants, and to purchase shares of Common Stock pursuant to the terms of this Warrant Certificate. If the holder has not fulfilled its obligations to exercise the Warrants pursuant to this Section 5 within fifteen (15) days after the holder's receipt of the Company Notice or by the Deferred Exercise Date, as applicable, then (without limiting the Company's available remedies) (A) the obligations of holder under this Section 5 shall continue but the purchase rights otherwise represented by this Warrant Certificate shall terminate, (B) the Company may thereafter refuse, in its sole discretion, to allow holder to exercise the Warrants (including pursuant to this Section 5), (C) all obligations of the Company under Sections 3, 6, 7 and 8 shall terminate, (D) no further adjustments to the Exercise Price shall be made unless the Company in its sole discretion consents in writing. Each Warrant holder's obligations under this Section 5(a) shall be subject to the expiration or termination of all waiting periods (and any extensions thereof) applicable to exercise of such holder's Warrants under the HSR Act (as defined below); provided that such holder shall have certified in writing to the Company that a filing under the HSR Act is required and provided further that such holder shall use its best efforts to cause the expiration or termination of such waiting period to occur as promptly as practicable.

        (b)  Holder represents and warrants to the Company that holder has full corporate power and authority to execute, deliver, and perform this Warrant Certificate and to consummate the transactions contemplated hereby. The execution, delivery, and performance by holder of this Warrant Certificate have been duly authorized by all necessary corporate action of holder. This Warrant Certificate has been duly executed and delivered by holder and constitutes a valid and legally binding obligation of holder, enforceable against holder in accordance with its terms, except that such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors' rights generally and (ii) general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law).

        (c)  The right to require exercise of the Warrants is hereby declared by the parties hereto to be a unique right, the loss of which is not readily susceptible to monetary quantification. Consequently, the parties hereto agree that an action for specific performance of the exercise and purchase obligations created by this Section 5 is an available remedy for the breach of the provisions of this Section 5. If the Company is forced to institute legal proceedings to enforce its rights in accordance with the provisions of this Section 5, it shall be entitled to recover its reasonable attorneys' fees and court costs incurred in enforcing such rights.

        (d)  Holder is executing this Warrant Certificate in order to make and agree to the covenants, representations and warranties of holder contained in this Section 5, which shall be binding upon the holder's successors and assigns.

        Section 6. Notices to Warrant Holders.    In the event:

        (a)  the Company shall authorize any consolidation or merger to which the Company is a party and for which approval of any stockholders of the Company is required, or of the conveyance or sale of all or substantially all of the assets of the Company, or of any reclassification or change of the Common Stock or other securities issuable upon exercise of the Warrants (other than a change in par value, or from par value to no par value, or from no par value to par value or as result of a subdivision

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or combination), or a tender offer or exchange offer for shares of Common Stock (or other securities issuable upon the exercise of the Warrants); or

        (b)  the Company shall declare any dividend (or any other distribution) on the Common Stock or any other class of its capital stock, other than dividends on the Shares, as defined in the Securities Purchase Agreement; or

        (c)  the Company shall authorize the granting to the holders of Common Stock or any other class of its capital stock of rights or warrants to subscribe for or purchase any shares of any class or series of capital stock or any other securities convertible into or exchangeable for shares of stock; or

        (d)  of the voluntary or involuntary dissolution, liquidation or winding up of the Company; then the Company shall cause to be sent to the holder hereof, at least 30 days prior to the applicable record date hereinafter specified, or promptly in the case of events for which there is no record date, a written notice stating (x) the date for the determination of the holders of record of shares of Common Stock (or other securities issuable upon the exercise of the Warrants) entitled to receive any such dividends or other distribution, (y) the initial expiration date set forth in any tender offer or exchange offer for shares of Common Stock (or other securities issuable upon the exercise of the Warrants), or (z) the date on which any of the events specified in subsections (a)-(d) is expected to become effective or consummated, and the date as of which it is expected that holders of record of shares of Common Stock (or other securities issuable upon the exercise of the Warrants) shall be entitled to exchange such shares for securities or other property, if any, deliverable upon any such event. Failure to give such notice or any defect therein shall not affect the legality or validity of any such event, or the vote upon any such action.

        Section 7. Reports to Warrant Holders.    The Company will cause to be delivered, by first-class mail, postage prepaid, to holder at such holder's address appearing hereon, or such other address as the holder shall specify, a copy of any reports delivered by the Company to the holders of Common Stock.

        Section 8. Covenants of the Company.    The Company covenants and agrees that:

        (a)  Until the Expiration Date, the Company shall at all times reserve and keep available, out of the aggregate of its authorized but unissued Common Stock (and other securities), for the purpose of enabling it to satisfy any obligation to issue shares of Common Stock (and other securities) upon the exercise of the Warrants, the number of shares of Common Stock (and other securities) issuable upon the exercise of such Warrants.

        (b)  The Company shall pay all expenses, taxes and other charges payable in connection with the preparation, issuance and delivery of new warrant certificates on transfer of the Warrants.

        (c)  All Common Stock (and other securities) which may be issued upon exercise of the Warrants shall upon issuance be validly issued, fully paid, non-assessable and free from all preemptive rights and all taxes, liens and charges with respect to the issuance thereof, and will not be subject to any restrictions on voting or transfer thereof except as set forth in the Securities Purchase Agreement, any stockholders agreement and except for restrictions arising under state or federal securities laws.

        (d)  All original issue taxes payable in respect of the issuance of shares of Common Stock to the registered holder hereof upon the exercise of the Warrants shall be borne by the Company; provided, that the Company shall not be required to pay any tax or charge imposed in connection with any transfer involved in the issuance of any certificates representing shares of Common Stock (and other securities) in any name other than that of the registered holder hereof, and in such case the Company shall not be required to issue or deliver any certificate representing shares of Common Stock (and other securities) until such tax or other charge has been paid or it has been established to the Company's satisfaction that no such tax or charge is due.

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        (e)  As soon as practicable after the receipt from the holder of this Warrant Certificate of notice of the intent to exercise of a number of warrants sufficient to require a filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules, regulations and formal interpretations thereunder, as amended from time to time (the "HSR Act") (and after the receipt, if applicable, of the notice referred to in Rule 803.5 of the HSR Act), but in any event no later than the 15th business day after receipt of such notice(s), the Company will (i) if required by the HSR Act, prepare and file with Antitrust Division of the Department of Justice (the "DOJ") and the Federal Trade Commission (the "FTC") the Notification and Report Form (accompanied by all documentary attachments contemplated thereby) required by the HSR Act, (ii) upon request of the holder, request early termination of the waiting period imposed by the HSR Act, and (iii) coordinate and cooperate with the holder in responding to formal and informal requests for additional information and documentary material from the DOJ and the FTC in connection with such filing. Notwithstanding the foregoing, if the holder is required to file with the DOJ and FTC the Notification and Report Form solely as a result of its holding and/or purchasing shares of Common Stock issued pursuant to this Warrant (with no regard to any other securities held by such holder or its affiliates) and the holder certifies such fact to the Company in writing, the Company agrees to promptly reimburse the holder for all fees and expenses for the preparation and filing of such form, including all legal expenses and filing fees.

        (f)    The Company will not change the par value of the Common Stock from par value $0.01 per share to any higher par value which exceeds the Exercise Price then in effect, and will reduce the par value of the Common Stock upon any event described in Section 2 that would, but for this provision, reduce the Exercise Price below the par value of the Common Stock.

        Section 9. No Rights as Stockholder.    The holder of the Warrants shall not, by virtue of holding such Warrants, be entitled to any rights of a stockholder of the Company either at law or in equity, and the rights of the holder of the Warrants are limited to those expressed herein.

        Section 10. Notices.    All notices, requests, demands, and other communications required or permitted to be given or made hereunder by any party hereto shall be in writing and shall be deemed to have been duly given or made if (i) delivered personally, (ii) sent by prepaid overnight courier service, or (iii) sent by telecopy or facsimile transmission, answer back requested, to the parties at the following addresses (or at such other addresses as shall be specified by the parties by like notice):

if to the holder:

Global Energy Partners
1100 Louisiana Street
Houston, Texas 77002
Fax: 713-890-1429
Attn: Steven A. Webster

and

CSFB Private Equity
11 Madison Avenue
New York, New York 10010
Fax: 917-326-8076
Attn: Ivy Dodes

with a copy to:

Gardere Wynne Sewell LLP
1000 Louisiana, Suite 3400
Houston, Texas 77002

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Attention: N.L. Stevens III
Telefax: 713-276-5807

and if to the Company:

Brigham Exploration Company
6300 Bridge Point Parkway
Building 2, Suite 500
Austin, Texas 78730
Attention: Chief Financial Officer
Telecopier: (512) 472-3400

Such notices, requests, demands, and other communications shall be effective (i) if delivered personally or sent by courier service, upon actual receipt by the intended recipient, or (ii) if sent by telecopy or facsimile transmission, when the answer back is received.

        Section 1. Governing Law.    This Warrant Certificate shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflict of laws.

        Section 12. Lost, Stolen, Mutilated or Destroyed Warrant Certificates.    Upon receipt by the Company of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Warrant Certificate, then, in the absence of notice to the Company that such Warrant Certificate has been acquired by a bona fide purchaser, the Company shall execute and deliver, in exchange for or in lieu of the lost, stolen, destroyed or mutilated Warrant Certificate, a substitute Warrant Certificate of the same tenor and evidencing a like number of Warrants.

        Section 13. Transfer.    Subject to Section 14 hereof and to the Securities Purchase Agreement, transfer of Warrants, in whole or in part, shall be registered on the books of the Company to be maintained for such purposes, upon surrender of the Warrant Certificate representing such Warrants at the principal office of the Company referred to in Section 10, together with a written assignment substantially in the form of Exhibit B to this Warrant Certificate and a written agreement, in form reasonably satisfactory to the Company, setting forth the new Warrant holder's agreement to be bound by all of the terms of this Warrant Certificate (including without limitation Section 14) and by Section 5.5 of the Securities Purchase Agreement, each duly executed by the holder, and funds sufficient to pay any transfer taxes payable by such holder upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant Certificate or Warrant Certificates in the name of the assignee or assignees and in the denomination specified in such instrument of assignment, and shall issue to the assignor a new Warrant Certificate or Warrant Certificates evidencing the portion of the old Warrant Certificate not so assigned, and the old Warrant Certificate shall promptly be canceled.

        Section 14. Restrictions on Transferability.    The Warrant Certificate represents Warrants referred to in the Securities Purchase Agreement. Said Securities Purchase Agreement is hereby incorporated by reference in and made a part of this instrument and is hereby referred to for a description of certain limitations of rights, obligations, duties and immunities thereunder of the Company and the holders, and in the event of any conflict between the terms of this Warrant Certificate and the provisions of the Securities Purchase Agreement, the provisions of the Securities Purchase Agreement shall control.

        Section 15. Severability.    If any provision of this Warrant Certificate is held to be unenforceable, then this Warrant Certificate shall be considered divisible and such provision shall be deemed inoperative to the extent it is deemed unenforceable, and in all other respects this Warrant Certificate shall remain in full force and effect to the maximum extent permitted by Applicable Law (as defined in the Securities Purchase Agreement).

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        IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be executed as of December    , 2002, by the undersigned, thereunto duly authorized.

BRIGHAM EXPLORATION COMPANY

By:

[INSERT APPROPRIATE CSFB ENTITY]

By:

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EXHIBIT A


ELECTION TO EXERCISE

        [To be executed on exercise of the Warrant evidenced by this Warrant Certificate pursuant to Section 1(a)]

        TO:    Brigham Exploration Company

        The undersigned, the holder of the Warrants evidenced by the attached Warrant Certificate, hereby irrevocably elects to exercise                        of such Warrants, and herewith makes payment of                        representing the aggregate Exercise Price thereof, and requests that the certificate representing the securities issuable hereunder be issued in the name of                         and delivered to                        , whose address is                        .

        The Exercise Price is being paid by bank draft or cashier's check.

Dated:
	Name of Registered Holder:
	Signature:
	Title:
	Address:

Notice: The above signature(s) must correspond with the name as written on the face of the Warrant Certificate in every detail, without alteration or enlargement or any change whatsoever.

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EXHIBIT B


ASSIGNMENT FORM

        FOR VALUE RECEIVED the undersigned registered owner of the attached Warrant Certificate hereby sells, assigns and transfers unto the assignee named below all of the rights of the undersigned under this Warrant Certificate, with respect to the number of shares of Common Stock set forth below:

Name and Address of Assignee:    ______________

No. of Shares of
Common Stock    _______

and does hereby irrevocably constitute and appoint                        attorney-in-fact to register such transfer on the books of Brigham Exploration Company maintained for that purpose, with full power of substitution in the premises.

Dated:

Name:

Signature:

Witness:

The assignee named above hereby agrees to purchase and take the attached Warrant Certificate pursuant to and in accordance with the terms and conditions of the Warrant Certificate and Section 5.5 of the Securities Purchase Agreement, dated as of December    , 2002, between Brigham Exploration Company and the initial holder named therein and agrees to be bound thereby.

Dated:

Name:

Signature:

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Exhibit 4.4

CERTIFICATE OF DESIGNATIONS of SERIES B PREFERRED STOCK (Par Value $.01 Per Share) of BRIGHAM EXPLORATION COMPANY
Pursuant to Section 151 of the General Corporation Law of the State of Delaware
EXHIBIT A
WARRANT CERTIFICATE
EXHIBIT A ELECTION TO EXERCISE
EXHIBIT B ASSIGNMENT FORM

EX-10.47

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Exhibit 10.47

EXCHANGE AGREEMENT

among

BRIGHAM EXPLORATION COMPANY

as Issuer

BRIGHAM OIL & GAS, L.P.

as Borrower

and

SHELL CAPITAL INC.

as Holder

Dated as of November 21, 2002

TABLE OF CONTENTS

ARTICLE I    DEFINITIONS; INTERPRETATION		1
	Section 1.01. Definitions	1
	Section 1.02. Rules of Interpretation	2
ARTICLE II    AGREEMENTS		2
	Section 2.01. Termination of Warrant Agreements, ECA; Surrender of Warrants	2
	Section 2.02. Issuance of Shares	2
	Section 2.03. CSFB Transaction	2
	Section 2.04. Failure of CSFB Transaction	2
	Section 2.05. Waiver of Notice	3
	Section 2.06. Restrictive Legend	3
	Section 2.07. Restrictions on Transfer	3
	Section 2.08. Registration Rights	3
ARTICLE III    REPRESENTATIONS AND WARRANTIES		4
	Section 3.01. Representations and Warranties of the Issuer	4
	Section 3.02. Representations and Warranties of the Borrower	5
	Section 3.03. Representations and Warranties of the Holder	5
ARTICLE IV    MISCELLANEOUS		5
	Section 4.01. Survival of Representations and Warranties	5
	Section 4.02. Severability	6
	Section 4.03. Amendment	6
	Section 4.04. Successors and Assigns	6
	Section 4.05. Headings	6
	Section 4.06. Governing Law; Submission to Jurisdiction	6
	Section 4.07. Counterparts	7
EXHIBIT A    FORM OF REGISTRATION RIGHTS AGREEMENT

i

EXCHANGE AGREEMENT

        THIS EXCHANGE AGREEMENT (this "Agreement"), dated as of November 21, 2002, is made by and between BRIGHAM EXPLORATION COMPANY, a Delaware corporation (the "Issuer"), BRIGHAM OIL & GAS, L.P., a Delaware limited partnership (the "Borrower") and SHELL CAPITAL INC., a Delaware corporation (the "Holder").

        W I T N E S S E T H :

        WHEREAS, the Borrower, Bank of Montreal, as agent (the "Senior Agent"), and the Holder, Bank of Montreal and Societe Generale, Southwest Agency, as lenders (collectively the "Senior Lenders") have entered into an Amended and Restated Credit Agreement dated as of February 17, 2000 (as such has and may be further amended, modified or supplemented, the "Senior Credit Agreement"), pursuant to which, among other things, the Senior Lenders agreed to advance certain amounts ("Senior Loans") to the Borrower on the terms and conditions set forth therein;

        WHEREAS, the Borrower, the Holder, as agent (the "Subordinated Agent"), the Holder, as a lender (the "Subordinated Lender") have entered into a Subordinated Credit Agreement dated as of October 31, 2000 (as such has and may be further amended, modified or supplemented, the "Subordinated Credit Agreement"), pursuant to which, among other things, the Subordinated Lender agreed to advance certain amounts ("Subordinated Loans") to the Borrower on the terms and conditions set forth therein;

        WHEREAS, in connection with the Senior Loan Agreement (a) the Issuer and the Holder entered into the Warrant Agreement dated as of February 17, 2000 (the "First Warrant Agreement") pursuant to which, among other things, the Issuer issued to the Holder certain warrants (the "First Warrants"), and (b) the Issuer, the Borrower and the Holder entered into the Equity Conversion Agreement dated as of February 17, 2000 (as amended by the Ancillary Agreement between the Holder and the Borrower dated October 31, 2000, and as such may have been further amended, modified or supplemented, the "ECA") pursuant to which, among other things, the Borrower granted the Holder the right to convert certain portions of the principal of the Holder's Senior Loans into equity in the Issuer;

        WHEREAS, in connection with the Subordinated Loan Agreement, the Issuer and the Holder entered into the Warrant Agreement dated as of October 31, 2000 (the "Second Warrant Agreement" and together with the First Warrant Agreement the "Warrant Agreements") pursuant to which, among other things, the Issuer issued certain warrants (the "Second Warrants" and together with the First Warrants, the "Warrants") to the Holder; and

        WHEREAS, the Issuer and the Holder entered into the Registration Rights Agreement dated as of February 17, 2000 (as amended by the First Amendment to Registration Rights Agreement between the Issuer and the Holder dated as of October 31, 2000, and as such may have been or may be further amended, modified or supplemented, the "Registration Rights Agreement");

        NOW, THEREFORE, in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I

Definitions; Interpretation.

        Section 1.01.    Definitions.    Capitalized terms used but not defined herein shall have the respective meanings assigned thereto in the Senior Credit Agreement and, to the extent not defined therein, in the Warrant Agreements. In addition, the following terms shall have the following meanings:

        "End Date" shall have the meaning assigned thereto in Section 2.04 hereof.

        "Exercise Date" shall mean the date on which the conditions described in Section 2.03 shall be satisfied.

        "Shares" shall have the meaning assigned thereto in Section 2.02 hereof.

        Section 1.02.    Rules of Interpretation.    Terms defined in the singular shall have the corresponding meaning when used in the plural and vice versa. All uses of "include" or "including" mean without limitation. References to a law, rule, regulation, contract, agreement, or other document mean that law, rule, regulation, contract, agreement, or document as amended, modified, or supplemented, if applicable. Any definition of one part of speech of a word, such as definition of the noun form of that word, shall have a comparable meaning when used as a difference part of speech, such as the verb form of that word. References to any Person shall include such Person's successors and permitted assigns. The words "this Agreement," "herein," "hereof," "hereby," and words of similar import refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited.

ARTICLE II

Agreements.

        Section 2.01.    Termination of Warrant Agreements, ECA; Surrender of Warrants.    On the Exercise Date the Holder shall surrender to the Issuer all original certificates representing all of the Warrants and thereupon the Warrant Agreements, the ECA (including without limitation any provisions relating to prepayment penalties) and the Registration Rights Agreement shall each be immediately terminated and shall be of no further force and effect. CSFB joins in the execution of this Agreement for the limited purpose of consenting to the termination of the ECA as provided in the preceding sentence to the extent necessary for the effectiveness of such termination.

        Section 2.02.    Issuance of Shares.    Immediately upon the surrender of the certificates representing the Warrants as provided in Section 2.01, the Issuer shall issue in the name of the Holder and deliver to the Holder five hundred and fifty thousand (550,000) fully paid and non-assessable common shares, $0.01 par value per share, of the Issuer, as constituted on the date hereof (the "Shares") and shall cause an entry to be made in the stock records of the Issuer to reflect the issuance of the Shares to the Holder and shall take such other actions reasonably necessary, at the Holder's request and at the Issuer's expense, to vest full title in the Shares in the Holder. The Issuer shall permit the Holder (or its designee), during normal business hours and upon reasonable notice, to examine the stock records of the Issuer to verify the compliance by the Issuer with the foregoing.

        Section 2.03.    CSFB Transaction.    The Exercise Date shall occur on the date on which all of the following shall have occurred:

        (a)      the Holder, at the request of the Borrower and with the consent of BMO, shall have sold, conveyed and assigned to certain Credit Suisse First Boston entities (collectively "CSFB") and CSFB shall have purchased and assumed an amount of the Senior Loans held by the Holder equal to $10,000,000 (the "CSFB Loans") pursuant to a certain Assignment Agreement dated as of the date hereof (the "CSFB Assignment Agreement") between the Holder and CSFB;

        (b)      pursuant to the CSFB Assignment Agreement, CSFB shall have fully converted the CSFB Loans into 2,564,102 ordinary shares in the Issuer in accordance with the provisions of the ECA; and

        (c)      the Holder shall have received the written consent, in accordance with Section 12.04 of the Senior Credit Agreement of (i) the BMO/Soc-Gen Majority Lenders to the termination of the ECA and (ii) the Majority Lenders to the other transactions contemplated herein.

        Section 2.04.    Failure of CSFB Transaction.    In the event that the transactions described in the foregoing Section 2.03 shall not have occurred on or prior to December 20, 2002 (the "End Date") then the End Date shall constitute the Exercise Date for the purposes of Section 2.01 hereof and the Holder, the Issuer and the Borrower shall effect the transactions described in Section 2.01 hereof on the End Date.

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        Section 2.05.    Waiver of Notice.    The Issuer and the Borrower each hereby irrevocably waive any requirement under the Warrant Agreements, the Registration Rights Agreement or the ECA to provide any notice of the transactions described in this Agreement.

        Section 2.06.    Restrictive Legend.    Each certificate representing the Shares shall be stamped or otherwise imprinted with a legend in substantially the following form:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM."

        Section 2.07.    Restrictions on Transfer.    Notwithstanding any provision contained in this Agreement to the contrary, Holder agrees that it will not, directly or indirectly, sell, assign, transfer, pledge, encumber, or otherwise dispose of any of the Shares except:

        (a)      in compliance with Rule 144 promulgated under the Securities Act of 1933 (the "Securities Act"); provided, however, that Holder shall provide the Issuer with copies of all filings made with the Securities and Exchange Commission with respect to sales of securities under Rule 144 and with such other information and documents as the Issuer shall reasonably require in order to assure full compliance with Rule 144; or

        (b)      pursuant to a no-action letter or other interpretive statement or release of the Securities and Exchange Commission to the effect that the proposed sale or other disposition may be effected without registration under the Securities Act; or

        (c)      pursuant to an applicable exemption (other than Rule 144) under the Securities Act; provided, however, that Holder shall have furnished the Issuer with an opinion of counsel, which opinion and counsel shall be reasonably acceptable to the Issuer, to the effect that such disposition does not require registration of such securities under the Securities Act; provided further, however, that no opinion of counsel shall be required in the case of a transfer to an affiliate (as defined in Rule 405 of the Securities Act) of Holder or to The Royal Bank of Scotland plc (or an affiliate (as defined in Rule 405 of the Securities Act) of The Royal Bank of Scotland plc), in each case only if such transferee shall have furnished the Issuer with the representations contained in Section 3.03(b) of this Agreement and shall have agreed with the Issuer to be subject to the terms of this Agreement to the same extent as if an original holder of securities pursuant hereto; or

        (d)      pursuant to an effective registration statement filed under the Securities Act.

        Section 2.08.    Registration Rights.    On the Exercise Date, the Issuer and the Holder shall enter into a new registration rights agreement with respect to the Shares in the form attached hereto as Exhibit A. DLJ MB Funding III, Inc., DLJ ESC II, LP, DLJ Merchant Banking Partners III, LP and DLJ Merchant Banking III, Inc., as advisory general partner on behalf of DLJ Offshore Partners III, C.V., each joins in the execution of this Agreement for the limited purpose of consenting to the agreement herein by the Issuer to execute such new registration rights agreement (and the execution by the Issuer on the Exercise Date of such new registration rights agreement) as provided in the preceding sentence to the extent necessary for the effectiveness of such agreement (and such execution).

3

ARTICLE III

Representations and Warranties.

        Section 3.01.    Representations and Warranties of the Issuer.    The Issuer hereby represents and warrant s as follows:

        (a)    Existence.    The Issuer (i) is a corporation duly organized, legally existing and in good standing under the laws of the State of Delaware and (ii) has all requisite corporate power, and has all material governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as now being or as proposed to be conducted.

        (b)    No Breach.    Neither the execution and delivery of this Agreement, nor compliance with the terms and provisions hereof will conflict with or result in a breach of, or require any consent which has not been obtained as of the date hereof under, the organizational documents of the Issuer, or any Governmental Requirement or any material agreement or instrument to which the Issuer is a party or by which it is bound or to which it or its Properties are subject, or constitute a default under any such agreement or instrument, or result in the creation or imposition of any Lien upon any of the material revenues or assets of the Issuer pursuant to the terms of any such agreement or instrument, provided that certain parties must provide consents to the entering into of the new registration rights agreement described in Section 2.08 hereof.

        (c)    Authority.    The Issuer has all necessary corporate power and authority to execute, deliver and perform its obligations hereunder and the execution, delivery and performance by the Issuer of this Agreement, have been duly authorized by all necessary corporate action on its part. Assuming that this Agreement constitutes the legal, valid and binding obligation of the Holder and is enforceable against the Holder, this Agreement constitutes the legal, valid and binding obligations of the Issuer, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer and similar laws affecting creditors' rights generally or by general principles of equity.

        (d)    Approvals.    No authorizations, approvals or consents of, and no filings or registrations with, any Governmental Authority are necessary for the execution, delivery or performance by the Issuer of this Agreement or for the validity or enforceability hereof.

        (e)    Shares.    The Issuer will issue and deliver the Shares to the Holder, and assuming due surrender of the Warrants pursuant to Section 2.01 hereof, such Shares shall be duly and fully paid and non-assessable. On the date of such delivery, the Holder will acquire good and valid title to the Shares, free and clear of any Liens, agreements, claims or demands, equities, options, proxies, voting restrictions, rights of first refusal or other limitation on disposition, other than limitations of the Holder's making.

        (f)    Solvency.

          (i)  The Issuer is not Insolvent, nor after giving effect to the transactions contemplated by this Agreement will become Insolvent as a result thereof.

        (ii)  The Issuer has not made any assignment for the benefit of creditors, filed any petition in bankruptcy, been adjudicated insolvent or bankrupt, petitioned or applied to any tribunal for any receiver, conservator or trustee of it or any of its properties or assets, or commenced any proceeding under any reorganization, arrangement, readjustment of debt, conservation, dissolution or liquidation law or statute of any jurisdiction, and no such action or proceeding has been commenced or, to the knowledge of the Issuer, threatened against the Issuer by any creditor, claimant, governmental agency or other Person.

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        Section 3.02.    Representations and Warranties of the Borrower.    The Borrower hereby represents and warrants as follows:

        (a)    Corporate Existence.    The Borrower: (i) is a limited partnership duly organized, legally existing and in good standing under the laws of the State of Delaware; (ii) has all requisite partnership power, and has all material governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as now being or as proposed to be conducted.

        (b)    No Breach.    Neither the execution and delivery of this Agreement, nor compliance with the terms and provisions hereof will conflict with or result in a breach of, or require any consent which has not been obtained as of the date hereof under, the Partnership Agreement or any Governmental Requirement or any material agreement or instrument to which the Borrower is a party or by which it is bound or to which it or its Properties are subject, or constitute a default under any such agreement or instrument, or result in the creation or imposition of any Lien upon any of the material revenues or assets of the Borrower pursuant to the terms of any such agreement or instrument.

        (c)    Authority.    The Borrower has all necessary partnership power and authority to execute, deliver, and perform its obligations under, this Agreement, and the execution, delivery and performance by the Borrower of this Agreement have been duly authorized by all necessary partnership action on its part. Assuming that this Agreement constitutes the legal, valid and binding obligation of Holder and is enforceable against Holder, this Agreement constitutes the legal, valid and binding obligations of the Borrower, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer and similar laws affecting creditors' rights generally or by general principles of equity.

        (d)    Approvals.    No authorizations, approvals or consents of, and no filings or registrations with, any Governmental Authority are necessary for the execution, delivery or performance by the Borrower of this Agreement or for the validity or enforceability hereof.

        Section 3.03.    Representations and Warranties of the Holder.    The Holder hereby represents and warrants as follows:

        (a)    Authority.    The Holder has all necessary corporate power and authority to execute, deliver, and perform its obligations under, this Agreement, and the execution, delivery and performance by the Holder of this Agreement, has been duly authorized by all necessary corporate action on its part.

        (b)    Purchase for Investment.    Holder understands that none of the Shares have been registered under the Securities Act. Holder also understands that the Shares are being offered and sold pursuant to an exemption from registration contained in the Securities Act based in part upon Holder's representations contained in this Agreement.

        (c)    Investment.    Holder is an accredited investor within the meaning of Regulation D under the Securities Act and is not acquiring the Shares with a view to a public distribution.

        (d)    Title.    Holder is, and as of the Exercise Date will be, the sole record owner of the Warrants and, subject to the consent of The Royal Bank of Scotland plc, upon consummation of the transactions contemplated herein the Holder will convey to the Issuer full title to the Warrants being transferred pursuant to Section 2.01 hereof, free and clear of all encumbrances.

ARTICLE IV

Miscellaneous.

        Section 4.01.    Survival of Representations and Warranties.    All agreements, representations and warranties made herein shall survive the execution and delivery of this Agreement.

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        Section 4.02.    Severability.    In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. Where provisions of any law or regulation resulting in such prohibition or unenforceability may be waived, they are hereby waived by each of the Issuer, the Borrower and the Holder to the full extent permitted by law so that this Agreement shall be deemed a valid, legal and binding agreement, enforceable in accordance with its terms. The parties hereto shall endeavor in good- faith negotiations to replace any invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possib le to that of the invalid, illegal or unenforceable provisions.

        Section 4.03.    Amendment.    No amendment, modification, supplement or waiver of or to any of the provisions of this Agreement shall be binding on any party hereto except as expressly set forth in a writing and duly signed and delivered by each of the Issuer, the Borrower and the Holder.

        Section 4.04.    Successors and Assigns.    This Agreement shall be binding upon and inure to the benefit of the Issuer, the Borrower and the Holder and their respective successors and permitted assigns. Notwithstanding the foregoing, neither the Issuer nor the Borrower may assign or delegate any of their respective rights or obligations hereunder without the prior written consent of the Holder (or the successor or permitted assign of the Holder, as the case may be) and any purported assignment or delegation that does not comply with the foregoing requirements shall be null and void.

        Section 4.05.    Headings.    Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.

        Section 4.06.    GOVERNING LAW; SUBMISSION TO JURISDICTION.

        (a)    GOVERNING LAW.    IN ALL RESPECT , INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO TH E PRINCIPLES THEREOF REGARDING CONFLICTS OF LAWS, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.

        (b)    SUBMISSION TO JURISDICTION.    THE ISSUER AND THE BORROWER EACH HEREBY EXPRESSLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF TEXAS OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS. FINAL JUDGMENT AGAINST SUCH PARTY IN ANY SUCH SUIT SHALL BE CONCLUSIVE, AND MAY BE ENFORCED IN ANY OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR AS OTHERWISE PERMITTED BY APPLICABLE LAW, A CERTIFIED OR TRUE COPY OF WHICH SHALL BE CONCLUSIVE EVIDENCE OF THE FACTS AND OF THE AMOUNT OF ANY INDEBTEDNESS OR LIABILITY OF SUCH PARTY THEREIN DESCRIBED; PROVIDED, HOWEVER, EACH PARTY MAY AT ITS OPTION BRING SUIT, OR INSTITUTE OTHER JUDICIAL PROCEEDINGS AGAINST THE OTHER PARTY OR ANY OF ITS ASSETS, IN THE COURTS OF ANY COUNTRY OR PLACE WHERE SUCH PARTY OR SUCH ASSETS MAY BE FOUND.

        (c)      THE ISSUER AND THE BORROWER EACH HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING BROUGHT IN ANY COURTS OF THE STATE OF TEXAS OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS AND HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT

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ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

        Section 4.07.    Counterparts.    This Agreement may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute but one and the same agreement.

        [Remainder of page intentionally left blank.]

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        IN WITNESS WHEREOF, the parties hereto have caused this Exchange Agreement to be duly executed as of the date first written above.

BRIGHAM EXPLORATION COMPANY
By:
	/s/  BEN M. BRIGHAM
	Name:    Ben M. Brigham Title:      President/CEO
BRIGHAM OIL & GAS, L.P.
	By: BRIGHAM, INC.,         its general partner
By:
	/s/  BEN M. BRIGHAM
	Name:    Ben M. Brigham Title:      President/CEO
SHELL CAPITAL INC.
By:
	/s/  CHRISTOPHER HILGERT
	Name:    Christopher Hilgert Title:      Vice President

ACKNOWLEDGED AND CONSENTED TO:
THE ROYAL BANK OF SCOTLAND plc
By:	/s/  PETER BUCHANAN
	Name:    Peter Buchanan Title:      Director

8

ACKNOWLEDGED AND CONSENTED TO For the limited purposes set forth in Section 2.01:
DLJ MERCHANT BANKING PARTNERS III, L.P.
	By: DLJ MERCHANT BANKING III, INC.,         its Managing General Partner
By:	/s/  ROBERT CABES
	Name:    Robert Cabes Title:      Attorney-in-Fact
DLJ MERCHANT BANKING III, INC., as advisory general partner on behalf of DLJ OFFSHORE PARTNERS III, C.V.
By:	/s/  ROBERT CABES
	Name:    Robert Cabes Title:      Attorney-in-Fact
DLJ MERCHANT BANKING III, INC., as advisory general partner on behalf of DLJ OFFSHORE PARTNERS III-1, C.V. and as attorney-in-fact for DLJ MERCHANT BANKING III, L.P., as associate general partner of DLJ OFFSHORE PARTNERS III-1, C.V.
By:	/s/  ROBERT CABES
	Name:    Robert Cabes Title:      Attorney-in-Fact

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DLJ MERCHANT BANKING III, INC., as advisory general partner on behalf of DLJ OFFSHORE PARTNERS III-2, C.V. and as attorney-in-fact for DLJ MERCHANT BANKING III, L.P., as associate general partner of DLJ OFFSHORE PARTNERS III-2, C.V.
By:	/s/  ROBERT CABES
	Name:    Robert Cabes Title:      Attorney-in-Fact
DLJ MB PARTNERS III GmbH & CO. KG
	By: DLJ MERCHANT BANKING III, L.P.,         its Managing Limited Partner         By:    DLJ MERCHANT BANKING III, INC.,                   its General Partner
By:	/s/  ROBERT CABES
	Name:    Robert Cabes Title:      Attorney-in-Fact
MILLENNIUM PARTNERS II, L.P.
	By: DLJ MERCHANT BANKING III, INC.,         its Managing General Partner
By:	/s/  ROBERT CABES
	Name:    Robert Cabes Title:      Attorney-in-Fact
MBP III PLAN INVESTORS, L.P.
	By: DLJ LBO PLANS MANAGEMENT CORPORATION,         its Managing General Partner
By:	/s/  ROBERT CABES
	Name:    Robert Cabes Title:      Attorney-in-Fact

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ACKNOWLEDGED AND CONSENTED TO For the limited purposes set forth in Section 2.08:
DLJ MB FUNDING III, INC.
By:	/s/  ROBERT CABES
	Name:    Robert Cabes Title:      Attorney-in-Fact
DLJ ESC II, LP
	By: DLJ LBO PLANS MANAGEMENT CORPORATION,         its general partner
By:	/s/  ROBERT CABES
	Name:    Robert Cabes Title:      Attorney-in-Fact
DLJ MERCHANT BANKING PARTNERS III, LP
	By: DLJ MERCHANT BANKING III, INC.,         its Managing General Partner
By:	/s/  ROBERT CABES
	Name:    Robert Cabes Title:      Attorney-in-Fact
DLJ MERCHANT BANKING III, INC., as advisory general partner on behalf of DLJ OFFSHORE PARTNERS III, C.V.
By:	/s/  ROBERT CABES
	Name:    Robert Cabes Title:      Attorney-in-Fact

11

Exhibit A


Form of Registration Rights Agreement


REGISTRATION RIGHTS AGREEMENT

        THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as of                  , 2002, by and among Brigham Exploration Company, a Delaware corporation (the "Company"), and Shell Capital Inc. ("SCI").

RECITALS

        WHEREAS, pursuant to that certain Exchange Agreement (the "Exchange Agreement") dated as of November 21, 2002 between the Company and SCI, the Company has agreed to issue SCI 550,000 shares of the Company's common stock, par value $.01 per share (the "Common Stock");

        WHEREAS, in connection with such issuance, the Company and SCI desire to enter into this Agreement in order to grant the registration rights as set forth below.

AGREEMENT

        1.    Definitions

        For purposes of this Agreement, the following terms have the following meanings:

        (a)  "Form S-3" means such form under the Act as in effect on the date hereof or any registration form under the Act subsequently adopted by the Securities and Exchange Commission (the "SEC") that similarly permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC.

        (b)  "Holder" means any person owning or having the right to acquire Registrable Securities who is a party to this Agreement as of the date hereof or who may be added as a party pursuant to the terms of this Agreement and any assignee thereof who meets the requirements set forth in Section 10.

        (c)  "register," "registered" and "registration" refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Securities Act of 1933, as amended (the "Act"), and the declaration or order of effectiveness of such registration statement or document.

        (d)  "Registrable Securities" means (i) the 550,000 shares of the Common Stock of the Company to be issued to SCI pursuant to the Exchange Agreement and (ii) any Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, such Common Stock, excluding in all cases, however, any Registrable Securities sold by a person in a transaction in which its rights under this Agreement are not assigned. For the purposes of this Agreement, a Registrable Security ceases to constitute a Registrable Security hereunder (i) when such Registrable Security shall have been effectively registered under the Securities Act and disposed of in a public market transaction pursuant to a Registration Statement, (ii) when such Registrable Security shall have been sold pursuant to Rule 144 (or any successor provision) under the Securities Act, (iii) when such Registrable Security shall have been otherwise transferred and a new certificate for such Registrable Security not bearing a legend restricting further transfer shall have been delivered by the Company, (iv) with respect to a particular Holder, at any time when all of such Holder's remaining Registrable Securities can be sold in a single transaction in compliance with Rule 144 under the Securities Act, or (v) when such Registrable Security shall have ceased to be outstanding.

        (e)  "Registrable Securities then outstanding" means the number of shares of Common Stock outstanding which are Registrable Securities.

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        (f)    "SEC" means the Securities and Exchange Commission.

        2.    Request for Registration

        (a)  If the Company shall receive a written request from the Holders of at least 50% of the Registrable Securities then outstanding (the "Initiating Holders") that the Company file a registrat ion statement under the Act covering the registration of at least 250,000 of the Registrable Securities (a "Demand Registration"), then the Company shall, within 10 days after the receipt of the Demand Registration, give written notice of such request to all Holders (the "Company Notice") and shall, subject to the limitations set forth below, use its reasonable best efforts to effect as soon as practicable the registration under the Act of all Registrable Securities that the Holders request to be registered in a written request to be given within 30 days of receipt of the Company Notice. The Company Notice shall include reasonable details relating to the proposed registration and the due date for replies.

        (b)  The Company is obligated to effect only one registration pursuant to this Section 2.

        (c)  Notwithstanding the foregoing, if the Company shall furnish to the Initiating Holders requesting a registration pursuant to this Section 2 within 30 days of receiving the Demand Registration a certificate signed by the President of the Company stating that in the good faith Judgment of the Board of Directors of the Company it would be seriously detrimental to the Company and its stockholders for such registration statement to be filed and it is therefore essential to defer the filing of such registration statement, the Company shall have the right to defer such filing for up to 2 periods of not more than 45 days each after receipt of the Demand Registration; provided, however, that the Company may not use this right more than once (for a total of up to 90 days) in any 12-month period; and provided, further that the Company shall promptly notify the Initiating Holders requesting a registration pursuant to this Section 2 of any decision by the Company to abandon or indefinitely delay such public offering. During any such delay the Initiating Holders may withdraw the Demand Registration and the consequence of such withdrawal is that the Company's obligation under Section 2(b) hereof is not satisfied.

        3.    Company Registration

        If the Company proposes to register (including for this purpose a registration effected by the Company for stockholders ("Requesting Holders") other than the Holders) any of its stock or other securities under the Act in connection with the public offering of such securities solely for cash (other than a registration relating solely to the sale of securities to participants in a Company stock plan, or a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of Registrable Securities), the Company shall, at each such time, promptly give each Holder written notice of such registration. Upon the written request of each such Holder given within 20 days after receipt of such notice by such Holder from the Company, the Company shall, subject to the provisions of the following sentence, use its reasonable best efforts to cause to be registered under the Act all of the Registrable Securities that each such Holder has requested to be registered. If the managing underwriter of a proposed public offering shall advise the Company in writing that, in its opinion, the distribution of the Registrable Securities requested to be included in the registration concurrently with the securities being registered by the Company or any Requesting Holder would materially and adversely affect the distribution of such securities by the Company or such Requesting Holders, then all selling security holders (but not the Company or the Requesting Holders) shall reduce the amount of Registrable Securities of each intended to be distributed through such offering on a pro rata basis to the greatest aggregate amount which, in the opinion of such managing underwriter, would not materially and adversely affect the distribution of such securities.

        In the event that the Company decides for any reason not to complete the registration of shares of Common Stock other than Registrable Securities, the Company shall have no obligation under this Section 3 to continue with the registration of Registrable Securities. Any request pursuant to this

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Section 3 to register Registrable Securities as part of an underwritten public offering of Common Stock shall specify that such Registrable Securities are to be included in the underwriting on the same terms and conditions as the shares of Common Stock otherwise being sold through underwriters under such registration. Notwithstanding any provision herein, the rights of all Holders under this Section 3 are subject to the express limitations contained in the registration rights agreements in effect on the date hereof between the Company and other parties, all of which are on file with the SEC on the date hereof.

        4.    Obligations of the Company

        Whenever required under this Agreement to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:

        (a)  Prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such registration statement to become effective, and, upon the request of the Holders of 50% of the Registrable Securities registered thereunder, keep such registration statement effective for up to one hundred twenty (120) days.

        (b)  Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Act with respect to the disposition of all securities covered by such registration statement.

        (c)  Furnish to the Holders such copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Act and such other documents as they may reasonably request to facilitate the disposition of all securities covered by such registration statement

        (d)  Use commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or blue sky laws of such jurisdictions as shall be reasonably requested by the Holders, provided that the Company shall not be required to qualify to do business or to file a general consent to service of process in any such states or jurisdictions.

        (e)  In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter(s) of such offering. Each Holder participating in such registration shall also enter into and perform its obligations under such an agreement.

        (f)    Notify each Holder of Registrable Securities covered by such registration statement, during the time when a prospectus is required to be delivered under the Act, of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing.

        (g)  At the request of any Holder selling Registrable Securities in such registration, furnish on the date that such Registrable Securities are delivered to the underwriters for sale in connection with such registration (i) an opinion, dated such date, of legal counsel representing the Company for the purposes of such registration, in form and substance as is customarily given by Company counsel to underwriters in an underwritten public offering, addressed to the underwriters and (ii) a letter, dated such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters.

        (h)  List the Registrable Securities being registered on any national securities exchange on which a class of the Company's equity securities is listed or qualify the Registrable Securities being registered for inclusion on Nasdaq if the Company does not have a class of equity securities listed on a national securities exchange.

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        5.    Furnish Information

        It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Agreement that the selling Holders shall furnish to the Company such information regarding themselves, the Registrable Securities held by them and the intended method of disposition of such securities as shall be reasonably required to effect the registration of their Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request.

        6.    Expenses of Registration

        In connection with any registration pursuant to this Agreement, the Company shall be responsible for the payment of all reasonable expenses of the registration, with the exception of (i) underwriting discounts and commissions, which shall be paid by the Company, the Holders and any other selling holders of the Company's securities in proportion to the aggregate value of the securities offered for sale by each of them, (ii) the fees and expenses of counsel to the selling Holders The expenses to be paid by the Company shall include, without limitation, all registration, filing and qualification fees, printing and accounting fees, and the fees and disbursements of counsel for the Company; provided, however, that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 2 if the registration request is subsequently withdrawn (other than a withdrawal due to a material adverse change in the Company's business or financial condition or pursuant to the last sentence of Section 2(c)), unless, in the event of a registration initiated pursuant to the provisions of Section 2, the Holders of all of the Registrable Securities agree to forfeit the right to one demand registration.

        7.    Delay of Registration

        No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any registration of the Company as the result of any controve rsy that might arise with respect to the interpretation or implementation of this Agreement.

        8.    Indemnification

        In the event any Registrable Securities are included in a registration statement under this Agreement:

        (a)  To the extent permitted by law, the Company will indemnify and hold harmless each Holder, any underwriter (as defined in the Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Act or the Securities Exchange Act of 1934, as amended (the "1934 Act"), against any actual expenses (including legal fees and costs), losses, claims, damages (including settlement amounts) or liabilities joint or several) (collectively, "Losses") to which they may become subject under the Act, the 1934 Act or other federal or state law, insofar as such Losses arise out of or are based upon any of the following statements, omissions or violations (collectively, a "Violation") relating to or in connections with the Registration Statement: (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein, or any amendments or supplements thereto, untrue in light of the circumstances under which they were made, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or (iii) any violation or alleged violation by the Company of the Act, the 1934 Act, any state securities law or any rule or regulation promulgated under the Act, the 1934 Act or any state securities law. The Company will reimburse (as incurred) each such Holder, underwriter or controlling person for any Losses reasonably incurred by them in connection with investigating or defending any Violations; provided, however, that the indemnity agreement contained in this Section 8(a) shall not apply to amounts paid in settlement of any c laims for Violations if such settlement is made without

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the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable in any such case for any Losses that arise out of or are based upon a Violation that occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by, or on behalf of, any such Holder, underwriter or controlling person.

        (b)  To the extent permitted by law, each selling Holder will indemnify and hold harmless the Company and its officers, directors, agents and employees, each underwriter and each other Holder selling securities in such in registration statement, and any person who controls any of the foregoing within the meaning of the Act or the 1934 Act, against any Losses to which the Company or such officer, director, agent, employee, or underwriter or other selling Holder or controlling person may become subject under the Act, the 1934 Act or other federal or state law, insofar as such Losses arise out of or are based upon any Violation that occurs in reliance upon and in conformity with written information furnished by, or on behalf of, such Holder expressly for use in connection with such registration; and each such Holder will reimburse any Losses reasonably incurred by the Company or its officers, directors, agents, employees, or underwriters or other selling Holders or controlling persons in connection with investigating or defending any Violations; provided, however, that (i) the indemnity agreement contained in this Section 8(b) shall not apply to amounts paid in settlement of any claims for Violations if such settlement is made without the consent of the Holder, which consent shall not be unreasonably withheld and (ii) the obligations of such Holders shall be limited to an amount equal to the gross proceeds before expenses and commissions to each such Holder of Registrable Securities sold as contemplated herein.

        (c)  Promptly after receipt of notice of the commencement of any action (including any governmental action), an indemnified party will, if a claim is to be made against any indemnifying party under this Section 8, deliver to the indemnifying party a written notice of the commencement, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly notified to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party shall have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying Party, if, in the opinion of counsel for the indemnifying party, representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in the proceeding. The failure to deliver written notice to the indemnifying party within a reasonable period of time after notice of the commencement of any such action shall relieve such indemnifying party of any liability to the indemnified party under this Section 8 to the extent such failure is prejudicial to its ability to defend such action, but the omission to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 8.

        (d)  If the indemnification provided for in this Section 8 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any Losses, then the indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such Losses in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the Violations that resulted in such Losses as well as any other relevant equitable considerations; provided, that, in no event shall any contribution by a Holder under this Section 8(d) exceed the gross proceeds before expenses and commissions to each such Holder, except in the case of willful fraud by such Holder. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the Violation resulting in such Losses relates to information supplied by the indemnifying party or by the indemnifying party and the parties' relative intent, knowledge, access to information, and opportunity to correct or prevent such Violation.

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        (e)  Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.

        (f)    The obligations of the Company and Holders under this Section 8 shall survive the completion of any offering of Registrable Securities and the termination of Registration Rights pursuant to Section 12.

        9.    Reports Under the Act

        With a view to making available to the Holders the benefits of SEC Rule 144 promulgated under the Act and any other rule or regulation of the SEC that may at an time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company agrees to use commercially reasonable efforts to:

        (a)  Make and keep public information available, as those terms are understood and defined in SEC Rule 144, at all times after the effective date of the first registration statement filed by the Company for the offering of its securities to the general public;

        (b)  File with the SEC in a timely manner all reports and other documents required of the Company under the Act and the 1934 Act; and

        (c)  Furnish to any Holder, so long as the Holder owns any Registrable Securities, promptly upon request (i) a written statement by the Company that it has complied with the reporting requirements of the 1934 Act (at any time after the date on which it becomes subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC that permits the selling of any such securities without registration or pursuant to such Form S-3.

        10.  Assignment of Registration Rights

        The rights to cause the Company to register Registrable Securities pursuant to this Agreement may be assigned by a Holder to a transferee or assignee of such securities who shall, upon such transfer or assignment, be deemed a "Holder" under this Agreement; provided that the Company is, within a reasonable period of time after such transfer, furnished with written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned; provided, further, that such assignment shall be effective only if immediately following such transfer the further disposition of such securities by the transferee or assignee is restricted under the Act and that such transferee or assignee is (a) an entity controlling, controlled by or under common control with any Holder that is not an individual or (b) a transferee or assignee that after the transfer or assignment holds at least one-third of the Registrable Securities or 175,000 of the Registrable Securities, whichever is greater.

        11.  "Market Standoff" Agreement

        The Holders hereby agree that they shall not, to the extent requested by the Company and an underwriter of Common Stock (or other securities) of the Company, sell or otherwise transfer or dispose (other than to transferees who agree to be similarly bound) of any Registrable Securities for 180 days following the effective date of a registration statement of the Company filed under the Act; provided, however, that the foregoing shall not be effective unless all officers and directors of the Company (whether or not pursuant to this Agreement) enter into similar agreements and the Company has used all reasonable efforts to obtain similar agreements from all holders of at least 1% of the Company's then outstanding Common Stock.

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        To enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to the Registrable Securities of the Holders (and the shares or securities of every other person subject to the foregoing restriction) until the end of such period.

        12.  Termination of Registration Rights

        The registration rights granted under Sections 2, 3 and 4 of this Agreement shall terminate as to each Holder on the third (3rd) anniversary of the date of this Agreement.

        13.  Miscellaneous

        13.1 Notices

        Any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given (a) upon personal delivery to the party to be notified, (b) upon confirmation of receipt by fax by the party to be notified, (c) one business day after deposit with a reputable overnight courier, prepaid for overnight delivery and addressed as set forth in (d), or (d) three days after deposit with the United States Post Office, postage prepaid, registered or certified with return receipt requested and addressed to the party to be notified at the address indicated for such party on the signature page, or at such other address as such party may designate by 10 days' advance written notice to the other parties given in the foregoing manner.

        13.2 Amendments and Waivers

        Any term of this Agreement may be amended and the observance of any term may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the holders of a majority of the Registrable Securities then outstanding; provided t hat no amendment may have the effect of excluding any Holder from participating in any registration covered hereby or grant additional rights to any Holder that are not granted to all Holders, unless the Holder adversely affected has executed the amendment. Additional Holders may be added to this Agreement with such consent by amending Schedule A and adding a signature page executed by such additional Holder.

        13.3 Governing Law; Jurisdiction; Venue

        This Agreement shall be governed by and construed under the la ws of the State of New York without regard to principles of conflict of laws. The parties irrevocably consent to the jurisdiction and venue of the state and federal courts located in New York City in connection with any action relating to this Agreement.

        13.4 Successors and Assigns

        The terms and conditions of this Agreement shall inure to the benefit of and be binding on the respective successors and assigns of the parties as provided herein.

        13.5 Severability

        If one or more provisions of this Agreement are held to be-unenforceable under applicable law, such provision shall be excluded from this Agreement, and the balance of this Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

        13.6 Entire Agreement; Counterparts

        This Agreement constitutes the entire agreement between the parties about its subject and supersedes all prior agreements. This Agreement may be executed in two or more counterparts, which together shall constitute one instrument.

        [Signature page follows]

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Schedule A
to Registration Rights Agreement

Holder Name	Number of Shares
Shell Capital Inc., a Delaware corporation	550,000

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Exhibit 10.47

EXCHANGE AGREEMENT among BRIGHAM EXPLORATION COMPANY as Issuer BRIGHAM OIL & GAS, L.P. as Borrower and SHELL CAPITAL INC. as Holder
TABLE OF CONTENTS
EXCHANGE AGREEMENT
ARTICLE I Definitions; Interpretation.
ARTICLE II Agreements.
ARTICLE III Representations and Warranties.
ARTICLE IV Miscellaneous.
Exhibit A Form of Registration Rights Agreement REGISTRATION RIGHTS AGREEMENT
RECITALS
AGREEMENT
Schedule A to Registration Rights Agreement

EX-10.48

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Exhibit 10.48

OMNIBUS AGREEMENT

        This Omnibus Agreement (this "Agreement"), dated as of December 20, 2002, is by and among Brigham Exploration Company, a Delaware corporation (the "Company"), Brigham Oil & Gas, L.P., a Delaware limited partnership (the "Borrower"), and the Credit Suisse First Boston entities listed on Schedule A hereto (the "CSFB Entities"). Unless otherwise defined herein, all terms used herein shall have the meaning given such terms in the Credit Agreement (defined herein).

RECITALS

        WHEREAS, the CSFB Entities and Shell Capital Inc., a Delaware corporation ("SCI") are parties to that certain Assignment Agreement, dated as of November 21, 2002 (the "Assignment Agreement"), pursuant to which the CSFB Entities purchased the Assigned Interest (as such term is defined in the Assignment Agreement) (the "Assignment") held by SCI pursuant to that certain Amended and Restated Credit Agreement, dated as of February 17, 2000, among the Borrower, Agent, and each of the Lenders (as amended and supplemented, the "Credit Agreement");

        WHEREAS, the parties desire that the CSFB Entities immediately convert all outstanding Loans acquired by the CSFB Entities pursuant to the Assignment Agreement into 2,564,102 shares of the Company's common stock, $0.01 par value (the "Shares"), in accordance with the Equity Conversion Agreement (the "Conversion");

        WHEREAS, the parties desire to waive certain actions required under the Credit Agreement or other Loan Documents in order to effect the Conversion in an expedient manner; and

        WHEREAS, the Company, the Borrower and SCI are parties to that certain Exchange Agreement, dated as of November 21, 2002 (the "Exchange Agreement"), pursuant to which certain of the Loan Documents will be amended or terminated;

        NOW, THEREFORE, in consideration of the mutual representations, covenants, and agreements contained herein, the parties hereto, intending to be legally bound, hereby agree as follows:

        1.    No Liability; Release. The Company and the Borrower agree that, upon completion of the Assignment and the Conversion, the CSFB Entities will not be a party to the Credit Agreement or any of the Loan Documents, and effective as of such time, the Company and the Borrower hereby release and indemnify the CSFB Entities from any liability of any kind thereunder (whether for matters occurring before or after the Conversion). The CSFB Entities acknowledge and agree that, upon completion of the Assignment and Conversion, they will have no further rights or obligations under the Credit Agreement or any of the Loan Documents and will cease to be a party under the Loan Documents.

        2.    Waiver of Delivery of Notes to the CSFB Entities. The CSFB Entities hereby irrevocably waive the requirement under Section 12.06(d) of the Credit Agreement that the Borrower deliver new Notes representing the principal amount of the CSFB Entities' Maximum Credit Amount following the Assignment.

        3.    Conversion; Delivery of Stock Certificates. On the Closing Date (as defined in the Assignment Agreement), the Company shall deliver stock certificates representing the Shares to the CSFB Entities in accordance with the allocations set forth in Schedule A hereto. The CSFB Entities shall not be required to present a Note representing the outstanding Loans owned in order to effect the Conversion.

        4.    Waiver of Conversion Notice. The Company and the Borrower hereby irrevocably waive any requirement under the Equity Conversion Agreement, including but not limited to Section 2.01(h) thereof, to provide any notice of the Conversion.

        5.    Inducement Payment. The Company shall pay the CSFB Entities the sum of Five Hundred Thousand Dollars ($500,000) on the Closing Date as an inducement by the Company to the CSFB Entities to exercise their conversion rights under the Equity Conversion Agreement. In addition, the Company shall pay or reimburse all reasonable out-of-pocket expenses incurred by the CSFB Entities, including attorneys' fees, in connection with the transactions contemplated by the Assignment Agreement or this Agreement.

        6.    Conditions Precedent. The effectiveness of this Agreement is subject to the execution and delivery of a consent and waiver letter executed by the Company, the Borrower, Agent and each of the Lenders in the form attached hereto as Exhibit A.

        7.    Notices. All notices and other communications provided for herein (including, without limitation, any modifications of, or waivers, requests or consents under, this Agreement) shall be given or made in writing (including, without limitation, by telex or telecopy) to the intended recipient at its "Address for Notices" specified below its name on the signature pages hereof or, as to either party, at such other address as shall be designated by such party in a notice to the other party.

        8.    Amendment, Modification or Waiver. No provision of this Agreement may be amended, modified or waived except by an instrument in writing signed by the parties.

        9.    Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

        10.  Governing Law. This Agreement shall be, in accordance with New York General Obligations Law Section 5-1401, governed by and construed in accordance with the laws of the State of New York.

        11.  Headings. The section headings appearing herein are included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Agreement.

        12.  Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be identical and all of which, taken together, shall constitute one and the same instrument, and each of the parties hereto may execute this Agreement by signing any such counterpart.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

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        IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or caused this Agreement to be executed by their respective duly authorized officers, as of the day and year first above written.

BRIGHAM EXPLORATION COMPANY
By:	/s/  DAVID T. BRIGHAM
Name:	David T. Brigham
Title:	Executive Vice President—Land and Administration
Address for Notice: 6300 Bridge Point ParkwayBuilding Two, Suite 500Austin, TX 78730
BRIGHAM OIL & GAS, L.P.
	By:	/s/  BRIGHAM, INC.
		Its General Partner
		By:	/s/  DAVID T. BRIGHAM
		Name:	David T. Brigham
		Title:	Executive Vice President—Land and Administration
Address for Notice: 6300 Bridge Point ParkwayBuilding Two, Suite 500Austin, TX 78730
CSFB ENTITIES:
DLJ MERCHANT BANKING PARTNERS III, L.P.
By:	DLJ MERCHANT BANKING III, INC., its Managing General Partner
	By:	/s/  ROBERT CABES      ROBERT CABES       Attorney- in-Fact

DLJ MERCHANT BANKING III, INC., AS ADVISORY GENERAL PARTNER ON BEHALF OF DLJ OFFSHORE PARTNERS III, C.V.
	By:	/s/  ROBERT CABES      ROBERT CABES       Attorney- in-Fact
DLJ MERCHANT BANKING III, INC., AS ADVISORY GENERAL PARTNER ON BEHALF OF DLJ OFFSHORE PARTNERS III-1, C.V. AND AS ATTORNEY-IN-FACT FOR DLJ MERCHANT BANKING III, L.P., AS ASSOCIATE GENERAL PARTNER OF DLJ OFFSHORE PARTNERS III-1, C.V.
	By:	/s/  ROBERT CABES      ROBERT CABES       Attorney- in-Fact
DLJ MERCHANT BANKING III, INC., AS ADVISORY GENERAL PARTNER ON BEHALF OF DLJ OFFSHORE PARTNERS III-2, C.V. AND AS ATTORNEY-IN-FACT FOR DLJ MERCHANT BANKING III, L.P., AS ASSOCIATE GENERAL PARTNER OF DLJ OFFSHORE PARTNERS III-2, C.V.
	By:	/s/  ROBERT CABES      ROBERT CABES       Attorney- in-Fact
DLJ MB PARTNERS III GmbH & CO. KG
By:	DLJ MERCHANT BANKING III, L.P., its Managing Limited Partner
	By:	DLJ MERCHANT BANKING III, INC., its General Partner
		By:	/s/  ROBERT CABES      ROBERT CABES       Attorney- in-Fact

MILLENNIUM PARTNERS II, L.P.
By:	DLJ MERCHANT BANKING III, INC., its Managing General Partner
	By:	/s/  ROBERT CABES      ROBERT CABES       Attorney- in-Fact
MBP III PLAN INVESTORS, L.P.
By:	DLJ LBO PLANS MANAGEMENT CORPORATION, its Managing General Partner
	By:	/s/  ROBERT CABES      ROBERT CABES       Attorney- in-Fact
ADDRESSES FOR NOTICES TO THE CSFB ENTITIES:
Global Energy Partners 1100 Louisiana Street Houston, Texas 77002 Fax: 713-890-1429 Attn: Steven A. Webster
and
CSFB Private Equity 11 Madison Avenue New York, New York 10010 Fax: 212-448-3502 Attn: Dorian S. Forshner

SCHEDULE A

Holder Name	No. of Shares
DLJ Merchant Banking Partners III, L.P.	1,848,463
DLJ Merchant Banking III, Inc., as Advisory General Partner on behalf of DLJ Offshore Partners III, C.V.	100,675
DLJ Merchant Banking III, Inc., as Advisory General Partner on behalf of DLJ Offshore Partners III-1, C.V. and as attorney-in-fact for DLJ Merchant Banking III, L.P., as Associate General Partner of DLJ Offshore Partners III-1, C.V.	33,699
DLJ Merchant Banking III, Inc., as Advisory General Partner on behalf of DLJ Offshore Partners III-2, C.V. and as attorney-in-fact for DLJ Merchant Banking III, L.P., as Associate General Partner of DLJ Offshore Partners III-2, C.V.	24,005
DLJ MB Partners III GmbH & Co. KG	15,926
Millennium Partners II, L.P.	3,210
MBP III Plan Investors, L.P.	538,124

EXHIBIT A

[Brigham Exploration Company Letterhead]

Bank of Montreal
700 Louisiana Street, Suite 4400
Houston, Texas 77002

Societe Generale
1111 Bagby Street, Suite 2020
Houston, Texas 77002

Shell Capital Inc.
910 Louisiana Street, Suite 5000
Houston, Texas 77002

The Royal Bank of Scotland plc
600 Travis Street, Suite 6070
Houston, Texas 77002

Re: Consent and Waiver Request

Gentlemen and Ladies:

        Reference is made to (a) the Amended and Restated Credit Agreement dated as of February 17, 2000 (as amended to date, the "Senior Credit Agreement") among Brigham Oil & Gas, L.P., as Borrower ("Borrower"), Bank of Montreal, as Agent (in such capacity, "Senior Agent", and individually, "BMO"), and BMO, Societe Generale ("Soc Gen"), and Shell Capital Inc. ("SCI"), as Lenders, and (b) the Subordinated Credit Agreement dated as of October 31, 2000 (as amended to date, the "Subordinated Credit Agreement") as originally between Borrower and SCI and now among Borrower, the Royal Bank of Scotland plc, as Agent (as successor to SCI), and the Lenders signatory thereto.

        As used in this consent and waiver letter, "Loan Documents" means the "Loan Documents" as defined in either the Senior Credit Agreement or the Subordinated Credit Agreement, and "Brigham" means Brigham Exploration Company.

        Brigham and Borrower intend to participate in the transactions or enter into the agreements (a copy of each of which is attached hereto) described below:

        1.    a certain Assignment Agreement dated as of November 21, 2002 (the "Assignment Agreement") between SCI, DLJ Merchant Banking Partners III, L.P. and various other affiliates of, or entities otherwise associated with, Credit Suisse First Boston (collectively, "CSFB") pursuant to which, among other things, SCI will assign to CSFB the principal amount of the loans outstanding under the Senior Credit Agreement equal to $10,000,000 and the right to convert such loans into common stock of Brigham pursuant to the Equity Conversion Agreement dated as of February 17, 2000 (as amended to date, the "Equity Conversion Agreement") among SCI, Brigham and Borrower;

        2.    a certain Omnibus Agreement by and among Brigham, the Borrower and CSFB in the form attached to the Assignment Agreement, that provides, among other things, for the exercise by CSFB of its conversion right (the "Note Conversion") in accordance with the Equity Conversion Agreement, the payment of $500,000 by Brigham to CSFB as an inducement to the Note Conversion, and the consequent issuance of 2,564,102 shares of Brigham's common stock to CSFB;

        3.    a certain Exchange Agreement dated as of November 21, 2002 (the "Exchange Agreement") by and between Brigham, the Borrower and SCI, pursuant to which, among other things, Brigham will issue 550,000 shares of its common stock to SCI, SCI will surrender all of its

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warrants issued by Brigham, and Brigham, the Borrower and SCI will terminate the Equity Conversion Agreement and other documents described therein;

        4.    a certain Registration Rights Agreement between Brigham and SCI in the form attached to the Exchange Agreement, pursuant to which SCI and its successors and assigns will have "demand" and "piggy back" registration rights to obtain registration of such 550,000 shares of common stock in certain circumstances; and

        5.    the sale by Brigham to CSFB, for $10,000,000 in cash, of shares of a new, mandatorily redeemable preferred stock plus new warrants to purchase common stock of Brigham at $4.35 per share, as more fully described on Exhibit A.

        As a result of these transactions, both the "Maximum Credit Amount" of SCI under the Senior Credit Agreement and the principal balance of SCI's loans under the Senior Credit Agreement will be reduced to $30,000,000, and, after giving effect to the Note Conversion, CSFB will have no such "Maximum Credit Amount".

        Please execute a copy of this consent and waiver letter in the space provided below to evidence (a) your consent to the execution of the documents described above and the consummation of the transactions therein and herein on the terms described above, (b) your agreement that the Assignment Agreement and the Note Conversion may be completed without any issuance of a new $10,000,000 promissory note to CSFB and without any surrender of such a note by CFSB to Brigham or Borrower, (c) your agreement that, upon completion of the Assignment Agreement and the Note Conversion, CSFB will not be a party to the Senior Credit Agreement or any of the Loan Documents and your release of CSFB from any liability of any kind thereunder (whether for matters occurring before or after the Note Conversion), and (d) your agreement to confirm the foregoing in writing directly to CSFB, if hereafter requested to do so.

        Brigham and Borrower hereby (x) waive any requirement in the Loan Documents that the Senior Agent or SCI give either of them notice of any of the transactions described above (whether under Section 12.06(d) of the Senior Credit Agreement, under the Equity Conversion Agreement, or otherwise), (y) agree to issue a new promissory note to SCI, in the stated amount of $30,000,000, and (z) confirm to Senior Agent, BMO, Soc Gen and SCI that the Loan Documents remain in full force and effect and (except as described in the Exchange Agreement) will remain in full force and effect after giving effect to the transactions described above.

        This consent and waiver letter shall be governed by and construed under the laws of the State of Texas. This consent and waiver le tter may be executed in multiple counterparts, and by the different parties hereto in separate counterparts (which may be delivered, among other ways, by the exchange of faxed signature pages), and all of such counterparts will constitute a single letter agreement.

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        Thank you very much for your cooperation.

			Yours truly,
			BRIGHAM EXPLORATION COMPANY
			By:
				Name:
				Title:
			BRIGHAM OIL & GAS, L.P.
			By:	Brigham, Inc., its general partner
				By:
					Name:
					Title:
CONSENTED TO as of the date set out above:
BANK OF MONTREAL, as Senior Agent and Lender
By:
	Name:
	Title:
SOCIETE GENERALE
By:
	Name:
	Title:
SHELL CAPITAL INC.
By:
	Name:
	Title:
THE ROYAL BANK OF SCOTLAND plc
By:
	Name:	Peter Buchanan
	Title:	Director

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EXHIBIT A

[Description of preferred stock and warrants to come based on final term sheet.]

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Exhibit 10.48

OMNIBUS AGREEMENT
RECITALS
SCHEDULE A
EXHIBIT A
EXHIBIT A

EX-10.49

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Exhibit 10.49

SECURITIES PURCHASE AGREEMENT

        This SECURITIES PURCHASE AGREEMENT (this "Agreement"), is entered into as of December 20, 2002, between Brigham Exploration Company, a Delaware corporation (the "Company"), and the Credit Suisse First Boston entities listed on Schedule A hereto (collectively referred to as "Investors").

        WHEREAS, the Company has authorized the sale and issuance of an aggregate of up to 500,000, shares of its Series B Preferred Stock (the "Shares") and warrants to acquire 2,298,850 shares of its Common Stock, (the "Warrants"), in the form attached hereto as Exhibit A;

        WHEREAS, Investors desire to purchase the Shares and the Warrants on the terms and conditions set forth herein; and

        WHEREAS, the Company desires to issue and sell the Shares and the Warrants to Investors on the terms and conditions set forth herein;

        NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the Company and Investors hereby agree as follows:

ARTICLE I
TERMS OF THE TRANSACTION

        1.1    Authorization of Shares.    On or prior to the Closing (as defined in Section 2.1 below), the Company shall have authorized (a) the sale and issuance to Investors of the Shares and the Warrants and (b) the issuance of such shares of Common Stock to be issued upon exercise of the Warrants (the "Warrant Shares"). The Shares shall have the rights, preferences, privileges and restrictions set forth in the Certificate of Designations of the Company, in the form attached hereto as Exhibit B as amended by the Certificate of Amendment of Certificate of Designations in the form attached hereto as Exhibit C (as so amended, the "Certificate of Designations").

        1.2    Sale and Purchase.    Subject to the terms and conditions hereof, at the Closing the Company hereby agrees to issue and sell to Investors, and Investors agree to purchase from the Company, 500,000 Units at a purchase price of Twenty Dollars ($20.00) per Unit, with each such Unit consisting of (i) one Share and (ii) Warrants to purchase 4.5977 Warrant Shares and such Shares and Warrants shall be allocated among the Investors as set forth on Schedule A hereto.

ARTICLE II
CLOSING

        2.1    Closing.    The closing of the sale and purchase of the Shares and Warrants under this Agreement (the "Closing") shall take place at the offices of Brigham Exploration Company, 6300 Bridge Point Parkway, Building 2, Suite 500, Austin, Texas 78730, at 10:00 a.m., local time, on the date of this Agreement or at such other time or place as the Company and Investors may mutually agree (the "Closing Date"). All closing transactions at the Closing shall be deemed to have occurred simultaneously.

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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

        The Company represents and warrants to Investors, as of the date hereof, that:

        3.1    Corporate Organization.    The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority in all material respects to own, lease, and operate its properties and to carry on its business as now being conducted. No actions or proceedings to dissolve the Company are pending or, to the best knowledge of the Company, threatened. The Company is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction where such qualification is necessary, except where the failure to so qualify or to be in good standing would not reasonably be expected to have a Material Adverse Effect.

        3.2    Capitalization of the Company.

        (a)  On the Closing Date, the authorized capital stock of the Company will consist of 50,000,000 shares of Common Stock and 10,000,000 shares of preferred stock, $.01 par value, 2,250,000 of which are designated as Series A Preferred Stock and 1,000,000 of which are designated as Series B Preferred Stock. As of the date hereof, (i) 16,302,857 shares of Common Stock are outstanding and 1,730,238 shares of preferred stock are outstanding and (ii) 1,852,235 shares of Common Stock are reserved for issuance upon exercise of outstanding employee, officer and director stock options and 16,990,503 shares of Common Stock are reserved for issuance upon exercise of outstanding warrants or conversion rights. All outstanding shares of capital stock of the Company have been validly issued and are fully paid and nonassessable, and no shares of capital stock of the Company are subject to, nor have any been issued in violation of, preemptive or similar rights. On the Closing Date, the rights, preferences, privileges and restrictions of the Shares will be as stated in the Certificate of Designations.

        (b)  Except as set forth above in subparagraph (a) of this Section 3.2, there are outstanding (i) no shares of capital stock or other voting securities of the Company; (ii) no securities of the Company convertible into or exchangeable for shares of capital stock or other voting securities of the Company; (iii) no options or other rights to acquire from the Company, and no obligation of the Company to issue or sell, any shares of capital stock or other voting securities of the Company or any securities of the Company convertible into or exchangeable for such capital stock or voting securities; and (iv) no equity equivalents, interests in the ownership or earnings, or other similar rights of or with respect to the Company.

        (c)  Neither the execution of this Agreement nor the performance of the Company's obligations hereunder, nor the consummation of any other transaction currently contemplated by the Company or any of its Subsidiaries, will trigger or cause any adjustment under any anti-dilution provisions or any other similar provisions contained in any agreement as currently in effect that have the effect of (i) causing a decrease in any exercise price or conversion price in any security exercisable for or convertible into shares of Common Stock (a "Common Stock Equivalent"), or (ii) causing an increase in the number of shares of Common Stock that may be acquired upon conversion or exercise of a Common Stock Equivalent.

        3.3    Authority Relative to This Agreement.    The Company has full corporate power and authority to execute, deliver, and perform this Agreement and to execute, deliver, and where applicable, perform the Ancillary Documents to which it is a party and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance by the Company of this Agreement and the execution, delivery, and where applicable, performance by it of the Ancillary Documents to which it is a party, and the consummation by it of the transactions contemplated hereby and thereby, have been (or prior to the Closing will have been) duly authorized by all necessary corporate action of the Company. This Agreement has been duly executed and delivered by the Company and constitutes, and

2

each Ancillary Document executed or to be executed by the Company has been, or when executed will be, duly executed and delivered by the Company and constitutes, or when executed and delivered will constitute, a valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms, except that such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors' rights generally and (ii) general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law).

        3.4    Noncontravention.    The execution, delivery, and performance by the Company of this Agreement and the execution, delivery, and where applicable, the performance by it of Ancillary Documents to which it is a party and the consummation by it of the transactions contemplated hereby and thereby do not and will not (i) conflict with or result in a violation of any provision of the Company's Certificate of Incorporation, as amended, or the Company's Bylaws, as amended, or the charter, bylaws, partnership agreement or other governing instruments of any Subsidiary, (ii) conflict with or result in a violation of any provision of, or constitute (with or without the giving of notice or the passage of time or both) a default under, or give rise (with or without the giving of notice or the passage of time or both) to any loss of material benefit, or of any right of termination, cancellation, or acceleration under, any Material Agreement, (iii) result in the creation or imposition of any Encumbrance upon the properties of the Company or any Subsidiary or (iv) assuming compliance with the matters referred to in Section 3.5, violate any Applicable Law binding upon the Company or any Subsidiary, except, in the case of clauses (ii), (iii) and (iv) above, for any such conflicts, violations, defaults, terminations, cancellations, accelerations, or Encumbrances which would not, individually or in the aggregate, have a Material Adverse Effect on the Company.

        3.5    Consents and Approvals.    No consent, approval, order, or authorization of, or declaration, filing, or registration with, any Governmental Entity is required to be obtained or made by the Company or any Subsidiary in connection with the execution, delivery, or performance by the Company of this Agreement and the execution, delivery, and where applicable, performance of Ancillary Documents to which it is a party or the consummation of the transactions contemplated hereby and thereby, other than (i) compliance with any applicable requirements of the Securities Act; (ii) compliance with any applicable requirements of the Exchange Act; (iii) compliance with any applicable state securities laws; (iv) filing of the Certificate of Amendment of Certificate of Designations with the Delaware Secretary of State;. (v) compliance with any applicable requirements of the HSR Act as a result of the exercise of any of the Warrants; and (vi) such consents, approvals, orders, or authorizations which, if not obtained, and such declarations, filings, or registrations which, if not made, would not, individually or in the aggregate, have a Material Adverse Effect on the Company. Except for such consents as are obtained before or contemporaneously with consummation of the Closing, no consent or approval of any person other than the Company, Investors or any Governmental Entity is required to be obtained or made by the Company or any Subsidiary in connection with the execution, delivery, or performance by the Company of this Agreement and execution, delivery and, where applicable, performance of the Ancillary Documents to which it is a party or the consummation of the transactions contemplated hereby and thereby, other than such consents, approvals, orders, or authorizations which, if not obtained, and such declarations, filings, or registrations which, if not made, would not, individually or in the aggregate, have a Material Adverse Effect on the Company.

        3.6    Authorization of Issuance; Reservation of Shares.    When issued and delivered pursuant to this Agreement and the Certificate of Designations against payment therefor, the Shares and the Warrants will be validly issued, fully paid and nonassessable. The Warrant Shares have been duly and validly reserved for issuance. The issuances of the Shares and the Warrants are not subject to any preemptive or similar rights.

        3.7    Financial Condition.    The audited consolidated balance sheet of the Company and its Subsidiaries as at December 31, 2001 and the related consolidated statement of income, stockholders'

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equity and cash flow of the Company and its Subsidiaries for the fiscal year ended on said date, with the opinion thereon of PricewaterhouseCoopers LLP heretofore furnished to the Investors and the unaudited consolidated balance sheet of the Company and its Subsidiaries as at September 30, 2002 and their related consolidated statements of income, stockholders' equity and cash flow of the Company and its Subsidiaries for the six-month period ended on such date heretofore furnished to the Investors, are complete and correct and fairly present the consolidated financial condition of the Company and its Subsidiaries as at said dates and the results of its operations for the fiscal year and the nine-month period on said dates, all in accordance with GAAP, as applied on a consistent basis (subject, in the case of the interim financial statements, to normal year-end adjustments). Neither the Company nor any Subsidiary has on the Closing Date any debt, trade payables, contingent liabilities, liabilities for taxes, unusual forward or long-term commitments or unrealized or anticipated losses from any unfavorable commitments, except as referred to or reflected or provided for in the Company's financial statements provided to the Investors as set forth in this Section 3.7 or in Schedule 3.7 or except to the extent that the existence of any of the foregoing would not have a Material Adverse Effect relative to the Company. Since December 31, 2001, there has been no change or event having a Material Adverse Effect relative to the Company, except as disclosed to the Investors in writing. Since December 31, 2001, neither the business nor the properties of the Company's Subsidiaries, taken as a whole, have been materially and adversely affected as a result of any fire, explosion, earthquake, flood, drought, windstorm, accident, strike or other labor disturbance, embargo, requisition or taking of property or cancellation of contracts, permits or concessions by any Governmental Entity, riot, activities of armed forces or acts of God or of any public enemy.

        3.8    Litigation.    Except as disclosed in Schedule 3.8 hereto, at the Closing Date there is no litigation, legal, administrative or arbitral proceeding, investigation or other action of any nature pending or, to the best of the Company's knowledge, threatened against or affecting the Company or any Subsidiary which both (a) involves the possibility of any judgment or liability against the Company or any Subsidiary not fully covered by insurance (except for normal deductibles), and (b) would be more likely than not to have a Material Adverse Effect relative to the Company.

        3.9    ERISA.    The Company and each ERISA Affiliate have complied in all material respects with ERISA and, where applicable, the Code regarding each Plan. Each Plan is, and has been, maintained in substantial compliance with ERISA and, where applicable, the Code.

        No act, omission or transaction has occurred which could result in imposition on the Company or any ERISA Affiliate (whether directly or indirectly) of an amount of $100,000 or more as (i) either a civil penalty assessed pursuant to section 502(c), (i) or (1) of ERISA or a tax imposed pursuant to Chapter 43 of Subtitle D of the Code or (ii) breach of fiduciary duty liability damages under section 409 of ERISA.

        No Plan (other than a defined contribution plan) or any trust created under any such Plan has been terminated since September 2, 1974. No liability to the Pension Benefit Guaranty Corporation in excess of $100,000 (other than for the payment of current premiums which are not past due) by the Company or any ERISA Affiliate has been or is expected by the Company or any ERISA Affiliate to be incurred with respect to any Plan. No ERISA Event with respect to any Plan has occurred which could reasonably be expected to result in liabilities of $100,000 or more.

        Full payment when due has been made of all amounts which the Company or any ERISA Affiliate is required under the terms of each Plan or applicable law to have paid as contributions to such Plan, and no accumulated funding deficiency in an amount of $100,000 or more (as defined in section 302 of ERISA and section 412 of the Code), whether or not waived, exists with respect to any Plan.

        The actuarial present value of the benefit liabilities under each Plan which is subject to Title IV of ERISA does not, as of the end of the Company's most recently ended fiscal year, exceed the current value of the assets (computed on a plan termination basis in accordance with Title IV of ERISA) of

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such Plan allocable to such benefit liabilities by $100,000 or more. The term "actuarial present value of the benefit liabilities" shall have the meaning specified in section 4041 of ERISA.

        None of the Company or any ERISA Affiliate sponsors, maintains, or contributes to an employee welfare benefit plan, as defined in section 3(1) of ERISA, including, without limitation, any such plan maintained to provide benefits to former employees of such entities, that may not be terminated by the Company or any ERISA Affiliate in its sole discretion at any time without any material liability.

        None of the Company or any ERISA Affiliate sponsors, maintains or contributes to, or has at any time in the preceding six calendar years, sponsored, maintained or contributed to, any Multiemployer Plan.

        None of the Company or any ERISA Affiliate is required to provide security under section 401(a)(29) of the Code due to a Plan amendment that results in an increase in current liability for the Plan.

        3.10    Taxes.    The Company has filed all United States Federal income tax returns and all other tax returns which are required to be filed by it and has paid all material taxes due pursuant to such returns or pursuant to any assessment received by the Company, except for any taxes which are being contested in good faith and by proper proceedings and against which adequate reserves are being maintained. The charges, accruals and reserves on the books of the Company in respect of taxes and other governmental charges are, in the opinion of the Company, adequate. No tax lien has been filed and, to the knowledge of the Company, no claim is being asserted with respect to any such tax, fee or other charge, except for any taxes, fees or other charges which are not material or which are being contested in good faith and by proper proceedings and against which adequate reserves are being maintained.

        3.11    Titles, etc.

        (a)  Subject to the matters set out in Schedule 3.11, each of the Company and the Subsidiaries has defensible title, in all material respects, to the material Oil and Gas Properties that are evaluated in the most recently delivered reserve report, free and clear of all Liens, other than Excepted Liens. Except for immaterial divergences, after giving full effect to the Excepted Liens, the Company owns, in all material respects, the net interests in production attributable to the Hydrocarbon Interests that are evaluated in the most recently delivered reserve report, and the ownership of such Hydrocarbon Interests shall not in any material respect obligate the Company to bear the costs and expenses relating to the maintenance, development and operations of each such Hydrocarbon Interest in an amount in excess of the working interest of such Hydrocarbon Interest (without a corresponding increase in net revenue interest). The Company does not believe, based upon information in its possession, that its most recently delivered reserve report materially overstates its oil and gas reserves, bearing in mind that reserves are evaluated based upon estimates and assumptions with respect to which reasonable minds of competent reserve engineers may differ.

        (b)  All leases and agreements necessary for the conduct of the business of the Company and the Subsidiaries are valid and subsisting, in all material respects, in full force and effect and there exists no default or event or circumstance which with the giving of notice or the passage of time or both would give rise to a default under any such lease or leases, which would have a Material Adverse Effect on the conduct of the business of the Company and the Subsidiaries.

        (c)  The Oil and Gas Properties presently owned (whether of record or beneficially owned), leased or licensed by the Company and the Subsidiaries, including, without limitation, all easements and rights of way, include all properties necessary to permit the Company and the Subsidiaries to conduct their business in all material respects in the same manner as its business has been conducted prior to the Closing Date.

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        (d)  All of the properties of the Company and the Subsidiaries which are reasonably necessary for the operation of their business are in good working condition in all material respects and are maintained in accordance with prudent business standards.

        3.12    No Material Misstatements.    Taken as a whole, the written information, statements, exhibits, certificates, documents and reports furnished to Investors by the Company or any Subsidiary in connection with the negotiation of this Agreement do not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not materially misleading in the light of the circumstances in which made and with respect to the Company or any Subsidiary. As of the Closing Date, there is no fact peculiar to the Company or Subsidiary which has a Material Adverse Effect relative to the Company or in the future is reasonably likely to have (so far as the Company can now foresee) a Material Adverse Effect and which has not been set forth in this Agreement or the other documents, certificates and statements furnished to Investors by or on behalf of the Company or any Subsidiary prior to, or on, the Closing Date in connection with the transactions contemplated hereby.

        3.13    Investment Company Act.    Neither the Company nor any Subsidiary is an "investment company" or a company "controlled" by an "investment company," within the meaning of the Investment Company Act of 1940, as amended.

        3.14    Public Utility Holding Company Act.    Neither the Company nor any Subsidiary is a "holding company," or a "subsidiary company" of a "holding company," or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company," or a "public utility" within the meaning of the Public Utility Holding Company Act of 1935, as amended.

        3.15    Subsidiaries.    Except as set forth on Schedule 3.15, the Company has no Subsidiaries. Each Subsidiary is a corporation, limited liability company or limited partnership, duly incorporated or organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization, if applicable, and has all requisite corporate power and authority in all material respects to own, lease, and operate its properties and to carry on its business as now being conducted. Each Subsidiary is duly qualified to do business as a foreign corporation or limited partnership, if applicable, and is in good standing in each jurisdiction where such qualification is necessary, except where the failure to so qualify or to be in good standing would not reasonably be expected to have a Material Adverse Effect. There are outstanding (i) no securities of any Subsidiary of the Company convertible into or exchangeable for shares of capital stock or other voting securities of any Subsidiary of the Company and (ii) no options or other rights to acquire from any Subsidiary of the Company, and no obligation of any Subsidiary of the Company to issue or sell, any shares of capital stock or other voting securities of any Subsidiary of the Company or any securities of any Subsidiary of the Company convertible into or exchangeable for such capital stock or voting securities.

        3.16    Defaults.    Neither the Company nor any Subsidiary is in default nor has any event or circumstance occurred which, but for the expiration of any applicable grace period or the giving of notice, or both, would constitute a default under any material agreement or instrument to which the Company is a party or by which the Company is bound, which default would have a Material Adverse Effect.

        3.17    Environmental Matters.    Except for matters which are more likely than not to not have a Material Adverse Effect (or with respect to (c), (d) and (e) below, where the failure to take such actions is more likely than not to not have a Material Adverse Effect):

        (a)  To the best of the Company's knowledge, neither any Oil and Gas Property of the Company or any of its Subsidiaries nor the operations conducted thereon violate any order or requirement of any court or Governmental Entity or any Environmental Laws;

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        (b)  Without limitation of clause (a) above, no Oil and Gas Property of the Company or any of its Subsidiaries nor the operations currently conducted thereon or, to the best knowledge of the Company, by any prior owner or operator of such property or operation, are in violation of or subject to any existing, pending or threatened action, suit, investigation, inquiry or proceeding by or before any court or Governmental Entity or to any remedial obligations under Environmental Laws;

        (c)  All notices, permits, licenses or similar authorizations, if any, required to be obtained or filed by the Company or any of its Subsidiaries in connection with the operation or use of any and all Oil and Gas Property of the Company and each of its Subsidiaries, including without limitation present, or to the best of Company's knowledge, past treatment, storage, disposal or release of a hazardous substance or solid waste into the environment, have been duly obtained or filed, and the Company and each Subsidiary thereof are in compliance with the terms and conditions of all such notices, permits, licenses and similar authorizations;

        (d)  To the best of the Company's knowledge, all hazardous substances, solid waste, and oil and gas exploration and production wastes, if any, generated at any and all Oil and Gas Property of the Company and each of its Subsidiaries have in the past, during the tenure of ownership of the Company and its Subsidiaries and prior thereto, been transported, treated and disposed of in accordance with Environmental Laws and so as not to pose an imminent and substantial endangerment to public health or welfare or the environment, and, to the best knowledge of the Company, all such transport carriers and treatment and disposal facilities have been and are operating in compliance with Environmental Laws and so as not to pose an imminent and substantial endangerment to public health or welfare or the environment, and are not the subject of any existing, pending or threatened action, investigation or inquiry by any Governmental Entity in connection with any Environmental Laws;

        (e)  To the best of the Company's knowledge, no hazardous substances, solid waste, or oil and gas exploration and production wastes, have been disposed of or otherwise released and there has been no threatened release of any hazardous substances on or to any Oil and Gas Property of the Company or any of its Subsidiaries except in compliance with Environmental Laws and so as not to pose an imminent and substantial endangerment to public health or welfare or the environment; and

        (f)    To the extent applicable, all Oil and Gas Property of the Company and each of its Subsidiaries currently satisfies all design, operation, and equipment requirements imposed by the OPA or scheduled as of the Closing Date to be imposed by OPA during the term of this Agreement, and the Company does not have any reason to believe that such Oil and Gas Property, to the extent subject to OPA, will not be able to maintain compliance with the OPA requirements during the term of this Agreement; and

        (g)  Neither the Company nor any of its Subsidiaries has any known contingent liability in connection with any release or threatened release of any oil, hazardous substance or solid waste into the environment.

        3.18    Compliance with the Law.    Neither the Company nor any Subsidiary has violated any Governmental Requirement or failed to obtain any license, permit, franchise or other governmental authorization necessary for the ownership of any of its Oil and Gas Properties or the conduct of its business, which violation or failure would have (in the event such violation or failure were asserted by any Person through appropriate action) a Material Adverse Effect. Except for such acts or failures to act as would not have a Material Adverse Effect, the Oil and Gas Properties (and properties unitized therewith) have been maintained and developed, and to the best of the Company's knowledge operated, in a good and workmanlike manner and in conformity with all applicable laws and all rules, regulations and orders of all duly constituted authorities having jurisdiction and in conformity with the provisions of all leases, subleases or other contracts comprising a part of the Hydrocarbon Interests and other contracts and agreements forming a part of the Oil and Gas Properties; specifically in this connection, but subject to the Material Adverse Effect qualification set forth above, (i) after the Closing Date, no Oil and Gas Property is subject to having allowable production reduced below the full

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and regular allowable (including the maximum permissible tolerance) because of any overproduction (whether or not the same was permissible at the time) prior to the Closing Date and (ii) none of the wells comprising a part of the Oil and Gas Properties (or properties unitized therewith) are deviated from the vertical more than the maximum permitted by applicable laws, regulations, rules and orders, and such wells are, in fact, bottomed under and are producing from, and the well bores are wholly within, the Oil and Gas Properties (or in the case of wells located on properties unitized therewith, such unitized properties).

        3.19    Insurance.    Schedule 3.19 attached hereto contains an accurate and complete description of all material policies of fire, liability, workmen's compensation and other forms of insurance owned or held by the Company and each Subsidiary as of the Closing Date. All such policies are in full force and effect, all premiums with respect thereto covering all periods up to and including the Closing Date have been paid, and no notice of cancellation or termination has been received with respect to any such policy. Such policies are sufficient for compliance with all requirements of law and of all agreements to which the Company or any Subsidiary is a party; are valid, outstanding and enforceable policies; provide adequate insurance coverage in at least such amounts and against at least such risks (but including in any event public liability) as are usually insured against in the same general area by companies engaged in the same or a similar business for the assets and operations of the Company and each Subsidiary; will remain in full force and effect through the respective dates set forth in Schedule 3.19 with the payment of additional premiums; and will not in any way be affected by, or terminate or lapse by reason of, the transactions contemplated by this Agreement. Schedule 3.19 identifies all material risks, if any, which the Company, the Subsidiaries and their respective Board of Directors or officers have designated as being self insured. Neither the Company nor any Subsidiary has been refused any insurance with respect to its assets or operations, nor has its coverage been limited below usual and customary policy limits, by an insurance carrier to which it has applied for any such insurance or with which it has carried insurance during the last three years.

        3.20    Hedging Agreements.    Schedule 3.20 sets forth, as of the Closing Date, a true and complete list of all Hedging Agreements (including commodity price swap agreements, forward agreements or contracts of sale which provide for prepayment for deferred shipment or delivery of oil, gas or other commodities) of the Company and each Subsidiary.

        3.21    Material Agreements.    Set forth on Schedule 3.21 hereto is a complete and correct list of all material agreements, leases, indentures, purchase agreements, obligations in respect of letters of credit, guarantees, joint venture agreements, and other instruments in effect or to be in effect as of the Closing Date (other than Hedging Agreements) providing for, evidencing, securing or otherwise relating to any material Debt of the Company or any Subsidiary, and all obligations of the Company or any Subsidiary to issuers of surety or appeal bonds (excluding operator's bonds, plugging and abandonment bonds, and similar surety obligations obtained in the ordinary course of business) issued for account of the Company or any such Subsidiary.

        3.22    Gas Imbalances.    As of the Closing Date, except as set forth in the most recent Reserve Report furnished to Investors, on a net basis there are no gas imbalances, take or pay or other prepayments with respect to the Company's or any Subsidiary's Hydrocarbon Interests in the aggregate which would require the Company or such Subsidiary to deliver five percent (5%) or more of the monthly production from the Company's and its Subsidiaries' Hydrocarbons produced on a monthly basis from the Hydrocarbon Interests, at some future time without then or thereafter receiving full payment therefor.

        3.23    Brokerage Fees.    The Company has not retained any financial advisor, broker, agent, or finder or paid or agreed to pay any financial advisor, broker, agent, or finder on account of the sale by the Company and the purchase by Investors of the Shares pursuant to this Agreement.

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        3.24    SEC Filings.    The Company has complied in all material respects with its obligations to file with the Securities and Exchange Commission all forms, reports, schedules, statements and other documents required to be filed by it since January 1, 1999 under the Securities Act and the Exchange Act. All forms, reports, schedules, statements, and other documents (including all amendments thereto) filed by the Company with the Securities and Exchange Commission since such date are herein collectively referred to as the "SEC Filings". The SEC Filings, at the time filed, complied in all material respects with all applicable requirements of federal securities laws. None of the SEC Filings, including, without limitation, any financial statements or schedules included therein, at the time filed or as same may have been amended, contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading.

        3.25    Stockholder Approval.    Neither the execution of this Agreement nor the consummation of the transactions contemplated hereunder require the approval of the stockholders of the Company under the applicable listing rules of the Nasdaq Stock Market, Inc.; provided, however, that certain of the anti-dilution provisions contained in the Warrants shall not be enforceable until after approval of the stockholders of the Company as set forth therein.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF INVESTORS

        Each Investor represents and warrants to the Company that:

        4.1    Organization.    Each of DLJ Merchant Banking Partners III, LP ("MBP"); Millennium Partners II, L.P. ("MPII"); and MBP III Plan Investors, L.P. ("MPIII") is a limited partnership duly organized, validly existing and in good standing under the laws of the State of Delaware. Each of DLJ Merchant Banking III, Inc., as Advisory General Partner on behalf of DLJ Offshore Partners III, C.V.("DOP"); DLJ Merchant Banking III, Inc., as Advisory General Partner on behalf of DLJ Offshore Partners III-1, C.V. and as attorney-in-fact for DLJ Merchant Banking III, L.P., as Associate General Partner of DLJ Offshore Partners III-1, C.V. ("DOP-1"); and DLJ Merchant Banking III, Inc., as Advisory General Partner on behalf of DLJ Offshore Partners III-2, C.V. and as attorney-in-fact for DLJ Merchant Banking III, L.P., as Associate General Partner of DLJ Offshore Partners III-2, C.V. ("DOP-2") is a limited partnership (commanditaire vennootschap) duly organized, validly existing and in good standing under the laws of the Netherlands Antilles. DLJ MB PartnersIII GmbH & Co. KG ("MBP GmbH") is a limited partnership duly organized, validly existing and in good standing under the laws of the Republic of Germany. Each Investor has all requisite corporate power and authority in all material respects to own, lease, and operate its properties and to carry on its business as now being conducted. No actions or proceedings to dissolve either Investor are pending or, to the best knowledge of any Investor, threatened.

        4.2    Authority Relative to This Agreement.    Each Investor has full corporate or (if applicable) other power and authority to execute, deliver, and perform this Agreement and execute, deliver and, where applicable, perform the Ancillary Documents to which it is a party and to consummate the transactions contemplated hereby and thereby. The execution, delivery, and performance by each Investor of this Agreement and execution, delivery, and, where applicable, performance of the Ancillary Documents to which it is a party, and the consummation by it of the transactions contemplated hereby and thereby, have been duly authorized by all necessary corporate (if applicable) action of such Investor. This Agreement has been duly executed and delivered by each Investor and constitutes, and each Ancillary Document executed or to be executed by each Investor has been, or when executed will be, duly executed and delivered by such Investor and constitutes, or when executed and delivered will constitute, a valid and legally binding obligation of such Investor, enforceable against such Investor in accordance with its terms, except that such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors' rights generally and (ii) general

9

equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law).

        4.3    Noncontravention.    The execution, delivery, and performance by each Investor of this Agreement and the execution, delivery and, where applicable, performance of Ancillary Documents to which it is a party and the consummation by it of the transactions contemplated hereby and thereby do not and will not (i) conflict with or result in a violation of any provision of MBP's, MPII's or MPIII's Certificate of Limited Partnership or partnership agreement, DOP's, DOP-1's or DOP-2's Agreement of Limited Partnership, or MBP GmbH's Certificate of Kommanditgesellschaft/L.P., (ii) conflict with or result in a violation of any provision of, or constitute (with or without the giving of notice or the passage of time or both) a default under, or give rise (with or without the giving of notice or the passage of time or both) to any right of termination, cancellation, or acceleration under, any bond, debenture, note, mortgage, indenture, lease, agreement or other instrument or obligation to which any Investor is a party or by which Investor or any of its properties may be bound, (iii) result in the creation or imposition of any Encumbrance upon the properties of any Investor, or (iv) violate any Applicable Law binding upon any Investor, except, in the case of clauses (ii), (iii) and (iv) above, for any such conflicts, violations, defaults, terminations, cancellations, accelerations, or Encumbrances which would not, individually or in the aggregate, have a Material Adverse Effect on any Investor.

        4.4    Consents and Approvals.    No consent, approval, order, or authorization of, or declaration, filing, or registration with, any Governmental Entity is required to be obtained or made by Investors in connection with the execution, delivery, or performance by Investors of this Agreement and the execution, delivery and, where applicable, performance of the Ancillary Documents to which it is a party or the consummation of the transactions contemplated hereby or thereby. No consent or approval of any person other than any Governmental Entity is required to be obtained or made by any Investor in connection with the execution, delivery or performance by Investors of this Agreement and the execution, delivery and, where applicable, performance of the Ancillary Documents to which it is a party or the consummation of the transactions contemplated hereby or thereby.

        4.5    Purchase for Investment.    Each Investor understands that none of the Shares, the Warrants or the Warrant Shares have been registered under the Securities Act. Each Investor also understands that the Shares, the Warrants and the Warrant Shares are being offered and sold pursuant to an exemption from registration contained in the Securities Act based in part upon Investors' representations contained in this Agreement. Each Investor hereby represents and warrants as follows:

        (a)    Investor Bears Economic Risk.    Each Investor has substantial experience in evaluating and investing in private placement transactions of securities in companies similar to the Company so that it is capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its own interests. Without limiting the generality of the foregoing, each Investor further represents that it has such knowledge regarding the oil and gas industry and the business of the Company and the current circumstances surrounding such industry and business that it is capable of evaluating the merits and risks of the acquisition of the Shares, the Warrants and the Warrant Shares. Each Investor must bear the economic risk of this investment indefinitely unless the Shares, the Warrants or the Warrant Shares are registered pursuant to the Securities Act, or an exemption from registration is available. Each Investor understands that the Company has no present intention of registering the Shares, the Warrants or the Warrant Shares. Each Investor also understands that there is no assurance that any exemption from registration under the Securities Act will be available and that, even if available, such exemption may not allow an Investor to transfer all or any portion of the Shares, Warrants or Warrant Shares under the circumstances, in the amounts or at the times an Investor might propose.

10

        (b)    Acquisition for Own Account.    Each Investor is acquiring the Shares, the Warrants and Warrant Shares for such Investor's own account for investment only, and not with a view towards their distribution.

        (c)    Investor Can Protect Its Interest.    Each Investor represents that by reason of its, or of its management's, business or financial experience, such Investor has the capacity to protect its own interests in connection with the transactions contemplated in this Agreement and the Ancillary Agreements. Further, no Investor is aware of any publication of any advertisement in connection with the transactions contemplated in the Agreement.

        (d)    Accredited Investor.    Each Investor represents that it is an accredited investor within the meaning of Regulation D under the Securities Act.

        (e)    Company Information.    Each Investor has had access to the Company's SEC Filings and has had an opportunity to discuss the Company's business, management and financial affairs with directors, officers and management of the Company and has had the opportunity to review the Company's operations and facilities. Each Investor has also had the opportunity to ask questions of, and receive answers from, the Company and its management regarding the terms and conditions of this investment. Each Investor hereby acknowledges and affirms that it has completed its own independent investigation, analysis, and evaluation of the Company and its subsidiaries, that it has made all such reviews and inspections of the business, assets, results of operations, condition (financial or otherwise), and prospects of the Company and its subsidiaries as it has deemed necessary or appropriate, and that in making its decision to enter into this Agreement and to consummate the transactions contemplated hereby it has relied solely on its own independent investigation, analysis, and evaluation of the Company and its subsidiaries, or that of its own independent advisers in evaluating its investment in the Shares, Warrants and Warrant Shares.

        (f)    Rule 144.    Each Investor acknowledges and agrees that the Shares and the Warrants, and, if issued, the Warrant Shares, must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Each Investor has been advised or is aware of the provisions of Rule 144, which permits limited resale of shares purchased in a private placement subject to the satisfaction of certain conditions, including, among other things: the availability of certain current public information about the Company, the resale occurring following the required holding period under Rule 144 and the number of shares being sold during any three-month period not exceeding specified limitations.

        (g)    Transfer Restrictions.    Each Investor acknowledges and agrees that the Shares, the Warrants and the Warrant Shares are subject to restrictions on transfer as set forth in Section 5.5, below, and further understands that the Shares, the Warrants and the Warrant Shares will not have been registered pursuant to the Securities Act or any applicable state securities laws, that the Shares, the Warrants and the Warrant Shares will be characterized as "restricted securities" under federal securities laws, and that under such laws and applicable regulations the Shares, the Warrants and the Warrant Shares cannot be sold or otherwise disposed of without registration under the Securities Act or an exemption therefrom. In this connection, each Investor represents that it is familiar with Rule 144 promulgated under the Securities Act, as currently in effect, and understands the resale limitations imposed thereby and by the Securities Act. Appropriate stop transfer instructions may be issued to the transfer agent for securities of the Company (or a notation may be made in the appropriate records of the Company) in connection with the Shares, the Warrants or the Warrant Shares.

        (h)    Confirmation.    The acquisition of the Shares by an Investor at the Closing shall constitute such Investor's confirmation of the foregoing representations.

        4.6    No Other Shares.    Except for such rights as may be conferred on an Investor under the First Purchase Agreement, the Second Purchase Agreement or by this Agreement and the Ancillary

11

Documents, Investors do not beneficially own, directly or indirectly, any shares of capital stock or other securities of the Company or any of its Subsidiaries.

        4.7    Financial Resources.    Each Investor has the financial resources available to it as are necessary to perform its obligations to acquire the Shares pursuant to the terms of this Agreement.

        4.8    Brokerage Fees.    No Investor has retained any financial advisor, broker, agent, or finder or paid or agreed to pay any financial advisor, broker, agent, or finder on account of the sale by the Company and the purchase by Investors of the Shares pursuant to this Agreement.

ARTICLE V
ADDITIONAL AGREEMENTS

        5.1    Reasonable Best Efforts.

        (a)  Each party hereto agrees that it will use its reasonable best efforts to take, or cause to be taken, all action and to do, or cause to be done, all things reasonably necessary, proper, or advisable under Applicable Laws to consummate the transactions contemplated by this Agreement, including, without limitation, (i) cooperation in determining whether any consents, approvals, orders, authorizations, waivers, declarations, filings, or registrations of or with any Governmental Entity or third party are required in connection with the consummation of the transactions contemplated hereby; (ii) reasonable best efforts to obtain any such consents, approvals, orders, authorizations, and waivers and to effect any such declarations, filings, and registrations; (iii) reasonable best efforts to cause to be lifted or rescinded any injunction or restraining order or other order adversely affecting the ability of the parties to consummate the transactions contemplated hereby; (iv) reasonable best efforts to defend, and cooperation in defending, all lawsuits or other legal proceedings challenging this Agreement or the consummation of the transactions contemplated hereby; and (v) the execution of any additional instruments necessary to consummate the transactions contemplated hereby.

        (b)  Without limiting the generality of Section 5.1(a), to the extent required by the HSR Act, each of the parties hereto shall (i) file or cause to be filed, as promptly as practicable but in no event later than five (5) consecutive Business Days after the execution and delivery of this Agreement, with the Federal Trade Commission and the United States Department of Justice, all reports and other documents required to be filed by such party under the HSR Act concerning the transactions contemplated hereby and (ii) promptly comply with or cause to be complied with any requests by the Federal Trade Commission or the United States Department of Justice for additional information concerning such transactions, in each case so that the waiting period applicable to this Agreement and the transactions contemplated hereby under the HSR Act shall expire as soon as practicable after the execution and delivery of this Agreement. Each party hereto agrees to request, and to cooperate with the other party or parties in requesting, early termination of any applicable waiting period under the HSR Act. Notwithstanding the foregoing, if any report or other document is required to be filed by any Investor under the HSR Act solely as a result of the purchase and sale of the Shares or the Warrants (with no regard to any other securities held by such Investor or its Affiliates), the Company shall pay any and all fees and expenses, including filing fees and legal expenses, incurred by such Investor in connection with the filing of such reports or other documents and any other actions required to comply with the provisions of the HSR Act.

        5.2    Press Releases.    Except as may be required by Applicable Law or by the rules of any national securities exchange or registered securities association, prior to the Closing, neither Investors nor the Company shall issue any press release with respect to this Agreement or the transactions contemplated hereby without the prior consent of the other party (which consent shall not be unreasonably withheld under the circumstances). Any such press release required by Applicable Law or by the rules of any national securities exchange or registered securities association shall only be made after reasonable notice to the other party.

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        5.3    Fees and Expenses.    Except as otherwise expressly provided in this Agreement, all fees and expenses, including fees and expenses of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such fee or expense.

        5.4    Survival.    The representations and warranties made herein shall survive the Closing, regardless of any investigation made by or on behalf of any party, until the second anniversary of the Closing Date; provided, however, the representations and warranties contained in Sections 3.9, 3.10 and 3.17 shall survive until the expiration of the applicable statute limitations relating to the subject matters of such representations and warranties (the "Survival Date".) All statements as to factual matters contained in any certificate or other instrument delivered by or on behalf of the Company pursuant hereto in connection with the transactions contemplated hereby shall be deemed to be representations and warranties by the Company herein for purposes of this Section 5.4. No action may be brought with respect to a breach of any representation or warranty after the Survival Date unless, prior to such time, the party seeking to bring such an action has notified the other parties of such claim, specifying in reasonable detail the nature of the loss suffered.

        5.5    Transfer Restrictions.

        (a)  Notwithstanding any provision contained in this Agreement to the contrary, each Investor agrees that it will not, directly or indirectly, sell, assign, transfer, pledge, encumber, or otherwise dispose of any of the Shares, Warrants or Warrant Shares except:

(i)

In compliance with Rule 144; provided, however, that the Investor shall provide the Company with copies of all filings made with the Securities and Exchange Commission with respect to sales of securities under Rule 144 and with such other information and documents as the Company shall reasonably require in order to assure full compliance with Rule 144; or (ii) Pursuant to a no-action letter or other interpretive statement or release of the Securities and Exchange Commission to the effect that the proposed sale or other disposition may be effected without registration under the Securities Act; or



(iii)

Pursuant to an applicable exemption (other than Rule 144) under the Securities Act; provided, however, that the Investor shall have furnished the Company with an opinion of counsel, which opinion and counsel shall be reasonably acceptable to the Company, to the effect that such disposition does not require registration of such securities under the Securities Act; provided further, however, that no opinion of counsel shall be required in the case of a transfer to affiliates (as hereinafter defined) of Investor if such affiliates shall have furnished the Company with the representations contained in Section 4.5 of this Agreement and shall have agreed with the Company to be subject to the terms of this Agreement to the same extent as if an original holder of securities pursuant hereto. For purposes of this Section 5.5(a)(iii), "affiliates" shall mean one or more of (A) Affiliates as defined in Section 11.1, or (B) any other Investor; or



(iv)

Pursuant to an effective registration statement filed under the Securities Act.

        (b)  It is agreed and understood by each Investor that the certificates or instruments representing the Shares, Warrants and Warrant Shares shall each be stamped or otherwise imprinted with a legend in substantially the following form:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM. SUCH SECURITIES ARE SUBJECT TO THE RESTRICTIONS AND PRIVILEGES SPECIFIED IN A SECURITIES PURCHASE AGREEMENT, DATED AS OF DECEMBER 20, 2002, BETWEEN BRIGHAM EXPLORATION COMPANY AND THE

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INITIAL HOLDERS OF SECURITIES NAMED THEREIN, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF BRIGHAM EXPLORATION COMPANY AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER HEREOF UPON WRITTEN REQUEST, AND THE HOLDER OF THIS CERTIFICATE AGREES TO BE BOUND THEREBY."

        5.6    Consideration.    The sum of Five Hundred Thousand Dollars ($500,000) shall be deducted from the Purchase Price as consideration for the Investors entering into the purchase of the Units. The Company shall pay all reasonable out-of-pocket expenses ("Investor Expenses") incurred by the Investors, including attorneys' fees. At the Closing, the company shall pay $75,000 in partial payment of the Investor Expenses, with a detailed final accounting for the Investor Expenses to be submitted by the Investors within thirty (30) days after the Closing Date. The Company shall pay to the Investors such final amount of Investor Expenses (less expenses already paid at Closing) within thirty (30) days following the Company's receipt of such final accounting from the Investors.

        5.7    Action at Annual Meeting of Stockholders.

        (a)  The Company shall take all action necessary in accordance with applicable law and the Company's Certificate of Incorporation and Bylaws to have the Company's common stockholders, at the Annual Meeting to be held on or before May 31, 2003, consider and approve the matters described in the Stockholders Voting Agreement dated December 20, 2002, by and among the Company and certain of its stockholders, such approval, when so obtained, shall be referred to as the "Stockholder Approval". The Company shall not mail or otherwise distribute the proxy statement or information statement (or any related proxy materials or amendments or supplements thereto, if any) relating to the Annual Meeting to its stockholders without consultation with Investors and their counsel, and such proxy statement or information statement and such other items shall, to the extent same relate to the subject matter of the Stockholders Voting Agreement, be in such form as Investors and their counsel shall approve (such approval not to unreasonably withheld).

        (b)  The Company shall provide a certificate signed by a duly authorized officer of the Company to each holder of Warrants promptly after the Annual Meeting certifying whether the Stockholder Approval has been obtained at the Annual Meeting and whether the anti-dilution provisions contained in the Warrants are then enforceable.

        5.8    Capitalization Certificate.    The Company shall provide, immediately after the Closing, a schedule reflecting the capitalization of the Company as of immediately after the transactions contemplated by this Agreement, including at least the information provided in the representation in Section 3.2 and indicating the number of fully-diluted shares of Common Stock, and certified by the Chief Financial Officer of the Company (the "Certificate"). Until the second anniversary of the Closing Date, the Company shall amend the Certificate at any time after the Closing to reflect any changes to the Certificate (which in all cases shall reflect the capitalization of the Company as of immediately after the transactions contemplated by this Agreement) if the Company learns that the Certificate is incorrect or not complete in any respect. Notwithstanding any provision contained in this Agreement, the Amended Registration Rights Agreement and the Warrant Certificate, if the number of fully-diluted shares of common stock as reflected in the Certificate at any time is more than 33,828 shares in excess of 33,827,779 shares of Common Stock, then the number of shares purchasable upon exercise of the Warrant shall be increased to a number of shares equal to 6.796% of the fully-diluted shares of Common Stock. Upon any such adjustment to the number of shares to be acquired upon exercise of the Warrant, the holder of the Warrant shall deliver to the Company the Warrant Certificate for cancellation and immediately thereupon the Company shall issue a new Warrant Certificate reflecting the registered number of shares purchasable thereunder. For purposes of this Section 5.8, the term "fully-diluted shares of Common Stock" means the sum of shares of Common Stock outstanding, plus all shares of Common Stock issuable pursuant to (i) the conversion or exchange of securities that are convertible into or exchangeable for shares of Common Stock or the exercise of any option, warrant or other right to acquire shares of Common Stock from the Company, (ii) the conversion or exchange of

14

any security that is convertible into or exchangeable for any securities referred to in Section 5.8(i) or the exercise of any security that is exercisable for any securities referenced in Section 5.8(i), and (iii) the exercise of any rights under any agreement regarding equity equivalents, interest in the ownership or earnings, or other similar rights of or with respect to the Company.

        5.9    Restrictions on Certain Actions.    Investors hereby agree (subject to the occurrence of the Closing) that for a period of one year from the Closing Date, Investors shall not, without the prior written approval of the Board of Directors of the Company, in any manner, directly or indirectly, acquire for their own accounts any Voting Securities (or beneficial ownership thereof), except by way of stock dividends or other distributions or offerings made available to holders of Voting Securities generally and except for acquisitions of Common Stock upon exercise of the Warrants (as defined herein), upon exercise of the Warrants (as defined in the First Purchase Agreement), upon exercise of the Warrants (as defined in the Second Purchase Agreement) or upon conversion of the Loans (as defined in the Assignment Agreement) in accordance with the Equity Conversion Agreement (as defined in the Assignment Agreement). The parties acknowledge that various Affiliates of the Investors are brokers or investment advisors or are otherwise engaged in transactions in securities generally as part of their ordinary course of business. The parties agree that actions taken by Affiliates of the Investors as such in the ordinary course of their business, such as acting as broker for clients acquiring shares of Voting Securities, shall not be deemed a violation of any of the provisions of this Section 5.9.

ARTICLE VI
CONDITIONS TO OBLIGATIONS OF THE COMPANY

        The obligations of the Company to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment on or prior to the Closing Date of each of the following conditions:

        6.1    Representations and Warranties.    All the representations and warranties of Investors contained in this Agreement shall be true and correct in all material respects, except as affected by transactions contemplated or permitted by this Agreement.

        6.2    Covenants and Agreements.    Investors shall have performed and complied with in all material respects all covenants and agreements required by this Agreement to be performed or complied with by them on or prior to the Closing Date.

        6.3    HSR Act.    All waiting periods (and any extensions thereof) applicable to this Agreement and the transactions contemplated hereby under the HSR Act shall have expired or been terminated.

        6.4    Legal Proceedings.    No Proceeding shall, on the Closing Date, be pending or threatened seeking to restrain, prohibit or obtain damages or other relief in connection with this Agreement or the consummation of the transactions contemplated hereby.

        6.5    Consents.    All consents, approvals, orders, authorizations and waivers of, and all declarations, filings and registrations with, third parties (including Governmental Entities) required to be obtained or made by or on the part of the parties hereto, or otherwise reasonably necessary for the consummation of the transactions contemplated hereby, shall have been obtained or made, and all thereof shall be in full force and effect at the time of Closing.

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ARTICLE VII
CONDITIONS TO OBLIGATIONS OF INVESTORS

        The obligations of Investors to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment on or prior to the Closing Date of each of the following conditions:

        7.1    Representations and Warranties.    All the representations and warranties of the Company contained in this Agreement shall be true and correct in all material respects, except as affected by transactions contemplated or permitted by this Agreement (or the announcement thereof).

        7.2    Covenants and Agreements.    The Company shall have performed and complied with in all material respects all covenants and agreements required by this Agreement to be performed or complied with by it on or prior to the Closing Date.

        7.3    HSR Act.    All waiting periods (and any extensions thereof) applicable to this Agreement and the transactions contemplated hereby under the HSR Act shall have expired or been terminated.

        7.4    Legal Proceedings.    No Proceeding shall, on the Closing Date, be pending or threatened seeking to restrain, prohibit or obtain damages or other relief in connection with this Agreement or the consummation of the transactions contemplated hereby.

        7.5    Consents.    All consents, approvals, orders, authorizations and waivers of, and all declarations, filings and registrations with, third parties (including Governmental Entities) required to be obtained or made by or on the part of the parties hereto, or otherwise reasonably necessary for the consummation of the transactions contemplated hereby, shall have been obtained or made, and all thereof shall be in full force and effect at the time of Closing.

        7.6    Legal Opinion.    Thompson & Knight, L.L.P., counsel to the Company, shall have delivered to the Investors a legal opinion satisfactory in form and substance to the Investors.

        7.7.    Assignment Agreement.    All conditions precedent to the effectiveness of the sale, assignment and transfer contemplated under the Assignment Agreement shall have been satisfied or waived.

        7.8    Letter Agreement.    All conditions precedent to the purchase of the Shares and Warrants contained in the Letter Agreement dated as of November 21, 2002, between the Company, BOG, and DLJ Merchant Banking III, Inc., shall have been satisfied or waived.

ARTICLE VIII
COVENANTS

        8.1    Affirmative Covenants.    The Company covenants and agrees that, so long as any of the Shares are outstanding:

        (a)  Financial Statements and Other Reports. The Company shall deliver, or shall cause to be delivered, to the Investors:

(i)

Annual Financial Statements. As soon as available and in any event within 90 days after the end of each fiscal year of the Company and its consolidated Subsidiaries for such fiscal year, and the related consolidated and unaudited consolidating balance sheets of the Company and its consolidated Subsidiaries as at the end of such fiscal year, and setting forth in each case in comparative form the corresponding figures for the preceding fiscal year, and accompanied by the related opinion of independent public accountants which opinion shall state that said financial statements fairly present the consolidated financial condition and results of operations of the Company and its consolidated Subsidiaries as at the end of, and for, such fiscal year and that such financial statements have been prepared in accordance with GAAP except for such changes in such principles with which the independent public accountants shall have concurred.

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(ii)

Quarterly Financial Statements. As soon as available and in any event within 60 days after the end of each of the first three fiscal quarterly periods of each fiscal year of the Company, consolidated statements of income, stockholders' equity, changes in financial position and cash flow of the Company and its consolidated Subsidiaries for such period and for the period from the beginning of the respective fiscal year to the end of such period, and the related consolidated and consolidating balance sheets as at the end of such period.



(iii)

Monthly Financial Statements. As soon as available and in any event within forty-five (45) days after the end of each calendar month that is not also the end of one of the Company's first three fiscal quarterly periods or of the Company's fiscal year, consolidated statements of income and changes in financial position of the Company and its consolidated Subsidiaries for such period and for the period from the beginning of the respective fiscal year to the end of such period, and the related consolidated balance sheets as at the end of such period and beginning statements setting forth in each case in comparative form the corresponding figures for the corresponding period in the preceding fiscal year.]

        (b)  SEC Filings, Etc. Promptly, upon its becoming available, each financial statement, report, notice or proxy statement sent by the Company to stockholders generally.

        (c)  Engineering Reports. Not later than April 30 and October 30 of each year, the Company shall furnish to the Investors a Reserve Report as of the preceding December 31 and June 30, respectively. The Reserve Report to be furnished in April of each year shall be prepared by certified independent petroleum engineers or other independent petroleum consultant(s) and the Reserve Report to be furnished in October of each year shall be prepared by or under the supervision of the chief engineer or Vice President of Operations of the Company who shall certify such Reserve Report to have been prepared in accordance with the procedures used in the immediately preceding April Reserve Report. At Company's option, the Reserve Report to be furnished in October of each year may instead consist of a report from the independent petroleum engineers referred to above on any new wells and a roll-forward by Company on any wells previously reported in the Reserve Report described in the immediately preceding April.

        (d)  Exchange Act Reports. At all times (i) timely file all reports required to be filed by the Company under Section 13(d) or Section 15 of the Exchange Act and the rules and regulations thereunder, and (ii) if the Company is no longer subject to the requirements of the Exchange Act, provide holders of the Shares reports in substantially the same form and at the same times as would be required if the Company were subject to the Exchange Act.

        (e)  Nasdaq Listing. Maintain at all times a valid listing for the Common Stock on a national securities exchange or the National Market System or SmallCap Market of the NASDAQ Stock Market, Inc.

        (f)    Further Assurances. The Company at its expense will promptly execute and deliver to the Investors upon request all such other documents, agreements and instruments to comply with or accomplish the covenants and agreements of the Company in this Agreement or any other agreements and documents executed by and between the Company and the Investors.

        8.2    Negative Covenants.    The Company covenants and agrees that, so long as at least 10% of the Shares are outstanding, without the prior written consent of the persons holding 75% of the then outstanding Shares:

        (a)  Dividends, Distributions and Redemptions. The Company will not declare or pay any dividend, purchase, redeem, or otherwise acquire for value any, other than those issued under the First Purchase Agreement or the Second Purchase Agreement, Parity Security or Junior Security

17

now or hereafter outstanding, return any capital or make a distribution of its assets to its stockholders.

        (b)  Nature of Business. Neither the Company nor Brigham Oil & Gas, L.P. will allow any material change to be made in the character of its business as an independent oil and gas exploration and production company.

        (c)  Environmental Matters. Neither the Company nor any Subsidiary will knowingly cause or permit any of its Property to be in violation of, or knowingly do anything or permit anything to be done which will subject any such Property to any remedial obligations under any Environmental Laws, assuming disclosure to the applicable Governmental Authority of all relevant facts, conditions and circumstances, if any, pertaining to such Property where such violations or remedial obligations would have a Material Adverse Effect.

        (d)  Transactions with Affiliates. Neither the Company nor any Subsidiary will enter into any transaction, including, without limitation, any purchase, sale, lease or exchange of Property or the rendering of any service, with any Affiliate unless such transactions are otherwise not in violation of this Agreement, and are upon fair and reasonable terms no less favorable to it than it would obtain in a comparable arm's length transaction with a Person not an Affiliate.

        8.3    Venture Capital Investment.    The rights contained in this Section 8 are intended to satisfy the requirement of management rights for purposes of qualifying the ownership of Common Stock, Preferred Stock and Warrants by one or more of the Investors as a venture capital investment for purposes of the Department of Labor "plan asset" regulation, 29 C.F.R. § 2510.3-101. In the event such rights are not satisfactory for such purpose, the Company and such Investors shall reasonably cooperate in good faith to agree upon mutually satisfactory management rights that satisfy such regulation.

        8.4    Amended Registration Rights Agreement.    Within two business days after the Closing, the Company shall execute and deliver to the Investors the Second Amendment to Registration Rights Agreement by and among the Company, the Investors, MB and ESC.

ARTICLE IX
AMENDMENT AND WAIVER

        9.1    Amendment.    This Agreement may not be amended except by an instrument in writing signed by or on behalf of all the parties hereto.

        9.2    Waiver.    No failure or delay by a party hereto in exercising any right, power, or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power, or privilege. The provisions of this Agreement may not be waived except by an instrument in writing signed by or on behalf of the party against whom such waiver is sought to be enforced.

ARTICLE X
MISCELLANEOUS

        10.1    Notices.    All notices, requests, demands, and other communications required or permitted to be given or made hereunder by any party hereto shall be in writing and shall be deemed to have been duly given or made if (i) delivered personally, (ii) sent by prepaid overnight courier service, or (iii) sent by telecopy or facsimile transmission, answer back requested, to the parties at the following addresses (or at such other addresses as shall be specified by the parties by like notice):

(a) If to the Company:

Brigham Exploration Company
6300 Bridge Point Parkway

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Building 2, Suite 500
Austin, TX 78730
Attention: Chief Financial Officer
Telefax: 512-427-3400

with a copy to:
Thompson & Knight L.L.P.
1700 Pacific Avenue, Suite 3300
Dallas, Texas 75201
Attention: Joe Dannenmaier
Telefax: 214-969-1751

(b) If to the Investors at:

Global Energy Partners
1100 Louisiana Street
Houston, Texas 77002
Fax: 713-890-1429
Attn: Steven A. Webster

and

CSFB Private Equity
11 Madison Avenue
New York, New York 10010
Fax: 917-326-8076
Attn: Ivy Dodes

with a copy to:
Gardere Wynne Sewell, LLP
1000 Louisiana, Suite 3400
Houston, Texas 77002
Attention: N.L. Stevens III
Telefax: 713-276-5807

Such notices, requests, demands, and other communications shall be effective (i) if delivered personally or sent by courier service, upon actual receipt by the intended recipient, or (ii) if sent by telecopy or facsimile transmission, when the answer back is received.

        10.2    Entire Agreement.    This Agreement, together with the Schedules, Exhibits, Annexes, and other writings referred to herein or delivered pursuant hereto, constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, both written and oral, between the parties and their Affiliates with respect to the subject matter hereof.

        10.3    Binding Effect; Assignment; No Third Party Benefit.    This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Except as otherwise expressly provided in this Agreement, neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto without the prior written consent of the other party. Nothing in this Agreement, express or implied, is intended to or shall confer upon any person other than the parties hereto, and their respective heirs, legal representatives, successors, and permitted assigns, any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement.

        10.4    Severability.    If any provision of this Agreement is held to be unenforceable, then this Agreement shall be considered divisible and such provision shall be deemed inoperative to the extent it

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is deemed unenforceable, and in all other respects this Agreement shall remain in full force and effect to the maximum extent permitted by Applicable Law.

        10.5    Injunctive Relief.    The parties hereto acknowledge and agree that irreparable damage would occur in the event any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement, and shall be entitled to enforce specifically the provisions of this Agreement, in any court of the United States or any state thereof having jurisdiction, in addition to any other remedy to which the parties may be entitled under this Agreement or at law or in equity.

        10.6    Governing Law.THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATEOF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.

        10.7    Jurisdiction.    Except as otherwise expressly provided in this Agreement, any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby may be brought in the United States District Court for the Southern District of New York or any other New York State court sitting in New York City, and each of the parties hereby consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 10.01 shall be deemed effective service of process on such party.

        10.8    Counterparts.    This Agreement may be executed by the parties hereto in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same agreement. Each counterpart may consist of a number of copies hereof each signed by less than all, but together signed by all, the parties hereto.

ARTICLE XI
DEFINITIONS

        11.1    Certain Defined Terms.    As used in this Agreement, each of the following terms has the meaning given it in this Article:

        "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 50% or more of the securities having ordinary voting power for the election of directors or other governing body of a corporation or 50% 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.

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        "Ancillary Documents" means each agreement, instrument, and document (other than this Agreement) executed or to be executed by the Company or any Investor in connection with the sale and purchase of the Shares and Warrants and the other transactions contemplated by this Agreement.

        "Applicable Law" means any statute, law, rule, or regulation or any judgment, order, writ, injunction, or decree of any Governmental Entity to which a specified person or property is subject.

        "Assignment Agreement" means the Assignment Agreement dated as of November 21, 2002, by and between Shell Capital Inc. as Assignor and the Investors as Assignees.

        "BOG" means Brigham Oil & Gas, L.P.

        "Business Day" shall mean any day other than a Saturday, a Sunday, or a day on which banking institutions in Austin, Texas are authorized or obligated by law or executive order to close.

        "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time and any successor statute.

        "Common Stock" means the common stock, par value of $.01 per share, of the Company, and such other class of securities as shall represent the common equity of the Company.

        "Debt" shall mean, for any Person the sum of the following (without duplication): (i) all obligations of such Person for borrowed money or evidenced by bonds, debentures, notes or other similar instruments (including principal, interest, fees and charges); (ii) all obligations of such Person (whether contingent or otherwise) in respect of bankers acceptances, letters of credit, surety or other bonds and similar instruments; (iii) all obligations of such Person to pay the deferred purchase price of Property or services (other than for borrowed money) excluding Trade Payables; (iv) all obligations under leases which shall have been, or should have been, in accordance with GAAP, recorded as capital leases in respect of which such Person is liable (whether contingent or otherwise); (v) all obligations under leases (other than capital leases and oil and gas leases) which require such Person or its Affiliate to make payments exceeding $100,000 over the term of such lease, including payments at termination, which are substantially equal to at least eighty percent (80%) of the purchase price of the Property subject to such lease plus interest at an imputed market rate of interest; (vi) all Debt (as described in the other clauses of this definition) of others secured by a Lien on any asset of such Person, whether or not such Debt is assumed by such Person; (vii) all Debt (as described in the other clauses of this definition) of others guaranteed by such Person or in which such Person otherwise assures a creditor against loss of the Debt of others; (viii) all obligations or undertakings of such Person to maintain or cause to be maintained the financial position or covenants of others including without limitation agreements expressed as an agreement to purchase the Debt or Property of others or otherwise; (x) obligations to pay for goods or services whether or not such goods or services are actually received or utilized by such Person; (xi) any capital stock of such Person in which such Person has a mandatory obligation to redeem such stock; (xii) the undischarged balance of any production payment created by such Person or for the creation of which such Person directly or indirectly received payment; and (xiii) all obligations of such Person under Hedging Agreements.

        "Encumbrances" means liens, charges, pledges, options, mortgages, deeds of trust, security interests, claims, restrictions (whether on voting, sale, transfer, disposition, or otherwise), easements, and other encumbrances of every type and description, whether imposed by law, agreement, understanding, or otherwise.

        "Environmental Laws" shall mean any and all Governmental Requirements pertaining to the environment in effect in any and all jurisdictions in which the Company or any Subsidiary is conducting or at any time has conducted business, or where any Oil and Gas Property of the Company or any Subsidiary is located, including without limitation, the Oil Pollution Act of 1990 ("OPA"), the Clean Air Act, as amended, the Comprehensive Environmental, Response, Compensation, and Liability Act of

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1980 ("CERCLA"), as amended, the Federal Water Pollution Control Act, as amended, the Occupational Safety and Health Act of 1970, as amended, the Resource Conservation and Recovery Act of 1976 ("RCRA"), as amended, the Safe Drinking Water ACT, as amended, the Toxic Substances Control Act, as amended, the Superfund Amendments and Reauthorization Act of 1986, as amended, the Hazardous Materials Transportation Act, as amended, and other environmental conservation or protection laws. As used in the provisions hereof relating to Environmental Laws, the term "oil" shall have the meaning specified in OPA, the terms "hazardous substance" and "release" (or "threatened release") have the meanings specified in CERCLA, and the terms "solid waste" and "disposal" (or "disposal") have the meanings specified in RCRA; provided that to the extent the laws of the state in which any Oil and Gas Property of the Company or any Subsidiary is located establish a meaning for "oil", "hazardous substance," "release," "solid waste" or "disposal" which is broader than that specified in either OPA, CERCLA or RCRA, such broader meaning shall apply.

        "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time and any successor statute.

        "ERISA Affiliate" shall mean each trade or business (whether or not incorporated) which together with the Company or any Subsidiary of the Company would be deemed to be a "single employer" within the meaning of section 4001(b)(1) of ERISA or subsections (b), (c), (m) or (o) of section 414 of the Code.

        "ESC" means DLJ ESC II, LP, a Delaware limited partnership.

        "Excepted Liens" shall mean: (i) Liens for taxes, assessments or other governmental charges or levies not yet due or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; (ii) Liens in connection with workmen's compensation, unemployment insurance or other social security, old age pension or public liability obligations not yet due or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; (iii) operators', vendors', carriers', warehousemen's, repairmen's, mechanics', workmen's, materialmen's, construction or other likeLiensarising by operation of law in the ordinary course of business or incident to the exploration, development, operation and maintenance of Oil and Gas Properties or customary landlord's liens, each of which is in respect of obligations that have not been outstanding more than 90 days or which are being contested in good faith by appropriate proceedings and for which adequate reserves have been maintained in accordance with GAAP; (iv) any Liens reserved in leases or farmout agreements for rent or royalties and for compliance with the terms of the farmout agreements or leases in the case of leasehold estates, to the extent that any such Lien referred to in this clause does not materially impair the use of the property covered by such Lien for the purposes for which such property is held or materially impair the value of such property subject thereto; (v) encumbrances (other than to secure the payment of borrowed money or the deferred purchase price of property or services), easements, restrictions, servitudes, permits, conditions, covenants, exceptions or reservations in any rights of way or other property for the purpose of roads, pipelines, transmission lines, transportation lines, distribution lines for the removal of gas, oil, coal or other minerals or timber, and other like purposes, or for the joint or common use of real estate, rights of way, facilities and equipment, and defects, irregularities, zoning restrictions and deficiencies in title of any rights of way or other property which in the aggregate do not materially impair the use of such rights of way or other property for the purposes of which such rights of way and other property are held or materially impair the value of such property subject thereto; (vi) deposits of cash or securities to secure the performance of bids, trade contracts, leases, statutory obligations and other obligations of a like nature incurred in the ordinary course of business; and (vii) Liens (including "Excepted Liens") permitted by or created pursuant to the Senior Credit Agreement and Liens permitted by or created pursuant to the Subordinated Credit Agreement.

        "Exchange Act" means the Securities Exchange Act of 1934, as amended.

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        "First Purchase Agreement" means that certain Securities Purchase Agreement dated as of November 1, 2000, between the Company, MB and ESC.

        "Governmental Entity" means any court or tribunal in any jurisdiction (domestic or foreign) or any public, governmental, or regulatory body, agency, department, commission, board, bureau, or other authority or instrumentality (domestic or foreign).

        "Governmental Requirement" shall mean any law, statute, code, ordinance, order, determination, rule, regulation, judgment, decree, injunction, franchise, permit, certificate, license, authorization or other directive or requirement (in the case of banking regulatory authorities whether or not having the force of law), including, without limitation, Environmental Laws, energy regulations and occupational, safety and health standards or controls, of any Governmental Entity.

        "Hedging Agreements" 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.

        "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

        "Hydrocarbon Interests" shall mean all rights, titles, interests and estates now or hereafter acquired in and to oil and gas leases, oil, gas and mineral leases, or other liquid or gaseous hydrocarbon leases, mineral fee interests, overriding royalty and royalty interests, net profit interests and production payment interests, including any reserved or residual interests of whatever nature.

        "Hydrocarbons" shall mean oil, gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all products refined or separated therefrom.

        "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 (i) the lien or security interest arising from a mortgage, encumbrance, pledge, security agreement, conditional sale or trust receipt or a lease, consignment or bailment for security purposes or (ii) production payments and the like payable out of Oil and Gas Properties. The term "Lien" shall include reservations, exceptions, encroachments, easements, rights of way, covenants, conditions, restrictions, leases and other title exceptions and encumbrances affecting property. For the purposes of this Agreement, a Person shall be deemed to be the owner of any property which it has acquired or holds subject to a conditional sale agreement, or leases under a financing lease or other arrangement pursuant to which title to the Property has been retained by or vested in some other Person in a transaction intended to create a financing.

        "Material Adverse Effect" means, relative to the Company or the Investors, as the case may be, any change, development, or effect (individually or in the aggregate) which is, or is reasonably likely to be, materially adverse (i) to the business, assets, results of operations, condition (financial or otherwise), or prospects of the Company and the Subsidiaries considered as a whole, or the Investors, as the case may be, or (ii) to the ability of the Company or the Investors, as the case may be, to perform on a timely basis any material obligation of the Company or the Investors, as the case may be, under this Agreement or any agreement, instrument, or document entered into or delivered in connection herewith.

        "Material Agreement" means (a) any written agreement, contract, lease, commitment, understanding, instrument or obligation to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary or any of their respective properties may be bound involving total value or consideration or liability in excess of $500,000, (b) any loan or credit agreement, bond, debenture, note, mortgage or indenture by which the Company or any Subsidiary or any of their respective

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properties may be bound, or (c) any agreement set forth as an exhibit to the Company's Form 10-K for the fiscal year ended December 31, 2001.

        "MB" means DLJMB Funding III, Inc., a Delaware corporation.

        "Oil and Gas Properties" shall mean Hydrocarbon Interests; the Properties now or hereafter pooled or unitized with Hydrocarbon Interests; all presently existing or future unitization, pooling agreements and declarations of pooled units and the units created thereby (including without limitation all units created under orders, regulations and rules of any Governmental Authority) which may affect all or any portion of the Hydrocarbon Interests; all operating agreements, contracts and other agreements which relate to any of the Hydrocarbon Interests or the production, sale, purchase, exchange or processing of Hydrocarbons from or attributable to such Hydrocarbon Interests; all Hydrocarbons in and under and which may be produced and saved or attributable to the Hydrocarbon Interests, including all oil in tanks, the lands covered thereby and all rents, issues, profits, proceeds, products, revenues and other incomes from or attributable to the Hydrocarbon Interests; all tenements, hereditaments, appurtenances and Properties in any manner appertaining, belonging, affixed or incidental to the Hydrocarbon Interests; and all Properties, rights, titles, interests and estates described or referred to above, including any and all Property, real or personal, now owned or hereinafter acquired and situated upon, used, held for use or useful in connection with the operating, working or development of any of such Hydrocarbon Interests or Property (excluding drilling rigs, automotive equipment or other personal property which may be on such premises for the purpose of drilling a well or for other similar temporary uses) and including any and all oil wells, gas wells, injection wells or other wells, buildings, structures, fuel separators, liquid extraction plants, plant compressors, pumps, pumping units, field gathering systems, tanks and tank batteries, fixtures, valves, fittings, machinery and parts, engines, boilers, meters, apparatus, appliances, tools, implements, cables, wires, towers, casing, tubing and rods, similar equipment, surface leases, rights-of-way, easements and servitudes together with all additions, substitutions, replacements, accessions and attachments to any and all of the foregoing.

        "Person" or "person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, enterprise, unincorporated organization, or Governmental Entity.

        "Plan" shall mean any employee pension benefit plan, as defined in Section 3(2) of ERISA, which (i) is currently or hereafter sponsored, maintained or contributed to by the Company, any Subsidiary or an ERISA Affiliate or (ii) was at any time during the preceding six calendar years sponsored, maintained or contributed to, by the Company, any Subsidiary or an ERISA Affiliate.

        "Proceeding" means any action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative, any appeal in such an action, suit or proceeding, and any inquiry or investigation that could lead to such an action, suit or proceeding.

        "Reasonable best efforts" means a party's best efforts in accordance with reasonable commercial practice and without the incurrence of unreasonable expense.

        "Rule 144" means Rule 144 promulgated under the Securities Act.

        "Second Purchase Agreement" means that certain Securities Purchase Agreement dated as of March 5, 2001, between the Company, MB, MBP, DOP and ESC.

        "Securities Act" means the Securities Act of 1933, as amended.

        "Senior Credit Agreement" means that certain Amended and Restated Credit Agreement dated as of February 17, 2000, by and between BOG, Bank of Montreal, as Agent, and the Lenders signatory thereto, as amended on October 31, 2000, together with the "Loan Documents" described therein.

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        "Subordinated Credit Agreement" means the Subordinated Credit Agreement dated as of October 31, 2000 by and between BOG, Shell Capital, Inc., as Agent, and the Lenders signatory thereto, together with the "Loan Documents" described therein.

        "Subsidiaries" means Brigham Oil & Gas, L.P.; Brigham, Inc.; Brigham Holdings I, LLC and Brigham Holdings II, LLC.

        "to the best of the Company's knowledge" and similar references to the knowledge of the Company mean the actual knowledge of the executive officers and senior management personnel of the Company after making a reasonable inquiry of individuals responsible for the particular matter.

        "Voting Securities" means shares of Common Stock and any other securities of the Company entitled to vote generally for the election of directors or any other securities (including, without limitation, rights, warrants, and options) convertible into or exchangeable or exercisable for any of the foregoing (whether or not presently convertible, exchangeable, or exercisable).

        IN WITNESS WHEREOF, the parties have executed this Agreement, or caused this Agreement to be executed by their duly authorized representatives, all as of the day and year first above written.

THE COMPANY:
BRIGHAM EXPLORATION COMPANY
By:	/s/  DAVID T. BRIGHAM
	Name: David T. Brigham
	Title: Executive Vice President—Land and Administration

INVESTORS:
DLJ MERCHANT BANKING PARTNERS III, L.P.
By: DLJ MERCHANT BANKING III, INC., its Managing General Partner
By:	/s/  ROBERT CABES
	ROBERT CABES         Attorney-in-Fact
DLJ MERCHANT BANKING III, INC., AS ADVISORY GENERAL PARTNER ON BEHALF OF DLJ OFFSHORE PARTNERS III, C.V.
By:	/s/  ROBERT CABES
	ROBERT CABES         Attorney-in-Fact

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DLJ MERCHANT BANKING III, INC., AS ADVISORY GENERAL PARTNER ON BEHALF OF DLJ OFFSHORE PARTNERS III-1, C.V. AND AS ATTORNEY-IN-FACT FOR DLJ MERCHANT BANKING III, L.P., AS ASSOCIATE GENERAL PARTNER OF DLJ OFFSHORE PARTNERS III-1, C.V.
By:		/s/  ROBERT CABES
		ROBERT CABES         Attorney-in-Fact
DLJ MERCHANT BANKING III, INC., AS ADVISORY GENERAL PARTNER ON BEHALF OF DLJ OFFSHORE PARTNERS III-2, C.V. AND AS ATTORNEY-IN-FACT FOR DLJ MERCHANT BANKING III, L.P., AS ASSOCIATE GENERAL PARTNER OF DLJ OFFSHORE PARTNERS III-2, C.V.
By:		/s/  ROBERT CABES
		ROBERT CABES         Attorney-in-Fact
DLJ MB PARTNERS III GmbH & CO. KG
By:		DLJ MERCHANT BANKING III, L.P., its Managing Limited Partner
By:		DLJ MERCHANT BANKING III, INC., its General Partner
	By:	/s/  ROBERT CABES
		ROBERT CABES Attorney-in-Fact
MILLENNIUM PARTNERS II, L.P.
By:		DLJ MERCHANT BANKING III, INC., its Managing General Partner
	By:	/s/  ROBERT CABES
		ROBERT CABES Attorney-in-Fact
MBP III PLAN INVESTORS, L.P.
By:		DLJ LBO PLANS MANAGEMENT CORPORATION, its Managing General Partner
	By:	/s/  ROBERT CABES
		ROBERT CABES Attorney-in-Fact

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SCHEDULE A

Name	No. of Shares	No. of Warrants
DLJ Merchant Banking Partners III, L.P.	360,450	1,657,241
DLJ Merchant Banking III, Inc., as Advisory General Partner on behalf of DLJ Offshore Partners III, C.V.	19,632	90,262
DLJ Merchant Banking III, Inc., as Advisory General Partner on behalf of DLJ Offshore Partners III-1, C.V. and as attorney-in-fact for DLJ Merchant Banking III, L.P., as Associate General Partner of DLJ Offshore Partners III-1, C.V.	6,571	30,211
DLJ Merchant Banking III, Inc., as Advisory General Partner on behalf of DLJ Offshore Partners III-2, C.V. and as attorney-in-fact for DLJ Merchant Banking III, L.P., as Associate General Partner of DLJ Offshore Partners III-2, C.V.	4,681	21,522
DLJ MB PartnersIII GmbH & Co. KG	3,106	14,280
Millennium Partners II, L.P.	626	2,878
MBP III Plan Investors, L.P.	104,934	482,456

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Exhibit 10.49

SECURITIES PURCHASE AGREEMENT
ARTICLE I TERMS OF THE TRANSACTION
ARTICLE II CLOSING
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF INVESTORS
ARTICLE V ADDITIONAL AGREEMENTS
ARTICLE VI CONDITIONS TO OBLIGATIONS OF THE COMPANY
ARTICLE VII CONDITIONS TO OBLIGATIONS OF INVESTORS
ARTICLE VIII COVENANTS
ARTICLE IX AMENDMENT AND WAIVER
ARTICLE X MISCELLANEOUS
ARTICLE XI DEFINITIONS
SCHEDULE A

EX-10.50

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Exhibit 10.50

REGISTRATION RIGHTS AGREEMENT

        THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as of December 20, 2002, by and among Brigham Exploration Company, a Delaware corporation (the "Company"), and Shell Capital Inc. ("SCI").

RECITALS

        WHEREAS, pursuant to that certain Exchange Agreement (the "Exchange Agreement") dated as of November 21, 2002 between the Company and SCI, the Company has agreed to issue SCI 550,000 shares of the Company's common stock, par value $.01 per share (the "Common Stock");

        WHEREAS, in connection with such issuance, the Company and SCI desire to enter into this Agreement in order to grant the registration rights as set forth below.

AGREEMENT

        1.    Definitions

        For purposes of this Agreement, the following terms have the following meanings:

        (a)  "Form S-3" means such form under the Act as in effect on the date hereof or any registration form under the Act subsequently adopted by the Securities and Exchange Commission (the "SEC") that similarly permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC.

        (b)  "Holder" means any person owning or having the right to acquire Registrable Securities who is a party to this Agreement as of the date hereof or who may be added as a party pursuant to the terms of this Agreement and any assignee thereof who meets the requirements set forth in Section 10.

        (c)  "register,""registered" and "registration" refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Securities Act of 1933, as amended (the "Act"), and the declaration or order of effectiveness of such registration statement or document.

        (d)  "Registrable Securities" means (i) the 550,000 shares of the Common Stock of the Company to be issued to SCI pursuant to the Exchange Agreement and (ii) any Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, such Common Stock, excluding in all cases, however, any Registrable Securities sold by a person in a transaction in which its rights under this Agreement are not assigned. For the purposes of this Agreement, a Registrable Security ceases to constitute a Registrable Security hereunder (i) when such Registrable Security shall have been effectively registered under the Securities Act and disposed of in a public market transaction pursuant to a Registration Statement, (ii) when such Registrable Security shall have been sold pursuant to Rule 144 (or any successor provision) under the Securities Act, (iii) when such Registrable Security shall have been otherwise transferred and a new certificate for such Registrable Security not bearing a legend restricting further transfer shall have been delivered by the Company, (iv) with respect to a particular Holder, at any time when all of such Holder's remaining Registrable Securities can be sold in a single transaction in compliance with Rule 144 under the Securities Act, or (v) when such Registrable Security shall have ceased to be outstanding.

        (e)  "Registrable Securities then outstanding" means the number of shares of Common Stock outstanding which are Registrable Securities.

        (f)    "SEC" means the Securities and Exchange Commission.

        2.    Request for Registration

        (a)  If the Company shall receive a written request from the Holders of at least 50% of the Registrable Securities then outstanding (the "Initiating Holders") that the Company file a registration statement under the Act covering the registration of at least 250,000 of the Registrable Securities (a "Demand Registration"), then the Company shall, within 10 days after the receipt of the Demand Registration, give written notice of such request to all Holders (the "Company Notice") and shall, subject to the limitations set forth below, use its reasonable best efforts to effect as soon as practicable the registration under the Act of all Registrable Securities that the Holders request to be registered in a written request to be given within 30 days of receipt of the Company Notice. The Company Notice shall include reasonable details relating to the proposed registration and the due date for replies.

        (b)  The Company is obligated to effect only one registration pursuant to this Section 2.

        (c)  Notwithstanding the foregoing, if the Company shall furnish to the Initiating Holders requesting a registration pursuant to this Section 2 within 30 days of receiving the Demand Registration a certificate signed by the President of the Company stating that in the good faith Judgment of the Board of Directors of the Company it would be seriously detrimental to the Company and its stockholders for such registration statement to be filed and it is therefore essential to defer the filing of such registration statement, the Company shall have the right to defer such filing for up to 2 periods of not more than 45 days each after receipt of the Demand Registration; provided, however, that the Company may not use this right more than once (for a total of up to 90 days) in any 12-month period; and provided, further that the Company shall promptly notify the Initiating Holders requesting a registration pursuant to this Section 2 of any decision by the Company to abandon or indefinitely delay such public offering. During any such delay the Initiating Holders may withdraw the Demand Registration and the consequence of such withdrawal is that the Company's obligation under Section 2(b) hereof is not satisfied.

        3.    Company Registration

        If the Company proposes to register (including for this purpose a registration effected by the Company for stockholders ("Requesting Holders") other than the Holders) any of its stock or other securities under the Act in connection with the public offering of such securities solely for cash (other than a registration relating solely to the sale of securities to participants in a Company stock plan, or a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of Registrable Securities), the Company shall, at each such time, promptly give each Holder written notice of such registration. Upon the written request of each such Holder given within 20 days after receipt of such notice by such Holder from the Company, the Company shall, subject to the provisions of the following sentence, use its reasonable best efforts to cause to be registered under the Act all of the Registrable Securities that each such Holder has requested to be registered. If the managing underwriter of a proposed public offering shall advise the Company in writing that, in its opinion, the distribution of the Registrable Securities requested to be included in the registration concurrently with the securities being registered by the Company or any Requesting Holder would materially and adversely affect the distribution of such securities by the Company or such Requesting Holders, then all selling security holders (but not the Company or the Requesting Holders) shall reduce the amount of Registrable Securities of each intended to be distributed through such offering on a pro rata basis to the greatest aggregate amount which, in the opinion of such managing underwriter, would not materially and adversely affect the distribution of such securities.

        In the event that the Company decides for any reason not to complete the registration of shares of Common Stock other than Registrable Securities, the Company shall have no obligation under this Section 3 to continue with the registration of Registrable Securities. Any request pursuant to this

2

Section 3 to register Registrable Securities as part of an underwritten public offering of Common Stock shall specify that such Registrable Securities are to be included in the underwriting on the same terms and conditions as the shares of Common Stock otherwise being sold through underwriters under such registration. Notwithstanding any provision herein, the rights of all Holders under this Section 3 are subject to the express limitations contained in the registration rights agreements in effect on the date hereof between the Company and other parties, all of which are on file with the SEC on the date hereof.

        4.    Obligations of the Company

        Whenever required under this Agreement to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:

        (a)  Prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such registration statement to become effective, and, upon the request of the Holders of 50% of the Registrable Securities registered thereunder, keep such registration statement effective for up to one hundred twenty (120) days.

        (b)  Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Act with respect to the disposition of all securities covered by such registration statement.

        (c)  Furnish to the Holders such copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Act and such other documents as they may reasonably request to facilitate the disposition of all securities covered by such registration statement

        (d)  Use commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or blue sky laws of such jurisdictions as shall be reasonably requested by the Holders, provided that the Company shall not be required to qualify to do business or to file a general consent to service of process in any such states or jurisdictions.

        (e)  In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter(s) of such offering. Each Holder participating in such registration shall also enter into and perform its obligations under such an agreement.

        (f)    Notify each Holder of Registrable Securities covered by such registration statement, during the time when a prospectus is required to be delivered under the Act, of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing.

        (g)  At the request of any Holder selling Registrable Securities in such registration, furnish on the date that such Registrable Securities are delivered to the underwriters for sale in connection with such registration (i) an opinion, dated such date, of legal counsel representing the Company for the purposes of such registration, in form and substance as is customarily given by Company counsel to underwriters in an underwritten public offering, addressed to the underwriters and (ii) a letter, dated such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters.

        (h)  List the Registrable Securities being registered on any national securities exchange on which a class of the Company's equity securities is listed or qualify the Registrable Securities being

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registered for inclusion on Nasdaq if the Company does not have a class of equity securities listed on a national securities exchange.

        5.    Furnish Information

        It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Agreement that the selling Holders shall furnish to the Company such information regarding themselves, the Registrable Securities held by them and the intended method of disposition of such securities as shall be reasonably required to effect the registration of their Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request.

        6.    Expenses of Registration

        In connection with any registration pursuant to this Agreement, the Company shall be responsible for the payment of all reasonable expenses of the registration, with the exception of (i) underwriting discounts and commissions, which shall be paid by the Company, the Holders and any other selling ho lders of the Company's securities in proportion to the aggregate value of the securities offered for sale by each of them, (ii) the fees and expenses of counsel to the selling Holders The expenses to be paid by the Company shall include, without limitatio n, all registration, filing and qualification fees, printing and accounting fees, and the fees and disbursements of counsel for the Company; provided, however, that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 2 if the registration request is subsequently withdrawn (other than a withdrawal due to a material adverse change in the Company's business or financial condition or pursuant to the last sentence of Section 2(c)), unless, in the eve nt of a registration initiated pursuant to the provisions of Section 2, the Holders of all of the Registrable Securities agree to forfeit the right to one demand registration.

        7.    Delay of Registration

        No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any registration of the Company as the result of any controversy that might arise with respect to the interpretation or implementation of this Agreement.

        8.    Indemnification

        In the event any Registrable Securities are included in a registration statement under this Agreement:

        (a)  To the extent permitted by law, the Company will indemnify and hold harmless each Holder, any underwriter (as defined in the Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Act or the Securities Exchange Act of 1934, as amended (the "1934 Act"), against any actual expenses (including legal fees and costs), losses, claims, damages (including settlement amounts) or liabilities joint or several) (collectively, "Losses") to which they may become subject under the Act, the 1934 Act or other federal or state law, insofar as such Losses arise out of or are based upon any of the following statements, omissions or violations (collectively, a "Violation") relating to or in connections with the Registration Statement: (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein, or any amendments or supplements thereto, untrue in light of the circumstances under which they were made, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or (iii) any violation or alleged violation by the Company of the Act, the 1934 Act, any state securities law or any rule or regulation promulgated under the Act, the 1934 Act or any state securities law. The Company will

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reimburse (as incurred) each such Holder, underwriter or controlling person for any Losses reasonably incurred by them in connection with investigating or defending any Violations; provided, however, that the indemnity agreement contained in this Section 8(a) shall not apply to amounts paid in settlement of any claims for Violations if such settlement is made without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable in any such case for any Losses that arise out of or are based upon a Violation that occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by, or on behalf of, any such Holder, underwriter or controlling person.

        (b)  To the extent permitted by law, each selling Holder will indemnify and hold harmless the Company and its officers, directors, agents and employees, each underwriter and each other Holder selling securities in such in registration statement, and any person who controls any of the foregoing within the meaning of the Act or the 1934 Act, against any Losses to which the Company or such officer, director, agent, employee, or underwriter or other selling Holder or controlling person may become subject under the Act, the 1934 Act or other federal or state law, insofar as such Losses arise out of or are based upon any Violation that occurs in reliance upon and in conformity with written information furnished by, or on behalf of, such Holder expressly for use in connection with such registration; and each such Holder will reimburse any Losses reasonably incurred by the Company or its officers, directors, agents, employees, or underwriters or other selling Holders or controlling persons in connection with investigating or defending any Violations; provided, however, that (i) the indemnity agreement contained in this Section 8(b) shall not apply to amounts paid in settlement of any claims for Violations if such settlement is made without the consent of the Holder, which consent shall not be unreasonably withheld and (ii) the obligations of such Holders shall be limited to an amount equal to the gross proceeds before expenses and commissions to each such Holder of Registrable Securities sold as contemplated herein.

        (c)  Promptly after receipt of notice of the commencement of any action (including any governmental action), an indemnified party will, if a claim is to be made against any indemnifying party under this Section 8, deliver to the indemnifying party a written notice of the commencement, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly notified to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party shall have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying Party, if, in the opinion of counsel for the indemnifying party, representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in the proceeding. The failure to deliver written notice to the indemnifying party within a reasonable period of time after notice of the commencement of any such action shall relieve such indemnifying party of any liability to the indemnified party under this Section 8 to the extent such failure is prejudicial to its ability to defend such action, but the omission to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 8.

        (d)  If the indemnification provided for in this Section 8 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any Losses, then the indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such Losses in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the Violations that resulted in such Losses as well as any other relevant equitable considerations; provided, that, in no event shall any

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contribution by a Holder under this Section 8(d) exceed the gross proceeds before expenses and commissions to each such Holder, except in the case of willful fraud by such Holder. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the Violation resulting in such Losses relates to information supplied by the indemnifying party or by the indemnifying party and the parties' relative intent, knowledge, access to information, and opportunity to correct or prevent such Violation.

        (e)  Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.

        (f)    The obligations of the Company and Holders under this Section 8 shall survive the completion of any offering of Registrable Securities and the termination of Registration Rights pursuant to Sectio n 12.

        9.    Reports Under the Act

        With a view to making available to the Holders the benefits of SEC Rule 144 promulgated under the Act and any other rule or regulation of the SEC that may at an time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company agrees to use commercially reasonable efforts to:

        (a)  Make and keep public information available, as those terms are understood and defined in SEC Rule 144, at all times after the effective date of the first registration statement filed by the Company for the offering of its securities to the general public;

        (b)  File with the SEC in a timely manner all reports and other documents required of the Company under the Act and the 1934 Act; and

        (c)  Furnish to any Holder, so long as the Holder owns any Registrable Securities, promptly upon request (i) a written statement by the Company that it has complied with the reporting requirements of the 1934 Act (at any time after the date on which it becomes subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC that permits the selling of any such securities without registration or pursuant to such Form S-3.

        10.  Assignment of Registration Rights

        The rights to cause the Company to register Registrable Securities pursuant to this Agreement may be assigned by a Holder to a transferee or assignee of such securities who shall, upon such transfer or assignment, be deemed a "Holder" under this Agreement; provided that the Company is, within a reasonable period of time after such transfer, furnished with written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned; provided, further, that such assignment shall be effective only if immediately following such transfer the further disposition of such securities by the transferee or assignee is restricted under the Act and that such transferee or assignee is (a) an entity controlling, controlled by or under common control with any Holder that is not an individual or (b) a transferee or assignee that after the transfer or assignment holds at least one-third of the Registrable Securities or 175,000 of the Registrable Securities, whichever is greater.

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        11.  "Market Standoff" Agreement

        The Holders hereby agree that they shall not, to the extent requested by the Company and an underwriter of Common Stock (or other securities) of the Company, sell or otherwise transfer or dispose (other than to transferees who agree to be similarly bound) of any Registrable Securities for 180 days following the effective date of a registration statement of the Company filed under the Act; provided, however, that the foregoing shall not be effective unless all officers and directors of the Company (whether or not pursuant to this Agreement) enter into similar agreements and the Company has used all reasonable efforts to obtain similar agreements from all holders of at least 1% of the Company's then outstanding Common Stock.

        To enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to the Registrable Securities of the Holders (and the shares or securities of every other person subject to the foregoing restriction) until the end of such period.

        12.  Termination of Registration Rights

        The registration rights granted under Sections 2, 3 and 4 of this Agreement shall terminate as to each Holder on the third (3rd) anniversary of the date of this Agreement.

        13.  Miscellaneous

        13.1 Notices

        Any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given (a) upon personal delivery to the party to be notified, (b) upon confirmation of receipt by fax by the party to be notified, (c) one business day after deposit with a reputable overnight courier, prepaid for overnight delivery and addressed as set forth in (d), or (d) three days after deposit with the United States Post Office, postage prepaid, registered or certified with return receipt requested and addressed to the party to be notified at the address indicated for such party on the signature page, or at such other address as such party may designate by 10 days' advance written notice to the other parties given in the foregoing manner.

        13.2 Amendments and Waivers

        Any term of this Agreement may be amended and the observance of any term may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the holders of a majority of the Registrable Securities then outstanding; provided that no amendment may have the effect of excluding any Holder from participating in any registratio n covered hereby or grant additional rights to any Holder that are not granted to all Holders, unless the Holder adversely affected has executed the amendment. Additional Holders may be added to this Agreement with such consent by amending Schedule A and adding a signature page executed by such additional Holder.

        13.3 Governing Law; Jurisdiction; Venue

        This Agreement shall be governed by and construed under the laws of the State of New York without regard to principles of conflict of laws. The parties irrevocably consent to the jurisdiction and venue of the state and federal courts located in New York City in connection with any action relating to this Agreement.

        13.4 Successors and Assigns

        The terms and conditions of this Agreement shall inure to the benefit of and be binding on the respective successors and assigns of the parties as provided herein.

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        13.5.Severability

        If one or more provisions of this Agreement are held to be-unenforceable under applicable law, such provision shall be excluded from this Agreement, and the balance of this Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

        13.6 Entire Agreement; Counterparts

        This Agreement constitutes the entire agreement between the parties about its subject and supersedes all prior agreements. This Agreement may be executed in two or more counterparts, which together shall constitute one instrument.

        [Signature page follows]

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        IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

BRIGHAM EXPLORATION COMPANY
By:	/s/  DAVID T. BRIGHAM
Address:
Brigham Exploration Company 6300 Bridge Point Parkway Building 2, Suite 500 Austin, TX 78730 Attention: Chief Financial Officer Fax: 512-427-3400
SHELL CAPITAL INC.
By:	/s/  CHRISTOPHER HILGERT
Address:
	Shell Capital Inc. Suite 5000 One Shell Plaza 910 Louisiana Houston, Texas 77002
	Telephone: 713-241-7010 Facsimile: 713-241-5222
with a copy to:
	Richard W. Bohan Senior Counsel One Shell Plaza 910 Louisiana Room 4804 Houston, Texas 77002
	Telephone: 713-241-2931 Facsimile: 713-241-5362

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and a copy to:
	The Royal Bank of Scotland plc 101 Park Avenue, 10th Floor New York, New York 10178
	Attention: Michael Loughney, Esq.
	Telephone: 212-401-3200 Facsimile: 212-401-3738

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Schedule A
to Registration Rights Agreement

Holder Name	Number of Shares
Shell Capital Inc., a Delaware corporation	550,000

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Exhibit 10.50

REGISTRATION RIGHTS AGREEMENT
RECITALS
AGREEMENT
Schedule A to Registration Rights Agreement

EX-10.51

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Exhibit 10.51

SECOND AMENDMENT TO
REGISTRATION RIGHTS AGREEMENT

        This Second Amendment to Registration Rights Agreement (this "Amendment") is entered into as of December 21, 2002, by and among Brigham Exploration Company, a Delaware corporation (the "Company"), and the Credit Suisse First Boston entities listed on Schedule A hereto (the "CSFB Entities").

RECITALS

        WHEREAS, pursuant to that certain Registration Rights Agreement, dated as of November 1, 2000 (the "Agreement"), by and among the Company, DLJMB Funding III, Inc., a Delaware corporation, and DLJ ESC II, L.P., a Delaware limited partnership (collectively, the "November 2000 Investors"), the Company provided certain registration rights to the November 2000 Investors regarding shares of the Company's common stock issuable upon exercise of warrants issued by the Company to the November 2000 Investors;

        WHEREAS, pursuant to that certain First Amendment to Registration Rights Agreement, dated March 5, 2001 (the "March 2002 Amendment"), by and among the Company, each of the November 2000 Investors, DLJ Merchant Banking Partners III, L.P., a Delaware limited partnership, and DLJ Merchant Banking III, Inc., as Advisory General Partner on behalf of DLJ Offshore Partners III, C.V., a Netherlands Antilles limited partnership (collectively, the "March 2001 Investors"), the Company provided certain registration rights under the Agreement to the March 2001 Investors regarding shares of the Company's common stock issuable upon exercise of warrants issued by the Company to the March 2001 Investors;

        WHEREAS, each of the November 2000 Investors is a party to a certain Warrant Certificate (the "November 2000 Warrant Certificates"), dated as of November 1, 2000, by and between the Company and such investor;

        WHEREAS, each of the March 2001 Investors is a party to a certain Warrant Certificate (the "March 2001 Warrant Certificates"), dated as of March 5, 2001, by and between the Company and such investor;

        WHEREAS, each of DLJ Merchant Banking Partners III, L.P., a Delaware limited partnership; DLJ Merchant Banking III, Inc., as Advisory General Partner on behalf of DLJ Offshore Partners III, C.V., a Netherlands Antilles limited partnership; DLJ Merchant Banking III, Inc., as Advisory General Partner on behalf of DLJ Offshore Partners III-1, C.V. and as attorney-in-fact for DLJ Merchant Banking III, L.P., as Associate General Partner of DLJ Offshore Partners III-1, C.V., a Netherlands Antilles limited partnership; DLJ Merchant Banking III, Inc., as Advisory General Partner on behalf of DLJ Offshore Partners III-2, C.V. and as attorney-in-fact for DLJ Merchant Banking III, L.P., as Associate General Partner of DLJ Offshore Partners III-2, C.V., a Netherlands Antilles limited partnership; DLJ MB Partners III GmbH & Co. KG, a German limited partnership; Millennium Partners II, L.P., a Delaware limited partnership; and MBP III Plan Investors, L.P., a Delaware limited partnership (collectively, the "December 2002 Investors, and together with the November 2000 Investors and the March 2001 Investors, the "Investors") is a party to a certain Warrant Certificate (the "December 2002 Warrant Certificates," and together with the November 2000 Warrant Certificates and the March 2001 Warrant Certificates, the "Warrant Certificates"), dated as of December 20, 2002, by and between the Company and such investor;

        WHEREAS, the December 2002 Warrant Certificates were executed and delivered in connection with the consummation of transactions contemplated by that certain Securities Purchase Agreement, dated December 20, 2002, by and among the Company and the December 2002 Investors;

        WHEREAS, pursuant to the Warrant Certificates, each Holder (as defined in the Agreement) has been issued a warrant (the "Warrant") to purchase shares of the Company's common stock, par value $0.01 per share (the "Company's Common Stock");

        WHEREAS, the December 2002 Investors and Shell Capital Inc. ("SCI") are parties to that certain Assignment Agreement, dated as of November 21, 2002 (the "Assignment Agreement"), whereby the December 2002 Investors have purchased from SCI a note payable by Brigham Oil & Gas, L.P. in the principal amount of $10,000,000 (the "Note") that is convertible into 2,564,102 shares of the Company's Common Stock;

        WHEREAS, the Company and the December 2002 Investors are parties to that certain Omnibus Agreement, dated as of December 20, 2002 (the "Omnibus Agreement"), whereby the December 2002 Investors have converted the Note into 2,564,102 shares of the Company's Common Stock; and

        WHEREAS, to induce the Investors to enter into the Warrant Certificates, the Securities Purchase Agreement, and the Omnibus Agreement, the Company has agreed to provide registration rights with respect to the shares issuable upon exercise of the Warrants and upon conversion under the Omnibus Agreement;

        NOW, THEREFORE, for and in consideration of the foregoing, and other good and valuable consideration, the sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree as follows:

1.    Amendments.

        (a)  The "RECITALS" section of the Agreement is amended by deleting such section entirely and replacing it with the following:

"WHEREAS, each of DLJMB Funding III, Inc. ("MB") and DLJ ESC II, L.P. ("ESC") (MB and ESC are sometimes referred to collectively as the "November 2000 Investors") is a party to a certain Warrant Certificate (the "November 2000 Warrant Certificates"), dated as of November 1, 2000, by and between the Company and such investor;

WHEREAS, each of the November 2000 Investors, DLJ Merchant Banking Partners III, L.P. ("MBP") and DLJ Merchant Banking III, Inc., as Advisory General Partner on behalf of DLJ Offshore Partners III, C.V. ("DOP") (the November 2000 Investors, MBP and DOP are sometimes referred to collectively as the "March 2001 Investors") is a party to a certain Warrant Certificate (the "March 2001 Warrant Certificates"), dated as of March 5, 2001, by and between the Company and such investor;

WHEREAS, each of MBP; DOP; DLJ Merchant Banking III, Inc., as Advisory General Partner on behalf of DLJ Offshore Partners III-1, C.V. and as attorney-in-fact for DLJ Merchant Banking III, L.P., as Associate General Partner of DLJ Offshore Partners III-1, C.V. ("DOP-1"); DLJ Merchant Banking III, Inc., as Advisory General Partner on behalf of DLJ Offshore Partners III-2, C.V. and as attorney- in-fact for DLJ Merchant Banking III, L.P., as Associate General Partner of DLJ Offshore Partners III-2, C.V. ("DOP-2"); DLJ MB Partners III GmbH & Co. KG ("MBP GmbH"); Millennium Partners II, L.P. ("MPII"); and MBP III Plan Investors, L.P. ("MPIII") (MBP, DOP, DOP-1, DOP-2, MBP GmbH, MPII and MPIII are sometimes referred to collectively as the "December 2002 Investors," and together with the November 2000 Investors and the March 2001 Investors, the "Investors") is a party to a certain Warrant Certificate (the "December 2002 Warrant Certificates," and together with the November 2000 Warrant Certificates and the March 2001 Warrant Certificates, the "Warrant Certificates"), dated as of December 20, 2002, by and between the Company and such investor;

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WHEREAS, the November 2000 Warrant Certificates were executed and delivered to the November 2000 Investors in connection with the consummation of transactions contemplated by that certain Securities Purchase Agreement, dated as of November 1, 2000, by and among the Company and the November 2000 Investors;

WHEREAS, the March 2001 Warrant Certificates were executed and delivered in connection with the consummation of transactions contemplated by that certain Securities Purchase Agreement, dated as of March 5, 2001, by and among the Company and the March 2001 Investors;

WHEREAS, the December 2002 Warrant Certificates were executed and delivered in connection with the consummation of transactions contemplated by that certain Securities Purchase Agreement, dated December 20, 2002, by and among the Company and the December 2002 Investors;

WHEREAS, pursuant to the Warrant Certificates, each Holder (as defined in the Agreement) has been issued a warrant (the "Warrant") to purchase shares of the Company's common stock, par value $0.01 per share (the "Company's Common Stock");

WHEREAS, the December 2002 Investors and Shell Capital Inc. ("SCI") are parties to that certain Assignment Agreement, dated as of November 21, 2002 (the "Assignment Agreement"), whereby the December 2002 Investors have purchased from SCI a note payable by Brigham Oil & Gas, L.P. in the principal amount of $10,000,000 (the "Note") that is convertible into 2,564,102 shares of the Company's Common Stock;

WHEREAS, the Company and the December 2002 Investors are parties to that certain Omnibus Agreement, dated as of December 20, 2002 (the "Omnibus Agreement"), whereby the December 2002 Investors have converted the Note into 2,564,102 shares of the Company's Common Stock; and

WHEREAS, to induce the Investors to enter into the Warrant Certificates, the Securities Purchase Agreement, and the Omnibus Agreement, the Company has agreed to provide registration rights with respect to the shares issuable upon exercise of the Warrants and upon conversion under the Omnibus Agreement;"

        (b)  The definition of Registrable Securities in Section 1(d) of the Agreement is amended by deleting such Section 1(d) entirely and replacing it with the following:

"(d) "Registrable Securities" means (i) the Common Stock of the Company issued upon exercise of the Warrants or issuable in connection with the future exercise of the Warrants; (ii) the Common Stock of the Company issued in connection with the Omnibus Agreement; and (iii) any Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, such Warrants or Common Stock, excluding in all cases, however, any Registrable Securities sold by a person in a transaction in which its rights under this Agreement are not assigned;"

        (c)  Section 2(a) of the Agreement is amended by deleting such Section 2(a) entirely and replacing it with the following:

"(a) If the Company shall receive a written request from the Holders of at least 25% of the Registrable Securities then outstanding (the "Initiating Holders") that the Company file a registration statement under the Act covering the registration of at least 25% of the Registrable Securities, then the Company shall (i) within 10 days after the receipt of such request, give written notice of such request to all Holders; (ii) subject to the limitations set forth below, file with the SEC a registration statement within 60 days after the receipt of such

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request, which registration statement shall cover all Registrable Securities that the Holders request to be registered within 30 days of receipt of the Company's notice; and (iii) use its best efforts to cause such registration statement to be declared effective on or prior to 120 days following the registration request."

        (d)  Section 2(b) of the Agreement is amended by deleting such Section 2(b) entirely and replacing it with the following:

"(b) The Company is obligated to effect only three registrations pursuant to this Section 2."

        (e)  Section 4(a) of the Agreement is amended by deleting such Section 4 entirely and replacing it with the following:

"(a) If the Company shall receive a written request from the Holders of at least 25% of the Registrable Securities then outstanding that the Company effect a registration on Form S-3 and the reasonably anticipated aggregate offering price to the public would equal or exceed $2,000,000, then the Company shall (i) within 10 days after the receipt of such request, give written notice of such request to all Holders; (ii) subject to the limitations set forth below, file with the SEC a Form S-3 within 60 days after the receipt of such request, which Form S-3 shall cover all Registrable Securities that the Holders request to be registered within 30 days of receipt of the Company's notice; and (iii) use its best efforts to cause such Form S-3 to be declared effective on or prior to 120 days following the registration request."

        (f)    Section 5(a) of the Agreement is amended by deleting such Section 5(a) entirely and replacing it with the following:

"(a) Prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such registration statement to be declared effective and, upon the request of the Holders of 25% of the Registrable Securities registered thereunder, keep such registration statement continuously effective until the earlier of one year or until the first date when all Registrable Securities covered by a registration statement shall have been sold or otherwise disposed of by the Holders whether pursuant to a registration statement or otherwise;"

        (g)  Section 8(a) of the Agreement is amended by deleting such Section 8(a) entirely and replacing it with the following:

"(a) The Holders requesting registration under Section 2 must distribute the Registrable Securities covered by their request by means of a public offering. Simultaneously with making the request for registration under Section 2(a), the Initiating Holders shall provide the Company with the names of one or more reputable national or regional underwriters who have indicated a willingness to underwrite the offering, and the Company shall use its best efforts to enter into an underwriting agreement in customary form and reasonably acceptable to the Holders with one or more of such underwriters. Any failure of the Initiating Holders to provide underwriter information to the Company, or any failure by such underwriter(s) to proceed with the offering on customary terms, shall relieve the Company of its obligation to file such registration statement within 60 days after receipt of the registration request, though the Company shall still be obligated to use its reasonable best efforts to effect the registration as soon as practicable using such alternative underwriters as shall be identified by the Initiating Holders and reasonably acceptable to the Company. The right of any Ho lder to include its Registrable Securities in such registration under Section 2 shall be conditioned upon such Holder's participation in such underwriting and the inclusion of such Holder's Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their Registrable Securities through such underwriting shall (together with the Company as provided in Section 5(e)) enter into an underwriting agreement in customary

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form with the underwriter or underwriters selected for such underwriting by a majority in interest of the Initiating Holders. Notwithstanding any other provision of Section 2, if the underwriter advises the Initiating Holders in writing that marketing factors require a limitation of the number of shares to be underwritten, then the Initiating Holders shall so advise all Holders of Registrable Securities which would otherwise have been underwritten pursuant to Section 2, and the number of shares of Registrable Securities that may be included in the registration shall be apportioned first pro rata among the selling Holders, including the Initiating Holders, according to the total amount of Registrable Securities requested to be sold in such registration by such Holders, then to the Company and then pro rata among any other selling stockholders according to the total amount of securities otherwise entitled to be included therein owned by each such selling stockholder, or in such other proportions as shall mutually be agreed to by such selling stockholders."

        (h)  Schedule A to the Agreement is amended by deleting such Schedule A entirely and replacing it with Schedule A to this Amendment.

2.    No Other Changes.    Except as explicitly amended by this Amendment, the terms, conditions, rights and obligations under the Agreement shall remain in full force and effect.

3.    Counterparts.    This Amendment may be executed by the parties hereto in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same agreement.

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        IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date set forth above.

BRIGHAM EXPLORATION COMPANY
By:	/s/  DAVID T. BRIGHAM
Name:	David T. Brigham
Title:	Executive Vice President—Land and Administration
Address: Brigham Exploration Company 6300 Bridge Point Parkway Building 2, Suite 500 Austin, TX 78730 Attention: Chief Financial Officer Fax: 512-427-3400
DLJ MB FUNDING III, INC.
	By:	/s/  ROBERT CABES      ROBERT CABES       Attorney-in-Fact
DLJ ESC II, LP
By: DLJ LBO PLANS MANAGEMENT CORPORATION, its general partner
	By:	/s/  ROBERT CABES      ROBERT CABES       Attorney-in-Fact
DLJ MERCHANT BANKING PARTNERS III, L.P.
By:	DLJ MERCHANT BANKING III, INC., its Managing General Partner
	By:	/s/  ROBERT CABES      ROBERT CABES       Attorney-in-Fact

DLJ MERCHANT BANKING III, INC., AS ADVISORY GENERAL PARTNER ON BEHALF OF DLJ OFFSHORE PARTNERS III, C.V.
	By:	/s/  ROBERT CABES      ROBERT CABES       Attorney-in-Fact
DLJ MERCHANT BANKING III, INC., AS ADVISORY GENERAL PARTNER ON BEHALF OF DLJ OFFSHORE PARTNERS III-1, C.V. AND AS ATTORNEY-IN-FACT FOR DLJ MERCHANT BANKING III, L.P., AS ASSOCIATE GENERAL PARTNER OF DLJ OFFSHORE PARTNERS III-1, C.V.
	By:	/s/  ROBERT CABES      ROBERT CABES       Attorney-in-Fact
DLJ MERCHANT BANKING III, INC., AS ADVISORY GENERAL PARTNER ON BEHALF OF DLJ OFFSHORE PARTNERS III-2, C.V. AND AS ATTORNEY-IN-FACT FOR DLJ MERCHANT BANKING III, L.P., AS ASSOCIATE GENERAL PARTNER OF DLJ OFFSHORE PARTNERS III-2, C.V.
	By:	ROBERT CABES       Attorney-in-Fact
DLJ MB PARTNERS III GmbH & CO. KG
By: DLJ MERCHANT BANKING III, L.P., its Managing Limited Partner
	By:	DLJ MERCHANT BANKING III, INC., its General Partner
	By:	/s/  ROBERT CABES      ROBERT CABES       Attorney-in-Fact

MILLENNIUM PARTNERS II, L.P.
By: DLJ MERCHANT BANKING III, INC., its Managing General Partner
	By:	/s/  ROBERT CABES      ROBERT CABES       Attorney-in-Fact
MBP III PLAN INVESTORS, L.P.
By: DLJ LBO PLANS MANAGEMENT CORPORATION, its Managing General Partner
	By:	/s/  ROBERT CABES      ROBERT CABES       Attorney-in-Fact
ADDRESSES FOR NOTICES TO CSFB ENTITIES:
Global Energy Partners 1100 Louisiana Street Houston, Texas 77002 Fax: 713-890-1429 Attn: Steven A. Webster
and
CSFB Private Equity 11 Madison Avenue New York, New York 10010 Fax: 212-448-3502 Attn: Dorian S. Forshner

Schedule A
to Registration Rights Agreement

	Number of Shares
Holder Name	November 1, 2000	March 5, 2001	December 20, 2002
DLJ Merchant Banking Partners III, L.P.	4,681,393	1,478,337	1,657,241
DLJ MB Funding III, Inc	125,748	39,709	- -0-
DLJ ESC II, LP	1,409,326	445,048	- -0-
DLJ Merchant Banking III, Inc., as Advisory General Partner on behalf of DLJ Offshore Partners III, C.V.	255,680	80,741	90,262
DLJ Merchant Banking III, Inc., as Advisory General Partner on behalf of DLJ Offshore Partners III-1, C.V. and as attorney-in-fact for DLJ Merchant Banking III, L.P., as Associate General Partner of DLJ Offshore Partners III-1, C.V.	85,360	26,956	30,211
DLJ Merchant Banking III, Inc., as Advisory General Partner on behalf of DLJ Offshore Partners III-2, C.V. and as attorney-in-fact for DLJ Merchant Banking III, L.P., as Associate General Partner of DLJ Offshore Partners III-2, C.V.	60,807	19,200	21,522
DLJ MB Partners III GmbH & Co. KG	40,340	12,741	14,280
Millennium Partners II, L.P.	8,013	2,531	2,878
MBP III Plan Investors, L.P.	- -0-	- -0-	482,456
Total	6,666,667	2,105,263	2,298,850

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Exhibit 10.51

SECOND AMENDMENT TO REGISTRATION RIGHTS AGREEMENT
RECITALS
Schedule A to Registration Rights Agreement

EX-10.52

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Exhibit 10.52

BRIGHAM EXPLORATION COMPANY
Stockholders Voting Agreement

        This STOCKHOLDERS VOTING AGREEMENT, dated December 20, 2002 (this "Agreement"), is made and entered into by and among Brigham Exploration Company, a Delaware corporation (the "Company"), the Credit Suisse First Boston entities listed on Schedule A hereto (the "CSFB Investors"), and the following stockholders of the Company (the "Stockholders"): Ben M. and Anne L. Brigham, individual residents of Travis County, Texas, Harold D. Carter, a resident of Dallas County, Texas, General Atlantic Partners III, L.P., a Delaware limited partnership, GAP-Brigham Partners, L.P., a Delaware limited partnership, GAP Coinvestment Partners II, L.P., a Delaware limited partnership, Aspect Resources, LLC, a Colorado limited liability company, and the individual officers of the Company listed on Schedule I hereto.

W I T N E S S E T H:

        WHEREAS, the Company and the CSFB Investors propose to enter into a Securities Purchase Agreement concurrently with the execution hereof (the "Purchase Agreement"), pursuant to which the Company will issue and sell to the CSFB Investors an aggregate of up to 500,000 shares of its Series B Preferred Stock and warrants (the "Warrants") to acquire 2,298,850 shares (the "Warrant Shares") of its common stock (the "Common Stock");

        WHEREAS, the Warrants contain certain anti-dilution provisions which, under the Nasdaq Market Rules, may not be enforceable until approved by the company's stockholders;

        WHEREAS, the Company has agreed to seek such approval at its annual stockholders' meeting to be held on or before May 31, 2003; and

        WHEREAS, as a condition to the agreement of the CSFB Investors to enter into the Purchase Agreement, the Company and the Stockholders have agreed to enter into this Agreement to provide for certain agreements relating to approval of the terms of the Warrants thereof;

        NOW, THEREFORE, in consideration of the foregoing and the mutual agreements set forth herein, the parties to this Agreement hereby agree as follows:

        1.    Agreement to Vote Shares.    Each Stockholder agrees that, at any special or annual meeting of stockholders of the Company, such Stockholder shall vote all shares of Common Stock registered in its, his or her name or beneficially owned by it, him or her as of the record date of the meeting at which the matter is considered (including without limitation any and all other capital stock of the Company legally or beneficially acquired by such Stockholder after the date hereof) to approve and ratify the Warrants and any future adjustments to the exercise price pursuant to the terms of the Warrants. Each Stockholder represents to the CSFB Investors that as of the date hereof such Stockholder owns the number of outstanding shares of Common Stock set forth opposite such Stockholder's name on the attached Schedule I.

        2.    Successors, Assigns and Transferees.    The terms and provisions of this Agreement shall not bind, inure to the benefit of or be enforceable by or against the successors, assigns or transferees of each of the parties hereto. No party hereto may assign its rights under this Agreement.

        3.    Entire Agreement; Amendments.    This Agreement, and such additional instruments as may be concurrently executed and delivered pursuant to this Agreement, constitutes the entire understanding of the parties with respect to its subject matter. There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings other than those expressly set forth herein or in

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the documents delivered concurrently herewith. This Agreement may be amended only by a written instrument duly executed by all the parties hereto.

        4.    Headings.    The section headings contained in this Agreement are for reference purposes only and shall not effect in any way the meaning or interpretation of this Agreement.

        5.    Notices.    All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given if so given) by hand delivery, facsimile or by mail (registered or certified, postage prepaid, return receipt requested) to the respective parties as follows:

If to Brigham:

Brigham Exploration Company
6300 Bridge Point Parkway
Building Two, Suite 500
Austin, Texas 78730
Attention: Ben M. "Bud" Brigham
Fax No: (512) 427-3400

If to any of the CSFB Investors:

Global Energy Partners
1100 Louisiana Street
Houston, Texas 77002
Fax: 713-890-1429
Attn: Steven A. Webster

and

CSFB Private Equity
11 Madison Avenue
New York, New York 10010
Fax: 917-326-8076
Attn: Ivy Dodes

with a copy to:

Gardere Wynne Sewell LLP
1000 Louisiana, Suite 3400
Houston, Texas 77002
Attention: N.L. Stevens III
Telefax: 713-276-5807

If to Ben M. Brigham:

Ben M. Brigham
Brigham Exploration Company
6300 Bridge Point Parkway
Building Two, Suite 500
Austin, Texas 78730
Fax No: (512) 427-3400

If to Anne L. Brigham:

Anne L. Brigham
Brigham Exploration Company
6300 Bridge Point Parkway

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Building Two, Suite 500
Austin, Texas 78730
Fax No: (512) 427-3400

If to Harold D. Carter:

Harold D. Carter
5949 Sherry Lane, Suite 620
Dallas, Texas 75225
Fax No.: (214) 692-7820

If to General Atlantic Partners III, L.P.:

General Atlantic Partners III, L.P.
c/o General Atlantic Service Corporation
3 Pickwick Plaza
Greenwich, CT 06830
Attention: Mr. Thomas J. Murphy
Fax No: (203) 622-8818

If to GAP-Brigham Partners, L.P.:

GAP-Brigham Partners, L.P.
c/o General Atlantic Service Corporation
3 Pickwick Plaza
Greenwich, CT 06830
Attention: Mr. Thomas J. Murphy
Fax No: (203) 622-8818

If to GAP Coinvestment Partners II, L.P.:

GAP Coinvestment Partners II, L.P.
c/o General Atlantic Service Corporation
3 Pickwick Plaza
Greenwich, CT 06830
Attention: Mr. Thomas J. Murphy
Fax No: (203) 622-8818

If to Aspect Resources, LLC:

Aspect Resources, LLC
511 16th Street, Suite 300
Denver, CO 80202
Attention: Mr. Paul D. Favret
Fax No: (303) 573-7340

If to any of the officers of Brigham:

Brigham Exploration Company
6300 Bridge Point Parkway
Building Two, Suite 500
Austin, Texas 78730
Attention: [name of officer]
Fax No: (512) 427-3400

or to such other address as the person to whom notice is given may have previously furnished to the others in writing in the manner set forth above.

        6.    Governing Law.    This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware, without reference to the conflict of laws principles thereof.

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        7.    Waiver.    Any waiver by any party of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. The failure of a party to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

        8.    Challenges to Agreement.    In the event that any part of this Agreement or any transaction contemplated hereby is temporarily, preliminarily or permanently enjoined or restrained by court of competent jurisdiction, the parties hereto shall use their reasonable best efforts to cause any such injunction or restraining order to be vacated or dissolved or otherwise declared or determined to be of no further force or effect.

        9.    Specific Performance.    Each of the Stockholders acknowledges and agrees that irreparable harm would occur if any provision of this Agreement were not performed in accordance with the terms thereof, or were otherwise breached, and that such harm could not be remedied by an award of damages. Accordingly, each of the Stockholders agrees that any non-breaching party shall be entitled to an injunction to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof.

        10.    Counterparts.    This Agreement may be executed in counterparts, each of which shall be an original, but each of which together shall constitute one and the same Agreement.

        * * * * *

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        IN WITNESS WHEREOF, and intending to be legally bound hereby, each of the undersigned parties has executed or caused this Agreement to be executed on the date first above written.

BRIGHAM EXPLORATION COMPANY

By:/s/  BEN M. BRIGHAM

Name: Ben M. Brigham

Title: CEO and President

/s/  BEN M. BRIGHAM Ben M. Brigham

/s/  ANNE L. BRIGHAM Anne L. Brigham

/s/  HAROLD D. CARTER Harold D. Carter

/s/  EUGENE B. SHEPHERD Eugene B. Shepherd

/s/  DAVID T. BRIGHAM David T. Brigham

/s/  A. LANCE LANGFORD A. Lance Langford

/s/  JEFFERY E. LARSON Jeffery E. Larson

/s/  MALCOLM BROWN Malcolm Brown

/s/  WARREN LUDLOW Warren Ludlow

GENERAL ATLANTIC PARTNERS III, L.P.
By GAP III Investors, Inc.
Its General Partner

By:

/s/  STEPHEN P. REYNOLDS Name: Stephen P. Reynolds
Title: President

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GAP-BRIGHAM PARTNERS, L.P.

By:

/s/  STEPHEN P. REYNOLDS Name: Stephen P. Reynolds
Title: General Partner

GAP COINVESTMENT PARTNERS II, L.P.

By:
/s/  THOMAS J. MURPHY

Name: Thomas J. Murphy Title: General Partner

ASPECT RESOURCES, LLC
By Aspect Management Corporation
Its Manager

By:
/s/  SCOTT RITGER

Name: Scott RitgerTitle: Manager

THE CSFB INVESTORS:
DLJ MERCHANT BANKING PARTNERS III, L.P.
By: DLJ MERCHANT BANKING III, INC., its Managing General Partner
	By:	/s/  ROBERT CABES      ROBERT CABES       Attorney-in-Fact
DLJ MERCHANT BANKING III, INC., AS ADVISORY GENERAL PARTNER ON BEHALF OF DLJ OFFSHORE PARTNERS III, C.V.
	By:	/s/  ROBERT CABES      ROBERT CABES       Attorney-in-Fact
DLJ MERCHANT BANKING III, INC., AS ADVISORY GENERAL PARTNER ON BEHALF OF DLJ OFFSHORE PARTNERS III-1, C.V. AND AS ATTORNEY-IN-FACT FOR DLJ MERCHANT BANKING III, L.P., AS ASSOCIATE GENERAL PARTNER OF DLJ OFFSHORE PARTNERS III-1, C.V.
	By:	/s/  ROBERT CABES      ROBERT CABES       Attorney-in-Fact

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DLJ MERCHANT BANKING III, INC., AS ADVISORY GENERAL PARTNER ON BEHALF OF DLJ OFFSHORE PARTNERS III-2, C.V. AND AS ATTORNEY-IN-FACT FOR DLJ MERCHANT BANKING III, L.P., AS ASSOCIATE GENERAL PARTNER OF DLJ OFFSHORE PARTNERS III-2, C.V.
	By:	/s/  ROBERT CABES      ROBERT CABES       Attorney-in-Fact
DLJ MB PARTNERS III GmbH & CO. KG
By: DLJ MERCHANT BANKING III, L.P., its Managing Limited Partner
	By:	DLJ MERCHANT BANKING III, INC., its General Partner
	By:	/s/  ROBERT CABES      ROBERT CABES       Attorney-in-Fact
MILLENNIUM PARTNERS II, L.P.
By: DLJ MERCHANT BANKING III, INC., its Managing General Partner
	By:	/s/  ROBERT CABES      ROBERT CABES       Attorney-in-Fact
MBP III PLAN INVESTORS, L.P.
By: DLJ LBO PLANS MANAGEMENT CORPORATION, its Managing General Partner
	By:	/s/  ROBERT CABES      ROBERT CABES       Attorney-in-Fact

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Schedule I

Stockholder	Number of Outstanding Shares of Common Stock
Ben M. and Anne L. Brigham, collectively	3,671,774
Harold D. Carter	314,893
General Atlantic Partners III, L.P.	2,679,418
GAP-Brigham Partners, L.P.	127,725
GAP Coinvestment Partners II, L.P.	975,610
Aspect Resources, LLC	487,805
Brigham Officers: Eugene B. Shepherd David T. Brigham Lance Langford Jeffery E. Larson Malcolm Brown Warren Ludlow	193,252 (in the aggregate)

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Exhibit 10.52

BRIGHAM EXPLORATION COMPANY Stockholders Voting Agreement
W I T N E S S E T H
Schedule I

EX-10.53

Exhibit 10.53

$80,000,000

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

Among

BRIGHAM OIL & GAS, L.P.,

as Borrower,

BRIGHAM EXPLORATION COMPANY,

and

BRIGHAM, INC.,

as Guarantors,

THE LENDERS PARTY HERETO FROM TIME TO TIME

as Lenders,

SOCIÉTÉ GÉNÉRALE,

as Lead Arranger, Administrative Agent and as Issuing Lender,

THE ROYAL BANK OF SCOTLAND plc,

as Co-Arranger and Documentation Agent,

and

BANK OF AMERICA, N.A.,

as Syndication Agent

March 21, 2003

TABLE OF CONTENTS

ARTICLE I         DEFINITIONS AND ACCOUNTING TERMS
Section 1.01	Certain Defined Terms
Section 1.02	Computation of Time Periods
Section 1.03	Accounting Terms; Changes in GAAP
Section 1.04	Types of Advances
Section 1.05	Miscellaneous
ARTICLE II        CREDIT FACILITIES
Section 2.01	Revolving Credit Facility
Section 2.02	Borrowing Base
Section 2.03	Method of Borrowing
Section 2.04	Reduction of the Commitments
Section 2.05	Prepayment of Advances
Section 2.06	Repayment of Advances
Section 2.07	Letters of Credit
Section 2.08	Fees
Section 2.09	Interest
Section 2.10	Payments and Computations
Section 2.11	Sharing of Payments, Etc
Section 2.12	Breakage Costs
Section 2.13	Increased Costs
Section 2.14	Taxes
ARTICLE III       CONDITIONS OF LENDING
Section 3.01	Conditions Precedent to Closing Date
Section 3.02	Conditions Precedent to All Borrowings
ARTICLE IV       REPRESENTATIONS AND WARRANTIES
Section 4.01	Corporate Existence; Subsidiaries
Section 4.02	Corporate Power
Section 4.03	Authorization and Approvals
Section 4.04	Enforceable Obligations
Section 4.05	Financial Statements

Section 4.06	True and Complete Disclosure
Section 4.07	Litigation
Section 4.08	Taxes
Section 4.09	Pension Plans
Section 4.10	Condition of Property; Casualties
Section 4.11	Security Instruments
Section 4.12	No Burdensome Restrictions; No Defaults
Section 4.13	Environmental Condition
Section 4.14	Gas Contracts
Section 4.15	Compliance with Laws
Section 4.16	Hedging Agreements
Section 4.17	Material Agreements
Section 4.18	Organizational Documents
Section 4.19	Guarantors
Section 4.20	Insurance
Section 4.21	Use of Proceeds
Section 4.22	Investment Company Act
Section 4.23	Public Utility Holding Company Act
Section 4.24	Transmitting Utility
ARTICLE V        AFFIRMATIVE COVENANTS
Section 5.01	Compliance with Laws, Etc
Section 5.02	Maintenance of Insurance
Section 5.03	Preservation of Corporate Existence, Etc
Section 5.04	Payment of Taxes, Etc
Section 5.05	Inspection; Books and Records
Section 5.06	Reporting Requirements
Section 5.07	Maintenance of Property
Section 5.08	Environmental Laws
Section 5.09	Payment of Trade Payables
Section 5.10	Use of Proceeds
Section 5.11	Additional Collateral
Section 5.12	New Subsidiaries
Section 5.13	Title

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Section 5.14	Further Assurances
Section 5.15	Operating Accounts
Section 5.16	Post-Closing Requirements
ARTICLE VI       NEGATIVE COVENANTS
Section 6.01	Liens, Etc
Section 6.02	Debts, Guaranties, and Other Obligations
Section 6.03	Agreements Restricting Liens and Distributions
Section 6.04	Merger or Consolidation
Section 6.05	Sales of Assets
Section 6.06	Restricted Payments
Section 6.07	Investments and Acquisitions
Section 6.08	Affiliate Transactions
Section 6.09	Compliance with ERISA
Section 6.10	Sales and Leasebacks
Section 6.11	Change of Business
Section 6.12	Use of Proceeds
Section 6.13	Gas Imbalances, Take-or-Pay or Other Prepayments
Section 6.14	Additional Subsidiaries
Section 6.15	Limitation on Leases
Section 6.16	Environmental Matters
Section 6.17	Borrower as Operator
Section 6.18	Equity Interests of Partners
Section 6.19	Speculative Trading
Section 6.20	Change of Name; Fiscal Year; Accounting Method
Section 6.21	Current Ratio
Section 6.22	Interest Coverage Ratio
Section 6.23	Restrictions on Limited Partners
Section 6.24	Subordinated Debt
Section 6.25	Advance Payment Contracts
ARTICLE VII     EVENTS OF DEFAULT; REMEDIES
Section 7.01	Events of Default
Section 7.02	Optional Acceleration of Maturity
Section 7.03	Automatic Acceleration of Maturity

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Section 7.04	Right of Set-off
Section 7.05	Non-exclusivity of Remedies
Section 7.06	Application of Proceeds
ARTICLE VIII    THE GUARANTY
Section 8.01	Liabilities Guaranteed
Section 8.02	Nature of Guaranty
Section 8.03	Agent’s Rights
Section 8.04	Guarantor’s Waivers
Section 8.05	Maturity of Obligations, Payment
Section 8.06	Agent’s Expenses
Section 8.07	Liability
Section 8.08	Events and Circumstances Not Reducing or Discharging any Guarantor’s Obligations
Section 8.09	Subordination of All Guarantor Claims
Section 8.10	Claims in Bankruptcy
Section 8.11	Payments Held in Trust
Section 8.12	Liens Subordinate
Section 8.13	Guarantor’s Enforcement Rights
ARTICLE IX      THE ADMINISTRATIVE AGENT AND THE ISSUING LENDER
Section 9.01	Authorization and Action
Section 9.02	Administrative Agent’s Reliance, Etc
Section 9.03	The Administrative Agent and Its Affiliates
Section 9.04	Lender Credit Decision
Section 9.05	Indemnification
Section 9.06	Successor Administrative Agent and Issuing Lender
Section 9.07	Other Agents
Section 9.08	Collateral Matters
ARTICLE X        MISCELLANEOUS
Section 10.01	Amendments, Etc
Section 10.02	Notices, Etc
Section 10.03	No Waiver; Remedies
Section 10.04	Costs and Expenses
Section 10.05	Binding Effect

iv

Section 10.06		Lender Assignments and Participations
Section 10.07		Indemnification
Section 10.08		Execution in Counterparts
Section 10.09		Survival of Representations, Etc
Section 10.10		Severability
Section 10.11		Governing Law
Section 10.12		Submission To Jurisdiction; Waivers
Section 10.13		Waiver of Jury Trial
Section 10.14		Oral Agreements
Section 10.15		Dissemination of Information
Section 10.16		Production Proceeds
Section 10.17		Amendment and Restatement
EXHIBITS:
Exhibit A	-		Form of Assignment and Acceptance
Exhibit B	-		Form of Compliance Certificate
Exhibit C	-		Form of Notice of Borrowing
Exhibit D	-		Form of Notice of Conversion or Continuation
Exhibit E	-		Form of Note
Exhibit F	-		Form of Mortgage Amendment
Exhibit G	-		Form of Pledge Agreement
Exhibit H	-		Form of Security Agreement
SCHEDULES:
Schedule 1				-	Notice Information, Commitments
Schedule 1.01				-	Preferred Shareholders
Schedule 4.01				-	Subsidiaries
Schedule 4.07				-	Litigation
Schedule 4.10				-	Title
Schedule 4.14				-	Gas Contracts
Schedule 4.16				-	Hedging Agreements
Schedule 4.17				-	Material Agreements
Schedule 6.01				-	Permitted Liens
Schedule 6.02				-	Permitted Debt
Schedule 6.02(i)				-	Additional Permitted Debt
Schedule 6.07				-	Permitted Investments

v

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

This Second Amended and Restated Credit Agreement dated as of March 21, 2003 is among Brigham Oil & Gas, L.P., a Delaware limited partnership (“Borrower”), Brigham Exploration Company, a Delaware corporation (“Brigham Exploration”), Brigham, Inc., a Nevada corporation (the “General Partner”), the lenders party hereto from time to time (“Lenders”), Société Générale, as lead arranger (in such capacity, the “Lead Arranger”), as administrative agent for such Lenders (in such capacity, the “Administrative Agent”) and as issuing lender for such Lenders (in such capacity, the “Issuing Lender”), The Royal Bank of Scotland plc, as co-arranger (in such capacity, the “Co-Arranger”) and as documentation agent (the “Documentation Agent”), and Bank of America, N.A., as Syndication Agent (the “Syndication Agent”).

INTRODUCTION

A.            The Borrower, the lenders party thereto, and Société Générale, as agent, are parties to that certain Amended and Restated Credit Agreement dated February 17, 2000, as amended on or before the date hereof (the “Existing Senior Credit Agreement”).

B.            The Borrower, the Lenders and the Administrative Agent desire to refinance the indebtedness and obligations arising under the Existing Senior Credit Agreement, and the indebtedness and liens arising under the Existing Senior Credit Agreement shall be assigned to the Administrative Agent and the Lenders pursuant hereto, so that all indebtedness and obligations arising hereunder shall be secured by such liens and security interests as were created pursuant to the Existing Senior Credit Agreement and such other liens as provided for herein, and the terms of Borrower’s financing shall hereafter be amended and restated in its entirety as set forth herein.

Therefore, the Borrower, the Guarantors (as defined below), the Lenders, the Issuing Lender and the Administrative Agent agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

Section 1.01       Certain Defined Terms.  As used in this Agreement, the terms defined above shall have the meanings set forth therein and the following terms shall have the following meanings (unless otherwise indicated, such meanings to be equally applicable to both the singular and plural forms of the terms defined):

“Acceptable Security Interest” in any Property means a Lien which (a) exists in favor of the Administrative Agent for the benefit of the Administrative Agent, the Issuing Lender, the Lenders, and any Swap Counterparty, (b) is superior to all Liens or rights of any other Person in the Property encumbered thereby, other than Permitted Liens, (c) secures the Obligations, and (d) is perfected and enforceable.

“Adjusted Base Rate” means, for any day, the fluctuating rate per annum of interest equal to the greater of (a) the Base Rate in effect on such day and (b) the Federal Funds Rate in effect on such day plus ½ of 1%.

“Administrative Agent” means Société Générale, in its capacity as agent pursuant to Article IX, and any successor agent pursuant to Section 9.06.

“Advance” means any advance hereunder of monies by a Lender to the Borrower as part of a Borrowing and refers to a Base Rate Advance or a Eurodollar Rate Advance.

“Advance Payment Contract” means any contract whereby any Person either receives or becomes entitled to receive (either directly or indirectly through a third party for such Person’s account or benefit) any payment (an “Advance Payment”) to be applied toward the payment of the purchase price of Hydrocarbons produced or to be produced from any Oil and Gas Properties owned by such Person and which Advance Payment is paid or to be paid more than 90 days in advance of actual delivery of such production to or for the account of the purchaser regardless of such production, and the Advance Payment is, or is to be, applied as payment in full for such production when sold and delivered or is, or is to become applied as payment for a portion only of the purchase price thereof or for a percentage or a share of such production.

“Affiliate” of any Person shall mean (a) any Person directly or indirectly controlled by, controlling or under common control with such first Person, (b) any director or officer of such first Person or of any Person referred to in clause (a) above and (c) if any Person in clause (a) 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; provided, however, that “Affiliate” shall not include any Affiliates of the Preferred Shareholders or GA Partners.

“Affiliated Fund” means, with respect to GA Partners or any Preferred Shareholder, any other fund that is managed or advised by the same manager, general partner or investment advisor as GA Partners or such Preferred Shareholder or by an Affiliate of such manager, general partner or investment advisor.

“Agent’s Fee Letter” means the letter dated March 21, 2003 among the Borrower, the Lead Arranger, the Administrative Agent and the Documentation Agent.

“Agents” means the Administrative Agent, the Documentation Agent and the Syndication Agent.

“Agreement” means this Credit Agreement, as the same may be amended, supplemented, and otherwise modified from time to time.

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“Applicable Lending Office” means, with respect to each Lender, such Lender’s Domestic Lending Office in the case of a Base Rate Advance and such Lender’s Eurodollar Lending Office in the case of a Eurodollar Rate Advance.

“Applicable Margin” means, as of any date of determination, the following percentages determined as a function of the Borrower’s Utilization Percentage:

Utilization Percentage	Eurodollar Rate Advances		Base Rate Advances		Commitment Fees
> 90%	2.50	%	1.50	%	0.50	%
> 75% and < 90%	2.25	%	1.25	%	0.50	%
> 50% and < 75%	2.00	%	1.00	%	0.50	%
> 25% and < 50%	1.75	%	0.75	%	0.50	%
< 25%	1.50	%	0.50	%	0.50	%

“Arrangers” means the Lead Arranger and the Co-Arranger.

“Assignment and Acceptance” means an assignment and acceptance entered into by a Lender and an Eligible Assignee, and accepted by the Administrative Agent, in substantially the form of the attached Exhibit A.

“Base Rate” means a fluctuating interest rate per annum as shall be in effect from time to time equal to the rate of interest publicly announced by Société Générale, as its Base Rate, whether or not the Borrower has notice thereof.

“Base Rate Advance” means an Advance which bears interest as provided in Section 2.09(a).

“Borrowing” means a borrowing consisting of simultaneous Advances of the same Type made by each Lender pursuant to Section 2.03(a), continued by each Lender pursuant to Section 2.03(b), or Converted by each Lender to Advances of a different Type pursuant to Section 2.03(b).

“Borrowing Base” means at any particular time, the Dollar amount determined in accordance with Section 2.02 on account of Proven Reserves attributable to Oil and Gas Properties of the Borrower and its Subsidiaries described in the most recent Independent Engineering Report or Internal Engineering Report, as applicable, delivered to the Administrative Agent and the Lenders pursuant to Section 2.02.

“Borrowing Base Deficiency” means the aggregate outstanding amount, if any, by which the sum of the Advances plus the Letter of Credit Exposure exceeds the lesser of the (i) Borrowing Base and (ii) the aggregate Commitments.

“Business Day” means a day of the year on which banks are not required or authorized to close in New York, New York and, if the applicable Business Day relates to any Eurodollar Rate Advances, on which dealings are carried on by banks in the London interbank market.

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“Capital Leases” means, as applied to any Person, any lease of any Property by such Person as lessee which would, in accordance with GAAP, be required to be classified and accounted for as a capital lease on the balance sheet of such Person.

“Capital Stock” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.

“Cash Collateral Account” means a special interest bearing cash collateral account pledged by the Borrower to the Issuing Lender containing cash deposited pursuant to Sections 2.05(b), 7.02(b), or 7.03(b) to be maintained with the Issuing Lender in accordance with Section 2.07(g) and bear interest or be invested in the Issuing Lender’s reasonable discretion.

“Cash Equivalents” means (a) direct obligations of the United States or any agency thereof, or obligations guaranteed by the United States or any agency thereof, in each case maturing within one year or less from the date of creation thereof, (b) commercial paper maturing within one year from the date of creation thereof rated in the highest grade by Standard and Poor’s Ratings Group (“S&P”) and by Moody’s Investors Service, Inc. (“Moody’s”), (c) deposits maturing within one year from the date of creation thereof with, including certificates of deposit issued by, any Lender or any office located in the United States, Canada or England or any other bank or trust company which is organized under the laws of the United States, Canada or England or any state or province thereof, has capital, surplus and undivided profits aggregating at least $100,000,000.00 (as of the date of such Lender’s or bank or trust company’s most recent financial reports) and has a short term deposit rating of not lower than A2 or P2, as such rating is set forth from time to time by S&P or Moody’s, respectively, and (d) deposits in money market funds investing exclusively in investments described in clauses (a) through (c) of this definition.

“CERCLA” means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, state and local analogs, and all rules and regulations and requirements thereunder in each case as now or hereafter in effect.

“Change of Control” means any of the following:  (a) any acquisition pursuant to which any Person or group (as defined in Section 13(d)(3) or 14(d)(2) of the Exchange Act) (other than the Preferred Shareholders) has become the direct or indirect beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of more than 35% of the Voting Stock of Brigham Exploration; (b) any transaction or acquisition pursuant to which any one or more of the Preferred Shareholders has or have become (whether pursuant to any Preferred Shareholder Transaction or otherwise) the direct or indirect beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of more than 47% of the Voting Stock of Brigham Exploration; (c)  Brigham Exploration is merged with or into or consolidated with another Person except as otherwise permitted by Section 6.04; (d)  Brigham Exploration, either individually or in conjunction with one or more of its Subsidiaries, sells, conveys, transfers or leases, or its Subsidiaries sell, convey, transfer or lease, all or substantially all of the assets of Brigham Exploration and its Subsidiaries, taken as a whole (either in one transaction or a series of related transactions), including Capital Stock of its Subsidiaries, to any Person except as otherwise permitted by Section 6.04; (e)  the

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first day on which a majority of the individuals who constitute the Board of Directors of Brigham Exploration are not Continuing Directors or (f)  Brigham Exploration shall cease to own, directly or indirectly, 100% of the Capital Stock of the Borrower.

“Closing Date” means the date on which the conditions set forth in Section 3.01 are satisfied, which date shall not be later than March 31, 2003.

“Code” means the Internal Revenue Code of 1986, as amended, and any successor statute.

“Collateral” means Property of the Credit Parties, now owned or hereafter acquired, that is subject to any Lien in favor of the Administrative Agent, the Lenders, the Issuing Bank or any Swap Counterparty to secure, directly or indirectly, the Obligations of the Credit Parties under the Loan Documents.

“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 Administrative 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 original aggregate amount of the Commitments is $80,000,000.

“Commitment Termination Date” means the earlier of (a) the Maturity Date and (b) the earlier termination in whole of the Commitments pursuant to Section 2.04 or Article VII.

“Compliance Certificate” means a compliance certificate in the form of the attached Exhibit B signed by a Responsible Officer of Brigham Exploration.

“Consolidated Net Income” means, with respect to Brigham Exploration and its consolidated Subsidiaries, for any period, the aggregate of the net income (or loss) of Brigham Exploration and its consolidated Subsidiaries after allowances for taxes for such period as determined on a consolidated basis in accordance with GAAP; provided, that there shall be excluded from the calculation of such net income (to the extent otherwise included therein) the following: (a) the net income of any Person in which Brigham Exploration or any consolidated Subsidiary has an interest (which interest does not cause the net income of such other Person to be consolidated with the net income of Brigham Exploration and its consolidated Subsidiaries in accordance with GAAP), except to the extent of the amount of dividends or distributions actually paid in such period by such other Person to Brigham Exploration or to a consolidated Subsidiary, as the case may be; (b) the net income (but not loss) of any consolidated Subsidiary to the extent that the declaration or payment of dividends or similar distributions or transfers or loans by that consolidated Subsidiary is not at the time permitted by operation of the terms of its charter or any agreement, instrument or Legal Requirement applicable to such consolidated Subsidiary, or is otherwise restricted or prohibited in each case determined in accordance with GAAP; (c) the net income (or loss) of any Person acquired in a pooling-of-interests transaction for any period prior to the date of such transaction; (d) any extraordinary gains or losses, including gains or losses attributable to Property sales not in the ordinary course of business; and (e) the cumulative effect

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of a change in accounting principles and any gains or losses attributable to writeups or writedowns of assets.

“Continuing Director” means an individual who (a) is a member of the full Board of Directors of Brigham Exploration and (b) either (i) was a member of the Board of Directors of Brigham Exploration on the Closing Date or (ii) whose nomination for election or election to the Board of Directors of Brigham Exploration was approved by vote of at least two-thirds of the directors then still in office who were either directors on the Closing Date or whose election or nomination for election was previously so approved.

“Controlled Group” means all members of a controlled group of corporations and all businesses (whether or not incorporated) under common control which, together with the Borrower, are treated as a single employer under Section 414 of the Code.

“Convert,” “Conversion,” and “Converted” each refers to a conversion of Advances of one Type into Advances of another Type pursuant to Section 2.03(b).

“Credit Parties” means the Borrower and the Guarantors.

“Debt,” for any Person, means without duplication:

(a)           indebtedness of such Person for borrowed money;

(b)           obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;

(c)           obligations of such Person (whether contingent or otherwise) in respect to letters of credit, bankers’ acceptances, surety or other bonds and similar instruments, and agreements relating to the issuance of letters of credit or acceptance financing;

(d)           obligations of such Person to pay the deferred purchase price of Property or services (other than current trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices and accrued current liabilities incurred in the ordinary course of business);

(e)           all obligations of such Person under Capital Leases;

(f)            all indebtedness created or arising under any conditional-sale or other title-retention agreement with respect to Property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such Property);

(g)           obligations of such Person under any Interest Hedge Agreement or Hydrocarbon Hedge Agreement;

(h)           obligations of such Person under any Advance Payment Contract;

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(i)            obligations of such Person owing in respect of redeemable preferred stock of such Person;

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

(k)           obligations of such Person under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) of such Person to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds referred to in clauses (a) through (j) above; and

(l)            indebtedness or obligations of others of the kinds referred to in clauses (a) through (k) secured by any Lien on or in respect of any Property of such Person.

“Default” means (a) an Event of Default or (b) any event or condition which with notice or lapse of time or both would become an Event of Default.

“Deposit Control Agreement” has the meaning set forth in Section 5.16.

“Dollars” and “$” means lawful money of the United States of America.

“Domestic Lending Office” means, with respect to any Lender, the office of such Lender specified as its “Domestic Lending Office” opposite its name on Schedule 1 or such other office of such Lender as such Lender may from time to time specify to the Borrower and the Administrative Agent.

“EBITDA” means, without duplication, for Brigham Exploration and its consolidated Subsidiaries for any period, (a) Consolidated Net Income for such period plus (b) to the extent deducted in determining Consolidated Net Income for such period, Interest Expense, taxes, depreciation, depletion, amortization and other non-cash charges for such period, minus (c) to the extent added in determining Consolidated Net Income for such period, all non-cash income during such period, in each case determined in accordance with GAAP and without duplication of amounts.

“Eligible Assignee” means (a) any Lender or any Affiliate of any Lender and (b) any commercial bank or other financial institution approved by (i) the Administrative Agent in its reasonable discretion and (ii) provided no Default or Event of Default has occurred and is continuing, the Borrower (which consent shall not be unreasonably withheld or delayed).

“Engineering Report” means either an Independent Engineering Report or an Internal Engineering Report.

“Environment” or “Environmental” shall have the meanings set forth in 43 U.S.C. 9601(8) (1988).

“Environmental Claim” means any third party (including governmental agencies and employees) action, lawsuit, claim, demand, regulatory action or proceeding, order, decree, consent agreement or notice of potential or actual responsibility or violation (including claims or proceedings under the Occupational Safety and Health Acts or similar laws or requirements

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relating to health or safety of employees) which seeks to impose liability under any Environmental Law.

“Environmental Law” means, as to any Credit Party, all Legal Requirements or common law theories applicable to any Credit Party arising from, relating to, or in connection with the Environment, including without limitation CERCLA, relating to (a) pollution, contamination, injury, destruction, loss, protection, cleanup, reclamation or restoration of the air, surface water, groundwater, land surface or subsurface strata, or other natural resources; (b) solid, gaseous or liquid waste generation, treatment, processing, recycling, reclamation, cleanup, storage, disposal or transportation; (c) exposure to pollutants, contaminants, hazardous, medical infections, or toxic substances, materials or wastes; or (d) the manufacture, processing, handling, transportation, distribution in commerce, use, storage or disposal of hazardous or toxic substances, materials or wastes.

“Environmental Permit” means any permit, license, order, approval, registration or other authorization under Environmental Law.

“Equity Interest” means with respect to any Person, any shares, interests, participation, or other equivalents (however designated) of corporate stock, membership interests or partnership interests (or any other ownership interests) of such Person.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

“Eurocurrency Liabilities” has the meaning assigned to that term in Regulation D of the Federal Reserve Board (or any successor), as in effect from time to time.

“Eurodollar Lending Office” means, with respect to any Lender, the office of such Lender specified as its “Eurodollar Lending Office” opposite its name on Schedule 1 (or, if no such office is specified, its Domestic Lending Office), or such other office of such Lender as such Lender may from time to time specify to the Borrower and the Administrative Agent.

“Eurodollar Rate” means, for the Interest Period for each Eurodollar Rate Advance comprising the same Borrowing, the interest rate per annum (rounded upward to the nearest whole multiple of 1/100 of 1% per annum) set forth on the applicable Telerate Page as the London Interbank Offered Rate, for deposits in Dollars at 11:00 a.m. (London, England time) two Business Days before the first day of such Interest Period and for a period equal to such Interest Period; provided that, if no such quotation appears on the applicable Telerate Page, the Eurodollar Rate shall be an interest rate per annum equal to the rate per annum at which deposits in Dollars are offered by the principal office of Société Générale in London, England to prime banks in the London interbank market at 11:00 a.m. (London, England time) two Business Days before the first day of such Interest Period in an amount substantially equal to the Eurodollar Rate Advance to be maintained by the Lender that is the Administrative Agent in respect of such Borrowing and for a period equal to such Interest Period.

“Eurodollar Rate Advance” means an Advance which bears interest as provided in Section 2.09(b).

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“Eurodollar Rate Reserve Percentage” of any Lender for the Interest Period for any Eurodollar Rate Advance means the reserve percentage applicable during such Interest Period (or if more than one such percentage shall be so applicable, the daily average of such percentages for those days in such Interest Period during which any such percentage shall be so applicable) under regulations issued from time to time by the Federal Reserve Board for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental, or other marginal reserve requirement) for such Lender with respect to liabilities or assets consisting of or including Eurocurrency Liabilities having a term equal to such Interest Period.

“Event of Default” has the meaning specified in Section 7.01.

“Excepted Liens” means (a) Liens for taxes, assessments or other governmental charges or levies not yet due or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; (b) Liens in connection with workmen’s compensation, unemployment insurance or other social security, old age pension or public liability obligations not yet due or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; (c) operators’, vendors’, carriers’, warehousemen’s, repairmen’s, mechanics’, workmen’s, materialmen’s, construction or other like Liens arising in the ordinary course of business or incident to the exploration, development, operation and maintenance of Oil and Gas Properties or customary landlord’s liens, each of which is in respect of obligations that have not been outstanding more than 90 days or which are being contested in good faith by appropriate proceedings and for which adequate reserves have been maintained in accordance with GAAP; (d) any Liens reserved in leases, farmout agreements, exploration agreements, operating agreements or participation agreements for rent or royalties and for compliance with the terms of such agreements or leases in the case of leasehold estates, to the extent that any such Lien referred to in this clause does not materially impair the use of the Property covered by such Lien for the purposes for which such Property is held or materially impair the value of such Property subject thereto; (e) encumbrances (other than to secure the payment of borrowed money or the deferred purchase price of Property or services), easements, restrictions, servitudes, permits, conditions, covenants, exceptions or reservations in any rights of way or other Property for the purpose of roads, pipelines, transmission lines, transportation lines, distribution lines for the removal of gas, oil, coal or other minerals or timber, and other like purposes, or for the joint or common use of real estate, rights of way, facilities and equipment, and defects, irregularities, zoning restrictions and deficiencies in the title of any rights of way or other Property which in the aggregate do not materially impair the use of such rights of way or other Property for the purposes of which such rights of way and other Property are held or materially impair the value of such Property subject thereto; (f) deposits of cash or securities to secure the performance of bids, trade contracts, leases, statutory obligations and other obligations of a like nature incurred in the ordinary course of business; and (g) minor defects in the chain of title to the Oil and Gas Properties that are customarily accepted in the oil and gas industry, provided, however, that none of such defects interfere with the ordinary conduct of the business of any of the Credit Parties or materially detract from the value or use of the Property to which such defects apply.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Existing Letters of Credit” means the letters of credit described on Schedule 2.07.

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“Existing Mortgages” means the collective reference to every Mortgage, Deed of Trust, Assignment of Production, Security Agreement and Financing Statement from the Borrower to the Trustee named therein and Bank of Montreal (or any successor thereto), covering the assets of the Borrower located in the continental United States, as amended prior to the Closing Date.

“Expiration Date” means, with respect to any Letter of Credit, the date on which such Letter of Credit will expire or terminate in accordance with its terms.

“Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for any such day on such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

“Federal Reserve Board” means the Board of Governors of the Federal Reserve System or any of its successors.

“Financial Letter of Credit” means a Letter of Credit qualifying as a “financial standby letter of credit” under 12 CFR Part 3, Appendix A, Section 4(a)(8) or any successor U.S. Comptroller of the Currency regulation and issued by an Issuing Bank under the terms of this Agreement.

“Financial Statements” means the audited consolidated balance sheet of Brigham Exploration and its consolidated Subsidiaries as at December 31, 2002 and the related consolidated statement of income, stockholders’ equity and cash flow of Brigham Exploration and its consolidated Subsidiaries for the fiscal year ended on such date.

“GA Partners” means General Atlantic Partners III, L.P., together with its successors, assigns and transferees of its shares of Capital Stock of Brigham Exploration that are an Affiliated Fund of GA Partners.

“GAAP” means United States generally accepted accounting principles as in effect from time to time, applied on a basis consistent with the requirements of Section 1.03.

“Governmental Authority” means, as to any Person in connection with any subject, any foreign, national, state or provincial governmental authority, or any political subdivision of any state thereof, or any agency, department, commission, board, authority or instrumentality, bureau or court, in each case having jurisdiction over such Person or such Person’s Property in connection with such subject.

“Guarantor” means Brigham Exploration, the General Partner, and each Subsidiary of the Borrower.

“Hazardous Substance” means the substances identified as such pursuant to CERCLA and those regulated under any other Environmental Law, including without limitation pollutants,

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contaminants, petroleum, petroleum products, radionuclides, radioactive materials, and medical and infectious waste.

“Hazardous Waste” means the substances regulated as such pursuant to any Environmental Law.

“Hydrocarbon Hedge Agreement” means a swap, collar, floor, cap, option, forward sale or purchase or other contract (excluding sales contracts with fixed or floating prices for Hydrocarbons sold) that is intended to reduce or eliminate the risk of fluctuations in the price of Hydrocarbons.

“Hydrocarbon Interests” means (a) all oil and gas and/or oil, gas and mineral leases and leasehold interests, fee mineral interests, term mineral interests, subleases, farmouts, royalties, overriding royalties, net profits interests, production payments and similar interests or estates including any reversionary or carried interests relating to any of the foregoing and interests under any exploration agreements, operating agreements and participation agreements, and (b) all production units and drilling and spacing units (and the Properties covered thereby) which may affect all or any portion of such interests including those units and any units created by agreement or designation or under orders, regulations, rules or other official acts of any Federal, state or other governmental body or agency having jurisdiction.

“Hydrocarbons” means oil, gas, coal seam gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate, and all other liquid and gaseous hydrocarbons produced or to be produced in conjunction therewith from a well bore and all products, by-products, and other substances derived therefrom or the processing thereof, and all other minerals and substances produced in conjunction with such substances, including, but not limited to, sulfur, geothermal steam, water, carbon dioxide, helium, and any and all minerals, ores, or substances of value and the products and proceeds therefrom.

“Independent Engineer” means Cawley, Gillespie & Associates or any other engineering firm reasonably acceptable to either the Administrative Agent or the Majority Lenders.

“Independent Engineering Report” means a report, in form and substance satisfactory to the Administrative Agent and each of the Lenders, prepared by an Independent Engineer, addressed to the Administrative Agent and the Lenders with respect to the Oil and Gas Properties owned by the Borrower or its Subsidiaries (or to be acquired by the Borrower or any of its Subsidiaries, as applicable) which are or are to be included in the Borrowing Base, which report shall (a) specify the location, quantity, and type of the estimated Proven Reserves attributable to such Oil and Gas Properties, (b) contain a projection of the rate of production of such Oil and Gas Properties, (c) contain an estimate of the associated capital expenditures and net operating revenues to be derived from the production and sale of Hydrocarbons from such Proven Reserves based on product price and cost escalation assumptions specified by the Administrative Agent and the Lenders, and (d) contain such other information as is customarily obtained from and provided in such reports or is otherwise reasonably requested by the Administrative Agent or any Lender.

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“Intercreditor and Subordination Agreement” means that certain Amended and Restated Intercreditor and Subordination Agreement, which shall be in a form acceptable to the Administrative Agent and the Lenders,  dated as of the Closing Date among the Administrative Agent, certain of the Credit Parties, and The Royal Bank of Scotland plc, as agent for the lenders party to the Subordinated Credit Agreement.

“Interest Coverage Ratio” means, for Brigham Exploration and its consolidated Subsidiaries, as of the end of any fiscal quarter, the ratio of (a) EBITDA calculated for the four fiscal quarters then ended, to (b) Interest Expense for such period.

“Interest Expense” means, for Brigham Exploration and its consolidated Subsidiaries for any period, total interest, letter of credit fees, and other fees and expenses incurred in connection with any Debt for such period, whether paid or accrued, including, without limitation, all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing and net costs under Interest Hedge Agreements and Hydrocarbon Hedge Agreements, all as determined in conformity with GAAP.

“Interest Hedge Agreement” means an interest hedge, rate swap, cap or collar, or similar arrangement between the Borrower and one or more financial institutions providing for the exchange of nominal interest obligations between the Borrower and such financial institution.

“Interest Period” means, for each Eurodollar Rate Advance comprising part of the same Borrowing, the period commencing on the date of such Eurodollar Rate Advance or the date of the Conversion of any Base Rate Advance into a Eurodollar Rate Advance and ending on the last day of the period selected by the Borrower pursuant to the provisions below and Section 2.03 and, thereafter, each subsequent period commencing on the last day of the immediately preceding Interest Period and ending on the last day of the period selected by the Borrower pursuant to the provisions below and Section 2.03.  The duration of each such Interest Period shall be one, two, three, or six months, in each case as the Borrower may, upon notice received by the Administrative Agent not later than 12:00 p.m. (New York time) on the third Business Day prior to the first day of such Interest Period, select; provided, however, that:

(a)           the Borrower may not select any Interest Period for any Advance which ends after the Maturity Date;

(b)           Interest Periods commencing on the same date for Advances comprising part of the same Borrowing shall be of the same duration;

(c)           whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day, provided that if such extension would cause the last day of such Interest Period to occur in the next following calendar month, the last day of such Interest Period shall occur on the next preceding Business Day; and

(d)           any Interest Period which begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month in which it would have ended if there were a numerically corresponding day in such calendar month.

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“Internal Engineering Report” means a report, in form and substance reasonably satisfactory to the Administrative Agent and each Lender, prepared by the Borrower and certified by a Responsible Officer of the General Partner, addressed to the Administrative Agent and the Lenders with respect to the Oil and Gas Properties owned by the Borrower or any of its Subsidiaries (or to be acquired by the Borrower or any of its Subsidiaries, as applicable) which are or are to be included in the Borrowing Base, which report shall (a) specify the location, quantity, and type of the estimated Proven Reserves attributable to such Oil and Gas Properties, (b) contain a projection of the rate of production of such Oil and Gas Properties, (c) contain an estimate of the associated capital expenditures and net operating revenues to be derived from the production and sale of Hydrocarbons from such Proven Reserves based on product price and cost escalation assumptions specified by the Administrative Agent and the Lenders, and (d) contain such other information as is customarily obtained from and provided in such reports or is otherwise reasonably requested by the Administrative Agent or any Lender.

“Investment” means any investment, made directly or indirectly, in any Person, whether by acquisition of Equity Interests, indebtedness or other obligations or securities or by loan, advance, capital contribution or otherwise.

“Issuing Lender” means Société Générale, and any successor issuing bank pursuant to Section 9.06.

“Legal Requirement” means, as to any Person, any law, statute, ordinance, decree, requirement, order, judgment, rule, regulation (or official interpretation of any of the foregoing) of, and the terms of any license or permit issued by, any Governmental Authority, including, but not limited to, Regulations D, T, U, and X, which is applicable to such Person.

“Lender” means each Lender that has a Commitment hereunder or is the holder of an Advance.

“Letter of Credit” means, individually, any standby letter of credit issued by the Issuing Lender for the account of the Borrower in connection with the Commitments and which is subject to this Agreement, and “Letters of Credit” means all such letters of credit collectively.

“Letter of Credit Application” means the Issuing Lender’s standard form letter of credit application for standby letters of credit that has been executed by the Borrower and accepted by the Issuing Lender in connection with the issuance of a Letter of Credit.

“Letter of Credit Documents” means all Letters of Credit, Letter of Credit Applications, and any other agreements, documents, and instruments entered into in connection with or relating thereto.

“Letter of Credit Exposure” means, at any time, the sum of (a) the aggregate undrawn maximum face amount of each Letter of Credit at such time plus (b) the aggregate unpaid amount of all Reimbursement Obligations at such time.

“Letter of Credit Obligations” means any obligations of the Borrower under this Agreement in connection with the Letters of Credit, including the Reimbursement Obligations.

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“Lien” means any mortgage, lien, pledge, assignment, charge, deed of trust, security interest, hypothecation, preference, deposit arrangement or encumbrance (or other type of arrangement having the practical effect of the foregoing) to secure or provide for the payment of any obligation of any Person, whether arising by contract, operation of law, or otherwise (including, without limitation, the interest of a vendor or lessor under any conditional sale agreement, synthetic lease, Capital Lease, or other title retention agreement).

“Limited Partners” means Brigham Holdings I, LLC, a Nevada limited liability company, and Brigham Holdings II, LLC, a Nevada limited liability company.

“Loan Documents” means this Agreement, the Notes, the Administrative Agent’s Fee Letter, the Letter of Credit Documents, the Security Instruments, the Intercreditor and Subordination Agreement, the Side Letter Agreement, any Interest Hedge Agreements with a Swap Counterparty, any Hydrocarbon Hedge Agreements with a Swap Counterparty, and each other agreement, instrument, or document executed by any Credit Party or any of their officers at any time in connection with this Agreement.

“Majority Lenders” means, at any time, the Administrative Agent and Lenders holding at least 66-2/3% of the then aggregate unpaid principal amount of the Notes held by the Lenders and the Letter of Credit Exposure of the Lenders at such time; provided that, if no Advances or Letter of Credit Exposure is then outstanding, “Majority Lenders” shall mean the Administrative Agent and Lenders having at least 66-2/3% of the aggregate amount of the Commitments at such time.

“Material Adverse Change” means (a) a material adverse change in the business, Property (including the Oil and Gas Properties), assets, liabilities, conditions (financial or otherwise) or prospects of the Borrower and its Subsidiaries, taken as a whole, (b) a material adverse effect on any Credit Party’s ability to perform its obligations under this Agreement, any Note, or any other Loan Document and (c) a material adverse effect on the validity or enforceability against any Credit Party of any of the Loan Documents or the rights or remedies of the Administrative Agent or the Lenders thereunder.

“Maturity Date” means March 21, 2006; provided, however, that if on or before July 31, 2005 (a) the Subordinated Debt has not been repaid, (b) the Subordinated Debt Maturity Date has not been extended to at least April 30, 2006 or (c) the Subordinated Debt has not been refinanced with Debt subordinated to the Obligations on substantially the same terms and conditions as set forth in the Intercreditor and Subordination Agreement (or terms otherwise acceptable to all of the Lenders) the maturity date of which is not earlier than 60 days after the Maturity Date, then the “Maturity Date” shall be August 31, 2005.

 “Maximum Rate” means the maximum nonusurious interest rate under applicable law (determined under such laws after giving effect to any items which are required by such laws to be construed as interest in making such determination, including without limitation if required by such laws, certain fees and other costs).

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“Mortgage Amendments” means each of the amended and restated mortgages or deeds of trust to be entered into on or before the Closing Date to amend and restate in their entirety the Existing Mortgages in substantially the form of the attached Exhibit F.

“Mortgages” means, collectively, each Mortgage Amendment or any other mortgage or deed of trust executed by any one or more of the Borrower and its Subsidiaries in favor of the Administrative Agent for the ratable benefit of the Administrative Agent, the Issuing Lender, the Lenders, and any Swap Counterparty, as the same may be amended, modified, restated or supplemented from time-to-time, and “Mortgages” shall mean all of such Mortgages collectively.

“Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA.

“Note” means a promissory note of the Borrower payable to the order of any Lender, in substantially the form of the attached Exhibit E, evidencing indebtedness of the Borrower to such Lender resulting from Advances owing to such Lender.

“Notice of Borrowing” means a notice of borrowing in the form of the attached Exhibit C signed by a Responsible Officer of the General Partner.

“Notice of Conversion or Continuation” means a notice of conversion or continuation in the form of the attached Exhibit D signed by a Responsible Officer of the General Partner.

“Obligations” means (a) all principal, interest, fees, reimbursements, indemnifications, and other amounts payable by any Credit Party to the Administrative Agent, the Issuing Lender or the Lenders under the Loan Documents, including without limitation, the Letter of Credit Obligations and (b) all obligations of any Credit Party owing to any Swap Counterparty under any Interest Hedge Agreement or Hydrocarbon Hedge Agreement.

“Oil and Gas Properties” means (a) all Hydrocarbon Interests; (b) all operating agreements, contracts and other agreements which relate to any of the Hydrocarbon Interests or the production, sale, purchase, exchange or processing of Hydrocarbons from or attributable to such Hydrocarbon Interests; (c) all Hydrocarbons in and under and which may be produced, saved, processed or attributable to the Hydrocarbon Interests, including all oil in tanks, the lands covered thereby and all rents, issues, profits, proceeds, products, revenues and other incomes from or attributable to the Hydrocarbon Interests; (d) all accounts (including accounts resulting from the sale of Hydrocarbons at the wellhead), contract rights and general intangibles, including all accounts, contract rights and general intangibles now or hereafter arising regardless of whether any of the foregoing is in connection with the sale or other disposition of any Hydrocarbons or otherwise, including all Liens securing the same; (e) all Properties, rights, titles, interests and estates described or referred to above, including any and all Property, real or personal, now owned or hereafter acquired, used or held for use in connection with the operating, working or development of any of such Hydrocarbon Interests or Property and including any and all oil wells, gas wells, injection wells or other wells, buildings, structures, fuel separators, liquid extraction plants, plant compressors, pumps, pumping units, field gathering systems, tanks and tank batteries, fixtures, valves, fittings, machinery and parts, engines, boilers, meters, apparatus,

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appliances, tools, implements, cables, wires, towers, casing, tubing and rods, and similar equipment; and (f) all additions, substitutions, replacements, accessions and attachments to any and all of the foregoing.

“Partners” means the General Partner and the Limited Partners.

“Partnership Agreement” means the Agreement of Limited Partnership of the Borrower among the Partners dated as of December 30, 1997, as heretofore or hereafter amended, supplemented or restated from time to time.

“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.

“Performance Letter of Credit” means a Letter of Credit qualifying as a “performance-based standby letter of credit” under 12 CFR Part 3, Appendix A, Section 3(b)(2)(i) or any successor U.S. Comptroller of the Currency regulation and issued by an Issuing Bank under the terms of this Agreement.

“Permit” means any approval, certificate of occupancy, consent, waiver, exemption, variance, franchise, order, permit, authorization, right or license of or from any Governmental Authority, including without limitation, an Environmental Permit.

“Permitted Liens” has the meaning ascribed to such term in Section 6.01.

“Person” means an individual, partnership, corporation (including a business trust), joint stock company, limited liability corporation or company, limited liability partnership, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof or any trustee, receiver, custodian or similar official.

“Plan” means an employee benefit plan (other than a Multiemployer Plan) maintained for employees of the Borrower or any member of the Controlled Group and covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code.

“Pledge Agreements” means each of the Amended and Restated Pledge Agreements, in substantially the form of the attached Exhibit G, executed by each of Brigham Exploration, the General Partner and the Borrower, as the same may be amended, modified, restated or supplemented from time to time.

“Preferred Shareholders” means each of the Persons listed on Schedule 1.01 who hold Capital Stock in Brigham Exploration, together with its successors, assigns and transferees of its shares of Capital Stock of Brigham Exploration that are Affiliated Funds of such Preferred Shareholders.

“Preferred Shareholder Transaction” means any transaction in which any of the Preferred Shareholders exercises (whether voluntarily or as required by Brigham Exploration) its warrants to purchase common stock issued by Brigham Exploration pursuant to the terms of such warrants or the applicable certificate of designations of Brigham Exploration.

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“Property” of any Person means any property or assets (whether real, personal, or mixed, tangible or intangible) of such Person.

“Pro Rata Share” means, with respect to any Lender, either (a) the ratio (expressed as a percentage) of such Lender’s Commitment at such time to the aggregate Commitments at such time or (b) if the Commitments have been terminated, the ratio (expressed as a percentage) of such Lender’s aggregate outstanding Advances and Letter of Credit Exposure at such time to the aggregate outstanding Advances and Letter of Credit Exposure of all the Lenders at such time.

“Proven Reserves” means, at any particular time, the estimated quantities of Hydrocarbons which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs attributable to Oil and Gas Properties under then existing economic and operating conditions (i.e., prices and costs as of the date the estimate is made).

“Register” has the meaning set forth in paragraph (c) of Section 10.06.

“Regulations D, T, U, and X” mean Regulations D, T, U, and X of the Federal Reserve Board, as the same are from time to time in effect, and all official rulings and interpretations thereunder or thereof.

“Reimbursement Obligations” means all of the obligations of the Borrower to reimburse the Issuing Lender for amounts paid by the Issuing Lender under Letters of Credit as established by the Letter of Credit Applications and Section 2.07(d).

“Release” shall have the meaning set forth in CERCLA or under any other Environmental Law.

“Response” shall have the meaning set forth in CERCLA or under any other Environmental Law.

“Responsible Officer” means (a) with respect to any Person that is a corporation, such Person’s Chief Executive Officer, President, Executive Vice President, Chief Financial Officer, or Vice President—Controller (b) with respect to any Person that is a limited liability company, a manager (or such Person’s Chief Executive Officer, President, Executive Vice President, Chief Financial Officer, or Vice President—Controller, if any) or the Responsible Officer of such Person’s managing member or manager, and (c) with respect to any Person that is a general partnership or a limited liability partnership, the Responsible Officer of such Person’s general partner or partners.

“Restricted Payment” means, with respect to any Person, any direct or indirect dividend or distribution (whether in cash, securities or other property) or any direct or indirect payment of any kind or character (whether in cash, securities or other property) in consideration for or otherwise in connection with any retirement, purchase, redemption or other acquisition of any Equity Interest of such Person, or any options, warrants or rights to purchase or acquire any such Equity Interest of such Person; provided that the term “Restricted Payment” shall not include any dividend or distribution payable solely in Equity Interests of Brigham Exploration or warrants, options or other rights to purchase such Equity Interests.

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“SEC” means the U.S. Securities and Exchange Commission.

“Security Agreements” means each of the Amended and Restated Security Agreements, in substantially the form of the attached Exhibit H, executed by each of the Borrower and its Subsidiaries, as the same may be amended, modified, or supplemented from time to time.

“Security Instruments” means, collectively, (a) the Mortgages, (b) the Pledge Agreements, (c) the Security Agreements, (d) the Deposit Control Agreements, (e) each other agreement, instrument or document executed at any time in connection with the Pledge Agreements, the Security Agreements and the Mortgages, (f) each agreement, instrument or document executed in connection with the Cash Collateral Account; and (g) each other agreement, instrument or document executed at any time in connection with securing the Obligations.

“Side Letter Agreement” means the letter agreement dated as of the Closing Date among the Borrower, the Guarantors, the Administrative Agent and The Royal Bank of Scotland plc, as agent under the Subordinated Credit Agreement.

“Significant PUD Location” means a particular drilling location or proven, undeveloped reserve prospect identified or designated as “PUD” or “proven undeveloped” reserves in the applicable Engineering Report, that has been assigned a discounted present value equal to or in excess of $2,000,000.00 in such Engineering Report.

“Solvent” means, with respect to any Person as of the date of any determination, that on such date (a) the fair value of the Property of such Person (both at fair valuation and at present fair saleable value) is greater than the total liabilities, including contingent liabilities, of such Person, (b) the present fair saleable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person is able to realize upon its assets and pay its debts and other liabilities, contingent obligations, and other commitments as they mature in the normal course of business, (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature, and (e) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s Property would constitute unreasonably small capital after giving due consideration to current and anticipated future capital requirements and current and anticipated future business conduct and the prevailing practice in the industry in which such Person is engaged.  In computing the amount of contingent liabilities at any time, such liabilities shall be computed at the amount that, in light of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

“Subordinated Credit Agreement” means the Subordinated Amended and Restated Credit Agreement dated as of the date hereof among the Borrower, the lenders party thereto, and The Royal Bank of Scotland plc, as administrative agent for such lenders.

“Subordinated Debt” means the “Obligations” as defined in the Subordinated Credit Agreement.

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“Subordinated Debt Maturity Date” means the “Maturity Date” as defined in the Subordinated Credit Agreement.

“Subordinated Loan Documents” means the Subordinated Credit Agreement, the promissory notes executed and delivered pursuant to the Subordinated Credit Agreement, all agreements, instruments, or documents executed at any time in connection with securing the Subordinated Debt, and each other agreement, instrument, or document executed by any Credit Party or any of their Responsible Officers in connection with the Subordinated Credit Agreement.

“Subsidiary” of a Person means any corporation or other entity of which more than 50% of the outstanding Equity Interests having ordinary voting power under ordinary circumstances to elect a majority of the board of directors or similar governing body of such corporation or other entity (irrespective of whether at such time Equity Interests of any other class or classes of such corporation or other entity shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more Subsidiaries of such Person or by one or more Subsidiaries of such Person.  Unless otherwise indicated herein, each reference to the term “Subsidiary” shall mean a Subsidiary of the Borrower.

“Swap Counterparty” means any Lender (or Affiliate of a Lender) that is party to a Hydrocarbon Hedge Agreement or Interest Hedge Agreement with the Borrower or any of its Subsidiaries.

“Termination Event” means (a) a Reportable Event described in Section 4043 of ERISA and the regulations issued thereunder (other than a Reportable Event not subject to the provision for 30-day notice to the PBGC under such regulations), (b) the withdrawal of the Borrower or any of its Affiliates from a Plan during a plan year in which it was a “substantial employer” as defined in Section 4001(a)(2) of ERISA, (c) the filing of a notice of intent to terminate a Plan or the treatment of a Plan amendment as a termination under Section 4041 of ERISA, (d) the institution of proceedings to terminate a Plan by the PBGC, or (e) any other event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan.

“Type” has the meaning set forth in Section 1.04.

“Unused Commitment Amount” means, with respect to a Lender at any time, the lesser of (a) such Lender’s Commitment at such time and (b) such Lender’s Pro Rata Share of the Borrowing Base then in effect at such time minus, in each case the sum of (i) the aggregate outstanding principal amount of all Advances owed to such Lender at such time plus (ii) such Lender’s Share of the aggregate Letter of Credit Exposure at such time.

“Utilization Percentage” means, at any time, the ratio (expressed as a percentage) at such time of (a) the sum of the aggregate outstanding principal amount of the Advances and the aggregate Letter of Credit Exposure at such time to (b) the lesser of (i) the Commitments or (ii) the Borrowing Base, as applicable, in effect at such time.

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“Voting Stock” means, with respect to any Person, securities of any class or classes of Capital Stock or other interests (including partnership interests) in such Person entitling the holders thereof (whether at all times or at the time that such class of Capital Stock has voting power by reason of the happening of any contingency) to vote in the election of members of the board of directors or comparable body of such Person.

Section 1.02       Computation of Time Periods.  In this Agreement, with respect to the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding”.

Section 1.03       Accounting Terms; Changes in GAAP.  Except as otherwise expressly provided herein, all accounting terms used herein shall be interpreted, and all financial statements and certificates and reports as to financial matters required to be delivered to the Lenders hereunder shall (unless otherwise disclosed to the Lenders in writing at the time of delivery thereof) be prepared, in accordance with GAAP applied on a basis consistent with those used in the preparation of the Financial Statements.  In addition, all calculations and defined accounting terms used herein shall, unless expressly provided otherwise, when referring to any Person, refer to such Person on a consolidated basis and mean such Person and its consolidated subsidiaries.

Section 1.04       Types of Advances.  Advances are distinguished by “Type.”  The “Type” of an Advance refers to the determination whether such Advance is a Eurodollar Rate Advance or Base Rate Advance.

Section 1.05       Miscellaneous.  Article, Section, Schedule, and Exhibit references are to Articles and Sections of and Schedules and Exhibits to this Agreement, unless otherwise specified.  All references to instruments, documents, contracts, and agreements are references to such instruments, documents, contracts, and agreements as the same may be amended, supplemented, and otherwise modified from time to time, unless otherwise specified.  The words “hereof”, “herein”, and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  The term “including” means “including, without limitation,”.  Paragraph headings have been inserted in this Agreement as a matter of convenience for reference only and it is agreed that such paragraph headings are not a part of this Agreement and shall not be used in the interpretation of any provision of this Agreement.  All Exhibits and Schedules attached to this Agreement are a part hereof for all purposes.  Pronouns in masculine, feminine and neuter genders shall be construed to include any other gender, and words in the singular form shall be construed to include the plural and vice versa, unless the context otherwise requires.

ARTICLE II

CREDIT FACILITIES

Section 2.01       Revolving Credit Facility.

(a)           Each Lender severally agrees, on the terms and conditions set forth in this Agreement, to make Advances to the Borrower from time to time on any Business Day during

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the period from the date of this Agreement until the Commitment Termination Date in an amount for each Lender not to exceed such Lender’s Unused Commitment Amount.  Each Borrowing shall, in the case of Borrowings consisting of Base Rate Advances, be in an aggregate amount not less than $1,000,000 and in integral multiples of $500,000 in excess thereof, and in the case of Borrowings consisting of Eurodollar Rate Advances, be in an aggregate amount not less than $2,000,000 and in integral multiples of $1,000,000 in excess thereof, and in each case shall consist of Advances of the same Type made on the same day by the Lenders ratably according to their respective Commitments.  Within the limits of each Lender’s Commitment, and subject to the terms of this Agreement, the Borrower may from time to time borrow, prepay, and reborrow Advances.

(b)           The indebtedness of the Borrower to each Lender resulting from the Advances owing to such Lender shall be evidenced by a Note of the Borrower payable to the order of such Lender in an amount equal to such Lender’s Commitment.

Section 2.02       Borrowing Base.

(a)           Borrowing Base.  The Borrowing Base as of the Closing Date has been set by the Administrative Agent and the Lenders and acknowledged by the Borrower as $70,000,000.  Such Borrowing Base shall remain in effect until the next redetermination made pursuant to this Section 2.02.  The Borrowing Base shall be determined in accordance with the standards set forth in Section 2.02(d) and is subject to periodic redetermination pursuant to Sections 2.02(b) and 2.02(c).

(b)           Calculation of Borrowing Base.

(i)            The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before April 1, 2003, and thereafter on or before each February 15, beginning February 15, 2004, an Independent Engineering Report dated effective as of the immediately preceding December 31, and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base.  Within 20 days after the Administrative Agent and the Lenders’ receipt of such Independent Engineering Report and other information, the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base.  Within 20 days after the Lenders’ receipt of the Administrative Agent’s recommendation, each Lender shall advise the Administrative Agent whether or not such Lender agrees with the Administrative Agent’s recommendation and the Borrowing Base shall be redetermined upon the approval of Majority Lenders (or all of the Lenders in case of an increase in the Borrowing Base); provided, however, the failure of any Lender to give such notice within such period of time shall be deemed to constitute an acceptance of such redetermination. The Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined; provided, however that the failure to give such notice shall not affect the validity of any such redetermination.

(ii)           The Borrower shall deliver to the Administrative Agent and each Lender on or before October 1, 2003, and thereafter on or before each August 15, beginning August 15, 2004, an Internal Engineering Report dated effective as of the immediately preceding June 30,

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and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base.  Within 20 days after the Administrative Agent and the Lenders’ receipt of such Internal Engineering Report and other information, the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base.  Within 20 days after the Lenders’ receipt of the Administrative Agent’s recommendation, each Lender shall advise the Administrative Agent whether or not such Lender agrees with the Administrative Agent’s recommendation and the Borrowing Base shall be redetermined upon the approval of Majority Lenders (or all of the Lenders in case of an increase in the Borrowing Base); provided, however, the failure of any Lender to give such notice within such period of time shall be deemed to constitute an acceptance of such redetermination. The Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined.

(iii)          In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Majority Lenders (or all the Lenders in case of an increase in the Borrowing Base) may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, as applicable, or other information whereupon the Administrative Agent and the Majority Lenders (or all the Lenders in case of an increase in the Borrowing Base) shall redetermine the Borrowing Base as otherwise specified in this Section 2.02.  The failure of the Administrative Agent and the Lenders to redetermine the Borrowing Base and redesignate the Borrowing Base by the dates specified above shall not affect the validity of any redetermination and redesignation conducted from time-to-time hereafter.

(iv)          Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Subsidiaries, as applicable, own the Oil and Gas Properties specified therein free and clear of any Liens (except Permitted Liens), and (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “proved developed” therein was developed for oil and gas, and the wells pertaining to such Oil and Gas Properties that are described therein as producing wells (“Wells”) were each producing oil and gas in paying quantities, except for Wells that were utilized as water or gas injection wells or as water disposal wells.

(c)           Interim Redetermination.  In addition to the Borrowing Base redeterminations provided for in Section 2.02(b), the Majority Lenders (except that any increase in the Borrowing Base shall require the consent of all the Lenders) may, either in their sole discretion or at the request of the Borrower and based on such information as the Administrative Agent and the Lenders deem relevant (but in accordance with Section 2.02(d)), make additional redeterminations of the Borrowing Base.  The parties requesting the redetermination shall give the other parties at least 10 days’ prior written notice that a redetermination of the Borrowing Base pursuant to this paragraph (c) is to be performed.  In connection with any redetermination of the Borrowing Base under this Section 2.02(c), the Borrower shall provide the Administrative

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Agent and the Lenders with such information regarding the Credit Parties’ business (including, without limitation, its Oil and Gas Properties, the Proven Reserves, and production relating thereto) as the Administrative Agent or any Lender may request, including, in the case of requests for an increase to the Borrowing Base of $1,000,000 or more, an updated Independent Engineering Report.  The Administrative Agent shall promptly notify the Borrower in writing of each redetermination of the Borrowing Base pursuant to this Section 2.02(c) and the amount of the Borrowing Base as so redetermined.

(d)           Standards for Redetermination.  Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiaries, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries as determined by the Administrative Agent and the Lenders.  In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate.  In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders.  No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent and the Lenders shall have received, at the Borrower’s expense, evidence of title satisfactory in form and substance to the Administrative Agent that the Administrative Agent has an Acceptable Security Interest in the Oil and Gas Properties relating thereto pursuant to the Security Instruments.  At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02.

Section 2.03       Method of Borrowing.

(a)           Notice.  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) (i) on the third Business Day before the date of the proposed Borrowing, in the case of a Borrowing consisting of Eurodollar Rate Advances or (ii) on the Business Day of the proposed Borrowing, in the case of a Borrowing consisting of Base Rate Advances, by the Borrower to the Administrative Agent, 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 Administrative Agent shall promptly notify each applicable

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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 Administrative Agent at its address referred to in Section 10.02, or such other location as the Administrative 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 Administrative Agent’s receipt of such funds and upon fulfillment of the applicable conditions set forth in Article III, the Administrative Agent shall make such funds available to the Borrower at its account with the Administrative Agent.

(b)           Conversions and Continuations.  The Borrower may elect to Convert or continue any Borrowing by delivering an irrevocable Notice of Conversion or Continuation to the Administrative Agent at the Administrative Agent’s office no later than 12:00 p.m. (New York time) (i) on the date which is at least three Business Days in advance of the proposed Conversion or continuation date in the case of a Conversion to or a continuation of a Borrowing comprised of Eurodollar Rate Advances and (ii) on the Business Day of the proposed Conversion in the case of a Conversion to a Borrowing comprised of Base Rate Advances.  Each such Notice of Conversion or Continuation shall be in writing or by telex or telecopier confirmed immediately in writing specifying the information required therein.  Promptly after receipt of a Notice of Conversion or Continuation under this Section, the Administrative Agent shall provide each Lender with a copy thereof and, in the case of a Conversion to or a continuation of a Borrowing comprised of Eurodollar Rate Advances, notify each Lender of the applicable interest rate under Section 2.09(b).

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

(i)            at no time shall there be more than six Interest Periods applicable to outstanding Eurodollar Rate Advances and the Borrower may not select Eurodollar Rate Advances for any Borrowing at any time that a Default has occurred and is continuing;

(ii)           if any Lender shall, at least one Business Day before the date of any requested Borrowing, Conversion, or continuation, notify the Administrative 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 Administrative Agent that the circumstances causing such suspension no longer exist, and the Advance made by such Lender in respect of such Borrowing, Conversion, or continuation shall be a Base Rate Advance;

(iii)          if the Administrative 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 Administrative 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;

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(iv)          if the Majority Lenders shall, at least one Business Day before the date of any requested Borrowing, notify the Administrative Agent that the Eurodollar Rate for Eurodollar Rate Advances comprising such Borrowing will not adequately reflect the cost to such Lenders of making or funding their respective Eurodollar Rate Advances, as the case may be, for such Borrowing, the right of the Borrower to select Eurodollar Rate Advances for such Borrowing or for any subsequent Borrowing shall be suspended until the Administrative 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

(v)           if the Borrower shall fail to select the duration or continuation of any Interest Period for any Eurodollar Rate Advances in accordance with the provisions contained in the definition of “Interest Period” in Section 1.01 and paragraph (b) above, the Administrative Agent shall forthwith so notify the Borrower and the Lenders and such Advances shall be made available to the Borrower on the date of such Borrowing as Base Rate Advances or, if an existing Advance, Convert into Base Rate Advances.

(d)           Notices Irrevocable.  Each Notice of Borrowing and Notice of Conversion or Continuation shall be irrevocable and binding on the Borrower.

(e)           Administrative Agent Reliance.  Unless the Administrative Agent shall have received notice from a Lender before the date of any Borrowing that such Lender shall not make available to the Administrative Agent such Lender’s Pro Rata Share of a Borrowing, the Administrative Agent may assume that such Lender has made its Pro Rata Share of such Borrowing available to the Administrative Agent on the date of such Borrowing in accordance with this Agreement and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount.  If and to the extent that such Lender shall not have so made its Pro Rata Share of such Borrowing available to the Administrative Agent, such Lender and the Borrower severally agree to immediately repay to the Administrative Agent on demand such corresponding amount, together with interest on such amount, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Administrative Agent, at (i) in the case of the Borrower, the interest rate applicable on such day to Advances comprising such Borrowing and (ii) in the case of such Lender, the Federal Funds Rate for such day.  If such Lender shall repay to the Administrative Agent such corresponding amount and interest as provided above, such corresponding amount so repaid shall constitute such Lender’s Advance as part of such Borrowing for purposes of this Agreement even though not made on the same day as the other Advances comprising such Borrowing.

(f)            Lender Obligations Several.  The failure of any Lender to make the Advance to be made by it as part of any Borrowing shall not relieve any other Lender of its obligation, if any, to make its Advance on the date of such Borrowing.  No Lender shall be responsible for the failure of any other Lender to make the Advance to be made by such other Lender on the date of any Borrowing.

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Section 2.04       Reduction of the Commitments.

(a)           The Borrower shall have the right, upon at least five Business Days’ irrevocable notice to the Administrative Agent, to terminate in whole or reduce ratably in part the unused portion of the Commitments; provided that each partial reduction shall be in the aggregate amount of $1,000,000 or in integral multiples of $1,000,000 in excess thereof.

(b)           Any reduction and termination of the Commitments pursuant to this Section 2.04 shall be applied ratably to each Lender’s Commitment and shall be permanent, with no obligation of the Lenders to reinstate such Commitments.

Section 2.05       Prepayment of Advances.

(a)           Optional.  The Borrower may prepay the Advances, without premium or penalty, after giving by 12:00 p.m. (New York time) (i) in the case of Eurodollar Rate Advances, at least three Business Days’ or (ii) in the case of Base Rate Advances, on the same Business Day, irrevocable prior written notice to the Administrative Agent stating the proposed date and aggregate principal amount of such prepayment.  If any such notice is given, the Borrower shall prepay the Advances in an aggregate principal amount equal to the amount specified in such notice, together with accrued interest to the date of such prepayment on the principal amount prepaid and amounts, if any, required to be paid pursuant to Section 2.12 as a result of such prepayment being made on such date; provided, however, that each partial prepayment with respect to:  (A) any Eurodollar Rate Advances shall be applied to Eurodollar Rate Advances comprising part of the same Borrowing; and (B) any Type of Advances shall be made in $2,500,000 and in integral multiples of $500,000 in excess thereof (or the remaining aggregate principal balance outstanding).  Full prepayments of any Borrowing are permitted without restriction of amounts.

(b)           Borrowing Base Deficiency.  If a Borrowing Base Deficiency exists, then the Administrative Agent shall give the Borrower and the Lenders prompt written notice thereof.  The Borrower shall prepay the Advances or, if the Advances have been repaid in full, make deposits into the Cash Collateral Account to provide cash collateral for the Letter of Credit Exposure, such that the Borrowing Base deficiency is cured within ninety (90) days after the date a deficiency notice regarding the Borrowing Base is received by the Borrower from the Administrative Agent.  Each prepayment pursuant to this Section 2.05(b) 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 2.12 as a result of such prepayment being made on such date.  Each prepayment under this Section 2.05(b) shall be applied to the Advances in accordance with Section 2.10.

(c)           Reduction of Commitments.  On the date of each reduction of the aggregate Commitments pursuant to Section 2.04, the Borrower agrees to make a prepayment in respect of the outstanding amount of the Advances to the extent, if any, that the aggregate unpaid principal amount of all Advances plus the Revolving Letter of Credit Exposure exceeds the lesser of (A) the aggregate Commitments, as so reduced and (B) the Borrowing Base.  Each prepayment pursuant to this Section 2.05(c) 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 2.12

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as a result of such prepayment being made on such date.  Each prepayment under this Section 2.05(c) shall be applied to the Advances as provided in Section 2.10(a).

(d)           Illegality.  If any Lender shall notify the Administrative Agent and the Borrower that the introduction of or any change in or in the interpretation of any law or regulation makes it unlawful, or that any central bank or other Governmental Authority asserts that it is unlawful for such Lender or its Eurodollar Lending Office to perform its obligations under this Agreement to maintain any Eurodollar Rate Advances of such Lender then outstanding hereunder, (i) the Borrower shall, no later than 12:00 p.m. (New York time) (A) if not prohibited by law, on the last day of the Interest Period for each outstanding Eurodollar Rate Advance made by such Lender or (B) if required by such notice, on the second Business Day following its receipt of such notice, prepay all of the Eurodollar Rate Advances made by such Lender then outstanding, together with accrued interest on the principal amount prepaid to the date of such prepayment and amounts, if any, required to be paid pursuant to Section 2.12 as a result of such prepayment being made on such date, (ii) such Lender shall simultaneously make a Base Rate Advance to the Borrower on such date in an amount equal to the aggregate principal amount of the Eurodollar Rate Advances prepaid to such Lender, and (iii) the right of the Borrower to select Eurodollar Rate Advances from such Lender for any subsequent Borrowing shall be suspended until such Lender gives notice referred to above shall notify the Administrative Agent that the circumstances causing such suspension no longer exist.

(e)           No Additional Right; Ratable Prepayment.  The Borrower shall have no right to prepay any principal amount of any Advance except as provided in this Section 2.05, and all notices given pursuant to this Section 2.05 shall be irrevocable and binding upon the Borrower.  Each payment of any Advance pursuant to this Section 2.05 shall be made in a manner such that all Advances comprising part of the same Borrowing are paid in whole or ratably in part.

Section 2.06       Repayment of Advances.  The Borrower shall repay to the Administrative Agent for the ratable benefit of the Lenders the outstanding principal amount of each Advance, together with any accrued interest on the Maturity Date or such earlier date pursuant to Section 7.02 or Section 7.03.

Section 2.07       Letters of Credit.

(a)           Issuance.  From time to time from the date of this Agreement until 30 days prior to the Commitment Termination Date, at the request of the Borrower, the Issuing Lender shall, on the terms and conditions hereinafter set forth, issue, increase, or extend the Expiration Date of, Letters of Credit for the account of the Borrower on any Business Day.  No Letter of Credit will be issued, increased, or extended:

(i)            if such issuance, increase, or extension would cause the Letter of Credit Exposure to exceed the lesser of (A) $5,000,000 and (B) the Unused Commitment Amount;

(ii)           unless such Letter of Credit has an Expiration Date not later than the earlier of (A) 12 months after the date of issuance thereof (or, if extendable beyond such period, unless such Letter of Credit is cancelable upon not more than 30 days’ notice given by the Issuing Lender to the beneficiary of such Letter of Credit) and (B) the Maturity Date;

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(iii)          unless such Letter of Credit Documents are in form and substance acceptable to the Issuing Lender in its sole discretion;

(iv)          unless such Letter of Credit is a standby letter of credit not supporting the repayment of indebtedness for borrowed money of any Person;

(v)           unless the Borrower has delivered to the Issuing Lender a completed and executed Letter of Credit Application; and

(vi)          unless such Letter of Credit is governed by either (B) the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No.  500 (or any successor to such publication) or (A) the International Standby Practices 1998, Institute of International Banking Law & Practice (or any successor to such publication).

If the terms of any Letter of Credit Application referred to in the foregoing clause (v) conflicts with the terms of this Agreement, the terms of this Agreement shall control.

(b)           Participations.  Upon the date of the issuance or increase of a Letter of Credit, the Issuing Lender shall be deemed to have sold to each Lender and each Lender shall be deemed to have purchased from the Issuing Lender a participation in the related Letter of Credit Obligations equal to such Lender’s Pro Rata Share at such date and such sale and purchase shall otherwise be in accordance with the terms of this Agreement.  The Issuing Lender shall promptly notify each Lender by telex, telephone, or telecopy of each Letter of Credit issued, increased, or extended or converted and the actual dollar amount of such Lender’s participation in such Letter of Credit; provided, however that the failure to give such notice shall not affect the validity of any such participation.

(c)           Issuing.  Each Letter of Credit shall be issued, increased, or extended pursuant to a Letter of Credit Application (or by telephone notice promptly confirmed in writing by a Letter of Credit Application), given not later than 12:00 p.m. (New York time) on the fifth Business Day before the date of the proposed issuance, increase, or extension of the Letter of Credit, and the Issuing Lender shall give to each other Lender prompt notice thereof by telex, telephone, or telecopy.  Each Letter of Credit Application shall be given by telecopier or telex, confirmed immediately in writing, specifying the information required therein.  After the Issuing Lender’s receipt of such Letter of Credit Application and upon fulfillment of the applicable conditions set forth in Article III, the Issuing Lender shall issue, increase, or extend such Letter of Credit for the account of the Borrower.  Each Letter of Credit Application shall be irrevocable and binding on the Borrower.

(d)           Reimbursement.  The Borrower hereby agrees to pay on demand to the Issuing Lender an amount equal to any amount paid by the Issuing Lender under any Letter of Credit; provided that, subject to the terms and conditions of this Agreement, the Borrower may request a Advance hereunder for the purpose of satisfying any such reimbursement obligation.  In the event the Issuing Lender makes a payment pursuant to a request for draw presented under a Letter of Credit and such payment is not promptly reimbursed by the Borrower pursuant to the preceding sentence, the Issuing Lender shall give the Administrative Agent notice of the

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Borrower’s failure to make such reimbursement and the Administrative Agent shall promptly notify each Lender of the amount necessary to reimburse the Issuing Lender.  Upon such notice from the Administrative Agent, each Lender shall promptly reimburse the Issuing Lender for such Lender’s Pro Rata Share of such amount, and such reimbursement shall be deemed for all purposes of this Agreement to be a Advance to the Borrower transferred at the Borrower’s request to the Issuing Lender.  If such reimbursement is not made by any Lender to the Issuing Lender on the same day on which the Administrative Agent notifies such Lender to make reimbursement to the Issuing Lender hereunder, such Lender shall pay interest on its Pro Rata Share thereof to the Issuing Lender at a rate per annum equal to the Federal Funds Rate.  The Borrower hereby unconditionally and irrevocably authorizes, empowers, and directs the Administrative Agent and the Lenders to record and otherwise treat such reimbursements to the Issuing Lender as Base Rate Advances under a Borrowing requested by the Borrower to reimburse the Issuing Lender which have been transferred to the Issuing Lender at the Borrower’s request.

(e)           Obligations Unconditional.  The obligations of the Borrower under this Agreement in respect of each Letter of Credit shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including, without limitation, the following circumstances:

(i)            any lack of validity or enforceability of any Letter of Credit Documents;

(ii)           any amendment or waiver of, or any consent to or departure from, any Letter of Credit Documents;

(iii)          the existence of any claim, set-off, defense, or other right which the Borrower may have at any time against any beneficiary or transferee of such Letter of Credit (or any Persons for whom any such beneficiary or any such transferee may be acting), the Issuing Lender, or any other person or entity, whether in connection with this Agreement, the transactions contemplated in this Agreement or in any Letter of Credit Documents, or any unrelated transaction;

(iv)          any statement or any other document presented under such Letter of Credit proving to be forged, fraudulent, invalid, or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;

(v)           payment by the Issuing Lender under such Letter of Credit against presentation of a draft or certificate which does not comply with the terms of such Letter of Credit; or

(vi)          any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.

provided, however, that nothing contained in this paragraph (e) shall be deemed to constitute a waiver of any remedies of the Borrower in connection with the Letters of Credit or the Borrower’s rights under Section 2.07(f) below.

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(f)            Liability of Issuing Lender.  The Borrower assumes all risks of the acts or omissions of any beneficiary or transferee of any Letter of Credit with respect to its use of such Letter of Credit.  Neither the Issuing Lender nor any of its officers or directors shall be liable or responsible for:

(i)            the use which may be made of any Letter of Credit or any acts or omissions of any beneficiary or transferee in connection therewith;

(ii)           the validity, sufficiency, or genuineness of documents, or of any endorsement thereon, even if such documents should prove to be in any or all respects invalid, insufficient, fraudulent, or forged;

(iii)          payment by the Issuing Lender against presentation of documents which do not comply with the terms of a Letter of Credit, including failure of any documents to bear any reference or adequate reference to the relevant Letter of Credit; or

(iv)          any other circumstances whatsoever in making or failing to make payment under any Letter of Credit (including the Issuing Lender’s own negligence),

except that the Borrower shall have a claim against the Issuing Lender, and the Issuing Lender shall be liable to the Borrower, to the extent of any direct, as opposed to consequential, damages suffered by the Borrower which the Borrower proves were caused by the Issuing Lender’s willful misconduct or gross negligence in determining whether documents presented under a Letter of Credit comply with the terms of such Letter of Credit.  In furtherance and not in limitation of the foregoing, the Issuing Lender may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary.

(g)           Cash Collateral Account.

(i)            If the Borrower is required to deposit funds in the Cash Collateral Account pursuant to Sections 2.05(b), 7.02(b), or 7.03(b), then the Borrower and the Issuing Lender shall establish the Cash Collateral Account and the Borrower shall execute any documents and agreements, including the Issuing Lender’s standard form assignment of deposit accounts, that the Issuing Lender requests in connection therewith to establish the Cash Collateral Account and grant the Issuing Lender a first priority security interest in such account and the funds therein.  The Borrower hereby pledges to the Issuing Lender and grants the Issuing Lender a security interest in the Cash Collateral Account, whenever established, all funds held in the Cash Collateral Account from time to time, and all proceeds thereof as security for the payment of the Obligations.

(ii)           So long as no Event of Default Exists, (A) the Issuing Lender may apply the funds held in the Cash Collateral Account only to the reimbursement of any Letter of Credit Obligations, and (B) the Issuing Lender shall release to the Borrower at the Borrower’s written request any funds held in the Cash Collateral Account in an amount up to but not exceeding the excess, if any (immediately prior to the release of any such funds), of the total amount of funds held in the Cash Collateral Account over the Letter of Credit Exposure.  During the existence of

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any Event of Default, the Issuing Lender may apply any funds held in the Cash Collateral Account to the Obligations in accordance with Section 7.06.

(iii)          The Issuing Lender shall exercise reasonable care in the custody and preservation of any funds held in the Cash Collateral Account and shall be deemed to have exercised such care if such funds are accorded treatment substantially equivalent to that which the Issuing Lender accords its own property, it being understood that the Issuing Lender shall not have any responsibility for taking any necessary steps to preserve rights against any parties with respect to any such funds.

Section 2.08       Fees.

(a)           Commitment Fees.  The Borrower agrees to pay to the Administrative Agent for the account of each Lender a commitment fee at a per annum rate equal to the Applicable Margin for commitment fees on the average daily Unused 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 March 31, 2003 and continuing thereafter through and including the Commitment Termination Date.

(b)           Letter of Credit Fees.  The Borrower agrees to pay (i) to the Administrative Agent for the pro rata benefit of the Lenders a per annum letter of credit fee for each Financial Letter of Credit issued hereunder in an amount equal to the Applicable Margin for Eurodollar Rate Advances on the aggregate amount available for drawing from time to time under such Letter of Credit, (ii) to the Administrative Agent for the pro rata benefit of the Lenders a per annum letter of credit fee for each Performance Letter of Credit issued hereunder in an amount equal to 50% of the Applicable Margin for Eurodollar Rate Advances on the aggregate amount available for drawing from time to time under such Letter of Credit.  Each such fee will be calculated based on the face amount of all Letters of Credit outstanding on each day at the above applicable rate and will be payable quarterly in arrears.  In addition, the Borrower agrees to pay to the Issuing Lender, (i) a fronting fee for each Letter of Credit equal to 0.125% of the face amount of such Letter of Credit and (ii) such other usual and customary fees associated with any transfers, amendments, drawings, negotiations or reissuances of any Letters of Credit.

(c)           Other Fees.  The Borrower agrees to pay to the Lead Arranger, the Administrative Agent and the Documentation Agent the fees described in the Administrative Agent’s Fee Letter.

Section 2.09       Interest.  The Borrower shall pay interest on the unpaid principal amount of each Advance made by each Lender from the date of such Advance until such principal amount shall be paid in full, at the following rates per annum:

(a)           Base Rate Advances.  If such Advance is a Base Rate Advance, a rate per annum equal at all times to the Adjusted Base Rate in effect from time to time plus the Applicable Margin in effect from time to time, payable quarterly in arrears on the last day of each calendar quarter and on the date such Base Rate Advance shall be paid in full, provided that upon the occurrence and continuance of an Event of Default, such Advances shall bear interest from the date on which such Event of Default occurred until such Event of Default has been cured or

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 waived, payable on demand, at a rate per annum equal at all times to the Adjusted Base Rate in effect from time to time plus the Applicable Margin plus 2.00%, provided that the rate charged pursuant to this Section 2.09(a) shall never exceed the Maximum Rate.

(b)           Eurodollar Rate Advances.  If such Advance is a Eurodollar Rate Advance, a rate per annum equal at all times during the Interest Period for such Advance to the Eurodollar Rate for such Interest Period plus the Applicable Margin in effect from time to time, payable on the last day of such Interest Period, and, in the case of six-month Interest Periods, on the day which occurs during such Interest Period three months from the first day of such Interest Period, provided that upon the occurrence and continuance of an Event of Default, such Advance shall bear interest from the date on which such Event of Default occurred until such Event of Default has been cured or waived, payable on demand, at a rate per annum equal at all times to the rate required to be paid on such Advance immediately prior to the occurrence of such Event of Default plus 2.00%, provided further, that any amount of principal, interest, fees or any other amount which is not paid when due (whether at stated maturity, by acceleration, or otherwise) shall bear interest from the date on which such amount is due until such amount is paid in full, payable on demand, at a rate per annum equal at all times to the Adjusted Base Rate in effect from time to time plus the Applicable Margin plus 2.00%, provided that the rate charged pursuant to this Section 2.09(b) shall never exceed the Maximum Rate.

(c)           Additional Interest on Eurodollar Rate Advances.  The Borrower shall pay to each Lender, so long as any such Lender shall be required under regulations of the Federal Reserve Board to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency Liabilities, additional interest on the unpaid principal amount of each Eurodollar Rate Advance of such Lender, from the effective date of such Advance until such principal amount is paid in full, at an interest rate per annum equal at all times to the remainder obtained by subtracting (i) the Eurodollar Rate for the Interest Period for such Advance from (ii) the rate obtained by dividing such Eurodollar Rate by a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage of such Lender for such Interest Period, payable on each date on which interest is payable on such Advance.  Such additional interest payable to any Lender shall be determined by such Lender and notified to the Borrower through the Administrative Agent (such notice to include the calculation of such additional interest, which calculation shall be conclusive in the absence of manifest error).

(d)           Usury Recapture.

(i)            If, with respect to any Lender, the effective rate of interest contracted for under the Loan Documents, including the stated rates of interest and fees contracted for hereunder and any other amounts contracted for under the 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 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

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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 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 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.

Section 2.10       Payments and Computations.

(a)           Payment Procedures.  The Borrower shall make each payment under this Agreement and under the Notes not later than 12:00 p.m. (New York time) on the day when due in Dollars to the Administrative Agent at the location referred to in the Notes (or such other location as the Administrative Agent shall designate in writing to the Borrower) in same day funds without deduction, setoff, or counterclaim of any kind.  The Administrative Agent shall promptly thereafter cause to be distributed like funds relating to the payment of principal, interest or fees ratably (other than amounts payable solely to the Administrative Agent, the Issuing Lender, or a specific Lender pursuant to Section 2.08(b), 2.08(c), 2.09(c), 2.12, 2.13, 2.14, 10.05, or 11.07, but after taking into account payments effected pursuant to Section 10.04) in accordance with each Lender’s Pro Rata Share to the Lenders for the account of their respective Applicable Lending Offices, and like funds relating to the payment of any other amount payable to any Lender or the Issuing Lender to such Lender for the account of its Applicable Lending Office, in each case to be applied in accordance with the terms of this Agreement.

(b)           Computations.  All computations of interest based on the Base Rate and of fees shall be made by the Administrative Agent on the basis of a year of 365 or 366 days, as the case may be, and all computations of interest based on the Eurodollar Rate and the Federal Funds Rate shall be made by the Administrative Agent, on the basis of a year of 360 days, in each case for the actual number of days (including the first day, but excluding the last day) occurring in the period for which such interest or fees are payable.  Each determination by the Administrative Agent of an interest rate or fee shall be conclusive and binding for all purposes, absent manifest error.

(c)           Non-Business Day Payments.  Whenever any payment shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest or fees, as the case may be; provided, however, that if such extension would cause

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payment of interest on or principal of Eurodollar Rate Advances to be made in the next following calendar month, such payment shall be made on the next preceding Business Day.

(d)           Administrative Agent Reliance.  Unless the Administrative Agent shall have received written notice from the Borrower prior to the date on which any payment is due to the Lenders that the Borrower shall not make such payment in full, the Administrative Agent may assume that the Borrower has made such payment in full to the Administrative Agent on such date and the Administrative Agent may, in reliance upon such assumption, cause to be distributed to each Lender on such date an amount equal to the amount then due such Lender.  If and to the extent the Borrower shall not have so made such payment in full to the Administrative Agent, each Lender shall repay to the Administrative Agent forthwith on demand such amount distributed to such Lender, together with interest, for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to the Administrative Agent, at the Federal Funds Rate for such day.

Section 2.11       Sharing of Payments, Etc.  If any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of the Advances or Letter of Credit Obligations made by it in excess of its Pro Rata Share of payments on account of the Advances or Letter of Credit Obligations obtained by all the Lenders, such Lender shall notify the Administrative Agent and forthwith purchase from the other Lenders such participations in the Advances made by them or Letter of Credit Obligations held by them as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded and such Lender shall repay to the purchasing Lender the purchase price to the extent of such Lender’s ratable share (according to the proportion of (a) the amount of the participation sold by such Lender to the purchasing Lender as a result of such excess payment to (b) the total amount of such excess payment) of such recovery, together with an amount equal to such Lender’s ratable share (according to the proportion of (i) the amount of such Lender’s required repayment to the purchasing Lender to (ii) the total amount of all such required repayments to the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered.  The Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section 2.11 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation.

Section 2.12       Breakage Costs.  If (a) any default by the Borrower in making any borrowing of, conversion into or continuation of any Eurodollar Rate Advance after the Borrower has given a notice requesting the same in accordance with the provisions of this Agreement, (b) any payment of any Eurodollar Rate Advance is made prior to the last day of the Interest Period for such Advance, whether as a result of any payment pursuant to Section 2.05, the acceleration of the maturity of the Notes pursuant to Article VII, or otherwise, or (c) any default by the Borrower in making any prepayment of any Eurodollar Rate Advance after the Borrower has given notice thereof in accordance with the provisions of this Agreement, the Borrower shall, within 10 days of any written demand sent by any Lender to the Borrower through the Administrative Agent, pay to the Administrative Agent for the account of such

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Lender any amounts required to compensate such Lender for any additional losses, out-of-pocket costs or expenses which it may reasonably incur as a result of such payment or nonpayment, including, without limitation, any loss, cost, or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund or maintain such Advance.

Section 2.13       Increased Costs.

(a)           Eurodollar Rate Advances.  If, due to either (i) the introduction of or any change (other than any change by way of imposition or increase of reserve requirements included in the Eurodollar Rate Reserve Percentage) in or in the interpretation of any law or regulation or (ii) the compliance with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), there shall be any increase in the cost to any Lender of agreeing to make or making, funding, or maintaining Eurodollar Rate Advances, then the Borrower shall from time to time, upon demand by such Lender (with a copy of such demand to the Administrative Agent), immediately pay to the Administrative Agent for the account of such Lender additional amounts sufficient to compensate such Lender for such increased cost.  A certificate as to the amount of such increased cost and detailing the calculation of such cost submitted to the Borrower and the Administrative Agent by such Lender shall be conclusive and binding for all purposes, absent manifest error.

(b)           Capital Adequacy.  If any Lender or the Issuing Lender determines in good faith that compliance with any law or regulation or any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law) affects or would affect the amount of capital required or expected to be maintained by such Lender or the Issuing Lender or any corporation controlling such Lender or the Issuing Lender and that the amount of such capital is increased by or based upon the existence of such Lender’s commitment to lend or the Issuing Lender’s commitment to issue the Letters of Credit and other commitments of this type, then, upon 30 days’ prior written notice by such Lender or the Issuing Lender (with a copy of any such demand to the Administrative Agent), the Borrower shall immediately pay to the Administrative Agent for the account of such Lender or to the Issuing Lender, as the case may be, from time to time as specified by such Lender or the Issuing Lender, additional amounts sufficient to compensate such Lender or the Issuing Lender for the reduced rate of return on that capital of such Lender or the Issuing Lender (but without duplication of amounts, if any, paid by the Borrower pursuant to Section 2.13(a) above), in light of such circumstances, (i) with respect to such Lender, to the extent that such Lender reasonably determines such increase in capital to be allocable to the existence of such Lender’s commitment to lend under this Agreement and (ii) with respect to the Issuing Lender, to the extent that the Issuing Lender reasonably determines such increase in capital to be allocable to the issuance or maintenance of the Letters of Credit.  A certificate as to such amounts and detailing the calculation of such amounts submitted to the Borrower by such Lender or the Issuing Lender shall be conclusive and binding for all purposes, absent manifest error.

(c)           Letters of Credit.  If any change in any law or regulation or in the interpretation thereof by any court or administrative or Governmental Authority charged with the administration thereof shall either (i) impose, modify, or deem applicable any reserve, special deposit, or similar requirement against letters of credit issued by, or assets held by, or deposits in

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or for the account of, the Issuing Lender or (ii) impose on the Issuing Lender any other condition regarding the provisions of this Agreement relating to the Letters of Credit or any Letter of Credit Obligations, and the result of any event referred to in the preceding clause (i) or (ii) shall be to increase the cost to the Issuing Lender of issuing or maintaining any Letter of Credit (which increase in cost shall be determined by the Issuing Lender’s reasonable allocation of the aggregate of such cost increases resulting from such event), then, upon demand by the Issuing Lender, the Borrower shall pay to the Issuing Lender, from time to time as specified by the Issuing Lender, additional amounts which shall be sufficient to compensate the Issuing Lender for such increased cost.  A certificate as to such increased cost incurred by the Issuing Lender, as a result of any event mentioned in clause (i) or (ii) above, and detailing the calculation of such increased costs submitted by the Issuing Lender to the Borrower, shall be conclusive and binding for all purposes, absent manifest error.

Section 2.14       Taxes.

(a)           No Deduction for Certain Taxes.  Any and all payments by the Borrower shall be made, in accordance with Section 2.10, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Lender, the Issuing Lender, and the Administrative Agent, taxes imposed on its net income, and franchise taxes imposed on it, by the jurisdiction under the laws of which such Lender, the Issuing Lender, or the Administrative Agent (as the case may be) is organized or any political subdivision of the jurisdiction (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as “Taxes”) and, in the case of each Lender and the Issuing Lender, Taxes by the jurisdiction of such Lender’s Applicable Lending Office or any political subdivision of such jurisdiction.  If the Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable to any Lender, the Issuing Lender, or the Administrative Agent, (i) the sum payable shall be increased as may be necessary so that, after making all required deductions (including deductions applicable to additional sums payable under this Section 2.14), such Lender, the Issuing Lender, or the Administrative Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made; provided, however, that if the Borrower’s obligation to deduct or withhold Taxes is caused solely by such Lender’s, the Issuing Lender’s, or the Administrative Agent’s failure to provide the forms described in paragraph (d) of this Section 2.14 and such Lender, the Issuing Lender, or the Administrative Agent could have provided such forms, no such increase shall be required; (ii) the Borrower shall make such deductions; and (iii) the Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.

(b)           Other Taxes.  In addition, the Borrower agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies which arise from any payment made or from the execution, delivery or registration of, or otherwise with respect to, this Agreement, the Notes, or the other Loan Documents (hereinafter referred to as “Other Taxes”).

(c)           Indemnification.  THE BORROWER INDEMNIFIES EACH LENDER, THE ISSUING LENDER, AND THE ADMINISTRATIVE AGENT FOR THE FULL AMOUNT OF TAXES OR OTHER TAXES (INCLUDING, WITHOUT LIMITATION, ANY TAXES OR OTHER TAXES IMPOSED BY ANY

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jurisdiction on amounts payable under this Section 2.14) paid by such Lender, the Issuing Lender, or the Administrative Agent (as the case may be) and any liability (including interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted unless the payment of such Taxes or Other Taxes were not correctly or legal asserted and such Lender’s payment of such Taxes or Other Taxes was the result of its gross negligence or wilful misconduct.  Each payment required to be made by the Borrower in respect of this indemnification shall be made to the Administrative Agent for the benefit of any party claiming such indemnification within 30 days from the date the Borrower receives written demand therefor from the Administrative Agent on behalf of itself as Administrative Agent, the Issuing Lender, or any such Lender.  If any Lender, the Administrative Agent, or the Issuing Lender receives a refund in respect of any Taxes paid by the Borrower under this paragraph (c), such Lender, the Administrative Agent, or the Issuing Lender, as the case may be, shall promptly pay to the Borrower the Borrower’s share of such refund.

(d)           Foreign Lender Withholding Exemption.  Each Lender and Issuing Lender that is not incorporated under the laws of the United States of America or a state thereof agrees that upon the request of the Borrower it shall deliver to the Borrower and the Administrative Agent (i) two duly completed copies of United States Internal Revenue Service Form W8-ECI, W8-IMY or W8-BEN or successor applicable form, as the case may be, certifying in each case that such Lender is entitled to receive payments under this Agreement and the Notes payable to it, without deduction or withholding of any United States federal income taxes, (ii) if applicable, an Internal Revenue Service Form W-9 or successor applicable form, as the case may be, to establish an exemption from United States backup withholding tax, and (iii) any other governmental forms which are necessary or required under an applicable tax treaty or otherwise by law to reduce or eliminate any withholding tax, which have been reasonably requested by the Borrower.  If an event (including without limitation any change in treaty, law or regulation) has occurred prior to the date on which any delivery required by the preceding sentence would otherwise be required which renders all such forms inapplicable or which would prevent any Lender from duly completing and delivering any such form with respect to it and such Lender advises the Borrower and the Administrative Agent that it is not capable of receiving payments without any deduction or withholding of United States federal income tax, and in the case of a Form W-9 establishing an exemption from United States backup withholding tax, such Lender shall not be required to deliver such form.  The Borrower shall withhold tax at the rate and in the manner required by the laws of the United States with respect to payments made to a Lender failing to timely provide the requisite Internal Revenue Service forms.  For any period with respect to which a Lender or the Issuing Lender has failed to provide the Borrower and the Administrative Agent with the appropriate form pursuant to this Section 2.14(d) (unless such failure is due to a change in treaty or Legal Requirement occurring subsequent to the date on which a form originally was required to be provided), such Lender or the Issuing Lender, as applicable, shall not be entitled to indemnification under Section 2.14(c) with respect to Taxes imposed by the United States which taxes would not have been imposed but for such failure to provide such forms; provided, however that should a Lender, which is otherwise exempt from or subject to a reduced rate of withholding tax becomes subject to Taxes because of its failure to

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deliver a form required hereunder, the Borrower shall take such steps as such Lender shall reasonable request to assist such Lender to recover such Taxes.

ARTICLE III

CONDITIONS OF LENDING

Section 3.01       Conditions Precedent to Closing Date.  The Closing Date shall occur upon the satisfaction of the following conditions precedent that:

(a)           Documentation.  The Administrative Agent shall have received the following duly executed by all the parties thereto, in form and substance satisfactory to the Administrative Agent, the Issuing Lender and the Lenders, and, where applicable, in sufficient copies for each Lender:

(i)            this Agreement;

(ii)           a Note payable to the order of each Lender in the amount of its Commitment;

(iii)          a Security Agreement executed by the Borrower and each of its Subsidiaries;

(iv)          a Pledge Agreement executed by Brigham Exploration and the General Partner;

(v)           stock certificates required in connection with the Pledge Agreements and stock powers executed in blank for each such stock certificate;

(vi)          the Mortgage Amendments and any additional Mortgages that may be required pursuant to Section 5.11;

(vii)         copies of insurance policies or certificates thereof naming the Administrative Agent loss payee or additional insured, as applicable, certified by the Borrower’s insurance broker as true and correct copies thereof, and which are otherwise satisfactory to the Administrative Agent;

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

(ix)           a favorable opinion dated as of the Closing Date of Mahaffey & Gore, P.C., Oklahoma counsel to the Credit Parties, in form and substance reasonably satisfactory to the Administrative Agent;

(x)            copies, certified as of the date of this Agreement by a Responsible Officer or the secretary or an assistant secretary of the General Partner of (A) the resolutions of the

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applicable governing body of the Borrower approving the Loan Documents to which the Borrower is a party, (B) the organizational documents of the Borrower, and (C) all other documents evidencing other necessary corporate action and governmental approvals, if any, with respect to this Agreement, the Notes, the Security Instruments and the other Loan Documents to which the Borrower is a party;

(xi)           certificates of a Responsible Officer or the secretary or an assistant secretary of the General Partner certifying the names and true signatures of the officers of the General Partner authorized to sign on behalf of the Borrower this Agreement, the Notes, Notices of Borrowing, Notices of Conversion or Continuation, the Security Instruments and the other Loan Documents to which the Borrower is a party;

(xii)          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 Loan Documents to which it is a party, (B) the organizational documents of such Guarantor, and (C) all other documents evidencing other necessary corporate action and governmental approvals, if any, with respect to this Agreement, the Security Instruments, and the other Loan Documents to which such Guarantor is a party;

(xiii)         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 Agreement, the Security Instruments and the other Loan Documents to which such Guarantor is a party;

(xiv)        certificates from the appropriate Governmental Authority certifying as to the good standing, existence and authority of each of the Credit Parties in all jurisdictions where required by the Administrative Agent;

(xv)         a certificate dated as of the date of this Agreement from the Responsible Officer of the General Partner stating that (A) all representations and warranties of the Borrower set forth in this Agreement are true and correct in all material respects; (B) no Default has occurred and is continuing; and (C) the conditions in this Section 3.01 have been met;

(xvi)        the Intercreditor and Subordination Agreement;

(xvii)       results of lien, tax and judgment searches of the UCC Records of the Secretary of State and applicable counties of the States of Delaware, Oklahoma and Texas from a source acceptable to the Administrative Agent and reflecting no Liens against any of the Collateral as to which perfection of a Lien is accomplished by the filing of a financing statement other than in favor of the Administrative Agent, other than Permitted Liens;

(xviii)      appropriate UCC-1 Financing Statements covering the Collateral for filing with the appropriate authorities and any other documents, agreements or instruments necessary to create an Acceptable Security Interest in such Collateral;

(xix)         the Side Letter Agreement; and

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(xx)          such other documents, governmental certificates, agreements and lien searches as the Administrative Agent or any Lender may reasonably request.

(b)           Due Diligence.  The Administrative Agent and the Lenders shall have completed satisfactory due diligence review of the assets, liabilities, business, operations and condition (financial or otherwise) of the Borrower and its Subsidiaries, including, but not limited, to a review of their Oil and Gas Properties, Subordinated Debt, and all legal, financial, accounting, governmental, environmental, tax and regulatory matters, and fiduciary aspects of the proposed financing.

(c)           Payment of Fees.  On the date of this Agreement, the Borrower shall have paid the fees required by Section 2.08(c) and all costs and expenses that have been invoiced and are payable pursuant to Section 10.04.

(d)           Delivery of Financial Statements.  The Administrative Agent and the Lenders shall have received true and correct copies of (i) the Financial Statements, and (ii) such other financial information as the Administrative Agent or any Lender may reasonably request.

(e)           No Default.  No Default shall have occurred and be continuing.

(f)            Representations and Warranties.  The representations and warranties contained in Article IV hereof and in each other Loan Document shall be true and correct in all respects.

(g)           Material Adverse Change.  No event or circumstance that could cause a Material Adverse Change shall have occurred.

(h)           No Proceeding or Litigation; No Injunctive Relief.  Except as described in Schedule 4.07, no action, suit, investigation or other proceeding (including, without limitation, the enactment or promulgation of a statute or rule) by or before any arbitrator or any Governmental Authority shall be threatened or pending and no preliminary or permanent injunction or order by a state or federal court shall have been entered against the Borrower or any of its Subsidiaries.

(i)            Consents, Licenses, Approvals, etc.  The Administrative Agent shall have received true copies (certified to be such by a Responsible Officer the Borrower or other appropriate Credit Party) of all consents, licenses and approvals required in accordance with applicable Legal Requirements, or in accordance with any document, agreement, instrument or arrangement to which any Credit Party is a party, in connection with the execution, delivery, performance, validity and enforceability of this Agreement and the other Loan Documents.  In addition, the Credit Parties shall have all such material consents, licenses and approvals required in connection with the continued operation of the Credit Parties, and such approvals shall be in full force and effect, and all applicable waiting periods shall have expired without any action being taken or threatened by any competent authority which would restrain, prevent or otherwise impose adverse conditions on this Agreement and the actions contemplated hereby.

(j)            Subordinated Debt.  The Borrower shall have entered into the Subordinated Credit Agreement, the terms and conditions thereof shall be reasonably satisfactory to the Administrative Agent and the Lenders and the conditions precedent set forth in Section 3.01 of

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the Subordinated Credit Agreement shall contemporaneously herewith have been satisfied or waived as of the date of the Closing Date.  The Borrower shall have delivered copies of the Subordinated Credit Agreement and each other agreement, instrument, or document executed by any Credit Party or any of their officers at any time in connection with the Subordinated Credit Agreement on or before the Closing Date.

(k)           Security Instruments.  The Administrative Agent shall have received all appropriate evidence required by the Administrative Agent and the Lenders in their sole discretion necessary to determine that arrangements have been made for the Administrative Agent (for its benefit and the benefit of the Lenders) to have an Acceptable Security Interest in the Collateral and that all actions or filings necessary to protect, preserve and validly perfect such Liens have been made, taken or obtained (or will be upon the filing and recording of the appropriate Security Instruments), as the case may be, and are in full force and effect.

(l)            Title.  The Administrative Agent shall be satisfied in its sole discretion with the title to the Oil and Gas Properties included in the Borrowing Base and that such Oil and Gas Properties constitute a percentage of such Collateral reasonably satisfactory to the Administrative Agent.

(m)          Assignment of Existing Senior Credit Agreement.  The Administrative Agent and the Lenders shall have received sufficient evidence indicating that simultaneously with the making of the initial Advances hereunder, the obligations of the Credit Parties under the Existing Senior Credit Agreement (including, without limitation, any obligations of any Credit Party in respect of guaranties and security agreements executed in connection with such Existing Credit Agreements) and the Liens securing the same shall have been assigned to the Administrative Agent for the benefit of the Lenders and encumbering the same Property.

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

Section 3.02       Conditions Precedent to All Borrowings.  The obligation of each Lender to make an Advance on the occasion of each Borrowing and of the Issuing Lender to issue, increase, or extend any Letter of Credit shall be subject to the further conditions precedent that on the date of such Borrowing or the date of the issuance, increase, or extension of such Letter of Credit:

(a)           the following statements shall be true (and each of the giving of the applicable Notice of Borrowing, Notice of Conversion or Continuation, or Letter of Credit Application and the acceptance by the Borrower of the proceeds of such Borrowing or the issuance, increase, or extension of such Letter of Credit shall constitute a representation and warranty by the Borrower that on the date of such Borrowing, the issuance, increase, or extension of such Letter of Credit, such statements are true):

(i)            the representations and warranties contained in Article IV of this Agreement and the representations and warranties contained in the Security Instruments, the Guaranties, and each of the other Loan Documents are true and correct in all material respects on

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and as of the date of such Borrowing or the date of the issuance, increase, or extension of such Letter of Credit, before and after giving effect to such Borrowing or to the issuance, increase, or extension of such Letter of Credit and to the application of the proceeds from such Borrowing, as though made on and as of such date (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 respect as of such earlier date);

(ii)           no Default has occurred and is continuing or would result from such Borrowing or from the application of the proceeds therefrom, or would result from the issuance, increase, or extension of such Letter of Credit; and

(iii)          after giving effect to the such proposed Borrowing, no Borrowing Base Deficiency exists; and

(b)           the Administrative Agent shall have received such other approvals, opinions, or documents reasonably deemed necessary or desirable by any Lender as a result of circumstances occurring after the date of this Agreement, as any Lender through the Administrative Agent may reasonably request.

ARTICLE IVREPRESENTATIONS AND WARRANTIES

Each Credit Party jointly and severally represents and warrants as follows:

Section 4.01       Corporate Existence; Subsidiaries.  Each of the Credit Parties is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation and in good standing and qualified to do business in each jurisdiction where its ownership or lease of Property or conduct of its business requires such qualification and where the failure to so qualify could reasonably be expected to cause a Material Adverse Change.  As of the Closing Date, the Credit Parties have no Subsidiaries other than those listed on Schedule 4.01.

Section 4.02       Corporate Power.  The execution, delivery, and performance by each Credit Party of this Agreement, the Notes, and the other Loan Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby (a) are within such Credit Party’s powers, (b) have been duly authorized by all necessary governing action, (c) do not contravene (i) such Credit Party’s governance documents or (ii) any Legal Requirement or any material contractual restriction binding on or affecting such Credit Party, and (d) will not result in or require the creation or imposition of any Lien upon any of the material Property of any Credit Party prohibited by this Agreement.  At the time of each Advance, such Advance and the use of the proceeds of such Advance will (A) be within the Borrower’s limited partnership powers, (B) have been duly authorized by all necessary partnership action, (C) not contravene (i) the Borrower’s limited partnership agreement or other organizational documents or (ii) any Legal Requirement or any material contractual restriction of any material agreement binding on or affecting the Borrower and (D) not result in or require the creation or imposition of any Lien upon any of the material Property of any Credit Party prohibited by this Agreement.

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Section 4.03       Authorization and Approvals.  No consent, order, authorization, or approval or other action by, and no notice to or filing with, any Governmental Authority or any other Person is required for the due execution, delivery, and performance by any Credit Party of this Agreement, the Notes, or the other Loan Documents to which such Credit Party is a party or the consummation of the transactions contemplated hereby or thereby.  At the time of each Borrowing and each issuance, increase or extension of a Letter of Credit, no authorization or approval or other action by, and no notice to or filing with, any Governmental Authority will be required for such Borrowing or such issuance, increase or extension of such Letter of Credit or the use of the proceeds of such Borrowing or such Letter of Credit.

Section 4.04       Enforceable Obligations.  This Agreement, the Notes, and the other Loan Documents to which each Credit Party is a party have been duly executed and delivered by such Credit Party.  Each Loan Document to which each Credit Party is a party is the legal, valid, and binding obligation of such Credit Party enforceable against such Credit Party in accordance with its terms, except as such enforceability may be limited by any applicable bankruptcy, insolvency, reorganization, moratorium, or similar law affecting creditors’ rights generally and by general principles of equity.

Section 4.05       Financial Statements.

(a)           The Borrower has delivered to the Administrative Agent and the Lenders the Financial Statements, and the Financial Statements are correct and complete in all material respects and present fairly the consolidated financial condition of the Credit Parties as of their respective dates and for their respective periods in accordance with GAAP, applied on a consistent basis.  As of the date of the Financial Statements, there were no material Debt, trade payables, contingent obligations, liabilities for taxes, unusual forward or long-term commitments, or unrealized or anticipated losses of any Credit Party, except as disclosed therein and adequate reserves for such items have been made in accordance with GAAP.

(b)           Since December 31, 2002, no event or circumstance that could reasonably be expected to cause a Material Adverse Change has occurred.

(c)           Each of the Credit Parties is Solvent.

Section 4.06       True and Complete Disclosure.  All written information (whether delivered before or after the Closing Date) furnished by or on behalf of any Credit Party to any Lender or the Administrative Agent for purposes of or in connection with this Agreement, any other Loan Document or any transaction contemplated hereby or thereby, when taken as a whole, is true and accurate in all material respects on the date as of which such information is dated or certified (or, if not dated and certified, as of the date as of which such information is provided) and does not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements contained therein not materially misleading at such time.  All projections, estimates, and pro forma financial information furnished by the Borrower were prepared on the basis of assumptions, data, information, tests, or conditions believed to be reasonable at the time such projections, estimates, and pro forma financial information were furnished, but the Credit Parties do not represent and warrant that such projections, estimates or pro forma information is (or will ultimately prove to have been) accurate.

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Section 4.07       Litigation.  There is no pending or, to the knowledge of any Responsible Officer of any Credit Party, threatened action or proceeding affecting any of the Credit Parties before any court, Governmental Authority or arbitrator which (a) both (i) involves the possibility of any judgment or liability against any Credit Party not fully covered by insurance (except for normal deductibles) and (ii) could reasonably be expected to be cause a Material Adverse Change or (b) purports to affect the legality, validity, binding effect or enforceability of this Agreement, any Note, or any other Loan Document.  Additionally, there is no pending or, to the knowledge of any Responsible Officer of any Credit Party, threatened action or proceeding instituted against any Credit Party which seeks to adjudicate such Credit Party as bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or for any substantial part of its Property.

Section 4.08       Taxes.

(a)           Reports and Payments.  All Returns (as defined below in clause (c) of this Section) required to be filed by or on behalf of any Credit Party or any member of the Controlled Group (hereafter collectively called the “Tax Group”) have been duly filed on a timely basis or appropriate extensions have been obtained and such Returns are and will be true, complete and correct in all material respects; and all Taxes shown to be payable on the Returns or on subsequent assessments with respect thereto will have been paid in full on a timely basis, and no other Taxes will be payable by the Tax Group with respect to items or periods covered by such Returns, except where any obligation is being contested in good faith and by appropriate proceedings and after adequate reserves for such items have been made in accordance with GAAP.  The reserves for accrued Taxes reflected in the financial statements delivered to the Lenders under this Agreement are adequate in the aggregate for the payment of all unpaid Taxes, whether or not disputed, for the period ended as of the date thereof and for any period prior thereto, and for which the Tax Group may be liable in its own right, as withholding agent or as a transferee of the assets of, or successor to, any Person.

(b)           Taxes Definition.  “Taxes” in this Section 4.08 shall mean all taxes, charges, fees, levies, or other assessments imposed by any federal, state, local, or foreign taxing authority, including without limitation, income, gross receipts, excise, real or personal property, sales, occupation, use, service, leasing, environmental, value added, transfer, payroll, and franchise taxes (and including any interest, penalties, or additions to tax attributable to or imposed on with respect to any such assessment).

(c)           Returns Definition.  “Returns” in this Section 4.08 shall mean any federal, state, local, or foreign report, estimate, declaration of estimated Tax, information statement or return relating to, or required to be filed in connection with, any Taxes, including any information return or report with respect to backup withholding or other payments of third parties.

Section 4.09       Pension Plans.  All Plans are in compliance in all material respects with all applicable provisions of ERISA.  No Termination Event has occurred with respect to any Plan, and each Plan has complied with and been administered in all material respects in accordance

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with applicable provisions of ERISA and the Code.  No “accumulated funding deficiency” (as defined in Section 302 of ERISA) has occurred and there has been no excise tax imposed under Section 4971 of the Code.  No Reportable Event has occurred with respect to any Multiemployer Plan, and each Multiemployer Plan has complied with and been administered in all material respects with applicable provisions of ERISA and the Code.  The present value of all benefits vested under each Plan (based on the assumptions used to fund such Plan) did not, as of the last annual valuation date applicable thereto, exceed the value of the assets of such Plan allocable to such vested benefits.  None of the Credit Parties or any member of the Controlled Group has had a complete or partial withdrawal from any Multiemployer Plan for which there is any withdrawal liability.  As of the most recent valuation date applicable thereto, none of the Credit Parties or any member of the Controlled Group would become subject to any liability under ERISA if any Credit Party or any member of the Controlled Group received notice that any Multiemployer Plan is insolvent or in reorganization.  Based upon GAAP existing as of the date of this Agreement and current factual circumstances, no Credit Party has reason to believe that the annual cost during the term of this Agreement to any Credit Party or any other member of the Controlled Group for post-retirement benefits to be provided to the current and former employees of the Borrower or any member of the Controlled Group under welfare benefit plans (as defined in Section 3(1) of ERISA) could, in the aggregate, reasonably be expected to cause a Material Adverse Change.

Section 4.10       Condition of Property; Casualties.

(a)           Subject to the matters set forth in Schedule 4.10, each of the Borrower and its Subsidiaries has good and indefeasible title to all of its Oil and Gas Properties evaluated in any Engineering Report, free and clear of all Liens except for Permitted Liens.  Brigham Exploration has good and defensible title to all of the Equity Interests in the General Partner and, directly and indirectly, all of the ownership interests in the Limited Partners, except for Permitted Liens.  Each of the General Partner and the Limited Partners has good and defensible title to all of the Equity Interests in the Borrower, except for Permitted Liens.

(b)           The quantum and nature of the interest of the Borrower and its Subsidiaries in and to its Hydrocarbon Interests as set forth in each Engineering Report includes the entire interest of the Borrower and its Subsidiaries in such Hydrocarbon Interests as of the date of such Engineering Report and are complete and accurate in all material respects as of the date of such Engineering Report; and there are no “back-in” or “reversionary” interests held by third parties which could materially reduce the interest of the Borrower and its Subsidiaries in such Hydrocarbon Interests except as taken into account in such Engineering Report.  The ownership of the Hydrocarbon Interests held by the Borrower and its Subsidiaries shall not in any material respect obligate any such Person to bear the costs and expenses relating to the maintenance, development or operations of such Hydrocarbon Interests in an amount in excess of the working interest of such Person in each such Hydrocarbon Interest set forth in the most recent Engineering Report.

(c)           All leases and agreements comprising the Borrower’s and its Subsidiaries’ Oil and Gas Properties necessary for the conduct of business of the Borrower and its Subsidiaries are valid and subsisting, in full force and effect and there exists no default or event of default or circumstance which with the giving of notice or lapse of time or both would give rise to a default

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under any such leases, instruments or agreements which would affect in any material respect the conduct of the business of the Borrower and its Subsidiaries.  Neither Borrower or any of its Subsidiaries nor, to the knowledge of Borrower, any other party to any leases, instruments or agreements comprising its Oil and Gas Properties evaluated in any Engineering Report, has given or threatened to give notice of any default under or inquiry into any possible default under, or action to alter, terminate, rescind or procure a judicial reformation of, any such lease, instrument or agreement.  Except as set forth on Schedule 4.10 or as otherwise disclosed in writing to the Administrative Agent, neither the Borrower nor any of its Subsidiaries is subject to any obligation to drill additional wells, finance the drilling of additional wells, or conduct additional operations in order to earn or continue to own any Significant PUD Location or any other proved developed producing reserves or proved developed nonproducing reserves evaluated in any Engineering Report.

(d)           The Properties presently owned, leased or licensed by the Borrower and its Subsidiaries, including, without limitation, all leases, easements, rights of way, and contractual rights, include all Properties necessary to permit the Borrower and its Subsidiaries to conduct their business in all material respects in the same manner as its business has been conducted prior to the Closing Date.

(e)           All of the Properties of the Borrower and its Subsidiaries that are reasonably necessary for the operation of their business are in good repair, working order and condition in all material respects and are maintained in accordance with prudent business standards.  Since the date of the most recent financial statements delivered pursuant to Section 5.06(a), neither the business nor the Properties of the Credit Parties, taken as a whole, has been materially and adversely affected as a result of any fire, explosion, earthquake, flood, drought, windstorm, accident, strike or other labor disturbance, embargo, requisition or taking of Property or cancellation of contracts, Permits, or concessions by a Governmental Authority, riot, activities of armed forces, or acts of God or of any public enemy.

(f)            Except as set forth on Schedule 4.10 or as otherwise disclosed in writing to the Administrative Agent:

(i)            In each case only with respect to any of the Borrower’s and its Subsidiaries’ Oil and Gas Properties that have been assigned a discounted present value equal to or in excess of $2,000,000 in any Engineering Report, (A) all rentals, royalties, overriding royalties, shut-in royalties and other payments due under or with respect to any such Hydrocarbon Interests evaluated in any Engineering Report have been properly and timely paid in the ordinary course of business and (B) all material expenses payable under the terms of the contracts and agreements comprising such Oil and Gas Properties (other than those described above in clause (A)) have been properly and timely paid in the ordinary course of business except in each case (1) where such payments are being contested in good faith by appropriate proceedings and for which adequate reserves complying with GAAP have been made or (2) for payments the late payment of which could not reasonably be expected to cause a termination or forfeiture of any of the Borrower’s or its Subsidiaries’ rights under any such leases, instruments or agreements comprising any such Oil and Gas Properties or otherwise, individually or in the aggregate, cause a Material Adverse Change;

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(ii)           All of the proceeds from the sale of Hydrocarbons produced from the Borrower’s and its Subsidiaries’ Hydrocarbon Interests are being properly and timely paid to the Borrower without suspense, other than any such proceeds the late payment or non-payment of which could not reasonably be expected to cause a Material Adverse Change or materially adversely affect the value of the Collateral taken as a whole; and

(iii)          No material amount of proceeds that has been received by any Credit Party from the sale of Hydrocarbons produced from the Oil and Gas Properties evaluated in any Engineering Report is subject to any claim for any refund or refund obligation, except as permitted under Section 4.14 or Section 6.13.

Section 4.11       Security Instruments.

(a)           The provisions of each of the Pledge Agreements delivered to the Administrative Agent are effective to create in favor of the Administrative Agent, for the ratable benefit of the Lenders, a legal, valid and enforceable security interest in the Pledged Collateral (as defined therein) and proceeds thereof and when (i) certificates, if any, representing or constituting the Pledged Collateral are delivered to the Administrative Agent, the Pledge Agreement shall constitute a first priority Acceptable Security Interest in, all right, title and interest of the pledgor party thereto in such Pledged Collateral and the proceeds thereof, subject to Permitted Liens or and (ii) upon the filing of UCC-1 Financing Statements with the secretary of state of each jurisdiction of formation for each of the grantors party thereto, the Pledge Agreements shall constitute a first priority Acceptable Security Interest in, all right, title and interest of the applicable Credit Party in such Pledged Collateral and the proceeds thereof, subject to Permitted Liens.

(b)           On the Closing Date, the Equity Interests listed on Schedule I to each of the Pledge Agreements will constitute all the issued and outstanding Equity Interests in the Borrower, the General Partner, the Limited Partners, and the direct and indirect Subsidiaries of the Borrower; all such Equity Interests have been duly and validly issued and are fully paid and nonassessable; and the relevant pledgor of said shares is the record and beneficial owner of said shares.

(c)           The provisions of the Mortgages will be effective to grant to the Administrative Agent, for the ratable benefit of the Lenders, legal, valid and enforceable mortgage liens on all of the right, title and interest of the Borrower and its Subsidiaries in the mortgaged property described therein.  Once such Mortgages have been recorded in the appropriate recording office, the Mortgages will constitute perfected first liens on, and security interest in, such mortgaged property, subject to Permitted Liens.

(d)           The provisions of each of the Security Agreements delivered to the Administrative Agent are effective to create in favor of the Administrative Agent, for the ratable benefit of the Lenders, a legal, valid and enforceable security interest in the collateral described therein and proceeds thereof and, upon the filing of UCC-1 Financing Statements with the secretary of state of each jurisdiction of formation for each of the grantors party thereto, the Security Agreement shall constitute a first priority Acceptable Security Interest in, all right, title

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and interest of the applicable Credit Party in such collateral and the proceeds thereof, subject to Permitted Liens.

(e)           Once the Deposit Control Agreements have been executed, the provisions of each of the Deposit Control Agreements will be effective to create in favor of the Administrative Agent, for the ratable benefit of the Lenders, a legal, valid and enforceable security interest in the collateral described therein and proceeds thereof and shall constitute a first priority Acceptable Security Interest in, all right, title and interest of the applicable Credit Party in such collateral and the proceeds thereof, subject to Permitted Liens.

(f)            On the Closing Date and except with respect to the Deposit Control Agreements until such Deposit Control Agreements have been executed, all governmental actions and all other filings, recordings, registrations, third party consents and other actions which are necessary to create and perfect the Liens provided for in the Security Instruments will have been made, obtained and taken in all relevant jurisdictions (or are the subject of arrangements, satisfactory to the Administrative Agent, to be made, obtained or taken on or promptly after the Closing Date).  No other filings or recordings are required in order to perfect the security interests created under any Security Instruments.

Section 4.12       No Burdensome Restrictions; No Defaults.

(a)           Neither the Borrower nor any of its Subsidiaries is a party to any indenture, loan, or credit agreement or any lease or other agreement or instrument or subject to any charter or corporate restriction or provision of applicable law or governmental regulation that could reasonably be expected to cause a Material Adverse Change.  Neither the Borrower nor any of its Subsidiaries is in default nor has any event or circumstance occurred which, but the expiration of any grace period or the giving of notice, or both, would constitute a default under (i) the Subordinated Credit Agreement or (ii) any other material contract, agreement, lease, or other instrument to which such Credit Party is a party which default could reasonably be expected to cause a Material Adverse Change.  None of the Credit Parties has received any notice of default under any material contract, agreement, lease, or other instrument to which such Credit Party is a party.

(b)           No Default has occurred and is continuing.

Section 4.13       Environmental Condition.  Other than exceptions to any of the following that would not reasonably be expected to cause a Material Adverse Change or materially adversely affect the value of the Collateral taken as a whole:

(a)           Permits, Etc.  With respect to its Oil and Gas Properties for which such Credit Party is the operator and with respect to its Oil and Gas Properties that are operated by operators other than the Borrower or a Subsidiary, to the best of its knowledge, in all material respects, each of the Credit Parties (i) has obtained all Environmental Permits necessary for the ownership and operation of any and all of their respective Properties and the conduct of their respective businesses; (ii) have at all times been and are in compliance with all terms and conditions of such Permits and with all other requirements of applicable Environmental Laws and other Legal Requirements; (iii) have not received notice of any violation or alleged violation of any

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Environmental Law or any such Permit; and (iv) are not subject to any actual or contingent Environmental Claim with respect to such Properties.

(b)           Certain Liabilities.  None of the present or, to the best knowledge of any Credit Party, previously owned or operated Property of any of the Credit Parties, wherever located, (i) has been placed on or proposed to be placed on the National Priorities List, the Comprehensive Environmental Response Compensation Liability Information System list, or their state or local analogs, or have been otherwise investigated, designated, listed, or identified as a potential site for removal, remediation, cleanup, closure, restoration, reclamation, or other response activity under any Environmental Laws; (ii) is subject to a Lien other than a Permitted Lien, arising under or in connection with any Environmental Laws, that attaches to any revenues or to any Property owned or operated by the Borrower or any of its Subsidiaries, wherever located; or (iii) has been the site of any Release of Hazardous Substances or Hazardous Wastes from present or past operations that has caused at the site or at any third-party site any condition that has resulted in or could reasonably be expected to result in the need for Response.

(c)           Certain Actions.  Without limiting the foregoing, (i) all necessary notices have been properly filed, and no further action is required under current Environmental Law as to each Response or other restoration or remedial project undertaken by the Borrower or its Subsidiaries or any of their former Subsidiaries on any of their presently or formerly owned or operated Property and (ii) there is no present and, to the Borrower’s knowledge, future liability, if any, of the Borrower and its Subsidiaries which could reasonably be expected to arise in connection with requirements under Environmental Laws.

Section 4.14       Gas Contracts.  Except as set forth in the most recent Engineering Report or in Schedule 4.14, on a net basis there are no material gas imbalances, material take-or-pay or other prepayments with respect to the Oil and Gas Properties of the Borrower and its Subsidiaries (or, in the case of Oil and Gas Properties operated by operators other than the Borrower or its Subsidiaries, to the Borrower’s knowledge after reasonable investigation) that would require the Borrower and its Subsidiaries to deliver 2.5% or more of the aggregate calendar quarter production from the Borrower’s and its Subsidiaries’ Hydrocarbons produced on a calendar quarter basis from their Hydrocarbon Interests at some future time without then or thereafter receiving full payment therefor.

Section 4.15       Compliance with Laws.  Except for any failure to comply with any of the foregoing which would not reasonably be expected to cause a Material Adverse Change, each of the Credit Parties has (a) complied with all applicable Legal Requirements of any Governmental Authority having jurisdiction over the conduct of their respective businesses or the ownership of their respective Property and (b) obtained all Permits that are necessary for the ownership of any of its Properties or the conduct of their business.  Other than immaterial exceptions to any of the following: (i) the prices being received by the Borrower and its Subsidiaries for the production of Hydrocarbons do not violate any material provision of any contract or agreement comprising the Oil and Gas Properties of the Borrower and its Subsidiaries or any Legal Requirement, (ii)   where applicable, all of the wells located on the Borrower’s and its Subsidiaries’ Hydrocarbon Interests and production of Hydrocarbons therefrom have been properly classified under appropriate governmental regulations, (iii) all necessary regulatory filings have been properly made in connection with the drilling, completion and operation of the wells on or attributable to

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the Borrower’s and its Subsidiaries’ Hydrocarbon Interests and all other operations related thereto and (iv) all production and sales of the Borrower’s and its Subsidiaries’ Hydrocarbons produced or sold from the Borrower’s and its Subsidiaries’ Hydrocarbon Interests have been made in accordance with any applicable allowables (plus permitted tolerances) imposed by any Governmental Authorities.

Section 4.16       Hedging Agreements.  Schedule 4.16 sets forth, as of the Closing Date, a true and complete list of all Interest Hedge Agreements and Hydrocarbon Hedge Agreements of the Borrower and each of its Subsidiaries, setting forth the type, term, effective date, termination date and notional amounts or volumes, and the counterparty to each such agreement.

Section 4.17       Material Agreements.  Schedule 4.17 sets forth a complete and correct list of all material agreements, leases, indentures, purchase agreements, obligations in respect of letters of credit, guarantees, joint venture agreements, and other instruments in effect or to be in effect as of the Closing Date (other than the agreements set forth in Schedule 4.16) providing for, evidencing, securing or otherwise relating to any material Debt of the Borrower or any of its Subsidiaries, and all obligations of the Borrower or any of its Subsidiaries to issuers of surety or appeal bonds (other than operator’s bonds, plugging and abandonment bonds, and similar surety obligations obtained in the ordinary course of business) issued for the account of the Borrower or any of its Subsidiaries, and such list correctly sets forth the names of the debtor or lessee and creditor or lessor with respect to the Debt or lease obligations outstanding or to be outstanding and the Property subject to any Lien securing such Debt or lease obligation.

Section 4.18       Organizational Documents.  The Partnership Agreement has not been terminated, is in full force and effect as of the Closing Date and no default has occurred and is continuing thereunder that could reasonably be expected to cause a Material Adverse Change.

Section 4.19       Guarantors.  All of the Borrower’s Subsidiaries are Guarantors under Article VIII.

Section 4.20       Insurance.  Each of the Borrower and its Subsidiaries carry insurance required under Section 5.02.

Section 4.21       Use of Proceeds.  The proceeds of the Advances will be used by the Borrower for the purposes described in Section 5.10.  The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U).  No proceeds of any Advance will be used to purchase or carry any margin stock in violation of Regulation T, U or X.

Section 4.22       Investment Company Act.  Neither Brigham Exploration nor any of its Subsidiaries is an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

Section 4.23       Public Utility Holding Company Act.  Neither Brigham Exploration nor any of its Subsidiaries is a “holding company,” or a “subsidiary company” of a “holding company,” or an “affiliate” of a “holding company” or of a “subsidiary company” of a “holding company,” or a “public utility” within the meaning of the Public Utility Holding Company Act of 1935, as amended.

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Section 4.24       Transmitting Utility.  Neither Brigham Exploration nor any of its Subsidiaries is a “transmitting utility” or an “interstate gas pipeline company” or a “public service corporation” within the meaning of the laws currently in effect for the States of Texas and/or Oklahoma.

ARTICLE VAFFIRMATIVE COVENANTS

So long as any Note or any amount under any Loan Document shall remain unpaid, any Letter of Credit shall remain outstanding, or any Lender shall have any Commitment hereunder, each of the Credit Parties agrees to comply with the following covenants.

Section 5.01       Compliance with Laws, Etc.  The Borrower shall comply, and cause each of its Subsidiaries to comply, in all material respects with all Legal Requirements; provided, however, that this Section 5.01 shall not prevent the Borrower or any of its Subsidiaries from, in good faith and with reasonable diligence, contesting the validity or application of any such laws or regulations by appropriate legal proceedings.  Without limitation of the foregoing, the Borrower shall use commercially reasonable efforts to obtain, and shall cause each of its Subsidiaries to use commercially reasonable efforts to obtain, as soon as practicable, all consents or approvals required from any states of the United States (or other Governmental Authorities) necessary to grant the Administrative Agent an Acceptable Security Interest in the Borrower’s and its Subsidiaries’ Oil and Gas Properties.

Section 5.02       Maintenance of Insurance.

(a)           The Borrower shall, and shall cause each of its Subsidiaries to, maintain with financially sound and reputable insurance companies insurance of such types, in such amounts and against such risks as is customary to be maintained by companies engaged in the same or a similar business in the same general area; and furnish to the Administrative Agent, upon written request, full information as to the insurance carried.  In addition, the Borrower shall, and shall cause each of its Subsidiaries to, comply with all requirements regarding insurance contained in the Security Instruments.

(b)           All certified copies of policies or certificates thereof, and endorsements and renewals thereof shall be delivered to and retained by the Administrative Agent.  All policies of insurance shall either have attached thereto a Lender’s loss payable endorsement for the benefit of the Administrative Agent, as loss payee in form reasonably satisfactory to the Administrative Agent or shall name the Administrative Agent as an additional insured, as applicable.  All policies or certificates of insurance shall set forth the coverage, the limits of liability, the name of the carrier, the policy number, and the period of coverage.  In addition, all policies of insurance required under the terms hereof shall contain an endorsement or agreement by the insurer that any loss shall be payable in accordance with the terms of such policy notwithstanding any act of negligence of the Borrower, or a Subsidiary or any party holding under the Borrower or a Subsidiary which might otherwise result in a forfeiture of the insurance and the further agreement of the insurer waiving all rights of setoff, counterclaim or deductions against the Borrower and its Subsidiaries.  All such policies shall contain a provision that notwithstanding

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any contrary agreements between the Borrower, its Subsidiaries, and the applicable insurance company, such policies will not be canceled, allowed to lapse without renewal, surrendered or amended (which provision shall include any reduction in the scope or limits of coverage) without at least 10 days’ prior written notice to the Administrative Agent in the event of the Borrower’s failure to pay any premiums and in all other cases, 30 days’ prior written notice to the Administrative Agent.  In the event that, notwithstanding the “lender’s loss payable endorsement” requirement of this Section 5.02, the proceeds of any insurance policy described above are paid to the Borrower or a Subsidiary of the Borrower, the Borrower shall deliver such proceeds to the Administrative Agent immediately upon receipt.

Section 5.03       Preservation of Corporate Existence, Etc.  Each of the Credit Parties shall preserve and maintain its corporate, limited partnership or limited liability company, as applicable, existence, and all of its material rights, franchises, and privileges in the jurisdiction of its formation, and qualify and remain qualified as a foreign entity in each jurisdiction in which qualification is necessary or desirable in view of its business and operations or the ownership of its Properties to the extent the failure to qualify could reasonably be expected to cause a Material Adverse Change.

Section 5.04       Payment of Taxes, Etc.  The Borrower shall, and shall cause each of its Subsidiaries to, pay and discharge, before the same shall become delinquent, (a) all taxes, assessments, and governmental charges or levies imposed upon it or upon its income or profits or Property prior to the date on which penalties attach thereto and (b) all lawful claims that are material in amount which, if unpaid, could by law become a Lien upon its Property; provided, however, that neither the Borrower nor any such Subsidiary shall be required to pay or discharge any such tax, assessment, charge, levy, or claim which is being contested in good faith and by appropriate proceedings, and with respect to which reserves in conformity with GAAP have been provided.

Section 5.05       Inspection; Books and Records.  Upon reasonable notice, each Credit Party shall permit the Administrative Agent and any Lender or any of their respective agents or representatives thereof, during normal business hours, to (a) examine and make copies of and abstracts from the records and books of account of, and visit and inspect at their reasonable discretion the Properties of, such Credit Party, and (b) discuss the affairs, finances and accounts of such Credit Party with any of their respective officers or directors, all to the extent reasonably requested by the Administrative Agent or such Lender, as the case may be.  Each Credit Party shall keep proper books of records and account in which full, true and correct entries in conformity with GAAP and all Legal Requirements shall be made of all dealings and transactions in relation to its business and activities.

Section 5.06       Reporting Requirements.  The Borrower shall furnish, or shall cause the applicable Credit Party to furnish, to the Administrative Agent and each Lender:

(a)           Annual Financials of Brigham Exploration.  As soon as available, but in any event within 90 days after the end of each fiscal year of Brigham Exploration or sooner if required by the SEC, the audited consolidated statements of income, stockholders’ equity, changes in financial position and cash flow of Brigham Exploration and its consolidated Subsidiaries for such fiscal year, and the related consolidated and unaudited consolidating balance sheets of

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Brigham Exploration and its consolidated Subsidiaries as at the end of such fiscal year, and setting forth in each case in comparative form the corresponding figures for the preceding fiscal year, together with a certification by its Chief Executive Officer and its Chief Financial Officer in accordance with the Sarbanes-Oxley Act of 2002 and accompanied by the related opinion of independent public accountants of recognized national standing reasonably acceptable to the Administrative Agent which opinion shall state that such financial statements fairly present the consolidated financial position and results of operations of Brigham Exploration and its consolidated Subsidiaries as at the end of, and for, such fiscal year and that such financial statements have been prepared in accordance with GAAP except for such changes in such principles with which the independent public accountants shall have concurred and such opinion shall not contain a “going concern” or like qualification or exception;

(b)           Quarterly Financials of Brigham Exploration.  As soon as available, but in any event not later than 45 days after the end of each of the first three quarterly fiscal periods of each fiscal year of Brigham Exploration and its consolidated Subsidiaries (or sooner if required by the SEC), consolidated statements of income, stockholders’ equity, changes in financial position and cash flow of Brigham Exploration and its consolidated Subsidiaries for such period and for the period from the beginning of the respective fiscal year to the end of such period, and the related consolidated and consolidating balance sheets of Brigham Exploration and its consolidated Subsidiaries as at the end of such period, and setting forth in each case in comparative form the corresponding figures for the corresponding period in the preceding fiscal year, together with a certification by its Chief Executive Officer and its Chief Financial Officer in accordance with the Sarbanes-Oxley Act of 2002 and accompanied by the certificate of  a Responsible Officer of Brigham Exploration, which certificate shall state that such financial statements fairly present the consolidated financial position and results of operations of Brigham Exploration and its consolidated Subsidiaries in accordance with GAAP, as at the end of, and for such period (subject to normal year-end audit adjustments);

(c)           Compliance Certificates.  Concurrently with the delivery of each of the financial statements referred to in subsections 5.06(a) and (b), a Compliance Certificated executed by a Responsible Officer of Brigham Exploration;

(d)           Insurance Certificates.  Concurrently with the delivery of each of the financial statements referred to in subsection 5.06(a), insurance certificates naming the Administrative Agent loss payee or additional insured, as applicable, and evidencing insurance which meets the requirements of this Agreement and the Security Instruments;

(e)           Notice of Defaults.  As soon as possible after the occurrence of a Default known to any Responsible Officer of any Credit Party which is continuing on the date of such statement, a statement of a Responsible Officer setting forth the details of such Default and the actions which the Credit Parties have taken and propose to take with respect thereto;

(f)            Material Changes.  Prompt written notice of any condition or event of which any Responsible Officer of any Credit Party has knowledge, which condition or event has resulted or could reasonably be expected to cause a Material Adverse Change;

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(g)           Annual Budget.  As soon as available and in any event prior to January 31, a one- year financial projection for Brigham Exploration and its Subsidiaries in form and substance acceptable to the Administrative Agent, which projection shall include revenues, expenses and capital expenditures (detailing the projected capital expenditures with respect to drilling (both development and exploration), leasehold, geological and geophysical, capitalized general and administrative expenses, and capitalized interest) for the following fiscal year;

(h)           Hedging Agreements.  Concurrently with the delivery of each of the financial statements referred to in subsections 5.06(a) and (b), a true and complete list of all Interest Hedge Agreements and Hydrocarbon Hedge Agreements of the Borrower and each of its Subsidiaries, setting forth the type, term, effective date, termination date and notional amounts or volumes and the counterparty to each such agreement;

(i)            Litigation.  Prompt written notice of (i) any claims, legal or arbitration proceedings, proceedings before any Governmental Authority, or disputes, or to the knowledge of the Borrower threatened, or affecting any Credit Party which, if adversely determined, could reasonably be expected to cause a Material Adverse Change, (ii) any material litigation or proceeding against the Borrower or any of its Subsidiaries in which the amount involved is not covered in full by insurance (subject to normal and customary deductibles), or in which injunctive or similar relief is sought or (iii) any claim, judgment, Lien or other encumbrance (other than a Permitted Lien) affecting any Property of the Borrower or any of its Subsidiaries if the value of such claim, judgment, Lien, or other encumbrance affecting such Property shall exceed $1,000,000 (excluding liabilities to the extent covered by insurance if the insurer has confirmed that such insurance covers such liabilities);

(j)            Environmental.  Prompt written notice of any threatened action, investigation or inquiry by any Governmental Authority of which any Responsible Officer of any Credit Party has knowledge in connection with any Environmental Laws with respect to the Property of the Borrower or any of its Subsidiaries, excluding routine testing, compliance and corrective action;

(k)           Other Accounting Reports.  Promptly upon receipt thereof, a copy of each other report or letter (excluding routine correspondence) submitted to any Credit Party by independent accountants in connection with any annual, interim or special audit made by them of the books of any Credit Party, and a copy of any response by any Credit Party to such letter or report;

(l)            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 or received from the SEC (excluding correspondence and other information received from the SEC concerning draft registration statements), or otherwise makes available to the public or the financial community generally;

(m)          Notices Under Other Loan Agreements.  Promptly after the furnishing thereof, copies of any statement, report or notice furnished to any Person pursuant to the terms of any indenture, loan or credit or other similar agreement, other than this Agreement and not otherwise required to be furnished to the Lenders pursuant to any other provision of this Section 5.06;

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(n)           ERISA Information and Compliance.  Promptly furnish, and will cause any ERISA Affiliate to promptly furnish, (i) if requested by the Administrative Agent promptly after the filing thereof with the United States Secretary of Labor, the Interest Revenue Service or the PBGC, copies of each annual and other report with respect to each Plan or any trust created thereunder, (ii) immediately upon becoming aware of the occurrence of any ERISA Event or of any “prohibited transaction,” as described in section 406 of ERISA or in section 4975 of the Code, in connection with any Plan or any trust created thereunder, a written notice signed by a Responsible Officer of the General Partner or such ERISA Affiliate specifying the nature thereof, what action the borrower or the ERISA Affiliate is taking or proposes to take with respect thereto, and when known, any action taken or proposed by the Internal Revenue Service, the Department of Labor or the PBGC with respect thereto, and (iii) immediately upon receipt thereof, copies of any notice of the PBGC’s intention to terminate or to have a trustee appointed to administer any Plan;

(o)           Acquisition Information.  Concurrently with the delivery of each of the financial statements referred to in subsections 5.06(a) and (b), a list of any Oil and Gas Properties purchased by the Borrower or any of its Subsidiaries during the previous twelve consecutive calendar months for a price equal to or greater than $1,000,000 for any single transaction or group of related transactions or $5,000,000 in the aggregate, together with such other information regarding such Oil and Gas Properties as Administrative Agent or any Lender may reasonably request; and

(p)           Other Information.  Subject to any applicable restrictions on disclosure, such other information respecting the business or Properties, or the condition or operations, financial or otherwise, of the Credit Parties (including, without limitation, any Plan or Multiemployer Plan and any reports or other information required to be filed under ERISA), as any Lender through the Administrative Agent may from time to time reasonably request.  The Administrative Agent agrees to provide the Lenders with copies of any material notices and information delivered solely to the Administrative Agent pursuant to the terms of this Agreement.

Section 5.07       Maintenance of Property.  The Borrower shall, and shall cause each of its Subsidiaries to, (a) develop and operate its Oil and Gas Properties in a good and workmanlike manner as is customary in the oil and gas industry, and observe and comply in all material respects with all of the terms and provisions, express or implied, of all oil and gas leases relating to such Properties so long as the oil and gas leases are capable of producing Hydrocarbons in quantities and at prices providing for continued efficient and profitable operation of business; (b) comply in all material respects with all contracts and agreements applicable to or relating to its Oil and Gas Properties or the production and sale of Hydrocarbons and accompanying elements therefrom; (c) maintain, preserve, and keep all operating equipment used with respect to its Oil and Gas Properties in proper repair, working order and condition, and make all necessary or appropriate repairs, renewals, replacements, additions and improvements thereto so that the efficiency of the operating equipment shall at all times be properly preserved and maintained, provided that no item of operating equipment need be so repaired, renewed, replaced, added to or improved, if the Borrower or its Subsidiaries shall in good faith determine that the action is not necessary or desirable for such Person’s continued efficient and profitable operation of business, and (d) with respect to its Oil and Gas Properties that are operated by operators other than the Borrower or a Subsidiary, (i) seek to enforce the operators’ contractual obligations to maintain,

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develop, and operate such Properties subject to the applicable operating agreements and (ii) cause or make reasonable and customary efforts to cause such Oil and Gas Properties to be operated in a good and workmanlike manner as is customary in the oil and gas industry.

Section 5.08       Environmental Laws.  To the extent that a reasonably prudent owner or operator would do so under the same or similar circumstances, the Borrower shall, and shall cause each of its Subsidiaries to establish and implement such procedures as may be reasonably necessary to periodically determine and assure that any failure of the following does not cause a Material Adverse Change: (i) all Property of the Borrower and its Subsidiaries and the operations conducted thereon and other activities of the Borrower and the Subsidiaries are in compliance with and do not violate the requirements of any Environmental Laws; (ii) no Hazardous Substances or Hazardous Wastes are disposed of or otherwise releases on or to any Property owned by any such party except in compliance with Environmental Laws, (iii) no Hazardous Substance will be released on or to any such Property in a quantity equal to or exceeding that quantity that requires reporting under CERCLA, and (iv) no Hazardous Substances or Hazardous Wastes is released on or to any such Property so as to pose an imminent and substantial endangerment to public health or welfare or the environment.

Section 5.09       Payment of Trade Payables.  Each of the Credit Parties shall pay, and shall cause each of its Subsidiaries to pay, all of their customary trade payables incurred in the ordinary course of business now or hereafter incurred within 90 days of the date the invoice is received by such Credit Party, unless subject to legal offset or unless being contested in good faith by appropriate proceedings and reserves adequate under GAAP shall have been established therefore.

Section 5.10       Use of Proceeds.  The Borrower shall use the proceeds of the Advances and Letters of Credit (a) to refinance Debt under the Existing Credit Agreements and (b) for other general corporate purposes, other than for acquisitions of seismic data, land or oil, gas and mineral leases other than in the ordinary course of the Borrower’s business as of the Closing Date.

Section 5.11       Additional Collateral.  The Borrower will grant, and will cause each of its Subsidiaries to grant, to the Administrative Agent an Acceptable Security Interest in such Oil and Gas Properties of the Borrower and its Subsidiaries, constituting at least 90% of the discounted net present value of the Proven Reserves of the Borrower and its Subsidiaries as determined by the Administrative Agent.

Section 5.12       New Subsidiaries.  Within 10 days after (a) the date of the creation of any new Subsidiary of Brigham Exploration or the Borrower, or (b) the purchase by Brigham Exploration, the Borrower, or any of its other Subsidiaries of the Equity Interests of any Person, which purchase results in such Person becoming a Subsidiary of Brigham Exploration or of the Borrower permitted by this Agreement, Brigham Exploration or the Borrower, as applicable, shall, in each case, cause (i) such Person to execute and deliver to the Administrative Agent (with sufficient originals for each applicable Lender) a joinder agreement to this Agreement in form and substance acceptable to the Administrative Agent, a Pledge Agreement (if such new Subsidiary owns one or more Subsidiaries), one or more Mortgages (if such new Subsidiary owns Oil and Gas Properties), a Security Agreement, and such other Security Instruments as the

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Administrative Agent or any Lender may reasonably request, in each case to secure the Obligations together with evidence of corporate authority to enter into and such legal opinions in relation to such joinder agreement, Pledge Agreement, Mortgages, Security Agreement and other Security Instruments as the Administrative Agent may reasonably request, and (ii) the stockholder of such new Subsidiary to execute a Pledge Agreement pledging its interests in the Equity Interests of such new Subsidiary to secure the Obligations and such evidence of corporate authority to enter into and such legal opinions in relation to such Pledge Agreement as the Administrative Agent may reasonably request, along with share certificates, if any, pledged thereby and appropriately executed stock powers in blank.

Section 5.13       Title.  As of the Closing Date, the Administrative Agent shall have received title opinions reflecting that the Borrower has title reasonably satisfactory to the Administrative Agent in such Oil and Gas Properties of the Borrower and its Subsidiaries constituting at least 50% of the Borrower’s and its Subsidiaries’ proved, developed, producing Hydrocarbon reserves and proved, developed, nonproducing Hydrocarbon reserves (each as determined in conformity with the guidelines in effect from time to time as promulgated by the Society of Petroleum Engineers or its successor association) as determined by the Administrative Agent.  In addition, the Borrower shall from time to time upon the reasonably request of the Administrative Agent or the Majority Lenders, provide evidence of title reasonably satisfactory to the Administrative Agent constituting an additional 30% of the Borrower’s and its Subsidiaries’ proved, developed, producing Hydrocarbon reserves and proved, developed, nonproducing Hydrocarbon reserves as determined by the Administrative Agent with respect to the Oil and Gas Properties of the Borrower and its Subsidiaries as of the Closing Date.  Thereafter, with respect to Oil and Gas Properties acquired after the Closing Date or not previously included in the Borrowing Base, the Borrower shall from time to time upon the reasonable request of the Administrative Agent, take such actions and execute and deliver such documents and instruments as the Administrative Agent shall require to ensure that the Administrative Agent shall, at all times, have received satisfactory title opinions (including, if requested, supplemental or new title opinions addressed to it), which title opinions shall be in form and substance acceptable to the Administrative Agent in its sole discretion and shall include opinions regarding the before payout and after payout ownership interests held by the Borrower and its Subsidiaries, for all wells located on the Oil and Gas Properties covered thereby as to the ownership of Oil and Gas Properties of the Borrower and its Subsidiaries, and reflecting that the Administrative Agent has an Acceptable Security Interest in such Oil and Gas Properties of the Borrower and its Subsidiaries.

Section 5.14       Further Assurances.  The Borrower shall, and shall cause each of its Subsidiaries to, cure promptly any defects in the execution and delivery of the Loan Documents, including, without limitation, the Security Instruments and this Agreement.  The Borrower hereby authorizes the Administrative Agent to file any financing statements without the signature of the Borrower to the extent permitted by applicable law in order to perfect or maintain the perfection of any security interest granted under any of the Loan Documents.  The Borrower at its expense will, and will cause each of its Subsidiaries to, promptly execute and deliver to the Administrative Agent upon request all such other documents, agreements and instruments to comply with or accomplish the covenants and agreements of the Borrower or any Subsidiary of the Borrower, as the case may be, in the Security Instruments and this Agreement, or to further evidence and more fully describe the collateral intended as security for the Notes, or to correct

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any omissions in the Loan Documents, or to state more fully the security obligations set out herein or in any of the Loan Documents, or to perfect, protect or preserve any Liens created pursuant to any of the Loan Documents, or to make any recordings, to file any notices or obtain any consents, all as may be necessary or appropriate in connection therewith or to enable the Administrative Agent to exercise and enforce its rights and remedies with respect to any Collateral.

Section 5.15       Operating Accounts.  Within 120 days after the Closing Date, the Borrower shall maintain its primary operating accounts with one or more of the Lenders (the “Operating Accounts”) and agrees to deposit therein all proceeds of any sales of Hydrocarbons attributable to its and its Subsidiaries’ Oil and Gas Properties unless and until the Administrative Agent directs it to act otherwise.  The Borrower may, prior to the occurrence and continuance of an Event of Default and the delivery of a notice of exclusive control or any other similar instruction under any Deposit Control Agreement, make withdrawals from such Operating Accounts to pay operating costs and expenses.  After the occurrence and continuance of an Event of Default, all amounts deposited in such Operating Accounts, may, at the option of the Administrative Agent or Majority Lenders, be retained by the Administrative Agent as collateral for the Obligations.  Neither the Administrative Agent nor any Lender waives or relinquishes any of its rights or interests arising under the Credit Documents by permitting the Borrower and its Subsidiaries to collect and deposit the proceeds of sales of Hydrocarbons attributable to its and its Subsidiaries’ Oil and Gas Properties.

Section 5.16       Post-Closing Requirements.  Within 120 days after the Closing Date, the Borrower shall deliver to the Administrative Agent duly executed tri-party deposit account control agreements, in each case satisfactory to Administrative Agent, with each of the lenders at which the Borrower’s and its Subsidiaries’ bank accounts are located (“Deposit Control Agreements”).

ARTICLE VINEGATIVE COVENANTS

So long as any Note or any amount under any Loan Document shall remain unpaid, any Letter of Credit shall remain outstanding, or any Lender shall have any Commitment, each of the Credit Parties agrees to comply with the following covenants.

Section 6.01       Liens, Etc.  None of the Credit Parties shall create, assume, incur, or suffer to exist, or permit any of their Subsidiaries to create, assume, incur, or suffer to exist, any Lien on or in respect of any of its Property whether now owned or hereafter acquired, or assign any right to receive income, except that the Credit Parties may create, incur, assume, or suffer to exist the following (collectively, the “Permitted Liens”):

(a)           Liens securing the Obligations;

(b)           Liens securing the Subordinated Debt;

(c)           Excepted Liens;

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(d)           Liens securing leases allowed under Section 6.02(f) but only on the Property under lease;

(e)           Liens disclosed on Schedule 6.01; and

(f)            any encumbrances permitted under the terms of any Mortgage.

Section 6.02       Debts, Guaranties, and Other Obligations.  None of the Credit Parties shall, and none of the Credit Parties shall permit any of their Subsidiaries to, create, assume, suffer to exist, or in any manner become or be liable in respect of, any Debt except:

(a)           Debt of the Borrower and its Subsidiaries under the Loan Documents;

(b)           Debt of the Borrower and its Subsidiaries under the Subordinated Loan Documents;

(c)           Debt existing on the Closing Date that is reflected in the Financial Statements or is disclosed on Schedule 6.02, and any renewals or extensions (but not increases) thereof;

(d)           Accounts payable for the deferred purchase price of Property or services (other than customary trade payables incurred in the ordinary course of business) from time to time incurred in the ordinary course of business which, if greater than 90 days past the date the invoice is received by such Credit Party, are being contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP have been established;

(e)           Debt owing by a Credit Party to any other Credit Party which is subordinated to the Obligations pursuant to subordination provisions in form and substance acceptable to the Administrative Agent;

(f)            Debt of the Borrower under Capital Leases not to exceed $2,000,000 at any one time outstanding;

(g)           Debt of the Borrower under Hydrocarbon Hedge Agreements or Interest Hedge Agreements that is made (i) with a Person that is, at the time such Hydrocarbon Hedge Agreement or Interest Hedge Agreement is made, either a Lender or an Affiliate of a Lender, or (ii) with another counterparty rated at least A- or better by S&P or A3 or better by Moody’s, provided that the aggregate notional amounts under all such Hydrocarbon Hedge Agreements (other than Hydrocarbon Hedge Agreement that are floors) do not exceed 75% of the Borrower’s proved, developed, producing Hydrocarbon reserves (as determined in conformity with the guidelines in effect from time to time as promulgated by the Society of Petroleum Engineers or its successor association) to be produced during the term of such Hydrocarbon Hedge Agreements and that such Hydrocarbon Hedge Agreements are entered into as a part of its normal business operations as risk management strategy and/or hedge against changes resulting from market conditions related to the Borrower’s and its Subsidiaries’ operations;

(h)           Debt of the Borrower and its Subsidiaries (i) associated with bonds or surety obligations required by Legal Requirements in connection with the operation of the Oil and Gas Properties and (ii) associated with the financing of insurance premiums;

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(i)            Debt of the Borrower described in Schedule 6.02(i) and such other Debt of the Borrower related to the acquisition of software and licensing rights related thereto that does not exceed $100,000 at any one time outstanding; and

(j)            Debt that is not described in subsections (a) through (i) above and that together with all Debt of the Borrower allowed under subsection (i) above does not exceed $1,000,000 at any one time outstanding.

Section 6.03       Agreements Restricting Liens and Distributions.  None of the Credit Parties shall, nor shall any of the Credit Parties permit any of their Subsidiaries to, create, incur, assume or permit to exist any contract, agreement or understanding (other than the Loan Documents and the Subordinated Loan Documents) that in any way prohibits or restricts (a) the granting, conveying, creation or imposition of any Lien on any of its Property, whether now owned or hereafter acquired, to secure the Obligations, except for customary limitations and restrictions contained in, and limited to, specific leases, licenses, conveyances, partnership agreements and co-owners’ agreements, and similar conveyances and agreements or (b) any Subsidiary from paying dividends or making any other distribution to the Borrower, or otherwise transferring assets to the Borrower, or which requires the consent of or notice to other Persons in connection therewith.

Section 6.04       Merger or Consolidation.  None of the Credit Parties shall, nor shall any of the Credit Parties permit any of their Subsidiaries to (a) merge or consolidate with or into any other Person, or (b) sell, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its Property to any other Person, except that (i) if either Brigham Exploration or the Borrower is a party to such merger or consolidation, then Brigham Exploration or the Borrower, as the case may be, shall be the continuing Person, (ii) a Subsidiary of the Borrower may merge with or into the Borrower or a wholly owned Subsidiary of the Borrower (provided that if either of such Subsidiaries is a Guarantor, the surviving entity shall be a Guarantor), (iii) a Subsidiary of the Borrower may transfer all or substantially all of its assets (upon voluntary liquidation or otherwise) to the Borrower or to another wholly-owned Subsidiary of the Borrower (provided that if the transferor in such a transaction is a Guarantor, then the transferee must either be the Borrower or a Guarantor), and (iv) a Subsidiary of Brigham Exploration (other than the Borrower and its Subsidiaries) may merge with or into Brigham Exploration or a wholly owned Subsidiary of Brigham Exploration (provided that if either of such Subsidiaries is a Guarantor, the surviving entity shall be a Guarantor), provided in each case that (A) no Event of Default exists or no Default would be caused thereby, and (B) if any Collateral is transferred pursuant to this Section 6.04, the Borrower shall provide the Administrative Agent with ten Business Days’ written notice prior to such transfer, and the Borrower or such Guarantor, as the case may be, owning the Collateral after such transfer shall ratify and confirm the Lien on such Collateral and shall take all action reasonably requested by the Administrative Agent in respect of the continued priority and perfection of the Lien over such Collateral.

Section 6.05       Sales of Assets.  None of the Credit Parties shall, nor shall any of the Credit Parties permit any of its Subsidiaries to, discount or sell (with or without recourse) any of their notes receivable or accounts receivable.  The Borrower shall not, nor shall it permit any of its Subsidiaries to sell, assign, farm-out, convey or otherwise transfer any Hydrocarbon Interests

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except for (a) the sale of Hydrocarbons in the ordinary course of business, (b) the sale or transfer of equipment that is no longer necessary for the business of such Person or contemporaneously replaced by equipment of at least comparable value and use, or (c) sales of Oil and Gas Properties made in arm’s length transactions for fair market value, not exceeding $3,000,000 in any period of twelve consecutive calendar months in the aggregate, provided that no Default or Event of Default has occurred and is continuing or would result from such sale.

Section 6.06       Restricted Payments.  Neither Brigham Exploration nor the Borrower shall make any Restricted Payments except (a) as permitted under Section 6.07(a)(iii) or (b) any Preferred Shareholder Transaction.

Section 6.07       Investments and Acquisitions.

(a)           None of the Credit Parties shall, nor shall any of the Credit Parties permit any of their Subsidiaries to, make or permit to exist any Investment, except:

(i)            Investments, loans or advances reflected in the Financial Statements or that are disclosed to the Lenders in Schedule 6.07;

(ii)           Investments in Cash Equivalents; and

(iii)          Investments by any Credit Party in the Borrower or a Person that is or will become within 10 Business Days after the making of such Investment a Guarantor in accordance with Section 5.12 or that will, within ten (10) Business Days after the making of any such Investment merge or consolidate into such Credit Party, provided, however, that the Borrower may only make Investments to Brigham Exploration or any Partner to pay federal or state taxes owing by any of them, payroll and payroll related taxes and other reasonable general and administrative expenses, or consisting of forgiveness of indebtedness;

(b)           None of the Credit Parties shall, nor shall any of the Credit Parties permit any of their Subsidiaries to, purchase any Hydrocarbon Interests not evaluated in any Engineering Report or any pipelines, gas gathering systems, gas plants, and similar assets related thereto in an aggregate amount in excess of $5,000,000 in any period of twelve consecutive calendar months.

Section 6.08       Affiliate Transactions.  None of the Credit Parties shall, nor shall any of the Credit Parties permit any of their Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction or series of transactions (including, but not limited to, the purchase, sale, lease or exchange of Property, the making of any investment, the giving of any guaranty, the assumption of any obligation or the rendering of any service) with any of their Affiliates (other than any transaction between the Borrower, any Credit Party, or any Subsidiary of the Borrower) unless such transaction or series of transactions is not in violation of this Agreement and upon fair and reasonable terms no less favorable to it than it would obtain in a comparable arm’s length transaction with a Person that is not such an Affiliate.

Section 6.09       Compliance with ERISA.  None of the Credit Parties shall, nor shall any of the Credit Parties permit any of their Subsidiaries to, directly or indirectly, (a) engage in, or permit any ERISA Affiliate to engage in, any transaction in connection with which any Credit Party or any ERISA Affiliate could be subjected to either a civil penalty assessed pursuant to

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section 502(c), (i) or (l) of ERISA or a tax imposed by Chapter 43 of Subtitle D of the Code in excess of $500,000; (b) terminate, or permit any ERISA Affiliate to terminate, any Plan in a manner, or take any other action with respect to any Plan, which could result reasonably be expected to result in any liability to any Credit Party or any ERISA Affiliate to the PBGC in excess of $500,000; (c) fail to make, or permit any ERISA Affiliate to fail to make, full payment when due of all amounts which, under the provisions of any Plan, agreement relating thereto or applicable law, any Credit Party or any ERISA Affiliate is required to pay as contributions thereto; (d) permit to exist, or allow any ERISA Affiliate to permit to exist, any accumulated funding deficiency in excess of $500,000 within the meaning of Section 302 of ERISA or section 412 of the Code, whether or not waived, with respect to any Plan; (e) permit, or allow any ERISA Affiliate to permit, the actuarial present value of the benefit liabilities (as “actuarial present value of the benefit liabilities” shall have the meaning specified in section 4041 of ERISA) under any Plan maintained by any Credit Party or any ERISA Affiliate which is regulated under Title IV of ERISA to exceed the current value of the assets (computed on a plan termination basis in accordance with Title IV of ERISA) of such Plan allocable to such benefit liabilities by an amount in excess of $500,000; (f) contribute to or assume an obligation to contribute to, or permit any ERISA Affiliate to contribute to or assume an obligation to contribute to, any Multiemployer Plan; (g) acquire, or permit any ERISA Affiliate to acquire, an interest in any Person that causes such Person to become an ERISA Affiliate with respect to any Credit Party or any ERISA Affiliate if such Person sponsors, maintains or contributes to, or at any time in the six-year period preceding such acquisition has sponsored, maintained, or contributed to, (i) any Multiemployer Plan, or (ii) any other Plan that is subject to Title IV of ERISA under which the actuarial present value of the benefit liabilities under such Plan exceeds the current value of the assets (computed on a plan termination basis in accordance with Title IV of ERISA) of such Plan allocable to such benefit liabilities; (h) incur, or permit any ERISA Affiliate to incur, a liability to or on account of a Plan under sections 515, 4062, 4063, 4064, 4201 or 4204 of ERISA which in the aggregate for all such liabilities exceeds $500,000; (i) contribute to or assume an obligation to contribute to, or permit any ERISA Affiliate to contribute to or assume an obligation to contribute to, any employee welfare benefit plan, as defined in section 3(1) of ERISA, including, without limitation, any such plan maintained to provide benefits to former employees of such entities, that may not be terminated by such entities in their sole discretion at any time without any material liability; or (j) amend or permit any ERISA Affiliate to amend, a Plan resulting in an increase in current liability such that any Credit Party or any ERISA Affiliate is required to provide security to such Plan under section 401(a)(29) of the Code.

Section 6.10       Sales and Leasebacks.  None of the Credit Parties shall, nor shall any of the Credit Parties permit any of their Subsidiaries to, enter into any arrangement, directly or indirectly, with any Person whereby such Credit Party shall sell or transfer any of its Property, whether now owned or hereafter acquired, and whereby such Credit Party shall then or thereafter rent or lease as lessee such Property or any part thereof or other Property which such Credit Party intends to use for substantially the same purpose or purposes as the Property sold or transferred.

Section 6.11       Change of Business.  None of the Credit Parties shall, nor shall any of the Credit Parties permit any of their Subsidiaries to, allow any material change to be made in the character of its business as an independent oil and gas exploration and production company.

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Section 6.12       Use of Proceeds.  The Borrower will not permit the proceeds of any Advance or Letters of Credit to be used for any purpose other than those permitted by Section 5.09.  Neither the Borrower nor any Person acting on behalf of the Borrower has taken or shall take, any action which might cause any of the Loan Documents to violate Regulation T, U or X or any other regulation of the Board of Governors of the Federal Reserve System or to violate Section 7 of the Securities Exchange Act of 1934 or any rule or regulation thereunder, in each case as now in effect or as the same may hereinafter be in effect.

Section 6.13       Gas Imbalances, Take-or-Pay or Other Prepayments.  Except as set forth in Schedule 4.14, the Borrower shall not allow gas imbalances, take-or-pay or other prepayments with respect to the Oil and Gas Properties of the Borrower and its Subsidiaries that would require the Borrower and its Subsidiaries to deliver 2.5% or more of the aggregate calendar quarter production from the Borrower’s and its Subsidiaries’ Hydrocarbons produced on a calendar quarter basis from such Hydrocarbon Interests at some future time without then or thereafter receiving full payment therefor.

Section 6.14       Additional Subsidiaries.  Except as otherwise permitted by Section 6.07, none of the Credit Parties shall, nor shall any of the Credit Parties permit any of their Subsidiaries to, create any additional Subsidiaries or make any additional Investment in a Subsidiary unless such Credit Party has complied with Section 5.12.  All Subsidiaries of the Borrower together at no time shall own or hold Oil and Gas Properties having Proven Reserves with a net discounted present value calculated in the same manner as in the most recent Engineering Report in excess of 10% of the total net discounted present value of Proven Reserves of the Borrower and its Subsidiaries as reflected in such Engineering Report (plus such Subsidiaries’ Proven Reserved not included in such Engineering Report).  Except as otherwise permitted by Section 6.07(a)(iii), no assets may be transferred to a Subsidiary that is not a Guarantor.

Section 6.15       Limitation on Leases.  None of the Credit Parties shall, nor shall any of the Credit Parties permit any of their Subsidiaries to, create, incur, assume or suffer to exist any obligation for the payment of rent or hire of Property of any kind whatsoever (real or personal including Capital Leases but excluding leases of Hydrocarbon Interests and the equipment used thereon), under leases or lease agreements that would cause the aggregate amount of all payments made by the Credit Parties and their Subsidiaries pursuant to all such leases or lease agreements to exceed $1,500,000 in any period of twelve consecutive calendar months during the life of such leases.

Section 6.16       Environmental Matters.  None of the Credit Parties shall, nor shall any of the Credit Parties permit any of their Subsidiaries to, cause or permit any of its Property to be in violation of, or do anything to permit anything to be done that will subject any such Property to any remedial obligations under any Environmental Laws, assuming disclosure to the applicable Governmental Authority of all relevant facts, conditions and circumstances, if any, pertaining to such Property where such violations or remedial obligations would cause a Material Adverse Change.

Section 6.17       Borrower as Operator.  Except for any Oil and Gas Properties sold in accordance with Section 6.05, the Borrower shall not, and shall not permit any of its Subsidiaries

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to, during any calendar year, voluntarily resign as the operator of Oil and Gas Properties constituting more than twenty-five percent (25%) of the value of the proved developed producing reserves evaluated in the Independent Engineering Report applicable to such calendar year unless the Majority Lenders deliver prior written approval of such resignations to the Borrower. 

Section 6.18       Equity Interests of Partners.  Brigham Exploration will not permit any of Equity Interests of any of the Partners to be owned or controlled by any Person other than Brigham Exploration or another Partner.

Section 6.19       Speculative Trading.  The Borrower shall not, nor shall it permit any of its Subsidiaries to, purchase, assume, or hold a speculative position in any commodities market or futures market or enter into any Hydrocarbon Hedge Agreement, Interest Hedge Agreement or similar hedge arrangements for speculative purposes; provided that any hedge arrangements which cover anticipated production volumes attributable to Proven Reserves of the Borrower and its Subsidiaries within the limits set forth in Section 6.02(g) shall not be considered “speculative”.

Section 6.20       Change of Name; Fiscal Year; Accounting Method.  None of the Credit Parties shall, nor shall any of the Credit Parties permit any of their Subsidiaries to, change its name, fiscal year or method of accounting except as required by GAAP; provided, however, any Credit Party may change its name if such Credit Party has given the Administrative Agent at least 30 days’ (unless otherwise consented to by the Administrative Agent) prior written notice of such name change and taken such action as the Administrative Agent deems reasonably necessary to continue the perfection of the Liens securing payment of the Obligations.

Section 6.21       Current Ratio.  Brigham Exploration shall not permit the ratio of (a) its consolidated current assets (including the Unused Commitment Amount) 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.

Section 6.22       Interest Coverage Ratio.  Brigham Exploration shall not permit the Interest Coverage Ratio as of the end of any fiscal quarter (calculated quarterly at the end of each fiscal quarter) to be less than 2.75 to 1.0 for the twelve month period ending March 31, 2003; and thereafter, not less than 3.25 to 1.0 for the twelve month period ending June 30, 2003, and each twelve month period ending at the end of each such fiscal quarter.

Section 6.23       Restrictions on Limited Partners.  Brigham Exploration shall not permit either of the Limited Partners to hold any Properties other than the limited partner interests in the Borrower.

Section 6.24       Subordinated Debt.  None of the Credit Parties may make any optional, mandatory or scheduled payments on account of principal (whether by redemption, purchase, retirement, defeasance, set-off or otherwise) in respect of the Subordinated Debt.  None of the Credit Parties may make any scheduled payments on account of interest on and fees in respect of the Subordinated Debt if a Default or an Event of Default would result or has occurred and is continuing.  None of the Credit Parties may amend, supplement or otherwise modify the terms of

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the Subordinated Debt, (including, without limitation, the Subordinated Credit Agreement) without the express written consent of the Majority Lenders, which consent will not be unreasonably withheld, which has the effect of (a) increasing the outstanding principal amount of the Subordinated Debt above $20,000,000, provided that the foregoing shall not affect the Borrower’s right to make payment in kind of accrued interest or the ability of the lenders thereunder to accept payment in kind as provided in the Subordinated Credit Agreement, thereby increasing the principal amount of the Subordinated Debt or (b) increasing the rate of interest except with respect to imposing the default rate as provided for in the Subordinated Credit Agreement on the date hereof or any fees charged on the Subordinated Debt.

Section 6.25       Advance Payment Contracts.  None of the Credit Parties will enter into or be a party to any Advance Payment Contract with respect to any Oil and Gas Properties that are Collateral.

ARTICLE VII
EVENTS OF DEFAULT; REMEDIES

Section 7.01       Events of Default.  The occurrence of any of the following events shall constitute an “Event of Default” under any Loan Document:

(a)           Payment.  The Borrower shall fail to (i) pay any principal of any Advance or reimburse any drawing under any Letter of Credit when the same becomes due and payable, or (ii) pay any interest on any Note, any fees, reimbursements, indemnifications, or other amounts payable in connection with the Obligations, this Agreement or any of the other Loan Documents within three Business Days after the same becomes due and payable;

(b)           Representation and Warranties.  Any representation or warranty made or deemed to be made (i) by any Credit Party in this Agreement or in any other Loan Document, or (ii) by any Credit Party in connection with this Agreement or any other Loan Document, shall prove to have been incorrect in any material and adverse respect when made or deemed to be made;

(c)           Covenant Breaches.  Any Credit Party shall fail to perform or observe (i) any covenant contained in Section 2.05(b), Section 5.02(a), Section 5.06(e), Section 5.12, or Article VI of this Agreement or (ii) any other term or covenant set forth in this Agreement or in any other Loan Document which is not covered by clause (i) above or any other provision of this Section 7.01 if such failure shall remain unremedied for 30 days after notice of such breach or failure has been given to the Borrower by the Administrative Agent or any of the Lenders (through the Administrative Agent);

(d)           Cross-Defaults.  (i) Any Credit Party shall fail to pay any principal of or premium or interest on its Debt which is outstanding in a principal amount of at least $1,000,000 individually or when aggregated with all such Debt of the Credit Parties so in default (but excluding Debt evidenced by the Notes) when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Debt; (ii) any other event shall occur or condition shall exist under any

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agreement or instrument (including, without limitation, the Subordinated Credit Agreement) relating to Debt which is outstanding in a principal amount of at least $1,000,000 individually or when aggregated with all such Debt of the Credit Parties so in default, and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such Debt; or (iii) any such Debt shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment or optional prepayment), prior to the stated maturity thereof;

(e)           Insolvency.  Any Credit Party shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against any Credit Party seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against any Credit Party either such proceeding shall remain undismissed for a period of 60 days or any of the actions sought in such proceeding shall occur; or any Credit Party shall take any corporate action to authorize any of the actions set forth above in this paragraph (e);

(f)            Judgments.  Any judgment or order for the payment of money in excess of $1,000,000 (excluding liabilities to the extent covered by insurance if the insurer has confirmed that such insurance covers such liabilities) shall be rendered against any Credit Party and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order or (ii) there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect;

(g)           Loan Documents.  Any provision of any Loan Document shall for any reason cease to be in full force and effect and valid, binding and enforceable in all material respects in accordance with their terms or cease in any material respect to create a valid and perfected Lien of the priority required thereby on any of the collateral purported to be covered thereby, except to the extent otherwise permitted by this Agreement, or any Credit Party shall so state in writing;

(h)           Brigham Exploration.  Any Change of Control shall occur; or

(i)            Operator.  The Borrower ceases to be the primary operating entity for Brigham Exploration and its Subsidiaries and the Borrower and its Subsidiaries cease to be the only Brigham Exploration entities owning Oil and Gas Properties. 

Section 7.02       Optional Acceleration of Maturity.  If any Event of Default (other than an Event of Default pursuant to paragraph (e) of Section 7.01) shall have occurred and be continuing, then, and in any such event,

(a)           the Administrative Agent (i) shall at the request, or may with the consent, of the Majority Lenders, by notice to the Borrower, declare the Commitments and the obligation of each Lender and the Issuing Lender to make extensions of credit hereunder, including making

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Advances and issuing Letters of Credit, to be terminated, whereupon the same shall forthwith terminate, and (ii) shall at the request, or may with the consent, of the Majority Lenders, by notice to the Borrower, declare all principal, interest, fees, reimbursements, indemnifications, and all other amounts payable under this Agreement, the Notes, and the other Loan Documents to be forthwith due and payable, whereupon all such amounts shall become and be forthwith due and payable in full, without notice of intent to demand, demand, presentment for payment, notice of nonpayment, protest, notice of protest, grace, notice of dishonor, notice of intent to accelerate, notice of acceleration, and all other notices, all of which are hereby expressly waived by the Borrower;

(b)           the Borrower shall, on demand of the Administrative Agent at the request or with the consent of the Majority Lenders, deposit with the Administrative Agent into the Cash Collateral Account an amount of cash equal to the Letter of Credit Exposure as security for the Obligations; and

(c)           the Administrative Agent shall at the request of, or may with the consent of, the Majority Lenders proceed to enforce its rights and remedies under the Security Instruments, this Agreement, and any other Loan Document for the ratable benefit of the Lenders by appropriate proceedings.

Section 7.03       Automatic Acceleration of Maturity.  If any Event of Default pursuant to paragraph (e) of Section 7.01 shall occur,

(a)           (i) the Commitments and the obligation of each Lender and the Issuing Lender to make extensions of credit hereunder, including making Advances and issuing Letters of Credit, shall terminate, and (ii) all principal, interest, fees, reimbursements, indemnifications, and all other amounts payable under this Agreement, the Notes, and the other Loan Documents shall become and be forthwith due and payable in full, without notice of intent to demand, demand, presentment for payment, notice of nonpayment, protest, notice of protest, grace, notice of dishonor, notice of intent to accelerate, notice of acceleration, and all other notices, all of which are hereby expressly waived by the Borrower;

(b)           the Borrower shall deposit with the Administrative Agent into the Cash Collateral Account an amount of cash equal to the outstanding Letter of Credit Exposure as security for the Obligations; and

(c)           the Administrative Agent shall at the request of, or may with the consent of, the Majority Lenders proceed to enforce its rights and remedies under the Security Instruments, this Agreement, and any other Loan Document for the ratable benefit of the Lenders by appropriate proceedings.

Section 7.04       Right of Set-off.  Upon the occurrence and during the continuance of any Event of Default, the Administrative Agent, the Issuing Lender and each Lender is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by the Administrative Agent, the Issuing Lender or such Lender to or for the credit or the account of the Borrower against any and all of the

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obligations of the Borrower now or hereafter existing under this Agreement, the Notes held by the Administrative Agent, the Issuing Lender or such Lender, and the other Loan Documents, irrespective of whether or not the Administrative Agent, the Issuing Lender or such Lender shall have made any demand under this Agreement, such Notes, or such other Loan Documents, and although such obligations may be unmatured.  The Administrative Agent, the Issuing Lender and each Lender agrees to promptly notify the Borrower after any such set-off and application made by the Administrative Agent, the Issuing Lender or such Lender, provided that the failure to give such notice shall not affect the validity of such set-off and application.  The rights of the Administrative Agent, the Issuing Lender and each Lender under this Section 7.04 are in addition to any other rights and remedies (including, without limitation, other rights of set-off) that the Administrative Agent, the Issuing Lender or such Lender may have.

Section 7.05       Non-exclusivity of Remedies.  No remedy conferred upon the Administrative Agent, the Issuing Lender and the Lenders is intended to be exclusive of any other remedy, and each remedy shall be cumulative of all other remedies existing by contract, at law, in equity, by statute or otherwise.

Section 7.06       Application of Proceeds.  From and during the continuance of any Event of Default, any monies or property actually received by the Administrative Agent pursuant to this Agreement or any other Loan Document, the exercise of any rights or remedies under any Security Instrument or any other agreement with the Borrower, any Guarantor or any of the Borrower’s Subsidiaries which secures any of the Obligations, shall be applied in the following order:

(a)           First, to the payment of all amounts, including without limitation costs and expenses incurred in connection with the collection of such proceeds and the payment of any part of the Obligations, due to the Administrative Agent under any of the expense reimbursement or indemnity provisions of this Agreement or any other Loan Document, any Security Instrument or other collateral documents, and any applicable law;

(b)           Second, to the ratable payment of accrued but unpaid fees of the Administrative Agent, commitment fees, letter of credit fees, and fronting fees owing to the Administrative Agent, the Issuing Lender, and the Lenders in respect of the Advances and Letters of Credit under this Agreement and the Notes;

(c)           Third, to the ratable payment of accrued but unpaid interest on the Advances owing under this Agreement and the Notes;

(d)           Fourth, ratably, according to the then unpaid amounts thereof, without preference or priority of any kind among them, to the ratable payment of all other Obligations then due and payable which relate to Advances and Letters of Credit and which are owing to the Administrative Agent and the Lenders and to the payment of all obligations of the Borrower or its Subsidiaries owing to any Swap Counterparty under any Interest Hedge Agreement or Hydrocarbon Hedge Agreement, if any, then due and payable; and

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(e)           Fifth, the remainder, if any, to the Borrower or its Subsidiaries, or its respective successors or assigns, or such other Person as may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct.

ARTICLE VIIITHE GUARANTY

Section 8.01       Liabilities Guaranteed. Each Guarantor hereby, joint and severally, irrevocably and unconditionally guarantees the prompt payment at maturity of the Obligations.

Section 8.02       Nature of Guaranty. This guaranty is an absolute, irrevocable, completed and continuing guaranty of payment and not a guaranty of collection, and no notice of the Obligations or any extension of credit already or hereafter contracted by or extended to the Borrower need be given to any Guarantor. This guaranty may not be revoked by any Guarantor and shall continue to be effective with respect to the Obligations arising or created after any attempted revocation by such Guarantor and shall remain in full force and effect until the Obligations are paid in full and the Commitments are terminated, notwithstanding that from time to time prior thereto no Obligations may be outstanding. The Borrower and the Lenders may modify, alter, rearrange, extend for any period and/or renew from time to time, the Obligations, and the Lenders may waive any Default or Events of Default without notice to any Guarantor and in such event each Guarantor will remain fully bound hereunder on the Obligations. This guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of the Obligations is rescinded or must otherwise be returned by any of the Lenders upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise, all as though such payment had not been made. This guaranty may be enforced by the Administrative Agent and any subsequent holder of any of the Obligations and shall not be discharged by the assignment or negotiation of all or part of the Obligations. Each Guarantor hereby expressly waives presentment, demand, notice of non-payment, protest and notice of protest and dishonor, notice of Default or Event of Default, and also notice of acceptance of this guaranty, acceptance on the part of the Lenders being conclusively presumed by the Lenders’ request for this guaranty and the Guarantors’ being party to this Agreement.

Section 8.03       Agent’s Rights. Each Guarantor authorizes the Administrative Agent, without notice or demand and without affecting any Guarantor’s liability hereunder, to take and hold security for the payment of its obligations under this Article VIII and/or the Obligations, and exchange, enforce, waive and release any such security; and to apply such security and direct the order or manner of sale thereof as the Administrative Agent in its discretion may determine, and to obtain a guaranty of the Obligations from any one or more Persons and at any time or times to enforce, waive, rearrange, modify, limit or release any of such other Persons from their obligations under such guaranties.

Section 8.04       Guarantor’s Waivers.

(a)           General. Each Guarantor waives any right to require any of the Lenders to (i) proceed against the Borrower or any other person liable on the Obligations, (ii) enforce any of their rights against any other guarantor of the Obligations, (iii) proceed or enforce any of their

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rights against or exhaust any security given to secure the Obligations, (iv) have the Borrower joined with any Guarantor in any suit arising out of this Article VIII and/or the Obligations, or (v) pursue any other remedy in the Lenders’ powers whatsoever. The Lenders shall not be required to mitigate damages or take any action to reduce, collect or enforce the Obligations. Guarantor waives any defense arising by reason of any disability, lack of corporate authority or power, or other defense of the Borrower or any other guarantor of the Obligations, and shall remain liable hereon regardless of whether the Borrower or any other guarantor be found not liable thereon for any reason. Whether and when to exercise any of the remedies of the Lenders under any of the Loan Documents shall be in the sole and absolute discretion of the Administrative Agent, and no delay by the Administrative Agent in enforcing any remedy, including delay in conducting a foreclosure sale, shall be a defense to any Guarantor’s liability under this Article VIII.

(b)           Subrogation. Until the Obligations have been paid in full, each Guarantor waives all rights of subrogation or reimbursement against the Borrower, whether arising by contract or operation of law (including, without limitation, any such right arising under any federal or state bankruptcy or insolvency laws) and waives any right to enforce any remedy which the Lenders now have or may hereafter have against the Borrower, and waives any benefit or any right to participate in any security now or hereafter held by the Administrative Agent or any Lender.

Section 8.05       Maturity of Obligations, Payment. Each Guarantor agrees that if the maturity of any of the Obligations is accelerated by bankruptcy or otherwise, such maturity shall also be deemed accelerated for the purpose of this Article VIII without demand or notice to any Guarantor. Each Guarantor will, forthwith upon notice from the Administrative Agent, jointly and severally pay to the Administrative Agent the amount due and unpaid by the Borrower and guaranteed hereby. The failure of the Administrative Agent to give this notice shall not in any way release any Guarantor hereunder.

Section 8.06       Agent’s Expenses. If any Guarantor fails to pay the Obligations after notice from the Administrative Agent of the Borrower’s failure to pay any Obligations at maturity, and if the Administrative Agent obtains the services of an attorney for collection of amounts owing by any Guarantor hereunder, or obtaining advice of counsel in respect of any of their rights under this Article VIII, or if suit is filed to enforce this Article VIII, or if proceedings are had in any bankruptcy, probate, receivership or other judicial proceedings for the establishment or collection of any amount owing by any Guarantor hereunder, or if any amount owing by any Guarantor hereunder is collected through such proceedings, each Guarantor jointly and severally agrees to pay to the Administrative Agent the Administrative Agent’s reasonable attorneys’ fees.

Section 8.07       Liability.  It is expressly agreed that the liability of each Guarantor for the payment of the Obligations guaranteed hereby shall be primary and not secondary.

Section 8.08       Events and Circumstances Not Reducing or Discharging any Guarantor’s Obligations. Each Guarantor hereby consents and agrees to each of the following to the fullest extent permitted by law, and agrees that each Guarantor’s obligations under this Article VIII shall not be released, diminished, impaired, reduced or adversely affected by any of the

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following, and waives any rights (including without limitation rights to notice) which each Guarantor might otherwise have as a result of or in connection with any of the following:

(a)           Modifications, etc. Any renewal, extension, modification, increase, decrease, alteration or rearrangement of all or any part of the Obligations, or of the Notes, or this Agreement or any instrument executed in connection therewith, or any contract or understanding between the Borrower and any of the Lenders, or any other Person, pertaining to the Obligations;

(b)           Adjustment, etc. Any adjustment, indulgence, forbearance or compromise that might be granted or given by any of the Lenders to the Borrower or any Guarantor or any Person liable on the Obligations;

(c)           Condition of the Borrower or any Guarantor. The insolvency, bankruptcy arrangement, adjustment, composition, liquidation, disability, dissolution, death or lack of power of the Borrower or any Guarantor or any other Person at any time liable for the payment of all or part of the Obligations; or any dissolution of the Borrower or any Guarantor, or any sale, lease or transfer of any or all of the assets of the Borrower or any Guarantor, or any changes in the shareholders, partners, or members of the Borrower or any Guarantor; or any reorganization of the Borrower or any Guarantor;

(d)           Invalidity of Obligations. The invalidity, illegality or unenforceability of all or any part of the Obligations, or any document or agreement executed in connection with the Obligations, for any reason whatsoever, including without limitation the fact that the Obligations, or any part thereof, exceed the amount permitted by law, the act of creating the Obligations or any part thereof is ultra vires, the officers or representatives executing the documents or otherwise creating the Obligations acted in excess of their authority, the Obligations violate applicable usury laws, the Borrower has valid defenses, claims or offsets (whether at law, in equity or by agreement) which render the Obligations wholly or partially uncollectible from the Borrower, the creation, performance or repayment of the Obligations (or the execution, delivery and performance of any document or instrument representing part of the Obligations or executed in connection with the Obligations, or given to secure the repayment of the Obligations) is illegal, uncollectible, legally impossible or unenforceable, or this Agreement or other documents or instruments pertaining to the Obligations have been forged or otherwise are irregular or not genuine or authentic;

(e)           Release of Obligors. Any full or partial release of the liability of the Borrower on the Obligations or any part thereof, of any co-guarantors, or any other Person now or hereafter liable, whether directly or indirectly, jointly, severally, or jointly and severally, to pay, perform, guarantee or assure the payment of the Obligations or any part thereof, it being recognized, acknowledged and agreed by any Guarantor that such Guarantor may be required to pay the Obligations in full without assistance or support of any other Person, and no Guarantor has been induced to enter into this Article VIII on the basis of a contemplation, belief, understanding or agreement that other parties other than the Borrower will be liable to perform the Obligations, or the Lenders will look to other parties to perform the Obligations.

(f)            Other Security. The taking or accepting of any other security, collateral or guaranty, or other assurance of payment, for all or any part of the Obligations;

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(g)           Release of Collateral etc. Any release, surrender, exchange, subordination, deterioration, waste, loss or impairment (including without limitation negligent, willful, unreasonable or unjustifiable impairment) of any collateral, property or security, at any time existing in connection with, or assuring or securing payment of, all or any part of the Obligations;

(h)           Care and Diligence. The failure of the Lenders or any other Person to exercise diligence or reasonable care in the preservation, protection, enforcement, sale or other handling or treatment of all or any part of such collateral, property or security;

(i)            Status of Liens. The fact that any collateral, security, security interest or lien contemplated or intended to be given, created or granted as security for the repayment of the Obligations shall not be properly perfected or created, or shall prove to be unenforceable or subordinate to any other security interest or lien, it being recognized and agreed by each Guarantor that no Guarantor is entering into this Article VIII in reliance on, or in contemplation of the benefits of, the validity, enforceability, collectibility or value of any of the collateral for the Obligations;

(j)            Payments Rescinded. Any payment by the Borrower to the Lenders is held to constitute a preference under the bankruptcy laws, or for any reason the Lenders are required to refund such payment or pay such amount to the Borrower or someone else; or

(k)           Other Actions Taken or Omitted.  Any other action taken or omitted to be taken with respect to this Agreement, the Obligations, or the security and collateral therefor, whether or not such action or omission prejudices any Guarantor or increases the likelihood that any Guarantor will be required to pay the Obligations pursuant to the terms hereof, it being the unambiguous and unequivocal intention of each Guarantor that each Guarantor shall be obligated to joint and severally pay the Obligations when due, notwithstanding any occurrence, circumstance, event, action, or omission whatsoever, whether contemplated or uncontemplated, and whether or not otherwise or particularly described herein, except for the full and final payment and satisfaction of the Obligations.

Section 8.09       Subordination of All Guarantor Claims. As used herein, the term “Guarantor Claims” shall mean all debts and liabilities of the Borrower or any Subsidiary of the Borrower to any Guarantor, whether such debts and liabilities now exist or are hereafter incurred or arise, or whether the obligation of the Borrower or such Subsidiary thereon be direct, contingent, primary, secondary, several, joint and several, or otherwise, and irrespective of whether such debts or liabilities be evidenced by note, contract, open account, or otherwise, and irrespective of the person or persons in whose favor such debts or liabilities may, at their inception, have been, or may hereafter be created, or the manner in which they have been or may hereafter be acquired by any Guarantor. The Guarantor Claims shall include without limitation all rights and claims of any Guarantor against the Borrower or any Subsidiary of the Borrower arising as a result of subrogation or otherwise as a result of such Guarantor’s payment of all or a portion of the Obligations. Until the Obligations shall be paid and satisfied in full and each Guarantor shall have performed all of its obligations hereunder, no Guarantor shall receive or collect, directly or indirectly, from the Borrower or any Subsidiary of the Borrower or any other

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party any amount upon the Guarantor Claims during the occurrence and continuance of an Event of Default.

Section 8.10       Claims in Bankruptcy. In the event of receivership, bankruptcy, reorganization, arrangement, debtor’s relief, or other insolvency proceedings involving the Borrower or any Subsidiary of the Borrower, as debtor, the Lenders shall have the right to prove their claim in any proceeding, so as to establish their rights hereunder and receive directly from the receiver, trustee or other court custodian, dividends and payments which would otherwise be payable upon Guarantor Claims.  Each Guarantor hereby assigns such dividends and payments to the Lenders. Should the Administrative Agent or any Lender receive, for application upon the Obligations, any such dividend or payment which is otherwise payable to any Guarantor, and which, as between the Borrower or any Subsidiary of the Borrower and any Guarantor, shall constitute a credit upon the Guarantor Claims, then upon payment in full of the Obligations, such Guarantor shall become subrogated to the rights of the Lenders to the extent that such payments to the Lenders on the Guarantor Claims have contributed toward the liquidation of the Obligations, and such subrogation shall be with respect to that proportion of the Obligations which would have been unpaid if the Administrative Agent or a Lender had not received dividends or payments upon the Guarantor Claims.

Section 8.11       Payments Held in Trust.  In the event that notwithstanding Sections 8.09 and 8.10 above, any Guarantor should receive any funds, payments, claims or distributions which is prohibited by such Sections, such Guarantor agrees to hold in trust for the Lenders an amount equal to the amount of all funds, payments, claims or distributions so received, and agrees that it shall have absolutely no dominion over the amount of such funds, payments, claims or distributions except to pay them promptly to the Administrative Agent, and each Guarantor covenants promptly to pay the same to the Administrative Agent.

Section 8.12       Liens Subordinate. Each Guarantor agrees that any liens, security interests, judgment liens, charges or other encumbrances upon the Borrower’s or any Subsidiary of the Borrower’s assets securing payment of the Guarantor Claims shall be and remain inferior and subordinate to any liens, security interests, judgment liens, charges or other encumbrances upon the Borrower’s or any Subsidiary of the Borrower’s assets securing payment of the Obligations, regardless of whether such encumbrances in favor of any Guarantor, the Administrative Agent or the Lenders presently exist or are hereafter created or attach.

Section 8.13       Guarantor’s Enforcement Rights. Without the prior written consent of the Lenders, no Guarantor shall (a) exercise or enforce any creditor’s right it may have against the Borrower or any Subsidiary of the Borrower, or (b) foreclose, repossess, sequester or otherwise take steps or institute any action or proceeding (judicial or otherwise, including without limitation the commencement of or joinder in any liquidation, bankruptcy, rearrangement, debtor’s relief or insolvency proceeding) to enforce any lien, mortgages, deeds of trust, security interest, collateral rights, judgments or other encumbrances on assets of the Borrower or any Subsidiary of the Borrower held by Guarantor.

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ARTICLE IX

THE ADMINISTRATIVE AGENT AND THE ISSUING LENDER

Section 9.01       Authorization and Action.  Each Lender hereby appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to the Administrative Agent by the terms hereof and of the other Loan Documents, together with such powers as are reasonably incidental thereto.  As to any matters not expressly provided for by this Agreement or any other Loan Document (including, without limitation, enforcement or collection of the Notes), the Administrative Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Majority Lenders, and such instructions shall be binding upon all Lenders and all holders of Notes; provided, however, that the Administrative Agent shall not be required to take any action which exposes the Administrative Agent to personal liability or which is contrary to this Agreement, any other Loan Document, or applicable law.

Section 9.02       Administrative Agent’s Reliance, Etc.  Neither the Administrative Agent nor any of its directors, officers, agents, or employees shall be liable for any action taken or omitted to be taken (including the Administrative Agent’s own negligence) by it or them under or in connection with this Agreement or the other Loan Documents, except for its or their own gross negligence or willful misconduct.  Without limitation of the generality of the foregoing, the Administrative Agent:  (a) may treat the payee of any Note as the holder thereof until the Administrative Agent receives written notice of the assignment or transfer thereof signed by such payee and in form satisfactory to the Administrative Agent; (b) may consult with legal counsel (including counsel for any Credit Party), independent public accountants, and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants, or experts; (c) makes no warranty or representation to any Lender and shall not be responsible to any Lender for any statements, warranties, or representations made in or in connection with this Agreement or the other Loan Documents; (d) shall not, except with respect to Administrative Agent’s receipt of payments due hereunder, have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or any other Loan Document on the part of any Credit Party or to inspect the property (including the books and records) of any Credit Party; (e) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency, or value of this Agreement or any other Loan Document; and (f) shall incur no liability under or in respect of this Agreement or any other Loan Document by acting upon any notice, consent, certificate, or other instrument or writing (which may be by telecopier or telex) believed by it to be genuine and signed or sent by the proper party or parties.

Section 9.03       The Administrative Agent and Its Affiliates.  With respect to its Commitments, the Advances made by it and the Notes issued to it, the Administrative Agent shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though it were not the Administrative Agent.  The term “Lender” or “Lenders” shall, unless otherwise expressly indicated, include the Administrative Agent in its individual capacity.  The Administrative Agent and its Affiliates may accept deposits from, lend

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money to, act as trustee under indentures of, and generally engage in any kind of business with, any Credit Party, and any Person who may do business with or own securities of any Credit Party, all as if the Administrative Agent were not an agent hereunder and without any duty to account therefor to the Lenders.

Section 9.04          Lender Credit Decision.  Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on the Financial Statements and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender also acknowledges that it shall, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement.

Section 9.05Indemnification.  The Lenders severally agree to indemnify the Administrative Agent and the Issuing Lender and each Affiliate thereof and their respective directors, officers, employees, and agents (to the extent not reimbursed by the Credit Parties), according to their respective Pro Rata Shares from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Administrative Agent and the Issuing Lender in any way relating to or arising out of this Agreement or any action taken or omitted by the Administrative Agent or the Issuing Lender under this Agreement or any other Loan Document (including the Administrative Agent’s and the Issuing Lender’s own negligence), and including, without limitation, environmental liabilities, provided that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, or disbursements resulting from the Administrative Agent’s or the Issuing Lender’s gross negligence or willful misconduct.  Without limitation of the foregoing, each Lender agrees to reimburse the Administrative Agent and the Issuing Lender promptly upon demand for its ratable share of any out-of-pocket expenses (including counsel fees) incurred by the Administrative Agent or the Issuing Lender in connection with the preparation, execution, delivery, administration, modification, amendment, or enforcement (whether through negotiations, legal proceedings, or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement or any other Loan Document, to the extent that the Administrative Agent or the Issuing Lender is not reimbursed for such by the Credit Parties, provided that no Lender shall be liable for any portion of such out-of-pocket expenses (including counsel fees) incurred by the Administrative Agent or the Issuing Bank as a result of the Administrative Agent’s or the Issuing Lender’s gross negligence or willful misconduct.

Section 9.06          Successor Administrative Agent and Issuing Lender.  The Administrative Agent or the Issuing Lender may resign at any time by giving written notice thereof to the Lenders and the Borrower and may be removed at any time with or without cause by the Majority Lenders upon receipt of written notice from the Majority Lenders to such effect.  Upon

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receipt of notice of any such resignation or removal, the Majority Lenders shall have the right to appoint a successor Administrative Agent or Issuing Lender with, if any Event of Default has not occurred and is not continuing, the consent of the Borrower, which consent shall not be unreasonably withheld.  If no successor Administrative Agent or Issuing Lender shall have been so appointed by the Majority Lenders with the consent of the Borrower, and shall have accepted such appointment, within 30 days after the resigning Administrative Agent’s or Issuing Lender’s giving of notice of resignation or the Majority Lenders’ removal of the resigning Administrative Agent or Issuing Lender, then the resigning Administrative Agent or Issuing Lender may, on behalf of the Lenders and the Borrower, appoint a successor Administrative Agent or Issuing Lender, which shall be, in the case of a successor agent, a Lender or any other commercial bank organized under the laws of the United States of America or of any State thereof and having a combined capital and surplus of at least $500,000,000.00 and, in the case of the Issuing Lender, a Lender.  Upon the acceptance of any appointment as Administrative Agent or Issuing Lender by a successor Administrative Agent or Issuing Lender, such successor Administrative Agent or Issuing Lender shall thereupon succeed to and become vested with all the rights, powers, privileges, and duties of the resigning Administrative Agent or Issuing Lender, and the resigning Administrative Agent or Issuing Lender shall be discharged from its duties and obligations under this Agreement and the other Loan Documents, except that the resigning Issuing Lender shall remain the Issuing Lender with respect to any Letters of Credit outstanding on the Closing Date of its resignation or removal and the provisions affecting the Issuing Lender with respect to such Letters of Credit shall inure to the benefit of the resigning Issuing Lender until the termination of all such Letters of Credit.  After any resigning Administrative Agent’s or Issuing Lender’s resignation or removal hereunder as Administrative Agent or Issuing Lender, the provisions of this Article IX shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent or Issuing Lender under this Agreement and the other Loan Documents.

Section 9.07          Other Agents.  None of the Lead Arranger, the Co-Arranger, the Documentation Agent or the Syndication Agent, in such respective capacities, shall have any duties or responsibilities, or incur any liabilities, under this Agreement or the other Loan Documents.

Section 9.08          Collateral Matters.

(a)           The Administrative Agent is authorized on behalf of the Lenders, without the necessity of any notice to or further consent from the Lenders, from time to time, to take any actions with respect to any Collateral or Security Instruments which may be necessary to perfect and maintain Acceptable Security Interests in and Liens upon the Collateral granted pursuant to the Security Instruments.  The Administrative Agent is further authorized on behalf of the Lenders, without the necessity of any notice to or further consent from the Lenders, from time to time, to take any action in exigent circumstances as may be reasonably necessary to preserve any rights or privileges of the Lenders under the Loan Documents or applicable Legal Requirements.

(b)           Each of the Lenders irrevocably authorizes the Administrative Agent to release any Lien granted to or held by the Administrative Agent upon any Collateral (i) upon termination of the Commitments and payment in full of all outstanding Advances and all other Obligations payable under this Agreement and under any other Loan Document; (ii) constituting property

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sold or to be sold or disposed of as part of or in connection with any disposition permitted under this Agreement or the other Loan Documents; (iii) constituting property in which any Credit Party owned no interest at the time the Lien was granted or at any time thereafter; (iv) constituting Oil and Gas Properties to which no Proven Reserves are attributed that currently encumbered under the Mortgage Amendments; (v) if approved, authorized or ratified in writing by the Majority Lenders or all the Lenders, as the case may be, as required by Section 10.01 or (vi) as otherwise permitted by this Agreement.  Upon the request of the Administrative Agent at any time, the Lenders will confirm in writing the Administrative Agent’s authority to release particular types or items of Collateral pursuant to this Section 9.08.  The Administrative Agent hereby agrees, from time to time upon the prior written request of the Borrower, to execute and deliver such releases and/or termination documents as may be necessary to effectively release any and all of the Liens granted to or held by the Administrative Agent upon any Collateral described in this Section 9.08(b).

(c)           The powers conferred on the Administrative Agent under this Agreement and the other Security Instruments are solely to protect its interest in the Collateral and shall not impose any duty upon it to exercise any such powers.  Except for the reasonable care of any Collateral in its possession and the accounting for monies or other property actually received by it hereunder, the Administrative Agent shall have no duty as to any Collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral.  The Administrative Agent shall be deemed to have exercised reasonable care as to the custody and preservation of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which the Administrative Agent accords its own property, provided that the Administrative Agent shall have no responsibility for taking any necessary steps to preserve rights against any parties with respect to any Collateral.

ARTICLE X

MISCELLANEOUS

Section 10.01        Amendments, Etc.  No amendment or waiver of any provision of this Agreement, the Notes, or any other Loan Document, nor consent to any departure by any Credit Party therefrom, shall in any event be effective unless the same shall be in writing and signed by the Majority Lenders and the Borrower, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that:

(a)           no amendment, waiver, or consent shall, unless in writing and signed by all of the Lenders and the Borrower, do any of the following:

(i)            waive any of the conditions specified in Section 3.01 or 3.02;

(ii)           increase the Commitments of the Lenders;

(iii)          change the percentage of Lenders which shall be required for the Lenders or any of them to take any action hereunder or under any other Loan Document;

(iv)          amend Section 2.11 or this Section 10.01;

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(v)           amend the definition of “Majority Lenders”;

(vi)          release any Guarantor from its obligations under Article VIII of this Agreement;

(vii)         permit any Credit Party to enter into any merger or consolidation with or into any other Person, except as permitted by Section 6.04, or amend Section 6.04;

(viii)        release any Collateral, except for releases of Collateral in connection with dispositions permitted by this Agreement;

(ix)           increase the Borrowing Base;

(x)            reduce the principal of, or interest on, the Notes or any fees or other amounts payable hereunder or under any other Loan Document to or for the benefit of the Lenders;

(xi)           postpone any date fixed for any payment of principal of, or interest on, the Notes or any fees or other amounts payable hereunder or extend the Maturity Date or the Commitment Termination Date; or

(xii)          amend or waive any provision of, nor consent to any departure by any party thereto from, the Intercreditor and Subordination Agreement;

(b)           no amendment, waiver, or consent shall, unless in writing and signed by the Majority Lenders, decrease the Borrowing Base; and

(c)           no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent or the Issuing Lender in addition to the Lenders required above to take such action, affect the rights or duties of the Administrative Agent or the Issuing Lender, as the case may be, under this Agreement or any other Loan Document.

Notwithstanding any of the foregoing provisions of this Section 10.01, the Administrative Agent may release Collateral relating to sales or transfers of property permitted under this Agreement or any other Loan Document; provided, however, in no event shall Administrative Agent release all or substantially all of the Collateral without the prior written consent of each of the Lenders.

Section 10.02        Notices, Etc.  All notices and other communications shall be in writing (including, without limitation, telecopy or telex) and mailed by certified mail, return receipt requested, telecopied, telexed, hand delivered, or delivered by a nationally recognized overnight courier, at the address for the appropriate party specified in Schedule 1 or at such other address as shall be designated by such party in a written notice to the other parties.  All such notices and communications shall, when so mailed, telecopied, telexed, or hand delivered or delivered by a nationally recognized overnight courier, be effective when received if mailed, when telecopy transmission is completed, when confirmed by telex answer-back, or when delivered by such messenger or courier, respectively, except that notices and communications to the Administrative Agent pursuant to Article II, IX or X shall not be effective until received by the Administrative Agent.

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Section 10.03        No Waiver; Remedies.  No failure on the part of any Lender, the Administrative Agent, or the Issuing Lender to exercise, and no delay in exercising, any right hereunder or under any Note shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right.  The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

Section 10.04        Costs and Expenses.  The Borrower agrees to pay on demand (a) all reasonable out-of-pocket costs and expenses of the Arrangers and the Agents in connection with the preparation, execution, delivery, administration, modification, and amendment of this Agreement, the Notes, and the other Loan Documents including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Administrative Agent with respect to advising the Administrative Agent as to its rights and responsibilities under this Agreement, and (b) all out-of-pocket costs and expenses, if any, of the Administrative Agent, the Issuing Lender, and each Lender (including, without limitation, reasonable counsel fees and expenses of the Administrative Agent, the Issuing Lender, and each Lender) in connection with the enforcement (whether through negotiations, legal proceedings, or otherwise) of this Agreement, the Notes, and the other Loan Documents.

Section 10.05        Binding Effect.  This Agreement shall become effective when it shall have been executed by each of the Credit Parties and the Administrative Agent, and when the Administrative Agent shall have, as to each Lender, either received a counterpart hereof executed by such Lender or been notified by such Lender that such Lender has executed it and thereafter shall be binding upon and inure to the benefit of the Credit Parties, the Administrative Agent, the Issuing Lender, and each Lender and their respective successors and assigns, except that the Borrower shall not have the right to assign its rights or delegate its duties under this Agreement or any interest in this Agreement without the prior written consent of each Lender.

Section 10.06        Lender Assignments and Participations.

(a)           Assignments.  Any Lender may assign to one or more banks or other entities all or any portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitments, the Advances owing to it, the Notes held by it, and the participation interest in the Letter of Credit Obligations held by it); provided, however, that (i) the amount of the Commitments and Advances of such Lender being assigned pursuant to each such assignment (determined as of the date of the Assignment and Acceptance with respect to such assignment) shall be, if to an entity other than a Lender, not less than $5,000,000.00, (ii) each such assignment shall be to an Eligible Assignee, (iii) the parties to each such assignment shall execute and deliver to the Administrative Agent, for its acceptance and recording in the Register, an Assignment and Acceptance, together with the Notes subject to such assignment, and (iv) each Eligible Assignee (other than an Eligible Assignee that is a Lender or an Affiliate of a Lender) shall pay to the Administrative Agent a $3,500 administrative fee.  Any such assignment need not be ratable as among the Facilities.  Upon such execution, delivery, acceptance and recording, from and after the effective date specified in each Assignment and Acceptance, which effective date shall be at least three Business Days after the execution thereof unless otherwise waived by the Administrative Agent in its sole discretion, (A) the assignee thereunder shall be a party hereto for all purposes and, to the extent that rights and obligations

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hereunder have been assigned to it pursuant to such Assignment and Acceptance, have the rights and obligations of a Lender hereunder and (B) such Lender thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of such Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto).

(b)           Term of Assignments.  By executing and delivering an Assignment and Acceptance, the Lender thereunder and the assignee thereunder confirm to and agree with each other and the other parties hereto as follows:  (i) other than as provided in such Assignment and Acceptance, such Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency of value of this Agreement or any other instrument or document furnished pursuant hereto; (ii) such Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Credit Party or the performance or observance by the Borrower or its Subsidiaries of any of their obligations under this Agreement or any other instrument or document furnished pursuant hereto; (iii) such assignee confirms that it has received a copy of this Agreement, together with copies of the most recently delivered financial statements pursuant to Section 5.06 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such assignee will, independently and without reliance upon the Administrative Agent, such Lender or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (v) such assignee appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to the Administrative Agent by the terms hereof, together with such powers as are reasonably incidental thereto; and (vi) such assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of this Agreement are required to be performed by it as a Lender.

(c)           The Register.  The Administrative Agent shall maintain at its address referred to in Section 10.02 a copy of each Assignment and Acceptance delivered to and accepted by it and a register for the recordation of the names and addresses of the Lenders and the Commitments of, and principal amount of the Advances owing to, each Lender from time to time (the “Register”).  The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and each of the Credit Parties, the Administrative Agent, the Issuing Lender, and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement.  The Register shall be available for inspection by the Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice.

(d)           Procedures.  Upon its receipt of an Assignment and Acceptance executed by a Lender and an Eligible Assignee, together with the Notes subject to such assignment, the Administrative Agent shall, if such Assignment and Acceptance has been completed and is in substantially the form of the attached Exhibit A, (i) accept such Assignment and Acceptance, (ii) record the information contained therein in the Register, and (iii) give prompt notice thereof to

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the Borrower.  Within five Business Days after its receipt of such notice, the Borrower shall execute and deliver to the Administrative Agent in exchange for the surrendered Notes (A) if such Eligible Assignee has acquired a Commitment, a new Note to the order of such Eligible Assignee in an amount equal to such Commitment assumed by it pursuant to such Assignment and Acceptance and (B) if such Lender has retained any Commitment hereunder, a new Note to the order of such Lender in an amount equal to the Commitment retained by it hereunder.  Such new Note shall be dated the effective date of such Assignment and Acceptance and shall otherwise be in substantially the form of the attached Exhibit E.

(e)           Participations.  Each Lender may sell participations to one or more banks or other entities in or to all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitments, the Advances owing to it, its participation interest in the Letter of Credit Obligations, and the Notes held by it); provided, however, that (i) such Lender’s obligations under this Agreement (including, without limitation, its Commitments to the Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) such Lender shall remain the holder of any such Notes for all purposes of this Agreement, (iv) the Credit Parties, the Administrative Agent, and the Issuing Lender and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement, and (v) such Lender shall not require the participant’s consent to any matter under this Agreement, except for change in the principal amount of the Notes, reductions in fees or interest, releasing all or substantially all of any Collateral or Brigham Exploration or the General Partner as a Guarantor, permitting any Credit Party to enter into any merger or consolidation with or into any other (except as permitted hereby),  postponement of any date fixed for any payment of principal of, or interest on, the Notes or any fees or other amounts payable hereunder, or extensions of either the Maturity Date or the Commitment Termination Date.  The Borrower hereby agrees that participants shall have the same rights under Sections 2.12, 2.13, 2.14, and 11.07 as a Lender to the extent of their respective participations.

Section 10.07Indemnification.  The Borrower shall indemnify the Arrangers, the Agents, the Lenders, the Issuing Lender, and each Affiliate thereof and their respective directors, officers, employees, and agents from, and discharge, release, and hold each of them harmless against, any and all losses, liabilities, claims, or damages which may be imposed on, incurred by, or asserted against them in any way relating to or arising out of this Agreement or any action taken or omitted by them under this Agreement or any other Loan Document (including any such losses, liabilities, claims, damages, or expense incurred by reason of the person being indemnified’s own negligence or strict liability) and including without limitation Environmental Liabilities, but excluding any such losses, liabilities, claims, damages, or expenses incurred by reason of the gross negligence or willful misconduct of the person to be indemnified.

Section 10.08        Execution in Counterparts.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

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Section 10.09        Survival of Representations, Etc.  All representations and warranties contained in this Agreement or made in writing by or on behalf of the Borrower in connection herewith shall survive the execution and delivery of this Agreement and the Loan Documents, the making of the Advances and any investigation made by or on behalf of the Lenders, none of which investigations shall diminish any Lender’s right to rely on such representations and warranties.  All obligations of the Borrower provided for in Sections 2.12, 2.13, 2.14(c), 10.04, and 10.07 and all of the obligations of the Lenders in Section 10.05 shall survive any termination of this Agreement and repayment in full of the Obligations.

Section 10.10        Severability.  In case one or more provisions of this Agreement or the other Loan Documents shall be invalid, illegal or unenforceable in any respect under any applicable law, the validity, legality, and enforceability of the remaining provisions contained herein or therein shall not be affected or impaired thereby.

Section 10.11        Governing Law.  Except as otherwise expressly stated in any Security Instrument, this Agreement, the Notes and the other Loan Documents shall be governed by, and construed and enforced in accordance with, the laws of the State of New York.  Each Letter of Credit shall be governed by either (a) the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No.  500 (or any successor to such publication) or (b) the International Standby Practices 1998, Institute of International Banking Law & Practice (or any successor to such publication).

Section 10.12        Submission To Jurisdiction; Waivers.  The Borrower hereby irrevocably and unconditionally:

(A)          submits for itself and its Property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the Courts of the State of New York, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof;

(b)          consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;

(c)          agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the Borrower at its address set forth in subsection 10.02 or at such other address of which the Administrative Agent shall have been notified pursuant thereto;

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(d)          agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and

(e)           waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this subsection any special, exemplary, punitive or consequential damages.

Section 10.13WAIVER OF JURY TRIAL.  EACH OF THE CREDIT PARTIES, THE LENDERS, THE ISSUING LENDER, THE ARRANGERS AND THE AGENTS HEREBY ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED BY AND HAS CONSULTED WITH COUNSEL OF ITS CHOICE, AND HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN RESPECT OF ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

Section 10.14ORAL AGREEMENTS.  THIS AGREEMENT AND THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG 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.

Section 10.15 Dissemination of Information.  Each of the Agents and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential); (b) to the extent requested by any Governmental Authority in connection with banking regulations or supervision; (c) to the extent required by applicable Legal Requirements or by any subpoena or similar legal process; (d) to any other party to this Agreement; (e) to the extent required, in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder; (f) subject to an agreement for the benefit of the Credit Parties containing provisions substantially the same as those of this Section 10.15 or any other confidentiality obligation referred to herein, to (i) any participant or Eligible Assignee or any other Person acquiring an interest in the Loan Documents (each a “Transferee”) and any prospective Transferee or (ii) any direct or indirect contractual counterparty or prospective counterparty (or such contractual counterparty’s or prospective counterparty’s professional advisor) to any credit derivative transaction relating to obligations of Credit Parties; (g) with the prior written consent of the Borrower; or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to any Agent or Lender on a nonconfidential basis from a source other than any Credit Party.  In addition, any Agent or any Lender may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry, and service providers to the Agents and the Lenders in connection with the administration and management of this Agreement, the other Loan Documents, and the Advances.  For the purposes of this Section, “Information” means all information received from, or on behalf of, any Credit Parties relating to any Credit Party or their business, other than any such information that is

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available to any Agent or any Lender on a nonconfidential basis prior to disclosure by any Credit Party; provided that, in the case of information received from any Credit Party after the date hereof, such information is clearly identified in writing at the time of delivery as confidential; provided, however, that notwithstanding the foregoing, each Engineering Report shall be deemed to be confidential regardless of whether such Engineering Report is identified in writing at the time of delivery as confidential.  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

Section 10.16        Production Proceeds.  Notwithstanding that, by the terms of the various Security Instruments, the Credit Parties are and will be assigning to the Administrative Agent and the Lenders all of the “Production Proceeds” (as defined therein) accruing to the Property covered thereby, so long as no Event of Default has occurred the Credit Parties may continue to receive from the purchasers of production all such Production Proceeds, subject, however, to the Liens created under the Security Instruments, which Liens are hereby affirmed and ratified.  Upon the occurrence of an Event of Default, the Administrative Agent and the Lenders may exercise all rights and remedies granted under the Security Instruments, including the right to obtain possession of all Production Proceeds then held by the Credit Parties or to receive directly from the purchasers of production all other Production Proceeds.  In no case shall any failure, whether intentional or inadvertent, by the Administrative Agent or the Lenders to collect directly any such Production Proceeds constitute in any way a waiver, remission or release of any of their rights under the Security Instruments, nor shall any release of any Production Proceeds by the Administrative Agent or the Lenders to the Credit Parties constitute a waiver, remission, or release of any other Production Proceeds or of any rights of the Administrative Agent or the Lenders to collect other Production Proceeds thereafter.

Section 10.17        Amendment and Restatement.  The Borrower, the Agents and the Lenders have agreed that this Agreement is an amendment and restatement of the Existing Senior Credit Agreement in its entirety and the terms and provisions hereof supersede the terms and provisions thereof, and this Agreement is not a new or substitute credit agreement or novation of the Existing Senior Credit Agreement.

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EXECUTED as of the date first above written.

BORROWER:
BRIGHAM OIL & GAS, L.P.
By:   Brigham, Inc., its General Partner
By:	/s/ Warren J. Ludlow
	Warren J. Ludlow
	Secretary
GUARANTORS:
BRIGHAM EXPLORATION COMPANY
By:	/s/ Warren J. Ludlow
	Warren J. Ludlow
	Secretary
BRIGHAM, INC.
By:	/s/ Warren J. Ludlow
	Warren J. Ludlow
	Secretary
ADMINISTRATIVE AGENT:
SOCIETE GENERALE
as Lead Arranger, Administrative Agent and as Issuing Lender
By:	/s/ Cary Hughes
	Cary Hughes
	Director

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LENDERS:
SOCIETE GENERALE
By:	/s/ Cary Hughes
	Cary Hughes
	Director

THE ROYAL BANK OF SCOTLAND plc
By:	/s/ Phillip Ballard
	Phillip Ballard
	Senior Vice President

BANK OF AMERICA, N.A.
By:	/s/ Steven A. Mackenzie
		Steven A. Mackenzie
		Vice President

HIBERNIA NATIONAL BANK
By:		/s/ David R. Reid
	David R. Reid
	Senior Vice President

NATEXIS BANQUE POPULAIRES
By:		/s/ Donovan C. Broussard
		Donovan C. Broussard
		Vice President and Manager
By:	/s/ Louis P. Laville, III
	Louis P. Laville, III
	Vice President and Manager

EXHIBIT A

ASSIGNMENT AND ACCEPTANCE

Dated               ,        

Reference is made to the Second Amended and Restated Credit Agreement dated as of March 21, 2003 (as the same may be amended or modified from time-to-time, the “Credit Agreement”) among Brigham Oil & Gas, L.P., a Delaware limited partnership (the “Borrower”), Brigham Exploration Company, a Delaware corporation, Brigham, Inc., a Nevada corporation, the lenders party thereto (the “Lenders”), and Société Générale, as administrative agent (“Administrative Agent”) and as issuing lender (“Issuing Lender”) for the Lenders.  Capitalized terms not otherwise defined in this Assignment and Acceptance shall have the meanings assigned to them in the Credit Agreement.

Pursuant to the terms of the Credit Agreement,                         wishes to assign and delegate        %(1) of its rights and obligations under the Credit Agreement.  Therefore,                         (“Assignor”),                         (“Assignee”), and the Administrative Agent agree as follows:

1.             The Assignor hereby sells and assigns and delegates to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, without recourse to the Assignor and without representation or warranty except for the representations and warranties specifically set forth in clauses (i) and (ii) of Section 2, a         % interest in and to all of the Assignor’s rights and obligations under the Credit Agreement as of the Effective Date (as defined below), including, without limitation, such percentage interest in the Assignor’s Commitment, the Advances owing to the Assignor, the Assignor’s Letter of Credit Exposure, and the Note held by the Assignor.

2.             The Assignor (i) represents and warrants that, prior to executing this Assignment and Acceptance, its Commitment is $                       , the aggregate outstanding principal amount of Advances owed to it by the Borrower is $                       , and its Pro Rata Share of the Letter of Credit Exposure is $                       ; (ii) represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; (iii) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties, or representations made in, or in connection with, the Credit Agreement or any other Loan Document or the execution, legality, validity, enforceability, genuineness, sufficiency, or value of the Credit Agreement or any other Loan Document or any other instrument or document furnished pursuant thereto; (iv) makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Credit Party or the performance or observance by any Credit Party of any of its respective obligations under the Credit Agreement or any other Loan Document or any other instrument or document furnished pursuant thereto; and (v) attaches the Note referred to in paragraph 1 above and requests that the Administrative Agent exchange such Note for a new Note dated

(1)  Specify percentage in no more than 5 decimal points.

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                       ,         in the principal amount of $                        payable to the order of the Assignee and [a new Note dated                        ,            in the principal amount of $                       payable to the order of the Assignor.]

3.             The Assignee (i) confirms that it has received a copy of the Credit Agreement, together with copies of the most recent financial statements referred to in Section 5.06 thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (ii) agrees that it will, independently and without reliance upon the Administrative Agent, the Assignor, or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement or any other Loan Document; (iii) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under the Credit Agreement and any other Loan Document as are delegated to the Administrative Agent by the terms thereof, together with such powers as are reasonably incidental thereto; (iv) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement or any other Loan Document are required to be performed by it as a Lender; (v) specifies as its Lending Office (and address for notices) the office set forth beneath its name on the signature pages hereof; (vi) attaches the forms prescribed by the Internal Revenue Service of the United States certifying as to the Assignee’s status for purposes of determining exemption from United States withholding taxes with respect to all payments to be made to the Assignee under the Credit Agreement and the Notes or such other documents as are necessary to indicate that all such payments are subject to such rates at a rate reduced by an applicable tax treaty(2), and (vii) represents that it is an Eligible Assignee.

4.             The effective date for this Assignment and Acceptance shall be                         (the “Effective Date”)(3) and following the execution of this Assignment and Acceptance, the Administrative Agent will record it.

5.             Upon such recording, and as of the Effective Date, (i) the Assignee shall be a party to the Credit Agreement for all purposes, and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of a Lender thereunder and (ii) the Assignor shall, to the extent provided in this Assignment and Acceptance, relinquish its rights and be released from its obligations under the Credit Agreement.

6.             Upon such recording, from and after the Effective Date, the Administrative Agent shall make all payments under the Credit Agreement and the Note in respect of the interest assigned hereby (including, without limitation, all payments of principal, interest, letter of credit fees and commitment fees) to the Assignee.  The Assignor and Assignee shall make all

(2)  If the Assignee is organized under the laws of a jurisdiction outside the United States.

(3)  See Section 11.06 of the Credit Agreement.  Such date shall be at least three Business Days after the date of this Assignment and Acceptance, unless otherwise waived by the Administrative Agent in its sole discretion.

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appropriate adjustments in payments under the Credit Agreement and the Note for periods prior to the Effective Date directly between themselves.

7.             This Assignment and Acceptance shall be governed by, and construed and enforced in accordance with, the laws of the State of New York.

The parties hereto have caused this Assignment and Acceptance to be duly executed as of the date first above written.

[ASSIGNOR]

By:

Name:

Title:

Address:

Attention:

Telecopy No: (XXX) XXX-XXXX

[ASSIGNEE]

By:

Name:

Title:

Lending Office

Address:

Attention:

Telecopy No: (XXX) XXX-XXXX

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Acknowledged [and approved](4) this          day of                  ,

200   :

SOCIÉTÉ GÉNÉRALE,

as Administrative Agent

By:

Name:

Title:

[Approved this        day of                   , 200   :

BRIGHAM OIL & GAS, L.P.
By:	Brigham, Inc., its general partner
	By:
	Name:
	Title:	](5)

(4)  Approval of Administrative Agent required if Assignee is not a Lender or an Affiliate of a Lender.

(5)  Provided no Default or Event of Default has occurred and is continuing, the consent of the Borrower is required if Assignee is not a Lender or an Affiliate of a Lender.

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EXHIBIT B

COMPLIANCE CERTIFICATE

FOR THE PERIOD FROM             , 200    TO          , 200

This certificate dated as of                            ,                   is prepared pursuant to the Second Amended and Restated Credit Agreement dated as of March 21, 2003 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”) among Brigham Oil & Gas, L.P., a Delaware limited partnership (“Borrower”), Brigham Exploration Company, a Delaware corporation, Brigham, Inc., a Nevada corpration, the lenders party thereto (the “Lenders”), and Société Générale, as administrative agent for such Lenders (in such capacity, the “Administrative Agent”).  Unless otherwise defined in this certificate, capitalized terms that are defined in the Credit Agreement shall have the meanings assigned to them by the Credit Agreement.

Brigham Exploration hereby certifies (a) that no Default or Event of Default has occurred or is continuing, (b) that all of the representations and warranties made by each of the Credit Parties in the Credit Agreement and the other Loan Documents are true and correct in all material respects as if made on this date (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 respect as of such earlier date), and (c) that as of the date hereof, the following amounts and calculations were true and correct:

1.	Section 6.22  Current Ratio.
	(a)	consolidated current assets of Brigham Exploration and its consolidated Subsidiaries (including the Unused Revolving Commitment Amount as of the date of calculation)	$
	(b)	consolidated current liabilities of Brigham Exploration and its consolidated Subsidiaries	$
	Current Ratio = (a) divided by (b)
	Minimum Current Ratio		1.00 to 1.00
	Compliance		Yes	No
2.	Section 6.23   Interest Coverage Ratio.
	(a)	Consolidated Net Income	$

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(b)	Interest Expense	$
(c)	taxes, depreciation, amortization, depletion, and other non-cash charges	$
(d)	all non-cash income	$
(e)	EBITDA = (a) + (b) + (c) – (d)	$
Interest Coverage Ratio = (e) divided by (b)
Minimum Current Ratio for twelve- month period ending March 31, 2003		2.75 to 1.00
For twelve-month period ending June 30, 2003 and each twelve-month period ending at the end of each fiscal quarter thereafter		3.25 to 1.00
Compliance		Yes	No

IN WITNESS THEREOF, I have hereto signed my name to this Compliance Certificate as an officer of Brigham Exploration and not in my individual capacity as of                                ,                      .

BRIGHAM EXPLORATION COMPANY

By:

Name:

Title:

2

EXHIBIT C

NOTICE OF BORROWING

[Date]

Société Générale, as Administrative Agent

560 Lexington Avenue

New York, New York  10022

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 March 21, 2003 (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 Société Générale, as administrative agent (the “Administrative 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 $                          .

(c)           [The Interest Period for each Eurodollar Rate Advance made as part of the Proposed Borrowing is           month[s].]

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 the Credit Agreement and each of the other 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

1

representations and warranties shall be true and correct in all material respect 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, no Borrowing Base Deficiency exists.

Very truly yours,
BRIGHAM OIL & GAS, L.P.
By:	Brigham, Inc., its general partner
By:
Name:
Title:

2

EXHIBIT D

NOTICE OF CONVERSION OR CONTINUATION

[Date]

Société Générale

560 Lexington Avenue

New York, New York  10022

Attention:                                           

Ladies and Gentlemen:

The undersigned, Brigham Oil & Gas, L.P., a Delaware limited partnership (the “Borrower”), refers to the Second Amended and Restated Credit Agreement dated as of March 21, 2003 (as the same may be amended, modified, or supplemented from time-to-time, the “Credit Agreement”, the defined terms of which are used in this Notice of Conversion or Continuation unless otherwise defined in this Notice of Conversion or Continuation) by and among the Borrower, Brigham Exploration Company, a Delaware corporation, Brigham, Inc., a Nevada corporation, the lenders party thereto (“Lenders”), and Société Générale, as administrative agent (“Administrative Agent”) for the Lenders, and hereby gives you irrevocable notice pursuant to Section 2.03(b) of the Credit Agreement that the undersigned hereby requests a [Conversion] [Continuation] of outstanding Revolving Advances, and in connection with that request sets forth below the information relating to such [Conversion][Continuation] (the “Proposed [Conversion][Continuation]”) as required by Section 2.03(b) of the Credit Agreement:

(a)           The Business Day of the Proposed [Conversion][Continuation] is                                 ,       .

(b)           The aggregate amount of the existing Advance to be Converted or Continued is $                  (“Existing Advance”).

(c)           The Proposed [Conversion][Continuation] consists of [a Conversion of the Existing Advance to a [Base Rate Advance] [Eurodollar Rate Advance]] [a Continuation of the Existing Advance as a Eurodollar Rate Advance].

[(d)          The Interest Period for the Proposed [Conversion][Continuation] is         month[s].]

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

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(i)            the representations and warranties contained in the Credit Agreement and each of the other Loan Documents are true and correct in all material respects on and as of the requested funding date of this Proposed [Conversion][Continuation], before and after giving effect to such Proposed [Conversion][Continuation] and to the application of the proceeds from such Proposed [Conversion][Continuation], as though made on and as of such date (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 respect as of such earlier date);

(ii)           no Default has occurred and is continuing or would result from such Proposed [Conversion][Continuation] or from the application of the proceeds therefrom; and

(iii)          after giving effect to such Proposed [Conversion][Continuation], no Borrowing Base Deficiency exists.

Very truly yours,
BRIGHAM OIL & GAS, L.P.
By:	Brigham, Inc., its general partner
By:
Name:
Title:

2

EXHIBIT E

NOTE

$                                                                                ,      

For value received, the undersigned BRIGHAM OIL & GAS, L.P., a Delaware limited partnership (“Borrower”), hereby promises to pay to the order of                  (“Payee”) the principal amount of                                   No/100 Dollars ($                           ) or, if less, the aggregate outstanding principal amount of the Advances (as defined in the Credit Agreement referred to below) made by the Payee to the Borrower, together with interest on the unpaid principal amount of the Advances from the date of such Advances until such principal amount is paid in full, at such interest rates, and at such times, as are specified in the Credit Agreement.  The Borrower may make prepayments on this Note in accordance with the terms of the Credit Agreement.

This Note is one of the Revolving Notes referred to in, and is entitled to the benefits of, and is subject to the terms of, the Second Amended and Restated Credit Agreement dated as of March 21, 2003, (as the same may be amended or modified from time to time, the “Credit Agreement”), among the Borrower, Brigham Exploration Company, a Delaware corporation, Brigham, Inc., a Nevada corporation, the lenders party thereto (the “Lenders”), and Société Générale, as administrative agent (the “Administrative Agent”) for the Lenders. Capitalized terms used in this Note that are defined in the Credit Agreement and not otherwise defined in this Note have the meanings assigned to such terms in the Credit Agreement.  The Credit Agreement, among other things, (a) provides for the making of the Advances by the Payee to the Borrower in an aggregate amount not to exceed at any time outstanding the Dollar amount first above mentioned, the indebtedness of the Borrower resulting from each such Advance being evidenced by this Note, and (b) contains provisions for acceleration of the maturity of this Note upon the happening of certain events stated in the Credit Agreement and for prepayments of principal prior to the maturity of this Note upon the terms and conditions specified in the Credit Agreement.

Both principal and interest are payable in lawful money of the United States of America to the Administrative Agent at 560 Lexington Avenue, New York, New York 10022 or such other location or address specified by the Administrative Agent to the Borrower in same day funds.  The Payee shall record payments of principal made under this Note, but no failure of the Payee to make such recordings shall affect the Borrower’s repayment obligations under this Note.

This Note is secured by the Security Instruments and guaranteed pursuant to Article VIII of the Credit Agreement.

Except as specifically provided in the Credit Agreement, the Borrower hereby waives presentment, demand, protest, notice of intent to accelerate, notice of acceleration, and any other notice of any kind.  No failure to exercise, and no delay in exercising, any

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rights hereunder on the part of the holder of this Note shall operate as a waiver of such rights.

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

THIS NOTE AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG 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.

BRIGHAM OIL & GAS, L.P.
By:	Brigham, Inc., its general partner
By:
Name:
Title:

2

EXHIBIT F

AMENDED AND RESTATED MORTGAGE, DEED OF TRUST,
ASSIGNMENT OF PRODUCTION, SECURITY AGREEMENT,
FIXTURE FILING, AND FINANCING STATEMENT

FROM

BRIGHAM OIL & GAS, L.P.
a Delaware limited partnership,
as grantor and mortgagor,

TO

CARY HUGHES,
as Trustee

FOR THE BENEFIT OF

SOCIÉTÉ GÉNÉRALE,
as Administrative Agent,
as beneficiary,

AND TO

SOCIÉTÉ GÉNÉRALE,
as Administrative Agent,
as Mortgagee

NOTICE TO MORTGAGOR:

A POWER OF SALE HAS BEEN GRANTED IN THIS INSTRUMENT.  WITH RESPECT TO PORTIONS OF THE MORTGAGED PROPERTY LOCATED IN THE STATE OF OKLAHOMA, SUCH POWER OF SALE IS GRANTED PURSUANT TO THE OKLAHOMA MORTGAGE FORECLOSURE ACT (AS DEFINED BELOW). IN CERTAIN STATES, A POWER OF SALE MAY ALLOW TRUSTEE OR MORTGAGEE, AS APPLICABLE, TO TAKE THE MORTGAGED PROPERTY AND SELL IT WITHOUT GOING TO COURT IN A FORECLOSURE ACTION UPON THE OCCURRENCE OF AN EVENT OF DEFAULT BY MORTGAGOR UNDER THIS INSTRUMENT. THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS. THIS INSTRUMENT SECURES PAYMENT OF FUTURE ADVANCES.  THIS INSTRUMENT COVERS ALL PRODUCTS AND PROCEEDS OF THE MORTGAGED PROPERTY. 

THIS INSTRUMENT COVERS THE INTEREST OF MORTGAGOR IN MINERALS OR THE LIKE (INCLUDING OIL AND GAS) BEFORE EXTRACTION AND THE SECURITY INTEREST CREATED BY THIS INSTRUMENT ATTACHES TO SUCH MINERALS AS EXTRACTED AND TO ACCOUNTS RESULTING FROM THE SALE THEREOF AT THE WELLHEAD. THIS INSTRUMENT COVERS MORTGAGOR’S INTEREST IN FIXTURES.  THIS FINANCING STATEMENT IS TO BE FILED FOR RECORD, AMONG OTHER PLACES, IN THE REAL ESTATE RECORDS.

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AMENDED AND RESTATED MORTGAGE, DEED OF TRUST,
ASSIGNMENT OF PRODUCTION, SECURITY AGREEMENT,
FIXTURE FILING, AND FINANCING STATEMENT

THIS AMENDED AND RESTATED MORTGAGE, DEED OF TRUST, ASSIGNMENT OF PRODUCTION, SECURITY AGREEMENT, FIXTURE FILING, AND FINANCING STATEMENT (this ”Mortgage”) is made effective as of March          , 2003 (the “Effective Date”) by BRIGHAM OIL & GAS, L.P., a Delaware limited partnership, whose address for notice is 6300 Bridge Point Parkway, Building 2, Suite 500, Austin, Texas 78730, as grantor and mortgagor (“Mortgagor”) to:

•CARY HUGHES, as Trustee, whose address for notice is 1221 Avenue of the Americas , New York, New York 10020 (“Trustee”) for the benefit of SOCIÉTÉ GÉNÉRALE, as beneficiary, whose address for notice is 1221 Avenue of the Americas , New York, New York 10020, as Administrative Agent (together with any successor administrative agents, “Administrative Agent”); and

•              Administrative Agent, as mortgagee (“Mortgagee”),

in each case for the benefit of the Administrative Agent and the Lenders.

RECITALS:

A.            Mortgagor, Administrative Agent (as Lead Arranger, Administrative Agent and Issuing Lender), The Royal Bank of Scotland plc (“RBS”) (as Co-Arranger and Documentation Agent), Bank of America, N.A. (“BOA”) (as Syndication Agent), and certain other lenders are parties to that certain Second Amended and Restated Credit Agreement dated effective as of March              , 2003, and all supplements thereto and amendments or modifications thereof, and all agreements, given in substitution therefore or in restatement, renewal or extension thereof, in whole or in part (the “Second Amended and Restated Credit Agreement”).  Administrative Agent, RBS, BOA and the other lenders party to the Second Amended and Restated Credit Agreement from time to time may be referred to periodically herein as, individually, a “Lender” and, collectively, as the “Lenders.”

B.            Mortgagor, the Lenders and the Administrative Agent entered into the Second Amended and Restated Credit Agreement to refinance the indebtedness and obligations arising under that certain Amended and Restated Credit Agreement dated February 17, 2000 among Mortgagor, Bank of Montreal (as agent) (“BMO”), and certain other lending institutions (as lenders thereunder) as amended by that certain First Amendment to Amended and Restated Credit Agreement dated as of October 31, 2000 and that certain Second Amendment to Amended and Restated Credit Agreement dated as of December 31, 2001 (the “First Amended and Restated Credit Agreement”).  In connection with that refinancing, all of the indebtedness and liens arising under the First Amended and Restated Credit Agreement were or will be assigned to Administrative Agent and the Lenders under the Second Amended and Restated Credit Agreement, so that all indebtedness and obligations arising under the Second Amended and Restated Credit Agreement shall be secured by such liens and security interests as were created pursuant to the First Amended and Restated Credit Agreement and such other liens as provided for herein.  The Second Amended and Restated Credit Agreement constitutes for all purposes an

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amendment and restatement of the First Amended and Restated Credit Agreement and not a new or substitute agreement.

C.            Pursuant to the Second Amended and Restated Credit Agreement, Mortgagor has agreed to enter into this Mortgage.  In addition, it is a condition to the obligation of each Lender to make such Lender’s initial Advance as part of the initial Borrowing and the obligation of the Issuing Lender to issue the initial Letter of Credit that this Mortgage be executed and delivered to Trustee and to Mortgagee.

D.            This Mortgage constitutes for all purposes an amendment and restatement of the security instruments more particularly described on Schedule I attached hereto and made a part hereof (collectively, the “Original Mortgages”) and not a new or substitute security instrument.

NOW, THEREFORE, in consideration of the foregoing, in order to comply with the terms, provisions, and conditions of the Second Amended and Restated Credit Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Mortgagor hereby enters into this Mortgage on the following terms and conditions:

ARTICLE I

Granting Clause; Description of Indebtedness Secured

Section 1.01           Granting Clause.  In order to secure the payment of the Indebtedness (as hereinafter defined in Section 1.03) and in order to secure the performance of the covenants, obligations, agreements, warranties, and undertakings herein contained, (x) with respect to any portion of the Mortgaged Property (as hereinafter defined) that is located in or is subject to the laws of the State of Texas or any other state pursuant to the law of which a deed of trust is a lawful security instrument, Mortgagor does hereby GRANT, BARGAIN, SELL, ASSIGN, PLEDGE, GIVE, MORTGAGE, WARRANT, SET OVER, TRANSFER, HYPOTHECATE, and CONVEY unto Trustee and Trustee’s successors and substitutes in trust hereunder IN TRUST WITH POWER OF SALE, for the use and benefit of Administrative Agent and the Lenders, all of Mortgagor’s right, title, and interest, whether now owned or hereafter acquired, in the real and personal property, rights, titles, interests and estates described hereinafter (the “Trust Estate Property”) and (y) with respect to any portion of the Mortgaged Property (as hereinafter defined) that is located in or is subject to the laws of the State of Oklahoma or any state pursuant to the law of which a deed of trust is not a lawful security instrument, Mortgagor does hereby GRANT, BARGAIN, SELL, ASSIGN, PLEDGE, GIVE, MORTGAGE, WARRANT, SET OVER, TRANSFER, HYPOTHECATE, and CONVEY to Mortgagee for the use and benefit of Administrative Agent and the Lenders all of Mortgagor’s right, title, and interest, whether now owned or hereafter acquired, in the real and personal property, rights, titles, interests and estates described hereinafter (the “Non-Trust Estate Property”) (the Trust Estate Property and the Non-Trust Estate Property are herein collectively called the “Mortgaged Property”):

(a)           All oil and gas and/or oil, gas and mineral leases and leasehold interests, fee mineral interests, term mineral interests, subleases, farmouts, royalties, overriding royalties, net profits interests, production payments and similar interests or estates

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described on Exhibit A attached hereto or constituting interests in the lands described on Exhibit A attached hereto, including, without limitation, any reversionary or carried interests relating to any of the foregoing, together with any instrument executed in amendment, correction, modification, confirmation, renewal or extension of the same (collectively, the “Hydrocarbon Property”), and including specifically, but without limitation, the undivided interests of Mortgagor which are represented, warranted, and more particularly described on Exhibit A hereto;

(b)           All rights, titles, interests, estates, tenements, hereditaments, and appurtenances now owned or existing or hereafter acquired by Mortgagor in and to:  (i) all production units and drilling and spacing units (and the property covered thereby) which may affect all or any portion of the Hydrocarbon Property including those units now or hereafter pooled or unitized with the Hydrocarbon Property; (ii) all presently existing or future unitization, communitization, pooling agreements and declarations of pooled units and the units created thereby, including, but not limited to, pooling orders of the Oklahoma Corporation Commission (together with all other units created under orders, regulations, rules or other official acts of any Governmental Authority having jurisdiction over any of the Mortgaged Property and any units created solely among working interest owners pursuant to operating agreements or otherwise) which may affect all or any portion of the Hydrocarbon Property including, without limitation, those units, if any, which may be described or referred to on attached Exhibit A; (iii) all operating agreements, production sales or other contracts, farmout agreements, farm-in agreements, area of mutual interest agreements, joint development agreements, joint exploration agreements, equipment leases and other agreements described or referred to in this Mortgage or which cover, affect or relate to any of the Hydrocarbon Property or interests in the Hydrocarbon Property described or referred to herein or on Exhibit A or to the production, sale, purchase, exchange, processing, handling, storage, transporting or marketing of the Hydrocarbons (hereinafter defined) from or attributable to such Hydrocarbon Property or interests; and (iv) subject to applicable restrictions on disclosure and/or transfer, all geological, geophysical, engineering, accounting, title, legal, and other technical or business data concerning the Mortgaged Property, the Hydrocarbons in which Mortgagor can otherwise grant a security interest, and all books, files, records, magnetic media, computer records, and other forms of recording or obtaining access to such data;

(c)           All rights, titles, interests and estates now owned or hereafter acquired by Mortgagor in and to all oil, gas, coal seam gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate, and all other liquid and gaseous hydrocarbons produced or to be produced in conjunction therewith from a well bore and all products, by-products, and other substances derived therefrom or the processing thereof, and all other minerals and substances produced in conjunction with such substances, including, but not limited to, sulfur, geothermal steam, water, carbon dioxide, helium, and any and all minerals, ores, or substances of value and the products and proceeds therefrom (collectively called the “Hydrocarbons”) in and under and which may be produced and saved from or attributable to the Hydrocarbon Property, the lands pooled or unitized therewith and Mortgagor’s interests therein, including all oil in tanks, gas in storage, and all rents, issues, profits, proceeds, products, revenues and other income from or

4

attributable to the Hydrocarbon Property, the lands pooled or unitized therewith and Mortgagor’s interests therein which are subjected to the liens and security interests of this Mortgage;

(d)           All tenements, hereditaments, appurtenances and properties in anywise appertaining, belonging, affixed or incidental to the Hydrocarbon Property or the rights, titles, interests and estates described or referred to in paragraphs (a) and (b) above, which are now owned or which may hereafter be acquired by Mortgagor, including, without limitation, any and all property, real or personal, now owned or hereafter acquired and situated upon, used, held for use, or useful in connection with the operating, working or development of any of such Hydrocarbon Property or the lands pooled or unitized therewith (excluding drilling rigs, trucks, automotive equipment or other personal property which may be taken to the premises for the purpose of drilling a well or for other similar temporary uses) and including any and all oil wells, gas wells, injection wells or other wells, buildings, structures, field separators, liquid extraction plants, plant compressors, pumps, pumping units, pipelines, sales and flow lines, gathering systems, field gathering systems, salt water disposal facilities, tanks and tank batteries, fixtures, valves, fittings, machinery and parts, engines, boilers, meters, apparatus, equipment, appliances, tools, implements, cables, wires, towers, casing, tubing and rods, surface leases, rights-of-way, easements, servitudes, licenses and other surface and subsurface rights together with all additions, substitutions, replacements, accessions and attachments to any and all of the foregoing properties;

(e)           Any property that may from time to time hereafter, by delivery or by writing of any kind, be subjected to the lien and security interest hereof by Mortgagor or by anyone on Mortgagor’s behalf; and Trustee is hereby authorized to receive the same at any time as additional security hereunder;

(f)            All of the rights, titles, interests and estates of every nature whatsoever now owned or hereafter acquired by Mortgagor in and to the Hydrocarbon Property, including, without limitation, all such rights, titles, interests and estates as the same may be enlarged by the discharge of any payments out of production or by the removal of any charges or Permitted Encumbrances (as hereinafter defined in Section 3.01) to which any of such rights, titles, interests or estates are subject, or otherwise; all rights of Mortgagor to liens and security interests securing payment of proceeds from the sale of production from the Mortgaged Property, including, but not limited to, those liens and security interests provided for in Section 9.343 of the Texas Business and Commerce Code, as amended from time to time; together with any and all renewals and extensions of any of such liens and security interests; all contracts and agreements supplemental to or amendatory of or in substitution for the contracts and agreements described or mentioned above, including, without limitation, any such contracts and agreements comprising or giving rise to any portion of the Hydrocarbon Property; and any and all additional interests of any kind hereafter acquired by Mortgagor in and to such rights, titles, interests or estates;

(g)           All accounts, contract rights, inventory, general intangibles, insurance contracts and insurance proceeds constituting a part of, relating to or arising out of those

5

portions of the Mortgaged Property which are described in paragraphs (a) through (f) above and all proceeds and products of all such portions of the Mortgaged Property and payments in lieu of production (such as “take or pay” payments), whether such proceeds or payments are goods, money, documents, instruments, chattel paper, securities, accounts, general intangibles, fixtures, real property, or other assets;

(h)           All payments received in lieu of production from the Mortgaged Property (regardless of whether such payments accrued, and/or the events which gave rise to such payments occurred, on, before, or after the Effective Date), including, without limitation, “take or pay” payments and similar payments, payments received in settlement of or pursuant to a judgment rendered with respect to take or pay or similar obligations or other obligations under a production sales contract, payments received in buyout or buydown or other settlement of a production sales contract, and payments received under a gas balancing or similar agreement as a result of (or received otherwise in settlement of or pursuant to a judgment rendered with respect to) rights held by Mortgagor as a result of Mortgagor (and/or its predecessors in title) taking or having taken less Hydrocarbons from lands covered by the Mortgaged Property (or lands pooled or unitized therewith) than their ownership of the Mortgaged Property would entitle Mortgagor to receive; and

(i)            Any rights or interests of Mortgagor under any present or future hedge or swap agreements, cap, floor, collar, exchange, forward or other hedge or protection agreements or transactions relating to Hydrocarbons, or any option with respect to such agreement or transaction now existing or hereafter entered into by or on behalf of Mortgagor.

TO HAVE AND TO HOLD the Trust Estate Property unto Trustee for the benefit of Administrative Agent and the Lenders, and Trustee’s successors in trust and assigns forever, and the Non-Trust Estate Property unto Mortgagee for the benefit of the Administrative Agent and the Lenders, and Mortgagee’s successors and assigns forever, in each case upon the terms, provisions, and conditions set forth herein.  Mortgagor does hereby bind itself, and its successors and permitted assigns, to warrant and forever defend all and singular the Mortgaged Property unto Trustee and Mortgagee against every Person whomsoever lawfully claiming or to claim the same, or any part thereof.

With respect to any Mortgaged Property located in the state of Oklahoma, Mortgagor hereby grants to Mortgagee the right and power to foreclose this Mortgage pursuant to the Oklahoma Power of Sale Mortgage Foreclosure Act, 46 Oklahoma Statutes, §40, et. seq. (the “Oklahoma Mortgage Foreclosure Act”) as presently in force and as may be amended from time to time.

Section 1.02           Grant of Security Interest.  To further secure the Indebtedness (as hereinafter defined in Section 1.03), Mortgagor hereby grants to Mortgagee for the benefit of the Administrative Agent and the Lenders, subject to the reservations and restrictions set forth herein below, a security interest in and to the Mortgaged Property (whether now or hereafter acquired by operation of law or otherwise) insofar as the Mortgaged Property consists of equipment, accounts, contract rights, general intangibles (subject in the case of geological and geophysical data (including without limitation raw data and interpretations) contract rights and general

6

intangibles to any existing restrictions on disclosure and/or transfer), insurance contracts, insurance proceeds, inventory, Hydrocarbons, fixtures and any and all other personal property of any kind or character defined in and subject to the provisions of the Uniform Commercial Code presently in effect in the jurisdiction in which the Mortgaged Property is situated (“Applicable UCC”), including the proceeds and products from any and all of such personal property, whether such proceed or products are goods, money, documents, instruments, chattel paper, securities, accounts, general intangibles, fixtures, real or immovable property, personal or movable property, or other assets.  In addition to all other rights and remedies afforded to Mortgagee pursuant to this Mortgage, upon the happening of any Event of Default, Mortgagee is and shall be entitled to all of the rights, powers and remedies afforded a secured party by the Applicable UCC with reference to the personal property and fixtures in which Mortgagee has been granted a security interest herein, or Trustee or Mortgagee may proceed as to both the real and personal property covered hereby in accordance with the rights and remedies granted under this Mortgage in respect of the real property covered hereby.  Such rights, powers and remedies shall be cumulative and in addition to those granted to Trustee or Mortgagee under any other provision of this Mortgage or under any other Security Instrument.  Written notice mailed to Mortgagor as provided herein at least ten (10) days prior to the date of public sale of any part of the Mortgaged Property which is personal property subject to the provisions of the Applicable UCC, or prior to the date after which private sale of any such part of the Mortgaged Property will be made, shall constitute reasonable notice.  It is Mortgagor’s intention that the security interest granted pursuant to this Mortgage encumber Mortgagor’s interest in As-Extracted Collateral (as hereinafter defined).  For purposes of this Mortgage, the term “As-Extracted Collateral” shall have the meaning ascribed to such term in the Applicable UCC.

Section 1.03           Indebtedness Secured.  This Mortgage is executed and delivered by Mortgagor to secure and enforce the following (collectively, the “Indebtedness”):

(a)           Full payment and performance of all indebtedness and other obligations now or hereafter incurred or arising pursuant to the provisions of the Second Amended and Restated Credit Agreement;

(b)           Full payment and performance of all promissory notes, letters of credit, or other evidences of indebtedness issued from time to time pursuant to the Second Amended and Restated Credit Agreement, including, without limitation, those certain promissory notes having a maturity date of                             , 2006;

(c)           All indebtedness and other obligations now or hereafter incurred or arising pursuant to the guarantee by the Guarantors in favor of Administrative Agent and the Lenders pursuant to the Second Amended and Restated Credit Agreement, pursuant to which guarantee the Guarantors have guaranteed the prompt payment at maturity of the Obligations (as defined in the Second Amended and Restated Credit Agreement).

(d)           Payment of and performance of any and all present or future obligations of Mortgagor or any Credit Party according to the terms of any present or future interest or currency rate swap, rate cap, rate floor, rate collar, exchange transaction, forward rate agreement, or other exchange or rate protection agreements or any option with respect to any such transaction now existing or hereafter entered into between Mortgagor or any

7

Credit Party, on the one hand, and any party that was a Lender (or any Affiliate of a Lender) at the time such transaction was entered into, on the other;

(e)           Payment of and performance of any and all present or future obligations of Mortgagor or any Credit Party according to the terms of any present or future swap agreements, cap, floor, collar, exchange transaction, forward agreement, or other exchange or protection agreements relating to Hydrocarbons, or any option with respect to any such transaction now existing or hereafter entered into between Mortgagor or any Credit Party, on the one hand, and any party that was a Lender (or any Affiliate of a Lender) at the time such transaction was entered into, on the other; and

(f)            Without limiting the generality of the foregoing, all post-petition interest, expenses, and other duties and liabilities with respect to indebtedness or other obligations described in the foregoing subsections (a) through (f) of this Section 1.03, which would be owed but for the fact that such duties and liabilities are unenforceable or not allowable due to the existence of a bankruptcy, reorganization, or similar proceeding.

Section 1.04           Fixture Filing, Etc.  Without in any manner limiting the generality of any of the other provisions of this Mortgage: (i) some portions of the goods described or to which reference is made herein are or are to become fixtures on the land described or to which reference is made herein or on attached Exhibit A; (ii) the security interests created hereby under applicable provisions of the Applicable UCC will attach to Hydrocarbons (minerals including oil and gas) or the accounts resulting from the sale thereof at the wellhead or minehead located on the land described or to which reference is made herein; and (iii) this Mortgage is to be filed of record in the real estate records as a fixture filing with respect to all fixtures comprising any part of the Mortgaged Property and as a financing statement pursuant to the Applicable UCC with respect to any As-Extracted Collateral and any other personal property comprising any part of the Mortgaged Property.  Mortgagor is the record owner of the real estate or interests in the real estate comprised of the Mortgaged Property.

Section 1.05           Defined Terms; Interpretation.  Initially-capitalized terms not otherwise specifically defined herein shall have the meaning ascribed to such terms in the Second Amended and Restated Credit Agreement.  All other rules of interpretation set forth in Section 1.05 of the Second Amended and Restated Credit Agreement shall apply to this Mortgage and are hereby incorporated herein by reference.

ARTICLE II

Assignment of Production

Section 2.01           Assignment.  Mortgagor has hereby absolutely and unconditionally assigned, transferred, set over, and conveyed, and does hereby absolutely and unconditionally assign, transfer, set over, and convey unto Mortgagee, its successors and assigns, all of the Hydrocarbons and all products obtained or processed therefrom, and the revenues and proceeds now and hereafter attributable to the Hydrocarbons and said products and all payments in lieu of the Hydrocarbons such as “take or pay” payments or settlements, together with the immediate and continuing right to collect and receive all of the foregoing (the “Production Proceeds”).  The

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Hydrocarbons and products are to be delivered into pipelines connected with the Mortgaged Property, or to the purchaser thereof, to the credit of Mortgagee, free and clear of all taxes, charges, costs, and expenses; and all such revenues and proceeds shall be paid directly to Mortgagee, at its banking quarters in New York, New York with no duty or obligation of any party paying the same to inquire into the rights of Mortgagee to receive the same, what application is made thereof, or as to any other matter.  Mortgagor agrees to perform all such acts, and to execute all such further assignments, transfers and division orders, and other instruments as may be required or desired by Mortgagee or any party in order to have said proceeds and revenues so paid to Mortgagee.  Mortgagee is fully authorized to receive and receipt for said revenues and proceeds; to endorse and cash any and all checks and drafts payable to the order of Mortgagor or Mortgagee for the account of Mortgagor received from or in connection with said revenues or proceeds and to hold the proceeds thereof in a bank account as additional collateral securing the Indebtedness; and to execute transfer and division orders in the name of Mortgagor, or otherwise, with warranties binding Mortgagor.  All proceeds received by Mortgagee pursuant to this assignment shall be applied as provided in the other Loan Documents.  Mortgagee shall not be liable for any delay, neglect, or failure to effect collection of any proceeds or to take any other action in connection therewith or hereunder; but Mortgagee shall have the right, at its election, in the name of Mortgagor or otherwise, to prosecute and defend any and all actions or legal proceedings deemed advisable by Mortgagee in order to collect such funds and to protect the interests of Mortgagee, and/or Mortgagor, with all costs, expenses and attorneys’ fees incurred in connection therewith being paid by Mortgagor.  Mortgagor hereby appoints Mortgagee as its attorney-in-fact to pursue any and all rights of Mortgagor to liens on and security interests in the Hydrocarbons securing payment of proceeds of runs attributable to the Hydrocarbons.  In addition to the rights granted to Trustee and/or Mortgagee in this Mortgage, Mortgagor hereby further transfers and assigns to Mortgagee any and all such liens, security interests, financing statements or similar interests of Mortgagor attributable to its interest in the Hydrocarbons and proceeds of runs therefrom arising under or created by said statutory provision, judicial decision or otherwise.  The power of attorney granted to Mortgagee in this Section 2.01, being coupled with an interest, shall be irrevocable so long as the Indebtedness or any part thereof remains unpaid.

Section 2.02           Rights Under Texas Act.  Mortgagor hereby grants, sells, assigns, sets over and mortgages unto Mortgagee during the term hereof, all of Mortgagor’s rights and interests pursuant to the provisions of Section 9.343 of the Texas Business and Commerce Code, hereby vesting in Mortgagee all of Mortgagor’s rights as an interest owner to the continuing security interest in and lien upon the Mortgaged Property.

Section 2.03           No Modification of Payment Obligations.  Nothing herein contained shall modify or otherwise alter the obligation of Mortgagor to make prompt payment of all principal and interest owing on the Indebtedness when and as the same become due regardless of whether the proceeds of the Hydrocarbons are sufficient to pay the same and the rights provided in accordance with the foregoing assignment provision shall be cumulative of all other security of any and every character now or hereafter existing to secure payment of the Indebtedness.

Section 2.04           Release from Liability; Indemnification.  Administrative Agent and its successors and assigns are hereby absolutely absolved from all liability for failure to enforce collection of the proceeds from runs attributable to the Hydrocarbons and from all other

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responsibility in connection therewith, except the responsibility to account to Mortgagor for funds actually received by Administrative Agent.  Mortgagor agrees to indemnify and hold harmless Administrative Agent, including, for purposes of this paragraph, Administrative Agent’s directors, officers, partners, employees, and agents and any persons owned or controlled by any affiliate of Administrative Agent, from and against all claims, demands, liabilities, losses, damages (including, without limitation, consequential, punitive, and special damages), causes of action, judgments, penalties, costs and reasonable out-of-pocket expenses (including, without limitation, reasonable attorneys’ fees and expenses) imposed upon, asserted against, or incurred or paid by Administrative Agent by reason of the assertion that Administrative Agent has received, either before or after payment in full of the Indebtedness, funds from the production of Hydrocarbons.  The foregoing indemnities shall not terminate upon the expiration, termination, or cancellation of the Second Amended and Restated Credit Agreement or this Mortgage, but shall survive such expiration, termination, or cancellation, as well as any foreclosure of this Mortgage or any conveyance in lieu of foreclosure, and the repayment of the Indebtedness and the discharge and release of this Mortgage and any other documents evidencing and/or securing the Indebtedness.  Without limiting the generality of the foregoing, it is the intention of Mortgagor and Mortgagor hereby agrees that the foregoing indemnities shall apply to each indemnified party with respect to all claims, demands, liabilities, losses, damages (including, without limitation, consequential, punitive, and special damages), causes of action, judgments, penalties, costs, and expenses (including, without limitation, reasonable attorneys’ fees and expenses) which in whole or in part are caused by or arise out of the negligence of any indemnified party.  Notwithstanding the foregoing, however, the indemnities set forth in this Section 2.04 shall not apply to any particular indemnified party (but shall apply to the other indemnified parties) to the extent the subject of the indemnification is caused by or arises out of the gross negligence or willful misconduct of such pericular indemnified party.

Section 2.05           Absolute Obligation of Credit Parties.  Nothing herein contained shall detract from or limit the obligations of any Mortgagor or any other Credit Party to make payment as required pursuant to the terms of the Loan Documents, regardless of whether the assignment of production described in this Article II is sufficient to pay same, and the rights under this Article II shall be cumulative of all other rights of Administrative Agent and any other Lender under the Loan Documents.

ARTICLE III

Representations, Warranties and Covenants

In order to induce Administrative Agent and the Lenders to enter into the transactions described in the Second Amended and Restated Credit Agreement, Mortgagor hereby represents, warrants and covenants, to Trustee, Administrative Agent, each of the Lenders, and to Mortgagee as follows:

Section 3.01           Title.  To the extent of the undivided interests in the wells specified on attached Exhibit A, Mortgagor is possessed of such interests in the Mortgaged Property, and Mortgagor has, and Mortgagor covenants to maintain, good and indefeasible title to the Mortgaged Property.  The Mortgaged Property is free of any and all Liens (as defined in the

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Second Amended and Restated Credit Agreement) except Permitted Liens (as defined in the Second Amended and Restated Credit Agreement) and Liens, if any, described in Exhibit A (collectively, the “Permitted Encumbrances”).

Section 3.02           Defend Title.  This Mortgage is, and always will be kept, a direct first lien and security interest upon the Mortgaged Property subject only to the Permitted Encumbrances, and, except for Permitted Encumbrances, Mortgagor will not create or suffer to be created or permit to exist any lien, security interest or charge prior or junior to or on a parity with the lien and security interest of this Mortgage upon the Mortgaged Property or any part thereof or upon the rents, issues, revenues, profits and other income therefrom.  Mortgagor hereby warrants and Mortgagor does by these presents agree to forever defend the Mortgaged Property against the claims and demands of all other persons whomsoever and to maintain and preserve the lien created hereby so long as any of the Indebtedness secured hereby remains unpaid.  Should an adverse claim be made against or a cloud develop upon the title to any part of the Mortgaged Property, Mortgagor agrees it will immediately defend against such adverse claim or take appropriate action to remove such cloud at Mortgagor’s cost and expense, and Mortgagor further agrees that Trustee and/or Mortgagee may take such other action as they deem advisable to protect and preserve their interests in the Mortgaged Property, and in such event Mortgagor will indemnify Trustee and Mortgagee against any and all cost, attorney’s fees and other expenses which they may incur in defending against any such adverse claim or taking action to remove any such cloud.

Section 3.03           Not a Foreign Person.  Mortgagor is not a “foreign person” within the meaning of the Internal Revenue Code of 1986, as amended (hereinafter called the “Code”), Sections 1445 and 7701 (i.e. Mortgagor is not a non-resident alien, foreign corporation, foreign partnership, foreign trust or foreign estate as those terms are defined in the Code and any regulations promulgated thereunder).

Section 3.04           Existence; Power to Create Lien and Security; Enforceable Obligations.

(a)           Mortgagor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation and in good standing and qualified to do business in each jurisdiction where its ownership or lease of any of the Mortgaged Property or conduct of its business requires such qualification and where the failure to so qualify could reasonably be expected to cause a Material Adverse Change.

(b)           The execution, delivery, and performance by Mortgagor of this Mortgage and the consummation of the transactions contemplated hereby and thereby (i) are within such Mortgagor’s powers, (ii) have been duly authorized by all necessary governing action, (iii) do not contravene (A) Mortgagor’s governance documents or (B) any Legal Requirement or any material contractual restriction binding on or affecting Mortgagor, and (iv) will not result in or require the creation or imposition of any Lien upon any of the material Property of any Credit Party prohibited by the Second Amended and Restated Credit Agreement.

(c)           This Mortgage has been duly executed and delivered by Mortgagor.  This Mortgage is the legal, valid, and binding obligation of Mortgagor enforceable against

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Mortgagor in accordance with its terms, except as such enforceability may be limited by any applicable bankruptcy, insolvency, reorganization, moratorium, or similar law affecting creditors’ rights generally and by general principles of equity.

Section 3.05           Net Revenue and Cost Bearing Interest.  With respect to each well listed on Exhibit A hereto which comprises a part of the Mortgaged Property, Mortgagor’s ownership of such Mortgaged Property does and will, with respect to each such well (whether such well is presently unitized or is presently producing on a lease basis) (a) entitle Mortgagor to receive (subject to the terms and conditions of this Mortgage) a decimal share of the Hydrocarbons produced from, or allocated to, such well equal to not less than the decimal share set forth on Exhibit A in connection with such well under the column on Exhibit A designated by the words “Net Revenue Interest”, the abbreviation “NRI”, or words or abbreviations of similar import, and (b) cause Mortgagor to be obligated to bear a decimal share of the cost of exploration, development, and operation of such well not greater than the decimal share set forth in Exhibit A in connection with such well under the column on Exhibit A designated by the words “Operating Interest” or “Working Interest”, the abbreviation “WI”, or words or abbreviations of similar import (unless there is a corresponding increase in the Net Revenue Interest).  The shares of production which Mortgagor is entitled to receive and the shares of expenses which Mortgagor is obligated to bear are not, and will not be, subject to change other than changes which (i) arise pursuant to non-consent provisions of operating agreements in connection with operations proposed after the effective date of this Mortgage, or (ii) are expressly described on Exhibit A.

Section 3.06           Rentals Paid; Leases in Effect.  Mortgagor shall maintain all leases and agreements comprising or relating to the Mortgaged Property in compliance with the requirements of the Second Amended and Restated Credit Agreement.

Section 3.07           Operation of Mortgaged Property.

(a)           The Mortgaged Property (and properties unitized therewith) is, and hereafter will be, maintained, operated, and developed in compliance with the requirements of the Second Amended and Restated Credit Agreement.

(b)           To the extent any interest owned by Mortgagor in the Mortgaged Property is not a working interest, Mortgagor covenants and agrees to take all reasonable action and to exercise all reasonable rights and remedies as are available to Mortgagor to cause the owner or owners of the working interest in such properties to comply with the covenants and agreements set forth in this Mortgage.

(c)           To the extent Mortgagor’s ownership of any particular well constituting the Mortgaged Property is a working interest but such well is operated by a party other than Mortgagor, Mortgagor agrees to take all such action and to exercise all rights and remedies as are reasonably available to Mortgagor (including, without limitation, all rights under any operating agreement) to cause the party who is the operator of such well to comply with the covenants and agreements set forth in this Mortgage.

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Section 3.08           Abandonment, Sales.  Mortgagor will not sell, lease, assign, transfer or otherwise dispose of or abandon any of the Mortgaged Property except in compliance with the requirements of the Second Amended and Restated Credit Agreement.

Section 3.09           Agreement.  In the event of foreclosure of this Mortgage, or other transfer of title to the Mortgaged Property in extinguishment in whole or in part of the Indebtedness, all right, title, and interest of Mortgagor in and to such policies then in force concerning the Mortgaged Property and all proceeds payable thereunder shall thereupon vest in the purchaser at such foreclosure or Administrative Agent or other transferee in the event of such other transfer of title.

Section 3.10           Further Assurances.  Mortgagor shall, and shall cause each of its Subsidiaries to, cure promptly any defects in the execution and delivery of this Mortgage or any of the other Loan Documents.  Mortgagor hereby authorizes the Administrative Agent to file any financing statements without Mortgagor’s signature to the extent permitted by applicable law in order to perfect or maintain the perfection of any security interest granted under any of the Loan Documents.  Mortgagor at its expense will, and will cause each of its Subsidiaries to, promptly execute and deliver to the Administrative Agent upon request all such other documents, agreements and instruments to comply with or accomplish the covenants and agreements of Mortgagor or any other Credit Party in this Mortgage or any other Loan Document, or to further evidence and more fully describe the collateral intended as security for Obligations, or to correct any omissions in the Loan Documents, or to state more fully the security obligations set out in this Mortgage or in any of the other Loan Documents, or to perfect, protect or preserve any Liens created pursuant to any of the Loan Documents, or to make any recordings, to file any notices or obtain any consents, all as may be necessary or appropriate in connection therewith or to enable the Administrative Agent to exercise and enforce its rights and remedies with respect to the Mortgaged Property.

Section 3.11           Taxes.  Mortgagor shall do or cause to be done everything necessary to preserve the lien hereof without expense to Trustee or Mortgagee, including, without limitation, paying and discharging or causing to be paid and discharged all taxes, charges, filing, registration and recording fees relating to the recording of this Mortgage, including but not limited to any mortgage tax payable in connection herewith.

Section 3.12           Failure to Perform.  Mortgagor agrees that if Mortgagor, after receipt from Mortgagee of written notice and demand,  fails to perform any act or to take any action which Mortgagor is required to perform or take hereunder or pay any money which Mortgagor is required to pay hereunder, each of Mortgagee and Trustee in Mortgagor’s name or its or their own name may, but shall not be obligated to, perform or cause to perform such act or take such action or pay such money, and any expenses so incurred by either of them and any money so paid by either of them shall be a demand obligation owing by Mortgagor to Mortgagee or Trustee, as the case may be, and each of Mortgagee and Trustee, upon making such payment, shall be subrogated to all of the rights of the Person receiving such payment.  Each amount due and owing by Mortgagor to each of Mortgagee and Trustee pursuant to this Mortgage shall bear interest from the date of such expenditure or payment or other occurrence which gives rise to such amount being owed to such Person until paid at post-default interest rate described in the

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Second Amended and Restated Credit Agreement, and all such amounts together with such interest thereon shall be a part of the Indebtedness described in Section 1.03 hereof.

Section 3.13           Waste.  Mortgagor shall not commit or permit any waste, impairment, or deterioration of the Mortgaged Property or any part thereof.

ARTICLE IV

Rights and Remedies

Section 4.01           Event of Default.  An “Event of Default” under the Second Amended and Restated Credit Agreement shall be an Event of Default under this Mortgage.

Section 4.02           Foreclosure and Sale.

(a)           If an Event of Default shall occur and be continuing, Mortgagee shall have the right and option to proceed with foreclosure by proceeding or by directing Trustee, or his successors or substitutes in trust, to proceed with foreclosure and to sell, to the extent permitted by law, all or any portion of the Mortgaged Property at one or more sales, as an entirety or in parcels, at such place or places in otherwise such manner and upon such notice as may be required by law, or, in the absence of any such requirement, as Mortgagee may deem appropriate, and to make conveyance to the purchaser or purchasers.  Where the Mortgaged Property is situated in more than one county, notice as above provided shall be posted and filed in all such counties (if such notices are required by law), and all such Mortgaged Property may be sold in any such county and any such notice shall designate the county where such Mortgaged Property is to be sold.  Nothing contained in this Section 4.02 shall be construed so as to limit in any way Mortgagee’s or Trustee’s rights to sell the Mortgaged Property, or any portion thereof, by private sale if, and to the extent that, such private sale is permitted under the laws of the applicable jurisdiction or by public or private sale after entry of a judgment by any court of competent jurisdiction so ordering.  Mortgagor hereby irrevocably appoints Trustee to be the attorney of Mortgagor and in the name and on behalf of Mortgagor to execute and deliver any deeds, transfers, conveyances, assignments, assurances and notices which Mortgagor ought to execute and deliver and do and perform any and all such acts and things which Mortgagor ought to do and perform under the covenants herein contained and generally, to use the name of Mortgagor in the exercise of all or any of the powers hereby conferred on Trustee.  At any such sale: (i) whether made under the power herein contained or any other legal enactment, or by virtue of any judicial proceedings or any other legal right, remedy or recourse, it shall not be necessary for Mortgagee or Trustee to have physically present, or to have constructive possession of, the Mortgaged Property (Mortgagor hereby covenanting and agreeing to deliver to Mortgagee or Trustee any portion of the Mortgaged Property not actually or constructively possessed by Mortgagee or Trustee immediately upon demand by Mortgagee or Trustee) and the title to and right of possession of any such property shall pass to the purchaser thereof as completely as if the same had been actually present and delivered to purchaser at such sale, (ii) each instrument of conveyance executed by Mortgagee or Trustee shall contain a general warranty of title, binding upon Mortgagor and its successors and assigns, (iii) each and

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every recital contained in any instrument of conveyance made by Mortgagee or Trustee shall conclusively establish the truth and accuracy of the matters recited therein, including, without limitation, nonpayment of the Indebtedness, advertisement and conduct of such sale in the manner provided herein and otherwise by law and appointment of any successor Trustee hereunder, (iv) any and all prerequisites to the validity thereof shall be conclusively presumed to have been performed, (v) the receipt of Mortgagee or Trustee or of such other party or officer making the sale shall be a sufficient discharge to the purchaser or purchasers for its purchase money and no such purchaser or purchasers, or its assigns or personal representatives, shall thereafter be obligated to see to the application of such purchase money, or be in any way answerable for any loss, misapplication or nonapplication thereof, (vi) to the fullest extent permitted by law, Mortgagor shall be completely and irrevocably divested of all of its right, title, interest, claim and demand whatsoever, either at law or in equity, in and to the property sold and such sale shall be a perpetual bar both at law and in equity against Mortgagor, and against any and all other persons claiming or to claim the property sold or any part thereof, by, through or under Mortgagor, and (vii) to the extent and under such circumstances as are permitted by law, Trustee, Mortgagee, or any Lender may be a purchaser at any such sale, and shall have the right, after paying or accounting for all costs of said sale or sales, to credit the amount of the bid upon the amount of the Indebtedness held by such purchaser, if any (in the order of priority set forth in Section 4.13 hereof) in lieu of cash payment.

(b)           With respect to any portion of the Mortgaged Property located in the state of Oklahoma and with respect any foreclosure by Mortgagor pursuant to the power of sale granted to Mortgagor in this Mortgage the following provisions of this Mortgage shall apply:

(i)            The notices described in Section 40 and certain following sections of the Oklahoma Mortgage Foreclosure Act, shall be given as and when required therein;

(ii)           All notices which are required to be given to Mortgagor under the Oklahoma Mortgage Foreclosure Act may be given to Mortgagor at the address which is set forth in the first paragraph of this Mortgage, or if such address has been changed in accordance with the express requirements of this Mortgage related to such a change of address, to that changed address;

(iii)          Mortgagee may purchase part or all of the Mortgaged Property at any such sale;

(iv)          Mortgagor stipulates that the total amounts owing under this Mortgage benefit, have benefited, and will benefit Mortgagor substantially and are not unconscionable in amount, and therefore the total amount of the Indebtedness, less the fair market value of the Mortgaged Property sold pursuant to the Oklahoma Mortgage Foreclosure Act, and any prior indebtedness, shall be available as a deficiency judgment against Mortgagor;

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(v)           The purchaser under any sale of the Mortgaged Property conducted pursuant to the Oklahoma Mortgage Foreclosure Act may seek and obtain a writ of assistance by application to the District Court in the county in Oklahoma in which the portion of the Mortgaged Property to be foreclosed upon is located, or the United States District Court having venue for actions arising in such county;

(vi)          Mortgagee may, at its option, proceed with foreclosure under judicial proceedings instead of exercising the rights of the power of sale granted by Mortgagor to Mortgagee in this Mortgage;

(vii)         All other terms, conditions, procedures, and requirements of the Oklahoma Mortgage Foreclosure Act shall be followed;

(viii)        After the completion of the sale as contemplated by the Oklahoma Mortgage Foreclosure Act, the purchaser shall have all of Mortgagor’s right, title and interest in and to Mortgaged Property sold pursuant to such sale, free and clear of all rights of Mortgagor, and free and clear of all rights of any person with a priority which is subordinate to the lien of this Mortgage, except any right which may be reserved under the Oklahoma Mortgage Foreclosure Act;

(ix)           Any recitation in any notice, publication thereof, recordation thereof, or deed, of the existence of an Event of Default, giving, publication, service and recordation of notice, occurrence of the sale at the time and place set forth in such notice or any postponement authorized and effective under the Oklahoma Mortgage Foreclosure Act, circumstances of sale and bidding, and compliance with the terms of the Oklahoma Mortgage Foreclosure Act, shall be presumed to be statements of fact and no person shall be required to investigate the truthfulness or accuracy of any such recitation; and

(x)            The proceeds of any such sale shall be applied first to the costs, attorney fees, and expenses of such sale, next to the payment of the Indebtedness; except that if such application of proceeds conflicts with the requirements of the Oklahoma Mortgage Foreclosure Act, the proceeds of such sale shall be applied as provided under the Oklahoma Mortgage Foreclosure Act, but in such event, only to the extent of any such conflict.

Section 4.03           Substitute Trustees and Agents.  Trustee or his successor or substitute may appoint or delegate any one or more persons as agent to perform any act or acts necessary or incident to any sale held by Trustee, including the posting of notices and the conduct of sale, but in the name and on behalf of Trustee, his successor or substitute.  If Trustee or his successor or substitute shall have given notice of sale hereunder, any successor or substitute trustee thereafter appointed may complete the sale and the conveyance of the property pursuant thereto as if such notice had been given by the successor or substitute trustee conducting the sale.

Section 4.04           Judicial Foreclosure; Receivership.

(a)           If any of the Indebtedness shall become due and payable and shall not be promptly paid, Trustee or Mortgagee shall have the right and power to proceed by a suit

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or suits in equity or at law, whether for the specific performance of any covenant or agreement herein contained or in aid of the execution of any power herein granted, or for any foreclosure hereunder or for the sale of the Mortgaged Property under the judgment or decree of any court or courts of competent jurisdiction, or for the appointment of a receiver pending any foreclosure hereunder or the sale of the Mortgaged Property under the order of a court or courts of competent jurisdiction or under executory or other legal process, or for the enforcement of any other appropriate legal or equitable remedy.  Any money advanced by Trustee and/or Mortgagee in connection with any such receivership shall be a demand obligation (which obligation Mortgagor hereby expressly promises to pay) owing by Mortgagor to Trustee and/or Mortgagee and shall bear interest from the date of making such advance by Trustee and/or Mortgagee until paid at the interest rate applicable to periods following an Event of Default in the Second Amended and Restated Credit Agreement.

(b)           If an action is filed to foreclose this Mortgage, or if Mortgagee or Trustee seeks to foreclose this Mortgage by power of sale under the Oklahoma Power of Sale Mortgage Foreclosure Act, Mortgagee or Trustee, as applicable, shall be entitled to the immediate appointment of a receiver pursuant to 12 Oklahoma Statutes §1551(2)(c) without the necessity of further proof.

Section 4.05           Foreclosure for Installments.  Mortgagee shall also have the option to proceed with foreclosure in satisfaction of any installments of the Indebtedness which have not been paid when due either through the courts or by directing Trustee or his successors in trust to proceed with foreclosure in satisfaction of the matured but unpaid portion of the Indebtedness as if under a full foreclosure, conducting the sale as herein provided and without declaring the entire principal balance and accrued interest due; such sale may be made subject to the unmatured portion of the Indebtedness, and any such sale shall not in any manner affect the unmatured portion of the Indebtedness, but as to such unmatured portion of the Indebtedness this Mortgage shall remain in full force and effect just as though no sale had been made hereunder.  It is further agreed that several sales may be made hereunder without exhausting the right of sale for any unmatured part of the Indebtedness, it being the purpose hereof to provide for a foreclosure and sale of the security for any matured portion of the Indebtedness without exhausting the power to foreclose and sell the Mortgaged Property for any subsequently maturing portion of the Indebtedness.

Section 4.06           Separate Sales.  The Mortgaged Property may be sold in one or more parcels and in such manner and order as Mortgagee, in its sole discretion, may elect, it being expressly understood and agreed that the right of sale arising out of any Event of Default shall not be exhausted by any one or more sales.

Section 4.07           Occupancy After Foreclosure.  In the event there is a foreclosure sale hereunder and at the time of such sale Mortgagor or Mortgagor’s heirs, devisees, representatives, successors or assigns or any other person claiming any interest in the Mortgaged Property by, through or under Mortgagor, are occupying or using the Mortgaged Property or any part thereof, each and all shall immediately become the tenant of the purchaser at such sale, which tenancy shall be a tenancy from day to day, terminable at the will of either the landlord or tenant, or at a reasonable rental per day based upon the value of the property occupied, such rental to be due

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daily to the purchaser; to the extent permitted by applicable law, the purchaser at such sale shall, notwithstanding any language herein apparently to the contrary, have the sole option to demand immediate possession following the sale or to permit the occupants to remain as tenants at will.  In the event the tenant fails to surrender possession of said property upon demand, the purchaser shall be entitled to institute and maintain a summary action for possession of the Mortgaged Property (such as an action for forcible entry and detainer) in any court having jurisdiction.

Section 4.08           Remedies Cumulative, Concurrent and Nonexclusive.  Every right, power and remedy herein given to Trustee or Mortgagee shall be cumulative and in addition to every other right, power and remedy herein specifically given or now or hereafter existing in equity, at law or by statute (including specifically those granted by the Applicable UCC in effect and applicable to the Mortgaged Property or any portion thereof) each and every right, power and remedy whether specifically herein given or otherwise existing may be exercised from time to time and so often and in such order as may be deemed expedient by Trustee or Mortgagee, and the exercise, or the beginning of the exercise, of any such right, power or remedy shall not be deemed a waiver of the right to exercise, at the same time or thereafter any other right, power or remedy.  No delay or omission by Trustee or Mortgagee in the exercise of any right, power or remedy shall impair any such right, power or remedy or operate as a waiver thereof or of any other right, power or remedy then or thereafter existing.

Section 4.09           No Release of Obligations.  Neither Mortgagor, any Guarantor, any other guarantor of the Indebtedness, nor any other person hereafter obligated for payment of all or any part of the Indebtedness shall be relieved of such obligation by reason of (a) the failure of Trustee or Mortgagee to comply with any request of Mortgagor, or any guarantor or any other person so obligated to foreclose the lien of this Mortgage or to enforce any provision hereunder or under the Second Amended and Restated Credit Agreement; (b) the release, regardless of consideration, of the Mortgaged Property or any portion thereof or interest therein or the addition of any other property to the Mortgaged Property; (c) any agreement or stipulation between any subsequent owner of the Mortgaged Property and Mortgagee extending, renewing, rearranging or in any other way modifying the terms of this Mortgage without first having obtained the consent of, given notice to or paid any consideration to Mortgagor, any guarantor or such other person, and in such event Mortgagor, guarantor and all such other persons shall continue to be liable to make payment according to the terms of any such extension or modification agreement unless expressly released and discharged in writing by Mortgagee; or (d) by any other act or occurrence save and except the complete payment of the Indebtedness and the complete fulfillment of all obligations hereunder or under the Second Amended and Restated Credit Agreement.

Section 4.10           Release of and Resort to Mortgaged Property.  Mortgagee may release, regardless of consideration, any part of the Mortgaged Property without, as to the remainder, in any way impairing, affecting, subordinating or releasing the lien or security interest created in or evidenced by this Mortgage or its stature as a first and prior lien and security interest in and to the Mortgaged Property, and without in any way releasing or diminishing the liability of any person or entity liable for the repayment of the Indebtedness.  For payment of the Indebtedness, Mortgagee may resort to any other security therefor held by Mortgagee or Trustee in such order and manner as Mortgagee may elect.

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Section 4.11           Waiver of Redemption, Notice and Marshalling of Assets, Etc.  To the fullest extent permitted by law, Mortgagor hereby irrevocably and unconditionally waives and releases (a) all benefits that might accrue to Mortgagor by virtue of any present or future moratorium law or other law exempting the Mortgaged Property from attachment, levy or sale on execution or providing for any appraisement, valuation, stay of execution, exemption from civil process, redemption or extension of time for payment and (b) any right to a marshalling of assets or a sale in inverse order of alienation.  If any law referred to in this Mortgage and now in force, of which Mortgagor or its successor or successors might take advantage despite the provisions hereof, shall hereafter be repealed or cease to be in force, such law shall thereafter be deemed not to constitute any part of the contract herein contained or to preclude the operation or application of the provisions hereof.  Provided, however, that if the laws of any state do not permit the redemption period to be waived, the redemption period is specifically reduced to the minimum amount of time allowable by statute.  With respect to any portion of the Mortgaged Property located in the state of Oklahoma, Mortgagee and Trustee hereby waive or do not waive appraisement, such election to be made at or before entry of judgment in any action to foreclose this Mortgage; provided, however, such waiver or non-waiver shall not affect Mortgagor’s waiver of such rights, which shall be absolute.

Section 4.12           Discontinuance of Proceedings  In case Mortgagee shall have proceeded to invoke any right, remedy or recourse permitted hereunder or under the Second Amended and Restated Credit Agreement and shall thereafter elect to discontinue or abandon same for any reason, Mortgagee shall have the unqualified right so to do and, in such an event, Mortgagor and Mortgagee shall be restored to their former positions with respect to the Indebtedness, this Mortgage, the Second Amended and Restated Credit Agreement, the Mortgaged Property and otherwise, and the rights, remedies, recourses and powers of Mortgagee shall continue as if same had never been invoked.

Section 4.13           Application of Proceeds.  The proceeds of any sale of the Mortgaged Property or any part thereof and all other monies received by Trustee or Mortgagee in any proceedings for the enforcement hereof or otherwise, whose application has not elsewhere herein been specifically provided for, shall be applied:

(a)           first, to the payment of all reasonable expenses incurred by Trustee or Mortgagee incident to the enforcement of this Mortgage, the Second Amended and Restated Credit Agreement or any of the Indebtedness (including, without limiting the generality of the foregoing, expenses of any entry or taking of possession, of any sale, of advertisement thereof, and of conveyances, and court costs, compensation of agents and employees, legal fees and a reasonable commission to Trustee acting), and to the payment of all other charges, reasonable expenses, liabilities and advances incurred or made by Trustee or Mortgagee under this Mortgage or in executing any trust or power hereunder;

(b)           second to payment of the Indebtedness in the order and manner required in the Second Amended and Restated Credit Agreement; and

(c)           third, to Mortgagor or as otherwise required by any Governmental Requirement.

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Section 4.14           Resignation of Operator.  In addition to all rights and remedies under this Mortgage, at law and in equity, if any Event of Default shall occur and Trustee or Mortgagee shall exercise any possessory remedies under this Mortgage with respect to any portion of the Hydrocarbon Property (or Mortgagor shall transfer any Mortgaged Property “in lieu of” foreclosure), Mortgagee or Trustee shall have the right to request that any operator of any Hydrocarbon Property which is either Mortgagor or any Affiliate of Mortgagor to resign as operator under the joint operating agreement applicable thereto, and no later than 60 days after receipt by Mortgagor of any such request, Mortgagor shall resign (or cause such other party to resign) as operator of such Hydrocarbon Property.

Section 4.15           Indemnity.  In connection with any action taken by Trustee and/or Mortgagee pursuant to this Mortgage, Trustee and/or Mortgagee and their officers, directors, employees, representatives, agents, attorneys, accountants and experts (“Indemnified Parties”) shall not be liable for any loss sustained by Mortgagor resulting from an assertion that Mortgagee has received funds from the production of Hydrocarbons claimed by third persons or any act or omission of any Indemnified Party in administering, managing, operating or controlling the Mortgaged Property INCLUDING SUCH LOSS WHICH MAY RESULT FROM THE NEGLIGENCE OF AN INDEMNIFIED PARTYunless such loss is caused by the gross negligence or willful misconduct of an Indemnified Party, nor shall Trustee and/or Mortgagee be obligated to perform or discharge any obligation, duty or liability of Mortgagor. Mortgagor shall and does hereby agree to indemnify each Indemnified Party for, and to hold each Indemnified Party harmless from, any and all liability, loss or damage which may or might be incurred by any Indemnified Party by reason of this Mortgage or the exercise of rights or remedies hereunder INCLUDING SUCH LIABILITY, LOSS, OR DAMAGE WHICH MAY RESULT FROM THE NEGLIGENCE OF AN INDEMNIFIED PARTY unless such liability, loss, or damage is caused by the gross negligence or willful misconduct of an Indemnified Party; should Trustee and/or Mortgagee make any expenditure on account of any such liability, loss or damage, the amount thereof, including costs, expenses and reasonable attorneys’ fees, shall be a demand obligation (which obligation Mortgagor hereby expressly promises to pay) owing by Mortgagor to Trustee and/or Mortgagee and shall bear interest from the date expended until paid at the Post-Default Rate, shall be a part of the Indebtedness and shall be secured by this Mortgage and any other Security Instrument.  Mortgagor hereby assents to, ratifies and confirms any and all actions of Trustee and/or Mortgagee with respect to the Mortgaged Property taken under, and in compliance with the terms of, this Mortgage.  The liabilities of Mortgagor as set forth in this Section 4.15 shall survive the termination of this Mortgage.

ARTICLE V

Trustee

Section 5.01           Duties, Rights, and Powers of Trustee.  It shall be no part of the duty of Trustee to see to any recording, filing or registration of this Mortgage or any other instrument in addition or supplemental thereto, or to give any notice thereof, or to see to the payment of or be under any duty in respect of any tax or assessment or other governmental charge which may be levied or assessed on the Mortgaged Property, or any part thereof, or against Mortgagor, or to see to the performance or observance by Mortgagor of any of the covenants and agreements

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contained herein.  Trustee shall not be responsible for the execution, acknowledgment or validity of this Mortgage or of any instrument in addition or supplemental hereto or for the sufficiency of the security purported to be created hereby, and makes no representation in respect thereof or in respect of the rights of Mortgagee.  Trustee shall have the right to advise with counsel upon any matters arising hereunder and shall be fully protected in relying as to legal matters on the advice of counsel.  Trustee shall not incur any personal liability hereunder except for Trustee’s own gross negligence, bad faith and/or willful misconduct; and Trustee shall have the right to rely on any instrument, document or signature authorizing or supporting any action taken or proposed to be taken by him hereunder, believed by him in good faith to be genuine.

Section 5.02           Successor Trustee; Resignation by Trustee.  Trustee may resign by written notice addressed to Mortgagee or be removed at any time with or without cause by an instrument in writing duly executed on behalf of Mortgagee.  In case of the death, resignation or removal of Trustee, a successor trustee may be appointed by Mortgagee by instrument of substitution complying with any applicable requirements of law, or, in the absence of any such requirement, without other formality than appointment and designation in writing.  Written notice of such appointment and designation shall be given by Mortgagee to Mortgagor, but the validity of any such appointment shall not be impaired or affected by failure to give such notice or by any defect therein.  Such appointment and designation shall be full evidence of the right and authority to make the same and of all the facts therein recited, and, upon the making of any such appointment and designation, this Mortgage shall vest in the successor trustee all the estate and title in and to all of the Mortgaged Property, and the successor trustee shall thereupon succeed to all of the rights, powers, privileges, immunities and duties hereby conferred upon Trustee named herein, and one such appointment and designation shall not exhaust the right to appoint and designate a successor trustee hereunder but such right may be exercised repeatedly as long as any Indebtedness remains unpaid hereunder.  To facilitate the administration of the duties hereunder, Mortgagee may appoint multiple trustees to serve in such capacity or in such jurisdictions as Mortgagee may designate.

Section 5.03           Retention of Moneys.  All moneys received by Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated in any manner from any other moneys (except to the extent required by law), and Trustee shall be under no liability for interest on any moneys received by him hereunder.

ARTICLE VI

Miscellaneous

Section 6.01           Instrument Construed as Mortgage, Etc.  With respect to any portions of the Mortgaged Property located in any state or other jurisdiction the laws of which do not provide for the use or enforcement of a deed of trust or the office, rights and authority of Trustee as herein provided, the general language of conveyance hereof to Trustee is intended and the same shall be construed as words of mortgage unto and in favor of Mortgagee and the rights and authority granted to Trustee herein may be enforced and asserted by Mortgagee in accordance with the laws of the jurisdiction in which such portion of the Mortgaged Property is located and the same may be foreclosed at the option of Mortgagee as to any or all such portions of the Mortgaged Property in any manner permitted by the laws of the jurisdiction in which such

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portions of the Mortgaged Property is situated.  This Mortgage may be construed as a mortgage, deed of trust, chattel mortgage, conveyance, assignment, security agreement, pledge, financing statement, hypothecation or contract, or any one or more of them, in order fully to effectuate the lien hereof and the purposes and agreements herein set forth.

Section 6.02           Release of Mortgage.  If all Indebtedness secured hereby shall be paid and the Second Amended and Restated Credit Agreement terminated, Mortgagee shall forthwith cause satisfaction and discharge of this Mortgage to be entered upon the record at the expense of Mortgagor and shall execute and deliver or cause to be executed and delivered such instruments of satisfaction and reassignment as Mortgagor may reasonably request.  Otherwise, this Mortgage shall remain and continue in full force and effect.

Section 6.03           Severability.  If any provision hereof is invalid or unenforceable in any jurisdiction, the other provisions hereof shall remain in full force and effect in such jurisdiction and the remaining provisions hereof shall be liberally construed in favor of Trustee and Mortgagee in order to effectuate the provisions hereof, and the invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of any such provision in any other jurisdiction.

Section 6.04           Successors and Assigns of Parties.  The term “Lender” as used herein shall mean and include any legal owner, holder, assignee or pledgee of any of the Indebtedness secured hereby.  The terms used to designate Trustee, Mortgagee and Mortgagor shall be deemed to include the respective heirs, legal representatives, successors and assigns of such parties.

Section 6.05           Satisfaction of Prior Encumbrance.  To the extent that proceeds of the Second Amended and Restated Credit Agreement are used to pay indebtedness secured by any outstanding lien, security interest, charge or prior encumbrance against the Mortgaged Property, such proceeds have been advanced by Mortgagee or any of the other Lenders at Mortgagor’s request, and Mortgagee shall be subrogated to any and all rights, security interests and liens owned by any owner or holder of such outstanding liens, security interests, charges or encumbrances, and it is expressly understood that, in consideration of the payment of such other indebtedness by Mortgagee or any of the other Lenders, Mortgagor hereby waives and releases all demands and causes of action against Mortgagee or any of the other Lenders for offsets and payments to, upon and in connection with the said indebtedness.

Section 6.06           Subrogation of Trustee.  This Mortgage is made with full substitution and subrogation of Trustee and his successors in this trust and his and their assigns in and to all covenants and warranties by others heretofore given or made in respect of the Mortgaged Property or any part thereof.

Section 6.07           Nature of Covenants.  The covenants and agreements herein contained shall constitute covenants running with the land and interests covered or affected hereby and shall be binding upon the heirs, legal representatives, successors and assigns

Section 6.08           Notices.  All notices and other communications shall be in writing (including, without limitation, telecopy or telex) and mailed by certified mail, return receipt

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requested, telecopied, telexed, hand delivered, or delivered by a nationally recognized overnight courier, at the address for the appropriate party specified in the first paragraph of this Mortgage or at such other address as shall be designated by such party in a written notice to the other parties.  All such notices and communications shall, when so mailed, telecopied, telexed, or hand delivered or delivered by a nationally recognized overnight courier, be effective when received if mailed, when telecopy transmission is completed, when confirmed by telex answer-back, or when delivered by such messenger or courier, respectively.

Section 6.09           Counterparts.  This Mortgage is being executed in several counterparts, all of which are identical, except that to facilitate recordation, if the Mortgaged Property is situated in more than one county, descriptions of only those portions of the Mortgaged Property located in the county in which a particular counterpart is recorded shall be attached as Exhibit A thereto. A complete Exhibit A will be attached to that certain counterpart that is filed in the real property records of                              County, Texas.  Each of such counterparts shall for all purposes be deemed to be an original and all such counterparts shall together constitute but one and the same instrument.

Section 6.10           Exculpation Provisions.  Each of the parties hereto specifically agrees that it has a duty to read this Mortgage; and agrees that it is charged with notice and knowledge of the terms of this Mortgage; that it has in fact read this Mortgage and is fully informed and has full notice and knowledge of the terms, conditions and effects of this Mortgage; that it has been represented by independent legal counsel of its choice throughout the negotiations preceding its execution of this Mortgage; and has received the advice of its attorney in entering into this Mortgage; and that it recognizes that certain of the terms of this Mortgage result in one party assuming the liability inherent in some aspects of the transaction and relieving the other party of its responsibility for such liability.  Each party hereto agrees and covenants that it will not contest the validity or enforceability of any exculpatory provision of this Mortgage on the basis that the party had no notice or knowledge of such provision or that the provision is not “conspicuous.”

Section 6.11           Security Agreement.  With respect to any portion of the Mortgaged Property which constitutes fixtures or other property governed by the Applicable UCC, this Mortgage shall constitute a security agreement between Mortgagor, as the debtor, and Mortgagee, as the secured party.  Cumulative of all other rights of Mortgagee hereunder, Mortgagee shall have all of the rights conferred upon secured parties by the Applicable UCC.

Section 6.12           Ratification of Original Mortgages; Effect of Mortgage.  The conveyance and the granting of liens in the Original Mortgages is hereby ratified, adopted, confirmed, and renewed.  In addition, as stated in the Recitals to this Mortgage, this Mortgage constitutes for all purposes an amendment and restatement of the Original Mortgages and not a new or substitute security instrument.

Section 6.13           Time of the Essence.  Time is of the essence in the performance of each and every obligation under this Mortgage.

Section 6.14           Authority of Administrative Agent.  The Lenders may, by agreement among them, provide for and regulate the exercise of rights and remedies hereunder, but, unless

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and until modified to the contrary in a writing signed by all such persons and recorded in the same counties and parishes as this Mortgage is recorded, (i) all persons other than Mortgagor and its affiliates shall be entitled to rely on the releases, waivers, consents, approvals, notifications and other acts (including, without limitation, appointment of substitute or successor trustee, or trustees, hereunder and the bidding in of all or any part of the secured indebtedness held by any one or more Lenders, whether the same be conducted under the provisions hereof or otherwise) of Administrative Agent, without inquiry into any such agreements or the existence of required consent or approval of any Lender and without the joinder of any party other than Administrative Agent in such releases, waivers, consents, approvals, notifications or other acts and (ii) all notices, requests, consents, demands and other communications required or permitted to be given hereunder may be given to Administrative Agent.

Section 6.15           Waivers.  Subject to the Second Amended and Restated Credit Agreement, Administrative Agent may at any time and from time to time in writing waive compliance by Mortgagor with any covenant herein made by Mortgagor to the extent and in the manner specified in such writing, or consent to Mortgagor’s doing any act which hereunder Mortgagor is prohibited from doing, or to Mortgagor’s failing to do any act which hereunder Mortgagor is required to do, to the extent and in the manner specified in such writing, or release any part of the Mortgaged Property or any interest therein or any Production Proceeds from the lien and security interest of this Mortgage, without the joinder of Trustee.  Any party liable, either directly or indirectly, for the secured indebtedness or for any covenant herein or in any other Loan Document may be released from all or any part of such obligations without impairing or releasing the liability of any other party.  No such act shall in any way impair any rights or powers hereunder except to the extent specifically agreed to in such writing.

Section 6.16           Compliance With Usury Laws.  It is the intent of Mortgagor, Trustee, Mortgagee and all other parties to any of the Loan Documents to contract in strict compliance with applicable usury law from time to time in effect.  In furtherance thereof, it is stipulated and agreed that none of the terms and provisions contained herein or in the other Loan Documents shall ever be construed to create a contract to pay, for the use, forbearance or detention of money, interest in excess of the maximum amount of interest permitted to be collected, charged, taken, reserved, or received by applicable law from time to time in effect.

Section 6.17           GOVERNING LAW.  This Mortgage shall be governed by and construed in accordance with the laws of the State of Texas, without giving effect to its laws relating to conflicts of laws, except to the extent that the laws of any other jurisdiction mandatorily govern the creation of, or the manner or procedure for enforcement of the lien created by this Mortgage, provided that any rights or remedies herein provided that shall be valid under the laws of the jurisdiction where proceedings for the enforcement hereof shall be taken shall not be affected by the invalidity, if any, of such rights or remedies under the laws of the State of Texas.

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NOTICE TO MORTGAGOR:

A POWER OF SALE HAS BEEN GRANTED IN THIS INSTRUMENT.  WITH RESPECT TO PORTIONS OF THE MORTGAGED PROPERTY LOCATED IN THE STATE OF OKLAHOMA, SUCH POWER OF SALE IS GRANTED PURSUANT TO THE OKLAHOMA MORTGAGE FORECLOSURE ACT (AS DEFINED IN SECTION 1.01 OF THIS MORTGAGE). THIS POWER OF SALE MAY ALLOW TRUSTEE OR MORTGAGEE, AS APPLICABLE, TO TAKE THE MORTGAGED PROPERTY AND SELL IT WITHOUT GOING TO COURT IN A FORECLOSURE ACTION UPON THE OCCURRENCE OF AN EVENT OF DEFAULT BY MORTGAGOR UNDER THIS INSTRUMENT. THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS, SECURES PAYMENT OF FUTURE ADVANCES, AND COVERS ALL PRODUCTS AND PROCEEDS OF MORTGAGED PROPERTY. 

IN WITNESS HEREOF, Mortgagor has executed and delivered this Mortgage as of the day and year first above written.

MORTGAGOR:
BRIGHAM OIL & GAS, L.P., a Delaware limited partnership
By:	Brigham, Inc., a Nevada corporation, its General Partner
	By:
	Name:
	Title:

Prepared by and after recording return to:
Bracewell & Patterson, L.L.P.
^c/_oGarrett B. Spear-Smith
711 Louisiana Street, Suite 2900
Houston, Texas 77002

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STATE OF TEXAS	§
	§
COUNTY OF	§

TEXAS

This instrument was acknowledged before me on March        , 2003 by                         , the                                of BRIGHAM, INC., a Nevada corporation, as general partner of BRIGHAM OIL & GAS, L.P., a Delaware limited partnership, on behalf of such corporation, acting as general partner of the limited partnership, on behalf of the limited partnership.

Notary Public in and for the

State of Texas

Notarial Seal:

OKLAHOMA

Before me, a Notary Public in and for said county and state, on this              day of March, 2003, personally appeared                                           , to me known to be the identical person who subscribed the name of the maker thereof to the foregoing instrument as                                         of BRIGHAM, INC., a Nevada corporation, as general partner of BRIGHAM OIL & GAS, L.P., a Delaware limited partnership, and acknowledged to me that such person executed the same as such person’s free and voluntary act and deed, and as the free and voluntary act and deed of such corporation for the uses and purposes therein set forth.

Notary Public in and for the

State of Texas

Notarial Seal:

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EXHIBIT A

TO

AMENDED AND RESTATED MORTGAGE, DEED OF TRUST,
ASSIGNMENT OF PRODUCTION, SECURITY AGREEMENT,
FIXTURE FILING, AND FINANCING STATEMENT

This Exhibit A describes the Hydrocarbon Property (as defined in the body of this instrument).  This Exhibit A also sets forth a list of certain of the wells located on the Hydrocarbon Property, together with Mortgagor’s representation as to the nature and quantum of Working Interest (as defined below) and Net Revenue Interest (as defined below) owned by Mortgagor with respect to those wells.

The designation “Working Interest” or “WI” when used in this Exhibit A means the interest of Mortgagor upon which is calculated Mortgagor’s proportionate share of the costs, expenses, and liabilities attributable to the oil, gas, and mineral leases described herein.  The designation “Net Revenue Interest” or “NRI” or “NRIO” or “NRIG” when used in this Exhibit A means the interest in the gross production of oil and gas and other minerals from other properties subject to the oil, gas, and mineral leases to which Mortgagor is entitled by virtue of its ownership of the Working Interest after deducting all landowner royalties, overriding royalties, and similar interests attributable to the Working Interest.  The designation “Overriding Royalty Interest” “ORRI” means an interest in production which is free of any obligation for the expense of exploration, development, and production, bearing only its pro rata share of severance, production, and other similar taxes and, in instances where the document creating the overriding royalty interest so provides, costs associated with compression, dehydration, other treating or processing, or transportation of production of oil, gas, or other minerals relating to the marketing of such production.  The designation “Royalty Interest” or “RI” means an interest in production which results from an ownership in the mineral fee estate or royalty estate in the relevant land and which is free of any obligation for the expense of exploration, development, and production, bearing only its pro rata share of severance,  production, ad valorem, and other similar taxes and, in instances where the document creating the royalty interest so provides, costs associated with compression, dehydration, other treating or processing or transportation of production of oil, gas, or other minerals relating to the marketing of such production.  Each amount set forth as “Working Interest” or “WI” or “Net Revenue Interest” or “NRI” or “NRIO” or “NRIG” is Mortgagor’s minimum interest after giving full effect to, among other things, all Permitted Liens (as defined in the Credit Agreement).

Any reference in this Exhibit A to wells or units is for warranty of interest, administrative convenience, and identification and shall not limit or restrict the right, title, interest, or properties covered by this Deed of Trust.  All right, title, and interest of Mortgagor in the properties described herein and in the Mortgaged Property (as defined in the body of this instrument) is and shall be subject to this Mortgage, regardless of the presence thereon of any interests, units, or wells not described herein.

Unless otherwise expressly provided, all recording references in this Exhibit A are references to the official public records of real property in the county or counties (or parish or parishes) in which the Mortgaged Property is located and in which records documents relating to the Mortgaged Property are recorded, whether Conveyance Records, Deed Records, Mortgage Records, Oil and Gas Records, Oil and Gas Lease Records, or other records.

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EXHIBIT G

FORM OF AMENDED AND RESTATED PLEDGE AGREEMENT

This Amended and Restated Pledge Agreement dated as of March 21, 2003 (“Pledge Agreement”) is between [Brigham Exploration Company, a Delaware corporation][Brigham, Inc., a Nevada corporation][Brigham Oil & Gas, L.P., a Delaware limited partnership] (“Pledgor”), and Société Générale, as administrative agent for the lenders party to the Credit Agreement described below (“Secured Party”).

INTRODUCTION

A.            [Brigham Oil & Gas, L.P., a Delaware limited partnership (“Borrower”)] [Pledgor], the lenders party thereto, and Bank of Montreal, as agent for such lenders (the “Existing Agent”), were parties to that certain Amended and Restated Credit Agreement dated February 17, 2000, as amended (the “Existing Credit Agreement”).

B.            In order to secure the full and punctual payment and performance of the obligations under the Existing Credit Agreement and the other loan documents contemplated thereby, the Pledgor executed and delivered the security instruments described on Schedule I attached hereto (the “Existing Security Documents”) in favor of the Existing Agent and has granted a continuing security interest in and to the Pledged Collateral (as hereafter defined).

C.            The Secured Party has replaced the Existing Agent as the administrative agent under the Existing Credit Agreement.

D.            [The Borrower] [Pledgor], [Brigham Exploration Company, a Delaware corporation], [Brigham, Inc., a Nevada corporation], the lenders named therein (the “Lenders”) and Secured Party, as agent for the Lenders, have entered into the Second Amended and Restated Credit Agreement dated as of March 21, 2003 (as amended, restated or otherwise modified from time-to-time, the “Credit Agreement”), which, among other things, amends and restates the Existing Credit Agreement in its entirety.

[E.           Pledgor has guaranteed the Obligations of Borrower under the Credit Agreement pursuant to Article VIII thereof (the “Guaranty”).]

F.             Under the Credit Agreement, it is a condition to the making of Advances by the Lenders that [Pledgor][Borrower] shall amend and restate the Existing Security Documents to secure its [obligations under the Guaranty][Obligations under the Credit Agreement] by entering into this Pledge Agreement.

Therefore, Pledgor hereby agrees with Secured Party for its benefit and the ratable benefit of the Lenders as follows:

Section 1.         Definitions.  All capitalized terms not otherwise defined in this Pledge Agreement that are defined in the Credit Agreement shall have the meaning assigned to such terms by the Credit Agreement.  Any capitalized terms used in this Pledge Agreement that are defined in Articles 8 or 9 of the Uniform Commercial Code as adopted in the State of New York

(“UCC”) shall have the meanings assigned to those terms by the UCC as of the date of this Pledge Agreement, whether specified elsewhere in this Pledge Agreement or not.  All other rules of interpretation set forth in Section 1.05 of the Credit Agreement shall apply to this Pledge Agreement and are hereby incorporated herein by reference.

Section 2.               Pledge.

(a)           Grant of Pledge.  Pledgor hereby pledges to Secured Party, and grants to Secured Party, for its benefit and the ratable benefit of the Lenders, a continuing lien on and security interest in the Pledged Collateral, as defined in Section 2(b) below.  This Pledge Agreement shall secure all Obligations of Pledgor now or hereafter existing under the Guaranty and the other Loan Documents to which it is a party, including any extensions, modification, substitutions, amendments, and renewals thereof, whether for principal, interest, fees, expenses, indemnifications or otherwise, in each case including the payment of amounts which would become due but for the operation of the automatic stay under Section 362(a) of the United States Bankruptcy Code, 11 U.S.C. §§ 101 et seq., as amended.  All such obligations shall be referred to in this Pledge Agreement as the “Secured Obligations”.

(b)           Pledged Collateral.  “Pledged Collateral” shall mean all of Pledgor’s right, title, and interest in the following, whether now owned or hereafter acquired:

(i)            all of the membership interests listed in the attached Schedule II issued to Pledgor (the “Membership Interests”), all such additional membership interests of any issuer of such interests hereafter acquired by Pledgor, the certificates representing the Membership Interests, if any, and all such additional membership interests, all of Pledgor’s rights, privileges, authority, and powers as a member of the issuer of such Membership Interests under the applicable [Limited Liability Company Operating Agreement][Limited Liability Company Regulations] of such issuer and all rights to money or Property which Pledgor now has or hereafter acquires in respect of the Membership Interests,  including, without limitation, (A) any Proceeds from a sale by or on behalf of Pledgor of any of the Membership Interests, and (B) any distributions, dividends, cash, instruments and other Property from time-to-time received or otherwise distributed in respect of the Membership Interests, whether regular, special or made in connection with the partial or total liquidation of the issuer and whether attributable to profits, the return of any contribution or investment or otherwise attributable to the Membership Interests or the ownership thereof other than distributions received by Pledgor in compliance with the Loan Documents (collectively, the “Membership Interests distributions”);

(ii)           all of the general and limited partnership interests listed in the attached Schedule II issued to Pledgor (the “Partnership Interests”), all such additional limited or general partnership interests of any issuer of such Partnership Interests hereafter acquired by Pledgor, all of Pledgor’s rights, privileges, authority, and powers as a limited or general partner of the issuer of such Partnership Interests under the applicable [Limited Partnership

2

Agreement][Partnership Agreement] of such issuer, and all rights to money or Property which Pledgor now has or hereafter acquires in respect of the Partnership Interests,  including, without limitation, (A) any Proceeds from a sale by or on behalf of Pledgor of any of the Partnership Interests, and (B) any distributions, dividends, cash, instruments and other Property from time-to-time received or otherwise distributed in respect of the Partnership Interests, whether regular, special or made in connection with the partial or total liquidation of the issuer and whether attributable to profits, the return of any contribution or investment or otherwise attributable to the Partnership Interests or the ownership thereof other than distributions received by Pledgor in compliance with the Loan Documents (collectively, the “Partnership Interest distributions”; together with the Membership Interest distributions, the “distributions”); and

(iii)          all of the shares of stock listed in the attached Schedule II issued to Pledgor (the “Pledged Shares”), all such additional shares of stock of any issuer of such Pledged Shares hereafter issued to Pledgor, the certificates representing the Pledged Shares and all such additional shares, all of Pledgor’s rights, privileges, authority, and powers as a shareholder of the issuer of such Pledged Shares under the applicable [Articles][Certificate] of Incorporation and Bylaws of such issuer and all rights to money or Property which Pledgor now has or hereafter acquires in respect of the Pledged Shares, including, without limitation, (A) any Proceeds from a sale by or on behalf of Pledgor of any of the Pledged Shares, and (B) any distributions, dividends, cash, instruments and other Property from time-to-time received or otherwise distributed in respect of the Pledged Shares, whether regular, special or made in connection with the partial or total liquidation of the issuer and whether attributable to profits, the return of any contribution or investment or otherwise attributable to the Pledged Shares or the ownership thereof other than distributions received by Pledgor in compliance with the Loan Documents (collectively, the “Pledged Shares distributions”; together with the Membership Interest distributions and the Partnership Interest distributions, the “distributions”); and

(iv)          all additions and accessions to, substitutions and replacements of, and all products and proceeds from the Pledged Collateral described in paragraphs (i), (ii) and (iii) of this Section 2(b).

(c)           Delivery of Pledged Collateral.  All certificates or instruments, if any, representing the Pledged Collateral shall be delivered to Secured Party and shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance reasonably satisfactory to Secured Party.  After the occurrence and during the continuance of an Event of Default, Secured Party shall have the right, upon prior written notice to Pledgor, to transfer to or to register in the name of Secured Party or any of its nominees any of the Pledged Collateral, subject to the rights specified in Section 2(d).  In addition, after the occurrence and during the continuance of an Event of Default, Secured Party shall have the right at any time to exchange the certificates or instruments representing the Pledged Collateral for certificates or instruments of smaller or larger denominations.

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(d)           Rights Retained by Pledgor.  Notwithstanding the pledge in Section 2(a), so long as no Event of Default shall have occurred and remain uncured:

(i)            and, if an Event of Default shall have occurred and remain uncured, until such time thereafter as such voting and other consensual rights have been terminated pursuant to Section 5 hereof, Pledgor shall be entitled to exercise any voting and other consensual rights pertaining to the Pledged Collateral for any purpose not inconsistent with the terms of this Pledge Agreement or the Credit Agreement; provided, however, that Pledgor shall not exercise or shall refrain from exercising any such right if such action would have a materially adverse effect on the value of the Pledged Collateral;

(ii)           except as otherwise provided in the Credit Agreement, Pledgor shall be entitled to receive and retain any dividends and other distributions paid on or in respect of the Pledged Collateral and the Proceeds of any sale of the Pledged Collateral and all payments of principal and interest on loans and advances made by Pledgor to the issuer of the Pledged Collateral; and

(iii)          at and after such time as voting and other consensual rights have been terminated pursuant to Section 5 hereof, Pledgor shall execute and deliver (or cause to be executed and delivered) to Secured Party all proxies and other instruments as Secured Party may reasonably request to (A) enable Secured Party to exercise the voting and other rights which Pledgor is entitled to exercise pursuant to subsection (i) of this Section 2(d), and (B) to receive the dividends or other distributions and Proceeds of sale of the Pledged Collateral and payments of principal and interest which Pledgor is authorized to receive and retain pursuant to paragraph (ii) of this Section 2(d).

Section 3.               Pledgor’s Representations and Warranties.  Pledgor represents and warrants to Secured Party and the Lenders as follows:

(a)           The Pledged Collateral listed on the attached Schedule II has been duly authorized and validly issued and is fully paid and nonassessable.

(b)           Pledgor is the legal and beneficial owner of the Pledged Collateral free and clear of any Lien or option, except for (i) the security interest created by this Pledge Agreement and (ii) other Permitted Liens.

(c)           No authorization, authentication, approval, or other action by, and no notice to or filing with, any Governmental Authority or regulatory body is required either (i) for the pledge by Pledgor of the Pledged Collateral pursuant to this Pledge Agreement or for the execution, delivery, or performance of this Pledge Agreement by Pledgor (except to the extent that financing statements are required under the UCC to be filed in order to maintain a perfected security interest) or (ii) for the exercise by Secured Party or any Lender of the voting or other rights provided for in this Pledge Agreement or the remedies in respect of the Pledged Collateral pursuant to this Pledge Agreement (except

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as may be required in connection with such disposition by laws affecting the offering and sale of securities generally).

(d)           Pledgor has the full right, power and authority to deliver, pledge, assign and transfer the Pledged Collateral to Secured Party.

(e)           [The [Membership Interests][Partnership Interests] listed on the attached Schedule II constitute [100][1]% of the issued and outstanding [membership][general partnership] interests of the respective issuer thereof and all [Membership Interests][Partnership Interests] in which Pledgor has any ownership interest.][The Pledged Shares listed on the attached Schedule II constitute 100% of the issued and outstanding shares of capital stock of the respective issuer thereof and of the Pledged Shares in which Pledgor has any ownership interests.]

(f)            The name of Pledgor set forth in the first paragraph of this Pledge Agreement is the exact legal name of Pledgor.  The legal address of Pledgor and the address of its principal place of business and chief executive office is 6300 Bridge Point Parkway, Building 2, Suite 500, Austin, Texas 78730.  Pledgor keeps all records and documents relating to the Pledged Collateral at such address or with Nevada Corporate Management, Inc., 3773 Howard Hughes Parkway, Suite 300, North Las Vegas, Nevada 89109.

Section 4.               Pledgor’s Covenants.  During the term of this Pledge Agreement and until all of the Secured Obligations have been fully and finally paid and discharged in full, Pledgor covenants and agrees with Secured Party that:

(a)           Protect Collateral; Further Assurances.  Pledgor will warrant and defend the rights and title herein granted unto Secured Party in and to the Pledged Collateral (and all right, title, and interest represented by the Pledged Collateral) against the claims and demands of all Persons whomsoever.  Pledgor agrees that, at the expense of Pledgor, Pledgor will promptly execute and deliver all further instruments and documents, and take all further action, that may be reasonably necessary and that Secured Party or any Lender may reasonably request, in order to perfect and protect any security interest granted or purported to be granted hereby or to enable Secured Party or any Lender to exercise and enforce its rights and remedies hereunder with respect to any Pledged Collateral.

(b)           Transfer, Other Liens, and Additional Shares.  Pledgor agrees that it will not (i) sell or otherwise dispose of, or grant any option with respect to, any of the Pledged Collateral or (ii) create or permit to exist any Lien upon or with respect to any of the Pledged Collateral, except for (A) the Liens and security interest under this Pledge Agreement and (B) other Permitted Liens.  Pledgor agrees that it will (1) cause each issuer of the Pledged Collateral not to issue any other membership interests, partnership interests, capital stock or other securities in addition to or in substitution for the Pledged Collateral issued by such issuer, except to Pledgor and (2) pledge hereunder, immediately upon its acquisition (directly or indirectly) thereof, any additional membership interests, partnership interests, capital stock or other securities of an issuer of the Pledged

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Collateral.  Pledgor shall not approve any amendment or modification of any of the Pledged Collateral unless it shall have given at least ten Business Days’ prior written notice (or such lesser period as may be agreed by Secured Party in writing) to, and such amendment or modification would not be materially adverse to the interests of the Lenders.

(c)           Jurisdiction of Formation; Name Change.  Pledgor shall not (i) amend, supplement, modify or restate its articles or certificate of incorporation, bylaws, limited liability company agreements, or other equivalent organizational documents if such amendment, supplement, modification or restatement would be materially adverse to the interests of the Lenders, or (ii) unless the Pledgor shall have given Secured Party at least ten Business Days’ prior written notice (or such lesser period as may be agreed by Secured Party in writing), amend its name or change its jurisdiction of incorporation, organization or formation.  Promptly upon the request of Secured Party, Pledgor shall take all such action as Secured Party shall reasonably request to maintain the security interest of Secured Party in the Pledged Collateral granted hereby at all time fully perfected and in full force and effect.

Section 5.               Remedies upon Default.  If any Event of Default shall have occurred and be continuing:

(a)           UCC Remedies.  To the extent permitted by law, Secured Party may exercise in respect of the Pledged Collateral, in addition to other rights and remedies provided for in this Pledge Agreement or otherwise available to it, all the rights and remedies of a secured party under the UCC (whether or not the UCC applies to the affected Pledged Collateral).  This Pledge Agreement shall not be construed to authorize the Secured Party to take any action prohibited by the UCC or to constitute a waiver by the Pledgor of any right that the UCC does not permit the Pledgor to waive.

(b)           Dividends and Other Rights.

(i)            All rights of Pledgor to exercise the voting and other consensual rights which it would otherwise be entitled to exercise pursuant to Section 2(d)(i) may be exercised by Secured Party if Secured Party so elects and gives written notice of such election to Pledgor and all rights of Pledgor to receive the dividends and other distributions on or in respect of the Pledged Collateral and the proceeds of sale of the Pledged Collateral which it would otherwise be authorized to receive and retain pursuant to Section 2(d)(ii) shall cease at such time as such written notice is deemed effective pursuant to the provisions of the Credit Agreement related to effectiveness of notices.

(ii)           All dividends and other distributions on or in respect of the Pledged Collateral and the proceeds of sale of the Pledged Collateral that are thereafter received by Pledgor shall be received in trust for the benefit of Secured Party, shall be segregated from other funds of Pledgor, and shall be promptly paid over to Secured Party as Pledged Collateral in the same form as so received (with any necessary indorsement).

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(c)           Sale of Pledged Collateral. Secured Party may sell all or part of the Pledged Collateral at public or private sale, at any of Secured Party’s offices or elsewhere, for cash, on credit, or for future delivery, and upon such other terms as Secured Party may deem commercially reasonable in accordance with applicable laws.  Pledgor agrees that to the extent permitted by law such sales may be made without notice.  If notice is required by law, Pledgor hereby deems 10 days’ advance notice of the time and place of any public sale or the time after which any private sale is to be made reasonable notification, recognizing that if the Pledged Collateral threatens to decline speedily in value or is of a type customarily sold on a recognized market shorter notice may be reasonable.  Secured Party shall not be obligated to make any sale of the Pledged Collateral regardless of notice of sale having been given.  Secured Party may adjourn any public or private sale from time-to-time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.  Pledgor shall cooperate fully with Secured Party in all respects in selling or realizing upon all or any part of the Pledged Collateral.  In addition, Pledgor shall fully comply with the securities laws of the United States, the State of [Delaware][Nevada], and other states and take such actions as may be necessary to permit Secured Party to sell or otherwise dispose of any securities representing the Pledged Collateral in compliance with such laws.

(d)           Exempt Sale.  If, in the opinion of Secured Party, there is any question that a public or semipublic sale or distribution of any Pledged Collateral will violate any state or federal securities law, Secured Party in its discretion (i) may offer and sell securities privately to purchasers who will agree to take them for investment purposes and not with a view to distribution and who will agree to imposition of restrictive legends on the certificates representing the security, or (ii) may sell such securities in an intrastate offering under Section 3(a)(11) of the Securities Act of 1933, as amended, and no sale so made in good faith by Secured Party shall be deemed to be not “commercially reasonable” solely because so made.  Pledgor shall cooperate fully with Secured Party in all reasonable respects in selling or realizing upon all or any part of the Pledged Collateral.

(e)           Application of Collateral. The proceeds of any sale, or other realization upon all or any part of the Collateral pledged by Pledgor shall be applied by Secured Party as set forth in Section 7.06 of the Credit Agreement.

(f)            Cumulative Remedies.  Each right, power and remedy herein specifically granted to Secured Party or otherwise available to it shall be cumulative, and shall be in addition to every other right, power and remedy herein specifically given or now or hereafter existing at law, in equity, or otherwise, and each such right, power and remedy, whether specifically granted herein or otherwise existing, may be exercised at any time and from time-to-time as often and in such order as may be deemed expedient by Secured Party in its sole discretion.  No failure on the part of Secured Party to exercise, and no delay in exercising, and no course of dealing with respect to, any such right, power or remedy, shall operate as a waiver thereof, nor shall any single or partial exercise of any such rights, power or remedy preclude any other or further exercise thereof or the exercise of any other right.

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Section 6.               Secured Party as Attorney-in-Fact for Pledgor.

(a)           Secured Party Appointed Attorney-in-Fact.  Pledgor hereby irrevocably appoints Secured Party as Pledgor’s attorney-in-fact, with full authority after the occurrence and during the continuance of an Event of Default to act for Pledgor and in the name of Pledgor, and, in Secured Party’s discretion, subject to Pledgor’s revocable rights specified in Section 2(d), to take any action and to execute any instrument which Secured Party may deem necessary or advisable to accomplish the purposes of this Pledge Agreement, including, without limitation, to receive, indorse, and collect all instruments made payable to Pledgor representing the proceeds of the sale of the Pledged Collateral, or any distribution in respect of the Pledged Collateral and to give full discharge for the same.  Pledgor hereby acknowledges, consents and agrees that the power of attorney granted pursuant to this Section is irrevocable and coupled with an interest.

(b)           Secured Party May Perform. Secured Party may from time-to-time, at its option and expense, perform any act which Pledgor agrees hereunder to perform and which Pledgor shall fail to perform after being requested in writing so to perform (it being understood that no such request need be given after the occurrence and during the continuance of any Event of Default and after notice thereof by Secured Party to Pledgor) and Secured Party may from time-to-time take any other action which Secured Party reasonably deems necessary for the maintenance, preservation or protection of any of the Pledged Collateral or of its security interest therein.  Secured Party shall be obligated to provide notice to Pledgor of any action taken hereunder by telecopy or by registered mail.

(c)           Secured Party Has No Duty.  The powers conferred on Secured Party hereunder are solely to protect its interest in the Pledged Collateral and shall not impose any duty on it to exercise any such powers.  Except for reasonable care of any Pledged Collateral in its possession and the accounting for moneys actually received by it hereunder, Secured Party shall have no duty as to any Pledged Collateral or responsibility for taking any necessary steps to preserve rights against prior parties or any other rights pertaining to any Pledged Collateral.

(d)           Reasonable Care.  Secured Party shall be deemed to have exercised reasonable care in the custody and preservation of the Pledged Collateral in its possession if the Pledged Collateral is accorded treatment substantially equal to that which Secured Party accords its own property, it being understood that Secured Party shall have no responsibility for (i) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders, or other matters relative to any Pledged Collateral, whether or not Secured Party has or is deemed to have knowledge of such matters, or (ii) taking any necessary steps to preserve rights against any parties with respect to any Pledged Collateral.

Section 7.               Miscellaneous.

(a)           Expenses.  Pledgor will upon demand pay to Secured Party for its benefit and the benefit of the Lenders the amount of any reasonable out-of-pocket expenses,

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including the reasonable fees and disbursements of its counsel and of any experts, which Secured Party and the Lenders may incur in connection with (i) the custody, preservation, use, or operation of, or the sale, collection, or other realization of, any of the Pledged Collateral, (ii) the exercise or enforcement of any of the rights of Secured Party or any Lender hereunder, and (iii) the failure by Pledgor to perform or observe any of the provisions hereof.

(b)           Amendments, Etc.  No amendment or waiver of any provision of this Pledge Agreement nor consent to any departure by Pledgor herefrom shall be effective unless made in writing and authenticated by Pledgor and Secured Party.  In addition, no such amendment or waiver shall be effective unless given or entered into with the necessary approvals of the Lenders as required in the Credit Agreement.  Any such waiver or consent, whether by Secured Party or Secured Party and the Lenders shall be effective only in the specific instance and for the specific purpose for which given.

(c)           Addresses for Notices.  All notices and other communications provided for hereunder shall be in the manner and to the addresses set forth in the Credit Agreement.

(d)           Continuing Security Interest; Transfer of Interest.  This Pledge Agreement shall create a continuing security interest in the Pledged Collateral and, unless expressly released by Secured Party, shall (i) remain in full force and effect until payment in full and termination of the Secured Obligations, (ii) be binding upon Pledgor, Secured Party, the Lenders and their successors, and assigns, and (iii) inure, together with the rights and remedies of Secured Party hereunder, to the benefit of and be binding upon, Secured Party, the Lenders and their respective successors, transferees, and assigns.  Upon the payment in full and termination of the Secured Obligations, the security interest granted hereby shall terminate and all rights to the Pledged Collateral shall revert to Pledgor to the extent such Pledged Collateral shall not have been sold or otherwise applied pursuant to the terms hereof.  Without limiting the generality of the foregoing clause, when any Lender assigns or otherwise transfers any interest held by it under the Credit Agreement or other Loan Document to any other Person pursuant to the terms of the Credit Agreement or other Loan Document, that other Person shall thereupon become vested with all the benefits held by such Lender under this Pledge Agreement.  Upon any such termination, Secured Party will, at Pledgor’s expense, deliver all Pledged Collateral to Pledgor, execute and deliver to Pledgor such documents as Pledgor shall reasonably request and take any other actions reasonably requested to evidence or effect such termination.

(e)           Waivers.  Pledgor hereby waives:

(i)            promptness, diligence, notice of acceptance, and any other notice with respect to any of the Secured Obligations and this Pledge Agreement;

(ii)           any requirement that Secured Party or any Lender protect, secure, perfect, or insure any Lien or any Property subject thereto or exhaust any right or

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take any action against Pledgor, any other Guarantor, Borrower or any other Person or any collateral; and

(iii)          any duty on the part of Secured Party to disclose to Pledgor any matter, fact, or thing relating to the business, operation, or condition of Pledgor, any other Guarantor, Borrower and their respective assets now known or hereafter known by such Person.

(f)            Severability.  Wherever possible each provision of this Pledge Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Pledge Agreement shall be prohibited by or invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Pledge Agreement.

(g)           Choice of Law.  This Pledge Agreement shall be governed by and construed and enforced in accordance with the laws of the state of New York, except to the extent that the validity or perfection of the security interests hereunder, or remedies hereunder, in respect of any particular Collateral are governed by the laws of a jurisdiction other than the state of New York.

(h)           Counterparts.  For the convenience of the parties, this Pledge Agreement may be executed in multiple counterparts, each of which for all purposes shall be deemed to be an original, and all such counterparts shall together constitute but one and the same Pledge Agreement.

(i)            Reinstatement.  If, at any time after payment in full by Pledgor of all Secured Obligations and termination of Secured Party’s security interest, any payments on the Secured Obligations previously made by Pledgor or any other person must be disgorged by Secured Party for any reason whatsoever, including, without limitation, the insolvency, bankruptcy or reorganization of Pledgor or such Person, this Pledge Agreement and Secured Party’s security interests herein shall be reinstated as to all disgorged payments as though such payments had not been made, and Pledgor shall sign and deliver to Secured Party all documents, and shall do such other acts and things, as may be necessary to reinstate and perfect Secured Party’s security interest.

(j)            Amendment and Restatement.  This Pledge Agreement amends and restates in its entirety the Existing Security Documents, and all of the terms hereof shall supersede the terms and provisions thereof.  This Pledge Agreement renews and extends all Liens existing by virtue of the Existing Security Documents, but the terms, provisions and conditions of such Liens shall hereafter be governed in all respects by this Pledge Agreement.

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Executed as of the date first above written.

BRIGHAM EXPLORATION COMPANY

By:

Name:

Title:

BRIGHAM, INC.

By:

Name:

Title:

BRIGHAM OIL & GAS, L.P.

By:      Bringham, Inc., its General Partner

By:

Name:

Title:

SOCIETE GENERALE, as Administrative Agent

By:

Name:

Title:

SCHEDULE I

EXISTING SECURITY DOCUMENTS

SCHEDULE II

PLEDGED COLLATERAL

EXHIBIT H

FORM OF AMENDED AND RESTATED SECURITY AGREEMENT

This Amended and Restated Security Agreement dated as of March 21, 2003 (“Security Agreement”) is by and between [Brigham Oil & Gas, L.P., a Delaware limited partnership][insert name and jurisdiction of formation of subsidiary of other grantor] (“Grantor”), and Société Générale, as administrative agent for the Lenders party to the Credit Agreement described below (“Secured Party”).

INTRODUCTION

A.            [Brigham Oil & Gas, L.P., a Delaware limited partnership (“Borrower”)] [Grantor], the lenders party thereto, and Bank of Montreal, as agent for such lenders (the “Existing Agent”), were parties to that certain Amended and Restated Credit Agreement dated February 17, 2000, as amended (the “Existing Credit Agreement”).

B.            In order to secure the full and punctual payment and performance of the obligations under the Existing Credit Agreement and the other loan documents contemplated thereby, the Grantor executed and delivered the security instruments described on Schedule I attached hereto (the “Existing Security Documents”) in favor of the Existing Agent and has granted a continuing security interest in and to the Collateral (as hereafter defined).

C.            The Secured Party has replaced the Existing Agent as the administrative agent under the Existing Credit Agreement.

D.            [The Borrower] [Grantor], [Brigham Exploration Company, a Delaware corporation], [Brigham, Inc., a Nevada corporation], the lenders named therein (the “Lenders”) and Secured Party, as agent for the Lenders, have entered into the Second Amended and Restated Credit Agreement dated as of March 21, 2003 (as amended, restated or otherwise modified from time-to-time, the “Credit Agreement”), which, among other things, amends and restates the Existing Credit Agreement in its entirety.

[E.           Grantor has guaranteed the Obligations of Borrower under the Credit Agreement pursuant to Article VIII thereof (the “Guaranty”).]

F.             Under the Credit Agreement, it is a condition to the making of Advances by the Lenders that [Grantor][Borrower] shall amend and restate the Existing Security Documents to secure its [obligations under the Guaranty][Obligations under the Credit Agreement] by entering into this Pledge Agreement.

Therefore, Grantor hereby agrees with Secured Party for its benefit and the ratable benefit of the Lenders as follows:

Section 1.               Definitions.  All capitalized terms not otherwise defined in this Security Agreement that are defined in the Credit Agreement shall have the meaning assigned to such terms by the Credit Agreement.  Any capitalized terms used in this Security Agreement that are defined in Article 9 of the Uniform Commercial Code as adopted in the State of New York

(“UCC”) shall have the meanings assigned to those terms by the UCC as of the date of this Security Agreement, whether specified elsewhere in this Security Agreement or not.  All other rules of interpretation set forth in Section 1.05 of the Credit Agreement shall apply to this Pledge Agreement and are hereby incorporated herein by reference.

Section 2.               Security Interest.

(a)           Grant of Security Interest.  Grantor hereby grants to Secured Party for its benefit and the ratable benefit of the Lenders a lien on and security interest in the Collateral (as defined in Section 2(b) below) to secure the performance and payment of all Obligations of Grantor now or hereafter existing under the [Credit Agreement, the Notes][the Guaranty] and the other Loan Documents to which it is a party, including any extensions, modifications, substitutions, amendments and renewals thereof, whether for principal, interest, fees, expenses, indemnification, or otherwise, in each case including the payment of amounts which would become due but for the operation of the automatic stay under Section 362(a) of the United States Bankruptcy Code, 11 U.S.C. §§ 101 et seq., as amended..  All such obligations shall be referred to in this Security Agreement as the “Secured Obligations”.

(b)           Collateral.  “Collateral” shall mean all of Grantor’s right, title, and interest in the following, whether now owned or hereafter acquired:

(i)            Accounts.  All Accounts and all other rights to payment owing or to be owing to Grantor, including all Instruments, Documents and Chattel Paper that represent any right of Grantor to payment for Property sold or leased or for services rendered, whether or not it has been earned by performance (all such Accounts, Instruments, Documents and Chattel Paper being the “Receivables”);

(ii)           Equipment.  All Equipment, and all parts thereof and all accessions and additions thereto;

(iii)          General Intangibles.  All General Intangibles or contract rights relating to, or existing in connection with, the other Collateral (all such General Intangibles and contract rights being the “General Intangibles”);

(iv)          Inventory.  All Inventory, including, without limitation, all Goods, whether such Goods are in possession of Grantor or of a bailee or other Person for sale, lease, storage, transit, processing, use or otherwise;

(v)           Records.  All ledger sheets, files, Records, and documents relating to the foregoing Collateral; and

(vi)          Proceeds.  All Proceeds of the foregoing Collateral and, to the extent not otherwise included, all payments under any insurance, indemnity, warranty, or guaranty of or for the foregoing Collateral.

Section 3.               Representations and Warranties.  Grantor hereby represents and warrants the following to Secured Party and the Lenders:

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(a)           Ownership of Collateral; Liens.  Grantor is, and will be the record and beneficial owner of all Collateral pledged by Grantor free and clear of any Lien, except for Liens created hereby or other Permitted Liens.  No effective financing statement or other instrument similar in effect covering all or any part of the Collateral is, or will be on file in any recording office, except such as may be filed in connection with this Security Agreement or in connection with other Permitted Liens or for which satisfactory releases have been received by Secured Party.  The execution, delivery and performance by Grantor of this Security Agreement and the grant of the security interest in the Collateral to Secured Party are within Grantor’s powers and have been duly authorized by all necessary governing action.

(b)           Authorization and Approvals.  No consent, order, authorization, or approval or other action by, and no notice to or filing with, any Governmental Authority (other than the filing of financing statements) or any other Person is required for (i) the due execution, delivery and performance by Grantor of this Security Agreement, (ii) the grant by Grantor of the security interest in the Collateral granted by this Security Agreement, (iii) the perfection of such security interest or (iv) the exercise by Secured Party or any Lender of its rights and remedies under this Security Agreement (except as may be required in connection with such disposition by laws affecting the offering and sale of securities generally).

(c)           Lien Priority and Perfection.  On the Closing Date this Security Agreement will create valid and continuing security interests in the Collateral, securing the payment of the Secured Obligations.  Upon the filing of financing statements in the office(s) set forth on Schedule II attached hereto, the security interests granted to Secured Party hereunder will constitute valid first-priority perfected security interests in all Collateral with respect to which a security interest can be perfected by the filing of a financing statement, subject only to Permitted Liens.

(d)           Legal Name; Address; Location of Records.  The name of Grantor set forth in the first paragraph of this Security Agreement is the exact legal name of Grantor.  The legal address of Grantor and the address of Grantor’s principal place of business and chief executive office is 6300 Bridge Point Parkway, Building 2, Suite 500, Austin, Texas 78730.  Grantor keeps all records and documents relating to the Collateral at such address.

Section 4.               Grantor Covenants.

(a)           Further Assurances.  Grantor agrees that at any time, at Grantor’s expense, Grantor will promptly execute and deliver all further instruments and documents, and take all further action, that may be reasonably necessary or that Secured Party or any Lender may reasonably request, in order to perfect and protect any security interest granted or purported to be granted hereby or to enable Secured Party or any Lender to exercise and enforce its rights and remedies hereunder with respect to any Collateral.  Without limiting the generality of the foregoing, Grantor will at Secured Party’s request:

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(i)            with respect to any of the Collateral that is evidenced by a promissory note or other Instrument or by Chattel Paper and if, in the case of any such instrument, its value exceeds $100,000, deliver and pledge to the Administrative Agent such note, Instrument or Chattel Paper, duly indorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to the Administrative Agent; and

(ii)           file (or authorize the filing of) such financing or continuation statements, or amendments thereto, and such other instruments or notices as may be reasonably necessary, or as Secured Party may reasonably request, in order to perfect and preserve the security interests granted or purported to be granted hereby.

(b)           Insurance.

(i)            Grantor shall, at its own expense, maintain, or cause to be maintained, insurance with respect to the Collateral owned by Grantor in such amounts, against such risks, in such form, and with such insurers, as the Credit Agreement requires.  Further, Grantor shall deliver certificates of insurance as the Credit Agreement requires.

(ii)           During the continuance of any Event of Default, all loss casualty insurance payments in respect to such Collateral shall be paid to and applied by Secured Party as specified in the Credit Agreement.

(c)           Jurisdiction of Formation; Name Change.  Grantor shall not (i) amend, supplement, modify or restate its articles or certificate of incorporation, bylaws, limited liability company agreements, or other equivalent organizational documents if such amendment, supplement, modification or restatement would be materially adverse to the interests of the Lenders, or (ii) unless the Grantor shall have given Secured Party at least ten Business Days’ prior written notice (or such lesser period as may be agreed by Secured Party in writing), amend its name or change its jurisdiction of incorporation, organization or formation.  Promptly upon the request of Secured Party, Grantor shall take all such action as Secured Party shall reasonably request to maintain the security interest of Secured Party in the Collateral granted hereby at all time fully perfected and in full force and effect.

(d)           Right of Inspection.  Grantor will hold and preserve, at its own cost and expense satisfactory and complete records of the Collateral, including, but not limited to, Instruments, Documents, Chattel Paper, contracts, and Records with respect to the Receivables.

(e)           Liability Under Contracts and Receivables.  Notwithstanding anything in this Security Agreement to the contrary,

(i)            the execution of this Security Agreement shall not release Grantor from its obligations and duties under the contracts and agreements and Receivables included in the Collateral to the extent set forth therein,

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(ii)           the exercise by Secured Party of any of its rights hereunder shall not release Grantor from any of its duties or obligations under the contracts and agreements and the Receivables included in the Collateral, and

(iii)          Secured Party shall not have any obligation or liability under the contracts and agreements and the Receivables included in the Collateral by reason of the execution and delivery of this Security Agreement, nor shall Secured Party be obligated to perform any of the obligations or duties of Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

(f)            Transfer of Certain Collateral; Release of Certain Security Interest.  Grantor agrees that it shall not sell, assign, or otherwise dispose of any Collateral except as otherwise permitted under the Credit Agreement.  Secured Party shall promptly, at Grantor’s expense, execute and deliver all further instruments and documents, and take all further action that Grantor may reasonably request in order to release its security interest in any Collateral that is disposed of in accordance with the terms of the Credit Agreement.

(g)           Receivables.  Grantor agrees that it will use commercially reasonable efforts to ensure that each Receivable:

(i)            is and will be, in all material respects, the genuine, legal, valid, and binding obligations of the Account Debtor in respect thereof, representing an unsatisfied obligation of such Account Debtor (except to the extent compromised or settled in the ordinary course of business),

(ii)           is and will be, in all material respects, enforceable in accordance with its terms, is not and will not be subject to any setoffs, defenses, taxes, counterclaims, except in the ordinary course of business,

(iii)          is and will be, in all material respects, in compliance with all applicable Legal Requirements, whether federal, state, local or foreign, and

(iv)          that if evidenced by Chattel Paper, will not require the consent of the account debtor in respect thereof in connection with its assignment hereunder.

Section 5.               Remedies.  If any Event of Default shall have occurred and be continuing:

(a)           UCC Remedies.

(i)            To the extent permitted by law, Secured Party may exercise in respect of the Collateral, in addition to other rights and remedies provided for in this Security Agreement or otherwise available to it, all the rights and remedies of a secured party under the UCC (whether or not the UCC applies to the affected Collateral).  This Security Agreement shall not be construed to authorize the Secured Party to take any action prohibited by the UCC or to constitute a waiver by the Grantor of any right that the UCC does not permit the Grantor to waive.

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(ii)           Upon written notice to Grantor, all payments received by Grantor under or in connection with or in respect of the Collateral shall be deposited with Secured Party.

(b)           Assembly of Collateral.  Secured Party may, in its reasonable discretion, require Grantor to, at Grantor’s expense, promptly assemble all or part of the Collateral in such locations as Grantor and Secured Party may agree at such time and that is reasonably convenient to both parties, and make it available to Secured Party at such locations.  Secured Party may occupy any premises owned or leased by Grantor where the Collateral or any part thereof is assembled for a reasonable period in order to effectuate its rights and remedies hereunder or under law, without obligation to Grantor in respect of such occupation.

(c)           Sale of Collateral.  Secured Party may sell all or part of the Collateral at a public or private sale, at any of Secured Party’s offices or elsewhere, for cash, on credit, or for future delivery, and upon such other terms as Secured Party may deem commercially reasonable.  Secured Party shall give Grantor 10 days advance notice of the time and place of any public sale or the time after which any private sale is to be made reasonable notification, recognizing that if the Collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market shorter notice may be reasonable.  Secured Party shall not be obligated to make any sale of Collateral regardless of notice of sale having been given.  Secured Party may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.

(d)           Contract Rights.  Secured Party may exercise any rights and remedies of Grantor under or in connection with the Instruments, Documents, Chattel Paper, or contracts which represent Receivables, the General Intangibles, or otherwise relate to the Collateral, including, without limitation, any rights of Grantor to demand or otherwise require payment of any amount under, or performance of any provisions of, the Instruments, Documents, Chattel Paper, or contracts which represent Receivables or the General Intangibles.

(e)           Receivables.

(i)            Secured Party may, or may direct Grantor to, take any action Secured Party deems necessary or advisable to enforce collection of the Receivables including, without limitation, notifying the Account Debtors or obligors under any Receivables of the assignment of such Receivables to Secured Party and directing such Account Debtors or obligors to make payment of all amounts due or to become due directly to Secured Party.  Upon such notification and direction, and at the expense of Grantor, Secured Party may enforce collection of any such Receivables, and adjust, settle, or compromise the amount or payment thereof in the same manner and to the same extent as Grantor might have done.

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(ii)           After receipt by Grantor of the notice referred to in subparagraph (i) above, all amounts and Proceeds (including Instruments) received by Grantor in respect of the Receivables shall be received in trust for the benefit of Secured Party hereunder, shall be segregated from other funds of Grantor, and shall promptly be paid over to Secured Party in the same form as so received (with any necessary indorsement) to be held as Collateral.  Grantor shall not adjust, settle, or compromise the amount or payment of any Receivable, or release wholly or partly any Account Debtor or obligor thereof, or allow any credit or discount thereon other than in the ordinary course of business and consistent with past practices.

Section 6.Application of Collateral.  The proceeds of any sale, or other realization upon all or any part of the Collateral pledged by Grantor shall be applied by Secured Party in the order set forth in Section 7.06 of the Credit Agreement.

Section 7.Secured Party as Attorney-in-Fact for Grantor.

(a)           Attorney-In-Fact.  Grantor hereby irrevocably appoints Secured Party as Grantor’s attorney-in-fact, with full authority after the occurrence and during the continuance of an Event of Default to act for Grantor and in the name of Grantor to, in Secured Party’s discretion:

(i)            file one or more financing or continuation statements, and amendments thereto, relative to all or any part of the Collateral;

(ii)           to obtain and adjust insurance as required pursuant to Section 5.02 of the Credit Agreement to the extent Grantor has failed to provide such insurance;

(iii)          to receive, indorse, and collect any drafts or other Instruments, Documents, and Chattel Paper which are part of the Collateral pledged by Grantor;

(iv)          to take or cause to be taken, all actions necessary to perform or comply or cause performance or compliance with the terms of this Security Agreement, including, without limitation, actions to pay or discharge taxes and Liens levied or placed on or threatened against the Collateral;

(v)           to ask, demand, collect, sue for, recover, compromise, receive, and give acquittance and receipts for moneys due and to become due under or in respect of any of the Collateral pledged by Grantor and to file any claims or take any action or institute any proceedings which Secured Party may deem necessary or desirable for the collection of any of such Collateral or otherwise to enforce the rights of Secured Party with respect to any of such Collateral.

The power of attorney granted hereby is coupled with an interest and is irrevocable.

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(b)           Secured Party May Perform.  Secured Party may from time-to-time, at its option and expense, perform any act which Grantor agrees hereunder to perform and which Grantor shall fail to perform after being requested in writing so to perform (it being understood that no such request need be given after the occurrence and during the continuance of any Event of Default) and Secured Party may from time-to-time take any other action which Secured Party reasonably deems necessary for the maintenance, preservation or protection of any of the Collateral or of its security interest therein.

(c)           Secured Party Has No Duty.  The powers conferred on Secured Party hereunder are solely to protect its interest in the Collateral and shall not impose any duty on it to exercise any such powers.  Except for reasonable care of any Collateral in its possession and the accounting for moneys actually received by it hereunder, Secured Party shall have no duty as to any Collateral or responsibility for taking any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral.

(d)           Reasonable Care.  Secured Party shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which Secured Party accords its own Property, it being understood that Secured Party shall have no responsibility for taking any necessary steps to preserve rights against any parties with respect to any Collateral.

Section 8.               Miscellaneous.

(a)           Expenses.  Grantor will upon demand pay to Secured Party for its benefit and the benefit of the Lenders the amount of any reasonable out-of-pocket expenses, including the reasonable fees and disbursements of its counsel and of any experts, which Secured Party and the Lenders may incur in connection with:

(i)            the custody, preservation, use, or operation of, or the sale, collection, or other realization of, any of the Collateral,

(ii)           the exercise or enforcement of any of the rights of Secured Party or any Lender hereunder, and

(iii)          the failure by Grantor to perform or observe any of the provisions hereof.

(b)           Amendments; Etc.  No amendment or waiver of any provision of this Security Agreement nor consent to any departure by Grantor herefrom shall be effective unless made in writing and authenticated by Grantor and Secured Party.  In addition, no such amendment or waiver shall be effective unless given or entered into with the necessary approvals of the Lenders as required in the Credit Agreement.  Any such waiver or consent, whether by Secured Party or Secured Party and the Lenders shall be effective only in the specific instance and for the specific purpose for which given.

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(c)           Addresses for Notices.  All notices and other communications provided for hereunder shall be made in the manner and to the addresses set forth in the Credit Agreement.

(d)           Continuing Security Interest; Transfer of Interest.  This Security Agreement shall create a continuing security interest in the Collateral and, unless expressly released by Secured Party, shall:

(i)            remain in full force and effect until payment in full and termination of the Secured Obligations,

(ii)           be binding upon Grantor, Secured Party, the Lenders and their successors, and assigns, and

(iii)          inure, together with the rights and remedies of Secured Party, hereunder, to the benefit of Secured Party, the Lenders and their respective successors, transferees, and assigns.

Upon the payment in full and termination of the Secured Obligations, the security interest granted hereby shall terminate and all rights to the Collateral pledged by Grantor shall revert to Grantor to the extent such Collateral shall not have been sold or otherwise applied pursuant to the terms hereof.  Without limiting the generality of the foregoing clause, when any Lender assigns or otherwise transfers any interest held by it under the Credit Agreement or other Loan Document to any other Person pursuant to the terms of the Credit Agreement or other Loan Document, that other Person shall thereupon become vested with all the benefits held by such Lender under this Security Agreement.  Upon any such termination, Secured Party will, at Grantor’s expense, execute and deliver to Grantor such documents as Grantor shall reasonably request and take any other actions reasonably requested to evidence or effect such termination.

(e)           Severability.  Wherever possible each provision of this Security Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Security Agreement shall be prohibited by or invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Security Agreement.

(f)            Choice of Law.  This Security Agreement shall be governed by and construed and enforced in accordance with the laws of the state of New York, except to the extent that the validity or perfection of the security interests hereunder, or remedies hereunder, in respect of any particular Collateral are governed by the laws of a jurisdiction other than the state of New York.

(g)           Amendment and Restatement.  This Security Agreement amends and restates in its entirety the Existing Security Documents, and all of the terms hereof shall supersede the terms and provisions thereof.  This Security Agreement renews and extends all Liens existing by virtue of the Existing Security Documents, but the terms, provisions

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and conditions of such Liens shall hereafter be governed in all respects by this Security Agreement.

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IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement to be duly executed as of the date first above written.

GRANTOR:
[BRIGHAM OIL & GAS, L.P., a Delaware limited partnership
By:	Brigham, Inc., its general partner]
	By:
	Name:
	Title:
SECURED PARTY:
SOCIÉTÉ GÉNÉRALE, as Administrative Agent for the ratable benefit of the Lenders
By:
Name:
Title:

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SCHEDULE I

EXISTING SECURITY DOCUMENTS

SCHEDULE II

UCC FILING LOCATIONS

EX-10.54

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Exhibit 10.54

$20,000,000

AMENDED AND RESTATED SUBORDINATED CREDIT AGREEMENT

among

BRIGHAM OIL & GAS, L.P.,

as the Borrower,

BRIGHAM EXPLORATION COMPANY,
and
BRIGHAM, INC.,

as Guarantors,

THE LENDERS PARTY HERETO FROM TIME TO TIME

as Lenders,

and

THE ROYAL BANK OF SCOTLAND plc,

as Agent,

March 21, 2003

TABLE OF CONTENTS

		Page
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS		1
	Section 1.01 Certain Defined Terms	1
	Section 1.02 Computation of Time Periods	13
	Section 1.03 Accounting Terms; Changes in GAAP	13
	Section 1.04 Miscellaneous	13
ARTICLE II CREDIT FACILITIES		14
	Section 2.01 Advances.	14
	Section 2.02 Intentionally Omitted.	14
	Section 2.03 Intentionally Omitted.	14
	Section 2.04 Reduction of the Commitments.	14
	Section 2.05 Prepayment of Advances.	15
	Section 2.06 Repayment of Advances	15
	Section 2.07 Intentionally Omitted.	15
	Section 2.08 Intentionally Omitted.	15
	Section 2.09 Interest.	15
	Section 2.10 Payments and Computations.	16
	Section 2.11 Sharing of Payments, Etc	17
	Section 2.12 Intentionally Omitted.	17
	Section 2.13 Increased Costs	17
	Section 2.14 Taxes.	18
ARTICLE III CONDITIONS OF LENDING		19
	Section 3.01 Conditions Precedent to Closing Date	19
	Section 3.02 Conditions Precedent to All Borrowings	22
ARTICLE IV REPRESENTATIONS AND WARRANTIES		22
	Section 4.01 Corporate Existence; Subsidiaries	22
	Section 4.02 Corporate Power	22
	Section 4.03 Authorization and Approvals	23
	Section 4.04 Enforceable Obligations	23
	Section 4.05 Financial Statements.	23
	Section 4.06 True and Complete Disclosure	23
	Section 4.07 Litigation	23
	Section 4.08 Taxes.	24
	Section 4.09 Pension Plans	24
	Section 4.10 Condition of Property; Casualties.	25
	Section 4.11 Security Instruments.	26
	Section 4.12 No Burdensome Restrictions; No Defaults.	27
	Section 4.13 Environmental Condition	27
	Section 4.14 Gas Contracts	28
	Section 4.15 Compliance with Laws	28
	Section 4.16 Hedging Agreements	28
	Section 4.17 Material Agreements	28
	Section 4.18 Organizational Documents	29
	Section 4.19 Guarantors	29
	Section 4.20 Insurance	29

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	Section 4.21 Use of Proceeds	29
	Section 4.22 Investment Company Act	29
	Section 4.23 Public Utility Holding Company Act	29
	Section 4.24 Transmitting Utility	29
ARTICLE V AFFIRMATIVE COVENANTS		29
	Section 5.01 Compliance with Laws, Etc	29
	Section 5.02 Maintenance of Insurance.	29
	Section 5.03 Preservation of Corporate Existence, Etc	30
	Section 5.04 Payment of Taxes, Etc	30
	Section 5.05 Inspection; Books and Records	30
	Section 5.06 Reporting Requirements	30
	Section 5.07 Maintenance of Property	33
	Section 5.08 Environmental Laws	33
	Section 5.09 Payment of Trade Payables	33
	Section 5.10 Use of Proceeds	33
	Section 5.11 Additional Collateral	33
	Section 5.12 New Subsidiaries	34
	Section 5.13 Title	34
	Section 5.14 Further Assurances	34
ARTICLE VI NEGATIVE COVENANTS		35
	Section 6.01 Liens, Etc	35
	Section 6.02 Debts, Guaranties, and Other Obligations	35
	Section 6.03 Agreements Restricting Liens and Distributions	36
	Section 6.04 Merger or Consolidation	36
	Section 6.05 Sales of Assets	37
	Section 6.06 Restricted Payments	37
	Section 6.07 Investments and Acquisitions.	37
	Section 6.08 Affiliate Transactions	37
	Section 6.09 Compliance with ERISA	37
	Section 6.10 Sales and Leasebacks	38
	Section 6.11 Change of Business	38
	Section 6.12 Use of Proceeds	38
	Section 6.13 Gas Imbalances, Take-or-Pay or Other Prepayments	38
	Section 6.14 Additional Subsidiaries	39
	Section 6.15 Limitation on Leases	39
	Section 6.16 Environmental Matters	39
	Section 6.17 Borrower as Operator	39
	Section 6.18 Equity Interests of Partners	39
	Section 6.19 Speculative Trading	39
	Section 6.20 Change of Name; Fiscal Year; Accounting Method	39
	Section 6.21 Current Ratio	40
	Section 6.22 Interest Coverage Ratio	40
	Section 6.23 Restrictions on Limited Partners	40
	Section 6.24 Advance Payment Contracts	40
ARTICLE VII EVENTS OF DEFAULT; REMEDIES		40
	Section 7.01 Events of Default	40
	Section 7.02 Optional Acceleration of Maturity	41
	Section 7.03 Automatic Acceleration of Maturity	42

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	Section 7.04 Right of Set off		42
	Section 7.05 Non-exclusivity of Remedies		42
	Section 7.06 Application of Proceeds		42
ARTICLE VIII THE GUARANTY			43
	Section 8.01 Liabilities Guaranteed		43
	Section 8.02 Nature of Guaranty		43
	Section 8.03 Agent's Rights		43
	Section 8.04 Guarantor's Waivers.		43
	Section 8.05 Maturity of Obligations, Payment		44
	Section 8.06 Agent's Expenses		44
	Section 8.07 Liability		44
	Section 8.08 Events and Circumstances Not Reducing or Discharging any Guarantor's Obligations		44
	Section 8.09 Subordination of All Guarantor Claims		46
	Section 8.10 Claims in Bankruptcy		46
	Section 8.11 Payments Held in Trust		47
	Section 8.12 Liens Subordinate		47
	Section 8.13 Guarantor's Enforcement Rights		47
ARTICLE IX THE AGENT			47
	Section 9.01 Authorization and Action		47
	Section 9.02 Agent's Reliance, Etc		47
	Section 9.03 The Agent and Its Affiliates		48
	Section 9.04 Lender Credit Decision		48
	Section 9.05 Indemnification		48
	Section 9.06 Successor Agent		49
	Section 9.07 Collateral Matters.		49
ARTICLE X MISCELLANEOUS			50
	Section 10.01 Amendments, Etc		50
	Section 10.02 Notices, Etc		50
	Section 10.03 No Waiver; Remedies		51
	Section 10.04 Costs and Expenses		51
	Section 10.05 Binding Effect		51
	Section 10.06 Lender Assignments and Participations		51
	Section 10.07 Indemnification		53
	Section 10.08 Execution in Counterparts		53
	Section 10.09 Survival of Representations, Etc		53
	Section 10.10 Severability		53
	Section 10.11 Governing Law		53
	Section 10.12 Submission To Jurisdiction; Waivers		54
	Section 10.13 Waiver of Jury Trial		54
	Section 10.14 Oral Agreements		54
	Section 10.15 Dissemination of Information		55
	Section 10.16 Production Proceeds		55
	Section 10.17 Amendment and Restatement		55
		EXHIBITS
		EXHIBIT A Form of Assignment and Acceptance
		EXHIBIT B Form of Compliance Certificate

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EXHIBIT C [Reserved]

EXHIBIT D [Reserved]

EXHIBIT E Form of Subordinated Note

EXHIBIT F Form of Second Mortgage Amendment

EXHIBIT G Form of Second Pledge Agreement

EXHIBIT H Form of Second Security Agreement

SCHEDULES

SCHEDULE 1 Notice Information, Commitments

SCHEDULE 1.01 Preferred Shareholders

SCHEDULE 4.01 Subsidiaries

SCHEDULE 4.07 Litigation

SCHEDULE 4.10 Title

SCHEDULE 4.14 Gas Contracts

SCHEDULE 4.16 Hedging Agreements

SCHEDULE 4.17 Material Agreements

SCHEDULE 6.01 Permitted Liens

SCHEDULE 6.02 Debt

SCHEDULE 6.02(i) Additional Permitted Debt

SCHEDULE 6.07 Permitted Investments

iv

AMENDED AND RESTATED SUBORDINATED CREDIT AGREEMENT

        THIS AMENDED AND RESTATED SUBORDINATED CREDIT AGREEMENT dated as of March 21, 2003 is 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 hereto from time to time (the "Lenders"), and THE ROYAL BANK OF SCOTLAND plc, as agent (in such capacity, the "Agent").

INTRODUCTION

        A.    The Borrower, the lenders party thereto, and The Royal Bank of Scotland plc, as agent, are parties to that certain Subordinated Credit Agreement dated October 31, 2000, as amended on or before the date hereof (the "Existing Subordinated Credit Agreement").

        B.    The Borrower, the Lenders and the Agent desire to refinance the indebtedness and obligations arising under the Existing Subordinated Credit Agreement, and the indebtedness and liens arising under the Existing Subordinated Credit Agreement shall be assigned to the Agent and the Lenders pursuant hereto, so that all indebtedness and obligations arising hereunder shall be secured by such liens and security interests as were created pursuant to the Existing Subordinated Credit Agreement and such other liens as provided for herein, and the terms of the Borrower's financing shall hereafter be amended and restated in its entirety as set forth herein.

        C.    Reference is made to that certain Second Amended and Restated Credit Agreement dated as of the date hereof (the "Senior Credit Agreement") among the Borrower, Brigham Exploration, the General Partner, the lenders party thereto from time to time (the "Senior Lenders"), Société Générale, as lead arranger (the "Lead Arranger"), as administrative agent for the Senior Lenders (the "Senior Agent") and as issuing lender for the Senior Lenders (the "Issuing Lender"), The Royal Bank of Scotland plc, as co-arranger (the "Co-Arranger") and as documentation agent (the "Documentation Agent"), and Bank of America, N.A., as Syndication Agent (the "Syndication Agent").

        D.    Pursuant to that certain Amended and Restated Intercreditor and Subordination Agreement dated as of the date hereof (the "Intercreditor and Subordination Agreement") among the Senior Agent, the Agent, the Borrower and the Guarantors, the Subordinated Obligations (as hereinafter defined) are expressly subordinated to the Senior Obligations (as hereinafter defined).

        Therefore, the Borrower, the Guarantors (as defined below), the Lenders and the Agent agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

        Section 1.01    Certain Defined Terms.    As used in this Agreement, the terms defined above shall have the meanings set forth therein and the following terms shall have the following meanings (unless otherwise indicated, such meanings to be equally applicable to both the singular and plural forms of the terms defined):

        "Acceptable Security Interest" in any Property means a Lien which (a) exists in favor of the Agent for the benefit of the Agent and the Lenders, (b) is superior to all Liens or rights of any other Person in the Property encumbered thereby, other than Permitted Liens, (c) secures the Subordinated Obligations, and (d) is perfected and enforceable.

        "Advance" means any advance hereunder of monies by a Lender to the Borrower as part of a Borrowing.

        "Advance Payment Contract" means any contract whereby any Person either receives or becomes entitled to receive (either directly or indirectly through a third party for such Person's

account or benefit) any payment (an "Advance Payment") to be applied toward the payment of the purchase price of Hydrocarbons produced or to be produced from any Oil and Gas Properties owned by such Person and which Advance Payment is paid or to be paid more than 90 days in advance of actual delivery of such production to or for the account of the purchaser regardless of such production, and the Advance Payment is, or is to be, applied as payment in full for such production when sold and delivered or is, or is to become applied as payment for a portion only of the purchase price thereof or for a percentage or a share of such production.

        "Affiliate" of any Person shall mean (a) any Person directly or indirectly controlled by, controlling or under common control with such first Person, (b) any director or officer of such first Person or of any Person referred to in clause (a) above and (c) if any Person in clause (a) 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; provided, however, that "Affiliate" shall not include any Affiliates of the Preferred Shareholders or GA Partners.

        "Affiliated Fund" means with respect to GA Partners or any Preferred Shareholder, any other fund that is managed or advised by the same manager, general partner or investment advisor as GA Partners or such Preferred Shareholder or by an Affiliate of such manager, general partner or investment advisor.

        "Agent" means The Royal Bank of Scotland plc, in its capacity as agent pursuant to Article IX and any successor agent pursuant to Section 9.06.

        "Agreement" means this Amended and Restated Subordinated Credit Agreement, as the same may be amended, supplemented, and otherwise modified from time to time.

        "Applicable Lending Office" means, with respect to any Lender, the office of such Lender specified as its "Lending Office" opposite its name on Schedule 1 or such other office of such Lender as such Lender may from time to time specify to the Borrower and the Agent.

        "Assignment and Acceptance" means an assignment and acceptance entered into by a Lender and an Eligible Assignee, and accepted by the Agent, in substantially the form of the attached Exhibit A.

        "Borrower" has the meaning given thereto in the Preamble.

        "Borrowing" means a borrowing of Advances renewed and extended by each Lender pursuant to Section 2.01.

        "Borrowing Base" has the meaning assigned to it now and from time to time hereafter in the Senior Credit Agreement.

        "Brigham Exploration" has the meaning given thereto in the Preamble.

        "Business Day" means a day of the year on which banks are not required or authorized to close in New York, New York.

        "Capital Leases" means, as applied to any Person, any lease of any Property by such Person as lessee which would, in accordance with GAAP, be required to be classified and accounted for as a capital lease on the balance sheet of such Person.

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        "Capital Stock" means any and all shares, interest, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interest in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.

        "Cash Equivalents" means (a) direct obligations of the United States or any agency thereof, or obligations guaranteed by the United States or any agency thereof, in each case maturing within one year or less from the date of creation thereof, (b) commercial paper maturing within one year from the date of creation thereof rated in the highest grade by Standard and Poor's Ratings Group ("S&P") and by Moody's Investors Service, Inc. ("Moody's"), (c) deposits maturing within one year from the date of creation thereof with, including certificates of deposit issued by, any Lender or any office located in the United States, Canada or England or any other bank or trust company which is organized under the laws of the United States, Canada or England or any state or province thereof, has capital, surplus and undivided profits aggregating at least $100,000,000.00 (as of the date of such Lender's or bank or trust company's most recent financial reports) and has a short term deposit rating of not lower than A2 or P2, as such rating is set forth from time to time by S&P or Moody's, respectively, and (d) deposits in money market funds investing exclusively in investments described in clauses (a) through (c) of this definition.

        "CERCLA" means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, state and local analogs, and all rules and regulations and requirements thereunder in each case as now or hereafter in effect.

        "Change of Control" means any of the following: (a) any acquisition pursuant to which any Person or group (as defined in Section 13(d)(3) or 14(d)(2) of the Exchange Act) (other than the Preferred Shareholders) has become the direct or indirect beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of more than 35% of the Voting Stock of Brigham Exploration; (b) any transaction or acquisition pursuant to which any one or more of the Preferred Shareholders have become (whether pursuant to any Preferred Shareholder Transaction or otherwise) the direct or indirect beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of more than 47% of the Voting Stock of Brigham Exploration; (c) Brigham Exploration is merged with or into or consolidated with another Person except as otherwise permitted by Section 6.04; (d) Brigham Exploration, either individually or in conjunction with one or more of its Subsidiaries, sells, conveys, transfers or leases, or its Subsidiaries sell, convey, transfer or lease, all or substantially all of the assets of Brigham Exploration and its Subsidiaries, taken as a whole (either in one transaction or a series of related transactions), including Capital Stock of its Subsidiaries, to any Person except as otherwise permitted by Section 6.04; (e) the first day on which a majority of the individuals who constitute the Board of Directors of Brigham Exploration are not Continuing Directors or (f) Brigham Exploration shall cease to own, directly or indirectly, 100% of the Capital Stock of the Borrower.

        "Closing Date" means the date on which the conditions set forth in Section 3.01 are satisfied, which date shall not be later than March 31, 2003.

        "Code" means the Internal Revenue Code of 1986, as amended, and any successor statute.

        "Collateral" means Property of the Credit Parties, now owned or hereafter acquired, that is subject to any Lien in favor of the Agent, or the Lenders, to secure, directly or indirectly, the Subordinated Obligations.

        "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

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Section 2.04 or Article VII or otherwise under this Agreement. The original aggregate amount of the Commitments is $20,000,000 (plus an amount equal to $3,000,000 to reflect any interest paid in kind pursuant to Section 2.09(a)).

        "Compliance Certificate" means a compliance certificate in the form of the attached Exhibit B signed by a Responsible Officer of Brigham Exploration.

        "Consolidated Net Income" means, with respect to Brigham Exploration and its consolidated Subsidiaries, for any period, the aggregate of the net income (or loss) of Brigham Exploration and its consolidated Subsidiaries after allowances for taxes for such period as determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded from the calculation of such net income (to the extent otherwise included therein) the following: (a) the net income of any Person in which Brigham Exploration or any consolidated Subsidiary has an interest (which interest does not cause the net income of such other Person to be consolidated with the net income of Brigham Exploration and its consolidated Subsidiaries in accordance with GAAP), except to the extent of the amount of dividends or distributions actually paid in such period by such other Person to Brigham Exploration or to a consolidated Subsidiary, as the case may be; (b) the net income (but not loss) of any consolidated Subsidiary to the extent that the declaration or payment of dividends or similar distributions or transfers or loans by that consolidated Subsidiary is not at the time permitted by operation of the terms of its charter or any agreement, instrument or Legal Requirement applicable to such consolidated Subsidiary, or is otherwise restricted or prohibited in each case determined in accordance with GAAP; (c) the net income (or loss) of any Person acquired in a pooling-of-interests transaction for any period prior to the date of such transaction; (d) any extraordinary gains or losses, including gains or losses attributable to Property sales not in the ordinary course of business; and (e) the cumulative effect of a change in accounting principles and any gains or losses attributable to writeups or writedowns of assets.

        "Continuing Director" means an individual who (a) is a member of the full Board of Directors of Brigham Exploration and (b) either (i) was a member of the Board of Directors of Brigham Exploration on the Closing Date or (ii) whose nomination for election or election to the Board of Directors of Brigham Exploration was approved by vote of at least two-thirds of the directors then still in office who were either directors on the Closing Date or whose election or nomination for election was previously so approved.

        "Controlled Group" means all members of a controlled group of corporations and all businesses (whether or not incorporated) under common control which, together with the Borrower, are treated as a single employer under Section 414 of the Code.

        "Credit Parties" means the Borrower and the Guarantors.

        "Debt" means, for any Person, without duplication:

        (a)  indebtedness of such Person for borrowed money;

        (b)  obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;

        (c)  obligations of such Person (whether contingent or otherwise) in respect to letters of credit, bankers' acceptances, surety or other bonds and similar instruments, and agreements relating to the issuance of letters of credit or acceptance financing;

        (d)  obligations of such Person to pay the deferred purchase price of Property or services (other than current trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices and accrued current liabilities incurred in the ordinary course of business);

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        (e)  all obligations of such Person under Capital Leases;

        (f)    all indebtedness created or arising under any conditional-sale or other title-retention agreement with respect to Property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such Property);

        (g)  obligations of such Person under any Interest Hedge Agreement or Hydrocarbon Hedge Agreement;

        (h)  obligations of such Person under any Advance Payment Contract;

        (i)    obligations of such Person owing in respect of redeemable preferred stock of such Person;

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

        (k)  obligations of such Person under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) of such Person to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds referred to in clauses (a) through (j) above; and

        (l)    indebtedness or obligations of others of the kinds referred to in clauses (a) through (k) above secured by any Lien on or in respect of any Property of such Person.

        "Default" means (a) an Event of Default or (b) any event or condition which with notice or lapse of time or both would become an Event of Default.

        "Dollars" and "$" means lawful money of the United States of America.

        "EBITDA" means, without duplication, for Brigham Exploration and its consolidated Subsidiaries for any period, (a) Consolidated Net Income for such period plus (b) to the extent deducted in determining Consolidated Net Income for such period, Interest Expense, taxes, depreciation, depletion, amortization and other non-cash charges for such period, minus (c) to the extent added in determining Consolidated Net Income for such period, all non-cash income during such period, in each case determined in accordance with GAAP and without duplication of amounts.

        "Eligible Assignee" means (a) any Lender or any Affiliate of any Lender and (b) any commercial bank or other financial institution approved by (i) the Agent in its reasonable discretion and (ii) provided that no Default or Event of Default has occurred and is continuing, the Borrower (which consent shall not be unreasonably withheld or delayed).

        "Engineering Report" means any "Engineering Report" as such term is defined in the Senior Credit Agreement.

        "Environment" or "Environmental" shall have the meanings set forth in 43 U.S.C. 9601(8) (1988).

        "Environmental Claim" means any third party (including governmental agencies and employees) action, lawsuit, claim, demand, regulatory action or proceeding, order, decree, consent agreement or notice of potential or actual responsibility or violation (including claims or proceedings under the Occupational Safety and Health Acts or similar laws or requirements relating to health or safety of employees) which seeks to impose liability under any Environmental Law.

        "Environmental Law" means, as to any Credit Party, all Legal Requirements or common law theories applicable to any Credit Party arising from, relating to, or in connection with the

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Environment, including without limitation CERCLA, relating to (a) pollution, contamination, injury, destruction, loss, protection, cleanup, reclamation or restoration of the air, surface water, groundwater, land surface or subsurface strata, or other natural resources; (b) solid, gaseous or liquid waste generation, treatment, processing, recycling, reclamation, cleanup, storage, disposal or transportation; (c) exposure to pollutants, contaminants, hazardous, medical infections, or toxic substances, materials or wastes; or (d) the manufacture, processing, handling, transportation, distribution in commerce, use, storage or disposal of hazardous or toxic substances, materials or wastes.

        "Environmental Permit" means any permit, license, order, approval, registration or other authorization under Environmental Law.

        "Equity Interest" means with respect to any Person, any shares, interests, participation, or other equivalents (however designated) of corporate stock, membership interests or partnership interests (or any other ownership interests) of such Person.

        "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time.

        "Event of Default" has the meaning specified in Section 7.01.

        "Excepted Liens" means (a) Liens for taxes, assessments or other governmental charges or levies not yet due or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; (b) Liens in connection with workmen's compensation, unemployment insurance or other social security, old age pension or public liability obligations not yet due or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; (c) operators', vendors', carriers', warehousemen's, repairmen's, mechanics', workmen's, materialmen's, construction or other like Liens arising in the ordinary course of business or incident to the exploration, development, operation and maintenance of Oil and Gas Properties or customary landlord's liens, each of which is in respect of obligations that have not been outstanding more than 90 days or which are being contested in good faith by appropriate proceedings and for which adequate reserves have been maintained in accordance with GAAP; (d) any Liens reserved in leases, farmout agreements, exploration agreements, operating agreements or participation agreements for rent or royalties and for compliance with the terms of such agreements or leases in the case of leasehold estates, to the extent that any such Lien referred to in this clause does not materially impair the use of the Property covered by such Lien for the purposes for which such Property is held or materially impair the value of such Property subject thereto; (e) encumbrances (other than to secure the payment of borrowed money or the deferred purchase price of Property or services), easements, restrictions, servitudes, permits, conditions, covenants, exceptions or reservations in any rights of way or other Property for the purpose of roads, pipelines, transmission lines, transportation lines, distribution lines for the removal of gas, oil, coal or other minerals or timber, and other like purposes, or for the joint or common use of real estate, rights of way, facilities and equipment, and defects, irregularities, zoning restrictions and deficiencies in the title of any rights of way or other Property which in the aggregate do not materially impair the use of such rights of way or other Property for the purposes of which such rights of way and other Property are held or materially impair the value of such Property subject thereto; (f) deposits of cash or securities to secure the performance of bids, trade contracts, leases, statutory obligations and other obligations of a like nature incurred in the ordinary course of business; and (g) minor defects in the chain of title to the Oil and Gas Properties that are customarily accepted in the oil and gas industry; provided that none of such defects interfere with the ordinary conduct of the business of any of the Credit Parties or materially detract from the value or use of the Property to which such defects apply.

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        "Exchange Act" means the Securities Exchange Act of 1934, as amended.

        "Existing Second Mortgages" means the collective reference to every Second Mortgage, Deed of Trust, Assignment of Production, Second Security Agreement and Financing Statement from the Borrower to the Trustee named therein and Bank of Montreal (or any successor thereto), covering the assets of the Borrower located in the continental United States, as amended prior to the Closing Date.

        "Existing Subordinated Credit Agreement" has the meaning given thereto in the Recitals.

        "Federal Funds Rate" means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for any such day on such transactions received by the Agent from three Federal funds brokers of recognized standing selected by it.

        "Federal Reserve Board" means the Board of Governors of the Federal Reserve System or any of its successors.

        "Financial Statements" means the audited consolidated balance sheet of Brigham Exploration and its consolidated Subsidiaries as at December 31, 2002 and the related consolidated statement of income, stockholders' equity and cash flow of Brigham Exploration and its consolidated Subsidiaries for the fiscal year ended on such date.

        "Fixed Rate" has the meaning given thereto in Section 2.09(a)

        "GA Partners" means General Atlantic Partners III, L.P., together with its successors, assigns and transferees of its shares of Capital Stock of Brigham Exploration that are an Affiliated Fund of GA Partners.

        "GAAP" means United States generally accepted accounting principles as in effect from time to time, applied on a basis consistent with the requirements of Section 1.03.

        "General Partner" has the meaning given thereto in the Preamble.

        "Governmental Authority" means, as to any Person in connection with any subject, any foreign, national, state or provincial governmental authority, or any political subdivision of any state thereof, or any agency, department, commission, board, authority or instrumentality, bureau or court, in each case having jurisdiction over such Person or such Person's Property in connection with such subject.

        "Guarantor" means Brigham Exploration, the General Partner, and each Subsidiary of the Borrower.

        "Hazardous Substance" means the substances identified as such pursuant to CERCLA and those regulated under any other Environmental Law, including without limitation pollutants, contaminants, petroleum, petroleum products, radionuclides, radioactive materials, and medical and infectious waste.

        "Hazardous Waste" means the substances regulated as such pursuant to any Environmental Law.

        "Hydrocarbon Hedge Agreement" means a swap, collar, floor, cap, option, forward sale or purchase or other contract (excluding sales contracts with fixed or floating prices for Hydrocarbons sold) that is intended to reduce or eliminate the risk of fluctuations in the price of Hydrocarbons.

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        "Hydrocarbon Interests" means (a) all oil and gas and/or oil, gas and mineral leases and leasehold interests, fee mineral interests, term mineral interests, subleases, farmouts, royalties, overriding royalties, net profits interests, production payments and similar interests or estates including any reversionary or carried interests relating to any of the foregoing and interests under any exploration agreements, operating agreements and participation agreements, and (b) all production units and drilling and spacing units (and the Properties covered thereby) which may affect all or any portion of such interests including those units and any units created by agreement or designation or under orders, regulations, rules or other official acts of any Federal, state or other governmental body or agency having jurisdiction.

        "Hydrocarbons" means oil, gas, coal seam gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate, and all other liquid and gaseous hydrocarbons produced or to be produced in conjunction therewith from a well bore and all products, by-products, and other substances derived therefrom or the processing thereof, and all other minerals and substances produced in conjunction with such substances, including, but not limited to, sulfur, geothermal steam, water, carbon dioxide, helium, and any and all minerals, ores, or substances of value and the products and proceeds therefrom.

        "Independent Engineer" means Cawley, Gillespie & Associates or any other engineering firm reasonably acceptable to either the Agent or the Majority Lenders.

        "Intercreditor and Subordination Agreement" has the meaning given thereto in the Recitals.

        "Interest Coverage Ratio" means, for Brigham Exploration and its consolidated Subsidiaries, as of the end of any fiscal quarter, the ratio of (a) EBITDA calculated for the four fiscal quarters then ended, to (b) Interest Expense for such period.

        "Interest Expense" means, for Brigham Exploration and its consolidated Subsidiaries for any period, total interest, letter of credit fees, and other fees and expenses incurred in connection with any Debt for such period, whether paid or accrued, including, without limitation, all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers' acceptance financing and net costs under Interest Hedge Agreements and Hydrocarbon Hedge Agreements, all as determined in conformity with GAAP.

        "Interest Hedge Agreement" means an interest hedge, rate swap, cap or collar, or similar arrangement between the Borrower and one or more financial institutions providing for the exchange of nominal interest obligations between the Borrower and such financial institution.

        "Interest Payment Date" has the meaning given thereto in Section 2.09(a).

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        "Investment" means any investment, made directly or indirectly, in any Person, whether by acquisition of Equity Interests, indebtedness or other obligations or securities or by loan, advance, capital contribution or otherwise.

        "Legal Requirement" means, as to any Person, any law, statute, ordinance, decree, requirement, order, judgment, rule, regulation (or official interpretation of any of the foregoing) of, and the terms of any license or permit issued by, any Governmental Authority, including, but not limited to, Regulations D, T, U, and X, which is applicable to such Person.

        "Lenders" has the meaning given thereto in the Preamble.

        "Lien" means any mortgage, lien, pledge, assignment, charge, deed of trust, security interest, hypothecation, preference, deposit arrangement or encumbrance (or other type of arrangement having the practical effect of the foregoing) to secure or provide for the payment of any obligation of any Person, whether arising by contract, operation of law, or otherwise (including, without limitation, the interest of a vendor or lessor under any conditional sale agreement, synthetic lease, Capital Lease, or other title retention agreement).

        "Limited Partners" means Brigham Holdings I, LLC, a Nevada limited liability company, and Brigham Holdings II, LLC, a Nevada limited liability company.

        "Majority Lenders" means, at any time, the Agent and Lenders holding at least 75% of the then aggregate unpaid principal amount of the Subordinated Notes held by the Lenders.

        "Material Adverse Change" means (a) a material adverse change in the business, Property (including the Oil and Gas Properties), assets, liabilities, conditions (financial or otherwise) or prospects of the Borrower and its Subsidiaries, taken as a whole, (b) a material adverse effect on any Credit Party's ability to perform its obligations under this Agreement, any Subordinated Note, or any other Subordinated Loan Document and (c) a material adverse effect on the validity or enforceability against any Credit Party of any of the Subordinated Loan Documents or the rights or remedies of the Agent or the Lenders thereunder.

        "Maturity Date" means October 31, 2005.

        "Maximum Rate" means the maximum nonusurious interest rate under applicable law (determined under such laws after giving effect to any items which are required by such laws to be construed as interest in making such determination, including without limitation if required by such laws, certain fees and other costs).

        "Multiemployer Plan" means a "multiemployer plan" as defined in Section 4001(a)(3) of ERISA.

        "Oil and Gas Properties" means (a) all Hydrocarbon Interests; (b) all operating agreements, contracts and other agreements which relate to any of the Hydrocarbon Interests or the production, sale, purchase, exchange or processing of Hydrocarbons from or attributable to such Hydrocarbon Interests; (c) all Hydrocarbons in and under and which may be produced, saved, processed or attributable to the Hydrocarbon Interests, including all oil in tanks, the lands covered thereby and all rents, issues, profits, proceeds, products, revenues and other incomes from or attributable to the Hydrocarbon Interests; (d) all accounts (including accounts resulting from the sale of Hydrocarbons at the wellhead), contract rights and general intangibles, including all accounts, contract rights and general intangibles now or hereafter arising regardless of whether any of the foregoing is in connection with the sale or other disposition of any Hydrocarbons or otherwise, including all Liens securing the same; (e) all Properties, rights, titles, interests and estates described or referred to above, including any and all Property, real or personal, now owned or hereafter acquired, used or held for use in connection with the operating, working or development of any of such Hydrocarbon Interests or Property and including any and all oil wells,

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gas wells, injection wells or other wells, buildings, structures, fuel separators, liquid extraction plants, plant compressors, pumps, pumping units, field gathering systems, tanks and tank batteries, fixtures, valves, fittings, machinery and parts, engines, boilers, meters, apparatus, appliances, tools, implements, cables, wires, towers, casing, tubing and rods, and similar equipment; and (f) all additions, substitutions, replacements, accessions and attachments to any and all of the foregoing.

        "Partners" means the General Partner and the Limited Partners.

        "Partnership Agreement" means the Agreement of Limited Partnership of the Borrower among the Partners dated as of December 30, 1997, as heretofore or hereafter amended, supplemented or restated from time to time.

        "PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.

        "Permit" means any approval, certificate of occupancy, consent, waiver, exemption, variance, franchise, order, permit, authorization, right or license of or from any Governmental Authority, including without limitation, an Environmental Permit.

        "Permitted Liens" has the meaning given in Section 6.01.

        "Person" means an individual, partnership, corporation (including a business trust), joint stock company, limited liability corporation or company, limited liability partnership, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof or any trustee, receiver, custodian or similar official.

        "Plan" means an employee benefit plan (other than a Multiemployer Plan) maintained for employees of the Borrower or any member of the Controlled Group and covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code.

        "Preferred Shareholders" means each of the Persons listed on Schedule 1.01 who hold preferred shares in Brigham Exploration (or common shares in Brigham Exploration following consummation of Preferred Shareholder Transactions), together with its successors, assigns and transferees of its shares of Capital Stock of Brigham Exploration that are Affiliated Funds of such Preferred Shareholders.

        "Preferred Shareholder Transaction" means any transaction in which any of the Preferred Shareholders exercises (whether voluntarily or as required by Brigham Exploration) its warrants to purchase common stock issued by Brigham Exploration pursuant to the terms of such warrants or the applicable certificate of designations of Brigham Exploration.

        "Property" of any Person means any property or assets (whether real, personal, or mixed, tangible or intangible) of such Person.

        "Pro Rata Share" means, with respect to any Lender, either (a) the ratio (expressed as a percentage) of such Lender's Commitment at such time to the aggregate Commitments at such time or (b) if the Commitments have been terminated, the ratio (expressed as a percentage) of such Lender's aggregate outstanding Advances at such time to the aggregate outstanding Advances of all the Lenders at such time.

        "Proven Reserves" means, at any particular time, the estimated quantities of Hydrocarbons which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs attributable to Oil and Gas Properties under then existing economic and operating conditions (i.e., prices and costs as of the date the estimate is made).

        "Register" has the meaning set forth in of Section 10.06(c).

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        "Regulations D, T, U, and X" mean Regulations D, T, U, and X of the Federal Reserve Board, as the same are from time to time in effect, and all official rulings and interpretations thereunder or thereof.

        "Release" shall have the meaning set forth in CERCLA or under any other Environmental Law.

        "Response" shall have the meaning set forth in CERCLA or under any other Environmental Law.

        "Responsible Officer" means (a) with respect to any Person that is a corporation, such Person's Chief Executive Officer, President, Executive Vice President, Chief Financial Officer, or Vice President-Controller, (b) with respect to any Person that is a limited liability company, a manager (or such Person's Chief Executive Officer, President, Executive Vice President, Chief Financial Officer, or Vice President-Controller, if any) or the Responsible Officer of such Person's managing member or manager, and (c) with respect to any Person that is a general partnership or a limited liability partnership, the Responsible Officer of such Person's general partner or partners.

        "Restricted Payment" means, with respect to any Person, any direct or indirect dividend or distribution (whether in cash, securities or other property) or any direct or indirect payment of any kind or character (whether in cash, securities or other property) in consideration for or otherwise in connection with any retirement, purchase, redemption or other acquisition of any Equity Interest of such Person, or any options, warrants or rights to purchase or acquire any such Equity Interest of such Person; provided that the term "Restricted Payment" shall not include any dividend or distribution payable solely in Equity Interests of Brigham Exploration or warrants, options or other rights to purchase such Equity Interests.

        "SEC "means the U.S. Securities and Exchange Commission.

        "Second Mortgage" means each Second Mortgage Amendment or any other mortgage or deed of trust executed by any one or more of the Borrower and its Subsidiaries in favor of the Agent for the ratable benefit of the Agent and the Lenders, as the same may be amended, modified, restated or supplemented from time to time and "Second Mortgages" shall mean all of such Second Mortgage Amendments, mortgages and deeds of trust collectively.

        "Second Mortgage Amendment" means each of the amended and restated mortgages or deeds of trust to be entered into on or before the Closing Date to amend and restate in their entirety the Existing Second Mortgages, in substantially the form of the attached Exhibit F.

        "Second Pledge Agreements" means each of the Amended and Restated Second Pledge Agreements substantially in the form of Exhibit G, executed by each of Brigham Exploration, the General Partner and the Borrower, as the same may be amended, modified, restated or supplemented from time to time.

        "Second Security Agreements" means each of the Amended and Restated Second Security Agreements, in substantially the form of the attached Exhibit H, executed by each of the Borrower and its Subsidiaries, as the same may be amended, modified, or supplemented from time to time.

        "Senior Credit Agreement" has the meaning given thereto in the Recitals.

        "Senior Agent" has the meaning given thereto in the Recitals.

        "Senior Lenders" has the meaning given thereto in the Recitals.

        "Senior Loan Documents" means the Senior Credit Agreement, the notes executed and delivered pursuant to agreements, instruments or documents executed at any time in connection with securing the Senior Obligations, and each other agreement, instrument, or document executed

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by any Credit Party or any of their officers at any time in connection with the Senior Credit Agreement.

        "Senior Obligations" means the "Obligations" as defined in the Senior Credit Agreement.

        "Side Letter Agreement" means the letter agreement dated as of the Closing Date among the Borrower, the Guarantors, the Senior Agent and the Agent.

        "Significant PUD Location" means a particular drilling location or proven, undeveloped reserve prospect identified or designated as "PUD" or "proven undeveloped" reserves in the applicable Engineering Report, that has been assigned a discounted present value equal to or in excess of $2,000,000.00 in such Engineering Report.

        "Solvent" means, with respect to any Person as of the date of any determination, that on such date (a) the fair value of the Property of such Person (both at fair valuation and at present fair saleable value) is greater than the total liabilities, including contingent liabilities, of such Person, (b) the present fair saleable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person is able to realize upon its assets and pay its debts and other liabilities, contingent obligations, and other commitments as they mature in the normal course of business, (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and liabilities mature, and (e) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person's Property would constitute unreasonably small capital after giving due consideration to current and anticipated future capital requirements and current and anticipated future business conduct and the prevailing practice in the industry in which such Person is engaged. In computing the amount of contingent liabilities at any time, such liabilities shall be computed at the amount that, in light of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

        "Subordinated Loan Documents" means this Agreement, the Subordinated Notes, the Subordinated Security Instruments, the Intercreditor and Subordination Agreement, the Side Letter Agreement and each other agreement, instrument, or document executed by any Credit Party or any of their officers at any time in connection with this Agreement.

        "Subordinated Note" means a promissory note of the Borrower payable to the order of any Lender, in substantially the form of the attached Exhibit E, evidencing indebtedness of the Borrower to such Lender resulting from Advances owing to such Lender.

        "Subordinated Obligations" means all principal, interest, fees, reimbursements, indemnifications, and other amounts payable by any Credit Party to the Agent or the Lenders under the Subordinated Loan Documents.

        "Subordinated Security Instruments" means, collectively, (a) the Second Mortgages, (b) the Second Pledge Agreements, (c) the Second Security Agreements, (d) each other agreement, instrument or document executed at any time in connection with the Second Pledge Agreements, the Second Security Agreements and the Second Mortgages, and (e) each other agreement, instrument or document executed at any time in connection with securing the Subordinated Obligations.

        "Subsidiary" of a Person means any corporation or other entity of which more than 50% of the outstanding Equity Interests having ordinary voting power under ordinary circumstances to elect a majority of the board of directors or similar governing body of such corporation or other entity (irrespective of whether at such time Equity Interests of any other class or classes of such corporation or other entity shall or might have voting power upon the occurrence of any

12

contingency) is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more Subsidiaries of such Person or by one or more Subsidiaries of such Person. Unless otherwise indicated herein, each reference to the term "Subsidiary" shall mean a Subsidiary of the Borrower.

        "Termination Event" means (a) a Reportable Event described in Section 4043 of ERISA and the regulations issued thereunder (other than a Reportable Event not subject to the provision for 30-day notice to the PBGC under such regulations), (b) the withdrawal of the Borrower or any of its Affiliates from a Plan during a plan year in which it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, (c) the filing of a notice of intent to terminate a Plan or the treatment of a Plan amendment as a termination under Section 4041 of ERISA, (d) the institution of proceedings to terminate a Plan by the PBGC, or (e) any other event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan.

        "Voting Stock" means, with respect to any Person, securities of any class or classes of Capital Stock or other interests (including partnership interests) in such Person entitling the holders thereof (whether at all times or at the time that such class of Capital Stock) has voting power by reason of the happening of any contingency to vote in the election of members of the board of directors or comparable body of such Person.

        Section 1.02    Computation of Time Periods.    In this Agreement, with respect to the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each means "to but excluding".

        Section 1.03    Accounting Terms; Changes in GAAP.    Except as otherwise expressly provided herein, all accounting terms used herein shall be interpreted, and all financial statements and certificates and reports as to financial matters required to be delivered to the Lenders hereunder shall (unless otherwise disclosed to the Lenders in writing at the time of delivery thereof) be prepared, in accordance with GAAP applied on a basis consistent with those used in the preparation of the Financial Statements. In addition, all calculations and defined accounting terms used herein shall, unless expressly provided otherwise, when referring to any Person, refer to such Person on a consolidated basis and mean such Person and its consolidated subsidiaries.

        Section 1.04    Miscellaneous.    Article, Section, Schedule, and Exhibit references are to Articles and Sections of and Schedules and Exhibits to this Agreement, unless otherwise specified. All references to instruments, documents, contracts, and agreements are references to such instruments, documents, contracts, and agreements as the same may be amended, supplemented, and otherwise modified from time to time, unless otherwise specified. The words "hereof", "herein", and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The term "including" means "including, without limitation,". Paragraph headings have been inserted in this Agreement as a matter of convenience for reference only and it is agreed that such paragraph headings are not a part of this Agreement and shall not be used in the interpretation of any provision of this Agreement. All Exhibits and Schedules attached to this Agreement are a part hereof for all purposes. Pronouns in masculine, feminine and neuter genders shall be construed to include any other gender, and words in the singular form shall be construed to include the plural and vice versa, unless the context otherwise requires.

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ARTICLE II

CREDIT FACILITIES

        Section 2.01    Advances.    

        (a)  Each Lender severally agrees, on the terms and conditions set forth in this Agreement (i) to renew and extend the Advance outstanding under the Existing Subordinated Credit Agreement on the Closing Date in a ratable amount for each Lender not to exceed such Lender's Commitment and (ii) to make Advances of the amounts of interest paid in kind pursuant to Section 2.09(a), the aggregate of which amounts shall not exceed such Lender's Pro Rata Share of $3,000,000. Principal payments made after the Closing Date may not be reborrowed.

        (b)    Subordinated Notes.    The indebtedness of the Borrower to each Lender resulting from the Advances owing to such Lender shall be evidenced by a Subordinated Note of the Borrower payable to the order of such Lender in an amount equal to such Lender's Commitment plus such Lender's Pro Rata Share of $3,000,000 (to accommodate deemed Advances through payment in kind pursuant to Section 2.09(a)).

        (c)    Agent Reliance.    Unless the Agent shall have received notice from a Lender before the date of any Borrowing that such Lender shall not make available to the Agent such Lender's Pro Rata Share of a Borrowing, the Agent may assume that such Lender has made its Pro Rata Share of such Borrowing available to the Agent on the date of such Borrowing in accordance with this Agreement and the Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If and to the extent that such Lender shall not have so made its Pro Rata Share of such Borrowing available to the Agent, such Lender and the Borrower severally agree to immediately repay to the Agent on demand such corresponding amount, together with interest on such amount, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Agent, at (i) in the case of the Borrower, the interest rate applicable on such day to Advances comprising such Borrowing and (ii) in the case of such Lender, the Federal Funds Rate for such day. If such Lender shall repay to the Agent such corresponding amount and interest as provided above, such corresponding amount so repaid shall constitute such Lender's Advance as part of such Borrowing for purposes of this Agreement even though not made on the same day as the other Advances comprising such Borrowing.

        (d)    Lender Obligations Several.    The failure of any Lender to make the Advance to be made by it as part of any Borrowing shall not relieve any other Lender of its obligation, if any, to make its Advance on the date of such Borrowing. No Lender shall be responsible for the failure of any other Lender to make the Advance to be made by such other Lender on the date of any Borrowing.

        Section 2.02    Intentionally Omitted.    

        Section 2.03    Intentionally Omitted.    

        Section 2.04    Reduction of the Commitments.    

        (a)  The Borrower shall have the right, upon at least five Business Days' irrevocable notice to the Agent, to terminate in whole or reduce ratably in part the unused portion of the Commitments; provided that each partial reduction shall be in the aggregate amount of $1,000,000 or in integral multiples of $1,000,000 in excess thereof.

        (b)  Any reduction and termination of the Commitments pursuant to this Section 2.04 shall be applied ratably to each Lender's Commitment and shall be permanent, with no obligation of the Lenders to reinstate such Commitments.

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        Section 2.05    Prepayment of Advances.    

        (a)    Optional.    The Borrower may prepay the Advances, without premium or penalty, after giving, by 12:00 p.m. (New York time) on the same Business Day, irrevocable prior written notice to the Agent stating the proposed date and aggregate principal amount of such prepayment. If any such notice is given, the Borrower shall prepay the Advances in an aggregate principal amount equal to the amount specified in such notice, together with accrued interest to the date of such prepayment on the principal amount prepaid; provided that each partial prepayment shall be made in an amount not less than $1,000,000 and in integral multiples of $500,000 in excess thereof (or the remaining aggregate principal balance outstanding). Full prepayments of the Subordinated Obligations are permitted without restriction of amounts. Notwithstanding the foregoing, no prepayment of the Subordinated Obligations that is inconsistent with the rights and obligations of the Senior Agent and the Senior Lenders under the Intercreditor and Subordinate Agreement shall be permitted.

        (b)    Reduction of Commitments.    On the date of each reduction of the aggregate Commitments pursuant to Section 2.04, the Borrower agrees to make a prepayment in respect of the outstanding amount of the Advances to the extent, if any, that the aggregate unpaid principal amount of all Advances exceeds the aggregate Commitments, as so reduced. Each prepayment pursuant to this Section 2.05(b) shall be accompanied by accrued interest on the amount prepaid to the date of such prepayment. Each prepayment under this Section 2.05(b) shall be applied to the Advances as provided in Section 2.10(a).

        (c)    No Additional Right.    The Borrower shall have no right to prepay any principal amount of any Advance except as provided in this Section 2.05, and all notices given pursuant to this Section 2.05 shall be irrevocable and binding upon the Borrower.

        Section 2.06    Repayment of Advances.    The Borrower shall repay to the Agent for the ratable benefit of the Lenders the outstanding principal amount of each Advance, together with any accrued interest on the Maturity Date or such earlier date pursuant to Section 7.02 or Section 7.03.

        Section 2.07    Intentionally Omitted.    

        Section 2.08    Intentionally Omitted.    

        Section 2.09    Interest.    

        (a)  The Borrower shall pay interest on the unpaid principal amount of each Advance made by each Lender from the date of such Advance until such principal amount shall be paid in full, at a rate per annum equal at all times to 10.75% (the "Fixed Rate"), payable quarterly in arrears on the last day of each January, April, July and October, beginning April 30, 2003 (each an "Interest Payment Date") and on the Maturity Date, provided that upon the occurrence and continuance of an Event of Default, such Advances shall bear interest from the date on which such Event of Default occurred until such Event of Default has been cured or waived, payable on demand, at a rate per annum equal at all times to the Fixed Rate plus 2.00%. On any Interest Payment Date occurring on or before October 2004, the Borrower shall have the absolute right to pay 50% of all accrued interest on the Advances in kind, instead of in cash. In the event any accrued interest due on any particular Interest Payment Date is paid in kind, it shall be deemed an advance of principal under the Subordinated Notes and, as of the Interest Payment Date, shall be added to the outstanding principal balance of the Subordinated Notes (notwithstanding that the outstanding principal balance may exceed, in the aggregate, the face amount of the Subordinated Notes). In order to exercise its option to pay interest in kind under this Section 2.09(a), the Borrower shall, on or at any time before the applicable Interest Payment Date, deliver written notice to the Agent, executed by a Responsible Officer of the Borrower, specifying its election to pay interest in kind. Should the Borrower fail to deliver such written notice in a timely fashion, the Borrower shall be deemed to have irrevocably elected to make payment of such accrued

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interest in cash. In the event that the Borrower elects to pay interest in kind, such interest shall be calculated at the Fixed Rate.

        (b)    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 paragraph (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.

        Section 2.10    Payments and Computations.    

        (a)    Payment Procedures.    The Borrower shall make each payment under this Agreement and under the Subordinated Notes not later than 12:00 p.m. (New York time) on the day when due in Dollars to the Agent at the location referred to in the Subordinated Notes (or such other location as the Agent shall designate in writing to the Borrower) in same day funds without deduction, setoff, or counterclaim of any kind. The Agent shall promptly thereafter cause to be distributed like funds relating to the payment of principal, interest or fees ratably (other than amounts payable solely to the Agent or a specific Lender pursuant to Section 2.13, Section 2.14, Section 9.05 or Section 10.07, but after taking into account payments effected pursuant to Section 10.04) in accordance with each Lender's Pro Rata Share to the Lenders for the account of their respective Applicable Lending Offices, and like funds relating to the payment of any other amount payable to any Lender to such Lender for the account of its Applicable Lending Office, in each case to be applied in accordance with the terms of this Agreement.

        (b)    Computations.    All computations of interest based on the Fixed Rate and of fees shall be made by the Agent on the basis of a year of 365 or 366 days, as the case may be, and all computations of interest based on the Federal Funds Rate shall be made by the Agent, on the basis of a year of 360 days, in each case for the actual number of days (including the first day, but excluding the last day)

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occurring in the period for which such interest or fees are payable. Each determination by the Agent of an interest rate or fee shall be conclusive and binding for all purposes, absent manifest error.

        (c)    Non-Business-Day Payments.    Whenever any payment shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest or fees, as the case may be.

        (d)    Agent Reliance.    Unless the Agent shall have received written notice from the Borrower prior to the date on which any payment is due to the Lenders that the Borrower shall not make such payment in full, the Agent may assume that the Borrower has made such payment in full to the Agent on such date and the Agent may, in reliance upon such assumption, cause to be distributed to each Lender on such date an amount equal to the amount then due such Lender. If and to the extent the Borrower shall not have so made such payment in full to the Agent, each Lender shall repay to the Agent forthwith on demand such amount distributed to such Lender, together with interest, for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to the Agent, at the Federal Funds Rate for such day.

        Section 2.11    Sharing of Payments, Etc.    If any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set off, or otherwise) on account of the Advances made by it in excess of its Pro Rata Share of payments on account of the Advances obtained by all the Lenders, such Lender shall notify the Agent and forthwith purchase from the other Lenders such participations in the Advances made by them as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them; provided that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded and such Lender shall repay to the purchasing Lender the purchase price to the extent of such Lender's ratable share (according to the proportion of (a) the amount of the participation sold by such Lender to the purchasing Lender as a result of such excess payment to (b) the total amount of such excess payment) of such recovery, together with an amount equal to such Lender's ratable share (according to the proportion of (i) the amount of such Lender's required repayment to the purchasing Lender to (ii) the total amount of all such required repayments to the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered. The Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section 2.11 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set off) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation.

        Section 2.12    Intentionally Omitted.    

        Section 2.13    Increased Costs.    If any Lender determines in good faith that compliance with any law or regulation or any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law) affects or would affect the amount of capital required or expected to be maintained by such Lender or any corporation controlling such Lender and that the amount of such capital is increased by or based upon the existence of such Lender's commitment to lend and other commitments of this type, then, upon 30 days' prior written notice by such Lender (with a copy of any such demand to the Agent), the Borrower shall immediately pay to the Agent for the account of such Lender from time to time as specified by such Lender additional amounts sufficient to compensate such Lender for the reduced rate of return on that capital of such Lender, in light of such circumstances, to the extent that such Lender reasonably determines such increase in capital to be allocable to the existence of such Lender's commitment to lend under this Agreement. A certificate as to such amounts and detailing the calculation of such amounts submitted to the Borrower by such Lender shall be conclusive and binding for all purposes, absent manifest error.

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        Section 2.14    Taxes.    

        (a)    No Deduction for Certain Taxes.    Any and all payments by the Borrower shall be made, in accordance with Section 2.10, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Lender and the Agent, taxes imposed on its net income, and franchise taxes imposed on it, by the jurisdiction under the laws of which such Lender or the Agent (as the case may be) is organized or any political subdivision of the jurisdiction (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as "Taxes") and, in the case of each Lender, Taxes by the jurisdiction of such Lender's Applicable Lending Office or any political subdivision of such jurisdiction. If the Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable to any Lender or the Agent, (i) the sum payable shall be increased as may be necessary so that, after making all required deductions (including deductions applicable to additional sums payable under this Section 2.14), such Lender or the Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made; provided that if the Borrower's obligation to deduct or withhold Taxes is caused solely by such Lender's or the Agent's failure to provide the forms described in Section 2.14(d) and such Lender or the Agent could have provided such forms, no such increase shall be required; (ii) the Borrower shall make such deductions; and (iii) the Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.

        (b)    Other Taxes.    In addition, the Borrower agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies which arise from any payment made or from the execution, delivery or registration of, or otherwise with respect to, this Agreement, the Subordinated Notes, or the other Subordinated Loan Documents (hereinafter referred to as "Other Taxes").

        (c)    Indemnification.    THE BORROWER INDEMNIFIES EACH LENDER AND THE AGENT FOR THE FULL AMOUNT OF TAXES OR OTHER TAXES (INCLUDING, WITHOUT LIMITATION, ANY TAXES OR OTHER TAXES IMPOSED BY ANY JURISDICTION ON AMOUNTS PAYABLE UNDER THIS SECTION 2.14) PAID BY SUCH LENDER OR THE AGENT (AS THE CASE MAY BE) AND ANY LIABILITY (INCLUDING INTEREST AND EXPENSES) ARISING THEREFROM OR WITH RESPECT THERETO, WHETHER OR NOT SUCH TAXES OR OTHER TAXES WERE CORRECTLY OR LEGALLY ASSERTED UNLESS THE PAYMENT OF SUCH TAXES OR OTHER TAXES WERE NOT CORRECTLY OR LEGAL ASSERTED AND SUCH LENDER'S PAYMENT OF SUCH TAXES OR OTHER TAXES WAS THE RESULT OF ITS GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. EACH PAYMENT REQUIRED TO BE MADE BY THE BORROWER IN RESPECT OF THIS INDEMNIFICATION SHALL BE MADE TO THE AGENT FOR THE BENEFIT OF ANY PARTY CLAIMING SUCH INDEMNIFICATION WITHIN 30 DAYS FROM THE DATE THE BORROWER RECEIVES WRITTEN DEMAND THEREFOR FROM THE AGENT ON BEHALF OF ITSELF AS AGENT OR ANY SUCH LENDER. IF ANY LENDER, THE AGENT RECEIVES A REFUND IN RESPECT OF ANY TAXES PAID BY THE BORROWER UNDER THIS PARAGRAPH (C), SUCH LENDER OR THE AGENT, AS THE CASE MAY BE, SHALL PROMPTLY PAY TO THE BORROWER THE BORROWER'S SHARE OF SUCH REFUND.

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        (d)    Foreign Lender Withholding Exemption.    Each Lender that is not incorporated under the laws of the United States of America or a state thereof agrees that upon the request of the Borrower it shall deliver to the Borrower and the Agent (i) two duly completed copies of United States Internal Revenue Service Form W8-ECI, W8-IMY or W8-BEN or successor applicable form, as the case may be, certifying in each case that such Lender is entitled to receive payments under this Agreement and the Subordinated Notes payable to it, without deduction or withholding of any United States federal income taxes, (ii) if applicable, an Internal Revenue Service Form W 9 or successor applicable form, as the case may be, to establish an exemption from United States backup withholding tax, and (iii) any other governmental forms which are necessary or required under an applicable tax treaty or otherwise by law to reduce or eliminate any withholding tax, which have been reasonably requested by the Borrower. If an event (including without limitation any change in treaty, law or regulation) has occurred prior to the date on which any delivery required by the preceding sentence would otherwise be required which renders all such forms inapplicable or which would prevent any Lender from duly completing and delivering any such form with respect to it and such Lender advises the Borrower and the Agent that it is not capable of receiving payments without any deduction or withholding of United States federal income tax, and in the case of a Form W-9 establishing an exemption from United States backup withholding tax, such Lender shall not be required to deliver such form. The Borrower shall withhold tax at the rate and in the manner required by the laws of the United States with respect to payments made to a Lender failing to timely provide the requisite Internal Revenue Service forms. For any period with respect to which a Lender has failed to provide the Borrower and the Agent with the appropriate form pursuant to this Section 2.14(d) (unless such failure is due to a change in treaty or Legal Requirement occurring subsequent to the date on which a form originally was required to be provided), such Lender, as applicable, shall not be entitled to indemnification under Section 2.14(c) with respect to Taxes imposed by the United States which taxes would not have been imposed but for such failure to provide such forms; provided that should a Lender, which is otherwise exempt from or subject to a reduced rate of withholding tax becomes subject to Taxes because of its failure to deliver a form required hereunder, the Borrower shall take such steps as such Lender shall reasonable request to assist such Lender to recover such Taxes.

ARTICLE III

CONDITIONS OF LENDING

        Section 3.01    Conditions Precedent to Closing Date.    The Closing Date shall occur upon the satisfaction of the following conditions precedent that:

        (a)    Documentation.    The Agent shall have received the following duly executed by all the parties thereto, in form and substance satisfactory to the Agent and the Lenders, and, where applicable, in sufficient copies for each Lender:

          (i)  this Agreement;

        (ii)  a Subordinated Note payable to the order of each Lender in the amount of its Commitment

        (iii)  a Second Security Agreement executed by the Borrower and each of its Subsidiaries;

        (iv)  a Second Pledge Agreement executed by Brigham Exploration and the General Partner;

        (v)  the Second Mortgage Amendments and any additional Second Mortgages that may be required pursuant to Section 5.11;

        (vi)  copies of the Borrower's insurance policies that name the Senior Agent as loss payee or additional insured, as applicable, and the Agent as additional insured, certified by the

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Borrower's insurance broker as true and correct copies thereof, and which are otherwise satisfactory to the Agent;

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

      (viii)  a favorable opinion dated as of the date of the Closing Date of Mahaffey & Gore, P.C., Oklahoma counsel to the Credit Parties, in form and substance reasonably satisfactory to the Agent;

        (ix)  copies, certified as of the date of this Agreement by a Responsible Officer or the secretary or an assistant secretary of the General Partner (on behalf of the Borrower) of (A) the resolutions of the applicable governing body of the Borrower approving the Subordinated Loan Documents to which the Borrower is a party, (B) the organizational documents of the Borrower, and (C) all other documents evidencing other necessary corporate action and governmental approvals, if any, with respect to this Agreement, the Subordinated Notes, the Subordinated Security Instruments and the other Subordinated Loan Documents to which the Borrower is a party;

        (x)  certificates of a Responsible Officer or the secretary or an assistant secretary of the General Partner certifying the names and true signatures of the officers of the General Partner authorized to sign on behalf of the Borrower this Agreement, the Subordinated Notes, the Subordinated Security Instruments and the other Subordinated Loan Documents to which the Borrower is a party;

        (xi)  copies, certified as of the date of this Agreement by a Responsible Officer or the secretary or an assistant secretary of each Guarantor (A) the resolutions of the applicable governing body of such Guarantor approving the Subordinated Loan Documents to which it is a party, (B) the organizational documents of such Guarantor, and (C) all other documents evidencing other necessary corporate action and governmental approvals, if any, with respect to this Agreement, the Subordinated Security Instruments, and the other Subordinated Loan Documents to which such Guarantor is a party;

      (xii)  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 Agreement, the Subordinated Security Instruments and the other Subordinated Loan Documents to which such Guarantor is a party;

      (xiii)  certificates from the appropriate Governmental Authority certifying as to the good standing, existence and authority of each of the Credit Parties in all jurisdictions where required by the Agent;

      (xiv)  a certificate dated as of the date of this Agreement from the Responsible Officer of the General Partner stating that (A) all representations and warranties of the Borrower set forth in this Agreement are true and correct in all material respects; (B) no Default has occurred and is continuing; and (C) the conditions in this Section 3.01 have been met;

      (xv)  the Intercreditor and Subordination Agreement;

      (xvi)  results of lien, tax and judgment searches of the UCC Records of the Secretary of State and applicable counties of the States of Delaware, Oklahoma and Texas from a source acceptable to the Agent and reflecting no Liens against any of the Collateral as to which perfection of a Lien is accomplished by the filing of a financing statement other than in favor of the Agent, other than Permitted Liens;

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    (xvii)  appropriate UCC-1 Financing Statements covering the Collateral for filing with the appropriate authorities and any other documents, agreements or instruments necessary to create an Acceptable Security Interest in such Collateral;

    (xviii)  the Side Letter Agreement; and

      (xix)  such other documents, governmental certificates, agreements and lien searches as the Agent or any Lender may reasonably request.

        (b)    Due Diligence.    The Agent and the Lenders shall have completed satisfactory due diligence review of the assets, liabilities, business, operations and condition (financial or otherwise) of the Borrower and its Subsidiaries, including, but not limited, to a review of their Oil and Gas Properties, Subordinated Debt, and all legal, financial, accounting, governmental, environmental, tax and regulatory matters, and fiduciary aspects of the proposed financing.

        (c)    Payment of Fees.    On the date of this Agreement, the Borrower shall have paid all costs and expenses that have been invoiced and are payable pursuant to Section 10.04.

        (d)    Delivery of Financial Statements.    The Agent and the Lenders shall have received true and correct copies of (i) the Financial Statements, and (ii) such other financial information as the Agent or any Lender may reasonably request.

        (e)    No Default.    No Default shall have occurred and be continuing.

        (f)    Representations and Warranties.    The representations and warranties contained in Article IV and in each other Subordinated Loan Document shall be true and correct in all respects.

        (g)    Material Adverse Change.    No event or circumstance that could cause a Material Adverse Change shall have occurred.

        (h)    No Proceeding or Litigation; No Injunctive Relief.    Except as described in Schedule 4.07, no action, suit, investigation or other proceeding (including, without limitation, the enactment or promulgation of a statute or rule) by or before any arbitrator or any Governmental Authority shall be threatened or pending and no preliminary or permanent injunction or order by a state or federal court shall have been entered against the Borrower or any of its Subsidiaries.

        (i)    Consents, Licenses, Approvals, etc.    The Agent shall have received true copies (certified to be such by a Responsible Officer the Borrower or other appropriate Credit Party) of all consents, licenses and approvals required in accordance with applicable Legal Requirements, or in accordance with any document, agreement, instrument or arrangement to which any Credit Party is a party, in connection with the execution, delivery, performance, validity and enforceability of this Agreement and the other Subordinated Loan Documents. In addition, the Credit Parties shall have all such material consents, licenses and approvals required in connection with the continued operation of the Credit Parties, and such approvals shall be in full force and effect, and all applicable waiting periods shall have expired without any action being taken or threatened by any competent authority which would restrain, prevent or otherwise impose adverse conditions on this Agreement and the actions contemplated hereby.

        (j)    Senior Credit Agreement.    The conditions precedent set forth in Section 3.01 of the Senior Credit Agreement shall have been contemporaneously herewith satisfied or waived as of the Closing Date. The Borrower shall have delivered copies of the Senior Loan Documents on or before the Closing Date.

        (k)    Subordinated Security Instruments.    The Agent shall have received all appropriate evidence required by the Agent and the Lenders in their sole discretion necessary to determine that arrangements have been made for the Agent (for its benefit and the benefit of the Lenders)

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to have an Acceptable Security Interest in the Collateral and that all actions or filings necessary to protect, preserve and validly perfect such Liens have been made, taken or obtained (or will be upon the filing and recording of the appropriate Subordinated Security Instruments), as the case may be, and are in full force and effect.

        (l)    Title.    The Agent shall be satisfied in its sole discretion with the title to the Oil and Gas Properties included in the Borrowing Base and that such Oil and Gas Properties constitute a percentage of such Collateral reasonably satisfactory to the Agent.

        Section 3.02    Conditions Precedent to All Borrowings.    The obligation of each Lender to make an Advance on the occasion of each Borrowing shall be subject to the further conditions precedent that on the date of such Borrowing:

        (a)  the following statements shall be true (and each of the giving of the applicable Notice of Borrowing or notice of payment in kind and the acceptance by the Borrower of the proceeds of such Borrowing shall constitute a representation and warranty by the Borrower that on the date of such Borrowing such statements are true):

          (i)  the representations and warranties contained in Article IV of this Agreement and the representations and warranties contained in the Subordinated Security Instruments, the Guaranties, and each of the other Subordinated Loan Documents are true and correct in all material respects on and as of the date of such Borrowing, before and after giving effect to such Borrowing and to the application of the proceeds from such Borrowing, as though made on and as of such date (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 respect as of such earlier date);

        (ii)  no Default has occurred and is continuing or would result from such Borrowing or from the application of the proceeds therefrom; and

        (b)  the Agent shall have received such other approvals, opinions, or documents reasonably deemed necessary or desirable by any Lender as a result of circumstances occurring after the date of this Agreement, as any Lender through the Agent may reasonably request.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

        Each Credit Party jointly and severally represents and warrants as follows:

        Section 4.01    Corporate Existence; Subsidiaries.    Each of the Credit Parties is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation and in good standing and qualified to do business in each jurisdiction where its ownership or lease of Property or conduct of its business requires such qualification and where the failure to so qualify could reasonably be expected to cause a Material Adverse Change. As of the Closing Date, the Credit Parties have no Subsidiaries other than those listed on Schedule 4.01.

        Section 4.02    Corporate Power.    The execution, delivery, and performance by each Credit Party of this Agreement, the Subordinated Notes, and the other Subordinated Loan Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby (a) are within such Credit Party's powers, (b) have been duly authorized by all necessary governing action, (c) do not contravene (i) such Credit Party's governance documents or (ii) any Legal Requirement or any material contractual restriction binding on or affecting such Credit Party, and (d) will not result in or require the creation or imposition of any Lien upon any of the material Property of any Credit Party prohibited by this Agreement. At the time of each Advance, such Advance and the use of the proceeds of such Advance will (A) be within the Borrower's limited partnership powers, (B) have been duly authorized

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by all necessary partnership action, (C) not contravene (i) the Borrower's limited partnership agreement or other organizational documents or (ii) any Legal Requirement or any material contractual restriction of any material agreement binding on or affecting the Borrower and (D) not result in or require the creation or imposition of any Lien upon any of the material Property of any Credit Party prohibited by this Agreement.

        Section 4.03    Authorization and Approvals.    No consent, order, authorization, or approval or other action by, and no notice to or filing with, any Governmental Authority or any other Person is required for the due execution, delivery, and performance by any Credit Party of this Agreement, the Subordinated Notes, or the other Subordinated Loan Documents to which such Credit Party is a party or the consummation of the transactions contemplated hereby or thereby. At the time of each Borrowing, no authorization or approval or other action by, and no notice to or filing with, any Governmental Authority will be required for such Borrowing or the use of the proceeds of such Borrowing.

        Section 4.04    Enforceable Obligations.    This Agreement, the Subordinated Notes, and the other Subordinated Loan Documents to which each Credit Party is a party have been duly executed and delivered by such Credit Party. Each Subordinated Loan Document to which each Credit Party is a party is the legal, valid, and binding obligation of such Credit Party enforceable against such Credit Party in accordance with its terms, except as such enforceability may be limited by any applicable bankruptcy, insolvency, reorganization, moratorium, or similar law affecting creditors' rights generally and by general principles of equity.

        Section 4.05    Financial Statements.    

        (a)  The Borrower has delivered to the Agent and the Lenders the Financial Statements, and the Financial Statements are correct and complete in all material respects and present fairly the consolidated financial condition of the Credit Parties as of their respective dates and for their respective periods in accordance with GAAP, applied on a consistent basis. As of the date of the Financial Statements, there were no material Debt, trade payables, contingent obligations, liabilities for taxes, unusual forward or long term commitments, or unrealized or anticipated losses of any Credit Party, except as disclosed therein and adequate reserves for such items have been made in accordance with GAAP.

        (b)  Since December 31, 2002, no event or circumstance that could reasonably be expected to cause a Material Adverse Change has occurred.

        (c)  Each of the Credit Parties is Solvent.

        Section 4.06    True and Complete Disclosure.    All written information (whether delivered before or after the Closing Date) furnished by or on behalf of any Credit Party to any Lender or the Agent for purposes of or in connection with this Agreement, any other Subordinated Loan Document or any transaction contemplated hereby or thereby, when taken as a whole, is true and accurate in all material respects on the date as of which such information is dated or certified (or, if not dated and certified, as of the date as of which such information is provided) and does not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements contained therein not materially misleading at such time. All projections, estimates and pro-forma financial information furnished by the Borrower were prepared on the basis of assumptions, data, information, tests, or conditions believed to be reasonable at the time such projections, estimates and pro-forma financial information were furnished, but the Credit Parties do not represent and warrant that such projections, estimates or pro forma information is (or will ultimately prove to have been) accurate.

        Section 4.07    Litigation.    There is no pending or, to the knowledge of any Responsible Officer of any Credit Party, threatened action or proceeding affecting any of the Credit Parties before any court, Governmental Authority or arbitrator which (a) both (i) involves the possibility of any judgment or

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liability against any Credit Party not fully covered by insurance (except for normal deductibles and (ii) could reasonably be expected to be cause a Material Adverse Change or (b) purports to affect the legality, validity, binding effect or enforceability of this Agreement, any Subordinated Note, or any other Subordinated Loan Document. Additionally, there is no pending or, to the knowledge of any Responsible Officer of any Credit Party, threatened action or proceeding instituted against any Credit Party which seeks to adjudicate such Credit Party as bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or for any substantial part of its Property.

        Section 4.08    Taxes.    

        (a)    Reports and Payments.    All Returns (as defined below in Section 4.08(c)) required to be filed by or on behalf of any Credit Party or any member of the Controlled Group (hereafter collectively called the "Tax Group") have been duly filed on a timely basis or appropriate extensions have been obtained and such Returns are and will be true, complete and correct in all material respects; and all Taxes shown to be payable on the Returns or on subsequent assessments with respect thereto will have been paid in full on a timely basis, and no other Taxes will be payable by the Tax Group with respect to items or periods covered by such Returns, except where any obligation is being contested in good faith and by appropriate proceedings and after adequate reserves for such items have been made in accordance with GAAP. The reserves for accrued Taxes reflected in the financial statements delivered to the Lenders under this Agreement are adequate in the aggregate for the payment of all unpaid Taxes, whether or not disputed, for the period ended as of the date thereof and for any period prior thereto, and for which the Tax Group may be liable in its own right, as withholding agent or as a transferee of the assets of, or successor to, any Person.

        (b)    Taxes Definition.    "Taxes" in this Section 4.08 shall mean all taxes, charges, fees, levies, or other assessments imposed by any federal, state, local, or foreign taxing authority, including without limitation, income, gross receipts, excise, real or personal property, sales, occupation, use, service, leasing, environmental, value added, transfer, payroll, and franchise taxes (and including any interest, penalties, or additions to tax attributable to or imposed on with respect to any such assessment).

        (c)    Returns Definition.    "Returns" in this Section 4.08 shall mean any federal, state, local, or foreign report, estimate, declaration of estimated Tax, information statement or return relating to, or required to be filed in connection with, any Taxes, including any information return or report with respect to backup withholding or other payments of third parties.

        Section 4.09    Pension Plans.    All Plans are in compliance in all material respects with all applicable provisions of ERISA. No Termination Event has occurred with respect to any Plan, and each Plan has complied with and been administered in all material respects in accordance with applicable provisions of ERISA and the Code. No "accumulated funding deficiency" (as defined in Section 302 of ERISA) has occurred and there has been no excise tax imposed under Section 4971 of the Code. No Reportable Event has occurred with respect to any Multiemployer Plan, and each Multiemployer Plan has complied with and been administered in all material respects with applicable provisions of ERISA and the Code. The present value of all benefits vested under each Plan (based on the assumptions used to fund such Plan) did not, as of the last annual valuation date applicable thereto, exceed the value of the assets of such Plan allocable to such vested benefits. None of the Credit Parties or any member of the Controlled Group has had a complete or partial withdrawal from any Multiemployer Plan for which there is any withdrawal liability. As of the most recent valuation date applicable thereto, none of the Credit Parties or any member of the Controlled Group would become subject to any liability under ERISA if any Credit Party or any member of the Controlled Group received notice that any Multiemployer Plan is insolvent or in reorganization. Based upon GAAP existing as of the date of this

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Agreement and current factual circumstances, no Credit Party has reason to believe that the annual cost during the term of this Agreement to any Credit Party or any other member of the Controlled Group for post-retirement benefits to be provided to the current and former employees of the Borrower or any member of the Controlled Group under welfare benefit plans (as defined in Section 3(1) of ERISA) could, in the aggregate, reasonably be expected to cause a Material Adverse Change.

        Section 4.10    Condition of Property; Casualties.    

        (a)  Subject to the matters set forth in Schedule 4.10, each of the Borrower and its Subsidiaries has good and indefeasible title to all of its Oil and Gas Properties evaluated in any Engineering Report, free and clear of all Liens except for Permitted Liens. Brigham Exploration has good and defensible title to all of the Equity Interests in the General Partner and, directly and indirectly, all of the ownership interests in the Limited Partners, except for Permitted Liens. Each of the General Partner and the Limited Partners has good and defensible title to all of the Equity Interests in the Borrower, except for Permitted Liens.

        (b)  The quantum and nature of the interest of the Borrower and its Subsidiaries in and to its Hydrocarbon Interests as set forth in each Engineering Report includes the entire interest of the Borrower and its Subsidiaries in such Hydrocarbon Interests as of the date of such Engineering Report and are complete and accurate in all material respects as of the date of such Engineering Report; and there are no "back-in" or "reversionary" interests held by third parties which could materially reduce the interest of the Borrower and its Subsidiaries in such Hydrocarbon Interests except as taken into account in such Engineering Report. The ownership of the Hydrocarbon Interests held by the Borrower and its Subsidiaries shall not in any material respect obligate any such Person to bear the costs and expenses relating to the maintenance, development or operations of such Hydrocarbon Interests in an amount in excess of the working interest of such Person in each such Hydrocarbon Interest set forth in the most recent Engineering Report.

        (c)  All leases and agreements comprising the Borrower's and its Subsidiaries' Oil and Gas Properties necessary for the conduct of business of the Borrower and its Subsidiaries are valid and subsisting, in full force and effect and there exists no default or event of default or circumstance which with the giving of notice or lapse of time or both would give rise to a default under any such leases, instruments or agreements which would affect in any material respect the conduct of the business of the Borrower and its Subsidiaries. Neither the Borrower or any of its Subsidiaries nor, to the knowledge of the Borrower, any other party to any leases, instruments or agreements comprising its Oil and Gas Properties evaluated in any Engineering Report, has given or threatened to give notice of any default under or inquiry into any possible default under, or action to alter, terminate, rescind or procure a judicial reformation of, any such lease, instrument or agreement. Except as set forth on Schedule 4.10 or as otherwise disclosed in writing to the Agent, neither the Borrower nor any of its Subsidiaries is subject to any obligation to drill additional wells, finance the drilling of additional wells, or conduct additional operations in order to earn or continue to own any Significant PUD Location or any other proved developed producing reserves or proved developed nonproducing reserves evaluated in any Engineering Report.

        (d)  The Properties presently owned, leased or licensed by the Borrower and its Subsidiaries, including, without limitation, all leases, easements, rights of way, and contractual rights, include all Properties necessary to permit the Borrower and its Subsidiaries to conduct their business in all material respects in the same manner as its business has been conducted prior to the Closing Date.

        (e)  All of the Properties of the Borrower and its Subsidiaries that are reasonably necessary for the operation of their business are in good repair, working order and condition in all material respects and are maintained in accordance with prudent business standards. Since the date of the most recent financial statements delivered pursuant to Section 5.06(a), neither the business nor the Properties of

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the Credit Parties, taken as a whole, has been materially and adversely affected as a result of any fire, explosion, earthquake, flood, drought, windstorm, accident, strike or other labor disturbance, embargo, requisition or taking of Property or cancellation of contracts, Permits, or concessions by a Governmental Authority, riot, activities of armed forces, or acts of God or of any public enemy.

        (f)    Except as set forth on Schedule 4.10 or as otherwise disclosed in writing to the Administrative Agent:

          (i)  In each case only with respect to any of the Borrower's and its Subsidiaries' Oil and Gas Properties that have been assigned a discounted present value equal to or in excess of $2,000,000 in any Engineering Report, (A) all rentals, royalties, overriding royalties, shut-in royalties and other payments due under or with respect to any such Hydrocarbon Interests evaluated in any Engineering Report have been properly and timely paid in the ordinary course of business and (B) all material expenses payable under the terms of the contracts and agreements comprising such Oil and Gas Properties (other than those described above in clause (A)) have been properly and timely paid in the ordinary course of business except in each case (1) where such payments are being contested in good faith by appropriate proceedings and for which adequate reserves complying with GAAP have been made or (2) for payments the late payment of which could not reasonably be expected to cause a termination or forfeiture of any of the Borrower's or its Subsidiaries' rights under any such leases, instruments or agreements comprising any such Oil and Gas Properties or otherwise, individually or in the aggregate, cause a Material Adverse Change;

        (ii)  All of the proceeds from the sale of Hydrocarbons produced from the Borrower's and its Subsidiaries' Hydrocarbon Interests are being properly and timely paid to the Borrower without suspense, other than any such proceeds the late payment or non-payment of which could not reasonably be expected to cause a Material Adverse Change or materially adversely affect the value of the Collateral taken as a whole; and

        (iii)  No material amount of proceeds that has been received by any Credit Party from the sale of Hydrocarbons produced from the Oil and Gas Properties evaluated in any Engineering Report is subject to any claim for any refund or refund obligation, except as permitted under Section 4.14 or Section 6.13.

        Section 4.11    Security Instruments.    

        (a)  The provisions of each of the Second Pledge Agreements delivered to the Agent are effective to create in favor of the Agent, for the ratable benefit of the Lenders, a legal, valid and enforceable security interest in the Pledged Collateral (as defined therein) and proceeds thereof and upon the filing of UCC-1 Financing Statements with the secretary of state of each jurisdiction of formation for each of the grantors party thereto, the Second Pledge Agreements shall constitute an Acceptable Security Interest in all right, title and interest of the applicable Credit Party in such Pledged Collateral and the proceeds thereof.

        (b)  On the Closing Date, the Equity Interests listed on Schedule I to each of the Second Pledge Agreements will constitute all the issued and outstanding Equity Interests in the Borrower, the General Partner, the Limited Partners, and the direct and indirect Subsidiaries of the Borrower; all such Equity Interests have been duly and validly issued and are fully paid and nonassessable; and the relevant pledgor of said shares is the record and beneficial owner of said shares.

        (c)  The provisions of each Second Mortgage will be effective to grant to the Agent, for the ratable benefit of the Lenders, legal, valid and enforceable mortgage liens on all of the right, title and interest of the Borrower and its Subsidiaries in the mortgaged property described therein. Once each such Second Mortgage has been recorded in the appropriate recording office, such Second Mortgage will constitute an Acceptable Security Interest in such mortgaged property.

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        (d)  The provisions of each Second Security Agreement delivered to the Agent are effective to create in favor of the Agent, for the ratable benefit of the Lenders, a legal, valid and enforceable security interest in the collateral described therein and proceeds thereof and, upon the filing of UCC-1 Financing Statements with the secretary of state of each jurisdiction of formation for each of the grantors party thereto, each Second Security Agreement shall constitute an Acceptable Security Interest in all right, title and interest of the applicable Credit Party in such collateral and the proceeds thereof.

        (e)  On the Closing Date all governmental actions and all other filings, recordings, registrations, third party consents and other actions which are necessary to create and perfect the Liens provided for in the Subordinated Security Instruments will have been made, obtained and taken in all relevant jurisdictions (or are the subject of arrangements, satisfactory to the Agent, to be made, obtained or taken on or promptly after the Closing Date). No other filings or recordings are required in order to perfect the security interests created under any Subordinated Security Instruments.

        Section 4.12    No Burdensome Restrictions; No Defaults.    

        (a)  Neither the Borrower nor any of its Subsidiaries is a party to any indenture, loan, or credit agreement or any lease or other agreement or instrument or subject to any charter or corporate restriction or provision of applicable law or governmental regulation that could reasonably be expected to cause a Material Adverse Change. Neither the Borrower nor any of its Subsidiaries is in default nor has any event or circumstance occurred which, but the expiration of any grace period or the giving of notice, or both, would constitute a default under (i) the Senior Credit Agreement or (ii) any other material contract, agreement, lease, or other instrument to which such Credit Party is a party which default could reasonably be expected to cause a Material Adverse Change. None of the Credit Parties has received any notice of default under any material contract, agreement, lease, or other instrument to which such Credit Party is a party.

        (b)  No Default has occurred and is continuing.

        Section 4.13    Environmental Condition.    Other than exceptions to any of the following that would not reasonably be expected to cause a Material Adverse Change or materially adversely affect the value of the Collateral taken as a whole:

        (a)    Permits, Etc.    With respect to its Oil and Gas Properties for which such Credit Party is the operator and with respect to its Oil and Gas Properties that are operated by operators other than the Borrower or a Subsidiary, to the best of its knowledge, in all material respects, each of the Credit Parties (i) has obtained all Environmental Permits necessary for the ownership and operation of any and all of their respective Properties and the conduct of their respective businesses; (ii) have at all times been and are in compliance with all terms and conditions of such Permits and with all other requirements of applicable Environmental Laws and other Legal Requirements; (iii) have not received notice of any violation or alleged violation of any Environmental Law or any such Permit; and (iv) are not subject to any actual or contingent Environmental Claim with respect to such Properties.

        (b)    Certain Liabilities.    None of the present or, to the best knowledge of any Credit Party, previously owned or operated Property of any of the Credit Parties, wherever located, (i) has been placed on or proposed to be placed on the National Priorities List, the Comprehensive Environmental Response Compensation Liability Information System list, or their state or local analogs, or have been otherwise investigated, designated, listed, or identified as a potential site for removal, remediation, cleanup, closure, restoration, reclamation, or other response activity under any Environmental Laws; (ii) is subject to a Lien, other than a Permitted Lien, arising under or in connection with any Environmental Laws, that attaches to any revenues or to any Property owned or operated by the Borrower or any of its Subsidiaries, wherever located; or (iii) has been the site of any Release of Hazardous Substances or Hazardous Wastes from present or past operations that has caused at the site or at any third party site any condition that has resulted in or could reasonably be expected to result in the need for Response.

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        (c)    Certain Actions.    Without limiting the foregoing, (i) all necessary notices have been properly filed, and no further action is required under current Environmental Law as to each Response or other restoration or remedial project undertaken by the Borrower or its Subsidiaries or any of their former Subsidiaries on any of their presently or formerly owned or operated Property and (ii) there is no present and, to the Borrower's knowledge, future liability, if any, of the Borrower and its Subsidiaries which could reasonably be expected to arise in connection with requirements under Environmental Laws.

        Section 4.14    Gas Contracts.    Except as set forth in the most recent Engineering Report or in Schedule 4.14, on a net basis there are no material gas imbalances, material take-or-pay or other prepayments with respect to the Oil and Gas Properties of the Borrower and its Subsidiaries (or, in the case of Oil and Gas Properties operated by operators other than the Borrower or its Subsidiaries, to the Borrower's knowledge after reasonable investigation) that would require the Borrower and its Subsidiaries to deliver 2.5% or more of the aggregate calendar quarter production from the Borrower's and its Subsidiaries' Hydrocarbons produced on a calendar quarter basis from their Hydrocarbon Interests at some future time without then or thereafter receiving full payment therefor.

        Section 4.15    Compliance with Laws.    Except for any failure to comply with any of the foregoing which would not reasonably be expected to cause a Material Adverse Change, each of the Credit Parties has (a) complied with all applicable Legal Requirements of any Governmental Authority having jurisdiction over the conduct of their respective businesses or the ownership of their respective Property and (b) obtained all Permits that are necessary for the ownership of any of its Properties or the conduct of their business. Other than immaterial exceptions to any of the following: (i) the prices being received by the Borrower and its Subsidiaries for the production of Hydrocarbons do not violate any material provision of any contract or agreement comprising the Oil and Gas Properties of the Borrower and its Subsidiaries or any Legal Requirement, (ii) where applicable, all of the wells located on the Borrower's and its Subsidiaries' Hydrocarbon Interests and production of Hydrocarbons therefrom have been properly classified under appropriate governmental regulations, (iii) all necessary regulatory filings have been properly made in connection with the drilling, completion and operation of the wells on or attributable to the Borrower's and its Subsidiaries' Hydrocarbon Interests and all other operations related thereto and (iv) all production and sales of the Borrower's and its Subsidiaries' Hydrocarbons produced or sold from the Borrower's and its Subsidiaries' Hydrocarbon Interests have been made in accordance with any applicable allowables (plus permitted tolerances) imposed by any Governmental Authorities.

        Section 4.16    Hedging Agreements.    Schedule 4.16 sets forth, as of the Closing Date, a true and complete list of all Interest Hedge Agreements and Hydrocarbon Hedge Agreements of the Borrower and each of its Subsidiaries, setting forth the type, term, effective date, termination date and notional amounts or volumes, and the counterparty to each such agreement.

        Section 4.17    Material Agreements.    Schedule 4.17 sets forth a complete and correct list of all material agreements, leases, indentures, purchase agreements, obligations in respect of letters of credit, guarantees, joint venture agreements, and other instruments in effect or to be in effect as of the Closing Date (other than the agreements set forth in Schedule 4.16) providing for, evidencing, securing or otherwise relating to any material Debt of the Borrower or any of its Subsidiaries, and all obligations of the Borrower or any of its Subsidiaries to issuers of surety or appeal bonds (other than operator's bonds, plugging and abandonment bonds, and similar surety obligations obtained in the ordinary course of business) issued for the account of the Borrower or any of its Subsidiaries, and such list correctly sets forth the names of the debtor or lessee and creditor or lessor with respect to the Debt or lease obligations outstanding or to be outstanding and the Property subject to any Lien securing such Debt or lease obligation.

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        Section 4.18    Organizational Documents.    The Partnership Agreement has not been terminated, is in full force and effect as of the Closing Date and no default has occurred and is continuing thereunder that could reasonably be expected to cause a Material Adverse Change.

        Section 4.19    Guarantors.    All of the Borrower's Subsidiaries are Guarantors under Article VIII.

        Section 4.20    Insurance.    Each of the Borrower and its Subsidiaries carry insurance required under Section 5.02.

        Section 4.21    Use of Proceeds.    The proceeds of the Advances will be used by the Borrower for the purposes described in Section 5.10. The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U). No proceeds of any Advance will be used to purchase or carry any margin stock in violation of Regulation T, U or X.

        Section 4.22    Investment Company Act.    Neither Brigham Exploration nor any of its Subsidiaries is an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended.

        Section 4.23    Public Utility Holding Company Act.    Neither Brigham Exploration nor any of its Subsidiaries is a "holding company," or a "subsidiary company" of a "holding company," or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company," or a "public utility" within the meaning of the Public Utility Holding Company Act of 1935, as amended.

        Section 4.24    Transmitting Utility.    Neither Brigham Exploration nor any of its Subsidiaries is a "transmitting utility" or an "interstate gas pipeline company" or a "public service corporation" within the meaning of the laws currently in effect for the States of Texas and/or Oklahoma.

ARTICLE V

AFFIRMATIVE COVENANTS

        So long as any Subordinated Note or any amount under any Subordinated Loan Document shall remain unpaid or any Lender shall have any Commitment hereunder, each of the Credit Parties agrees to comply with the following covenants.

        Section 5.01    Compliance with Laws, Etc.    The Borrower shall comply, and cause each of its Subsidiaries to comply, in all material respects with all Legal Requirements; provided that this Section 5.01 shall not prevent the Borrower or any of its Subsidiaries from, in good faith and with reasonable diligence, contesting the validity or application of any such laws or regulations by appropriate legal proceedings. Without limitation of the foregoing, the Borrower shall use commercially reasonable efforts to obtain, and shall cause each of its Subsidiaries to use commercially reasonable efforts to obtain, as soon as practicable, all consents or approvals required from any states of the United States (or other Governmental Authorities) necessary to grant the Agent an Acceptable Security Interest in the Borrower's and its Subsidiaries' Oil and Gas Properties.

        Section 5.02    Maintenance of Insurance.    

        (a)  The Borrower shall, and shall cause each of its Subsidiaries to, maintain with financially sound and reputable insurance companies insurance of such types, in such amounts and against such risks as is customary to be maintained by companies engaged in the same or a similar business in the same general area; and furnish to the Agent, upon written request, full information as to the insurance carried. In addition, the Borrower shall, and shall cause each of its Subsidiaries to, comply with all requirements regarding insurance contained in the Subordinated Security Instruments.

        (b)  All certified copies of policies or certificates thereof, and endorsements and renewals thereof shall be delivered to and retained by the Agent. All policies of insurance shall name the Agent as an

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additional insured. All policies or certificates of insurance shall set forth the coverage, the limits of liability, the name of the carrier, the policy number, and the period of coverage. In addition, all policies of insurance required under the terms hereof shall contain an endorsement or agreement by the insurer that any loss shall be payable in accordance with the terms of such policy notwithstanding any act of negligence of the Borrower, or a Subsidiary or any party holding under the Borrower or a Subsidiary which might otherwise result in a forfeiture of the insurance and the further agreement of the insurer waiving all rights of setoff, counterclaim or deductions against the Borrower and its Subsidiaries. All such policies shall contain a provision that notwithstanding any contrary agreements between the Borrower, its Subsidiaries, and the applicable insurance company, such policies will not be canceled, allowed to lapse without renewal, surrendered or amended (which provision shall include any reduction in the scope or limits of coverage) without at least 10 days' prior written notice to the Agent in the event of the Borrower's failure to pay any premiums and in all other cases, 30 days' prior written notice to the Agent.

        Section 5.03    Preservation of Corporate Existence, Etc.    Each of the Credit Parties shall preserve and maintain its corporate, limited partnership or limited liability company, as applicable, existence, and all of its material rights, franchises, and privileges in the jurisdiction of its formation, and qualify and remain qualified as a foreign entity in each jurisdiction in which qualification is necessary or desirable in view of its business and operations or the ownership of its Properties to the extent the failure to qualify could reasonably be expected to cause a Material Adverse Change.

        Section 5.04    Payment of Taxes, Etc.    The Borrower shall, and shall cause each of its Subsidiaries to, pay and discharge, before the same shall become delinquent, (a) all taxes, assessments, and governmental charges or levies imposed upon it or upon its income or profits or Property prior to the date on which penalties attach thereto and (b) all lawful claims that are material in amount which, if unpaid, could by law become a Lien upon its Property; provided that neither the Borrower nor any such Subsidiary shall be required to pay or discharge any such tax, assessment, charge, levy, or claim which is being contested in good faith and by appropriate proceedings, and with respect to which reserves in conformity with GAAP have been provided.

        Section 5.05    Inspection; Books and Records.    Upon reasonable notice, each Credit Party shall permit the Agent and any Lender or any of their respective agents or representatives thereof, during normal business hours, to (a) examine and make copies of and abstracts from the records and books of account of, and visit and inspect at their reasonable discretion the Properties of, such Credit Party, and (b) discuss the affairs, finances and accounts of such Credit Party with any of their respective officers or directors, all to the extent reasonably requested by the Agent or such Lender, as the case may be. Each Credit Party shall keep proper books of records and account in which full, true and correct entries in conformity with GAAP and all Legal Requirements shall be made of all dealings and transactions in relation to its business and activities.

        Section 5.06    Reporting Requirements.    The Borrower shall furnish, or shall cause the applicable Credit Party to furnish, to the Agent and each Lender:

        (a)    Annual Financials of Brigham Exploration.    As soon as available, but in any event within 90 days after the end of each fiscal year of Brigham Exploration or sooner if required by the SEC, the audited consolidated statements of income, stockholders' equity, changes in financial position and cash flow of Brigham Exploration and its consolidated Subsidiaries for such fiscal year, and the related consolidated and unaudited consolidating balance sheets of Brigham Exploration and its consolidated Subsidiaries as at the end of such fiscal year, and setting forth in each case in comparative form the corresponding figures for the preceding fiscal year, together with a certification by its Chief Executive Officer and its Chief Financial Officer in accordance with the Sarbanes-Oxley Act of 2002 and accompanied by the related opinion of independent public accountants of recognized national standing reasonably acceptable to the Agent which opinion

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shall state that such financial statements fairly present the consolidated financial position and results of operations of Brigham Exploration and its consolidated Subsidiaries as at the end of, and for, such fiscal year and that such financial statements have been prepared in accordance with GAAP except for such changes in such principles with which the independent public accountants shall have concurred and such opinion shall not contain a "going concern" or like qualification or exception;

        (b)    Quarterly Financials of Brigham Exploration.    As soon as available, but in any event not later than 45 days after the end of each of the first three quarterly fiscal periods of each fiscal year of Brigham Exploration and its consolidated Subsidiaries (or sooner if required by the SEC), consolidated statements of income, stockholders' equity, changes in financial position and cash flow of Brigham Exploration and its consolidated Subsidiaries for such period and for the period from the beginning of the respective fiscal year to the end of such period, and the related consolidated and consolidating balance sheets of Brigham Exploration and its consolidated Subsidiaries as at the end of such period, and setting forth in each case in comparative form the corresponding figures for the corresponding period in the preceding fiscal year, together with a certification by its Chief Executive Officer and its Chief Financial Officer in accordance with the Sarbanes-Oxley Act of 2002 and accompanied by the certificate of a Responsible Officer of Brigham Exploration, which certificate shall state that such financial statements fairly present the consolidated financial position and results of operations of Brigham Exploration and its consolidated Subsidiaries in accordance with GAAP, as at the end of, and for such period (subject to normal year-end audit adjustments);

        (c)    Compliance Certificates.    Concurrently with the delivery of each of the financial statements referred to in Section 5.06(a) and Section 5.06(b), a Compliance Certificated executed by a Responsible Officer of Brigham Exploration;

        (d)    Insurance Certificates.    Concurrently with the delivery of each of the financial statements referred to in Section 5.06(a), insurance certificates naming the Agent additional insured and evidencing insurance which meets the requirements of this Agreement and the Subordinated Security Instruments;

        (e)    Notice of Defaults.    As soon as possible after the occurrence of a Default known to any Responsible Officer of any Credit Party which is continuing on the date of such statement, a statement of a Responsible Officer setting forth the details of such Default and the actions which the Credit Parties have taken and propose to take with respect thereto;

        (f)    Material Changes.    Prompt written notice of any condition or event of which any Responsible Officer of any Credit Party has knowledge, which condition or event has resulted or could reasonably be expected to cause a Material Adverse Change;

        (g)    Annual Budget.    As soon as available and in any event prior to January 31, a one- year financial projection for Brigham Exploration and its Subsidiaries in form and substance acceptable to the Agent, which projection shall include revenues, expenses and capital expenditures (detailing the projected capital expenditures with respect to drilling (both development and exploration), leasehold, geological and geophysical, capitalized general and administrative expenses, and capitalized interest) for the following fiscal year;

        (h)    Hedging Agreements.    Concurrently with the delivery of each of the financial statements referred to in Section 5.06(a) and Section 5.06(b), a true and complete list of all Interest Hedge Agreements and Hydrocarbon Hedge Agreements of the Borrower and each of its Subsidiaries, setting forth the type, term, effective date, termination date and notional amounts or volumes and the counterparty to each such agreement;

        (i)    Litigation.    Prompt written notice of (i) any claims, legal or arbitration proceedings, proceedings before any Governmental Authority, or disputes, or to the knowledge of the Borrower

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threatened, or affecting any Credit Party which, if adversely determined, could reasonably be expected to cause a Material Adverse Change, (ii) any material litigation or proceeding against the Borrower or any of its Subsidiaries in which the amount involved is not covered in full by insurance (subject to normal and customary deductibles), or in which injunctive or similar relief is sought or (iii) any claim, judgment, Lien or other encumbrance (other than a Permitted Lien) affecting any Property of the Borrower or any of its Subsidiaries if the value of such claim, judgment, Lien, or other encumbrance affecting such Property shall exceed $1,000,000 (excluding liabilities to the extent covered by insurance if the insurer has confirmed that such insurance covers such liabilities);

        (j)    Environmental.    Prompt written notice of any threatened action, investigation or inquiry by any Governmental Authority of which any Responsible Officer of any Credit Party has knowledge in connection with any Environmental Laws with respect to the Property of the Borrower or any of its Subsidiaries, excluding routine testing, compliance and corrective action;

        (k)    Other Accounting Reports.    Promptly upon receipt thereof, a copy of each other report or letter (excluding routine correspondence) submitted to any Credit Party by independent accountants in connection with any annual, interim or special audit made by them of the books of any Credit Party, and a copy of any response by any Credit Party to such letter or report;

        (l)    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 or received from the SEC (excluding correspondence and other information received from the SEC concerning draft registration statements), or otherwise makes available to the public or the financial community generally;

        (m)    Notices Under Other Loan Agreements.    Promptly after the furnishing thereof, copies of any statement, report or notice furnished to any Person pursuant to the terms of any indenture, loan or credit or other similar agreement, other than this Agreement and not otherwise required to be furnished to the Lenders pursuant to any other provision of this Section 5.06;

        (n)    ERISA Information and Compliance.    Promptly furnish, and will cause any ERISA Affiliate to promptly furnish, (i) if requested by the Agent promptly after the filing thereof with the United States Secretary of Labor, the Interest Revenue Service or the PBGC, copies of each annual and other report with respect to each Plan or any trust created thereunder, (ii) immediately upon becoming aware of the occurrence of any ERISA Event or of any "prohibited transaction," as described in Section 406 of ERISA or in Section 4975 of the Code, in connection with any Plan or any trust created thereunder, a written notice signed by a Responsible Officer of the General Partner or such ERISA Affiliate specifying the nature thereof, what action the borrower or the ERISA Affiliate is taking or proposes to take with respect thereto, and when known, any action taken or proposed by the Internal Revenue Service, the Department of Labor or the PBGC with respect thereto, and (iii) immediately upon receipt thereof, copies of any notice of the PBGC's intention to terminate or to have a trustee appointed to administer any Plan; and

        (o)    Acquisition Information.    Concurrently with the delivery of each of the financial statements referred to in Section 5.06(a) and Section 5.06(b), a list of any Oil and Gas Properties purchased by the Borrower or any of its Subsidiaries during the previous twelve consecutive calendar months for a price equal to or greater than $1,000,000 for any single transaction or group of related transactions or $5,000,000 in the aggregate, together with such other information regarding such Oil and Gas Properties as Agent or any Lender may reasonably request; and

        (p)    Other Information.    Subject to any applicable restrictions on disclosure, such other information respecting the business or Properties, or the condition or operations, financial or

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otherwise, of the Credit Parties (including, without limitation, any Plan or Multiemployer Plan and any reports or other information required to be filed under ERISA), as any Lender through the Agent may from time to time reasonably request. The Agent agrees to provide the Lenders with copies of any material notices and information delivered solely to the Agent pursuant to the terms of this Agreement.

        Section 5.07    Maintenance of Property.    The Borrower shall, and shall cause each of its Subsidiaries to, (a) develop and operate its Oil and Gas Properties in a good and workmanlike manner as is customary in the oil and gas industry, and observe and comply in all material respects with all of the terms and provisions, express or implied, of all oil and gas leases relating to such Properties so long as the oil and gas leases are capable of producing Hydrocarbons in quantities and at prices providing for continued efficient and profitable operation of business; (b) comply in all material respects with all contracts and agreements applicable to or relating to its Oil and Gas Properties or the production and sale of Hydrocarbons and accompanying elements therefrom; (c) maintain, preserve, and keep all operating equipment used with respect to its Oil and Gas Properties in proper repair, working order and condition, and make all necessary or appropriate repairs, renewals, replacements, additions and improvements thereto so that the efficiency of the operating equipment shall at all times be properly preserved and maintained, provided that no item of operating equipment need be so repaired, renewed, replaced, added to or improved, if the Borrower or its Subsidiaries shall in good faith determine that the action is not necessary or desirable for such Person's continued efficient and profitable operation of business, and (d) with respect to its Oil and Gas Properties that are operated by operators other than the Borrower or a Subsidiary, (i) seek to enforce the operators' contractual obligations to maintain, develop, and operate such Properties subject to the applicable operating agreements and (ii) cause or make reasonable and customary efforts to cause such Oil and Gas Properties to be operated in a good and workmanlike manner as is customary in the oil and gas industry.

        Section 5.08    Environmental Laws.    To the extent that a reasonably prudent owner or operator would do so under the same or similar circumstances, the Borrower shall, and shall cause each of its Subsidiaries to establish and implement such procedures as may be reasonably necessary to periodically determine and assure that any failure of the following does not cause a Material Adverse Change: (i) all Property of the Borrower and its Subsidiaries and the operations conducted thereon and other activities of the Borrower and the Subsidiaries are in compliance with and do not violate the requirements of any Environmental Laws; (ii) no Hazardous Substances or Hazardous Wastes are disposed of or otherwise releases on or to any Property owned by any such party except in compliance with Environmental Laws, (iii) no Hazardous Substance will be released on or to any such Property in a quantity equal to or exceeding that quantity that requires reporting under CERCLA, and (iv) no Hazardous Substances or Hazardous Wastes is released on or to any such Property so as to pose an imminent and substantial endangerment to public health or welfare or the environment.

        Section 5.09    Payment of Trade Payables.    Each of the Credit Parties shall pay, and shall cause each of its Subsidiaries to pay, all of their customary trade payables incurred in the ordinary course of business now or hereafter incurred within 90 days of the date the invoice is received by such Credit Party, unless subject to legal offset or unless being contested in good faith by appropriate proceedings and reserves adequate under GAAP shall have been established therefor.

        Section 5.10    Use of Proceeds.    The Borrower shall use the proceeds of the Advances and Letters of Credit to refinance Debt under the Existing Subordinated Credit Agreement.

        Section 5.11    Additional Collateral.    The Borrower will grant, and will cause each of its Subsidiaries to grant, to the Agent an Acceptable Security Interest in such Oil and Gas Properties of the Borrower and its Subsidiaries, constituting at least 90% of the discounted net present value of the Proven Reserves of the Borrower and its Subsidiaries as determined by the Agent.

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        Section 5.12    New Subsidiaries.    Within 10 days after (a) the date of the creation of any new Subsidiary of Brigham Exploration or the Borrower, or (b) the purchase by Brigham Exploration, the Borrower, or any of its other Subsidiaries of the Equity Interests of any Person, which purchase results in such Person becoming a Subsidiary of Brigham Exploration or of the Borrower permitted by this Agreement, Brigham Exploration or the Borrower, as applicable, shall, in each case, cause (i) such Person to execute and deliver to the Agent (with sufficient originals for each applicable Lender) a joinder agreement to this Agreement in form and substance acceptable to the Agent, a Second Pledge Agreement (if such new Subsidiary owns one or more Subsidiaries), one or more Second Mortgages (if such new Subsidiary owns Oil and Gas Properties), a Second Security Agreement, and such other Subordinated Security Instruments as the Agent or any Lender may reasonably request, in each case to secure the Subordinated Obligations together with evidence of corporate authority to enter into and such legal opinions in relation to such joinder agreement, Second Pledge Agreement, Second Mortgages, Second Security Agreement and other Subordinated Security Instruments as the Agent may reasonably request, and (ii) the stockholder of such new Subsidiary to execute a Second Pledge Agreement pledging its interests in the Equity Interests of such new Subsidiary to secure the Subordinated Obligations and such evidence of corporate authority to enter into and such legal opinions in relation to such Second Pledge Agreement as the Agent may reasonably request, along with share certificates, if any, pledged thereby and appropriately executed stock powers in blank.

        Section 5.13    Title.    As of the Closing Date, the Agent shall have received title opinions reflecting that the Borrower has title reasonably satisfactory to the Agent in such Oil and Gas Properties of the Borrower and its Subsidiaries constituting at least 50% of the Borrower's and its Subsidiaries' proved, developed, producing Hydrocarbon reserves and proved, developed, nonproducing Hydrocarbon reserves (each as determined in conformity with the guidelines in effect from time to time as promulgated by the Society of Petroleum Engineers or its successor association) as determined by the Agent. In addition, the Borrower shall from time to time upon the reasonably request of the Agent or the Majority Lenders, provide evidence of title reasonably satisfactory to the Agent constituting an additional 30% of the Borrower's and its Subsidiaries' proved, developed, producing Hydrocarbon reserves and proved, developed, nonproducing Hydrocarbon reserves as determined by the Agent with respect to the Oil and Gas Properties of the Borrower and its Subsidiaries as of the Closing Date. Thereafter, with respect to Oil and Gas Properties acquired after the Closing Date or not previously included in the Borrowing Base, the Borrower shall from time to time upon the reasonable request of the Agent, take such actions and execute and deliver such documents and instruments as the Agent shall require to ensure that the Agent shall, at all times, have received satisfactory title opinions (including, if requested, supplemental or new title opinions addressed to it), which title opinions shall be in form and substance acceptable to the Agent in its sole discretion and shall include opinions regarding the before payout and after payout ownership interests held by the Borrower and its Subsidiaries, for all wells located on the Oil and Gas Properties covered thereby as to the ownership of Oil and Gas Properties of the Borrower and its Subsidiaries, and reflecting that the Agent has an Acceptable Security Interest in such Oil and Gas Properties of the Borrower and its Subsidiaries.

        Section 5.14    Further Assurances.    The Borrower shall, and shall cause each of its Subsidiaries to, cure promptly any defects in the execution and delivery of the Subordinated Loan Documents, including, without limitation, the Subordinated Security Instruments and this Agreement. The Borrower hereby authorizes the Agent to file any financing statements without the signature of the Borrower to the extent permitted by applicable law in order to perfect or maintain the perfection of any security interest granted under any of the Subordinated Loan Documents. The Borrower at its expense will, and will cause each of its Subsidiaries to, promptly execute and deliver to the Agent upon request all such other documents, agreements and instruments to comply with or accomplish the covenants and agreements of the Borrower or any Subsidiary of the Borrower, as the case may be, in the Subordinated Security Instruments and this Agreement, or to further evidence and more fully describe the collateral intended as security for the Subordinated Notes, or to correct any omissions in the

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Subordinated Loan Documents, or to state more fully the security obligations set out herein or in any of the Subordinated Loan Documents, or to perfect, protect or preserve any Liens created pursuant to any of the Subordinated Loan Documents, or to make any recordings, to file any notices or obtain any consents, all as may be necessary or appropriate in connection therewith or to enable the Agent to exercise and enforce its rights and remedies with respect to any Collateral.

ARTICLE VI

NEGATIVE COVENANTS

        So long as any Subordinated Note or any amount under any Subordinated Loan Document shall remain unpaid or any Lender shall have any Commitment, each of the Credit Parties agrees to comply with the following covenants.

        Section 6.01    Liens, Etc.    None of the Credit Parties shall create, assume, incur, or suffer to exist, or permit any of their Subsidiaries to create, assume, incur, or suffer to exist, any Lien on or in respect of any of its Property whether now owned or hereafter acquired, or assign any right to receive income, except that the Credit Parties may create, incur, assume, or suffer to exist the following (collectively, the "Permitted Liens"):

        (a)  Liens securing the Subordinated Obligations;

        (b)  Liens securing the Senior Obligations;

        (c)  Excepted Liens;

        (d)  Liens securing leases allowed under Section 6.02(f) but only on the Property under lease;

        (e)  Liens disclosed on Schedule 6.01; and

        (f)    any encumbrances permitted under the terms of any Second Mortgage.

        Section 6.02    Debts, Guaranties, and Other Obligations.    None of the Credit Parties shall, and none of the Credit Parties shall permit any of their Subsidiaries to, create, assume, suffer to exist, or in any manner become or be liable in respect of, any Debt except:

        (a)  the Senior Obligations;

        (b)  the Subordinated Obligations;

        (c)  Debt existing on the Closing Date that is reflected in the Financial Statements or is disclosed on Schedule 6.02, and any renewals or extensions (but not increases) thereof;

        (d)  Accounts payable for the deferred purchase price of Property or services (other than customary trade payables incurred in the ordinary course of business) from time to time incurred in the ordinary course of business which, if greater than 90 days past the date the invoice is received by such Credit Party, are being contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP have been established;

        (e)  Debt owing by a Credit Party to any other Credit Party which is subordinated to the Subordinated Obligations pursuant to subordination provision in form and substance acceptable to the Agent;

        (f)    Debt of the Borrower under Capital Leases not to exceed $2,000,000 at any one time outstanding;

        (g)  Debt of the Borrower under Hydrocarbon Hedge Agreements or Interest Hedge Agreements that is made (i) with a Person that is, at the time such Hydrocarbon Hedge Agreement or Interest Hedge Agreement is made, either a Lender, a Senior Lender or an Affiliate

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of a Lender or a Senior Lender, or (ii) with another counterparty rated at least A- or better by S&P or A3 or better by Moody's, provided that the aggregate notional amounts under all such Hydrocarbon Hedge Agreements (other than Hydrocarbon Hedge Agreement that are floors) do not exceed 75% of the Borrower's proved, developed, producing Hydrocarbon reserves (as determined in conformity with the guidelines in effect from time to time as promulgated by the Society of Petroleum Engineers or its successor association) to be produced during the term of such Hydrocarbon Hedge Agreements and that such Hydrocarbon Hedge Agreements are entered into as a part of its normal business operations as risk management strategy and/or hedge against changes resulting from market conditions related to the Borrower's and its Subsidiaries' operations;

        (h)  Debt of the Borrower and its Subsidiaries (i) associated with bonds or surety obligations required by Legal Requirements in connection with the operation of the Oil and Gas Properties and (ii) associated with the financing of insurance premiums;

        (i)    Debt of the Borrower described in Schedule 6.02(i) and such other Debt of the Borrower related to the acquisition of software and licensing rights related thereto that does not exceed $100,000 at any one time outstanding; and

        (j)    Debt that is not described in subsections (a) through (i) above and that together with all Debt of the Borrower allowed under subsection (i) above does not exceed $1,000,000 at any one time outstanding.

        Section 6.03    Agreements Restricting Liens and Distributions.    None of the Credit Parties shall, nor shall any of the Credit Parties permit any of their Subsidiaries to, create, incur, assume or permit to exist any contract, agreement or understanding (other than the Senior Loan Documents and the Subordinated Loan Documents) that in any way prohibits or restricts (a) the granting, conveying, creation or imposition of any Lien on any of its Property, whether now owned or hereafter acquired, to secure the Subordinated Obligations, except for customary limitations and restrictions contained in, and limited to, specific leases, licenses, conveyances, partnership agreements and co-owners' agreements, and similar conveyances and agreements or (b) any Subsidiary from paying dividends or making any other distribution to the Borrower, or otherwise transferring assets, or which requires the consent of or notice to other Persons in connection therewith.

        Section 6.04    Merger or Consolidation.    None of the Credit Parties shall, nor shall any of the Credit Parties permit any of their Subsidiaries to (a) merge or consolidate with or into any other Person, or (b) sell, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its Property to any other Person, except that (i) if either Brigham Exploration or the Borrower is a party to such merger or consolidation, then Brigham Exploration or the Borrower, as the case may be, shall be the continuing Person, (ii) a Subsidiary of the Borrower may merge with or into the Borrower or a wholly owned Subsidiary of the Borrower (provided that if either of such Subsidiaries is a Guarantor, the surviving entity shall be a Guarantor), (iii) a Subsidiary of the Borrower may transfer all or substantially all of its assets (upon voluntary liquidation or otherwise) to the Borrower or to another wholly owned Subsidiary of the Borrower (provided that if the transferor in such a transaction is a Guarantor, then the transferee must either be the Borrower or a Guarantor), and (iv) a Subsidiary of Brigham Exploration (other than the Borrower and its Subsidiaries) may merge with or into Brigham Exploration or a wholly owned Subsidiary of Brigham Exploration (provided that if either of such Subsidiaries is a Guarantor, the surviving entity shall be a Guarantor), provided in each case that (A) no Event of Default exists or no Default would be caused thereby, and (B) if any Collateral is transferred pursuant to this Section 6.04, the Borrower shall provide the Agent with ten Business Days' written notice prior to such transfer, and the Borrower or such Guarantor, as the case may be, owning the Collateral after such transfer shall ratify and confirm the Lien on such Collateral and shall take all action reasonably requested by the Agent in respect of the continued priority and perfection of the Lien over such Collateral.

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        Section 6.05    Sales of Assets.    None of the Credit Parties shall, nor shall any of the Credit Parties permit any of its Subsidiaries to, discount or sell (with or without recourse) any of their notes receivable or accounts receivable. The Borrower shall not, nor shall it permit any of its Subsidiaries to sell, assign, farm-out, convey or otherwise transfer any Hydrocarbon Interests except for (a) the sale of Hydrocarbons in the ordinary course of business, (b) the sale or transfer of equipment that is no longer necessary for the business of such Person or contemporaneously replaced by equipment of at least comparable value and use, or (c) sales of Oil and Gas Properties made in arm's length transactions for fair market value, not exceeding $3,000,000 in any period of twelve consecutive calendar months in the aggregate, provided that no Default or Event of Default has occurred and is continuing or would result from such sale.

        Section 6.06    Restricted Payments.    Neither Brigham Exploration nor the Borrower shall make any Restricted Payments except (a) as permitted under Section 6.07(a)(iii) or (b) any Preferred Shareholder Transaction.

        Section 6.07    Investments and Acquisitions.    

        (a)  None of the Credit Parties shall, nor shall any of the Credit Parties permit any of their Subsidiaries to, make or permit to exist any Investment, except:

          (i)  Investments, loans or advances reflected in the Financial Statements or that are disclosed to the Lenders in Schedule 6.07;

        (ii)  Investments in Cash Equivalents; and

        (iii)  Investments by any Credit Party in the Borrower or a Person that is or will become within 10 Business Days after the making of such Investment a Guarantor in accordance with Section 5.12 or that will, within ten (10) Business Days after the making of any such Investment merge or consolidate into such Credit Party, provided that the Borrower may only make Investments to Brigham Exploration or any Partner to pay federal or state taxes owing by any of them, payroll and payroll related taxes and other reasonable general and administrative expenses, or consisting of forgiveness of indebtedness;

        (b)  None of the Credit Parties shall, nor shall any of the Credit Parties permit any of their Subsidiaries to, purchase any Hydrocarbon Interests not evaluated in any Engineering Report or any pipelines, gas gathering systems gas plants, and similar assets related thereto in an aggregate amount in excess of $5,000,000 in any period of twelve consecutive calendar months.

        Section 6.08    Affiliate Transactions.    None of the Credit Parties shall, nor shall any of the Credit Parties permit any of their Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction or series of transactions (including, but not limited to, the purchase, sale, lease or exchange of Property, the making of any investment, the giving of any guaranty, the assumption of any obligation or the rendering of any service) with any of their Affiliates (other than any transaction between the Borrower, any Credit Party, or any Subsidiary of the Borrower) unless such transaction or series of transactions is not in violation of this Agreement and upon fair and reasonable terms no less favorable to it than it would obtain in a comparable arm's length transaction with a Person that is not such an Affiliate.

        Section 6.09    Compliance with ERISA.    None of the Credit Parties shall, nor shall any of the Credit Parties permit any of their Subsidiaries to, directly or indirectly, (a) engage in, or permit any ERISA Affiliate to engage in, any transaction in connection with which any Credit Party or any ERISA Affiliate could be subjected to either a civil penalty assessed pursuant to Section 502(c), (i) or (l) of ERISA or a tax imposed by Chapter 43 of Subtitle D of the Code in excess of $500,000; (b) terminate, or permit any ERISA Affiliate to terminate, any Plan in a manner, or take any other action with respect to any Plan, which could result reasonably be expected to result in any liability to any Credit

37

Party or any ERISA Affiliate to the PBGC in excess of $500,000; (c) fail to make, or permit any ERISA Affiliate to fail to make, full payment when due of all amounts which, under the provisions of any Plan, agreement relating thereto or applicable law, any Credit Party or any ERISA Affiliate is required to pay as contributions thereto; (d) permit to exist, or allow any ERISA Affiliate to permit to exist, any accumulated funding deficiency in excess of $500,000 within the meaning of Section 302 of ERISA or Section 412 of the Code, whether or not waived, with respect to any Plan; (e) permit, or allow any ERISA Affiliate to permit, the actuarial present value of the benefit liabilities (as "actuarial present value of the benefit liabilities" shall have the meaning specified in Section 4041 of ERISA) under any Plan maintained by any Credit Party or any ERISA Affiliate which is regulated under Title IV of ERISA to exceed the current value of the assets (computed on a plan termination basis in accordance with Title IV of ERISA) of such Plan allocable to such benefit liabilities by an amount in excess of $500,000; (f) contribute to or assume an obligation to contribute to, or permit any ERISA Affiliate to contribute to or assume an obligation to contribute to, any Multiemployer Plan; (g) acquire, or permit any ERISA Affiliate to acquire, an interest in any Person that causes such Person to become an ERISA Affiliate with respect to any Credit Party or any ERISA Affiliate if such Person sponsors, maintains or contributes to, or at any time in the six-year period preceding such acquisition has sponsored, maintained, or contributed to, (i) any Multiemployer Plan, or (ii) any other Plan that is subject to Title IV of ERISA under which the actuarial present value of the benefit liabilities under such Plan exceeds the current value of the assets (computed on a plan termination basis in accordance with Title IV of ERISA) of such Plan allocable to such benefit liabilities; (h) incur, or permit any ERISA Affiliate to incur, a liability to or on account of a Plan under Sections 515, 4062, 4063, 4064, 4201 or 4204 of ERISA which in the aggregate for all such liabilities exceeds $500,000; (i) contribute to or assume an obligation to contribute to, or permit any ERISA Affiliate to contribute to or assume an obligation to contribute to, any employee welfare benefit plan, as defined in Section 3(1) of ERISA, including, without limitation, any such plan maintained to provide benefits to former employees of such entities, that may not be terminated by such entities in their sole discretion at any time without any material liability; or (j) amend or permit any ERISA Affiliate to amend, a Plan resulting in an increase in current liability such that any Credit Party or any ERISA Affiliate is required to provide security to such Plan under Section 401(a)(29) of the Code.

        Section 6.10    Sales and Leasebacks.    None of the Credit Parties shall, nor shall any of the Credit Parties permit any of their Subsidiaries to, enter into any arrangement, directly or indirectly, with any Person whereby such Credit Party shall sell or transfer any of its Property, whether now owned or hereafter acquired, and whereby such Credit Party shall then or thereafter rent or lease as lessee such Property or any part thereof or other Property which such Credit Party intends to use for substantially the same purpose or purposes as the Property sold or transferred.

        Section 6.11    Change of Business.    None of the Credit Parties shall, nor shall any of the Credit Parties permit any of their Subsidiaries to, allow any material change to be made in the character of its business as an independent oil and gas exploration and production company

        Section 6.12    Use of Proceeds.    The Borrower will not permit the proceeds of any Advance or Letters of Credit to be used for any purpose other than those permitted by Section 5.09. Neither the Borrower nor any Person acting on behalf of the Borrower has taken or shall take, any action which might cause any of the Subordinated Loan Documents to violate Regulation T, U or X or any other regulation of the Board of Governors of the Federal Reserve System or to violate Section 7 of the Securities Exchange Act of 1934 or any rule or regulation thereunder, in each case as now in effect or as the same may hereinafter be in effect.

        Section 6.13    Gas Imbalances, Take-or-Pay or Other Prepayments.    Except as set forth in Schedule 4.14, the Borrower shall not allow gas imbalances, take-or-pay or other prepayments with respect to the Oil and Gas Properties of the Borrower and its Subsidiaries that would require the Borrower and its Subsidiaries to deliver 2.5% or more of the aggregate calendar quarter production

38

from the Borrower's and its Subsidiaries' Hydrocarbons produced on a calendar quarter basis from such Hydrocarbon Interests at some future time without then or thereafter receiving full payment therefor.

        Section 6.14    Additional Subsidiaries.    Except as otherwise permitted by Section 6.07, none of the Credit Parties shall, nor shall any of the Credit Parties permit any of their Subsidiaries to, create any additional Subsidiaries or make any additional Investment in a Subsidiary unless such Credit Party has complied with Section 5.12. All Subsidiaries of the Borrower together at no time shall own or hold Oil and Gas Properties having Proven Reserves with a net discounted present value calculated in the same manner as in the most recent Engineering Report in excess of 10% of the total net discounted present value of Proven Reserves of the Borrower and its Subsidiaries as reflected in such Engineering Report (plus such Subsidiaries' Proven Reserved not included in such Engineering Report). Except as otherwise permitted by Section 6.07(a)(iii), no assets may be transferred to a Subsidiary that is not a Guarantor.

        Section 6.15    Limitation on Leases.    None of the Credit Parties shall, nor shall any of the Credit Parties permit any of their Subsidiaries to, create, incur, assume or suffer to exist any obligation for the payment of rent or hire of Property of any kind whatsoever (real or personal including Capital Leases but excluding leases of Hydrocarbon Interests and the equipment used thereon), under leases or lease agreements that would cause the aggregate amount of all payments made by the Credit Parties and their Subsidiaries pursuant to all such leases or lease agreements to exceed $1,500,000 in any period of twelve consecutive calendar months during the life of such leases.

        Section 6.16    Environmental Matters.    None of the Credit Parties shall, nor shall any of the Credit Parties permit any of their Subsidiaries to, cause or permit any of its Property to be in violation of, or do anything to permit anything to be done that will subject any such Property to any remedial obligations under any Environmental Laws, assuming disclosure to the applicable Governmental Authority of all relevant facts, conditions and circumstances, if any, pertaining to such Property where such violations or remedial obligations would cause a Material Adverse Change.

        Section 6.17    Borrower as Operator.    Except for any Oil and Gas Properties sold in accordance with Section 6.05, the Borrower shall not, and shall not permit any of its Subsidiaries to, during any calendar year, voluntarily resign as the operator of Oil and Gas Properties constituting more than twenty-five percent (25%) of the value of the proved developed producing reserves evaluated in the Engineering Report applicable to such calendar year unless the Majority Lenders deliver prior written approval of such resignations to the Borrower.

        Section 6.18    Equity Interests of Partners.    Brigham Exploration will not permit any of Equity Interests of any of the Partners to be owned or controlled by any Person other than Brigham Exploration or another Partner.

        Section 6.19    Speculative Trading.    The Borrower shall not, nor shall it permit any of its Subsidiaries to, purchase, assume, or hold a speculative position in any commodities market or futures market or enter into any Hydrocarbon Hedge Agreement, Interest Hedge Agreement or similar hedge arrangements for speculative purposes; provided that any hedge arrangements which cover anticipated production volumes attributable to Proven Reserves of the Borrower and its Subsidiaries within the limits set forth in Section 6.02(g) shall not be considered "speculative".

        Section 6.20    Change of Name; Fiscal Year; Accounting Method.    None of the Credit Parties shall, nor shall any of the Credit Parties permit any of their Subsidiaries to, change its name, fiscal year or method of accounting except as required by GAAP; provided that any Credit Party may change its name if such Credit Party has given the Agent at least 30 days' (unless otherwise consented to by the Agent) prior written notice of such name change and taken such action as the Agent deems reasonably necessary to continue the perfection of the Liens securing payment of the Subordinated Obligations.

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        Section 6.21    Current Ratio.    Brigham Exploration shall not permit the ratio of (a) its consolidated current assets (including the Unused Commitment Amount, as such term is defined in the Senior Credit Agreement) 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.

        Section 6.22    Interest Coverage Ratio.    Brigham Exploration shall not permit the Interest Coverage Ratio as of the end of any fiscal quarter (calculated quarterly at the end of each fiscal quarter) to be less than 2.75 to 1.0 for the twelve month period ending March 31, 2003; and thereafter, not less than 3.25 to 1.0 for the twelve-month period ending June 30, 2003, and each twelve-month period ending at the end of each fiscal quarter.

        Section 6.23    Restrictions on Limited Partners.    Brigham Exploration shall not permit either of the Limited Partners to hold any Properties other than the limited partner interests in the Borrower.

        Section 6.24    Advance Payment Contracts.    None of the Credit Parties will enter into or be a party to any Advance Payment Contract with respect to any Oil and Gas Properties that are Collateral.

ARTICLE VII

EVENTS OF DEFAULT; REMEDIES

        Section 7.01    Events of Default.    The occurrence of any of the following events shall constitute an "Event of Default" under any Subordinated Loan Document:

        (a)    Payment.    The Borrower shall fail to (i) pay any principal of any Advance when the same becomes due and payable, or (ii) pay any interest on any Subordinated Note, any fees, reimbursements, indemnifications, or other amounts payable in connection with the Subordinated Obligations, this Agreement or any of the other Subordinated Loan Documents within three Business Days after the same becomes due and payable;

        (b)    Representation and Warranties.    Any representation or warranty made or deemed to be made (i) by any Credit Party in this Agreement or in any other Subordinated Loan Document, or (ii) by any Credit Party in connection with this Agreement or any other Subordinated Loan Document, shall prove to have been incorrect in any material and adverse respect when made or deemed to be made;

        (c)    Covenant Breaches.    Any Credit Party shall fail to perform or observe (i) any covenant contained in Section 2.05(b), Section 5.02(a), Section 5.06(e), Section 5.12 or Article VI or (ii) any other term or covenant set forth in this Agreement or in any other Subordinated Loan Document which is not covered by clause (i) above or any other provision of this Section 7.01 if such failure shall remain unremedied for 30 days after notice of such breach or failure has been given to the Borrower by the Agent or any of the Lenders (through the Agent);

        (d)    Cross Defaults.    (i) Any Credit Party shall fail to pay any principal of or premium or interest on its Debt which is outstanding in a principal amount of at least $1,000,000 individually or when aggregated with all such Debt of the Credit Parties so in default (but excluding Debt evidenced by the Subordinated Notes) when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Debt; (ii) any other event shall occur or condition shall exist under any agreement or instrument (including, without limitation, the Senior Credit Agreement) relating to Debt which is outstanding in a principal amount of at least $1,000,000 individually or when aggregated with all such Debt of the Credit Parties so in default, and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such Debt; or (iii) any such Debt shall

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be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment or optional prepayment), prior to the stated maturity thereof;

        (e)    Insolvency.    Any Credit Party shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against any Credit Party seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against any Credit Party either such proceeding shall remain undismissed for a period of 60 days or any of the actions sought in such proceeding shall occur; or any Credit Party shall take any corporate action to authorize any of the actions set forth above in this Section 7.01(e);

        (f)    Judgments.    Any judgment or order for the payment of money in excess of $1,000,000 (excluding liabilities to the extent covered by insurance if the insurer has confirmed that such insurance covers such liabilities) shall be rendered against any Credit Party and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order or (ii) there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect;

        (g)    Subordinated Loan Documents.    Any provision of any Subordinated Loan Document shall for any reason cease to be in full force and effect and valid, binding and enforceable in all material respects in accordance with their terms or cease in any material respect to create a valid and perfected Lien of the priority required thereby on any of the collateral purported to be covered thereby, except to the extent otherwise permitted by this Agreement, or any Credit Party shall so state in writing;

        (h)    Brigham Exploration.    Any Change of Control shall occur; or

        (i)    Operator.    The Borrower ceases to be the primary operating entity for Brigham Exploration and its Subsidiaries and the Borrower and its Subsidiaries cease to be the only Brigham Exploration entities owning Oil and Gas Properties.

        Section 7.02    Optional Acceleration of Maturity.    If any Event of Default (other than an Event of Default pursuant to Section 7.01(e)) shall have occurred and be continuing, then, and in any such event:

        (a)  the Agent (i) shall at the request, or may with the consent, of the Majority Lenders, by notice to the Borrower, declare the Commitments and the obligation of each Lender to make extensions of credit hereunder, including making Advances, to be terminated, whereupon the same shall forthwith terminate, and (ii) shall at the request, or may with the consent, of the Majority Lenders, by notice to the Borrower, declare all principal, interest, fees, reimbursements, indemnifications, and all other amounts payable under this Agreement, the Subordinated Notes, and the other Subordinated Loan Documents to be forthwith due and payable, whereupon all such amounts shall become and be forthwith due and payable in full, without notice of intent to demand, demand, presentment for payment, notice of nonpayment, protest, notice of protest, grace, notice of dishonor, notice of intent to accelerate, notice of acceleration, and all other notices, all of which are hereby expressly waived by the Borrower; and

        (b)  the Agent shall at the request of, or may with the consent of, the Majority Lenders proceed to enforce its rights and remedies under the Subordinated Security Instruments, this Agreement, and any other Subordinated Loan Document for the ratable benefit of the Lenders by appropriate proceedings.

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        Section 7.03    Automatic Acceleration of Maturity.    If any Event of Default pursuant to Section 7.01(e) shall occur:

        (a)  (i) the Commitments and the obligation of each Lender to make extensions of credit hereunder, including making Advances, shall terminate, and (ii) all principal, interest, fees, reimbursements, indemnifications, and all other amounts payable under this Agreement, the Subordinated Notes, and the other Subordinated Loan Documents shall become and be forthwith due and payable in full, without notice of intent to demand, demand, presentment for payment, notice of nonpayment, protest, notice of protest, grace, notice of dishonor, notice of intent to accelerate, notice of acceleration, and all other notices, all of which are hereby expressly waived by the Borrower; and

        (b)  the Agent shall at the request of, or may with the consent of, the Majority Lenders proceed to enforce its rights and remedies under the Subordinated Security Instruments, this Agreement, and any other Subordinated Loan Document for the ratable benefit of the Lenders by appropriate proceedings.

        Section 7.04    Right of Set off.    Upon the occurrence and during the continuance of any Event of Default, the Agent and each Lender is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by the Agent or such Lender to or for the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under this Agreement, the Subordinated Notes held by the Agent or such Lender, and the other Subordinated Loan Documents, irrespective of whether or not the Agent or such Lender shall have made any demand under this Agreement, such Subordinated Notes, or such other Subordinated Loan Documents, and although such obligations may be unmatured. The Agent and each Lender agrees to promptly notify the Borrower after any such set off and application made by the Agent or such Lender, provided that the failure to give such notice shall not affect the validity of such set off and application. The rights of the Agent and each Lender under this Section 7.04 are in addition to any other rights and remedies (including, without limitation, other rights of set off) that the Agent or such Lender may have.

        Section 7.05    Non-exclusivity of Remedies.    No remedy conferred upon the Agent and the Lenders is intended to be exclusive of any other remedy, and each remedy shall be cumulative of all other remedies existing by contract, at law, in equity, by statute or otherwise.

        Section 7.06    Application of Proceeds.    From and during the continuance of any Event of Default, any monies or property actually received by the Agent pursuant to this Agreement or any other Subordinated Loan Document, the exercise of any rights or remedies under any Subordinated Security Instrument or any other agreement with the Borrower, any Guarantor or any of the Borrower's Subsidiaries which secures any of the Subordinated Obligations, shall be applied in the following order:

        (a)  First, to the payment of all amounts, including without limitation costs and expenses incurred in connection with the collection of such proceeds and the payment of any part of the Subordinated Obligations, due to the Agent under any of the expense reimbursement or indemnity provisions of this Agreement or any other Subordinated Loan Document, any Subordinated Security Instrument or other collateral documents, and any applicable law;

        (b)  Second, to the ratable payment of accrued but unpaid commitment fees under this Agreement and the Subordinated Notes;

        (c)  Third, to the ratable payment of accrued but unpaid interest on the Advances owing under this Agreement and the Subordinated Notes;

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        (d)  Fourth, ratably, according to the then unpaid amounts thereof, without preference or priority of any kind among them, to the ratable payment of all other Subordinated Obligations then due and payable which relate to Advances and which are owing to the Agent and the Lenders; and

        (e)  Fifth, the remainder, if any, to the Borrower or its Subsidiaries, or its respective successors or assigns, or such other Person as may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct.

ARTICLE VIII

THE GUARANTY

        Section 8.01    Liabilities Guaranteed.    Each Guarantor hereby, joint and severally, irrevocably and unconditionally guarantees the prompt payment at maturity of the Subordinated Obligations.

        Section 8.02    Nature of Guaranty.    This guaranty is an absolute, irrevocable, completed and continuing guaranty of payment and not a guaranty of collection, and no notice of the Subordinated Obligations or any extension of credit already or hereafter contracted by or extended to the Borrower need be given to any Guarantor. This guaranty may not be revoked by any Guarantor and shall continue to be effective with respect to the Subordinated Obligations arising or created after any attempted revocation by such Guarantor and shall remain in full force and effect until the Subordinated Obligations are paid in full and the Commitments are terminated, notwithstanding that from time to time prior thereto no Subordinated Obligations may be outstanding. The Borrower and the Lenders may modify, alter, rearrange, extend for any period and/or renew from time to time, the Subordinated Obligations, and the Lenders may waive any Default or Events of Default without notice to any Guarantor and in such event each Guarantor will remain fully bound hereunder on the Subordinated Obligations. This guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of the Subordinated Obligations is rescinded or must otherwise be returned by any of the Lenders upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise, all as though such payment had not been made. This guaranty may be enforced by the Agent and any subsequent holder of any of the Subordinated Obligations and shall not be discharged by the assignment or negotiation of all or part of the Subordinated Obligations. Each Guarantor hereby expressly waives presentment, demand, notice of non-payment, protest and notice of protest and dishonor, notice of Default or Event of Default, and also notice of acceptance of this guaranty, acceptance on the part of the Lenders being conclusively presumed by the Lenders' request for this guaranty and the Guarantors' being party to this Agreement.

        Section 8.03    Agent's Rights.    Each Guarantor authorizes the Agent, without notice or demand and without affecting any Guarantor's liability hereunder, to take and hold security for the payment of its obligations under this Article VIII or the Subordinated Obligations, and exchange, enforce, waive and release any such security; and to apply such security and direct the order or manner of sale thereof as the Agent in its discretion may determine, and to obtain a guaranty of the Subordinated Obligations from any one or more Persons and at any time or times to enforce, waive, rearrange, modify, limit or release any of such other Persons from their obligations under such guaranties.

        Section 8.04    Guarantor's Waivers.    

        (a)    General.    Each Guarantor waives any right to require any of the Lenders to (i) proceed against the Borrower or any other person liable on the Subordinated Obligations, (ii) enforce any of their rights against any other guarantor of the Subordinated Obligations, (iii) proceed or enforce any of their rights against or exhaust any security given to secure the Subordinated Obligations, (iv) have the Borrower joined with any Guarantor in any suit arising out of this Article VIII or the Subordinated Obligations, or (v) pursue any other remedy in the Lenders' powers whatsoever. The Lenders shall not

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be required to mitigate damages or take any action to reduce, collect or enforce the Subordinated Obligations. Guarantor waives any defense arising by reason of any disability, lack of corporate authority or power, or other defense of the Borrower or any other guarantor of the Subordinated Obligations, and shall remain liable hereon regardless of whether the Borrower or any other guarantor be found not liable thereon for any reason. Whether and when to exercise any of the remedies of the Lenders under any of the Subordinated Loan Documents shall be in the sole and absolute discretion of the Agent, and no delay by the Agent in enforcing any remedy, including delay in conducting a foreclosure sale, shall be a defense to any Guarantor's liability under this Article VIII.

        (b)    Subrogation.    Until the Subordinated Obligations have been paid in full, each Guarantor waives all rights of subrogation or reimbursement against the Borrower, whether arising by contract or operation of law (including, without limitation, any such right arising under any federal or state bankruptcy or insolvency laws) and waives any right to enforce any remedy which the Lenders now have or may hereafter have against the Borrower, and waives any benefit or any right to participate in any security now or hereafter held by the Agent or any Lender.

        Section 8.05    Maturity of Obligations, Payment.    Each Guarantor agrees that if the maturity of any of the Subordinated Obligations is accelerated by bankruptcy or otherwise, such maturity shall also be deemed accelerated for the purpose of this Article VIII without demand or notice to any Guarantor. Each Guarantor will, forthwith upon notice from the Agent, jointly and severally pay to the Agent the amount due and unpaid by the Borrower and guaranteed hereby. The failure of the Agent to give this notice shall not in any way release any Guarantor hereunder.

        Section 8.06    Agent's Expenses.    If any Guarantor fails to pay the Subordinated Obligations after notice from the Agent of the Borrower's failure to pay any Subordinated Obligations at maturity, and if the Agent obtains the services of an attorney for collection of amounts owing by any Guarantor hereunder, or obtaining advice of counsel in respect of any of their rights under this Article VIII, or if suit is filed to enforce this Article VIII, or if proceedings are had in any bankruptcy, probate, receivership or other judicial proceedings for the establishment or collection of any amount owing by any Guarantor hereunder, or if any amount owing by any Guarantor hereunder is collected through such proceedings, each Guarantor jointly and severally agrees to pay to the Agent the Agent's reasonable attorneys' fees.

        Section 8.07    Liability.    It is expressly agreed that the liability of each Guarantor for the payment of the Subordinated Obligations guaranteed hereby shall be primary and not secondary.

        Section 8.08    Events and Circumstances Not Reducing or Discharging any Guarantor's Obligations.    Each Guarantor hereby consents and agrees to each of the following to the fullest extent permitted by law, and agrees that each Guarantor's obligations under this Article VIII shall not be released, diminished, impaired, reduced or adversely affected by any of the following, and waives any rights (including without limitation rights to notice) which each Guarantor might otherwise have as a result of or in connection with any of the following:

        (a)    Modifications, etc.    Any renewal, extension, modification, increase, decrease, alteration or rearrangement of all or any part of the Subordinated Obligations, or of the Subordinated Notes, or this Agreement or any instrument executed in connection therewith, or any contract or understanding between the Borrower and any of the Lenders, or any other Person, pertaining to the Subordinated Obligations;

        (b)    Adjustment, etc.    Any adjustment, indulgence, forbearance or compromise that might be granted or given by any of the Lenders to the Borrower or any Guarantor or any Person liable on the Subordinated Obligations;

        (c)    Condition of the Borrower or any Guarantor.    The insolvency, bankruptcy arrangement, adjustment, composition, liquidation, disability, dissolution, death or lack of power of the Borrower

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or any Guarantor or any other Person at any time liable for the payment of all or part of the Subordinated Obligations; or any dissolution of the Borrower or any Guarantor, or any sale, lease or transfer of any or all of the assets of the Borrower or any Guarantor, or any changes in the shareholders, partners, or members of the Borrower or any Guarantor; or any reorganization of the Borrower or any Guarantor;

        (d)    Invalidity of Obligations.    The invalidity, illegality or unenforceability of all or any part of the Subordinated Obligations, or any document or agreement executed in connection with the Subordinated Obligations, for any reason whatsoever, including without limitation the fact that the Subordinated Obligations, or any part thereof, exceed the amount permitted by law, the act of creating the Subordinated Obligations or any part thereof is ultra vires, the officers or representatives executing the documents or otherwise creating the Subordinated Obligations acted in excess of their authority, the Subordinated Obligations violate applicable usury laws, the Borrower has valid defenses, claims or offsets (whether at law, in equity or by agreement) which render the Subordinated Obligations wholly or partially uncollectible from the Borrower, the creation, performance or repayment of the Subordinated Obligations (or the execution, delivery and performance of any document or instrument representing part of the Subordinated Obligations or executed in connection with the Subordinated Obligations, or given to secure the repayment of the Subordinated Obligations) is illegal, uncollectible, legally impossible or unenforceable, or this Agreement or other documents or instruments pertaining to the Subordinated Obligations have been forged or otherwise are irregular or not genuine or authentic;

        (e)    Release of Obligors.    Any full or partial release of the liability of the Borrower on the Subordinated Obligations or any part thereof, of any co-guarantors, or any other Person now or hereafter liable, whether directly or indirectly, jointly, severally, or jointly and severally, to pay, perform, guarantee or assure the payment of the Subordinated Obligations or any part thereof, it being recognized, acknowledged and agreed by any Guarantor that such Guarantor may be required to pay the Subordinated Obligations in full without assistance or support of any other Person, and no Guarantor has been induced to enter into this Article VIII on the basis of a contemplation, belief, understanding or agreement that other parties other than the Borrower will be liable to perform the Subordinated Obligations, or the Lenders will look to other parties to perform the Subordinated Obligations.

        (f)    Other Security.    The taking or accepting of any other security, collateral or guaranty, or other assurance of payment, for all or any part of the Subordinated Obligations;

        (g)    Release of Collateral etc.    Any release, surrender, exchange, subordination, deterioration, waste, loss or impairment (including without limitation negligent, willful, unreasonable or unjustifiable impairment) of any collateral, property or security, at any time existing in connection with, or assuring or securing payment of, all or any part of the Subordinated Obligations;

        (h)    Care and Diligence.    The failure of the Lenders or any other Person to exercise diligence or reasonable care in the preservation, protection, enforcement, sale or other handling or treatment of all or any part of such collateral, property or security;

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        (i)    Status of Liens.    The fact that any collateral, security, security interest or lien contemplated or intended to be given, created or granted as security for the repayment of the Subordinated Obligations shall not be properly perfected or created, or shall prove to be unenforceable or subordinate to any other security interest or lien, it being recognized and agreed by each Guarantor that no Guarantor is entering into this Article VIII in reliance on, or in contemplation of the benefits of, the validity, enforceability, collectibility or value of any of the collateral for the Subordinated Obligations;

        (j)    Payments Rescinded.    Any payment by the Borrower to the Lenders is held to constitute a preference under the bankruptcy laws, or for any reason the Lenders are required to refund such payment or pay such amount to the Borrower or someone else; or

        (k)    Other Actions Taken or Omitted.    Any other action taken or omitted to be taken with respect to this Agreement, the Subordinated Obligations, or the security and collateral therefor, whether or not such action or omission prejudices any Guarantor or increases the likelihood that any Guarantor will be required to pay the Subordinated Obligations pursuant to the terms hereof, it being the unambiguous and unequivocal intention of each Guarantor that each Guarantor shall be obligated to joint and severally pay the Subordinated Obligations when due, notwithstanding any occurrence, circumstance, event, action, or omission whatsoever, whether contemplated or uncontemplated, and whether or not otherwise or particularly described herein, except for the full and final payment and satisfaction of the Subordinated Obligations.

        Section 8.09    Subordination of All Guarantor Claims.    As used herein, the term "Guarantor Claims" shall mean all debts and liabilities of the Borrower or any Subsidiary of the Borrower to any Guarantor, whether such debts and liabilities now exist or are hereafter incurred or arise, or whether the obligation of the Borrower or such Subsidiary thereon be direct, contingent, primary, secondary, several, joint and several, or otherwise, and irrespective of whether such debts or liabilities be evidenced by note, contract, open account, or otherwise, and irrespective of the person or persons in whose favor such debts or liabilities may, at their inception, have been, or may hereafter be created, or the manner in which they have been or may hereafter be acquired by any Guarantor. The Guarantor Claims shall include without limitation all rights and claims of any Guarantor against the Borrower or any Subsidiary of the Borrower arising as a result of subrogation or otherwise as a result of such Guarantor's payment of all or a portion of the Subordinated Obligations. Until the Subordinated Obligations shall be paid and satisfied in full and each Guarantor shall have performed all of its obligations hereunder, no Guarantor shall receive or collect, directly or indirectly, from the Borrower or any Subsidiary of the Borrower or any other party any amount upon the Guarantor Claims during the occurrence and the continuance of an Event of Default.

        Section 8.10    Claims in Bankruptcy.    In the event of receivership, bankruptcy, reorganization, arrangement, debtor's relief, or other insolvency proceedings involving the Borrower or any Subsidiary of the Borrower, as debtor, the Lenders shall have the right to prove their claim in any proceeding, so as to establish their rights hereunder and receive directly from the receiver, trustee or other court custodian, dividends and payments which would otherwise be payable upon Guarantor Claims. Each Guarantor hereby assigns such dividends and payments to the Lenders, subject to the prior rights of the Senior Agent and the Senior Lenders. Should the Agent or any Lender receive, for application upon the Subordinated Obligations, any such dividend or payment which is otherwise payable to any Guarantor, and which, as between the Borrower or any Subsidiary of the Borrower and any Guarantor, shall constitute a credit upon the Guarantor Claims, then upon payment in full of the Subordinated Obligations, such Guarantor shall become subrogated to the rights of the Lenders to the extent that such payments to the Lenders on the Guarantor Claims have contributed toward the liquidation of the Subordinated Obligations, and such subrogation shall be with respect to that proportion of the Subordinated Obligations which would have been unpaid if the Agent or a Lender had not received dividends or payments upon the Guarantor Claims.

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        Section 8.11    Payments Held in Trust.    In the event that notwithstanding Section 8.09 and Section 8.10, any Guarantor should receive any funds, payments, claims or distributions which is prohibited by such Sections, such Guarantor agrees to hold in trust for the Lenders an amount equal to the amount of all funds, payments, claims or distributions so received, and agrees that it shall have absolutely no dominion over the amount of such funds, payments, claims or distributions except to pay them promptly to the Agent or the Senior Agent, and each Guarantor covenants promptly to pay the same to the Agent or the Senior Agent.

        Section 8.12    Liens Subordinate.    Each Guarantor agrees that any liens, security interests, judgment liens, charges or other encumbrances upon the Borrower's or any Subsidiary of the Borrower's assets securing payment of the Guarantor Claims shall be and remain inferior and subordinate to any liens, security interests, judgment liens, charges or other encumbrances upon the Borrower's or any Subsidiary of the Borrower's assets securing payment of the Subordinated Obligations, regardless of whether such encumbrances in favor of any Guarantor, the Agent or the Lenders presently exist or are hereafter created or attach.

        Section 8.13    Guarantor's Enforcement Rights.    Without the prior written consent of the Lenders, no Guarantor shall (a) exercise or enforce any creditor's right it may have against the Borrower or any Subsidiary of the Borrower, or (b) foreclose, repossess, sequester or otherwise take steps or institute any action or proceeding (judicial or otherwise, including without limitation the commencement of or joinder in any liquidation, bankruptcy, rearrangement, debtor's relief or insolvency proceeding) to enforce any lien, mortgages, deeds of trust, security interest, collateral rights, judgments or other encumbrances on assets of the Borrower or any Subsidiary of the Borrower held by Guarantor.

ARTICLE IX

THE AGENT

        Section 9.01    Authorization and Action.    Each Lender hereby appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to the Agent by the terms hereof and of the other Subordinated Loan Documents, together with such powers as are reasonably incidental thereto. As to any matters not expressly provided for by this Agreement or any other Subordinated Loan Document (including, without limitation, enforcement or collection of the Subordinated Notes), the Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Majority Lenders, and such instructions shall be binding upon all Lenders and all holders of Subordinated Notes; provided that the Agent shall not be required to take any action which exposes the Agent to personal liability or which is contrary to this Agreement, any other Subordinated Loan Document, or applicable law.

        Section 9.02    Agent's Reliance, Etc.    Neither the Agent nor any of its directors, officers, agents, or employees shall be liable for any action taken or omitted to be taken (INCLUDING THE AGENT'S OWN NEGLIGENCE) by it or them under or in connection with this Agreement or the other Subordinated Loan Documents, except for its or their own gross negligence or willful misconduct. Without limitation of the generality of the foregoing, the Agent: (a) may treat the payee of any Subordinated Note as the holder thereof until the Agent receives written notice of the assignment or transfer thereof signed by such payee and in form satisfactory to the Agent; (b) may consult with legal counsel (including counsel for any Credit Party), independent public accountants, and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants, or experts; (c) makes no warranty or representation to any Lender and shall not be responsible to any Lender for any statements, warranties, or representations made in or in connection with this Agreement or the other Subordinated Loan Documents; (d) shall not have any duty to ascertain or to inquire as to the performance or observance

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of any of the terms, covenants or conditions of this Agreement or any other Subordinated Loan Document on the part of any Credit Party or to inspect the property (including the books and records) of any Credit Party; (e) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency, or value of this Agreement or any other Subordinated Loan Document; and (f) shall incur no liability under or in respect of this Agreement or any other Subordinated Loan Document by acting upon any notice, consent, certificate, or other instrument or writing (which may be by telecopier or telex) believed by it to be genuine and signed or sent by the proper party or parties.

        Section 9.03    The Agent and Its Affiliates.    With respect to its Commitments, the Advances made by it and the Subordinated Notes issued to it, the Agent shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though it were not the Agent. The term "Lender" or "Lenders" shall, unless otherwise expressly indicated, include the Agent in its individual capacity. The Agent and its Affiliates may accept deposits from, lend money to, act as trustee under indentures of, and generally engage in any kind of business with, any Credit Party, and any Person who may do business with or own securities of any Credit Party, all as if the Agent were not an agent hereunder and without any duty to account therefor to the Lenders.

        Section 9.04    Lender Credit Decision.    Each Lender acknowledges that it has, independently and without reliance upon the Agent or any other Lender and based on the Financial Statements and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it shall, independently and without reliance upon the Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement.

        Section 9.05    Indemnification.    THE LENDERS SEVERALLY AGREE TO INDEMNIFY THE AGENT AND EACH AFFILIATE THEREOF AND ITS DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS (TO THE EXTENT NOT REIMBURSED BY THE CREDIT PARTIES), ACCORDING TO THEIR RESPECTIVE PRO RATA SHARES FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES, OR DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST THE AGENT IN ANY WAY RELATING TO OR ARISING OUT OF THIS AGREEMENT OR ANY ACTION TAKEN OR OMITTED BY THE AGENT UNDER THIS AGREEMENT OR ANY OTHER SUBORDINATED LOAN DOCUMENT (INCLUDING THE AGENT'S OWN NEGLIGENCE), AND INCLUDING, WITHOUT LIMITATION, ENVIRONMENTAL LIABILITIES, PROVIDED THAT NO LENDER SHALL BE LIABLE FOR ANY PORTION OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES, OR DISBURSEMENTS RESULTING FROM THE AGENT'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. WITHOUT LIMITATION OF THE FOREGOING, EACH LENDER AGREES TO REIMBURSE THE AGENT PROMPTLY UPON DEMAND FOR ITS RATABLE SHARE OF ANY OUT-OF-POCKET EXPENSES (INCLUDING COUNSEL FEES) INCURRED BY THE AGENT IN CONNECTION WITH THE PREPARATION, EXECUTION, DELIVERY, ADMINISTRATION, MODIFICATION, AMENDMENT, OR ENFORCEMENT (WHETHER THROUGH NEGOTIATIONS, LEGAL PROCEEDINGS, OR OTHERWISE) OF, OR LEGAL ADVICE IN RESPECT OF RIGHTS OR RESPONSIBILITIES UNDER, THIS AGREEMENT OR ANY OTHER SUBORDINATED LOAN DOCUMENT, TO THE EXTENT THAT THE AGENT IS NOT REIMBURSED FOR SUCH BY THE CREDIT PARTIES, PROVIDED THAT NO LENDER SHALL BE LIABLE FOR ANY PORTION OF SUCH OUT-OF-POCKET EXPENSES (INCLUDING COUNSEL FEES) INCURRED BY THE AGENT AS A RESULT OF THE AGENT'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

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        Section 9.06    Successor Agent.    The Agent may resign at any time by giving written notice thereof to the Lenders and the Borrower and may be removed at any time with or without cause by the Majority Lenders upon receipt of written notice from the Majority Lenders to such effect. Upon receipt of notice of any such resignation or removal, the Majority Lenders shall have the right to appoint a successor Agent with, if any Event of Default has not occurred and is not continuing, the consent of the Borrower, which consent shall not be unreasonably withheld. If no successor Agent shall have been so appointed by the Majority Lenders with the consent of the Borrower, and shall have accepted such appointment, within 30 days after the resigning Agent's giving of notice of resignation or the Majority Lenders' removal of the resigning Agent, then the resigning Agent may, on behalf of the Lenders and the Borrower, appoint a successor Agent, which shall be, in the case of a successor agent, a commercial bank having a combined capital and surplus of at least $500,000,000.00. Upon the acceptance of any appointment as Agent by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges, and duties of the resigning Agent, and the resigning Agent shall be discharged from its duties and obligations under this Agreement and the other Subordinated Loan Documents. After any resigning Agent's resignation or removal hereunder as Agent, the provisions of this Article IX shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement and the other Subordinated Loan Documents.

        Section 9.07    Collateral Matters.    

        (a)  The Agent is authorized on behalf of the Lenders, without the necessity of any notice to or further consent from the Lenders, from time to time, to take any actions with respect to any Collateral or Subordinated Security Instruments which may be necessary to perfect and maintain Acceptable Security Interests in and Liens upon the Collateral granted pursuant to the Subordinated Security Instruments. The Agent is further authorized on behalf of the Lenders, without the necessity of any notice to or further consent from the Lenders, from time to time, to take any action in exigent circumstances as may be reasonably necessary to preserve any rights or privileges of the Lenders under the Subordinated Loan Documents or applicable Legal Requirements.

        (b)  Each of the Lenders irrevocably authorizes the Agent to release any Lien granted to or held by the Agent upon any Collateral (i) upon termination of the Commitments and payment in full of all outstanding Advances and all other Obligations payable under this Agreement and under any other Subordinated Loan Document; (ii) constituting property sold or to be sold or disposed of as part of or in connection with any disposition permitted under this Agreement or the other Subordinated Loan Documents; (iii) constituting property in which any Credit Party owned no interest at the time the Lien was granted or at any time thereafter; (iv) constituting Oil and Gas Properties to which no Proven Reserves are attributed that currently encumbered under the Mortgage Amendments; (v) if approved, authorized or ratified in writing by the Majority Lenders or all the Lenders, as the case may be, as required by Section 10.01 or (vi) as otherwise permitted by this Agreement. Upon the request of the Agent at any time, the Lenders will confirm in writing the Agent's authority to release particular types or items of Collateral pursuant to this Section 9.07. The Agent hereby agrees, from time to time upon the prior written request of the Borrower, to execute and deliver such releases and/or termination documents as may be necessary to effectively release any and all of the Liens granted to or held by the Agent upon any Collateral described in this Section 9.07(b).

        (c)  The powers conferred on the Agent under this Agreement and the other Subordinated Security Instruments are solely to protect its interest in the Collateral and shall not impose any duty upon it to exercise any such powers. Except for the reasonable care of any Collateral in its possession and the accounting for monies or other property actually received by it hereunder, the Agent shall have no duty as to any Collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral. The Agent shall be deemed to have exercised reasonable care as to the custody and preservation of the Collateral in its possession if the Collateral is

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accorded treatment substantially equal to that which the Agent accords its own property, provided that the Agent shall have no responsibility for taking any necessary steps to preserve rights against any parties with respect to any Collateral.

ARTICLE X

MISCELLANEOUS

        Section 10.01    Amendments, Etc.    No amendment or waiver of any provision of this Agreement, the Subordinated Notes, or any other Subordinated Loan Document, nor consent to any departure by any Credit Party therefrom, shall in any event be effective unless the same shall be in writing and signed by the Majority Lenders and the Borrower, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided that:

        (a)  no amendment, waiver, or consent shall, unless in writing and signed by all of the Lenders and the Borrower, do any of the following:

          (i)  waive any of the conditions specified in Section 3.01 or Section 3.02;

        (ii)  increase the Commitments of the Lenders;

        (iii)  change the percentage of Lenders which shall be required for the Lenders or any of them to take any action hereunder or under any other Subordinated Loan Document;

        (iv)  amend Section 2.11 or this Section 10.01;

        (v)  amend the definition of "Majority Lenders";

        (vi)  release any Guarantor from its obligations under Article VIII;

      (vii)  permit any Credit Party to enter into any merger or consolidation with or into any other Person, except as permitted by Section 6.04, or amend Section 6.04;

      (viii)  release any Collateral, except for releases of Collateral in connection with dispositions permitted by this Agreement;

        (ix)  reduce the principal of, or interest on, the Subordinated Notes or any fees or other amounts payable hereunder or under any other Subordinated Loan Document to or for the benefit of the Lenders;

        (x)  postpone any date fixed for any payment of principal of, or interest on, the Subordinated Notes or any fees or other amounts payable hereunder or extend the Maturity Date; or

        (xi)  amend or waive any provision of, nor consent to any departure by any party thereto from, the Intercreditor and Subordination Agreement;

        (b)  no amendment, waiver or consent shall, unless in writing and signed by the Agent in addition to the Lenders required above to take such action, affect the rights or duties of the Agent, as the case may be, under this Agreement or any other Subordinated Loan Document.

        Notwithstanding any of the foregoing provisions of this Section 10.01, the Agent may release Collateral relating to sales or transfers of property permitted under this Agreement or any other Subordinated Loan Document; provided that in no event shall Agent release all or substantially all of the Collateral without the prior written consent of each of the Lenders.

        Section 10.02    Notices, Etc.    All notices and other communications shall be in writing (including, without limitation, telecopy or telex) and mailed by certified mail, return receipt requested, telecopied, telexed, hand delivered, or delivered by a nationally recognized overnight courier, at the address for the

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appropriate party specified in Schedule 1 or at such other address as shall be designated by such party in a written notice to the other parties. All such notices and communications shall, when so mailed, telecopied, telexed, or hand delivered or delivered by a nationally recognized overnight courier, be effective when received if mailed, when telecopy transmission is completed, when confirmed by telex answer-back, or when delivered by such messenger or courier, respectively, except that notices and communications to the Agent pursuant to Article II, Article IX or Article X shall not be effective until received by the Agent.

        Section 10.03    No Waiver; Remedies.    No failure on the part of any Lender or the Agent to exercise, and no delay in exercising, any right hereunder or under any Subordinated Note shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

        Section 10.04    Costs and Expenses.    The Borrower agrees to pay on demand (a) all reasonable out-of-pocket costs and expenses of the Agent in connection with the preparation, execution, delivery, administration, modification, and amendment of this Agreement, the Subordinated Notes, and the other Subordinated Loan Documents including, without limitation, the reasonable fees and out of pocket expenses of counsel for the Agent with respect to advising the Agent as to its rights and responsibilities under this Agreement, and (b) all out of pocket costs and expenses, if any, of the Agent and each Lender (including, without limitation, reasonable counsel fees and expenses of the Agent and each Lender) in connection with the enforcement (whether through negotiations, legal proceedings, or otherwise) of this Agreement, the Subordinated Notes, and the other Subordinated Loan Documents.

        Section 10.05    Binding Effect.    This Agreement shall become effective when it shall have been executed by each of the Credit Parties and the Agent, and when the Agent shall have, as to each Lender, either received a counterpart hereof executed by such Lender or been notified by such Lender that such Lender has executed it and thereafter shall be binding upon and inure to the benefit of the Credit Parties, the Agent and each Lender and their respective successors and assigns, except that the Borrower shall not have the right to assign its rights or delegate its duties under this Agreement or any interest in this Agreement without the prior written consent of each Lender.

        Section 10.06    Lender Assignments and Participations.    

        (a)    Assignments.    Any Lender may assign to one or more banks or other entities all or any portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitments, the Advances owing to it and the Subordinated Notes held by it); provided that (i) the amount of the Commitments and Advances of such Lender being assigned pursuant to each such assignment (determined as of the date of the Assignment and Acceptance with respect to such assignment) shall be, if to an entity other than a Lender, not less than $5,000,000.00, (ii) each such assignment shall be to an Eligible Assignee, (iii) the parties to each such assignment shall execute and deliver to the Agent, for its acceptance and recording in the Register, an Assignment and Acceptance, together with the Subordinated Notes subject to such assignment, and (iv) each Eligible Assignee (other than an Eligible Assignee that is a Lender or an Affiliate of a Lender) shall pay to the Agent a $3,500 administrative fee. Any such assignment need not be ratable as among the Facilities. Upon such execution, delivery, acceptance and recording, from and after the effective date specified in each Assignment and Acceptance, which effective date shall be at least three Business Days after the execution thereof unless otherwise waived by the Agent in its sole discretion, (A) the assignee thereunder shall be a party hereto for all purposes and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, have the rights and obligations of a Lender hereunder and (B) such Lender thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under this Agreement (and, in the case of an Assignment

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and Acceptance covering all or the remaining portion of such Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto).

        (b)    Term of Assignments.    By executing and delivering an Assignment and Acceptance, the Lender thereunder and the assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, such Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency of value of this Agreement or any other instrument or document furnished pursuant hereto; (ii) such Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Credit Party or the performance or observance by the Borrower or its Subsidiaries of any of their obligations under this Agreement or any other instrument or document furnished pursuant hereto; (iii) such assignee confirms that it has received a copy of this Agreement, together with copies of the most recently delivered financial statements pursuant to Section 5.06 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such assignee will, independently and without reliance upon the Agent, such Lender or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (v) such assignee appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to the Agent by the terms hereof, together with such powers as are reasonably incidental thereto; and (vi) such assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of this Agreement are required to be performed by it as a Lender.

        (c)    The Register.    The Agent shall maintain at its address referred to in Section 10.02 a copy of each Assignment and Acceptance delivered to and accepted by it and a register for the recordation of the names and addresses of the Lenders and the Commitments of, and principal amount of the Advances owing to, each Lender from time to time (the "Register"). The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and each of the Credit Parties, the Agent and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice.

        (d)    Procedures.    Upon its receipt of an Assignment and Acceptance executed by a Lender and an Eligible Assignee, together with the Subordinated Notes subject to such assignment, the Agent shall, if such Assignment and Acceptance has been completed and is in substantially the form of the attached Exhibit A, (i) accept such Assignment and Acceptance, (ii) record the information contained therein in the Register, and (iii) give prompt notice thereof to the Borrower. Within five Business Days after its receipt of such notice, the Borrower shall execute and deliver to the Agent in exchange for the surrendered Subordinated Notes (A) if such Eligible Assignee has acquired a Commitment, a new Subordinated Note to the order of such Eligible Assignee in an amount equal to such Commitment assumed by it pursuant to such Assignment and Acceptance and (B) if such Lender has retained any Commitment hereunder, a new Subordinated Note to the order of such Lender in an amount equal to the Commitment retained by it hereunder. Such new Subordinated Note shall be dated the effective date of such Assignment and Acceptance and shall otherwise be in substantially the form of the attached Exhibit E.

        (e)    Participations.    Each Lender may sell participations to one or more banks or other entities in or to all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitments, the Advances owing to it and the Subordinated Notes held by it); provided that (i) such Lender's obligations under this Agreement (including, without limitation, its Commitments to the Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain solely

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responsible to the other parties hereto for the performance of such obligations, (iii) such Lender shall remain the holder of any such Subordinated Notes for all purposes of this Agreement, (iv) the Credit Parties, the Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement, and (v) such Lender shall not require the participant's consent to any matter under this Agreement, except for change in the principal amount of the Subordinated Notes, reductions in fees or interest, releasing all or substantially all of any Collateral or Brigham Exploration or the General Partner as a Guarantor, permitting any Credit Party to enter into any merger or consolidation with or into any other (except as permitted hereby), postponement of any date fixed for any payment of principal of, or interest on, the Subordinated Notes or any fees or other amounts payable hereunder, or extensions of the Maturity Date. The Borrower hereby agrees that participants shall have the same rights under Section 2.13, Section 2.14 and Section 10.07 as a Lender to the extent of their respective participations.

        Section 10.07    INDEMNIFICATION.    THE BORROWER SHALL INDEMNIFY THE AGENT, THE LENDERS AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS FROM, AND DISCHARGE, RELEASE, AND HOLD EACH OF THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS, OR DAMAGES WHICH MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST THEM IN ANY WAY RELATING TO OR ARISING OUT OF THIS AGREEMENT OR ANY ACTION TAKEN OR OMITTED BY THEM UNDER THIS AGREEMENT OR ANY OTHER SUBORDINATED LOAN DOCUMENT (INCLUDING ANY SUCH LOSSES, LIABILITIES, CLAIMS, DAMAGES, OR EXPENSE INCURRED BY REASON OF THE PERSON BEING INDEMNIFIED'S OWN NEGLIGENCE OR STRICT LIABILITY) AND INCLUDING WITHOUT LIMITATION ENVIRONMENTAL LIABILITIES, BUT EXCLUDING ANY SUCH LOSSES, LIABILITIES, CLAIMS, DAMAGES, OR EXPENSES INCURRED BY REASON OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PERSON TO BE INDEMNIFIED.

        Section 10.08    Execution in Counterparts.    This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

        Section 10.09    Survival of Representations, Etc.    All representations and warranties contained in this Agreement or made in writing by or on behalf of the Borrower in connection herewith shall survive the execution and delivery of this Agreement and the Subordinated Loan Documents, the making of the Advances and any investigation made by or on behalf of the Lenders, none of which investigations shall diminish any Lender's right to rely on such representations and warranties. All obligations of the Borrower provided for in Section 2.13, Section 2.14(c), Section 10.04 and Section 10.07 and all of the obligations of the Lenders in Section 10.05 shall survive any termination of this Agreement and repayment in full of the Subordinated Obligations.

        Section 10.10    Severability.    In case one or more provisions of this Agreement or the other Subordinated Loan Documents shall be invalid, illegal or unenforceable in any respect under any applicable law, the validity, legality, and enforceability of the remaining provisions contained herein or therein shall not be affected or impaired thereby.

        Section 10.11    GOVERNING LAW.    EXCEPT AS OTHERWISE EXPRESSLY STATED IN ANY SUBORDINATED SECURITY INSTRUMENT, THIS AGREEMENT, THE SUBORDINATED NOTES AND THE OTHER SUBORDINATED LOAN DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

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        Section 10.12    SUBMISSION TO JURISDICTION; WAIVERS.    THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY:

        (a)  SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER SUBORDINATED LOAN DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;

        (b)  CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;

        (c)  AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS SET FORTH IN SECTION 10.02 OR AT SUCH OTHER ADDRESS OF WHICH THE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO;

        (d)  AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND

        (e)  WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN THIS SECTION 10.12(E) ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES.

        Section 10.13    WAIVER OF JURY TRIAL.    EACH OF THE CREDIT PARTIES, THE LENDERS AND THE AGENT HEREBY ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED BY AND HAS CONSULTED WITH COUNSEL OF ITS CHOICE, AND HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN RESPECT OF ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER SUBORDINATED LOAN DOCUMENT, OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

        Section 10.14    ORAL AGREEMENTS.    THIS AGREEMENT AND THE SUBORDINATED LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG 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.

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        Section 10.15    Dissemination of Information.    The Agent and each Lender agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates' directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential); (b) to the extent requested by any Governmental Authority in connection with banking regulations or supervision; (c) to the extent required by applicable Legal Requirements or by any subpoena or similar legal process; (d) to any other party to this Agreement; (e) to the extent required, in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder; (f) subject to an agreement for the benefit of the Credit Parties containing provisions substantially the same as those of this Section 10.15 or any other confidentiality obligation referred to herein, to (i) any participant or Eligible Assignee or any other Person acquiring an interest in the Subordinated Loan Documents (each a "Transferee") and any prospective Transferee or (ii) any direct or indirect contractual counterparty or prospective counterparty (or such contractual counterparty's or prospective counterparty's professional advisor) to any credit derivative transaction relating to obligations of Credit Parties; (g) with the prior written consent of the Borrower; or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Agent or any Lender on a nonconfidential basis from a source other than any Credit Party. In addition, the Agent or any Lender may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry, and service providers to the Agent and the Lenders in connection with the administration and management of this Agreement, the other Subordinated Loan Documents, and the Advances. For the purposes of this Section 10.15, "Information" means all information received from, or on behalf of, any Credit Parties relating to any Credit Party or their business, other than any such information that is available to any Agent or any Lender on a nonconfidential basis prior to disclosure by any Credit Party; provided that, in the case of information received from any Credit Party after the date hereof, such information is clearly identified in writing at the time of delivery as confidential; and provided, further, that notwithstanding the foregoing, each Engineering Report shall be deemed to be confidential regardless of whether such Engineering Report is identified in writing at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section 10.15 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

        Section 10.16    Production Proceeds.    Notwithstanding that, by the terms of the various Subordinated Security Instruments, the Credit Parties are and will be assigning to the Agent and the Lenders all of the "Production Proceeds" (as defined therein) accruing to the Property covered thereby, so long as no Event of Default has occurred the Credit Parties may continue to receive from the purchasers of production all such Production Proceeds, subject, however, to the Liens created under the Subordinated Security Instruments, which Liens are hereby affirmed and ratified. Upon the occurrence of an Event of Default, the Agent and the Lenders may exercise all rights and remedies granted under the Subordinated Security Instruments, including the right to obtain possession of all Production Proceeds then held by the Credit Parties or to receive directly from the purchasers of production all other Production Proceeds. In no case shall any failure, whether intentional or inadvertent, by the Agent or the Lenders to collect directly any such Production Proceeds constitute in any way a waiver, remission or release of any of their rights under the Subordinated Security Instruments, nor shall any release of any Production Proceeds by the Agent or the Lenders to the Credit Parties constitute a waiver, remission, or release of any other Production Proceeds or of any rights of the Agent or the Lenders to collect other Production Proceeds thereafter.

        Section 10.17    Amendment and Restatement.    The Borrower, the Agent and the Lenders have agreed that this Agreement is an amendment and restatement of the Existing Subordinated Credit Agreement in its entirety and the terms and provisions hereof supersede the terms and provisions thereof, and this Agreement is not a new or substitute credit agreement or novation of the Existing Subordinated Credit Agreement.

55

        EXECUTED as of the date first above written.

BORROWER:
BRIGHAM OIL & GAS, L.P.
By:	Brigham, Inc., its General Partner
By:	/s/ WARREN J. LUDLOW Name: Warren J. Ludlow Title: Secretary
GUARANTORS:
BRIGHAM EXPLORATION COMPANY
By:	/s/ WARREN J. LUDLOW Name: Warren J. Ludlow Title: Secretary
BRIGHAM, INC.
By:	/s/ WARREN J. LUDLOW Name: Warren J. Ludlow Title: Secretary
AGENT:
THE ROYAL BANK OF SCOTLAND plc, as Agent
By:	/s/ PHILLIP BALLARD Name: Phillip Ballard Title: Senior Vice President
LENDERS:
THE ROYAL BANK OF SCOTLAND plc
By:	/s/ PHILLIP BALLARD Name: Phillip Ballard Title: Senior Vice President

56

EXHIBIT A

FORM OF ASSIGNMENT AND ACCEPTANCE

Dated                        ,             

        Reference is made to the Amended and Restated Subordinated Credit Agreement dated as of March [    ], 2003 (as the same may be amended or modified from time-to-time, the "Subordinated Credit Agreement") among Brigham Oil & Gas, L.P., a Delaware limited partnership (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") for the Lenders. Capitalized terms not otherwise defined in this Assignment and Acceptance shall have the meanings assigned to them in the Subordinated Credit Agreement.

        Pursuant to the terms of the Subordinated Credit Agreement,                        wishes to assign and delegate    %(1) of its rights and obligations under the Subordinated Credit Agreement. Therefore,                        ("Assignor"), ("Assignee"), and the Agent agree as follows:

(1)

Specify percentage in no more than 5 decimal points.

        1.    The Assignor hereby sells and assigns and delegates to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, without recourse to the Assignor and without representation or warranty except for the representations and warranties specifically set forth in clauses (i) and (ii) of Section 2, a    % interest in and to all of the Assignor's rights and obligations under the Subordinated Credit Agreement as of the Effective Date (as defined below), including, without limitation, such percentage interest in the Assignor's Advances owing to the Assignor, and the Subordinated Note held by the Assignor.

        2.    The Assignor (i) represents and warrants that, prior to executing this Assignment and Acceptance, the aggregate outstanding principal amount of Advances owed to it by the Borrower is $                                           ; (ii) represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; (iii) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties, or representations made in, or in connection with, the Subordinated Credit Agreement or any other Subordinated Loan Document or the execution, legality, validity, enforceability, genuineness, sufficiency, or value of the Subordinated Credit Agreement or any other Subordinated Loan Document or any other instrument or document furnished pursuant thereto; (iv) makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Credit Party or the performance or observance by any Credit Party of any of its respective obligations under the Subordinated Credit Agreement or any other Subordinated Loan Document or any other instrument or document furnished pursuant thereto; and (v) attaches the Subordinated Note referred to in paragraph 1 above and requests that the Agent exchange such Subordinated Note for a new Subordinated Note dated                        ,             in the principal amount of $                                           payable to the order of the Assignee, and [a new Subordinated Note dated                        ,             in the principal amount of $                        payable to the order of the Assignor.]

        3.    The Assignee (i) confirms that it has received a copy of the Subordinated Credit Agreement, together with copies of the most recent financial statements referred to in Section 5.06 thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (ii) agrees that it will, independently and without reliance upon the Agent, the Assignor, or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Subordinated Credit Agreement or any other Subordinated Loan

A-1

Document; (iii) appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under the Subordinated Credit Agreement and any other Subordinated Loan Document as are delegated to the Agent by the terms thereof, together with such powers as are reasonably incidental thereto; (iv) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Subordinated Credit Agreement or any other Subordinated Loan Document are required to be performed by it as a Lender; (v) specifies as its Lending Office (and address for notices) the office set forth beneath its name on the signature pages hereof; (vi) attaches the forms prescribed by the Internal Revenue Service of the United States certifying as to the Assignee's status for purposes of determining exemption from United States withholding taxes with respect to all payments to be made to the Assignee under the Subordinated Credit Agreement and the Subordinated Notes or such other documents as are necessary to indicate that all such payments are subject to such rates at a rate reduced by an applicable tax treaty;(2) and (vii) represents that it is an Eligible Assignee.

(2)

If the Assignee is organized under the laws of a jurisdiction outside the United States.

        4.    The Assignee confirms that it has received a copy of the Intercreditor and Subordination Agreement and expressly agrees that it will be bound, in its capacity as a Subordinated Lender, by the terms thereof. The Assignee shall execute such other agreements, documents and instruments as the Senior Agent may reasonably request to effect the purpose of this paragraph 4.

        5.    The effective date for this Assignment and Acceptance shall be dated                        ,             (the "Effective Date")(3) and following the execution of this Assignment and Acceptance, the Agent will record it.

(3)

See Section 11.06 of the Subordinated Credit Agreement. Such date shall be at least three Business Days after the date of this Assignment and Acceptance, unless otherwise waived by the Agent in its sole discretion.

        6.    Upon such recording, and as of the Effective Date, (i) the Assignee shall be a party to the Subordinated Credit Agreement for all purposes, and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of a Lender thereunder and (ii) the Assignor shall, to the extent provided in this Assignment and Acceptance, relinquish its rights and be released from its obligations under the Subordinated Credit Agreement.

        7.    Upon such recording, from and after the Effective Date, the Agent shall make all payments under the Subordinated Credit Agreement and the Subordinated Note in respect of the interest assigned hereby (including, without limitation, all payments of principal, interest, letter of credit fees and commitment fees) to the Assignee. The Assignor and Assignee shall make all appropriate adjustments in payments under the Subordinated Credit Agreement and the Subordinated Note for periods prior to the Effective Date directly between themselves.

        8.    This Assignment and Acceptance shall be governed by, and construed and enforced in accordance with, the laws of the State of New York.

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        The parties hereto have caused this Assignment and Acceptance to be duly executed as of the date first above written.

[ASSIGNOR]

By:

Name:

Title:

Address:

Attention:

Telecopy No: (XXX) XXX-XXXX

[ASSIGNEE]

By:

Name:

Title:

Lending Office

Address:

Attention:

Telecopy No: (XXX) XXX-XXXX

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EXHIBIT B

Form of Compliance Certificate

FOR THE PERIOD FROM            , 200    TO            , 200

        This certificate dated as of            , 200    is prepared pursuant to Amended and Restated Subordinated Credit Agreement dated as of March [    ], 2003 (as the same may be amended or modified from time-to-time, the "Subordinated Credit Agreement") among Brigham Oil & Gas, L.P., a Delaware limited partnership (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") for the Lenders. Unless otherwise defined in this certificate, capitalized terms that are defined in the Subordinated Credit Agreement shall have the meanings assigned to them by the Subordinated Credit Agreement.

        Brigham Exploration hereby certifies (a) that no Default or Event of Default has occurred or is continuing, (b) that all of the representations and warranties made by each of the Credit Parties in the Subordinated Credit Agreement and the other Loan Documents are true and correct in all material respects as if made on this date (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 respect as of such earlier date), and (c) that as of the date hereof, the following amounts and calculations were true and correct:

1.	Section 6.22 Current Ratio.
	(a)	consolidated current assets of Brigham Exploration and its consolidated Subsidiaries (including the Unused Revolving Commitment Amount as of the date of calculation)	$
	(b)	consolidated current liabilities of Brigham Exploration and its consolidated Subsidiaries	$
	Current Ratio = (a) divided by (b)
	Minimum Current Ratio		1.00 to 1.00
	Compliance		Yes	No
2.	Section 6.23 Interest Coverage Ratio.
	(a)	Consolidated Net Income	$
	(b)	Interest Expense	$
	(c)	taxes, depreciation, amortization, depletion, and other non-cash charges	$
	(d)	all non-cash income	$
	(e)	EBITDA = (a) + (b) + (c) - (d)	$
	Interest Coverage Ratio = (e) divided by (b)
	Minimum Current Ratio for twelve-month period ending March 31, 2003		2.75 to 1.00
	For twelve-month period ending June 30, 2003 and each twelve-month period ending at the end of each fiscal quarter thereafter		3.25 to 1.00
	Compliance		Yes	No

        IN WITNESS THEREOF, I have hereto signed my name to this Compliance Certificate as an officer of Brigham Exploration and not in my individual capacity as of            , 200  .

B-1

EXHIBIT C

[RESERVED]

C-1

EXHIBIT D

[RESERVED]

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EXHIBIT E

FORM OF SUBORDINATED NOTE

THIS INSTRUMENT IS SUBORDINATED TO THE EXTENT AND IN THE MANNER PROVIDED IN THE INTERCREDITOR AND SUBORDINATION AGREEMENT REFERRED TO BELOW.

SUBORDINATED NOTE

$23,000,000.00 March [21], 2003

        For value received, the undersigned BRIGHAM OIL & GAS, L.P., a Delaware limited partnership (the "Borrower"), hereby promises to pay to the order of            (the "Payee") the principal amount of            No/100 Dollars ($            ) or, if less, the aggregate outstanding principal amount of the Advances (as defined in the Subordinated Credit Agreement referred to below) made by the Payee to the Borrower, together with interest on the unpaid principal amount of the Advances from the date of such Advances until such principal amount is paid in full, at such interest rates, and at such times, as are specified in the Subordinated Credit Agreement. The Borrower may make prepayments on this Subordinated Note in accordance with the terms of the Subordinated Credit Agreement.

        This Subordinated Note is one of the Subordinated Notes referred to in, and is entitled to the benefits of, and is subject to the terms of, the Amended and Restated Subordinated Credit Agreement dated as of March [21], 2003, (as the same may be amended or modified from time to time, the "Subordinated Credit Agreement"), 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") for the Lenders. Capitalized terms used in this Subordinated Note that are defined in the Subordinated Credit Agreement and not otherwise defined in this Subordinated Note have the meanings assigned to such terms in the Subordinated Credit Agreement. The Subordinated Credit Agreement, among other things, (a) provides for the making of the Advances by the Payee to the Borrower in an aggregate amount not to exceed at any time outstanding the Dollar amount first above mentioned, the indebtedness of the Borrower resulting from each such Advance being evidenced by this Subordinated Note, and (b) contains provisions for acceleration of the maturity of this Subordinated Note upon the happening of certain events stated in the Subordinated Credit Agreement and for prepayments of principal prior to the maturity of this Subordinated Note upon the terms and conditions specified in the Subordinated Credit Agreement.

        In connection with the execution and delivery of the Subordinated Credit Agreement, the Agent, the Borrower, Brigham Exploration Company, Brigham, Inc., and Société Générale, as administrative agent (the "Senior Agent") under that certain Second Amended and Restated Credit Agreement dated as of March [21], 2003, (as the same may be amended or modified from time to time, the "Senior Credit Agreement"), among the Borrower, Brigham Exploration Company, Brigham, Inc., the lenders party thereto, have entered into that certain Amended and Restated Intercreditor and Subordination Agreement dated as of March [21], 2003 (as the same may be amended or supplemented from time to time, the "Intercreditor and Subordination Agreement"). Payments of principal and interest on this Subordinated Note are subordinated to the extent provided in the Intercreditor and Subordination Agreement.

        Both principal and interest are payable in lawful money of the United States of America to the Agent at 101 Park Avenue, 12^th Floor, New York, New York 10178 or such other location or address in New York specified by the Agent to the Borrower in same day funds. The Payee shall record payments of principal made under this Subordinated Note, but no failure of the Payee to make such recordings shall affect the Borrower's repayment obligations under this Subordinated Note.

        This Subordinated Note is secured by the Subordinated Security Instruments and guaranteed pursuant to Article VIII of the Subordinated Credit Agreement.

E-1

        Except as specifically provided in the Subordinated Credit Agreement, the Borrower hereby waives presentment, demand, protest, notice of intent to accelerate, notice of acceleration, and any other notice of any kind. No failure to exercise, and no delay in exercising, any rights hereunder on the part of the holder of this Subordinated Note shall operate as a waiver of such rights.

        THIS SUBORDINATED NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

        THIS SUBORDINATED NOTE AND THE OTHER SUBORDINATED LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG 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.

[SIGNATURE OF BRIGHAM OIL & GAS, L.P.]

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EXHIBIT F

FORM OF SECOND MORTGAGE AMENDMENT

AMENDED AND RESTATED SECOND MORTGAGE, DEED OF TRUST,
ASSIGNMENT OF PRODUCTION, SECURITY AGREEMENT,
FIXTURE FILING, AND FINANCING STATEMENT

FROM

BRIGHAM OIL & GAS, L.P.

a Delaware limited partnership,

as grantor and mortgagor,

TO

PHILLIP BALLARD,

as Trustee

FOR THE BENEFIT OF

THE ROYAL BANK OF SCOTLAND plc,

as Agent,

as beneficiary,

AND TO

THE ROYAL BANK OF SCOTLAND plc,

as Agent,

as Mortgagee

NOTICE TO MORTGAGOR:

A POWER OF SALE HAS BEEN GRANTED IN THIS INSTRUMENT. WITH RESPECT TO PORTIONS OF THE MORTGAGED PROPERTY LOCATED IN THE STATE OF OKLAHOMA, SUCH POWER OF SALE IS GRANTED PURSUANT TO THE OKLAHOMA MORTGAGE FORECLOSURE ACT (AS DEFINED BELOW). # IN CERTAIN STATES, A POWER OF SALE MAY ALLOW TRUSTEE OR MORTGAGEE, AS APPLICABLE, TO TAKE THE MORTGAGED PROPERTY AND SELL IT WITHOUT GOING TO COURT IN A FORECLOSURE ACTION UPON THE OCCURRENCE OF AN EVENT OF DEFAULT BY MORTGAGOR UNDER THIS INSTRUMENT. THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS. THIS INSTRUMENT SECURES PAYMENT OF FUTURE ADVANCES. THIS INSTRUMENT COVERS ALL PRODUCTS AND PROCEEDS OF THE MORTGAGED PROPERTY.

THIS INSTRUMENT COVERS THE INTEREST OF MORTGAGOR IN MINERALS OR THE LIKE (INCLUDING OIL AND GAS) BEFORE EXTRACTION AND THE SECURITY INTEREST CREATED BY THIS INSTRUMENT ATTACHES TO SUCH MINERALS AS EXTRACTED AND TO ACCOUNTS RESULTING FROM THE SALE THEREOF AT THE WELLHEAD. THIS INSTRUMENT COVERS MORTGAGOR'S INTEREST IN FIXTURES. THIS FINANCING STATEMENT IS TO BE FILED FOR RECORD, AMONG OTHER PLACES, IN THE REAL ESTATE RECORDS.

F-1

AMENDED AND RESTATED SECOND MORTGAGE, DEED OF TRUST, ASSIGNMENT OF PRODUCTION, SECURITY AGREEMENT, FIXTURE FILING, AND FINANCING STATEMENT

THE OBLIGATIONS UNDER THIS INSTRUMENT ARE EXPRESSLY SUBORDINATED TO THAT CERTAIN AMENDED AND RESTATED MORTGAGE, DEED OF TRUST, ASSIGNMENT OF PRODUCTION, SECURITY AGREEMENT, FIXTURE FILING, AND FINANCING STATEMENT DATED AS OF THE DATE HEREOF THAT HAS BEEN EXECUTED BY MORTGAGOR (AS HEREINAFTER DEFINED) IN FAVOR OF SOCIÉTÉ GÉNÉRALE ("SG"), THE ADMINISTRATIVE AGENT FOR THE BENEFIT OF THE SENIOR LENDERS (AS HEREINAFTER DEFINED), THAT PROVIDES AND IS INTENDED TO PROVIDE, A FIRST PRIORITY DEED OF TRUST AND MORTGAGE LIEN AND A FIRST PRIORITY SECURITY INTEREST IN THE MORTGAGED PROPERTY (AS HEREINAFTER DEFINED) TO SECURE THE OBLIGATIONS MORE PARTICULARLY DESCRIBED IN THAT CERTAIN SECOND AMENDED AND RESTATED CREDIT AGREEMENT BY AND AMONG MORTGAGOR, BRIGHAM EXPLORATION COMPANY, BRIGHAM, INC., SG, THE ROYAL BANK OF SCOTLAND PLC ("RBS"), AND EACH OF THE OTHER LENDERS PARTY THERETO FROM TIME TO TIME (COLLECTIVELY, "SENIOR LENDERS"). THIS INSTRUMENT IS SUBJECT TO THE TERMS AND PROVISIONS OF THAT CERTAIN AMENDED AND RESTATED INTERCREDITOR AGREEMENT DATED MARCH    , 2003 BY AND BETWEEN THE SENIOR LENDERS.

        THIS AMENDED AND RESTATED SECOND MORTGAGE, DEED OF TRUST, ASSIGNMENT OF PRODUCTION, SECURITY AGREEMENT, FIXTURE FILING, AND FINANCING STATEMENT (this "Second Mortgage") is made effective as of March    , 2003 (the "Effective Date") by BRIGHAM OIL & GAS, L.P., a Delaware limited partnership, whose address for notice is 6300 Bridge Point Parkway, Building 2, Suite 500, Austin, Texas 78730, as grantor and mortgagor ("Mortgagor") to:

PHILLIP BALLARD, as Trustee, whose address for notice is 600 Travis Street, Suite 6070, Houston, TX 77002 ("Trustee") for the benefit of THE ROYAL BANK OF SCOTLAND plc, as beneficiary, whose address for notice is 600 Travis Street, Suite 6070, Houston, TX 77002, as Agent (together with any successor agents, "Agent"); and

Agent, as mortgagee ("Mortgagee").

RECITALS:

        A.    Mortgagor, Brigham, Inc., a Nevada Corporation, Brigham Exploration Company, a Delaware corporation, Agent, and certain other lenders are parties to that certain Amended and Restated Subordinated Credit Agreement dated effective as of March     , 2003, and all supplements thereto and amendments or modifications thereof, and all agreements, given in substitution therefore or in restatement, renewal or extension thereof, in whole or in part (the "Amended and Restated Subordinated Credit Agreement"). Agent and the other lenders party, from time to time, to the Amended and Restated Subordinated Credit Agreement may be referred to periodically herein as, individually, a "Lender" and, collectively, as the "Lenders."

        B.    Mortgagor, the lenders party thereto, and Agent entered into that certain Subordinated Credit Agreement dated October 31, 2000 (the "Existing Subordinated Credit Agreement").

        C.    Pursuant to the Amended and Restated Subordinated Credit Agreement, Mortgagor has agreed to enter into this Second Mortgage. In addition, it is a condition to the obligation of each Lender to make such Lender's initial Advance as part of the initial Borrowing that this Second Mortgage be executed and delivered to Trustee and to Mortgagee.

        D.    This Mortgage constitutes for all purposes an amendment and restatement of the security instruments more particularly described on Schedule I attached hereto and made a part hereof (collectively, the "Original Mortgages") and not a new or substitute security instrument.

F-2

        NOW, THEREFORE, in consideration of the foregoing, in order to comply with the terms, provisions, and conditions of the Amended and Restated Subordinated Credit Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Mortgagor hereby enters into this Second Mortgage on the following terms and conditions:

ARTICLE I

Granting Clause; Description of Indebtedness Secured

        Section 1.01    Granting Clause.    In order to secure the payment of the Indebtedness (as hereinafter defined in Section 1.03) and in order to secure the performance of the covenants, obligations, agreements, warranties, and undertakings herein contained, (x) with respect to any portion of the Mortgaged Property (as hereinafter defined) that is located in or is subject to the laws of the State of Texas or any other state pursuant to the law of which a deed of trust is a lawful security instrument, Mortgagor does hereby GRANT, BARGAIN, SELL, ASSIGN, PLEDGE, GIVE, MORTGAGE, WARRANT, SET OVER, TRANSFER, HYPOTHECATE, and CONVEY unto Trustee and Trustee's successors and substitutes in trust hereunder IN TRUST WITH POWER OF SALE, for the use and benefit of Agent and the Lenders, all of Mortgagor's right, title, and interest, whether now owned or hereafter acquired, in the real and personal property, rights, titles, interests and estates described hereinafter (the "Trust Estate Property") and (y) with respect to any portion of the Mortgaged Property (as hereinafter defined) that is located in or is subject to the laws of the State of Oklahoma or any state pursuant to the law of which a deed of trust is not a lawful security instrument, Mortgagor does hereby GRANT, BARGAIN, SELL, ASSIGN, PLEDGE, GIVE, MORTGAGE, WARRANT, SET OVER, TRANSFER, HYPOTHECATE, and CONVEY to Mortgagee for the use and benefit of Agent and the Lenders all of Mortgagor's right, title, and interest, whether now owned or hereafter acquired, in the real and personal property, rights, titles, interests and estates described hereinafter (the "Non-Trust Estate Property") (the Trust Estate Property and the Non-Trust Estate Property are herein collectively called the "Mortgaged Property"):

        (a)  All oil and gas and/or oil, gas and mineral leases and leasehold interests, fee mineral interests, term mineral interests, subleases, farmouts, royalties, overriding royalties, net profits interests, production payments and similar interests or estates described on Exhibit A attached hereto or constituting interests in the lands described on Exhibit A attached hereto, including, without limitation any reversionary or carried interests relating to any of the foregoing, together with any instrument executed in amendment, correction, modification, confirmation, renewal or extension of the same (collectively, the "Hydrocarbon Property"), and including specifically, but without limitation, the undivided interests of Mortgagor which are represented, warranted, and more particularly described on Exhibit A hereto;

        (b)  All rights, titles, interests, estates, tenements, hereditaments, and appurtenances now owned or existing or hereafter acquired by Mortgagor in and to: (i) all production units and drilling and spacing units (and the property covered thereby) which may affect all or any portion of the Hydrocarbon Property including those units now or hereafter pooled or unitized with the Hydrocarbon Property; (ii) all presently existing or future unitization, communitization, pooling agreements and declarations of pooled units and the units created thereby, including, but not limited to, pooling orders of the Oklahoma Corporation Commission (together with all other units created under orders, regulations, rules or other official acts of any Governmental Authority having jurisdiction over any of the Mortgaged Property and any units created solely among working interest owners pursuant to operating agreements or otherwise) which may affect all or any portion of the Hydrocarbon Property including, without limitation, those units, if any, which may be described or referred to on attached Exhibit A; (iii) all operating agreements, production sales or other contracts, farmout agreements, farm-in agreements, area of mutual interest agreements, joint development agreements, joint exploration agreements, equipment leases and

F-3

other agreements described or referred to in this Second Mortgage or which cover, affect or relate to any of the Hydrocarbon Property or interests in the Hydrocarbon Property described or referred to herein or on Exhibit A or to the production, sale, purchase, exchange, processing, handling, storage, transporting or marketing of the Hydrocarbons (hereinafter defined) from or attributable to such Hydrocarbon Property or interests; and (iv) subject to applicable restrictions on disclosure and/or transfer, all geological, geophysical, engineering, accounting, title, legal, and other technical or business data concerning the Mortgaged Property, the Hydrocarbons in which Mortgagor can otherwise grant a security interest, and all books, files, records, magnetic media, computer records, and other forms of recording or obtaining access to such data;

        (c)  All rights, titles, interests and estates now owned or hereafter acquired by Mortgagor in and to all oil, gas, coal seam gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate, and all other liquid and gaseous hydrocarbons produced or to be produced in conjunction therewith from a well bore and all products, by-products, and other substances derived therefrom or the processing thereof, and all other minerals and substances produced in conjunction with such substances, including, but not limited to, sulfur, geothermal steam, water, carbon dioxide, helium, and any and all minerals, ores, or substances of value and the products and proceeds therefrom (collectively called the "Hydrocarbons") in and under and which may be produced and saved from or attributable to the Hydrocarbon Property, the lands pooled or unitized therewith and Mortgagor's interests therein, including all oil in tanks, gas in storage, and all rents, issues, profits, proceeds, products, revenues and other income from or attributable to the Hydrocarbon Property, the lands pooled or unitized therewith and Mortgagor's interests therein which are subjected to the liens and security interests of this Second Mortgage;

        (d)  All tenements, hereditaments, appurtenances and properties in anywise appertaining, belonging, affixed or incidental to the Hydrocarbon Property or the rights, titles, interests and estates described or referred to in paragraphs (a) and (b) above, which are now owned or which may hereafter be acquired by Mortgagor, including, without limitation, any and all property, real or personal, now owned or hereafter acquired and situated upon, used, held for use, or useful in connection with the operating, working or development of any of such Hydrocarbon Property or the lands pooled or unitized therewith (excluding drilling rigs, trucks, automotive equipment or other personal property which may be taken to the premises for the purpose of drilling a well or for other similar temporary uses) and including any and all oil wells, gas wells, injection wells or other wells, buildings, structures, field separators, liquid extraction plants, plant compressors, pumps, pumping units, pipelines, sales and flow lines, gathering systems, field gathering systems, salt water disposal facilities, tanks and tank batteries, fixtures, valves, fittings, machinery and parts, engines, boilers, meters, apparatus, equipment, appliances, tools, implements, cables, wires, towers, casing, tubing and rods, surface leases, rights-of-way, easements, servitudes, licenses and other surface and subsurface rights together with all additions, substitutions, replacements, accessions and attachments to any and all of the foregoing properties;

        (e)  Any property that may from time to time hereafter, by delivery or by writing of any kind, be subjected to the lien and security interest hereof by Mortgagor or by anyone on Mortgagor's behalf; and Trustee is hereby authorized to receive the same at any time as additional security hereunder;

        (f)    All of the rights, titles, interests and estates of every nature whatsoever now owned or hereafter acquired by Mortgagor in and to the Hydrocarbon Property, including, without limitation, all such rights, titles, interests and estates as the same may be enlarged by the discharge of any payments out of production or by the removal of any charges or Permitted Encumbrances (as hereinafter defined in Section 3.01) to which any of such rights, titles, interests or estates are subject, or otherwise; all rights of Mortgagor to liens and security interests securing payment of proceeds from the sale of production from the Mortgaged Property, including, but not limited to,

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those liens and security interests provided for in Section 9.343 of the Texas Business and Commerce Code, as amended from time to time; together with any and all renewals and extensions of any of such liens and security interests; all contracts and agreements supplemental to or amendatory of or in substitution for the contracts and agreements described or mentioned above, including, without limitation, any such contracts and agreements comprising or giving rise to any portion of the Hydrocarbon Property; and any and all additional interests of any kind hereafter acquired by Mortgagor in and to such rights, titles, interests or estates;

        (g)  All accounts, contract rights, inventory, general intangibles, insurance contracts and insurance proceeds constituting a part of, relating to or arising out of those portions of the Mortgaged Property which are described in paragraphs (a) through (f) above and all proceeds and products of all such portions of the Mortgaged Property and payments in lieu of production (such as "take or pay" payments), whether such proceeds or payments are goods, money, documents, instruments, chattel paper, securities, accounts, general intangibles, fixtures, real property, or other assets;

        (h)  All payments received in lieu of production from the Mortgaged Property (regardless of whether such payments accrued, and/or the events which gave rise to such payments occurred, on, before, or after the Effective Date), including, without limitation, "take or pay" payments and similar payments, payments received in settlement of or pursuant to a judgment rendered with respect to take or pay or similar obligations or other obligations under a production sales contract, payments received in buyout or buydown or other settlement of a production sales contract, and payments received under a gas balancing or similar agreement as a result of (or received otherwise in settlement of or pursuant to a judgment rendered with respect to) rights held by Mortgagor as a result of Mortgagor (and/or its predecessors in title) taking or having taken less Hydrocarbons from lands covered by the Mortgaged Property (or lands pooled or unitized therewith) than their ownership of the Mortgaged Property would entitle Mortgagor to receive; and

        (i)    Any rights or interests of Mortgagor under any present or future hedge or swap agreements, cap, floor, collar, exchange, forward or other hedge or protection agreements or transactions relating to Hydrocarbons, or any option with respect to such agreement or transaction now existing or hereafter entered into by or on behalf of Mortgagor.

        TO HAVE AND TO HOLD the Trust Estate Property unto Trustee for the benefit of Agent and the Lenders, and Trustee's successors in trust and assigns forever, and the Non-Trust Estate Property unto Mortgagee for the benefit of Agent and the Lenders, and Mortgagee's successors and assigns forever, in each case upon the terms, provisions, and conditions set forth herein. Mortgagor does hereby bind itself, and its successors and permitted assigns, to warrant and forever defend all and singular the Mortgaged Property unto Trustee and Mortgagee against every Person whomsoever lawfully claiming or to claim the same, or any part thereof.

WITH RESPECT TO ANY MORTGAGED PROPERTY LOCATED IN THE STATE OF OKLAHOMA, MORTGAGOR HEREBY GRANTS TO MORTGAGEE AND TO TRUSTEE THE RIGHT AND POWER TO FORECLOSE THIS SECOND MORTGAGE PURSUANT TO THE OKLAHOMA POWER OF SALE MORTGAGE # FORECLOSURE ACT, 46 OKLAHOMA STATUTES, §40, ET. SEQ. (THE "OKLAHOMA MORTGAGE FORECLOSURE ACT") AS PRESENTLY IN FORCE AND AS MAY BE AMENDED FROM TIME TO TIME.

        Section 1.02    Grant of Security Interest.    To further secure the Indebtedness (as hereinafter defined in Section 1.03), Mortgagor hereby grants to Mortgagee for the benefit of Agent and the Lenders, subject to the reservations and restrictions set forth herein below, a security interest in and to the Mortgaged Property (whether now or hereafter acquired by operation of law or otherwise) insofar as the Mortgaged Property consists of equipment, accounts, contract rights, general intangibles (subject in the case of geological and geophysical data (including without limitation raw data and

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interpretations) contract rights and general intangibles to any existing restrictions on disclosure and/or transfer), insurance contracts, insurance proceeds, inventory, Hydrocarbons, fixtures and any and all other personal property of any kind or character defined in and subject to the provisions of the Uniform Commercial Code presently in effect in the jurisdiction in which the Mortgaged Property is situated ("Applicable UCC"), including the proceeds and products from any and all of such personal property, whether such proceed or products are goods, money, documents, instruments, chattel paper, securities, accounts, general intangibles, fixtures, real or immovable property, personal or movable property, or other assets. In addition to all other rights and remedies afforded to Mortgagee pursuant to this Second Mortgage, upon the happening of any Event of Default, Mortgagee is and shall be entitled to all of the rights, powers and remedies afforded a secured party by the Applicable UCC with reference to the personal property and fixtures in which Mortgagee has been granted a security interest herein, or Trustee or Mortgagee may proceed as to both the real and personal property covered hereby in accordance with the rights and remedies granted under this Second Mortgage in respect of the real property covered hereby. Such rights, powers and remedies shall be cumulative and in addition to those granted to Trustee or Mortgagee under any other provision of this Second Mortgage or under any other Security Instrument. Written notice mailed to Mortgagor as provided herein at least ten (10) days prior to the date of public sale of any part of the Mortgaged Property which is personal property subject to the provisions of the Applicable UCC, or prior to the date after which private sale of any such part of the Mortgaged Property will be made, shall constitute reasonable notice. It is Mortgagor's intention that the security interest granted pursuant to this Mortgage encumber Mortgagor's interest in As-Extracted Collateral (as hereinafter defined). For purposes of this Mortgage, the term "As-Extracted Collateral" shall have the meaning ascribed to such term in the Applicable UCC.

        Section 1.03    Indebtedness Secured.    This Second Mortgage is executed and delivered by Mortgagor to secure and enforce the following (collectively, the "Indebtedness"):

        (a)  Full payment and performance of all indebtedness and other obligations now or hereafter incurred or arising pursuant to the provisions of the Amended and Restated Subordinated Credit Agreement;

        (b)  Full payment and performance of all promissory notes, letters of credit, or other evidences of indebtedness issued from time to time pursuant to the Amended and Restated Subordinated Credit Agreement, including, without limitation, those certain promissory notes having a maturity date of                        , 2006;

        (c)  All indebtedness and other obligations now or hereafter incurred or arising pursuant to the guarantee by the Guarantors in favor of Agent and the Lenders pursuant to the Amended and Restated Subordinated Credit Agreement, pursuant to which guarantee the Guarantors have guaranteed the prompt payment at maturity of the Subordinated Obligations (as defined in the Amended and Restated Subordinated Credit Agreement).

        (d)  Payment of and performance of any and all present or future obligations of Mortgagor or any Credit Party according to the terms of any present or future interest or currency rate swap, rate cap, rate floor, rate collar, exchange transaction, forward rate agreement, or other exchange or rate protection agreements or any option with respect to any such transaction now existing or hereafter entered into between Mortgagor or any Credit Party, on the one hand, and any party that was a Lender (or any Affiliate of a Lender) at the time such transaction was entered into, on the other;

        (e)  Payment of and performance of any and all present or future obligations of Mortgagor or any Credit Party according to the terms of any present or future swap agreements, cap, floor, collar, exchange transaction, forward agreement, or other exchange or protection agreements relating to Hydrocarbons, or any option with respect to any such transaction now existing or hereafter entered into between Mortgagor or any Credit Party, on the one hand, and any party

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that was a Lender (or any Affiliate of a Lender) at the time such transaction was entered into, on the other; and

        (f)    Without limiting the generality of the foregoing, all post-petition interest, expenses, and other duties and liabilities with respect to indebtedness or other obligations described in the foregoing subsections (a) through (f) of this Section 1.03, which would be owed but for the fact that such duties and liabilities are unenforceable or not allowable due to the existence of a bankruptcy, reorganization, or similar proceeding.

        Section 1.04    Fixture Filing, Etc.    Without in any manner limiting the generality of any of the other provisions of this Second Mortgage: (i) some portions of the goods described or to which reference is made herein are or are to become fixtures on the land described or to which reference is made herein or on attached Exhibit A; (ii) the security interests created hereby under applicable provisions of the Applicable UCC will attach to Hydrocarbons (minerals including oil and gas) or the accounts resulting from the sale thereof at the wellhead or minehead located on the land described or to which reference is made herein; and (iii) this Second Mortgage is to be filed of record in the real estate records as a fixture filing with respect to all fixtures comprising any part of the Mortgaged Property and as a financing statement pursuant to the Applicable UCC with respect to any As-Extracted Collateral and any other personal property comprising any part of the Mortgaged Property. Mortgagor is the record owner of the real estate or interests in the real estate comprised of the Mortgaged Property.

        Section 1.05    Defined Terms; Interpretation.    Initially-capitalized terms not otherwise specifically defined herein shall have the meaning ascribed to such terms in the Amended and Restated Subordinated Credit Agreement. All other rules of interpretation set forth in Section 1.05 of the Amended and Restated Subordinated Credit Agreement shall apply to this Second Mortgage and are hereby incorporated herein by reference.

ARTICLE II

Assignment of Production

        Section 2.01    Assignment.    Mortgagor has hereby absolutely and unconditionally assigned, transferred, set over, and conveyed, and does hereby absolutely and unconditionally assign, transfer, set over, and convey unto Mortgagee, its successors and assigns, all of the Hydrocarbons and all products obtained or processed therefrom, and the revenues and proceeds now and hereafter attributable to the Hydrocarbons and said products and all payments in lieu of the Hydrocarbons such as "take or pay" payments or settlements, together with the immediate and continuing right to collect and receive all of the foregoing (the "Production Proceeds"). The Hydrocarbons and products are to be delivered into pipelines connected with the Mortgaged Property, or to the purchaser thereof, to the credit of Mortgagee, free and clear of all taxes, charges, costs, and expenses; and all such revenues and proceeds shall be paid directly to Mortgagee, at its banking quarters in [New York, New York] with no duty or obligation of any party paying the same to inquire into the rights of Mortgagee to receive the same, what application is made thereof, or as to any other matter. Mortgagor agrees to perform all such acts, and to execute all such further assignments, transfers and division orders, and other instruments as may be required or desired by Mortgagee or any party in order to have said proceeds and revenues so paid to Mortgagee. Mortgagee is fully authorized to receive and receipt for said revenues and proceeds; to endorse and cash any and all checks and drafts payable to the order of Mortgagor or Mortgagee for the account of Mortgagor received from or in connection with said revenues or proceeds and to hold the proceeds thereof in a bank account as additional collateral securing the Indebtedness; and to execute transfer and division orders in the name of Mortgagor, or otherwise, with warranties binding Mortgagor. All proceeds received by Mortgagee pursuant to this assignment shall be applied as provided in the other Loan Documents. Mortgagee shall not be liable for any delay, neglect, or failure

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to effect collection of any proceeds or to take any other action in connection therewith or hereunder; but Mortgagee shall have the right, at its election, in the name of Mortgagor or otherwise, to prosecute and defend any and all actions or legal proceedings deemed advisable by Mortgagee in order to collect such funds and to protect the interests of Mortgagee, and/or Mortgagor, with all costs, expenses and attorneys' fees incurred in connection therewith being paid by Mortgagor. Mortgagor hereby appoints Mortgagee as its attorney-in-fact to pursue any and all rights of Mortgagor to liens on and security interests in the Hydrocarbons securing payment of proceeds of runs attributable to the Hydrocarbons. In addition to the rights granted to Trustee and/or Mortgagee in this Second Mortgage, Mortgagor hereby further transfers and assigns to Mortgagee any and all such liens, security interests, financing statements or similar interests of Mortgagor attributable to its interest in the Hydrocarbons and proceeds of runs therefrom arising under or created by said statutory provision, judicial decision or otherwise. The power of attorney granted to Mortgagee in this Section 2.01, being coupled with an interest, shall be irrevocable so long as the Indebtedness or any part thereof remains unpaid.

        Section 2.02    Rights Under Texas Act.    Mortgagor hereby grants, sells, assigns, sets over and mortgages unto Mortgagee during the term hereof, all of Mortgagor's rights and interests pursuant to the provisions of Section 9.343 of the Texas Business and Commerce Code, hereby vesting in Mortgagee all of Mortgagor's rights as an interest owner to the continuing security interest in and lien upon the Mortgaged Property.

        Section 2.03    No Modification of Payment Obligations.    Nothing herein contained shall modify or otherwise alter the obligation of Mortgagor to make prompt payment of all principal and interest owing on the Indebtedness when and as the same become due regardless of whether the proceeds of the Hydrocarbons are sufficient to pay the same and the rights provided in accordance with the foregoing assignment provision shall be cumulative of all other security of any and every character now or hereafter existing to secure payment of the Indebtedness.

        Section 2.04    Release from Liability; Indemnification.    Agent and its successors and assigns are hereby absolutely absolved from all liability for failure to enforce collection of the proceeds from runs attributable to the Hydrocarbons and from all other responsibility in connection therewith, except the responsibility to account to Mortgagor for funds actually received by Agent. Mortgagor agrees to indemnify and hold harmless Agent, including, for purposes of this paragraph, Agent's directors, officers, partners, employees, and agents and any persons owned or controlled by any affiliate of Agent, from and against all claims, demands, liabilities, losses, damages (including, without limitation, consequential, punitive, and special damages), causes of action, judgments, penalties, costs and reasonable out-of-pocket expenses (including, without limitation, reasonable attorneys' fees and expenses) imposed upon, asserted against, or incurred or paid by Agent by reason of the assertion that Agent has received, either before or after payment in full of the Indebtedness, funds from the production of Hydrocarbons. The foregoing indemnities shall not terminate upon the expiration, termination, or cancellation of the Amended and Restated Subordinated Credit Agreement or this Second Mortgage, but shall survive such expiration, termination, or cancellation, as well as any foreclosure of this Second Mortgage or any conveyance in lieu of foreclosure, and the repayment of the Indebtedness and the discharge and release of this Second Mortgage and any other documents evidencing and/or securing the Indebtedness. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, IT IS THE INTENTION OF MORTGAGOR AND MORTGAGOR HEREBY AGREES THAT THE FOREGOING INDEMNITIES SHALL APPLY TO EACH INDEMNIFIED PARTY WITH RESPECT TO ALL CLAIMS, DEMANDS, LIABILITIES, LOSSES, DAMAGES (INCLUDING, WITHOUT LIMITATION, CONSEQUENTIAL, PUNITIVE, AND SPECIAL DAMAGES), CAUSES OF ACTION, JUDGMENTS, PENALTIES, COSTS, AND EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES AND EXPENSES) WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF ANY INDEMNIFIED PARTY. Notwithstanding the foregoing, however, the indemnities set forth

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in this Section 2.04 shall not apply to any particular indemnified party (but shall apply to the other indemnified parties) to the extent the subject of the indemnification is caused by or arises out of the gross negligence or willful misconduct of such particular indemnified party.

        Section 2.05    Absolute Obligation of Credit Parties.    Nothing herein contained shall detract from or limit the obligations of any Mortgagor or any other Credit Party to make payment as required pursuant to the terms of the Loan Documents, regardless of whether the assignment of production described in this Article II is sufficient to pay same, and the rights under this Article II shall be cumulative of all other rights of Agent and any other Lender under the Loan Documents.

ARTICLE III

Representations, Warranties and Covenants

        In order to induce Agent and the Lenders to enter into the transactions described in the Amended and Restated Subordinated Credit Agreement, Mortgagor hereby represents, warrants and covenants, to Trustee, Agent, each of the Lenders, and to Mortgagee as follows:

        Section 3.01    Title.    To the extent of the undivided interests in the wells specified on attached Exhibit A, Mortgagor is possessed of such interests in the Mortgaged Property, and Mortgagor has, and Mortgagor covenants to maintain, good and indefeasible title to the Mortgaged Property. The Mortgaged Property is free of any and all Liens (as defined in the Amended and Restated Subordinated Credit Agreement) except Permitted Liens (as defined in the Amended and Restated Subordinated Credit Agreement) and Liens, if any, described in Exhibit A (collectively, the "Permitted Encumbrances").

        Section 3.02    Defend Title.    This Second Mortgage is, and always will be kept, a direct lien and security interest upon the Mortgaged Property subject only to the Permitted Encumbrances, and, except for Permitted Encumbrances, Mortgagor will not create or suffer to be created or permit to exist any lien, security interest or charge prior or junior to or on a parity with the lien and security interest of this Second Mortgage upon the Mortgaged Property or any part thereof or upon the rents, issues, revenues, profits and other income therefrom. Mortgagor hereby warrants and Mortgagor does by these presents agree to forever defend the Mortgaged Property against the claims and demands of all other persons whomsoever and to maintain and preserve the lien created hereby so long as any of the Indebtedness secured hereby remains unpaid. Should an adverse claim be made against or a cloud develop upon the title to any part of the Mortgaged Property, Mortgagor agrees it will immediately defend against such adverse claim or take appropriate action to remove such cloud at Mortgagor's cost and expense, and Mortgagor further agrees that Trustee and/or Mortgagee may take such other action as they deem advisable to protect and preserve their interests in the Mortgaged Property, and in such event Mortgagor will indemnify Trustee and Mortgagee against any and all cost, attorney's fees and other expenses which they may incur in defending against any such adverse claim or taking action to remove any such cloud.

        Section 3.03    Not a Foreign Person.    Mortgagor is not a "foreign person" within the meaning of the Internal Revenue Code of 1986, as amended (hereinafter called the "Code"), Sections 1445 and 7701 (i.e. Mortgagor is not a non-resident alien, foreign corporation, foreign partnership, foreign trust or foreign estate as those terms are defined in the Code and any regulations promulgated thereunder).

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        Section 3.04    Existence; Power to Create Lien and Security; Enforceable Obligations.

        (a)  Mortgagor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation and in good standing and qualified to do business in each jurisdiction where its ownership or lease of any of the Mortgaged Property or conduct of its business requires such qualification and where the failure to so qualify could reasonably be expected to cause a Material Adverse Change.

        (b)  The execution, delivery, and performance by Mortgagor of this Second Mortgage and the consummation of the transactions contemplated hereby and thereby (i) are within such Mortgagor's powers, (ii) have been duly authorized by all necessary governing action, (iii) do not contravene (A) Mortgagor's governance documents or (B) any Legal Requirement or any material contractual restriction binding on or affecting Mortgagor, and (iv) will not result in or require the creation or imposition of any Lien upon any of the material Property of any Credit Party prohibited by the Amended and Restated Subordinated Credit Agreement.

        (c)  This Second Mortgage has been duly executed and delivered by Mortgagor. This Second Mortgage is the legal, valid, and binding obligation of Mortgagor enforceable against Mortgagor in accordance with its terms, except as such enforceability may be limited by any applicable bankruptcy, insolvency, reorganization, moratorium, or similar law affecting creditors' rights generally and by general principles of equity.

        Section 3.05    Net Revenue and Cost Bearing Interest.    With respect to each well listed on Exhibit A hereto which comprises a part of the Mortgaged Property, Mortgagor's ownership of such Mortgaged Property does and will, with respect to each such well (whether such well is presently unitized or is presently producing on a lease basis) (a) entitle Mortgagor to receive (subject to the terms and conditions of this Second Mortgage) a decimal share of the Hydrocarbons produced from, or allocated to, such well equal to not less than the decimal share set forth on Exhibit A in connection with such well under the column on Exhibit A designated by the words "Net Revenue Interest", the abbreviation "NRI", or words or abbreviations of similar import, and (b) cause Mortgagor to be obligated to bear a decimal share of the cost of exploration, development, and operation of such well not greater than the decimal share set forth in Exhibit A in connection with such well under the column on Exhibit A designated by the words "Operating Interest" or "Working Interest", the abbreviation "WI", or words or abbreviations of similar import (unless there is a corresponding increase in the Net Revenue Interest). The shares of production which Mortgagor is entitled to receive and the shares of expenses which Mortgagor is obligated to bear are not, and will not be, subject to change other than changes which (i) arise pursuant to non-consent provisions of operating agreements in connection with operations proposed after the effective date of this Second Mortgage, or (ii) are expressly described on Exhibit A.

        Section 3.06    Rentals Paid; Leases in Effect.    Mortgagor shall maintain all leases and agreements comprising or relating to the Mortgaged Property in compliance with the requirements of the Amended and Restated Subordinated Credit Agreement.

        Section 3.07    Operation of Mortgaged Property.

        (a)  The Mortgaged Property (and properties unitized therewith) is, and hereafter will be, maintained, operated, and developed in compliance with the requirements of the Amended and Restated Subordinated Credit Agreement.

        (b)  To the extent any interest owned by Mortgagor in the Mortgaged Property is not a working interest, Mortgagor covenants and agrees to take all reasonable action and to exercise all reasonable rights and remedies as are available to Mortgagor to cause the owner or owners of the working interest in such properties to comply with the covenants and agreements set forth in this Second Mortgage.

        (c)  To the extent Mortgagor's ownership of any particular well constituting the Mortgaged Property is a working interest but such well is operated by a party other than Mortgagor, Mortgagor

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agrees to take all such action and to exercise all rights and remedies as are reasonably available to Mortgagor (including, without limitation, all rights under any operating agreement) to cause the party who is the operator of such well to comply with the covenants and agreements set forth in this Second Mortgage.

        Section 3.08    Abandonment, Sales.    Mortgagor will not sell, lease, assign, transfer or otherwise dispose of or abandon any of the Mortgaged Property except in compliance with the requirements of the Amended and Restated Subordinated Credit Agreement.

        Section 3.09    Insurance.    Mortgagor shall carry and maintain insurance as provided in the Amended and Restated Subordinated Credit Agreement. In the event of foreclosure of this Second Mortgage, or other transfer of title to the Mortgaged Property in extinguishment in whole or in part of the Indebtedness, all right, title, and interest of Mortgagor in and to such policies then in force concerning the Mortgaged Property and all proceeds payable thereunder shall thereupon vest in the purchaser at such foreclosure or Agent or other transferee in the event of such other transfer of title.

        Section 3.10    Further Assurances.    Mortgagor shall, and shall cause each of its Subsidiaries to, cure promptly any defects in the execution and delivery of this Second Mortgage or any of the other Loan Documents. Mortgagor hereby authorizes the Agent to file any financing statements without Mortgagor's signature to the extent permitted by applicable law in order to perfect or maintain the perfection of any security interest granted under any of the Loan Documents. Mortgagor at its expense will, and will cause each of its Subsidiaries to, promptly execute and deliver to the Agent upon request all such other documents, agreements and instruments to comply with or accomplish the covenants and agreements of Mortgagor or any other Credit Party in this Second Mortgage or any other Loan Document, or to further evidence and more fully describe the collateral intended as security for Obligations, or to correct any omissions in the Loan Documents, or to state more fully the security obligations set out in this Second Mortgage or in any of the other Loan Documents, or to perfect, protect or preserve any Liens created pursuant to any of the Loan Documents, or to make any recordings, to file any notices or obtain any consents, all as may be necessary or appropriate in connection therewith or to enable the Agent to exercise and enforce its rights and remedies with respect to the Mortgaged Property.

        Section 3.11    Taxes.    Mortgagor shall do or cause to be done everything necessary to preserve the lien hereof without expense to Trustee or Mortgagee, including, without limitation, paying and discharging or causing to be paid and discharged all taxes, charges, filing, registration and recording fees relating to the recording of this Second Mortgage, including but not limited to any mortgage tax payable in connection herewith.

        Section 3.12    Failure to Perform.    Mortgagor agrees that if Mortgagor, after receipt from Mortgagee of written notice and demand, fails to perform any act or to take any action which Mortgagor is required to perform or take hereunder or pay any money which Mortgagor is required to pay hereunder, each of Mortgagee and Trustee in Mortgagor's name or its or their own name may, but shall not be obligated to, perform or cause to perform such act or take such action or pay such money, and any expenses so incurred by either of them and any money so paid by either of them shall be a demand obligation owing by Mortgagor to Mortgagee or Trustee, as the case may be, and each of Mortgagee and Trustee, upon making such payment, shall be subrogated to all of the rights of the Person receiving such payment. Each amount due and owing by Mortgagor to each of Mortgagee and Trustee pursuant to this Second Mortgage shall bear interest from the date of such expenditure or payment or other occurrence which gives rise to such amount being owed to such Person until paid at post-default interest rate described in the Amended and Restated Subordinated Credit Agreement, and all such amounts together with such interest thereon shall be a part of the Indebtedness described in Section 1.03 hereof.

        Section 3.13    Waste.    Mortgagor shall not commit or permit any waste, impairment, or deterioration of the Mortgaged Property or any part thereof.

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ARTICLE IV

Rights and Remedies

        Section 4.01    Event of Default.    An "Event of Default" under the Amended and Restated Subordinated Credit Agreement shall be an Event of Default under this Second Mortgage.

        Section 4.02    Foreclosure and Sale.

        (a)  If an Event of Default shall occur and be continuing, Mortgagee shall have the right and option to proceed with foreclosure by proceeding or by directing Trustee, or his successors or substitutes in trust, to proceed with foreclosure and to sell, to the extent permitted by law, all or any portion of the Mortgaged Property at one or more sales, as an entirety or in parcels, at such place or places in otherwise such manner and upon such notice as may be required by law, or, in the absence of any such requirement, as Mortgagee may deem appropriate, and to make conveyance to the purchaser or purchasers. Where the Mortgaged Property is situated in more than one county, notice as above provided shall be posted and filed in all such counties (if such notices are required by law), and all such Mortgaged Property may be sold in any such county and any such notice shall designate the county where such Mortgaged Property is to be sold. Nothing contained in this Section 4.02 shall be construed so as to limit in any way Mortgagee's or Trustee's rights to sell the Mortgaged Property, or any portion thereof, by private sale if, and to the extent that, such private sale is permitted under the laws of the applicable jurisdiction or by public or private sale after entry of a judgment by any court of competent jurisdiction so ordering. Mortgagor hereby irrevocably appoints Trustee to be the attorney of Mortgagor and in the name and on behalf of Mortgagor to execute and deliver any deeds, transfers, conveyances, assignments, assurances and notices which Mortgagor ought to execute and deliver and do and perform any and all such acts and things which Mortgagor ought to do and perform under the covenants herein contained and generally, to use the name of Mortgagor in the exercise of all or any of the powers hereby conferred on Trustee. At any such sale: (i) whether made under the power herein contained or any other legal enactment, or by virtue of any judicial proceedings or any other legal right, remedy or recourse, it shall not be necessary for Mortgagee or Trustee to have physically present, or to have constructive possession of, the Mortgaged Property (Mortgagor hereby covenanting and agreeing to deliver to Mortgagee or Trustee any portion of the Mortgaged Property not actually or constructively possessed by Mortgagee or Trustee immediately upon demand by Mortgagee or Trustee) and the title to and right of possession of any such property shall pass to the purchaser thereof as completely as if the same had been actually present and delivered to purchaser at such sale, (ii) each instrument of conveyance executed by Mortgagee or Trustee shall contain a general warranty of title, binding upon Mortgagor and its successors and assigns, (iii) each and every recital contained in any instrument of conveyance made by Mortgagee or Trustee shall conclusively establish the truth and accuracy of the matters recited therein, including, without limitation, nonpayment of the Indebtedness, advertisement and conduct of such sale in the manner provided herein and otherwise by law and appointment of any successor Trustee hereunder, (iv) any and all prerequisites to the validity thereof shall be conclusively presumed to have been performed, (v) the receipt of Mortgagee or Trustee or of such other party or officer making the sale shall be a sufficient discharge to the purchaser or purchasers for its purchase money and no such purchaser or purchasers, or its assigns or personal representatives, shall thereafter be obligated to see to the application of such purchase money, or be in any way answerable for any loss, misapplication or nonapplication thereof, (vi) to the fullest extent permitted by law, Mortgagor shall be completely and irrevocably divested of all of its right, title, interest, claim and demand whatsoever, either at law or in equity, in and to the property sold and such sale shall be a perpetual bar both at law and in equity against Mortgagor, and against any and all other persons claiming or to claim the property sold or any part thereof, by, through or under Mortgagor, and (vii) to the extent and under such circumstances as are permitted by law, Trustee, Mortgagee, or any Lender may be a purchaser at any such sale, and shall have the right, after paying or accounting for all costs of said sale or sales, to credit the amount of the bid upon the amount of the Indebtedness

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held by such purchaser, if any (in the order of priority set forth in Section 4.13 hereof) in lieu of cash payment.

        (b)  With respect to any portion of the Mortgaged Property located in the state of Oklahoma and with respect any foreclosure by Mortgagor pursuant to the power of sale granted to Mortgagor in this Second Mortgage the following provisions of this Second Mortgage shall apply:

          (i)  The notices described in Section 40 and certain following sections of the Oklahoma Mortgage Foreclosure Act, shall be given as and when required therein;

        (ii)  All notices which are required to be given to Mortgagor under the Oklahoma Mortgage Foreclosure Act may be given to Mortgagor at the address which is set forth in the first paragraph of this Second Mortgage, or if such address has been changed in accordance with the express requirements of this Second Mortgage related to such a change of address, to that changed address;

        (iii)  Mortgagee may purchase part or all of the Mortgaged Property at any such sale;

        (iv)  Mortgagor stipulates that the total amounts owing under this Second Mortgage benefit, have benefited, and will benefit Mortgagor substantially and are not unconscionable in amount, and therefore the total amount of the Indebtedness, less the fair market value of the Mortgaged Property sold pursuant to the Oklahoma Mortgage Foreclosure Act, and any prior indebtedness, shall be available as a deficiency judgment against Mortgagor;

        (v)  The purchaser under any sale of the Mortgaged Property conducted pursuant to the Oklahoma Mortgage Foreclosure Act may seek and obtain a writ of assistance by application to the District Court in the county in Oklahoma in which the portion of the Mortgaged Property to be foreclosed upon is located, or the United States District Court having venue for actions arising in such county;

        (vi)  Mortgagee may, at its option, proceed with foreclosure under judicial proceedings instead of exercising the rights of the power of sale granted by Mortgagor to Mortgagee in this Second Mortgage;

      (vii)  All other terms, conditions, procedures, and requirements of the Oklahoma Mortgage Foreclosure Act shall be followed;

      (viii)  After the completion of the sale as contemplated by the Oklahoma Mortgage Foreclosure Act, the purchaser shall have all of Mortgagor's right, title and interest in and to Mortgaged Property sold pursuant to such sale, free and clear of all rights of Mortgagor, and free and clear of all rights of any person with a priority which is subordinate to the lien of this Second Mortgage, except any right which may be reserved under the Oklahoma Mortgage Foreclosure Act;

        (ix)  Any recitation in any notice, publication thereof, recordation thereof, or deed, of the existence of an Event of Default, giving, publication, service and recordation of notice, occurrence of the sale at the time and place set forth in such notice or any postponement authorized and effective under the Oklahoma Mortgage Foreclosure Act, circumstances of sale and bidding, and compliance with the terms of the Oklahoma Mortgage Foreclosure Act, shall be presumed to be statements of fact and no person shall be required to investigate the truthfulness or accuracy of any such recitation; and

        (x)  The proceeds of any such sale shall be applied first to the costs, attorney fees, and expenses of such sale, next to the payment of the Indebtedness; except that if such application of proceeds conflicts with the requirements of the Oklahoma Mortgage Foreclosure Act, the proceeds of such sale shall be applied as provided under the Oklahoma Mortgage Foreclosure Act, but in such event, only to the extent of any such conflict.

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        Section 4.03    Substitute Trustees and Agents.    Trustee or his successor or substitute may appoint or delegate any one or more persons as agent to perform any act or acts necessary or incident to any sale held by Trustee, including the posting of notices and the conduct of sale, but in the name and on behalf of Trustee, his successor or substitute. If Trustee or his successor or substitute shall have given notice of sale hereunder, any successor or substitute trustee thereafter appointed may complete the sale and the conveyance of the property pursuant thereto as if such notice had been given by the successor or substitute trustee conducting the sale.

        Section 4.04    Judicial Foreclosure; Receivership.

        (a)  If any of the Indebtedness shall become due and payable and shall not be promptly paid, Trustee or Mortgagee shall have the right and power to proceed by a suit or suits in equity or at law, whether for the specific performance of any covenant or agreement herein contained or in aid of the execution of any power herein granted, or for any foreclosure hereunder or for the sale of the Mortgaged Property under the judgment or decree of any court or courts of competent jurisdiction, or for the appointment of a receiver pending any foreclosure hereunder or the sale of the Mortgaged Property under the order of a court or courts of competent jurisdiction or under executory or other legal process, or for the enforcement of any other appropriate legal or equitable remedy. Any money advanced by Trustee and/or Mortgagee in connection with any such receivership shall be a demand obligation (which obligation Mortgagor hereby expressly promises to pay) owing by Mortgagor to Trustee and/or Mortgagee and shall bear interest from the date of making such advance by Trustee and/or Mortgagee until paid at the interest rate applicable to periods following an Event of Default in the Amended and Restated Subordinated Credit Agreement.

        (b)  If an action is filed to foreclose this Second Mortgage, or if Mortgagee or Trustee seeks to foreclose this Second Mortgage by power of sale under the Oklahoma Power of Sale Mortgage Foreclosure Act, Mortgagee or Trustee, as applicable, shall be entitled to the immediate appointment of a receiver pursuant to 12 Oklahoma Statutes §1551(2)(c) without the necessity of further proof.

        Section 4.05    Foreclosure for Installments.    Mortgagee shall also have the option to proceed with foreclosure in satisfaction of any installments of the Indebtedness which have not been paid when due either through the courts or by directing Trustee or his successors in trust to proceed with foreclosure in satisfaction of the matured but unpaid portion of the Indebtedness as if under a full foreclosure, conducting the sale as herein provided and without declaring the entire principal balance and accrued interest due; such sale may be made subject to the unmatured portion of the Indebtedness, and any such sale shall not in any manner affect the unmatured portion of the Indebtedness, but as to such unmatured portion of the Indebtedness this Second Mortgage shall remain in full force and effect just as though no sale had been made hereunder. It is further agreed that several sales may be made hereunder without exhausting the right of sale for any unmatured part of the Indebtedness, it being the purpose hereof to provide for a foreclosure and sale of the security for any matured portion of the Indebtedness without exhausting the power to foreclose and sell the Mortgaged Property for any subsequently maturing portion of the Indebtedness.

        Section 4.06    Separate Sales.    The Mortgaged Property may be sold in one or more parcels and in such manner and order as Mortgagee, in its sole discretion, may elect, it being expressly understood and agreed that the right of sale arising out of any Event of Default shall not be exhausted by any one or more sales.

        Section 4.07    Occupancy After Foreclosure.    In the event there is a foreclosure sale hereunder and at the time of such sale Mortgagor or Mortgagor's heirs, devisees, representatives, successors or assigns or any other person claiming any interest in the Mortgaged Property by, through or under Mortgagor, are occupying or using the Mortgaged Property or any part thereof, each and all shall immediately become the tenant of the purchaser at such sale, which tenancy shall be a tenancy from day to day, terminable at the will of either the landlord or tenant, or at a reasonable rental per day based upon the value of the property occupied, such rental to be due daily to the purchaser; to the extent permitted by

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applicable law, the purchaser at such sale shall, notwithstanding any language herein apparently to the contrary, have the sole option to demand immediate possession following the sale or to permit the occupants to remain as tenants at will. In the event the tenant fails to surrender possession of said property upon demand, the purchaser shall be entitled to institute and maintain a summary action for possession of the Mortgaged Property (such as an action for forcible entry and detainer) in any court having jurisdiction.

        Section 4.08    Remedies Cumulative, Concurrent and Nonexclusive.    Every right, power and remedy herein given to Trustee or Mortgagee shall be cumulative and in addition to every other right, power and remedy herein specifically given or now or hereafter existing in equity, at law or by statute (including specifically those granted by the Applicable UCC in effect and applicable to the Mortgaged Property or any portion thereof) each and every right, power and remedy whether specifically herein given or otherwise existing may be exercised from time to time and so often and in such order as may be deemed expedient by Trustee or Mortgagee, and the exercise, or the beginning of the exercise, of any such right, power or remedy shall not be deemed a waiver of the right to exercise, at the same time or thereafter any other right, power or remedy. No delay or omission by Trustee or Mortgagee in the exercise of any right, power or remedy shall impair any such right, power or remedy or operate as a waiver thereof or of any other right, power or remedy then or thereafter existing.

        Section 4.09    No Release of Obligations.    Neither Mortgagor, any Guarantor, any other guarantor of the Indebtedness, nor any other person hereafter obligated for payment of all or any part of the Indebtedness shall be relieved of such obligation by reason of (a) the failure of Trustee or Mortgagee to comply with any request of Mortgagor, or any guarantor or any other person so obligated to foreclose the lien of this Second Mortgage or to enforce any provision hereunder or under the Amended and Restated Subordinated Credit Agreement; (b) the release, regardless of consideration, of the Mortgaged Property or any portion thereof or interest therein or the addition of any other property to the Mortgaged Property; (c) any agreement or stipulation between any subsequent owner of the Mortgaged Property and Mortgagee extending, renewing, rearranging or in any other way modifying the terms of this Second Mortgage without first having obtained the consent of, given notice to or paid any consideration to Mortgagor, any guarantor or such other person, and in such event Mortgagor, guarantor and all such other persons shall continue to be liable to make payment according to the terms of any such extension or modification agreement unless expressly released and discharged in writing by Mortgagee; or (d) by any other act or occurrence save and except the complete payment of the Indebtedness and the complete fulfillment of all obligations hereunder or under the Amended and Restated Subordinated Credit Agreement.

        Section 4.10    Release of and Resort to Mortgaged Property.    Mortgagee may release, regardless of consideration, any part of the Mortgaged Property without, as to the remainder, in any way impairing, affecting, subordinating or releasing the lien or security interest created in or evidenced by this Second Mortgage or its stature as a first and prior lien and security interest in and to the Mortgaged Property, and without in any way releasing or diminishing the liability of any person or entity liable for the repayment of the Indebtedness. For payment of the Indebtedness, Mortgagee may resort to any other security therefor held by Mortgagee or Trustee in such order and manner as Mortgagee may elect.

        Section 4.11    Waiver of Redemption, Notice and Marshalling of Assets, Etc.    To the fullest extent permitted by law, Mortgagor hereby irrevocably and unconditionally waives and releases (a) all benefits that might accrue to Mortgagor by virtue of any present or future moratorium law or other law exempting the Mortgaged Property from attachment, levy or sale on execution or providing for any appraisement, valuation, stay of execution, exemption from civil process, redemption or extension of time for payment and (b) any right to a marshalling of assets or a sale in inverse order of alienation. If any law referred to in this Second Mortgage and now in force, of which Mortgagor or its successor or successors might take advantage despite the provisions hereof, shall hereafter be repealed or cease to be in force, such law shall thereafter be deemed not to constitute any part of the contract herein contained or to preclude the operation or application of the provisions hereof. Provided, however, that

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if the laws of any state do not permit the redemption period to be waived, the redemption period is specifically reduced to the minimum amount of time allowable by statute. With respect to any portion of the Mortgaged Property located in the state of Oklahoma, Mortgagee and Trustee hereby waive or do not waive appraisement, such election to be made at or before entry of judgment in any action to foreclose this Second Mortgage; provided, however, such waiver or non-waiver shall not affect Mortgagor's waiver of such rights, which shall be absolute.

        Section 4.12    Discontinuance of Proceedings.    In case Mortgagee shall have proceeded to invoke any right, remedy or recourse permitted hereunder or under the Amended and Restated Subordinated Credit Agreement and shall thereafter elect to discontinue or abandon same for any reason, Mortgagee shall have the unqualified right so to do and, in such an event, Mortgagor and Mortgagee shall be restored to their former positions with respect to the Indebtedness, this Second Mortgage, the Amended and Restated Subordinated Credit Agreement, the Mortgaged Property and otherwise, and the rights, remedies, recourses and powers of Mortgagee shall continue as if same had never been invoked.

        Section 4.13    Application of Proceeds.    The proceeds of any sale of the Mortgaged Property or any part thereof and all other monies received by Trustee or Mortgagee in any proceedings for the enforcement hereof or otherwise, whose application has not elsewhere herein been specifically provided for, shall be applied:

        (a)  first, to the payment of all reasonable expenses incurred by Trustee or Mortgagee incident to the enforcement of this Second Mortgage, the Amended and Restated Subordinated Credit Agreement or any of the Indebtedness (including, without limiting the generality of the foregoing, expenses of any entry or taking of possession, of any sale, of advertisement thereof, and of conveyances, and court costs, compensation of agents and employees, legal fees and a reasonable commission to Trustee acting), and to the payment of all other charges, reasonable expenses, liabilities and advances incurred or made by Trustee or Mortgagee under this Second Mortgage or in executing any trust or power hereunder;

        (b)  second to payment of the Indebtedness in the order and manner required in the Amended and Restated Subordinated Credit Agreement; and

        (c)  third, to Mortgagor or as otherwise required by any Governmental Requirement.

        Section 4.14    Resignation of Operator.    In addition to all rights and remedies under this Second Mortgage, at law and in equity, if any Event of Default shall occur and Trustee or Mortgagee shall exercise any possessory remedies under this Second Mortgage with respect to any portion of the Hydrocarbon Property (or Mortgagor shall transfer any Mortgaged Property "in lieu of" foreclosure), Mortgagee or Trustee shall have the right to request that any operator of any Hydrocarbon Property which is either Mortgagor or any Affiliate of Mortgagor to resign as operator under the joint operating agreement applicable thereto, and no later than 60 days after receipt by Mortgagor of any such request, Mortgagor shall resign (or cause such other party to resign) as operator of such Hydrocarbon Property.

        Section 4.15    Indemnity.    In connection with any action taken by Trustee and/or Mortgagee pursuant to this Second Mortgage, Trustee and/or Mortgagee and their officers, directors, employees, representatives, agents, attorneys, accountants and experts ("Indemnified Parties") shall not be liable for any loss sustained by Mortgagor resulting from an assertion that Mortgagee has received funds from the production of Hydrocarbons claimed by third persons or any act or omission of any Indemnified Party in administering, managing, operating or controlling the Mortgaged Property INCLUDING SUCH LOSS WHICH MAY RESULT FROM THE NEGLIGENCE OF AN INDEMNIFIED PARTY unless such loss is caused by the gross negligence or willful misconduct of an Indemnified Party, nor shall Trustee and/or Mortgagee be obligated to perform or discharge any obligation, duty or liability of Mortgagor. Mortgagor shall and does hereby agree to indemnify each Indemnified Party for, and to hold each Indemnified Party harmless from, any and all liability, loss or damage which may or might be incurred

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by any Indemnified Party by reason of this Second Mortgage or the exercise of rights or remedies hereunder INCLUDING SUCH LIABILITY, LOSS, OR DAMAGE WHICH MAY RESULT FROM THE NEGLIGENCE OF AN INDEMNIFIED PARTY unless such liability, loss, or damage is caused by the gross negligence or willful misconduct of an Indemnified Party; should Trustee and/or Mortgagee make any expenditure on account of any such liability, loss or damage, the amount thereof, including costs, expenses and reasonable attorneys' fees, shall be a demand obligation (which obligation Mortgagor hereby expressly promises to pay) owing by Mortgagor to Trustee and/or Mortgagee and shall bear interest from the date expended until paid at the Post-Default Rate, shall be a part of the Indebtedness and shall be secured by this Second Mortgage and any other Security Instrument. Mortgagor hereby assents to, ratifies and confirms any and all actions of Trustee and/or Mortgagee with respect to the Mortgaged Property taken under, and in compliance with the terms of, this Second Mortgage. The liabilities of Mortgagor as set forth in this Section 4.15 shall survive the termination of this Second Mortgage.

ARTICLE V

Trustee

        Section 5.01    Duties, Rights, and Powers of Trustee.    It shall be no part of the duty of Trustee to see to any recording, filing or registration of this Second Mortgage or any other instrument in addition or supplemental thereto, or to give any notice thereof, or to see to the payment of or be under any duty in respect of any tax or assessment or other governmental charge which may be levied or assessed on the Mortgaged Property, or any part thereof, or against Mortgagor, or to see to the performance or observance by Mortgagor of any of the covenants and agreements contained herein. Trustee shall not be responsible for the execution, acknowledgment or validity of this Second Mortgage or of any instrument in addition or supplemental hereto or for the sufficiency of the security purported to be created hereby, and makes no representation in respect thereof or in respect of the rights of Mortgagee. Trustee shall have the right to advise with counsel upon any matters arising hereunder and shall be fully protected in relying as to legal matters on the advice of counsel. Trustee shall not incur any personal liability hereunder except for Trustee's own gross negligence, bad faith and/or willful misconduct; and Trustee shall have the right to rely on any instrument, document or signature authorizing or supporting any action taken or proposed to be taken by him hereunder, believed by him in good faith to be genuine.

        Section 5.02    Successor Trustee; Resignation by Trustee.    Trustee may resign by written notice addressed to Mortgagee or be removed at any time with or without cause by an instrument in writing duly executed on behalf of Mortgagee. In case of the death, resignation or removal of Trustee, a successor trustee may be appointed by Mortgagee by instrument of substitution complying with any applicable requirements of law, or, in the absence of any such requirement, without other formality than appointment and designation in writing. Written notice of such appointment and designation shall be given by Mortgagee to Mortgagor, but the validity of any such appointment shall not be impaired or affected by failure to give such notice or by any defect therein. Such appointment and designation shall be full evidence of the right and authority to make the same and of all the facts therein recited, and, upon the making of any such appointment and designation, this Second Mortgage shall vest in the successor trustee all the estate and title in and to all of the Mortgaged Property, and the successor trustee shall thereupon succeed to all of the rights, powers, privileges, immunities and duties hereby conferred upon Trustee named herein, and one such appointment and designation shall not exhaust the right to appoint and designate a successor trustee hereunder but such right may be exercised repeatedly as long as any Indebtedness remains unpaid hereunder. To facilitate the administration of the duties hereunder, Mortgagee may appoint multiple trustees to serve in such capacity or in such jurisdictions as Mortgagee may designate.

        Section 5.03    Retention of Moneys.    All moneys received by Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be

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segregated in any manner from any other moneys (except to the extent required by law), and Trustee shall be under no liability for interest on any moneys received by him hereunder.

ARTICLE VI

Miscellaneous

        Section 6.01    Instrument Construed as Mortgage, Etc.    With respect to any portions of the Mortgaged Property located in any state or other jurisdiction the laws of which do not provide for the use or enforcement of a deed of trust or the office, rights and authority of Trustee as herein provided, the general language of conveyance hereof to Trustee is intended and the same shall be construed as words of mortgage unto and in favor of Mortgagee and the rights and authority granted to Trustee herein may be enforced and asserted by Mortgagee in accordance with the laws of the jurisdiction in which such portion of the Mortgaged Property is located and the same may be foreclosed at the option of Mortgagee as to any or all such portions of the Mortgaged Property in any manner permitted by the laws of the jurisdiction in which such portions of the Mortgaged Property is situated. This Second Mortgage may be construed as a mortgage, deed of trust, chattel mortgage, conveyance, assignment, security agreement, pledge, financing statement, hypothecation or contract, or any one or more of them, in order fully to effectuate the lien hereof and the purposes and agreements herein set forth.

        Section 6.02    Release of Mortgage.    If all Indebtedness secured hereby shall be paid and the Amended and Restated Subordinated Credit Agreement terminated, Mortgagee shall forthwith cause satisfaction and discharge of this Second Mortgage to be entered upon the record at the expense of Mortgagor and shall execute and deliver or cause to be executed and delivered such instruments of satisfaction and reassignment as Mortgagor may reasonably request. Otherwise, this Second Mortgage shall remain and continue in full force and effect.

        Section 6.03    Severability.    If any provision hereof is invalid or unenforceable in any jurisdiction, the other provisions hereof shall remain in full force and effect in such jurisdiction and the remaining provisions hereof shall be liberally construed in favor of Trustee and Mortgagee in order to effectuate the provisions hereof, and the invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of any such provision in any other jurisdiction.

        Section 6.04    Successors and Assigns of Parties.    The term "Lender" as used herein shall mean and include any legal owner, holder, assignee or pledgee of any of the Indebtedness secured hereby. The terms used to designate Trustee, Mortgagee and Mortgagor shall be deemed to include the respective heirs, legal representatives, successors and assigns of such parties.

        Section 6.05    Satisfaction of Prior Encumbrance.    To the extent that proceeds of the Amended and Restated Subordinated Credit Agreement are used to pay indebtedness secured by any outstanding lien, security interest, charge or prior encumbrance against the Mortgaged Property, such proceeds have been advanced by Mortgagee or any of the other Lenders at Mortgagor's request, and Mortgagee shall be subrogated to any and all rights, security interests and liens owned by any owner or holder of such outstanding liens, security interests, charges or encumbrances, and it is expressly understood that, in consideration of the payment of such other indebtedness by Mortgagee or any of the other Lenders, Mortgagor hereby waives and releases all demands and causes of action against Mortgagee or any of the other Lenders for offsets and payments to, upon and in connection with the said indebtedness.

        Section 6.06    Subrogation of Trustee.    This Second Mortgage is made with full substitution and subrogation of Trustee and his successors in this trust and his and their assigns in and to all covenants and warranties by others heretofore given or made in respect of the Mortgaged Property or any part thereof.

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        Section 6.07    Nature of Covenants.    The covenants and agreements herein contained shall constitute covenants running with the land and interests covered or affected hereby and shall be binding upon the heirs, legal representatives, successors and assigns of the parties hereto.

        Section 6.08    Notices.    All notices and other communications shall be in writing (including, without limitation, telecopy or telex) and mailed by certified mail, return receipt requested, telecopied, telexed, hand delivered, or delivered by a nationally recognized overnight courier, at the address for the appropriate party specified in the first paragraph of this Second Mortgage or at such other address as shall be designated by such party in a written notice to the other parties. All such notices and communications shall, when so mailed, telecopied, telexed, or hand delivered or delivered by a nationally recognized overnight courier, be effective when received if mailed, when telecopy transmission is completed, when confirmed by telex answer-back, or when delivered by such messenger or courier, respectively.

        Section 6.09    Counterparts.    This Second Mortgage is being executed in several counterparts, all of which are identical, except that to facilitate recordation, if the Mortgaged Property is situated in more than one county, descriptions of only those portions of the Mortgaged Property located in the county in which a particular counterpart is recorded shall be attached as Exhibit A thereto. A complete Exhibit A will be attached to that certain counterpart that is filed in the real property records of                        County, Texas. Each of such counterparts shall for all purposes be deemed to be an original and all such counterparts shall together constitute but one and the same instrument.

        Section 6.10    Exculpation Provisions.    Each of the parties hereto specifically agrees that it has a duty to read this Second Mortgage; and agrees that it is charged with notice and knowledge of the terms of this Second Mortgage; that it has in fact read this Second Mortgage and is fully informed and has full notice and knowledge of the terms, conditions and effects of this Second Mortgage; that it has been represented by independent legal counsel of its choice throughout the negotiations preceding its execution of this Second Mortgage; and has received the advice of its attorney in entering into this Second Mortgage; and that it recognizes that certain of the terms of this Second Mortgage result in one party assuming the liability inherent in some aspects of the transaction and relieving the other party of its responsibility for such liability. Each party hereto agrees and covenants that it will not contest the validity or enforceability of any exculpatory provision of this Second Mortgage on the basis that the party had no notice or knowledge of such provision or that the provision is not "conspicuous."

        Section 6.11    Security Agreement.    With respect to any portion of the Mortgaged Property which constitutes fixtures or other property governed by the Applicable UCC, this Second Mortgage shall constitute a security agreement between Mortgagor, as the debtor, and Mortgagee, as the secured party. Cumulative of all other rights of Mortgagee hereunder, Mortgagee shall have all of the rights conferred upon secured parties by the Applicable UCC.

        Section 6.12    Ratification of Original Mortgages; Effect of Mortgage.    The conveyance and the granting of liens in the Original Mortgages is hereby ratified, adopted, confirmed, and renewed. In addition, as stated in the Recitals to this Mortgage, this Mortgage constitutes for all purposes an amendment and restatement of the Original Mortgages and not a new or substitute security instrument.

        Section 6.13    Time of the Essence.    Time is of the essence in the performance of each and every obligation under this Second Mortgage.

        Section 6.14    Authority of Agent.    The Lenders may, by agreement among them, provide for and regulate the exercise of rights and remedies hereunder, but, unless and until modified to the contrary in a writing signed by all such persons and recorded in the same counties and parishes as this Second Mortgage is recorded, (i) all persons other than Mortgagor and its affiliates shall be entitled to rely on the releases, waivers, consents, approvals, notifications and other acts (including, without limitation, appointment of substitute or successor trustee, or trustees, hereunder and the bidding in of all or any

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part of the secured indebtedness held by any one or more Lenders, whether the same be conducted under the provisions hereof or otherwise) of Agent, without inquiry into any such agreements or the existence of required consent or approval of any Lender and without the joinder of any party other than Agent in such releases, waivers, consents, approvals, notifications or other acts and (ii) all notices, requests, consents, demands and other communications required or permitted to be given hereunder may be given to Agent.

        Section 6.15    Waivers.    Subject to the Amended and Restated Subordinated Credit Agreement, Agent may at any time and from time to time in writing waive compliance by Mortgagor with any covenant herein made by Mortgagor to the extent and in the manner specified in such writing, or consent to Mortgagor's doing any act which hereunder Mortgagor is prohibited from doing, or to Mortgagor's failing to do any act which hereunder Mortgagor is required to do, to the extent and in the manner specified in such writing, or release any part of the Mortgaged Property or any interest therein or any Production Proceeds from the lien and security interest of this Second Mortgage, without the joinder of Trustee. Any party liable, either directly or indirectly, for the secured indebtedness or for any covenant herein or in any other Loan Document may be released from all or any part of such obligations without impairing or releasing the liability of any other party. No such act shall in any way impair any rights or powers hereunder except to the extent specifically agreed to in such writing.

        Section 6.16    Compliance With Usury Laws.    It is the intent of Mortgagor, Trustee, Mortgagee and all other parties to any of the Loan Documents to contract in strict compliance with applicable usury law from time to time in effect. In furtherance thereof, it is stipulated and agreed that none of the terms and provisions contained herein or in the other Loan Documents shall ever be construed to create a contract to pay, for the use, forbearance or detention of money, interest in excess of the maximum amount of interest permitted to be collected, charged, taken, reserved, or received by applicable law from time to time in effect.

        Section 6.17    GOVERNING LAW.THIS SECOND MORTGAGE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO ITS LAWS RELATING TO CONFLICTS OF LAWS, EXCEPT TO THE EXTENT THAT THE LAWS OF ANY OTHER JURISDICTION MANDATORILY GOVERN THE CREATION OF, OR THE MANNER OR PROCEDURE FOR ENFORCEMENT OF THE LIEN CREATED BY THIS SECOND MORTGAGE, PROVIDED THAT ANY RIGHTS OR REMEDIES HEREIN PROVIDED THAT SHALL BE VALID UNDER THE LAWS OF THE JURISDICTION WHERE PROCEEDINGS FOR THE ENFORCEMENT HEREOF SHALL BE TAKEN SHALL NOT BE AFFECTED BY THE INVALIDITY, IF ANY, OF SUCH RIGHTS OR REMEDIES UNDER THE LAWS OF THE STATE OF TEXAS.

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NOTICE TO MORTGAGOR:

A POWER OF SALE HAS BEEN GRANTED IN THIS INSTRUMENT. WITH RESPECT TO PORTIONS OF THE MORTGAGED PROPERTY LOCATED IN THE STATE OF OKLAHOMA, SUCH POWER OF SALE IS GRANTED PURSUANT TO THE OKLAHOMA MORTGAGE FORECLOSURE ACT (AS DEFINED IN SECTION 1.01 OF THIS SECOND MORTGAGE). THIS POWER OF SALE MAY ALLOW TRUSTEE OR MORTGAGEE, AS APPLICABLE, TO TAKE THE MORTGAGED PROPERTY AND SELL IT WITHOUT GOING TO COURT IN A FORECLOSURE ACTION UPON THE OCCURRENCE OF AN EVENT OF DEFAULT BY MORTGAGOR UNDER THIS INSTRUMENT. THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS, SECURES PAYMENT OF FUTURE ADVANCES, AND COVERS ALL PRODUCTS AND PROCEEDS OF MORTGAGED PROPERTY.

        IN WITNESS HEREOF, Mortgagor has executed and delivered this Second Mortgage as of the day and year first above written.

[SIGNATURE OF MORTGAGOR]

Prepared by and after recording return to:
Chadbourne & Parke
c/o Daniel Rogers
1100 Louisiana Street, Suite 3500
Houston, Texas 77002

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STATE OF TEXAS	§
	§
COUNTY OF	§
TEXAS

        This instrument was acknowledged before me on March            , 2003 by            , the            of BRIGHAM, INC., a Nevada corporation, as general partner of BRIGHAM OIL & GAS, L.P., a Delaware limited partnership, on behalf of such corporation, acting as general partner of the limited partnership, on behalf of the limited partnership.

Notary Public in and for the
State of Texas

Notarial Seal:

OKLAHOMA

        Before me, a Notary Public in and for said county and state, on this            day of March, 2003, personally appeared                        , to me known to be the identical person who subscribed the name of the maker thereof to the foregoing instrument as                        of BRIGHAM, INC., a Nevada corporation, as general partner of BRIGHAM OIL & GAS, L.P., a Delaware limited partnership, and acknowledged to me that such person executed the same as such person's free and voluntary act and deed, and as the free and voluntary act and deed of such corporation for the uses and purposes therein set forth.

Notary Public in and for the
State of Texas

Notarial Seal:

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EXHIBIT A

TO

AMENDED AND RESTATED SECOND MORTGAGE, DEED OF TRUST,
ASSIGNMENT OF PRODUCTION, SECURITY AGREEMENT,
FIXTURE FILING, AND FINANCING STATEMENT

        This Exhibit A describes the Hydrocarbon Property (as defined in the body of this instrument). This Exhibit A also sets forth a list of certain of the wells located on the Hydrocarbon Property, together with Mortgagor's representation as to the nature and quantum of Working Interest (as defined below) and Net Revenue Interest (as defined below) owned by Mortgagor with respect to those wells.

        The designation "Working Interest" or "WI" when used in this Exhibit A means the interest of Mortgagor upon which is calculated Mortgagor's proportionate share of the costs, expenses, and liabilities attributable to the oil, gas, and mineral leases described herein. The designation "Net Revenue Interest" or "NRI" or "NRIO" or "NRIG" when used in this Exhibit A means the interest in the gross production of oil and gas and other minerals from other properties subject to the oil, gas, and mineral leases to which Mortgagor is entitled by virtue of its ownership of the Working Interest after deducting all landowner royalties, overriding royalties, and similar interests attributable to the Working Interest. The designation "Overriding Royalty Interest" "ORRI" means an interest in production which is free of any obligation for the expense of exploration, development, and production, bearing only its pro rata share of severance, production, and other similar taxes and, in instances where the document creating the overriding royalty interest so provides, costs associated with compression, dehydration, other treating or processing, or transportation of production of oil, gas, or other minerals relating to the marketing of such production. The designation "Royalty Interest" or "RI" means an interest in production which results from an ownership in the mineral fee estate or royalty estate in the relevant land and which is free of any obligation for the expense of exploration, development, and production, bearing only its pro rata share of severance, production ad valorem, and other similar taxes and, in instances where the document creating the royalty interest so provides, costs associated with compression, dehydration, other treating or processing or transportation of production of oil, gas, or other minerals relating to the marketing of such production. Each amount set forth as "Working Interest" or "WI" or "Net Revenue Interest" or "NRI" or "NRIO" or "NRIG" is Mortgagor's minimum interest after giving full effect to, among other things, all Permitted Liens (as defined in the Credit Agreement).

        Any reference in this Exhibit A to wells or units is for warranty of interest, administrative convenience, and identification and shall not limit or restrict the right, title, interest, or properties covered by this Deed of Trust. All right, title, and interest of Mortgagor in the properties described herein and in the Mortgaged Property (as defined in the body of this instrument) is and shall be subject to this Second Mortgage, regardless of the presence thereon of any interests, units, or wells not described herein.

        Unless otherwise expressly provided, all recording references in this Exhibit A are references to the official public records of real property in the county or counties (or parish or parishes) in which the Mortgaged Property is located and in which records documents relating to the Mortgaged Property are recorded, whether Conveyance Records, Deed Records, Mortgage Records, Oil and Gas Records, Oil and Gas Lease Records, or other records.

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EXHIBIT G

FORM OF SECOND PLEDGE AGREEMENT

THE OBLIGATIONS UNDER THIS INSTRUMENT ARE EXPRESSLY SUBORDINATED TO THE AMENDED AND RESTATED PLEDGE AGREEMENT EXECUTED BY PLEDGOR (AS HEREINAFTER DEFINED) IN FAVOR OF SOCIÉTÉ GÉNÉRALE ("SG"), THE ADMINISTRATIVE AGENT FOR THE BENEFIT OF THE SENIOR LENDERS (AS HEREINAFTER DEFINED), THAT PROVIDES, AND IS INTENDED TO PROVIDE, A FIRST PRIORITY SECURITY INTEREST IN THE PLEDGED COLLATERAL (AS HEREINAFTER DEFINED) TO SECURE THE OBLIGATIONS MORE PARTICULARLY DESCRIBED IN THAT CERTAIN SECOND AMENDED AND RESTATED CREDIT AGREEMENT BY AND AMONG PLEDGORS, BRIGHAM OIL AND GAS, L.P., SG, THE ROYAL BANK OF SCOTLAND PLC ("RBS"), AND THE OTHER LENDERS PARTY THERETO FROM TIME TO TIME (COLLECTIVELY "SENIOR LENDERS"). THIS INSTRUMENT IS SUBJECT TO THE TERMS AND PROVISIONS OF THAT CERTAIN AMENDED AND RESTATED INTERCREDITOR AGREEMENT DATED MARCH    , 2003 BY AND BETWEEN THE SENIOR LENDERS.

        This Amended and Restated Second Pledge Agreement dated as of March    , 2003 ("Second Pledge Agreement") is between [Brigham Exploration Company, a Delaware corporation][Brigham, Inc., a Nevada corporation] ("Pledgor"), and The Royal Bank of Scotland plc, as agent for the lenders party to the Subordinated Credit Agreement described below ("Secured Party").

INTRODUCTION

        A.    Brigham Oil & Gas, L.P., a Delaware limited partnership ("Borrower"), the lenders party thereto, and The Royal Bank of Scotland plc, as agent for such lenders (the "Agent"), were parties to that certain Subordinated Credit Agreement dated October 31, 2000, as amended or supplemented on or before the date hereof (the "Existing Credit Agreement").

        B.    In order to secure the full and punctual payment and performance of the obligations under the Existing Credit Agreement and the other loan documents contemplated thereby, the Pledgor executed and delivered the security instruments described on Schedule 1 attached hereto (the "Existing Security Documents" in favor of the Agent and has granted a continuing security interest in and to the Pledged Collateral (as hereafter defined).

        C.    Borrower, Pledgor, [Brigham Exploration Company, a Delaware corporation], [Brigham, Inc., a Nevada corporation], the lenders named therein (the "Lenders") and Secured Party, as agent for the Lenders, have entered into the Amended and Restated Subordinated Credit Agreement dated as of March            , 2003 (as amended, restated or otherwise modified from time-to-time, the "Subordinated Credit Agreement"), which, among other things, amends and restates the Existing Credit Agreement in its entirety.

        D.    Pledgor has guaranteed the Obligations of Borrower under the Subordinated Credit Agreement pursuant to Article VIII thereof (the "Subordinated Guaranty").

        E.    Under the Subordinated Credit Agreement, it is a condition to the making of Advances by the Lenders that Pledgor shall amend and restate the Existing Security Documents to secure its obligations under the Subordinated Credit Agreement and the Subordinated Guaranty by entering into this Second Pledge Agreement.

        F.    Pledgor and Société Générale, as administrative agent for the lenders party ("Senior Agent") to that certain Second Amended and Restated Credit Agreement, dated as of the date hereof, have entered into the Amended and Restated Pledge Agreement, dated as of the date hereof (the "Senior Pledge Agreement").

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        Therefore, Pledgor hereby agrees with Secured Party for its benefit and the ratable benefit of the Lenders as follows:

        Section 1.    Definitions.    All capitalized terms not otherwise defined in this Second Pledge Agreement that are defined in the Subordinated Credit Agreement shall have the meaning assigned to such terms by the Subordinated Credit Agreement. Any capitalized terms used in this Second Pledge Agreement that are defined in Articles 8 or 9 of the Uniform Commercial Code as adopted in the State of New York ("UCC") shall have the meanings assigned to those terms by the UCC as of the date of this Second Pledge Agreement, whether specified elsewhere in this Second Pledge Agreement or not. All other rules of interpretation set forth in Section 1.05 of the Subordinated Credit Agreement shall apply to this Second Pledge Agreement and are hereby incorporated herein by reference.

        Section 2.    Pledge.

        (a)    Grant of Pledge.    Pledgor hereby pledges to Secured Party, and grants to Secured Party, for its benefit and the ratable benefit of the Lenders, a continuing lien on and security interest in the Pledged Collateral, as defined in Section 2(b) below. This Second Pledge Agreement shall secure all Obligations of Pledgor now or hereafter existing under the Subordinated Credit Agreement, the Guaranty and the other Subordinated Loan Documents to which it is a party, including any extensions, modification, substitutions, amendments, and renewals thereof, whether for principal, interest, fees, expenses, indemnifications or otherwise, in each case, including the payment of amounts which would become due but for the operation of the automatic stay under Section 362(a) of the United States Bankruptcy Code, 11 U.S.C. §§ 101 et seq., as amended. All such obligations shall be referred to in this Second Pledge Agreement as the "Secured Obligations".

        (b)    Pledged Collateral.    "Pledged Collateral" shall mean all of Pledgor's right, title, and interest in the following, whether now owned or hereafter acquired:

        (i)    all of the membership interests listed in the attached Schedule II issued to Pledgor (the "Membership Interests"), all such additional membership interests of any issuer of such interests hereafter acquired by Pledgor, the certificates representing the Membership Interests, if any, and all such additional membership interests, all of Pledgor's rights, privileges, authority, and powers as a member of the issuer of such Membership Interests under the applicable [Limited Liability Company Operating Agreement][Limited Liability Company Regulations] of such issuer and all rights to money or Property which Pledgor now has or hereafter acquires in respect of the Membership Interests, including, without limitation, (A) any Proceeds from a sale by or on behalf of Pledgor of any of the Membership Interests, and (B) any distributions, dividends, cash, instruments and other Property from time-to-time received or otherwise distributed in respect of the Membership Interests, whether regular, special or made in connection with the partial or total liquidation of the issuer and whether attributable to profits, the return of any contribution or investment or otherwise attributable to the Membership Interests or the ownership thereof other than distributions received by Pledgor in compliance with the Loan Documents (collectively, the "Membership Interests Distributions");

        (ii)  all of the general and limited partnership interests listed in the attached Schedule II issued to Pledgor (the "Partnership Interests"), all such additional limited or general partnership interests of any issuer of such Partnership Interests hereafter acquired by Pledgor, all of Pledgor's rights, privileges, authority, and powers as a limited or general partner of the issuer of such Partnership Interests under the applicable [Limited Partnership Agreement][Partnership Agreement] of such issuer, and all rights to money or Property which Pledgor now has or hereafter acquires in respect of the Partnership Interests, including, without limitation, (A) any Proceeds from a sale by or on behalf of Pledgor of any of the Partnership Interests, and (B) any distributions, dividends, cash, instruments and other

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Property from time-to-time received or otherwise distributed in respect of the Partnership Interests, whether regular, special or made in connection with the partial or total liquidation of the issuer and whether attributable to profits, the return of any contribution or investment or otherwise attributable to the Partnership Interests or the ownership thereof other than distributions received by Pledgor in compliance with the Loan Documents (collectively, the "Partnership Interest Distributions"); and

        (iii)  all of the shares of stock listed in the attached Schedule II issued to Pledgor (the "Pledged Shares"), all such additional shares of stock of any issuer of such Pledged Shares hereafter issued to Pledgor, the certificates representing the Pledged Shares and all such additional shares, all of Pledgor's rights, privileges, authority, and powers as a shareholder of the issuer of such Pledged Shares under the applicable [Articles][Certificate] of Incorporation and Bylaws of such issuer and all rights to money or Property which Pledgor now has or hereafter acquires in respect of the Pledged Shares, including, without limitation, (A) any Proceeds from a sale by or on behalf of Pledgor of any of the Pledged Shares, and (B) any distributions, dividends, cash, instruments and other Property from time-to-time received or otherwise distributed in respect of the Pledged Shares, whether regular, special or made in connection with the partial or total liquidation of the issuer and whether attributable to profits, the return of any contribution or investment or otherwise attributable to the Pledged Shares or the ownership thereof other than distributions received by Pledgor in compliance with the Loan Documents (collectively, the "Pledged Shares Distributions"; together with the Membership Interest Distributions and the Partnership Interest Distributions, the "Distributions"); and

        (iv)  all additions and accessions to, substitutions and replacements of, and all products and proceeds from the Pledged Collateral described in paragraphs (i), (ii), and (iii) of this Section 2(b).

        (c)    Delivery of Pledged Collateral.    All certificates or instruments, if any, representing the Pledged Collateral shall be delivered to Senior Agent pursuant to Section 2(c) of the Senior Pledge Agreement and shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance reasonably satisfactory to the Senior Agent and the Secured Party. After the occurrence and during the continuance of an Event of Default, Senior Agent or Secured Party shall have the right, upon prior written notice to Pledgor, to transfer to or to register in the name of Senior Agent or Secured Party or any of its nominees any of the Pledged Collateral, subject to the rights specified in Section 2(d) of this Second Pledge Agreement and Section 2(d) of the Senior Pledge Agreement. In addition, after the occurrence and during the continuance of an Event of Default, Senior Agent or Secured Party shall have the right at any time to exchange the certificates or instruments representing the Pledged Collateral for certificates or instruments of smaller or larger denominations.

        (d)    Rights Retained by Pledgor.    Notwithstanding the pledge in Section 2(a), so long as no Event of Default shall have occurred and remain uncured:

        (i)    and, if an Event of Default shall have occurred and remain uncured, until such time thereafter as such voting and other consensual rights have been terminated pursuant to Section 5 hereof, Pledgor shall be entitled to exercise any voting and other consensual rights pertaining to the Pledged Collateral for any purpose not inconsistent with the terms of this Second Pledge Agreement or the Subordinated Credit Agreement; provided, however, that Pledgor shall not exercise or shall refrain from exercising any such right if such action would have a materially adverse effect on the value of the Pledged Collateral;

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        (ii)  except as otherwise provided in the Subordinated Credit Agreement, Pledgor shall be entitled to receive and retain any dividends and other distributions paid on or in respect of the Pledged Collateral and the Proceeds of any sale of the Pledged Collateral and all payments of principal and interest on loans and advances made by Pledgor to the issuer of the Pledged Collateral; and

        (iii)  at and after such time as voting and other consensual rights have been terminated pursuant to Section 5 hereof, Pledgor shall execute and deliver (or cause to be executed and delivered) to Secured Party all proxies and other instruments as Secured Party may reasonably request to (A) enable Secured Party to exercise the voting and other rights which Pledgor is entitled to exercise pursuant to subsection (i) of this Section 2(d), and (B) to receive the dividends or other distributions and Proceeds of sale of the Pledged Collateral and payments of principal and interest which Pledgor is authorized to receive and retain pursuant to paragraph (ii) of this Section 2(d).

        Section 3.    Pledgor's Representations and Warranties.    Pledgor represents and warrants to Secured Party and the Lenders as follows:

        (a)  The Pledged Collateral listed on the attached Schedule II has been duly authorized and validly issued and is fully paid and nonassessable.

        (b)  Pledgor is the legal and beneficial owner of the Pledged Collateral free and clear of any Lien or option, except for (i) the security interest created by this Pledge Agreement and (ii) other Permitted Liens.

        (c)  No authorization, authentication, approval, or other action by, and no notice to or filing with, any Governmental Authority or regulatory body is required either (i) for the pledge by Pledgor of the Pledged Collateral pursuant to this Second Pledge Agreement or for the execution, delivery, or performance of this Second Pledge Agreement by Pledgor (except to the extent that financing statements are required under the UCC to be filed in order to maintain a perfected security interest) or (ii) for the exercise by Secured Party or any Lender of the voting or other rights provided for in this Second Pledge Agreement or the remedies in respect of the Pledged Collateral pursuant to this Second Pledge Agreement (except as may be required in connection with such disposition by laws affecting the offering and sale of securities generally).

        (d)  Pledgor has the full right, power and authority to deliver, pledge, assign and transfer the Pledged Collateral to Secured Party.

        (e)  [The [Membership Interests][Partnership Interests] listed on the attached Schedule II constitute [100][1]% of the issued and outstanding [membership][general partnership] interests of the respective issuer thereof and all [Membership Interests][Partnership Interests] in which Pledgor has any ownership interest.][The Pledged Shares listed on the attached Schedule II constitute 100% of the issued and outstanding shares of capital stock of the respective issuer thereof and of the Pledged Shares in which Pledgor has any ownership interests.]

        (f)    The name of Pledgor set forth in the first paragraph of this Pledge Agreement is the exact legal name of Pledgor. The legal address of Pledgor and the address of its principal place of business and chief executive office is [6300 Bridge Point Parkway, Building 2, Suite 500, Austin, Texas 78730]. Pledgor keeps all records and documents relating to the Pledged Collateral at such address or with Nevada Corporate Management, Inc., 3773 Howard Hughes Parkway, Suite 300, North Las Vegas, Nevada 89109.

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        Section 4.    Pledgor's Covenants.    During the term of this Second Pledge Agreement and until all of the Secured Obligations have been fully and finally paid and discharged in full, Pledgor covenants and agrees with Secured Party that:

        (a)    Protect Collateral; Further Assurances.    Pledgor will warrant and defend the rights and title herein granted unto Secured Party in and to the Pledged Collateral (and all right, title, and interest represented by the Pledged Collateral) against the claims and demands of all Persons whomsoever, except Senior Agent. Pledgor agrees that, at the expense of Pledgor, Pledgor will promptly execute and deliver all further instruments and documents, and take all further action, that may be reasonably necessary and that Secured Party or any Lender may reasonably request, in order to perfect and protect any security interest granted or purported to be granted hereby or to enable Secured Party or any Lender to exercise and enforce its rights and remedies hereunder with respect to any Pledged Collateral.

        (b)    Transfer, Other Liens, and Additional Shares.    Pledgor agrees that it will not (i) sell or otherwise dispose of, or grant any option with respect to, any of the Pledged Collateral or (ii) create or permit to exist any Lien upon or with respect to any of the Pledged Collateral, except for (A) the Liens and security interest under this Pledge Agreement and (B) other Permitted Liens. Pledgor agrees that it will (1) cause each issuer of the Pledged Collateral not to issue any other membership interests, partnership interests, capital stock or other securities in addition to or in substitution for the Pledged Collateral issued by such issuer, except to Pledgor and (2) pledge hereunder, immediately upon its acquisition (directly or indirectly) thereof, any additional membership interests, partnership interests, capital stock or other securities of an issuer of the Pledged Collateral. Pledgor shall not approve any amendment or modification of any of the Pledged Collateral unless it shall have given at least ten Business Days' prior written notice (or such lesser period as may be agreed by Secured Party in writing) to, and such amendment or modification would not be materially adverse to the interests of the Lenders.

        (c)    Jurisdiction of Formation; Name Change.    Pledgor shall not (i) amend, supplement, modify or restate its articles or certificate of incorporation, bylaws, limited liability company agreements, or other equivalent organizational documents if such amendment, supplement, modification or restatement would be materially adverse to the interests of the Lenders, or (ii) unless the Pledgor shall have given Secured Party at least ten (10) Business Days' prior written notice (or such lesser period as may be agreed by Secured Party in writing), amend its name or change its jurisdiction of incorporation, organization or formation. Promptly upon the request of Secured Party, Pledgor shall take all such action as Secured Party shall reasonably request to maintain the lien and security interest of Secured Party granted hereby at all time fully perfected and in full force and effect.

        Section 5.    Remedies upon Default.    If any Event of Default shall have occurred and be continuing:

        (a)    UCC Remedies.    To the extent permitted by law, Secured Party may exercise in respect of the Pledged Collateral, in addition to other rights and remedies provided for in this Second Pledge Agreement or otherwise available to it, all the rights and remedies of a secured party under the UCC (whether or not the UCC applies to the affected Pledged Collateral). This Second Pledge Agreement shall not be construed to authorize the Secured Party to take any action prohibited by the UCC or to constitute a waiver by the Pledgor of any right that the UCC does not permit the Pledgor to waive.

        (b)    Dividends and Other Rights.

        (i)    All rights of Pledgor to exercise the voting and other consensual rights which it would otherwise be entitled to exercise pursuant to Section 2(d)(i) may be exercised by

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Secured Party if Secured Party so elects and gives written notice of such election to Pledgor and all rights of Pledgor to receive the dividends and other distributions on or in respect of the Pledged Collateral and the proceeds of sale of the Pledged Collateral which it would otherwise be authorized to receive and retain pursuant to Section 2(d)(ii) shall cease at such time as such written notice is deemed effective pursuant to the provisions of the Subordinated Credit Agreement related to effectiveness of notices.

        (ii)  All dividends and other distributions on or in respect of the Pledged Collateral and the proceeds of sale of the Pledged Collateral that are thereafter received by Pledgor shall be received in trust for the benefit of Secured Party, shall be segregated from other funds of Pledgor, and shall be promptly paid over to Senior Agent or Secured Party as Pledged Collateral in the same form as so received (with any necessary indorsement).

        (c)    Sale of Pledged Collateral.    Secured Party may sell all or part of the Pledged Collateral at public or private sale, at any of Secured Party's offices or elsewhere, for cash, on credit, or for future delivery, and upon such other terms as Secured Party may deem commercially reasonable in accordance with applicable laws. Pledgor agrees that to the extent permitted by law such sales may be made without notice. If notice is required by law, Pledgor hereby deems ten (10) days' advance notice of the time and place of any public sale or the time after which any private sale is to be made reasonable notification, recognizing that if the Pledged Collateral threatens to decline speedily in value or is of a type customarily sold on a recognized market shorter notice may be reasonable. Secured Party shall not be obligated to make any sale of the Pledged Collateral regardless of notice of sale having been given. Secured Party may adjourn any public or private sale from time-to-time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Pledgor shall cooperate fully with Secured Party in all respects in selling or realizing upon all or any part of the Pledged Collateral. In addition, Pledgor shall fully comply with the securities laws of the United States, the State of [Delaware][Nevada], and other states and take such actions as may be necessary to permit Secured Party to sell or otherwise dispose of any securities representing the Pledged Collateral in compliance with such laws.

        (d)    Exempt Sale.    If, in the opinion of Secured Party, there is any question that a public or semipublic sale or distribution of any Pledged Collateral will violate any state or federal securities law, Secured Party in its discretion (i) may offer and sell securities privately to purchasers who will agree to take them for investment purposes and not with a view to distribution and who will agree to imposition of restrictive legends on the certificates representing the security, or (ii) may sell such securities in an intrastate offering under Section 3(a)(11) of the Securities Act of 1933, as amended, and no sale so made in good faith by Secured Party shall be deemed to be not "commercially reasonable" solely because so made. Pledgor shall cooperate fully with Secured Party in all reasonable respects in selling or realizing upon all or any part of the Pledged Collateral.

        (e)    Application of Collateral.    The proceeds of any sale, or other realization upon all or any part of the Collateral pledged by Pledgor shall be applied by Secured Party as set forth in Section 7.06 of the Subordinated Credit Agreement.

        (f)    Cumulative Remedies.    Each right, power and remedy herein specifically granted to Secured Party or otherwise available to it shall be cumulative, and shall be in addition to every other right, power and remedy herein specifically given or now or hereafter existing at law, in equity, or otherwise, and each such right, power and remedy, whether specifically granted herein or otherwise existing, may be exercised at any time and from time-to-time as often and in such order as may be deemed expedient by Secured Party in its sole discretion. No failure on the part of Secured Party to exercise, and no delay in exercising, and no course of dealing with respect to, any

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such right, power or remedy, shall operate as a waiver thereof, nor shall any single or partial exercise of any such rights, power or remedy preclude any other or further exercise thereof or the exercise of any other right.

        Section 6.    Secured Party as Attorney-in-Fact for Pledgor.

        (a)    Secured Party Appointed Attorney-in-Fact.    Pledgor hereby irrevocably appoints Secured Party as Pledgor's attorney-in-fact, with full authority after the occurrence and during the continuance of an Event of Default to act for Pledgor and in the name of Pledgor, and, in Secured Party's discretion, subject to Pledgor's revocable rights specified in Section 2(d), to take any action and to execute any instrument which Secured Party may deem necessary or advisable to accomplish the purposes of this Second Pledge Agreement, including, without limitation, to receive, indorse, and collect all instruments made payable to Pledgor representing the proceeds of the sale of the Pledged Collateral, or any distribution in respect of the Pledged Collateral and to give full discharge for the same. Pledgor hereby acknowledges, consents and agrees that the power of attorney granted pursuant to this Section 6 is irrevocable and coupled with an interest.

        (b)    Secured Party May Perform.    Secured Party may from time-to-time, at its option and expense, perform any act which Pledgor agrees hereunder to perform and which Pledgor shall fail to perform after being requested in writing so to perform (it being understood that no such request need be given after the occurrence and during the continuance of any Event of Default and after notice thereof by Secured Party to Pledgor) and Secured Party may from time-to-time take any other action which Secured Party reasonably deems necessary for the maintenance, preservation or protection of any of the Pledged Collateral or of its security interest therein. Secured Party shall be obligated to provide notice to Pledgor of any action taken hereunder by telecopy or by registered mail.

        (c)    Secured Party Has No Duty.    The powers conferred on Secured Party hereunder are solely to protect its interest in the Pledged Collateral and shall not impose any duty on it to exercise any such powers. Except for reasonable care of any Pledged Collateral in its possession and the accounting for moneys actually received by it hereunder, Secured Party shall have no duty as to any Pledged Collateral or responsibility for taking any necessary steps to preserve rights against prior parties or any other rights pertaining to any Pledged Collateral.

        (d)    Reasonable Care.    Secured Party shall be deemed to have exercised reasonable care in the custody and preservation of the Pledged Collateral in its possession if the Pledged Collateral is accorded treatment substantially equal to that which Secured Party accords its own property, it being understood that Secured Party shall have no responsibility for (i) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders, or other matters relative to any Pledged Collateral, whether or not Secured Party has or is deemed to have knowledge of such matters, or (ii) taking any necessary steps to preserve rights against any parties with respect to any Pledged Collateral.

        Section 7.    Miscellaneous.

        (a)    Expenses.    Pledgor will upon demand pay to Secured Party for its benefit and the benefit of the Lenders the amount of any reasonable out-of-pocket expenses, including the reasonable fees and disbursements of its counsel and of any experts, which Secured Party and the Lenders may incur in connection with (i) the custody, preservation, use, or operation of, or the sale, collection, or other realization of, any of the Pledged Collateral, (ii) the exercise or enforcement of any of the rights of Secured Party or any Lender hereunder, and (iii) the failure by Pledgor to perform or observe any of the provisions hereof.

        (b)    Amendments, Etc.    No amendment or waiver of any provision of this Second Pledge Agreement nor consent to any departure by Pledgor herefrom shall be effective unless made in

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writing and authenticated by Pledgor and Secured Party. In addition, no such amendment or waiver shall be effective unless given or entered into with the necessary approvals of the Lenders as required in the Subordinated Credit Agreement. Any such waiver or consent, whether by Secured Party or Secured Party and the Lenders shall be effective only in the specific instance and for the specific purpose for which given.

        (c)    Addresses for Notices.    All notices and other communications provided for hereunder shall be in the manner and to the addresses set forth in the Subordinated Credit Agreement.

        (d)    Continuing Security Interest; Transfer of Interest.    This Second Pledge Agreement shall create a continuing security interest in the Pledged Collateral and, unless expressly released by Secured Party, shall (i) remain in full force and effect until payment in full and termination of the Secured Obligations, (ii) be binding upon Pledgor, Secured Party, the Lenders and their successors, and assigns, and (iii) inure, together with the rights and remedies of Secured Party hereunder, to the benefit of and be binding upon, Secured Party, the Lenders and their respective successors, transferees, and assigns. Upon the payment in full and termination of the Secured Obligations, the security interest granted hereby shall terminate and all rights to the Pledged Collateral shall revert to Pledgor to the extent such Pledged Collateral shall not have been sold or otherwise applied pursuant to the terms hereof. Without limiting the generality of the foregoing clause, when any Lender assigns or otherwise transfers any interest held by it under the Subordinated Credit Agreement or other Subordinated Loan Document to any other Person pursuant to the terms of the Subordinated Credit Agreement or other Subordinated Loan Document, that other Person shall thereupon become vested with all the benefits held by such Lender under this Second Pledge Agreement. Upon any such termination, Secured Party will, at Pledgor's expense, deliver all Pledged Collateral to Pledgor, execute and deliver to Pledgor such documents as Pledgor shall reasonably request and take any other actions reasonably requested to evidence or effect such termination.

        (e)    Waivers.    Pledgor hereby waives:

        (i)    promptness, diligence, notice of acceptance, and any other notice with respect to any of the Secured Obligations and this Second Pledge Agreement;

        (ii)  any requirement that Secured Party or any Lender protect, secure, perfect, or insure any Lien or any Property subject thereto or exhaust any right or take any action against Pledgor, any other Guarantor, Borrower or any other Person or any collateral; and

        (iii)  any duty on the part of Secured Party to disclose to Pledgor any matter, fact, or thing relating to the business, operation, or condition of Pledgor, any other Guarantor, Borrower and their respective assets now known or hereafter known by such Person.

        (f)    Severability.    Wherever possible each provision of this Second Pledge Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Second Pledge Agreement shall be prohibited by or invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Second Pledge Agreement.

        (g)    Choice of Law.    This Second Pledge Agreement shall be governed by and construed and enforced in accordance with the laws of the state of New York, except to the extent that the validity or perfection of the security interests hereunder, or remedies hereunder, in respect of any particular Collateral are governed by the laws of a jurisdiction other than the state of New York.

        (h)    Counterparts.    For the convenience of the parties, this Second Pledge Agreement may be executed in multiple counterparts, each of which for all purposes shall be deemed to be an

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original, and all such counterparts shall together constitute but one and the same Pledge Agreement.

        (i)    Reinstatement.    If, at any time after payment in full by Pledgor of all Secured Obligations and termination of Secured Party's security interest, any payments on the Secured Obligations previously made by Pledgor or any other person must be disgorged by Secured Party for any reason whatsoever, including, without limitation, the insolvency, bankruptcy or reorganization of Pledgor or such Person, this Second Pledge Agreement and Secured Party's security interests herein shall be reinstated as to all disgorged payments as though such payments had not been made, and Pledgor shall sign and deliver to Secured Party all documents, and shall do such other acts and things, as may be necessary to reinstate and perfect Secured Party's security interest.

        (j)    Amendment and Restatement.    This Pledge Agreement amends and restates in its entirety the Existing Security Documents, and all of the terms hereof shall supersede the terms and provisions thereof. This Pledge Agreement renews and extends all Liens existing by virtue of the Existing Security Documents, but the terms, provisions and conditions of such Liens shall hereafter be governed in all respects by this Pledge Agreement.

        Executed as of the date first above written.

        [SIGNATURES OF PLEDGOR AND SECURED PARTY]

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SCHEDULE I

EXISTING SECURITY DOCUMENTS

[To be provided.]

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SCHEDULE II

PLEDGED COLLATERAL

[Pledgor to provide.]

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EXHIBIT H

FORM OF SECOND SECURITY AGREEMENT

THE OBLIGATIONS UNDER THIS INSTRUMENT ARE EXPRESSLY SUBORDINATED TO THE AMENDED AND RESTATED SECURITY AGREEMENT EXECUTED BY DEBTOR (AS HEREINAFTER DEFINED) IN FAVOR OF SOCIÉTÉ GÉNÉRALE ("SG"), THE ADMINISTRATIVE AGENT FOR THE BENEFIT OF THE SENIOR LENDERS (AS HEREINAFTER DEFINED), THAT PROVIDES, AND IS INTENDED TO PROVIDE, A FIRST PRIORITY SECURITY INTEREST IN THE COLLATERAL (AS HEREINAFTER DEFINED) TO SECURE THE OBLIGATIONS MORE PARTICULARLY DESCRIBED IN THAT CERTAIN SECOND AMENDED AND RESTATED CREDIT AGREEMENT BY AND AMONG DEBTOR, BRIGHAM EXPLORATION COMPANY, BRIGHAM, INC., SG, THE ROYAL BANK OF SCOTLAND PLC ("RBS"), AND THE OTHER LENDERS PARTY THERETO FROM TIME TO TIME (COLLECTIVELY, "SENIOR LENDERS"). THIS INSTRUMENT IS SUBJECT TO THE TERMS AND PROVISIONS OF THAT CERTAIN AMENDED AND RESTATED INTERCREDITOR AGREEMENT DATED MARCH    , 2003 BY AND BETWEEN THE SENIOR LENDERS.

        This Amended and Restated Second Security Agreement dated as of March    , 2003 ("Second Security Agreement") is by and between Brigham Oil & Gas, L.P., a Delaware limited partnership ("Grantor"), and The Royal Bank of Scotland plc, as agent for the Lenders party to the Subordinated Credit Agreement described below ("Secured Party").

INTRODUCTION

        A.    Grantor, Brigham Exploration Company, a Delaware corporation, Brigham, Inc., a Nevada corporation, the lenders party thereto, and The Royal Bank of Scotland plc, as agent for such lenders (the "Agent"), catered into that certain Subordinated Credit Agreement dated October 31, 2000, as amended (the "Existing Credit Agreement").

        B.    In order to secure the full and punctual payment and performance of the obligations under the Existing Credit Agreement and the other loan documents contemplated thereby, the Grantor executed and delivered the security instruments described on Schedule I attached hereto (the "Existing Security Documents") in favor of the Agent and has granted a continuing security interest in and to the Collateral (as hereafter defined).

        C.    Grantor, Brigham Exploration Company, a Delaware corporation, Brigham, Inc., a Nevada corporation, the lenders named therein (the "Lenders") and Secured Party, as agent for the Lenders, have entered into the Amended and Restated Subordinated Credit Agreement dated as of March    , 2003 (as amended, restated or otherwise modified from time-to-time, the "Subordinated Credit Agreement"), which, among other things, amends and restates the Existing Credit Agreement in its entirety.

        D.    Under the Subordinated Credit Agreement, it is a condition to the making of Advances by the Lenders that Grantor shall amend and restate the Existing Security Documents to secure its Obligations under the Subordinated Credit Agreement by entering into this Second Security Agreement.

        E.    Grantor and Société Générale, as administrative agent for the lenders party ("Senior Agent") to that certain Second Amended and Restated Credit Agreement, dated as of the date hereof, have entered into the Amended and Restated Security Agreement, dated as of the date hereof (the "Senior Security Agreement").

        Therefore, Grantor hereby agrees with Secured Party for its benefit and the ratable benefit of the Lenders as follows:

        Section 1.    Definitions.    All capitalized terms not otherwise defined in this Second Security Agreement that are defined in the Subordinated Credit Agreement shall have the meaning assigned to

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such terms by the Subordinated Credit Agreement. Any capitalized terms used in this Second Security Agreement that are defined in Article 9 of the Uniform Commercial Code as adopted in the State of New York ("UCC") shall have the meanings assigned to those terms by the UCC as of the date of this Second Security Agreement, whether specified elsewhere in this Second Security Agreement or not. All other rules of interpretation set forth in Section 1.05 of the Subordinated Credit Agreement shall apply to this Second Security Agreement and are hereby incorporated herein by reference.

        Section 2.    Security Interest.

        (a)    Grant of Security Interest.    Grantor hereby grants to Secured Party for its benefit and the ratable benefit of the Lenders a lien on and security interest in the Collateral (as defined in Section 2(b) below) to secure the performance and payment of all Obligations of Grantor now or hereafter existing under the Subordinated Credit Agreement, the Subordinated Notes and the other Subordinated Loan Documents to which it is a party, including any extensions, modifications, substitutions, amendments and renewals thereof, whether for principal, interest, fees, expenses, indemnification, or otherwise, in each case, including the payment of amounts which would become due but for the operation of the automatic stay under Section 362(a) of the United States Bankruptcy Code, 11 U.S.C. §§ 101 et seq., as amended. All such obligations shall be referred to in this Second Security Agreement as the "Secured Obligations".

        (b)    Collateral.    "Collateral" shall mean all of Grantor's right, title, and interest in the following, whether now owned or hereafter acquired:

        (i)    Accounts.    All Accounts and all other rights to payment owing or to be owing to Grantor, including all Instruments, Documents and Chattel Paper that represent any right of Grantor to payment for Property sold or leased or for services rendered, whether or not it has been earned by performance (all such Accounts, Instruments, Documents and Chattel Paper being the "Receivables");

        (ii)    Equipment.    All Equipment, and all parts thereof and all accessions and additions thereto;

        (iii)    General Intangibles.    All General Intangibles or contract rights relating to, or existing in connection with, the other Collateral (all such General Intangibles and contract rights being the "General Intangibles");

        (iv)    Inventory.    All Inventory, including, without limitation, all Goods, whether such Goods are in possession of Grantor or of a bailee or other Person for sale, lease, storage, transit, processing, use or otherwise;

        (v)    Records.    All ledger sheets, files, Records, and documents relating to the foregoing Collateral; and

        (vi)    Proceeds.    All Proceeds of the foregoing Collateral and, to the extent not otherwise included, all payments under any insurance, indemnity, warranty, or guaranty of or for the foregoing Collateral.

        Section 3.    Representations and Warranties.    Grantor hereby represents and warrants the following to Secured Party and the Lenders:

        (a)    Ownership of Collateral; Liens.    Grantor is, and will be the record and beneficial owner of all Collateral pledged by Grantor free and clear of any Lien, except for Liens created hereby or other Permitted Liens. No effective financing statement or other instrument similar in effect covering all or any part of the Collateral is, or will be on file in any recording office, except such as may be filed in connection with this Second Security Agreement or in connection with other Permitted Liens or for which satisfactory releases have been received by Secured Party. The execution, delivery and performance by Grantor of this Second Security Agreement and the grant

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of the security interest in the Collateral to Secured Party are within Grantor's powers and have been duly authorized by all necessary governing action.

        (b)    Authorization and Approvals.    No consent, order, authorization, or approval or other action by, and no notice to or filing with, any Governmental Authority (other than the filing of financing statements) or any other Person (except for the Senior Agent and Senior Lenders) is required for (i) the due execution, delivery and performance by Grantor of this Second Security Agreement, (ii) the grant by Grantor of the security interest in the Collateral granted by this Second Security Agreement, (iii) the perfection of such security interest or (iv) the exercise by Secured Party or any Lender of its rights and remedies under this Second Security Agreement (except as may be required in connection with such disposition by laws affecting the offering and sale of securities generally).

        (c)    Lien Priority and Perfection.    On the Closing Date this Second Security Agreement will create valid and continuing security interests in the Collateral, securing the payment of the Secured Obligations. Upon the filing of financing statements in the office(s) set forth on Schedule II attached hereto, the security interests granted to Secured Party hereunder will constitute valid, perfected security interests in all Collateral with respect to which a security interest can be perfected by the filing of a financing statement, subject only to Permitted Liens.

        (d)    Legal Name; Address; Location of Records.    The name of Grantor set forth in the first paragraph of this Second Security Agreement is the exact legal name of Grantor. The legal address of Grantor and the address of Grantor's principal place of business and chief executive office is 6300 Bridge Point Parkway, Building 2, Suite 500, Austin, Texas 78730. Grantor keeps all records and documents relating to the Collateral at such address.

        Section 4.    Grantor Covenants.

        (a)    Further Assurances.    Grantor agrees that at any time, at Grantor's expense, Grantor will promptly execute and deliver all further instruments and documents, and take all further action, that may be reasonably necessary or that Secured Party or any Lender may reasonably request, in order to perfect and protect any security interest granted or purported to be granted hereby or to enable Secured Party or any Lender to exercise and enforce its rights and remedies hereunder with respect to any Collateral. Without limiting the generality of the foregoing, Grantor will at Secured Party's request:

        (i)    with respect to any of the Collateral that is evidenced by a promissory note or other Instrument or by Chattel Paper and if, in the case of any such instrument, its value exceeds $100,000, deliver and pledge to the Senior Agent under the Senior Security Agreement, such note, Instrument or Chattel Paper, duly indorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to the Secured Party; and

        (ii)  file (or authorize the filing of) such financing or continuation statements, or amendments thereto, and such other instruments or notices as may be reasonably necessary, or as Secured Party may reasonably request, in order to perfect and preserve the security interests granted or purported to be granted hereby.

        (b)    Insurance.

        (i)    Grantor shall, at its own expense, maintain, or cause to be maintained, insurance with respect to the Collateral owned by Grantor in such amounts, against such risks, in such form, and with such insurers, as the Subordinated Credit Agreement requires. Further, Grantor shall deliver certificates of insurance as the Subordinated Credit Agreement requires.

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        (ii)  During the continuance of any Event of Default, all loss casualty insurance payments in respect to such Collateral shall be paid to and applied by Secured Party as specified in the Subordinated Credit Agreement.

        (c)    Jurisdiction of Formation; Name Change.    Grantor shall not (i) amend, supplement, modify or restate its certificate of limited partnership, limited partnership agreements, or other equivalent organizational documents if such amendment, supplement, modification or restatement would be materially adverse to the interests of the Lenders, or (ii) unless the Grantor shall have given Secured Party at least ten (10) Business Days' prior written notice (or such lesser period as may be agreed by Secured Party in writing), amend its name or change its jurisdiction of, organization, or formation. Promptly upon the request of Secured Party, Grantor shall take all such action as Secured Party shall reasonably request to maintain the security interest of Secured Party in the Collateral granted hereby at all time fully perfected and in full force and effect.

        (d)    Maintenance and Preservation of Records.    Grantor will hold and preserve, at its own cost and expense satisfactory and complete records of the Collateral, including, but not limited to, Instruments, Documents, Chattel Paper, contracts, and Records with respect to the Receivables.

        (e)    Liability Under Contracts and Receivables.    Notwithstanding anything in this Second Security Agreement to the contrary,

        (i)    the execution of this Second Security Agreement shall not release Grantor from its obligations and duties under the contracts and agreements and Receivables included in the Collateral to the extent set forth therein,

        (ii)  the exercise by Secured Party of any of its rights hereunder shall not release Grantor from any of its duties or obligations under the contracts and agreements and the Receivables included in the Collateral, and

        (iii)  Secured Party shall not have any obligation or liability under the contracts and agreements and the Receivables included in the Collateral by reason of the execution and delivery of this Second Security Agreement, nor shall Secured Party be obligated to perform any of the obligations or duties of Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

        (f)    Transfer of Certain Collateral; Release of Certain Security Interests.    Grantor agrees that it shall not sell, assign, or otherwise dispose of any Collateral except as otherwise permitted under the Subordinated Credit Agreement. Secured Party shall promptly, at Grantor's expense, execute and deliver all further instruments and documents, and take all further action that Grantor may reasonably request in order to release its security interest in any Collateral that is disposed of in accordance with the terms of the Subordinated Credit Agreement.

        (g)    Receivables.    Grantor agrees that it will use commercially reasonable efforts to ensure that each Receivable:

        (i)    is and will be, in all material respects, the genuine, legal, valid, and binding obligation of the Account Debtor in respect thereof, representing an unsatisfied obligation of such Account Debtor (except to the extent compromised or settled in the ordinary course of business),

        (ii)  is and will be, in all material respects, enforceable in accordance with its terms, is not and will not be subject to any setoffs, defenses, taxes, counterclaims, except in the ordinary course of business,

        (iii)  is and will be, in all material respects, in compliance with all applicable Legal Requirements, whether federal, state, local or foreign, and

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        (iv)  that if evidenced by Chattel Paper, will not require the consent of the account debtor in respect thereof in connection with its assignment hereunder.

        Section 5.    Remedies.    If any Event of Default shall have occurred and be continuing:

        (a)    UCC Remedies.    

        (i)    To the extent permitted by law, Secured Party may exercise in respect of the Collateral, in addition to other rights and remedies provided for in this Second Security Agreement or otherwise available to it, all the rights and remedies of a secured party under the UCC (whether or not the UCC applies to the affected Collateral). This Second Security Agreement shall not be construed to authorize the Secured Party to take any action prohibited by the UCC or to constitute a waiver by the Grantor of any right that the UCC does not permit the Grantor to waive.

        (ii)  Upon written notice to Grantor, all payments received by Grantor under or in connection with or in respect of the Collateral shall be deposited with Senior Agent or Secured Party.

        (b)    Assembly of Collateral.    Secured Party may, in its reasonable discretion, require Grantor to, at Grantor's expense, promptly assemble all or part of the Collateral in such locations as Grantor and Secured Party may agree at such time and that is reasonably convenient to both parties, and make it available to Secured Party at such locations. Secured Party may occupy any premises owned or leased by Grantor where the Collateral or any part thereof is assembled for a reasonable period in order to effectuate its rights and remedies hereunder or under law, without obligation to Grantor in respect of such occupation.

        (c)    Sale of Collateral.    Secured Party may sell all or part of the Collateral at a public or private sale, at any of Secured Party's offices or elsewhere, for cash, on credit, or for future delivery, and upon such other terms as Secured Party may deem commercially reasonable. Secured Party shall give Grantor ten (10) days' advance notice of the time and place of any public sale or the time after which any private sale is to be made reasonable notification, recognizing that if the Collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market shorter notice may be reasonable. Secured Party shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. Secured Party may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.

        (d)    Contract Rights.    Secured Party may exercise any rights and remedies of Grantor under or in connection with the Instruments, Documents, Chattel Paper, or contracts which represent Receivables, the General Intangibles, or otherwise relate to the Collateral, including, without limitation, any rights of Grantor to demand or otherwise require payment of any amount under, or performance of any provisions of, the Instruments, Documents, Chattel Paper, or contracts which represent Receivables or the General Intangibles.

        (e)    Receivables.    

        (i)    Secured Party may, or may direct Grantor to, take any action Secured Party deems necessary or advisable to enforce collection of the Receivables including, without limitation, notifying the Account Debtors or obligors under any Receivables of the assignment of such Receivables to Secured Party and directing such Account Debtors or obligors to make payment of all amounts due or to become due directly to Secured Party. Upon such notification and direction, and at the expense of Grantor, Secured Party may enforce collection of any such Receivables, and adjust, settle, or compromise the amount or payment thereof in the same manner and to the same extent as Grantor might have done.

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        (ii)  After receipt by Grantor of the notice referred to in subparagraph (i) above, all amounts and Proceeds (including Instruments) received by Grantor in respect of the Receivables shall be received in trust for the benefit of Secured Party hereunder, shall be segregated from other funds of Grantor, and shall promptly be paid over to Senior Agent or Secured Party in the same form as so received (with any necessary indorsement) to be held as Collateral. Grantor shall not adjust, settle, or compromise the amount or payment of any Receivable, or release wholly or partly any Account Debtor or obligor thereof, or allow any credit or discount thereon other than in the ordinary course of business and consistent with past practices.

        Section 6.    Application of Collateral.    The proceeds of any sale, or other realization upon all or any part of the Collateral pledged by Grantor shall be applied by Secured Party in the order set forth in Section 7.06 of the Subordinated Credit Agreement.

        Section 7.    Secured Party as Attorney-in-Fact for Grantor.    

        (a)    Attorney-In-Fact.    Grantor hereby irrevocably appoints Secured Party as Grantor's attorney-in-fact, with full authority after the occurrence and during the continuance of an Event of Default to act for Grantor and in the name of Grantor to, in Secured Party's discretion:

        (i)    file one or more financing or continuation statements, and amendments thereto, relative to all or any part of the Collateral;

        (ii)  to obtain and adjust insurance as required pursuant to Section 5.02 of the Subordinated Credit Agreement to the extent Grantor has failed to provide such insurance;

        (iii)  to receive, indorse, and collect any drafts or other Instruments, Documents, and Chattel Paper which are part of the Collateral pledged by Grantor;

        (iv)  to take or cause to be taken, all actions necessary to perform or comply or cause performance or compliance with the terms of this Second Security Agreement, including, without limitation, actions to pay or discharge taxes and Liens levied or placed on or threatened against the Collateral;

        (v)  to ask, demand, collect, sue for, recover, compromise, receive, and give acquittance and receipts for moneys due and to become due under or in respect of any of the Collateral pledged by Grantor and to file any claims or take any action or institute any proceedings which Secured Party may deem necessary or desirable for the collection of any of such Collateral or otherwise to enforce the rights of Secured Party with respect to any of such Collateral.

        The power of attorney granted hereby is coupled with an interest and is irrevocable.

        (b)    Secured Party May Perform.    Secured Party may from time-to-time, at its option and expense, perform any act which Grantor agrees hereunder to perform and which Grantor shall fail to perform after being requested in writing so to perform (it being understood that no such request need be given after the occurrence and during the continuance of any Event of Default) and Secured Party may from time-to-time take any other action which Secured Party reasonably deems necessary for the maintenance, preservation or protection of any of the Collateral or of its lien thereof and security interest therein.

        (c)    Secured Party Has No Duty.    The powers conferred on Secured Party hereunder are solely to protect its interest in the Collateral and shall not impose any duty on it to exercise any such powers. Except for reasonable care of any Collateral in its possession and the accounting for moneys actually received by it hereunder, Secured Party shall have no duty as to any Collateral or

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responsibility for taking any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral.

        (d)    Reasonable Care.    Secured Party shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which Secured Party accords its own Property, it being understood that Secured Party shall have no responsibility for taking any necessary steps to preserve rights against any parties with respect to any Collateral.

        Section 8.    Miscellaneous.    

        (a)    Expenses.    Grantor will upon demand pay to Secured Party for its benefit and the benefit of the Lenders the amount of any reasonable out-of-pocket expenses, including the reasonable fees and disbursements of its counsel and of any experts, which Secured Party and the Lenders may incur in connection with:

        (i)    the custody, preservation, use, or operation of, or the sale, collection, or other realization of, any of the Collateral,

        (ii)  the exercise or enforcement of any of the rights of Secured Party or any Lender hereunder, and

        (iii)  the failure by Grantor to perform or observe any of the provisions hereof.

        (b)    Amendments; Etc.    No amendment or waiver of any provision of this Second Security Agreement nor consent to any departure by Grantor herefrom shall be effective unless made in writing and authenticated by Grantor and Secured Party. In addition, no such amendment or waiver shall be effective unless given or entered into with the necessary approvals of the Lenders as required in the Subordinated Credit Agreement. Any such waiver or consent, whether by Secured Party or Secured Party and the Lenders shall be effective only in the specific instance and for the specific purpose for which given.

        (c)    Addresses for Notices.    All notices and other communications provided for hereunder shall be made in the manner and to the addresses set forth in the Subordinated Credit Agreement.

        (d)    Continuing Security Interest; Transfer of Interest.    This Second Security Agreement shall create a continuing security interest in the Collateral and, unless expressly released by Secured Party, shall:

        (i)    remain in full force and effect until payment in full and termination of the Secured Obligations,

        (ii)  be binding upon Grantor, Secured Party, the Lenders and their successors, and assigns, and

        (iii)  inure, together with the rights and remedies of Secured Party, hereunder, to the benefit of Secured Party, the Lenders and their respective successors, transferees, and assigns.

Upon the payment in full and termination of the Secured Obligations, the security interest granted hereby shall terminate and all rights to the Collateral pledged by Grantor shall revert to Grantor to the extent such Collateral shall not have been sold or otherwise applied pursuant to the terms hereof. Without limiting the generality of the foregoing clause, when any Lender assigns or otherwise transfers any interest held by it under the Subordinated Credit Agreement or other Subordinated Loan Document to any other Person pursuant to the terms of the Subordinated Credit Agreement or other Subordinated Loan Document, that other Person shall thereupon become vested with all the benefits held by such Lender under this Second Security Agreement. Upon any such termination, Secured Party will, at Grantor's

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expense, execute and deliver to Grantor such documents as Grantor shall reasonably request and take any other actions reasonably requested to evidence or effect such termination.

        (e)    Severability.    Wherever possible each provision of this Second Security Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Second Security Agreement shall be prohibited by or invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Second Security Agreement.

        (f)    Choice of Law.    This Second Security Agreement shall be governed by and construed and enforced in accordance with the laws of the state of New York, except to the extent that the validity or perfection of the security interests hereunder, or remedies hereunder, in respect of any particular Collateral are governed by the laws of a jurisdiction other than the state of New York.

        (g)    Amendment and Restatement.    This Security Agreement amends and restates in its entirety the Existing Security Documents, and all of the terms hereof shall supercede the terms and provisions thereof. This Security Agreement renews and extends all Liens existing by virtue of the Existing Security Documents, but the terms, provisions and conditions of such Liens shall hereafter be governed in all respects by this Security Agreement.

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        IN WITNESS WHEREOF, the parties hereto have caused this Second Security Agreement to be duly executed as of the date first above written.

[SIGNATURES OF GRANTOR AND SECURED PARTY]

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SCHEDULE I

EXISTING SECURITY DOCUMENTS

        [To be provided.]

H-10

SCHEDULE II

UCC FILING LOCATIONS

        [Grantor to provide.]

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Exhibit 10.54

TABLE OF CONTENTS
AMENDED AND RESTATED SUBORDINATED CREDIT AGREEMENT
INTRODUCTION
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
ARTICLE II CREDIT FACILITIES
ARTICLE III CONDITIONS OF LENDING
ARTICLE IV REPRESENTATIONS AND WARRANTIES
ARTICLE V AFFIRMATIVE COVENANTS
ARTICLE VI NEGATIVE COVENANTS
ARTICLE VII EVENTS OF DEFAULT; REMEDIES
ARTICLE VIII THE GUARANTY
ARTICLE IX THE AGENT
ARTICLE X MISCELLANEOUS
EXHIBIT A FORM OF ASSIGNMENT AND ACCEPTANCE
EXHIBIT B Form of Compliance Certificate
EXHIBIT C
EXHIBIT D
EXHIBIT E – Form of Subordinated Note
EXHIBIT F FORM OF SECOND MORTGAGE AMENDMENT
AMENDED AND RESTATED SECOND MORTGAGE, DEED OF TRUST, ASSIGNMENT OF PRODUCTION, SECURITY AGREEMENT, FIXTURE FILING, AND FINANCING STATEMENT
Exhibit A
EXHIBIT G FORM OF SECOND PLEDGE AGREEMENT
SCHEDULE I EXISTING SECURITY DOCUMENTS
SCHEDULE II PLEDGED COLLATERAL
EXHIBIT H – Form of Second Security Agreement
SCHEDULE I EXISTING SECURITY DOCUMENTS
SCHEDULE II UCC FILING LOCATIONS

EX-21

Exhibit 21

SUBSIDIARIES

Brigham Oil & Gas, L.P., a Delaware limited partnership

EX-23.1

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Exhibit 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (Nos. 333-85435 and 333-37558) and Form S-8 (Nos. 333-56961 and 333-70137) of Brigham Exploration Company of our report dated March 27, 2003 relating to the financial statements, which appears in this Form 10-K.

PricewaterhouseCoopers LLP

Dallas, Texas
March 27, 2003

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Exhibit 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

EX-99.1

EXHIBIT 99.1

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the accompanying Annual Report of Brigham Exploration Company (the “Company”) on Form 10-K for the period ended December 31, 2002 (the “Report”), I, Ben M. Brigham, Chief Executive Officer, President and Chairman of the Board of the Company, hereby certify that:

(1)           The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2)           The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: March 31, 2003

/s/ Ben M. Brigham

Ben M. Brigham

Chief Executive Officer

EX-99.2

EXHIBIT 99.2

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the accompanying Annual Report of Brigham Exploration Company (the “Company”) on Form 10-K for the period ended December 31, 2002 (the “Report”), I, Eugene B. Shepherd, Jr., Chief Financial Officer of the Company, hereby certify that:

(1)           The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2)           The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: March 31, 2003

/s/ Eugene B. Shepherd, Jr.

Eugene B. Shepherd, Jr.

 Chief Financial Officer