Document:

EXHIBIT
4.2

 

	
  COMMON STOCK

  	
   

  	
  COMMON STOCK

  
	
  NUMBER

  	
   

  	
  SHARES

  

 

[LOGO]

 

INCORPORATED UNDER THE
LAWS OF THE STATE OF MINNESOTA

 

 

CUSIP 584639 40 5

see reverse for certain definitions

 

THIS CERTIFIES THAT

 

 

is the record holder of

 

FULLY PAID AND NON-ASSESSABLE SHARES OF THE
COMMON STOCK, $.01 PAR VALUE PER SHARE, OF

 

MEDICALCV, INC.

 

transferable on the books of the Corporation by the
holder hereof in person or by duly authorized attorney upon surrender of this
certificate properly endorsed. This certificate is not valid unless
countersigned by the Transfer Agent and registered by the Registrar.

 

WITNESS the facsimile signatures of the Corporation’s duly
authorized officers.

 

Dated:

 

	
  SECRETARY

  	
   

  	
  CHIEF EXECUTIVE
  OFFICER

  

 

COUNTERSIGNED AND
REGISTERED:

REGISTRAR & TRANSFER
COMPANY

TRANSFER AGENT AND REGISTRAR

 

BY

 

AUTHORIZED SIGNATURE

 

 

THE ARTICLES OF INCORPORATION OF THE CORPORATION GRANT
TO THE BOARD OF DIRECTORS THE POWER TO ESTABLISH MORE THAN ONE CLASS OR SERIES
OF SHARES AND TO FIX THE RELATIVE RIGHTS AND PREFERENCES OF ANY SUCH DIFFERENT
CLASS OR SERIES, THE CORPORATION WILL FURNISH TO ANY SHAREHOLDER UPON REQUEST
AND WITHOUT CHARGE A FULL STATEMENT OF THE DESIGNATIONS, PREFERENCES,
LIMITATIONS AND RELATIVE RIGHTS OF THE SHARES OF EACH CLASS OR SERIES AUTHORIZED
TO BE ISSUED, SO FAR AS THEY HAVE BEEN DETERMINED, AND THE AUTHORITY OF THE
BOARD TO DETERMINE THE RELATIVE RIGHTS AND PREFERENCES OF SUBSEQUENT CLASSES OR
SERIES.

 

The following abbreviations, when used in the
inscription on the face of this certificate, shall be construed as though they
were written out in full according to applicable laws or regulations:

 

	
  TEN COM

  	
   

  	
  as tenants in common

  
	
  TEN ENT

  	
   

  	
  as tenants by the
  entireties

  
	
  JT TEN

  	
   

  	
  as joint tenants with
  right of survivorship and not as tenants in common

  
	
  COMM PROP

  	
   

  	
  as community property
  (until age          )

  
	
  UNIF GIFT MIN ACT

  	
   

  	
            Custodian
             under Uniform
  Gifts to Minors Act

  
	
   

  	
   

  	
  (Cust)                
  (Minor)                                                        (State)

  
	
  UNIF TRF MIN ACT

  	
   

  	
            Custodian
  (until age         ) under
  Uniform Transfers to Minors Act

  
	
   

  	
   

  	
  (Cust)                (Minor)                                                              
  (State)

  

 

Additional abbreviations may also be used though not in the above list.

 

FOR VALUE RECEIVED,                     
hereby sell, assign and transfer unto

 

PLEASE INSERT SOCIAL
SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

PLEASE PRINT OR TYPEWRITE
NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE

                                                                                                                                           
Shares of the capital stock represented by the within Certificate, and do
hereby irrevocably constitute and appoint

                                                                                                                                           
Attorney to transfer the said stock on the books of the
within-named Corporation with full power of substitution in the premises.

 

	
  Dated

  	
   

  

 

	
  X

  	
   

  
	
  X

  	
   

  

 

NOTICE: THE SIGNATURE(S)
TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN UPON THE FACE OF
THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY
CHANGE WHATSOEVER.

 

 

IMPORTANT: ALL SIGNATURES
MUST BE GUARANTEED IN THE SPACE PROVIDED BELOW BY A FIRM THAT IS A MEMBER OF A
NATIONAL SECURITIES EXCHANGE OR OF THE NATIONAL ASSOCIATION OF SECURITIES
DEALERS, INC. OR BY A COMMERCIAL BANK OR TRUST COMPANY LOCATED IN THE UNITED
STATES.

 

Signature(s) GuaranteedExhibit 4.1

 

THE EMPIRE
DISTRICT GAS COMPANY

 

$55,000,000

 

First Mortgage
Bonds, 6.82% Series due 2036

 

 

 

BOND PURCHASE
AGREEMENT

 

Dated June 1,
2006

 

 

 

Table of
Contents

	
  SECTION

  	
   

  	
  HEADING

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.

  	
   

  	
  AUTHORIZATION OF BONDS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
   

  	
  SALE AND PURCHASE OF BONDS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
   

  	
  CLOSING

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
   

  	
  CONDITIONS TO CLOSING

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.1

  	
   

  	
  Representations and Warranties

  	
   

  	
  2

  
	
  Section 4.2

  	
   

  	
  Performance; No Default

  	
   

  	
  2

  
	
  Section 4.3

  	
   

  	
  Compliance Certificates

  	
   

  	
  2

  
	
  Section 4.4

  	
   

  	
  Opinions of Counsel

  	
   

  	
  3

  
	
  Section 4.5

  	
   

  	
  Purchase Permitted By Applicable Law, Etc.

  	
   

  	
  3

  
	
  Section 4.6

  	
   

  	
  Sale of Other Bonds

  	
   

  	
  3

  
	
  Section 4.7

  	
   

  	
  Payment of Special Counsel Fees

  	
   

  	
  3

  
	
  Section 4.8

  	
   

  	
  Private Placement Number

  	
   

  	
  3

  
	
  Section 4.9

  	
   

  	
  Changes in Corporate Structure

  	
   

  	
  3

  
	
  Section 4.10

  	
   

  	
  Completion of Acquisition

  	
   

  	
  4

  
	
  Section 4.11

  	
   

  	
  Funding Instructions

  	
   

  	
  4

  
	
  Section 4.12

  	
   

  	
  Letter of Acknowledgment

  	
   

  	
  4

  
	
  Section 4.13

  	
   

  	
  Documents Required by Mortgage; Basis for
  Authentication

  	
   

  	
  4

  
	
  Section 4.14

  	
   

  	
  Recordings

  	
   

  	
  4

  
	
  Section 4.15

  	
   

  	
  Proceedings and Documents

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
   

  	
  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.1

  	
   

  	
  Organization; Power and Authority

  	
   

  	
  5

  
	
  Section 5.2

  	
   

  	
  Authorization, Enforceability, Etc.

  	
   

  	
  5

  
	
  Section 5.3

  	
   

  	
  Disclosure

  	
   

  	
  6

  
	
  Section 5.4

  	
   

  	
  Affiliates

  	
   

  	
  6

  
	
  Section 5.5

  	
   

  	
  Financial Information

  	
   

  	
  6

  
	
  Section 5.6

  	
   

  	
  Compliance with Laws, Other Instruments, Etc.

  	
   

  	
  7

  
	
  Section 5.7

  	
   

  	
  Regulatory Approval Required

  	
   

  	
  7

  
	
  Section 5.8

  	
   

  	
  Litigation; Observance of Agreements, Statutes and
  Orders

  	
   

  	
  8

  
	
  Section 5.9

  	
   

  	
  Taxes

  	
   

  	
  8

  
	
  Section 5.10

  	
   

  	
  Title to Property; Power of Eminent Domain; Leases

  	
   

  	
  8

  
	
  Section 5.11

  	
   

  	
  Licenses, Permits, Etc.

  	
   

  	
  9

  
	
  Section 5.12

  	
   

  	
  Compliance with ERISA

  	
   

  	
  9

  
	
  Section 5.13

  	
   

  	
  Private Offering by the Company

  	
   

  	
  9

  
	
  Section 5.14

  	
   

  	
  Use of Proceeds; Margin Regulations

  	
   

  	
  10

  
	
  Section 5.15

  	
   

  	
  Existing Indebtedness

  	
   

  	
  10

  
	
  Section 5.16

  	
   

  	
  Foreign Assets Control Regulations, Etc.

  	
   

  	
  10

  

 

 i
 

 

 

	
  Section 5.17

  	
   

  	
  Regulation; Investment Company

  	
   

  	
  11

  
	
  Section 5.18

  	
   

  	
  Environmental Matters

  	
   

  	
  11

  
	
  Section 5.19

  	
   

  	
  Asset Purchase Agreement

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
   

  	
  REPRESENTATIONS OF THE PURCHASERS

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.1

  	
   

  	
  Purchase for Investment

  	
   

  	
  12

  
	
  Section 6.2

  	
   

  	
  Source of Funds

  	
   

  	
  12

  
	
  Section 6.3

  	
   

  	
  Status under Securities Laws; Transfer Restrictions

  	
   

  	
  13

  
	
  Section 6.4

  	
   

  	
  Authorization, Etc.

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
   

  	
  INFORMATION AS TO COMPANY

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.1

  	
   

  	
  Financial and Business Information

  	
   

  	
  14

  
	
  Section 7.2

  	
   

  	
  Officer’s Certificate

  	
   

  	
  16

  
	
  Section 7.3

  	
   

  	
  Visitation

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
   

  	
  PAYMENT, PREPAYMENT AND PURCHASE OF THE BONDS

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.1

  	
   

  	
  Payments and Prepayments

  	
   

  	
  17

  
	
  Section 8.2

  	
   

  	
  Allocation of Partial Prepayments

  	
   

  	
  17

  
	
  Section 8.3

  	
   

  	
  Purchase of Bonds

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
   

  	
  AFFIRMATIVE COVENANTS

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.1

  	
   

  	
  Compliance with Law

  	
   

  	
  18

  
	
  Section 9.2

  	
   

  	
  Insurance

  	
   

  	
  18

  
	
  Section 9.3

  	
   

  	
  Maintenance of Properties

  	
   

  	
  18

  
	
  Section 9.4

  	
   

  	
  Payment of Taxes and Claims

  	
   

  	
  18

  
	
  Section 9.5

  	
   

  	
  Corporate Existence, Etc.

  	
   

  	
  18

  
	
  Section 9.6

  	
   

  	
  Books and Records

  	
   

  	
  19

  
	
  Section 9.7

  	
   

  	
  Recordation Information

  	
   

  	
  19

  
	
  Section 9.8

  	
   

  	
  Ratings Covenant

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
   

  	
  NEGATIVE COVENANTS

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.1

  	
   

  	
  Transactions with Affiliates

  	
   

  	
  19

  
	
  Section 10.2

  	
   

  	
  Line of Business

  	
   

  	
  20

  
	
  Section 10.3

  	
   

  	
  Terrorism Sanctions Regulations

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11.

  	
   

  	
  EVENTS OF DEFAULT

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 12.

  	
   

  	
  REMEDIES ON DEFAULT, ETC.

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 12.1

  	
   

  	
  Remedies Under this Agreement

  	
   

  	
  21

  
	
  Section 12.2

  	
   

  	
  No Waivers or Election of Remedies, Expenses, Etc.

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 13.

  	
   

  	
  CERTAIN SPECIAL RIGHTS

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 13.1

  	
   

  	
  Direct Payment

  	
   

  	
  22

  
	
  Section 13.2

  	
   

  	
  Delivery Expenses

  	
   

  	
  22

  

 

 ii
 

 

 

	
  Section 13.3

  	
   

  	
  Indemnity for Destroyed, Lost or Stolen Bonds

  	
   

  	
  22

  
	
  Section 13.4

  	
   

  	
  Late Payments of Interest

  	
   

  	
  22

  
	
  Section 13.5

  	
   

  	
  No Presentation of Bonds

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 14.

  	
   

  	
  EXPENSES, ETC.

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 14.1

  	
   

  	
  Transaction Expenses

  	
   

  	
  23

  
	
  Section 14.2

  	
   

  	
  Survival

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 15.

  	
   

  	
  SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
  AGREEMENT

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 16.

  	
   

  	
  AMENDMENT AND WAIVER OF THIS AGREEMENT

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 16.1

  	
   

  	
  Requirements

  	
   

  	
  24

  
	
  Section 16.2

  	
   

  	
  Solicitation of Holders of Bonds

  	
   

  	
  24

  
	
  Section 16.3

  	
   

  	
  Binding Effect, etc.

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 17.

  	
   

  	
  NOTICES

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 18.

  	
   

  	
  REPRODUCTION OF DOCUMENTS

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 19.

  	
   

  	
  CONFIDENTIAL INFORMATION

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 20.

  	
   

  	
  SUBSTITUTION OF PURCHASER

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 21.

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 21.1

  	
   

  	
  Successors and Assigns

  	
   

  	
  27

  
	
  Section 21.2

  	
   

  	
  Payments Due on Non-Business Days

  	
   

  	
  27

  
	
  Section 21.3

  	
   

  	
  Accounting Terms

  	
   

  	
  27

  
	
  Section 21.4

  	
   

  	
  Severability

  	
   

  	
  27

  
	
  Section 21.5

  	
   

  	
  Construction, etc.

  	
   

  	
  27

  
	
  Section 21.6

  	
   

  	
  Counterparts

  	
   

  	
  27

  
	
  Section 21.7

  	
   

  	
  Governing Law

  	
   

  	
  27

  
	
  Section 21.8

  	
   

  	
  Jurisdiction and Process; Waiver of Jury Trial

  	
   

  	
  28

  

 

 iii
 

 

 

	
  Schedule A —

  	
   

  	
  INFORMATION RELATING TO PURCHASERS

  
	
   

  	
   

  	
   

  
	
  Schedule B —

  	
   

  	
  DEFINED TERM

  
	
   

  	
   

  	
   

  
	
  Schedule 5.3 —

  	
   

  	
  Disclosure Materials

  
	
   

  	
   

  	
   

  
	
  Schedule 5.4 —

  	
   

  	
  Affiliates

  
	
   

  	
   

  	
   

  
	
  Schedule 5.5(a) —

  	
   

  	
  Selected Balance Sheet Information

  
	
   

  	
   

  	
   

  
	
  Schedule 5.5(b) —

  	
   

  	
  Division Income Statement Information

  
	
   

  	
   

  	
   

  
	
  Schedule 5.5(c) —

  	
   

  	
  Purchase Price Estimate

  
	
   

  	
   

  	
   

  
	
  Schedule 5.11(c)
  —

  	
   

  	
  Intellectual Property Infringement

  
	
   

  	
   

  	
   

  
	
  Schedule 5.15 —

  	
   

  	
  Existing Indebtedness

  
	
   

  	
   

  	
   

  
	
  Schedule 9.7 —

  	
   

  	
  Recordation Information

  
	
   

  	
   

  	
   

  
	
  Exhibit A —

  	
   

  	
  Form of Supplemental Indenture, including the form
  of First Mortgage Bonds, 6.82% Series due 2036

  
	
   

  	
   

  	
   

  
	
  Exhibit
  4.4(a)(i) —

  	
   

  	
  Form of Opinion of Special New York Counsel for the
  Company

  
	
   

  	
   

  	
   

  
	
  Exhibit
  4.4(a)(ii) —

  	
   

  	
  Form of Opinion of Special Missouri and Kansas
  Counsel for the Company

  
	
   

  	
   

  	
   

  
	
  Exhibit
  4.4(a)(iii) —

  	
   

  	
  Form of Opinion of Special Missouri Regulatory
  Counsel for the Company

  
	
   

  	
   

  	
   

  
	
  Exhibit
  4.4(a)(iv) —

  	
   

  	
  Form of Opinion of Special Kansas Regulatory Counsel
  for the Company

  
	
   

  	
   

  	
   

  
	
  Exhibit 4.4(b) —

  	
   

  	
  Form of Opinion of Special Counsel for the Purchasers

  
	
   

  	
   

  	
   

  
	
  Exhibit 9.7 —

  	
   

  	
  Form of Post-Closing Opinion

  

 

 iv

THE
EMPIRE DISTRICT GAS COMPANY

FIRST
MORTGAGE BONDS, 6.82% SERIES DUE 2036

June 1, 2006

TO
EACH OF THE PURCHASERS LISTED IN
                SCHEDULE A HERETO:

Ladies and Gentlemen:

THE
EMPIRE DISTRICT GAS COMPANY, a Kansas corporation (the “Company”), agrees with each of the purchasers whose names
appear at the end hereof (each, a “Purchaser” and,
collectively, the “Purchasers”) as
follows:

Section 1.                                          Authorization
of Bonds.

The Company has authorized the issue and sale of
$55,000,000 aggregate principal amount of its First Mortgage Bonds, 6.82% Series due
2036 (the “Bonds”) to be issued under and secured
by that certain Indenture of Mortgage and Deed of Trust dated as of June 1,
2006 (the “Original Mortgage”) by and between
the Company, Spencer R. Thomson, as deed of trust trustee, and The Bank of New
York Trust Company, N.A., as bond trustee (collectively, the “Trustee”), as to be supplemented and amended by a First
Supplemental Indenture dated as of June 1, 2006 (the “Supplemental
Indenture”), and will be entitled to the benefits thereof. The
Original Mortgage, as heretofore supplemented and amended including, without
limitation, by the Supplemental Indenture, is hereinafter referred to as the “Mortgage.”  The
Supplemental Indenture, including the form of the Bonds, shall be in the form
set out in Exhibit A.

The Mortgage creates and will create a first mortgage
Lien on and a first security interest in the property of the Company described
therein as being subjected to the Lien thereof (excluding Excepted Property and
subject to Permitted Liens as therein defined), except such property as may
have been released from the Lien thereof in accordance with the terms thereof
(such property which at such time is subject to the Lien of the Mortgage being
hereinafter referred to as the “Mortgaged Property”).

Certain capitalized and other terms used in this
Agreement are defined in Schedule B; and references to a “Schedule” or an “Exhibit”
are, unless otherwise specified, to a Schedule or an Exhibit attached to
this Agreement.

Section 2.                                          Sale
and Purchase of Bonds.

Subject to the terms and conditions of this Agreement,
the Company will issue and sell to each Purchaser and each Purchaser will
purchase from the Company, at the Closing provided for in Section 3, Bonds
in the principal amount specified opposite such Purchaser’s name in Schedule A
at the purchase price of 100% of the principal amount thereof. The Purchasers’
obligations hereunder are several and not joint obligations and no Purchaser
shall have any liability to any Person for the performance or non-performance
of any obligation by any other Purchaser hereunder.

 

Section 3.                                          Closing.

The sale and purchase of the Bonds to be purchased by
each Purchaser shall occur at the offices of Pillsbury Winthrop Shaw Pittman
LLP, 1540 Broadway, NY, NY 10036, at 10:00 a.m., New York, New York time,
at a closing (the “Closing”) on June 1,
2006 or at such other time on such other Business Day thereafter on or prior to
June 1, 2006 as may be agreed upon by the Company and the Purchasers. At
the Closing the Company will deliver to each Purchaser the Bonds to be
purchased by such Purchaser in the form of a single Bond (or such greater
number of Bonds in denominations of at least $1,000 and integral multiples of
$1,000 in excess thereof as such Purchaser may request) dated the date of the
Closing and registered in such Purchaser’s name (or in the name of its
nominee), against delivery by such Purchaser to the Company or its order of
immediately available funds in the amount of the purchase price therefor by
wire transfer of immediately available funds for the account of the Company to
account number 9871280691 at UMB Bank, N.A., ABA #101-000-695. The
minimum initial investment in the Bonds is $500,000. The Purchasers acknowledge
that the Company intends to pay the Agents a fee in respect of the sale of the
Bonds to the Purchasers. If at the Closing the Company shall fail to tender
such Bonds to any Purchaser as provided above in this Section 3, or any of
the conditions specified in Section 4 shall not have been fulfilled to
such Purchaser’s satisfaction, such Purchaser shall, at its election, be
relieved of all further obligations under this Agreement, without thereby
waiving any rights such Purchaser may have by reason of such failure or such
nonfulfillment.

Section 4.              Conditions to Closing. Each Purchaser’s
obligation to purchase and pay for the Bonds to be sold to such Purchaser at
the Closing is subject to the fulfillment to such Purchaser’s satisfaction,
prior to or at the Closing, of the following conditions:

Section 4.1            Representations
and Warranties. The representations and warranties of the
Company in this Agreement shall be correct when made and at the time of the
Closing.

Section 4.2            Performance;
No Default. The Company shall have performed and complied
with all agreements and conditions contained in this Agreement, the Mortgage
and the Supplemental Indenture required to be performed or complied with by it
prior to or at the Closing and, after giving effect to the issue and sale of
the Bonds (and the application of the proceeds thereof as contemplated by Section 5.14),
no Default or Event of Default shall have occurred and be continuing. Neither
the Company nor any Subsidiary shall have entered into any transaction since
the date of the Memorandum that would have been prohibited by Sections 10.1 had
such Section applied since such date.

Section 4.3            Compliance Certificates.

(a)           Officer’s Certificate. The
Company shall have delivered to such Purchaser an Officer’s Certificate, dated
the date of the Closing, certifying that the conditions specified in Sections
4.1, 4.2, 4.9 and 4.10 have been fulfilled.

(b)           Secretary’s Certificate. The
Company shall have delivered to such Purchaser a certificate of its Secretary
or Assistant Secretary, dated the date of Closing, 

 2
 

 

certifying as to the
resolutions attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Bonds and this Agreement.

Section 4.4            Opinions
of Counsel. Such Purchaser shall have received opinions in
form and substance reasonably satisfactory to such Purchaser, dated the date of
the Closing (a)(i) from Cahill Gordon & Reindell LLP, special
New York counsel for the Company, (ii) from Bryan Cave LLP, special
Missouri and Kansas counsel for the Company, (iii) from Brydon, Swearengen &
England P.C., special Missouri regulatory counsel for the Company, and (iv) from
Anderson &
Byrd, special Kansas regulatory counsel for the Company, covering the
matters set forth in Exhibit 4.4(a)(i), 4.4(a)(ii), 4.4(a)(iii) and
4.4(a)(iv), respectively and covering such other matters incident to the
transactions contemplated hereby as such Purchaser or the Purchasers’ counsel
may reasonably request (and the Company hereby instructs its counsel to deliver
such opinions to the Purchasers) and (b) from Pillsbury Winthrop Shaw
Pittman LLP, the Purchasers’ special counsel in connection with such
transactions, covering the matters set forth in Exhibit 4.4(b) and
covering such other matters incident to such transactions as such Purchaser may
reasonably request.

Section 4.5            Purchase
Permitted By Applicable Law, Etc. On the date of the Closing
such Purchaser’s purchase of Bonds shall (a) be permitted by the laws and
regulations of each jurisdiction to which such Purchaser is subject, without
recourse to provisions (such as section 1405(a)(8) of the New York
Insurance Law) permitting limited investments by insurance companies without
restriction as to the character of the particular investment, (b) not
violate any applicable law or regulation (including, without limitation,
Regulation T, U or X of the Board of Governors of the Federal Reserve System)
and (c) not subject such Purchaser to any tax, penalty or liability under
or pursuant to any applicable law or regulation, which law or regulation was
not in effect on the date hereof. If requested by such Purchaser, such
Purchaser shall have received an Officer’s Certificate certifying as to such
matters of fact as such Purchaser may reasonably specify to enable such
Purchaser to determine whether such purchase is so permitted.

Section 4.6            Sale
of Other Bonds. Contemporaneously with the Closing the
Company shall sell to each other Purchaser and each other Purchaser shall
purchase the Bonds to be purchased by it at the Closing as specified in
Schedule A.

Section 4.7            Payment
of Special Counsel Fees. Without limiting the provisions of Section 14.1,
the Company shall have paid on or before the Closing the reasonable fees,
charges and disbursements of the Purchasers’ special counsel referred to in Section 4.4
to the extent reflected in a statement of such counsel rendered to the Company
at least one Business Day prior to the Closing.

Section 4.8           
Private Placement Number. A Private Placement Number issued
by Standard & Poor’s CUSIP Service Bureau (in cooperation with the
SVO) shall have been obtained for the Bonds.

Section 4.9            Changes
in Corporate Structure. The Company shall not have changed
its jurisdiction of incorporation or organization, as applicable, or been a
party to any merger or consolidation or succeeded to all or any substantial
part of the liabilities of any other entity (other 

 3
 

 

than in connection with
the Acquisition), at any time following the date of the most recent financial
statements referred to in Schedule 5.5(a) or (b).

Section 4.10         Completion
of Acquisition. The transaction contemplated by the Asset
Purchase Agreement (the “Acquisition”)
shall have been, or shall concurrently be, consummated by the Company on the
terms set forth therein or on such other terms as shall be reasonably
acceptable to the Purchasers; no further amendment to the Asset Purchase
Agreement (other than Amendment No. 1 thereto) shall have been made unless
approved by the Purchasers acting reasonably; and an equity contribution of not
less than $45 million shall have been made by the Parent to the Company, on
terms reasonably acceptable to the Purchasers, in order to provide funds to
complete the Acquisition.

Section 4.11         Funding
Instructions. At least three Business Days prior to the date
of the Closing, each Purchaser shall have received written instructions signed
by a Responsible Officer on letterhead of the Company confirming the
information specified in Section 3 including (i) the name and address
of the transferee bank, (ii) such transferee bank’s ABA number and (iii) the
account name and number into which the purchase price for the Bonds is to be
deposited.

Section 4.12         Letter
of Acknowledgment. Each Purchaser shall have received a
letter from, or acknowledged and accepted by, the Trustee, in form and
substance reasonably satisfactory to such Purchaser and the Purchasers’ special
counsel, acknowledging and accepting the terms of Sections 13.1 (Direct
Payment) 13.3 (Indemnity for Destroyed, Lost, or Stolen Bonds), 13.4 (Late
Payments of Interest) and 13.5 (No Presentation of Bonds) hereof.

Section 4.13         Documents
Required by Mortgage; Basis for Authentication. The Company
shall have furnished to the Trustee the resolutions, certificates, opinions and
other instruments required to be delivered prior to or upon the issuance of the
Bonds pursuant to the provisions of the Mortgage. The Company shall have
requested the Trustee to authenticate and the Trustee shall have authenticated
the Bonds pursuant to Section 303 of the Mortgage. The Company shall be
able to comply with all other conditions with respect to the authentication of
the Bonds imposed by the Mortgage.

Section 4.14         Recordings.

(a)                           On
or prior to the Closing Date, the Original Mortgage and the Supplemental
Indenture shall have been duly authorized, executed and delivered by the
Company and the Trustee, and shall be in full force and effect.

(b)                           (i) The
Original Mortgage and the Supplemental Indenture shall be in proper form for
recordation and shall have been delivered, together with the applicable fixture
filings, to the agents of a title insurance company reasonably acceptable to
the Purchasers for recordation immediately following the registration of the
deeds and assignments for the properties, assets, rights of way, franchises and
easements to be acquired by the Company in the Acquisition, and with the
Secretary of State of Missouri and (ii) a Uniform Commercial Code
financing statement (the “Financing Statement”)
shall have been filed or shall be in proper form for filing with the Secretary
of State of Kansas.

 4
 

 

Section 4.15         Proceedings
and Documents. All corporate and other proceedings in
connection with the transactions contemplated by this Agreement and all
documents and instruments incident to such transactions shall be reasonably
satisfactory to such Purchaser and the Purchasers’ special counsel, and such
Purchaser and the Purchasers’ special counsel shall have received all such
counterpart originals or certified or other copies of such documents as such
Purchaser or such special counsel may reasonably request.

Section 5               Representations and Warranties of the Company.
The Company represents and warrants to each Purchaser that:

Section 5.1            Organization;
Power and Authority. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Kansas, and is duly qualified as a foreign corporation and is in good standing
in each jurisdiction in which such qualification is required by law, other than
those jurisdictions as to which the failure to be so qualified or in good
standing could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. The Company has the corporate power and
authority to own or hold under lease the properties it purports to own or hold under
lease, to transact the business it transacts and proposes to transact, to
execute and deliver this Agreement and the Bonds and to perform the provisions
hereof and thereof.

Section 5.2            Authorization, Enforceability, Etc.

(a)                           This
Agreement, the Original Mortgage and the Supplemental Indenture have been duly
authorized by all necessary corporate action on the part of the Company, and
this Agreement constitutes, and upon execution and delivery thereof each of the
Original Mortgage and the Supplemental Indenture will constitute, a legal,
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).

(b)                           The
Bonds have been duly authorized, and when executed, authenticated and issued by
the Company in accordance with the provisions of the Mortgage and delivered to
and paid for by the Purchasers in accordance with the terms of this Agreement,
will be entitled to the benefits and security of the Mortgage, and will be
valid and binding obligations of the Company, in each case enforceable against
the Company in accordance with their terms, except as such enforceability may
be limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors’ rights
generally and (ii) general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).

(c)                           The
Mortgage constitutes a direct and valid first mortgage lien upon the properties
and assets of the Company specifically or generally described or referred to in
the Original Mortgage as being subject to the lien thereof and will create a
similar lien upon all properties and assets acquired by the Company after the
date hereof located in counties in which the Original Mortgage has been
recorded and required by the Original Mortgage to be subjected 

 5
 

 

to the lien of the Original Mortgage when acquired by
the Company, subject only to Permitted Liens (as defined in the Original
Mortgage) and as to property specifically described or referred to in Schedule
A to the Original Mortgage, to the Liens (as defined in the Original Mortgage),
charges and encumbrances, reservations, restrictions, conditions, limitations,
covenants, interests and exceptions, if any, set forth and referred to in such
Schedule A.

Section 5.3            Disclosure.
The Company, through its agents, Bank of America Securities LLC and UBS
Securities LLC (the “Agents”),  have delivered to you and each other
Purchaser a copy of a Private Placement Memorandum, dated May 9, 2006 (the
“Memorandum”), relating to the
transactions contemplated hereby. The Memorandum fairly describes, in all
material respects, the general nature of the business and principal properties
of the Company after giving effect to the Acquisition. This Agreement, the
Memorandum and the documents, certificates or other writings delivered to the
Purchasers by or on behalf of the Company in connection with the transactions
contemplated hereby and identified in Schedule 5.3, and the financial
statements listed in Schedules 5.5(a) and 5.5(b) (this Agreement, the
Memorandum and such documents, certificates or other writings and such
financial statements delivered to each Purchaser prior to May 31, 2006
being referred to, collectively, as the “Disclosure Documents”),
taken as a whole, do not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein not
misleading in the light of the circumstances under which they were made. Except
as disclosed in the Disclosure Documents, since May 9, 2006, there has
been no change in the financial condition, operations, business, properties or
prospects of the Company or any Subsidiary except changes that individually or
in the aggregate could not reasonably be expected to have a Material Adverse
Effect. There is no fact known to the Company that could reasonably be expected
to have a Material Adverse Effect that has not been set forth herein or in the
Disclosure Documents. The representations in this Section 5.3, with
respect to the assets, business, operations, properties and prospects of the
Business to be acquired by the Company in the Acquisition are made by the
Company to the best of its knowledge based on due diligence activities
(including discussions with the Seller), and, as a result, such representations
are limited to such extent.

Section 5.4            Affiliates.

(a)                           Schedule
5.4 contains (except as noted therein) a complete and correct list of the
Company’s directors and senior officers.

(b)                           The
Company has no Subsidiaries or Affiliates that it Controls.

Section 5.5            Financial
Information. (a)  Subject
to clause (e) below, Schedule 5.5(a) sets forth the Book Values, as
of December 31, 2004 and June 30, 2005, respectively, of selected
balance sheet information with respect to the Purchased Assets and the Business.
The information set forth on Schedule 5.5(a) is referred to herein as the “Selected Balance Sheet Information.”

(b)                           Subject
to clause (e) below, Schedule 5.5(b) sets forth the division income
statements for the Business for the 12-month period ended December 31,
2004, the six-month period ended June 30, 2005 and the twelve-month period
ended December 31, 2005. The 

 6
 

 

information set forth in Schedule 5.5(b) is referred to herein as
the “Division Income Statement Information.”

(c)                           Subject
to clause (e) below, Schedule 5.5(c) sets forth the good faith
estimate of the Purchase Price, based on Seller’s good faith estimate of the
Adjustment Amount, delivered by Seller to the Company pursuant to Section 3.2(a) of
the Asset Purchase Agreement.

(d)                           Subject
to clause (e) below, the Selected Balance Sheet Information and the
Division Income Statement Information fairly present as of the dates thereof or
for the periods covered thereby, in all material respects, the items reflected
therein, all in accordance with (i) FERC Accounting Rules  applied on
a consistent basis in accordance with Seller’s normal accounting practices, and
(ii) except as indicated in the notes thereto, the basis upon which the
financial information set forth on Schedule 3.1-C of the Asset Purchase
Agreement was prepared.

(e)                           The
representations in this Section 5.5 are made to the best of the Company’s
knowledge based solely on the Company’s due diligence activities, (including
discussions with Seller) and, as a result, such representations are limited to
such extent. However, nothing has caused the Company to believe that the
information set forth on Schedules 5.5(a), 5.5(b) and 5.5(c) (as
amended by the First Amendment to the Purchase Agreement) is incorrect in any
material respect, it being understood that the information set forth on
Schedule 5.5(c) is subject to adjustment after the closing of the
Acquisition as provided in Section 3.2 of the Asset Purchase Agreement.

Section 5.6            Compliance
with Laws, Other Instruments, Etc. The execution, delivery
and performance by the Company of this Agreement and the Bonds will not (i) contravene,
result in any breach of, or constitute a default under, or result in the
creation of any Lien in respect of any property of the Company under, any
indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease,
corporate charter or by-laws, or any other agreement or instrument to which the
Company is bound or by which the Company or any of its properties may be bound
or affected (other than the lien created by the Mortgage), (ii) conflict
with or result in a breach of any of the terms, conditions or provisions of any
order, judgment, decree, or ruling of any court, arbitrator or Governmental
Authority applicable to the Company or (iii) violate any provision of any
statute or other rule or regulation of any Governmental Authority
applicable to the Company.

Section 5.7            Regulatory
Approval Required. Assuming that (i) the Bonds are
offered and sold as described in the Memorandum, (ii) the representations
set forth in Section 6.1 (Purchase for Investment), Section 5.13
(Private Offering by the Company) and Section 6.3 (Status Under Securities
Laws; Transfer Restrictions) of this Agreement are correct, and (iii) the
information contained in the letter to be furnished by the Agents to the
Company on the Closing Date regarding the extent and manner of the offering of
the Bonds is correct, no consent of, approval or authorization by, filing or
registration with, or notice to any governmental or public authority or agency
is required for the issuance, sale or delivery of the Bonds or the execution,
delivery or performance of this Agreement or the Mortgage by the Company, other
than (x) the approval of the Missouri Public Service Commission (the “MPSC”) that has already been 

 7
 

 

obtained and (y) the
recordings or filings, in respect of the Lien of the Mortgage, required under
the Mortgage.

Section 5.8            Litigation;
Observance of Agreements, Statutes and Orders. (a) 
There are no actions, suits, investigations or proceedings pending or, to the
knowledge of the Company, threatened against or affecting (i) the Company,
(ii) the property to be acquired by the Company in the Acquisition or (iii) the
Parent insofar as it relates to the Acquisition, in any court or before any
arbitrator of any kind or before or by any Governmental Authority that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

(b)                           The
Company is not in default under any term of any agreement or instrument to
which it is a party or by which it is bound, or any order, judgment, decree or
ruling of any court, arbitrator or Governmental Authority or in violation of
any applicable law, ordinance, rule or regulation (including without
limitation Environmental Laws or the USA Patriot Act) of any Governmental
Authority, which default or violation, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

Section 5.9            Taxes.
The Company has filed all tax returns that are required to have been filed in
any jurisdiction, and have paid all taxes shown to be due and payable on such
returns and all other taxes and assessments levied upon it or its properties,
assets, income or franchises, to the extent such taxes and assessments have
become due and payable and before they have become delinquent, except for any
taxes and assessments (i) the amount of which is not individually or in
the aggregate Material or (ii) the amount, applicability or validity of
which is currently being contested in good faith by appropriate proceedings and
with respect to which the Company has established adequate reserves in
accordance with GAAP. The Company knows of no basis for any other tax or
assessment (including, without limitation, in respect of the business to be
acquired by the Company in the Acquisition) that could reasonably be expected
to have a Material Adverse Effect. Subject to Section 5.5(e), the charges,
accruals and reserves on the books of the Company in respect of Federal, state
or other taxes for all fiscal periods are adequate.

Section 5.10         Title
to Property; Power of Eminent Domain; Leases. (a)  The
Mortgaged Property constitutes substantially all of the property of the Company
(other than the Excepted Property (as defined in the Mortgage)). As of the time
of the closing of the Acquisition, the Company will have such title (or may
obtain such title by the exercise of its power to condemn property) to its
property as will be necessary to engage in the Business, and substantially all
such property is in good repair (ordinary wear and tear excepted), is properly
maintained and is suitable for the use for which it is intended. All real property
that constitutes the Mortgaged Property is located in the State of Missouri. There
is no outstanding Indebtedness of the Company or of any other Person for the
purchase price or construction of, or for services, materials and supplies
rendered or delivered in connection with the construction of, any property, or
for current operations, that has or could become the basis of a Lien prior to
the Lien of the Mortgage upon any or all of the Mortgaged Property, other than
a Permitted Lien.

(b)                           The
Company has the power of eminent domain which it may exercise, subject to the
requirements of law, in order to acquire any additional property that is
necessary for it to perform its responsibilities as a public service company.

 8

 

(c)                           All
leases that individually or in the aggregate are Material are valid and
subsisting and are in full force and effect in all material respects.

Section 5.11         Licenses,
Permits, Etc. (a)  As of the time of the closing of the
Acquisition, the Company will own or possess all licenses, permits, franchises,
authorizations, patents, copyrights, proprietary software, service marks,
trademarks and trade names, or rights thereto, that individually or in the
aggregate are Material, without known conflict with the rights of others,
except as set forth on Schedule 5.11(c).

(b)                           To
the best knowledge of the Company, no Material product of the Company infringes
in any material respect any license, permit, franchise, authorization, patent,
copyright, proprietary software, service mark, trademark, trade name or other
right owned by any other Person.

(c)                           Except
as set forth on Schedule 5.11(c), to the best knowledge of the Company, there
is no Material violation by any Person of any right of the Company with respect
to any patent, copyright, proprietary software, service mark, trademark, trade
name or other right owned or used by the Company.

Section 5.12         Compliance
with ERISA. (a)  The Company and each ERISA Affiliate
have operated and administered each Plan in compliance with all applicable laws
except for such instances of noncompliance as have not resulted in and could
not reasonably be expected to result in a Material Adverse Effect. Neither the
Company nor any ERISA Affiliate has incurred any liability pursuant to Title I
or IV of ERISA or the penalty or excise tax provisions of the Code relating to
employee benefit plans (as defined in section 3(3) of ERISA), and no
event, transaction or condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by the Company or
any ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions
or to section 401(a)(29) or 412 of the Code or section 4068 of ERISA, other
than such liabilities or Liens as would not be individually or in the aggregate
Material.

(b)                           The
Company and its ERISA Affiliates have not incurred withdrawal liabilities (and
are not subject to contingent withdrawal liabilities) under section 4201 or
4204 of ERISA in respect of Multiemployer Plans that individually or in the
aggregate are Material.

(c)                           The
execution and delivery of this Agreement and the issuance and sale of the Bonds
hereunder will not involve any transaction that is subject to the prohibitions
of section 406 of ERISA or in connection with which a tax could be imposed
pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation by
the Company to each Purchaser in the first sentence of this Section 5.12(c) is
made in reliance upon and subject to the accuracy of such Purchaser’s
representation in Section 6.2 as to the sources of the funds used to pay
the purchase price of the Bonds to be purchased by such Purchaser.

Section 5.13         Private
Offering by the Company. Neither the Company nor anyone
acting on its behalf has offered the Bonds or any similar securities for sale
to, or solicited any offer to buy any of the same from, or otherwise approached
or negotiated in respect thereof with,

 9
 

 

any person other than the Purchasers and not more than 4 other
Institutional Investors, each of which has been offered the Bonds at a private
sale for investment. Neither the Company nor anyone acting on its behalf has
taken, or will take, any action that would subject the issuance or sale of the
Bonds to the registration requirements of Section 5 of the Securities Act
or to the registration requirements of any securities or blue sky laws of any
applicable jurisdiction.

 

Section 5.14         Use
of Proceeds; Margin Regulations. The Company will apply
the proceeds of the sale of the Bonds together with equity contributed by the
Parent to acquire the Missouri natural gas operations of Aquila, Inc.
pursuant to that certain Asset Purchase Agreement by and between Aquila, Inc.
and The Empire District Electric Company dated September 21, 2005, as
amended by Amendment No. 1 thereto dated as of February 27, 2006 (the
“Asset Purchase Agreement”). No part of
the proceeds from the sale of the Bonds hereunder will be used, directly or
indirectly, for the purpose of buying or carrying any margin stock within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
(12 CFR 221), or for the purpose of buying or carrying or trading in any
securities under such circumstances as to involve the Company in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a
violation of Regulation T of said Board (12 CFR 220). Margin stock does not
constitute more than 5% of the value of the consolidated assets of the Company
and the Company does not have any present intention that margin stock will
constitute more than 5% of the value of such assets. As used in this Section,
the terms “margin stock” and “purpose of buying or carrying” shall have the
meanings assigned to them in said Regulation U.

Section 5.15         Existing
Indebtedness. (a)  Except as described therein, Schedule
5.15 sets forth a complete and correct list of all outstanding Indebtedness of
the Company as of the Closing Date after giving effect to the Acquisition
(including a description of the obligors and obligees, principal amount
outstanding and collateral therefor, if any, and Guaranty thereof, if any),
since which date there has been no Material change in the amounts, interest
rates, sinking funds, installment payments or maturities of the Indebtedness of
the Company. The Company is not in default and no waiver of default is
currently in effect, in the payment of any principal or interest on any
Indebtedness of the Company and no event or condition exists with respect to
any Indebtedness of the Company that would permit (or that with notice or the
lapse of time, or both, would permit) one or more Persons to cause such Indebtedness
to become due and payable before its stated maturity or before its regularly
scheduled dates of payment.

(b)                           The
Company is not a party to, or otherwise subject to any provision contained in,
any instrument evidencing Indebtedness of the Company, any agreement relating
thereto or any other agreement (including, but not limited to, its charter or
other organizational document) which limits the amount of, or otherwise imposes
restrictions on the incurring of, Indebtedness of the Company, except as
specifically indicated in Schedule 5.15 and as provided in the Mortgage.

Section 5.16         Foreign
Assets Control Regulations, Etc. (a)  Neither the sale
of the Bonds by the Company hereunder nor its use of the proceeds thereof will
violate the Trading with the Enemy Act, as amended, or any of the foreign
assets control regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) or any enabling legislation or executive
order relating thereto.

 10
 

 

(b)           The
Company (i) is not a Person described or designated in the Specially
Designated Nationals and Blocked Persons List of the Office of Foreign Assets
Control or in Section 1 of the Anti Terrorism Order and (ii) does not
engage in any dealings or transactions with any such Person. The Company is in
compliance, in all material respects, with the USA Patriot Act.

(c)                           No
part of the proceeds from the sale of the Bonds hereunder will be used,
directly or indirectly, for any payments to any governmental official or
employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in
violation of the United States Foreign Corrupt Practices Act of 1977, as
amended, assuming in all cases that such Act applies to the Company.

Section 5.17         Regulation;
Investment Company. (a)  The Company is subject to
the jurisdiction of the Missouri Public Service Commission and various other
state, federal and local governmental departments and regulatory and
environmental commissions, agencies, authorities and bodies with respect to its
business operations. The Company is not directly subject to the jurisdiction of
the FERC.

(b)                           The
Company is not subject to regulation under the Investment Company Act of 1940.

Section 5.18         Environmental
Matters. With respect to the assets, Business,
properties and operations to be acquired by the Company in the Acquisition:

(a)           The
Company has no knowledge of any claim nor has it received any notice of any
claim, and no proceeding has been instituted raising any claim against the
Seller, the Company or any real properties now or formerly owned, leased or
operated by Seller as part of the Business or such assets, alleging any damage
to the environment or violation of any Environmental Laws, except, in each
case, such as could not reasonably be expected to result in a Material Adverse
Effect and except with respect to liabilities not being transferred to the
Company in the Acquisition.

(b)                           The
Company has no knowledge of any facts which would give rise to any claim,
public or private, of violation of Environmental Laws or damage to the
environment emanating from, occurring on or in any way related to such real
properties now or formerly owned, leased or operated by Seller as part of the
Business or to such assets or their use, except, in each case, such as could
not reasonably be expected to result in a Material Adverse Effect and except
with respect to liabilities not being transferred to the Company in the
Acquisition; and

(c)                           To
the knowledge of the Company, Seller as part of such business has not stored
any Hazardous Materials on the real properties now or formerly owned, leased or
operated by Seller as part of the Business and has not disposed of any
Hazardous Materials in a manner contrary to any Environmental Laws in each case
in any manner that could reasonably be expected to result in a Material Adverse
Effect and except with respect to liabilities not being transferred to the Company
in the Acquisition.

 11
 

 

Section 5.19         Asset
Purchase Agreement. The Asset Purchase Agreement
is in full force and effect and has not been amended (or the provisions thereof
waived) except in compliance with Section 4.10 hereof. The Company has not
received any notice from the Seller, and is not otherwise aware, of any breach
of the Asset Purchase Agreement or as to the inaccuracy in any material respect
of any of the representations and warranties made in the Asset Purchase
Agreement.

Section 6.                                          Representations
of the Purchasers.

Section 6.1            Purchase
for Investment. Each Purchaser severally represents that
it is purchasing the Bonds for its own account or for one or more separate
accounts maintained by such Purchaser or for the account of one or more pension
or trust funds and not with a view to the distribution thereof, provided that
the disposition of such Purchaser’s or their property shall at all times be
within such Purchaser’s or their control. Each Purchaser understands that the
Bonds have not been registered under the Securities Act and may be resold or
transferred only if registered pursuant to the provisions of the Securities Act
or if an exemption from registration is available, except under circumstances
where neither such registration nor such an exemption is required by law, and
that the Company is not required to register the Bonds.

Section 6.2            Source
of Funds. Each Purchaser severally represents that at
least one of the following statements is an accurate representation as to each
source of funds (a “Source”) to be
used by such Purchaser to pay the purchase price of the Bonds to be purchased
by such Purchaser hereunder:

(a)                           the
Source is an “insurance company general account” (as the term is defined in PTE
95-60) in respect of which the reserves and liabilities (as defined by
the annual statement for life insurance companies approved by the NAIC (the “NAIC Annual Statement”)) for the general
account contract(s) held by or on behalf of any employee benefit plan
together with the amount of the reserves and liabilities for the general
account contract(s) held by or on behalf of any other employee benefit
plans maintained by the same employer (or affiliate thereof as defined in PTE 95-60)
or by the same employee organization in the general account do not exceed 10%
of the total reserves and liabilities of the general account (exclusive of
separate account liabilities) plus surplus as set forth in the NAIC Annual
Statement filed with such Purchaser’s state of domicile; or

(b)                           the
Source is a separate account that is maintained solely in connection with such
Purchaser’s fixed contractual obligations under which the amounts payable, or
credited, to any employee benefit plan (or its related trust) that has any
interest in such separate account (or to any participant or beneficiary of such
plan (including any annuitant)) are not affected in any manner by the
investment performance of the separate account; or

(c)                           the
Source is either (i) an insurance company pooled separate account, within
the meaning of PTE 90-1 or (ii) a bank collective investment fund,
within the meaning of the PTE 91-38 and, except as disclosed by such
Purchaser to the Company in writing pursuant to this clause (c), no employee
benefit plan or group of plans maintained by the same employer or employee
organization beneficially owns more than 10% of all assets allocated to such
pooled separate account or collective investment fund; or

 12
 

 

(d)                           the
Source constitutes assets of an “investment fund” (within the meaning of Part V
of PTE 84-14 (the “QPAM Exemption”))
managed by a “qualified professional asset manager” or “QPAM” (within the
meaning of Part V of the QPAM Exemption), no employee benefit plan’s
assets that are included in such investment fund, when combined with the assets
of all other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section V(c)(1) of
the QPAM Exemption) of such employer or by the same employee organization and
managed by such QPAM, exceed 20% of the total client assets managed by such
QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption
are satisfied, neither the QPAM nor a person controlling or controlled by the
QPAM (applying the definition of “control” in Section V(e) of the
QPAM Exemption) owns a 5% or more interest in the Company and (i) the
identity of such QPAM and (ii) the names of all employee benefit plans
whose assets are included in such investment fund have been disclosed to the
Company in writing pursuant to this clause (d); or

(e)                           the
Source constitutes assets of a “plan(s)” (within the meaning of Section IV
of PTE 96-23 (the “INHAM Exemption”))
managed by an “in-house asset manager” or “INHAM” (within the meaning of Part IV
of the INHAM exemption), the conditions of Part I(a), (g) and (h) of
the INHAM Exemption are satisfied, neither the INHAM nor a person controlling
or controlled by the INHAM (applying the definition of “control” in Section IV(d) of
the INHAM Exemption) owns a 5% or more interest in the Company and (i) the
identity of such INHAM and (ii) the name(s) of the employee benefit
plan(s) whose assets constitute the Source have been disclosed to the
Company in writing pursuant to this clause (e); or

(f)                            the
Source is a governmental plan; or

(g)                           the
Source is one or more employee benefit plans, or a separate account or trust
fund comprised of one or more employee benefit plans, each of which has been
identified to the Company in writing pursuant to this clause (g); or

(h)                           the
Source does not include assets of any employee benefit plan, other than a plan
exempt from the coverage of ERISA.

As used in this Section 6.2, the terms “employee
benefit plan,” “governmental plan,” and “separate account” shall have the
respective meanings assigned to such terms in section 3 of ERISA.

Section 6.3            Status
under Securities Laws; Transfer Restrictions. Each Purchaser
severally represents that it (i) is a “qualified institutional buyer” (as
defined in Rule 144A promulgated under the Securities Act), (ii) is
aware that the sale to it is being made in reliance on a private placement
exemption from registration under the Securities Act and (iii) is
acquiring the Bonds for its own account or for the accounts of other qualified
institutional buyers. Each Purchaser makes to the Company each of the representations
set forth in paragraphs (1) through (6) under the caption entitled “Notice
to Investors; Transfer Restrictions” in the Memorandum. Each Purchaser
acknowledges that the Bonds are subject to restrictions on transfer as
described in the Memorandum and that a legend to that effect, in the form and
substance set forth in the Memorandum, will be endorsed on each certificate for
the Bonds.

 13
 

 

Section 6.4            Authorization,
Etc. Each Purchaser severally represents that this
Agreement has been duly authorized by all necessary corporate action on the
part of such Purchaser, and this Agreement constitutes a legal, valid and
binding obligation of such Purchaser enforceable against such Purchaser in
accordance with its terms, except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).

Section 7.                                          Information
as to Company.

Section 7.1            Financial
and Business Information. The Company shall deliver to
each holder of Bonds that is an Institutional Investor:

(a)           Quarterly Statements. Within
60 days after the end of each quarterly fiscal period in each fiscal year of
the Company (other than the last quarterly fiscal period of each such fiscal
year) beginning with the quarter ended September 30, 2006, duplicate
copies of,

(i)            a consolidated balance sheet of the
Company as at the end of such quarter, and

(ii)           consolidated statements of income and
cash flows of the Company, for such quarter and (in the case of the second and
third quarters, commencing with the quarter ending June 30, 2007) for the
portion of the fiscal year ending with such quarter,

setting forth in each case in comparative form,
beginning with the quarter ended September 30, 2007, the figures for the
corresponding periods in the previous fiscal year, all in reasonable detail,
prepared in accordance with GAAP applicable to quarterly financial statements
generally, other than the omission of footnotes, and certified by a Senior
Financial Officer as fairly presenting, in all material respects, the financial
position of the companies being reported on and its results of operations and
cash flows, subject to changes resulting from year-end adjustments; provided
that the Company shall be deemed to have made such delivery of the information
required in this Section 7.1(a) if the Company shall have timely made
such information available on the Parent’s home page on the worldwide web
(at the date of this Agreement located at: http//www.empiredistrict.com) or via
electronic delivery to a web-based workspace such as IntralinksTM and the
Company shall have given each Purchaser prior notice of such availability in
connection with each delivery (such availability and notice thereof being
referred to as “Electronic Delivery”);

(b)           Annual Statements. Within
105 days after the end of each fiscal year of the Company, duplicate copies of

(i)            a consolidated balance sheet of the
Company as at the end of such year, and

 14
 

 

(ii)           consolidated statements of income,
shareholders’ equity and cash flows of the Company for such year (or, in the
case of the year ending December 31, 2006, for the seven-month period
ending December 31, 2006),

setting forth in each case in comparative form,
beginning with the fiscal year ended December 31, 2007, the figures for
the previous fiscal year, provided that such audited financial statements for December 31,
2007 will compare the 12 months ended December 31, 2007 to the seven
months ended December 31, 2006, all in reasonable detail, prepared in
accordance with GAAP, and accompanied by an opinion thereon of independent
public accountants of recognized national standing, which opinion shall state
that such financial statements present fairly, in all material respects, the
financial position of the companies being reported upon and its results of
operations and cash flows and have been prepared in conformity with GAAP, and
that the examination of such accountants in connection with such financial
statements has been made in accordance with generally accepted auditing
standards, and that such audit provides a reasonable basis for such opinion in
the circumstances, provided that the Company shall be deemed to have made such
delivery of the documents provided in this Section 7.1(b) if the
Company shall have timely made Electronic Delivery thereof.

(c)           SEC and Other Reports. Promptly
upon their becoming available, one copy of (i) each financial statement,
report, notice or proxy statement sent by the Company to its public securities
holders generally, and (ii) each regular or periodic report, each
registration statement that shall have become effective (without exhibits
except as expressly requested by such holder), and each final prospectus and
all amendments thereto filed by the Company with the SEC and of all press
releases and other statements made available generally by the Company to the
public concerning developments that are Material;

(d)           Notice of Default or Event of Default.
Promptly, and in any event within 5 Business Days after a Responsible Officer
becoming aware of the existence of any Default or Event of Default or that any
Person has given any notice or taken any action with respect to a claimed
default hereunder or that any Person has given any notice or taken any action
with respect to a claimed default of the type referred to in Section 11(f),
a written notice specifying the nature and period of existence thereof and what
action the Company is taking or proposes to take with respect thereto;

(e)           ERISA Matters. Promptly,
and in any event within 5 Business Days after a Responsible Officer becoming
aware of any of the following, a written notice setting forth the nature
thereof and the action, if any, that the Company or an ERISA Affiliate proposes
to take with respect thereto:

(i)            with respect to any Plan, any
reportable event, as defined in section 4043(c) of ERISA and the
regulations thereunder, for which notice thereof has not been waived pursuant
to such regulations as in effect on the date hereof; or

(ii)           the taking by the PBGC of steps to
institute, or the threatening by the PBGC of the institution of, proceedings
under section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the Company

 15
 

 

or any ERISA Affiliate of
a notice from a Multi-employer Plan that such action has been taken by the PBGC
with respect to such Multi-employer Plan; or

 

(iii)          any event, transaction or condition
that could result in the incurrence of any liability by the Company or any
ERISA Affiliate pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans, or in the imposition
of any Lien on any of the rights, properties or assets of the Company or any
ERISA Affiliate pursuant to Title I or IV of ERISA or such penalty or excise
tax provisions, if such liability or Lien, taken together with any other such
liabilities or Liens then existing, could reasonably be expected to have a
Material Adverse Effect;

(f)            Notice of Environmental Matters.

(i)            Written notice within 15 days of a
Responsible Officer becoming aware of any of the following, that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect on the
Company:

(A)          the violation of any Environmental
Law;

(B)           any claim, demand, investigation,
proceeding, cost recovery action, litigation, judgment, order or lien arising
pursuant to any Environmental Law or from the release or disposal of any
Hazardous Substance; or,

(C)           any other environmental, health or
safety condition or occurrence.

(g)           Notices from Governmental Authority.
Promptly, and in any event within 30 days of receipt thereof, copies of any
notice to the Company (in addition to those covered by clause (f) above)
from any Federal or state Governmental Authority relating to any order, ruling,
statute or other law or regulation that could reasonably be expected to have a
Material Adverse Effect; and

(h)           Requested Information. With
reasonable promptness, such other data and information relating to the
business, operations, affairs, financial condition, assets or properties of the
Company or relating to the ability of the Company to perform its obligations
hereunder and under the Bonds as from time to time may be reasonably requested
by any such holder of Bonds.

Section 7.2            Officer’s Certificate; Debt
Issuances.  (a) Each set of financial statements
delivered to a holder of Bonds pursuant to Sections 7.1(a) or 7.1(b) shall
be accompanied by a certificate of a Senior Financial Officer setting forth
(which, in the case of Electronic Delivery of any such financial statements,
shall be by separate concurrent delivery of such certificate to each holder of
Bonds): a statement that such Senior Financial Officer has reviewed the
relevant terms hereof and has made, or caused to be made, under his or her
supervision, a review of the transactions and conditions of the Company from
the beginning of the quarterly or annual period covered by the statements then
being furnished to the date of the certificate and that such review shall not
have disclosed the existence during such period of any condition or event that
constitutes a Default or an Event of Default or, if any such condition or event
existed or exists (including, without limitation, any such event or condition
resulting from

 16
 

 

the failure of the
Company to comply with any Environmental Law), specifying the nature and period
of existence thereof and what action the Company shall have taken or proposes
to take with respect thereto.

(b)           For any issuance of First Mortgage
Bonds or any incurrence of Debt that is Funded Debt governed by Sections 2.05
or 2.06 of the Supplemental Indenture, the Company shall within 5 Business Days
deliver to the Purchasers a copy of all documents, certificates, opinions and
calculations delivered to the Trustee in connection with such incurrence or
issuance.

Section 7.3            Visitation. The
Company shall permit the representatives of each holder of Bonds that is an
Institutional Investor:

(a)           No Default. If no Default
or Event of Default then exists, at the expense of such holder and upon
reasonable prior notice to the Company, to visit the principal executive office
of the Company, to discuss the affairs, finances and accounts of the Company
with the Company’s officers, and (with the consent of the Company, which
consent will not be unreasonably withheld) its independent public accountants,
and (with the consent of the Company, which consent will not be unreasonably
withheld) to visit the other offices and properties of the Company, all at such
reasonable times during regular business hours and as often as may be reasonably
requested in writing; and

(b)           Default. If a Default or
Event of Default then exists, at the expense of the Company to visit and
inspect any of the offices or properties of the Company, to examine all of its
books of account, records, reports and other papers, to make copies and
extracts therefrom, and to discuss its affairs, finances and accounts with its
officers and independent public accountants (and by this provision the Company
authorizes said accountants to discuss the affairs, finances and accounts of
the Company), all at such times during regular business hours and as often as
may be requested.

Section 8.                                          Payment,
Prepayment and Purchase of the Bonds.

Section 8.1            Payments
and Prepayments. The Bonds shall mature and be subject
to optional redemption solely as provided in the Supplemental Indenture.

Section 8.2            Allocation
of Partial Prepayments. In the case of each partial
prepayment of the Bonds, the principal amount of the Bonds to be prepaid shall
be allocated among all of the Bonds at the time outstanding in proportion, as
nearly as practicable, to the respective unpaid principal amounts thereof not
theretofore called for prepayment.

Section 8.3            Purchase
of Bonds. The Company will not and will not permit any
Affiliate (other than any Affiliate that Controls the Parent but that Controls
less than a majority of the voting stock of the Parent) to purchase, redeem,
prepay or otherwise acquire, directly or indirectly, any of the outstanding
Bonds except upon the payment or prepayment of the Bonds in accordance with the
terms of this Agreement and the Mortgage. The Company will promptly deliver all
Bonds acquired by it or any Affiliate (other than any Affiliate that Controls
the Parent but that Controls less than a majority of the voting stock of
Parent) to the Trustee for cancellation.

 17

 

Section 9.              Affirmative Covenants.

The Company covenants
that so long as any of the Bonds are outstanding:

Section 9.1            Compliance
with Law. Without limiting Section 10.4, the
Company will comply with all laws, ordinances or governmental rules or
regulations to which it is subject, including, without limitation, ERISA, the
USA Patriot Act and Environmental Laws, and will obtain and maintain in effect
all licenses, certificates, permits, franchises and other governmental
authorizations necessary to the ownership of its respective properties or to
the conduct of its respective businesses, in each case to the extent necessary
to ensure that non-compliance with such laws, ordinances or governmental rules or
regulations or failures to obtain or maintain in effect such licenses,
certificates, permits, franchises and other governmental authorizations could
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

Section 9.2            Insurance. The
Company will maintain, with financially sound and reputable insurers, insurance
with respect to its respective properties and businesses against such
casualties and contingencies, of such types, on such terms and in such amounts
(including deductibles, co-insurance and self-insurance, if adequate reserves
are maintained with respect thereto) as is customary in the case of entities of
established reputations engaged in the same or a similar business and similarly
situated.

Section 9.3            Maintenance
of Properties. The Company will maintain and keep, or
cause to be maintained and kept, its properties in good repair, working order
and condition (other than ordinary wear and tear), so that the business carried
on in connection therewith may be properly conducted at all times, provided
that this Section shall not prevent the Company from discontinuing the
operation and the maintenance of any of its properties if such discontinuance
is desirable in the conduct of its business and the Company has concluded that
such discontinuance could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

Section 9.4            Payment
of Taxes and Claims. The Company will file all tax
returns required to be filed in any jurisdiction and to pay and discharge all
taxes shown to be due and payable on such returns and all other taxes,
assessments, governmental charges, or levies imposed on it or any of its
properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent
and all claims for which sums have become due and payable that have or might
become a Lien on properties or assets of the Company, provided that the Company
need not pay any such tax or assessment or claims if (i) the amount,
applicability or validity thereof is contested by the Company on a timely basis
in good faith and in appropriate proceedings, and the Company has established
adequate reserves therefor in accordance with GAAP on the books of the Company
or (ii) the nonpayment of all such taxes, assessments and claims in the
aggregate could not reasonably be expected to have a Material Adverse Effect.

Section 9.5            Corporate
Existence, Etc. Subject to Article Twelve of the
Mortgage, the Company will at all times preserve and keep in full force and effect
its corporate existence. The Company will at all times preserve and keep in
full force and effect all rights and franchises of the Company unless, in the
good faith judgment of the Company, the termination of or failure

 18
 

 

to preserve and keep in
full force and effect right or franchise could not, individually or in the
aggregate, have a Material Adverse Effect.

Section 9.6            Books
and Records. The Company will maintain proper books of
record and account in conformity with GAAP and all applicable requirements of
any Governmental Authority having legal or regulatory jurisdiction over the
Company, as the case may be.

Section 9.7            Recordation
Information. The filings for recordation of the Original
Mortgage and the Supplemental Indenture contemplated by Section 4.14(b) shall
be completed not later than 6:00 P.M., New York time, on Tuesday, June 6,
2006, and the Company shall promptly notify the Purchasers of such completion
of recordation. Within 60 days after Closing, the Company shall deliver to the
Trustee and the Purchasers (a) an Officer’s Certificate certifying that (i) the
Original Mortgage and the Supplemental Indenture have each been duly recorded as a mortgage of real estate in each
county or recording or filing district listed on Schedule 9.7 to this Agreement,
and (ii) upon such filing and recording, and upon the filing of the
Financing Statement, no further recording or filing, and under present law, no
periodic or other re-recording or re-filing of the Original Mortgage or any
other instrument, will be required to preserve and protect the lien of the
Original Mortgage either as a mortgage on real estate or as a security interest
in personal property other than amendments to the Financing Statement with
respect to any Mortgaged Property acquired subsequent to a change in the name
or location (within the meaning of the applicable Uniform Commercial Code) of
the Company, change in or disposition of Mortgaged Property, or if a new debtor
becomes bound by the Mortgage; and (b) the opinion of Bryan Cave
LLP or other counsel reasonably acceptable to the Purchasers substantially in
the form attached hereto as Exhibit 9.7.

Section 9.8            Ratings
Covenant. Within not less than 30 days from receipt of
a written request of any Purchaser received after April 30, 2007 and
prior to December 31, 2009, the Company shall apply for a rating of the
Bonds (which may be a private letter rating) from at least one of the four
nationally recognized rating agencies as of the date hereof (Moody’s Investors
Service, Inc.; Standard & Poor’s, a division of The McGraw-Hill
Companies, Inc.; Fitch Ratings; and Dominion Bond Ratings Service). The
Company shall deliver evidence, reasonably satisfactory to the Purchasers, of
the rating to each Purchaser promptly upon receipt thereof, and shall
thereafter maintain a current rating on a current basis so long as any of the
Bonds are Outstanding, unless each Purchaser otherwise agrees. The cost of
obtaining and maintaining any such rating shall be borne by the Company.

Section 10.                                   Negative
Covenants.

The Company covenants that so long as any of the Bonds
are outstanding:

Section 10.1         Transactions
with Affiliates. The Company will not enter into
directly or indirectly any transaction or group of related transactions
(including without limitation the purchase, lease, sale or exchange of
properties of any kind or the rendering of any service) with any Affiliate,
except in the ordinary course and pursuant to the reasonable requirements of
the Company’s business and upon fair and reasonable terms no less favorable to
the Company than would be obtainable in a comparable arm’s-length transaction
with a Person not an Affiliate.

 19
 

 

Section 10.2         Line
of Business. The Company will not engage in any business
if, as a result, the general nature of the business in which the Company would
then be engaged would be substantially changed from the general nature of the
business in which the Company is engaged on the date of this Agreement as
described in the Memorandum.

Section 10.3         Terrorism
Sanctions Regulations. The Company will not (a) become
a Person described or designated in the Specially Designated Nationals and
Blocked Persons List of the Office of Foreign Assets Control or in Section 1
of the Anti-Terrorism Order or (b) engage in any dealings or transactions
with any such Person.

Section 11.                                   Events
of Default.

An “Event of Default”
shall exist if any of the following conditions or events shall occur and be
continuing:

(a)                           failure
to pay any interest, including interest on overdue interest, on any Bond when
it becomes due and payable and continuance of such default for a period of 5
Business Days; or

(b)                           an
“Event of Default” set forth in Section 901(b) — (f) of the
Mortgage; or

(c)                           the
Company defaults in the performance of or compliance with any term contained in
Sections 7.1(d), 7.1(e), 7.1(f), 7.1(g) or 9.7 of this Agreement or
Sections 2.04, 2.05, 2.06 or 2.07 of the Supplemental Indenture; or

(d)                           the
Company defaults in the performance of or compliance with any term contained
herein (other than those referred to in the other subsections of this Section)
and such default is not remedied within 30 days after the earlier of (i) a
Responsible Officer obtaining actual knowledge of such default and (ii) the
Company receiving written notice of such default from any holder of a Bond (any
such written notice to be identified as a “notice of default” and to refer
specifically to this subsection); or

(e)                           any
representation or warranty made in writing by or on behalf of the Company or by
any officer of the Company in this Agreement or in any writing furnished in
connection with the transactions contemplated hereby proves to have been false
or incorrect in any material respect on the date as of which made or furnished,
as the case may be; or

(f)                            (i) the
Company or any Subsidiary is in default (as principal or as guarantor or other
surety) in the payment of any principal of or premium or make-whole amount or
interest on any Indebtedness that is outstanding in an aggregate principal
amount of at least $5,000,000 beyond any period of grace provided with respect
thereto, or (ii) the Company or any Subsidiary is in default in the
performance of or compliance with any term of any evidence of any Indebtedness
in an aggregate outstanding principal amount of at least $5,000,000 or of any
mortgage, indenture or other agreement relating thereto or any other condition
exists, and as a consequence of such default or condition such Indebtedness has
become, or has been declared (or one or more Persons are entitled to declare
such Indebtedness to be), due and payable before its stated maturity or before
its regularly scheduled dates of payment, or (iii) as a consequence of the
occurrence or continuation of any event or condition (other than the passage of
time or the

 20
 

 

right of the holder of
Indebtedness to convert such Indebtedness into equity interests), (x) the
Company or any Subsidiary has become obligated to purchase or repay
Indebtedness before its regular maturity or before its regularly scheduled
dates of payment in an aggregate outstanding principal amount of at least
$5,000,000 or (y) one or more Persons have the right to require the
Company or any Subsidiary so to purchase or repay such Indebtedness; or

(g)                           a
final judgment or judgments for the payment of money aggregating in excess of
$5,000,000 are rendered against one or more of the Company or any Subsidiary
and such judgments are not, within 60 days after entry thereof, bonded,
discharged or stayed pending appeal, or are not discharged within 60 days after
the expiration of such stay; or

(h)                           if
(i) any Plan shall fail to satisfy the minimum funding standards of ERISA
or the Code for any plan year or part thereof or a waiver of such standards or
extension of any amortization period is sought or granted under section 412 of
the Code, (ii) a notice of intent to terminate any Plan shall have been
filed with the PBGC or the PBGC shall have instituted proceedings under ERISA
section 4042 to terminate or appoint a trustee to administer any Plan or the
PBGC shall have notified the Company or any ERISA Affiliate that a Plan may
become a subject of any such proceedings, (iii) the Company or any ERISA
Affiliate shall have incurred or is reasonably expected to incur any liability
pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of
the Code relating to employee benefit plans, (iv) the Company or any ERISA
Affiliate withdraws from any Multiemployer Plan, or (v) the Company
establishes or amends any employee welfare benefit plan that provides
post-employment welfare benefits in a manner that would increase the liability
of the Company thereunder; and any such event or events described in clauses (i) through
(v) above, either individually or together with any other such event or
events, could reasonably be expected to have a Material Adverse Effect. As used
in Section 11(h), the terms “employee benefit plan” and “employee welfare
benefit plan” shall have the respective meanings assigned to such terms in Section 3
of ERISA; or

(i)                            the
Company fails to apply for a rating within the time specified in Section 9.8
of this Agreement or to receive such rating within 150 days following the date
of application therefor.

Section 12.                                   Remedies
on Default, Etc.

Section 12.1         Remedies
Under this Agreement. If any Default or Event of Default
has occurred and is continuing, and irrespective of whether any Bonds have
become or have been declared immediately due and payable under the Mortgage or
of the exercise of any remedies under the Mortgage, any holder of any Bond at
the time outstanding entitled to the benefits of this Agreement may proceed to
protect and enforce the rights of such holder by an action at law, suit in
equity or other appropriate proceeding, whether for the specific performance of
any agreement contained herein, or for an injunction against a violation of any
of the terms hereof, or in aid of the exercise of any power granted hereby or
by law or otherwise.

Section 12.2         No
Waivers or Election of Remedies, Expenses, Etc. No
course of dealing and no delay on the part of any holder of any Bond in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder’s rights, powers or remedies. No right, power
or remedy conferred by this Agreement or by any Bond upon any

 21
 

 

holder thereof shall be
exclusive of any other right, power or remedy referred to herein or therein or
now or hereafter available at law, in equity, by statute or otherwise. Without
limiting the obligations of the Company under Section 14, the Company will
pay to the holder of each Bond on demand such further amount as shall be
sufficient to cover all costs and expenses of such holder incurred in any
enforcement or collection under this Section 12, including, without
limitation, reasonable attorneys’ fees, expenses and disbursements.

Section 13.            Certain Special Rights. In
the event of any conflict between any provisions set forth below and the
Mortgage, the provisions set forth below shall control.

Section 13.1         Direct
Payment. Notwithstanding anything to the contrary
contained in this Agreement, the Mortgage or the Bonds, the Company shall pay
(or cause the Trustee or a Paying Agent under the Mortgage to pay) all amounts
with respect to each Bond held by each holder of Bonds that is an Institutional
Investor (without any presentment of such Bond and without any notation of such
payment being made thereon) by crediting before 3:00 p.m., New  York time, by Federal funds bank wire or
other transfer, the account of such Institutional Investor, in any bank in the
United States of America as may be designated in writing by such Institutional
Investor, or in such other lawful manner as may be directed or to such other
address in the United States of America as may be designated in writing by such
Institutional Investor. Your address on Schedule A to this Agreement shall be
deemed to constitute notice, direction or designation (as appropriate) to the
Company and the Trustee with respect to direct payments as aforesaid.

Section 13.2         Delivery
Expenses. If a Purchaser surrenders any Bond to the
Company or the Trustee pursuant to this Agreement or the Mortgage, or if the
Company issues any new Bond pursuant to this Agreement or the Mortgage (other
than pursuant to requests of Bond holders for exchanges), the Company will pay
the cost of delivering to or from such Purchaser’s office from or to the
Company or the Trustee, insured to such Purchaser’s reasonable satisfaction,
the surrendered Bond or Bonds and any Bond or Bonds issued in substitution or
replacement for the surrendered Bond or Bonds, in each case insured to such
Purchaser’s reasonable satisfaction.

Section 13.3         Indemnity
for Destroyed, Lost or Stolen Bonds. The Company and the
Trustee acknowledge that any holder of Bonds that is an Institutional Investor
may satisfy its obligation to deliver security or indemnity in respect of
destroyed, lost, or stolen Bonds, as set forth in Section 306 (Mutilated,
destroyed, lost and stolen First Mortgage Bonds) of the Mortgage, by delivering
its own unsecured letter of indemnity in respect thereof.

Section 13.4         Late
Payments of Interest. The provisions of Section 307
(Payment of interest on Bonds; interest rights preserved) (other than the first
and last paragraphs thereof) of the Mortgage shall not apply to the Bonds. Interest
on any Bond, other than that paid in accordance with first sentence of such Section 307,
shall be paid to the Person in whose name that Bond (or one or more Predecessor
First Mortgage Bonds (as defined in the Mortgage)) is registered at the close
of business on the day before such payment.

Section 13.5         No
Presentation of Bonds. Notwithstanding any provisions of
the Mortgage to the contrary, no holder of Bonds shall be required to present
or surrender such

 22
 

 

Bonds to the Company, the
Trustee or any other Person prior to, or as a condition of, receiving any
payment in respect thereof. Each Purchaser agrees that it will deliver to the
Company all Bonds registered in such Purchaser’s name, at the time of final
payment in full of all amounts due in respect thereof, within a reasonable
period after such final payment.

Section 14.                                   Expenses,
Etc.

Section 14.1         Transaction
Expenses. Whether or not the transactions contemplated
hereby are consummated, the Company will pay all costs and expenses (including
reasonable attorneys’ fees of a single special counsel and, if reasonably
required by the Required Holders, a single local or other counsel per
jurisdiction) incurred by the Purchasers and each other holder of a Bond in
connection with such transactions and in connection with any amendments,
waivers or consents under or in respect of this Agreement or the Bonds (whether
or not such amendment, waiver or consent becomes effective), including, without
limitation: (a) the costs and expenses incurred in enforcing or defending
(or determining whether or how to enforce or defend) any rights under this
Agreement or the Bonds or in responding to any subpoena or other legal process
or informal investigative demand issued in connection with this Agreement or
the Bonds, or by reason of being a holder of any Bond, (b) the costs and
expenses, including financial advisors’ fees, incurred in connection with the
insolvency or bankruptcy of the Company 
or in connection with any work-out or restructuring of the transactions
contemplated hereby and by the Bonds and (c) the costs and expenses
incurred in connection with the initial filing of this Agreement and all
related documents and financial information with the SVO provided, that such
costs and expenses shall not exceed $3,000. The Company will pay, and will save
each Purchaser and each other holder of a Bond harmless from, all claims in
respect of any fees, costs or expenses, if any, of brokers and finders (other
than those, if any, retained by a Purchaser or other holder, in connection with
its purchase of the Bonds).

Section 14.2         Survival. The
obligations of the Company under this Section 14 will survive the payment
or transfer of any Bond, the enforcement, amendment or waiver of any provision
of this Agreement or the Bonds, and the termination of this Agreement.

Section 15.                                   Survival
of Representations and Warranties; Entire Agreement.

All representations and warranties contained herein
shall survive the execution and delivery of this Agreement and the Bonds, the
purchase or transfer by any Purchaser of any Bond or portion thereof or
interest therein and the payment of any Bond, and may be relied upon by any
subsequent holder of a Bond, regardless of any investigation made at any time
by or on behalf of such Purchaser or any other holder of a Bond. All statements
contained in any certificate or other instrument delivered by or on behalf of
the Company pursuant to this Agreement shall be deemed representations and
warranties of the Company under this Agreement. Subject to the preceding
sentence, this Agreement, the Original Mortgage, the Supplemental Indenture and
the Bonds embody the entire agreement and understanding between each Purchaser
and the Company and supersede all prior agreements and understandings relating
to the subject matter hereof.

 23
 

 

Section 16.            Amendment and Waiver of this
Agreement.

Section 16.1         Requirements. This
Agreement may be amended, and the observance of any term hereof may be waived
(either retroactively or prospectively), with (and only with) the written
consent of the Company and holders of a majority of the principal amount of all
Outstanding Bonds, except that (a) no amendment or waiver of any of the
provisions of Section 1, 2, 3, 4, 6 or 20 hereof, or any defined term (as
it is used therein), will be effective as to any Purchaser unless consented to
by such Purchaser in writing, and (b) no such amendment or waiver may,
without the written consent of the holder of each Bond at the time Outstanding
affected thereby, (i) change the percentage of the principal amount of the
Bonds the holders of which are required to consent to any such amendment or
waiver, or (ii) amend any of Sections 8, 12, 16 or 19.

Section 16.2         Solicitation of Holders of Bonds.

(a)           Solicitation. The
Company will provide each holder of the Bonds (irrespective of the amount of
Bonds then owned by it) with sufficient information, sufficiently far in
advance of the date a decision is required, to enable such holder to make an
informed and considered decision with respect to any proposed amendment, waiver
or consent in respect of any of the provisions hereof or of the Bonds. The
Company will deliver executed or true and correct copies of each amendment,
waiver or consent effected pursuant to the provisions of this Section 16
to each holder of Outstanding Bonds promptly following the date on which it is
executed and delivered by, or receives the consent or approval of, the
requisite holders of Bonds.

(b)           Payment. The Company
will not directly or indirectly pay or cause to be paid any remuneration,
whether by way of supplemental or additional interest, fee or otherwise, or
grant any security or provide other credit support, to any holder of Bonds as
consideration for or as an inducement to the entering into by any holder of
Bonds of any waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or security is concurrently
granted or other credit support concurrently provided, on the same terms,
ratably to each holder of Bonds then outstanding even if such holder did not
consent to such waiver or amendment.

Section 16.3         Binding
Effect, etc. Any amendment or waiver consented to as
provided in this Section 16 applies equally to all holders of Bonds and is
binding upon them and upon each future holder of any Bond and upon the Company
without regard to whether such Bond has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or
waived or impair any right consequent thereon. No course of dealing between the
Company and the holder of any Bond nor any delay in exercising any rights
hereunder or under any Bond shall operate as a waiver of any rights of any
holder of such Bond. As used herein, the term “this Agreement” and references
thereto shall mean this Agreement as it may from time to time be amended or
supplemented.

 24

 

Section 17.                                   Notices.

All notices and communications provided for hereunder
shall be in writing and sent (a) by telecopy if the sender on the same day
sends a confirming copy of such notice by a recognized overnight delivery
service (charges prepaid), or (b) by registered or certified mail with
return receipt requested (postage prepaid), or (c) by a recognized
overnight delivery service (with charges prepaid). Any such notice must be
sent:

(i)            if to any Purchaser or its nominee,
to such Purchaser or nominee at the address specified for such communications
in Schedule A, or at such other address as such Purchaser or nominee shall have
specified to the Company in writing,

(ii)           if to any other holder of any Bond,
to such holder at such address as such other holder shall have specified to the
Company in writing, or

(iii)          if to the Company, to the Company at
its address set forth on Schedule A the attention of the Chief Financial
Officer, or at such other address as the Company shall have specified to the
holder of each Bond in writing.

Notices under this Section 17 will be deemed
given only when actually received.

Section 18.                                   Reproduction
of Documents.

This Agreement and all documents relating thereto,
including, without limitation, (a) consents, waivers and modifications
that may hereafter be executed, (b) documents received by any Purchaser at
the Closing (except the Bonds themselves), and (c) financial statements,
certificates and other information previously or hereafter furnished to any
Purchaser, may be reproduced by such Purchaser by any photographic,
photostatic, electronic, digital, or other similar process and such Purchaser
may destroy any original document so reproduced. The Company agrees and
stipulates that, to the extent permitted by applicable law, any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by such Purchaser in
the regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence. This
Section 18 shall not prohibit the Company or any other holder of Bonds
from contesting any such reproduction to the same extent that it could contest
the original, or from introducing evidence to demonstrate the inaccuracy of any
such reproduction.

Section 19.                                   Confidential
Information.

For the purposes of this Section 19, “Confidential Information” means information delivered to any
Purchaser by or on behalf of the Company in connection with the transactions
contemplated by or otherwise pursuant to this Agreement that is proprietary in
nature and that was clearly marked or labeled or otherwise adequately
identified when received by such Purchaser as being confidential information of
the Company, provided that such term does not include information that (a) was
publicly known or otherwise known to such Purchaser prior to the time of such
disclosure, (b) subsequently becomes publicly known through no act or
omission by such Purchaser or any person acting on such Purchaser’s behalf, (c) otherwise

 25
 

 

 becomes known
to such Purchaser other than through disclosure by the Company or (d) constitutes
financial statements delivered to such Purchaser under Section 7.1 that
are otherwise publicly available. Each Purchaser will maintain the
confidentiality of such Confidential Information in accordance with procedures
adopted by such Purchaser in good faith to protect confidential information of
third parties delivered to such Purchaser, provided that such Purchaser may
deliver or disclose Confidential Information to (i) its directors,
officers, employees, agents, attorneys and affiliates (to the extent such
disclosure reasonably relates to the administration of the investment
represented by its Bonds), (ii) its financial advisors and other
professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of this Section 19,
(iii) any other holder of any Bond, (iv) any Institutional Investor
to which it sells or offers to sell such Bond or any part thereof or any
participation therein (if such Person has agreed in writing prior to its
receipt of such Confidential Information to be bound by the provisions of this Section 19),
(v) any Person from which it offers to purchase any security of the
Company (if such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this Section 19),
(vi) any federal or state regulatory authority having jurisdiction over
such Purchaser, (vii) the NAIC or the SVO or, in each case, any similar
organization, or any nationally recognized rating agency that requires access
to information about such Purchaser’s investment portfolio, or (viii) any
other Person to which such delivery or disclosure may be necessary or
appropriate (w) to effect compliance with any law, rule, regulation or
order applicable to such Purchaser, (x) in response to any subpoena or
other legal process, (y) in connection with any litigation to which such
Purchaser is a party or (z) if an Event of Default has occurred and is
continuing, to the extent such Purchaser may reasonably determine such delivery
and disclosure to be necessary or appropriate in the enforcement or for the
protection of the rights and remedies under such Purchaser’s Bonds and this
Agreement. Each holder of a Bond, by its acceptance of a Bond, will be deemed
to have agreed to be bound by and to be entitled to the benefits of this Section 19
as though it were a party to this Agreement. On reasonable request by the
Company in connection with the delivery to any holder of a Bond of information
required to be delivered to such holder under this Agreement or requested by
such holder (other than a holder that is a party to this Agreement or its
nominee), such holder will enter into an agreement with the Company embodying
the provisions of this Section 19.

Section 20.                                   Substitution
of Purchaser.

Each Purchaser shall have the right to substitute any
one of its Affiliates as the purchaser of the Bonds that it has agreed to
purchase hereunder, by written notice to the Company, which notice shall be
signed by both such Purchaser and such Affiliate, shall contain such Affiliate’s
agreement to be bound by this Agreement and shall contain a confirmation by
such Affiliate of the accuracy with respect to it of the representations set
forth in Section 6. Upon receipt of such notice, any reference to such
Purchaser in this Agreement (other than in this Section 20), shall be
deemed to refer to such Affiliate in lieu of such original Purchaser. In the
event that such Affiliate is so substituted as a Purchaser hereunder and such
Affiliate thereafter transfers to such original Purchaser all of the Bonds then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
any reference to such Affiliate as a “Purchaser” in this Agreement (other than
in this Section 20), shall no longer be deemed to refer to such Affiliate,
but shall refer to such original Purchaser, and such original Purchaser shall
again have all the rights of an original holder of the Bonds under this
Agreement.

 26
 

 

Section 21.                                   Miscellaneous.

Section 21.1         Successors
and Assigns.   All covenants and other agreements
contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent holder of a Bond) whether so expressed or
not.

Section 21.2         Payments
Due on Non-Business Days.   Anything in this Agreement,
the Mortgage or the Bonds to the contrary notwithstanding, any payment of
principal of or Make-Whole Amount or interest on any Bond that is due on a date
other than a Business Day shall be made on the next succeeding Business Day
without including the additional days elapsed in the computation of the
interest payable on such next succeeding Business Day; provided that if the
maturity date of any Bond is a date other than a Business Day, the payment
otherwise due on such maturity date shall be made on the next succeeding
Business Day and shall include the additional days elapsed in the computation
of interest payable on such next succeeding Business Day.

Section 21.3         Accounting
Terms.   All accounting terms used herein which are not
expressly defined in this Agreement have the meanings respectively given to
them in accordance with GAAP. Except as otherwise specifically provided herein,
(i) all computations made pursuant to this Agreement shall be made in
accordance with GAAP, and (ii) all financial statements shall be prepared
in accordance with GAAP.

Section 21.4         Severability.   Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.

Section 21.5         Construction,
etc.   Each covenant contained herein shall be construed
(absent express provision to the contrary) as being independent of each other
covenant contained herein, so that compliance with any one covenant shall not
(absent such an express contrary provision) be deemed to excuse compliance with
any other covenant. Where any provision herein refers to action to be taken by
any Person, or which such Person is prohibited from taking, such provision
shall be applicable whether such action is taken directly or indirectly by such
Person.

For the avoidance of doubt, all Schedules and Exhibits
attached to this Agreement shall be deemed to be a part hereof.

Section 21.6         Counterparts.   This
Agreement may be executed in any number of counterparts, each of which shall be
an original but all of which together shall constitute one instrument. Each
counterpart may consist of a number of copies hereof, each signed by less than
all, but together signed by all, of the parties hereto.

Section 21.7         Governing
Law.   This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the law of
the State of New

 27
 

 

York excluding choice of law principles of the law of
such State that would permit the application of the laws of a jurisdiction
other than such State.

Section 21.8         Jurisdiction
and Process; Waiver of Jury Trial.   (a)  The
Company irrevocably submits to the non-exclusive jurisdiction of any New York
State or federal court sitting in the Borough of Manhattan, The City of New
York, over any suit, action or proceeding arising out of or relating to this
Agreement or the Bonds. To the fullest extent permitted by applicable law, the
Company irrevocably waives and agrees not to assert, by way of motion, as a
defense or otherwise, any claim that it is not subject to the jurisdiction of
any such court, any objection that it may now or hereafter have to the laying
of the venue of any such suit, action or proceeding brought in any such court
and any claim that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum.

(b)                           The
Company consents to process being served by or on behalf of any holder of Bonds
in any suit, action or proceeding of the nature referred to in Section 21.8(a) by
mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, return receipt requested, to it at its
address specified in Section 17 or at such other address of which such
holder shall then have been notified pursuant to said Section. The Company
agrees that such service upon receipt (i) shall be deemed in every respect
effective service of process upon it in any such suit, action or proceeding and
(ii) shall, to the fullest extent permitted by applicable law, be taken
and held to be valid personal service upon and personal delivery to it. Notices
hereunder shall be conclusively presumed received as evidenced by a delivery
receipt furnished by the United States Postal Service or any reputable
commercial delivery service.

(c)                           Nothing
in this Section 21.8 shall affect the right of any holder of a Bond to
serve process in any manner permitted by law, or limit any right that the
holders of any of the Bonds may have to bring proceedings against the Company
in the courts of any appropriate jurisdiction or to enforce in any lawful
manner a judgment obtained in one jurisdiction in any other jurisdiction.

(d)                           The
parties hereto hereby waive trial by jury in any action brought on or with
respect to this Agreement, the Bonds, the Mortgage or any other document
executed in connection herewith or therewith.

*  * 
*  *  *

 28

 

If you are in agreement with the foregoing, please
sign the form of agreement on a counterpart of this Agreement and return it to
the Company, whereupon this Agreement shall become a binding agreement between
you and the Company.

	
  

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
  THE EMPIRE DISTRICT GAS COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ RONALD F. GATZ

  
	
   

  	
   

  	
  Ronald F. Gatz, Vice President

  

 

 

This Agreement is hereby

accepted and agreed to as

of the date thereof.

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

	
  By:

  	
  Delaware Investment Advisers,

  	
   

  
	
   

  	
  a series of Delaware Management Business Trust,

  	
   

  
	
   

  	
  Attorney in Fact

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ NICOLE
  W. TULLO

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  

 

 

This Agreement is hereby

accepted and agreed to as

of the date thereof.

FIRST PENN-PACIFIC LIFE INSURANCE COMPANY

	
  By:

  	
  Delaware Investment Advisers,

  	
   

  
	
   

  	
  a series of Delaware Management Business Trust,

  	
   

  
	
   

  	
  Attorney in Fact

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ NICOLE W. TULLO

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  

 

 

This Agreement is hereby

accepted and agreed to as

of the date thereof.

LINCOLN LIFE &
ANNUITY COMPANY OF NEW YORK

	
  By:

  	
  Delaware Investment Advisers,

  	
   

  
	
   

  	
  a series of Delaware Management Business Trust,

  	
   

  
	
   

  	
  Attorney in Fact

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ NICOLE W. TULLO

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  

 

 

This Agreement is hereby

accepted and agreed to as

of the date thereof.

JEFFERSON PILOT FINANCIAL INSURANCE COMPANY

	
  By:

  	
  Delaware Investment Advisers,

  	
   

  
	
   

  	
  a series of Delaware Management Business Trust,

  	
   

  
	
   

  	
  Attorney in Fact

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ NICOLE W. TULLO

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  

 

 

This Agreement is hereby

accepted and agreed to as

of the date thereof.

JEFFERSON-PILOT LIFE INSURANCE COMPANY

	
  By:

  	
  Delaware Investment Advisers,

  	
   

  
	
   

  	
  a series of Delaware Management Business Trust,

  	
   

  
	
   

  	
  Attorney in Fact

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ NICOLE W. TULLO

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  

 

SCHEDULE
B

DEFINED
TERMS

As used herein, the following terms have the
respective meanings set forth below or set forth in the Section hereof
following such term:

 “Adjustment
Amount” is defined in the Asset Purchase Agreement.

“Affiliate” means, at any time,
and with respect to any Person, any other Person that at such time directly or
indirectly through one or more intermediaries Controls, or is Controlled by, or
is under common Control with, such first Person, and, with respect to the
Company, shall include any Person beneficially owning or holding, directly or
indirectly, 10% or more of any class of voting or equity interests of the
Company or any corporation of which the Company beneficially owns or holds, in
the aggregate, directly or indirectly, 10% or more of any class of voting or
equity interests. As used in this definition, “Control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise. Unless the context
otherwise clearly requires, any reference to an “Affiliate” is a reference to
an Affiliate of the Company.

“Agreement” is defined in Section 16.3.

“Anti-Terrorism Order” means
Executive Order No. 13,224 of September 24, 2001, Blocking Property
and Prohibiting Transactions with Persons Who Commit, Threaten to Commit or
Support Terrorism, 66 U.S. Fed. Reg. 49, 079 (2001), as amended.

“Acquisition” is defined in Section 4.10.

“Asset Purchase Agreement” is
defined in Section 5.14.

“Book Values” is defined in the
Asset Purchase Agreement.

“Business” means the natural gas
utility business conducted by the Company (or, prior to the Closing, the
Seller) serving customers in the Territory.

“Business Day” is defined in the
Mortgage.

“Capital Lease” means, at any
time, a lease with respect to which the lessee is required concurrently to
recognize the acquisition of an asset and the incurrence of a liability in
accordance with GAAP.

“Closing” is defined in Section 3.

“Code” means the Internal
Revenue Code of 1986, as amended from time to time, and the rules and
regulations promulgated thereunder from time to time.

 

“Company” means The Empire
District Gas Company, a Kansas corporation or any successor that becomes such
in the manner prescribed in Article 12 of the Original Mortgage.

“Confidential Information” is
defined in Section 19.

“Debt” is defined in the
Mortgage.

“Default” means an event or
condition the occurrence or existence of which would, with the lapse of time or
the giving of notice or both, become an Event of Default.

“Disclosure Documents” is
defined in Section 5.3.

“Division Income Statement Information”
is defined in Section 5.5(b).

“Electronic Delivery” is defined
in Section 7.1(a).

“Environmental Laws” means any
and all Federal, state, local, and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions relating to
pollution and the protection of the environment or the release of any materials
into the environment, including but not limited to those related to Hazardous
Materials.

“ERISA” means the Employee
Retirement Income Security Act of 1974, as amended from time to time, and the rules and
regulations promulgated thereunder from time to time in effect.

“ERISA Affiliate” means any
trade or business (whether or not incorporated) that is treated as a single
employer together with the Company under section 414 of the Code.

“Event of Default” is defined in
Section 11.

“FERC” means the Federal Energy
Regulatory Commission.

“FERC Accounting Rules” is
defined in the Asset Purchase Agreement.

“Financing Statement”
is defined in Section 4.14(b).

“Funded Debt”
means all Debt which by its terms or by the terms of any instrument or
agreement relating thereto matures, or which is otherwise payable or unpaid,
one year or more from, or is directly or indirectly renewable or extendible at
the option of the obligor in respect thereof to a date one year or more
(including, without limitation, an option of such obligor under a revolving
credit or similar agreement obligating the lender or lenders to extend credit
over a period of one year or more) from, the date of the creation thereof, provided, that Funded Debt shall include, as at any date of
determination, current maturities of Funded Debt.

“GAAP” means generally accepted
accounting principles as in effect from time to time in the United States of
America.

“Governmental Authority” means

 2
 

 

(a)           the government of

(i)            the United States of America or any
State or other political subdivision thereof, or

(ii)           any other jurisdiction in which the
Company conducts all or any part of its business, or which asserts jurisdiction
over any properties of the Company, or

(b)           any entity exercising executive,
legislative, judicial, regulatory or administrative functions of, or pertaining
to, any such government.

“Guaranty” means, with respect
to any Person, any obligation (except the endorsement in the ordinary course of
business of negotiable instruments for deposit or collection) of such Person
guaranteeing or in effect guaranteeing any indebtedness, dividend or other
obligation of any other Person in any manner, whether directly or indirectly,
including (without limitation) obligations incurred through an agreement,
contingent or otherwise, by such Person:

(a)           to purchase such indebtedness or
obligation or any property constituting security therefor;

(b)           to advance or supply funds (i) for
the purchase or payment of such indebtedness or obligation, or (ii) to
maintain any working capital or other balance sheet condition or any income
statement condition of any other Person or otherwise to advance or make
available funds for the purchase or payment of such indebtedness or obligation;

(c)           to lease properties or to purchase
properties or services primarily for the purpose of assuring the owner of such
indebtedness or obligation of the ability of any other Person to make payment
of the indebtedness or obligation; or

(d)           otherwise to assure the owner of such
indebtedness or obligation against loss in respect thereof.

In any computation of the indebtedness or other
liabilities of the obligor under any Guaranty, the indebtedness or other
obligations that are the subject of such Guaranty shall be assumed to be direct
obligations of such obligor.

“Hazardous Material” means any
and all pollutants, toxic or hazardous wastes or other substances that might
pose a hazard to health and safety, the removal of which may be required or the
generation, manufacture, refining, production, processing, treatment, storage,
handling, transportation, transfer, use, disposal, release, discharge,
spillage, seepage or filtration of which is or shall be restricted,
prohibited or penalized by any applicable law including, but not limited to,
asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls,
petroleum, petroleum products, lead based paint, radon gas or similar
restricted, prohibited or penalized substances.

“Indebtedness” with respect to
any Person means, at any time, without duplication,

 3
 

 

(a)           its liabilities for borrowed money
and its redemption obligations in respect of mandatorily redeemable Preferred
Stock;

(b)           its liabilities for the deferred
purchase price of property acquired by such Person (excluding accounts payable
arising in the ordinary course of business but including all liabilities
created or arising under any conditional sale or other title retention
agreement with respect to any such property);

(c)           (i) all liabilities appearing on
its balance sheet in accordance with GAAP in respect of Capital Leases and (ii) all
liabilities which would appear on its balance sheet in accordance with GAAP in
respect of Synthetic Leases assuming such Synthetic Leases were accounted for as
Capital Leases;

(d)           all liabilities for borrowed money
secured by any Lien with respect to any property owned by such Person (whether
or not it has assumed or otherwise become liable for such liabilities);

(e)           all its liabilities in respect of
letters of credit or instruments serving a similar function issued or accepted
for its account by banks and other financial institutions (whether or not
representing obligations for borrowed money);

(f)            the aggregate Swap Termination Value
of all Swap Contracts of such Person; and

(g)           any Guaranty of such Person with
respect to liabilities of a type described in any of clauses (a) through (f) hereof.

Indebtedness of any Person shall include all
obligations of such Person of the character described in clauses (a) through
(g) to the extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be extinguished under
GAAP.

“Institutional Investor” means (a) any
Purchaser of a Bond, (b) any holder of a Bond holding (together with one
or more of its Affiliates) more than 10% of the aggregate principal amount of
the Bonds then outstanding, (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form, and (d) any
Related Fund of any holder of any Bond.

“Lien” means, with respect to
any Person, any mortgage, lien, pledge, charge, security interest or other
encumbrance, or any interest or title of any vendor, lessor, lender or other
secured party to or of such Person under any conditional sale or other title
retention agreement or Capital Lease, upon or with respect to any property or asset
of such Person (including in the case of stock, stockholder agreements, voting
trust agreements and all similar arrangements).

“Material” means material in
relation to the business, operations, affairs, financial condition, assets or
properties of the Company after giving effect to the Acquisition.

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“Material Adverse Effect” means
a material adverse effect on (a) the business, operations, affairs,
financial condition, assets or properties of the Company, or (b) the
ability of the Company to perform its obligations under this Agreement and the
Bonds, or (c) the validity or enforceability of this Agreement or the
Bonds.

“Memorandum” is defined in Section 5.3.

“Multiemployer Plan” means any
Plan that is a “multiemployer plan” (as such term is defined in section 4001(a)(3) of
ERISA).

“Mortgage” is defined in Section 1.

“Mortgaged Property” is defined
in Section 1.

“MPSC” is defined in Section 5.7.

“NAIC” means the National
Association of Insurance Commissioners or any successor thereto.

“Outstanding” is defined in the
Mortgage.

 “Officer’s
Certificate” means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.

“Original Mortgage” is defined
in Section 1.

“Parent” means The Empire
District Electric Company, a Kansas corporation.

“PBGC” means the Pension Benefit
Guaranty Corporation referred to and defined in ERISA or any successor thereto.

“Person” means an individual,
partnership, corporation, limited liability company, association, trust,
unincorporated organization, business entity or Governmental Authority.

“Plan” means an “employee benefit plan” (as defined
in section 3(3) of ERISA) subject to Title I of ERISA that is or, within
the preceding five years, has been established or maintained, or to which
contributions are or, within the preceding five years, have been made or
required to be made, by the Company or any ERISA Affiliate or with respect to
which the Company or any ERISA Affiliate may have any liability.

“Preferred Stock” means any
class of capital stock of a Person that is preferred over any other class of
capital stock (or similar equity interests) of such Person as to the payment of
dividends or the payment of any amount upon liquidation or dissolution of such
Person.

“property” or “properties” means, unless otherwise specifically limited,
real or personal property of any kind, tangible or intangible, choate or
inchoate.

“PTE” means a Prohibited
Transaction Exemption issued by the Department of Labor.

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“Purchased Assets” is defined in
the Asset Purchase Agreement.

“Purchaser” is defined in the
first paragraph of this Agreement.

“Purchase Price” is defined in
the Asset Purchase Agreement.

“Qualified Institutional Buyer”
means any Person who is a “qualified
institutional buyer” within the
meaning of such term as set forth in Rule 144A(a)(1) under the
Securities Act.

“Related Fund” means, with
respect to any holder of any Bond, any fund or entity that (i) invests in
Securities or bank loans, and (ii) is advised or managed by such holder,
the same investment advisor as such holder or by an affiliate of such holder or
such investment advisor.

“Required Holders” means, at any
time, the holders of at least a majority in principal amount of the Bonds at
the time outstanding (exclusive of Bonds then owned by the Company or any of
its Affiliates).

“Responsible Officer” means any
Senior Financial Officer and any other officer of the Company with
responsibility for the administration of the relevant portion of this
Agreement.

“SEC” shall mean the Securities
and Exchange Commission of the United States, or any successor thereto.

“Securities” or “Security” shall have the meaning specified in Section 2(a)(1) of
the Securities Act.

“Securities Act” means the
Securities Act of 1933, as amended from time to time, and the rules and
regulations promulgated thereunder from time to time in effect.

“Selected Balance Sheet Information”
is defined in Section 5.5(a).

“Seller” means Aquila Inc., a
Delaware Corporation.

“Senior Financial Officer” means
the chief financial officer, principal accounting officer, treasurer or
comptroller of the Company.

“Subsidiary” means, as to any
Person, any other Person in which such first Person or one or more of its
Subsidiaries or such first Person and one or more of its Subsidiaries owns
sufficient equity or voting interests to enable it or them (as a group)
ordinarily, in the absence of contingencies, to elect a majority of the
directors (or Persons performing similar functions) of such second Person, and
any partnership or joint venture if more than a 50% interest in the profits or
capital thereof is owned by such first Person or one or more of its
Subsidiaries or such first Person and one or more of its Subsidiaries (unless
such partnership can and does ordinarily take major business actions without
the prior approval of such Person or one or more of its Subsidiaries).

“Supplemental Indenture” is
defined in Section 1.

 6
 

 

“SVO” means the Securities
Valuation Office of the NAIC or any successor to such Office.

“Swap Contract” means (a) any
and all interest rate swap transactions, basis swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward foreign
exchange transactions, cap transactions, floor transactions, currency options,
spot contracts or any other similar transactions or any of the foregoing (including,
but without limitation, any options to enter into any of the foregoing), and (b) any
and all transactions of any kind, and the related confirmations, which are
subject to the terms and conditions of, or governed by, any form of master
agreement published by the International Swaps and Derivatives Association, Inc.,
any International Foreign Exchange Master Agreement.

“Swap Termination Value” means,
in respect of any one or more Swap Contracts, after taking into account the
effect of any legally enforceable netting agreement relating to such Swap
Contracts, (a) for any date on or after the date such Swap Contracts have
been closed out and termination value(s) determined in accordance
therewith, such termination value(s), and (b) for any date prior to the
date referenced in clause (a), the amounts(s) determined as the
mark-to-market values(s) for such Swap Contracts, as determined based upon
one or more mid-market or other readily available quotations provided by any
recognized dealer in such Swap Contracts.

“Synthetic Lease” means, at any
time, any lease (including leases that may be terminated by the lessee at any
time) of any property (a) that is accounted for as an operating lease
under GAAP and (b) in respect of which the lessee retains or obtains ownership
of the property so leased for U.S. federal income tax purposes, other than any
such lease under which such Person is the lessor.

“Territory” means the service
territory in which the Company provides natural gas utility service in the
state of Missouri, in the counties (or portions thereof) indicated on Schedule
1.1G of the Asset Purchase Agreement.

“Trustee” is defined in Section 1.

“USA Patriot Act” means United
States Public Law 107-56, Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT
ACT) Act of 2001, as amended from time to time, and the rules and
regulations promulgated thereunder from time to time in effect.

 7

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