Unassociated Document


    
      Exhibit
10.1

      Confidential
Treatment Requested -  Redacted version

      
        	
                ****
      

              	
                Indicates
      that information has been omitted pursuant to a request for confidential
      treatment pursuant to  Rule 24b-2 of the Securities Exchange Act
      of 1934.  The omitted information has been filed separately with
      the Securities and Exchange
Commission.

              


      



    Base
Contract for Sale and Purchase of Natural Gas

     

    This Base
Contract is entered into as of the following date: July 1, 2008.  The
parties to this Base Contract are the following:

     

    
      
        	
                ATMOS
      ENERGY MARKETING, LLC

                13430
      Northwest Freeway, Suite 700, Houston, Texas 77040-6091

              	
                and

              	
                CORNING NATURAL GAS
      CORPORATION

              
	 	 	 
	
                Duns
      Number: 83-570-5831  

                Contract
      Number: _________________________________

                U.S.
      Federal Tax ID Number: 75-2079833 

              	 
      	
                Duns
      Number: 002877231

                Contract
      Number:

                U.S.
      Federal Tax ID Number: 16-0397420

              
	 	 	 
	
                Notices:

                13430
      Northwest Freeway, Suite 700, Houston, Texas 77040-6091

                Attn:
      Contract Administration

                Phone:
      (713)
      688-7771              Fax:
      (713) 688-1625 

              	 
      	
                 

                330
      West William Street, Corning, New York 14830

                Attn:
      Marie Husted

                Phone:
      (607)
      936-3755                   Fax:
      (607) 962-2844

              
	 	 	 
	
                Invoices
      and Payments:

                13430
      Northwest Freeway, Suite 700, Houston, Texas 77040-6091

                Attn:
      Contract Administration

                Phone:
      (713)
      688-7771             Fax:
      (713) 688-1625

              	 
      	
                 

                330
      West William Street, Corning, New York 14830

                Attn:
      Fi Sarhangi

                Phone:
      (607)
      936-3755                     Fax:
      (607) 962-2844

              
	 	 	 
	
                Wire
      Transfer or ACH Numbers (if applicable):

                 

              	 
      	 
      
	
                BANK: Bank of America, Dallas,
      TX         

                ABA:
      ****

                ACCT:
      **** 

                Other
      Details:

              	 
      	
                BANK:
      Community National Bank, N.A.

                ABA:
      **** 

                ACCT:
      ****

                Other Details: 331 W. Pulteney
      St. Corning, NY 14830 

              


      

    

     

    The Base
Contract incorporates by reference for all purposes the General Terms and
Conditions for Sale and Purchase of Natural Gas published by the North American
Energy Standards Board.  The parties hereby agree to the following
provisions offered in said General Terms and Conditions.  In the event
the parties fail to check a box, the specified default provision shall
apply.  Select only one box from
each section:

    


    
      	
              Section 1.2     x Oral
      (default

              Transaction   
       o  Written

            	
              Section
      7.2        
            x 25th
      Day of Month following Month of delivery (default)

              Payment
      Date           o ____
      Day of Month following Month of delivery

            
	
              Section
      2.5      x 2
      Business Days after receipt (default)

              Confirm        
         o ___Business
      Days after receipt

              Deadline

            	
              Section
      7.2      
              x Wire
      Transfer (default)

              Method
      of                o Automated
      Clearinghouse Credit (ACH)

              Payment                
         o Check

            
	
              Section
      2.6      x Seller
      (default)

              Confirming    
        o Buyer

              Party              
        o_________________________

            	
              Section
      7.7       
             x Netting
      applies (default)

              Netting              
             o  Netting
      does not apply

            
	
              Section
      3.2      x Cover
      Standard (default)

              Performance 
        o Spot
      Price Standard

              Obligation

              Note:
      The following Spot Price Publication applies to both of the immediately
      preceding.

               

              Section
      2.26   x Gas
      Daily Midpoint (default)

              Spot
      Price        o _________________________

              Publication

            	
              Section
      10.3.1         x Early
      Termination Damages Apply (default)

              Early
      Termination    o Early
      Termination Damages Do Not Apply

              Damages                                                                               

              Section
      10.3.2         x Other
      Agreement Setoffs Apply (default)

              Other
      Agreement    o Other
      Agreement Setoffs Do Not Apply

              Setoffs                                                                               

              Section
      14.5

              Choice of
      Law          New
      York                                                                     

            
	
              Section
      6         x Buyer
      Pays At and After Delivery Point

              Taxes                o  (default)

                   ****  Seller
      Pays Before and At Delivery Point

            	
              Section
      14.10          x Confidentiality
      applies (default)

              Confidentiality         o Confidentiality
      does not apply

            
	
              x  Special
      Provisions Number of sheets attached 3

              o  Addendum(s): _________________________________________________________

            


    

     

    IN
WITNESS WHEREOF, the parties have executed this Base Contract in
duplicate.

     

    
      	
              ATMOS ENERGY MARKETING, LLC (Party “A”)

              Party
      Name

               

              By: 
      /s/ Marc
      Tronzo 

              
                
      

              Name: Marc Tronzo  

              Title:   Sr. VP of Trading

            	
              CORNING NATURAL GAS CORPORATION (Party “B”)

              Party
      Name

               

              By:  /s/ Stanley G.
      Sleve

              
                
      

              Name: Stanley G. Sleve

              Title:   Vice
  President 

            


    

     

    
      
        
        

      

      
        Page 1 of
10

        
          

        

      

      
        
        

      

    

     

    General
Terms and Conditions

    Base
Contract for Sale and Purchase of Natural Gas

     

    SECTION
1. PURPOSE AND PROCEDURES

     

    1.1.
These General Terms and Conditions are intended to facilitate purchase and sale
transactions of Gas on a Firm or Interruptible basis. "Buyer" refers to the
party receiving Gas and "Seller" refers to the party delivering Gas. The entire
agreement between the parties shall be the Contract as defined in Section
2.7.  

    


    The
parties have selected either the "Oral Transaction Procedure" or the "Written
Transaction Procedure" as indicated on the Base Contract.

     

    Oral Transaction
Procedure:

     

    1.2. The
parties will use the following Transaction Confirmation procedure. Any Gas
purchase and sale transaction may be effectuated in an EDI transmission or
telephone conversation with the offer and acceptance constituting the agreement
of the parties. The parties shall be legally bound from the time they so agree
to transaction terms and may each rely thereon, Any such transaction shall be
considered a "writing" and to have been "signed". Notwithstanding the foregoing
sentence, the parties agree that Confirming Party shall, and the other party
may, confirm a telephonic transaction by sending the other party a Transaction
Confirmation by facsimile, EDI or mutually agreeable electronic means within
three Business Days of a transaction covered by this Section 1.2 (Oral
Transaction Procedure) provided that the failure to send a Transaction
Confirmation shall not invalidate the oral agreement of the parties. Confirming
Party adopts its confirming letterhead, or the like, as its signature on any
Transaction Confirmation as the identification and authentication of Confirming
Party. If the Transaction Confirmation contains any provisions other than those
relating to the commercial terms of the transaction (i.e., price, quantity,
performance obligation, delivery point, period of delivery and/or transportation
conditions), which modify or supplement, the Base Contract or General Terms and
Conditions of this Contract (e.g., arbitration or additional representations and
warranties) such provisions shall not be deemed to be accepted pursuant to
Section 1.3 but must be expressly agreed to by both parties; provided that the
foregoing shall not invalidate any transaction agreed to by the
parties.    

     

    Written Transaction
Procedure:

     

    1.2. The
parties will use the following Transaction Confirmation procedure. Should the
parties come to an agreement regarding a Gas purchase and sale transaction for a
particular Delivery Period, tire Confirming Party shall, and the other party
may, record that agreement on a Transaction Confirmation and communicate such
Transaction Confirmation by facsimile, EDI or mutually agreeable electronic
means, to the other party by the close of the Business Day following the date of
agreement. The parties acknowledge that their agreement will not be binding
until the exchange of non-conflicting Transaction Confirmations or the passage
of the Confirm Deadline without objection from the receiving party, as provided
in Section 1.3.

     

    1.3. If
a sending party's Transaction Confirmation is materially different farm the
receiving party's understanding of the agreement referred to in Section 1.2,
such receiving party shall notify the sending party via facsimile, EDI or
mutually agreeable electronic means by the Confirm Deadline, unless such
receiving party has previously sent a Transaction Confirmation to the sending
party. The failure of the receiving party to so notify the sending party in
writing by the Confirm Deadline constitutes the receiving party's agreement to
the farms of the transaction described in the sending party's Transaction
Confirmation. If there are any material differences between timely sent
Transaction Confirmations governing the same transaction, then neither
Transaction Confirmation shall be binding until or unless such differences are
resolved including the use of any evidence that clearly resolves the differences
in the Transaction Confirmations, in the event of a conflict among the terms of
(i) a binding Transaction Confirmation pursuant to Section 1.2, (ii) the oral
agreement of the parties which may be evidenced by a recorded conversation,
where the parties have selected the Oral Transaction Procedure of the Base
Contract, (iii) the Base Contract, and (iv) these General Terms and Conditions,
the terms of the documents shall govern in the priority listed in this
sentence.

     

    1.4. The
parties agree that each party may electronically record all telephone
conversations with respect to this Contract between their respective employees,
without any special or further notice to the
other party. Each party shall obtain any necessary consent of its agents and
employees to such recording. Where the parties have selected the Oral
Transaction Procedure in Section 1.2 of the Base Contract, the parties agree not
to contest the validity or enforceability of telephonic recordings entered into
in accordance with the requirements of this Base Contract, However, nothing
herein shall be construed as a waiver of any objection to the admissibility of
such evidence.

     

    SECTION
2. DEFINITIONS

     

    The terms
set forth below shall have the meaning ascribed to them below. Other terms are
also defined elsewhere in the Contract and shall have the meanings ascribed to
them herein.

     

    2.1. "Alternative
Damages" shall mean such damages, expressed in dollars or dollars per MMBtu, as
the parties shall agree upon in the Transaction Confirmation, in the event
either Seller or Buyer fails to perform a Firm obligation to deliver Gas in the
case of Seller or to receive Gas in the case of Buyer.

     

    2.2. "Base
Contract" shall mean a contract executed by the parties that incorporates these
General Terms and Conditions by reference; that specifics the agreed selections
of provisions contained herein; and that sets forth other information required
herein and any Special Provisions and addendum(s) as identified on page
one.

     

    2.3. "British
thermal unit" or "Btu" shall mean the International BTU, which is also called
the Btu (IT).

     

    
      
        
        

      

      
        Page 2 of
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    2.4. "Business
Day" shall mean any day except Saturday, Sunday or Federal Reserve Bank
holidays.

     

    2.5. "Confirm
Deadline" shall mean 5:00 p.m. in the receiving party's time zone on the second
Business Day following the Day a Transaction Confirmation is received or, if
applicable, on the Business Day agreed to by the parties in the Base Contract;
provided, if the Transaction Confirmation is time stamped after 5:00 p.m. in the
receiving party's time zone, it shall be deemed received at the opening of the
next Business Day.

     

    2.6. "Confirming
Party" shall mean the party designated in the Base Contract to prepare and
forward Transaction Confirmations to the other party.

     

    2.7. "Contract”
shall mean the legally-binding relationship established by (i) the Base
Contract, (ii) any and all binding Transaction Confirmations and (iii) where the
parties have selected the Oral Transaction Procedure in Section 1.2 of the Base
Contract, any and all transactions that the parties have entered into through an
EDI transmission or by telephone, but that have not been confirmed in a binding
Transaction Confirmation.

     

    2.8. "Contract
Price" shall mean the amount expressed in U.S. Dollars per MMBtu to be paid by
Buyer to Seller for the purchase of Gas as agreed to by the parties in a
transaction.

     

    2.9. "Contract
Quantity" shall mean the quantity of Gas to be delivered and taken as agreed to
by the parties in a transaction.

     

    2.10. "Cover
Standard", as referred to in Section 3.2, shall mean that it there is an
unexcused failure to take or deliver any quantity of Gas pursuant to this
Contract, then the performing party shall use commercially reasonable efforts to
(i) if Buyer is the performing party, obtain Gas, (or an alternate fuel if
elected by Buyer and replacement Gas is not available), or (ii) if Seller is the
performing party, sell Gas, in either case, at a price reasonable for the
delivery or production area, as applicable, consistent with. the amount of
notice provided by the nonperforming party; the immediacy of the Buyer's Gas
consumption needs or Seller's Gas sales requirements, as applicable; the
quantities involved; and the anticipated length of failure by the nonperforming
party.

     

    2.11. "Credit
Support Obligation(s)” shall mean any obligation(s) to provide or establish
credit support for, or on behalf of, a party to this Contract such as an
irrevocable standby letter of credit, a margin agreement, a prepayment, a
security interest in an asset, a performance bond, guaranty, or other good and
sufficient security of a continuing nature.

     

    2.12. "Day"
shall mean a period of 24 consecutive hours, coextensive with a "day" as defined
by the Receiving Transporter in a particular transaction.

     

    2.13. "Delivery
Period" shall be the period during which deliveries are to be made as agreed to
by the parties in a transaction.

     

    2.14. "Delivery
Point(s)" shall mean such point(s) as are agreed to by the parties in a
transaction.

     

    2.15. "EDI"
shall mean an electronic data interchange pursuant to an agreement entered into
by the parties, specifically relating to the communication of Transaction
Confirmations under this Contract.

     

    2.16. "EFP"
shall mean the purchase, sale or exchange of natural Gas as the "physical" side
of an exchange for physical transaction involving gas futures contracts, EFP
shall incorporate the meaning and remedies of "Firm", provided that a party's
excuse for nonperformance of its obligations to deliver or receive Gas will be
governed by the rules of the relevant futures exchange regulated under the
Commodity Exchange Act.

     

    2.17. "Firm"
shall mean that either party may interrupt its performance without liability
only to the extent that such performance is prevented for reasons of Force
Majeure; provided, however, that during Force Majeure interruptions, the party
invoking Force Majeure may be responsible for any Imbalance Charges as set forth
in Section 4.3 related to its interruption after the nomination is made to the
Transporter and until the change in deliveries and/or receipts is confirmed by
the Transporter.

     

    2.18. "Gas"
shall mean any mixture of hydrocarbons and noncombustible gases in a gaseous
state consisting primarily of methane.

     

    2.19. "Imbalance
Charges" shall mean any fees, penalties, costs or charges (in cash or in kind)
assessed by a Transporter for failure to satisfy the Transporter's balance
and/or nomination requirements.

     

    2.20. "Interruptible"
shall mean that either party may interrupt its performance at any time for any
reason, whether or not caused by an event of Force Majeure, with no liability,
except such interrupting party may be responsible for any Imbalance Charges as
set forth in Section 4.3 related to its interruption after the nomination is made, to the
Transporter and until the change in deliveries and/or receipts is
confirmed by Transporter.

     

    2.21. "'MMBtu"
shall mean one million British thermal units, which is equivalent to one
dekatherm.

     

    2.22. "Month"
shall mean the period beginning on the first Day of the calendar month and
ending immediately prior to the commencement of the first Day of the next
calendar month.

     

    2.23. "Payment
Date" shall mesa a date, as indicated on the Base Contract, on or before which
payment is due Seller for Gas received by Buyer in the previous
Month.

     

    2.24. "Receiving
Transporter" shall mean the Transporter receiving Gas at a Delivery Point, or
absent such receiving Transporter, the Transporter delivering Gas at a Delivery
Point.

     

    2.25. "Scheduled
Gas" shall mean the quantity of Gas confirmed by Transporter(s) for movement,
transportation or management.

     

    2.26. "Spot
Price” as referred to in Section 3.2 shall mean the price listed in the
publication indicated on the Base Contract, under the listing applicable to the
geographic location closest in proximity to the Delivery Point(s) for the
relevant Day; provided, if there is no single price published for such location
for such Day, hot there is published a range of prices, then the Spot Price
shall be the average of such high and low prices. If no price or range of prices
is published for such Day, then the Spot Price shall be the average of the
following: (i) the price (determined as stated above) for the first Day for
which a price or range of prices is published that next precedes the relevant
Day: and (ii) the price (determined as stated above) for the first Day for which
a price or range of price* is published that next follows the relevant
Day.

     

    
      
        
        

      

      
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    2.27. "Transaction
Confirmation" shall mean a document, similar to the form of Exhibit A, setting
forth the terms of a transaction formed pursuant to Section 1 for a particular
Delivery Period.

     

    2.28. "Termination Option` shall
mean the option of either party to terminate a transaction in the event that the
other party fails to perform a Firm obligation to deliver Gas in the case of
Seller or to receive Gas in the case of Buyer for a designated number of days
during a period as specified on the applicable Transaction
Confirmation.

     

    2.29.  "Transporter(s)"
shall mean all Gas gathering or pipeline companies, or local distribution
companies, acting in the capacity of a transporter, transporting Gas for Seller
or Buyer upstream or downstream, respectively: of the Delivery Point pursuant to
a particular transaction.

     

    SECTION
3. PERFORMANCE OBLIGATION

     

    3.1. Seller
agrees to sell and deliver, and Buyer agrees to receive and purchase, the
Contract Quantity for a particular transaction in accordance with the terms of
the Contract. Sales and purchases will be on a Firm or Interruptible basis, as
agreed to by the parties in a transaction.

     

    The
parties have selected either the "Cover Standard" or the Price Standard" as
indicated on the Base Contract.

     

    Cover
Standard:

    


    3.2. The
sole and exclusive remedy of the parties in the event of a breach of a Firm
obligation to deliver or receive Gas shall be recovery of the following: (i) in
the event of a breach by Seller on any Day(s), payment by Seller to Buyer in an
amount equal to the positive difference, if any, between the purchase price paid
by Buyer utilizing the Cover Standard and the Contract Price, adjusted for
commercially reasonable differences in transportation costs to or from the
Delivery Point(s), multiplied by the difference between the Contract Quantity
and the quantity actually delivered by Seller for such Day(s); or (ii) in the
event of a breach by Buyer on any Day(s), payment by Buyer to Seller in the
amount equal to the positive difference, if any, between the Contract Price and
the price received by Seller utilizing the Cover Standard for the resale of such
Gas, adjusted for commercially reasonable differences in transportation costs to
or from the Delivery Point(s), multiplied by the difference between the Contract
Quantity and the quantity actually taken by Buyer for such Day(s); or (iii) in
the event that Buyer has used commercially reasonable efforts to replace the Gas
or Seller has used commercially reasonable efforts to sell the Gas to a third
party, and no such replacement or sale is available, then the sole and exclusive
remedy of the performing party shall be any unfavorable difference between the
Contract Price and the Spot Price, adjusted for such transportation to the
appropriate Delivery Palm, multiplied try the difference between the Contract
Quantity and the quantity actually delivered by Seller and received by Buyer for
such Day(s). Imbalance Charges shall not be recovered under this Section 3.2,
but Seller and/or Buyer shall be responsible for Imbalance Charges, if any, as
provided in Section 4.3. The amount of such unfavorable difference shall payable
five Business Days after presentation of the performing party's invoice, which
shall set forth the basis upon which such amount was calculated.

    


    Spot Price
Standard:

    


    3.2. The
sole and exclusive remedy of the parties in the event of a breach of a Firm
obligation to deliver or receive Gas shall be recovery of the following; (i) in
the event of a breach by Seller on any Day(s), payment by Seller to Buyer in an
amount equal to the difference between the Contract Quantity and the actual
quantity delivered by Seiler and received by Buyer for such Day(s), multiplied
by the positive difference, if any, obtained by subtracting the Contract Price
from the Spot Price; or (ii) in the event of a breach by Buyer on any Day(s),
payment by Buyer to Seller in an amount equal to the difference between the
Contract Quantity and the actual quantity delivered by Seller and received by
Buyer for such Day(s), multiplied by the positive difference, if any, obtained
by subtracting the applicable Spot Price from the Contract Price. Imbalance
Charges shall not be recovered under this Section 3.2, but Seller and/or Buyer
shall be responsible for unbalance Charges, if any, as provided in Section 4.3.
The amount of such
unfavorable difference shall be payable five Business Days after
presentation of the prevailing party's invoice, which shall set forth the basis
upon which such amount was calculated.

     

    3.3. Notwithstanding
Section 3.2, the parties may agree to Alternative Damages in a Transaction
Confirmation executed in writing by both parties.

     

    3.4  In
addition to Sections 3.2 and 3.3, the parties may provide for a Termination
Option in a Transaction Confirmation executed in Writing by both parties. The
Transaction Confirmation containing the Termination Option will designate the
length of nonperformance triggering the Termination Option and the procedures
for exercise thereof, how damages for nonperformance will be compensated, and
how liquidation costs will be calculated.

     

    SECTION
4. TRANSPORTATION, NOMINATIONS, AND IMBALANCES

     

    4.1. Seller
shall have the sole responsibility for transporting the Gas to
the Delivery Point(s). Buyer shall have the sole responsibility for transporting
the Gas from the Delivery Point(s).

     

    4.2. The
parties shall coordinate their nomination activities, giving sufficient lime to
meet the deadlines of the affected Transporter(s). Each party shall give the
other party timely prior Notice, sufficient to meet the requirements or a
Transporter(s) Involved in the Transaction, of the quantities of Gas to be
delivered and purchased each Day. Should either party become aware that actual
deliveries at the Delivery Points) are greater or lesser than the Scheduled Gas,
such party shall promptly notify the other party.

     

    4.3  The
parties shall use commercially reasonable efforts to avoid imposition of any
Imbalance Charges.  If Buyer or Seller receives an invoice from a
Transporter that includes Imbalance Charges, the parties shall determine the
validity as well as the cause of such Imbalance Charges.  If the
Imbalance Charges were incurred as a result of Buyer’s receipt of quantities of
Gas greater than or less than the Scheduled Gas, then Buyer shall pay for such
imbalance Charges or reimburse Seller for such Imbalance Charges paid by
Seller.   If the Imbalance Charges were incurred as a result of
Seller's delivery of quantities of Gas greater than or less than the Scheduled
Gas, then Seller shall pay for such imbalance Charges or reimburse Buyer for
such Imbalance Charges paid by Buyer.

     

    
      
        
        

      

      
        Page 4 of
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    SECTION
5. QUALITY AND MEASUREMENT

     

    All Gas
delivered by Seller shall meet the pressure, quality and heat content
requirements of the Receiving Transporter.  The unit of quantity
measurement for purposes of this Contract shall be one MMBtu dry. Measurement of
Gas quantities hereunder shall be in accordance with the established procedures
of the Receiving Transporter.

     

    SECTION
6. TAXES

     

    The
parties have selected either "Buyer Pays At and After Delivery Point" or "Seller
Pays Before and At Delivery Point" as indicated on the Base
Contract.

     

    Buyer
Pays At and After Delivery Point:

     

    Seller
shall pay or cause to be paid all taxes, fees, levies, penalties, licenses or
charges Imposed by any government authority (Taxes") on or with respect to the
Gas prior to the Delivery Point(s). Buyer shall pay or cause to be paid all
Taxes on or with respect to the Gas at the Delivery Points) and at Taxes after
the Delivery Point(s). if a party is required to remit or pay Taxes that are the
other party's responsibility hereunder, the party responsible for such Taxes
shall promptly reimburse the other party for such Taxes. Any party entitled to
an exemption from any such Taxes or charges shall furnish the other pa an
necessary documentation thereof.

     

    Seller
Pays Before and At Delivery
Point:            

     

    Seller
shall pay or cause to be paid all taxes, fees, levies, penalties, licenses or
charges imposed by any government authority ('Taxes") on or with respect to the
Gas prior to the Delivery Point(s) and all Taxes at the Delivery Point(s). Buyer
shall pay or cause to be paid all Taxes on or with respect to the Gas after the
Delivery Point(s)-lf-a party-is squired to remit or pay Taxes that are the other
party’s responsibility hereunder, the party responsible for such Taxes shall
promptly reimburse the other party for such Taxes.  Any party entitled
to an exemption from any such Taxes or charges shall furnish the other party any
necessary documentation thereof.

     

    SECTION
7. BILLING, PAYMENT, AND AUDIT

     

    7.1. Seller
shall invoice Buyer for Gas delivered and received in the preceding Month and
for any other applicable charges, providing supporting documentation acceptable
to Industry practice to support the amount charged. If the actual quantity
delivered is not known by the billing date, billing sill be prepared based on
the quantity of Scheduled Gas, The invoiced quantity will then be adjusted to
the actual quantity on the following Month's billing or as soon thereafter as
actual delivery information is available.

     

    7.2. Buyer
shall remit the amount due under Section 7.1 in the manner specified in the Base
Contract, in immediately available funds, on or before the later of the Payment
Date or 10 Days after receipt of the invoice by Buyer; provided that if the
Payment Date is not a Business Day, payment is due on the next Business Day
following that date. In the event any payments are due Buyer hereunder, payment
to Buyer shall be made in accordance with this Section 7.2.

     

    7.3. In
the event payments become due pursuant to Sections 3.2 or 3.3, the performing
party may submit an invoice to the nonperforming party for an accelerated
payment setting form the basis upon which the invoiced amount was calculated.
Payment from the nonperforming party will be due five Business Days after
receipt of invoice.

     

    7.4. If
the invoiced party, in good faith, disputes the amount of any such invoice or
any part thereof, such invoiced party will pay such amount as it concedes to be
correct; provided, however, if the invoiced party disputes the amount due, it
must provide supporting documentation acceptable in industry practice to support
the amount paid or disputed, in the event the parties are unable to resolve such
dispute, either party may pursue any remedy available at Law or in equity to
enforce its rights pursuant to this Section.

     

    7.5. If
the invoiced party fails to remit the full amount payable when due, interest on
the unpaid portion shall accrue from the date due until the date of payment at a
rate equal to the lower of (i) the then-effective prime rate of interest
published under 'Money Rates" by The Wall Street Journal, plus two percent per
annum; or (ii) the maximum applicable lawful interest rate.

     

    7.6. A
party shall have the right, at its own expense, upon reasonable Notice and at
reasonable times, to examine and audit and to obtain copies of the relevant
portion of the books, records, and telephone recordings of the other party only
to the extent reasonably necessary to verify the accuracy of any statement,
charge, payment, or computation made under the Contract, This right to examine,
audit, and to obtain copies shall not be available with respect to proprietary
information not directly relevant to transactions under this
Contract.  All invoices and billings small be conclusively presumed
final and accurate and all associated claims for under or overpayments shell be
deemed waived unless suds invoices and billings are objected to in writing, with
adequate explanation and for documentation, within two years after the Month of
Gas delivery. All retroactive adjustments under Section 7 shall be paid in full
by the party owing payment within 30 Days of Notice and substantiation of such
inaccuracy.

     

    7.7. Unless  the
parties have elected on the Base Contract not to make this Section 7.7
applicable to this Contract, the parties shall net all undisputed amounts due
and owing, and/or past due arising under the Contract such that the party owing
the greater amount shall make 8 single payment of the net amount to the other
party in accordance with Section 7; provided that no payment required to be made
pursuant to the terms of any Credit Support Obligation or pursuant to Section
7.3 shall be subject to netting under this Section. If the parties have executed
a separate netting agreement, the terms and conditions therein shall prevail to
the extent inconsistent herewith.

     

    
      
        
        

      

      
        Page 5 of
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    SECTION
8. TITLE, WARRANTY, AND INDEMNITY

     

    8.1. Unless
otherwise specifically agreed, title to the Gas shall pass from Seller to Buyer
at the Delivery Point(s). Seller shall have responsibility for and assume any
liability with respect to the Gas prior to its delivery to Buyer at the
specified Delivery Point(s). Buyer shall have responsibility for and any
liability with respect to said Gas after its delivery to Buyer at the Delivery
Point(s).

     

    8.2. Seller
warrants that it will have the right to convey and will transfer good and
merchantable title to all Gas Sold hereunder and delivered by it to Buyer, free
and clear of all liens, encumbrances, and claims. EXCEPT AS PROVIDED IN THIS
SECTION 8.2 AND IN SECTION 14.8, ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING ANY WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR ANY PARTICULAR
PURPOSE ARE DISCLAIMED.

     

    8.3. Seller
agrees to indemnify Buyer and save it harmless from ail losses, liabilities or
claims including reasonable attorneys' fees and costs of court ("Claims"), from
any and all persons, arising from or out of claims of title, personal injury or
property damage from said Gas or other charges thereon which attach before title
passes to buyer. Buyer agrees to indemnify Seller and save it harmless from all
Claims, from any and all persons, arising from or out of claims regarding
payment, personal injury or property damage from said Gas or other charges thereon
which attach after title passes to Buyer.

     

    8.4. Notwithstanding
the other provisions of this Section 8, as between Seller and Buyer, Seller will
be table for all Claims to the extent that such arise from the failure of Gas
delivered by Seller to meet the quality requirements of Section 5.

     

    SECTION
9. NOTICES

     

    9.1. All
Transaction Confirmations, invoices, payments and other communications made
pursuant to the Base Contract (“Notices") shall be made to the addresses
specified in writing by the respective parties from time to time.

     

    9.2. All
Notices required hereunder may be sent by facsimile or mutually acceptable
electronic means, a nationally recognized overnight courier service, first class
mail or hand delivered.

     

    9.3 
Notice shall be given when received on a Business Day by the addressee. In the
absence of proof of the actual receipt date, the following presumptions will
apply. Notices sent by facsimile shall be deemed to have been received upon the
sending party's receipt of its facsimile machine’s confirmation of successful
transmission.  If the day on which such facsimile is-received
is not a Business Day or is after five p.m. on a Business Day, then such
facsimile shall be deemed to have been received on the next following Business
Day. Notice by overnight mail of courier shall be deemed to have been received
on the next Business Day after it was sent or such earlier time as is confirmed
by the receiving party. Notice via first class mail shall be considered
delivered five Business Days after mailing.

     

    SECTION
10. FINANCIAL RESPONSIBILITY

     

    10.1. If
either party ("X") has reasonable grounds for insecurity regarding the
performance of any obligation under this Contract (whether or not then due) by
the other party ("Y') (including, without limitation, the occurrence of a
material change in the creditworthiness of Y), X may demand Adequate Assurance
of Performance. "Adequate Assurance of Performance" shall mean sufficient
security in the form, amount and for the term reasonably acceptable to X,
including, but not limited to, a standby irrevocable letter of credit,, a
prepayment, a security interest in an asset or a performance bond or guaranty
(including the issuer of any such security).

     

    10.2. In
the event (each an "Event of Default") either party (the "Defaulting Party”) or
its guarantor shall: (i) make an assignment or any general arrangement for the
benefit of creditors, (ii) file a petition or otherwise commence, authorize, or
acquiesce in the commencement of a proceeding or case under any bankruptcy or
similar law for the protection of creditors or have such petition filed or
proceeding commenced against it; (iii) otherwise become bankrupt or insolvent
(however evidenced); (iv) be unable to pay its debts as they fall due; (v) have
a receiver, provisional liquidator, conservator, custodian, trustee or other
similar official appointed with respect to it or substantially all of its
assets; (vi) fail to perform arty obligation to the other party with respect to
any Credit Support Obligations relating to the Contract; (vii) fail to give
Adequate Assurance of Performance under Section 10.1 within 48 hours but at
least one Business Day of a written request by the other party; or (viii) not
have paid any amount due the other party hereunder on or before the second
Business Day following written Notice that such payment is due: then the other
party (the "Non-Defaulting Party") shall have the right, at its sole election,
to immediately withhold and/or suspend deliveries or payments upon Notice and/or
to terminate and liquidate the transactions under the Contract, in the manner
provided In Section 10.3, in addition to any and all other remedies available
hereunder.

     

    10.3. If
an Event of Default has occurred and is continuing, the Non-Defaulting Party
shall have the right, by Notice to the Defaulting Party, to designate a Day, no
earlier than the Day such Notice is given and no later than 20 Days after such
Notice is given, as an early termination date (the "Early Termination Date') for
the liquidation and termination pursuant to Section 10.11 of all transactions
under the Contract, each a "Terminated Transaction".  On the Early
Termination Date, all transactions will terminate. other then those
transactions, if any, that may not be liquidated and terminated under applicable
law or that are, in the reasonable opinion of the Non-Defaulting Party,
commercially impracticable to liquidate and terminate ('Excluded Transactions'),
which Excluded Transactions must be liquidated and terminated as soon thereafter
as is reasonably practicable. and upon termination shall be a Terminated
Transaction and be valued consistent with Section 10.3.1 below, With respect to
each Excluded Transaction, its actual termination date shall be the Early
Termination Date for purposes of Section 10.3.1.

     

    The
parties have selected either “Early Termination Damages Apply” or “Early
Termination Damages Do Not Apply” as indicated on the Base
Contract. 

     

    Early Termination Damages
Apply: 

     

    10.3.1. As
of the Early Termination Date, the Non-Defaulting Party shall determine, in good
faith and in a commercially reasonable manner, the amount owed (whether or not
then due) by each party with respect to all Gas delivered and received between
the parties under Terminated Transactions and Excluded Transactions on and
before the Early Termination Date and all other applicable charges relating to
such deliveries and receipts (including without limitation any amounts owed
under Section 3.2), for which payment has not yet been made by the party that
owes such payment under this Contract and (II) the Market Value, as defined
below, of each Terminated Transaction.  The Non-Defaulting Party shall
(x) liquidate and accelerate each Terminated Transaction at its Market Value, so
that each amount equal to the difference between such Market Value and the
Contract Value, as defined below, of such Terminated Transaction(s) shall be due
by the Buyer under the Terminated Transaction(s) if such Market value exceeds
the Contract Value and to the Seller if the opposite is the case; and (y) where
appropriate, discount each amount then due under clause (x) above to present
value in a commercially reasonable manner as of the Early Termination Date (to
take account of the period between the date of liquidation and the date on which
such amount would have otherwise been due pursuant to the relevant Terminated
Transactions).

     

    
      
        
        

      

      
        Page 6 of
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    For
purposes of this Section 10.3.1, "Contract Value" means the amount of Gas
remaining to be delivered or purchased under a transaction multiplied by the
Contract Price, and “Market Value" means the amount of Gas remaining to be
delivered or purchased under a transaction multiplied by the market price for a
similar transaction at the Delivery Point determined by the Non-Defaulting Party
in a commercially reasonable manner. To ascertain the Market Value, the
Non-Defaulting Party may consider, among other valuations, any or all of the
settlement prices of NYMEX Gas futures contracts, quotations from leading
dealers in energy swap contracts or physical gas trading markets, similar sales
or purchases and any other bona fide third-party offers, all adjusted for the
length of the term and differences in transportation costs.  A party
shall not be required to enter into a replacement transactions) in order to
determine the Market Value. Any extension(s) of the term of a transaction to
which parties are not bound as of the Early Termination Date (including but not
limited to "evergreen provisions") shall not be considered in determining
Contract Values and Market Values. For the avoidance of doubt, any opinion
pursuant to which one party has the right to extend the term of a transaction
shall be considered in determining Contract Values and Market Values. The rate
of interest used in calculating the present value shall be determined by the
Non-Defaulting Party in a commercially reasonable manner.

     

    Early Termination Damages Do
Not Apply:

     

    10.3.1. As
of the Early Termination Date, the Non-Defaulting Party shall determine,  in
good faith and in a commercially reasonable manner, the amount owed (whether or
not then due) by each party with respect to all Gas delivered and received
between the parties under Terminated Transactions and Excluded Transactions on
and before the Early Termination Date and all other applicable charges relating
to such deliveries and receipts (including without limitation any amounts owed
under Section 3.2), for which payment has not yet been made by the party that
owes such payment under this Contract.

     

    The parties have selected either
“Other Agreement Setoffs Apply” or “Other Agreement Setoffs Do Not Apply” as
indicated on the Base
Contract.        

     

    Other
Agreement Setoffs Apply:

     

    10.3.2. The
Non-Defaulting Party shall net or aggregate, as appropriate, any and all amounts
owing between the parties under Section 10.3.1, so that all such amounts are
netted or aggregated to a single liquidated amount payable by one party to the
other (the "Net Settlement Amount"). At its sole option and without prior Notice
to the Defaulting Party, the Non-Defaulting Party may setoff (i) any Net
Settlement Amount owed to the Non-Defaulting Party against any margin or other
collateral held by it in connection with any Credit Support Obligation relating
to the Contract; or (ii) any Net Settlement Amount payable to the Defaulting
Party against any amount(s) payable by the Defaulting Party to the
Non-Defaulting Party under any other agreement or arrangement between the
parties. 

     

    Other
Agreement Setoffs Do Not Apply:

     

    10.3.2. The
Non-Defaulting Party shall net or aggregate, as appropriate, any and all amounts
owing between the parties under Section 10.3.1, so that all such amounts are
netted or aggregated to a single liquidated amount payable by one party to the
other (the "Net Settlement Amount"). At its sole option and without prior Notice
to the Defaulting Party, the Non-Defaulting Party may setoff any Net Settlement
Amount owed to the Non-Defaulting Party against any margin or other collateral
held by it in connection with any Credit Support Obligation relating to the
Contract.

     

    10.3.3. If
any obligation that is to be included in any netting, aggregation or setoff
pursuant to Section 10.3.2 is unascertained, the Non-Defaulting Party may in
good faith estimate that obligation and net, aggregate or setoff, as applicable,
in respect of the estimate, subject to the Non-Defaulting Party accounting to
the Defaulting Party when the obligation is ascertained. Any amount not then due
which is included in any netting, aggregation or setoff pursuant to Section
10.12 shall be discounted to net present value in a commercially reasonable
manner determined by the Non-Defaulting Party.

     

    10.4. As
soon as practicable after a liquidation, Notice shall be given by the
Non-Defaulting Party to the Defaulting Party of the Net Settlement Amount, and
whether the Net Settlement Amount is due to or due from the Non-Defaulting
Party. The Notice shall include a written statement explaining in reasonable
detail the calculation of such amount, provided that failure to give such Notice
shall not affect the validity or enforceability of the liquidation or give rise
to any claim by the Defaulting Party against the Non-Defaulting Party. The Net
Settlement Amount shall be paid by the close of business on the second Business
Day following such Notice, which date shall not be earlier than the Early
Termination Date. Interest on any unpaid portion of the Net Settlement Amount
shall accrue from the date due until the date of payment at a rate equal to the
lower of (i) the then-effective prime rate of interest published under "Money
Rates" by The Wall Street Journal, plus two percent per annum; or (ii) the
maximum applicable lawful interest rate.

     

    
      
        
        

      

      
        Page 7 of
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    10.5. The
parties agree that the transactions hereunder constitute a "forward contract"
within the meaning of the United States Bankruptcy Code and that Buyer and
Seller are each "forward contract merchants" within the meaning of the United
States Bankruptcy Code.

     

    10.6 
The Non-Defaulting Party`s remedies under this Section 10 are the sole and
exclusive remedies of the Non-Defaulting Party with respect to the occurrence of
any Early Termination Date. Each party reserves to itself all other rights,
setoffs, counterclaims and other defenses that it is or may be entitled to
arising from the Contract.

     

    10.7. With
respect to this Section 10, if the parties have executed a separate netting
agreement with close-out netting provisions, the terms and conditions therein
shall prevail to the extent inconsistent herewith.

     

    SECTION
11. FORCE MAJEURE

     

    11.1. Except
with regard to a party's obligation to make payments) due under Section 7,
Section 10.4 and Imbalance Charges under Section 4, neither party shall be
liable to the other for failure to perform a Firm obligation, to the extent such
failure was caused by Force Majeure. The term "Force Majeure" as employed herein
means any cause not reasonably within the control of the party claiming
suspension, as further defined in Section 11.2.

     

    11.2. Force
Majeure shall include, but not be limited to, the following: (i) physical events
such as acts of God, landslides, lightning; earthquakes, fires, storms or storm
warnings, such as hurricanes, which result in evacuation of the affected area,
floods, washouts, explosions, breakage or accident or necessity of repairs to
machinery or equipment or lines of pipe, (ii) weather related events affecting
an entire geographic region, such as low temperatures which cause freezing or
failure of wells or lines of pipe; (iii) interruption and/or curtailment of Firm
transportation and/or storage by Transporters; (iv) acts of others such as
strikes, lockouts or other industrial disturbances, riots, sabotage,
insurrections or wars, and (v) governmental actions Such as necessity for
compliance with any court order, taw, statute, ordinance, regulation, or policy
having the effect of law promulgated by a governmental authority having
jurisdiction. Seller and Buyer shall make reasonable efforts to avoid the
adverse impacts of a Force Majeure and to resolve the event or occurrence once
it has occurred in order to resume performance..

     

    11.3. Neither
party shall be entitled to the benefit of the provisions of Force Majeure to the
extent performance is affected by any or all of the following circumstances: (i)
the curtailment of interruptible or secondary Firm transportation unless
primary, in-path, Firm transportation is also curtailed; (ii) the party claiming
excuse failed to remedy the condition and to resume the performance of such
covenants or obligations with reasonable dispatch; or (iii) economic hardship,
to include, without limitation, Seller's ability to sell Gas at a higher or more
advantageous price than the Contract Price, Buyer's ability to purchase Gas at a
lower or more advantageous price than the Contract Price, or a regulatory agency
disallowing, in whole or in part, the pass through of costs resulting from this
Agreement (iv) the loss of Buyer's market(s) or Buyers inability to use or
resell Gas purchased hereunder, except, in either case, as provided in Section
11.2; or (v) the loss or failure of Seller's gas supply or depletion of
reserves, except, in either case, as provided in Section 11.2. The party
claiming Force Majeure shall not be excused from its responsibility for
Imbalance Charges.

     

    11.4. Notwithstanding
anything to the contrary herein, the parties agree that the settlement of
strikes, lockouts or other industrial disturbances shall be within the sole
discretion of the party experiencing such disturbance.

     

    11.5. The
party whose performance is prevented by Force Majeure must provide Notice to the
other party. Initial Notice may be given orally, however, written Notice with
reasonably full particulars of the event or occurrence is required as soon as
reasonably possible. Upon providing written Notice of Force Majeure to the other
party, the affected party will be relieved of its obligation, from the onset of
the Force Majeure event, to make or accept delivery of Gas, as applicable, to
the extent and for the duration of Force Majeure, and neither party shall be
deemed to have failed in such obligations to the other during such occurrence or
event.

     

    11.6. Notwithstanding
Sections 11.2 and 11.3, the parties may agree to alternative Force Majeure
provisions in a Transaction Confirmation executed in writing by both
parties.

     

    SECTION
12. TERM

     

    This
Contract may be terminated on 30 days written Notice, but shall remain in effect
until the expiration of the latest Delivery Period of any transaction(s). The
rights of either party pursuant to Section 7.6 and Section 10, the obligations
to make payment hereunder, and the obligation of either party to indemnify the
other, pursuant hereto shall survive the termination of the Base Contract or any
transaction.

     

    SECTION
13. LIMITATIONS

     

    FOR
BREACH OF ANY PROVISION FOP WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS
PROVIDED, SUCH EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND
EXCLUSIVE REMEDY. A PARTY'S LIABILITY HEREUNDER SHALL BE LIMITED AS SET FORTH IN
SUCH PROVISION, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE
WAIVED. IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN OR IN A
TRANSACTION, A PARTY'S LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY.
SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, ANC ALL OTHER
REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED UNLESS EXPRESSLY HEREIN
PROVIDED. NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE,
EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION
DAMAGES, BY STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITY PROVISION OR
OTHERWISE. IT IS THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED
ON REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR CAUSES
RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE
BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE, TO THE EXTENT ANY DAMAGES
REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE
DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, OR OTHERWISE OBTAINING AN
ADEQUATE REMEDY IS INCONVENIENT AND THE DAMAGES CALCULATED RATED HEREUNDER
CONSTITUTE A REASONABLE APPROXIMATION OF THE HARM OR LOSS.

     

    
      
        
        

      

      
        Page 8 of
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    SECTION
14. MISCELLANEOUS

     

    14.1. This
Contract shall be binding upon and inure to the benefit of the successors,
assigns, personal representatives, and heirs of the respective parties hereto,
and the covenants, conditions, rights and obligations of this Contract shall run
for the full term of this Contract. No assignment of this Contract, in whole or
in part, will be made without the prior written consent of the non-assigning
party (and shall not relieve the assigning party from liability hereunder),
which consent will not be unreasonably withheld or delayed provided, either
party may (i) transfer, sell, pledge, encumber, or assign this Contract or the
accounts, revenues, or proceeds hereof in connection with any financing or other
financial arrangements, or (ii) transfer its interest to any parent or affiliate
by assignment, merger or otherwise without the prior approval of the other
party. Upon any such assignment, transfer and assumption, the transferor shall
remain principally liable for and shall not be relieved of or discharged from
any obligations hereunder.

     

    14.2. If
any provision in this Contract is determined to be invalid, void or
unenforceable by any court having jurisdiction, such determination shall not
invalidate, void, or make unenforceable any other provision, agreement or
covenant of this Contract.

     

    14.3. No
waiver of any breach of this Contract shall be held to be a waiver of any other
or subsequent breach.

     

    14.4. This
Contract sets forth all understandings between the parties respecting each
transaction subject hereto, and any prior contracts, understandings and
representations, whether oral or written, relating to such transactions are
merged into and superseded by this Contract and any effective transaction(s),
This Contract may be amended only by a writing executed by both
parties.

     

    14.5. The
interpretation and performance of this Contract shall be governed by the laws of
the jurisdiction as indicated on the Base Contract excluding, however, every
conflict of laws rule which would apply the law of another
jurisdiction.

     

    14.6. This
Contract and all provisions herein will be subject to all applicable and valid
statutes, rules, orders and regulations of any governmental authority having
jurisdiction over the parties, their facilities, or Gas supply, this Contract or
transaction or any provisions thereof.

     

    14.7. There
is no third party beneficiary to this Contract,

     

    14.8, Each
party to this Contract represents and warrants that it has full and complete
authority to enter into and perform this Contract. Each person who executes this
Contract on behalf of either party represents and warrants that it has full and
complete authority to do so and that such party will be bound
thereby.

     

    14.9. The
headings and subheadings contained in this Contract are used solely for
convenience and do not constitute a part of this Contract between the parties
and shall not be used to construe or interpret the provisions of this
Contract.

     

    14.10. Unless
the parties have elected on the Base Contract not to make this Section 14.10
applicable to this Contract, neither party shall disclose directly or indirectly
without the prior written consent of the other party the terms of any
transaction to a third party (other than the employees, lenders, royalty owners,
counsel, accountants and other agents of the party, or prospective purchasers of
all or substantially all of a party's assets or of any rights under this
Contract, provided such person shall have agreed to keep such terms.
confidential) except (i) in order to comply with any applicable law, order,
regulation, or exchange rule, (ii) to the extent necessary for the enforcement
of this Contract, (iii) to the extent necessary to implement any transaction, or
(iv) to the extent such information is delivered to such third party for the
sole purpose of calculating a published index.  Each party shall
notify the other party of any proceeding of which it is aware which may result
in disclosure of the terms of any transaction (other than as permitted
hereunder) and use reasonable efforts to prevent or limit the
disclosure.  The existence of this Contract is not subject to this
confidentiality obligation. Subject to Section 13, the parties shall be entitled
to all remedies available at law or in equity to enforce, or seek relief in
connection with this confidentiality obligation. The terms of any transaction
hereunder shall be kept confidential by the parties hereto for one year from the
expiration of the transaction.

     

    In the
event that disclosure is required try a governmental body or applicable law, the
party subject to such requirement may disclose the material terms of this
Contract to the extent so required, but shall promptly notify the other party,
prior to disclosure, and shall cooperate (consistent with the disclosing party's
legal obligations) with the other party's efforts to obtain protective orders or
similar restraints with respect to such disclosure at the expense of the other
party.

     

    14.11 The
parties may agree to dispute resolution procedures in Special Provisions
attached to the Base Contract or in a Transaction Confirmation executed in
writing by both parties.

     

    
      	
              DISCLAIMER:
      The purposes of this Contract are to facilitate trade, avoid
      misunderstandings and make more definite the terms of contracts of
      purchase and sale of natural gas.  Further, NAESB does not
      mandate the use of this Contract by any party.  NAESB DISCLAIMS
      AND EXCLUDES, AND ANY USER OF THIS CONTRACT ACKNOWLEDGES AND AGREES TO
      NAESB’S DISCLAIMER OF, ANY AND ALL WARRANTIES, CONDITIONS OR
      REPRESENTATIONS, EXPRESS OR IMPLIED, ORAL OR WRITTEN, WITH RESPECT TO THIS
      CONTRACT OR ANY PART THEREOF, INCLUDING ANY AND ALL IMPLIED WARRANTIES OR
      CONDITIONS OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY, OR FITNESS OR
      SUITABILITY FOR ANY PARTICULAR PURPOSE (WHETHER OR NOT NAESB KNOWS, HAS
      REASON TO KNOW, HAS BEEN ADVISED, OR IS OTHERWISE IN FACT AWARE OF ANY
      SUCH PURPOSE), WHETHER ALLEGED TO ARISE BY LAW, BY REASON OF CUSTOM OR
      USAGE IN THE TRADE, OR BY COURSE OF DELAYING.  EACH USER OF THIS
      CONTRACT ALSO AGREES THAT UNDER NO CIRCUMSTANCES WILL NAESB BE LIABLE FOR
      ANY DIRECT, SPECIAL, INCIDENTAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
      DAMAGES ARISING OUT OF ANY USE OF THIS
CONTRACT.

            


    

     

    
      
        
        

      

      
        Page 9 of
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    TRANSACTION
CONFIRMATION

    FOR
IMMEDIATE DELIVERY


    
       

      SAMPLE
DOCUMENT

       

      
        	
                Letterhead/Logo

              	 
      	
                Date: ___________________________________                                       

              
	 	 	
                Transaction
      Confirmation #:
______________

              


      

       

      
        	
                This
      Transaction Confirmation is subject to the Base Contract between Seller and Buyer dated ____________________.  The
      terms of this Transaction Confirmation are binding unless disputed in
      writing within 2 Business Days of receipt unless otherwise specified in
      the Base Contract.

              
	 	 	 
	
                SELLER:

              	 
      	
                BUYER:

              
	_____________________________________________	 
      	_____________________________________________
	_______________________________________	 
      	_____________________________________________
	
                Attn:  ___________________________________

              	 	
                Attn: ___________________________________

              
	
                Phone:
      __________________________________

              	 
      	
                Phone: __________________________________

              
	
                Fax: ____________________________________

              	 
      	
                Fax:
      ____________________________________

              
	
                Base
      Contract No. __________________________

              	 
      	
                Base
      Contract No. __________________________

              
	
                Transporter:
      ______________________________

              	 
      	
                Transporter: 
      _____________________________

              
	
                Transporter
      Contract Number: __________________

              	 
      	
                Transporter
      Contract Number: __________________

              
	
                 

                Contract
      Price: $                                           MBtu
      or                                                                                                                                  
      

              
	 
	
                Delivery
      Period:  Begin:                                                                End: _________________________

              
	 
	
                Performance Obligation and
      Contract Quantity:  (Select
  One)

              


      

       

      
        	
                Firm
      (Fixed Quantity):

              	
                Firm (Variable
      Quantity):

              	
                Interruptible:

              
	
                _______
      MMBtus/day

              	
                _______MMBtus/day
      Minimum

              	
                Up
      to _______MMBtus/day

              
	 
      	
                _______MMBtus/day
      Maximum

              	 
      
	 
      	
                Subject
      to Section 4.2 at 

                election
      of ∏  Buyer or ∏ Seller

              	 
      


      

       

      
        	
                Delivery
      Point(s):                                                                           

                (If
      a pooling point is used, list a specific geographic and pipeline
      location):

                 

              
	
                Special
      Conditions:

                 

                SAMPLE
      DOCUMENT

                 

              
	
                Seller: SAMPLE
      DOCUMENT                                           

              	 
      	
                Seller: SAMPLE
      DOCUMENT                                           

              
	 	 	 
	
                By:       __________________________

              	 
      	
                By:   
      ___________________________

              
	
                Title:    __________________________       

              	 
      	
                Title: ___________________________

              
	
                Date:    __________________________    

              	 	
                Date: ___________________________

              


      

       

      
        
          
          

        

        
          Page 10 of 10

          
            

          

        

        
          
          

        

      

       

    

    SPECIAL
PROVISIONS TO THE NASEBY BASE CONTRACT

    FOR
SALE AND PURCHASE OF NATURAL GAS

    DATED
JULY 1, 2008

    BETWEEN

    ATMOS
ENERGY MARKETING, LLC

    and

    CORNING
NATURAL GAS CORPORATION

     

    If
the terms of these Special Provisions and the other terms of this Base Contract
conflict, the terms of these Special Provisions shall govern. Any definitions
used in the Base Contract, unless otherwise defined in these Special Provisions,
shell have the same meaning in these Special Provisions.

     

    Any
reference to a Section in these Special Provisions refers to the same Section of
the General Terms and Conditions to the Base Contract.


     

    Section
1. Purposes and Procedures

     

    Section 1 2 of be amended by adding the
following sentence after the last sentence of the
Section;

     

    "Notwithstanding
the provisions of this Section 1.2 the parties agree that for transactions
having a Delivery Period for less than one (1) Month's duration, the Confirming
Party shall not be obligated to issue a Transaction Confirmation."

     

    Section
2. Definitions

     

    Section 2. 11 is amended
by deleting the section in its entirety and replacing it with the
following:

     

    2.11 "Credit
Support Obligation(s)" shall mean any obligation(s) to provide or establish
credit support for, or on behalf of, a party to this contract such as
accelerated payment, a prepayment, an irrevocable standby letter of credit, a
margin agreement, guaranty, deposit or other mutually acceptable form of
security, consideration or adequate assurance of performance."

     

    Section 2.28 is amended by deleting the section in its entirety
and replacing
it with
the following:

     

    2.28 "Termination
Option" shall mean the option of either party to terminate a transaction in the
event that the other party fans to perform a Firm obligation to deliver Gas in
the case of Seller or to receive and make full and timely payment for Gas in the
case of Buyer for a designated number of days during a period as specified on
the applicable Transaction Confirmation."

     

    Section
6. Taxes

     

    Section 6 is hereby
amended by adding the following
sentence to the end of the
Section:

     

    "Notwithstanding
the foregoing, Buyer agrees to reimburse Seller for any sales, use, utility,
utility receipts, gross receipts or similar tax  currently or in the
future imposed by any taxing or governmental authority with respect to the sale,
receipts from the sale, use or transportation of the gas sold pursuant to this
Contract."

     

    
      
        
        

      

      
        Page 1 of 3

        
          

        

      

      
        
        

      

    

     

    Section
8. Title, Warranty and Indemnity

     

    Section 8.3 is hereby
amended by adding the following sentence to the end of this
section:

     

    “Neither
party shall be obligated to indemnify, defend, or hold the other party harmless
to the extent any liability, suit, action, damage, loss or expense arises out of
or in connection with any intentional act, negligent act or failure to act on
the part of the other party, its officers, agents, or employees.”

     

    Section
10. Financial Responsibility

     

    Section 10.1 is hereby
amended by deleting everything after “may demand” on line 3 and replacing
with:

     

    “One or
more Credit Support Obligations to provide adequate assurance of Y’s
performance.”

     

    The clause identified as
(iv) in Section
10.2 shat be deleted and replaced by the following:

     

    “(iv) be
unable to pay its debts as they fall due at any time or become insolvent or
experience an adverse change in financial condition prior to the closing of a
case arising under Title 11 of the United States Code;"

     

    The clause identified as (vii)) in
Section 10.2, shall be deleted and replaced by the
following:

     

    "(vii)
fail to provide the additional Credit Support Obligation required under Section
10.1 within at least two Business Days of a written request by the other party;
or"

     

    Section 10.5 is amended by deleting the section in its entirety and
replacing it with the following:

     

    “Bankruptcy
Matters.

     

    
      	
              (a)  

            	
              Each
      party acknowledges and agrees that (i) the Contract and all
      transaction(s), both together and separately, constitute "forward
      contracts" within the meaning of Title 11 of the United States Code (the
      "Bankruptcy Code"); (ii) each Party is a "forward contract merchant"
      within the meaning of the Bankruptcy Code with respect to the Contract and
      any transactions thereunder; (iii) all payments made or to be made by one
      party to the other party, and/or credits, offsets, liquidation of
      collateral, drawdowns, or any other similar settlement of the transactions
      and Credit Support Obligations pursuant to this Contract, of whatever
      nature or character, physical or financial, constitute “settlement
      payments" within the meaning of the Bankruptcy Code; (iv) all transfers,
      directly or indirectly, by one party to the other party arising under or
      related to Section 10.1 of this Contract constitute "margin payments"
      within the meaning of the Bankruptcy Code; and (v) each party's rights
      under Sections 10.2, 10.3 and 10.4 of this Contract constitutes a
      contractual right to liquidate, accelerate, offset and/or terminate” the
      transactions within the meaning of the Bankruptcy
  Code.

            


    

     

    
      	
              (b)  

            	
              Each
      party acknowledges and agrees that, for purposes of this Contract, the
      other party is not a “utility” as such term is used in Section 366 of the
      Bankruptcy Code.

            


    

     

    
      	
              (c)  

            	
              Each
      party acknowledges and that upon an Event of Default, the Non-Defaulting
      Party may terminate the Contract and transactions, and all obligations.
      including Credit Support Obligations, arising under or related to the
      Contract and transactions, of whatever nature or character, financial,
      physical or otherwise, may be liquidated, accelerated and settled at the
      option of the Non-Defaulting Party pursuant to the terms of this Contract
      and applicable state law and, if a case is initiated under the Bankruptcy
      Code, such termination shall occur pursuant to the provisions in the
      Bankruptcy Code applicable to forward contracts In that regard, unless the
      parties have entered into a separate master netting agreement covering all
      transactions, this Contract shall constitute a "master netting agreement"
      under the applicable provisions of the Bankruptcy Code. including, without
      limitation, Section 561 thereof.”

            


    

     

    
      
        
        

      

      
        Page 2 of 3

        
          

        

      

      
        
        

      

    

     

    Section
11. Force Majeure

     

    Section 11 is amended
by adding the following as Section 11.7

     

    
      	
              11.7

            	
              In
      the event that the party whose performance is prevented by Force Majeure
      is unable to make or accept delivery of Gas, as applicable, pursuant to
      the Contract, or pursuant to a modified delivery schedule acceptable to
      the non-affected party, then such non-affected party shall also be
      relieved of its obligation, from the onset of the Force Majeure event, to
      make or accept delivery of Gas, as
applicable.

            


    

     

    Section
14. Miscellaneous

     

    Section 14.4 is amended by
deleting the section in its entirety and replacing it with the
following:

     

    "The
parties agree that this Contract shall supersede and replace all prior
agreements between the parties hereto with respect to the purchase and sale of
natural gas and that all transactions under any such prior agreements are,
effective as of the date of this Contract, now governed solely by the terms of
this Contract and shall be transactions hereunder and a part of the single
integrated agreement between the parties. This Contract may be amended only by a
writing executed by both parties."

     

    Section 14 is amended by
adding the following as Section 14.12:

     

    
      	
              14.12

            	
              The
      parties do hereby represent and warrant that the General Terms and
      Conditions of the Base Contract have not been modified, altered, or
      amended in any respect except for these Special Provisions which are
      attached to and made a part of the Base
  Contract.

            


    

    
      
        	 	 	 	 	 
	
                Atmos
      Energy Marketing, LLC

              	 	 	
                Corning
      Natural Gas Corporation

              	 
	
                 

              	 	 	 	 
	
                By:       /s/Marc
      Tronzo 

              	 	 	
                
                  By:      /s/Stanley G.
      Sleve 

                

              	 
	
                
                  
                    
      

                  Name: Marc Tronzo

                

              	 	 	
                
                  
                    
      

                  Name: Stanley G.
      Sleve

                

              	 
	
                
                  Title:   Sr. VP of Trading

                

              	 	 	
                
                  Title:   Vice President 

                

              	 
	
                Date:   July 1, 2008

              	 	 	
                Date:   June 20, 2008

              	 


      

    

    


    
      
        
        

      

      
        Page 3 of 3

        
          

        

      

      
        
        

      

    

    
    

    
      
         

        Confidential
Treatment Requested -  Redacted version

        
          	
                  **** 
      

                	
                  Indicates
      that information has been omitted pursuant to a request for confidential
      treatment pursuant to  Rule 24b-2 of the Securities Exchange Act
      of 1934.  The omitted information has been filed separately with
      the Securities and Exchange
Commission.

                


        

      

       

      TRANSACTION
CONFIRMATION

      


      
        	
                      ATMOS

                energy

                                      Atmos
      Energy Marketing

              	 
      	
                Date:
      July
      1st,
      2008

                Transaction
      Confirmation #: 255785;
      255786

              


      

       

      This
Transaction Confirmation is subject to the Base Contract between Seller and
Buyer dated July 1, 2008.  The terms of this Transaction Confirmation
are binding unless disputed in writing within 2 Business Days of receipt unless
otherwise specified in the Base Contract.

       

      
        	
                SELLER:

                 

                Atmos
      Energy Marketing, LLC

                13430
      Northwest Freeway, Suite 700, Houston, TX 77040

                Attn:
      Trevor Atkins

                Phone:
      502-326-1381

                Fax:
      713-688-1625

                Transporter(s):
      Columbia Gas
      Transmission (“TCO”); Tennessee Gas Pipeline (“TGP”); Dominion
      Transmission (“DTI”) and Transcontinental Gas Pipe Line Corporation
      (“TRANSCO”).

              	 
      	
                BUYER:

                 

                Corning
      Natural Gas Corporation

                330
      W. William St.

                Corning,
      NY 14830

                Attn:
      Jerry Sleve

                Phone:
      607-936-3755

                Fax:
      607-926-2844

                 

              


      

       

      Contract Price:
****

       

      Delivery
Period:  Begin:  July 1, 2008            End: March 31,
2010

       

      Performance Obligation and Contract
Quantity:  Firm/MMBtus:  See
Special Condition #4

       

      Delivery Point(s): SELLER’S
Delivery Points to BUYER off of TGP and TRANSCO shall be into DTI and/or
TCO.  SELLER will not be shipper of record for BUYER’S capacity on TCO
or DTI but, as agent, will nominate and schedule deliveries for Customer to
Customer’s city gate(s) off TCP and/or DTI.

       

      Special
Conditions:

       

      1) At
the expiration of the initial Delivery Period and any extension thereof, this
Transaction Confirmation, and the Delivery Period shall automatically extend for
successive (12) month periods unless terminated by BUYER or SELLER upon ninety
(90) days written notice to the other. Upon termination, the rights, duties and
obligations of BUYER and SELLER under this Contract cease except that this
Contract shall apply and govern through the Delivery Period of any agreed upon
transaction which continues beyond termination and to the extent that final
reconciliations and payments are necessary. ****

       

      2) SELLER
shall have the right to optimize BUYER'S capacity on TRANSCO and TGP and such
capacity shall be released to SELLER (so long as BUYER'S contracts are not
modified other than as to the counter-party) as fully recallable, pre-arranged
releases at maximum rates for the term hereof, and BUYER authorizes SELLER to
effectuate such release through a posted releases on the applicable pipeline
electronic bulletin boards. SELLER may optimize this capacity and shall share
with BUYER any optimization revenue derived by SELLER according to the formula
set forth herein below. SELLER shall act as BUYER'S agent for purposes of
nominating and scheduling deliveries on BUYER'S capacity on DTI and TCO to
BUYER'S city gate(s). BUYER hereby designates SELLER as its Agent to perform
scheduling under BUYER'S Firm and Interruptible Transportation and Storage
Contracts as listed on the attached Addendum. Furthermore, BUYER shall designate
SELLER as its agent to receive all measurement reports, statements and other
documentation as are provided by the Transporters, their affiliates or billing
agencies. BUYER agrees to execute documents required to effectuate these
transactions and SELLER'S agency authority. It is expressly understood by BUYER
that no fiduciary duty of any kind from SELLER to BUYER is created tinder this
agreement or by virtue of SELLER'S status as BUYER'S agent.

       

      3) From
time to time, BUYER and SELLER may mutually agree to BUYER'S release to SELLER
of portions of its capacity on DTI or TCO.  As BUYER’S Agent, SELLER
shall perform required release functions on the appropriate pipeline electronic
bulletin board ("EBB"). These potential releases will be posted as recallable
and biddable releases at prearranged rates. Revenue derived from capacity
release activity will be included in the Revenue Sharing amount.

       

      4) During
the term of this Transaction Confirmation, the SELLER is obligated to sell and
deliver on a Firm basis, and BUYER is entitled to purchase and receive the
Maximum Daily Quantity (MDQ) available in dekatherms (Dth) at its city gate
Interconnect with DTI and **** dekatherms via TCO to BUYER'S city gate with that
pipeline.  As Blanket Agent on DTI and TOO, SELLER shall manage the
scheduling process such that BUYER uses its no notice storage agreements on DTI
and TCO to meet BUYER'S additional daily demand requirements- SELLER shall use
commercially reasonable efforts to supply any quantities above the MDQ that are
timely requested by BUYER at a mutually agreed upon price. The MDQ represents
BUYER'S anticipated maximum daily natural gas use requirements.

       

      
        Note:
The  MDQ calculation for Marketers requiring utility capacity is
re-calculated every October. This does not correspond with the rollover dates of
this agreement. However it is not anticipated that a change in the released
volume from 1 year to the next would cause an increase or decrease in daily
available MDQ of greater than 2% of the currently available capacity of
****.

         

      

      
        
          
          

        

        
          Page 1 of
5

          
            

          

        

        
          
          

        

      

       

      5) SELLER
shall arrange for the purchase of gas and the transportation and delivery of gas
to BUYER.  In accordance with the terms of this Agreement. SELLER
shall procure supply and effectuate nominations with the appropriate pipeline(s)
for the delivery of gas to BUYER'S Delivery Points. SELLER shall coordinate
nomination requirements on a timely basis with BUYER. BUYER'S nominations for
base load gas will be submitted to SELLER no later than six (6) business days
prior to the beginning of each month, BUYER'S nominations for daily purchases
will be submitted to SELLER no later than 8:00 AM central standard time ("CST")
on the day prior to the day of flow. SELLER will generate for BUYER a statement
showing quantities delivered and related transportation and storage
charges.

       

      6) All
Pipeline and Storage Demand Charges are to be paid by SELLER for the contracts
delineated in the Addendum as Shipper of Record (TGP and TRANSCO). BUYER shall
reimburse SELLER for one hundred percent (100%) of these charges.

       

      7) BUYER
shall pay usage and volumetric fees as well as retainage on Transco and TOP
between the Receipt points and Delivery Points applicable to gas delivered for
BUYERS use. In determining the invoicing of gas costs and FT commodity and fuel
(including storage injections) to SELLER, BUYER will nominate monthly base load
quantities to be delivered to DTI & TCO and the logical invoicing path from
the supply areas on BUYER'S transportation agreements to be managed by SELLER.
This logical invoicing quantity and path will be inclusive of BUYER’S projected
storage injection activity on DTI & TCO which will be determined by taking
the desired ending balance less the beginning balance at the time of the
agreement divided by the number of months left in the summer injection season.
If the agreement starts on July 1, 2008, SELLER would include one-fourth (1/4)
of the remaining injection quantity for the rest of the summer. For the
injection season within calendar year 2009, SELLER would invoice one-seventh
(1/7) of the remaining injection quantity for each summer injection season
month, To the extent operationally feasible and permitted by the pipelines) FERC
Tariffs, SELLER shall be permitted to create value for Revenue Sharing by
deviating from the logical billing plan by using alternate supply areas-and.
transportation paths as well as deferring or accelerating deliveries to DTI and
TCO to the extent these deferred or accelerated deliveries do not create
additional DTI & TCO contract storage costs or penalties. SELLER shall
deliver the appropriate quantity of gas to BUYER over the course of this
Agreement such that logical invoiced amounts are balanced with actual deliveries
after accounting for pipeline retainage.

       

      8) BUYER'S
monthly nominations of base load gas up to its pipeline entitlements will
specify the appropriate sourcing of supply from receipt areas on TOP, TRANSCO,
DTI, and TCO. The locations available and the price of the gas from each
location is detailed as follows:

       

      
        	
                ****

              	
                ****

              
	
                ****

              	
                ****

              
	
                ****

              	
                ****

              
	
                ****

              	
                ****

              
	
                ****

              	
                ****

              
	
                ****

              	
                ****

              
	
                ****

              	
                ****

              


      

       

      9) BUYER
shall have the ability to purchase additional spot gas on a daily basis up to
its remaining pipeline entitlements as required based upon the following
indices:

       

      
        	
                ****

              	
                ****

              
	
                ****

              	
                ****

              
	
                ****

              	
                ****

              
	
                ****

              	
                ****

              
	
                ****

              	
                ****

              
	
                ****

              	
                ****

              
	
                ****

              	
                ****

              


      

       

      10) The
amount available for Revenue Sharing ****.

       

      11) SELLER
will retain **** of the Revenue Sharing amount and rebate **** to
BUYER.

       

      12) ****

       

      13) ****

       

      14) SELLER
will have full discretion as to the manner in which firm transportation and
storage entitlements are used as long as it does not result in higher overall
natural gas costs to BUYER.  The revenue sharing calculation will be
determined at month end and based upon the pre-determined logical billing
paths.  BUYER’S Gas Supply and Acquisition Plan (Supply Plan) as
approved by the New York State Public Service Commission (“PSC”) will become the
basis for determining these logical billing paths and the corresponding Revenue
Sharing Amount.

       

      
        
          
          

        

        
          Page 2 of
5

          
            

          

        

        
          
          

        

      

       

      15) SELLER
will use its best efforts to schedule natural gas for delivery to BUYER in a
manner that maximizes the amount to be shared under the sharing mechanism.
Within the boundaries of the timing of any required purchases, whether
base-load, fixed-price gas, storage or spot purchases, SELLER recognizes that it
is required to document it in written monthly reports to BUYER its optimization
activities in regards to sourcing and shipping natural gas to BUYER and third
parties.

       

      16) In
regards to BUYER'S requirement to provide monthly gas supply reports to the New
York State Public Service Commission by the 15th of each
month, SELLER recognizes that this report includes data that will be supplied by
SELLER. SELLER also recognizes that it will be a requirement that SELLER provide
timely reports which include all requisite data including storage transactions
(injections and withdrawals) and levels, base-load supply, spot purchases, all
off system sales transactions, as well as other information that may be required
by the PSC. BUYER will provide SELLER with required report information for the
previous month and a preliminary invoice no later than the 10th of each
month.

       

      17) BUYER
and SELLER shall cooperate to ensure that BUYER nominates sufficient quantities
to achieve the following minimum storage inventory balances (in dekatherms) by
the beginning of the identified months on DTI and TCO:

      


      
        	
                Month

              	
                 

              	
                Days

              	 	
                %
      Full

              	 	
                DTI
      GSS

              	 	
                TCO

                FSS

              
	
                April

              	 	
                30

              	 	
                ****

              	 	
                ****

              	 	
                ****

              
	
                May

              	 	
                31

              	 	
                ****

              	 	
                ****

              	 	
                ****

              
	
                June

              	 	
                30

              	 	
                ****

              	 	
                ****

              	 	
                ****

              
	
                July

              	 	
                31

              	 	
                ****

              	 	
                ****

              	 	
                ****

              
	
                August

              	 	
                31

              	 	
                ****

              	 	
                ****

              	 	
                ****

              
	
                September

              	 	
                30

              	 	
                ****

              	 	
                ****

              	 	
                ****

              
	
                October

              	 	
                31

              	 	
                ****

              	 	
                ****

              	 	
                ****

              
	
                November

              	 	
                30

              	 	
                ****

              	 	
                ****

              	 	
                ****

              
	
                December

              	 	
                31

              	 	
                ****

              	 	
                ****

              	 	
                ****

              
	
                January

              	 	
                31

              	 	
                ****

              	 	
                ****

              	 	
                ****

              
	
                February

              	 	
                28

              	 	
                ****

              	 	
                ****

              	 	
                ****

              
	
                March

              	 	
                31

              	 	
                ****

              	 	
                ****

              	 	
                ****

              


      

       

      Note: AEM
Fill requirements for year 1 begin July 1, 2008.

       

      18) Estimated
Monthly and Daily city Gate deliveries in dekatherms:

       

      
        	
                Period

              	 	
                Monthly

              	 	
                Daily

              
	
                JANUARY

              	 	
                ****

              	 	
                ****

              
	
                FEBRUARY

              	 	
                ****

              	 	
                ****

              
	
                MARCH

              	 	
                ****

              	 	
                ****

              
	
                APRIL

              	 	
                ****

              	 	
                ****

              
	
                MAY

              	 	
                ****

              	 	
                ****

              
	
                JUNE

              	 	
                ****

              	 	
                ****

              
	
                JULY

              	 	
                ****

              	 	
                ****

              
	
                AUGUST

              	 	
                ****

              	 	
                ****

              
	
                SEPTEMBER

              	 	
                ****

              	 	
                ****

              
	
                OCTOBER

              	 	
                ****

              	 	
                ****

              
	
                NOVEMBER

              	 	
                ****

              	 	
                ****

              
	
                DECEMBER

              	 	
                ****

              	 	
                ****

              


      

       

      
        
          
          

        

        
          Page 3 of
5

          
            

          

        

        
          
          

        

      

       

      Seller
will extend an unsecured line of **** to BUYER (the “Credit
Line”).  SELLER currently estimates a maximum exposure, in the current
market, of **** on a revolving ****-day period.  BUYER shall
accelerate the normal payment date to the **** day of the month following gas
flow on those occasions where BUYER is projected to exceed the Credit
Line.  BUYER shall ensure that a letter of credit is issued by BUYER’S
bank to SELLER prior to August 25th, 2008
in the amount based upon the calculations attached as “Corning Natural Gas - Exhibit
A”.  BUYER will furnish SELLER copies of its quarterly financial
statements.  BUYER agrees that SELLER may request and BUYER will
furnish Adequate Assurance of Performance in the event that one or more of the
following occur: 1) BUYER’S net income is negative for the latest **** and
BUYER’S then current year-to-date income ****, or 2) BUYER’S stock price
falls below ****, provided that the foregoing shall be in addition to and shall
not be considered a limitation on SELLER’S right to request and receive Adequate
Assurance of Performance in accordance with Section 10.1 of the Base
Contract.

       

      
        
          	
                  SELLER:  Atmos
      Energy Marketing, LLC

                	 	 	
                  BUYER:  Corning
      Natural Gas Corporation

                	 
	 	 	 	 	 
	
                  
                    By:    /s/ Marc Tronzo 

                  

                	 	 	
                  
                    By:    /s/ Stanley G. Sleve

                  

                	 
	
                  
                    
                      
      

                    Title: Sr. VP of
    Trading 

                  

                	 	 	
                  
                    
                      
      

                    Title: Vice President -
      Administration

                  

                	 
	
                  
                    Date: July 1, 2008 

                  

                	 	 	
                  
                    Date: June 19, 2008

                  

                	 


        

      

       

      
        
          
          

        

        
          Page 4 of
5

          
            

          

        

        
          
          

        

      

    

     

    
      	
              ADDENDUM

            
	
              BUYER’S
      TRANSPORTATION AND STORAGE
CONTRACTS

            


    

     

    
      	
              CUSTOMER

            	 	
              RATE
      SCHEDULE

            	 	
              MDQ/SCQ

            	 	
              SCQ
      IN DTH

            	 	
              CONTRACT
      NO.

            	 	
              PIPELINE

            
	
              CORNING
      NATURAL GAS

            	 	
              FTNN

            	 	
              ****

            	 	
              ****

            	 	
              ****

            	 	
              DTI

            
	
              CORNING
      NATURAL GAS

            	 	
              FTNN-GSS

            	 	
              ****

            	 	
              ****

            	 	
              ****

            	 	
              DTI

            
	
              CORNING
      NATURAL GAS

            	 	
              GSS

            	 	
              ****

            	 	
              ****

            	 	
              ****

            	 	
              DTI

            
	
              CORNING
      NATURAL GAS

            	 	
              FTS

            	 	
              ****

            	 	
              ****

            	 	
              ****

            	 	
              TCO

            
	
              CORNING
      NATURAL GAS

            	 	
              NTS

            	 	
              ****

            	 	
              ****

            	 	
              ****

            	 	
              TCO

            
	
              CORNING
      NATURAL GAS

            	 	
              SST

            	 	
              ****

            	 	
              ****

            	 	
              ****

            	 	
              TCO

            
	
              CORNING
      NATURAL GAS

            	 	
              FSS

            	 	
              ****

            	 	
              ****

            	 	
              ****

            	 	
              TCO

            
	
              CORNING
      NATURAL GAS

            	 	
              FT-A

            	 	
              ****

            	 	
              ****

            	 	
              ****

            	 	
              TGP

            
	
              CORNING
      NATURAL GAS

            	 	
              FT

            	 	
              ****

            	 	
              ****

            	 	
              ****

            	 	
              TRANSCO

            


    

     

    NOTE:
(8) DTI Contract FTNN Contract 100117 MDQ reduced by 3,401 to 8.012 to
accommodate marketer obligations on CNG system.

     

    
      
        
        

      

      
        Page 5 of
5