Document:

Exhibit 10.1

AMENDMENT NO. 1

TO

AGREEMENT AND PLAN OF MERGER

This AMENDMENT NO. 1 TO
AGREEMENT AND PLAN OF MERGER, dated as of August 18, 2006 (this
“Amendment”), is entered into by and between C&T
Enterprises, Inc., a corporation organized and existing under
the laws of the Commonwealth of Pennsylvania (“C&T”), C&T Acquisition, Inc., a recently-formed
New York corporation and wholly owned subsidiary of C&T (“Merger Sub”), and
Corning Natural Gas Corporation, a
corporation organized and existing under the laws of the State of New York (the
“Company”). Capitalized terms used herein have the meanings ascribed to them in
the Merger Agreement.

WITNESSETH

WHEREAS, C&T, Merger Sub and the Company entered into
an Agreement and Plan of Merger dated as of May 11, 2006 (the “Merger
Agreement”);

WHEREAS, all parties to the Merger Agreement desire to
amend the Merger Agreement as set forth in this Amendment No. 1 to
establish definitive Merger Consideration and a definitive per-share price for
each Transferred Share;

NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein and in the Merger Agreement and in
the Transaction Documents, and intending to be legally bound hereby, C&T,
Merger Sub and the Company hereby agree as follows:

1.  Amendment to Section 2.02(a).  Section 2.02(a) of the Merger Agreement
is hereby amended and restated in its entirety to read as follows:

“(a) Subject to the terms and
conditions of this Agreement, the per-share consideration for each Transferred
Share shall be $16.50, in cash, without adjustment other than applicable
withholding, if any, as provided for in Section 2.05. The aggregate merger
consideration for all Transferred Shares shall be $8,364,147, without
adjustment other than applicable withholding, if any, as provided for in
Section 2.05 (the “Merger Consideration”).”

2.  Deletion of Sections 2.02(e) and (f).  Sections 2.02(e) and (f) of the Merger
Agreement are hereby deleted from the Merger Agreement.

3.  New Section 3.16A. Amendment to
Compensation Arrangements and 280G Excise Tax.  A new Section 3.16A shall be added to
the Merger Agreement, which shall read in its entirety as follows:

“3.16A. Compensation Reduction & 280G Excise Tax
Savings.  The Company has
previously entered compensation and severance arrangements with Barry and
Robinson (collectively the “Pre-Merger Arrangements”). The Company, Barry and
Robinson have entered into amendments to the Pre-Merger Arrangements fully-executed
copies of which are attached hereto and included in the definition of “Transaction
Documents” hereunder (collectively, the “2006 Amendments”) which
(i) result in a savings of $175,740 to the Surviving Corporation in
compensation and severance payments otherwise due Barry and Robinson
post-Closing under the Pre-Merger Arrangements prior to the 2006 Amendments,
and (ii) result in savings of $87,870 to the Surviving Corporation in
excise tax payments under Code Section 280G and related “gross up”
payments otherwise reimbursable to Barry and Robinson post-Closing under the
Pre-Merger Arrangements that the Surviving Corporation will be able to avoid by
reason of the 2006 Amendments.”

 

4.  Amendment to Section 5.10.  Section 5.10 is hereby amended and
restated in its entirety to read as follows:

“5.10 Subsidiary Transactions. 
(a) Prior to the Effective Time, the Company shall dispose of all
of the assets and liabilities of its Subsidiaries and any Affiliate(s) thereof,
as currently reflected on Exhibit 5.10 hereto, except that (i) the
Company need not dispose of the real estate located at and commonly known as
2511 Corning Road, Elmira, New York (the “Elmira Real Estate”) provided the
Company makes reasonable efforts to sell such Elmira Real Estate, and
(ii) the disposal of (a) the Promissory Note dated September 15,
2003 in the original principal amount of $240,000 with Corning Appliance
Corporation as Obligor (with present principal amount outstanding of $80,000
with another $80,000 due November 2006); and (b) the Promissory Note
dated September 15, 2003 in the original principal amount of $600,000 with
Corning Appliance Corporation as Maker (with principal amount outstanding of
$476,747 as of July 31, 2006) (collectively, the “Promissory Notes”) for
at least 90% of the principal amount due under such Promissory Notes in cash or
offset to cash severance payments otherwise due Barry and Robinson pursuant to
the Promissory Notes Put Agreement dated August 18, 2006 (a fully-executed
copy of which is attached hereto and included in the definition of “Transaction
Documents” hereunder) shall not be a breach of this Section 5.10, provided
that the Company makes reasonable efforts to otherwise dispose of the
Promissory Notes at no less than 90% of the principal amount due under such
Promissory Notes in cash.

(b)         At or prior to Closing, the Company
shall provide evidence reasonably satisfactory to C&T that (i) it has
sold substantially all the assets of Corning Realty Associates LLC (“Realty Co.”)
and the net cash proceeds after deduction for its all Realty Co.’s liabilities,
including without limitation taxes assessed as a result of the transaction of
such disposition (along with any other cash held by such entity at the time of
sale) shall be at least $750,000.

(c)          At Closing, the Company shall
(consistent with its obligations under Section 3.07(a) and subject to the
representations and warranties set forth therein) provide a true, correct and
complete consolidating balance sheet of the entities referenced in
Exhibit 5.10 reflecting only cash and the Elmira Real Estate (if not
previously sold) as assets, and no liabilities, except for the mortgage on the
Elmira Real Estate (if the Elmira Real Estate is not previously sold).”

5.  Amendment of Section 8.01(i) (xii).  Section 8.01(i)(xii) Agreement is
hereby amended and restated in its entirety to read as follows:

“(xii) a
transaction opinion of Rich May, a Professional Corporation, counsel to the
Company, dated as of the Closing Date and addressed to C&T, in form and
substance reasonably satisfactory to C&T and its counsel;”

6.  Additions to Section 8.01(i).  Section 8.01 is further amended by
renumbering subparagraph (xiii) as subparagraph “(xiv)” and adding a new
subparagraph (xiii) to read as follows:

“(xiii) the
items required to be delivered by the Company, or by Barry and Robinson, as
applicable, under Section 5.10 hereof; and”

7.  Amendment to Section 8.01(r).  Section 8.01(r) is hereby amended to
delete therefrom subsection (ii), accordingly, it is hereby amended and
restated in its entirety to read as follows:

“(r) Barry and Robinson shall
have amended their severance agreements with the Company prior to the date of
this Agreement to extend the requisite payment date thereunder for a period no
less than thirty (30) days from the Effective Time.”

 2
 

 

8.  Company Transaction Costs.  New Section 8.01(t). A new
Section 8.01(t) shall be added to the Merger Agreement, which shall read
in its entirety as follows:

“(t) The aggregate fees and
expenses of, or payable by, the Company and incurred and/or accrued after
February 13, 2006 and before the Closing in connection with the Merger
(including, without limitation, the costs of obtaining Shareholder approval for
the Merger, fees and expenses of Company legal counsel, fees and expenses of
financial advisors including brokerage fees and commissions, any accountants’
and auditors’ fees and expenses and fees and expenses of any other advisors
engaged by the Company in connection with the Merger, including without
limitation costs of producing the compliance statement referenced in Section 8.01(s)
and legal fees, costs and expenses relating to the Competing Transaction
described in the Schedule 13D (and attachments thereto) filed in July,
2006 by the Richard M Osborne Trust) (the “Company Transaction Costs”) shall
not exceed $1,300,000; provided however, if the Company Transaction Costs
exceed $1,075,000 and are less than $1,300,000, then payments due to Barry and
Robinson post-Closing from the Surviving Corporation under the Pre-Merger
Agreements as amended by the 2006 Amendments shall be reduced in an amount
equal to the amount of the excess of Company Transaction Costs over $1,075,000
(the “8.01(t) Severance Reductions”); further provided that in calculating the
8.01(t) Severance Reductions, any savings to the Surviving Corporation in excise
tax payments under Code Section 280G and related “gross up” payments
otherwise reimbursable to Barry and Robinson post-Closing (collectively “Tax
Savings”) will be used to reduce the 8.01(t) Severance Reductions. The 8.01(t)
Severance Reductions, if applicable, shall be in addition to the reduction set
forth in Section 3.16A of this Agreement and such reductions shall be
allocated evenly between Barry and Robinson. The Company shall provide at
Closing C&T a full, complete and correct itemized list of Company
Transaction Costs.”

9.  Ratification.  Except as expressly amended hereby, the
Merger Agreement is hereby ratified and affirmed by all parties.

10.  Counterparts.  This Agreement may be executed via facsimile
in one or more counterparts, any one of which need not contain the signatures
of more than one party, but all such counterparts taken together shall
constitute one and the same instrument.

11.  No Waiver.  The execution of this Amendment by any party
shall not be deemed or construed a waiver of any rights that had accrued to
such party under the Merger Agreement prior to the execution hereof including,
without limitation, C&T’s right to terminate the Agreement prior to the
Effective Time pursuant to Section 9.01(b) and, to the extent applicable,
related right to payment of the termination fee under Section 9.03(a) all
as a result of the Competing Transaction referenced in Section 8, above.

[Space
intentionally left blank.]

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment
as of the day and year first above written.

	
   

  	
  C&T ENTERPRISES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  R. TOOMBS

  
	
   

  	
  Its:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  C&T ACQUISITION, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  R. TOOMBS

  
	
   

  	
  Its:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CORNING NATURAL GAS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  THOMAS K. BARRY

  
	
   

  	
  Its:

  	
  President &
  CEO

  

 

Limited Joinder.  The
undersigned Barry and Robinson hereby join this Amendment for the limited
purpose of being bound by Sections 3, 4, 6, 7, 8, 9 and 10 hereof.

	
   

  	
  /s/
  THOMAS K. BARRY

  
	
   

  	
  Thomas
  K. Barry

  
	
   

  	
   

  
	
   

  	
  /s/
  KENNETH J. ROBINSON

  
	
   

  	
  Kenneth
  James Robinson

  

 

 4Exhibit
10.2

Promissory
Notes Put Agreement

This
Agreement dated as of August 18, 2006, is entered into by and between C&T
Enterprises, Inc., a Pennsylvania corporation (“C&T”), Corning Natural Gas
Corporation, a New York corporation (“Corning”), Corning Natural Gas Appliance
Corporation (“CNGAC”), Thomas K. Barry (“Barry”) and Kenneth James Robinson (“Robinson”).

WHEREAS,
C&T and Corning have entered into an Agreement and Plan of Merger dated as
of May 11, 2006 (as amended, the “Merger Agreement”) pursuant to which Corning
will merge into a wholly-owned subsidiary of C&T, subject to certain
closing conditions (the “Merger”);

WHEREAS,
CNGAC holds the following promissory notes: (i) the Promissory Note dated
September 15, 2003 in the original principal amount of $240,000 with Corning
Appliance Corporation as Obligor (with principal amount outstanding as of July
31, 2006 of $80,000, and an additional $80,000 due November 2006); and (ii) the
Promissory Note dated September 15, 2003 in the original principal amount of
$600,000 with Corning Appliance Corporation as Maker and Messrs. Malekzadeh,
Raj, Sesar and Perry as Guarantors (with principal amount outstanding as of
July 31, 2006 of $476,747)(collectively, the “Promissory Notes”);

WHEREAS,
C&T has expressed its desire that the Promissory Notes be sold by CNGAC for
cash prior to closing of the Merger (the “Closing”);

WHEREAS
Barry and Robinson each agree to be the buyers of last resort if the Promissory
Notes have not been sold or transferred for cash proceeds prior to the Closing;

NOW
THEREFORE, for good and valuable consideration, the receipt of which is
acknowledged by all parties hereto, the parties hereto agree as follows:

1.    Corning and CNGAC each agree to use
commercially reasonable efforts to sell, assign and transfer the Promissory
Notes prior to the Closing in exchange for cash consideration; provided
however, C&T must approve any sale, assignment or transfer of any
Promissory Note, if the cash proceeds from such sale, exchange or assignment is
less than 90% of the principal amount due under such Promissory Note.

2.    At C&T’s written request at or
immediately prior to Closing, Corning agrees to cause CNGAC to sell, assign and
transfer the Promissory Notes to Barry and Robinson immediately prior to
Closing and Barry and Robinson agree to purchase and accept assignment from
CNGAC in exchange for cash proceeds equal to 90% of the principal amount due
under each Promissory Note sold assigned and transferred.  In lieu of a cash payment for such Promissory
Notes, Corning shall reduce the amounts payable to Barry and Robinson under
their respective Severance Agreements. 
The sale, assignment and transfer shall be subject to the Closing
actually occurring.

 

 

3.    Unless other written notice is provided by
Barry and Robinson to Corning and C&T, Barry shall purchase a 50% interest
in the Promissory Notes and Robinson shall acquire a 50% interest in the
Promissory Notes.

4.    In connection with any sale, assignment and
transfer of the Promissory Notes to Barry and Robinson, Corning shall cause
CNGAC to also transfer and assign to Barry and Robinson all rights related to
such Promissory Notes, including without limitation, Guarantees of each of
Messrs. Malekzadeh, Raj, Sesar and Perry, each dated September 15, 2003, rights
to late payments under the Promissory Notes and security interests relating to
the Promissory Notes.

5.    To the extent reasonably requested by Barry
or Robinson, C&T will provide reasonable assistance and access to
information and records concerning the Promissory Notes so that Barry and
Robinson can enforce their rights under the Promissory Notes and under any
agreements ancillary to the Promissory Notes.

6.    Corning
Counsel.  Barry and Robison recognize
and agree that Rich May, a Professional Corporation is acting as counsel solely
to Corning and not to Barry or Robinson. 
Barry and Robison each agree and state that he has been specifically
advised of that fact and that he has had the opportunity to engage his own
counsel for the negotiation and drafting of this Agreement and all matter
relating to this Agreement.

[Signatures on following page]

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IN
WITNESS WHEREOF, Corning, CNGAC and C&T have caused this Agreement to be
executed by its officers thereunto duly authorized, and Barry and Robison have
signed this Promissory Note Put Agreement, all effective as of the date first
above written.

	
  

  	
  Corning Natural Gas Corporation:

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas K. Barry

  
	
   

  	
  Title:

  	
  President & CEO

  
	
   

  	
   

  	
   

  
	
   

  	
  Corning Natural Gas Appliance Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas K. Barry

  
	
   

  	
  Title:

  	
  President & CEO

  
	
   

  	
   

  	
   

  
	
   

  	
  C&T Enterprises, Inc.:

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert O. Toombs

  
	
   

  	
  Title:

  	
  President & CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Thomas K.
  Barry

  
	
   

  	
  Thomas K. Barry,
  individually

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Kenneth J.
  Robinson

  
	
   

  	
  Kenneth James
  Robinson, individually

  

 

 3

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