Exhibit 10.21**FIRST AMENDMENT TO CREDIT AGREEMENT**     THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is dated as of February21, 2008, by and among THE MERIDIAN RESOURCE CORPORATION, a Texas corporation (the“Borrower”), the several banks, financial institutions and other entities from time to timeparties to the Credit Agreement (as defined below) (collectively, the “Lenders”), andFORTIS CAPITAL CORP. (“Fortis”), as administrative agent for the Lenders.**RECITALS**     WHEREAS, the Borrower, Fortis as Administrative Agent, and certain financial institutions haveentered into an Amended and Restated Credit Agreement dated as of December 23, 2004 (as amended,the “Credit Agreement”);     WHEREAS, certain of the Lenders, RZB Finance LLC (“RZB”), Standard Bank plc(“Standard”), Union Bank of California, N.A. (“UBOC”), Allied Irish Banks, plc, andFortis have assigned all or part of their interests in the Credit Agreement to Fortis, The Bank ofNova Scotia, U.S. Bank National Association (“US Bank”), and Comerica Bank by way ofAssignments and Acceptances executed immediately prior to the effectiveness of this Amendment;     WHEREAS, as a consequence of such Assignments and Acceptances and this Amendment, US Bank willbecome a Lender and a party to the Credit Agreement and RZB, Standard and UBOC shall no longer beLenders under or a party to the Credit Agreement;     WHEREAS, the Borrower has requested that the Lenders extend the maturity date of the CreditAgreement to February 21, 2012 and make certain other amendments to the Credit Agreement, and,subject to the terms and conditions set forth herein, the Lenders have agreed to make suchextension;     WHEREAS, on January 3, 2007 the Borrower organized TMR Drilling Corporation, a Texascorporation (“TMR Drilling”) as a Subsidiary, and executed a Second Amendment of PledgeAgreement dated as of May 31, 2007 whereby it pledged its stock in TMR Drilling to theAdministrative Agent for the benefit of the Creditors (as defined therein);     WHEREAS, TMR Drilling has executed a Second Amendment of Security Agreement and Joinder toGuarantee, both dated as of May 31, 2007, whereby TMR Drilling became a Debtor and Guarantorrespectively; and     WHEREAS, the Borrower has requested that the Lenders (a) waive certain provisions of theCredit Agreement to enable TMR Drilling to purchase a land based drilling rig and related equipment(the “Drilling Rig”) from Orion Drilling Company, LP (“Orion”) and lease theDrilling Rig back to Orion with financing for the transaction to be provided by The CITGroup/Equipment Financing, Inc. (“CIT”) as more fully described in Appendix Iattached hereto (the “Drilling Rig Transaction”), and (b) release and discharge theirsecurity interest in the Drilling Rig and related property as more fully described in AppendixI attached hereto (the “CIT Collateral”), and, subject to the terms and conditions setforth herein, the Lenders have
 

 
agreed to grant such waivers and release and discharge their security interest in the CITCollateral;     NOW, THEREFORE, in consideration of the premises herein contained and other good and valuableconsideration, the sufficiency of which is hereby acknowledged, the parties hereto, intending to belegally bound, agree as follows:     1. Defined Terms. All capitalized terms used but not otherwise defined in thisAmendment shall have the meaning ascribed to them in the Credit Agreement. Unless otherwisespecified, all section references herein refer to sections of the Credit Agreement.     2. Amendments to Credit Agreement.          2.1 Definitions (Section 1).     (a) Applicable Margin. The definition of “Applicable Margin” isamended to read as follows:     “‘Applicable Margin’ — for any day with respect toEurodollar Loans and ABR Loans, the applicable per annum rate setforth below opposite the Borrowing Base Usage in effect on any suchday:         Borrowing Base Usage Eurodollar Margin ABR Margin Less than or equal to 50%  1.50%  0.75%Greater than 50% and less than or equalto 75%  1.75%  1.00%Greater than 75% and less than or equalto 90%  2.00%  1.25%Greater than 90%  2.50%  1.75%As used herein, “Borrowing Base Usage” on any day means thepercentage equivalent to the ratio of (i) the sum of the aggregateprincipal amount of the Loans then outstanding and Letter of CreditOutstandings on such day to (ii) the Borrowing Base in effect onsuch day.”     (b) Consolidated Tangible Net Worth. The definition of “ConsolidatedTangible Net Worth” is amended to read as follows:     ”‘Consolidated Tangible Net Worth’ means, at any date ofdetermination, all assets of the Borrower and its Subsidiaries as ofsuch date, minus intangible assets, minus the liabilities of theBorrower and its Subsidiaries, and all determined in accordance
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with GAAP on a consistent basis with the latest financialstatements. For purposes of this definition, “intangible assets”shall include patents, copyrights, licenses, franchises, good will,trade names, and trade secrets but shall exclude oil, gas, or othermineral leases, and all leases required to be capitalized underGAAP. The calculation of Consolidated Tangible Net Worth shallexclude the impact of ceiling test write-downs and the non-cashimpact of Commodity Hedging Agreements and other comprehensiveincome (determined in accordance with GAAP), in each such caseoccurring as of June 30, 2007 or thereafter.”     (c) Syndication Agent. The definition of “Syndication Agent” isamended to read as follows:     “‘Syndication Agent’ — The Bank of Nova Scotia.”     (d) Termination Date. The definition of “Termination Date” is amendedto read as follows:     “‘Termination Date‘ — February 21, 2012.”     (e) Uniform Customs. The definition of “Uniform Customs” is amended toread as follows:     “‘Uniform Customs‘ — the Uniform Customs and Practicefor Documentary Credits (2007 Revision), International Chamber ofCommerce Publication No. 600, as the same may be amended from timeto time.”     (f) Agents. The terms “Documentation Agent” and “Sole Lead Arranger”are hereby deleted from the Credit Agreement. The term “Co-Lead Arrangers” is addedto the Credit Agreement as follows:     “‘Co-LeadArrangers’ — Fortis and The Bank of NovaScotia.”     2.2 Section 7.2(f) (Certificates; Other Information). Section 7.2(f)is amended to read as follows:     “(f) within 60 days of the commencement of each fiscal year, annualcash flow projections for such fiscal year of the Borrower, includingquarterly production volumes, revenues, expenses, taxes and budgeted capitalexpenditures; and”     2.3 Section 8.1(d) (Tangible Net Worth). Section 8.1(d) is amended toread as follows:
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     “(d) Tangible Net Worth. Permit the Consolidated Tangible NetWorth of the Borrower and its Subsidiaries to be less than $215,000,000.00,plus (i) (A) 50% of Consolidated Net Income for the period beginning July 1,2007 and ending December 31, 2007, and (B) 50% of the Consolidated NetIncome for any fiscal year commencing after December 31, 2007, and (ii) 50%of the net cash proceeds of any equity offering received by the Borrower orany of its Subsidiaries after June 30, 2007.”     2.4 Section 8.4 (Limitation on Guarantee Obligations). Section 8.4(c)is amended to read as follows:     “8.4 Limitation on Guarantee Obligations. Create, incur,assume or suffer to exist any Guarantee Obligation except (a) GuaranteeObligations in existence on the date hereof and listed on Schedule 8.4, (b)Guarantee Obligations arising under the Loan Documents, (c) GuaranteeObligations with respect to Indebtedness permitted by subsection 8.2 (otherthan subsections (g) and (h) thereof), (d) Guarantee Obligations incurred byany Borrower or any Subsidiary thereof with respect to any obligations orliabilities of a Borrower or any Subsidiary thereof, so long as theincurring of such obligations or liabilities is not prohibited by Section8.2 hereof, and (e) Guarantee Obligations issued by the Borrower or by anyof its Subsidiaries in the ordinary course of business of obligations ofother Persons (other than in respect of Indebtedness) in connection withcurrent oil and gas drilling, oil and gas production, oil and gastransportation, crude oil purchasing, oil and gas exploration or othersimilar programs or operations. Notwithstanding any provision in thisSection 8.4, the Borrower and one or more of its Subsidiaries shall bepermitted to incur Guarantee Obligations (i) in connection with the DrillingRig Transaction as described in the First Amendment to Credit Agreementdated February 21, 2008 in an amount not to exceed $10,300,000.00, and (ii)with respect to Indebtedness permitted by subsection 8.2(h) not to exceed$2,500,000 in the aggregate.”     2.5 Section 10.11 (Others). Section 10.11 is amended to read asfollows:     “10.11. Others. None of the Co-Lead Arrangers or theBookrunner, in such respective capacities, shall have any duties orresponsibilities, or incur any liabilities, under this Agreement or theother Loan Documents.”     2.6 Section 11.5 (Payment of Expenses and Taxes). Section 11.5 isamended to read as follows:     “11.5. Payment of Expenses and Taxes. The Borrower agrees (a)to pay or reimburse the Administrative Agent for all its reasonable anddocumented out-of-pocket costs and expenses incurred in connection with thedevelopment, syndication, preparation and execution of, and any
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amendment, supplement or modification to, this Agreement and the otherLoan Documents and any other documents prepared in connection herewith ortherewith, and the consummation and administration of the transactionscontemplated hereby and thereby, including, without limitation, thereasonable fees and disbursements of (i) counsel to the Administrative Agentand (ii) the Administrative Agent customarily charged by it in connectionwith syndicated credits, (b) to pay or reimburse each Lender and theAdministrative Agent for all its reasonable and documented costs andexpenses incurred in connection with the enforcement or preservation of anyrights under this Agreement, the other Loan Documents and any such otherdocuments, including, without limitation, the reasonable fees anddisbursements of counsel to the Administrative Agent and to the severalLenders, (c) to pay, indemnify, and hold each Lender, the AdministrativeAgent, the Co-Lead Arrangers, the Bookrunner and the Syndication Agent (andtheir respective Affiliates and their respective directors, officers,employees and agents) harmless from, any and all recording and filing feesand any and all liabilities with respect to, or resulting from any delay inpaying, stamp, excise and other taxes, if any, which may be payable ordetermined to be payable in connection with the execution and delivery of,or consummation or administration of any of the transactions contemplatedby, or any amendment, supplement or modification of, or any waiver orconsent under or in respect of, this Agreement, the other Loan Documents andany such other documents, and (d) to pay, indemnify, and hold each Lender,the Administrative Agent, the Co-Lead Arrangers, the Bookrunner and theSyndication Agent (and their respective directors, officers, employees,agents and affiliates) harmless from and against any and all otherliabilities, obligations, losses, damages, penalties, actions, judgments,suits, costs, expenses or disbursements of any kind or nature whatsoeverwith respect to the execution, delivery, enforcement, performance andadministration of this Agreement, the other Loan Documents or the use or theproposed use of proceeds contemplated by this Agreement, including, withoutlimitation, any of the foregoing relating to the violation of, noncompliancewith or liability under, any Environmental Law applicable to any Loan Partyor any of the Properties (all the foregoing in this clause (d),collectively, the “indemnified liabilities”), provided that the Borrowershall have no obligation under this clause (d) to any Administrative Agent,the Co-Lead Arrangers, the Bookrunner, the Syndication Agent, or any Lender(or any of their respective directors, officers, employers, agents oraffiliates), with respect to indemnified liabilities to the extent suchliabilities are determined by a court of competent jurisdiction by final andnonappealable judgment to have resulted from the gross negligence or willfulmisconduct of such Person. Without limiting the foregoing, and to theextent permitted by applicable law, the Borrower agrees not to assert, andhereby waives, and agrees to cause each of its Subsidiaries not to assertand to so waive, all rights for contribution or any other rights of
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recovery with respect to all claims, demands, penalties, fines,liabilities, settlements, damages, costs and expenses of whatever kind ornature, under or related to Environmental Laws, that any of them might haveby statute or otherwise against any Person entitled to indemnification underthis subsection 11.5. The agreements in this subsection shall surviverepayment of the Loans and all other amounts payable hereunder and thetermination of this Agreement.”     2.7 Schedules. The Schedules to the Credit Agreement are hereby deleted andreplaced by the Schedules attached to this Amendment as Appendix II.     3. Borrowing Base. The Borrowing Base as of the effectiveness of this Amendment is$110,000,000.00.     4. New Lenders. Each new Lender hereby represents and warrants: (a) from and afterthe effectiveness of this Amendment, it shall be bound by the provisions of the Credit Agreement asa Lender thereunder and, to the extent of its Commitment, shall have the obligations of a Lenderthereunder, and (b) it has received a copy of the Credit Agreement, together with copies of themost recent financial statements delivered pursuant to Section 7.1 thereof, as applicable,and such other documents and information as it has deemed appropriate to make its own creditanalysis and decision to enter into this Amendment on the basis of which it has made such analysisand decision independently and without reliance on the Administrative Agent or any other Lender,and agrees that it will perform in accordance with their terms all of the obligations which by theterms of the Loan Documents are required to be performed by it as a Lender.     5. Reallocation of Existing Commitments, Loans, and Letter of Credit Outstandings. Inconnection herewith, contemporaneously with the effectiveness hereof, Fortis, The Bank of NovaScotia, U.S. Bank, and Comerica Bank hereby acknowledge and agree that they have purchased andaccepted from other Lenders, a portion of the outstanding aggregate Commitments, Loans and Letterof Credit Outstandings immediately prior to the effectiveness hereof (and if any such sale,assignment, transfer or conveyance includes the assignment of any Eurodollar Rate Loan on a dayother than the last day of the Interest Period therefore, Borrower agrees that it shall pay anyamounts requested by an affected Lender pursuant to Section 4.14 of the Credit Agreement),such that (a) each Lender’s Commitment shall equal the Commitment amount set forth opposite suchLender’s name on Schedule 1.1(a) attached to this Amendment in Appendix II, and (b)the amount of each Lender’s outstanding Loans and Letter of Credit Outstandings shall equal suchLender’s Commitment Percentage (as set forth in Schedule 1.1(a)) of the total outstandingLoans and Letter of Credit Outstandings. The Borrower, the Administrative Agent and each Lender aparty hereto hereby consent to all reallocations and assignments of the Commitments, Loans andLetter of Credit Outstandings effected pursuant to the foregoing.     6. Effectiveness of Amendment. This Amendment shall become effective upon receipt bythe Administrative Agent, on behalf of the Lenders, of:     (a) An executed copy of this Amendment;
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     (b) An executed copy of each Assignment and Acceptance referred to in theRecitals to this Amendment;     (c) A duly executed Note payable to the order of each new Lender and anyexisting Lender whose Commitment has changed as a result of this Amendment;     (d) A copy of the resolution, in form and substance satisfactory to theAdministrative Agent, of the board of directors of the Borrower authorizing theexecution, delivery and performance of this Amendment and the Notes issued pursuantto paragraph (b) above;     (e) A copy of a Confirmation of Guarantee, in form and substance satisfactoryto the Administrative Agent, duly executed by each Guarantor; and     (f) Payment of all fees due and owing to the Administrative Agent and theLenders.     7. Consent and Waiver.     (a) The Lenders hereby (i) consent to the Drilling Rig Transaction and waiveany related Event of Default caused thereby, (ii) waive any violations ofSections 8.11 and 8.13 of the Credit Agreement to the extent such provisionswould be deemed violated solely due to the Drilling Rig Transaction, (iii) consentto the pledge of the CIT Collateral to CIT pursuant to the Drilling Rig Transaction,and (iv) agree that the CIT Collateral (A) shall not be considered “Collateral”within the meaning of Section 2.1 of the Security Agreement dated as ofAugust 13, 2002, as amended, executed by the Borrower and the other Debtors partythereto in favor of the Administrative Agent for the benefit of the Creditors asdefined therein, and, notwithstanding Sections 8.18 and 7.9(a) of the CreditAgreement, do hereby release and discharge their security interest in the CITCollateral, and (B) shall not secure any Obligations or other liabilities owed bythe Borrower or any of its Subsidiaries to the Lenders or the Administrative Agent.     (b) Except as expressly waived or agreed herein, all covenants, obligations andagreements of Borrower contained in the Credit Agreement shall remain in full forceand effect in accordance with their terms. Without limitation of the foregoing, theconsents and agreements set forth herein are limited precisely to the extent setforth herein and shall not be deemed to (i) be a consent or agreement to, or waiveror modification of, any other term or condition of the Credit Agreement or any otherdocuments referred to therein, or a consent to or waiver of any future action orinaction by the Borrower, or (ii) except as expressly set forth herein, prejudiceany right or rights which the Lenders may now have or may have in the future underor in connection with the Credit Agreement or any of the documents referred totherein. Except as expressly modified hereby, the terms and provisions of theCredit Agreement and any other documents or
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instruments executed in connection with any of the foregoing, are and shallremain in full force and effect, and the same are hereby ratified and confirmed byBorrower in all respects.     8. Ratifications, Borrower Representations and Warranties.     8.1 The terms and provisions set forth in this Amendment shall modify and supersede allinconsistent terms and provisions set forth in the Credit Agreement and, except as expresslymodified and superseded by this Amendment, the terms and provisions of the Credit Agreementare ratified and confirmed and shall continue in full force and effect. The Borrower andthe Lenders agree that the Credit Agreement and the Loan Documents, as amended hereby, shallcontinue to be legal, valid, binding and enforceable in accordance with their respectiveterms.     8.2 To induce the Lenders to enter into this Amendment, the Borrower ratifies andconfirms that each representation and warranty set forth in the Credit Agreement is true andcorrect in all material respects as if such representations and warranties were made on theeven date herewith (unless any such representations and warranties are stated to refer to aspecific earlier date, in which case such representations and warranties shall be true andcorrect in all material respects as of such earlier date), and further represents andwarrants (a) that there has occurred since the date of the last financial statementsdelivered to the Lender no event or circumstance that has resulted or could reasonably beexpected to result in a Material Adverse Effect, (b) that no Event of Default exists on thedate hereof, and (c) that the Borrower is fully authorized to enter into this Amendment.     9. Benefits. This Amendment shall be binding upon and inure to the benefit of theLender and the Borrower and their respective successors and assigns; provided, however, thatBorrower may not, without the prior written consent of the Lenders, assign any rights, powers,duties or obligations under this Amendment, the Credit Agreement or any of the other LoanDocuments.     10. Construction. This Amendment shall be governed by and construed in accordancewith the laws of the State of Texas.     11. Invalid Provisions. If any provision of this Amendment is held to be illegal,invalid or unenforceable under present or future laws, such provision shall be fully severable andthe remaining provisions of this Amendment shall remain in full force and effect and shall not beaffected by the illegal, invalid or unenforceable provision or by its severance.     12. Entire Agreement. The Credit Agreement, as amended by this Amendment, containsthe entire agreement among the parties regarding the subject matter hereof and supersedes all priorwritten and oral agreements and understandings among the parties hereto regarding same.     13. Reference to Credit Agreement. The Credit Agreement and any and all otheragreements, documents or instruments now or hereafter executed and delivered pursuant to the termshereof or pursuant to the terms of the Credit Agreement, as amended hereby, are hereby
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amended so that any reference in the Credit Agreement to the Credit Agreement shall mean areference to the Credit Agreement as amended hereby.     14. Counterparts. This Amendment may be separately executed in any number ofcounterparts (including by facsimile or other electronic transmission), each of which shall be anoriginal, but all of which, taken together, shall be deemed to constitute one and the sameagreement.*[The Remainder of this Page Intentionally Left Blank]*
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     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as ofthe day and year first written above.      THE MERIDIAN RESOURCE CORPORATION