Document:

GENERAL SECURITY AGREEMENT

New York

 

 

Debtor (Name): Corning Natural Gas Corporation

(Organizational Structure): Corporation 

(State Law organized under): New York 

(Organizational Identification Number, if any; note
that this is NOT a request for the Taxpayer Identification Number):

(Address of residence/chief executive office): 330
West William Street, Corning, New York 14830

 

Bank/Secured Party: M&T Bank, a New York
banking corporation with its banking offices at One M&T Plaza, Buffalo, New York 14203 Attention: Office of General Counsel.

 

For good and valuable consideration, the receipt and
sufficiency of which is acknowledged, and intending to be legally bound, Debtor agrees with Secured Party as follows:

 

1.       Security
Interests.

 

1.1       Grant.
As security for the prompt and complete payment and performance when due of all of the Obligations, Debtor does hereby grant to Secured
Party a continuing security interest (“Security Interest”) in all personal property and fixtures of Debtor, wherever located,
whether now existing or owned or hereafter arising or acquired, whether or not subject to the Uniform Commercial Code, as the same may
be in effect in the State of New York, as amended from time to time (“UCC”), and whether or not affixed to any realty, including,
without limitation, (i) all accounts, chattel paper, investment property, deposit accounts, documents, goods, equipment, farm products,
general intangibles (including trademarks, service marks, trade names, patents, copyrights, licenses and franchises), instruments, inventory,
money, letter of credit rights, causes of action (including tort claims) and other personal property (including agreements and instruments
not constituting chattel paper or a document, general intangible or instrument); (ii) all additions to, accessions to, substitutions for,
replacements of and supporting obligations of the foregoing; (iii) all proceeds, products, rents, issues, profits and accounts arising
from the foregoing and substitutions therefore, including, without limitation, insurance proceeds; and (iv) all business records and information
relating to any of the foregoing and any software or other programs for accessing and manipulating such information (collectively, the
“Collateral”). Debtor acknowledges and agrees that the foregoing collateral description is intended to cover all assets of
Debtor, specifically excluding however all assets in the Debtor’s Rabbi Trust and any proceeds, profits and accounts directly
related thereto. 

 

If, now or in the
future, any of the obligations secured pursuant to any security interest or lien created by this instrument include any Special Flood
Zone Loan, then the following shall apply: any such Special Flood Zone Loan shall not be secured pursuant to any security interest
or lien created by this instrument in personal property that would constitute "contents" located within Flood Zone Improvements
securing such Special Flood Zone Loan, where, for purposes of the foregoing, "Flood Zone Improvements" means any "improved"
real property that is located within a Special Flood Hazard Area, a "Special Flood Zone Loan" means a loan, line of credit or
other credit facility which is secured by Flood Zone Improvements, and
the terms "improved" real property, "Special Flood Hazard Area," and "contents" shall have the meaning ascribed
to them by the Flood Disaster Protection Act of 1973, 42 U.S.C.
§ 4001 et seq., and implementing regulations, 44 C.F.R. Parts 59 et seq., and/or the Federal
Emergency Management Agency, all as may be amended from time to time.

 

1.2       Obligations. The term
“Obligations” means any and all indebtedness or other obligations of Debtor to Secured Party in any capacity, now existing
or hereafter incurred, however created or evidenced, regardless of kind, class or form, whether direct, indirect, absolute or contingent
(including obligations pursuant to any guaranty, endorsement, other assurance of payment or otherwise), whether joint or several, whether
from time to time reduced and thereafter increased, or entirely extinguished and thereafter reincurred, together with all extensions,
renewals and replacements thereof, and all interest, fees, charges, costs or expenses which accrue on or in connection with the foregoing,
including, without limitation, any indebtedness or obligations (i) not yet outstanding but contracted for, or with regard to which any
other commitment by Secured Party exists; (ii) arising prior to, during or after any pendency of any bankruptcy, insolvency, receivership
or other similar proceeding, regardless of whether allowed or allowable in such proceeding; (iii) owed by Debtor to others and which Secured
Party obtained, or may obtain, by assignment or otherwise; or (iv) payable under this Agreement.

 

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2.       Covenants.
Debtor covenants and agrees as follows:

 

2.1       Perfection
of Security Interest. Debtor shall execute and deliver to Secured Party such financing statements, control agreements or other documents,
in form and content satisfactory to Secured Party, as Secured Party may from time to time request to perfect and continue the Security
Interest. Upon the request of Secured Party, Debtor shall deliver to Secured Party any and all instruments, chattel paper, negotiable
documents or other documents evidencing or constituting any part of the Collateral properly endorsed or assigned, in a manner satisfactory
to Secured Party. Until such delivery, Debtor shall hold such portion of the Collateral in trust for Secured Party. Debtor shall pay all
expenses for the preparation, filing, searches and related costs in connection with the grant and perfection of the Security Interest.
Debtor authorizes (both prospectively and retroactively) Secured Party to file financing statements, and any continuations and amendments
thereof, with respect to the Collateral without Debtor’s signature. A photocopy or other reproduction of any financing statement
or this Agreement shall be sufficient as a financing statement for filing in any jurisdiction.

 

2.2       Negative
Pledge; Disposition of Collateral. Debtor shall not grant or allow the imposition of any lien, security interest or encumbrance on,
or assignment of, the Collateral unless consented to in writing by Secured Party. Debtor shall not make or permit to be made any sale,
transfer or other disposition of the Collateral; provided, however, prior to the occurrence of an Event of Default, Debtor may in the
ordinary course of business consistent with its past practices and with prudent and standard practices used in the industry that is the
same or similar to that in which Debtor is engaged: (i) dispose of any Collateral consisting of equipment that is obsolete or worn-out;
(ii) sell or exchange any Collateral consisting of equipment in connection with the acquisition of other equipment that is at least as
valuable as such equipment, that Debtor intends to use for substantially the same purposes as such equipment and that is not subject to
any security interest or other lien or encumbrance; (iii) collect Collateral consisting of accounts or assign such Collateral for purposes
of collection; or (iv) sell or lease Collateral consisting of inventory. A sale, lease or other transfer of such Collateral consisting
of inventory in the ordinary course of Debtor’s business does not include a transfer in partial or complete satisfaction of any
liability or obligation or any bulk sale.

 

2.3       Condition
of Collateral; Impermissible Use. Debtor shall keep the Collateral consisting of goods in good condition and shall not commit or permit
damage or destruction (other than ordinary wear and tear) to such Collateral. Debtor shall not permit any Collateral consisting of goods
(i) to be used in such a manner that would violate any insurance policy or warranty covering the Collateral or that would violate any
applicable law of any governmental authority (including any environmental law) now or hereafter in effect; (ii) to become fixtures on
any real property on which Secured Party does not have a first priority mortgage lien (unless Secured Party has been provided with an
acceptable landlord/mortgagee waiver) or become an accession to any goods not included in the Collateral; or (iii) to be placed in any
warehouse that may issue a negotiable document with regard to such Collateral.

 

2.4       Modification
to Collateral. Debtor shall not, without Secured Party’s prior written consent, grant any extension on, compound, settle for
less than the full amount of, release (in whole or in part), modify, cancel, or allow for any substitution, credit or adjustment on Collateral
consisting of accounts, chattel paper, general intangibles, instruments, documents or investment property, except that in the absence
of an Event of Default, Debtor may grant to account debtors, or other persons obligated with respect to the Collateral, extensions, credits,
discounts, compromises or settlements in the ordinary course of business consistent with its past practices and consistent with prudent
and standard practices used in the industries that are the same or similar to those in which Debtor is engaged.

 

2.5       Titled
Goods. Debtor shall cause all goods included in the Collateral to be properly titled and registered to the extent required by applicable
law. Upon the request of Secured Party, Debtor shall cause the interest of Secured Party to be properly indicated on any certificate of
title relating to such goods and deliver to Secured Party each such certificate, and any additional evidence of ownership, certificates
of origin or other documents evidencing any interest in such goods.

 

2.6       Insurance.
Debtor shall, at its own expense and at all times, maintain effective insurance policies covering damage to persons and against fire,
flood, theft and all other risks to which the Collateral may be subject, all in such amounts, with such deductibles and issued by such
insurance company as shall be satisfactory to Secured Party. Such insurance policies shall have all endorsements that Secured Party may
require and shall further (i) name Secured Party, exclusively, as the additional insured on the casualty insurance and the lender’s
loss payee and/or mortgagee on the hazard insurance; (ii) provide that Secured Party shall receive a minimum of thirty (30) days prior
written notice of any amendment or cancellation; and (iii) insure Secured Party notwithstanding any act or neglect of Debtor or other
owner of the property described in such insurance. If Debtor fails to obtain the required insurance as provided herein, Secured Party
may, but is not obligated, to obtain such insurance as Secured Party may deem appropriate, including, without limitation, if Secured Party
so chooses, “single interest insurance” which will cover only Secured Party’s interest in the Collateral. Debtor shall
pay or reimburse to Secured Party the cost of such insurance. Secured Party shall have the option, in its sole discretion, to hold insurance
proceeds as part of the Collateral, apply any insurance proceeds toward the Obligations or allow the Debtor to apply the insurance proceeds
towards repair or replacement of the item of Collateral in respect of which such proceeds were received. Upon the request of Secured Party,
Debtor shall from time to time deliver to Secured Party such insurance policies, or other evidence of such policies satisfactory to Secured
Party, and such other related information Secured Party may request.

 

2.7       Collateral
Information. Debtor shall provide all information, in form and substance satisfactory to Secured Party, that Secured Party shall from
time to time request to (i) identify the nature, extent, value, age and location of any of the Collateral, or (ii) identify any account
debtor or other party obligated with respect to any chattel paper, general intangible, instrument, investment property, document or deposit
account included in the Collateral.

 

2.8       Financial
Information. Debtor shall furnish to Secured Party financial statements in such form (e.g., audited, reviewed, compiled) and
at such intervals as Secured Party shall request from time to time plus any additional financial information that Secured Party may request.
All such financial statements shall be in conformity with generally accepted accounting principles consistently applied.

 

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2.9       Taxes;
Licenses; Compliance with Laws. Before the end of any applicable grace period, Debtor shall pay each tax, assessment, fee and charge
imposed by any governmental authority upon the Collateral, the ownership, disposition or use of any of the Collateral, this Agreement
or any instrument evidencing any of the Obligations. Debtor shall maintain in full force and effect each license, franchise or other authorization
needed for any ownership, disposition or use of the Collateral and the conduct of its business, operations or affairs. Debtor shall comply
with all applicable law of any governmental authority (including any environmental law), now or hereafter in effect, applicable to the
ownership, disposition or use of the Collateral or the conduct of its business, operations or affairs.

 

2.10       Records;
Legend. Debtor shall maintain accurate and complete books and records relating to the Collateral in conformity with generally accepted
accounting principles consistently applied. At Secured Party’s request, Debtor will legend, in form and manner satisfactory to Secured
Party, its books and records to indicate the Security Interest.

 

2.11       Additional
Collateral. If at any time the liquidation value of any of the Collateral is unsatisfactory to Secured Party, then, on demand of Secured
Party, Debtor shall immediately (i) furnish such additional collateral satisfactory to Secured Party to be held by Secured Party as if
originally pledged hereunder and execute such additional security agreements, financing statements or other agreements as requested by
Secured Party, or (ii) repay the Obligations to bring the outstanding amount of the Obligations to within a satisfactory relationship
to the liquidation value of the Collateral.

 

2.12       Debtor
Notices. Immediately upon acquiring knowledge or reason to know of any of the following, Debtor shall notify Secured Party of the
occurrence or existence of (i) any Event of Default; (ii) any event or condition that, after notice, lapse of time or after both notice
and lapse of time, would constitute an Event of Default; (iii) any account or general intangible that arises out of a contract with any
governmental authority (including the United States); (iv) any event or condition that has or (so far as can be foreseen) will or might
have any material adverse effect on the Collateral (including a material loss, destruction or theft of, or of any damage to, the Collateral,
material decline in value of the Collateral or a material default by an account debtor or other party’s performance of obligations
with respect to the Collateral), on Debtor or its business, operations, affairs or condition (financial or otherwise).

 

2.13       Lien
Law. If any account or general intangible included in the Collateral represents money owing pursuant to any contract for the improvement
of real property or for a public improvement for purposes of the Lien Law of the State of New York (the “Lien Law”), Debtor
shall (i) give Secured Party notice of such fact; (ii) receive and hold any money advanced by Secured Party with respect to such account
or general intangible as a trust fund to be first applied to the payment of trust claims as such term and/or concept is defined in the
Lien Law (in Section 71 thereof, or otherwise); and (iii) until such trust claim is paid, not use or permit the use of any such money
for any purpose other than the payment of such trust claims.

 

2.14       Protection
of Collateral; Further Assurances. Debtor shall, at its own cost, faithfully preserve, defend and protect the Security Interest as
a prior perfected security interest in the Collateral under the UCC and other applicable law, superior and prior to the rights of all
third parties (other than those permitted pursuant to Section 3.1) and shall defend the Collateral against all setoffs, claims, counterclaims,
demands and defenses. Debtor shall, and shall cause its affiliates to take such action and execute and deliver to the Secured Party such
additional documents, instruments, certificates, and agreements as the Secured Party may reasonably request from time to time to effectuate
the purposes and intent of the transaction(s) contemplated hereby, including, without limitation, (i) to attach, continue, preserve, perfect
or protect the Security Interest and Secured Party’s interests in the Collateral and rights hereunder, including obtaining waivers
(in form and content acceptable to Secured Party) from landlords, warehousemen and mortgagees and (ii) causing any affiliate, entity or
series of entities it may create hereafter through merger, division or otherwise, to execute agreements, in form and substance acceptable
to Secured Party, (a) assuming or guarantying the Debtor’s obligations under this Agreement and all related agreements and (b) pledging
assets to the Secured Party to the same extent as the Debtor. Debtor hereby irrevocably appoints Secured Party, its officers, employees
and agents, or any of them, as attorneys-in-fact for Debtor with full power and authority in the place and stead of Debtor and in the
name of Debtor or its own name from time to time in Secured Party’s discretion, to perform all acts which Secured Party deems appropriate
to attach, continue, preserve or perfect and continue the Security Interest, including signing for Debtor (to the extent such signature
may be required by applicable law) UCC-1 financing statements, UCC-3 amendment or other instruments and documents to accomplish the purposes
of this Agreement. This power of attorney, being coupled with an interest, is irrevocable and shall not be affected by the subsequent
disability or incompetence of Debtor.

 

3.       Representations
and Warranties. Debtor represents, warrants and agrees as follows:

 

3.1       Title.
Debtor holds good and marketable title to the Collateral free and clear from any security interest or other lien or encumbrance of any
party, other than the Security Interest or such liens, security interests or other liens or encumbrances specifically permitted by Secured
Party and set forth on Exhibit A hereto (“Permitted Liens”). Debtor has not made any prior sale, pledge, encumbrance, assignment
or other disposition of any of the Collateral except for the Permitted Liens.

 

3.2       Authority.
If Debtor is a business entity, it is duly organized, validly existing and in good standing under the laws of the above-named state of
organization. Debtor has the full power and authority to grant the Security Interest and to execute, deliver and perform its obligations
in accordance with this Agreement. The execution and delivery of this Agreement will not (i) violate any applicable law of any governmental
authority or any judgment or order of any court, other governmental authority or arbitrator; (ii) violate any agreement governing Debtor
or to which Debtor is a party; or (iii) result in a security interest or other lien or encumbrance on any of Debtor’s assets, except
in favor of Secured Party. Debtor’s certificate of incorporation, by-laws or other organizational documents do not prohibit any
term or condition of this Agreement. Each authorization, approval or consent from, each registration and filing with, each declaration
and notice to, and each other act by or relating to, any party required as a condition of Debtor’s execution, delivery or performance
of this Agreement (including any shareholder or board of directors or similar approvals) has been duly obtained and is in full force and
effect. Debtor has the power and authority to transact the business in which it is engaged and is duly licensed or qualified and in good
standing in each jurisdiction in which the conduct of its business or ownership of property requires such licensing or such qualifications.

 

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3.3       Judgments
and Litigation. There is no pending or threatened claim, audit, investigation, action or other legal proceeding or judgment or order
of any court, agency or other governmental authority or arbitrator which involves Debtor or the Collateral and which might have a material
adverse effect upon the Collateral, the Debtor, its business, operations, affairs or condition (financial or otherwise), or threaten the
validity of this Agreement or any related document or action. Debtor will immediately notify Secured Party upon acquiring knowledge of
the foregoing.

 

3.4       Enforceability
of Collateral. Instruments, chattel paper, accounts or documents which constitute any part of the Collateral are genuine and enforceable
in accordance with their terms, comply with the applicable law of any governmental authority concerning form, content, manner of preparation
and execution, and all persons appearing to be obligated on such Collateral have authority and capacity to contract and are in fact obligated
as they appear to be on such Collateral. There are no restrictions on any assignment or other transfer or grant of the Security Interest
by Debtor. Each sum represented by Debtor from time to time as owing on accounts, instruments, deposit accounts, chattel paper and general
intangibles constituting any part of the Collateral by account debtors and other parties with respect to such Collateral is the sum actually
and unconditionally owing by account debtors and other parties with respect thereto at such time, except for applicable normal cash discounts.
None of the Collateral is subject to any defense, set-off, claim or counterclaim of a material nature against Debtor except as to which
Debtor has notified Secured Party in writing.

 

3.5       Location
of Chief Executive Office, Records, Collateral. The locations of the following are listed on page one of this Agreement or, if different
or additional, on Exhibit A hereto: (i) Debtor’s residence, principal place of business and chief executive office; (ii) the office
in which Debtor maintains its books or records relating to the Collateral; (iii) the facility (including any storage facility) at which
now owned or subsequently acquired inventory, equipment, goods, fixtures and other tangible personal property constituting any part of
the Collateral shall be kept; and (iv) the real property on which any crop included in the Collateral is growing or is to be grown, or
on which any timber constituting any part of the Collateral is or is to be standing. Debtor will not effect or permit any change in any
of the foregoing locations (or remove or permit the removal of the records or Collateral therefrom, except for mobile equipment included
in the Collateral which may be moved to another location for not more than thirty (30) days) without thirty (30) days prior written notice
to Secured Party and all actions deemed necessary by Secured Party to maintain the Security Interest intended to be granted hereby at
all times fully perfected and in full force and effect have been taken. All of the locations listed on page one or Exhibit A are owned
by Debtor, or if not, by the party(ies) identified on Exhibit A.

 

3.6       Structure;
Name. Debtor’s organizational structure, state of registration and organizational identification number (if any) are stated
accurately on page one of this Agreement, and its full legal name and any trade name used to identify it are stated accurately on page
one of this Agreement, or if different or additional are listed on Exhibit A hereto. Debtor will not change its name, any trade names
or its identity, its organizational structure, state of registration or organizational identification number without thirty (30) days
prior written notice to Secured Party. All actions deemed necessary by Secured Party to maintain the Security Interest intended to be
granted hereby at all times fully perfected and in full force and effect have been taken.

 

4.       Performance
and Expenditures by Secured Party. If Debtor fails to perform or comply with any of the terms hereof, Secured Party, at its option,
but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such terms including the
payment or discharge of all taxes, fees, security interest or other liens, encumbrances or claims, at any time levied or placed on the
Collateral. An election to make expenditures or to take action or perform an obligation of Debtor under this Agreement, after Debtor’s
failure to perform, shall not affect Secured Party’s right to declare an Event of Default and to exercise its remedies. Nor shall
the provisions of this Section relieve Debtor of any of its obligations hereunder with respect to the Collateral or impose any obligation
on Secured Party to proceed in any particular manner with respect to the Collateral. Interest on any judgment entered against Debtor related
to this Agreement shall accrue at the highest default rate specified in any instrument evidencing any of the Obligations.

 

5.       Duty
of Secured Party. Secured Party’s sole duty with respect to the custody, safekeeping and physical preservation of the Collateral
in its possession shall be to deal with it in the same manner as Secured Party deals with similar property for its own account. Neither
Secured Party nor its directors, officers, employees or agents shall be liable for failure to demand, collect or realize upon the Collateral
or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of the Collateral upon the request of Debtor
or any other person or to take any other action whatsoever with regard to the Collateral. The powers conferred on Secured Party hereunder
are solely to protect Secured Party’s interests in the Collateral and shall not impose any duty upon any Secured Party to exercise
any such powers. Secured Party shall be accountable only for amounts that it actually receives as a result of the exercise of its powers
under this Agreement, and neither it nor its officers, directors, employees or agents shall be responsible to Debtor for any act or failure
to act hereunder, except for its own gross negligence or willful misconduct.

 

6.       Certain
Rights and Remedies.

 

6.1       Inspection;
Verification. Secured Party, and such persons as it may designate, shall have the right from time to time to (i) audit and inspect
(a) the Collateral, (b) all books and records related thereto (and make extracts and copies from such records), and (c) the premises upon
which any of the Collateral or books and records may be located; (ii) discuss Debtor’s business, operations, affairs or condition
(financial or otherwise) with its officers, accountants; and (iii) verify the validity, amount, quality, quantity, value, condition and
status of, or any other matter relating to the Collateral in any manner and through any medium Secured Party may consider appropriate
(including contacting account debtors or third party possessing the Collateral for purpose of making such verification). Debtor shall
furnish all assistance and information and perform any acts Secured Party may require regarding thereto. Debtor shall bear the cost and
expense of any such inspection and verification.

 

6.2       Notification
of Security Interest. Secured Party may notify any or all account debtors and other person obligated with respect to the Collateral
of the Security Interest therein. Upon the request of Secured Party, Debtor agrees to enter into such warehousing, lockbox or other custodial
arrangement with respect to any of the Collateral that Secured Party shall deem necessary or desirable.

 

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6.3       Application
of Proceeds. Secured Party may apply the proceeds from the sale, lease or other disposition or realization upon the Collateral to
the Obligations in such order and manner and at such time as Secured Party shall, in its sole discretion, determine. Debtor shall remain
liable for any deficiency if the proceeds of any sale, lease or other disposition or realization upon the Collateral are insufficient
to pay the Obligations. Any proceeds received by Debtor from the Collateral after an Event of Default shall (i) be held by Debtor in trust
for Secured Party in the same medium in which received; (ii) not be commingled with any assets of Debtor; and (iii) be delivered to Secured
Party in the form received, properly indorsed to permit collection. After an Event of Default, Debtor shall promptly notify Secured Party
of the return to or repossession by Debtor of goods constituting part of the Collateral, and Debtor shall hold the same in trust for Secured
Party and shall dispose of the same as Secured Party directs.

 

6.4       Income
and Proceeds of Instruments and Investment Property. Until the occurrence of an Event of Default, Debtor reserves the right to request
to receive all cash income or cash distribution (whether in cash or evidenced by check) payable on account of any instrument or investment
property constituting part of the Collateral (collectively, “Cash Distribution”). Until actually paid, all rights in the foregoing
shall remain subject to the Security Interest. Any other income, dividend, distribution, increase in or profits (including any stock issued
as a result of any stock split or dividend, any capital distributions and the like) on account of any instrument or investment property
constituting part of the Collateral and, upon the occurrence of an Event of Default, all Cash Distributions, shall be delivered to Secured
Party immediately upon receipt, in the exact form received and without commingling with other property which may be received by, paid
or delivered to Debtor or for Debtor’s account, whether as an addition to, in discharge of, in substitution of, or in exchange of
the Collateral. Until delivery, such Collateral shall be held in trust for Secured Party.

 

6.5       Registered
Holder of the Collateral. Secured Party shall have the right to transfer to or register (with or without reference to this Agreement)
in the name of Secured Party or its nominee any investment property, general intangible, instrument or deposit account constituting part
of the Collateral so that Secured Party or such nominee shall appear as the sole owner of record thereof; provided, however, that so long
as no Event of Default has occurred, Secured Party shall deliver to Debtor all notices, statements or other communications received by
it or its nominee as such registered owner, and upon demand and receipt of payment of necessary expenses thereof, shall give to Debtor
or its designee a proxy or proxies to vote and take all action with respect to such Collateral. After the occurrence of any Event of Default,
Debtor waives all rights to be advised of or to receive any notices, statements or communications received by Secured Party or its nominee
as such record owner, and agrees that no proxy or proxies given by Secured Party to Debtor or its designee as aforesaid shall thereafter
be effective.

 

7.       Default.

 

7.1       Events
of Default. Any of the following events or conditions shall constitute an “Event of Default”: (i) failure by Debtor to
make any payment when due (whether at the stated maturity, by acceleration or otherwise) related to the Obligations, or any part thereof,
or there occurs any event or condition which after notice, lapse of time or both will permit such acceleration of any Obligation; (ii)
Debtor defaults in the performance of any obligation, condition, covenant or other provision of this Agreement or any other agreement
between Debtor and the Secured Party or any of its affiliates or subsidiaries (collectively, “Affiliates”); (iii) Debtor fails
to pay when due (whether at the stated maturity, by acceleration or otherwise) any indebtedness for borrowed money owing to the Secured
Party (other than under this Agreement), any third party or Affiliate or the occurrence of any event which could result in acceleration
of payment of any such indebtedness or the failure to perform any agreement with any third party or Affiliate; (iv) the sale, assignment
transfer or delivery, by operation of law or otherwise, of all or substantially all of the assets of the Debtor to a third party; (v)
a non-individual Debtor, without the Secured Party’s prior written consent, engages in, agrees to or approves a plan for (a) reorganization,
(b) merger or consolidation, (c) division into (or of) one or more entities or series of entities or allocation or transfer of any of
Debtor’s assets or liabilities as a result of such a division, (d) conversion to another form of business entity, or (e) dissolution
of Debtor or cessation by Debtor as a going business concern; (vi) the death or judicial declaration of incompetency of Debtor, if an
individual; (vii) failure to pay, withhold or collect any tax as required by law; the service or filing against Debtor or any of its assets
of any lien (other than a lien permitted in writing by the Secured Party), judgment, garnishment, order or award; (viii) if Debtor becomes
insolvent or is generally not paying its debts as such debts become due; (ix) the making of any general assignment by Debtor for the benefit
of creditors; the appointment of a receiver or similar trustee for Debtor or its assets; or the making of any, or sending notice of any
intended, bulk sale; (x) Debtor commences (or has commenced against it and not dismissed or stayed within forty-five (45) days) any proceeding
or request for relief under any bankruptcy, insolvency or similar laws now or hereafter in effect in the United States of America or any
state or territory thereof or any foreign jurisdiction or any formal or informal proceeding for the dissolution or liquidation of, settlement
of claims against or winding up of affairs of Debtor; (xi) any representation or warranty made in this Agreement, any related document,
any agreement between Debtor and the Secured Party or any Affiliate or in any financial statement of Debtor or elsewhere was misleading
in any material respect when made; Debtor omits to state a material fact necessary to make the statements made in this Agreement, any
related document, any agreement between Debtor and the Secured Party or any Affiliate or any financial statement of Debtor or elsewhere
not misleading in light of the circumstances in which they were made; or, if upon the date of execution of this Agreement, there shall
have been any material adverse change in any of the facts disclosed in any financial statement, representation, warranty or elsewhere
that was not disclosed in writing to the Secured Party at or prior to the time of execution hereof; (xii) any pension plan of Debtor fails
to comply with applicable law or has vested unfunded liabilities that, in the opinion of the Secured Party, might have a material adverse
effect on Debtor’s ability to repay its debts; (xiii) an adverse change in the Collateral, or the Debtor, its business, assets,
operations, management, ownership, affairs or condition (financial or otherwise) from the status shown on any financial statement or other
document submitted to the Secured Party or any Affiliate, and which change the Secured Party determines will have a material adverse effect
on (a) the Collateral, or the Debtor, its business, assets, operations or condition (financial or otherwise), or (b) the ability of the
Debtor to pay or perform any obligation to the Secured Party; (xiv) any indication or evidence received by the Secured Party that the
Debtor may have directly or indirectly engaged in any type of activity which, in the Secured Party’s discretion, might result in
the forfeiture of any property of the Debtor to any governmental authority; (xv) the occurrence of any event described in sub-paragraph
(i) through and including (xiv) hereof with respect to any endorser, guarantor or any other party liable for, or whose assets or any interest
therein secures, payment of any of the Obligations; (xvi) Debtor fails to supply new or additional collateral within ten (10) days of
request by the Secured Party; or (xvii) the Secured Party in good faith deems itself insecure with respect to payment or performance of
any of the Obligations.

 

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7.2       Rights
and Remedies Upon Default. Upon the occurrence of any Event of Default, Secured Party without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice required by law) to or upon Debtor or any other person (all
and each of which demands, presentments, protests, advertisements and notices are hereby waived), may exercise all rights and remedies
of a secured party under the UCC, under other applicable law, in equity or otherwise or available under in this Agreement including:

 

7.2.1       Obligations
Immediately Due; Termination of Lending. Secured Party may declare all or any part of any Obligations not payable on demand to be
immediately due and payable without demand or notice of any kind. All or any part of any Obligations whether or not payable on demand,
shall be immediately due and payable automatically upon the occurrence of an Event of Default in Section 7.1 (ix) or (x) above. The provisions
hereof are not intended in any way to affect any rights of Secured Party with respect to any Obligations which may now or hereafter be
payable on demand. Secured Party may terminate any obligation it may have to grant any additional loan, credit or other financial accommodation
to Debtor.

 

7.2.2       Access
to Collateral. Secured Party, or its agents, may peaceably retake possession of the Collateral with or without notice or process of
law, and for that purpose may enter upon any premises where the Collateral is located and remove the same. At Secured Party’s request,
Debtor shall assemble the Collateral and deliver it to Secured Party or any place designated by Secured Party, at Debtor’s expense.

 

7.2.3       Sell
Collateral. Secured Party shall have the right to sell, lease or otherwise dispose of the Collateral in one or more parcels at public
or private sale or sales upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on
credit or for future delivery without assumption of any credit risk. Each purchaser at any such sale shall hold the property sold absolutely,
free from any claim or right on the part of Debtor. Debtor hereby waives (to the extent permitted by law) all rights of redemption, stay
and appraisal which Debtor now has or may at any time in the future have under any applicable law now existing or hereafter enacted. Secured
Party shall have the right to use Debtor’s premises and any materials or rights of Debtor (including any intellectual property rights)
without charge for such sales or disposition of the Collateral or the completion of any work in progress for such times as Secured Party
may see fit. Without in any way requiring notice to be given in the following time and manner, Debtor agrees that with respect to any
notice by Secured Party of any sale, lease or other disposition or realization or other intended action hereunder or in connection herewith,
whether required by the UCC or otherwise, such notice shall be deemed reasonable and proper if given at least five (5) days before such
action in the manner described below in the Section entitled “Notices”.

 

7.2.4       Collect
Revenues. Secured Party may either directly or through a receiver (i) demand, collect and sue on any Collateral consisting of accounts
or any other Collateral including notifying account debtors or any other persons obligated on the Collateral to make payment on the Collateral
directly to Secured Party; (ii) file any claim or to take any other action or proceeding in any court of law or equity or otherwise deemed
appropriate by Secured Party with respect to the Collateral or to enforce any other right in respect of the Collateral; (iii) take control,
in any manner, of any payment or proceeds from the Collateral; (iv) prosecute or defend any suit, action or proceeding brought against
Debtor with respect to the Collateral; (v) settle, compromise or adjust any and all claims arising under the Collateral or, to give such
discharges or releases as Secured Party may deem appropriate; (vi) receive and collect all mail addressed to Debtor, direct the place
of delivery thereof to any location designated by Secured Party; to open such mail; to remove all contents therefrom; to retain all contents
thereof constituting or relating to the Collateral; (vii) execute, sign or endorse any and all claims, endorsements, assignments, checks
or other instruments with respect to the Collateral; or (viii) generally, use, sell, transfer, pledge and make any agreement with respect
to or otherwise deal with any of the Collateral; and Debtor hereby irrevocably appoints Secured Party, its officers, employees and agents,
or any of them, as attorneys-in-fact for Debtor with full power and authority in the place and stead of Debtor and in the name of Debtor
or in its own name from time to time in Secured Party’s discretion, to take any and all appropriate action Secured Party deems necessary
or desirable to accomplish any of the foregoing or otherwise to protect, preserve, collect or realize upon the Collateral or to accomplish
the purposes of this Agreement. Debtor revokes each power of attorney (including any proxy) heretofore granted by Debtor with regard to
the Collateral. This power of attorney, being coupled with an interest, is irrevocable and shall not be affected by the subsequent disability
or incompetence of Debtor.

 

7.2.5       Setoff.
Secured Party may place an administrative hold on and set off against the Obligations any property held in a deposit or other account
with Secured Party or any of its Affiliates or otherwise owing by Secured Party or any of its Affiliates in any capacity to Debtor. Such
set-off shall be deemed to have been exercised immediately at the time Secured Party or such Affiliate elects to do so.

 

7.2.6       Appointment
of Receiver. Secured Party, upon occurrence of an Event of Default, shall be entitled, and Debtor hereby consents, without notice
or demand and without regard to the adequacy of any security for the indebtedness and other Obligations or the solvency or insolvency
of any person liable for the payment thereof, to the appointment of a receiver for the Collateral. The receiver shall have all rights
and powers permitted under applicable law and such other powers as the court making such appointment shall confer. The expenses, including,
without limitation, receiver’s fees, attorneys’ fees, court costs, and agent’s compensation, incurred pursuant to or
arising from the powers herein contained shall be secured by the Collateral. The right of a receiver, among other rights and powers, to
enter and take possession of and to manage and operate the Collateral, and to collect the rents, issues, profits and proceeds thereof
shall be cumulative to any other rights or remedies hereunder or afforded by law, and may be exercised concurrently therewith or independently
thereof. Notwithstanding the appointment of any receiver or other custodian, Secured Party shall be entitled as pledgee to the possession
and control of any cash, deposits, or instruments or other Collateral at the time held by, or payable or deliverable under the terms of
this Agreement to Secured Party.

 

8.       Expenses.
Debtor shall pay to Secured Party on demand all costs and expenses (including all reasonable fees and disbursements of all counsel retained
for advice, suit, appeal or other proceedings or purpose and of any experts or agents it may retain), which Secured Party may incur in
connection with (i) the administration of this Agreement, including any administrative fees Secured Party may impose for the preparation
of discharges, releases or assignments to third-parties; (ii) the custody or preservation of, or the sale, lease or other disposition
or realization on the Collateral; (iii) the enforcement and collection of any Obligations or any guaranty thereof; (iv) the exercise,
performance, enforcement or protection of any of the rights of Secured Party hereunder; or (v) the failure of Debtor to perform or observe
any provisions hereof. After such demand for 

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payment of any cost, expense or fee under this Section or elsewhere under this Agreement,
Debtor shall pay interest at the highest default rate specified in any instrument evidencing any of the Obligations from the date payment
is demanded by Secured Party to the date reimbursed by Debtor. All such costs, expenses or fees under this Agreement shall be added to
the Obligations.

 

9.       Indemnification.
Debtor shall indemnify Secured Party and its Affiliates and each officer, employee, accountant, attorney and other agent thereof (each
such person being an “Indemnified Party”) on demand, without any limitation as to amount, against each liability, cost and
expense (including all reasonable fees and disbursements of all counsel retained for advice, suit, appeal or other proceedings or purpose,
and of any expert or agents an Indemnified Party may retain) heretofore or hereafter imposed on, incurred by or asserted against any Indemnified
Party (including any claim involving any allegation of any violation of applicable law of any governmental authority (including any environmental
law or criminal law)), however asserted and whether now existing or hereafter arising, arising out of any ownership, disposition or use
of any of the Collateral; provided, however, the foregoing indemnity shall not apply to liability, cost or expense solely attributable
to an Indemnified Party’s gross negligence or willful misconduct. This indemnity agreement shall survive the termination of this
Agreement. Any amounts payable under this or any other section of this Agreement shall be additional Obligations secured hereby.

 

10.       USA
PATRIOT Act Notice. Secured Party hereby notifies the Debtor that pursuant to the requirements of the USA PATRIOT Act (“Patriot
Act”), it is required to obtain, verify and record information that identifies the Debtor, which information includes the name and
address of the Debtor and other information that will allow Secured Party to identify the Debtor in accordance with the Patriot Act. 
The Debtor agrees to, promptly following a request by Secured Party, provide all such other documentation and information that Secured
Party requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering
rules and regulations, including the Patriot Act.

 

11.       Miscellaneous.

 

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

 

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

 

11.3       Security
Interest Absolute. All rights of Secured Party hereunder, the Security Interest and all obligations of Debtor hereunder shall be absolute
and unconditional irrespective of (i) any filing by or against Debtor of any petition in bankruptcy or any action under federal or state
law for the relief of debtors or the seeking or consenting to of the appointment of an administrator, receiver, custodian or similar officer
for the wind up of its business; (ii) any lack of validity or enforceability of any agreement with respect to any of the Obligations,
(iii) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment
or waiver of or any consent to any departure from any agreement or instrument with respect to the Obligations, (iv)any exchange, release
or non-perfection of any lien or any release or amendment or waiver of or consent under or departure from any guarantee, securing or guaranteeing
all or any of the Obligations, or (v) any other circumstance that might otherwise constitute a defense available to, or a discharge of,
Debtor in respect of the Obligations or this Agreement. If, after receipt of any payment of all or any part of the Obligations, Secured
Party is for any reason compelled to surrender such payment to any person or entity, because such payment is determined to be void or
voidable as a preference, impermissible setoff, or a diversion of trust funds, or for any other reason, such payment shall be reinstated
as part of the Obligations and this Agreement shall continue in full force notwithstanding any contrary action which may have been taken
by Secured Party in reliance upon such payment, and any such contrary action so taken shall be without prejudice to Secured Party’s
rights under this Agreement and shall be deemed to have been conditioned upon such payment having become final and irrevocable.

 

11.4       Remedies
Cumulative; Preservation of Rights. The rights and remedies herein are cumulative, may be exercised singly or concurrently and are
not exclusive of any other rights or remedies which Secured Party may have under other agreements now or hereafter in effect between Debtor
and Secured Party, at law (including under the UCC) or in equity. No failure or delay of Secured Party in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other
right or power. Debtor expressly disclaims any reliance on any course of dealing or usage of trade or oral representation of Secured Party
including representations to make loans to Debtor. No notice to or demand on Debtor in any case shall entitle Debtor to any other or further
notice or demand in similar or other circumstances.

 

11.5       Joint
and Several; Successors and Assigns. If there is more than one Debtor, each of them shall be jointly and severally liable for all
amounts, which become due, and the performance of all obligations under this Agreement and the term “Debtor” shall include
each as well as all of 

    7 

     

    

them. This Agreement shall be binding upon Debtor and upon its heirs and legal representatives, its successors
and assignees, and shall inure to the benefit of, and be enforceable by, Secured Party, its successors and assignees and each direct or
indirect assignee or other transferee of any of the Obligations; provided, however, that this Agreement may not be assigned by Debtor
without the prior written consent of Secured Party.

 

11.6       Waivers;
Changes in Writing. No course of dealing or other conduct, no oral agreement or representation made by Secured Party or usage of trade
shall operate as a waiver of any right or remedy of Secured Party. No waiver of any provision of this Agreement or consent to any departure
by Debtor therefrom shall in any event be effective unless made specifically in writing by Secured Party and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which given. No modification to any provision of this Agreement
shall be effective unless made in writing in an agreement signed by Debtor and Secured Party.

 

11.7       Interpretation.
Unless the context otherwise clearly requires, references to plural includes the singular and references to the singular include the plural;
the word “or” has the inclusive meaning represented by the phrase “and/or”; the word “including”,
“includes” and “include” shall be deemed to be followed by the words “without limitation”; and captions
or section headings are solely for convenience and not part of the substance of this Agreement. Any representation, warranty, covenant
or agreement herein shall survive execution and delivery of this Agreement and shall be deemed continuous. Each provision of this Agreement
shall be interpreted as consistent with existing law and shall be deemed amended to the extent necessary to comply with any conflicting
law. If any provision nevertheless is held invalid, the other provisions shall remain in effect. Debtor agrees that in any legal proceeding,
a photocopy of this Agreement kept in Secured Party’s course of business may be admitted into evidence as an original. Terms not
otherwise defined in this Agreement shall have the meanings attributed to such terms in the UCC.

 

11.8       Waiver
of Jury Trial. Debtor and Secured Party hereby knowingly, voluntarily, and intentionally
waive any right to trial by jury Debtor and Secured Party may have in any action or proceeding, in law or in equity, in connection with
this Agreement or any transactions related hereto. Debtor represents and warrants that no representative or agent of Secured Party has
represented, expressly or otherwise, that Secured Party will not, in the event of litigation, seek to enforce this jury trial waiver.
Debtor acknowledges that Secured Party has been induced to enter into this Agreement by, among other things, the provisions of this section.

 

 

 

 

 

 

SIGNATURE PAGE TO FOLLOW

 

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Dated September 30, 2021

 

 

 

	  	 	CORNING NATURAL GAS CORPORATION
	 	 	 	 
	 	 	By:	 
	Signature of Witness	 	Name: 	 Michael I. German
	 	 	Title: 	 President/CEO 
	Typed Name of Witness	 	 	 

 

ACKNOWLEDGMENT

 

	STATE OF NEW YORK 	 )
	 	: SS.
	COUNTY OF STEUBEN	 )

 

On the 29th day
of September, in the year 2021, before me, the undersigned, a Notary Public in and for said State, personally appeared MICHAEL I. GERMAN,
personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within
instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the individual,
or the person upon behalf of which the individual acted, executed the instrument.

 

 

	 	 
	 	Notary Public

 

 

 

 

 

 

 

 

 

	FOR SECURED PARTY USE ONLY:
	Authorization confirmed:  	 
	If Debtor’s Obligations arise under a guaranty in favor of Secured Party, list the name whose indebtedness is being guaranteed under such guaranty:
	 	 

 

    9 

     

    

Exhibit A

 

 

		1.	Grant (§1.1): ): the Security Interest granted by Debtor pursuant to this General Security Agreement
covers collateral that includes, but is not limited to, the property described below:

 

All
rights, tangible and intangible (including pipelines, easements, rights of way and compressors) in the Debtor’s gas distribution
system pursuant to municipal franchises or otherwise.

 

 

 

	2.	 Permitted Liens (§3.1)

 

None

 

 

	3. 	Residence, principal place of business or chief executive office (§3.5(i))

 

330 West William Street,
Corning, New York 14830

 

 

	4. 	Location of Books and Records (§3.5(ii))

 

330 West William Street,
Corning, New York 14830

 

 

	5. 	Location of Inventory, Equipment, Fixtures, Crops or Timber (§3.5(iii) and §3.5(iv))

 

330 West William Street,
Corning, New York 14830

 

 

	6.  	Locations Not Owned by Debtor and Name of Record Owner (§3.5)

 

N/A

 

 

	7.  	Trade Name, “Doing Business As” Name or Assumed Name (§3.6)

 

N/A

 

    10EXHIBIT
10.1

 

 

LOAN
MODIFICATION AGREEMENT

 

This LOAN
MODIFICATION AGREEMENT (hereinafter, this “Agreement”) is made this 29th day of September, 2021,
by and among EMPIRE NEW MEXICO LLC, a Delaware limited liability company d/b/a Green Tree New Mexico (“Company”),
Empire Petroleum Corporation, a Delaware corporation (“Parent”), and ENERGY EVOLUTION MASTER FUND, LTD., a Cayman
Islands exempted company (“Investor”). Each of Company, Parent and Investor is referred to herein as a “Party”
or, collectively, as the “Parties.” Capitalized terms utilized but not defined herein shall have the meaning ascribed
to them in the Empire New Mexico LLC Senior Secured Convertible Note Due December 31, 2021, between Company, Parent and Investor dated
May 14, 2021 (the “Note”).

 

Recitals

 

Whereas,
Company, Parent and Investor entered into certain loan arrangements evidenced by, among other things, the Note, the Security Agreement
(defined below), and that certain Mortgage, Fixture Filing, Assignment of As-Extracted Collateral, Security Agreement and Financing Statement
between Company and Investor with an effective date of May 14, 2021 (the “Mortgage,” and collectively, together with
the Note the Security Agreement, and all other documents, instruments, and agreements executed in connection herewith related hereto,
the “Loan Documents”);

 

Whereas,
Parent and Company must reduce their consolidated Debt obligations in order for Parent to meet the requirements to be listed on a recognized
securities exchange;

 

Whereas,
Parent is making arrangements to convert the balance of all unsecured convertible notes issued by Company (the “Unsecured Convertible
Debt”) into equity of Parent, or payoff the balance of any Unsecured Convertible Debt prior to the Loan Settlement Date;

 

Whereas,
Company and Parent (hereinafter, collectively, “Obligors”) have requested that Investor, among other things, extend
the Maturity Date under the Note until June 30, 2023, immediately convert the Maximum Convertible Amount under the Note, and waive Investor’s
right to a downward adjustment of the Conversion Price;

 

Whereas,
if Investor exercised its rights to adjust the Conversion Price down from $1.25/share to $1.00/share under Section 14 of the Note, Investor
would receive approximately 1,300,000 additional shares of Parent’s Common Stock at no additional cost when it converted the Maximum
Convertible Amount; and

 

Whereas,
despite the delay in receiving a return of principal and the lost benefit of receiving an additional 1,300,000 million shares of Common
Stock at no additional cost, Investor is willing to modify the Note on the terms and conditions expressly set forth herein.

 

Now
therefore, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is hereby agreed
by and between Obligors and Investor as follows:

 

Acknowledgment
of Indebtedness

 

1.         Obligors and Investor each hereby acknowledge and agree that, in accordance with the terms and conditions of the Loan Documents, that:

 

 

 

 

    	1 

    	 

    

 

a.               
The payment to be made on September 30, 2021 (the “Loan Settlement Date”) for all accrued and unpaid interest
on the Note is $119,009.01.

 

b.               
The principal balance on the Note on the Loan Settlement Date, after the preceding interest payment is $12,215,353.10.

 

Hereinafter,
all amounts set forth in this Paragraph 1 and all other amounts owed under this Agreement and/or the other Loan Documents shall be referred
to, collectively, as the “Obligations”.

 

No
Offsets, Credits or Reductions

 

2.         Each of Obligors hereby acknowledges and agrees that it has no offsets, credits or other basis to claim any existing or past basis to reduce the amount of the Obligations as stated in Paragraph 1.

 

Ratification
of Loan Documents; Cross-Collateralization;

Cross-Guaranty;
Cross-Default; Further Assurances

 

	3.		Obligors:

 

a.               
Hereby acknowledge and agree that this Agreement, once executed shall constitute one of the Loan Documents for all purposes;

 

b.              
Hereby ratify, confirm, and reaffirm all and singular the terms and conditions of the Loan Documents as amended pursuant to this Agreement.
Obligors further acknowledge and agree that except as specifically modified in this Agreement, all terms and conditions of the Loan Documents
shall remain in full force and effect;

 

c.             
Hereby ratify, confirm, and reaffirm that (i) the obligations secured by the Loan Documents (as now modified) include, without limitation,
the Obligations, and any future modifications, amendments, substitutions, or renewals thereof, (ii) all collateral, whether now
existing or hereafter acquired, granted to Investor pursuant to the Loan Documents, or otherwise, shall secure all of the Obligations
until the full, final, and indefeasible payment and/or satisfaction of all Obligations, and (iii) the occurrence of an Event of
Default under any Loan Document, shall constitute an Event of Default under all of the Loan Documents, it being the express intent of
the Company that all of the Obligations be fully cross-collateralized and cross-defaulted; and

 

d.               
Shall, from and after the execution of this Agreement, execute and deliver to Investor whatever additional documents, instruments, and
agreements that Investor may reasonably require in order to correct any document deficiencies, or to vest or perfect the Loan Documents
and the collateral granted therein more securely in Investor and/or to otherwise give effect to the terms and conditions of this Agreement
and the other Modification Documents.

 

Conditions
Precedent

 

4.         Investor’s agreements, as contemplated herein, shall not be effective unless and until each of the following conditions precedent have been fulfilled by September 30, 2021, all as determined by Investor in its reasonable discretion:

 

a.               
Company shall have paid to Investor and Investor shall have received all accrued and unpaid interest under the Note on the Loan Settlement
Date as set forth in Paragraph 1 above, which shall
be paid as an interest conversion in accordance with the provisions Section 5(b) of the Note, as amended hereby. 

 

 

 

    	2 

    	 

    

 

 

 

b.             
Company shall have amended its Company Agreement to authorize its Member to pledge, transfer and/or assign all of Parent’s equity
interest in Company, including the economic rights, the control rights, and status as a full member of the Company as security for the
Obligations pursuant to the Security Agreement;

 

c.               
Parent shall have (1) executed a Pledge and Security Agreement in form and substance satisfactory to Investor (the “Security
Agreement”) granting Investor a first priority perfected security interest in Parent’s membership interest in Company,
including all economic and control rights and status as a full member of the Company, as security for the Obligations, (2) delivered
physical possession of Parent’s certificate of membership interest or such other documents, if any, evidencing Parent’s membership
interest in Company to Investor to prefect Investor’s interest therein, and/or (3) taken all such other actions as may be required
by Investor to confirm Investor’s first priority lien on and security interest in Parent’s membership interest in Company;

 

d.               
Obligors shall have taken all steps necessary to convert $6,500,000.00 of the balance of the Note at a Conversion Price of $1.25/share
(pursuant to the amendment below), the corresponding reduction of the balance on the Note to be effective as of the Loan Settlement Date;

 

e.             
All action on the part of Obligors necessary for the valid execution, delivery, and performance by Obligors of this Agreement and the
Security Agreement shall have been duly and effectively taken and evidence thereof satisfactory to Investor shall have been provided
to Investor (including, without limitation, (i)  current certificates of good standing for Obligors from the state where each Obligor
is formed; and (ii) copies of the resolutions authorizing Obligors to enter into this Agreement and the Security Agreement and certification
of each Obligor’s Secretary that such Resolutions have been adopted and remain in effect);

 

f.                
Obligors shall have taken all other actions and complied with all other covenants required under this Loan Modification; and

 

g.               
This Agreement shall have been executed and delivered by each of the Parties and shall be in full force and effect.

 

Modifications
to Loan Documents

 

5. 
       Investor will notify Obligors in writing on the date on which the conditions precedent set forth in Paragraph 4 have been satisfied
(the “Effective Date”). From and after the Effective Date, the Note is hereby deemed modified as
follows:

 

a.               
Maturity Date. The Maturity Date of the Note shall be extended from December 31, 2021 to June 30, 2023.

 

b.               
Conversion Price. The definition of “Conversion Price” shall be amended by deleting it in its entirety and
replacing it with the following, “‘Conversion Price’ means $1.25 per share, subject to adjustment from time
to time in accordance with Section 10 and Section 11.”

 

c.               
Maximum Convertible Amount. The definition of “Maximum Convertible Amount” shall be amended to add the words
“and unpaid interest” so that the language after the last close parenthesis will read “...together with any accrued
and unpaid interest hereunder at such time, subject
to adjustment from time to time in accordance with Section 13.” For the avoidance of doubt, this definition only applies in connection
with conversion of principal amount of the Note prior to Maturity and is not applicable to Quarterly Interest Payments under Section
5(b) of the Note or to Maturity Conversion under Section 5(c) of the Note.

 

 

 

 

    	3 

    	 

    

 

 

 

d.               
Underlying Shares. The definition of “Underlying Shares” shall be amended to add the following language after
the final word but before the period, “or in satisfaction of Quarterly Interest Payments.”

 

e.               
New Definitions. The following definitions shall be added to Section 1:

 

		i.	“Event
                                            of Default” has the meaning given to it in the Mortgage, provided that this Loan
                                            Modification Agreement shall also be understood to be a “Loan Document” as that
                                            term is utilized in the Mortgage.

 

		ii.	“Interest
                                            Conversion Price” means (a) $1.25 per share prior to the 4 to 1 reverse
                                            stock split to be authorized upon filing of the Amended and Restated Certificate of Incorporation
                                            approved by the Board and shareholders of Parent on or about August 27, 2021 and August 31,
                                            2021, respectively, (the “Stock Split”) and (b) $5.00 per share after
                                            the Stock Split, subject to adjustment from time to time in each case in accordance with
                                            Section 10 and Section 11 in the same manner as the Conversion Price; provided however, that
                                            the Stock Split shall not result in any adjustment under Section 10(a).

 

		iii.	“Loan
                                            Modification” means that Loan Modification Agreement between Investor, on the one
                                            hand, and Company and Parent, on the other hand, dated September 29, 2021.

 

		iv.	“Maturity
                                            Conversion Price” means $8.00 per share after the Stock Split (provided
                                            that if for any reason the Stock Split does not occur or until it occurs, Maturity Conversion
                                            Price shall mean $2.00 per share), subject to adjustment from time to time in each case in
                                            accordance with Section 10 and Section 11; provided however, that the Stock Split shall not
                                            result in any adjustment under Section 10(a).

 

		v.	“Mortgage”
                                            means that certain Mortgage, Fixture Filing, Assignment of As-Extracted Collateral, Security
                                            Agreement and Financing Statement between Company and Investor with an effective date of
                                            May 14, 2021.

 

		vi.	“Security
                                            Agreement” the Pledge and Security Agreement between Investor and Parent, dated
                                            September 30, 2021.

 

f.                
Interest. Section 2 of the Note shall be amended to delete the final sentence and replace it with the following, “Company
shall pay all accrued and unpaid interest in arrears (each, a “Quarterly Interest Payment”) on the first day of each
calendar quarter (beginning on October 1, 2021) (each, an “Interest Due Date”) and calculated on the basis of a 360-day
year for the actual number of days elapsed and shall accrue daily commencing on the Original Issue Date and be compounded monthly on
the first day of each calendar month. For the sake of clarity, the Quarterly Interest Payment shall be the payment necessary to return
the principal balance as of the preceding Interest Due Date less the aggregate principal amount of all prepayment of principal of this
Note approved by Investor, if any, since the preceding Interest Due Date, and a final Quarterly Interest Payment shall be made on the
Maturity Date. Each Quarterly Interest Payment shall be payable to Investor
in shares of Common Stock or, at Investor’s option in cash, in accordance with Section 5(b).

 

 

 

    	4 

    	 

    

 

 

 

g.               
Conversion. Section 5 of the Note shall be amended to so that the current text shall become a new subsection 5(a) subtitled
“Pre-Maturity Date Conversion,” and new subsections 5(b) and (c) shall be added as follows:

 

		(b)	Interest
                                            Payment in Shares or Cash. Each Quarterly Interest Payment shall be payable in shares
                                            of Common Stock converted at the Interest Conversion Price on the applicable Interest Due
                                            Date, unless Investor provides Company with a written election at least 3 days before the
                                            Interest Due Date to have such Quarterly Interest Payment made in cash or cash equivalent,
                                            in which case, such Quarterly Interest Payment shall be paid in cash or cash equivalent on
                                            the applicable Interest Due Date.

 

		(c)	Maturity
                                            Conversion. Investor may elect to collect the full and final balance due and outstanding
                                            on the Note, including all accrued and unpaid interest thereon, on the Maturity Date (i)
                                            in cash, or (ii) by converting all or any portion of such outstanding balance into shares
                                            of Common Stock at the Maturity Conversion Price (as “Maturity Conversion”).
                                            Investor may elect a Maturity Conversion by delivering to Company a Conversion Notice and
                                            Conversion Schedule at least 14 days prior to the Maturity Date. Upon the timely delivery
                                            of the Conversion Notice and Conversion Schedule, the Maturity Conversion shall be completed
                                            in the same manner and under the same terms as a conversion prior to the Maturity Date under
                                            Section 5(a).

 

h.               
Debt. The first sentence of Section 7(b) shall be deleted in its entirety and replaced with the following, “Until
all amounts due under the Note have been paid in full Company and Parent will not, directly or indirectly, enter into, create, incur,
assume, or suffer to exist any Debt, mortgage, lien, security interest or other encumbrance of any kind, on or with respect to any of
Company’s property or assets (including Parent’s equity interest in Company) now owned or hereafter acquired or any interest
therein or income or profits therefrom, without first obtaining Investor’s express written consent, which shall be at Investor’s
sole discretion.”

 

i.                
Certain Adjustments. Section 10 of the Note shall be amended to delete the first sentence.

 

j.                
Prepayment. Section 12 of the Note shall be deleted in its entirety and replaced with the following, “The
Note may not be prepaid except with the consent of Investor, to be granted in Investor’s sole and absolute discretion.”

 

k.               
Registration Statement. Section 13 of the Note shall be deleted and replaced in its entirety by the following:

 

The
Parent shall use commercially reasonable best efforts to cause a registration statement on Form S-3 to be filed with the Securities
Exchange Commission by the sooner of 10 days after FINRA approval of the actions set forth in Section 6(e) of the Loan Modification
or October 30, 2021 for the Common Stock and the Common Stock underlying warrants issued by the Parent prior to April 1, 2021 and
the unsecured convertible notes issued by Company, with sale rights being allocated between the holders thereof by
the Parent’s board of directors, it being understood that additional Form S-3 filings will be necessary to sell the
unallocated Common Stock and the Common Stock underlying warrants.

 

 

 

    	5 

    	 

    

 

 

 

l.                
Events of Default. Section 14 of the Note shall be deleted and replaced in its entirety by a new section titled
“Events of Default” to read as follows: “Upon the occurrence of an Event of Default, the outstanding principal amount
of the Note and all accrued and unpaid interest thereon shall be immediately due and payable to Investor. Company waives presentment,
demand, notice of dishonor, protest and notice of nonpayment and protest of this Note.”

 

Additional
Covenants

 

	6.		Obligors hereby
agree to the following additional covenants:

 

a.             
Green Tree Separation. Parent and Company shall cooperate and use commercially reasonable best efforts to separate Company
from Parent as a separate, independent business from Company and analyze the most beneficial structure to spin-off, split-off or otherwise
separate Company from Parent with the intended result that the shareholders of Parent shall, to extent practicable hold an equal proportionate
interest in Company with the same rights, privileges and restrictions as the shareholders hold in Parent, consistent with Section 15(b)(ii)
of Parent’s Amended and Restated Bylaws, to the reasonable satisfaction of Investor. The failure to complete the separation of
Company from Parent on or before December 31, 2022 shall constitute an Event of Default, except to the extent such failure is (i) related
to the action/inaction of Series A Directors (as defined in the Amended and Restated Bylaws), Investor and/or Phil Mulacek or (ii) due
to an injunction, order, rule, or law restraining, enjoining, or otherwise prohibiting the consummation of such separation. In addition,
upon completion of the covenants set forth in Section 6(e) and the issuance of Series A Voting Preferred Stock, this covenant shall be
terminated and be of no further effect.

 

b.               
No Amending Governing Documents. Company shall not amend its Certificate of Formation or its Limited Liability Company
Agreement (“Company Agreement”) without Investor’s express consent (not to be unreasonably withheld), provided,
that Investor shall not withhold consent of such changes as are reasonably necessary for Company to perform its obligations under Section
6(a).

 

c.             
Investor Enforcement Expenses. Company shall reimburse Investor on demand for any and all costs, expenses and/or fees incurred
by Investor (including attorneys’ fees and expenses) heretofore or hereafter incurred by Investor in connection with the protection,
preservation, and enforcement by Investor of its rights and remedies under the Loan Documents. If Company fails to pay such reimbursement
within 30 days of receiving Company’s demand then Investor may add them to the principal of the Note without further notice to
or action against Company.

 

d.               
Issue Warrant. As additional consideration for the agreements of Investor in this Agreement, on or before the Loan Settlement
Date, Parent shall issue a warrant to Investor in the form attached hereto as Exhibit A for 500,000 shares of Common Stock at an exercise
price of $5.00/share (assuming the effectiveness of the Stock Split) that may be exercised any time on or before December 31, 2023.

 

e.             
Company Action. The full and final completion, approval, adoption and implementation of the following documents by the
board of directors (the “Board”) and, where applicable the majority of all shareholders and/or the majority of the
minority-shareholders of Parent, each as submitted
to the Board on August 27, 2021, on or before the later of seven days after FINRA approval of such actions or November 1, 2021:

 

 

    	6 

    	 

    

		i.	Certificate
                                            of Designation of Series A Voting Preferred Stock of Empire Petroleum Corporation shall be
                                            filed with the Delaware Secretary of State and the Series A Voting Preferred Stock shall
                                            be issued in accordance therewith;

		ii.	Amended
                                            and Restated Certificate of Incorporation of Empire Petroleum Corporation shall be filed
                                            with the Delaware Secretary of State; and

		iii.	Amended
                                            and Restated Bylaws of Empire Petroleum Corporation (a Delaware Corporation) shall have passed
                                            all required approvals and received all necessary consents to be effective an operating as
                                            the bylaws of Parent.

 

Representations,
Warranties, and Covenants

 

	7.		Obligors hereby
represent, warrant, and covenant to Investor as follows:

 

a.               
Company’s exact legal name is as shown in the preamble of this Agreement.

 

b.               
Company is duly organized, validly existing, and in good standing under the laws of Delaware.

 

c.             
Company is qualified to do business in every state in which the nature of its business conducted or the character of its property owned
in such state would require such qualification, except where such failure to qualify would not result in a material adverse effect.

 

d.              
The execution and delivery of this Agreement and the other Loan Documents by Obligors and the performance by Obligors of their respective
obligations and agreements under this Agreement and the other Loan Documents are within the authority of Obligors, have been duly authorized
by all necessary corporate or limited liability company proceedings on behalf of Obligors, and do not and will not contravene any provision
of law, statute, rule or regulation to which Obligors (or any of them) are subject or, if applicable, Obligors’ charter, other
organization papers, by-laws, or any stock provision or any amendment thereof or of any agreement or other instrument binding upon any
of Obligors.

 

e.               
This Agreement, the Security Agreement and the other Loan Documents constitute legal, valid, and binding obligations of Obligors, enforceable
in accordance with their respective terms, except as such enforceability may be limited by applicable bankruptcy or other similar laws
affecting the rights and remedies of creditors generally as well as to general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).

 

f.                
No approval or consent of, or filing with, any governmental agency or authority is required to make valid and legally binding the execution,
delivery or performance by Obligors of this Agreement, the Security Agreement or the other Loan Documents.

 

g.              
Obligors have performed and complied in all material respects with all terms and conditions of the Loan Documents required to be performed
or complied with by Obligors prior to or at the time hereof, and as of the date hereof, no Event of Default (as defined in the Mortgage)
has occurred and is continuing.

 

h.               
The representations and warranties contained in the Mortgage are true and correct as of the date hereof, except to the extent of changes
resulting from transactions specifically contemplated or specifically permitted by this Agreement, the Security Agreement, or the other
Loan Documents, changes
which have been disclosed in writing to Investor on or prior to the date hereof, changes occurring in the ordinary course of business
that singly or in the aggregate are not materially adverse, and excepting such representations and warranties that expressly relate only
to an earlier date.

 

 

 

    	7 

    	 

    

 

i.                
Obligors have read and understand each of the terms and conditions of this Agreement and the other Loan Documents and that they are entering
into this Agreement and the other Loan Documents freely and voluntarily, without duress, after having had an opportunity for consultation
with independent counsel of their own selection, and not in reliance upon any representations, warranties, or agreements made by Investor
and not set forth in this Agreement or the other Loan Documents.

 

Waivers

 

8.   
    Jury Trial. Obligors and Investor hereby make the following waiver knowingly, voluntarily, and
intentionally, and understand that the other, in entering into this Agreement, is relying on such a waiver: OBLIGORS AND INVESTOR
EACH HEREBY IRREVOCABLY WAIVE ANY PRESENT OR FUTURE RIGHT TO A JURY IN ANY TRIAL OF ANY CASE OR CONTROVERSY IN WHICH THE OTHER
BECOMES A PARTY (WHETHER SUCH CASE OR CONTROVERSY IS INITIATED BY OR AGAINST SUCH PARTY OR IN WHICH SUCH PARTY IS JOINED AS A PARTY
LITIGANT), WHICH CASE OR CONTROVERSY ARISES OUT OF, OR IS IN RESPECT OF, ANY RELATIONSHIP BETWEEN OBLIGORS, OR ANY OTHER PERSON, AND
INVESTOR.

 

Entire
Agreement

 

9.      
This Agreement shall be binding upon Obligors and Obligors’ respective employees, representatives, successors, and assigns, and
shall inure to the benefit of Investor and Investor’s successors and assigns. This Agreement, the Security Agreement and the other
Loan Documents incorporate all of the discussions and negotiations between Obligors and Investor, either express or implied, concerning
the matters included herein and in such other documents, instruments, and agreements, any statute, custom, or usage to the contrary notwithstanding.
No such discussions or negotiations shall limit, modify, or otherwise affect the provisions hereof. No modification, amendment, or waiver
of any provision of this Agreement, or any provision of any other document, instrument, or agreement between Obligors and Investor shall
be effective unless executed in writing by the party to be charged with such modification, amendment, or waiver, and if such party be
Investor, then by a duly authorized officer thereof.

 

Construction
of Agreement

 

10.    
In connection with the interpretation of this Agreement and the Security Agreement:

 

a.               
All rights and obligations hereunder and thereunder, including matters of construction, validity, and performance, shall be governed
by and construed in accordance with the law of the Delaware.

 

b.               
The captions of this Agreement are for convenience purposes only, and shall not be used in construing the intent of Investor and Obligors
under this Agreement.

 

c.               
Except as explicitly set forth herein and therein, this Agreement and the Security Agreement are not intended to, nor shall they be construed
to, replace or supersede any prior amendments and/or modifications to the Loan Documents but are intended to be supplemental thereto.
However, in the event of any express inconsistency between the provisions of this Agreement
and the Security Agreement on the one hand and any other document, instrument, or agreement entered into by and between Investor and
Obligors on the other, the provisions of this Agreement and the Security Agreement shall govern and control.

 

 

    	8 

    	 

    

 

 

 

d.               
Investor and Obligors have prepared this Agreement and the Security Agreement with the aid and assistance of their respective counsel.
Accordingly, all such documents shall be deemed to have been drafted jointly by Investor and Obligors and shall not be construed against
either Investor or Obligors. 

 

Miscellaneous

 

11.    
If any provision of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, the remainder of the
Agreement that can be given effect without the invalid provision shall continue in full force and effect and shall in no way be impaired
or invalidated.

 

12.  
   This Agreement may be executed in multiple identical counterparts (including by facsimile or e-mail transmission of an
adobe file format document (also known as a PDF file)), each of which when duly executed shall be deemed an original, and all of
which shall be construed together as one agreement. This Agreement will not be binding on or constitute evidence of a contract
between the Parties hereto until such time as a counterpart has been executed by such Party and a copy thereof is delivered to each
other party to this Agreement.

 

13.     
No failure on the part of Investor to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right.
Investor’s rights and remedies provided herein and in any other instrument or document now or hereafter securing all or any part
of the Obligations are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law.

 

[signature
page follows]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	9 

    	 

    

 

IN
WITNESS WHEREOF, the duly authorized representatives of Investor, Company and Parent have executed this Agreement on this the day and
year first above written.

 

 

 

	 	COMPANY:

     

    EMPIRE
    NEW MEXICO LLC, d/b/a GREEN TREE NEW MEXICO

     

    

     

    By:
    /s/ Michael R. Morrisett                                  

    Michael
    R. Morrisett, President

     

     

     

    Parent:

     

    EMPIRE
    PETROLEUM CORPORATION

     

     

    By:
    /s/ Michael R. Morrisett                                   

    Michael
    R. Morrisett, President

     

     

     

	 	INVESTOR:

     

    ENERGY
    EVOLUTION MASTER FUND, LTD.

     

     

    By/s/
    Sterling Mulacek                                            

           Sterling
    Mulacek, Director

	 	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10

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