Exhibit 10.2

 

CONSENT AND AMENDMENT NO. 1

TO THE

SECOND AMENDED AND RESTATED

FINANCING AGREEMENT

 

THIS CONSENT AND AMENDMENT NO. 1, dated as of November 14, 2003 (this
“Amendment”), to the Second Amended and Restated Financing Agreement, dated as
of August 13, 2003, as amended or otherwise modified from time to time (the
“Financing Agreement”), by and among ATP Oil & Gas Corporation, a Texas
corporation (the ”Borrower”), each subsidiary of the Borrower listed as a
“Guarantor” on the signature pages thereto (each a “Guarantor” and collectively,
the “Guarantors” and, together with the Borrower, each a “Loan Party” and
collectively, the “Loan Parties”), each of the lenders from time to time party
thereto (each a “Lender” and collectively, the ”Lenders”), Ableco Finance LLC, a
Delaware limited liability company (“Ableco”), as collateral agent and
administrative agent for the Lenders (in such capacity, the ”Collateral Agent”
or the “Administrative Agent”), and Wells Fargo Foothill, Inc., a California
corporation (“Foothill”), as funding agent for the Lenders (in such capacity,
the “Funding Agent”, and together with the Administrative Agent and the
Collateral Agent, each an “Agent” and collectively the “Agents”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to the Financing Agreement among the Borrower, the Guarantors,
each of the Lenders from time to time party thereto, Ableco, in its capacity as
the Collateral Agent and Administrative Agent for the Lenders, and Foothill, in
its capacity as Funding Agent for the Lenders, the Lenders have agreed to make
certain revolving loans, which includes a subfacility for the issuance of
Letters of Credit (as defined in the Financing Agreement) to the Borrower;

 

WHEREAS, the Borrower has advised the Agents and the Lenders that the Borrower
is in default under certain covenants set forth in the Financing Agreement and
has requested a waiver of such defaults, and the Lenders have agreed to such
waivers subject to the execution and delivery of this Amendment by the Loan
Parties and the other terms and conditions set forth herein;

 

WHEREAS, the Borrower has requested amendments to the Financing Agreement to
certain financial covenants and other covenants related to the funding by the
Borrower of the working capital requirements of its Foreign Subsidiaries, and
the Lenders have agreed to such amendments; and

 

WHEREAS, the Loan Parties have agreed to cause ATP UK (as defined in the
Financing Agreement) to become a Guarantor under the Financing Agreement and to
grant liens on and security interests in its property in favor of the
Administrative Agent, for the benefit of the Agents and the Lenders, and Ableco
has agreed to establish an additional revolving credit

 

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facility under the Financing Agreement not exceeding $15,000,000 on terms to be
mutually agreed upon by the Loan Parties, the Agents and the Lenders.

 

NOW, THEREFORE, in consideration of the premises and agreements herein, the
parties hereto hereby agree as follows:

 

1. Definitions. All terms used herein that are defined in the Financing
Agreement and not otherwise defined herein are used herein as defined therein.

 

2. Conditions Precedent to All Loans and Letters of Credit. The following new
clause (f) shall be added to Section 5.02 of the Financing Agreement and the
existing clause (f) of Section 5.02 of the Financing Agreement shall be
relettered and referred to as clause (g):

 

“(f) Material Adverse Effect. There shall not have occurred an event or
development that which could reasonably be expected to have a Material Adverse
Effect.”

 

3. Use of Proceeds. Clause (e) of Section 6.01(t) of the Financing Agreement is
hereby amended and restated in its entirety to read as follows:

 

“subject to the terms and conditions set forth in Section 7.02(e), to fund
working capital of the Foreign Subsidiaries in an aggregate amount not to exceed
$17,500,000, which funding shall be pursuant to a budget to be delivered by the
Borrower to the Agents and which, with the consent of the Agents, may be updated
by the Borrower from time to time, in each case the form and substance of which
shall be satisfactory to the Agents in their sole discretion (the “Foreign
Working Capital Budget”).”

 

4. Hedging Agreements. Section 7.01(t) of the Financing Agreement is hereby
amended and restated in its entirety as follows:

 

“(t) The Loan Parties shall maintain in effect one or more Hedging Agreements
with respect to the Borrower’s and ATP UK’s Hydrocarbon production with one or
more counterparties rated at least investment grade by Moody’s and S&P, or the
equivalent by a rating agency acceptable to the Agents, or with a counterparty
otherwise reasonably acceptable to the Agents, on terms and conditions
satisfactory to the Agents with aggregate notional volumes of Hydrocarbons
covered thereby of: (i) not less than 40% for the period from the Effective Date
until December 31, 2003, and not less than 60% for the period on and after
December 31, 2003, and, in either case, not greater than 80% of the Borrower’s
aggregate estimated Hydrocarbon production volumes on an mcf equivalent basis
(where one barrel of oil is equal to six mcf of gas) for the succeeding twelve
calendar months on a rolling twelve calendar month basis for such period from
its Proved Developed Producing Reserves as of the date of the most recent
monthly report delivered pursuant to Section 7.01(a)(vii); and (ii)

 

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with respect to the production of the Oil and Gas Properties of ATP UK referred
to as the Helvellyn field in the North Sea — UK Sector, not less than 40% for
the period commencing on the date that is 30 days after the commencement of
commercial production of Hydrocarbons from such field and ending the date that
is 60 days after the commencement of such commercial production, and, not less
than less than 60% for the period thereafter and, in either case, not greater
than 80% of ATP UK’s aggregate estimated Hydrocarbon production volumes on an
mcf equivalent basis (where one barrel of oil is equal to six mcf of gas) for
the succeeding twelve calendar months on a rolling twelve calendar month basis
for such period from its Proved Developed Producing Reserves as of the date of
the most recent monthly report with respect to such Oil and Gas Properties which
the Borrower shall be required to deliver to the Agents in form and substance
satisfactory to the Agents.”

 

5. Loans, Advances, Investments, Etc. Subclause (y) of Section 7.02(e)(iii) of
the Financing Agreement is hereby amended by deleting the amount “$7,500,000”
and substituting in lieu thereof the amount “$17,500,000”.

 

6. Financial Covenants. (a) Section 7.03(a) of the Financing Agreement is hereby
amended and restated in its entirety to read as follows:

 

“(a) Total Leverage Ratio. Permit the ratio of Consolidated Funded Indebtedness
to Consolidated EBITDA of the Borrower and its Subsidiaries as of the end of
period set forth below, to be greater than the ratio corresponding to such
period set forth below:

 

Fiscal Period

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   Ratio

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Twelve month period ended September 30, 2003

   2.5 to 1.0  

Twelve month period ended October 31, 2003

   2.5 to 1.0  

Twelve month period ended November 30, 2003

   2.8 to 1.0  

Twelve month period ended December 31, 2003

   3.0 to 1.0  

Twelve month period ended January 31, 2004

   3.1 to 1.0  

Twelve month period ended February 29, 2004

   3.0 to 1.0  

Twelve month period ended March 31, 2004

   2.8 to 1.0  

Twelve month period ended April 30, 2004

   2.6 to 1.0  

Twelve month period ended May 31, 2004

   2.4 to 1.0  

Twelve month period ended June 30, 2004

   2.2 to 1.0  

Twelve month period ended July 31, 2004

   2.0 to 1.0  

Twelve month period ended August 31, 2004

   1.8 to 1.0  

Twelve month period ended September 30, 2004 and for each twelve month period
ended thereafter

   1.6 to 1.0 ”

 

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(b) Section 7.03(b) of the Financing Agreement is hereby amended and restated in
its entirety to read as follows:

 

“(b) Domestic Leverage Ratio. Permit the ratio of Consolidated Funded
Indebtedness to Consolidated EBITDA of the Borrower and its Subsidiaries (in
each case, other than the Foreign Subsidiaries) as of the end of any period set
forth below, to be greater than the ratio corresponding to such period set forth
below:

 

Fiscal Period

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   Ratio

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Twelve month period ended September 30, 2003

   2.5 to 1.0

Twelve month period ended October 31, 2003

   2.5 to 1.0

Twelve month period ended November 30, 2003

   2.7 to 1.0

Twelve month period ended December 31, 2003

   2.9 to 1.0

Twelve month period ended January 31, 2004

   3.0 to 1.0

Twelve month period ended February 29, 2004

   3.1 to 1.0

Twelve month period ended March 31, 2004

   3.1 to 1.0

Twelve month period ended April 30, 2004

   3.1 to 1.0

Twelve month period ended May 31, 2004

   3.0 to 1.0

Twelve month period ended June 30, 2004

   3.0 to 1.0

Twelve month period ended July 31, 2004

   2.8 to 1.0

Twelve month period ended August 31, 2004

   2.6 to 1.0

Twelve month period ended September 30, 2004

   2.4 to 1.0

Twelve month period ended October 31, 2004

   2.3 to 1.0

Twelve month period ended November 30, 2004

   2.2 to 1.0

Twelve month period ended December 31, 2004

   2.1 to 1.0

Twelve month period ended January 31, 2005

   2.0 to 1.0

Twelve month period ended February 28, 2005 and for each twelve month period
ended thereafter

   1.9 to 1.0

 

(c) Section 7.03(e) of the Financing Agreement is hereby amended and restated in
its entirety to read as follows:

 

“(e) Consolidated EBITDA. Permit Consolidated EBITDA of the Borrower and its
Subsidiaries as of the end of any period set forth below, to be less than the
amount set forth below:

 

Fiscal Period

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   Consolidated EBITDA

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Twelve month period ended July 31, 2003

   $ 42,908,000  

Twelve month period ended August 31, 2003

   $ 44,846,000  

Twelve month period ended September 30, 2003

   $ 48,306,000  

One month period ended October 31, 2003

   $ 1,793,000  

Two month period ended November 30, 2003

   $ 4,284,000  

Three month period ended December 31, 2003

   $ 7,790,000  

Four month period ended January 31, 2004

   $ 11,804,000  

Five month period ended February 29, 2004

   $ 15,922,000  

Six month period ended March 31, 2004

   $ 24,178,000  

Seven month period ended April 30, 2004

   $ 32,248,000  

Eight month period ended May 31, 2004

   $ 40,874,000  

Nine month period ended June 30, 2004

   $ 49,303,000  

Ten month period ended July 31, 2004

   $ 58,133,000  

Eleven month period ended August 31, 2004

   $ 67,093,000  

Twelve month period ended September 30, 2004 and for each twelve month period
ended thereafter

   $ 75,654,000 ”

 

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(d) Liquidity. Section 7.03(f) of the Financing Agreement is hereby amended by
deleting the amount “$2,500,000” and substituting in lieu thereof the amount
“$1,000,000”.

 

(e) Current Ratio. Section 7.03(g) of the Financing Agreement is hereby amended
by deleting the phrase “1.0 to 1.0 at the end of any fiscal quarter” and
substituting in lieu thereof the phrase “the following at the end of any fiscal
month: (x) for the fiscal month ending September 30, 2003, 1.0 to 1.0, (y) for
the end of each fiscal month commencing on October 31, 2003 and through and
including December 31, 2004, .35 to 1.0, and (z) for the end of each fiscal
month commencing on January 31, 2005 and thereafter, 1.0 to 1.0”.

 

7. Event of Default. (a) Clause (t) of Section 9.01 of the Financing Agreement
is hereby amended by adding immediately after the semicolon the word “or”, (b)
clause (u) of Section 9.01 of the Financing Agreement is hereby amended by
deleting the word “or” at the end of such clause, and (c) clause (v) of Section
9.01 of the Financing Agreement is hereby deleted in its entirety.

 

8. Waiver. (a) Effective as of the Amendment Effective Date (as hereinafter
defined), and in reliance upon the representations and warranties of the
Borrower and the Guarantors set forth in the Financing Agreement, this Amendment
and the other Loan Documents, and in accordance with Section 11.02 of the
Financing Agreement, the Lenders hereby consent to, and waive, each of the
following Events of Default:

 

(i) the failure by the Borrower to comply with the minimum Consolidated EBITDA
requirement for the fiscal month ending September 30, 2003 set forth in Section
7.03(e) of the Financing Agreement;

 

(ii) the failure by the Borrower to comply with the minimum Current Ratio
requirement for the fiscal quarter ending September 30, 2003 set forth in
Section 7.03(g) of the Financing Agreement; and

 

(iii) the failure by the Borrower pursuant to Section 7.01(u)(iii) of the
Financing Agreement to perfect the pledge of 65% of the stock of each Foreign
Subsidiary in the jurisdiction of its formation on or prior to August 21, 2003.

 

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(b) The consent and waiver of the Events of Default relating to the events set
forth in paragraph (a) above (i) shall be effective only in each specific
instance set forth herein and for the specific purposes set forth herein, and
(ii) does not allow for any other or further departure from the terms and
conditions of the Financing Agreement or any other Loan Documents, which terms
and conditions shall continue in full force and effect.

 

9. Conditions to Effectiveness. The effectiveness of this Amendment (the date of
such effectiveness, the “Amendment Effective Date”) is subject to the following
conditions precedent that:

 

(a) this Amendment shall have been duly executed and delivered to the
Administrative Agent by an Authorized Officer of the Borrower and each Guarantor
and the Agents and the Lenders;

 

(b) after giving effect to this Amendment, each of the representations and
warranties made by each Loan Party in or pursuant to the Loan Documents shall be
true and correct in all material respects on and as of the Amendment Effective
Date as if 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
respects as of such earlier date);

 

(c) after giving effect to this Amendment, no Default or Event of Default shall
have occurred and be continuing on such date;

 

(d) a supplemental Fee Letter shall have been duly executed and delivered to the
Administrative Agent by an Authorized Officer of the Borrower and each Guarantor
and the Agents;

 

(e) the Borrower shall have been delivered to the Agents updated financial
projections, in form and substance satisfactory to the Agents, which financial
projections shall include a budget for Capital Expenditures (including a
“development plan”) for the Borrower and its Subsidiaries (the “Management
Projections”), the form and substance of which shall be satisfactory to the
Agents and which Management Projections shall be certified by the Chief
Financial Officer of the Borrower and attached hereto as Exhibit A;

 

(f) the Borrower shall have delivered to the Agents internally prepared weekly
cash flow schedules as at the end of each week, for each period commencing at
the end of the immediately preceding week and ending with the end of such week
for the period from the Amendment Effective Date through March 5, 2004 (the
“Weekly Cash Flow Schedules”), all in reasonable detail, and such weekly cash
flow schedules shall include an updated foreign working capital budget (the
“Updated Foreign Working Capital Budget”), all in form and substance
satisfactory to the Agents and which Weekly Cash Flow Schedules, including the
Updated Foreign Working Capital Budget, shall be certified by the Chief
Financial Officer of the Borrower and attached hereto as Exhibit B; and

 

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(g) all other legal matters incident to this Amendment shall be satisfactory to
the Agents and their counsel.

 

10. Agreements. Notwithstanding anything contained in the Financing Agreement
and in consideration of the amendments, waivers and consents set forth in this
Amendment, each of the Loan Parties agrees as follows:

 

(a) Each of the Loan Parties will not, and will cause ATP UK not to, create,
incur, assume or suffer to exist, any Lien upon or with respect to any of ATP
UK’s properties, including, without limitation, ATP UK’s Oil and Gas Properties,
whether now owned or hereafter acquired; file or suffer to exist under any law
or statute of the United Kingdom or any other jurisdiction, a financing
statement (or the equivalent thereof) that names ATP UK or any of ATP UK’s
Subsidiaries as debtor; sign or suffer to exist any security agreement
authorizing any secured party thereunder to file such financing statement (or
the equivalent thereof); sell any of ATP UK’s properties or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable) with recourse to ATP UK or
any of ATP UK’s Subsidiaries; or permit ATP UK or any of ATP UK’s Subsidiaries
to assign or otherwise transfer, any account or other right to receive income.

 

(b) Each of the Loan Parties shall immediately, and in no event later than
November 30, 2003, take each of the following actions:

 

(i) cause ATP UK to execute and deliver to the Administrative Agent a Guaranty,
which shall be in form and substance satisfactory to the Agents,

 

(ii) cause ATP UK to execute and deliver to the Administrative Agent a joinder
agreement, joining ATP UK to the Loan Documents as a Loan Party, which shall be
in form and substance satisfactory to the Agents,

 

(iii) deliver to the Administrative Agent an amendment to the Pledge Agreements,
pledging the Capital Stock of ATP UK not pledged to the Administrative Agent on
the Effective Date and such other instruments as may be necessary or desirable
in the opinion of the Agents in order to perfect its pledge on such Capital
Stock;

 

(iv) deliver to the Administrative Agent, supplements to the schedules to the
Financing Agreement and the other Loan Documents, supplementing the information
set forth therein with respect to ATP UK;

 

(v) cause ATP UK to grant Liens on all of its properties in favor of the
Administrative Agent, for the benefit of the Agents and the Lenders, including
without limitation, pursuant to the delivery of Mortgages (or such similar
instruments) in respect of its Oil and Gas Properties to the Administrative

 

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Agent with such Liens to be validly perfected, first priority Liens on such
properties, and causing title opinions or other evidence of title to such
properties to be rendered by the Borrower’s counsel or such other Person
acceptable to the Agents, all in form and substance satisfactory to the Agents;
and

 

(vi) deliver such other agreements, instruments, opinions and other documents as
shall be required by the Agents and their counsel.

 

(c) Each of the Loan Parties agrees that from and after the date of the
Amendment Effective Date, the Updated Foreign Working Capital Budget delivered
pursuant to paragraph 9(f) shall be the Foreign Working Capital Budget referred
to in clause (e) of Section 6.01(t) of the Financing Agreement.

 

(d) Notwithstanding Section 8.01(a) of the Financing Agreement, from and after
the Amendment Effective Date, the Loan Parties agree that all funds received in
the Collection Account shall be sent by wire transfer or Automated Clearing
House, Inc. payment to the Funding Agent’s Account for application at the end of
each Business Day to reduce the then principal balance of the Revolving Loans,
conditional upon final payment to the Funding Agent.

 

11. Fees. The Borrower shall pay to the Funding Agent, for the account of the
Lenders, in accordance with a written agreement among such Lenders and the
Agents, a non-refundable amendment fee equal to $1,650,000, which shall be
deemed fully earned on the Amendment Effective Date and due and payable at the
earliest of (x) February 16, 2004, (y) upon the occurrence of an Event of
Default and (z) upon the termination of the Commitments under the Financing
Agreement.

 

12. Representations and Warranties. Each of the Loan Parties hereby jointly and
severally represents and warrants to the Agents and the Lenders as follows:

 

(a) Each of the Loan Parties has all requisite power and authority to execute,
deliver and perform this Amendment, and to perform the Financing Agreement, as
amended hereby, and this Amendment has been duly executed and delivered by each
Loan Party.

 

(b) The execution, delivery and performance of this Amendment by each of the
Loan Parties, and the performance by each of the Loan Parties of the Financing
Agreement, as amended hereby, (i) have been duly authorized by all necessary
action, (ii) do not and will not contravene its charter or by-laws, its limited
liability company or operating agreement or its certificate of partnership or
partnership agreement, as applicable, or any applicable law or any contractual
restriction binding on or otherwise affecting it or any of its properties, (iii)
do not and will not result in or require the creation of any Lien (other than
pursuant to any Loan Document) upon or with respect to any of its material
properties, and (iv) do not and will not result in any material default,
noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of
any material permit, license, authorization or approval applicable to its
operations or any of its properties.

 

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(c) No authorization or approval or other action by, and no notice to or filing
with, any Governmental Authority is required in connection with the due
execution, delivery and performance by any Loan Party of this Amendment or the
performance by any Loan Party of the Financing Agreement, as amended hereby,
other than as maybe required to perfect the Liens on the properties of ATP UK.

 

(d) This Amendment and the Financing Agreement, as amended hereby, constitute
the legal, valid and binding obligations of each Loan Party, enforceable against
such Persons in accordance with their terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws.

 

13. Ratification. Except as otherwise expressly provided herein, each Loan Party
confirms and agrees that (a) each Loan Document to which it is a party is, and
shall continue to be, in full force and effect and is hereby ratified and
confirmed in all respects except that on and after the date on which this
Amendment is effective all references in any such Loan Document to “the
Financing Agreement”, “thereto”, “thereof”, “thereunder”, or words of like
import referring to the Financing Agreement shall mean the Financing Agreement
as amended by this Amendment, and (b) to the extent that any such Loan Document
purports to assign or pledge to the Administrative Agent, or to grant to the
Administrative Agent a security interest in or lien on, any collateral as
security for its obligations from time to time existing in respect of the Loan
Documents, such pledge, assignment and/or grant of a security interest or lien
is hereby ratified and confirmed in all respects as security for all of its
obligations, whether now existing or hereafter arising. This Amendment does not
and shall not affect any Obligation or Guarantee Obligation (as the case may
be), other than as expressly provided herein, of any Loan Party under or arising
from the Financing Agreement or any other Loan Document, all of which
obligations are hereby ratified and shall remain in full force and effect.
Except as expressly provided herein, the execution, delivery and effectiveness
of this Amendment shall not operate as a waiver of any right, power or remedy of
the Agents or the Lenders under the Financing Agreement or any other Loan
Document, nor constitute a waiver of any provision of the Financing Agreement or
any other Loan Document.

 

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14. Expenses. The Borrower hereby agrees to pay to the Agents upon demand the
amount of any and all fees, costs and expenses, including the reasonable fees,
disbursements and other client charges of the Agents’ counsel, which the Agents
may incur in connection with this Amendment, the amounts of which the Borrower
agrees may be charged to the Loan Account.

 

15. Counterparts. This Amendment may be executed in any number of counterparts
and by the different parties hereto in separate counterparts, each of which
shall be deemed to be an original, but all of which taken together shall
constitute one and the same waiver. Delivery of an executed counterpart of this
Amendment by telecopier shall be equally as effective as delivery of an original
executed counterpart of this Amendment.

 

16. Governing Law. This Amendment shall be governed by and construed in
accordance with the law of the State of New York applicable to contracts made
and to be performed within such state.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
and delivered by their duly authorized officers as of the date first above
written.

 

AGENTS AND LENDERS:

ABLECO FINANCE LLC, as Collateral Agent, Administrative Agent and Lender, for
itself as a Lender and on behalf of its affiliate assigns as Lenders

By:   /s/    KEVIN GENDA          

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Title:

  Senior Vice President

 

WELLS FARGO FOOTHILL, INC., as
Funding Agent and Lender By:   /s/    DREW STAWIN          

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Title:

  Senior Vice President

 

BORROWER:

ATP OIL & GAS CORPORATION

By:   /s/    T. PAUL BULMAHN          

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Title:

  President and CEO

 

GUARANTOR:

ATP ENERGY, INC.

By:   /s/    T. PAUL BULMAHN          

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Title:

  President and CEO