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                                                                    EXHIBIT 4.18

                        THE MERIDIAN RESOURCE CORPORATION

                              AMENDED AND RESTATED
                           STATEMENT OF DESIGNATION OF
                 SERIES C REDEEMABLE CONVERTIBLE PREFERRED STOCK

                       PURSUANT TO ARTICLES 2.13 AND 4.03
                                     OF THE
                         TEXAS BUSINESS CORPORATION ACT

         WHEREAS, by written consent dated March 28, 2002, the Board of
Directors of The Meridian Resource Corporation, a Texas corporation (the
"Company"), pursuant to the authority conferred on the Board of Directors by the
Company's Third Amended and Restated Articles of Incorporation and in accordance
with Article 2.13 of the Texas Business Corporation Act (the "TBCA"),
established a series of 1,500,000 shares of preferred stock, $1.00 par value, of
the Company designated as "Series C Redeemable Convertible Preferred Stock" (the
"Series C Preferred Stock");

         WHEREAS, by written consent dated as of May 20, 2002, the Board of
Directors of the Company approved certain revisions to the provisions of the
Series C Preferred Stock to change the conversion price and to provide for
certain adjustments to the conversion price in certain circumstances, as more
fully set forth herein;

         WHEREAS, the Board of Directors of the Company and the holders of a
majority of the outstanding shares of the Series C Preferred Stock wish to amend
and restate the Statement of Designation of the Series C Preferred Stock to
reflect such revisions;

         NOW, THEREFORE, the Company certifies that pursuant to the authority
conferred on the Board of Directors of the Company by the Third Amended and
Restated Articles of Incorporation of the Company, and in accordance with
Articles 2.13 and 4.03 of the TBCA, the Board of Directors by written consent
dated as of May 20, 2002, and the holders of a majority of the outstanding
shares of the Series C Preferred Stock voting as a class, by written consents
dated as of May 30, 2002, in accordance with Articles 4.03 and 9.10A. of the
TBCA, duly adopted the following resolution, which remains in full force and
effect on the date hereof:

         RESOLVED, that the voting and other powers, preferences and relative,
participating, optional or or other rights of the Series C Preferred Stock as
set forth in the Statement of Designation of Series C Redeemable Convertible
Preferred Stock are hereby amended and restated in their entirety as follows:

                 SERIES C REDEEMABLE CONVERTIBLE PREFERRED STOCK

                  1. Designation and Amount. There shall be a series of
preferred stock, $1.00 par value, designated as "Series C Redeemable Convertible
Preferred Stock", and the number of shares constituting such series shall be
1,500,000. Such series is referred to herein as the "Convertible Preferred
Stock". Such shares may be issued in part on the date hereof and in part on any
later date.

                  2. Stated Capital. The amount to be represented in stated
capital at all times for each share of Convertible Preferred Stock shall be $100
(the "Stated Value").

                  3. Rank. All shares of Convertible Preferred Stock shall rank
prior to all of the Company's common stock, par value $.01 per share (the
"Common Stock"), now or hereafter issued, both

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as to payment of dividends and as to distributions of assets upon liquidation,
dissolution or winding up of the Company, whether voluntary or involuntary.

                  4. Dividends. Subject to the provisions of Section 3 above,
the holders of any shares of Convertible Preferred Stock shall be entitled to
receive, when, as and if declared, and upon declaration by the Board of
Directors out of funds at the time legally available therefor, dividends on each
such share at the rate of 8.5% of the Stated Value per annum per share, and no
more, which shall be fully cumulative, shall accrue in all events, whether or
not declared, without interest from the date of first issuance of such share of
Convertible Preferred Stock and shall be payable in cash, semi-annually in
arrears on January 2 and July 1 of each year commencing the first such date
after issuance of such share Convertible Preferred Stock (except that if any
such date is a Saturday, Sunday or legal holiday, then such dividend shall be
payable on the next day that is not a Saturday, Sunday or legal holiday) to
holders of record as they appear on the stock books of the Company on such
dates. For purposes hereof, the term "legal holiday" shall mean any day on which
banking institutions are authorized to close in Houston, Texas. Subject to the
next paragraph of this Section 4, if dividends on the Convertible Preferred
Stock have not been paid in cash pursuant to the provisions of this Section 4
within 30 days after a dividend payment date, the Company, in lieu of its
obligation to pay cash dividends pursuant to the provisions of this Section 4,
shall pay, within ten days after the end of such 30 day period, any such
dividends in the form of additional shares of Convertible Preferred Stock valued
at the Stated Value. The amount of dividends payable per share of Convertible
Preferred Stock for each semi-annual dividend period shall be computed by
dividing the annual dividend amount by two. The amount of dividends payable for
the initial dividend period and any period shorter than a full semi-annual
dividend period shall be computed on the basis of a 360-day year of twelve
30-day months. Dividends also shall accrue and compound on any dividend
arrearages.

                  Subject to the provisions of Section 3, no dividends or other
distributions, other than dividends payable solely in shares of Common Stock or
other capital stock of the Company ranking junior as to payment of dividends and
as to liquidation rights to the Convertible Preferred Stock (or rights to
purchase Common Stock or any other such capital stock), shall be declared, paid
or set apart for payment on, and no purchase, redemption or other acquisition
shall be made by the Company of, any shares of Common Stock or other capital
stock of the Company ranking junior as to payment of dividends to the
Convertible Preferred Stock (the "Junior Dividend Stock") unless and until all
accrued and unpaid dividends on the Convertible Preferred Stock then due shall
have been paid or declared and set apart for payment.

                  Subject to the provisions of Section 3, if at any time any
dividend on any capital stock of the Company ranking senior as to dividends to
the Convertible Preferred Stock (the "Senior Dividend Stock") shall be in
default or in arrears, in whole or in part, then (except to the extent allowed
by the terms of such Senior Dividend Stock) no dividend shall be paid or
declared and set apart for payment on the Convertible Preferred Stock unless and
until all accrued and unpaid dividends with respect to the Senior Dividend Stock
then due shall have been paid or declared and set apart for payment. No full
dividends shall be paid or declared and set apart for payment on any class or
series of the Company's capital stock ranking, as to payment of dividends, on a
parity with the Convertible Preferred Stock, if any (the "Parity Dividend
Stock"), for any period unless full cumulative dividends have been, or
contemporaneously are, paid or declared and set apart for such payment on the
Convertible Preferred Stock for all dividend payment periods terminating on or
prior to the date of payment of such full cumulative dividends. No full
dividends shall be paid or declared and set apart for payment on the Convertible
Preferred Stock for any period unless full cumulative dividends have been, or
contemporaneously are, paid or declared and set apart for payment on the Parity
Dividend Stock for all dividend periods terminating on or prior to the date of
payment of such full cumulative dividends. When dividends are not paid in full
upon the Convertible Preferred Stock and the Parity Dividend Stock, all

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dividends paid or declared and set aside for payment upon shares of the
Convertible Preferred Stock and the Parity Dividend Stock shall be paid or
declared and set aside for payment pro rata so that the amount of dividends paid
or declared and set aside for payment per share on the Convertible Preferred
Stock and the Parity Dividend Stock shall in all cases bear to each other the
same ratio that accrued and unpaid dividends per share on the shares of the
Convertible Preferred Stock and the Parity Dividend Stock bear to each other.

                  Any reference to "distribution" contained in this Section 4
shall not be deemed to include any distribution made in connection with any
liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary.

                  5. Liquidation Preference. Subject to the provisions of
Section 3, in the event of a liquidation, dissolution or winding up of the
Company, whether voluntary or involuntary, the holders of Convertible Preferred
Stock shall be entitled to receive out of the assets of the Company available
for distribution, whether such assets are stated capital or surplus of any
nature, an amount equal to the dividends accrued and unpaid thereon to the date
of final distribution to such holders, whether or not declared, without
interest, and a sum equal to $100 per share, and no more, before any payment
shall be made or any assets distributed to the holders of Common Stock or any
other class or series of the Company's capital stock ranking junior as to
liquidation rights to the Convertible Preferred Stock (the "Junior Liquidation
Stock"); provided, however, that such rights shall accrue to the holders of
Convertible Preferred Stock only if the Company's payments with respect to the
liquidation preferences of the holders of capital stock of the Company ranking
senior as to liquidation rights to the Convertible Preferred Stock (the "Senior
Liquidation Stock") are fully met. The entire assets of the Company available
for distribution after the liquidation preferences of the Senior Liquidation
Stock are fully met shall be distributed ratably among the holders of the
Convertible Preferred Stock and any other class or series of the Company's
capital stock that may hereafter be created having parity as to liquidation
rights with the Convertible Preferred Stock in proportion to the respective
preferential amounts to which each is entitled (but only to the extent of such
preferential amounts). Neither a consolidation or merger of the Company with
another company nor a sale or transfer of all or part of the Company's assets
for cash, securities or other property will be considered a liquidation,
dissolution or winding up of the Company.

                  6. Redemption at Option of the Company. Subject to the
provisions of Section 3, the Company, at its option at any time following the
third anniversary of the date of initial issuance, may redeem all shares of
Convertible Preferred Stock, in whole or in part, from time to time at the
redemption price of $100 per share, plus an amount in cash equal to any and all
accumulated dividends that are accrued and unpaid thereon to and including the
date fixed for the redemption. The redemption price per share as determined in
this paragraph of this Section 6 shall be hereinafter referred to as the
"Redemption Price". In the case of redemption of less than all of the
outstanding shares of Convertible Preferred Stock pursuant to this Section 6,
the shares to be so redeemed shall be selected pro rata or by lot or in such
other manner as the Board of Directors may determine, as may be prescribed by
resolution of the Board of Directors of the Company, provided that only whole
shares shall be selected for redemption.

                  Not more than 60 nor less than 10 days before the redemption
date, notice by first class mail, postage prepaid, shall be given to the holders
of record of the Convertible Preferred Stock to be redeemed, addressed to such
holders at their last addresses as shown on the books of the Company. Each such
notice of redemption shall specify the date fixed for redemption, the Redemption
Price, the place or places of payment, that payment will be made upon
presentation and surrender of the shares of Convertible Preferred Stock, that on
and after the redemption date dividends will cease to accumulate on such shares,
the then-effective Conversion Price pursuant to Section 7 and that the right of
holders to convert shall terminate at the close of business on the fifth
business day prior to the redemption date.

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                  Any notice that is mailed as herein provided shall be
conclusively presumed to have been duly given, whether or not the holder of the
Convertible Preferred Stock receives such notice; and failure properly to give
such notice by mail, or any defect in such notice, to the holders of any shares
designated for redemption shall not affect the validity of the proceedings for
the redemption of any other shares of Convertible Preferred Stock. On or after
the date fixed for redemption as stated in such notice, each holder of the
shares called for redemption shall surrender the certificate evidencing such
shares to the Company at the place designated in such notice and shall thereupon
be entitled to receive payment of the Redemption Price. If, on the date fixed
for redemption, funds necessary for the redemption shall be available therefor
and shall have been irrevocably deposited or set aside in the manner described
in Section 9(i), then, notwithstanding that the certificates evidencing any
shares properly called for redemption shall not have been surrendered, the
dividends with respect to the shares so called shall cease to accrue after the
date fixed for redemption, the shares shall no longer be deemed outstanding, the
holders thereof shall cease to be stockholders, and all rights whatsoever with
respect to the shares so called for redemption (except the right of the holders
to receive the Redemption Price without interest upon surrender of their
certificates therefor) shall terminate.

                  The shares of Convertible Preferred Stock shall not be subject
to the operation of any purchase, retirement or sinking fund.

                  7. Conversion Privilege; Mandatory Conversion.

                  (a) Right of Conversion at Option of Holder. Each share of
Convertible Preferred Stock shall be convertible at the option of the holder
thereof, at any time prior to the close of business on the fifth business day
prior to date fixed for redemption of such share as herein provided, into the
number of fully paid and nonassessable shares of Common Stock equal to $100
divided by the Conversion Price (as defined in Section 7(d)) in effect from time
to time.

                  For the purpose of this Section 7, the term "Common Stock"
shall mean the class designated as Common Stock, par value $.01 per share, of
the Company, subject to adjustment as hereinafter provided.

                  (b) Mandatory Conversion.

                  (i) If the closing sale price per share of Common Stock, as
         reported on the New York Stock Exchange, is greater than 150% of the
         then current Conversion Price for 30 out of 40 consecutive trading days
         immediately prior to the date of delivery of a Mandatory Conversion
         Notice (as defined herein), and provided that the Company is not as of
         the date of delivery of the Mandatory Conversion Notice or as of the
         Effective Time of the Mandatory Conversion (as defined herein) in
         material violation of any of its obligations under its senior credit
         facility or this Statement of Designation, then the Company shall have
         the right to require the conversion (the "Initial Mandatory
         Conversion") of up to one-third of the then outstanding shares of
         Convertible Preferred Stock, which right shall be exercisable by
         delivery of a Mandatory Conversion Notice (as defined herein) in
         accordance with the procedures set forth in Section 7(b)(iv).

                  (ii) If, no earlier than 12 months following the Effective
         Time of the Initial Mandatory Conversion, the closing sale price per
         share of Common Stock, as reported on the New York Stock Exchange, is
         again greater than 150% of the then current Conversion Price for 30 out
         of 40 consecutive trading days immediately prior to the date of
         delivery of a Mandatory Conversion Notice (as defined herein), and
         subject to the same restrictions as provided in subparagraph (i) above,
         then the Company shall have the right to require the conversion (the
         "Second Mandatory Conversion") of up to one-half of the then
         outstanding shares of Convertible

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         Preferred Stock, which right shall be exercisable by delivery of a
         Mandatory Conversion Notice (as defined herein) in accordance with the
         procedures set forth in Section 7(b)(iv).

                  (iii) If, no earlier than 12 months following the Effective
         Time of the Second Mandatory Conversion, the closing sale price per
         share of Common Stock, as reported on the New York Stock Exchange, is
         again greater than 150% of the then current Conversion Price for 30 out
         of 40 consecutive trading days immediately prior to the date of
         delivery of a Mandatory Conversion Notice (as defined herein), and
         subject to the same restrictions as provided in subparagraph (i) above,
         then the Company shall have the right to require the conversion (the
         "Final Mandatory Conversion") of any or all remaining outstanding
         shares of Convertible Preferred Stock, which right shall be exercisable
         by delivery of a Mandatory Conversion Notice (as defined herein) in
         accordance with the procedures set forth in Section 7(b)(iv).

                  (iv) In the case of Initial Mandatory Conversion and Second
         Mandatory Conversion of less than all of the outstanding shares of
         Convertible Preferred Stock pursuant to this Section 7(b), the shares
         to be so converted shall be selected pro rata or by lot or in such
         other manner as the Board of Directors may determine, as may be
         prescribed by resolution of the Board of Directors of the Company,
         provided that only whole shares shall be selected for conversion.
         Notwithstanding the foregoing, the Company shall not redeem any of the
         shares of Convertible Preferred Stock at any time outstanding until all
         dividends accrued and in arrears on all shares of the Convertible
         Preferred Stock then outstanding shall have been paid for all past
         dividend periods. The Company shall effect a mandatory conversion under
         this Section 7(b) by delivering an irrevocable written notice thereof
         (the "Mandatory Conversion Notice") no less than five nor more than ten
         business days prior to the time on which any such mandatory conversion
         is to become effective (the "Effective Time of Mandatory Conversion")
         to each holder of shares of Convertible Preferred Stock subject to a
         mandatory conversion in the manner provided in Section 13 hereof.

                  (c) Conversion Procedures. Any holder of shares of Convertible
Preferred Stock desiring to convert such shares into Common Stock, and any
holders of shares of Convertible Preferred Stock subject to mandatory conversion
as provided herein, shall surrender the certificate or certificates for such
shares of Convertible Preferred Stock at the office of the transfer agent for
the Convertible Preferred Stock, which certificate or certificates, if the
Company shall so require, shall be duly endorsed to the Company or in blank, or
accompanied by proper instruments of transfer to the Company or in blank,
accompanied by irrevocable written notice to the Company that the holder elects
so to convert such shares of Convertible Preferred Stock and specifying the name
or names (with address) in which a certificate or certificates for Common Stock
are to be issued.

                  Upon the conversion of any shares of Convertible Preferred
Stock, the Company shall, subject to the provisions of Sections 3 and 4, pay the
holder surrendering such shares cash in an amount equal to any accrued but
unpaid dividends to the date of conversion on such shares of Convertible
Preferred Stock. In the event the Company does not pay such accrued and unpaid
dividends, the obligation to pay such dividends shall remain outstanding and
dividends shall continue to accrue (at the dividend rate set forth in Section 4)
on such outstanding obligation.

                  The Company will, as soon as practicable (but in no event
later than ten business days) after such deposit of certificates for Convertible
Preferred Stock accompanied by the written notice and compliance with any other
conditions herein contained, deliver at such office of such transfer agent to
the person for whose account such shares of Convertible Preferred Stock were so
surrendered, or to his nominee or nominees, certificates for the number of full
shares of Common Stock to which he shall be entitled as aforesaid, together with
a cash adjustment of any fraction of a share as hereinafter provided.

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Subject to the following provisions of this paragraph, such conversion shall be
deemed to have been made as of the date of such surrender of the shares of
Convertible Preferred Stock to be converted, and the person or persons entitled
to receive the Common Stock deliverable upon conversion of such Convertible
Preferred Stock shall be treated for all purposes as the record holder or
holders of such Common Stock on such date; provided, however, that the Company
shall not be required to convert any shares of Convertible Preferred Stock while
the stock transfer books of the Company are closed for any purpose, but the
surrender of Convertible Preferred Stock for conversion during any period while
such books are so closed shall become effective for conversion immediately upon
the reopening of such books as if the surrender had been made on the date of
such reopening, and the conversion shall be at the Conversion Price in effect on
such date.

                  (d) Conversion Price. The conversion price for determining the
number of shares of Common Stock deliverable upon conversion (the "Conversion
Price") shall initially be $4.75 per share of Common Stock. The Conversion Price
shall be subject to adjustment from time to time as follows:

                  (i) In case the Company shall (A) pay a dividend to all
         holders of its Common Stock or make a distribution on the Common Stock
         to all holders of the Common Stock, which is paid or made (I) in other
         shares of stock of the Company or (II) in rights to purchase stock or
         other securities if such rights are not separable from the Common Stock
         except upon the occurrence of a contingency, (B) subdivide its
         outstanding shares of Common Stock into a greater number of shares or
         (C) combine its outstanding shares of Common Stock into a smaller
         number of shares, then in each such case the Conversion Price in effect
         immediately prior thereto and the securities issuable shall be adjusted
         retroactively as provided below so that the holder of any shares of
         Convertible Preferred Stock thereafter surrendered for conversion shall
         be entitled to receive the number of shares of Common Stock and other
         shares and rights to purchase stock or other securities that such
         holder would have owned or have been entitled to receive after the
         happening of any of the events described above had such shares of
         Convertible Preferred Stock been converted immediately prior to the
         happening of such event. In the event of the redemption of any shares
         or rights referred to in clause (A), such holder shall have the right
         to receive, in lieu of any such shares or rights, any cash, property or
         securities paid in respect of such redemption; provided, however, that
         if the value of such cash, property or securities is less than $.10 per
         share of Common Stock, such holder shall not be entitled to such cash,
         property or securities. An adjustment made pursuant to this
         subparagraph (i) shall become effective immediately after the record
         date in the case of a dividend or distribution and shall become
         effective immediately after the effective date in the case of a
         subdivision or combination.

                  (ii) In case the Company shall issue rights or warrants to all
         holders of the Common Stock entitling them to subscribe for or purchase
         shares of Common Stock at a price per share less than the current
         market price per share (determined as provided below) of the Common
         Stock on the date fixed for the determination of shareholders entitled
         to receive such rights or warrants, then the Conversion Price in effect
         at the opening of business on the day following the date fixed for such
         determination shall be reduced by multiplying such conversion price by
         a fraction of which the denominator shall be the number of shares of
         Common Stock outstanding at the close of business on the date fixed for
         such determination plus the number of shares of Common Stock so offered
         for subscription or purchase and the numerator shall be the number of
         shares of Common Stock outstanding at the close of business on the date
         fixed for such determination plus the number of shares of Common Stock
         that the aggregate of the offering price of the total number of shares
         of Common Stock so offered for subscription or purchase would purchase
         at such current market price, such reduction to become effective
         immediately after the opening of business on the day following the date
         fixed for such determination; provided, however, in the event that all
         the shares of Common Stock offered for subscription or purchase are not
         delivered

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         upon the exercise of such rights or warrants, upon the expiration of
         such rights or warrants the conversion price shall be readjusted to the
         conversion price that would have been in effect had the denominator and
         the numerator of the foregoing fraction and the resulting adjustment
         been made based upon the number of shares of Common Stock actually
         delivered upon the exercise of such rights or warrants rather than upon
         the number of shares of Common Stock offered for subscription or
         purchase. For the purposes of this subparagraph (ii), the number of
         shares of Common Stock at any time outstanding shall not include shares
         held in the treasury of the Company.

                  (iii) In case the Company shall sell or otherwise issue, for
         aggregate consideration in excess of $10 million in a single
         transaction or series of related transactions, rights, warrants or any
         other equity or debt security entitling the holder thereof to subscribe
         for, purchase or otherwise acquire shares of Common Stock at a price
         per share less than the Conversion Price in effect immediately prior
         thereto, then such Conversion Price shall be reduced to the conversion
         price of such newly issued security.

                  (iv) In case the Company at any time that the Convertible
         Preferred Stock is outstanding shall sell, in a public or private
         offering, shares of Common Stock for a consideration having a fair
         market value per share that is less than $4.16 per share (as
         appropriately adjusted for stock splits and combinations), then the
         Conversion Price in effect immediately prior thereto shall be reduced
         to the price determined by multiplying such consideration per share of
         Common Stock by 1.15. Such adjustment shall be made successively each
         time any event described above in this subparagraph shall occur.

                  (v) Notwithstanding anything in subparagraphs (iii) or (iv) to
         the contrary, sales or issuances of shares of Common Stock made by the
         Company pursuant to any option, warrant or right in existence on the
         date of the initial issuance of shares of the Convertible Preferred
         Stock or pursuant to any employee stock option plan or other employee
         benefit plan of the Company or any of its subsidiaries shall not result
         in any reduction in the Conversion Price.

                  (vi) For the purpose of any computation under subparagraph
         (ii), the current market price per share of Common Stock on any date
         shall be deemed to be the average of the daily closing prices for the
         30 consecutive trading days commencing with the 45th trading day before
         the day in question. The closing price for each day shall be the
         reported last sales price regular way or, in case no such reported sale
         takes place on such day, the average of the reported closing bid and
         asked prices regular way, in either case on the New York Stock Exchange
         or, if the Common Stock is not listed or admitted to trading on such
         Exchange, on the principal national securities exchange on which the
         Common Stock is listed or admitted to trading (based on the aggregate
         dollar value of all securities listed or admitted to trading) or, if
         not listed or admitted to trading on any national securities exchange,
         on the NASDAQ National Market System or, if the Common Stock is not
         listed or admitted to trading on any national securities exchange or
         quoted on the NASDAQ National Market System, the average of the closing
         bid and asked prices in the over-the-counter market as furnished by any
         New York Stock Exchange member firm selected from time to time by the
         Company for that purpose, or, if such prices are not available, the
         fair market value set by, or in a manner established by, the Board of
         Directors of the Company in good faith. "Trading day" shall mean a day
         on which the national securities exchange or the NASDAQ National Market
         System used to determine the closing price is open for the transaction
         of business or the reporting of trades or, if the closing price is not
         so determined, a day on which the New York Stock Exchange is open for
         the transaction of business.

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                  (vii) No adjustment in the Conversion Price shall be required
         unless such adjustment would require an increase or decrease of at
         least 1% in such price; provided, however, that the Company may make
         any such adjustment at its election; and provided, further, that any
         adjustments that by reason of this subparagraph (vii) are not required
         to be made shall be carried forward and taken into account in any
         subsequent adjustment. All calculations under this Section 7 shall be
         made to the nearest cent or to the nearest one-hundredth of a share, as
         the case may be.

                  (viii) Whenever the Conversion Price is adjusted as provided
         in any provision of this Section 7:

                           (1) the Company shall compute the adjusted conversion
                  price in accordance with this Section 7 and shall prepare a
                  certificate signed by the principal financial officer of the
                  Company setting forth the adjusted Conversion Price and
                  showing in reasonable detail the facts upon that such
                  adjustment is based, and such certificate shall forthwith be
                  filed with the transfer agent of the Convertible Preferred
                  Stock; and

                           (2) a notice stating that the Conversion Price has
                  been adjusted and setting forth the adjusted conversion price
                  shall forthwith be required, and as soon as practicable after
                  it is required, such notice shall be mailed by the Company to
                  all record holders of Convertible Preferred Stock at their
                  last addresses as they shall appear in the stock transfer
                  books of the Company.

                  (ix) If at any time, as a result of any adjustment made
         pursuant to this Section 7, the holder of any shares of Convertible
         Preferred Stock thereafter surrendered for conversion shall become
         entitled to receive any shares of the Company other than shares of
         Common Stock or to receive any other securities, the number of such
         other shares or securities so receivable upon conversion of any share
         of Convertible Preferred Stock shall be subject to adjustment from time
         to time in a manner and on terms as nearly equivalent as practicable to
         the provisions contained in this Section 7 with respect to the Common
         Stock.

                  (e) No Fractional Shares. No fractional shares or scrip
representing fractional shares of Common Stock shall be issued upon conversion
of Convertible Preferred Stock. If more than one certificate representing shares
of Convertible Preferred Stock shall be surrendered for conversion at one time
by the same holder, the number of full shares issuable upon conversion thereof
shall be computed on the basis of the aggregate number of shares of Convertible
Preferred Stock so surrendered. Instead of any fractional share of Common Stock
that would otherwise be issuable upon conversion of any shares of Convertible
Preferred Stock, the Company will pay a cash adjustment in respect of such
fractional interest in an amount equal to the same fraction of the current
market price per share of Common Stock (determined in accordance with
subparagraph (d)(vi)) at the close of business on the day of conversion.

                  (f) Reclassification, Consolidation, Merger or Sale of Assets.
In case of any reclassification of the Common Stock, any consolidation of the
Company with, or merger of the Company into, any other person, any merger of
another person into the Company (other than a merger that does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock of the Company), any sale or transfer of all or substantially all
of the assets of the Company or any compulsory share exchange pursuant to which
share exchange the Common Stock is converted into other securities, cash or
other property, then lawful provision shall be made as part of the terms of such
transaction whereby the ranking of the Convertible Preferred Stock shall be
preserved as to payment of dividends and distributions upon liquidation,
dissolution or winding up and whereby the holder of each

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share of Convertible Preferred Stock then outstanding shall have the right
thereafter, during the period such share shall be convertible hereunder, to
convert such share only into the kind and amount of securities, cash and other
property receivable upon such reclassification, consolidation, merger, sale,
transfer or share exchange by a holder of the number of shares of Common Stock
of the Company into which such share of Convertible Preferred Stock might have
been converted immediately prior to such reclassification, consolidation,
merger, sale, transfer or share exchange assuming such holder of Common Stock of
the Company (i) is not a person with which the Company consolidated or into
which the Company merged or that merged into the Company, to which such sale or
transfer was made or a party to such share exchange, as the case may be
("constituent person"), or an affiliate of a constituent person and (ii) failed
to exercise his rights of election, if any, as to the kind or amount of
securities, cash and other property receivable upon such reclassification,
consolidation, merger, sale, transfer or share exchange (provided that if the
kind or amount of securities, cash and other property receivable upon such
reclassification, consolidation, merger, sale, transfer or share exchange is not
the same for each share of Common Stock of the Company held immediately prior to
such consolidation, merger, sale or transfer by other than a constituent person
or an affiliate thereof and in respect of which such rights of election shall
not have been exercised ("non-electing share"), then the kind and amount of
securities, cash and other property receivable upon such reclassification,
consolidation, merger, sale, transfer or share exchange by each non-electing
share shall be deemed to be the kind and amount so receivable per share by a
plurality of the non-electing shares). The Company, the person formed by such
consolidation or resulting from such merger or that acquires such assets or that
acquires the Company's shares, as the case may be, shall make provisions in its
certificate or articles of incorporation or other constituent document to
establish such right. Such certificate or articles of incorporation or other
constituent document shall provide for adjustments that, for events subsequent
to the effective date of such certificate or articles of incorporation or other
constituent document, shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 7. The above provisions shall similarly
apply to successive reclassifications, consolidations, mergers, sales, transfers
or share exchanges.

                  (g) Reservation of Shares; Transfer Taxes; Etc. The Company
shall at all times reserve and keep available, out of its authorized and
unissued stock, solely for the purpose of effecting the conversion of the
Convertible Preferred Stock, such number of shares of its Common Stock free of
preemptive rights as shall from time to time be sufficient to effect the
conversion of all shares of Convertible Preferred Stock from time to time
outstanding. The Company shall from time to time, in accordance with the laws of
the State of Texas, increase the authorized number of shares of Common Stock if
at any time the number of shares of Common Stock not outstanding shall not be
sufficient to permit the conversion of all the then-outstanding shares of
Convertible Preferred Stock.

                  If any shares of Common Stock required to be reserved for
purposes of conversion of the Convertible Preferred Stock hereunder require
registration with or approval of any governmental authority under any Federal or
State law before such shares may be issued upon conversion, the Company will in
good faith and as expeditiously as possible endeavor to cause such shares to be
duly registered or approved, as the case may be. If the Common Stock is listed
on the New York Stock Exchange or any other national securities exchange, the
Company will, if permitted by the rules of such exchange, as soon as practicable
following issuance of the Convertible Preferred Stock, list and keep listed on
such exchange, upon official notice of issuance, all shares of Common Stock
issuable upon conversion of the Convertible Preferred Stock.

                  The Company will pay any and all issue or other taxes that may
be payable in respect of any issue or delivery of shares of Common Stock on
conversion of the Convertible Preferred Stock. The Company shall not, however,
be required to pay any tax that may be payable in respect of any transfer
involved in the issue or delivery of Common Stock (or other securities or
assets) in a name other than that in which the shares of Convertible Preferred
Stock so converted were registered, and no such issue or

                                      -9-

<PAGE>

delivery shall be made unless and until the person requesting such issue has
paid to the Company the amount of such tax or has established, to the
satisfaction of the Company, that such tax has been paid.

                  Before taking any action that would cause an adjustment
reducing the Conversion Price to less than the then par value of the Common
Stock, the Company will take any corporate action that may, in the opinion of
its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable shares of Common Stock at the conversion
price as so adjusted.

                  (h) Prior Notice of Certain Events. In case:

                  (i) the Company shall (1) declare any dividend (or any other
         distribution) on its Common Stock, other than (A) a dividend payable in
         shares of Common Stock or (B) regular cash dividends or (2) declare or
         authorize a redemption or repurchase of in excess of 20% of the
         then-outstanding shares of Common Stock; or

                  (ii) the Company shall authorize the granting to the holders
         of Common Stock of rights or warrants to subscribe for or purchase any
         shares of stock of any class or of any other rights or warrants (other
         than any rights specified in paragraph (d)(i)(A)(II) of this Section
         7); or

                  (iii) of any reclassification of Common Stock (other than a
         subdivision or combination of the outstanding Common Stock, or a change
         in par value, or from par value to no par value, or from no par value
         to par value), or of any consolidation or merger to which the Company
         is a party and for which approval of any stockholders of the Company
         shall be required, or of the sale or transfer of all or substantially
         all of the assets of the Company or of any compulsory share exchange
         whereby the Common Stock is converted into other securities, cash or
         other property; or

                  (iv) of the voluntary or involuntary dissolution, liquidation
         or winding up of the Company;

then the Company shall cause to be mailed to the holders of record of the
Convertible Preferred Stock, at their last address as they shall appear upon the
stock transfer books of the Company, at least 15 days prior to the applicable
record date hereinafter specified, a notice stating (x) the date on which a
record is to be taken for the purpose of such dividend, distribution, redemption
or granting of rights or warrants or, if a record is not to be taken, the date
as of which the holders of Common Stock of record to be entitled to such
dividend, distribution, redemption, rights or warrants are to be determined, or
(y) the date on which such reclassification, consolidation, merger, sale,
transfer, share exchange, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding up (but no failure to mail such notice or any defect therein or in
the mailing thereof shall affect the validity of the corporate action required
to be specified in such notice).

                  (i) Other Changes in Conversion Price. The Company may make
reductions in the Conversion Price, in addition to those required or allowed by
this Section 7, as shall be determined by it, as evidenced by a resolution of
the Board of Directors, to be advisable in order to avoid or diminish any income
tax to holders of Common Stock 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. Whenever the Conversion
Price is so reduced, the Company shall mail to holders of record of the
Convertible Preferred Stock a notice of the reduction at least 10 days before
the date the reduced

                                      -10-

<PAGE>

conversion price takes effect, and such notice shall state the reduced
conversion price and the period it will be in effect.

                  8. Mandatory Redemption. The Convertible Preferred Stock shall
be subject to mandatory redemption on March 31, 2009 (the "Mandatory Redemption
Date"). On the Mandatory Redemption Date, the Company shall, subject to the
provisions of Section 3, pay each record holder of Convertible Preferred Stock
on the Mandatory Redemption Date the entire Stated Value of the shares of
Convertible Preferred Stock held of record by them, plus accrued and unpaid
dividends to the Mandatory Redemption Date. The Convertible Preferred Stock
shall cease to be outstanding on the Mandatory Redemption Date and dividends
shall cease to accrue on the Mandatory Redemption Date and no conversion rights
or other rights (except to receive the payment described in the previous
sentence) shall exist after the Mandatory Redemption Date; provided, however, in
the event the Company fails to redeem the Convertible Preferred Stock on the
Maturity Date, whether due to restrictions under the Company's credit facilities
or otherwise, the Convertible Preferred Stock not so redeemed, and any accrued
and unpaid dividends relating thereto, shall continue to be outstanding and
shall continue to accrue dividends in accordance with the provisions hereof.

                  9. Outstanding Shares. Except as set forth in the next
sentence, for purposes of this Statement of Designation, all shares of
Convertible Preferred Stock shall be deemed outstanding except (i) from the date
fixed for redemption pursuant to Section 6 hereof, all shares of Convertible
Preferred Stock that have been so called for redemption under Section 6 if funds
necessary for the redemption of such shares are available and have been
deposited in trust with a bank having a combined capital and surplus in excess
of $50,000,000, as trustee, for the benefit of the holders of such shares to be
redeemed for payment of the relevant redemption price; (ii) from the date of
surrender of certificates representing shares of Convertible Preferred Stock,
all shares of Convertible Preferred Stock converted into Common Stock; (iii)
from the date of registration of transfer, all shares of Convertible Preferred
Stock held of record by the Company or any subsidiary of the Company; and (iv)
upon payment of the Stated Value and accrued and unpaid dividends pursuant to
Section 8. For purposes of voting or consenting with respect to any action
shares called for redemption pursuant to Section 6 shall not be treated as
outstanding from and after the date of any such deposit of the funds for
redemption.

                  10. Status of Acquired Shares. Shares of Convertible Preferred
Stock redeemed by the Company, received upon conversion pursuant to Section 7 or
otherwise acquired by the Company will be restored to the status of authorized
but unissued shares of Preferred Stock, without designation as to class, and may
thereafter be issued.

                  11. Preemptive Rights. The Convertible Preferred Stock is not
entitled to any preemptive or subscription rights in respect of any securities
of the Company.

                  12. Severability of Provisions. Whenever possible, each
provision hereof shall be interpreted in a manner as to be effective and valid
under applicable law, but if any provision hereof is held to be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating or otherwise
adversely affecting the remaining provisions hereof. If a court of competent
jurisdiction should determine that a provision hereof would be valid or
enforceable if a period of time were extended or shortened or a particular
percentage were increased or decreased, then such court may make such change as
shall be necessary to render the provision in question effective and valid under
applicable law.

                  13. Notices. If at the time of the giving of any notice
provided for in Section 6 there shall be fewer than ten holders of record of the
Convertible Preferred Stock, then such notice shall be given by registered first
class mail, postage prepaid, return receipt requested. Any notice shall be given
in

                                      -11-

<PAGE>

such manner to the initial holder of the Convertible Preferred Stock so long
as it remains a holder of record of any Convertible Preferred Stock.

                  14. Voting Rights.

                  (a) Except as provided in this Section 14, no holder of
Convertible Preferred Stock shall be entitled to any voting rights at any annual
or special meeting of shareholders of the Company or otherwise.

                  (b) So long as shares of Convertible Preferred Stock remain
outstanding the affirmative vote or consent of the holders of a majority of the
shares of Convertible Preferred Stock outstanding at the time, voting as a
single class, given in person or by proxy, either in writing or at a meeting,
shall be necessary to permit or effect any amendment to the Company's Third
Amended and Restated Articles of Incorporation if the amendment would accomplish
any of the following:

                  (i) the amendment, restatement, modification, alteration or
         repeal of any of the provisions of this Statement of Designation;

                  (ii) increase or decrease the aggregate number of authorized
         shares of Convertible Preferred Stock;

                  (iii) effect an exchange, or create a right of exchange, of
         all or any part of the shares of another class into the shares of
         Convertible Preferred Stock;

                  (iv) create a new class or series of shares having rights and
         preferences equal, prior, or superior to the Convertible Preferred
         Stock, or increase the rights and preferences of any class or series
         having rights and preferences equal, prior, or superior to the
         Convertible Preferred Stock, or increase the rights and preferences of
         any class or series having rights or preferences later or inferior to
         the Convertible Preferred Stock in such a manner as to become equal,
         prior, or superior to the Convertible Preferred Stock; or

                  (v) cancel or otherwise affect dividends on the shares of
         Convertible Preferred Stock that had accrued but had not been declared.

                                      -12-

<PAGE>

                  IN WITNESS WHEREOF, The Meridian Resource Company has caused
this statement to be signed by the undersigned officer this 11th day of June,
2002.

                                         THE MERIDIAN RESOURCE CORPORATION

                                         By: /s/ JOSEPH A. REEVES, JR.
                                            ------------------------------------
                                              Chairman of the Board and
                                               Chief Executive Officer

                                      -13-<PAGE>
                                                                   EXHIBIT 10(o)

                       ARABIAN SHIELD DEVELOPMENT COMPANY

                    10830 North Central Expressway, Suite 175
                                Dallas TX, 75231
                                 (214) 692-7872

                                                               November 15, 1996

Sheikh Fahad Al-Athel
P.O. Box 4900
Riyadh 11412
Saudi Arabia

Dear Sheikh Fahad Al-Athel:

         Arabian Shield Development Company, a Delaware Corporation, agrees to
sell you Four Hundred Fifty Thousands Shares (450,000) of its authorized and
unissued common stock, par value $.10 per share, and you agree to purchase such
shares at the price of 1.00 Dollar (one) per share. Payment for these shares
shall be made on the following schedule:

                  $100,000 to be paid on the date of your signing; and
                  $100,000 monthly thereafter.

         These shares have not been registered under the United States
Securities Act of 1933 (the "Act"), as amended, and are being sold to you in
reliance upon one or more exemptions from the registration requirements of the
Act, including but not limited to, the exemptions set forth in Regulation S
relating to offers and sales made outside the United States of America.

         By your execution of this letter agreement, you represent to the
Company as follows:

1.       You are not a citizen or resident of the United States of America;

2.       You are purchasing the shares for your own account for investment and
         not with a view to the resale or distribution of the shares within, or
         to citizens or residents of, the United States of America;

3.       You are not purchasing the shares for the account or benefit or a
         citizen or resident of the United States of America or any partnership
         or corporation organized or incorporated under the laws of any
         jurisdiction in the United States of America;

<PAGE>

Sheikh Fahad Al-Athel
Page 2
November 15, 1996

4.       At the time you are executing this letter agreement, you are outside
         the United States of America;

5.       You have received or have had access to all information you consider
         necessary or advisable in order to enable you to make an informed
         decision concerning your purchase of the shares; and

6.       You have such knowledge and experience in business and financial
         matters that you are capable of evaluating the merits and risks or
         investing in the shares, and you are able to bear the economic risk of
         investing in the shares.

         You further agree that the shares may not be offered for sale, sold, or
otherwise disposed of within or to United States citizens or residents unless
the shares are subsequently registered under the Act or an exemption from
registration is available. The certificate representing the shares will contain
a restrictive legend with respect to the foregoing. In the event that by reason
of your acquisition of the shares you are required to make any filings pursuant
to the United States Securities Exchange Act of 1934, as amended, the
certificate representing the shares will not be issued to you until all
applicable filing requirements have been satisfied.

                                       Very truly yours,

                                       ARABIAN SHIELD DEVELOPMENT COMPANY

                                       By: /s/ Hatem El-Khalidi
                                          --------------------------------------

AGREED TO:

By: /s/ Sheikh Fahad Al-Athel
   -------------------------------
Date: November 30, 1996
     -----------------------------

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