Contract

EXHIBIT 10.2 ———— GAS PURCHASE AGREEMENT DATED MARCH 31, 1999 BETWEEN NORTHEAST OHIO GAS MARKETING, INC., AND ATLAS ENERGY GROUP, INC., ATLAS RESOURCES, INC., AND RESOURCE ENERGY, INC. GAS PURCHASE AGREEMENT This Agreement made and entered into as of this 31st day of March,1999, by and between Northeast Ohio Gas Marketing, Inc., an Ohio corporation(“Buyer”) of P. O. Box 430, Lancaster, Ohio 43130-0430 and Atlas Energy Group,Inc., an Ohio corporation, Atlas Resources, Inc., a Pennsylvania corporation andResource Energy, Inc., a Delaware corporation (collectively “Seller” of 311Rouser Road, P.O. Box 611, Coraopolis, Pennsylvania 15108. RECITALS WHEREAS, Buyer utilizes volumes of natural gas, hereinafter referred toas “gas”, for its customers situated in Ohio and Pennsylvania; and WHEREAS, Seller is in the business of developing and producing a supplyof gas from gas and/or on wells situated in Ohio and Pennsylvania; and WHEREAS, Seller is the owner of such gas or is the authorized agent forthe owner or owners of such gas and therefore has the authority to contract forthe sale of such gas; and WHEREAS, Seller desires to sell and to agree to sell for itself andthose owners for which it is the authorized agent, all of the gas produced fromthe wells, and Buyer desires to purchase such gas; and WHEREAS, as of the date hereof, FirstEnergy Trading and PowerMarketing, Inc., an affiliate of Buyer, and AIC, Inc., an affiliate of Seller,are entering into an agreement (the “Stock Purchase Agreement’) relating to thepurchase of all of the common stock of Atlas Gas Marketing, Inc. NOW, THEREFORE, in consideration of the mutual covenants containedherein and other good and valuable consideration, the receipt and sufficiency ofwhich are hereby expressly acknowledged, the parties do hereby agree as follows: 1. AGREEMENT: Subject to the terms of this Agreement, Seller doeshereby agree to sell to Buyer on a firm basis and Buyer does hereby agree topurchase on a firm basis, during the continuing term of this Agreement, thosequantities of natural gas described in. this Agreement. 2. TERM OF AGREEMENT: The term of this Agreement shall be effective fora primary term of ten (10) years commencing March 31, 1999 and terminating March31, 2009. This Agreement shall automatically renew for successive annual termsunless either party, within one hundred twenty (120) days prior to the end ofthe primary term or any successive annual term, notifies the other party, inwriting, of its intent to terminate this Agreement at the end of such term. Theprimary term and successive annual terms shall be considered the “term” of thisAgreement. The price for gas for the first one (1) or two (2) years of the term 1of this Agreement shall be set forth on Schedule I attached hereto. The pricefor gas for subsequent annual periods shall be agreed to between Buyer andSeller by November 30th of each subsequent year for the next succeeding annualperiod, which period shall commence on April 1st. Should the Buyer and Seller be unable to reach agreement as to thepurchase price at any Point of Delivery, after the initial one or two year term,as applicable, or for any subsequent annual period, the Seller may solicitoffers to purchase such gas from other third parties. In the event Seller shouldreceive a bona fide offer to purchase all of Seller’s gas, which is subject tothis Agreement, at a specific Point of Delivery, it shall give notice (the”Notice”) of the Point of Delivery, the name of prospective purchaser, the termof the proposed agreement and the purchase price to Buyer. If Buyer refuses tomatch such offer within five (5) business days of receipt of the Notice fromSeller, then Seller shall be free to sell such gas to a party other than Buyeron the terms set forth in the Notice. Buyer’s future rights to purchase such gasshall be restored at the completion of the term set forth in the Notice, subjectto the provisions of this Paragraph. 3. DELIVERY POINT AND TRANSPORTATION: Subject to further provisions ofthis Agreement, and during the term hereof, any gas purchased hereunder shall besold and delivered by Seller to Buyer at the interstate pipeline or localdistribution company facilities of Tennessee Gas Pipeline Company, East Ohio GasCompany, National Fuel Gas Distribution, National Fuel Gas Supply, PeoplesNatural Gas Company and Columbia Gas Transmission Corp., hereinafter be referredto as the “Points of Delivery”. Additional Points of Delivery may be added bymutual agreement of Buyer and Seller. Title to the gas delivered hereunder shallvest to Buyer upon delivery by Seller to the Points of Delivery. Seller shall beresponsible and pay for all gas transportation costs and retainage imposed byupstream pipelines to the Points of Delivery. As between the parties hereto,Seller shall be responsible for any damage or injury caused by the gas until thesame shall have been delivered to the Points of Delivery after which deliveryBuyer shall be in exclusive control and possession thereof and responsible forany damage or injury caused thereby. 4. QUANTITY: Seller shall exclusively make available to Buyer and Buyeragrees to purchase from Seller, during the term of this Agreement a quantityequal to 100% of the current and future production into the Points of Delivery.Except as otherwise provided in this Section, Seller shall deliver all gas itdevelops and produces into the Points of Delivery. Unless agreed to by BuyerSeller shall not sell any gas to any other party. It is currently estimated thatAtlas Energy Group, Inc. and Atlas Resources, Inc. will collectively deliverapproximately 27,000 Mcf per day and Resource Energy. Inc. will deliverapproximately 7,000 Mcf per day at the Points of Delivery. Buyer and Selleragree to mutually cooperate and regularly meet to establish production schedulesof gas into the Points of Delivery. Seller shall nominate, by the 25th calendar day of the preceding month,the daily volumes to be delivered during the following month to the Points ofDelivery. Seller’s daily deliveries shall be no greater than one hundred and tenpercent (110%) or no less than ninety percent (90%) of Seller’s daily nominatedvolume as long as Seller’s deliveries at each Point of Delivery are at least 500Mcf per day, with the exception of the Wheatland Dehydration Meter, for whichthe minimum volume is 300 Mcf per day. If Seller’s daily volume delivery is lessthan ninety percent (90%) of Seller’s daily nominated volume, then Seller’sshall pay Buyer one hundred and two percent (102%) of the Buyer’s replacement 2cost, less the price set forth on Schedule I, for the volume of gas which is thedifference between Seller’s daily volume delivery and ninety percent (90%) ofSeller’s daily nominated volume. If Seller’s daily volume delivery is more thanone hundred and ten percent (110%) of Seller’s daily nominated volume, then,regardless of other pricing provisions contained in this Agreement, Buyer shallpay Seller ninety eight percent (98%) of the daily market price of each Point ofDelivery, as set forth on Schedule I, for the volume of gas which is thedifference between Seller’s daily volume delivery and one hundred and tenpercent (110%) of Seller’s daily nominated volume. Notwithstanding the first paragraph of this Section 4, it is understoodand agreed to by the parties that Seller shall continue to supply gas to itsthree (3) direct delivery customers, Wheatland Tube Company, CSC Industries andWarren Consolidated for the life of those agreements, including any extensionsor renewals. Buyer and Seller agree that Buyer will provide all billing servicesfor the above three (3) customers. Buyer agrees that it will not utilizeSeller’s local production, or any other source of supply, as source of sales tothe above three (3) customers of Seller to the extent Buyer’s offer wouldsupplant or in any manner displace the existing amount of Seller’s directdelivery agreements throughout the term of Seller’s agreements with the abovethree (3) customers, including any extensions or renewals. Seller currentlydelivers 2,600 Mcf per day to the Wheatland Tube Company, 3,400 Mcf per day toCSC Industries and 325 Mcf per day to Warren Consolidated. Seller agrees thatBuyer may sell any amount, in excess of Seller’s current volumes (so long asSeller continues to have a contact with the above three (3) customers) to suchcustomers. Buyer shall not be restricted in selling to any of the above three(3) customers if Seller no longer has a contract with such customer. Seller’s commitment to deliver all of the gas it produces to Buyer issubject to the right of investors, including limited partnerships where Selleris acting as the General Partner, in wells operated by Seller, to take their gasin kind. In the event a party wishes to take its gas in kind, Seller shallpromptly notify Buyer. Seller further agrees to indemnify Buyer for full lossesattributable to gas which has been taken in kind by investors in wells operatedby Seller, to the extent Buyer has incurred a loss on such gas because of aprior commitment by Buyer. 5. PURCHASE PRICE: The price to be paid by Buyer to Seller for gasdelivered to Buyer at the Point(s) of Delivery shall be as set forth on ScheduleI attached hereto. 6. BILLING AND PAYMENT: Invoices shall be rendered to Buyer by the 14thcalendar day of the month for gas delivered the preceding monthly period andpayment shall be made monthly to Seller not later than the 28th calendar day ofthe month. Payment shall be made at the following address, or other address thatmay be designated by Seller from time to time: 311 Rouser Road, P.O. Box 611,Coraopolis, Pennsylvania 15108. Invoices shall be delivered to Buyer at: P.O.Box 430, Lancaster, Ohio 43130-0430. The quantities invoiced by Seller will bebased on the quantities delivered by Seller at the Point(s) of Delivery. In theevent the actual quantity delivered to the Point(s) of Delivery is unavailable,the estimated volumes of gas tendered for delivery by Seller to the Point(s) ofDelivery shall be invoiced to Buyer. Any appropriate adjustment shall be made inthe following billing period. Payment not received by the twenty-eighth (28th)calendar day of the month shall bear interest at PNC Bank, NA’s then currentprime lending rate minus two percent (2%). 3 7. QUALITY AND MEASUREMENT: Seller warrants that gas delivered underthis Agreement shall meet the quality and measurement standards established byinterstate pipeline and/or local distribution companies receiving gas fromSeller for Buyer’s account at the Point(s) of Delivery. 8. WARRANTY OF TITLE AND TAXES. Seller warrants title to all gasdelivered by it and warrants that such gas is free from all liens and adverseclaims. Seller shall indemnify and save Buyer harmless against all suits, debts,damages, costs and expenses arising from adverse claims to the gas delivered byit or taxes, payments or other charges thereon applicable before such gas isdelivered to the Point(s) of Delivery. All present and future production,severance, gross proceeds or assessments of a similar nature imposed or leviedby any state or other governmental agency or duly constituted authority upon thegas sold and delivered hereunder and the components thereof and the royalty,overriding royalty, production payment and other lease burden owners, as thecase may be, shall be borne and paid by Seller. In the event Buyer is requiredto pay any of such taxes and assessments, Buyer may deduct same from thepayments to be made by it hereunder and may make a reasonable charge for suchservice. Buyer shall be responsible for all taxes, liens and adverse claimswhich may be imposed on such gas after the Point(s) of Delivery. 9. REGULATORY BODIES. This Agreement and Buyer’s and Seller’sobligation hereunder shall be subject to all valid applicable State and Federallaws, and orders, directives, rules and regulations of any government body orofficial having jurisdiction hereunder. 10. NOTICES: Whenever under the terms of this Agreement, any notice isrequired or permitted to be given by one party to the other, it shall be givenin writing and shall be deemed to have been sufficiently given for all purposeshereof if sent by telegram or mailed, postage prepaid, to the parties at theaddress set forth below: Seller: Atlas Energy Group. Inc. Atlas Resources, Inc. Resource Energy, Inc. Attn: Contract Administrator 311 Rouser Road P.O. Box 611 Coraopolis. Pennsylvania 15108 Buyer: Northeast Ohio Gas Marketing. Inc. Attn: Contract Administrator P. O. Box 430 Lancaster, Ohio 43130-0430 11. GOVERNING LAW: The interpretation and performance of this Agreementshall be in accordance with the laws of the State of Ohio. 12. FORCE MAJEURE: If either Buyer or Seller is rendered unable, whollyor in part, by force majeure to perform its obligations under this Agreement,other than the obligation to make payments then or thereafter due, it is agreedthat performance of the respective obligations of the parties hereto to deliver 4and receive gas, so far as they are affected by such force majeure, shall besuspended from the inception of any such inability until it is corrected, butfor no longer period. The party claiming such inability shall give noticethereof to the other party as soon as practicable after the occurrence of theforce majeure. If such notice is first given by telephone communications, itshall be confirmed promptly in writing giving full particulars. The partyclaiming such inability shall promptly correct such inability to the extent itmay be corrected through the exercise of reasonable diligence. Force majeure asused herein shall mean acts of God, vandalism, war, civil disturbance,rebellion, blockade, strike or other labor dispute, lightning, fire, flood,explosion, hurricane, freezing of wells or pipelines which result in the failureof third party pipelines to transport gas hereunder, permanent plant closing ofeither the Carbide Graphite plant or the Duferco Farrell Corporation plant(during the term of the existing agreement with such party, excluding anyextensions or renewals) and other causes not within the control of the partyclaiming a force majeure situation. 13. ASSIGNMENT: Neither party may assign any of its rights under thisAgreement without the prior written consent of the other party, which will notbe unnecessarily withheld, except that Buyer may assign any of its rights underthis Agreement to any affiliate of Buyer, provided that Buyer remainsresponsible for all financial obligations hereunder. Subject to the precedingsentence, this Agreement will apply to, be binding in all respects upon, andinure to the benefit of the successors and permitted assigns of the parties. 14. SURVIVAL OBLIGATIONS: The obligation of Buyer to make paymenthereunder shall survive the termination or cancellation of this Agreement. Theobligations of Seller to indemnify Buyer pursuant to the provisions set forthunder Section 8 shall survive the termination or cancellation of this Agreement.If any provision in this Agreement is determined to be invalid, void, or madeunenforceable by any court having jurisdiction, then such determination shallnot invalidate, void or make unenforceable any other provision, agreement orcovenant in this Agreement. No waiver of any breach of this Agreement shall beheld to be a waiver of any other or subsequent breach. All remedies afforded inthis Agreement shall be taken and construed as cumulative, that is, in additionto every other remedy provided therein or by law. 15. COMPLETE AGREEMENT: This Agreement, and the Stock PurchaseAgreement, represent the complete and entire understanding between the partiesand their affiliates respecting the subject matter of this transaction. Theparties hereto declare that there are no promises, representations, conditions,warranties or other agreements, express or implied, oral or written, made orrelied upon by either party, except those contained herein or in the StockPurchase Agreement. 5 IN WITNESS WHEREOF, the parties. or their authorized agent, hereto havecaused this Agreement to be executed on this the 31st day of March, 1999.Witnesses: Seller: Atlas Energy Group, Inc._______________________________ By: ______________________________________________________________ Title: ____________________________Witnesses: Seller: Atlas Resources, Inc._______________________________ By: ______________________________________________________________ Title: ____________________________Witnesses: Seller: Resource Energy, Inc._______________________________ By: ______________________________________________________________ Title: ____________________________Witnesses: Buyer: Northeast Ohio Gas Marketing, Inc._______________________________ By: ______________________________________________________________ Title: ____________________________ 6 AMENDMENT TO GAS PURCHASE AGREEMENT THIS AMENDMENT, dated as of February 1, 2001, by and between AtlasResources, Inc., a Pennsylvania corporation, Atlas Energy Group, Inc., an Ohiocorporation, and Resource Energy, Inc., a Delaware corporation (hereinaftercollectively referred to as “Seller”), and FirstEnergy Services Corp., an assignof Northeast Ohio Gas Marketing, Inc. (“Buyer”). WHEREAS, Buyer and Seller are parties to an Agreement dated March 31,1999 (the “Agreement”), concerning the sale and purchase of natural gas; and WHEREAS, Viking Resources Corporation (“Viking”), is in the business ofdeveloping and producing natural gas from wells in Ohio and Pennsylvania, andrecently became an affiliate of Seller; and WHEREAS, Viking is the owner of such natural gas or is the authorizedagent for the owner of such natural gas and therefore has the authority tocontract for the sale of such natural gas; and WHEREAS, as an inducement for Buyer to establish a Guaranty to Sellerfrom Buyer’s parent, FirstEnergy Corp., Viking has offered to sell for itselfand those owners for which it is the authorized agent all of the gas produced atthe meters identified on Exhibit A attached hereto, and Buyer offered topurchase such natural gas from Viking; NOW, THEREFORE, in consideration of the mutual covenants herein, andother good and valuable consideration, the Seller and Buyer do hereby agree toamend the Agreement to include the purchase and sale of Viking’s natural gasproduction at the meters identified on Exhibit A. This Amendment shall become effective upon execution by the parties. All other terms and conditions of the Agreement shall remain in fullforce and effect. 1 IN WITNESS WHEREOF, the parties have hereunto set their corporatesignatures by their duly authorized officers as of the day and year first abovewritten.WITNESS: SELLERS: ATLAS RESOURCES, INC. ATLAS ENERGY GROUP, INC. RESOURCE ENERGY, INC. VIKING RESOURCES CORPORATION__________________________ ___________________________ By:WITNESS: BUYER: FIRSTENERGY SERVICES CORP.__________________________ ___________________________ By: 2 SECOND AMENDMENT TO BASE GAS PURCHASE AGREEMENT Dated July 16, 2003 Between FirstEnergy Solutions Corp. and Atlas Energy Group, Inc., Atlas Resources, Inc. and Resource Energy, Inc. The criteria for the Amendment are as follows: WHEREAS, Atlas Energy Group, Inc., Atlas Resources, Inc. and ResourceEnergy, Inc. (Seller) and FirstEnergy Solutions Corp. (Buyer) have entered intoa Gas Purchase Agreement dated March 31, 1999 (Agreement), and whereas theparties desire to implement certain amendments to the Base Agreement as setforth herein; WHEREAS, Seller represents that it is the owner of the Gas or is theauthorized agent for the owner or owners of the Gas and therefore has theauthority to contract for the delivery and sale of the Gas, and WHEREAS, Buyer and Seller are parties to an Amendment to the Agreementdated February 1, 2001, concerning the purchase and sale of Viking ResourceCorporation’s natural gas production; Now, therefore, in consideration of the mutual covenants and promisesset forth below, the parties hereto, intending to be legally bound, herebycovenant, promise and agree as follows: 1. In exchange for a corporate guaranty or other credit assurancereasonably acceptable in form and substance to the Buyer, Seller may, at anytime prior to Noon on the day of the applicable NYMEX Contract closing day,notify an authorized representative of Buyer by telephone to execute financialhedging instruments at a mutually agreed price (“Hedge Price”) then-currentlytraded for that month (“Hedge Month”) on a specified volume (“Hedge Volume”). IfBuyer agrees to exercises the Hedge described in the previous sentence, Buyerwill send a written notice to the Seller to confirm the Hedge Price and HedgeVolume for the respective Hedge Month. Thereafter, the Hedge Price shall servein lieu of any Floating Contract Price specified in the Transaction Confirmationfor Gas delivered in the Hedge Month up to the Contract Hedge Volume. ContractHedge Volume shall be defined as any portion (in 10,000 Dth increments) of thevolume that the Seller is obligated to deliver pursuant to a specifiedTransaction Confirmation. If Seller delivers less than One Hundred (100) Percentof the Contract Hedge Volume for a given Hedge Month and the Contract HedgePrice is lower than the NYMEX Contract Settlement Price (as determined on thelast day of trading allowed by NYMEX for the respective contract month), Sellershall be assessed a Market Differential Cost equal to (the NYMEX ContractSettlement Price minus Contract Hedge Price), multiplied by the undeliveredContract Hedge Volume. The Market Differential Cost shall apply to theunderproduction of Seller’s Contract Hedge Volume, but shall not apply to theunderproduction of Seller’s daily nominated gas volumes. In the event ofSeller’s underproduction of daily nominated gas volumes, Seller shall beassessed the replacement costs set forth in paragraph 4 of the Agreement 2. Seller shall deposit with Buyer a commercial letter of credit in theaggregate amount of $1,000,000, which letter of credit shall be in the formattached hereto as Exhibit A and issued by a commercial bank acceptable to 1Buyer, payable on presentation by Buyer to such bank of one or more sight draftsin form acceptable to Buyer. The letter of credit to be deposited and maintainedwith Buyer shall be held by Buyer as security for the full faith and performanceand observance by Seller of each and every term, covenant, and condition of theAgreement as amended. Concurrent with the delivery of the above referenced letter of creditby the Seller to the Buyer, Buyer shall deliver to Seller a parental corporateguaranty reasonably acceptable in form and substance to the Seller, guaranteeingthe payment in the amount fifteen million dollars ($15,000,000) in the event ofnon-payment by Buyer of any amounts due and owing Seller under the Agreementand/or the Second Amendment to the Agreement. The term of Buyer’s parentalguaranty shall be for the identical term of the letter of credit Seller depositswith Buyer. This guaranty shall supercede any existing parental guaranty thatBuyer has delivered to Seller. 3. This Letter of Credit may be drawn upon if an Event of Defaultoccurs. Event of Default shall mean the Applicant (the “Defaulting Party”) orits guarantor fails to perform any obligation under the Gas Purchase Agreementdated March 31, 1999, including Seller’s failure to pay Buyer, within forty five(45) days upon receipt of an invoice, for any assessed Market Differential Costsfor Seller’s underproduction of natural gas resulting in a net negative impactto Buyer. IN WITNESS WHEREOF, the parties have hereunto set their signatures bytheir officers hereunto duly authorized the day and year first above written.FirstEnergy Solutions Corp. Atlas Energy Group, Inc. Atlas Resources, Inc. Resource Energy, Inc._______________________________ By: _________________________Dated: ________________________ Dated: July 16, 2003 2 Exhibit A (Proposed form of Letter of Credit)Beneficiary ApplicantFirstEnergy Solutions Corp. ________________________________395 Ghent Road ________________________________Akron, OH 44333 ________________________________Attn: 1. We hereby issue our irrevocable Letter of Credit (this “Letter ofCredit”) No. __________ in your favor for $_____________________ U.S. Dollarsavailable for payment at sight in immediately available funds.This Letter of Credit is issued at the request of the Applicant, and we herebyirrevocably authorize you to draw on us, in accordance with the terms andconditions hereof, up to the maximum amount of this Letter of Credit. ThisLetter of Credit may be drawn upon an Event of Default under the SecondAmendment to Base Gas Purchase Agreement dated July ___, 2003 betweenFirstEnergy Solutions Corp. and Atlas Energy Group, Inc., Atlas Resources, Inc.and Resource Energy, Inc. 2. A partial or full drawing hereunder may be made by you on anyBusiness Day prior to the expiration of this Letter of Credit by delivering, byno later than 11:00 A.M. (New York, NY) on such Business Day to Bank_____________________, _________________________ (address), (i) a noticeexecuted by you in the form of Annex 1 hereto, appropriately completed and dulysigned by your Authorized Officer and (ii) your draft in the form of Annex 2hereto, appropriately completed and duly signed by your Authorized Officer.Authorized Officer shall mean President, Treasurer, any Vice President or anyAssistant Treasurer.3. This Letter of Credit expires at the counters of _____________ on______________ (which date as may be extended in the manner provided herein isreferred to as the “termination date”). The termination date shall be deemedautomatically extended without amendments for one year from the initialtermination date and thereafter for one year from each anniversary of theinitial termination date unless at least ninety (90) days prior to the thenapplicable termination date we notify you in writing by certified mail returnreceipt requested that we are not going to extend the termination date. Duringsaid ninety (90) day period, this Letter of Credit shall remain in full forceand effect. 4. We hereby agree with the beneficiary drawers, endorsers, and bonafide holders of drafts and documents drawn under and in compliance with theterms and conditions of this Letter of Credit that same will be duly honored byus upon presentation to ourselves as specified, by payment in accordance withthe beneficiary’s payment instructions. If requested by the beneficiary, paymentunder this Letter of Credit will be made by wire transfer of immediatelyavailable funds to the beneficiary’s account at any financial institutionlocated in the Continental United States. All payments under this Letter ofCredit will be made in our own funds. 3 5. This Letter of Credit is subject to the ICC Uniform Customs andPractice for Documentary Credits (1993 Revision) International Chamber ofCommerce Publication Number 500, or any revisions thereto. 6. We will send via facsimile a copy of this Letter of Credit to thebeneficiary at the following facsimile number: _____________, attention:__________________, and we will send via overnight courier the original of thisLetter of Credit to the beneficiary at the above address, attention of:_______________________. 7. All bank charges are for the account of _____________________. 8. This letter of credit is transferable and assignable in whole or inpart by beneficiary.(Signed) 4Annex 1 to Letter of CreditDRAWING UNDER LETTER OF CREDIT NO. ______________________________________, 200__To: (Bank) (Address) Attention: Standby Letter of Credit UnitLadies and Gentlemen: The undersigned is making a drawing under the above-referenced Letterof Credit in the amount specified below and herby certifies to you as follows: 1. Capitalized terms used herein are defined herein shall have themeanings ascribed thereto in the Letter of Credit. 2. Pursuant to Paragraph 2 of the Letter of Credit No. _____________,dated _____________, 200__, the undersigned is entitled to make a drawing underthe Letter of Credit in the amount of $________________, inasmuch as there is anEvent of Default under the Second Amendment to Base Gas Purchase Agreement datedJuly ___, 2003 between the Applicant and us. 3. We acknowledge that, upon your honoring the drawing hereinrequested, the amount of the Letter of Credit available for drawing shall beautomatically decreased by an amount equal to this drawing. Very truly yours, FirstEnergy Solutions Corp. By: _________________________ Name: Title: Date:Cc: ____________________- (Applicant) 5Annex 2 to Letter of CreditDRAWING UNDER LETTER OF CREDIT NO. ______________________________, 200__ON [Business Day immediately succeeding date of presentation]PAY TO: FirstEnergy Solutions Corp.Attn:$________________________For credit in the amount of $____________________________.FOR VALUE RECEIVED AND CHARGE TO ACCOUNT OF LETTER OF CREDIT NO. ___________ OF (Bank) (Address) FirstEnergy Solutions Corp. By: ___________________________ Name: Title: 6