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                                                                   EXHIBIT 10.16

                               AMENDING AGREEMENT

           WHEREAS the parties to this Amending Agreement (this "AGREEMENT")
have entered into that certain Revolving Credit Agreement dated August 28, 2001,
which was replaced and superceded by that certain Amended & Restated Revolving
Credit Agreement dated October 1, 2001 (the "CREDIT FACILITY") (unless otherwise
defined herein, all capitalized terms herein have the meanings given to them in
the Credit Facility); and

           WHEREAS the Borrower and the Lender wish to amend the Credit Facility
pursuant to the terms and conditions set forth herein;

           NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the
covenants and agreements herein contained and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties to this Agreement agree as follows:

     1.   As set forth in Section 1.1 of the Credit Facility, the definition of:

          a.   Applicable Margin is amended by

               i.   deleting the word "and" immediately following clause (c)
                    therein; and

               ii.  deleting clause (d) in its entirety and replacing it with
                    "(d) if on any day the principal amount of the Advances then
                    outstanding equals or exceeds $250,000,000 in the aggregate,
                    an additional 50 basis points PER ANNUM, and (e) an
                    additional 200 basis points PER ANNUM upon the occurrence
                    and during the continuance of any Event of Default

          b.   Commitment is amended by deleting "250,000,000" and replacing it
               with "350,000,000".

     2.   This Agreement shall be effective as of the date hereof.

     3.   Save and except as amended hereby, the Credit Facility is hereby
          ratified and confirmed. For greater certainty, the Borrower shall be
          deemed to have repeated the representations and warranties contained
          in Section 4.01of the Credit Facility by executing this Agreement.

     4.   This Agreement shall be conclusively deemed to be a contract made
          under, and shall for all purposes be governed by and construed in
          accordance with, the laws of the State of Missouri.

     5.   This Agreement may be executed by the parties hereto in separate
          counterparts, each of which when so executed and delivered shall be
          deemed an original, but all such counterparts shall together
          constitute one in the same agreement. This Agreement may be executed
          and delivered by facsimile, which when so executed and delivered shall
          constitute a binding agreement.

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           IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the 8th of November 2001.

UTILICORP UNITED INC.                             AQUILA, INC.

--------------------------------                  -----------------------------
Name: Randal P. Miller                            Name: Joseph L. Gocke
Title: Vice President and Treasurer               Title: Treasurer

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                           LINE OF CREDIT DEMAND NOTE

         ON DEMAND, for value received this 13th day of December, 2001, Aquila,
Inc., a Delaware corporation (the "BORROWER"), promises to pay to the order of
UTILICORP UNITED INC., a Delaware corporation (the "LENDER"), the aggregate
unpaid principal balance of each advance (an "ADVANCE" and collectively the
"ADVANCES") made by the Lender to the Borrower hereunder. The total principal
amount of Advances outstanding at any one time hereunder shall not exceed
U.S.$100,000,000.

         The unpaid principal balance of each Advance shall bear interest from
the date thereof until the occurrence of a demand for payment hereof at the
Interest Rate (as defined below). The principal amount of each Advance shall
mature and be payable on demand by the Lender.

         For purposes of this Note, "INTEREST RATE" means, for any date in
question, the Base Rate plus 300 basis points PER ANNUM, where "BASE RATE" means
the interest rate PER ANNUM appearing on the display shown as LIBOR 1M on the
Bloomberg Screen Page BTMM at approximately 11 a.m. and, if such rate is not
published on such page at such time, then the one-month LIBOR rate quoted by a
reputable lending institution in the Kansas City bank market (as determined in
the sole discretion of the Lender).

         Accrued but unpaid interest on each Advance shall be payable on the
earlier of (a) the last day of each month or (b) upon payment of such Advance in
full. Any Advance which is not paid in full on or before demand shall thereafter
bear interest, payable upon demand, until paid at a rate equal to the greater of
(x) the Interest Rate plus two percent (2%) per annum and (y) the maximum amount
allowed under Missouri law.

         The Borrower hereby authorizes the Lender to charge any account of the
Borrower maintained with the Lender for any amounts due or payable hereunder,
unless the Borrower instructs otherwise, all Advances made to the Borrower under
this Note shall be credited to an account of the Borrower with the Lender. THE
LENDER AT ITS OPTION MAY MAKE ADVANCES HEREUNDER UPON TELEPHONIC INSTRUCTIONS
AND IN SO DOING SHALL BE FULLY ENTITLED TO RELY SOLELY UPON INSTRUCTIONS,
INCLUDING INSTRUCTIONS TO MAKE TRANSFERS TO THIRD PARTIES, REASONABLY BELIEVED
BY THE LENDER TO HAVE BEEN GIVEN BY AN AUTHROIZED PERSON, WITHOUT INDEPENDENT
INQUIRY OF ANY TYPE.

         All payments hereunder shall be payable at the principal office of the
Lender at 20 West Ninth Street, Kansas City, Missouri 64105 or by wire transfer
to an account designated in writing by the Lender, in lawful money of the United
States of America and in immediately available funds.

         The Lender shall, and is hereby authorized by the Borrower to, record
in its records the date and principal amount of each Advance, the applicable
Interest Rate, and the date and amount of each payment of principal and interest
made by the Borrower with respect to each such Advance; PROVIDED, HOWEVER, the
failure of the Lender to make any recordation shall not limit or otherwise
affect the right of the Lender to repayment of all Advances (including interest
thereon) made by the Lender to the Borrower. The Lender agrees to send to
Borrower, as soon as reasonably practicable following the date of recordation, a
copy of Lender's records showing the date and principal amount of each Advance,
the applicable Interest Rate, and the date and amount of each payment of
principal and interest made by the Borrower with respect to each Advance. The
Lender's records relating to Advances shall be rebuttably presumptive evidence
of the outstanding principal and interest on the Advances.

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         The Borrower hereby represents and warrants to the Lender that (a) it
is a corporation existing and in good standing under the laws of its state of
incorporation and duly qualified, in good standing and authorized to do business
in each jurisdiction where the failure to so qualify would have a material and
adverse effect on its financial condition; (b) the borrowings hereunder and the
execution and delivery of this Note are within the Borrower's corporate powers,
have been duly authorized by all necessary corporate action, have received any
necessary governmental approval and do not contravene or conflict with any
provision of law or of the charter or by-laws of the Borrower or of any
agreement binding upon it; and (c) there has been no material adverse change in
the business, financial condition, properties, assets, operations or prospects
of the Borrower since the date of the latest financial statements provided by or
on behalf of the Borrower to the Lender. The Borrower further represents,
warrants, and covenants that no proceeds from any Advance hereunder will be used
to facilitate, assist, or participate in a hostile acquisition or hostile
take-over.

         The Borrower shall be deemed to have remade the foregoing
representations and warranties each time it requests an Advance hereunder,
except that (c) shall be deemed to refer to the then most recent financial
statements furnished to the Lender.

         All sums outstanding under this Note shall be immediately due and
payable without further action of any kind on the part of the Lender, and the
Lender shall have and may exercise any and all rights and remedies available at
law or in equity, when the Lender demands payment hereof. Such sums shall be
deemed to have been so demanded, and shall be immediately and automatically due
and payable without any action of any kind on the part of the Lender, and the
Lender shall have and may exercise any and all rights and remedies available at
law or in equity, if any bankruptcy, insolvency, reorganization, arrangement,
readjustment, liquidation, dissolution, or similar proceeding, domestic or
foreign, is instituted by the Borrower (or is instituted against the Borrower
and remains undismissed for more than 60 days); or if the Borrower shall
authorize such a proceeding; or if the Borrower shall become insolvent,
generally shall fail or be unable to pay its debts as they mature, shall admit
in writing its inability to pay its debts as they mature, shall make a general
assignment for the benefit of its creditors, shall enter into any composition or
similar agreement, or shall suspend the transaction of all or a substantial
portion of its usual business.

         All notices, requests and demands hereunder shall be deemed to have
been given or made when delivered by messenger or express delivery service, or
five (5) days after deposit in the U.S. mail, first class postage prepaid,
addressed to the address provided by each party to the other party prior to the
date hereof or to such other address as may be hereafter designated in writing
by the respective parties hereto.

         THIS NOTE AND ANY DOCUMENT OR INSTRUMENTS EXECUTED IN CONNECTION
HEREWITH SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAW
OF THE STATE OF MISSOURI AND SHALL BE DEEMED TO HAVE BEEN EXECUTED AND DELIVERED
IN MISSOURI. Unless the context requires otherwise, wherever used herein the
singular shall include the plural and vice versa. This Note shall bind the
Borrower, its successors and assigns, and shall inure to the benefit of the
Lender, its successors and assigns, except that the Borrower may not transfer or
assign any of its rights or interest hereunder without the prior written consent
of the Lender. The Borrower agrees to pay upon demand all expenses (including,
without limitation, reasonable attorneys' fees, legal costs and expenses, and
time charges of attorneys who may be employees of the Lender, in each case
whether in or out of the court, in original or appellate proceedings or in
bankruptcy) incurred or paid by the Lender or any holder hereof in connection
with the enforcement

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or preservation of its rights hereunder or under any document or instrument
executed in connection herewith. The Borrower expressly and irrevocably waives
presentment, protest, demand and notice of any kind in connection herewith.

         NO PROVISIONS OF THIS NOTE OR ANY RELATED DOCUMENT OR INSTRUMENT SHALL
BE CONSTRUED TO REQUIRE THE LENDER TO EXTEND ANY CREDIT OR MAKE ANY LOAN TO THE
BORROWER, OR TO REQUIRE THE BORROWER TO BORROW, WHETHER OR NOT ANY FEE IS
PAYABLE BY THE BORROWER IN CONNECTION HEREWITH. THE BORROWER CLEARLY UNDERSTANDS
AND AGREES THAT THIS NOTE IS A DEMAND OBLIGATION PAYMENT OF WHICH IN FULL
(INCLUDING PRINCIPAL, INTEREST, AND ANY OTHER AMOUNTS) MAY BE DEMANDED BY THE
LENDER AT ANY TIME IN ITS DISCRETION WITHOUT PRIOR ORAL OR WRITTEN NOTICE OF ANY
KIND.

                             AQUILA, INC.

                             By: ________________________________

                             Name: Joseph L. Gocke

                             Title:  Treasurer

The Lender, UtiliCorp United Inc., hereby acknowledges the terms and conditions
set forth above, and the due execution of this Line of Credit Demand Note. The
Lender further agrees that all payments made by the Borrower to the Lender under
this Agreement are subordinate and junior in right of payment to the prior
payment in full of all senior debt of the Borrower, whether outstanding at the
date hereof or thereafter occurred.

                             UTILICORP UNITED INC.

                             By: ________________________________

                             Name:

                             Title:

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                           LINE OF CREDIT DEMAND NOTE

         ON DEMAND, for value received this 15th day of January, 2002, Aquila,
Inc., a Delaware corporation (the "BORROWER"), promises to pay to the order of
UTILICORP UNITED INC., a Delaware corporation (the "LENDER"), the aggregate
unpaid principal balance of each advance (an "ADVANCE" and collectively the
"ADVANCES") made by the Lender to the Borrower hereunder. The total principal
amount of Advances outstanding at any one time hereunder shall not exceed an
amount to be agreed by the parties.

         The unpaid principal balance of each Advance shall bear interest from
the date thereof until the occurrence of a demand for payment hereof at the
Interest Rate (as defined below). The principal amount of each Advance shall
mature and be payable on demand by the Lender.

         For purposes of this Note, "INTEREST RATE" means, for any date in
question, the Base Rate plus the Margin, where "BASE RATE" means the interest
rate PER ANNUM equal to the Lender's cost of funding from time to time (as
determined by the Lender acting in good faith), and "MARGIN" equals an amount
agreed by the parties immediately prior to the making of each Advance. The
parties agree to re-examine the Base Rate and Margin applicable to each Advance
from time to time in order to best meet the parties' financing needs.

         Accrued but unpaid interest on each Advance shall be payable on demand
by the Lender or as otherwise agreed by the parties. Any Advance which is not
paid in full on or before demand shall thereafter bear interest, payable upon
demand, until paid at a rate equal to the greater of (x) the Interest Rate plus
two percent per annum and (y) the maximum amount allowed under Missouri law.

         The Borrower hereby authorizes the Lender to charge any account of the
Borrower maintained with the Lender for any amounts due or payable hereunder,
unless the Borrower instructs otherwise, all Advances made to the Borrower under
this Note shall be credited to an account of the Borrower with the Lender. THE
LENDER AT ITS OPTION MAY MAKE ADVANCES HEREUNDER UPON TELEPHONIC INSTRUCTIONS
AND IN SO DOING SHALL BE FULLY ENTITLED TO RELY SOLELY UPON INSTRUCTIONS,
INCLUDING INSTRUCTIONS TO MAKE TRANSFERS TO THIRD PARTIES, REASONABLY BELIEVED
BY THE LENDER TO HAVE BEEN GIVEN BY AN AUTHROIZED PERSON, WITHOUT INDEPENDENT
INQUIRY OF ANY TYPE.

         All payments hereunder shall be payable at the principal office of the
Lender at 20 West Ninth Street, Kansas City, Missouri 64105 or by wire transfer
to an account designated in writing by the Lender, in lawful money of the United
States of America and in immediately available funds.

         The Lender shall, and is hereby authorized by the Borrower to, record
in its records the date and principal amount of each Advance, the applicable
Interest Rate, and the date and amount of each payment of principal and interest
made by the Borrower with respect to each such Advance; PROVIDED, HOWEVER, the
failure of the Lender to make any recordation shall not limit or otherwise
affect the right of the Lender to repayment of all Advances (including interest
thereon) made by the Lender to the Borrower. The Lender agrees to send to
Borrower, as soon as reasonably practicable following the date of recordation, a
copy of Lender's records showing the date and principal amount of each Advance,
the applicable Interest Rate, and the date and amount of each payment of
principal and interest made by the Borrower with respect to each Advance. The
Lender's records relating to Advances shall be rebuttably presumptive evidence
of the outstanding principal and interest on the Advances.

         The Borrower hereby represents and warrants to the Lender that (a) it
is a corporation existing and in good standing under the laws of its state of
incorporation and duly qualified, in good standing and authorized to do business
in each jurisdiction where the failure to so qualify would have a material and
adverse effect on its financial condition; (b) the borrowings hereunder and the
execution and delivery of this Note are within the Borrower's corporate powers,
have been

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duly authorized by all necessary corporate action, have received any necessary
governmental approval and do not contravene or conflict with any provision of
law or of the charter or by-laws of the Borrower or of any agreement binding
upon it; and (c) there has been no material adverse change in the business,
financial condition, properties, assets, operations or prospects of the Borrower
since the date of the latest financial statements provided by or on behalf of
the Borrower to the Lender. The Borrower further represents, warrants, and
covenants that no proceeds from any Advance hereunder will be used to
facilitate, assist, or participate in a hostile acquisition or hostile
take-over, unless otherwise agreed by the Lender in advance.

         The Borrower shall be deemed to have remade the foregoing
representations and warranties each time it requests an Advance hereunder,
except that (c) shall be deemed to refer to the then most recent financial
statements furnished to the Lender.

         All sums outstanding under this Note shall be immediately due and
payable without further action of any kind on the part of the Lender, and the
Lender shall have and may exercise any and all rights and remedies available at
law or in equity, when the Lender demands payment hereof. Such sums shall be
deemed to have been so demanded, and shall be immediately and automatically due
and payable without any action of any kind on the part of the Lender, and the
Lender shall have and may exercise any and all rights and remedies available at
law or in equity, if any bankruptcy, insolvency, reorganization, arrangement,
readjustment, liquidation, dissolution, or similar proceeding, domestic or
foreign, is instituted by the Borrower (or is instituted against the Borrower
and remains undismissed for more than 60 days); or if the Borrower shall
authorize such a proceeding; or if the Borrower shall become insolvent,
generally shall fail or be unable to pay its debts as they mature, shall admit
in writing its inability to pay its debts as they mature, shall make a general
assignment for the benefit of its creditors, shall enter into any composition or
similar agreement, or shall suspend the transaction of all or a substantial
portion of its usual business.

         All notices, requests and demands hereunder shall be deemed to have
been given or made when delivered by messenger or express delivery service, or
five (5) days after deposit in the U.S. mail, first class postage prepaid,
addressed to the address provided by each party to the other party prior to the
date hereof or to such other address as may be hereafter designated in writing
by the respective parties hereto.

         THIS NOTE AND ANY DOCUMENT OR INSTRUMENTS EXECUTED IN CONNECTION
HEREWITH SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAW
OF THE STATE OF MISSOURI AND SHALL BE DEEMED TO HAVE BEEN EXECUTED AND DELIVERED
IN MISSOURI. Unless the context requires otherwise, wherever used herein the
singular shall include the plural and vice versa. This Note shall bind the
Borrower, its successors and assigns, and shall inure to the benefit of the
Lender, its successors and assigns, except that the Borrower may not transfer or
assign any of its rights or interest hereunder without the prior written consent
of the Lender. The Borrower agrees to pay upon demand all expenses (including,
without limitation, reasonable attorneys' fees, legal costs and expenses, and
time charges of attorneys who may be employees of the Lender, in each case
whether in or out of the court, in original or appellate proceedings or in
bankruptcy) incurred or paid by the Lender or any holder hereof in connection
with the enforcement or preservation of its rights hereunder or under any
document or instrument executed in connection herewith. The Borrower expressly
and irrevocably waives presentment, protest, demand and notice of any kind in
connection herewith.

         NO PROVISIONS OF THIS NOTE OR ANY RELATED DOCUMENT OR INSTRUMENT SHALL
BE CONSTRUED TO REQUIRE THE LENDER TO EXTEND ANY CREDIT OR MAKE ANY LOAN TO THE
BORROWER, OR TO REQUIRE THE BORROWER TO BORROW, WHETHER OR NOT ANY FEE IS
PAYABLE BY THE BORROWER IN CONNECTION HEREWITH. THE BORROWER CLEARLY UNDERSTANDS
AND AGREES THAT THIS NOTE IS A DEMAND OBLIGATION PAYMENT OF WHICH IN FULL
(INCLUDING PRINCIPAL, INTEREST, AND ANY OTHER AMOUNTS) MAY BE DEMANDED BY THE
LENDER AT ANY TIME IN ITS DISCRETION WITHOUT PRIOR ORAL OR WRITTEN NOTICE OF ANY
KIND.

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                      AQUILA, INC.

                      By: ________________________________

                      Name:  Joseph L. Gocke

                      Title:  Treasurer

The Lender, UtiliCorp United Inc., hereby acknowledges the terms and conditions
set forth above, and the due execution of this Line of Credit Demand Note. The
Lender further agrees that all payments made by the Borrower to the Lender under
this Agreement are subordinate and junior in right of payment to the prior
payment in full of all senior debt of the Borrower, whether outstanding at the
date hereof or thereafter occurred.

                      UTILICORP UNITED INC.

                      By: ________________________________

                      Name:  Randal P. Miller

                      Title:  Treasurer<Page>

                                                                ARTHUR ANDERSEN

                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
                    -----------------------------------------

As independent public accountants, we hereby consent to the use of our
reports (and to all references to our Firm) included in or made a part of
this Registration Statement File No. 333-34998 for Hartford Life and Annuity
Insurance Company Separate Account Three on Form N-4.

Hartford, Connecticut                                   /s/ Arthur Andersen LLP
April 8, 2002

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