Bid Document For Construction Services

Exhibit 10.1

Corning Natural Gas Corporation

CORNING NATURAL GAS CORPORATION

Construction Services

For

Natural Gas Main and Service Installation

In

The Corning, New York Area

Corning Natural Gas Corporation

Table of Contents

Cover Letter

Bid Acknowledgement Sheet

Instructions to Bidders

SECTION I      Contract Agreement

SECTION II      Schedules and Appendices

SCHEDULE “A”        Scope of Work, Specification(s) and Drawing(s)

SCHEDULE “B”       Remuneration

SCHEDULE “C”       Construction Schedule

SCHEDULE “D”       Contractor Personnel

SCHEDULE “E”       Contractor Equipment

SCHEDULE “F”       Contractor’s Subcontractors and Vendors

SCHEDULE “G”       Certificate of Final Payment and Release

Corning Natural Gas Corporation

Bid Acknowledgement

To:		CORNING NATURAL GAS CORPORATION
		PO Box 58
		Corning, NY
		14830-2152
		Attention:		Jen Beers, Operations Clerk
				Fax: (607) 936-4014
				Number of Pages to Follow:

Additional Comments:

Corning Natural Gas Corporation

Corning Natural Gas Corporation

Pipeline Construction in the Corning, New York Area

Bid Number:		Date:                      , 2008

CORNING NATURAL GAS CORPORATION (the “Company”)
PO Box 58
Corning, NY
14830-2152
Attention: Ray Spear, System Planning Supervisor

Dear Sir:

The undersigned (the “Contractor”), a corporation organized under the laws of the state of                                           , and authorized to carry on business in the State of New York, and whose office is located in                                                                , certify that we have read, examined and understood, all the Contract Documents concerning the Work described therein. We have also made an inspection of the Worksite and are thoroughly familiar with the conditions that exist on the Worksite. We hereby offer to enter into a contract to perform, in accordance with these Contract Documents, all Work necessary for the prices shown in the Schedules attached hereto and forming a part hereof:

		Section II		–		Schedules
						Schedule “A” – Scope of Work, Specification and Drawing
						Schedule “B” — Remuneration
						Schedule “C” – Construction Schedule
						Schedule “D” – Contractor Personnel
						Schedule “E” – Contractor Equipment
						Schedule “F” – Contractor’s Subcontractors and Vendors
						Schedule “G” – Certificate of Final Payment and Release

It is understood that the Company shall not be obliged to accept the lowest Bid, or any Bid, and shall have the right to reject any and all Bids, in whole or part, and may award a contract to other than the lowest Bidder. Company shall not be deemed to have accepted any Bid unless and until it has duly executed a contract that is substantially in the same form as the attached form of agreement with the Bidder, and has delivered the executed Contract Agreement or a copy thereof to the Bidder.

Furthermore, Company reserves the right to waive non-compliance with the Terms, Conditions, Scope, and/or specifications of this inquiry, at the Companies sole discretion, and it is understood that all capitalized terms used herein shall have the meaning ascribed to them in Section I, Contract Agreement.

Respectfully submitted:				Per:
				Per:
Contractor’s Name				Per:
Seal Affixed

Corning Natural Gas Corporation

Instructions to Bidders

1.		Receiving Of Tenders
		Bids shall be received in the offices of Corning Natural Gas Corporation, 330 W William Street, PO Box 58 Corning, NY, 14830-2152 not later than 2:00 p.m., on the Wednesday, May 21, 2008 to the attention of Ms. Jen Beers, Operations Clerk. No faxed or emailed bids allowed.
		In the context of these documents, “Bidder” means a firm that is in the business of providing Work of the type described in these Bid documents and that is registered in the State where the Work is to be performed.
2.		Requirement Description
		The requirement is for the Construction of Pipeline and as specified in Section lll attached hereto. This contract is intended to cover work up to an unspecified dollar value. Contracts could be awarded to one or more Contractor(s) for Pipeline work and/or facilities work for each of the following projects in the Corning Natural Gas locations:

Project 1		Skyline Drive, Corning, NY		Contract #080014
Project 2		Victory Highway, Painted Post, NY		Contract #080016
Project 3		Corning Boulevard, Corning, NY		Contract #080018
Project 4		Denmark Hill, Corning, NY		Contract #080019
Project 5		Trescott Drive, Corning, NY		Contract #080020
Project 6		West Caton Road, Corning, NY		Contract #080025

		Contractor is urged to bid on any or all projects listed above.
		The Company reserves the right to bid any and all work in the Corning region at its discretion.

3.		Type of Contract
		The Work shall be awarded on a lump sum not to exceed basis for each project. Bids must be submitted complete with the following information:

Schedule “A” – Scope of Work, Specification and Drawing
Schedule “B” — Remuneration
Schedule “C” – Construction Schedule
Schedule “D” – Contractor Personnel
Schedule “E” – Contractor Equipment
Schedule “F” – Contractor’s Subcontractors and Vendors
Schedule “G” – Certificate of Final Payment and Release

4.		Project Award Incentive
		If one contractor is awarded three of the above projects then Corning will be granted a 3% discount off the total of the three projects. If one contractor is awarded six of the above projects then Corning will be granted a 6% discount off the total of the six projects.
5.		Price and Payment Considerations

	(a)		Bidder must state payment terms.
	(b)		Bidder must complete all schedules.
	(c)		Bidder must state the expiry date of its proposal.

Corning Natural Gas Corporation

6.		Site Investigation
		Bidder must be familiar with regional conditions where the proposed Work/Services are to be provided, judging for and satisfying himself as to the conditions to be encountered. Bidder may not claim after the submission of a bid that there was any misunderstanding with respect to the conditions imposed by the site(s).
7.		Form of Submission
		One (1) completed copy of your sealed bid proposal are herby requested and should be sent to the address indicated in item 1.
		Bidders are requested to return via FAX the enclosed Bid acknowledgement sheet indicating whether or not a Bid will be submitted.
8.		Insurance
		The successful Bidder shall provide insurance as called for and shall submit certified evidence of this to Company immediately upon award of this Agreement. See Contract Agreement Section I of these documents for Company’s insurance requirements.
9.		Signing of Bid
		The Bid Form must be executed under the corporate seal of the Bidder, and signed by an authorized officer or director of the Bidder.
10.		Withdrawal of Bid
		A Bidder may, without prejudice to himself, withdraw this bid at any time prior to two (2) hours before the time set for the closing of Bids.
11.		Bid Rejection
		The Company reserves the right to reject any or all Bids; the lowest or any Bid will not necessarily be accepted. Without limiting the generality of the foregoing, any Bid may be rejected which is incomplete, obscure, irregular, which has erasures or corrections in the Bid, or in which prices are omitted or are unbalanced.
		Furthermore, Company reserves the right to waive non-compliance with the Terms, Conditions, Scope, and/or specifications of this inquiry, at the Company’s sole discretion
12.		Acceptance of Contractor’s Bid
		All Bids submitted shall constitute continuing offers to perform the Work outlined herein and shall be considered to remain in effect for a period of not less than sixty (60) days after the closing date.
13.		Subcontractors, Vendors and Key Personnel
		Bidders shall submit the names of all Subcontractors, Vendors and Key Personnel it proposes to employ in the Work. Subcontractors, Vendors and Key Personnel may not be changed nor additional Subcontractors, Vendors or Key Personnel employed without the written consent of the Company.
14.		Materials
		All materials such as pipe, valves, fittings, risers, supports, tape and wire for the project will be supplied by the Company. For any other material, the Contractor shall supply and shall submit the names of the material suppliers it intends to use, together with the trade or brand name of the materials supplied. Material suppliers must not be changed nor additional material suppliers utilized without the written approval of the Company.

Corning Natural Gas Corporation

15.		Taxes
		Except for any applicable state or local taxes, the Bidder shall be responsible for, and pay, any taxes and contributions now or hereafter imposed by any government, including payments required under Worker’s Compensation laws prevailing in the area of operations.
		The Bidder’s price(s) specified in the Bid shall not include state or local taxes. Any tax credits obtained by the Bidder, on taxes included in the tendered price, shall be credited to the Company. The bidder shall supply its Tax registration number with the Bid.
16.		Scheduling
		It is intended that the Company shall award the Contract(s) by May 28, 2008 with Work commencing anytime after June 1, 2008. The required completion date for all projects is November 3, 2008 . Bidder should quote pricing valid for one (1) year.
		The contractor shall pay to the Company $500 per business day for every day past the November 3, 2008 completion deadline.
17.		Compliance with Regulations
		The Bidder shall be solely responsible for taking into consideration the effect of the progress and cost of Work to be performed and of all regulations by governing bodies having jurisdiction over matters including, but not limited to, hours of work, qualification of personnel, prevailing wage scales, local labor conditions, licenses, permits and use of public conveniences.
18.		Discrepancies or Omissions
		If a bidder finds discrepancies in or omissions from the included Schedules herein or other contract documents, or has any doubt as to the meaning or intent of any part thereof, he shall at once inform the Company, who may send written instruction or clarification to all Bidders.
		No oral interpretation shall be made to any Bidder as to the meaning of the Contract Documents. Every request for an interpretation shall be made in writing, addressed and forwarded to:
		CORNING NATURAL GAS CORPORATION PO Box 58 Corning, NY 14830-2152 Attention: Ray Spear, System Planning Supervisor Ph: 607-936-3755 ext 202 Fax:607-936-9673
19.		Bid Evaluation and Clarification
		It is a condition of the Company that during the evaluation period of the submitted Bids the Company has the right to contact Bidders for clarifications of the submitted Bid. In the event that a clarification results in a change in the quoted Sum, Company reserves the right to contact each Bidder to obtain the same clarification which may or may not change the Bidder being the lowest Bidder. It shall be at the Companies sole discretion to change the rating of the Bidders.
		The Company, also, reserves the right to waive compliance of this bid request at the discretion of the Company.
20.		Contract
		Notwithstanding anything herein, the Bidder selected by Company to perform the Work required including the procurement of materials as provided in these documents agrees that it will enter into a Contract Agreement substantially in the same form as the form attached hereto as Section I prior to commencing Work or any compensation being due and/or payable.
21.		Traffic Requirement
		Where it is applicable the Contractor must be aware of and comply with any and all Traffic and transportation regulations and rules.

Corning Natural Gas Corporation

22.		Contract
		The Company reserves the right to award to more than one bidder. Notwithstanding anything herein, the Bidder or Bidders selected by Company to perform the Services required herein and possible procurement of materials as provided herein in this document hereto agrees that it will enter into a contract agreement substantially in the form attached prior to commencing Services or any compensation being due and/or payable.
23.		Code Rule 753
		Any violations and penalties issued to the Company as a result of damage by the Contractor to properly marked underground facilities, per Code Rule 753, will be the responsibility of the Contractor.

Corning Natural Gas Corporation

SECTION I

Contract Agreement

TABLE OF CONTENTS

ARTICLE 1 – DEFINITIONS AND INTERPRETATION			4
1.1 Definition of Terms			4
1.2 Interpretation			6
1.3 Priority of Documents			7
1.4 Schedules			7
ARTICLE 2 – SCOPE AND DESCRIPTION OF WORK			7
2.1 Scope of Work			7
2.2 Discrepancies			8
2.3 Changes and Extra Work			8
2.4 Payment for Changes and Extra Work			8
ARTICLE 3 – TERM AND TERMINATION			9
3.1 Term of Agreement			9
3.2 Suspension of Work by Company			9
3.3 Termination for Cause by Either Party			10
3.4 Termination for Cause by Company			10
3.5 Consequences of Termination			11
3.6 Termination at Will by Company			12
3.7 Requirement to Complete			12
3.8 Company’s Right to Terminate			12
3.9 Termination of Abreement by Contractor			12
ARTICLE 4 – CONSTRUCTION SCHEDULE			13
4.1 Construction Schedule			13
4.2 Extension of Completion Date			13
4.3 Insufficient Rate of Progress			13
4.4 Failure to Complete on Time			13
4.5 No Bonus			14
ARTICLE 5 – PERFORMANCE STANDARDS			14
5.1 Contractor Representations			14
5.2 Independent Contractor			14
5.3 Compliance			14
ARTICLE 6 – REPRESENTATIVES			15
6.1 Company Representatives			15
6.2 Contractor Representative			15
6.3 Possession of Agreement			16
ARTICLE 7 – WORKSITE			16
7.1 Lands Provided by Company			16
7.2 Private Land			16
7.3 Site and Conduct of Work Thereon			16
7.4 Copy of Agreement			16
ARTICLE 8 – RESPONSIBILITIES OF CONTRACTOR			16
8.1 Contractor Personnel			16
8.2 Contractor Equipment			17
8.3 Superintendence by Contractor			18
8.4 Permits and Licenses			18
8.5 Safety			18
8.6 Contractor’s Financial Responsibilities and Liens			18
8.7 Performance Bond			19
ARTICLE 9 – MATERIALS			19
9.1 Materials Supplied by Contractor			19
9.2 Materials Supplied by Company			20
9.3 Storage of Materials by Contractor			20
9.4 Wastage			20

Corning Natural Gas Corporation

ARTICLE 10 – INSPECTION			20
10.1 Inspection			20
10.2 No Deemed Acceptance			21
ARTICLE 11 – DEFICIENCIES			21
11.1 Rejected Work and Materials			21
11.2 Company’s Right to Correct Deficiencies			21
11.3 Non-Waiver of Defaults			21
ARTICLE 12 – OWNERSHIP OF WORK			22
12.1 Title to Materials			22
12.2 Title to Work			22
12.3 Use of Completed Portions			22
123.4 Damage to Work			22
ARTICLE 13 – RIGHTS OF COMPANY			22
13.1 Separate Contracts			22
13.2 Review of purchase Orders			23
ARTICLE 14 – COMPLETION AND ACCEPTANCE			23
14.1 Completion of Work			23
14.2 Final Inspection by Company			23
14.3 Partial Acceptance of Work			23
ARTICLE 15 – GUARANTEE OF WORK			24
15.1 Guarantee Period			24
15.2 Correction of Deficiencies Pursuant to Guarantee			24
15.3 Failure to Correct			24
ARTICLE 16 – FINANCIAL MATTERS			24
16.1 Compensation			24
16.2 Invoices			25
16.3 Progress Payments			25
16.4 Withholdings			25
16.5 Final Progress Payment			26
16.6 Release of Amounts Withheld			26
16.7 Partial Release of Amounts Withheld			26
16.8 Removal of Liens			27
16.9 Set-Off			27
16.10 Taxes			27
ARTICLE 17 – AUDIT			28
17.1 Audit Right			28
17.2 Maintenance of Records			28
17.3 Audit			28
17.4 Access to Facilities and Records			28
17.5 Audit Adjustments			28
17.6 Cost of Audit			28
17.7 Subcontractors			29
ARTICLE 18 – ASSIGNMENT AND SUBCONTRACTING			29
18.1 Assignment by Company			29
18.2 Assignment by Contractor			29
18.3 Subcontractors			29
ARTICLE 19 – LIABILITIES AND INDEMNITIES			30
19.1 Acts of Contractor and Contractor Personnel			30
19.2 Specific Claims			30
19.3 Compliance and Regulations			30
19.4 Patents and Intellectual Property Indemnity			30
19.5 Company Right to Defend			30
ARTICLE 20 – INSURANCE			31
20.1 Insurance Required of Contractor			31
20.2 No Limit of Liability			31
20.3 Notice to Company			31
20.4 Company Group as Additional Insureds			32
20.5 Subcontractors’ Insurance			32

Corning Natural Gas Corporation

20.6 Deductibles			32
20.7 Certificates of Insurance			32
20.8 Right of Company to Insure			32
ARTICLE 21 – FORCE MAJEURE			32
21.1 Definition			32
21.2 No Liability			33
21.3 Notice			33
ARTICLE 22 – GENERAL			33
22.1 Entire Agreement			33
22.2 No Waiver			33
22.3 Notices			33
22.4 Confidential Information			34
22.5 Public Announcements			34
22.6 Anti-Corruption			34
22.7 Severability of Provisions			35
22.8 Drafting			35
22.9 Time of Essence			35
22.10 Governing Law			35
22.11 Survival			36
22.12 Counterpart and Facsimile Execution			36

Corning Natural Gas Corporation

CONTRACT AGREEMENT

THIS AGREEMENT made as of the AWARD DATE ,

BETWEEN:

CORNING NATURAL GAS CORPORATION, a body corporate,
registered and carrying on business in accordance with the laws of New York
(hereinafter called the “Company”)

OF THE FIRST PART

- and -

CONTRACTOR’S NAME , a body corporate, incorporated under the laws
of CONTRACTOR’S STATE INCPORPORATION , having an office in
CONTRACTOR’S LOCATION , (hereinafter called the “Contractor”)

OF THE SECOND PART

WITNESSETH:

The Parties agree as follows:

ARTICLE 1
DEFINITIONS AND INTERPRETATION

1.1		Definition of Terms
		In this Agreement, the meaning of the following words and phrases shall be as follows:

	a)		“ Addenda ” means any instructions in writing issued by Company relating to the Work and intended to amend or add to this Agreement.
	b)		“ Affiliate ” means a company or person which controls or is controlled by a Party, or which controls or is controlled by a company or person which controls such Party, where control means the power to direct or cause the direction of the management and policies of the other person, whether directly or indirectly, through one or more intermediaries or otherwise, and whether by virtue of the ownership of shares or other equity interests, the holding of voting rights or contractual rights, or otherwise.
	c)		“ Agreement ” means the body of this Agreement, all schedules to this Agreement, all renewals of and Addenda to this Agreement, and every CWO.
	d)		“ Builders’ Lien Act ” means the Builders’ Lien Act or other similar legislation that is enacted and in force in the state where the Worksite is located.
	e)		“ Change ” means any change, variation, supplement or revision to the Work or the Extra Work, other than a Minor Change.
	f)		“ Claim ” means any and all liabilities, obligations, losses, damages, royalties, penalties, claims, demands, actions, suits, judgments, costs, expenses and disbursements, whether founded or unfounded, and includes court costs, legal fees (on a solicitor and own client basis) and expenses and costs of investigation.
	g)		“ Company Group ” means Company, its Affiliates, and all Company Personnel.

Corning Natural Gas Corporation

	h)		“ Company Material and Equipment ” means materials and process equipment purchased and supplied by Company and delivered to Contractor for incorporation into the Work in accordance with Schedule “G” of this Agreement or pursuant to a CWO.
	i)		“ Company Personnel ” means the directors, officers, employees, contractors (excluding Contractor), agents, servants and Invitees of Company, and each Affiliate of Company.
	j)		“ Company Representative ” has the meaning set forth in Article 6.1.
	k)		“ Construction Schedule ” has the meaning set forth in Article 4.1.
	l)		“ Contract Price ” means the total sum payable by Company to Contractor for the completion of the Work in strict accordance with the provisions of this Agreement.
	m)		“ Contractor Equipment ” means any equipment furnished by Contractor from time to time which is required to complete the Work but which does not become a part of the completed Work.
	n)		“ Contractor Group ” means Contractor, its Affiliates, and all Contractor Personnel.
	o)		“ Contractor Personnel ” means the directors, officers, employees, Subcontractors, agents, servants and Invitees of Contractor, and of each Affiliate and Subcontractor of, and each joint venture with, Contractor.
	p)		“ Contractor Representative ” has the meaning set forth in Article 6.2.
	q)		“ CWO ” means any Change Work Order in a form prepared by Company, completed by Contractor, and executed by both Parties which specifies a Change, or which initiates any Extra Work.
	r)		“ Equipment ” means machinery, equipment, facilities, drilling tools, tools, supplies, special tools, apparatus, utilities, instruments, transportation, spare parts and other items of whatever nature used directly or indirectly for Work, irrespective of ownership.
	s)		“ Extra Work ” means the performance of any work or compliance with any other requirements, other than a Change, which is not contemplated in the Work as described in this Agreement.
	t)		“ Inspector ” means a person authorized in writing by Company to inspect the Work or any part of it.
	u)		“ Invitee ” means any person not a Party to this Agreement whose presence is at the invitation of a Party to this Agreement as a guest and not under employment, retainer, contract or subcontract.
	v)		“ Minor Change ” means an alteration to a portion of Work which is consistent with the intent of this Agreement and the anticipated development and refinement of specifications and drawings, and which does not unreasonably alter portions of Work already completed or affect the schedule for, or cost of, completing the remaining portions of Work.
	w)		“ Parties ” means the parties to this Agreement, and “ Party ” means any one of them.
	x)		“ Progress Payment ” means the amount payable by Company to Contractor based on completion of a portion of the Work as specified in Schedule “H”.
	y)		“ Rates ” means the charges, rates, lump sum payments and reimbursable costs to be paid to Contractor by Company from time to time for Extra Work or Changes, as set out in Schedule “B”, and as may be varied from time to time upon request by Contractor and pursuant to a CWO.

Corning Natural Gas Corporation

	z)		“ Regulations ” means all statutes, laws, regulations, rules, orders, directives and statutory instruments in effect from time to time and made by governments or governmental boards or agencies having jurisdiction over the subject matter of this Agreement or any CWO.
	aa)		“ Subcontract ” means any contract between Contractor and any other person for the performance of Work or any part thereof, including any joint venture and partnership agreements relating thereto.
	bb)		“ Subcontractor ” means any person, firm or corporation having a contract with Contractor for the execution of a part or parts of the Work included in this Agreement, including any person, firm or corporation furnishing material called for in this Agreement and manufactured to a special design according to the specifications and drawings and including any partners and associates of Contractor in any joint venture, partnership or like agreement, but not including any person, firm or corporation that merely furnishes material not so manufactured.
	cc)		“ Subcontractors ” means subcontractors, sub-suppliers and sub-vendors of a person, in any tier.
	dd)		“ Work ” means the construction, delivery and installation of a booster compressor by Contractor in strict accordance with this Agreement and each CWO, and includes the entirety of the materials, consumables, equipment, personnel, services, operations and obligations of Contractor required to perform such Work.
	ee)		“ Worksite ” means the location or locations designated by Company where Work is to be performed.

      1.2 Interpretation

          In this Agreement and each CWO, unless specifically stated otherwise:

	a)		“herein”, “hereby”, “hereunder”, “hereof” and similar expressions are references to this Agreement and not to any particular Article, Exhibit or Schedule;
	b)		“Article”, “Section”, “subsection”, “Clause”, “clause”, “Schedule”, “schedule”, “Exhibit” and “exhibit” are references to an Article, Section, Schedule or Exhibit to this Agreement;
	c)		“Person”, “person” or “persons” shall include individuals, corporations, partnerships, associations, bodies politic and other entities;
	d)		“including” means “including without limitation”;
	e)		“$”, “dollars” or other sums of money means United States currency, unless specifically stated otherwise;
	f)		words importing the singular shall include the plural and vice versa, and words importing the masculine gender shall include the feminine and neuter genders;
	g)		headings are for convenience of reference only and shall not affect the construction or interpretation of this Agreement or any CWO;
	h)		where a word or phrase is defined, its derivatives or other grammatical forms have a corresponding meaning;
	i)		where a word or phrase appears in quotations or parenthesis or both, that word or phrase is deemed to be a defined word or phrase and gets its meaning from the words or phrases that immediately precede or follow that word or phrase;
	j)		references to any Regulation include all of amendments and re-enactments of such Regulation; and

Corning Natural Gas Corporation

1.3

Priority of Documents

	a)		In the event of any inconsistency or conflict between the body of this Agreement and any Schedule, the body of this Agreement shall prevail. In the event of a conflict between any of the Schedules, precedence shall be determined by the order in which the Schedules are listed in Article 1.4, in descending order.
	b)		In the event of a conflict between the body of this Agreement and a term contained in a CWO, the terms of this Agreement shall govern. In the event of a conflict between an Addenda or CWO and a Schedule hereto, the Addenda or CWO shall govern. Where a conflict or conflicts exist between any Addenda or CWOs, the Addendum or CWO subsequent in time shall govern.
	c)		The fact that any of Schedule to this Agreement or any CWO specifies Work or acts to be done in more particularity or shall require more Work or acts to be done in connection with any particular operation than is required by another of the Schedules or CWOs, or shall broaden the obligations of either of the Parties over the obligations expressed in another of the Schedules or CWOs, is not and shall not be considered a conflict. It is the intention of the Parties that the body of this Agreement, the Schedules and any CWOs and their provisions shall be cumulative.

1.4		Schedules
		The following schedules are attached to, form part of, and are incorporated into this Agreement:

Schedule “A” — Scope of Work, Specification and Drawings
Schedule “B” — Remuneration
Schedule “C” — Construction Schedule
Schedule “D” — Contractor Personnel
Schedule “E” — Contractor Equipment
Schedule “F” — Contractor’s Subcontractors and Vendors
Schedule “G” — Certificate of Final Payment and Release

ARTICLE 2
SCOPE AND DESCRIPTION OF WORK

2.1		Scope of Work
		Contractor shall provide all Contractor Personnel, Contractor Equipment, materials, supplies, and supervision required for the proper execution of the Work in accordance with this Agreement. Contractor shall perform all Work shown on the drawings and described in the specifications and all other things necessary to complete the Work. One complete set of all specifications and drawings shall be maintained by Contractor at the Worksite and shall be available to Company at all times.
2.2		Discrepancies
		Company shall have the right to determine the meaning and intention of any portion of Schedule “A”. Where the same may be thought to be obscure or in dispute, Company shall have the right to correct any errors or omissions therein when corrections are necessary to the proper fulfilment of the intent of the scope of Work, specifications or drawings. Company’s decision thereon shall be final and conclusive. Any discrepancies found between the specifications and drawings and any errors or omissions in such specifications or drawings, in each case as set out in Schedule “A” hereto, shall immediately be reported to Company, and Company shall promptly correct such discrepancies, errors or omissions in writing.

Corning Natural Gas Corporation

2.3

Changes and Extra Work

	a)		Company may, through a written CWO, make Changes and require the performance of Extra Work from time to time as it may deem necessary or advisable.
	b)		Contractor shall not undertake or make any Change or do any Extra Work under this Agreement unless it has received written authorization from Company Representative.

2.4

Payment for Changes and Extra Work

	a)		If a Change or Extra Work is reasonably expected to result in an increase or a decrease in the cost to Contractor in comparison with what its cost would have been had no change been made, the Contract Price will be equitably adjusted on account thereof.
	b)		If a Change or Extra Work is required at the request of Contractor, Contractor shall prepare and submit to Company a written valuation of the cost of the Change or Extra Work.
	c)		If a Change or Extra Work is required at the request of Company, Contractor shall prepare and submit to Company a written valuation of the cost of the Change or Extra Work.
	d)		Contractor shall only be entitled to compensation in addition to the Contract Price for Changes or Extra Work if:

	i.		prior to the performance of the Change or Extra Work, Contractor has received a CWO signed by the Company Representative authorizing the Change or Extra Work; and
	ii.		an inspection determines that such Change or Extra Work was not caused by a negligent act or omission of Contractor or any Contractor Personnel or by faulty Work furnished by Contractor or any of the Parties.

e)

For Changes and Extra Work when additional compensation is specified in a CWO, Contractor shall receive compensation on the following basis:

	i.		a lump sum or unit price (based on a blanket contract) shall be agreed upon in writing between Company and Contractor prior to the commencement of the Change or Extra Work; or
	ii.		if a lump sum or unit price cannot be agreed upon, Company shall pay to Contractor an amount equal to the sum of:

	A.		charges for Contractor Personnel and Contractor Equipment actually employed in the implementation of such Changes or Extra Work, as substantiated by timesheets approved by the Company Representative, at the Rates specified in Schedule “B” hereto; plus
	B.		the actual net cost of materials furnished by Contractor, provided that such materials were specifically authorized in the CWO and the actual use thereof has been verified by the Company Representative, as substantiated by original vendor’s invoice and verification in writing by the Company Representative of the use of such materials; plus
	C.		charges for services subcontracted by Contractor for the performance or completion of the Change or Extra Work in accordance with the terms of this Agreement, provided that both the Subcontractor and the terms of payment to the Subcontractor have been approved by Company Representative; plus

Corning Natural Gas Corporation

D.

a charge for overhead and profit for the totals of the items set out in subsections (B) and (C) of this Article, in accordance with Schedule “B” hereto.

(iii)

Reports specifying the costs of the Change or Extra Work performed each day must be submitted to Company in a format acceptable to Company on each succeeding day after such Change or Extra Work is carried out. The submission to, or acceptance or approval by Company, of such Work cost records shall not at any time be deemed to be an admission that the Work is properly chargeable as a Change or Extra Work.

ARTICLE 3
TERM AND TERMINATION

3.1

Term of Agreement

Contractor shall commence the Work any time after June 1, 2008 (the “ Commencement Date ”) and continue to complete the same as soon as reasonably possible. The entirety of the Work shall be completed to the satisfaction of Company, including the installation of all appurtenances and the performance of clean-up as specified in the terms of this Agreement, and the Work shall in all respects be ready for its intended use, not later than November 3, 2008 (the “ Completion Date ”). This Agreement shall continue in force until the Work is completed in accordance with the terms of this Agreement and to the reasonable satisfaction of Company, unless terminated earlier pursuant to the terms hereof.

3.2

Suspension of Work by Company

(a)

Company may at any time suspend the Work, or any portion thereof, for any reason by giving Contractor written notice of suspension. Except where required to comply with Regulations or Policies, Contractor shall cease all Work on the date specified in the notice and secure the Work and the equipment. Contractor shall resume Work immediately upon receipt of written notice of Company to resume Work.

(b)

If the Work is suspended pursuant to Article 3.2, and such suspension is not due to Force Majeure, Company shall pay to Contractor for such shutdown an amount computed on the following basis:

	(i)		The direct hourly labor cost of all workers who are ready, willing and able to work, but are idle as a result of such suspension, for each day or part thereof that such workers are idle up to the time Contractor is required by Company to maintain only a skeleton crew; and after such request for reduction in manpower, the direct labor costs for such skeleton crew as Company may request to be maintained for ready resumption of the Work; all such labor costs to be determined under the provisions of Article 2.4(d)(ii) hereof; and
	(ii)		The hourly cost of Contractor Equipment that is available for the Work but is idle as a result of such suspension, for each day or part thereof such Contractor Equipment is shutdown, calculated at one-half of the Contractor Equipment costs set forth in Article 2.4(d)(ii) hereof.

Company shall not, however, be required to pay Contractor such amount unless the workers and Contractor Equipment for such Work that has been suspended are actually standing-by idle. Contractor covenants and agrees to the best of its ability to use any Contractor Personnel and Contractor Equipment that are standing by for the performance of other parts of the Work or for Changes to the Work or Extra Work which may be required under this Agreement.

Section I - Page 9

Corning Natural Gas Corporation

	(c)		Contractor acknowledges that delays that may arise by reason of the nature of the Work have been taken into account and are compensated for in the Contract Price and payments for any CWO, and that in no circumstances shall Contractor be entitled to recover from Company any payment for any damages suffered by Contractor as a result of such suspension.
	(d)		At any time after receiving notice of a total or partial shutdown, Company may require Contractor to work part days, or shutdown the Work or any part thereof partially or completely.

3.3

Termination for Cause by Either Party

Either Party shall have the right to terminate this Agreement at any time immediately upon notice to the other Party, in the event that:

	(a)		the other Party becomes insolvent;
	(b)		dissolution, winding-up, bankruptcy, insolvency, liquidation or similar proceedings are commenced or are proposed in respect of the other Party;
	(c)		the other Party takes the benefit of any bankruptcy or insolvency legislation or files any plan of arrangement there under; or
	(d)		a receiver is appointed for the other Party or any of its property.

3.4

Termination for Cause by Company

Company shall have the right to terminate this Agreement for cause, immediately upon notice to Contractor. Without limiting Company’s right to cite other reasons or occurrences as justification of termination for cause, each of the following shall constitute grounds for termination for cause:

	(a)		Contractor is not able to commence Work on the Commencement Date for any reason other than Company’s default or Force Majeure;
	(b)		Contractor abandons any Work required pursuant to this Agreement, other than pursuant to an event of Force Majeure;
	(c)		Company is dissatisfied with the performance of Contractor with respect to the Work for any justified reason, including unreasonably slow progress on the part of Contractor or Contractor’s failure to carry out the Work in a competent, skilful and workmanlike manner or in accordance with its obligations under this Agreement, and Contractor does not take steps to remedy the cause of such dissatisfaction within five (5) days of written notice from Company specifying the basis for the dissatisfaction;
	(d)		Contractor fails to supply sufficient:

	(i)		qualified, skilled, competent, careful and efficient Contractor Personnel;
	(ii)		serviceable Contractor Equipment in good operating condition; or
	(iii)		materials of proper quality for the due performance of the Work under this Agreement;

	(e)		any damage to, defect in or failure, loss or breakdown of any item of Contractor Equipment results in the suspension or interruption of Work for a period of two (2) successive days during which Contractor does not make every reasonable effort to correct the cause of the interruption;
	(f)		Contractor fails to observe any material provision of this Agreement, or it is apparent to Company that Contractor will not be able to complete Work required pursuant to this Agreement on or before the Completion Date;

Section I - Page 10

Corning Natural Gas Corporation

(g)

Contractor has unilaterally interrupted the execution of Work for more than two (2) days without fully justifying such interruption to Company’s satisfaction;

(h)

Contractor fails to prosecute the Work, or any part thereof, with such speed as in the opinion of Company is necessary to complete the same in accordance with the Construction Schedule;

(i)

Contractor has failed to maintain the insurance policies required by this Agreement;

	(j)		Contractor has failed to comply with any Policy;
	(k)		there is a change of control of Contractor or Contractor sells or assigns substantially all of its business or its assets or;
	(l)		Contractor fails to make payment for services or materials in accordance with the terms of an applicable contract; or
	(m)		Contractor has failed to comply with or has violated the terms and conditions of any Regulation or Governmental authorization.

3.5

Consequences of Termination

	(a)		If Company terminates this Agreement pursuant to Article 3.3 or Article 3.4, Company may complete the Work by whatever methods it deems expedient, with or without the assistance of third parties, without incurring any liability to Contractor. In such cases, Company shall have the right to take possession of and use or permit others to use all or any part of the materials, the Contractor Equipment (including appliances thereon), supplies and property of every kind provided by Contractor for the purpose of completing the Work.
	(b)		Contractor shall, if requested by Company, assign to Company or to such other person or persons as Company may designate any Subcontract or equipment rental agreement.
	(c)		Contractor shall pay Company for all actual direct costs reasonably necessitated by the termination that would not otherwise have been incurred, including costs incurred in obtaining re-performance of all portions of the Work that are incomplete or defective and in obtaining performance of the remaining Work by a third party or by Company. If Company performs any such re-performance or remainder of the Work or any part thereof, the cost thereof shall be deemed to include reasonable overhead of Company in supervising or carrying on the Work so performed and such other costs and damages as Company may suffer by reason of Contractor’s default.
	(d)		The remedies of Company set out in this Article 3.5 are in addition to, and not in substitution for, any other remedies available to Company at law or in equity. The action of Company in terminating this Agreement and requiring Contractor to stop the performance of the Work or any part thereof shall in no way vitiate this Agreement or affect the obligations, liabilities and responsibilities of Contractor. Company may exercise any remedy under this Agreement or otherwise at law or in equity contemporaneously one with the other, or in such priority as Company may see fit, and may exercise any one or more or all of such remedies at such time and in such priority and without prejudice to its right to any other remedy as Company may see fit.

3.6

Termination at Will by Company

	(a)		If Company determines, in its sole discretion and for any reason whatsoever, that it is in the best interest of Company to do so, it shall have the right to terminate this Agreement by giving not less than five (5) days notice in writing to Contractor to that effect.
	(b)		In such event, the effective date of such termination shall be the date upon which such notice period expires. If Contractor has begun operations under this Agreement,

Section I - Page 11

Corning Natural Gas Corporation

			Contractor shall cease such operations by the effective date of termination. Contractor shall cease such operations by the effective date of termination. Contractor shall immediately cease placing orders for equipment and materials upon receipt of such notice unless Company approves such orders in writing.
	(c)		In the event of any such termination, neither Party shall be liable one to the other with respect to this Agreement, except that each Party shall remain liable with respect to all obligations created or arising under this Agreement with respect to Work done prior to the effective date of termination and Company shall compensate Contractor for all Work performed and materials furnished prior to the time of such cancellation and termination, by paying the total of:

	(i)		A sum based on the actual amount of Work completed from which shall be deducted all payments previously made to Contractor; and
	(ii)		A sum equal to the cost (including freight and haulage charges) of all Contractor furnished materials on hand and unused by Contractor at the time of such cancellation and termination, and materials ordered but not on hand and for which Contractor has paid or is firmly obligated to pay, none of which has been included in previous payments. Such material shall, upon payment thereof by Company, become the property of Company;

Subject to any holdbacks required pursuant to the Builders’ Lien Act and subject to the terms and conditions of this Agreement as to payment and deductions.

3.7

Requirement to Complete

Notwithstanding the termination of this Agreement pursuant to this Article 3, Company shall have the right to require Contractor to complete any phase of the Work to any degree of completion required by Company, whether before or after the effective date of termination. Any Work so required to be completed shall be paid for under this Agreement as if such termination had not occurred, and shall be made subject to all the provisions of this Agreement. If such Work is performed after the effective date of termination, Contractor will be paid for such Work in accordance with Article 2.4(d)(ii).

3.8

Company’s Right to Terminate

The right to terminate given to Company in Article 3.4 and Article 3.6 may be exercised in the sole discretion of Company. Nothing contained herein shall abridge or alter any rights or privileges given to Company in any other portion of this Agreement.

3.9

Termination of Agreement by Contractor

Contractor shall have the right to terminate this Agreement when an Order of any Court or other public authority, other than Company, causes the Work to be stopped or suspended for at least thirty (30) days, and such stoppage or suspension occurs through no act or fault of Contractor or any member of Contractor Group. Contractor shall receive from Company payment for the Work performed, expenses incurred, and losses sustained in respect of materials up to the time of termination. Company shall not be liable for any loss of profits or damages incurred by Contractor as a result of such stoppage or suspension. Such termination shall be effective upon Contractor giving notice thereof.

ARTICLE 4
CONSTRUCTION SCHEDULE

4.1

Construction Schedule

Contractor shall submit to Company for approval a construction schedule and plan of operation (the “ Construction Schedule ”). The Construction Schedule, upon approval by Company, shall

Section I - Page 12

Corning Natural Gas Corporation

be attached to this Agreement as Schedule “C”, and shall be incorporated into and made a part of this Agreement. The Construction Schedule shall not be changed without the prior approval of Company.

4.2

Extension of Completion Date

The Completion Date may be extended if:

	(a)		Company authorizes a Change or Extra Work and a time extension is specified in the relevant CWO;
	(b)		the Work is suspended as provided for in Article 3.2 hereof;
	(c)		the Work is delayed as a result of an event of Force Majeure;
	(d)		a delay occurs in the progress of the Work as a result of the negligence of Company or Company Personnel;
	(e)		a delay occurs as a result of use by Company of a portion of the Work as provided for in Article 12.3 hereof; or
	(f)		a delay occurs by reason of the failure of delivery of any Company Material and Equipment.

A claim for extension of the Completion Date shall only be considered when submitted by Contractor to Company in writing within seven (7) days of the occurrence of the delay on which the claim is based; provided, however, that in the case of a continuing cause of delay only one (1) claim shall be necessary. Company will make the final decision on all requests for extension of time. The granting of additional time to complete the Work pursuant to this Article 4.2 shall not give Contractor grounds to make any claims whatsoever for additional payment, save on the grounds set out in sub-clauses (b) and (e) hereof, in which case payments shall be made as specified in Article 3.2 and 12.3 respectively, and in sub-clause (d) hereof in which case payment shall be agreed upon by the Parties in writing.

4.3

Insufficient Rate of Progress

If (a) Contractor or any Contractor Personnel is responsible for a delay in the progress of the Work, or fails to complete any phase of the Work within the time limits prescribed in the Construction Schedule; or (b) in Company’s opinion the rate of progress of the Work is insufficient to enable the whole of the Work, or any part or parts thereof to be completed within the time or times specified for such completion in the Construction Schedule, then Contractor shall work such overtime, acquire and use for prosecution of the Work such necessary additional labor and equipment, and perform all such other acts as may be necessary to expedite the progress of the Work to achieve completion of the Work or any portion thereof in accordance with the Construction Schedule. Contractor shall not be entitled to any extra payment by reason of taking such steps.

4.4

Failure to Complete on Time

If Contractor fails to complete the Work within the time required by this Agreement, Company, in addition to any other rights and remedies it may have, shall be entitled to deduct from any payments due to Contractor the additional costs to Company of Work incurred as a result of Contractor’s failure to complete on time.

4.5

No Bonus

There shall be no bonus payable to Contractor for completion of the Work prior to the Completion Date.

Section I - Page 13

Corning Natural Gas Corporation

ARTICLE 5
PERFORMANCE STANDARDS

5.1

Contractor Representations

Contractor represents and warrants that:

	(a)		it has had an opportunity to examine, and has carefully examined, this Agreement and that it has fully acquainted itself with the general topography, soil structure, subsurface conditions, obstructions and all other conditions pertaining to the Work, and the Worksite;
	(b)		it has made all investigations essential to a full understanding of the difficulties which may be encountered in performing the Work, as well as a full understanding and anything else in any of this Agreement or in any representation, statements or information made or furnished by Company or its representatives;
	(c)		it will, regardless of any such conditions pertaining to the Work, or the Worksite, complete the Work for the Contract Price stated in these Contract Documents and shall assume full responsibility for any such conditions pertaining to the Work, the Worksite and all risks in connection therewith;
	(d)		it has authority to do business in the state or states in which the Worksite is located;
	(e)		it is fully qualified to perform the Work and shall perform the Work in accordance with the terms of this Agreement, all applicable Regulations and Policies, and to the best standards of engineering and workmanship established within the petroleum industry; and
	(f)		it shall cooperate at all times with the Company Representatives, the Inspectors and all Company Personnel.

5.2

Independent Contractor

Contractor is an independent Contractor and the Work shall be carried out by Contractor under its own direction and superintendence and at its own risk. Contractor has full power and authority to select the means, methods and manner of performing the Work, being responsible to Company for all materials delivered to Contractor from Company and for the results contracted for; and upon completion, Contractor agrees to deliver the Work complete and undamaged in accordance with this Agreement.

5.3

Compliance

	(a)		All Work performed shall comply with the Regulations and further, Contractor agrees to abide by the Policies.
	(b)		Contractor shall observe and comply with all Regulations, whether imposed upon Company as owner or Contractor as construction and testing contractor in any manner howsoever relating to the Work.
	(c)		Company shall furnish, as necessary for the execution of the Work, additional instructions, by means of drawings or otherwise. All such additional instructions shall be consistent with and form part of this Agreement. In the event that any portion of the Work requires additional instructions Contractor shall secure the same from Company before proceeding with such Work and the Work shall be executed in conformity therewith. In giving such additional instructions, Company shall have the authority to require Minor Changes to be made without additional charge to Company, provided that no additional material costs have been incurred by Contractor.
	(d)		Contractor shall cooperate fully with Company and with other contractors and subcontractors performing other Work at or adjacent to the Worksite and shall plan and

Section I - Page 14

Corning Natural Gas Corporation.

coordinate the Work with that of other contractors and subcontractors so as to prevent interference with their operations.

ARTICLE 6
REPRESENTATIVES

	(a)		Prior to commencement of the Work, Company shall designate one or more representatives (each a “Company Representative” and collectively the “Company Representatives”) who shall be authorized to act on Company’s behalf for purposes of this Agreement. Company shall notify Contractor of all Company Representatives. Company may change Company Representatives at any time. A Company Representative, may delegate to other persons certain aspects of his authority he deems appropriate.
	(b)		A Company Representative will observe the Work in progress on behalf of Company. A Company Representative will have the authority to stop the Work whenever such stoppage may be necessary in his opinion, to ensure the proper execution of the Work in accordance with the provisions of this Agreement.
	(c)		If at any time, a Company Representative is of the opinion that there exists a danger to life or property, he may order Contractor to stop the Work or to take such remedial measures as he considers necessary and Contractor shall obey such orders immediately.
	(d)		Contractor shall obey, perform and comply with Company Representative’s orders or instructions with respect to the Work or concerning the conduct thereof promptly, efficiently and to the satisfaction of Company Representative. However, if Contractor is of the opinion that such orders or instructions are not authorized under the provisions of this Agreement, Contractor shall so notify Company Representative in writing before proceeding to carry them out. If Contractor does not so notify Company Representative in writing Contractor shall not claim, at any time thereafter, that the orders or instructions were not authorized. Nevertheless, the giving of such notice to Company Representative shall not relieve Contractor of its obligations to carry out and obey such orders and instructions.

6.2

Contractor Representative

Contractor shall, before commencement of the Work, designate one senior executive as its representative (the “ Contractor Representative ”), who shall be on call at all times and be made available to Company if, as and when required by Company. Contractor may change the Contractor Representative by notice to Company. Company shall have the right to approve the Contractor Representative and any replacement thereof, and any Contractor Representative not approved by Company shall not be recognized by Company for purposes of this Agreement.

6.3

Possession of Agreement

Both the Company Representatives and the Contractor Representative shall be in possession of an updated copy of this Agreement, including all Schedules and every CWO, at all times.

ARTICLE 7
WORKSITE

7.1

Lands Provided by Company

Company shall provide the lands upon which the Worksite is located.

Section I - Page 15

Corning Natural Gas Corporation

7.2

Private Land

It shall be Contractor’s responsibility to ascertain the boundaries within which the Work must be confined. Contractor shall not enter upon lands other than those provided by Company, for any purpose, without obtaining prior written permission of the landowners and occupiers. Contractor shall not enter upon lands owned by others on which Company has leases, easements, rights-of-entry or other surface rights without having received the written authorization of Company for such entry.