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Exhibit 10.2    
  

EMPLOYMENT AGREEMENT  

        THIS EMPLOYMENT AGREEMENT (the "Employment Agreement") is made this 21st day of October, 2002, by and between PNG CORPORATION, a Delaware
corporation (hereinafter referred to as "the Company"), and WILLIAM G. JANACEK, an individual residing at 47 W. Rock Wing Place, The Woodlands, TX 77381 (hereinafter referred to as the "Executive"). 

W I T N E S S E T H:  

        WHEREAS, the Executive presently serves as an officer of the Company and possesses skills and knowledge in the field of business of the Company, and is familiar
with the business affairs, concerns, personnel and customers and potential customers of the Company; and 

        WHEREAS,
the Company desires to secure the continued employment and assistance of the Executive and is willing to provide to the Executive the compensation and benefits described herein;
and 

        WHEREAS,
the Executive is willing to continue employment with the Company pursuant to the terms and conditions of this Employment Agreement; 

        NOW
THEREFORE, in consideration of the agreements and covenants set forth herein, the Company and the Executive hereby agree as follows: 

ARTICLE ONE

EMPLOYMENT, TITLE AND DUTIES  

        SECTION
1.1    Employment and Title.    The Executive hereby agrees to perform services in the employ of the Company
during the Employment Term (as such term in hereinafter defined) of this Employment Agreement and the Company hereby employs the Executive during such Employment Term, in accordance with the
provisions of this Employment Agreement. During the Employment Term, the Executive's title will be President and Chief Operating Officer of the Company. In his capacity as President and Chief
Operating Officer, the Executive shall report to the Board of Directors of the Company. 

        SECTION
1.2    Duties.    The Executive shall have those duties and responsibilities that are assigned to him from
time to time by the Board of Directors during the Employment Term of this Employment Agreement. The Executive shall exercise due diligence and reasonable care, and use his best efforts, in the
performance of his duties and responsibilities and to maintain and enhance the business and reputation of the Company. 

ARTICLE TWO

EXCLUSIVITY OF SERVICE  

        SECTION
2.1    Exclusive Service.    The Executive agrees to devote substantially all of his business time, efforts
and attention to the business and affairs of the Company on an exclusive basis, and not to engage in any other business activities for any person or entity, other than as expressly provided in this
Section 2.1. The Executive may engage in personal investment activities that do not materially affect the performance of the Executive's duties hereunder. The Executive may also expend
reasonable time as determined by the Board of Directors of the Company (the "Board"), in its sole discretion, in charitable or civic activities. 

 
ARTICLE THREE

TERM  

        SECTION
3.1    Employment Term.    Unless earlier terminated as contemplated herein, the term of this Employment
Agreement will begin on September 1, 2002 and end on March 1, 2004 (hereinafter referred to as the "Employment Term"), unless sooner terminated pursuant to Section 3.2. 

        SECTION
3.2    Early Termination.    Notwithstanding the provisions of Section 3.1 hereinabove, the Employment
Term of this Employment Agreement shall cease upon the first to occur of the events described below in this Section 3.2. 

        (a)    Death or Disability.    If the Executive shall die or become "Disabled" (as hereinafter defined), this
Employment Agreement shall terminate, except for the provisions of Articles Six and Seven. In such event, notwithstanding the termination of this Employment Agreement, the Executive (or his estate, as
the case may be) shall be entitled to (i) the Base Salary described in Section 4.1 to the date of death or Disability and (ii) project bonuses, if any, accrued under
Section 4.2 to the date of death or Disability. For purposes of this Employment Agreement, the Executive shall be "Disabled" on the date the Executive is determined to be physically or mentally
incapable, with or without accommodation, of performing the usual and normal functions of his position, and has been so for a consecutive period of 3 months (or 120 days out of a
180 day period) as evidenced by a physician's certification that is acceptable to the Company in good faith. 

        (b)    Voluntary Resignation.    In the event that the Executive shall resign from employment with the company other
than due to Constructive Termination (as hereinafter defined), then, as of the effective date of such resignation or as of any earlier date determined by the Board following receipt of such
resignation, this Employment Agreement shall terminate except for the provisions of Articles Six and Seven. The effective date of any resignation submitted by the Executive shall not be less than
30 days from the date of the giving of such notice. In such event, the Executive shall be entitled to (i) his Base Salary through the date upon which the Executive's employment shall
terminate and (ii) project bonuses, if any, accrued under Section 4.2 prior to the effective date of such resignation. After the payment of such Base Salary, no further compensation or
benefits shall be due under this Employment Agreement. The Executive agrees that the amounts the Executive has received before resignation are sufficient consideration to support the provisions of
Articles Six and Seven. 

        (c)    Discharge for Cause.    In the event that the Executive is discharged for "Cause" (as defined in this
Section 3.2(c)), this Employment Agreement shall immediately terminate, other than the provisions of Articles Six and Seven, and the Executive shall be entitled to (i) the Base Salary
accrued to the date of termination and (ii) project bonuses, if any, accrued under Section 4.2 prior to the date of termination. After the payment of such Base Salary, no further
compensation or benefits shall be due under this Employment Agreement. For purposes of this Employment Agreement, the Executive may be terminated for "Cause" by majority vote of the Board as a result
of (i) the Executive's repeated failure
to perform his assigned duties (other than as a result of a cause or event outside of the control of the Executive), or to perform and observe his employment obligations under this Employment
Agreement, (ii) any material breach of this Employment Agreement by the Executive; (iii) fraud or dishonesty which results in a personal enrichment at the expense of the Company;
(iv) the Executive's conviction of or a plea of guilty or nolo contendere to a charge of felony, or for a misdemeanor involving fraud, embezzlement, theft, dishonesty or breach of fiduciary
duty, or other criminal conduct, or the violation of any state or federal law (other than traffic violations or other insignificant infractions of law that do not affect the performance of duties
hereunder); or (v) any material violation of the written policies of the Company. In the event 

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that the employment of the Executive is terminated pursuant to this Section 3.2(c), the Company shall provide a final written notice of termination for cause to the Executive. In the event
that the Executive shall dispute any such determination, the Executive may invoke Section 9.1 as to a determination of "Cause," but not as to the Board's right to terminate the employment of
the Executive. The Executive agrees that the amounts the Executive has received are sufficient consideration to support the provisions of Articles Six and Seven. 

        (d)    Discharge Not For Cause and Voluntary Resignation Due To Constructive Termination.    In the event that during
the Employment Term the Executive's employment with the Company is terminated by the Company for any reason other than discharge for Cause (as described in Section 3.2(c)), or is terminated by
the Executive through resignation due to Constructive Termination (as defined in Section 3.2(e)), this Employment Agreement shall terminate as of the date of such termination, except for the
provisions of Articles Six and Seven, and the Executive shall be entitled to receive (i) his Base Salary through the date upon which the Executive's employment shall terminate;
(ii) project bonuses, if any, accrued under Section 4.2 prior to the date of termination; and (iii) provided that the Executive executes a release of all employment-derived claims
mutually acceptable in form and content to the Company and the Executive, the Executive's Base Salary continued for a period commencing as of the date of termination of employment and ending upon the
expiration of the Employment Term specified in Section 3.1 of the Employment Agreement. The Company may elect to pay such amount in a lump sum. The Executive agrees that the amount the
Executive has received are sufficient consideration to support the provisions of Articles Six and Seven. 

        (e)    Definitions.    

        (i)    For
purposes of this Employment Agreement, a "Constructive Termination" shall be deemed to have occurred, subject to the provisions specified in this subparagraph
3.2(c)(i), in the event that (A) the Executive's Base Salary (as defined in Section 4.1) is reduced below the then effective rate of Base Salary per annum, or the bonus structure set
forth in Section 4.2 is reduced, other than in connection with a "Change of Control" (as defined below), below the then effective rate of bonus compensation; (B) the Company materially
breaches this Employment Agreement; or (C) a "Change of Control" (as defined below) occurs and, within the six-month period following the Change of Control, the Executive is subject
to a "Termination Event" as defined below. However, a Constructive Termination shall not be deemed to have occurred pursuant to paragraphs 3.2(e)(i)(B) or 3.2(e)(i)(C) unless the
Executive provides written notice to the Company identifying the specific acts constituting Construction Termination, and the Company, within thirty (30) days after receiving such written
notice, ceases or remedies said acts. 

        (ii)  For
purposes of this Employment Agreement, the term "Termination Event" shall mean: (A) the Executive's Base Salary (as defined in Section 4.1) in effect
as of the date of the Change in Control is reduced without written consent of the Executive; (B) a significant and material diminution in the Executive's responsibilities, authority or scope of
duties in effect as of the date of Change of Control is effected by the Board and such diminution is made without the Executive's written consent; provided, however, that a change in Executive's
responsibilities, authority or scope of duties shall not constitute a "Termination Event" if Executive is offered a substantial position with a similar level of responsibility taking into account the
nature and size of the Company following the Change in Control; or (C) the Company materially breaches this Employment Agreement. 

        (iii)  For
purposes of this Employment Agreement, the term "Change of Control" shall mean: (A) the stockholders of the Company approve a merger or consolidation of the
Company with any corporation or other entity, other than a merger or consolidation 

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which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities
of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation;
(B) the approval of the Board (or by the stockholders if stockholder approval is required by applicable law or under the terms of any relevant agreement) of any agreement for the sale or
disposition of all or substantially all of the Company's assets or a sale/leaseback of all or substantially all of the Company's assets (with or without a purchase option); (C) a transfer of
all or substantially all of the Company's assets pursuant to a partnership or joint venture agreement where the Company's resulting interest is or becomes 50% or less; or (D) the Board (or the
stockholders if stockholder approval is required by applicable law or under the terms of any relevant agreement) shall approve a plan of complete liquidation of the Company. 

        SECTION
3.3    Renewal.    The parties may renew this Employment Agreement by written agreement for additional periods
on mutually acceptable terms and conditions, but neither the Company nor the Executive is under any obligation to agree to such extensions and may refuse to extend or renew this Employment Agreement
for any or no reason. It is the express intent of the parties hereto that, unless this Agreement is extended or renewed by mutual written agreement of the parties, it shall not automatically extend or
renew pursuant to any common or statutory law at the end of the then-current Employment Term. If the option to extend or renew the Employment Agreement is not exercised as provided in this
Employment Agreement, it is the parties' express understanding and agreement that the Employment Agreement is terminated at the end of the then-current Employment Term even if the
Executive continues to provide services to the Company in the same or in any other capacity. 

ARTICLE FOUR

COMPENSATION  

        SECTION
4.1    Base Salary.    During the Employment Term, the Executive shall receive a base salary of One Hundred
Seventy-Five Thousand Dollars ($175,000) per annum ("Base Salary"). Such salary shall be reviewed at least annually by the Board and may be increased upon the approval of the Board in its
own discretion. Such Base Salary shall be paid in monthly or bi-weekly installments in accordance with the Company's regular payroll policies and shall be subject to al applicable
withholding requirements. It is agreed that the Executive's compensation described in this Section 4.1 and in Section 4.2 is paid in part in consideration of the Executive's undertakings
described in Article Six and Article Seven. 

        SECTION
4.2    Cash Project Bonus.    The Executive shall additionally be eligible for cash bonuses consisting of one
percent of the cost of laterals built by the Company for which the Executive is the Project Developer. The Board of Directors, upon approving construction of a pipeline lateral, will set bonus
parameters with respect to the calculation of construction costs and timing (the "Construction Budget"). These bonus parameters shall provide a sliding scale with an increase in the bonus of ten
percent (10%) for each one percent (1%) the actual construction costs are under the Construction Budget and a decrease in the bonus of ten percent (10%) for each one percent (1%) the actual
construction costs are over the Construction Budget. The maximum cash project bonus shall be two percent (2%) of the Construction Budget. Any such bonuses shall be subject to all applicable
withholding requirements. 

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ARTICLE FIVE

BENEFITS  

        SECTION
5.1    Regular Company Benefits.    The Executive shall be designated a participant in any medical or health
benefit plan, short or long-term disability plan, pension, profit-sharing, thrift, 401(k) or any other "qualified" plan, dental benefit plans, life insurance or death benefit plan
sponsored by the Company and available to employees of the Company who are not represented by a union in collective bargaining with the Company. The Executive's entitlement to benefits under any such
plans or programs shall be determined and governed by the terms of such plans and programs, as in effect from time to time. 

        SECTION
5.2    Car Allowance.    The Executive shall receive from the Company an automobile allowance of Six Hundred
Dollars ($600) per month and shall have the use of a Company gasoline credit card for use on Company business trips. All other automobile expenses, including, without limitation, acquisition,
replacement, maintenance, repair, liability and casualty and liability insurance, shall be the responsibility of the Executive. 

        SECTION
5.3    Vacation.    The Executive shall be entitled to a minimum vacation time of three (3) weeks per
year and such additional vacation time, if any, as is provided pursuant to applicable Company executive vacation policies. Vacation time may not be carried over to the succeeding years. 

        SECTION
5.4    Expense Reimbursement.    The Executive shall be reimbursed for all reasonable
out-of-pocket business and business entertainment expenses paid by the Executive, in accordance with applicable Company executive expense reimbursement policies. Any travel
expenses of the Executive shall be reimbursed in accordance with applicable Company executive reimbursement policies. 

ARTICLE SIX

INVENTIONS  

        SECTION
6.1    Inventions.    The Executive hereby grants to the Company or its nominee all rights of every kind
whatsoever, exclusively and perpetually, in and to all services performed, products created and product or marketing ideas conceived by the Executive while employed at any time by the Company or its
nominees, and hereby agrees, upon the Company's request therefore, to assign and transfer to the Company or its nominees, any and all inventions, trade secrets, product or marketing ideas,
improvements, processes, and "know how" relating to the business or products of the Company including any thereof which the Executive may learn, possess or acquire during the Executive's employment by
the Company, and the Executive agrees that all such things and such knowledge are, and will be known or held by the Executive, only for the benefit of the Company or its nominees. Any patent,
trademark or servicemark developed, obtained or conceived by the Executive while employed or engaged by the Company which relates to the business or product development activities of the Company or
its nominees shall be and remain the sole property of the Company or its nominees. At the Company's request, the Executive will execute any and all applications, assignments or other instruments which
the Company or its nominees may deem necessary to apply for and obtain letters patent, trademarks, servicemarks or copyrights of the United States or any foreign country or to protect otherwise the
Company's interest therein. 

ARTICLE SEVEN

CONFIDENTIALITY AND NONCOMPETITION  

        SECTION
7.1    Confidentiality.    The Executive recognizes and acknowledges that the Executive will have access to
certain information concerning the Company that is confidential and proprietary and constitutes valuable and unique property of the Company. The Executive will not during and after the Executive's
employment with the Company, disclose to others, use, copy or permit to be copied, except pursuant to the Executive's duties on behalf of the Company or its successors, assigns or nominees, any 

5

 

secret or confidential information of the Company (whether or not developed by the Executive) without the prior written consent of the Board. The term "secret or confidential information of the
Company" (sometimes referred to herein as "Confidential Information") means information disclosed to or known by the Executive as a direct or indirect consequence of or through the employment about
the Company or any company affiliated with the Company (hereinafter referred to as "Affiliate"), or their respective businesses, products and practices which information is not generally known in the
business in which the Company or any Affiliate is or may be engaged and shall include, without limitation, the Company's plans, strategies, potential acquisitions, costs, prices, systems, customer
lists, pricing policies, financial information, the names of and pertinent information regarding suppliers or customers, computer programs, policy or procedure manuals, training and recruiting
procedures, accounting procedures, the status and content of the Company's contracts with its suppliers or customers, or servicing methods and techniques at any time used, developed, or investigated
by the Company, before or during the Executive's tenure of employment, to the extent any of the foregoing are (i) not generally available to the public and (ii) maintained as
confidential by the Company. The Executive further agrees to maintain in confidence any confidential information of third parties received as a result of the Executive's employment and duties with the
Company. Nothing in this Section 7.1 shall prohibit use or disclosure by the Executive of knowledge that is in general use in the industry or of general business knowledge. 

        SECTION
7.2    Return of Material.    At the termination of the Executive's employment, the Executive will deliver to
the Company, as determined appropriate by the Company, all correspondence, memoranda, notes, records, customer lists, computer systems, programs, or other documents and all copies thereof made,
composed or received by the Executive, solely or jointly with others, and which are in the Executive's possession, custody, or control at such date and which are related in any manner to the past,
present, or anticipated business of the Company. 

        SECTION
7.3    Noncompetition.    Executive acknowledges and agrees that, in the course of his employment with the
Company, he will have access to and make use of the Company's Confidential Information, and the Company hereby promises to provide Executive with such Confidential Information, including new
Confidential Information not heretofore provided to Executive. To protect and safeguard the Company's trade secrets and Confidential Information and the Company's goodwill with its suppliers and
customers, which goodwill is a valuable asset of the Company, and in consideration of the Company's promise to provide the Executive with Confidential Information and goodwill, the Executive will not,
during the Executive's employment with the Company, and for the period thereafter consisting of 24 months, without the prior written consent of the Board of Directors, directly or indirectly,
engage in or participate in (as owner, partner, shareholder, employee, director, agent, consultant or otherwise), any business that is a "competitor of the Company" (as hereinafter defined) in any
counties in which the Company has operations or has written plans or proposals to establish operations during the Executive's employment with the Company or any counties contiguous to such counties.
For purposes of this Employment Agreement, a "competitor of the Company" is any entity, including without limitation, a corporation, sole proprietorship, partnership, joint venture, syndicate, trust
or any other form of organization or a parent, subsidiary, segment or division of any of the foregoing, which, during such period or the immediately preceding fiscal year of such entity, was
principally engaged in the ownership or operation of gas gathering systems, gas treating systems, electric generating facility gas supply laterals or related facilities. The terms of this
Section 7.3 shall not apply to the Executive's present or future investments in the securities of companies listed on a national securities exchange or
traded on the over-the-counter market to the extent such investments do not exceed five percent (5%) of the total outstanding shares of any such company. Furthermore, the terms
of this Section 7.3 shall not be construed to prohibit the Executive from participating in any activities that the Executive is expressly authorized to participate in pursuant to
Section 2.1. 

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        SECTION
7.4    No Inducement.    For a period of 12 months after the expiration or termination of the
Executive's employment for whatever reason, the Executive shall not induce or otherwise entice any employee of the Company to leave the employment of the Company, nor shall the Executive or his then
current employer or agent or representative attempt to hire any of the Company's employees. 

        SECTION
7.5    No Solicitation.    During the Executive's employment with the Company, and for the period thereafter
consisting of 24 months, the Executive shall not, without the prior written consent of the Board of Directors, solicit any actual or prospective Customer (as hereinafter defined) of the
Company, or influence or attempt to influence any actual or prospective Customer of the Company to cease doing business with the Company. For purposes of this Section 7.5, "Customer" shall mean
any person, firm, corporation, partnership, association or other entity to which the Company provided services or sold products during the 12 months prior to the termination of this Employment
Agreement and with which the Executive had contact in the course of his employment with the Company, or with respect to which the Executive possesses information that is proprietary or confidential to
the Company. 

        SECTION
7.6    Nondisparagement.    The Executive shall not (i) publicly criticize or disparage the Company or
any Affiliate, or privately criticize or disparage the Company or any Affiliate in a manner intended or reasonably calculated to result in a public embarrassment to, or injury to the reputation of,
the Company or any Affiliate in any community in which the Company or any Affiliate is engaged in business; or (ii) commit damage to the property of the Company or any Affiliate or otherwise
engage in any misconduct which is injurious to the business or reputation of the Company or any Affiliate. 

        SECTION
7.7    Reasonable Scope; Application.    The Executive agrees that the foregoing restrictions contain
reasonable limitations as to the time, geographical area, and scope of activity to be restrained and that these restrictions do not impose any greater restraint than is necessary to protect the
goodwill and other legitimate business interests of the Company, including but not limited to the protection of Confidential Information. The Executive agrees that, in the event of a breach of
threatened breach by the Executive of any of the provisions of Articles Six and Seven of this Employment Agreement, the Company shall be entitled to injunctive relief restraining and preventing the
Executive from any violation thereof, as any such breach or threatened breach would cause irreparable injury to the Company for which it would have not adequate remedy at law. Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedies available for any such breach of threatened breach, including the recovery of damages from the Executive. The Executive also
agrees that the general public shall not be harmed by the enforcement of Articles Six and Seven of this Employment Agreement. The Executive expressly agrees and acknowledges that this covenant not to
compete is reasonable as to time and geographical area and does not place any unreasonable burden upon him. The Executive has requested or has had the opportunity to request that his personal legal
counsel
review this covenant not to compete. The Executive understands and hereby agrees to each and every term and condition of this covenant not to compete. Should any provision in this Article Seven
be held unreasonably broad with respect to the restrictions as to time, geographical area, or scope of activity to be restrained, any such restriction shall be construed by limiting and reducing it to
the extent necessary to render it reasonable, and as so construed, such provision shall be enforced. 

ARTICLE EIGHT

OPTION GRANTS  

        SECTION
8.1    Option Grants.    All stock options previously granted to the Executive under the terms of
Section 6.1 of the employment agreement between the parties dated R PROVISION shall continue to vest and be exercisable pursuant to the provisions of the Company's 2000 Incentive Stock Plan
(the "Plan") and the Non-Qualified Stock Option Agreement between the Executive and the Company. 

7

 
ARTICLE NINE

ARBITRATION  

        SECTION
9.1    Arbitration.    Any controversy or claim arising out of or relating to this Employment Agreement, or
any breach thereof, shall, except as provided in Section 7.6, be adjudged only by arbitration in accordance with the rules of the American Arbitration Association, and judgment upon such award
rendered by the arbitrator may be entered in nay court having jurisdiction thereof. Any dispute pursuant to Section 7.6 shall be subject to arbitration but may be enforced by injunctive relief
pursuant to Section 7.6. The arbitration shall be held in the City of Dallas, Texas, or such other place as may be agreed upon at the time by the parties to the arbitration. The arbitrator(s)
shall, in their award, allocate between the parties the costs of arbitration, which shall include reasonable attorneys' fees of the parties, as well as the arbitrators' fees and expenses, in such
proportions as the arbitrator(s) deem just. 

ARTICLE TEN

OTHER PROVISIONS  

        SECTION
10.1    Governing Law.    This Employment Agreement will be governed by, construed and enforced in accordance
with the laws of the State of Texas, excluding any conflicts of law, rule or principle that might otherwise refer to the substantive law of another jurisdiction. 

        SECTION
10.2    Assignment.    Except as otherwise indicated, this Employment Agreement is not assignable without the
written authorization of both parties; provided that the Company may assign this Employment Agreement to any entity to which the Company transfers substantially all of its assets or to any entity
which is a successor to the Company by reorganization, incorporation, merger or similar business combination. In the event of any such transfer or assignment by the Company, the rights and privileges
of the Board hereunder shall be vested in the Board or other governing body of the transferee or successor entity, and the protection afforded to the Company and its affiliates hereunder shall extend
to such transferee or successor entity and its affiliates. However, notwithstanding anything to the contrary contained herein, this Employment Agreement will be binding upon any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, and the Company will require any such successor by
agreement, in form and substance satisfactory to the Executive, to expressly assume and agree to perform this Employment Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place. As used in this Employment Agreement, "the Company" shall mean the Company as hereinbefore defined and any successor to its business and/or
assets as aforesaid which executes and delivers the agreement provided for in this Section 10.2 or which otherwise becomes bound by all the terms and provisions of this Employment Agreement by
operation of law. This Employment Agreement and all rights of the parties hereto shall inure to the benefit of and be enforceable by the parties hereto, their assigns, personal or legal
representatives, executors, administrators, successors, heirs, distributes, devises and legatees. 

        SECTION
10.3    Survival.    Except as otherwise provided herein, the provisions of Articles Six and Seven of this
Employment Agreement shall survive the termination of this Employment Agreement. 

        SECTION
10.4    Agreement Supersedes.    This Employment Agreement sets forth the entire and only agreement or
understanding between the parties relating to the subject matter hereof. This Employment Agreement supersedes all prior agreements between the parties with respect to the subject matter hereof,
including that certain employment agreement between the parties dated October 2000. There are no other effective employment agreements, written or oral, between the Company and the Executive. 

8

 

        SECTION
10.5    Amendment.    This Employment Agreement may be amended only by written amendment duly executed by both
parties hereto or their legal representatives and authorized by action of the Board. Except as otherwise specifically provided in this Employment Agreement, no waiver by either party hereto of any
breach by the other party hereto of any condition or provision of this Employment Agreement to be performed by such other party shall be deemed a waiver of a subsequent breach of such condition or
provision or a waiver of a similar or dissimilar provision or condition to the same or at any prior or subsequent time. 

        SECTION
10.6    Notices.    Any notice or other communication required or permitted pursuant to the terms of this
Employment Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States mail, first class, postage prepaid and registered with return receipt
requested, addressed to the intended recipient at his or its address set forth below and, in the case of a notice or other communication to the Company, directed to the attention of the Board with a
copy to the Secretary of the Company, or to such other address as the intended recipient may have theretofore furnished to the send in writing in accordance herewith, except that until any notice of
change of address is received, notices shall be sent to the following addresses: 

	If to the Executive:	 	If to the Company:
	

Mr. William G. Janacek

47 W. Rock Wing Place

The Woodlands, Texas 77381	
 	

PNG Corporation

5100 Westheimer, Suite 320

Houston, Texas 77056

Phone: (713) 965-9151

Fax: (713) 965-9156

Attn: Vice President of Finance
	

 	
 	

With a copy to:
	

 	
 	

Energy Spectrum Partners LP

5956 Sherry Lane, Suite 600

Dallas, Texas 75225

Phone: (214) 373-4080

Fax: (214) 373-4334

Attn: Sidney L. Tassin

        SECTION
10.7    Severability.    If any one or more of the provisions or parts of a provision contained in this
Employment Agreement shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity or unenforceability shall not affect any other provision or part of a provision of this Employment Agreement, but this Employment Agreement shall be reformed and construed as
if such invalid or illegal or unenforceable provision or part of a provision had never been contained herein and such provisions or part thereof shall be reformed so that it would be valid, legal and
enforceable to the maximum extent permitted by law. 

        SECTION
10.8    Headings.    The headings in this Employment Agreement are solely for convenience of reference and
shall be given no effect in the construction or interpretation of this Agreement. 

        SECTION
10.9    Counterparts.    This Employment Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which when taken together shall constitute one and the same instrument. 

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

	

 	
 	

 William G. Janacek

"Executive"
	

 	
 	

PNG CORPORATION
	

 	
 	

By:	
 	

	 	 	Its:	 	 
	 	 	"The Company"

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Exhibit 10.3    
  

FIRST AMENDMENT TO

CREDIT AGREEMENT  

        THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered into as of March 28, 2003, among
MARKWEST ENERGY OPERATING COMPANY, L.L.C., a Delaware limited liability company, as borrower (the "Borrower"), the undersigned Guarantors (collectively,
the "Guarantors"), BANK OF AMERICA, N.A., as Administrative Agent for the Lenders parties to the hereinafter defined Credit Agreement (in such capacity,
the "Administrative Agent"), ROYAL BANK OF CANADA, as Successor Administrative Agent and Increasing
Lender (as such terms are defined below), and the undersigned Lenders. 

        Reference
is made to the Credit Agreement dated as of May 20, 2002 (the "Credit Agreement"), among Borrower, MarkWest Energy
Partners, L.P., a Delaware limited partnership, the Administrative Agent, and the Lenders parties thereto. Unless otherwise defined in this Amendment, capitalized terms used herein shall have the
meaning set forth in the Credit Agreement; all section and schedule references herein are to sections and schedules in the Credit Agreement; and all paragraph references herein are to
paragraphs in this Amendment. 

RECITALS

        A.    Pinnacle Natural Gas Company, a Texas corporation, Pinnacle Pipeline Co., a Texas corporation, PNG Transmission
Company, Inc., a Texas corporation, PNG Utility Company, a Texas corporation, Bright Star Gathering, Inc., a Texas corporation, MarkWest Pinnacle L.P., a Texas limited partnership and a
Subsidiary of Borrower ("MW Pinnacle"), MarkWest PNG Utility L.P., a Texas limited partnership and a Subsidiary of Borrower ("MW
PNG"), MarkWest Texas PNG Utility L.P., a Texas limited partnership and a Subsidiary of Borrower ("MW Texas PNG"), and MarkWest
Blackhawk L.P., a Texas limited partnership and a Subsidiary of Borrower ("MW Blackhawk"), have agreed to merge pursuant to and in accordance with that
certain Plan of Merger dated as of March 28, 2003 (the "Pinnacle Merger Agreement"), pursuant to which the assets and liabilities of each of the
foregoing entities shall be allocated and shall vest in accordance with the provisions of Section 2 therein (the merger, consolidation,
allocation of assets and liabilities, and related transactions contemplated by the Pinnacle Merger Agreement are herein called the "Pinnacle Merger"). 

        B.    The Borrower has requested certain amendments to the Credit Agreement in order to facilitate the Pinnacle Merger, which
include, among other things, an increase in the amount of the Commitment of Royal Bank of Canada (the "Increasing Lender") under the Term Loan Facility
by $15,000,000. 

        C.    Subject to the terms and conditions of this Amendment, the Administrative Agent, the Increasing Lender, and the other
Lenders are willing to agree to such amendments. 

        Accordingly,
for adequate and sufficient consideration, the parties hereto agree, as follows: 

        Paragraph 1.    Amendments.    Effective
as of the Effective Date, the Credit Agreement is amended as follows: 

        1.1    Definitions. Section 1.01 is amended
as follows: 

        (a)  Each
of the following definitions is amended in its entirety to read as follows: 

        Agent-Related Persons means the Administrative Agent (including any successor administrative agent) and its Affiliates (including the
officers, directors, employees, agents and attorneys-in-fact of such Persons). 

        L/C Issuer means Royal Bank of Canada in its capacity as issuer of Letters of Credit hereunder, or any successor issuer of Letters of
Credit hereunder. 

 

        Midstream Businesses means gathering, transportation, fractionation, processing, marketing, and storage of natural gas, natural gas
liquids and other liquid hydrocarbons and businesses closely related to the foregoing. 

        Term Loan Commitment means an amount (subject to reduction or cancellation as herein provided) equal to $36,400,000. 

        (b)  The
following definitions are inserted alphabetically into Section 1.1: 

        Blackhawk Pipeline means that certain natural gas pipeline in Hutchinson County, Texas, approximately five (5) miles in length,
connected and transporting gas to the electrical generation plant owned by Borger Energy Associates, LP, known as Blackhawk Station, from the El Paso Pipeline northeast of Borger, Texas. 

        Counterparty Consent means a consent from a counterparty to a pipeline transportation agreement consenting to the Liens granted by the
Collateral Documents and containing such other terms as are satisfactory to the Administrative Agent. 

        First Amendment to Credit Agreement means that certain First Amendment to Credit Agreement dated as of March 28, 2003, among the
Borrower, the Guarantors, Bank of America, N.A., as Administrative Agent, Royal Bank of Canada, as Successor Administrative Agent and Increasing Lender, and the Lenders. 

        Hobbs Pipeline means that certain natural gas pipeline in Lea County, New Mexico, connected and transporting gas to Southwestern Public
Service Company's Cunningham Station, in Section 28, T18S, R36E, NMPM, and Maddox Station in Section 25, T18S, R36E, NMPM, Lea County, New Mexico. 

        Lake Whitney Pipeline means that certain natural gas pipeline lateral in Johnson, Hill and Bosque Counties, Texas, approximately 33 miles
in length, connected and delivering gas to SEI Texas, LP's electrical generation facility located in Bosque County, Texas. 

        MarkWest Merger Subsidiaries means, collectively, MW Pinnacle, MW PNG, MW Texas PNG and MW Blackhawk. 

        MW Blackhawk means MarkWest Blackhawk L.P., a Texas limited partnership. 

        MW GP means MarkWest Texas GP, L.L.C., a Delaware limited liability company. 

        MW Limited means MarkWest Texas Limited, L.L.C., a Delaware limited liability company. 

        MW New Mexico means MarkWest New Mexico L.P., a Texas limited partnership, or any other Subsidiary of the Borrower that owns the Hobbs
Pipeline. 

        MW Pinnacle means MarkWest Pinnacle L.P., a Texas limited partnership. 

        MW PNG means MarkWest PNG Utility L.P., a Texas limited partnership. 

        MW Texas PNG means MarkWest Texas PNG Utility L.P., a Texas limited partnership. 

        Pinnacle Escrow Agreement means that certain Escrow Agreement dated as of March     , 2003, executed by the Borrower, the
MLP, MW GP, MW Limited, each of the MarkWest Merger Subsidiaries, Energy Spectrum Partners LP, PNG Corporation, each of the Pinnacle Merger Subsidiaries, JPMorgan Chase Bank, as Escrow Agent, Royal
Bank of Canada, as Administrative Agent, Land America Title Insurance Company and Union Bank of California. 

        Pinnacle Merger Agreement means the certain Plan of Merger dated as of March 28, 2003, by and among the MarkWest Merger
Subsidiaries and the Pinnacle Merger Subsidiaries. 

2

 

        Pinnacle Purchase Agreement means that certain Purchase Agreement dated as of March 24, 2003, among Energy Spectrum Partners LP, a
Delaware limited partnership, PNG Corporation, a Delaware corporation, MW GP, MW Limited, and the MLP. 

        Pinnacle Merger Subsidiaries means, collectively, Pinnacle Natural Gas Company, a Texas corporation, Pinnacle Pipeline Co., a Texas
corporation, PNG Transmission Company, Inc., a Texas corporation, PNG Utility Company, a Texas corporation, and Bright Star Gathering, Inc., a Texas corporation. 

        Pro Rata Share means, at any date of determination, for any Lender with respect to a particular Facility, the percentage (carried out to
the ninth decimal place) that its Committed Sum for such Facility bears to the aggregate Committed Sums of all Lenders for such Facility. Facility means any of the Acquisition Subfacility, the Working
Capital/Distribution Subfacility, and the Term Loan Facility. 

        Rio Nogales Pipelines means those two natural gas pipeline laterals in Guadalupe and Caldwell Counties, Texas, one approximately
twenty-two (22) miles in length and the other approximately seven (7) miles in length, connected and transporting gas to Rio Nagales Power Project, LP's electrical generation
facility located in or near the city of Seguin, Guadalupe County, Texas. 

        (c)  The
commitment fee set forth in the definition of "Applicable Rate" for Pricing Levels 1 and 2 is amended to be 37.5
basis points. 

        (d)  The
definition of "Letter of Credit Sublimit" is amended by replacing the words "Aggregate Commitments" with "Aggregate
Commitments under the Working Capital/Distribution Subfacility". 

        1.2    Section 2.04.    Section 2.04
is amended by adding a new subsection (f) immediately following Section 2.04(e) to read as
follows: 

        (f)    In
the event that the conditions precedent set forth in the Pinnacle Escrow Agreement for release of the funds escrowed thereunder to the Pinnacle Merger Subsidiaries is
not satisfied within the time period set forth therein, then the Borrower shall make: (a) a mandatory prepayment of Term Loan Principal Debt in the amount of $15,000,000, and (b) a
mandatory prepayment of Revolver Principal Debt under the Acquisition Subfacility in the amount of $24,700,000, provided, that no corresponding reduction in the Revolver Commitment is required by
reason of such prepayment. Amounts received by the Administrative Agent from the Escrow Agent (as defined in the Pinnacle Escrow Agreement) shall be applied to the making of such prepayments. The
mandatory prepayment of Term Loan Principal Debt made pursuant to this subsection shall be applied to Term Loan Principal Debt owed to Royal Bank of Canada, and after such prepayment the
respective Pro Rata Shares of the Term Loan Lenders shall be readjusted to reflect such prepayment. The mandatory prepayment of Revolver Principal Debt made pursuant to this subsection shall be
applied to the Revolver Principal Debt owed to the Revolving Lenders in accordance with their respective Pro Rata Shares. 

        1.3    Section 2.08(b).    The
first sentence of Section 2.08(b)is hereby amended to read as follows: 

        The
Borrower shall pay certain fees to Royal Bank of Canada for its own account, including an agency fee, in the amounts and at the times specified in the letter agreement dated
March 3, 2003 (the "Agent/Arranger Fee Letter"). 

3

 

        1.4    Section 2.14.    Section 2.14
is amended by adding a new subsection (l) immediately following Section 2.14(k) to read as
follows: 

        (l)    Letters
of Credit may be issued only under the Working Capital/Distribution Subfacility, and for purposes of this  Section 2.14, the term "Lenders" shall mean only Lenders with Committed Sums under
the Working Capital/Distribution Subfacility. 

        1.5    Section 6.12(a).    Section 6.12(a)
is hereby amended to read as follows: 

        (a)  Use
the proceeds of the Term Loan Facility (i) on the Conditions Effective Date, to finance the purchase of the Purchased Assets, and (ii) on the Effective
Date (as defined in the First Amendment to Credit Agreement), (A) to make payment of consideration required to be paid pursuant to the Pinnacle Merger Agreement and (B) to refinance
certain Indebtedness of PNG Corporation, a Delaware corporation, and the PNG Group (as defined in the Pinnacle Purchase Agreement), which Indebtedness is assumed by MarkWest Merger Subsidiaries
pursuant to Section 2.2 of the Pinnacle Purchase Agreement. 

        1.6    Section 6.12(b).    Section 6.12(b)
is hereby amended to read as follows: 

        (b)  Use
the proceeds of the Acquisition Subfacility as follows: (i) to finance Acquisitions and Capital Expenditures by the Borrower and its Subsidiaries of Persons
or assets (including without limitation the acquisition by MW New Mexico of the Hobbs Pipeline) subject to compliance with this Agreement, including  Sections 7.02 and 7.10, and (ii) on the Initial Funding Date, the Borrower may request a
Borrowing in an amount not to exceed $5,600,000 to finance a portion of the Purchased Assets; and 

        1.7    Section 6.16(a).    Section 6.16(a)
is hereby amended to read as follows: 

        (a)  The
Borrower and the MLP shall cause the MLP and each Subsidiary of the Borrower and the MLP to take such actions and to execute and deliver such documents and
instruments as the Administrative Agent shall require to ensure that the Administrative Agent on behalf of the Lenders shall, at all times, have received currently effective duly executed Loan
Documents granting Liens and security interests in substantially all of the assets of the MLP and each Subsidiary of the Borrower and the MLP, including all capital stock, partnership, joint venture,
membership interests, or other equity interests; provided,
however that (i) MarkWest Energy Appalachia, L.L.C. shall not be required to grant a Lien on its interests in the Equitable Leases; and (ii) unless otherwise requested by the
Administrative Agent acting upon the direction of the Required Lenders, the MarkWest Merger Subsidiaries shall not be required to grant a Lien on any assets acquired pursuant to and in accordance with
the Pinnacle Merger Agreement, other than assets constituting part of or related to the lateral pipeline transmission systems located in Texas, and the Appleby and Brahaney gas gathering, compressor
and processing pipeline systems, as applicable. 

        1.8    Section 7.04(d).    Section 7.04(d)
is hereby amended to read as follows: 

        (d)  Obligations
(contingent or otherwise) of the Borrower, the MLP or any Subsidiary (other than MW Texas PNG, MW New Mexico, MW PNG, and MW Blackhawk) existing or arising
under any Swap Contract to the extent permitted by Section 7.03; 

        1.9    Section 7.04(e).    Section 7.04(e)
is hereby amended to read as follows: 

        (e)  Indebtedness
of the MLP, the Borrower and their respective Subsidiaries (other than MW Texas PNG, MW New Mexico, MW PNG, and MW Blackhawk) in respect of purchase money
obligations for fixed or capital assets within the limitations set forth in Section 7.01(k); provided,
however, that the aggregate amount of such Indebtedness at any one time outstanding shall not exceed $5,000,000; 

4

 

        1.10    Section 7.04(f).    Section 7.04(f)
is hereby amended to read as follows: 

        (f)    Other
Indebtedness of the MLP, the Borrower and their respective Subsidiaries (other than MW Texas PNG, MW New Mexico, MW PNG and MW Blackhawk) not to exceed $5,000,000
in the aggregate principal amount outstanding at any time. 

        1.11    Section 7.10.    The last
sentence of Section 7.10is hereby amended to read as follows: 

        In
addition to the foregoing, (a) the MLP may not engage in any business other than the ownership of the Borrower and the operation of the MLP, (b) MW Texas PNG may not
engage in any business other than the ownership and operation of the Rio Nogales Pipelines, (c) in the event MW New Mexico acquires the Hobbs Pipeline, MW New Mexico may not engage in any
business other than the ownership and operation of the Hobbs Pipeline, (d) MW Blackhawk may not engage in any business
other than the ownership and operation of the Blackhawk Pipeline, and (e) MW PNG may not engage in any business other than the ownership and operation of the Lake Whitney Pipeline. 

        1.12    Section 7.17.    Article VII
is amended by adding a new Section 7.17 immediately following Section 7.16 to read as
follows: 

        Counterparty Consents.    In the event that the Borrower delivers to the Administrative Agent a Counterparty Consent with
respect to the Blackhawk Pipeline, Hobbs Pipeline, Lake Whitney Pipeline or Rio Nogales Pipeline, the Borrower may, at the time of such delivery of the Counterparty Consent, request that the
parentheticals set forth in Sections 7.04(d), 7.04(e), and  7.04(f), and the
restrictions set forth in Section 7.10, no longer apply to the Subsidiary that
owns such pipeline. Upon receipt of such Counterparty Consent and such request, the Administrative Agent shall issue a notice to the Borrower and the Lenders declaring that from and after the issuance
of such notice, the parentheticals set forth in Sections 7.04(d), 7.04(e), and  7.04(f), and restrictions set forth in Section 7.10, no longer apply to such Subsidiary. 

        1.13    Schedule 2.01.    Schedule 2.01
to the Credit Agreement is hereby replaced in its entirety with Schedule 2.01 attached hereto. 

        1.14    Schedule 10.02 to the Credit
Agreement is hereby replaced in its entirety with Schedule 10.02 attached hereto. 

        1.15    References to $60,000,000.    All
references to "$60,000,000" in the Credit Agreement (including the cover page thereto) and other Loan Documents shall be amended to read "$75,000,000". 

        1.16    References to Bank of
America.    Each reference to "Bank of America" or "Bank of America, N.A." in the definitions of "Base
Rate," "Eurodollar Rate" and "Federal Funds Rate" and in  Sections 2.03(b)
, 9.01(c), 9.09, and
10.07(h) of the Credit Agreement shall be deemed to be a reference to "Royal Bank of Canada". 

        Paragraph 2.    Effective
Date.    This Amendment shall not become effective, and the disbursement of additional Loans under the Term Loan Facility and the Revolver Facility to
finance the purchase of the Pinnacle Assets shall not be made, until the date (such date, the "Effective Date") the Administrative Agent receives all of
the agreements, documents, certificates, instruments, and other items described below, provided that the items described on Attachment A hereto may be
delivered after the Effective Date, but not later than the respective dates for delivery for such items specified on Attachment A): 

        (a)  this
Amendment, executed by the Borrower, the Guarantors, the Increasing Lender and each other Lender; 

        (b)  a
Term Note payable to the order of the Increasing Lender reflecting the Increasing Lender's increased Commitment under the Term Loan Facility; 

5

 

        (c)  counterparts
of the Guaranty, the Pledge and Security Agreement and other Collateral Documents, each executed by MW Pinnacle, MW PNG, MarkWest Texas GP, L.L.C., a
Delaware limited liability company ("MW GP"), MW Texas PNG, MW Blackhawk and MW Texas Limited, L.L.C., a Delaware limited liability company
("MW Limited"), in form and substance satisfactory to the Administrative Agent and the Successor Administrative Agent, which shall be held in escrow by
the Escrow Agent (as defined in the Pinnacle Escrow Agreement) pursuant to the Pinnacle Escrow Agreement, and shall be released therefrom upon satisfaction of the conditions precedent to such release
set forth therein; 

        (d)  from
the Borrower and the existing Guarantors, such certificates of secretary, assistant secretary, manager, or general partner, as applicable, as the Administrative
Agent may require, certifying (i) resolutions of its board of directors, managers or members (or their equivalent) authorizing the execution and performance of this Amendment and the other Loan
Documents which such Person is executing in connection herewith, (ii) the incumbency and signature of the officer executing such documents, and (iii) no change in such Person's
organizational documents since May 20, 2002; 

        (e)  for
each Guarantor formed to consummate the Pinnacle Merger, a certificate of its secretary, assistant secretary, manager or general partner, as applicable, certifying
(i) resolutions of its board of directors, managers or members (or their equivalent) authorizing the execution and performance of this Amendment and the other Loan Documents which such Person
is executing in connection herewith, (ii) the incumbency and signature of the officer executing such documents, and (iii) such Person's organizational documents; 

        (f)    such
other documents and agreements pursuant to Sections 6.15and  6.16 of the Credit Agreement as may be required by, and each in form and
substance satisfactory to, the Administrative Agent and the Successor
Administrative Agent; 

        (g)  legal
opinions from counsel to the Borrower and each Guarantor, in form and substance satisfactory to the Administrative Agent and the Successor Administrative Agent; 

        (h)  a
certificate of the Borrower representing and warranting that (i) the Articles of Merger have been filed with the Secretary of State of the State of Texas;
(ii) such Articles of Merger were previously approved or otherwise pre-cleared by the Secretary of State of the State of Texas; (iii) the only outstanding condition to the
consummation of the Pinnacle Merger is the issuance of the Certificates of Merger by the Secretary of State of the State of Texas; (iv) upon the issuance of the Certificates of Merger by the
Secretary of State of the State of Texas, the Pinnacle Merger will be consummated in accordance with the terms of the Pinnacle Merger Agreement and in accordance with applicable Laws, without waiver
of any of the conditions precedent to such closing set forth in the Pinnacle Merger Agreement; (v) the consideration paid by the Borrower in connection with the Pinnacle Merger does not and
will not exceed $38,500,000 (excluding acquired working capital and fees/expenses associated with the Pinnacle Merger); (vi) all approvals of shareholders and other equity owners required for
consummation of the Pinnacle Merger have been obtained; (vii) all material third party approvals required for consummation of the Pinnacle Merger have been obtained; (viii) no approval
of or filing with any Governmental Authority is required in connection with the Pinnacle Merger except for reporting requirements of the Securities and Exchange Commission under the Securities
Exchange Act of 1934; (ix) both before and after giving effect to the Pinnacle Merger, there has been no event or circumstance that has or could reasonably be expected to have a material
adverse change in the business, assets, liabilities (actual or condition), operations, condition (financial or otherwise) or prospects of the Borrower, any Guarantor, or any of the businesses, assets
or liabilities acquired or assumed by the Borrower or its Subsidiaries in connection with the Pinnacle Merger; and (x) there is not 

6

 

any action, suit, investigation or proceeding pending or threatened in any court or before any arbitrator or governmental authority by or against the Borrower, any Guarantor, the MLP's General
Partner, any party to the Pinnacle Merger Agreement, or any of their respective properties, that (a) contests or seeks to adversely affect the Pinnacle Merger, or (b) could reasonably be
expected to materially and adversely affect the Borrower or any Guarantor, or (c) seeks to affect or pertains to any transaction contemplated hereby or contemplated by the Pinnacle Merger
Agreement or the ability of the Borrower or any Guarantor to perform its obligations under any Loan Document; 

        (i)    receipt
of (i) the First Amendment to Fifth Amended and Restated Credit Agreement dated as of the Effective Date, executed by MarkWest Hydrocarbon, Inc., a
Delaware corporation, as borrower, Bank of America, N.A., as administrative agent, and the "Required Lenders" parties thereto, and (ii) the First Amendment to Amended and Restated Credit
Agreement dated as of the Effective Date, executed by MarkWest Resources Canada Corp., an Alberta corporation, as borrower, the guarantors parties thereto, Bank of America, N.A., as administrative
agent, and the "Required Lenders" parties thereto; 

        (j)    fees
and expenses required to be paid pursuant to Paragraph 6of this Amendment, to the extent invoiced prior to
the Effective Date; and 

        (k)  such
other assurances, certificates, documents and consents as the Administrative Agent or the Successor Administrative Agent may require. 

        Paragraph 3.    Post-Closing Items; Waiver of MW New Mexico
Deliverables.    (a) The Borrower agrees to deliver the documents and other items described in Attachment
A attached hereto, and to take the other actions described in Attachment A, not later than the dates set forth in  Attachment
A. At the Successor Administrative Agent's request, Borrower agrees to deliver to the Successor Administrative Agent such information,
reports, and documents, and do all other acts or things, as the Successor Administrative Agent may request in order to evidence, perfect, continue, or preserve the priority of the Liens and security
interests in the Collateral or to supplement or correct any information, report, document, or certificate delivered to the Administrative Agent or the Successor Administrative Agent at any time prior
to the Effective Date or in connection with the delivery of the documents and other items set forth on Attachment A hereto. 

        (b)  Each
Lender hereby waives delivery by MW New Mexico of a Guaranty, Security Agreement and other Collateral Documents as otherwise required pursuant to  Sections 6.15 and 6.16 of the Credit Agreement until such time as MW New Mexico owns or otherwise
acquires any asset. MW New Mexico acknowledges that upon the acquisition by MW New Mexico of any asset, it shall deliver the applicable documents required to be delivered pursuant to such
sections concurrently with such acquisition. 

        Paragraph 4.    Acknowledgment and
Ratification.    As a material inducement to the Administrative Agent and the Lenders to execute and deliver this Amendment, (a) each of the
Borrower and the Guarantors (i) consents to the agreements in this Amendment, (ii) agrees and acknowledges that the execution, delivery, and performance of this Amendment shall in no way
release, diminish, impair, reduce, or otherwise affect the respective obligations of the Borrower or any Guarantor under the Loan Documents to which it is a party, which Loan Documents shall remain in
full force and effect, and all rights thereunder are hereby ratified and confirmed, and (b) each MarkWest Merger Subsidiary acknowledges that it is an "OLLC Subsidiary" as defined in the
Agreement Regarding Collateral and agrees to the terms, conditions, and agreements set forth therein as if an original party thereto. 

        Paragraph 5.    Representations.    As
a material inducement to the Administrative Agent and the Lenders to execute and deliver this Amendment, each of the Borrower and the Guarantors represents and warrants to the Administrative Agent and
the Lenders that as of the Effective Date of this 

7

 

Amendment and as of the date of execution of this Amendment, (a) all representations and warranties in the Loan Documents are true and correct in all material respects as though made on the
date hereof, except to the extent that any of them speak to a different specific date, and (b) no Default or Event of Default exists. 

        Paragraph 6.    Expenses; Funding
Losses.    The Borrower shall pay on demand all costs, fees, and expenses paid or incurred by each of the Administrative Agent and the Successor
Administrative Agent incident to this Amendment, including, without limitation, Attorney Costs in connection with the negotiation, preparation, delivery, and execution of this Amendment and any
related documents, filing and recording costs, and the costs of title insurance endorsements. The Borrower shall also pay on demand all funding losses incurred by the Lenders in connection with the
conversion of existing Term Loans on the Effective Date. 

        Paragraph 7.    Permitted Acquisition; Pro Forma Adjustments for Purposes of
Sections 7.15 (a) and (b).    Each of the Lenders (a) acknowledges that it has received a certificate of Responsible Officer of
the Borrower demonstrating pro forma compliance with Sections 7.01, 7.04 and  7.15
of the Credit Agreement as of the closing of the Pinnacle Merger after giving effect thereto and after giving effect to the Indebtedness incurred
in connection therewith (the "Permitted Acquisition Compliance Certificate"), (b) waives the requirement that Borrower deliver the Permitted
Acquisition Compliance Certificate at least fourteen days prior to the Pinnacle Merger, and (c) agrees that for the purposes of determining compliance with  Sections 7.15(a) and
(b), Consolidated EBITDA shall be calculated after giving effect, on a pro
forma basis for the four consecutive fiscal quarters most recently completed, to the Pinnacle Acquisition as if the Pinnacle Merger had occurred on the first day of such period. 

        Paragraph 8.    Brightstar Partnership, L.P., Las Animas Landfill Gas, L.L.C., and
Texana Pipeline Co., J.V.    (a) Notwithstanding anything to the contrary set forth in  Sections 6.15 and 6.16 of the Credit Agreement, Brightstar Partnership, L.P., a Texas limited
partnership ("Brightstar"), shall not be required to execute and deliver a Guaranty or Security Agreement on the Conditions Effective Date; provided
however, that Brightstar shall execute and deliver a Guaranty and Security Agreement, as applicable, if any of the following shall occur: (a) Brightstar's agreement of limited partnership no
longer prohibits it from executing such Guaranty or Security Agreement; (b) as of the last day of any quarter, EBITDA for Brightstar for a period of four fiscal quarters ending on such date
equals more than five percent (5%) of Consolidated EBITDA for such period; or (c) the book value of Brightstar's assets as reflected on the balance sheet of the MLP equals more than five
percent (5%) of the book value of assets of the MLP and its Subsidiaries on a consolidated basis. 

        (b)  Notwithstanding
anything to the contrary set forth in Section 6.16 of the Credit Agreement, MW Pinnacle shall not
be required to pledge its partnership interest in Brightstar; provided however, that MW Pinnacle shall pledge its partnership interest in Brightstar if any of the following shall occur:
(i) Brightstar's agreement of limited partnership no longer prohibits MW Pinnacle's pledge of its partnership interest in Brightstar; (ii) as of the last day of any quarter, EBITDA for
Brightstar for a period of four fiscal quarters ending on such date equals more than five percent (5%) of Consolidated EBITDA for such period; or (iii) the book value of Brightstar's assets as
reflected on the balance sheet of the MLP equals more than five percent (5%) of the book value of assets of the MLP and its Subsidiaries on a consolidated basis. 

        (c)  Notwithstanding
anything to the contrary set forth in Section 6.16 of the Credit Agreement, MW Pinnacle shall not
be required to pledge its limited liability company interest in Las Animas Landfill Gas, L.L.C., a Texas limited liability company ("Las Animas");
provided however, that MW Pinnacle shall pledge its limited liability company interest in Las Animas if any of the following shall occur: (i) Las Animas' limited liability company agreement no
longer prohibits MW Pinnacle's pledge of its limited liability company interest 

8

 

in Las Animas; (ii) as of the last day of any quarter, EBITDA for Las Animas for a period of four fiscal quarters ending on such date as reflected on the financial statements of the MLP equals
more than five percent (5%) of Consolidated EBITDA for such period; or (iii) the book value of MW Pinnacle's equity investment in Las Animas as reflected on the balance sheet of the MLP equals
more
than five percent (5%) of the book value of assets of the MLP and its Subsidiaries on a consolidated basis. 

        (d)  Notwithstanding
anything to the contrary set forth in Section 6.16 of the Credit Agreement, MW Pinnacle shall not
be required to pledge its joint venture interest in Texana Pipeline Co., J.V. ("Texana"); provided however, that MW Pinnacle shall pledge its joint
venture interest in Texana if any of the following shall occur: (i) Texana's joint venture agreement no longer prohibits MW Pinnacle's pledge of its joint venture interest in Texana;
(ii) as of the last day of any quarter, EBITDA for Texana for a period of four fiscal quarters ending on such date as reflected on the financial statements of the MLP equals more than five
percent (5%) of Consolidated EBITDA for such period; or (iii) the book value of MW Pinnacle's equity investment in Texana as reflected on the balance sheet of the MLP equals more than five
percent (5%) of the book value of assets of the MLP and its Subsidiaries on a consolidated basis. 

        As
used in this Paragraph 8, "EBITDA" means an amount equal to the sum of
(a) Consolidated Net Income, (b) Consolidated Interest Charges, (c) the amount of taxes, based on or measured by income, used or included in the determination of such Consolidated
Net Income, (d) the amount of depreciation, depletion, and amortization expense deducted in determining such Consolidated Net Income, and (e) other non-cash charges and
expenses, including, without limitation, non-cash charges and expenses relating to Swap Contracts or resulting from accounting convention changes. 

        Paragraph 9.    L/C
Issuer.    (a) Bank of America hereby withdraws as L/C Issuer under the Credit Agreement, (b) the Borrower and the Lenders consent to
such withdrawal, (c) Royal Bank of Canada is hereby named successor L/C Issuer under the Credit Agreement (in such capacity, the "Successor L/C
Issuer"), and (d) the Borrower and the Lenders consent to the appointment of the Successor L/C Issuer as "L/C Issuer" under the Credit Agreement. 

        Paragraph 10.    Resignation of Administrative Agent; Appointment of Successor
Administrative Agent; Assignment.

        (a)  Pursuant
to and in accordance with Section 9.10 of the Credit Agreement, effective upon the Effective Date,
(i) Bank of America resigns as Administrative Agent under the Credit Agreement, (ii) the Borrower and the Lenders waive the requirement of 30 days prior notice of such
resignation, (iii) Royal Bank of Canada is appointed successor administrative agent for the Lenders under the Credit Agreement (in such capacity, the "Successor
Administrative Agent"), (iv) the Borrower consents to the appointment of the Successor Administrative Agent as "Administrative Agent" under the Credit Agreement, and
(v) Royal Bank of Canada accepts its appointment as Successor Administrative Agent, and Bank of America is relieved of all duties and obligations as Administrative Agent. 

        (b)  Effective
as of the Effective Date, Bank of America assigns all of the liens held by it in its capacity as Administrative Agent to Royal Bank of Canada, as Successor
Administrative Agent. The Lenders
authorize Bank of America to execute such documents as may be required to effectuate such assignment. 

        (c)  Bank
of America's rights to be indemnified and to be reimbursed for costs pursuant to the Credit Agreement, including  Sections 9.08, 10.04
and 10.05, shall extend to
actions taken in its capacity as retiring Administrative Agent. 

9

 

        Paragraph 11.    Pinnacle Loan Documents; Assignment of Notes and
Liens.    Reference is made to that certain Assignment of Debt, Documents and Liens and Partial Release Agreement dated of even date herewith, entered
into between Union Bank of California, as assignor, and the Successor Administrative Agent, as assignee (the "Assignment of Notes and Liens"). Each of
the Borrower, MW GP, MW Limited, and the MarkWest Merger Subsidiaries (a) consents to the execution and delivery of the Assignment of Notes and Liens, and the assignment of the liens and
security interests to the Successor Administrative Agent as contemplated therein, (b) represents that it is not aware of any claims or causes of actions against Union Bank of California under
the Credit Agreement (as defined in the Assignment of Notes and Liens), the Notes (as defined in the Assignment of Notes and Liens), any Guaranty (as defined in the Assignment of Notes and Liens), the
Security Documents (as defined in the Assignment of Notes and Liens), or any other document executed in connection therewith (collectively, the "Pinnacle Loan
Documents"), and that it has no claims, causes of actions, or offset rights against Union Bank of California under any of the Pinnacle Loan Documents, (c) hereby
releases, discharges and acquits forever the Administrative Agent, the Successor Administrative Agent, the L/C Issuer, the Successor L/C Issuer, the Lenders, and each of their respective officers,
trustees, agents, employees and counsel (in each case, past, present or future) from any and all liabilities, claims, defenses, demands, actions, causes of action, judgments, deficiencies, interest,
liens, costs, or expenses (including court costs, penalties, attorneys' fees and disbursements and amounts paid in settlement) of any kind and character whatsoever, including claims for usury, breach
of contract, breach of commitment, negligent misrepresentation or failure to act in good faith, in each case whether now known or unknown, suspected or unsuspected, asserted or unasserted or primary
or contingent, and whether arising out of written documents, underwritten undertakings, course of conduct, tort, violations of laws or regulations or otherwise, with respect to the Pinnacle Loan
Documents and the transactions arising or contemplated thereunder, existing as of or arising on or prior to the Effective Date, (d) agrees and acknowledges that advances under the Notes are in
partial renewal, extension and modification of, but not in novation or discharge of, the indebtedness evidenced by the promissory notes delivered under the Pinnacle Loan Documents, and
(e) agrees and acknowledges that the execution, delivery, and performance of this Amendment shall in no way release, diminish, impair, reduce, or otherwise affect its obligations under the
Pinnacle Loan Documents to which it or any predecessor in interest is a party, which Pinnacle Loan Documents shall remain in full force and effect, as amended by the Loan Documents. 

        Paragraph 12.    Escrow
Agreement.    Each of the Lenders (a) authorizes the Administrative Agent to execute and deliver, on its behalf, the Pinnacle Escrow Agreement
substantially in the form of Attachment B attached hereto, (b) agrees to be bound by the terms and conditions set forth in the Pinnacle Escrow
Agreement as if a party thereto. The parties hereto agree that the proceeds of the Loans made on the
Effective Date for the purpose of funding the Pinnacle Merger shall be disbursed to the Escrow Agent (as defined in the Pinnacle Escrow Agreement) to be held pursuant to the Pinnacle Escrow Agreement. 

        Paragraph 13.    Miscellaneous.    This
Amendment is a "Loan Document"referred to in the Credit Agreement. The provisions relating to Loan
Documents in Article X of the Credit Agreement are incorporated in this Amendment by reference. Unless stated otherwise (a) the singular
number includes the plural and vice versa and words of any gender include each other gender, in each case, as appropriate, (b) headings and
captions may not be construed in interpreting provisions, (c) this Amendment must be construed, and its performance enforced, under Texas law and applicable U.S. federal law, (d) if any
part of this Amendment is for any reason found to be unenforceable, all other portions of it nevertheless remain enforceable, and (e) this Amendment may be executed in any number of
counterparts with the same effect as if all signatories had signed the same document, and all of those counterparts must be construed together to constitute the same document. 

10

 

        Paragraph 14.    Entire
Agreement.    THIS AMENDMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES ABOUT THE SUBJECT MATTER OF THIS AMENDMENT AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

        Paragraph 15.    Parties.    This
Amendment binds and inures to the benefit of the Borrower, the Guarantors, the Administrative Agent, the Successor Administrative Agent, the Increasing Lender, the other Lenders, and their respective
successors and assigns. 

        Paragraph 16.    Further
Assurances.    The parties hereto each agree to execute from time to time such further documents as may be necessary to implement the terms of this
Agreement. 

        The
parties hereto have executed this Amendment in multiple counterparts to be effective as of the Effective Date. 

Remainder of Page Intentionally Blank.

Signature Pages to Follow.  

11

 

	 	 	MARKWEST ENERGY OPERATING COMPANY,

L.L.C., a Delaware limited liability company, as

Borrower
	

 	
 	

By:	

MarkWest Energy Partners, L.P.

its sole Member
	

 	
 	

By:	

MarkWest Energy GP, L.L.C.,

its General Partner
	

 	
 	

By:	

 Name:

Title:
	

 	
 	

MARKWEST ENERGY PARTNERS, L.P., a Delaware limited partnership, as a Guarantor
	

 	
 	

By:	

MarkWest Energy GP, L.L.C.,

its General Partner
	

 	
 	

By:	

 Name:

Title:
	

 	
 	

MARKWEST PINNACLE L.P., a Texas limited partnership, as Guarantor
	

 	
 	

By:	

MarkWest Texas GP, L.L.C.,

its General Partner
	

 	
 	

By:	

MarkWest Energy Operating Company,

L.L.C., its sole Member
	

 	
 	

By:	

MarkWest Energy Partners, L.P.

its sole Member
	

 	
 	

By:	

MarkWest Energy GP, L.L.C.,

its General Partner
	

 	
 	

By:	

 Name:

Title:

12

 

	

 	
 	

MARKWEST PNG UTILITY, L.P., a Texas limited partnership, as a Guarantor
	

 	
 	

By:	

MarkWest Texas GP, L.L.C.,

its General Partner
	

 	
 	

By:	

MarkWest Energy Operating Company,

L.L.C., its sole Member
	

 	
 	

By:	

MarkWest Energy Partners, L.P.

its sole Member
	

 	
 	

By:	

MarkWest Energy GP, L.L.C.,

its General Partner
	

 	
 	

By:	

 Name:

Title:
	

 	
 	

MARKWEST TEXAS PNG UTILITY L.P., a Texas limited partnership, as a Guarantor
	

 	
 	

By:	

MarkWest Texas GP, L.L.C.,

its General Partner
	

 	
 	

By:	

MarkWest Energy Operating Company,

L.L.C., its sole Member
	

 	
 	

By:	

MarkWest Energy Partners, L.P.

its sole Member
	

 	
 	

By:	

MarkWest Energy GP, L.L.C.,

its General Partner
	

 	
 	

By:	

 Name:

Title:

13

 

	

 	
 	

MARKWEST BLACKHAWK L.P., a Texas limited partnership, as a Guarantor
	

 	
 	

By:	

MarkWest Texas GP, L.L.C.,

its General Partner
	

 	
 	

By:	

MarkWest Energy Operating Company,

L.L.C., its sole Member
	

 	
 	

By:	

MarkWest Energy Partners, L.P.

its sole Member
	

 	
 	

By:	

MarkWest Energy GP, L.L.C.,

its General Partner
	

 	
 	

By:	

 Name:

Title:
	

 	
 	

MARKWEST TEXAS GP, L.L.C., a Delaware limited liability company, as a Guarantor
	

 	
 	

By:	

MarkWest Energy Operating Company,

L.L.C., its sole Member
	

 	
 	

By:	

MarkWest Energy Partners, L.P.

its sole Member
	

 	
 	

By:	

MarkWest Energy GP, L.L.C.,

its General Partner
	

 	
 	

By:	

 Name:

Title:

14

 

	

 	
 	

MW TEXAS LIMITED, L.L.C., a Delaware limited liability company, as a Guarantor
	

 	
 	

By:	

MarkWest Energy Operating Company,

L.L.C., its sole Member
	

 	
 	

By:	

MarkWest Energy Partners, L.P.

its sole Member
	

 	
 	

By:	

MarkWest Energy GP, L.L.C.,

its General Partner
	

 	
 	

By:	

 Name:

Title:

15

 

	

 	
 	

BANK OF AMERICA, N.A., as resigning

Administrative Agent, resigning L/C Issuer

and a Lender
	

 	
 	

By:	

 Richard L. Stein

Principal

16

 

	

 	
 	

ROYAL BANK OF CANADA, as Successor

Administrative Agent
	

 	
 	

By:	

 Name:

Title:
	

 	
 	

ROYAL BANK OF CANADA, as Lender,

Increasing Lender and L/C Issuer
	

 	
 	

By:	

 Jason York

Manager

17

 

	

 	
 	

FORTIS CAPITAL CORP., as a Lender
	

 	
 	

By:	

 Name:

Title:
	

 	
 	

By:	

 Name:

Title:

18

 

	

 	
 	

WELLS FARGO BANK, N.A. as a Lender
	

 	
 	

By:	

 Name:

Title:

19

 

	

 	
 	

U. S. BANK, NATIONAL ASSOCIATION,

as a Lender
	

 	
 	

By:	

 Name:

Title:

20

 

	

 	
 	

BANK OF OKLAHOMA, N.A., as a Lender
	

 	
 	

By:	

 Name:

Title:

21

QuickLinks

Exhibit 10.3

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