Document:

EX-10.1

EXHIBIT 10.1

Petroleum Development Corporation

2005 Non-Employee Director Restricted Stock Plan

Amended and Restated as of March 8, 2008

Section 1. Introduction

	 	1.1	 	The Plan; Effective Date; Duration. Petroleum Development
Corporation, a Nevada corporation (the “Corporation”), amends and restates the
Petroleum Development Corporation 2005 Non-Employee Director Restricted Stock
Plan (the “Plan”), originally effective as of June 10, 2005 (“Effective Date”).
Subject to the approval by the Corporation’s stockholders, the Plan, as
amended and restated, will become effective as of March 8, 2008 (the
“Restatement Effective Date”). The Plan will continue in effect until all
awards have been granted covering all available shares of Stock (as hereinafter
defined) or until the termination of the Plan. For purposes of the Plan, a
“non-employee director” means any director of the Corporation (as hereinafter
defined) who is not an employee of the Corporation or any of its affiliates or
subsidiaries.
	 
	 	1.2	 	Purpose. The purpose of the Plan is to provide each
non-employee member (“Director”) of the Board of Directors (the “Board”) of the
Corporation with awards of shares of common stock, par value $.01 per share or
other successor security (“Stock”) of the Corporation, subject to the
restrictions and other provisions of the Plan (“Restricted Stock”). It is
intended that the Plan will (a) permit Directors to increase their stock
ownership and proprietary interest in the Corporation and enhance their
identification with the interests of the Corporation’s stockholders
(“Stockholders”), (b) provide a means of compensating Directors that will help
attract qualified candidates to serve as Directors, and (c) induce incumbent
Directors to continue to serve if the Board desires that they remain on the
Board.
	 
	 	1.3	 	Shares of Stock Available Under the Plan.

	 	a.	 	Subject to any adjustments made pursuant to
Section 1.3(c), the aggregate number of shares of Stock that may be
issued under the Plan shall be 100,000. No fractional shares of Stock
will be issued under the Plan.
	 
	 	b.	 	Shares of Stock awarded under the Plan may be
(i) authorized but unissued shares of Stock, (ii) previously issued
shares of Stock reacquired by the Corporation, including shares
purchased in the open market, or (iii) a combination thereof.
	 
	 	c.	 	As determined by the Compensation Committee of
the Board or such other committee of directors (the “Committee”) as may
be designated by the Board, in their best judgment, appropriate and
equitable adjustment may be made in the number of shares of Stock
available under the Plan and covered by Plan awards in the event of any
recapitalization, reorganization, merger, consolidation, spin-off,
combination, repurchase, exchange of shares or other securities of the
Corporation, stock split, reverse stock split, stock dividend,
extraordinary dividend, liquidation, dissolution, or other similar
corporate transaction or event affecting the Corporation.

 

 

Section 2. Restricted Stock Awards

	 	2.1	 	Award Dates

	 	a.	 	As of the date of each annual meeting of
Stockholders (“Annual Meeting”), commencing with the 2005 Annual
Meeting, each Director will be awarded such number of shares of
Restricted Stock as determined by the Board, after consideration of the
recommendation of the Committee. Directors may, but need not, be
awarded the same number of shares of Restricted Stock.
	 
	 	b.	 	A Director who is elected to the Board on a
date other than the date of an Annual Meeting will be awarded such
number of shares of Restricted Stock as of such date of election as
determined by the Board, after consideration of the recommendation of
the Committee.
	 
	 	c.	 	The Board shall cause the amount of the award
for the plan year commencing upon the next Annual Meeting to be
disclosed in the Corporation’s proxy statement for that Annual Meeting.

	 	2.2	 	Issuance of Stock. Subject to Section 2.7(c), as promptly as
practical after the date as of which an award is made, the Corporation shall
issue a certificate (“Certificate”), registered in the name of the Director
receiving an award, representing the number of shares of Restricted Stock
covered by the Director’s award.
	 
	 	2.3	 	Rights of Holders of Restricted Stock. Upon issuance of a
Certificate, the Director in whose name the Certificate is registered will,
subject to the provisions of the Plan including Section 2.7(b), have all of the
rights of a Stockholder with respect to the shares of Restricted Stock
represented by the Certificate, including the right to vote the shares and
receive cash dividends and other cash distributions thereon.
	 
	 	2.4	 	Restricted Period. Restricted Stock will be subject to the
restrictions set forth in Sections 2.5 and 2.7 of the Plan and the other
provisions of the Plan for a period (the “Restricted Period”) commencing on the
date as of which the Restricted Stock is awarded (the “Award Date”) and ending
on the earliest of the first to occur of the following:

	 	a.	 	the retirement of the Director from the Board
in compliance with the Board’s retirement policy as then in effect;
	 
	 	b.	 	the termination of the Director’s service on
the Board as a result of the Director’s not being nominated for
reelection by the Board;
	 
	 	c.	 	the termination of the Director’s service on
the Board because of the Director’s resignation or failure to stand for
reelection with the consent of the Corporation’s Board (which means
approval by at least 80% of the directors voting, with the affected
Director abstaining);
	 
	 	d.	 	the termination of the Director’s service on
the Board because the Director, although nominated for reelection by
the Board, is not reelected by the Stockholders;
	 
	 	e.	 	the termination of the Director’s service on
the Board because of (i) the Director’s resignation at the request of
the Nominating and Governance Committee of the Board (or successor
committee), (ii) the Director’s removal by action of the Stockholders
or by the Board, or (iii) a Change in Control of the Corporation. A
“Change in Control” of the Corporation is deemed to have

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	 		 	occurred as of the first day that any one or more of the following
conditions shall have been satisfied:

	 	(i)	 	Change in Ownership: A
change in ownership of the Corporation occurs on the date that
any one person, or more than one person acting as a group,
acquires ownership of stock of the Corporation that, together
with stock held by such person or group, constitutes more than
50% of the total fair market value or total voting power of the
stock of the Corporation, excluding the acquisition of
additional stock by a person or more than one person acting as a
group who is considered to own more than 50% of the total fair
market value or total voting power of the stock of the
Corporation.
	 
	 	(ii)	 	Change in Effective
Control: A change in effective control of the Corporation
occurs on the date that either:

	 	(A)	 	Any one person,
or more than one person acting as a group, acquires (or
has acquired during the l2-month period ending on the
date of the most recent acquisition by such person or
persons) ownership of stock of the Corporation
possessing 30% or more of the total voting power of the
stock of the Corporation; or
	 
	 	(B)	 	A majority of the
members of the Board is replaced during any l2-month
period by directors whose appointment or election is not
endorsed by a majority of the members of the board of
directors prior to the date of the appointment or
election; provided, that this paragraph (B) will apply
only to the Corporation if no other corporation is a
majority shareholder.

	 	(iii)	 	Change in Ownership of
Substantial Assets: A change the ownership of a substantial
portion of the Corporation’s assets occurs on the date that any
one person, or more than one person acting as a group, acquires
(or has acquired during the l2-month period ending on the date
of the most recent acquisition by such person or persons) assets
from the Corporation that have a total gross fair market value
equal to or more than 40% of the total gross fair market value
of the assets of the Corporation immediately prior to such
acquisition or acquisitions. For this purpose, “gross fair
market value” means the value of the assets of the Corporation,
or the value of the assets being disposed of, determined without
regard to any liabilities associated with such assets.

	 	f.	 	the termination of the Director’s service on
the Board because of Disability or death. “Disability” will have the
meaning ascribed to such term in the Corporation’s governing long-term
disability plan, or if no such plan exists, at the discretion of the
Committee, as hereinafter defined; or
	 
	 	g.	 	the vesting of the Restricted Stock. For this
purpose, beginning with awards of Restricted Stock issued to Directors
at the 2008 Annual Meeting, an award of Restricted Stock will vest on
July 1 of the calendar year following the year of the award of the
Restricted Stock, if such non-employee Director provides continued
service on the Board through such date. All awards of Restricted Stock
made prior to the 2008 Annual Meeting to non-employee Directors who
continue to serve on the Board through July 1, 2008 will vest on July
1, 2008.

	 	 	 	Section 2.4(a) through (g) above are subject to the further restriction that
a removal or resignation for “Cause” will not be deemed to constitute
completion of the Restricted

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	 	 	 	Period, but will result in a forfeiture of Restricted Stock not previously
vested under Section 2.5. For purposes of this Plan, “Cause” will be a good
faith determination by the Board that the Director (i) failed to
substantially perform his duties (other than a failure resulting from his
incapacity due to physical or mental illness) after a written demand for
substantial performance has been delivered to him by the Board, which demand
specifically identifies the manner in which the Board believes he has not
substantially performed his duties; (ii) has engaged in conduct the
consequences of which are materially adverse to the Corporation, monetarily
or otherwise; or (iii) has pleaded guilty to or been convicted of a felony.
The Director will not be deemed to have been terminated for Cause unless
there will have been delivered to the Director a letter setting forth the
reasons for the Corporation’s termination of the Director for Cause and the
Director has failed to cure such reason for termination within thirty (30)
days of the receipt of such notice.
	 
	 	2.5	 	Forfeiture of Restricted Stock. As of the date (“Termination
Date”) a Director ceases to be a member of the Board for any reason, including
but not limited to removal or resignation for Cause, the Director will forfeit
to the Corporation all Restricted Stock awarded to the Director for which the
Restricted Period has not ended pursuant to Section 2.4 as of or prior to the
Termination Date.
	 
	 	2.6	 	Release of Restricted Stock. Upon completion of the Restricted
Period, as provided in Section 2.4, the Corporation will release the Restricted
Stock to the Director, free and clear of all restrictions and other provisions
of the Plan, on the first business day immediately following the last day of
the Restricted Period with respect to such Restricted Stock.
	 
	 	2.7	 	Restrictions. Restricted Stock will be subject to the
following restrictions during the Restricted Period:

	 	a.	 	The Restricted Stock will be subject to
forfeiture to the Corporation as provided in Section 2.5 of the Plan.
	 
	 	b.	 	The Restricted Stock may not be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of, and
neither the right to receive Restricted Stock nor any interest under
the Plan may be assigned by a Director, and any attempted assignment
shall be void.
	 
	 	c.	 	Each Certificate representing shares of
Restricted Stock will be held by the Corporation and will, at the
option of the Corporation, bear an appropriate restrictive legend and
be subject to appropriate “stop transfer” orders. The Director shall
deliver to the Corporation a stock power endorsed in blank to the
Corporation.
	 
	 	d.	 	Any additional Stock or other securities or
property (other than cash) that may be issued with respect to
Restricted Stock as a result of any stock dividend, stock split,
business combination or other event, will be subject to the
restrictions and other provisions of the Plan.
	 
	 	e.	 	The issuance of any Restricted Stock award will
be subject to and contingent upon (i) completion of any registration or
qualification of the Stock under any federal or state law or
governmental rule or regulation that the Corporation, in its sole
discretion, determines to be necessary or advisable; and (ii) the
execution by the Director and delivery to the Corporation of (A) any
agreement reasonably required by the Corporation, and (B) the stock
power referred to in Section 2.7(c).

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	 	2.8	 	Tax Withholding. The Corporation will have the right to
withhold from any settlement of Stock made under the Plan (or deemed settlement
due to an Internal Revenue Code (“Code”) Section 83(b) election) any federal,
state, or local taxes of any kind subsequently required by law to be withheld
or paid by the Corporation on behalf of a Director with respect to such
settlement. If any such taxes are imposed, the subject Director will be
required to make arrangements satisfactory to the Corporation for the
satisfaction of any such withholding tax obligation, including by electing to
have stock withheld up to an amount that does not exceed such withholding tax
obligation. The Corporation will not be required to deliver Stock under the
Plan until any such obligation is satisfied.
	 
	 	2.9	 	Effect of Tax Election. If any Director makes a timely
election under Code Section 83(b) with respect to any award, the Stock will be
deemed (for income tax purposes) to be transferred to the Director effective as
of the Award Date (and any obligation for withholding tax liability imposed by
subsequent changes in tax laws that would be due as of the Award Date).
However, such an election will not affect the restrictions or terminate the
Restriction Period for such award.

Section 3. General Provisions

	 	3.1	 	Administration. The Plan will be administered by the
Committee. The Committee will have full power, discretion and authority to
interpret and administer the Plan, except that the Committee will have no power
to (a) determine the eligibility for awards of Restricted Stock or the number
of shares of Restricted Stock to be awarded or the timing or value of awards of
Restricted Stock to be awarded to any Director, or (b) take any action
specifically delegated to the Board under the Plan. The Committee’s
interpretations and actions will, except as otherwise determined by the Board,
be final, conclusive and binding upon all persons for all purposes. The
Committee may employ such legal counsel, consultants and agents as it may deem
desirable for the administration of the Plan, and may rely upon any advice or
opinion received from any such counsel or consultant and any computation
received from any such consultant or agent. Expenses incurred by the Committee
in the engagement of such counsel, consultant or agent will be paid by the
Corporation.
	 
	 	3.2	 	No Retention Rights. Neither the establishment of the Plan or
the awarding of Restricted Stock to a Director will be considered to give the
Director the right to be retained on, or nominated for reelection to, the
Board, or to any benefits or awards not specifically provided for by the Plan.
	 
	 	3.3	 	Interests Not Transferable. Except as to withholding of any
tax required under the laws of the United States or any state or locality, no
benefit payable at any time under the Plan will be subject in any manner to
alienation, sale, transfer, assignment, pledge, attachment, or other legal
process, or encumbrance of any kind. Any attempt to alienate, sell, transfer,
assign, pledge, attach or otherwise encumber any such benefits whether
currently or thereafter payable, will be void. No benefit will, in any manner,
be liable for or subject to the debts or liabilities of any person entitled to
such benefits. If any person attempts to, or alienates, sells, transfers,
assigns, pledges or otherwise encumbers such person’s benefits under the Plan,
or if by reason of such person’s bankruptcy or any other event, such benefits
would devolve upon any other person or would not be enjoyed by the person
entitled thereto under the Plan, then the Committee, in its discretion, may
terminate the interest in any such benefits of the person entitled thereto
under the Plan and hold or apply them to or for the benefit of such person
entitled thereto under the Plan or such person’s spouse, children or other
dependents, or any of them, in such manner as the Committee may deem proper.
	 
	 	3.4	 	Amendment and Termination. The Board may at any time amend or
terminate the Plan; provided that:

5

 

	 	a.	 	no amendment or termination will, without the
written consent of a Director, adversely affect the Director’s rights
under outstanding awards of Restricted Stock; and
	 
	 	b.	 	Stockholder approval of any amendment will be
required if Stockholder approval is required under applicable law or
the listing requirements of any national securities exchange or other
exchange on which are listed any of the Corporation’s equity
securities.

	 	3.5	 	Severability. If all or any part of the Plan is declared by
any court or governmental authority to be unlawful or invalid, such
unlawfulness or invalidity will not serve to invalidate any portion of the Plan
not declared to be unlawful or invalid. Any Section or part hereof so declared
to be unlawful or invalid will, if possible, be construed in a manner which
will give effect to the terms of such Section or part thereof to the fullest
extent possible while remaining lawful and valid.
	 
	 	3.6	 	Controlling Law. The law of West Virginia, except with
reference to the Code or Federal securities law, will be controlling in all
matters relating to the Plan.
	 
	 	3.7	 	Stockholder Approval. The Plan as amended and restated will be
submitted for approval by Corporation’s Stockholders at the Corporation’s 2008
annual meeting of stockholders and, if not so approved, will be deemed
terminated immediately following the meeting.

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PETROLEUM DEVELOPMENT CORPORATION

2005 NON-EMPLOYEE DIRECTOR RESTRICTED STOCK PLAN

DESIGNATION OF BENEFICIARY

(Please type or print)

	 	 	 	 	 
	Name of Director: 

	 	Marital Status:
	 	Single:
	 

	 	 	 	 
	 
	 	 	 	 
	Social Security No.: 

	 	 	 	Married:
	 

	 	 	 	 

     I hereby revoke any previous designation(s) of beneficiary made by me with respect to amounts
payable by Petroleum Development Corporation (the “Corporation”) under the Corporation’s 2005
Non-Employee Director Restricted Stock Plan in the event of my death; and I hereby designate the
following person(s) or entity to receive, upon my death, any such amounts:

     Primary Beneficiary or Beneficiaries:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Name:

	 	Share:
	 	 	%	 	 	Relationship:
	 	 	 	Birth Date:
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Address:

	 	 	 	 	 	 	 	 	 	SS #	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Name:

	 	Share:
	 	 	%	 	 	Relationship:
	 	 	 	Birth Date:
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Address:

	 	 	 	 	 	 	 	 	 	SS #	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 

     Contingent Beneficiary or Beneficiaries (if your Primary Beneficiary(ies) all predecease you):

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Name:

	 	Share:
	 	 	%	 	 	Relationship:
	 	 	 	Birth Date:
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Address:

	 	 	 	 	 	 	 	 	 	SS #	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Name:

	 	Share:
	 	 	%	 	 	Relationship:
	 	 	 	Birth Date:
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Address:

	 	 	 	 	 	 	 	 	 	SS #	 	 

Date:                                            Director’s Signature

* * * * *

7ex10_1.htm

     

    Exhibit 10.1

     

    THE
EMPIRE DISTRICT ELECTRIC COMPANY

     

    $60,000,000

    Common
Stock

    (par
value $1.00 per share)

     

    EQUITY
DISTRIBUTION AGREEMENT

     

    February
25, 2009

     

    UBS
Securities LLC

    299 Park
Avenue

    New York,
New York 10171-0026

     

    Ladies
and Gentlemen:

     

    The
Empire District Electric Company, a Kansas corporation (the “Company”), confirms its
agreement (this “Agreement”) with UBS
Securities LLC (the “Manager”), as
follows:

     

    SECTION
1. Description of
Securities.  The Company proposes to issue and sell through or
to the Manager, as sales agent and/or principal, shares of the Company’s common
stock, par value $1.00 per share (the “Common Stock”), and the
preference stock purchase rights appurtenant thereto (the “Rights”), having an aggregate
offering price of up to $60,000,000 (the “Shares”) on the terms set
forth in Section 3 of this Agreement.  The Company agrees that
whenever it determines to sell the Shares directly to the Manager as principal,
it will enter into a separate agreement (each, a “Terms Agreement”), in form
and substance mutually satisfactory to the Manager and the Company, relating to
such sale in accordance with Section 3 of this Agreement.  The Rights
will be issued in accordance with the Rights Agreement, dated April 27, 2000
(the “Rights
Agreement”), between the Company and Wells Fargo Bank, N.A. (as successor
to ChaseMellon Shareholder Services LLC), as rights agent.

     

    SECTION
2. Representations and
Warranties of the Company.  The Company represents and warrants
to and agrees with the Manager that:

     

    (a) The
registration statement on Form S-3 (File No. 333-152729), in respect of various
securities including the Shares, including a form of prospectus, has been
prepared and filed by the Company not earlier than three years prior to the date
hereof, in conformity with the requirements of the Securities Act of 1933, as
amended, and the rules and regulations thereunder (collectively called the
“Act”) and the rules
and regulations of the Securities and Exchange Commission (the “Commission”) thereunder (the
“Rules and
Regulations”).  Such registration statement contains certain
information concerning the offering and sale of the Common Stock, including the
Shares, and contains additional information concerning the Company and its
business;

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    the
Commission has not issued an order preventing or suspending the use of the Basic
Prospectus (as defined below), the Prospectus Supplement (as defined below), the
Prospectus (as defined below) or any Permitted Free Writing Prospectus (as
defined below), or the effectiveness of such registration statement, and no
proceeding for that purpose or pursuant to Section 8A of the Act has been
instituted or, to the Company’s knowledge, threatened by the
Commission.  Except where the context otherwise requires, “Registration Statement,” as
used herein, means the registration statement, as amended at the time of such
registration statement’s effectiveness for purposes of Section 11 of the Act, as
such section applies to the Manager, as well as any new registration statement
or post-effective amendment as may have been filed pursuant to Section 4(e) of
this Agreement, including (1) all documents filed as a part thereof or
incorporated or deemed to be incorporated by reference therein, (2) any
information contained or incorporated by reference in a prospectus filed with
the Commission pursuant to Rule 424(b) under the Act, to the extent such
information is deemed, pursuant to  Rule 430B or Rule 430C under the
Act, to be part of the registration statement at the time of such registration
statement’s effectiveness for purposes of Section 11 of the Act, as such section
applies to the Manager, and (3) any registration statement filed to register the
offer and sale of Shares pursuant to Rule 462(b) under the
Act.  Except where the context otherwise requires, “Basic Prospectus,” as used
herein, means the prospectus filed as part of each Registration Statement,
together with any amendments or supplements thereto as of the date of the
Agreement.  Except where the context otherwise requires, “Prospectus Supplement,” as
used herein, means the final prospectus supplement, relating to the Shares,
filed by the Company with the Commission pursuant to Rule 424(b) under the Act
on or before the second business day after the date hereof (or such earlier time
as may be required under the Act), in the form furnished by the Company to the
Manager in connection with the offering of the Shares.  Except where
the context otherwise requires, “Prospectus,” as used herein,
means the Prospectus Supplement together with the Basic Prospectus attached to
or used with the Prospectus Supplement.  “Permitted Free Writing
Prospectuses,” as used herein, means the documents listed on Schedule
A attached hereto or as otherwise agreed by the Company and the Manager
in writing.  Any reference herein to the registration statement, the
Registration Statement, the Basic Prospectus, the Prospectus Supplement, the
Prospectus or any Permitted Free Writing Prospectus shall be deemed to refer to
and include the documents, if any, incorporated by reference, or deemed to be
incorporated by reference, therein (the “Incorporated Documents”),
including, unless the context otherwise requires, the documents, if any, filed
as exhibits to such Incorporated Documents.  Any reference herein to
the terms “amend,”
“amendment” or “supplement” with respect to
the Registration Statement, the Basic Prospectus, the Prospectus Supplement, the
Prospectus or any Permitted Free Writing Prospectus shall be deemed to refer to
and include the filing of any document under the Securities Exchange Act of
1934, as amended, and the rules and

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    regulations
thereunder (collectively, the “Exchange Act”) on or after
the initial effective date of the Registration Statement, or the date of the
Basic Prospectus, the Prospectus Supplement, the Prospectus or such Permitted
Free Writing Prospectus, as the case may be, and deemed to be incorporated
therein by reference.

     

    (b) The
Registration Statement complied when it became effective, complies as of the
date hereof and, as amended, at each deemed effective date with respect to the
Manager pursuant to Rule 430B(f)(2) of the Act, at each Settlement Date (as
defined in Section 3(a)(vi) hereof), and at all times during which a prospectus
is required by the Act to be delivered (whether physically, deemed to be
delivered pursuant to Rule 153 or through compliance with Rule 172 under the Act
or any similar rule) in connection with any sale of Shares, will comply, in all
material respects, with the requirements of the Act, and the Registration
Statement did not and will not, at or during such times, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; the
conditions to the use of Form S-3 in connection with the offering and sale of
the Shares as contemplated hereby have been satisfied;  the
Registration Statement meets, and the offering and sale of the Shares as
contemplated hereby complies with, the requirements of Rule 415 under the Act
(including, without limitation, Rule 415(a)(5)); the Basic Prospectus complied
or will comply, at the time it was or will be filed with the Commission,
complies as of the date hereof (if filed with the Commission on or prior to the
date hereof) and, as of the time of each sale of Shares pursuant to this
Agreement (each, a “Time of
Sale”), at each Settlement Date and at all times during which a
prospectus is required by the Act to be delivered (whether physically, deemed to
be delivered pursuant to Rule 153 or through compliance with Rule 172 under the
Act or any similar rule) in connection with any sale of Shares, will comply, in
all material respects, with the requirements of the Act; the Prospectus will
comply, as of the date that it is filed with the Commission, the date of the
Prospectus Supplement, each Time of Sale, each Settlement Date, and at all times
during which a prospectus is required by the Act to be delivered (whether
physically, deemed to be delivered pursuant to Rule 153 or through compliance
with Rule 172 under the Act or any similar rule) in connection with any sale of
Shares, in all material respects, with the requirements of the Act (including,
without limitation, Section 10(a) of the Act); at no time during the period that
begins on the date of the Prospectus Supplement and ends at the later of each
Settlement Date and the end of the period during which a prospectus is required
by the Act to be delivered (whether physically, deemed to be delivered pursuant
to Rule 153 or through compliance with Rule 172 under the Act or any similar
rule) in connection with any sale of Shares did or will the Prospectus, as then
amended or supplemented, together with all of the then issued Permitted Free
Writing Prospectuses, if any, include an untrue statement of a material fact or
omit to

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided, however, that the Company
makes no representation or warranty with respect to any statement contained in
the Registration Statement, the Basic Prospectus, the Prospectus or any
Permitted Free Writing Prospectus in reliance upon and in conformity with
information concerning the Manager and furnished in writing by or on behalf of
the Manager expressly for use in the Registration Statement, the Basic
Prospectus, the Prospectus or such Permitted Free Writing Prospectus; each
Incorporated Document, at the time such document was filed with the Commission
or at the time such document became effective, as applicable, complied, in all
material respects, with the requirements of the Exchange Act and did not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

     

    (c) Prior to
the execution of this Agreement, the Company has not, directly or indirectly,
offered or sold any Shares by means of any “prospectus” (within the meaning of
the Act) or used any “prospectus” (within the meaning of the Act) in connection
with the offer or sale of the Shares; the Company has not, directly or
indirectly, prepared, used or referred to any Permitted Free Writing Prospectus
except in compliance with Rule 163 or with Rules 164 and 433 under the Act;
assuming that any such Permitted Free Writing Prospectus is so sent or given
after the Registration Statement was filed with the Commission (and after such
Permitted Free Writing Prospectus was, if required pursuant to Rule 433(d) under
the Act, filed with the Commission), the sending or giving, by the Manager, of
any Permitted Free Writing Prospectus will satisfy the provisions of Rule 164 or
Rule 433 (without reliance on subsections (b), (c) and (d) of Rule 164); the
conditions set forth in one or more of subclauses (i) through (iv), inclusive,
of Rule 433(b)(1) under the Act are satisfied, and the registration statement
relating to the offering of the Shares contemplated hereby, as initially filed
with the Commission, includes a prospectus that, other than by reason of Rule
433 or Rule 431 under the Act, satisfies the requirements of Section 10 of the
Act; neither the Company nor the Manager is disqualified, by reason of
subsection (f) or (g) of Rule 164 under the Act, from using, in connection with
the offer and sale of the Shares, “free writing prospectuses” (as defined in
Rule 405 under the Act) pursuant to Rules 164 and 433 under the Act; the Company
is not an “ineligible issuer” (as defined in Rule 405 under the Act) as of the
eligibility determination date for purposes of Rules 164 and 433 under the Act
with respect to the offering of the Shares contemplated by the Registration
Statement; the parties hereto agree and understand that the content of any and
all “road shows” (as defined in Rule 433 under the Act) related to the offering
of the Shares contemplated hereby is solely the property of the
Company.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

     

    (d) The
information contained under the heading “Capitalization and liabilities” set
forth in the consolidated balance sheet as of December 31, 2008 or as of the
Company’s then most recently completed quarter or fiscal year, contained in the
Company’s quarterly report on Form 10-Q or the Company’s annual report on Form
10-K, as applicable, sets forth the authorized and outstanding capital stock of
the Company at the indicated date, and there has been no material change in such
information since December 31, 2008 or the Company’s then most recently
completed quarter or fiscal year (subject to the issuance of shares of Common
Stock under the Company's (i) dividend reinvestment and stock purchase plan,
(ii) director and executive compensation plans and (iii) other employee benefits
plans disclosed as outstanding in the Registration Statement (excluding the
exhibits thereto) and the Prospectus and the grant of options or other equity
awards under any such director and executive compensation plans described in the
Registration Statement (excluding the exhibits thereto), the Basic Prospectus
and the Prospectus) (the foregoing clauses (i), (ii) and (iii) being herein
referred to as the “Plans”); all of the issued and outstanding shares of capital
stock, including the Common Stock, of the Company have been duly authorized and
validly issued and are fully paid and non-assessable.

     

    (e) The
Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Kansas, with full corporate power
and authority to own, lease and operate its properties and conduct its business
as described in the Registration Statement, the Prospectus and the Permitted
Free Writing Prospectuses, if any, to execute and deliver this Agreement and to
issue, sell and deliver the Shares as contemplated herein.

     

    (f) The
Empire District Gas Company (“Empire Gas”) has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the State of Kansas, with full corporate power and authority to own,
lease and operate its properties and conduct its business as described in the
Registration Statement, the Prospectus and the Permitted Free Writing
Prospectuses.  Other than Empire Gas, the Company has no “significant
subsidiary,” as such term is defined in Rule 1-02(w) of Regulation S-X under the
Act.

     

    (g) The
Company is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where the ownership or leasing of its properties
or the conduct of its business requires such qualification, except where the
failure to so qualify or be in good standing would not reasonably be expected to
(i) have a material adverse effect, and would not result in any development
which is reasonably likely to have a

     

    
      
         

      

      
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    material
adverse effect, on the business, properties, financial condition or results of
operations of the Company and its subsidiaries taken as a whole, (ii) prevent or
materially interfere with consummation of the transactions contemplated hereby
or (iii) result in the delisting of shares of Common Stock from the New York
Stock Exchange (“NYSE”) (the occurrence of any such effect or development or any
such prevention or interference or any such result described in the foregoing
clauses (i), (ii) and (iii) being herein referred to as a “Material Adverse
Effect”).

     

    (h) Empire
Gas is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where the ownership or leasing of its properties
or the conduct of its businesses requires such qualification, except where the
failure to so qualify would not reasonably be expected to have a Material
Adverse Effect.

     

    (i) The
Shares have been duly and validly authorized and, when issued and delivered
against payment therefor as provided herein, will be duly and validly issued,
fully paid and non-assessable and free of statutory and contractual preemptive
rights, resale rights, rights of first refusal and similar rights; the Shares,
when issued and delivered against payment therefor as provided herein, will be
free of any restriction upon the voting or transfer thereof pursuant to the
Company’s charter or bylaws or any agreement or other instrument to which the
Company is a party; and each such share carries with it one preference stock
purchase right, the terms of which are set forth in the Rights Agreement
thereunder.

     

    (j) The
capital stock of the Company, including the Shares and the rights appurtenant
thereto, conforms in all material respects to each description thereof, if any,
contained or incorporated by reference in the Registration Statement, the
Prospectus or any Permitted Free Writing Prospectus; and the certificates for
the Shares are in due and proper form.

     

    (k) All of
the issued and outstanding shares of capital stock of Empire Gas have been duly
authorized and validly issued, are fully paid and non-assessable and, except as
otherwise disclosed in the Registration Statement (excluding the exhibits
thereto), and the Prospectus, are owned by the Company, in each case subject to
no security interest, other encumbrance or adverse claim.

     

    (l) This
Agreement has been duly authorized, executed and delivered by the
Company.  The Company has not entered into any other sales agency or
distribution agreements or similar arrangements with any agent or other
representative similar in nature to the equity distribution program established
by this Agreement.

     

    (m) The
Rights Agreement has been duly authorized, executed and delivered by the
Company; when the Rights shall have been issued in

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    accordance
with the terms of this Agreement, such Rights will constitute legally issued and
binding obligations.

     

    (n) Each of
the Company and Empire Gas (1) is not in violation of its charter or
by-laws, (2) is not in default in any respect, and no event has occurred
which, with notice or lapse of time or both, would constitute such a default, in
the due performance or observance of any term, covenant or condition contained
in any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which it is a party or by which it is bound or to which any of its
properties or assets is subject and (3) is not in violation in any respect
of any law, ordinance, governmental rule, regulation or court decree to which it
or its property or assets may be subject and has not failed to obtain any
material license, permit, certificate, franchise or other governmental
authorization or permit necessary to the ownership of its property or to the
conduct of its business, except, in the case of clause (2) or (3) above,
for any such default, violation or failure that would not reasonably be expected
to result in a Material Adverse Effect.

     

    (o) The
execution, delivery and performance of this Agreement and the issuance of the
Shares and consummation of the transactions contemplated hereby will not
conflict with, or result in any breach of or constitute a default under (nor
constitute any event which with notice, lapse of time, or both would result in
any breach of, or constitute a default under), (1) any provisions of the charter
or by-laws of the Company or Empire Gas, or (2) under any provision of any
license, indenture, mortgage, deed of trust, bank loan or credit agreement or
other evidence of indebtedness, or any lease, contract or other agreement or
instrument to which the Company or Empire Gas is a party or by which it or its
respective properties may be bound or affected, or (3) under any federal, state,
local or foreign law, regulation or rule or any decree, judgment or order
applicable to the Company or Empire Gas, except, in the case of clause (2)
above, for any such conflict, breach or default which would not reasonably be
expected to result in a Material Adverse Effect.

     

    (p) The
Company has obtained or made all approvals, authorizations, consents or orders
of or filings with any national, state or local governmental or regulatory
commission, board, body, authority or agency required in connection with the
issuance and sale of the Shares or the consummation by the Company of the
transactions as contemplated hereby other than any necessary qualification under
the securities or blue sky laws of the various jurisdictions in which the Shares
are being offered by the Manager.

     

    (q) Except as
described in the Registration Statement (excluding the exhibits thereto) and the
Prospectus or except as permitted under the Plans, (i) no person has the right,
contractual or otherwise, to cause the Company to issue or sell to it any shares
of Common Stock or shares of any

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    other
capital stock or other equity interests of the Company, (ii) no person has any
preemptive rights, resale rights, rights of first refusal or other rights to
purchase any shares of Common Stock or shares of any other capital stock of or
other equity interests in the Company and (iii) no person has the right to act
as an underwriter, agent, financial advisor to the Company or in any similar
capacity in connection with the offer and sale of the Shares; no person has the
right, contractual or otherwise, to cause the Company to register under the Act
any shares of Common Stock or shares of any other capital stock of or other
equity interests in the Company, or to include any such shares or interests in
the Registration Statement or the offering contemplated thereby.

     

    (r) There are
no actions, suits, claims, investigations or proceedings pending or threatened
to which the Company or Empire Gas or any of their respective directors or
officers is or would be a party or of which any of their respective properties
is or would be subject, at law, in equity, or before or by any federal, state,
local or foreign governmental or regulatory commission, board, body, authority
or agency which would reasonably be expected to result in a Material Adverse
Effect or prevent consummation of the transactions contemplated
hereby.

     

    (s) The
accountants (the “Accountants”) who certified the audited financial statements
of the Company and supporting schedules and notes thereto incorporated by
reference in the Registration Statement and the Prospectus are an independent
registered public accounting firm with respect to the Company within the meaning
of the Act and the applicable rules and regulations thereunder adopted by the
Commission and the Public Company Accounting Oversight Board.

     

    (t) The
financial statements included or incorporated by reference in the Registration
Statement, the Prospectus or any Permitted Free Writing Prospectus, together
with the related notes and schedules, present fairly in all material respects
the consolidated financial position of the Company as of the dates indicated and
the consolidated results of operations, cash flows and changes in stockholders’
equity of the Company for the periods specified (subject, in the case of interim
unaudited financial statements, to year-end adjustments) and have been prepared
in compliance with the applicable requirements of the Act and Exchange Act and
in conformity with U.S. generally accepted accounting principles applied on a
consistent basis during the periods involved, except as otherwise set forth
therein. All disclosures contained or incorporated by reference in the
Registration Statement, the Prospectus or any Permitted Free Writing Prospectus
regarding “non-GAAP financial measures” (as such term is defined by the rules
and regulations of the Commission) comply with Regulation G of the Exchange Act
and Item 10 of Regulation S-K under the Act, to the extent
applicable.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

     

    (u) Subsequent
to the respective dates as of which information is given in the Registration
Statement, the Prospectus and the Permitted Free Writing Prospectuses, if any,
there has not been any material adverse change, or any development that is
reasonably likely to result in a material adverse change, in the business,
properties, financial condition or results of operations of the Company and its
subsidiaries taken as a whole, whether or not arising in the ordinary course of
business (any such change or development, a “Material Adverse
Change”).

     

    (v) Neither
the Company nor Empire Gas is, and at no time during which a prospectus is
required by the Act to be delivered (whether physically or through compliance
with Rule 172 under the Act or any similar rule) in connection with any sale of
Shares will any of them be, and, after giving effect to the offering and sale of
the Shares, neither of them will be, an “investment company,” as such term is
defined in the Investment Company Act of 1940, as amended.

     

    (w) The
Company has good and marketable title in fee simple to substantially all its
owned real and fixed properties and good and marketable title to substantially
all its other owned properties and assets, including, without limitation, the
properties of the Company referred to in Item 2. Properties in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2008, in each
case free and clear of all liens, charges and encumbrances except (i) the lien
of the Indenture of Mortgage and Deed of Trust, dated as of September 1,
1944, by and between the Company and The Bank of New York Mellon Trust Company,
N.A. and UMB Bank & Trust, N.A., as trustees, as supplemented and amended
(the “Indenture”), as
disclosed in the Registration Statement and the Prospectus; (ii) permitted
encumbrances as defined in the Indenture; and (iii) such other liens, charges
and encumbrances as do not individually, or in the aggregate, impair the
operations of the businesses of the Company in any material
respect;

     

    (x) There has
been no storage, disposal, generation, manufacture, refinement, transportation,
handling or treatment of toxic wastes, medical wastes, hazardous wastes or
hazardous substances by the Company or any of its subsidiaries (or, to the
actual knowledge of the Company, any of their predecessors in interest) at, upon
or from any of the property now or previously owned or leased by the Company or
its subsidiaries in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or which would require remedial
action under any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit, except for any violation or remedial action which would not
reasonably be expected to have, singularly or in the aggregate with all such
violations and remedial actions, a Material Adverse Effect; there has been no
material spill, discharge, leak, emission, injection, escape, dumping or release
of any kind onto such property or into the

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    environment
surrounding such property of any toxic wastes, medical wastes, solid wastes,
hazardous wastes or hazardous substances due to or caused by the Company or any
of its subsidiaries or with respect to which the Company or any of its
subsidiaries have actual knowledge, except for any such spill, discharge, leak,
emission, injection, escape, dumping or release which would not reasonably be
expected to have, singularly or in the aggregate with all such spills,
discharges, leaks, emissions, injections, escapes, dumpings and releases, a
Material Adverse Effect; and the terms “hazardous wastes,” “toxic wastes,”
“hazardous substances” and “medical wastes” shall have the meanings specified in
any applicable local, state, federal and foreign laws or regulations with
respect to environmental protection.

     

    (y) All
material tax returns required to be filed by the Company have been filed in all
jurisdictions where such returns are required to be filed, except where valid
extensions have been obtained; and all taxes, including withholding, value added
and franchise taxes, penalties and interest, assessments, fees and other charges
that are due and payable have been paid (or, with respect to those based on good
faith estimates, have been paid to the extent of such estimates), other than
those being contested in good faith and for which reserves have been provided in
accordance with U.S. generally accepted accounting principles or those currently
payable without penalty or interest and except where the failure to make such
required filings or payments could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.  To the
knowledge of the Company, there are no material proposed additional tax
assessments against the Company or its assets or property.

     

    (z) The
Company maintains insurance covering its properties, operations, personnel and
businesses as the Company deems adequate; such insurance insures against such
losses and risks to an extent which is adequate, in the good faith judgment of
management, to protect the Company and its business.

     

    (aa) The
Common Stock is an “actively-traded security” excepted from the requirements of
Rule 101 of Regulation M under the Exchange Act by subsection (c)(1) of
such rule.

     

    (bb) (A)           The
Company has devised and established and maintains the following, among other,
internal controls (without duplication):

     

    (1) a system
of “internal accounting controls” as contemplated in Section 13(b)(2)(B) of the
Exchange Act;

     

    (2) “disclosure
controls and procedures” as such term is defined in Rule 13a-15(e) under the
Exchange Act; and

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

     

    (3) “internal
control over financial reporting” (as such term is defined in Rule 13a-15(f)
under the Exchange Act) (the internal controls referred to in clauses (1) and
(2) above and this clause (3) being hereinafter called, collectively, the
“Internal Controls”).

     

                                   
(B)           The
Internal Controls are evaluated by the Company’s senior management periodically
as appropriate and, in any event, as required by law.

     

                                 (C)           The
Internal Controls are, individually and in the aggregate, effective in all
material respects to perform the functions for which they were
established.

     

    (D)           Based
on the most recent evaluations of the Company’s internal control over financial
reporting, (1) there are no material weaknesses in the design or operation
of the Company’s internal control over financial reporting, whether considered
individually or collectively, and (2) all significant deficiencies, if any, in
the design or operation of the Company’s internal control over financial
reporting have been identified and reported to the Company’s independent
auditors and the audit committee of the Company’s board of
directors.

     

    (cc) Any
statistical and market-related data included or incorporated by reference in the
Registration Statement, the Prospectus or any Permitted Free Writing Prospectus,
if any, are based on or derived from sources that the Company believes to be
reliable and accurate, and the Company has obtained the written consent to the
use of such data from such sources to the extent required.

     

    (dd) The
Company is in compliance in all material respects with the rules of the NYSE,
including, without limitation, the requirements for continued listing of the
Common Stock on the NYSE and the Company has not received any notice from the
NYSE regarding the delisting of the Common Stock from the NYSE.

     

    (ee) Except
pursuant to this Agreement, neither the Company nor any of the subsidiaries has
incurred any liability for any finder’s or broker’s fee or agent’s commission in
connection with the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby or by the Registration
Statement.

     

    (ff) Neither
the Company nor any of the subsidiaries nor any of their respective directors,
officers, affiliates or controlling persons has taken, directly or indirectly,
any action designed, or which has constituted or might reasonably be expected to
cause or result in the stabilization or manipulation of

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    the price
of any security of the Company to facilitate the sale or resale of the
Shares.

     

    (gg) All
contracts or documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement have been so described and filed as required.

     

    (hh) Neither
the Company nor any of its subsidiaries nor, to the Company’s knowledge after
due inquiry, any employee or agent of the Company or its subsidiaries has made
any payment of funds of the Company or its subsidiaries or received or retained
any funds in violation of any law, rule or regulation, which payment, receipt or
retention of funds is of a character required to be disclosed in the
Registration Statement or the Prospectus.

     

    In addition, any certificate signed by
any officer of the Company or any of its subsidiaries and delivered to the
Manager or counsel for the Manager in connection with the offering of the Shares
shall be deemed to be a representation and warranty by the Company, as to
matters covered thereby, to the Manager.

    

    SECTION
3. Sale and Delivery of
Securities.  (a) On the basis of the representations,
warranties and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to issue and sell through the
Manager, as sales agent, and the Manager agrees to use its commercially
reasonable efforts to sell, as sales agent for the Company, the Shares on the
following terms:

     

    (i) The
Shares are to be sold on a daily basis or otherwise as shall be agreed to by the
Company and the Manager on any day that (A) is a trading day for the NYSE (other
than a day on which the NYSE is scheduled to close prior to its regular weekday
closing time), (B) the Company has instructed (which such instructions need not
be provided on a daily basis) the Manager by telephone (confirmed promptly by
electronic mail) from any of the individuals listed as authorized
representatives of the Company on Schedule B hereto (the "Authorized Company
Representatives") to make such sales and (C) the Company has satisfied its
obligations under Section 6 of this Agreement.  The Company will
designate the maximum amount of the Shares to be sold by the Manager daily as
agreed to by the Manager and in any event not in excess of the amount available
for issuance under the currently effective Registration Statement or in a number
in excess of the number of Shares authorized from time to time to be issued and
sold under this Agreement by the Company's board of directors, or a duly
authorized committee thereof, and notified to the Manager in writing. Subject to
the terms and conditions hereof, the Manager shall use its commercially
reasonable efforts to offer and sell all of the Shares designated; provided,
however, that the Manager shall have no obligation to offer or sell any Shares,
and the Company acknowledges and agrees that the Manager shall have no such
obligation, in the event an offer or sale of the Shares on behalf
of

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    the
Company may in the judgment of the Manager constitute the sale of a “block”
under Rule 10b-18(a)(5) under the Exchange Act or a “distribution” within the
meaning of Rule 100 of Regulation M under the Exchange Act or the Manager
reasonably believes it may be deemed an “underwriter” under the Act in a
transaction that is other than by means of ordinary brokers’ transactions
between members of the NYSE that qualify for delivery of a prospectus in
accordance with Rule 153 under the Act (such transactions are hereinafter
referred to as “At the Market
Offerings”).

     

    (ii) Notwithstanding
the foregoing, the Company, through any of the Authorized Company
Representatives, may instruct the Manager by telephone (confirmed promptly by
electronic mail) not to sell the Shares if such sales cannot be effected at or
above the price designated by the Company in any such
instruction.  Furthermore, the Company shall not authorize the
issuance and sale of, and the Manager shall not be obligated to use its
commercially reasonable efforts to sell, any Shares at a price lower than the
minimum price therefor designated from time to time by the Company’s Board of
Directors and notified to the Manager in writing.  In addition, the
Company or the Manager may, upon notice to the other party hereto by telephone
(confirmed promptly by electronic mail), suspend the offering of the Shares;
provided, however, that such suspension
shall not affect or impair the parties’ respective obligations with respect to
the Shares sold hereunder prior to the giving of such notice.

     

    (iii) The
Manager hereby covenants and agrees not to make any sales of the Shares on
behalf of the Company, pursuant to this Section 3(a), other than (A) by means of
At the Market Offerings and (B) such other sales of the Shares on behalf of the
Company in its capacity as agent of the Company as shall be agreed by the
Company and the Manager.

     

    (iv) The
compensation to the Manager, as an agent of the Company, for sales of the Shares
shall be 4.25% of the gross sales price of the Shares sold pursuant to this
Section 3(a).  The remaining proceeds, after further deduction for any
transaction fees imposed by any governmental or self-regulatory organization in
respect of such sales, shall constitute the net proceeds to the Company for such
Shares (the “Net
Proceeds”).

     

    (v) The
Manager shall provide written confirmation to the Company following the close of
trading on the NYSE each day in which the Shares are sold under this Section
3(a) setting forth the number of the Shares sold on such day, the aggregate
gross sale proceeds and the Net Proceeds to the Company, and the compensation
payable by the Company to the Manager with respect to such sales.

     

    (vi) Settlement
for sales of the Shares pursuant to this Section 3(a) will occur on the third
business day following the date on which such sales are made (each such date, a
“Settlement
Date”).  On each Settlement Date, the Shares sold through the
Manager for settlement on such date shall be issued and delivered by
the

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    Company
to the Manager against payment of the Net Proceeds for the sale of such
Shares.  Settlement for all such Shares shall be effected by free
delivery of the Shares by the Company or its transfer agent to
the Manager’s account, or to the account of the Manager's designee, at The
Depository Trust Company through its Deposit and Withdrawal at Custodian System
(“DWAC”) or by such other means of delivery as may be mutually agreed upon by
the parties hereto, which in all cases shall be freely tradable, transferable,
registered shares in good deliverable form, in return for payments in same day
funds delivered to the account designated by the Company.  If the
Company, or its transfer agent (if applicable), shall default on its obligation
to deliver the Shares on any Settlement Date, the Company shall
(A) indemnify and hold the Manager harmless against any loss, claim or
damage arising from or as a result of such default by the Company and
(B) pay the Manager any commission to which it would otherwise be entitled
absent such default.  The Company personnel listed on Schedule C shall
be the contact persons for the Company for all matters related to the settlement
of the transfer of the Shares through DWAC for purposes of this Section
3(vi).

     

    (vii) At each
Time of Sale, Settlement Date and Representation Date (as defined in Section
4(o)), the Company shall be deemed to have affirmed each representation and
warranty contained in this Agreement.  Any obligation of the Manager
to use its commercially reasonable efforts to sell the Shares on behalf of the
Company shall be subject to the continuing accuracy of the representations and
warranties of the Company herein, to the performance by the Company of its
obligations hereunder and to the continuing satisfaction of the additional
conditions specified in Section 6 of this Agreement.

     

    (b) (i)  If
the Company wishes to issue and sell the Shares other than as set forth in
Section 3(a) of this Agreement (each, a “Placement”), it will notify
the Manager of the proposed terms of such Placement.  If the Manager,
acting as principal, wishes to accept such proposed terms (which it may decline
to do for any reason in its sole discretion) or, following discussions with the
Company, wishes to accept amended terms, the Manager and the Company will enter
into a Terms Agreement setting forth the terms of such Placement.  In
the event of a conflict between the terms of this Agreement and the terms of any
Terms Agreement, the terms of such Terms Agreement will control.

     

    (c) (i)  Under
no circumstances shall the aggregate gross sales proceeds of the Shares sold
pursuant to this Agreement exceed the least of (A) the amount set forth in
Section 1, (B) the amount available for offer and sale under the currently
effective Registration Statement and (C) the aggregate dollar amount of Shares
authorized from time to time to be issued and sold under this Agreement by the
Company's board of directors, or a duly authorized committee thereof, and
notified to the Manager in writing.

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    

     

    (ii) If either
party has reason to believe that the exemptive provisions set forth in Rule
101(c)(1) of Regulation M under the Exchange Act are not satisfied with respect
to the Shares, it shall promptly notify the other party and sales of the Shares
under this Agreement shall be suspended until that or other exemptive provisions
have been satisfied in the judgment of each party.

     

    (d) Each sale
of the Shares to or through the Manager shall be made in accordance with the
terms of this Agreement or, if applicable, a Terms Agreement.

     

    (e) Subject
to such further limitations on offers and sales of Shares or delivery of
instructions to offer and sell Shares as set forth herein and as may be mutually
agreed upon by the Company and the Manager, offers and sales of Shares pursuant
to this Agreement shall not be requested by the Company and need not be made by
the Manager at any time when or during any period in which the Company is or
could be deemed to be in possession of material non-public
information.

     

    (f) The
Company acknowledges and agrees that (A) there can be no assurance that the
Manager will be successful in selling the Shares, (B) the Manager will incur no
liability or obligation to the Company or any other person or entity if it does
not sell Shares for any reason other than a failure by the Manager to use its
commercially reasonable efforts consistent with its normal trading and sales
practices and applicable law and regulations to sell such Shares in accordance
with the terms of this Agreement, and (C) the Manager shall be under no
obligation to purchase Shares on a principal basis pursuant to this Agreement,
except as otherwise specifically agreed by the Manager and the
Company.

     

    SECTION
4. Covenants of the
Company.  The Company agrees with the Manager:

     

    (a) During
the period in which a prospectus relating to the Shares is required to be
delivered under the Act (whether physically, deemed to be delivered pursuant to
Rule 153 or through compliance with Rule 172 under the Act or any similar rule),
to notify the Manager promptly of the time when any amendment to the
Registration Statement has become effective or any supplement to the Basic
Prospectus, the Prospectus or any Permitted Free Writing Prospectus has been
filed; to prepare and file with the Commission, promptly upon the Manager’s
request, any amendments or supplements to the Registration Statement, the Basic
Prospectus, the Prospectus or any Permitted Free Writing Prospectus that, in the
Manager’s reasonable opinion, may be necessary or advisable in connection with
the offering of the Shares by the Manager; and to cause each amendment or
supplement to the Basic Prospectus or the Prospectus to be filed with the
Commission as required pursuant to the applicable paragraph of Rule 424(b) of
the Act or, in the case of any Incorporated Document, to be filed with the
Commission as required pursuant to the Exchange Act, within the time period
prescribed.

     

    
      
         

      

      
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    (b) To
promptly advise the Manager, confirming such advice in writing, of any
suspension of the Manager's obligations under Rule 15c2-8(i) under the Exchange
Act or any request by the Commission for amendments or supplements to the
Registration Statement, the Basic Prospectus, the Prospectus or any Permitted
Free Writing Prospectus or for additional information with respect thereto, or
of notice of examination, institution of proceedings for, or the entry of a stop
order suspending the effectiveness of the Registration Statement and, if the
Commission should enter a stop order suspending the effectiveness of the
Registration Statement, to use its reasonable best efforts to obtain the lifting
or removal of such order as soon as possible; to promptly advise the Manager of
any proposal to amend or supplement the Registration Statement, the Basic
Prospectus or the Prospectus, and to provide the Manager and its counsel copies
of any such documents for review and comment a reasonable amount of time prior
to any proposed filing and to file no such amendment or supplement (other than
any prospectus supplement relating to the offering of other securities
(including, without limitation, the Common Stock)) to which the Manager shall
have reasonably objected in writing.

     

    (c) To make
available to the Manager, as soon as practicable after this Agreement becomes
effective, and thereafter from time to time to furnish to the Manager, as many
copies of the Prospectus (or of the Prospectus as amended or supplemented if the
Company shall have made any amendments or supplements thereto after the
effective date of the Registration Statement) as the Manager may request for the
purposes contemplated by the Act; in case the Manager is required to deliver
(whether physically, deemed to be delivered pursuant to Rule 153 or through
compliance with Rule 172 under the Act or any similar rule), in connection with
the sale of the Shares, a prospectus after the nine-month period referred to in
Section 10(a)(3) of the Act, or after the time a post-effective amendment to the
Registration Statement is required pursuant to Item 512(a) of Regulation S-K
under the Act, the Company will prepare, at its expense, promptly upon request
such amendment or amendments to the Registration Statement and the Prospectus as
may be necessary to permit compliance with the requirements of Section 10(a)(3)
of the Act or Item 512(a) of Regulation S-K under the Act, as the case may
be.

     

    (d) Subject
to Section 4(b) hereof, to file promptly all reports and documents and any
preliminary or definitive proxy or information statement required to be filed by
the Company with the Commission in order to comply with the Exchange Act for so
long as a prospectus is required by the Act to be delivered (whether physically,
deemed to be delivered pursuant to Rule 153 or through compliance with Rule 172
under the Act or any similar rule) in connection with any sale of Shares; and to
provide the Manager, for its review and comment, with a copy of such reports and
statements and other documents to be filed by the Company pursuant to Section
13, 14 or 15(d) of the Exchange Act during such period a reasonable amount of
time prior to any

     

    
      
         

      

      
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    proposed
filing, and to file no such report, statement or document to which the Manager
shall have reasonably objected in writing; and to promptly notify the Manager of
such filing.

     

    (e) If
immediately prior to the third anniversary (the “Renewal Deadline”) of the
initial effective date of the Registration Statement, any of the Shares remain
unsold by the Manager, the Company will, prior to the Renewal Deadline file, if
it has not already done so and is eligible to do so, a new registration
statement relating to the Shares, in a form reasonably satisfactory to the
Manager, and will use its reasonable best efforts to cause such registration
statement to be declared effective within 180 days after the Renewal
Deadline.  The Company will take all other action reasonably necessary
or appropriate to permit the public offering and sale of the Shares to continue
as contemplated in the expired registration statement.  References
herein to the Registration Statement shall include such new shelf registration
statement, if any.

     

    (f) To
promptly notify the Manager of the happening of any event that could require the
making of any change in the Prospectus then being used so that the Prospectus
would not include an untrue statement of material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they are made, not misleading, and, during any
period during which a prospectus is required to be delivered (whether
physically, deemed to be delivered pursuant to Rule 153 or through compliance
with Rule 172 under the Act or any similar rule) in connection with any sale of
Shares, subject to Section 4(b), to prepare and furnish, at the Company’s
expense, to the Manager promptly such amendments or supplements to such
Prospectus as may be necessary to reflect any such change.

     

    (g) To
furnish such information as may be required and otherwise to cooperate in
qualifying the Shares for offering and sale under the securities or blue sky
laws of such states or other jurisdictions as the Manager may designate and to
maintain such qualifications in effect so long as required for the distribution
of the Shares; provided, however, that the Company
shall not be required to qualify as a foreign corporation or to consent to the
service of process under the laws of any such jurisdiction (except service of
process with respect to the offering and sale of the Shares); and to promptly
advise the Manager of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for offer or sale
in any jurisdiction or the initiation or threatening of any proceeding for such
purpose.

     

    (h) To make
generally available to its security holders, and to deliver to the Manager, an
earnings statement of the Company (which will satisfy the provisions of Section
11(a) of the Act) covering a period of twelve months beginning after the
effective date (as defined in Rule 158(c) of the Act)

     

    
      
         

      

      
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    of the
Registration Statement as soon as is reasonably practicable after the
termination of such twelve-month period but not later than eighteen months after
the effective date (as such date is defined in Rule 158(c) under the Act) of the
Registration Statement.

     

    (i) To apply
the net proceeds from the sale of the Shares in the manner set forth under the
caption “Use of proceeds” in the Prospectus Supplement.

     

    (j) Not to
sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any
option to sell or otherwise dispose of or agree to dispose of, directly or
indirectly, any shares of the Common Stock or securities convertible into or
exchangeable or exercisable for the Common Stock or warrants or other rights to
purchase the Common Stock or any other securities of the Company that are
substantially similar to the Common Stock or permit the
registration under the Act of any shares of the Common Stock, in each case
without giving the Manager at least three business days’ prior written notice
specifying the nature of the proposed sale and the date of such proposed
sale.  Notwithstanding the foregoing, the Company may (i) register the
offer and sale of the Shares through the Manager pursuant to this Agreement;
(ii) file registration statements relating to Common Stock that may be issued
pursuant the Company's (a) dividend reinvestment and stock purchase plan, (b)
director and executive compensation plans and (c) other employee benefits plans
(in the case of (a), (b) and (c) above as such plans are described in the
Company’s reports filed with the Commission under the Exchange Act); or (iii)
issue shares of the Common Stock, issue options to purchase shares of the Common
Stock or make grants of other equity awards, pursuant to any of the plans
referred to in clause (ii) above.  In the event that notice of a
proposed sale is provided by the Company pursuant to this Section 4(j), the
Manager may suspend activity under this program for such period of time as may
be requested by the Company or as may be deemed appropriate by the
Manager.

     

    (k) Not, at
any time at or after the execution of this Agreement, to offer or sell any
Shares by means of any “prospectus” (within the meaning of the Act), or use any
“prospectus” (within the meaning of the Act) in connection with the offer or
sale of the Shares, in each case other than the Prospectus.

     

    (l) The
Company will not, and will cause its subsidiaries not to, take, directly or
indirectly, any action designed, or which will constitute, or has constituted,
or might reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares.

     

    (m) To use
its reasonable best efforts to cause the Common Stock to be listed on the NYSE
and to maintain such listing.

     

    
      
         

      

      
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    (n) To advise
the Manager immediately after it shall have received notice or obtain knowledge
thereof, of any information or fact that would alter or affect any opinion,
certificate, letter and other document provided to the Manager pursuant to
Section 6 herein.

     

    (o) Upon
commencement of the offering of the Shares under this Agreement, and each time
that (i) the Registration Statement or the Prospectus shall be amended or
supplemented (other than pursuant to subclause (ii) below and other than a
prospectus supplement filed pursuant to Rule 424(b) under the Act relating
solely to the offering of securities other than the Shares), (ii) there is
filed with the Commission any document incorporated by reference into the
Prospectus (other than a Current Report on Form 8-K, unless the Manager shall
otherwise reasonably request), or (iii) the Manager may otherwise reasonably
request (the date of commencement of the offering of the Shares under this
Agreement and each date referred to in subclauses (i), (ii) and (iii) above,
each a “Representation
Date”), to furnish or cause to be furnished to the Manager forthwith a
certificate dated and delivered the Representation Date, in form reasonably
satisfactory to the Manager to the effect that the statements contained in the
certificate referred to in Section 6(h) of this Agreement which were last
furnished to the Manager are true and correct as of such Representation Date, as
though made at and as of such date (except that such statements shall be deemed
to relate to the Registration Statement and the Prospectus as amended and
supplemented to such date) or, in lieu of such certificate, a certificate of the
same tenor as the certificate referred to in said Section 6(h), modified as
necessary to relate to the Registration Statement and the Prospectus as amended
and supplemented to the time of delivery of such certificate.

     

    (p) At each
Representation Date, to furnish or cause to be furnished forthwith to the
Manager a written opinion of Cahill Gordon & Reindel LLP, counsel to the
Company (“Company
Counsel”), or other counsel satisfactory to the Manager, dated and
delivered as of such Representation Date, in form and substance reasonably
satisfactory to the Manager, of the same tenor as the opinion referred to in
Section 6(c) of this Agreement, but modified as necessary to relate to the
Registration Statement and the Prospectus as amended and supplemented to the
time of delivery of such opinion.

     

    (q) At each
Representation Date, to furnish or cause to be furnished forthwith to the
Manager a written opinion of Spencer, Scott & Dwyer, P.C., Missouri counsel
to the Company (“Missouri
Counsel”), or other counsel reasonably satisfactory to the Manager, dated
and delivered as of such Representation Date, in form and substance satisfactory
to the Manager, of the same tenor as the opinion referred to in Section 6(d) of
this Agreement, but modified as necessary to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of delivery
of such opinion.

     

    
      
         

      

      
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    (r) At each
Representation Date, to furnish or cause to be furnished forthwith to the
Manager a written opinion of Anderson & Byrd, LLP, Kansas counsel to the
Company (“Kansas
Counsel”), or other counsel reasonably satisfactory to the Manager, dated
and delivered as of such Representation Date, in form and substance satisfactory
to the Manager, of the same tenor as the opinion referred to in Section 6(e) of
this Agreement, but modified as necessary to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of delivery
of such opinion.

     

    (s) At each
Representation Date, to furnish or cause to be furnished forthwith to the
Manager a written opinion of Brydon, Swearengen & England, Professional
Corporation, special regulatory counsel to the Company (“Special Regulatory Counsel”),
or other counsel reasonably satisfactory to the Manager, dated and delivered as
of such Representation Date, in form and substance satisfactory to the Manager,
of the same tenor as the opinion referred to in Section 6(f) of this Agreement,
but modified as necessary to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of delivery of such
opinion.

     

    (t) At each
Representation Date, to furnish or cause to be furnished to the Manager
forthwith a certificate of the Secretary of the Company, dated and delivered as
of such Representation Date, in form and substance reasonably satisfactory to
the Manager.

     

    (u) At each
Representation Date, Dewey & LeBoeuf LLP, counsel to the Manager, shall
deliver a written opinion, dated and delivered as of such Representation Date,
in form and substance satisfactory to the Manager.

     

    (v) Upon
commencement of the offering of the Shares under this Agreement, and each time
that (i) the Registration Statement or the Prospectus shall be amended or
supplemented to include additional or amended financial information, (ii) the
Company shall file an annual report on Form 10-K or a quarterly report on Form
10-Q or (iii) upon the reasonable request by the Manager and upon reasonable
advance notice to the Company, there is filed with the Commission any document
(other than an annual report on Form 10-K or a quarterly report on Form 10-Q)
incorporated by reference into the Prospectus which contains financial
statements, to cause the Accountants, or other independent accountants
satisfactory to the Manager, forthwith to furnish the Manager a letter, dated
the date of the commencement of the offering, the date of effectiveness of such
amendment, the date of filing of such supplement or other document with the
Commission, as the case may be, in form and substance reasonably satisfactory to
the Manager, of the same tenor as the letter referred to in Section 6(g) of this
Agreement but modified to relate to the

     

    
      
         

      

      
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    Registration
Statement and the Prospectus, as amended and supplemented to the date of such
letter.

     

    (w) At each
Representation Date, to conduct a due diligence session, in form and substance,
reasonably satisfactory to the Manager, which shall include representatives of
the management and the accountants of the Company.

     

    (x) That the
Company consents to the Manager trading in the Common Stock for the Manager’s
own account and for the account of its clients at the same time as sales of the
Shares occur pursuant to this Agreement.

     

    (y) If to the
knowledge of the Company, any condition set forth in Section 6(a) or 6(k)
of this Agreement shall not have been satisfied on the applicable Settlement
Date, to offer to any person who has agreed to purchase the Shares from the
Company as the result of an offer to purchase solicited by the Manager the right
to refuse to purchase and pay for such Shares.

     

    (z) To
disclose in its quarterly reports on Form 10-Q and in its annual report on Form
10-K the number of the Shares sold through or to the Manager under this
Agreement, the Net Proceeds to the Company and the compensation paid by the
Company with respect to sales of the Shares pursuant to this Agreement during
the relevant quarter.

     

    (aa) To ensure
that prior to instructing the Manager to sell Shares the Company shall have
obtained all necessary corporate and regulatory authority for the offer and sale
of such Shares.

     

    (bb) That each
acceptance by the Company of an offer to purchase the Shares hereunder shall be
deemed to be an affirmation to the Manager that the representations and
warranties of the Company contained in or made pursuant to this Agreement are
true and correct as of the date of such acceptance as though made at and as of
such date, and an undertaking that such representations and warranties will be
true and correct as of the Settlement Date for the Shares relating to such
acceptance, as though made at and as of such date (except that such
representations and warranties shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented as of the date of such
acceptance).

     

    SECTION
5. Payment of
Expenses.  (a) The Company agrees with the Manager that whether
or not the transactions contemplated hereunder are consummated or this Agreement
is terminated, to pay all of the Company's expenses incident to the performance
of its obligations hereunder, including, but not limited to, such costs,
expenses, fees and taxes in connection with (i) the preparation and filing of
the Registration Statement, the Basic Prospectus, the Prospectus Supplement, the
Prospectus, each Permitted Free Writing Prospectus and any amendments or
supplements thereto, and

     

    
      
         

      

      
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    the
printing and furnishing of copies of each thereof to the Manager (including
costs of mailing and shipment), (ii) the registration, issue, sale and delivery
of the Shares including any stock or transfer taxes and stamp or similar duties
payable upon the sale, issuance or delivery of the Shares, (iii) the
reproduction and/or printing and furnishing of this Agreement and any other
closing document to the Manager (including costs of mailing and shipment), (iv)
the qualification of the Shares for offering and sale under state laws and the
determination of their eligibility for investment under state or foreign law as
aforesaid (including the reasonable legal fees and filing fees and other
disbursements of counsel for the Manager) and the printing and furnishing of
copies of any blue sky surveys to the Manager, (v) the listing of the Shares on
any securities exchange or qualification of the Shares for quotation on the NYSE
and any registration thereof under the Exchange Act, (vi) any filing for review
of the public offering of the Shares by Financial Industry Regulatory Authority
(“FINRA”), including the reasonable legal fees and disbursements of counsel for
the Manager relating to FINRA matters and (vii) the reasonable fees and
disbursements of the Company’s counsel and of the Company’s
accountants.

     

    (b) The
Company shall reimburse the Manager for all reasonable fees and disbursements of
counsel for the Manager incurred in connection with this Agreement and any Terms
Agreement (“Manager Expenses”) in accordance with Schedule D attached
hereto.

     

    (c) Except as
provided in this Section 5 and Schedule D hereto, the Manager will pay all of
its other own out-of-pocket costs and expenses incurred in connection with
entering into this Agreement and the transactions contemplated by this
Agreement, including, without limitation, travel, reproduction, printing and
similar expenses.

     

    SECTION
6. Conditions of Manager’s
Obligations.  The obligations of the Manager hereunder are
subject to (i) the accuracy of the representations and warranties on the
part of the Company on the date hereof, as of each Representation Date and as of
each Settlement Date, (ii) the performance by the Company of its
obligations hereunder and (iii) to the following additional conditions
precedent:

     

    (a) (i)  No
stop order with respect to the effectiveness of the Registration Statement shall
have been issued under the Act or proceedings initiated under Section 8(d) or
8(e) of the Act, and no order directed at or in relation to any document
incorporated by reference therein and no order preventing or suspending the use
of the Prospectus has been issued by the Commission, and no suspension of the
qualification of the Shares for offering or sale in any jurisdiction, or to the
knowledge of the Company or the Manager of the initiation or threatening of any
proceedings for any of such purposes, has occurred; (ii) the Registration
Statement, as amended, shall not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; (iii)

     

    
      
         

      

      
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    none of
the Basic Prospectus or the Prospectus, as amended, shall include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they are made, not misleading; and (iv) no Prospectus, together with all
Permitted Free Writing Prospectuses, if any, shall include an untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they are
made, not misleading.

     

    (b) Subsequent
to the respective dates as of which information is given in the Registration
Statement, the Basic Prospectus, the Prospectus and the Permitted Free Writing
Prospectuses, if any, no Material Adverse Change, in the judgment of the
Manager, shall have occurred (other than as referred to in the Registration
Statement and Prospectus); and no transaction which is material and unfavorable
to the Company (other than as referred to in the Registration Statement and the
Prospectus) in the judgment of the Manager, shall have been entered into by the
Company or Empire Gas.

     

    (c) The
Company shall furnish to the Manager, at every date specified in Section 4(p) of
this Agreement, an opinion of Company Counsel, addressed to the Manager, and
dated as of such date, and in form reasonably satisfactory to the Manager, in
the form set forth in Exhibits A-1 and A-2
hereto.

     

    (d) The
Company shall furnish to the Manager, at every date specified in Section 4(q) of
this Agreement, an opinion of Missouri Counsel, addressed to the Manager, and
dated as of such date, and in form reasonably satisfactory to the Manager, in
the form set forth in Exhibit B
hereto.

     

    (e) The
Company shall furnish to the Manager, at every date specified in Section 4(r) of
this Agreement, an opinion of Kansas Counsel, addressed to the Manager, and
dated as of such date, and in form reasonably satisfactory to the Manager, in
the form set forth in Exhibit C
hereto.

     

    (f) The
Company shall furnish to the Manager, at every date specified in Section 4(s) of
this Agreement, an opinion of Special Regulatory Counsel, addressed to the
Manager, and dated as of such date, and in form reasonably satisfactory to the
Manager, in the form set forth in Exhibit D
hereto.

     

    (g) At the
dates specified in Section 4(v) of this Agreement, the Manager shall have
received from the Accountants a letter dated the date of delivery thereof and
addressed to the Manager in form and substance reasonably satisfactory to the
Manager.

     

    
      
         

      

      
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    (h) The
Company shall deliver to the Manager, at every Representation Date, a
certificate signed on behalf of the Company by the Company's chief executive
officer or chief financial officer to the effect that (i) the representations
and warranties of the Company as set forth in this Agreement are true and
correct as of the Representation Date, (ii) the Company has performed such of
its obligations under this Agreement as are to be performed at or before each
such Representation Date, and (iii) the conditions set forth in paragraphs (a)
and (b) of Section 6 have been met.  The certificate shall also state
that the Shares have been duly and validly authorized by the Company, that all
corporate action required to be taken for the issuance and sale of the Shares
has been validly and sufficiently taken, and that the Company’s Board of
Directors or any other body with authority has not revoked, rescinded or
otherwise modified or withdrawn such authorization or corporate
action.

     

    (i) The
Manager shall have received, at every date specified in Section 4(u) of this
Agreement, the favorable opinion of Dewey & LeBoeuf LLP, counsel to the
Manager, dated as of such date, and in form and substance reasonably
satisfactory to the Manager.

     

    (j) The
Manager shall have received, at every date specified in Section 4(t) of this
Agreement, a certificate of the Secretary of the Company, dated as of such date,
and in form and substance reasonably satisfactory to the Manager.

     

    (k) All
filings with the Commission required by Rule 424 under the Act to have been
filed by the Settlement Date shall have been made within the applicable time
period prescribed for such filing by Rule 424.

     

    (l) The
Shares shall have been approved for listing on the NYSE, subject only to notice
of issuance at or prior to the Settlement Date.

     

    SECTION
7. Indemnification and
Contribution.

     

    (a) The
Company will indemnify and hold harmless the Manager and its affiliates, and
such person, if any, who controls the Manager within the meaning of the Act, the
Manager’s and its affiliates' directors and officers, and the successors and
assigns of all of the foregoing persons, against the losses, claims, damages or
liabilities, joint or several, to which the Manager, its affiliates or such
controlling person may become subject, under the Act, the Exchange Act, common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the Registration
Statement, the Basic Prospectus, the Prospectus or any Permitted Free Writing
Prospectus or any amendment or supplement to any thereof, or arise out of or are
based upon the omission or

     

    
      
         

      

      
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    alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; and will reimburse the
Manager, its affiliates and such controlling person for any legal or other
expenses reasonably incurred by the Manager, its affiliates or such controlling
person in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company
will not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any of such
documents in reliance upon and in conformity with written information furnished
to the Company by the Manager specifically for use therein.  The
indemnification obligation contained in this Section 7 will be in addition
to any liability which the Company may otherwise have.

     

    (b) The
Manager will indemnify and hold harmless the Company, each of its directors,
each of its officers who has signed the Registration Statement, and each person,
if any, who controls the Company within the meaning of the Act, against any
losses, claims, damages or liabilities to which the Company or any such
director, officer or controlling person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or action in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of any material fact contained in the Registration Statement,
the Basic Prospectus, the Prospectus, any Permitted Free Writing Prospectus, or
any amendment or supplement to any thereof, or arise out of or are based upon
the omission or the alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by the
Manager specifically for use therein, and will reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer or
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action.  The indemnification obligation
contained in this Section 7 will be in addition to any liability which the
Manager may otherwise have.

     

    In addition to any other information
the Manager may furnish, the Manager hereby furnishes to the Company
specifically for use in the Prospectus the information set forth in the last
sentence of the first paragraph under the heading “Plan of
Distribution”.  The Manager has not furnished anything else to the
Company up to the date hereof and the Company agrees that the Manager did not
furnish anything else up to the date hereof.

     

    
      
         

      

      
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    (c) Promptly
after receipt by an indemnified party under this Section 7 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this Section 7,
notify the indemnifying party of the commencement thereof; but the omission so
to notify the
indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 7.  In case any action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel selected by the indemnifying party
and acceptable to the indemnified party (the indemnified party shall not
unreasonably reject such counsel), and after notice from the indemnifying party
to such indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section 7 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.  The indemnified party shall have the right to
employ its counsel in any such action, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i)  the
employment of counsel by such indemnified party has been authorized by the
indemnifying party, (ii) the indemnified party shall have reasonably concluded
that there may be a conflict of interest between the indemnifying party and the
indemnified party in the conduct of the defense of such action (in which case
the indemnifying party shall not have the right to direct the defense of such
action on behalf of the indemnified party) or (iii) the indemnifying party shall
not in fact have employed counsel to assume the defense of such action, in each
of which cases the fees and expenses of one counsel representing all indemnified
parties shall be at the expense of the indemnifying party.  An
indemnifying party shall not be liable for any settlement of any action or claim
effected without its consent.  No indemnifying party shall (i) without
the prior written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding and does not include an admission of fault, culpability
or a failure to act, by or on behalf of such indemnified
party, or (ii) be liable for any settlement of any action or claim
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party or if there
be a final judgment of the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by

     

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

    reason of
such settlement or judgment in accordance with the other provisions of this
Section 7.

     

    (d) If
recovery is not available under the foregoing indemnification provisions of
Section 7 of this Agreement, for any reason other than as specified therein, the
parties entitled to indemnification by the terms thereof shall be entitled to
contribution to liabilities and expenses, except to the extent that contribution
is not permitted under Section 11(f) of the Act.  In determining the
amount of contribution to which the respective parties are entitled, there shall
be considered the relative benefits received by each party from the issuance and
sale of the Shares, the parties’ relative knowledge and access to information
concerning the matter with respect to which the claim was asserted, the
opportunity to correct and prevent any statement or omission, and any other
equitable considerations appropriate under the circumstances.  The
Company and the Manager agree that it would not be equitable if the amount of
such contribution were determined by pro rata or per capita
allocation.  The Manager or any person controlling the Manager shall
not be obligated to make contribution hereunder which in the aggregate exceeds
commissions received by it under this Agreement, less the aggregate amount of
any damages which the Manager and its controlling persons have otherwise been
required to pay in respect of the same claim or any substantially similar
claim.  No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.

     

    SECTION
8. Representations and
Agreements to Survive Delivery.  The indemnity and contribution
agreements contained in Section 7 and the covenants, warranties and
representations of the Company contained in this Agreement or in certificates
delivered pursuant hereto shall remain in full force and effect regardless of
any investigation made by or on behalf of the Manager, its partners, directors
or officers or any person (including each partner, officer or director of such
person) who controls the Manager within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, or by or on behalf of the Company, its
directors or officers or any person who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, and shall
survive any termination of this Agreement or the issuance and delivery of the
Shares.

     

    SECTION
9. Termination.

     

    (a) The
Company shall have the right, by giving written notice as hereinafter specified,
to terminate the provisions of this Agreement relating to the solicitation of
offers to purchase the Shares in its sole discretion at any time.  Any
such termination shall be without liability of any party to any other party
except that (i) if any of the Shares have been sold through the Manager for the
Company, then Section 4(x) shall remain in full force and effect,
(ii)

     

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    with
respect to any pending sale, through the Manager for the Company, the
obligations of the Company, including in respect of compensation of the Manager,
shall remain in full force and effect notwithstanding the termination and (iii)
the provisions of Sections 5, 7, 8, 10, 11, 12, 17 and 19 of this Agreement
shall remain in full force and effect notwithstanding such
termination.

     

    (b) The
Manager shall have the right, by giving written notice as hereinafter specified,
to terminate the provisions of this Agreement relating to the solicitation of
offers to purchase the Shares in its sole discretion at any time.  Any
such termination shall be without liability of any party to any other party
except that the provisions of Sections 5, 7, 8, 10, 11, 12, 17 and 19 of this
Agreement shall remain in full force and effect notwithstanding such
termination.

     

    (c) This
Agreement shall remain in full force and effect unless terminated pursuant to
Sections 9(a) or (b) above or otherwise by mutual agreement of the parties;
provided that any such
termination by mutual agreement shall in all cases be deemed to provide that
Sections 5, 7 and 8 shall remain in full force and effect.

     

    (d) Any
termination of this Agreement shall be effective on the date specified in such
notice of termination; provided that such
termination shall not be effective until the close of business on the date of
receipt of such notice by the Manager or the Company, as the case may
be.  If such termination shall occur prior to the Settlement Date for
any sale of the Shares, such sale shall settle in accordance with the provisions
of Section 3(a)(vi) of this Agreement.

     

    SECTION
10. Notices.  Except
as otherwise herein provided, all statements, requests, notices and agreements
under this Agreement shall be in writing and delivered by hand, overnight
courier, mail or facsimile and, if to the Manager, shall be sufficient in all
respects if delivered or sent to UBS Securities LLC, 299 Park Avenue, New
York, NY 10171-0026, Attention: Syndicate Department, Fax No. (212) 821-6186,
with a copy for information purposes to UBS Securities LLC, 677 Washington
Blvd., Stamford, CT, 06901, Attention:  Legal and Compliance
Department, Fax No. (203) 719-0680 and, if to the Company, it shall be
sufficient in all respects if delivered or sent to the Company at the offices of
the Company at 602 S. Joplin Avenue, Joplin, Missouri 64801, Fax No. (417)
625-5153 (Attention:  Vice President - Finance) (or such other place
as the Company may specify in writing).  Each party to this Agreement
may change such address for notices by sending to the parties to this Agreement
written notice of a new address for such purpose.

     

    SECTION
11. Parties at
Interest.  The Agreement herein set forth has been and is made
solely for the benefit of the Manager and the Company and to the

     

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

    extent
provided in Section 7 of this Agreement the controlling persons, directors and
officers referred to in such section, and their respective successors, assigns,
heirs, personal representatives and executors and administrators.  No
other person, partnership, association or corporation (including a purchaser, as
such purchaser, from the Manager) shall acquire or have any right under or by
virtue of this Agreement.

     

    SECTION
12. No Fiduciary
Relationship.  The Company hereby acknowledges that the Manager
is acting solely as sales agent and/or principal in connection with the purchase
and sale of the Company’s securities.  The Company further
acknowledges that the Manager is acting pursuant to a contractual relationship
created solely by this Agreement entered into on an arm’s length basis, and in
no event do the parties intend that the Manager act or be responsible as a
fiduciary to the Company, its management, stockholders or creditors or any other
person in connection with any activity that the Manager may undertake or have
undertaken in furtherance of the purchase and sale of the Company’s securities,
either before or after the date hereof.  The Manager hereby expressly
disclaims any fiduciary or similar obligations to the Company, either in
connection with the transactions contemplated by this Agreement or any matters
leading up to such transactions, and the Company hereby confirms its
understanding and agreement to that effect.  The Company and the
Manager agree that they are each responsible for making their own independent
judgments with respect to any such transactions and that any opinions or views
expressed by the Manager to the Company regarding such transactions, including,
but not limited to, any opinions or views with respect to the price or market
for the Company’s securities, do not constitute advice or recommendations to the
Company.  The Company hereby waives and releases, to the fullest
extent permitted by law, any claims that the Company may have against the
Manager with respect to any breach or alleged breach of any fiduciary or similar
duty to the Company in connection with the transactions contemplated by this
Agreement or any matters leading up to such transactions.

     

    SECTION
13. Press Releases and
Disclosure.  The Company may issue a press release in
compliance with Rule 134 under the Securities Act describing the material terms
of the transactions contemplated hereby as soon as practicable following the
date hereof, and may file with the Commission a Current Report on Form 8-K
describing the material terms of the transaction contemplated hereby, and the
Company shall consult with the Manager prior to making such disclosures, and the
parties shall use all reasonable efforts, acting in good faith, to agree upon a
text for such disclosures that is reasonably satisfactory to all
parties.  No party hereto shall issue thereafter any press release or
like public statement (excluding any disclosure required in reports filed with
the Commission pursuant to the Exchange Act) related to this Agreement or any of
the transactions contemplated hereby without the prior written approval, except
as may be necessary or appropriate in the opinion of the party seeking to make
disclosure to comply with the requirements of applicable law, regulation or
stock exchange rules.  If any such press release or like public
statement is so required, the party making such disclosure shall consult with
the other party prior to making such disclosure, and the parties
shall

     

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

    use all
reasonable efforts, acting in good faith, to agree upon a text for such
disclosure that is reasonably satisfactory to all parties.

     

    SECTION
14. Adjustments for Stock
Splits.  The parties acknowledge and agree that all share
related numbers contained in this Agreement shall be adjusted to take into
account any stock split effected with respect to the Shares.

     

    SECTION
15. Entire
Agreement.  This Agreement constitutes the entire agreement and
supersedes all other prior and contemporaneous agreements and undertakings, both
written and oral, among the parties hereto with regard to the subject matter
hereof.

     

    SECTION
16. Counterparts.  This
Agreement may be signed by the parties in one or more counterparts which
together shall constitute one and the same agreement among the
parties.

     

    SECTION
17. Law;
Construction.  This Agreement and any claim, counterclaim or
dispute of any kind or nature whatsoever arising out of or in any way relating
to this Agreement (“Claim”), directly or
indirectly, shall be governed by, and construed in accordance with, the internal
laws of the State of New York.

     

    SECTION
18. Headings.  The
Section headings in this Agreement have been inserted as a matter of convenience
of reference and are not a part of this Agreement.

     

    SECTION
19. Submission to
Jurisdiction.  Except as set forth below, no Claim may be
commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and the Company
consents to the jurisdiction of such courts and personal service with respect
thereto.  The Company hereby consents to personal jurisdiction,
service and venue in any court in which any Claim arising out of or in any way
relating to this Agreement is brought by any third party against the Manager or
any indemnified party.  Each of the Manager and the Company (on its
behalf and, to the extent permitted by applicable law, on behalf of its
stockholders and affiliates) waives all right to trial by jury in any action,
proceeding or counterclaim (whether based upon contract, tort or otherwise) in
any way arising out of or relating to this Agreement.  The Company
agrees that a final judgment in any such action, proceeding or counterclaim
brought in any such court shall be conclusive and binding upon the Company and
may be enforced in any other courts to the jurisdiction of which the Company is
or may be subject, by suit upon such judgment.

     

    SECTION
20. Successors and
Assigns.  This Agreement shall be binding upon the Manager and
the Company and their successors and assigns and any successor or assign of any
substantial portion of the Company’s and the Manager’s respective businesses
and/or assets.

     

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

    

     

    SECTION
21. Miscellaneous.  The
Manager, an indirect, wholly-owned subsidiary of UBS AG, is not a bank and is
separate from any affiliated bank, including any U.S. branch or agency of UBS
AG.  Because the Manager is a separately incorporated entity, it is
solely responsible for its own contractual obligations and commitments,
including obligations with respect to sales and purchases of
securities.  Securities sold, offered or recommended by the Manager
are not deposits, are not insured by the Federal Deposit Insurance Corporation,
are not guaranteed by a branch or agency, and are not otherwise an obligation or
responsibility of a branch or agency.

     

    Lending
affiliates of the Manager have or may in the future have lending relationships
with issuers of securities underwritten or privately placed by the
Manager.  Prospectuses and other disclosure documents for securities
underwritten or privately placed by the Manager may disclose the existence of
any such lending relationships and whether the proceeds of the issue may be used
to repay debts owed to affiliates of the Manager.

     

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

    If the
foregoing correctly sets forth the understanding between the Company and the
Manager, please so indicate in the space provided below for that purpose,
whereupon this Agreement and your acceptance shall constitute a binding
agreement between the Company and the Manager.  Alternatively, the
execution of this Agreement by the Company and its acceptance by or on behalf of
the Manager may be evidenced by an exchange of telegraphic or other written
communications.

     

    
      
        
          	
                  

                    Very
      truly yours,

                  

                   

                   

                  THE
      EMPIRE DISTRICT ELECTRIC COMPANY

                   

                   

                
	
                  By:

                	
                  /s/
      Gregory A. Knapp        

                
	 
      	
                  Name:  Gregory
      A. Knapp

                
	 
      	
                  Title:  
       Vice President – Finance and

                
	 
      	
                              
      Chief Financial Officer

                

        

      

    

     

    ACCEPTED
as of the date

    first
above written

     

    
      
        	
                UBS
      SECURITIES LLC

              
	 
      	 
      
	 
      	 
      
	
                By:

              	
                /s/
      Jonathan Schmudmak        

              
	 
      	
                Name:  Jonathan
      Schudmak

              
	 
      	
                Title:  Director

              
	 
      	 
      

      

    

    

    
      
        	
                UBS
      SECURITIES LLC

              
	 
      	 
      
	 
      	 
      
	
                By:

              	
                /s/
      Ahmet Ugurlu            

              
	 
      	
                Name:  Ahmet
      Ugurlu

              
	 
      	
                Title:  Associate
      Director

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