HALLWOOD ENERGY CORP
AMENDMENT NO. 5 TO CREDIT AGREEMENT, DATED 6/30/00
<DOCUMENT>
<TYPE>EX-10.17
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>AMENDMENT NO. 5 TO CREDIT AGREEMENT, DATED 6/30/00
<TEXT>


                                                                  EXECUTION COPY


                       AMENDMENT NO. 5 TO CREDIT AGREEMENT


         AMENDMENT  dated as of June 30, 2000 to the Amended and Restated Credit
Agreement  dated as of June 8,  1999 (the  "Credit  Agreement")  among  HALLWOOD
ENERGY  CORPORATION,  HALLWOOD ENERGY PARTNERS,  L.P. and HALLWOOD  CONSOLIDATED
RESOURCES CORPORATION (collectively,  the "Borrowers"),  the BANKS party thereto
(the  "Banks"),  FIRST  UNION  NATIONAL  BANK,  as  Collateral  Agent and MORGAN
GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent").

                              W I T N E S S E T H :

         WHEREAS, the parties hereto desire to amend the Credit Agreement as
set forth herein;

         NOW, THEREFORE, the parties hereto agree as follows:

     SECTION 1. Defined Terms; References. Unless otherwise specifically defined
herein,  each term used herein which is defined in the Credit  Agreement has the
meaning  assigned  to such  term in the  Credit  Agreement.  Each  reference  to
"hereof",  "hereunder",  "herein" and "hereby" and each other similar  reference
and  each  reference  to  "this  Agreement"  and each  other  similar  reference
contained in the Credit Agreement shall, after this Amendment becomes effective,
refer to the Credit Agreement as amended hereby.

     SECTION 2. Resetting of the Availability  Limit and the Debt Limit. (a) The
definition  of  "Availability  Limit"  set forth in  Section  1.01 of the Credit
Agreement is amended by to read in its entirety as follows:

     "Availability  Limit" means,  on any date, an amount equal to the lesser of
(i) the aggregate  amount of the Commitments at such date and (ii)  $70,000,000;
provided  that on any date on which the Debt  Limit is reset to a new  amount in
accordance  with  Section  4.17(c)(ii),  Section  4.17(c)(iii)  or  Section 3 of
Amendment No. 5 to this  Agreement  (and,  in the case of any reset  pursuant to
Section  4.17(c)(iii)  or Section 3 of such Amendment No. 5 that  constitutes an
increase  in the Debt Limit,  all the Banks have  agreed to such new amount,  in
their sole discretion), the amount set forth in this clause (ii) shall be deemed
to have been amended  (effective  on and as of the date such reset is effective)
to be such

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new amount,  without any further action on the part of any Borrower or any Bank.
Except as set forth in the proviso to clause (ii) of the  immediately  preceding
sentence,  the  Availability  Limit may be  increased  only by an  amendment  in
accordance  with Section  8.05,  which the Banks may agree to or not agree to in
their sole discretion.

         (b)  Effective  on and as of the date  hereof,  the  "Debt  Limit",  as
determined  in  accordance  with  subsection  (b) of Section  4.17 of the Credit
Agreement, shall be $70,000,000.

         SECTION 3. Additional Review of the Debt Limit and Availability  Limit.
(a) (i) On or prior to August 1, 2000, the Borrowers  shall provide to the Banks
such  information  as the  Required  Banks may  reasonably  request  in order to
redetermine the Debt Limit.

         (ii)  Reasonably  promptly after receipt of the  information  delivered
pursuant to clause (i), Banks having at least 70% of the aggregate amount of the
Commitments  shall have the option to  redetermine  the Debt Limit and the Agent
shall notify the Borrowers of any such  redetermination,  upon which notice such
new Debt Limit (the "New Debt Limit")  shall become  immediately  effective  and
binding  on all  parties  to the  Credit  Agreement  and shall be the Debt Limit
thereunder,  until further  determinations  thereof in  accordance  with Section
4.17(c) of the Credit Agreement.  The redetermination of the Debt Limit pursuant
to this  Section  shall not affect the  ability of the  Borrowers  to request an
additional such  redetermination  pursuant to Section  4.17(c)(iv) of the Credit
Agreement in accordance with, and subject to the terms of, such Section.

         (iii) If upon the  effectiveness  of the New Debt Limit,  the aggregate
unpaid principal amount of the Debt of the Borrowers exceeds the New Debt Limit,
then the Borrowers  shall take one of the actions  contemplated  by clauses (i),
(ii) and (iii) of Section 2.10 of the Credit Agreement within three (3) Domestic
Business Date from the date the Borrowers  receive  notice from the Agent of the
New Debt Limit.

         (iv) Failure by the  Borrowers to comply with the  provisions of clause
(iii) above shall  constitute an "Event of Default"  under the Credit  Agreement
and shall entitle the Agent,  the Collateral Agent and the Banks to exercise all
rights and remedies available under the Financing  Documents upon the occurrence
of an Event of Default.

         SECTION 4.  Additional Condition to Borrowing.  Section 6.03 of the
Credit Agreement is amended by the addition of the following new subsection (f):

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                  (f) in the case of any Borrowing prior to the  redetermination
         of the Debt Limit in  accordance  with Section 3 of Amendment  No. 5 to
         the  Agreement  which results in the  aggregate  outstanding  principal
         amount  of the  Loans  exceeding  $66,000,000,  the fact  that any Loan
         proceeds in excess of $66,000,000  shall be applied on the date of such
         Borrowing  to the  payment by the  Borrower  of the  purchase  price of
         additional   Proved  Reserves  in  the  United  States  pursuant  to  a
         transaction which shall have been approved in writing by all Banks.

         SECTION 5.  Representations of Borrowers.  The Borrowers  represent and
warrant that (i) the  representations  and warranties of the Borrowers set forth
in Article 3 of the Credit  Agreement  are true on and as of the date hereof and
(ii) no Default has occurred and is continuing.

         SECTION 6.  Governing Law.  This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.

         SECTION 7. Counterparts.  This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

         SECTION 8.  Effectiveness.  This Amendment shall become effective as of
the date  hereof on the date on which the Agent  shall  have  received  from the
Borrowers and the Required  Banks a  counterpart  hereof signed by such party or
facsimile or other written confirmation (in form satisfactory to the Agent) that
such party has signed a counterpart hereof.

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         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.


                                            HALLWOOD ENERGY CORPORATION



                                            By:
                                                  Name:
                                                  Title:


                                            HALLWOOD CONSOLIDATED
                                                RESOURCES CORPORATION



                                            By:
                                                  Name:
                                                  Title:



                                            HALLWOOD ENERGY PARTNERS, L.P.


                                            By: HEC Acquisition Corp., its
                                                   General Partner

                                                  By___________________________
                                                       Name:
                                                        Title:




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                                            MORGAN GUARANTY TRUST
                                                  COMPANY OF NEW YORK



                                            By:
                                                  Name:
                                                  Title:


                                            FIRST UNION NATIONAL BANK



                                            By:
                                                  Name:
                                                  Title:



                                            WELLS FARGO BANK TEXAS, N.A.



                                            By:
                                                  Name:
                                                  Title:

(NY) 27008/757/AMEND/amend00.5.wpd




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Acknowledged by:

                                    HALLWOOD LA PLATA, LLC
                                    LA PLATA ASSOCIATES, LLC

                                    By: HALLWOOD PETROLEUM, INC.

                                    By:______________________________________
                                         Name:
                                         Title:

                                    The Manager of Hallwood La Plata LLC and La
                                            Plata Associates LLC

                                    CONCISE OIL AND GAS PARTNERSHIP
                                    EM NOMINEE PARTNERSHIP COMPANY
                                    MAY ENERGY PARTNERS OPERATING
                                                 PARTNERSHIP LTD.

                                    By: HEC ACQUISITION CORP.

                                    By:______________________________________
                                         Name:
                                         Title:

                                    The  General  Partner of Concise Oil and Gas
                                    Partnership, EM Nominee Partnership Company,
                                    May Energy  Partners  Operating  Partnership
                                    LTD.

                                    HALLWOOD CONSOLIDATED PARTNERS,
                                      L.P.

                                    By: HALLWOOD CONSOLIDATED
                                    RESOURCES CORPORATION

                                    By:______________________________________
                                         Name:
                                         Title:

                                    The General Partner of Hallwood Consolidated
                                            Partners, L.P.


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