Exhibit
                  10.1

              
	  	 


      

    

     

    CREDIT
      AGREEMENT

    New
      York

     

    
      
        	
                Buffalo,
                  New York     May 7, 2008

              	 
	
                Borrower: Corning Natural Gas Corporation                                                                                                                                                           

              
	
                a(n) o individual x corporation o  general partnership o limited liability company

              	o                   
	
                organized under the laws of New York                                                                                                                                                                           

              
	
                having its chief executive office at 330 West William Street, Corning, New York 14830.                                                                                    

              


      

       

    

    
      	
              Bank:

            	
              MANUFACTURERS
                AND TRADERS TRUST COMPANY,
                a
                New York banking corporation with its chief executive office at One
                M&T Plaza, Buffalo, NY 14240. Attention: Office of General
                Counsel.

            


    

    


    The
      Bank
      and the Borrower agree as follows:

    


    
      	1.	
              DEFINITIONS.

            


    

    


    
      	
            	a.	
              “Capital
                Expenditures”
                means, for any fiscal year, the aggregate of all expenditures (whether
                paid in cash or accrued as liabilities, and including expenditures
                for
                obligations under any lease with respect to which Borrower’s obligations
                thereunder should, in accordance with G.A.A.P., be capitalized and
                reflected as a liability on the balance sheet of Borrower) by Borrower
                during such period that are required by G.A.A.P. to be included in
                or
                reflected by the property, plant or equipment or similar fixed asset
                accounts on the balance sheet of
                Borrower.

            


    

    


    
      	
            	b.	
              “Cash
                Flow”
                means the sum of (i) net income after tax, dividends and distributions,
                plus (ii) depreciation expense and amortization, plus (iii) Interest
                Expense, all determined in accordance with
                G.A.A.P.

            


    

    


    
      	
            	c.	
              “Cash
                Flow Coverage”
                means the ratio of Cash Flow to the sum of (i) the current portion
                of all
                Long Term Debt as specified in the financial statement dated twelve
                (12)
                months prior, plus (ii) Interest Expense, all determined in accordance
                with G.A.A.P

            


    

    


    
      	
            	d.	
              “Credit”
                means any and all credit facilities and any other financial accommodations
                made by the Bank in favor of the Borrower whether now or hereafter
                in
                existence.

            


    

    


    
      	 	
              e.

            	
              “Current
                Assets”
                means, at any time, the aggregate amount of all current assets, including,
                but not limited to, cash, cash equivalents, marketable securities,
                receivables maturing within twelve (12) months from such time, and
                inventory (net of LIFO Reserve), but excluding prepaid expenses and
                officer, stockholder, employee and related entity advances and
                receivables, all as determined in accordance with
                G.A.A.P.

            


    

    


    
      	 	
              f.

            	
              “Current
                Liabilities”
                means, at any time, the aggregate amount of all liabilities and
                obligations which are due and payable on demand or within twelve
                (12)
                months from such time, or should be properly reflected as attributable
                to
                such twelve (12) month period in accordance with
                G.A.A.P.

            


    

    


    
      	
            	g.	
              “Current
                Ratio”
                means the ratio of Current Assets to Current
                Liabilities.

            


    

    


    
      	 	
              h.

            	
              “G.A.A.P.”
                means, with respect to any date of determination, generally accepted
                accounting principles as used by the Financial Accounting Standards
                Board
                and/or the American Institute of Certified Public Accountants consistently
                applied and maintained throughout the periods
                indicated.

            


    

     

    
      	
            	i.	
              “Interest
                Expense”
                means all finance charges reflected on the income statement as interest
                expense for all obligations of Borrower to any person, including,
                but not
                limited to, Bank, as shown on the balance sheet in accordance with
                G.A.A.P. 

            


    

     

    
      	 	
              j.

            	
              “Long
                Term Debt”
                means all obligations of Borrower to any person, including, but not
                limited to, the Obligations, payable more than twelve (12) months
                from the
                date of their creation, which in accordance with G.A.A.P. are shown
                on the
                balance sheet as a liability (excluding reserves for deferred income
                taxes) for the period then ended.

            


    

    


    
      	
            	k.	
              “Obligations”
                means any and all indebtedness or other obligations of the Borrower
                to the
                Bank in any capacity, now existing or hereafter incurred, however
                created
                or evidenced, regardless of kind, class or form, whether direct,
                indirect,
                absolute or contingent (including obligations pursuant to any guaranty,
                endorsement, other assurance of payment or otherwise), whether joint
                or
                several, whether from time to time reduced and thereafter increased,
                or
                entirely extinguished and thereafter reincurred, together with all
                extensions, renewals and replacements thereof, and all interest,
                fees,
                charges, costs or expenses which accrue on or in connection with
                the
                foregoing, including any indebtedness or obligations (i) not yet
                outstanding but contracted for, or with regard to which any other
                commitment by the Bank exists; (ii) arising prior to, during or after
                any
                pendency of any bankruptcy, insolvency, receivership or other similar
                proceeding, regardless of whether allowed or allowable in such proceeding;
                (iii) owed by the Borrower to others and which the Bank obtained,
                or may
                obtain, by assignment or otherwise; and (iv) payable under this
                Agreement.

            


    

     

    
      ©
        Manufacturers and Traders Trust Company, 2004

       

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    
      	
            	l.	
              “Quick
                Ratio”
                means the ratio of Current Assets less inventory (net of LIFO Reserve),
                to
                Current Liabilities.

            


    

    


    
      	
            	m.	
              “Subordinated
                Debt”
                means all indebtedness of the Borrower which has been formally
                subordinated to payment and collection of the
                Obligations.

            


    

    


    
      	 	
              n.

            	
              “Subsidiary”
                means any corporation or other business entity of which at least
                fifty
                percent (50%) of the voting stock or other ownership interest is
                owned by
                the Borrower directly or indirectly through one or more Subsidiaries.
                If
                the Borrower has no Subsidiaries, the provisions of this Agreement
                relating to the Subsidiaries shall be disregarded, without affecting
                the
                applicability of such provisions to the Borrower
                alone.

            


    

    


    
      	
            	o.	
              “Tangible
                Net Worth”
                means the aggregate assets of Borrower excluding all intangible assets,
                including, but not limited to, goodwill, licenses, trademarks, patents,
                copyrights, organization costs, appraisal surplus, officer, stockholder,
                related entity and employee advances or receivables, mineral rights
                and
                the like, less liabilities, plus Subordinated Debt, all determined
                in
                accordance with G.A.A.P. (except to the extent that under G.A.A.P.
                “tangible net worth” excludes leasehold improvements which are included in
                “Tangible Net Worth” as defined
                herein).

            


    

    


    
      	
            	p.	
              “Total
                Liabilities”
                means the aggregate amount of all assets of the Borrower less the
                sum of
                shareholder equity and Subordinated Debt (if any), as shown on the
                balance
                sheet in accordance with G.A.A.P. 

            


    

    


    
      	 	
              q.

            	
              “Transaction
                Documents”
                means this Agreement and all documents, instruments or other agreements
                by
                the Borrower in favor of the Bank in connection (directly or indirectly)
                with the Obligations, whether now or hereafter in existence, including
                promissory notes, security agreements, guaranties and letter of credit
                reimbursement agreements.

            


    

    


    
      	 	
              r.

            	
              “Working
                Capital”
                means that amount which is equal to the excess of Current Assets
                over
                Current Liabilities.

            


    

    


    
      	2.	
              REPRESENTATIONS
                AND WARRANTIES.
                The Borrower makes the following representations and warranties and
                any
                “Additional Representations and Warranties” on the schedule attached
                hereto and made part hereof (the “Schedule”), all of which shall be deemed
                to be continuing representations and warranties as long as this Agreement
                is in effect:

            


    

    


    
      	 	
              a)

            	
              Good
                Standing; Authority.
                The Borrower and each Subsidiary (if either is not an individual)
                is duly
                organized, validly existing and in good standing under the laws of
                the
                jurisdiction in which it was formed. The Borrower and each Subsidiary
                is
                duly authorized to do business in each jurisdiction in which failure
                to be
                so qualified might have a material adverse effect on its business
                or
                assets and has the power and authority to own each of its assets
                and to
                use them in the ordinary course of business now and in the
                future.

            


    

    


    
      	 	
              b)

            	
              Compliance.
                The Borrower and each Subsidiary conducts its business and operations
                and
                the ownership of its assets in compliance with each applicable statute,
                regulation and other law, including environmental laws. All approvals,
                including authorizations, permits, consents, franchises, licenses,
                registrations, filings, declarations, reports and notices (the
                “Approvals”) necessary for the conduct of the Borrower’s and each
                Subsidiary’s business and for the Credit have been duly obtained and are
                in full force and effect. The Borrower and each Subsidiary is in
                compliance with the Approvals. The Borrower and each Subsidiary (if
                either
                is not an individual) is in compliance with its certificate of
                incorporation, by-laws, partnership agreement, articles of organization,
                operating agreement or other applicable organizational or governing
                document as may be applicable to the Borrower or a Subsidiary depending
                on
                its organizational structure (“Governing Documents”). The Borrower and
                each Subsidiary is in compliance with each agreement to which it
                is a
                party or by which it or any of its assets is
                bound.

            


    

    


    
      	 	
              c)

            	
              Legality.
                The execution, delivery and performance by the Borrower of this Agreement
                and all related documents, including the Transaction Documents, (i)
                are in
                furtherance of the Borrower’s purposes and within its power and authority;
                (ii) do not (A) violate any statute, regulation or other law or any
                judgment, order or award of any court, agency or other governmental
                authority or of any arbitrator with respect to the Borrower or any
                Subsidiary or (B) violate the Borrower’s or any Subsidiary’s Governing
                Documents (if either is not an individual), constitute a default
                under any
                agreement binding on the Borrower or any Subsidiary or result in
                a lien or
                encumbrance on any assets of the Borrower or any Subsidiary; and
                (iii) if
                the Borrower or any Subsidiary is not an individual, have been duly
                authorized by all necessary organizational
                actions.

            


    

    


    
      	 	
              d)

            	
              Fiscal
                Year.
                The fiscal year of the Borrower is the calendar year unless the following
                blank states otherwise: year ending September 30th.

            


    

    


    
      	 	
              e)

            	
              Title
                to Assets.
                The Borrower and each Subsidiary has good and marketable title to
                each of
                its assets free of security interests, mortgages or other liens or
                encumbrances, except as set forth on the Schedule titled “Permitted Liens”
                or pursuant to the Bank’s prior written
                consent.

            


    

    


    
      	 	
              f)

            	
              Judgments
                and Litigation.
                There is no pending or threatened claim, audit, investigation, action
                or
                other legal proceeding or judgment, order or award of any court,
                agency or
                other governmental authority or arbitrator (any, an “Action”) which
                involves the Borrower, its Subsidiaries or their respective assets
                and
                might have a material adverse effect upon the Borrower or any Subsidiary
                or threaten the validity of the Credit, any Transaction Document
                or any
                related document or action.

            


    

    


    
      	 	
              g)

            	
              Full
                Disclosure.
                Neither this Agreement nor any certificate, financial statement or
                other
                writing provided to the Bank by or on behalf of the Borrower or any
                Subsidiary contains any statement of fact that is incorrect or misleading
                in any material respect or omits to state any fact necessary to make
                any
                such statement not incorrect or misleading. The Borrower has not
                failed to
                disclose to the Bank any fact that might have a material adverse
                effect on
                the Borrower or any Subsidiary.

            


    

     

    
      ©
        Manufacturers and Traders Trust Company, 2004

    


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    


    
      	3.	
              AFFIRMATIVE
                COVENANTS.
                So
                long as this Agreement is in effect, the Borrower will comply with
                any
                “Additional Affirmative Covenant” contained in the Schedule and
                shall:

            


    

    


    
      	 	
              a)

            	
              Financial
                Statements and Other Information.
                Promptly deliver to the Bank (i) within sixty (60) days after the
                end of
                each of its first three fiscal quarters, an unaudited accountant
                prepared consolidating
                and consolidated financial statement of the Borrower and each Subsidiary
                as of the end of such quarter, which financial statement shall consist
                of
                income and cash flows for the quarter, for the corresponding quarter
                in
                the previous fiscal year and for the period from the end of the previous
                fiscal year, with a consolidating and consolidated balance sheet
                as of the
                quarter end all in such detail as the Bank may request; (ii) within
                one
                hundred twenty (120) days
                after the end of each fiscal year, consolidating and consolidated
                statements of the Borrower’s and each Subsidiary’s income and cash flows
                and its consolidating and consolidated balance sheet as of the end
                of such
                fiscal year, setting forth comparative figures for the preceding
                fiscal
                year and to be (check applicable box, if no box is checked the financial
                statements shall be audited):

            


    

    

      
        	
                x
                  audited

              	
                o 
                  reviewed

              	
                o
                  compiled

              


      

    

    


    by
      an
      independent certified public accountant acceptable to the Bank; all such
      statements shall be certified by the Borrower’s chief financial officer to be
      correct and in accordance with the Borrower’s and each Subsidiary’s records and
      to present fairly the results of the Borrower’s and each Subsidiary’s operations
      and cash flows and its financial position at year end; and (iii) with each
      statement of income, a certificate executed by the Borrower’s chief executive
      and chief financial officers or other such person responsible for the financial
      management of the Borrower (A) setting forth the computations required to
      establish the Borrower’s compliance with each financial covenant, if any, during
      the statement period, (B) stating that the signers of the certificate have
      reviewed this Agreement and the operations and condition (financial or other)
      of
      the Borrower and each of its Subsidiaries during the relevant period and (C)
      stating that no Event of Default occurred during the period, or if an Event
      of
      Default did occur, describing its nature, the date(s) of its occurrence or
      period of existence and what action the Borrower has taken with respect thereto.
      The Borrower shall also promptly provide the Bank with copies of all annual
      reports, proxy statements and similar information distributed to shareholders,
      partners or members, and copies of all filings with the Securities and Exchange
      Commission and the Pension Benefit Guaranty Corporation, and shall provide,
      in
      form satisfactory to the Bank, such additional information, reports or other
      information as the Bank may from time to time reasonably request regarding
      the
      financial and business affairs of the Borrower or any Subsidiary. If the
      Borrower is an individual, the Borrower shall provide annually a personal
      financial statement in form and detail acceptable to the Bank and such other
      financial information as the Bank may from time to time reasonably
      request.

    


    
      	 	
              b)

            	
              Accounting;
                Tax Returns and Payment of Claims.
                The Borrower and each Subsidiary will maintain a system of accounting
                and
                reserves in accordance with generally accepted accounting principles,
                has
                filed and will file each tax return required of it and, except as
                disclosed in the Schedule, has paid and will pay when due each tax,
                assessment, fee, charge, fine and penalty imposed by any taxing authority
                upon it or any of its assets, income or franchises, as well as all
                amounts
                owed to mechanics, materialmen, landlords, suppliers and the like
                in the
                normal course of business.

            


    

    


    
      	 	
              c)

            	
              Inspections.
                Promptly upon the Bank’s request, the Borrower will permit, and cause its
                Subsidiaries to permit, the Bank’s officers, attorneys or other agents to
                inspect its and its Subsidiary’s premises, examine and copy its records
                and discuss its and its Subsidiary’s business, operations and financial or
                other condition with its and its Subsidiary’s responsible officers and
                independent accountants.

            


    

    


    
      	 	
              d)

            	
              Intentionally
                Omitted.

            


    

    


    
      	 	
              e)

            	
              Changes
                in Management and Control.
                If
                the Borrower is not an individual, immediately upon any change in
                the
                identity of the Borrower’s chief executive officers or in its beneficial
                ownership, the Borrower will provide to the Bank a certificate executed
                by
                its senior individual authorized to transact business on behalf of
                the
                Borrower, specifying such change.

            


    

    


    
      	 	
              f)

            	
              Notice
                of Defaults and Material Adverse Changes.
                Immediately upon acquiring reason to know of (i) any Event of Default,
                (ii) any event or condition that might have a material adverse effect
                upon
                the Borrower or any Subsidiary or (iii) any Action, the Borrower
                will
                provide to the Bank a certificate executed by the Borrower’s senior
                individual authorized to transact business on behalf of the Borrower,
                specifying the date(s) and nature of the event or the Action and
                what
                action the Borrower or its Subsidiary has taken or proposes to take
                with
                respect to it.

            


    

    


    
      	 	
              g)

            	
              Insurance.
                Maintain its, and cause its Subsidiaries to maintain, property in
                good
                repair and will on request provide the Bank with evidence of insurance
                coverage satisfactory to the Bank, including fire and hazard, liability,
                workers’ compensation and business interruption insurance and flood hazard
                insurance as required.

            


    

    


    
      	 	
              h)

            	
              Further
                Assurances.
                Promptly upon the request of the Bank, the Borrower will execute,
                and
                cause its Subsidiaries to execute, and deliver each writing and take
                each
                other action that the Bank deems necessary or desirable in connection
                with
                any transaction contemplated by this
                Agreement.

            


    

    


    
      	4.	
              NEGATIVE
                COVENANTS.
                As
                long as this Agreement is in effect, the Borrower shall not violate,
                and
                shall not suffer or permit any of its Subsidiaries to violate, any
                of the
                following covenants and any “Additional Negative Covenant” on the
                Schedule. The Borrower shall not:

            


    

     

    
      ©
        Manufacturers and Traders Trust Company, 2004

    


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    


    
      	 	
              a)

            	
              Intentionally
                Omitted.

            


    

    


    
      	 	
              b)

            	
              Intentionally
                Omitted.

            


    

    


    
      	 	
              c)

            	
              Intentionally
                Omitted.

            


    

    


    
      	 	
              d)

            	
              Intentionally
                Omitted.

            


    

    


    
      	 	
              e)

            	
              Intentionally
                Omitted.

            


    

    


    
      	 	
              f)

            	
              Intentionally
                Omitted.

            


    

    


    
      	 	
              g)

            	
              Changes
                In Form.
                (i) Transfer or dispose of substantially all of its assets, (ii)
                acquire
                substantially all of the assets of any other entity, (iii) do business
                under or otherwise use any name other than its true name or (iv)
                make any
                material change in its business, structure, purposes or operations
                that
                might have a material adverse effect on the Borrower or any of its
                Subsidiaries. If the Borrower or any Subsidiary is not an individual,
                (i)
                participate in any merger, consolidation or other absorption or (ii)
                make,
                terminate or permit to be revoked any election pursuant to Subchapter
                S of
                the Internal Revenue Code.

            


    

    


    
      	5.	
              FINANCIAL
                COVENANTS. During
                the term of this Agreement, the Borrower shall not violate, and shall
                not
                suffer or permit any of its Subsidiaries to violate, any of the following
                covenants (complete applicable financial covenant) or any Additional
                Financial Covenants on the Schedule. For
                purposes of this Section, if the Borrower has any Subsidiaries all
                references to the Borrower shall include the Borrower and all of
                its
                Subsidiaries on a consolidated basis.
                Unless a different measurement period is specified, compliance for
                the
                financial covenants shall be required at all times.
                

            


    

    


    
      	
            	o	
              A. Borrower
                shall maintain Tangible Net Worth of not less than $_________________,
                measured (select one: quarterly or annually) ______________ as of
                each
                (select one: quarter or fiscal year) ___________
                end.

            


    

    


    o B. Borrower
      shall maintain a ratio of Total Liabilities to Tangible Net Worth of not greater
      than __________________:_______, measured (select one: quarterly or annually)
      ______________ as of each (select one; quarter or fiscal year ) ___________
      end.

    


    o C. Borrower
      shall maintain a Current Ratio of not less than ________________:______________,
      measured (select one: quarterly or annually) ______________ as of each (select
      one: quarter or fiscal year) ___________ end.

    


    o D. Borrower
      shall maintain Working Capital of not less than $______________________________,
      measured (select one: quarterly or annually) ______________ as of each (select
      one: quarter or fiscal year)___________ end.

     

    o E. Borrower
      shall maintain Cash Flow Coverage of not less than ______________:_____________,
      measured for the previous four quarters as of each (select one: quarter or
      fiscal year)___________ end.

    


    o F. Without
      the prior written consent of Bank, Borrower shall not make any Capital
      Expenditures in excess of $______________ in the aggregate during any fiscal
      year of Borrower.

    


    o G. Borrower
      shall not pay or accrue during any fiscal year compensation (including but
      not
      limited to all salary, bonuses, consulting, management or other fees, rentals
      and other payments to any person owning or managing 5%or more of the Borrower
      or
      any relative or cohabitant of such a person, and to any entity under common
      control with or controlling the Borrower) exceeding $_______________ in the
      aggregate.

    


    o H. Borrower
      shall not become obligated as lessee pursuant to operating leases exceeding
      $_______________ in the aggregate during any fiscal year.

    
       

      
        ©
          Manufacturers and Traders Trust Company, 2004

         

        
          
            
              
              

            

            
              4

              
                

              

            

            
              
              

            

          

        

      

    

     

    
      	6.	
              DEFAULT.

            


    

    


    
      	 	
              a)

            	
              Events
                of Default.
                Any of the following events or conditions shall constitute an “Event of
                Default”: (i) failure by the Borrower to pay when due (whether at the
                stated maturity, by acceleration, upon demand or otherwise) the
                Obligations, or any part thereof, or there occurs any event or condition
                which after notice, lapse of time or after both notice and lapse
                of time
                will permit acceleration of any Obligation; (ii) default by the Borrower
                in the performance of any obligation, term or condition of this Agreement,
                the other Transaction Documents or any other agreement with the Bank
                or
                any of its affiliates or subsidiaries (collectively, “Affiliates”); (iii)
                failure by the Borrower to pay when due (whether at the stated maturity,
                by acceleration, upon demand or otherwise) any indebtedness or obligation
                owing to any third party or any Affiliate, the occurrence of any
                event
                which could result in acceleration of payment of any such indebtedness
                or
                obligation or the failure to perform any agreement with any third
                party or
                any Affiliate; (iv) the Borrower is dissolved, becomes insolvent,
                generally fails to pay or admits in writing its inability generally
                to pay
                its debts as they become due; (v) the Borrower makes a general assignment,
                arrangement or composition agreement with or for the benefit of its
                creditors or makes, or sends notice of any intended, bulk sale; the
                sale,
                assignment, transfer or delivery of all or substantially all of the
                assets
                of the Borrower to a third party; or the cessation by the Borrower
                as a
                going business concern; (vi) the Borrower files a petition in bankruptcy
                or institutes any action under federal or state law for the relief
                of
                debtors or seeks or consents to the appointment of an administrator,
                receiver, custodian or similar official for the wind up of its business
                (or has such a petition or action filed against it and such petition
                action or appointment is not dismissed or stayed within forty-five
                (45)
                days); (vii) the reorganization, merger, consolidation or dissolution
                of
                the Borrower (or the making of any agreement therefor); (viii) the
                death
                or judicial declaration of incompetency of the Borrower, if an individual;
                (ix) the entry of any judgment or order of any court, other governmental
                authority or arbitrator against the Borrower; (x) falsity, omission
                or
                inaccuracy of facts submitted to the Bank or any Affiliate (whether
                in a
                financial statement or otherwise); (xi) an adverse change in the
                Borrower,
                its business, assets, operations, affairs or condition (financial
                or
                otherwise) from the status shown on any financial statement or other
                document submitted to the Bank or any Affiliate, and which change
                the Bank
                determines will have a material adverse affect on (a) the Borrower,
                its
                business, assets, operations or condition (financial or otherwise),
                or (b)
                the ability of the Borrower to pay or perform the Obligations; (xii)
                any
                pension plan of the Borrower fails to comply with applicable law
                or has
                vested unfunded liabilities that, in the opinion of the Bank, might
                have a
                material adverse effect on the Borrower’s ability to repay its debts;
                (xiii) any indication or evidence received by the Bank that the Borrower
                may have directly or indirectly been engaged in any type of activity
                which, in the Bank’s discretion, might result in the forfeiture or any
                property of the Borrower to any governmental authority; (xiv) the
                occurrence of any event described in Section 6(a)(i) through and
                including
                6(a)(xiii) with respect to any Subsidiary or to any endorser, guarantor
                or
                any other party liable for, or whose assets or any interest therein
                secures, payment of any of the Obligations; or (xv) the Bank in good
                faith
                deems itself insecure with respect to payment or performance of the
                Obligations.

            


    

    


    
      	 	
              b)

            	
              Rights
                and Remedies Upon Default.
                Upon the occurrence of any Event of Default, the Bank without demand
                of
                performance or other demand, presentment, protest, advertisement
                or notice
                of any kind (except any notice required by law) to or upon the Borrower,
                any Subsidiary or any other person (all and each of which demands,
                presentments, protests, advertisements and notices are hereby waived),
                may
                exercise all rights and remedies under the Borrower’s or its Subsidiaries’
                agreements with the Bank or its Affiliates, applicable law, in equity
                or
                otherwise and may declare all or any part of any Obligations not
                payable
                on demand to be immediately due and payable without demand or notice
                of
                any kind and terminate any obligation it may have to grant any additional
                loan, credit or other financial accommodation to the Borrower or
                any
                Subsidiary. All or any part of any Obligations whether or not payable
                on
                demand, shall be immediately due and payable automatically upon the
                occurrence of an Event of Default in Section 6(a)(vi) above. The
                provisions hereof are not intended in any way to affect any rights
                of the
                Bank with respect to any Obligations which may now or hereafter be
                payable
                on demand.

            


    

    


    
      	7.	
              EXPENSES.
                The Borrower shall pay to the Bank on demand all costs and expenses
                (including all fees and disbursements of counsel retained for advice,
                suit, appeal or other proceedings or purpose and of any experts or
                agents
                it may retain), which the Bank may incur in connection with (i) the
                administration of the Obligations, including any administrative fees
                the
                Bank may impose for the preparation of discharges, releases or assignments
                to third-parties; (ii) the enforcement and collection of any Obligations
                or any guaranty thereof; (iv) the exercise, performance ,enforcement
                or
                protection of any of the rights of the Bank hereunder; or (v) the
                failure
                of the Borrower or any Subsidiary to perform or observe any provisions
                hereof. After such demand for payment of any cost, expense or fee
                under
                this Section or elsewhere under this Agreement, the Borrower shall
                pay
                interest at the highest default rate specified in any instrument
                evidencing any of the Obligations from the date payment is demanded
                by the
                Bank to the date reimbursed by the Borrower. All such costs, expenses
                or
                fees under this Agreement shall be added to the
                Obligations.

            


    

    


    
      	8.	
              TERMINATION.
                This Agreement shall remain in full force and effect until (i) all
                Obligations outstanding, or contracted or committed for (whether
                or not
                outstanding), shall be finally and irrevocably paid in full and (ii)
                all
                Transaction Documents have been terminated by the
                Bank.

            


    

    


    
      	9.	
              RIGHT
                OF SETOFF.
                If
                an Event of Default occurs, the Bank shall have the right to set
                off
                against the amounts owing under this Agreement and the other Transaction
                Documents any property held in a deposit or other account or otherwise
                with the Bank or its Affiliates or otherwise owing by the Bank or
                its
                Affiliates in any capacity to the Borrower, its Subsidiary or any
                guarantor of, or endorser of any of the Transaction Documents evidencing,
                the Obligations. Such setoff shall be deemed to have been exercised
                immediately at the time the Bank or such Affiliate elect to do
                so.

            


    

    


    
      	10.	
              MISCELLANEOUS.

            


    

    


    
      	 	
              a)

            	
              Notices.
                Any demand or notice hereunder or under any applicable law pertaining
                hereto shall be in writing and duly given if delivered to Borrower
                (at its
                address on the Bank’s records) or to the Bank (at the address on page one
                and separately to the Bank officer responsible for Borrower’s relationship
                with the Bank). Such notice or demand shall be deemed sufficiently
                given
                for all purposes when delivered (i) by personal delivery and shall
                be
                deemed effective when delivered, or (ii) by mail or courier and shall
                be
                deemed effective three (3) business days after deposit in an official
                depository maintained by the United States Post Office for the collection
                of mail or one (1) business day after delivery to a nationally recognized
                overnight courier service (e.g., Federal Express). Notice by e-mail
                is not
                valid notice under this or any other agreement between Borrower and
                the
                Bank.

            


    

    


    
      	 	
              b)

            	
              Generally
                Accepted Accounting Principles.
                Any financial calculation to be made, all financial statements and
                other
                financial information to be provided, and all books and records,
                system of
                accounting and reserves to be kept in connection with the provisions
                of
                this Agreement, shall be in accordance with generally accepted accounting
                principles consistently applied during each interval and from interval
                to
                interval; provided, however, that in the event changes in generally
                accepted accounting principles shall be mandated by the Financial
                Accounting Standards Board or any similar accounting body of comparable
                standing, or should be recommended by Borrower’s certified public
                accountants, to the extent such changes would affect any financial
                calculations to be made in connection herewith, such changes shall
                be
                implemented in making such calculations only from and after such
                date as
                Borrower and the Bank shall have amended this Agreement to the extent
                necessary to reflect such changes in the financial and other covenants
                to
                which such calculations relate.

            


    

     

    
      ©
        Manufacturers and Traders Trust Company, 2004


      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

    

    


    
      	 	
              c)

            	
              Indemnification.
                If
                after receipt of any payment of all, or any part of, the Obligations,
                the
                Bank is, for any reason, compelled to surrender such payment to any
                person
                or entity because such payment is determined to be void or voidable
                as a
                preference, an impermissible setoff, or a diversion of trust funds,
                or for
                any other reason, the Transaction Documents shall continue in full
                force
                and the Borrower shall be liable, and shall indemnify and hold the
                Bank
                harmless for, the amount of such payment surrendered. The provisions
                of
                this Section shall be and remain effective notwithstanding any contrary
                action which may have been taken by the Bank in reliance upon such
                payment, and any such contrary action so taken shall be without prejudice
                to the Bank’s rights under the Transaction Documents and shall be deemed
                to have been conditioned upon such payment having become final and
                irrevocable. The provisions of this Section shall survive the
                termination of this Agreement and the Transaction
                Documents.

            


    

    


    
      	 	
              d)

            	
              Further
                Assurances.
                From time to time, the Borrower shall take, and cause its Subsidiaries
                to
                take, such action and execute and deliver to the Bank such additional
                documents, instruments, certificates, and agreements as the Bank
                may
                reasonably request to effectuate the purposes of the Transaction
                Documents.

            


    

    


    
      	 	
              e)

            	
              Cumulative
                Nature and Non-Exclusive Exercise of Rights and
                Remedies.
                All rights and remedies of the Bank pursuant to this Agreement and
                the
                Transaction Documents shall be cumulative, and no such right or remedy
                shall be exclusive of any other such right or remedy. In the event
                of any
                unreconcilable inconsistencies, this Agreement shall control. No
                single or
                partial exercise by the Bank of any right or remedy pursuant to this
                Agreement or otherwise shall preclude any other or further exercise
                thereof, or any exercise of any other such right or remedy, by the
                Bank.

            


    

    


    
      	 	
              f)

            	
              Governing
                Law; Jurisdiction.
                This Agreement has been delivered to and accepted by the Bank and
                will be
                deemed to be made in the State of New York. Except as otherwise provided
                under federal law, this Agreement will be interpreted in accordance
                with
                the laws of the State of New York excluding its conflict of laws
                rules.
                BORROWER
                HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY
                STATE OR
                FEDERAL COURT IN THE STATE OF NEW YORK IN A COUNTY OR JUDICIAL DISTRICT
                WHERE THE BANK MAINTAINS A BRANCH AND CONSENTS THAT THE BANK MAY
                EFFECT
                ANY SERVICE OF PROCESS IN THE MANNER AND AT BORROWER’S ADDRESS SET FORTH
                ABOVE FOR PROVIDING NOTICE OR DEMAND; PROVIDED THAT NOTHING CONTAINED
                IN
                THIS AGREEMENT WILL PREVENT THE BANK FROM BRINGING ANY ACTION, ENFORCING
                ANY AWARD OR JUDGMENT OR EXERCISING ANY RIGHTS AGAINST BORROWER
                INDIVIDUALLY, AGAINST ANY SECURITY OR AGAINST ANY PROPERTY OF BORROWER
                WITHIN ANY OTHER COUNTY, STATE OR OTHER FOREIGN OR DOMESTIC
                JURISDICTION.
                Borrower acknowledges and agrees that the venue provided above is
                the most
                convenient forum for both the Bank and Borrower. Borrower waives
                any
                objection to venue and any objection based on a more convenient forum
                in
                any action instituted under this Agreement.


            


    

    


    
      	 	
              g)

            	
              Joint
                and Several; Successors and Assigns.
                If
                there is more than one Borrower, each of them shall be jointly and
                severally liable for all amounts, which become due, and the performance
                of
                all obligations under this Agreement, and the term “the Borrower” shall
                include each as well as all of them. This Agreement shall be binding
                upon
                the Borrower and upon its heirs and legal representatives, its successors
                and assignees, and shall inure to the benefit of, and be enforceable
                by,
                the Bank, its successors and assignees and each direct or indirect
                assignee or other transferee of any of the Obligations; provided,
                however,
                that this Agreement may not be assigned by the Borrower without the
                prior
                written consent of the Bank.

            


    

    


    
      	 	
              h)

            	
              Waivers;
                Changes in Writing.
                No
                failure or delay of the Bank in exercising any power or right hereunder
                shall operate as a waiver thereof, nor shall any single or partial
                exercise of any such right or power, or any abandonment or discontinuance
                of steps to enforce such a right or power, preclude any other or
                further
                exercise thereof or the exercise of any other right or power. The
                Borrower
                expressly disclaims any reliance on any course of dealing or usage
                of
                trade or oral representation of the Bank (including representations
                to
                make loans to the Borrower) and agrees that none of the foregoing
                shall
                operate as a waiver of any right or remedy of the Bank. No notice
                to or
                demand on the Borrower in any case shall entitle the Borrower to
                any other
                or further notice or demand in similar or other circumstances. No
                waiver
                of any provision of this Agreement or consent to any departure by
                the
                Borrower therefrom shall in any event be effective unless made
                specifically in writing by the Bank and then such waiver or consent
                shall
                be effective only in the specific instance and for the purpose for
                which
                given. No modification to any provision of this Agreement shall be
                effective unless made in writing in an agreement signed by the Borrower
                and the Bank.

            


    

    


    
      	 	
              i)

            	
              Interpretation.
                Unless the context otherwise clearly requires, references to plural
                includes the singular and references to the singular include the
                plural;
                references to “individual” shall mean a natural person and shall include a
                natural person doing business under an assumed name (e.g.,
                a
                “DBA”); the word “or” has the inclusive meaning represented by the phrase
                “and/or”; the word “including”, “includes” and “include” shall be deemed
                to be followed by the words “without limitation”; and captions or section
                headings are solely for convenience and not part of the substance
                of this
                Agreement. Any representation, warranty, covenant or agreement herein
                shall survive execution and delivery of this Agreement and shall
                be deemed
                continuous. Each provision of this Agreement shall be interpreted
                as
                consistent with existing law and shall be deemed amended to the extent
                necessary to comply with any conflicting law. If any provision
                nevertheless is held invalid, the other provisions shall remain in
                effect.
                The Borrower agrees that in any legal proceeding, a photocopy of
                this
                Agreement kept in the Bank’s course of business may be admitted into
                evidence as an original.

            


    

     

    
      ©
        Manufacturers and Traders Trust Company, 2004


      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

    

    


    
      	 	
              j)

            	
              Waiver
                of Jury Trial. THE
                BORROWER AND THE BANK HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY
                WAIVE ANY RIGHT TO TRIAL BY JURY THE BORROWER AND THE BANK MAY HAVE
                IN ANY
                ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN CONNECTION WITH THIS
                AGREEMENT OR ANY TRANSACTIONS RELATED HERETO. THE BORROWER REPRESENTS
                AND
                WARRANTS THAT NO REPRESENTATIVE OR AGENT OF THE BANK HAS REPRESENTED,
                EXPRESSLY OR OTHERWISE, THAT THE BANK WILL NOT, IN THE EVENT OF
                LITIGATION, SEEK TO ENFORCE THIS JURY TRIAL WAIVER. THE BORROWER
                ACKNOWLEDGES THAT THE BANK HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT
                BY, AMONG OTHER THINGS, THE PROVISIONS OF THIS
                SECTION.

            


    

    


    Acknowledgment.
      Borrower acknowledges that it has read and understands all the provisions of
      this Agreement, including the Governing
      Law,
      Jurisdiction
      and
Waiver
      of Jury Trial,
      and has
      been advised by counsel as necessary or appropriate.

    

      
        	
                MANUFACTURERS
                  AND TRADERS TRUST COMPANY

              
	 	 	 	 
	
                By

              	
                /s/

              	
                Edgar
                  B. Parsons III

              
	 	 	 	 
	 	 	
                Name:
                  

              	
                Edgar
                  B. Parsons III

              
	 	 	 	 
	 	 	
                Title:
                  

              	
                Assistant
                  Vice President

              
	 	 	 	 
	 	 	 	 
	
                CORNING
                  NATURAL GAS CORPORATION

              
	 	 	 	 
	
                By

              	
                /s/

              	
                Michael
                  I. German

              
	 	 	 	 
	 	 	
                Name:
                  

              	
                Michael
                  I. German

              
	 	 	 	 
	 	 	
                Title:
                  

              	
                President

              


      

    

     

    
      ©
        Manufacturers and Traders Trust Company, 2004


      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      



    ACKNOWLEDGMENT

    


    
      	
              STATE
                OF NEW YORK

            	
              )

            
	 	
              :
                SS.

            
	
              COUNTY
                OF BROOME

            	
              )

            


    

    


    On
      the
 
      day of
      May in the year 2008 ,
      before
      me, the undersigned, a Notary Public in and for said State, personally appeared
      EDGAR
      B. PARSONS III,
      personally known to me or proved to me on the basis of satisfactory evidence
      to
      be the individual(s) whose name(s) is (are) subscribed to the within instrument
      and acknowledged to me that he/she/they executed the same in his/her/their
      capacity(ies), and that by his/her/their signature(s) on the instrument, the
      individual(s), or the person upon behalf of which the individual(s) acted,
      executed the instrument.

    


    
      	 
	
              Notary
                Public

            


    

    


    ACKNOWLEDGMENT

    


    
      	
              STATE
                OF NEW YORK

            	
              )

            
	 	
              :
                SS.

            
	
              COUNTY
                OF BROOME

            	
              )

            
	 	 


    

     

    On
      the
           
       day
      of May, in the year 2008, before me, the undersigned, a Notary Public in and
      for
      said State, personally appeared MICHAEL
      I. GERMAN,
      personally known to me or proved to me on the basis of satisfactory evidence
      to
      be the individual(s) whose name(s) is (are) subscribed to the within instrument
      and acknowledged to me that he/she/they executed the same in his/her/their
      capacity(ies), and that by his/her/their signature(s) on the instrument, the
      individual(s), or the person upon behalf of which the individual(s) acted,
      executed the instrument.

    


    
      	 
	
              Notary
                Public

            


    

     

      
        

      

    

    BANK
      USE ONLY

    


    Authorization Confirmed:                                                                                                                                                                                                                                                                                 

    Signature

     

    
      ©
        Manufacturers and Traders Trust Company, 2004


      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      



    SCHEDULE

    


    Additional
      Representations and Warranties (§2)

    


    Additional
      Affirmative Covenants (§3)

    


    Permitted
      Indebtedness (§4(a))

    


    Permitted
      Guaranties (§4(b))

    


    Permitted
      Liens (§4(c))


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    Permitted
      Investments (§4(d))

    


    Permitted
      Loans (§4(e))

    


    Additional
      Financial Covenants (§5)


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    Addendum
      to

    Credit
      Agreement

    Corning
      Natural Gas Corporation 

    With

    Manufacturers
      and Traders Trust Company

    


    Upon
      receipt of NY Public Service Commission Approval, and prior to May 5, 2009,
      Borrower will have the option of either a floating rate equal to the 30 day
      Libor rate plus 180 basis points, or a fixed rate of 6.70%. Further, upon
      receipt of Public Service Commission approval, the Bank agrees to modify the
      loan facility’s interest rate to a five year fixed rate option of 6.70% up until
      June 1, 2008. After June 1, 2008, the fixed rate option will be based on the
      respective Bank’s Cost of Funds plus 180 basis points.

    


    The
      Cost
      of Funds shall mean the most recent yield on United States Treasury Obligations
      adjusted to the maturity of your rate option in effect two business days prior
      to the closing date as published by the Board of Governors of the Federal
      Reserve System in the Federal Reserve Statistical Release II.15(519), or by
      such
      other quoting service, index or commonly available source utilized by the Bank,
      plus the “ask” side of the rate option swap spread in effect two business days
      prior to closing date as set forth in Bloomberg, L.P., or by such other quoting
      service, index, or commonly available source utilized by the Bank. An indicative
      fixed rate, including spread, would be 6.16%, as of December 18,
      2007.