Document:

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                                                                    EXHIBIT 10.3

Draft of March 15, 2005
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                          INSITUFORM TECHNOLOGIES, INC.

                       -----------------------------------

                           SECOND AMENDMENT AND WAIVER
                                       TO
                             NOTE PURCHASE AGREEMENT

                           Dated as of March 16, 2005

                       -----------------------------------

             Re: Note Purchase Agreement dated as of April 24, 2003
                                       and
                    $65,000,000 Senior Notes, Series 2003-A,
                               Due April 24, 2013

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                           SECOND AMENDMENT AND WAIVER
                                       TO
                             NOTE PURCHASE AGREEMENT

      THIS SECOND AMENDMENT AND WAIVER TO NOTE PURCHASE AGREEMENT dated as of
March 16, 2005 (the or this "Second Amendment") is between INSITUFORM
TECHNOLOGIES, INC., a Delaware corporation (the "Company"), and each of the
institutions holding a Note (as hereinafter defined) and party hereto
(collectively, the "Noteholders").

                                    RECITALS:

      A. The Company entered into the Note Purchase Agreement dated as of April
24, 2003 (as amended, supplemented or otherwise modified through the date
hereof, the "Note Agreement"), pursuant to which the Company issued its 5.29%
Senior Notes, Series 2003-A, due April 24, 2013 in the original aggregate
principal amount of $65,000,000 (as amended, supplemented or otherwise modified
through the date hereof, the "Notes").

      B. The Company and the Noteholders now desire to amend the Note Agreement
and the Notes in the respects, but only in the respects, hereinafter set forth
in order to reflect certain agreements between the Company and the Noteholders.

      C. The Company has also advised the Noteholders that the Company has
violated certain terms and conditions set forth in the Note Agreement and more
particularly described herein and requests that the Noteholders waive such
Defaults and Events of Default.

      D. Capitalized terms used herein shall have the respective meanings
ascribed thereto in the Note Agreement unless herein defined or the context
shall otherwise require.

      E. All requirements of law have been fully complied with and all other
acts and things necessary to make this Second Amendment a valid, legal and
binding instrument according to its terms for the purposes herein expressed have
been done or performed.

      NOW, THEREFORE, upon the full and complete satisfaction of the conditions
precedent to the effectiveness of this Second Amendment set forth in Section 4.1
hereof, and in consideration of good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the Company and the Noteholders do
hereby agree as follows:

SECTION 1. WAIVER OF DEFAULTS.

      Section 1.1. Waiver of Defaults (Cross-Default). The Company has notified
the Noteholders that the Company has violated the minimum Fixed Charges Coverage
Ratio required to be maintained under Section 10.2 of the note purchase
agreement, under and pursuant to which the 1997 Notes (the "1997 Note
Agreement") were issued, for the fiscal quarter ended December 31, 2004. The
Noteholders hereby waive the Event of Default arising under the Note

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Agreement on account of the Company's violation of the financial covenant
described above in the 1997 Note Agreement for the fiscal quarter ended December
31, 2004.

      Section 1.2. Waiver of Defaults and Consent (Acquisitions). The Company
has notified the Noteholders that Insituform Technologies Limited, a foreign
Subsidiary of the Company organized in England and Wales ("ITL"), entered into a
joint venture arrangement with Environmental Techniques Limited, a Northern
Ireland company ("ETL"), during the fiscal year ended 2004, pursuant to which
ITL and ETL formed a new company in Northern Ireland called Insituform
Environmental Techniques Limited ("IETL"), in connection with which ITL has
subscribed to purchase 499 shares of the authorized share capital (the
"Subscribed Joint Venture Shares") (comprised of a total of 1000 ordinary
shares) of IETL for an amount equal to (pound)499 (approximately equivalent to
U.S. $1,000). The Noteholders hereby waive compliance with Section 10.12 of the
Note Agreement to the extent necessary to waive any Event of Default arising
under the Note Agreement on account of the Subscribed Joint Venture Shares and
hereby consent to the purchase by ITL of the Subscribed Joint Venture Shares.

      Section 1.3. Limited Waivers; Reservation of Rights. The Company
acknowledges and agrees that the waivers granted in this Section 1 are specific
in intent and are valid only for the specific purpose for which they are being
given, are waivers of the events described in Sections 1.1 and 1.2 hereof only,
shall not in any way obligate the Noteholders to agree to any additional waivers
of the provisions of the Note Agreement, including but not limited to Section
10.12, Section 11(c) and Section 11(g), and shall not in any way be deemed to
constitute or operate as a waiver of any Noteholder's right under the Note
Agreement to exercise remedies resulting from (i) existing and/or continuing
Defaults or Events of Default of which such Noteholder is not actually aware or
(ii) other future Defaults or Events of Default, whether or not of a similar
nature and whether or not known to any Noteholder.

SECTION 2. AMENDMENTS TO NOTE AGREEMENT AND THE NOTES.

      Section 2.1. Amendment to Interest Rate on the Series 2003-A Notes. Upon
the Effective Date (as defined in Section 4.1 of this Second Amendment), the
rate of interest payable on each outstanding Series 2003-A Note shall be changed
from 6.04% per annum to 6.54% per annum. As used in the Note Agreement and the
Notes "Applicable Rate" shall mean (i) 6.04% for the period commencing October
24, 2004 to but not including the Effective Date and (ii) 6.54% from and after
the Effective Date.

      Section 2.2. Amendment to Section 8.4 (Maturity; Surrender; Etc.). Section
8.4 of the Note Agreement shall be and is hereby amended by deleting the
reference to "Section 8" therein and substituting in lieu thereof a reference to
"Section 8 or Section 10.5".

      Section 2.3. Amendment to Section 9 (Additional Financial Covenants).
Section 9.8 of the Note Agreement shall be and is hereby amended in its entirety
to read as follows:

                  "Section 9.8. Additional Covenants. If the Bank Credit
            Agreement is amended, replaced or renewed after the Effective Date
            in a manner which makes the financial covenants set forth

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            therein more restrictive on the Company and its Subsidiaries than
            the financial covenants contained in Section 10 of this Agreement or
            to add additional financial covenants or to make the existing Bank
            Credit Agreement covenants more restrictive than the financial
            covenants in the Bank Credit Agreement on the Effective Date, then
            such more restrictive financial covenants and any related
            definitions (the "Additional Financial Covenants") shall
            automatically be deemed to be incorporated into Section 7.2(a) and
            Section 10 of this Agreement by reference and Section 11(c) shall be
            deemed to be amended to include such Additional Financial Covenants
            from the time such Additional Financial Covenants become binding
            upon the Company. No amendment or modification of the Additional
            Financial Covenants shall result in any change in the covenants
            expressly set forth in Section 10 which shall at all times remain in
            effect. Promptly but in no event more than 5 Business Days following
            the execution of any new Bank Credit Agreement, or any amendment to
            the Bank Credit Agreement, the Company shall furnish each holder of
            the Notes with a copy of such agreement. In no event shall the
            Company or any Subsidiary provide any collateral or other security
            to secure Indebtedness under the Bank Credit Agreement."

      Section 2.4. Amendment to Section 10.1 (Consolidated Net Worth). Section
10.1 of the Note Agreement shall be and is hereby amended in its entirety to
read as follows:

                  "Section 10.1. Consolidated Net Worth. The Company will not,
            at any time, permit Consolidated Net Worth to be less than the sum
            of (i) $260,000,000 plus (ii) 50% of Consolidated Net Income (if
            positive) on a cumulative basis for each fiscal quarter ending after
            December 31, 2004."

      Section 2.5. Amendment to Section 10.2. (Limitation on Consolidated
Indebtedness). Section 10.2 of the Note Agreement shall be and is hereby amended
in its entirety to read as follows:

                  "Section 10.2. Limitation on Consolidated Indebtedness. The
            Company will not at any time permit:

                  (a) (i) the Consolidated Leverage Ratio to exceed 4.25 to 1.0
            for the fiscal quarter ending March 31, 2005, 4.0 for the fiscal
            quarters ending June 30, 2005 and September 30, 2005, and 3.0 to 1.0
            for each fiscal quarter ending thereafter; and (ii) the ratio of
            Consolidated Total Indebtedness to Consolidated Total Capitalization
            to exceed 0.45 to 1.0; provided that in connection with any
            calculation of Indebtedness for purposes of determining compliance
            with this Section 10.2(a), there shall be excluded all Indebtedness
            of the Company and its Subsidiaries

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            outstanding under any revolving credit agreement between the Company
            and a committed bank or banks if, during the 365-day period
            immediately preceding the date of any such calculation of
            Indebtedness, there shall have been a period of at least 60
            consecutive days on each day of which Indebtedness of the Company
            and its Subsidiaries outstanding under such revolving credit
            agreement is equal to zero by virtue, and solely by virtue, of such
            Indebtedness having been paid from general corporate funds of the
            Company and not from funds borrowed by the Company or any Subsidiary
            pursuant to any other revolving credit agreement for the purpose of
            paying such Indebtedness. If there shall not have been such 60
            consecutive day period on each day of which such Indebtedness was
            equal to zero, then and in such event there shall be included in
            such calculation of Indebtedness for purposes of this Section
            10.2(a) an amount equal to the average aggregate amount of all
            Indebtedness outstanding under such revolving credit agreement
            during such preceding 365-day period; and

                  (b) Priority Debt to exceed $7,500,000 at any time. In
            addition from and after the Effective Date, no Priority Debt shall
            be incurred except by foreign Subsidiaries of the Company under
            agreements for which the Company shall have no liability except
            pursuant to an unsecured Guaranty of such Subsidiary obligation."

      Section 2.6. Amendment to Section 10.3 (Fixed Charge Coverage Ratio).
Section 10.3 of the Note Agreement shall be and is hereby amended in its
entirety to read as follows:

                  "Section 10.3. Fixed Charge Coverage Ratio. The Company will
            not at any time permit the Fixed Charge Coverage Ratio to be less
            than 1.25 to 1.0 for the fiscal quarters ending March 31, 2005 and
            June 30, 2005, 1.50 to 1.0 for the fiscal quarter ending September
            30, 2005, 1.75 to 1.0 for the fiscal quarter ending December 31,
            2005, 2.0 to 1.0 for each of the fiscal quarters ending March 31,
            2006 and June 30, 2006, 2.25 to 1.0 for each of the fiscal quarters
            ending September 30, 2006 and December 31, 2006, and 2.5 to 1.0 for
            each fiscal quarter ending thereafter."

      Section 2.7. Amendment to Section 10.5 (Sale of Assets). Section 10.5 of
the Note Agreement shall be and is hereby amended in its entirety to read as
follows:

                  "Section 10.5. Sale of Assets. The Company will not, and will
            not permit any Subsidiary to, sell, lease or otherwise dispose of
            any substantial part (as defined below) of the assets of the Company
            and its Subsidiaries; provided, however, that the Company or any
            Subsidiary may sell, lease or otherwise dispose of assets (including
            the sale of Receivables pursuant to Securitization Transactions)
            constituting a substantial part of the assets of the

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            Company and its Subsidiaries if such assets are sold in an arms
            length transaction and, at such time and after giving effect
            thereto, no Default or Event of Default shall have occurred and be
            continuing and an amount equal to the Net Proceeds received from
            such sale, lease or other disposition shall be used within 365 days
            of such sale, lease or disposition, in any combination:

                  (1) to acquire productive assets used or useful in carrying on
            the business of the Company and its Subsidiaries and having a value
            at least equal to the value of such assets sold, leased or otherwise
            disposed of; or

                  (2) to prepay or retire Senior Indebtedness of the Company
            and/or its Subsidiaries; provided that the Company (i) shall offer
            to prepay each outstanding Note in a principal amount which equals
            the Ratable Portion for such Note, and (ii) any such prepayment of
            the Notes shall be made at par, together with accrued interest and
            the applicable Make-Whole Amount or other premium to the date of
            such prepayment.

                  Any offer of prepayment of the Notes pursuant to this Section
            10.5 shall be given to each holder of the Notes by written notice
            which shall be delivered not less than 120 days and not more than
            180 days prior to the proposed prepayment date. Each such notice
            shall state that it is given pursuant to this Section and that the
            offer set forth in such notice must be accepted by such holder in
            writing and shall also set forth (i) the prepayment date, (ii) a
            description of the circumstances which give rise to the proposed
            prepayment, and (iii) a calculation of the Ratable Portion for such
            holder's Notes. Each holder of the Notes which desires to have its
            Notes prepaid shall notify the Company in writing delivered not more
            than 60 days nor less than 30 days prior to the proposed prepayment
            date of its acceptance of such offer of prepayment. If any holder of
            the Notes (or any other Senior Indebtedness) elects not to accept
            such offer of prepayment, then, only for purposes of such
            application of an amount equal to such Net Proceeds for the
            prepayment of Senior Indebtedness, the Company nevertheless will be
            deemed on such particular occasion to have paid Senior Indebtedness
            in an amount equal to the Ratable Portion of such Note (or such
            other Senior Indebtedness, as the case may be).

                  As used in this Section 10.5, a sale, lease or other
            disposition of assets shall be deemed to be a "substantial part" of
            the assets of the Company and its Subsidiaries if the book value of
            such assets, when added to the book value of all other assets sold,

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            leased or otherwise disposed of by the Company and its Subsidiaries
            from the date of this Agreement to and including the date of the
            sale, lease or other disposition of such assets exceeds $20,000,000;
            provided that there shall be excluded from any determination of a
            "substantial part" any (i) sale or disposition of assets in the
            ordinary course of business of the Company and its Subsidiaries,
            (ii) any transfer of assets from the Company to any Subsidiary or
            from any Subsidiary to the Company or another Subsidiary, and (iii)
            any Excluded Sale and Leaseback Transaction."

      Section 2.8. Amendment to Section 10.9 (Restricted Payments). Section 10.9
of the Note Agreement shall be and is hereby amended in its entirety to read as
follows:

                  "Section 10.9. Restricted Payments. The Company will not:

                  (1) declare or pay any dividends, either in cash or property,
            on any shares of its capital stock of any class (except dividends or
            other distributions payable solely in shares of common stock of the
            Company),

                  (2) directly or indirectly, or through any Subsidiary or
            through any Affiliate of the Company, purchase, redeem or retire any
            shares of its capital stock of any class or any warrants, rights or
            options to purchase or acquire any shares of its capital stock
            (other than in exchange for or out of the net cash proceeds to the
            Company from the substantially concurrent issue or sale of shares of
            common stock of the Company or warrants, rights or options to
            purchase or acquire any shares of its common stock), or

                  (3) make any other payment or distribution, either directly or
            indirectly or through any Subsidiary, in respect of its capital
            stock."

      Section 2.9. Amendment to Section 10.10 (Prepayment and Purchase of
Notes). Section 10.10 of the Note Agreement shall be and is hereby amended in
its entirety to read as follows:

                  "Section 10.10. Prepayment and Purchase of Notes. So long as
            any 1997 Note shall be outstanding, the Company will not make any
            optional prepayment of the Series 2003-A Notes pursuant to Section
            8.2 or otherwise prepay or purchase any Series 2003-A Notes from any
            holder unless concurrently therewith, the Company shall prepay or
            purchase, as the case may be, a pro rata principal amount of the
            1997 Notes."

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      Section 2.10. Amendment to Section 10.11 (Capital Expenditures and
Acquisitions). Section 10.11 of the Note Agreement shall be and is hereby
amended in its entirety to read as follows:

                  "Section 10.11. Capital Expenditures and Acquisitions. The
            Company will not, and will not permit any Subsidiary to, make any
            (a) Capital Expenditures or (b) acquisitions of stock or other
            equity interests in any Person, or all or substantially all of the
            assets of any Person if the aggregate amount of all such Capital
            Expenditures and acquisitions made by the Company and its
            Subsidiaries would exceed (i) $40,000,000 during the fiscal year
            ending December 31, 2005 and (ii) $40,000,000 during the fiscal year
            ending December 31, 2006; provided that any calculation of Capital
            Expenditures during such periods shall be done net of proceeds
            realized by the Company from the routine sale of fixed assets in the
            ordinary course of business during such period so long as such sale
            of fixed assets comply with the requirements of Section 10.5 hereof
            and the proceeds therefrom are applied in the manner described in
            10.5(1)."

      Section 2.11. Amendment to Section 10.12 (Deletion of Acquisition; New
Covenant). Section 10.12 of the Note Agreement shall be and is hereby amended in
its entirety to read as follows:

                  "Section 10.12. Bank Credit Agreement.

                  (a) The Company shall at all times maintain a Bank Credit
            Agreement which provides for commitments in favor of the Company of
            not less than $25,000,000.

                  (b) So long as the Company is required to maintain an
            Unrestricted Cash Balance under the Bank Credit Agreement, initially
            $50,000,000 or its equivalent in any other currency, the Company
            will not permit such Unrestricted Cash Balance to be less than the
            amount from time to time required under the Bank Credit Agreement."

      Section 2.12. Amendment to Section 11 (Events of Default). Section 11(g)
of the Note Agreement shall be and is hereby amended by deleting each reference
therein to "5% of Consolidated Net Worth" and substituting in lieu thereof a
reference to "$5,000,000".

      Section 2.13. Amendment to Schedule B (Definitions - Amended Terms). The
definitions of "Applicable Rate", "Bank Credit Agreement", "Capital
Expenditures", "Effective Date", "Make-Whole Amount" and "Rentals" shall be and
are hereby amended in their entirety to read as follows:

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                  "`Applicable Rate' has the meaning set forth in Section 2.1 of
            the Second Amendment."

                  "`Bank Credit Agreement' shall mean the Amended and Restated
            Credit Agreement dated as of March 12, 2004 between the Company and
            Bank of America, N.A., as such agreement may be amended, restated,
            joined, supplemented, renewed, replaced, refunded or refinanced from
            time to time and any successor bank credit facility which
            constitutes the primary bank credit facility of the Company."

                  "`Capital Expenditure' means an expenditure for an asset that
            must be depreciated or amortized under GAAP, for goodwill, or for
            any asset that under GAAP must be treated as a capital asset,
            including payments under Capital Leases. An expenditure for purposes
            of this definition includes any deferred or seller financed portion
            of the purchase price of an asset and the original capitalized
            amount of a Capital Lease. Capital Expenditures shall exclude
            expenditures by the Company and its Subsidiaries for equipment
            related to its tunnel business which is acquired by the Company or
            any Subsidiary in connection with the performance of any
            construction contract but only to the extent to which the Company
            has received payments under the contract sufficient to cover the
            cost of the equipment."

                  "`Effective Date' has the meaning set forth in Section 4.1 of
            the Second Amendment."

                  "`Make-Whole Amount' shall have the meaning (i) set forth in
            Section 8.6 with respect to any Series 2003-A Note and (ii) set
            forth in the applicable Supplement with respect to any other Series
            of Notes; provided that notwithstanding anything herein to the
            contrary, in the calculation of any Make-Whole Amount payable to a
            holder of a 2003-A Note pursuant to Section 8, Section 10.5 or
            Section 12.1 of this Agreement the rate of interest borne by any
            such Series 2003-A Note shall be deemed to be 6.04% per annum."

                  "`Rentals' means and includes as of the date of any
            determination thereof, without duplication, all fixed payments
            (including as such all payments which the lessee is obligated to
            make to the lessor on termination of the lease or surrender of the
            property) payable by the Company or a Subsidiary, as lessee or
            sublessee under a lease of real or personal property, but shall be
            exclusive of any amounts required to be paid by the Company or a
            Subsidiary (whether or not designated as rents or additional rents)
            on account of maintenance, repairs, insurance, taxes and similar

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            charges. Fixed rents under any so-called "percentage leases" shall
            be computed solely on the basis of the minimum rents, if any,
            required to be paid by the lessee regardless of sales volume or
            gross revenues."

                  "`Second Amendment' means the Second Amendment and Waiver to
            Note Purchase Agreement dated as of March 16, 2005 between the
            Company and the holders of Notes, in respect of this Agreement."

      Section 2.14. Amendment to Schedule B (Definitions - New Terms). Schedule
B of the Note Agreement shall be and is hereby amended by the addition thereto
of the following new definitions which shall appear in alphabetical order
therein and which shall read as follows:

                  "`Consolidated Adjusted Net Worth' means as of the date of any
            determination thereof, without duplication, the arithmetic sum of:

            (a) the amount of the consolidated stockholders' equity of the
            Company and its Subsidiaries as reflected in its most recent
            quarterly financial statements,

            PLUS

            (b) Minority Interests and deferred tax liabilities of the Company
            and its Subsidiaries up to an amount not exceeding $10,000,000 in
            the aggregate;

            MINUS

                  (c) the net book value, after deducting any reserves
            applicable thereto, of all items of the following character which
            are included in the assets of the Company and its Subsidiaries, to
            wit:

                  (i) the incremental increase in an asset resulting from any
            reappraisal, revaluation or write-up of assets (other than any
            revaluation or write-up of assets in accordance with GAAP);

                  (ii) goodwill or the "cost in excess of net assets of
            businesses acquired" to the extent and in the amount by which the
            net book value thereof exceeds $70,000,000; and

                  (iii) patents, patent applications, permits, trademarks, trade
            names, copyrights, licenses, franchises, experimental expense,
            organizational expense, unamortized debt discount and expense, and
            such other assets (other than goodwill or the "cost in excess of net
            assets of businesses acquired") as are properly

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            classified as "intangible assets" in accordance with GAAP to the
            extent and in the amount by which the net book value thereof exceeds
            $20,000,000;

            all determined in accordance with GAAP."

                  "`Consolidated Total Capitalization' means as of the date of
            any determination thereof, without duplication, the sum of (a)
            Consolidated Total Indebtedness plus (b) Consolidated Adjusted Net
            Worth."

                  "`Consolidated Total Indebtedness' means as of the date of any
            determination thereof, without duplication, all Indebtedness of the
            Company and its Subsidiaries after eliminating all offsetting debits
            and credits between the Company and its Subsidiaries and all other
            items to be eliminated in the course of the preparation of
            consolidated financial statements of the Company and its
            Subsidiaries in accordance with GAAP."

                  "`Minority Interest' means, without duplication, any shares of
            stock of any class of a Subsidiary (other than directors' qualifying
            shares as required by law) that are not owned by the Company and/or
            one or more of its Subsidiaries. Minority Interests shall be valued
            by valuing Minority Interests constituting preferred stock at the
            voluntary or involuntary liquidating value of such preferred stock,
            whichever is greater, and by valuing Minority Interests constituting
            common stock at the book value of common stock, additional paid-in
            capital and retained earnings applicable thereto adjusted, if
            necessary, to reflect any changes from the book value of such common
            stock required by the foregoing method of valuing Minority Interests
            in preferred stock."

                  "`Ratable Portion' means, with respect to any Note, an amount
            equal to the product of (x) the amount equal to the Net Proceeds
            being so applied to the prepayment of Senior Indebtedness multiplied
            by (y) a fraction the numerator of which is the outstanding
            principal amount of such Note and the denominator of which is the
            aggregate principal amount of Senior Indebtedness of the Company and
            its Subsidiaries."

                  "`Unrestricted Cash Balance' means as of any date of
            determination for the Company and its Subsidiaries on a consolidated
            basis, an amount equal to the sum of cash and cash equivalents
            (excluding any restricted cash balances or other retainage
            deposits), determined in accordance with GAAP."

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      Section 2.15. Amendment to Schedule B (Definitions - Omnibus Change).
Schedule B to the Note Agreement shall be and is hereby amended by deleting the
term "Restricted" from each instance of its usage in the following definitions:
"Consolidated Indebtedness", "Consolidated Leverage Ratio", "Consolidated Net
Income", "EBITDA", "Interest Expense", "Priority Debt", "Rentals" and
"Wholly-Owned Restricted Subsidiary".

SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

      Section 3.1. To induce the Noteholders to execute and deliver this Second
Amendment, the Company represents and warrants (which representations shall
survive the execution and delivery of this Second Amendment) to the Noteholders
that:

            (a) this Second Amendment has been duly authorized, executed and
      delivered by it and this Second Amendment constitutes the legal, valid and
      binding obligation, contract and agreement of the Company enforceable
      against it in accordance with its terms, except as enforcement may be
      limited by bankruptcy, insolvency, reorganization, moratorium or similar
      laws or equitable principles relating to or limiting creditors' rights
      generally;

            (b) the Note Agreement and the Notes, as amended by this Second
      Amendment, constitute the legal, valid and binding obligations, contracts
      and agreements of the Company enforceable against it in accordance with
      their terms, except as enforcement may be limited by bankruptcy,
      insolvency, reorganization, moratorium or similar laws or equitable
      principles relating to or limiting creditors' rights generally;

            (c) the execution, delivery and performance by the Company of this
      Second Amendment (i) has been duly authorized by all requisite corporate
      action and, if required, shareholder action, (ii) does not require the
      consent or approval of any governmental or regulatory body or agency, and
      (iii) will not (A) violate (1) any provision of law, statute, rule or
      regulation or its certificate of incorporation or bylaws, (2) any order of
      any court or any rule, regulation or order of any other agency or
      government binding upon it, or (3) any provision of any material
      indenture, agreement or other instrument to which it is a party or by
      which its properties or assets are or may be bound, or (B) result in a
      breach or constitute (alone or with due notice or lapse of time or both) a
      default under any indenture, agreement or other instrument referred to in
      clause (iii)(A)(3) of this Section 3.1(c), other than any violation,
      breach or default which individually or in the aggregate could not
      reasonably be expected to have a Material Adverse Effect;

            (d) as of the date hereof and after giving effect to this Second
      Amendment, no Default or Event of Default has occurred which is
      continuing;

            (e) the unaudited financial statements of the Company for the fiscal
      year ended December 31, 2004 furnished to you do not, nor does any written
      statement furnished by the Company to you in connection with the execution
      and delivery of this Second Amendment, contain any untrue statement of a
      material fact or omit to state any material fact necessary to make the
      statements contained therein not misleading in light

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      of the circumstances under which they were made. There is no fact known to
      the Company which the Company has not disclosed to you in writing which
      could reasonably be expected to have a Material Adverse Effect; and

            (f) The Company has not paid any consideration to any holder of
      indebtedness of the Company in connection with the transactions
      contemplated by this Second Amendment, except for the legal fees of
      counsel to the holders of such indebtedness and consideration paid to the
      holders of the 1997 Notes which is identical to the consideration to be
      paid to the holders of the Notes and consideration paid to Bank of
      America, N.A. pursuant to and as set forth in the First Amendment to
      Credit Agreement dated as of March 16, 2005 (the "Bank Credit Agreement
      Amendment") between the Company and Bank of America, N.A. (in respect of
      the Amended and Restated Credit Agreement dated as of March 12, 2004 (the
      "Bank Credit Agreement") between the Company and Bank of America, N.A.).

SECTION 4. CONDITIONS TO EFFECTIVENESS OF THIS SECOND AMENDMENT.

      Section 4.1. This Second Amendment shall become effective when each of the
following conditions has been satisfied:

            (a) executed counterparts of this Second Amendment, duly executed by
      the Company and the holders of at least 51% of the outstanding principal
      of the Notes, shall have been delivered to the Noteholders;

            (b) executed copies of a consent to this Agreement shall have been
      duly executed by the Subsidiaries which are parties to the Subsidiary
      Guaranties;

            (c) the representations and warranties of the Company set forth in
      Section 3 hereof shall be true and correct on and with respect to the date
      hereof and a certificate of a Responsible Officer certifying the same
      shall have been delivered to the Noteholders;

            (d) the Fifth Amendment to Note Purchase Agreement dated as of March
      16, 2005, in respect of the 1997 Notes, shall have been duly executed and
      delivered by the requisite percentage of the noteholders thereunder needed
      to approve such amendment and such agreement shall be in form and
      substance satisfactory to each Noteholder;

            (e) the Company shall have paid a fee to each Noteholder in an
      amount equal to .25% of the outstanding principal amount of the Notes held
      by such Noteholder;

            (f) Thompson Coburn LLP, counsel for the Company, shall have
      delivered a legal opinion, dated as of the effective date of this Second
      Amendment, in form and substance reasonably satisfactory to the
      Noteholders and their special counsel to the effect that this Second
      Amendment constitutes the legal, valid and binding obligation of the
      Company;

                                      -12-
<PAGE>

            (g) the Bank Credit Agreement Amendment shall have been duly
      executed and delivered by the parties thereto and such agreement shall be
      in form and substance satisfactory to each Noteholder executing the Second
      Amendment; and

            (h) the Company shall have paid the fees, costs, expenses and
      disbursements of Chapman and Cutler LLP, special counsel to the
      Noteholders, incurred in connection with the consummation of the
      transactions contemplated by this Second Amendment.

Upon receipt of all of the foregoing, this Second Amendment shall become
effective. Delivery of this Second Amendment to the Company, duly executed by
the holders of at least 51% of the outstanding principal amount of the Notes,
shall acknowledge satisfaction of the foregoing conditions. The date upon which
this Second Amendment becomes effective is herein referred to as the "Effective
Date." The Company shall give written notice to the Noteholders of the Effective
Date, confirming the date upon which the increased interest rate referred to in
Section 2.1 hereof shall begin to accrue.

SECTION 5. MISCELLANEOUS.

      Section 5.1. Automatically, and without any further action on the part of
the Company or any holder of a Note, on the Effective Date, the Notes shall be
deemed to be amended to reflect the change in interest rate set forth in Section
2.1 of this Second Amendment; provided, however, that if any holder of a Note
elects to surrender its Note (an "Existing Note") to the Company for
cancellation and the issuance of a new note reflecting such change in interest
rate (a "New Note"), the Company shall issue a New Note to such holder within 5
business days of receipt of the Existing Note surrendered therefor, such New
Note to be dated the date to which interest has been paid on the Existing Note
surrendered therefor and such New Note shall be payable on the same dates as set
forth in the Existing Note surrendered therefor.

      Section 5.2. Release of Claims. In further consideration of each
Noteholder's execution of this Second Amendment, the Company hereby releases
each Noteholder and its respective affiliates, officers, employees, directors,
trustees, agents and attorneys (collectively, the "Releasees") from any and all
claims, demands, liabilities, responsibilities, disputes, causes of action
(whether at law or in equity) and obligations of every nature whatsoever,
whether liquidated or unliquidated, known or unknown, matured or unmatured,
fixed or contingent, that the Company may have against the Releasees which arise
from or relate to any actions which the Releasees may have taken or omitted to
take prior to the date thereof with respect to the Notes, the Note Agreement or
the Subsidiary Guaranty. For purposes of the release contained in this section,
the term "Company" shall mean and include such party's successors and assigns,
including, without limitation, any trustees acting on behalf of such party and
any debtor-in-possession in respect of such party.

      Section 5.3. The Company acknowledges and agrees that by agreeing to the
amendments of the Note Agreement set forth herein, the Noteholders shall not be
deemed to have waived any rights as on account of any Default or Event of
Default which may at any time hereafter exist under the Note Agreement, which
rights are hereby expressly reserved by the holders of the Notes.

                                      -13-
<PAGE>

      Section 5.4. This Second Amendment shall be construed in connection with
and as part of the Note Agreement, and except as modified and expressly amended
by this Second Amendment, all terms, conditions and covenants contained in the
Note Agreement and the Notes are hereby ratified and shall be and remain in full
force and effect.

      Section 5.5. Any and all notices, requests, certificates and other
instruments executed and delivered after the execution and delivery of this
Second Amendment may refer to the Note Agreement without making specific
reference to this Second Amendment but nevertheless all such references shall
include this Second Amendment unless the context otherwise requires.

      Section 5.6. The descriptive headings of the various Sections or parts of
this Second Amendment are for convenience only and shall not affect the meaning
or construction of any of the provisions hereof.

      Section 5.7. This Second Amendment shall be governed by and construed in
accordance with Illinois law.

                                      -14-
<PAGE>
          The execution hereof by you shall constitute a contract between us for
     the uses and purposes hereinabove set forth, and this Second Amendment may
     be executed in any number of counterparts, each executed counterpart
     constituting an original, but all together only one agreement.

                                      INSITUFORM TECHNOLOGIES, INC.

                                      By /s/ Christian G. Farman
                                         Name:  Christian G. Farman
                                         Title: Senior Vice President and CFO

<PAGE>

Accepted and agreed to as of the date first written above:

                                      CONNECTICUT GENERAL LIFE INSURANCE COMPANY

                                      By:   CIGNA Investments, Inc. (authorized
                                            agent)

                                            By /s/ Stephen A. Osborn
                                               Name:  Stephen A. Osborn
                                               Title:  Managing Director

<PAGE>

Accepted and agreed to as of the date first written above:

                                      THE NORTHWESTERN MUTUAL LIFE INSURANCE
                                        COMPANY

                                      By /s/ David A. Barras
                                         Name:  David A. Barras
                                         Title: Authorized Representative

<PAGE>

Accepted and agreed to as of the date first written above:

                                      PRINCIPAL LIFE INSURANCE COMPANY,
                                         an Iowa corporation

                                      By:   Principal Global Investors, LLC, a
                                            Delaware limited liability company,
                                            its authorized signatory

                                            By /s/ John C. Heing
                                               ---------------------------------
                                               Name: John C. Heing
                                                     ---------------------------
                                               Title: Counsel
                                                     ---------------------------

                                            By /s/ Stephen G. Skrivanek
                                               ---------------------------------
                                               Name: Stephen G. Skrivanek
                                                     ---------------------------
                                               Title: Counsel
                                                     ---------------------------

                                      MELLON BANK, N.A., solely in its capacity
                                         as Custodian for the Aviva Life -
                                         Principal Glob Priv Structured
                                         Settlements IMM ANN (as directed by the
                                         Principal Global Investors, LLC), and
                                         not in its individual capacity (MAC &
                                         CO) - Nominee Name

                                      By /s/ Bernadette T. Rist
                                         Name:  Bernadette T. Rist
                                         Title: Authorized Signatory

                                      CALHOUN & CO., as nominee for Comerica
                                         Bank & Trust, National Association,
                                         Trustee to the Trust created by Trust
                                         Agreement dated October 1, 2002

                                      By /s/ Annette Lawson
                                         ---------------------------------
                                         Name: Annette Lawson
                                               ---------------------------
                                         Title: Attorney-in-fact and Agent
                                               ---------------------------

<PAGE>

Accepted and agreed to as of the date first written above:

                                      THE SECURITY FINANCIAL LIFE INSURANCE CO.

                                      By /s/ David T. Wallman
                                         Name:  David T. Wallman
                                         Title: Senior Vice President & Chief
                                                Actuary<PAGE>

                                                                    EXHIBIT 10.9

[INSITUFORM TECHNOLOGIES;INC. LOGO]

    Worldwide Pipeline    702 Spirit 40 Park Drive      Tel:(636) 530-8000
    Rehabilitation        Chesterfield, MO 63005-3700   Fax:(636) 530-8746

December 23, 2004

Mr. David Morris
1843 Kennet Place
St. Louis, MO 63104

Dear David:

It is indeed a pleasure to offer you the position of Vice President and General
Counsel for Insituform Technologies, Inc. This letter outlines the details of
your offer.

1.    BASE SALARY: In accepting this position, you will be paid a base salary of
      $17,500 per month ($210,000 annualized). Your base salary will be reviewed
      on an annual basis by the Compensation Committee and Board of Directors of
      ITI.

2.    ANNUAL INCENTIVE BONUS: In addition, you will be eligible for out
      Management Annual Incentive program at a target rate of 40% of your annual
      base pay. This is a discretionary incentive program, and the amount of
      money available for incentive payments, if any, is determined by how well
      the company meets specific financial targets. Full details of this plan
      are provided in the enclosed incentive plan document. The amount and
      criteria for your annual incentive bonus will be reviewed annually by the
      Compensation Committee.

3.    LONG TERM INCENTIVES: You are eligible to participate in the Insituform
      Technologies, Inc. Long Term Incentive Plan (the "LTIP"). Currently, the
      Company makes annual awards of stock options, restricted stock and
      performance cash to LTIP participants at your level. The targeted annual
      value of your total LTIP award is currently $180,000. The actual award
      will be made in the first half of each calendar year. The total amount of
      your award and the mix of award types will be subject to approval by the
      Compensation Committee of the Board.

4.    DEFERRED COMPENSATION: You are also eligible to participate in the Senior
      Management Voluntary Deferred Compensation Plan (the "DCP"). Tax deferred
      contributions may be made into the DCP after the maximum allowable
      contribution (as defined by the IRS) has been made into ITI's 401(k) plan.
      The first 3% of DCP contributions are matched by ITI at 100% and the next
      2% are matched at a 50% rate. The maximum company match to both the 401(k)
      and DCP together is $8,400 (for 2005).

5.    ADDITIONAL BENEFITS:

      a.    You will be provided with a car allowance of $850.00 per month,
            subject to adjustment in accordance with ITI's policy.

      b.    You will be provided with a cell phone allowance of $175.00 per
            month, subject to adjustment in accordance with ITI's policy.

<PAGE>

      c.    As an employee of Insituform, you are also eligible for our
            comprehensive benefits programs as outlined on the enclosed benefits
            summary. We provide a wide array of benefits for both you and your
            family including a 401(k) plan, health, dental, life and disability
            insurance. While the attached contains benefit eligibility and
            overages, specifics will be provided in the plan documents you will
            receive on your first date of employment. As with any company
            benefits, these are subject to change with or without notice and
            operate at the sole discretion of the company.

      d.    You will receive holidays in accordance with ITI's policy, and three
            weeks vacation per year.

      e.    Severance: As Vice President and General Counsel, you will report to
            the Chief Executive Officer and you will serve at the pleasure of
            the ITI Board of Directors; however, if your employment is
            terminated by ITI for reasons other than "cause" (as defined below)
            during your first 24 months of employment, you will receive, upon
            such termination, a severance payment equal to twelve months' base
            salary, car allowance, medical/dental benefits, and reasonable
            outplacement assistance.

      The amount of "base salary" will be calculated as the product obtained by
      multiplying (i) the number of months of severance you are entitled by (ii)
      your highest monthly base salary during the twelve months prior to your
      termination.

      "Cause" shall be defined as:

      (i)   Your willful and continued failure to perform substantially your
            duties with ITI or any of its affiliates (other than failure
            resulting from incapacity due to physical or mental illness), after
            a written demand for substantial performance is delivered to you by
            the Chairman of the Board of Directors which specifically identifies
            the manner in which the Board of Directors believes that you have
            not substantially performed your duties; or

      (ii)  Your willful engaging in illegal conduct or gross misconduct which
            is materially and demonstrably injurious to ITI, whether or not
            sub-sequentially discontinued or corrected; or

      (iii) Your conviction of a crime other than misdemeanor traffic offenses
            or commission of an act of moral turpitude; or

      (iv)  Your inability to report to work for a period of four months or
            greater.

      Cessation of employment shall not be deemed for "cause" unless and until
      there shall have been delivered to you a copy of a resolution duly adopted
      by the affirmative vote of on less than majority of the entire membership
      of the Board of Directors, finding that, in the good faith opinion of the
      Board of Directors, you are guilty of the conduct described.

6.    CONFIDENTIALITY AND NON-COMPETITION, DRUG TESTING AND BACKGROUND CHECK:
      You must sign ITI's standard Employee Confidentiality, Work Product and
      Non-Competition Agreement. Our offer of employment is contingent upon
      verification of a satisfactory background check, the successful completion
      of a pre-employment drug screen for controlled substances and evidence of
      your US employment eligibility (I-9 Form). Your drug screening will be
      paid for by Insituform and must be completed prior to your start date.
      Please contact Jennifer Guinto at (636) 530-8068 within 24 hours of your
      acceptance to arrange your drug screening.

This letter (and the terms of the plans, documents and standard agreements
referred to herein) contains the entire agreement of both parties with respect
to the subject matter hereof, and

<PAGE>

supercedes any and all prior understanding, commitments and agreements with
respect thereto. The terms of this letter (but not the standard agreements
referred to herein) will expire when the severance provisions expire.

Your appointment as Vice President and General Counsel will not be effective
until your first date of employment with ITI as its executive office in
Chesterfield, Missouri. We propose a start date on or about January 4, 2005.

If the above terms accurately reflect your understanding and agreement, please
sign this letter where indicated below along with the enclosed confidentiality
agreement. Please make one copy of each for your personal records and return the
originals to me acknowledging your acceptance.

Sincerely,

/s/ Thomas S. Rooney, Jr.

Thomas S. Rooney, Jr.
President and Chief Executive Officer

Enclosures

Accepted and Agreed:

I accept the position of Vice President and General Counsel with Insituform
Technologies, Inc. and the details of the position as outlined herein.

/s/  David F. Morris                                    12/31/04
-----------------------------                       ----------------------------
David F. Morris                                Date

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