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EXHIBIT 10.4
EXECUTION COPY
FIRST AMENDMENT TO WARRANT AGREEMENT
THIS FIRST AMENDMENT TO WARRANT AGREEMENT (this "Amendment")
dated as of February 17, 2000 is between Brigham Exploration Company, a Delaware
corporation ("Issuer") and Bank of Montreal, a Canadian bank (the "Warrant
Holder" or "BMO").
RECITALS
A. Brigham Oil & Gas, L.P., a Delaware limited partnership
(the "Borrower"), BMO and Societe Generale Southwest Agency (the "Prior
Lenders") previously entered into that certain Credit Agreement dated as of
January 26, 1998, as amended by First Amendment to Credit Agreement dated as of
August 20, 1998, Second Amendment to Credit Agreement dated as of March 26,
1999, Third Amendment to Credit Agreement dated as of July 19, 1999 and Fourth
Amendment to Credit Agreement dated as of October 7, 1999 (such Credit Agreement
as amended called the "Prior Credit Agreement"), pursuant to which the Prior
Lenders agreed to make certain loans and extensions of credit to the Borrower as
evidenced by those certain promissory notes in the aggregate principal amount of
$75,000,000 (the "Prior Notes").
B. By Partial Assignment of Notes of even date herewith Shell
Capital Inc. ("SCI") has acquired an interest in the Prior Notes and a like
interest in all security for the payment of the Prior Notes and the performance
of the Borrower's obligations under the Prior Credit Agreement; and
C. The Prior Lenders and SCI (collectively, the "Lenders")
have agreed to provide senior secured debt in the amount of up to $75,000,000
consisting of a rearrangement of the Prior Notes and advances to the Borrower,
and the Borrower, BMO as Agent (the "Agent") and the Lenders are entering into
that certain Amended and Restated Credit Agreement (the "Credit Agreement") of
even date herewith which amends and restates in its entirety the Prior Credit
Agreement and Prior Notes; and
D. Issuer and BMO now desire to amend certain provisions of
the Warrant Agreement dated as of July 19, 1999 between Issuer and BMO (the
"Warrant Agreement") in recognition of the benefits Issuer will obtain under the
Credit Agreement.
NOW THEREFORE, in consideration of the mutual covenants and
agreements herein contained, Issuer and BMO hereby agree that the Warrant
Agreement shall be amended as follows:
Section 1. Certain Definitions. As used in this Amendment, the
terms "Agent", "Amendment", "Borrower", "Credit Agreement", "Issuer", "BMO",
"SCI", "Lenders", "Prior Credit Agreement", "Prior Lenders," "Prior Notes", and
"Warrant Agreement" shall have the meanings indicated above; and unless
otherwise defined herein, all terms beginning with a capital letter which are
defined in the Warrant Agreement shall have the same meanings herein as therein
unless the context hereof otherwise requires.
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Section 2. Amendments to Warrant Agreement.
Section 2.1 The definition of Current Warrant Price in section
1. of the Warrant Agreement is hereby deleted in its entirety and the following
is substituted therefor:
"Current Warrant Price" shall mean, in respect of a share of
Common Stock at any date herein specified, two dollars and two
cents ($2.02) per share of Common Stock, subject to adjustment
from time to time as provided in this Agreement."
Section 2.2 Exhibit A to the Warrant Agreement (Form of
Warrant Certificate) is amended as follows:
(a) to change the reference "of two and 25/100 dollars
($2.25)" to "of two and 02/100 dollars ($2.02)";
(b) to add the following language after the date "July
19, 1999, to the next to the last paragraph of the
Form of Warrant Certificate: "as amended by that
certain First Amendment to Warrant Agreement dated as
of February 17, 2000".
Section 2.3 All references to the "Credit Agreement" in the
Warrant Agreement shall henceforth refer to the Credit Agreement as defined in
this Amendment, as such Credit Agreement is from time to time further amended,
supplemented or restated.
Section 2.4 The second sentence of Section 4.3(b) of the
Warrant Agreement is hereby deleted in its entirety and the following is
substituted therefor:
"No adjustment of the number of shares of Common Stock for
which a Warrant shall be exercised shall be made under Section
4.3(a) of this Agreement upon the issuance of any Additional
Shares of Common Stock which are issued pursuant to the
exercise of any warrants or other subscription or purchase
rights or pursuant to the exercise of any conversion or
exchange rights in any Convertible Securities (i) if any such
adjustment shall previously have been made upon the issuance
of such Convertible Securities (or upon the issuance of any
such warrants or other rights) pursuant to Section 4.4 or
Section 4.5 of this Agreement, (ii) if no adjustment was
required pursuant to such sections upon the issuance of such
Convertible Securities, warrants or other rights or (iii) in
the event the issuance of such Convertible Securities,
warrants or other rights predates or is of the same date as
this Agreement, if no adjustment would have been required
pursuant to such sections upon such issuance had this
Agreement been in effect."
Section 3. Representations and Warranties. Issuer hereby
reaffirms that as of the effective date of this Amendment, the representations
and warranties made by the Issuer in the Warrant Agreement will be true and
correct as though made on and as of the date of this Amendment.
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Section 4. Ratification. Issuer hereby expressly ratifies and
affirms its obligations under the Warrant Agreement as amended by this Amendment
and agrees that the Warrant Agreement as amended by this Amendment remains in
full force and effect.
Section 5. Issuance of Warrant Certificate. Contemporaneously
with the execution of this Amendment, Issuer will deliver to BMO a Warrant
Certificate reflecting the amendments described in Section 2.2 hereof.
Section 6. Governing Law. This Amendment and the rights and
obligations of the parties hereunder and under the Warrant Agreement shall be
construed in accordance with and be governed by the laws of the State of Texas
and the United States of America.
Section 7. Descriptive Headings, Etc. The descriptive headings
of the several Sections of this Amendment are inserted for convenience only and
shall not be deemed to affect the meaning or construction of any of the
provisions hereof.
Section 8. Counterparts. This Amendment may be executed in any
number of counterparts and by different parties on separate counterparts and all
of such counterparts shall together constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered and effective as of the date first
above written.
BANK OF MONTREAL, as Warrant Holder
By:
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Name: Thomas E. McGraw
Title: Director
BRIGHAM EXPLORATION COMPANY,
As Issuer
By:
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Name: Karen E. Lynch
Title: Vice President
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