Document:

Stockholder Agreement dated June 30, 2006

    

      Exhibit
        10.1

       

      EXECUTION
        COPY

       

      

      
 

      

      STOCKHOLDER
        AGREEMENT

      

      

      THIS
        STOCKHOLDER AGREEMENT (this “Agreement”) is entered on June 30, 2006, among the
        direct and indirect holders signatory hereto (the “Stockholders”) of certain
        shares of common stock of AMERCO, a Nevada corporation (the “Company”) As used
        in this Agreement, the term “Shares” shall refer to all shares of common stock,
        $0.25 par value, of the Company held or acquired by each Stockholder at any
        time
        during the term of this Agreement, and of any other type, class, or series
        of
        voting stock of the Company which may be issued at any time by the Company
        and
        acquired by any Stockholder at any time during the term of this Agreement,
        including, but not limited to, any shares of any type, class, or series of
        voting stock of the Company into which Shares held pursuant to this Agreement
        may be and are converted, and shall also include all powers or rights to
        vote
        any shares of common or other voting stock of the Company that are owned
        or
        controlled, directly or indirectly, by a Stockholder individually, or as
        a
        fiduciary, partner, joint venturer, stockholder, or director of a holder
        of such
        shares, or otherwise.

      

      WITNESSETH:

      

      WHEREAS,
        the Stockholders desire to combine their voting power in order to further
        its
        interests; and

      

      WHEREAS,
        the Stockholders believe that this Agreement will advance this goal by
        facilitating (1) corporate stability, (2) evaluation of strategies to maximize
        the value and liquidity of the Company’s securities, and (3) other matters of
        interest to the Stockholders;

      

      NOW,
        THEREFORE, the Stockholders, for and in consideration of the mutual promises
        and
        covenants herein made, do hereby agree to and with each other as
        follows:

      

      1.
        Duration.
        The
        term of this Agreement shall commence on the date first set forth above (the
        "Commencement Date”) and the restrictions and obligations described herein shall
        be effective and remain in force between the parties until July 1,2007, or
        until
        terminated as provided for herein, whichever occurs first. This Agreement
        shall
        automatically renew on July 1, of each successive year, unless a Stockholder
        provides written notice by June 1, to all other Stockholders of its intent
        to
        withdraw from the Agreement.

      

      2. Voting
        the Shares; Limitations Thereon: Proxy.
        Unless
        otherwise provided for herein, in voting on all matters that may come before
        any
        meeting of the stockholders of the Company (a “Company Stockholders Meeting”)
        occurring during the term of this Agreement, the Shares shall be voted as
        one
        block in the manner and upon the conditions and restrictions set forth
        below:

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      A. Majority
        Voting.
        Except
        as otherwise specifically provided herein all voting with respect to the
        Shares
        shall be at the direction of “a majority in interest of the Stockholders”
(defined below) in accordance with this Section 2. For purposes of this
        Agreement and unless otherwise provided for herein, with respect to any voting
        of the Shares requiring the direction or vote of a majority in interest of
        the
        Stockholders, each Stockholder (whether an individual or an entity) shall
        be
        entitled to one vote for each Share subject to this Agreement; provided,
        however, that if any Shares are entitled to more or less than one vote per
        Share
        in any matter to be voted on at a Company Stockholders Meeting, then for
        purposes of any vote taken hereunder with respect to such matter, such Shares
        shall have the same voting entitlement under this Agreement. For purposes
        of
        this Agreement, a “majority in interest of the Stockholders” shall mean
        Stockholders holding greater than fifty percent (50%) of all Shares that
        are
        actually voted pursuant to this Agreement at a Stockholders Meeting (defined
        below) or at any other meeting of the Stockholders hereunder in person or
        by
        proxy by the Stockholders, or if any such Shares are entitled to more or
        less
        than one vote per Share in any matter to be voted on at a Company Stockholders
        Meeting, then for purposes of any vote taken hereunder with respect to such
        matter, a “majority in interest of the Stockholders" shall mean Stockholders
        holding greater than fifty percent (50%) of the votes that are actually voted
        pursuant to this Agreement at a Stockholders Meeting in person or by proxy
        by
        the Stockholders. When so voting or directing the manner in which the Shares
        shall be voted, Stockholders may vote at a Stockholders Meeting or at any
        other
        meeting of the Stockholders hereunder by written proxy. Stockholders may
        also
        participate in and vote at a Stockholders Meeting or at any other meeting
        of the
        Stockholders hereunder by means of conference telephone or similar
        communications equipment whereby all Stockholders participating in such meeting
        can hear one another, and such participation shall constitute presence in
        person
        at any such meeting. In addition, any action that may be taken hereunder
        by a
        majority in interest of the Stockholders at a Stockholders Meeting or at
        any
        other meeting of the Stockholders hereunder may be taken without a meeting
        upon
        the express written consent of all Stockholders. 

      

      B. Stockholders
        Meeting.
        Prior
        to voting the Shares with respect to any resolution or election which comes
        before any Company Stockholders Meeting, a meeting of the Stockholders for
        the
        purpose of directing the manner in which the Shares shall be voted (a
“Stockholders Meeting”) shall be held no earlier than forty-eight (48) hours
        after the receipt by each of the Stockholders of a Stockholder Meeting Notice
        (defined below) and no later than the day preceding a Company Stockholders
        Meeting. The Stockholders hereby appoint the Proxy referenced in Section
        2.C
        hereof, and such Proxy accepts such appointment, as the Stockholder responsible
        for giving written notice of each Stockholders Meeting (“Stockholder Meeting
        Notice”) to all Stockholders within seven (7) days after such Proxy receives
        notice of a Company Stockholders Meeting, which Stockholder Meeting Notice
        shall
        include:

      

      (i) The
        matters to be submitted to the vote of the stockholders of the Company and
        the
        date on which such matter is to be submitted to the vote of the stockholders
        of
        Company or a reference to a particular notice of a Company Stockholders Meeting
        otherwise sent by the Company to its stockholders and received by all
        Stockholders hereunder; and

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      (ii) The
        place
        (unless such meeting is to be held among all of the Stockholders participating
        solely by conference telephone or similar communications equipment), day,
        and
        hour of the Stockholders Meeting to direct the manner in which the Shares
        shall
        be voted. The place of any such meeting shall be selected by the Proxy
        referenced in Section 2.C hereof, provided, however, that such place shall
        be
        within Maricopa County, Arizona and, provided further, that an “absolute
        majority of the Stockholders” may agree that such meeting shall be held
        elsewhere. Any Stockholder who desires to participate in any such meeting
        by
        conference telephone or similar communications equipment must give written
        notice, which notice must be received by the Proxy referenced in Section
        2.C
        hereof no later than twenty-four (24) hours prior to such meeting, stating
        such
        desire and a telephone number at which such Stockholder can be reached on
        the
        day and hour of such meeting. If the meeting is to be held solely by means
        of
        conference telephone or similar communications equipment, the Stockholders
        Meeting Notice shall also describe the procedure pursuant to which the meeting
        shall be held and the method by which each Stockholder may participate therein.
        The term “absolute majority of the Stockholders” shall mean for purposes of this
        Agreement the Stockholders holding greater than fifty percent (50%) of all
        Shares held by all Stockholders pursuant to this Agreement, or if any such
        Shares are entitled to more or less than one vote per Share in any matter
        to be
        voted on at a Company Stockholders Meeting, that for purposes of any vote
        taken
        hereunder with respect to such matter, upon the express written consent of
        the
        Stockholders holding greater than fifty percent (50%) of the votes held by
        all
        Stockholders pursuant to this Agreement.

      

      The
        obligation of the Proxy referenced in Section 2.C hereof to give notice to
        all
        Stockholders under this Section 2.B may be delegated by such Proxy to any
        other
        person. The provisions of this Section 2.B shall not apply when action is
        taken
        on any matter to be voted on at a Company Stockholders Meeting by written
        consent in accordance with the third to last sentence of Section 2.A
        hereof.

      

      C.
        Appointment
        of Proxy.
        In
        addition to and in order to carry out the provisions and intentions set forth
        in
        this Section 2, the Stockholders hereby constitute and appoint James P. Shoen,
        and James P. Shoen accepts such appointment, as the Stockholders’ true and
        lawful attorney and agent in their name, place and stead to vote the Shares
        as
        their proxy in accordance with the direction as to voting such Shares as
        provided for in this Agreement (in his capacity as proxy for the Stockholders,
        James P. Shoen shall hereinafter be referred to as “Proxy,” which term shall
        include any successor proxy designated or selected in accordance with Section
        9
        hereof). The proxy granted herein shall be irrevocable and coupled with an
        interest and shall continue in force until this Agreement is terminated.
        The
        Stockholders, and each of them, and Proxy shall execute on the date hereof
        the
        form of proxy attached hereto as Exhibit A and made a part hereof. Proxy
        agrees
        to promptly file a copy of the fully executed proxy with the Secretary of
        the
        Company for notification purposes. If the Stockholders fail, for whatever
        reason, to direct Proxy as to the manner in which the Shares are to be voted,
        then, Proxy shall exercise his best judgment in voting the Shares. Proxy
        shall
        not have any liability to any person for any acts taken in good faith and
        that
        do not constitute willful malfeasance.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      D. Limitations.
        Notwithstanding any other provision of this Agreement, to the extent any
        Stockholder is prohibited by applicable law, rule, or regulation from allowing
        such Stockholder’s Shares to be voted in accordance with the provisions of this
        Section 2, the remaining Stockholders’ obligations and duties pursuant to this
        Section 2 shall not be affected or impaired in any manner.

      

      3.
        Termination.
        This
        Agreement shall be effective on the Commencement Date and shall remain in
        full
        force and effect for the term set forth in Section 1 above; provided, however,
        that this Agreement may be terminated at any time upon

      

      (i) the
        consent of Stockholders holding greater than 60% of all Shares held by all
        Stockholders pursuant to this Agreement.

      

      4.
        Merger,
        Sale or Consolidation.
        In the
        event of a merger,sale or consolidation involving the Company and in which
        (a)
        the Company is not the surviving entity or (b) the Company becomes the
        subsidiary of another corporation, the termination date hereof shall be
        accelerated to the effective date of said consolidation, sale or merger unless
        Stockholders holding greater than 60% of all Shares held by all Stockholders
        pursuant to this Agreement elect or consent to continue this Agreement for
        its
        full term, substituting where appropriate the voting shares issued pursuant
        to
        said consolidation, sale or merger for the Shares.

      

      5.
        Additional
        Shares.
        During
        the term of this Agreement, any and all additional shares of the common stock
        or
        other voting stock of the Company which may be acquired by or issued to the
        Stockholders in any transaction with any party shall be subject to the terms,
        restrictions, and conditions of this Agreement and shall be considered Shares
        for all purposes of this Agreement.

      

      6.
        Additional
        Stockholders.
        From
        time to time after the execution of this Agreement by the Stockholders who
        are
        the initial parties to this Agreement, additional holders of certain shares
        of
        common stock or any other type of voting stock that may be issued by the
        Company
        may become parties to this Agreement subject to the terms hereof upon the
        consent of Stockholders holding greater than 60% of all Shares held by all
        stockholders pursuant to this Agreement and upon the execution of a counterpart
        signature page by each such holder

      

      7.
        Stockholders
        Representations and Warranties.
        The
        Stockholders, and each of them, by signing this Agreement, or a counterpart
        hereof, represent and warrant:

      

      (i) That
        they
        (A) are the legal and equitable owners of, (B) are the legal owners of and
        hold
        in trust for the equitable owners, or (C) otherwise have the legal right
        to
        enter into this Agreement on behalf of the legal and equitable owners of,
        the
        number of Shares listed beside their respective signatures;

      

      (ii) That
        such
        Shares so listed constitute all of the Shares which they legally or beneficially
        own or control, directly or indirectly;

      

      

      
        
          
             

            

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

      (iii)
        That they have the right and power to vote the number of Shares listed beside
        their respective signatures;

      

      (iv)
        That
        they have the right and power to enter into this Agreement, and to perform
        the
        undertakings set forth herein; and

      

      (v)
        Except as may be provided in the Company’s Articles of Incorporation or By-Laws,
        there are no prior binding agreements to which any of the Stockholders are
        a
        party or to which the Shares are subject that affect or restrict the voting
        rights of the Shares or the manner in which the Shares shall be voted and,
        to
        the extent any such purported agreement or agreements exist, have existed
        or are
        claimed to exist, they are hereby released, discharged, cancelled, terminated
        and rendered null and void, provided, however,
        that
        the Stockholders acknowledge and agree that the Stockholders may execute
        agreements solely between and with, or for the benefit of, other Stockholders
        which further restrict the voting or the transferability of the Shares, such
        additional restrictive agreements being subject to all of the terms and
        conditions of this Agreement

      

      (vi)
        Stockholders shall have the right to pledge 

      shares
        as
        collateral on any transaction.

      

      8. Compensation
        and Reimbursement.
        Proxy
        shall not be entitled to any compensation for his services as Proxy, but
        the
        Stockholders, jointly and severally, shall reimburse him and hold him harmless
        for any expenses (including attorneys’ fees) and disbursements reasonably
        incurred by Proxy in connection with any litigation that may arise in respect
        of
        this Agreement or in respect of the Company, to which Proxy is a party as
        a
        consequence of his acting as Proxy pursuant to this Agreement.

      

      9. Removal
        and Replacement of Proxy.
        Proxy
        may be removed and replaced as Proxy for any reason by an affirmative vote
        of an
        absolute majority of the Stockholders (as defined in Section 2.A) at a meeting
        called by any Stockholder for the purpose of considering the replacement
        of
        Proxy. Such meeting shall require seven (7) days advance written notice to
        all
        Stockholders. If Proxy is removed, the Stockholders shall cause a written
        notice
        to that effect to be sent to the removed Proxy effective as of the date set
        forth in said notice. Upon the disability, removal, or resignation of Proxy
        or
        any successor Proxy, the vacancy shall be filled by appointment by an absolute
        majority of the Stockholders voting on such issue. Until the appointment
        of a
        new Proxy in accordance with this Section 9, Edward J. Shoen shall serve
        as
        interim Proxy hereunder. At any time that a proxy is removed or replaced
        hereunder and a new Proxy is appointed, including the interim Proxy contemplated
        in this Section 9, the Stockholders will execute a new proxy in substantially
        the form of Exhibit
        A
        hereto
        but with the name of the new or interim Proxy substituted for James P. Shoen
        each time such name appears in such proxy.

      

      10. Knowing
        Covenants.
        The
        parties hereby represent to each other that the covenants and agreements
        provided for in this Agreement have been knowingly and voluntarily granted
        after
        thorough consultation with counsel as to the binding and irrevocable effect
        thereof. Based upon consultation with counsel, the parties hereby represent
        and
        warrant to each other that this Agreement is binding and enforceable in
        accordance with its terms.

      

      11. Exhibits.
        All
        Exhibits attached to this Agreement are fully incorporated herein and are
        made
        part of this Agreement whether or not the Exhibits are executed by any or
        all of
        the parties.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      12. Incorporation
        of Prefatory Language.
        The
        prefatory language made and stated hereinabove is hereby incorporated by
        reference into, and made a part of, this Agreement.

      

      13. No
        Other Parties to Benefit.
        This
        Agreement is made for the sole benefit of the parties hereto and their
        successors and assigns. Except as expressly provided herein, no other person
        or
        entity is intended to or shall have any rights or benefits hereunder, whether
        as
        third party beneficiaries or otherwise.

      

      14. Notice.
        All
        notices provided for herein shall be hand delivered or sent by Federal Express
        or other reputable overnight courier or by registered or certified mail,
        postage
        prepaid, addressed to all parties hereto at the address designated for each
        party in the signature pages hereto or at such other address as the party
        who is
        to receive such notice may designate in writing delivered to all other parties
        hereto. Notice shall be deemed received upon: (i)
        such
        hand
        delivery, (ii) one (1) day after the day such notice is delivered to Federal
        Express or other reputable overnight courier for next day delivery, or (iii)
        three (3) days after the deposit of same in a letter box or other means provided
        for the posting of mail, properly addressed in accordance with the first
        sentence of this Section 14 and with the proper amount of postage affixed
        thereto or other delivery charge paid or otherwise provided for. Actual receipt
        of notice shall not be required to effect notice hereunder. Each party shall
        promptly notify each other of any change of address.

      

      15. Governing
        Law; Construction.
        The
        substantive laws of the State of Nevada shall govern the interpretation and
        enforcement of this Agreement. This Agreement is intended to express the
        mutual
        intent of the parties hereto, irrespective of the party preparing or causing
        the
        preparation of any document, and no rule of construction shall be applied
        against any party. Except as otherwise provided herein, this Agreement shall
        be
        binding upon and shall inure to the benefit of the parties, their heirs,
        successors, and assigns.

      

      16. Modification
        and Waiver.
        No
        provision of this Agreement shall be amended, waived, or modified except
        by an
        instrument in writing signed by all of the parties hereto who have executed
        this
        Agreement or a counterpart hereof.

      

      17. Materiality.
        All
        covenants, agreements, representations, and warranties made herein shall
        be
        deemed to be material and to have been relied on by the parties in entering
        into
        this Agreement and shall survive the execution and delivery of this
        Agreement.

      

      18. Headings.
        All
        sections and descriptive headings of sections and subsections in this Agreement
        are inserted for convenience only and shall not affect the construction or
        interpretation hereof.

      

      19. Integration.
        This
        Agreement constitutes and embodies the full and complete understanding and
        agreement of the parties hereto and supersedes all prior understandings,
        whether
        oral or written. No representation, promise, inducement, or statement of
        intention has been made by any party hereto which is not embodied in this
        Agreement, and no party hereto shall be bound by or liable for any alleged
        misrepresentation, promise, inducement, or statement of intention not so
        set
        forth.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      20. Time
        of the Essence.
        Time is
        of the essence in all matters associated with this Agreement.

      

      21. Assignability.
        Except
        upon a merger, sale or transfer of Shares in accordance with Section 4 hereof,
        no party shall assign this Agreement or any part hereof or rights hereunder
        without the prior written consent of a majority in interest of the Stockholders.
        Any assignment in violation of this paragraph shall be null and void and
        vest no
        rights in the purported assignee.

      

      22. Meetings
        of Stockholders; Notice.
        Whenever this Agreement requires or allows the vote of Stockholders on any
        matter other than a matter to be voted on at a Company Stockholders Meeting,
        as
        described in Section 2.B, or as provided in Section 11 hereof in connection
        with
        the removal and replacement of Proxy, a meeting may be called by any Stockholder
        for the purpose of voting on such matter. Such meeting shall require seven
        (7)
        days advance written notice to all Stockholders. Action on any such matter
        may
        also be taken by written consent in accordance with the third to last sentence
        of Section 2.A hereof.

      

      23. Indulgences
        Not Waivers.
        Neither
        the failure nor any delay on the part of any party to exercise any right,
        remedy, power, or privilege under this Agreement shall operate as a waiver
        thereof, nor shall any single or partial exercise of any right, remedy, power,
        or privilege preclude any other or further exercise of the same or of any
        other
        right, remedy, power, or privilege, nor shall any waiver of any right, remedy,
        power, or privilege with respect to any occurrence be construed as a waiver
        of
        such right, remedy, power, or privilege with respect to any other
        occurrence.

      

      24. Additional
        Instruments and Acts.
        The
        parties to this Agreement shall execute (with acknowledgment or in affidavit
        form, if required) any further or additional instruments, and shall perform
        any
        acts, which are or may become necessary to effectuate and carry out the purposes
        of this Agreement or as may be required by law.

      

      25. Interpretation.
        In this
        Agreement the singular includes the plural, and the plural the singular;
        words
        importing any gender include the other genders; references to “writing” include
        printing, typing, lithography, and other means of reproducing words in a
        tangible visible form.

      

      26. Enforcement;
        Attorneys’ Fees.
        Should
        any proceeding be commenced or dispute arise between the parties hereto
        concerning the terms of this Agreement, or the rights and duties of the parties
        hereto, the prevailing party in such proceeding or dispute shall be entitled,
        in
        addition to such other relief as may be granted, to a reasonable sum as and
        for
        the prevailing party’s attorneys’ fees.

      

      27. Remedies.
        In the
        event of a breach of this Agreement or any term hereof by any party hereto,
        each
        Stockholder shall have all rights and remedies available at law, in equity,
        or
        under the terms of this Agreement, including, without limitation, the right
        to
        seek injunctive relief and specific performance of any party’s obligations
        hereunder. All rights and remedies of the Stockholders shall be cumulative
        and
        the exercise of any right or remedy by any Stockholder shall not be deemed
        a
        waiver, relinquishment, or abandonment of any other right or remedy, and
        shall
        not affect or limit in any way the future assertion of the same, or any other
        right or remedy.

      

      

      
        
          
             

            

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

      28. Authority.
        By
        execution of this Agreement, the signatories hereto represent and warrant
        their
        authority to act in the capacity represented. By execution of this Agreement
        each party represents and warrants its right, power, and authority to perform
        its obligations under this Agreement.

      

      29. Counterparts;
        Effectiveness.
        This
        Agreement may be executed in several counterparts, and all so executed shall
        constitute one agreement, binding among the parties hereto who have executed
        a
        counterpart hereof.

      

      30. Severability;
        Invalid Provision.
        To the
        extent that any provision of this Agreement is determined to be invalid,
        illegal, or otherwise unenforceable as to any Stockholder, such determination
        shall have no effect upon the remaining provisions of this Agreement or upon
        the
        duties and obligations of the other Stockholders. Further, in lieu of each
        such
        invalid, illegal, or unenforceable provision, a valid, legal, and enforceable
        provision as similar in terms to such invalid, illegal, or unenforceable
        provision shall be automatically added to this Agreement and this Agreement
        shall be deemed reformed so as to incorporate such substitute provision.
        Additionally, to the extent any Stockholder is an employee benefit plan subject
        to ERISA, or other laws, rules, or regulations render any Section (or any
        provision of any Section) invalid, illegal, or unenforceable, as to such
        Stockholder, such determination shall have no effect upon the remaining
        provisions of this Agreement or upon the duties or obligations of the other
        Stockholders.

      

      IN
        WITNESS WHEREOF, the parties hereto have hereunto set their hands as of the
        date
        set forth beside their signature.

      

       

       

      Name
        & Sig.                 Date
        of  

      of
        Stockholders               Execution  

       

      

      Edward
        J.
        Shoen,                June
        30,2006

      an
        individual 

      and
        as
        Trustee of MVS 028 Trust

      Suite
        1100

      2727
        N.
        Central

      Phoenix,
        AZ 85004

      

      

      /s/Edward
        J. Shoen

      Edward
        J.
        Shoen

      

      

      

      

      Mark
        V.
        Shoen                 June
        30,2006

      an
        individual

      and
        as
        Trustee of EJS 028 Trust

      Suite
        1100

      2727
        N.
        Central

      Phoenix,
        AZ 85004

      

      /s/Mark
        V. Shoen

      Mark
        V.
        Shoen

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      James
        P.
        Shoen,                 June
        30,2006

      an
        individual

      Suite
        100

      1325
        Airmotive Way 

      Reno,
        NV
        89502

      

      /s/James
        P. Shoen

      James
        P.
        Shoen

      

      JPS
        Partners LTD               June
        30, 2006

      A
        Limited
        Partnership

      

      /s/James
        P. Shoen

      James
        P.
        Shoen

      General
        Partner

      

      Rosmarie
        T. Donovan, Trustee,

      

      Shoen
        Irrevocable Trust, dated November 2, 1998, fbo Rose S.Shoen

      

      /s/Rosmarie
        T. Donovan

      Rosmarie
        T. Donovan, Trustee

      

      Shoen
        Irrevocable Trust, dated November 2, 1998, fbo Sarah K.Shoen

      

      /s/Rosmarie
        T. Donovan

      Rosmarie
        T. Donovan, Trustee

      

      Shoen
        Irrevocable Trust, dated November 2, 1998, fbo Ann M. Shoen

      

      /s/Rosmarie
        T. Donovan

      Rosmarie
        T. Donovan, Trustee

      

      Shoen
        Irrevocable Trust, dated November 2, 1998, fbo Mary C.Shoen

       

      /s/Rosmarie
        T. Donovan

      Rosmarie
        T. Donovan, Trustee

      

      Shoen
        Irrevocable Trust, dated November 2, 1998, fbo James P.Shoen II

       

      /s/Rosmarie
        T. Donovan

      Rosmarie
        T. Donovan, Trustee

      

      Mark
        V.
        Shoen as President of

      Blackwater
        Investments, Inc.

      

      /s/Mark
        V. Shoen

      Mark
        V.
        Shoen, President

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      

      Southwest
        Fiduciary, Inc.           June
        30, 2006

      an
        Arizona Corporation,

      Trustee
        under that "C"

      Irrevocable
        Trust

      dated
        December 20, 1982

      (Mark
        V.
        Shoen, Grantor)

      

      

      

      By
        /s/Greg Dovico

      Its
        President

      

      Southwest
        Fiduciary, Inc.         June
        30,
        2006

      an
        Arizona Corporation,

      Trustee
        under that "C"

      Irrevocable
        Trust

      dated
        December 20, 1982

      (James
        P.
        Shoen, Grantor)

      

      

      By
        /s/Greg Dovico

      Its
        President

      

      

      

      Southwest
        Fiduciary, Inc.         June
        30, 2006

      an
        Arizona Corporation,

      Trustee
        under that "C"

      Irrevocable
        Trust

      dated
        December 20, 1982

      (Edward
        J. Shoen, Grantor)

      

      

      

      By
        /s/Greg Dovico

      Its
        President

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      

      Exhibit
        A

      AMERCO

      

      PROXY

      

      (Including
        Power of Attorney)

      

      The
        undersigned stockholder of AMERCO, a Nevada corporation, does hereby appoint
        James P. Shoen agent and proxy of the undersigned, with full power of
        substitution and with full power to act as true and lawful attorney in fact,
        to
        vote, in accordance with the terms and conditions of that certain Stockholder
        Agreement dated as of June 30, 2006 (the “Stockholder Agreement”), at any
        meeting of the stockholders of AMERCO and upon all business as may properly
        come
        before the meeting, in the name and place as proxy of the undersigned and
        with
        all the powers which the undersigned would possess if personally present,
        all of
        the stock of AMERCO standing in the name of the undersigned or which the
        undersigned would be entitled to vote if personally present. James P. Shoen
        may
        exercise the rights granted under this proxy either in person at any meeting
        of
        the stockholders of AMERCO or by signing a proxy on behalf of the undersigned.
        This proxy shall be valid and irrevocable until July 1, 2007 or until
        termination of the Stockholder Agreement in accordance with the terms thereof,
        whichever occurs first.

      

      Dated: As
        of
        June 30, 2006

      

      

      Name
        & Sig.                   Date
        of  

      of
        Stockholders               Execution  

       

      

      Edward
        J.
        Shoen,                 June
        30,2006

      an
        individual 

      and
        as
        Trustee of MVS 028 Trust

      Suite
        1100

      2727
        N.
        Central

      Phoenix,
        AZ 85004

      

      

      /s/Edward
        J. Shoen

      Edward
        J.
        Shoen

      

      

      

      Mark
        V.
        Shoen                     June
        30,2006

      an
        individual

      and
        as
        Trustee of EJS 028 Trust

      Suite
        1100

      2727
        N.
        Central

      Phoenix,
        AZ 85004

      

      

      /s/Mark
        V. Shoen

      Mark
        V.
        Shoen

      

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      

      James
        P.
        Shoen,                   June
        30,2006

      an
        individual

      Suite
        100

      1325
        Airmotive Way 

      Reno,
        NV
        89502

      

      /s/James
        P. Shoen

      James
        P.
        Shoen

      

      JPS
        Partners LTD                 June
        30,
        2006

      A
        Limited
        Partnership

      

      

      /s/James
        P. Shoen

      James
        P.
        Shoen

      General
        Partner

      

      Rosmarie
        T. Donovan, Trustee,

      

      Shoen
        Irrevocable Trust, dated November 2, 1998, fbo Rose S.Shoen

      

      /s/Rosmarie
        T. Donovan

      Rosmarie
        T. Donovan, Trustee

      

      Shoen
        Irrevocable Trust, dated November 2, 1998, fbo Sarah K.Shoen

      

      /s/Rosmarie
        T. Donovan

      Rosmarie
        T. Donovan, Trustee

      

      Shoen
        Irrevocable Trust, dated November 2, 1998, fbo Ann M. Shoen

      

      /s/Rosmarie
        T. Donovan

      Rosmarie
        T. Donovan, Trustee

      

      Shoen
        Irrevocable Trust, dated November 2, 1998, fbo Mary C.Shoen

       

      /s/Rosmarie
        T. Donovan

      Rosmarie
        T. Donovan, Trustee

      

      Shoen
        Irrevocable Trust, dated November 2, 1998, fbo James P.Shoen II

       

      /s/Rosmarie
        T. Donovan

      Rosmarie
        T. Donovan, Trustee

      

      

      Mark
        V.
        Shoen as President of

      Blackwater
        Investments, Inc.

      

      

      /s/Mark
        V. Shoen

      Mark
        V.
        Shoen, President

      

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      

      Southwest
        Fiduciary, Inc.            
June
        30,
        2006

      an
        Arizona Corporation,

      Trustee
        under that "C"

      Irrevocable
        Trust

      dated
        December 20, 1982

      (Mark
        V.
        Shoen, Grantor)

      

      

      

      By/s/Greg
        Dovico

      Its
        President

      

      Southwest
        Fiduciary, Inc.            June
        30, 2006

      an
        Arizona Corporation,

      Trustee
        under that "C"

      Irrevocable
        Trust

      dated
        December 20, 1982

      (James
        P.
        Shoen, Grantor)

      

      

      By/s/Greg
        Dovico

      Its
        President

      

      

      

      Southwest
        Fiduciary, Inc.            
June
        30, 2006

      an
        Arizona Corporation,

      Trustee
        under that "C"

      Irrevocable
        Trust

      dated
        December 20, 1982

      (Edward
        J. Shoen, Grantor)

      

      

      

      By
        /s/Greg Dovico

      Its
        PresidentEx 4(b) - Company Order and Officers' Certificate, 06/07/05, Series J and K

    
      

    

     

    EXHIBIT
      4(b)

    

    June
      7,
      2005

    Company
      Order and Officers' Certificate

    4.40%
      Senior Notes, Series J, due 2010

    5%
      Senior
      Notes, Series K, due 2017

    

    The
      Bank
      of New York, as Trustee

    101
      Barclay Street - 8W

    New
      York,
      New York 10286

    

    Ladies
      and Gentlemen:

    

    Pursuant
      to Article Two of the Indenture, dated as of January 1, 1998 (as it may be
      amended or supplemented, the "Indenture"), from Appalachian Power Company (the
      "Company") to The Bank of New York, as trustee (the "Trustee"), and the Board
      Resolutions dated December 15, 2004, a copy of which certified by the Secretary
      or an Assistant Secretary of the Company is being delivered herewith under
      Section 2.01 of the Indenture, and unless otherwise provided in a subsequent
      Company Order pursuant to Section 2.04 of the Indenture,

     

    1. the
      Company's 4.40% Senior Notes, Series J, due 2010 (the "Series J Notes") and
      5%
      Senior Notes, Series K, due 2017 (the "Series K Notes") are hereby established.
      The Series J Notes and the Series K Notes are collectively referred to herein
      as
      the "Notes". The Notes shall be in substantially the forms attached hereto
      as
      Exhibits 1 and 2. 

     

    2. the
      terms
      and characteristics of the Notes shall be as follows (the numbered clauses
      set
      forth below corresponding to the numbered subsections of Section 2.01 of the
      Indenture, with terms used and not defined herein having the meanings specified
      in the Indenture):

     

    (i) the
      aggregate principal amount of Notes which may be authenticated and delivered
      under the Indenture initially shall be limited to $150,000,000 for the Series
      J
      Notes and $250,000,000 for the Series K Notes, except as contemplated in Section
      2.01(i) of the Indenture and
      except that such principal amount may be increased from time to time; all Series
      J Notes and all Series K Notes need not be issued at the same time and each
      such
      series may be reopened at any time, without the consent of any securityholder,
      for issuance of additional Notes, which Notes will have the same interest rate,
      maturity and other terms as those initially issued;

     

     (ii) the
      date
      on which the principal of the Series J Notes shall be payable shall be June
      1,
      2010 and the date on which the principal of the Series K Notes shall be payable
      shall be June 1, 2017;

    
      (iii) interest
        shall accrue from the date of authentication of the Notes; the Interest Payment
        Dates on which such interest will be payable shall be June 1 and December
        1, and
        the Regular Record Date for the determination of holders to whom interest
        is
        payable on any such Interest Payment Date shall be the May 15 or November
        15
        preceding the relevant Interest Payment Date; provided that the first Interest
        Payment Date shall be December 1, 2005 and interest payable on the Stated
        Maturity Date or any Redemption Date shall be paid to the Person to whom
        principal shall be paid;

    

                      

    (iv) the
      interest rate at which the Series J Notes shall bear interest shall be 4.40%
      per
      annum and the interest rate at which the Series K Notes shall bear interest
      shall be 5% per annum;

                    

    (v) the
      Notes
      shall be redeemable at the option of the Company, in whole at any time or in
      part from time to time, upon not less than thirty but not more than sixty days'
      previous notice given by mail to the registered owners of the Notes at a
      redemption price equal to the greater of (i) 100% of the principal amount of
      the
      Notes being redeemed and (ii) the sum of the present values of the remaining
      scheduled payments of principal and interest on the Notes being redeemed
      (excluding the portion of any such interest accrued to the date of redemption)
      discounted (for purposes of determining present value) to the redemption date
      on
      a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months)
      at the Treasury Rate (as defined below) plus 15 basis points for the Series
      J
      Notes and 20 basis points for the Series K Notes, plus, in each case, accrued
      interest thereon to the date of redemption.

     

    "Treasury
      Rate" means, with respect to any redemption date, the rate per annum equal
      to
      the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
      assuming a price for the Comparable Treasury Issue (expressed as a percentage
      of
      its principal amount) equal to the Comparable Treasury Price for such redemption
      date.

     

    "Comparable
      Treasury Issue" means the United States Treasury security selected by an
      Independent Investment Banker as having a maturity comparable to the remaining
      term of the Notes that would be utilized, at the time of selection and in
      accordance with customary financial practice, in pricing new issues of corporate
      debt securities of comparable maturity to the remaining term of the
      Notes.

     

    "Comparable
      Treasury Price" means, with respect to any redemption date, (1) the average
      of
      the Reference Treasury Dealer Quotations for such redemption date, after
      excluding the highest and lowest such Reference Treasury Dealer Quotations,
      or
      (2) if fewer than four such Reference Treasury Dealer Quotations are obtained,
      the average of all such quotations. 

     

    "Independent
      Investment Banker" means one of the Reference Treasury Dealers appointed by
      the
      Company and reasonably acceptable to the Trustee.

     

    "Reference
      Treasury Dealer" means a primary U.S. government securities dealer in New York
      City selected by the Company and reasonably acceptable to the
      Trustee.

     

    "Reference
      Treasury Dealer Quotation" means, with respect to the Reference Treasury Dealer
      and any redemption date, the average, as determined by the Trustee, of the
      bid
      and asked prices for the Comparable Treasury Issue (expressed in each case
      as a
      percentage of its principal amount) quoted in writing to the Trustee by such
      Reference Treasury Dealer at or before 5:00 p.m., New York City time, on the
      third Business Day preceding such redemption date.

     

    
      (vi)
        (a)
        the Notes shall be issued in the form of a Global Note; (b) the Depositary
        for
        such Global Note shall be The Depository Trust Company; and (c) the procedures
        with respect to transfer and exchange of Global Notes shall be as set forth
        in
        the form of Note attached hereto;

    

     

    (vii) the
      title
      of the Series J Notes shall be "4.40% Senior Notes, Series J, due 2010" and
      the
      title of the Series K Notes shall be "5% Senior Notes, Series K, due
      2017"

     

    (viii) the
      form
      of the Notes shall be as set forth in Paragraph 1, above;

     

    (ix) not
      applicable;

     

    (x) the
      Notes
      shall not be subject to a Periodic Offering;

     

    (xi) not
      applicable;

     

    (xii) not
      applicable;

     

    (xiii) not
      applicable;

     

    (xiv) the
      Notes
      shall be issuable in denominations of $1,000 and any integral multiple
      thereof;

     

    (xv) not
      applicable;

     

    (xvi) the
      Notes
      shall not be issued as Discount Securities;

    
       

    

    (xvii) not
      applicable;

            

    (xviii) not
      applicable; and

     

    (xix) So
      long
      as any of the Notes are outstanding, the Company will not create or suffer
      to be
      created or to exist any additional mortgage, pledge, security interest, or
      other
      lien (collectively "Liens") on any of its utility properties or tangible assets
      now owned or hereafter acquired to secure any indebtedness for borrowed money
      ("Secured Debt"), without providing that the Notes will be similarly secured.
      This restriction does not apply to the Company's subsidiaries, nor will it
      prevent any of them from creating or permitting to exist Liens on their property
      or assets to secure any Secured Debt. Further, this restriction on Secured
      Debt
      does not apply to the Company's existing first mortgage bonds that have
      previously been issued under its mortgage indenture or any indenture
      supplemental thereto; provided that this restriction will apply to future
      issuances thereunder (other than issuances of refunding first mortgage bonds).
      In addition, this restriction does not prevent the creation or existence
      of:

     

    (a) Liens
      on
      property existing at the time of acquisition or construction of such property
      (or created within one year after completion of such acquisition or
      construction), whether by purchase, merger, construction or otherwise, or to
      secure the payment of all or any part of the purchase price or construction
      cost
      thereof, including the extension of any Liens to repairs, renewals,
      replacements, substitutions, betterments, additions, extensions and improvements
      then or thereafter made on the property subject thereto; 

     

    (b) Financing
      of the Company's accounts receivable for electric service; 

     

    (c) Any
      extensions, renewals or replacements (or successive extensions, renewals or
      replacements), in whole or in part, of liens permitted by the foregoing clauses;
      and

     

    (d) The
      pledge of any bonds or other securities at any time issued under any of the
      Secured Debt permitted by the above clauses.

     

    In
      addition to the permitted issuances above, Secured Debt not otherwise so
      permitted may be issued in an amount that does not exceed 15% of Net Tangible
      Assets as defined below. 

     

    "Net
      Tangible Assets" means the total of all assets (including revaluations thereof
      as a result of commercial appraisals, price level restatement or otherwise)
      appearing on the Company's balance sheet, net of applicable reserves and
      deductions, but excluding goodwill, trade names, trademarks, patents,
      unamortized debt discount and all other like intangible assets (which term
      shall
      not be construed to include such revaluations), less the aggregate of the
      Company's current liabilities appearing on such balance sheet. For purposes
      of
      this definition, the Company's balance sheet does not include assets and
      liabilities of its subsidiaries.

     

    This
      restriction also does not apply to or prevent the creation or existence of
      leases made, or existing on property acquired, in the ordinary course of
      business.

     

    3. You
      are
      hereby requested to authenticate $150,000,000 aggregate principal amount of
      4.40% Senior Notes, Series J, due 2010 and $250,000,000 aggregate principal
      amount of 5% Senior Notes, Series K, due 2017, executed by the Company and
      delivered to you concurrently with this Company Order and Officers' Certificate,
      in the manner provided by the Indenture.

     

    4. You
      are
      hereby requested to hold the Notes as custodian for DTC in accordance with
      the
      Blanket Issuer Letter of Representations dated June 24, 2004, from the Company
      to DTC.

     

    5. Concurrently
      with this Company Order and Officers' Certificate, an Opinion of Counsel under
      Sections 2.04 and 13.06 of the Indenture is being delivered to you.

     

    6. The
      undersigned Stephan T. Haynes and Thomas G. Berkemeyer, the Assistant Treasurer
      and Assistant Secretary, respectively, of the Company do hereby certify
      that:

     

    (i) we
      have
      read the relevant portions of the Indenture, including without limitation the
      conditions precedent provided for therein relating to the action proposed to
      be
      taken by the Trustee as requested in this Company Order and Officers'
      Certificate, and the definitions in the Indenture relating thereto;

     

    (ii) we
      have
      read the Board Resolutions of the Company and the Opinion of Counsel referred
      to
      above;

     

    (iii) we
      have
      conferred with other officers of the Company, have examined such records of
      the
      Company and have made such other investigation as we deemed relevant for
      purposes of this certificate;

     

    (iv) in
      our
      opinion, we have made such examination or investigation as is necessary to
      enable us to express an informed opinion as to whether or not such conditions
      have been complied with; and 

     

    (v) on
      the
      basis of the foregoing, we are of the opinion that all conditions precedent
      provided for in the Indenture relating to the action proposed to be taken by
      the
      Trustee as requested herein have been complied with.

     

    Kindly
      acknowledge receipt of this Company Order and Officers' Certificate, including
      the documents listed herein, and confirm the arrangements set forth herein
      by
      signing and returning the copy of this document attached hereto.

    

    Very
      truly yours,

    

    APPALACHIAN
      POWER COMPANY

    

    By:
      /s/ Stephan T. Haynes

    Assistant
      Treasurer

    

    And:
      /s/ Thomas G. Berkemeyer

        Assistant
      Secretary

     

    Acknowledged
      by Trustee:

    

    By:
      /s/ Joseph Lloret

    Authorized
      Signatory

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      1

    

    Unless
      this certificate is presented by an authorized representative of The Depository
      Trust Company (55 Water Street, New York, New York) to the issuer or its agent
      for registration of transfer, exchange or payment, and any certificate to be
      issued is registered in the name of Cede & Co. or in such other name as is
      requested by an authorized representative of The Depository Trust Company and
      any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
      FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
      registered owner hereof, Cede & Co., has an interest herein. Except as
      otherwise provided in Section 2.11 of the Indenture, this Security may be
      transferred, in whole but not in part, only to another nominee of the Depository
      or to a successor Depository or to a nominee of such successor
      Depository.

    

    No.
      R1

    APPALACHIAN
      POWER COMPANY

    4.40%
      Senior Notes, Series J, due 2010

    

    CUSIP:
      037735 CC 9     
      Original
      Issue Date: June 7, 2005

    

    Stated
      Maturity: June 1, 2010      Interest
      Rate: 4.40%

    

    Principal
      Amount: $150,000,000

    

    Redeemable:  Yes   X    No 

    In
      Whole:   Yes   X    No
      

    In
      Part:     Yes    X     No
      

    

    APPALACHIAN
      POWER COMPANY, a corporation duly organized and existing under the laws of
      the
      Commonwealth of Virginia (herein referred to as the “Company”, which term
      includes any successor corporation under the Indenture hereinafter referred
      to),
      for value received, hereby promises to pay to CEDE & CO. or registered
      assigns, the Principal Amount specified above on the Stated Maturity specified
      above, and to pay interest on said Principal Amount from the Original Issue
      Date
      specified above or from the most recent interest payment date (each such date,
      an “Interest Payment Date”) to which interest has been paid or duly provided
      for, semi-annually in arrears on June 1 and December 1 in each year, commencing
      on December 1, 2005, at the Interest Rate per annum specified above, until
      the
      Principal Amount shall have been paid or duly provided for. Interest shall
      be
      computed on the basis of a 360-day year of twelve 30-day months.

    

    The
      interest so payable, and punctually paid or duly provided for, on any Interest
      Payment Date, as provided in the Indenture, as hereinafter defined, shall be
      paid to the Person in whose name this Note (or one or more Predecessor
      Securities) shall have been registered at the close of business on the Regular
      Record Date with respect to such Interest Payment Date, which shall be the
      May
      15 or November 15 (whether or not a Business Day) prior to such Interest Payment
      Date, provided that interest payable on the Stated Maturity or any redemption
      date shall be paid to the Person to whom principal is paid. Any such interest
      not so punctually paid or duly provided for shall forthwith cease to be payable
      to the Holder on such Regular Record Date and shall be paid as provided in
      said
      Indenture.

    

    If
      any
      Interest Payment Date, any redemption date or Stated Maturity is not a Business
      Day, then payment of the amounts due on this Note on such date will be made
      on
      the next succeeding Business Day, and no interest shall accrue on such amounts
      for the period from and after such Interest Payment Date, redemption date or
      Stated Maturity, as the case may be, with the same force and effect as if made
      on such date. The principal of (and premium, if any) and the interest on this
      Note shall be payable at the office or agency of the Company maintained for
      that
      purpose in the Borough of Manhattan, the City of New York, New York, in any
      coin
      or currency of the United States of America which at the time of payment is
      legal tender for payment of public and private debts; provided, however, that
      payment of interest (other than interest payable on the Stated Maturity or
      any
      redemption date) may be made at the option of the Company by check mailed to
      the
      registered holder at such address as shall appear in the Security
      Register.

    

    This
      Note
      is one of a duly authorized series of Notes of the Company (herein sometimes
      referred to as the “Notes”), specified in the Indenture, all issued or to be
      issued in one or more series under and pursuant to an Indenture dated as of
      January 1, 1998 duly executed and delivered between the Company and The Bank
      of
      New York, a corporation organized and existing under the laws of the State
      of
      New York, as Trustee (herein referred to as the “Trustee”) (such Indenture, as
      originally executed and delivered and as thereafter supplemented and amended
      being hereinafter referred to as the “Indenture”), to which Indenture and all
      indentures supplemental thereto or Company Orders reference is hereby made
      for a
      description of the rights, limitations of rights, obligations, duties and
      immunities thereunder of the Trustee, the Company and the holders of the Notes.
      By the terms of the Indenture, the Notes are issuable in series which may vary
      as to amount, date of maturity, rate of interest and in other respects as in
      the
      Indenture provided. This Note is one of the series of Notes designated on the
      face hereof.

    

    This
      Note
      may be redeemed by the Company at its option, in whole at any time or in part
      from time to time, upon not less than thirty but not more than sixty days’
previous notice given by mail to the registered owners of the Note at a
      redemption price equal to the greater of (i) 100% of the principal amount of
      the
      Note being redeemed and (ii) the sum of the present values of the remaining
      scheduled payments of principal and interest on the Note being redeemed
      (excluding the portion of any such interest accrued to the date of redemption)
      discounted (for purposes of determining present value) to the redemption date
      on
      a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months)
      at the Treasury Rate (as defined below) plus 15 basis points, plus, in each
      case, accrued interest thereon to the date of redemption.

    

    “Treasury
      Rate” means, with respect to any redemption date, the rate per annum equal to
      the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
      assuming a price for the Comparable Treasury Issue (expressed as a percentage
      of
      its principal amount) equal to the Comparable Treasury Price for such redemption
      date.

    

    “Comparable
      Treasury Issue” means the United States Treasury security selected by an
      Independent Investment Banker as having a maturity comparable to the remaining
      term of the Notes that would be utilized, at the time of selection and in
      accordance with customary financial practice, in pricing new issues of corporate
      debt securities of comparable maturity to the remaining term of the
      Notes.

    

    “Comparable
      Treasury Price” means, with respect to any redemption date, (1) the average of
      the Reference Treasury Dealer Quotations for such redemption date, after
      excluding the highest and lowest such Reference Treasury Dealer Quotations,
      or
      (2) if fewer than four such Reference Treasury Dealer Quotations are obtained,
      the average of all such quotations.

    

    “Independent
      Investment Banker” means one of the Reference Treasury Dealers appointed by the
      Company and reasonably acceptable to the Trustee.

    

    “Reference
      Treasury Dealer” means a primary U. S. government securities dealer in New York
      City selected by the Company and reasonably acceptable to the
      Trustee.

    

    “Reference
      Treasury Dealer Quotation” means, with respect to the Reference Treasury Dealer
      and any redemption date, the average, as determined by the Trustee, of the
      bid
      and asked prices for the Comparable Treasury Issue (expressed in each case
      as a
      percentage of its principal amount) quoted in writing to the Trustee by such
      Reference Treasury Dealer at or before 5:00 p.m., New York City time, on the
      third Business Day preceding such redemption date.

    

    The
      Company shall not be required to (i) issue, exchange or register the transfer
      of
      any Notes during a period beginning at the opening of business 15 days before
      the day of the mailing of a notice of redemption of less than all the
      outstanding Notes of the same series and ending at the close of business on
      the
      day of such mailing, nor (ii) register the transfer of or exchange of any Notes
      of any series or portions thereof called for redemption. This Global Note is
      exchangeable for Notes in definitive registered form only under certain limited
      circumstances set forth in the Indenture.

    

    In
      the
      event of redemption of this Note in part only, a new Note or Notes of this
      series, of like tenor, for the unredeemed portion hereof will be issued in
      the
      name of the Holder hereof upon the surrender of this Note.

    

    In
      case
      an Event of Default, as defined in the Indenture, shall have occurred and be
      continuing, the principal of all of the Notes may be declared, and upon such
      declaration shall become, due and payable, in the manner, with the effect and
      subject to the conditions provided in the Indenture.

    

    The
      Indenture contains provisions for defeasance at any time of the entire
      indebtedness of this Note upon compliance by the Company with certain conditions
      set forth therein.

    

    As
      described in the Company Order and Officers’ Certificate, so long as this Note
      is outstanding, the Company is subject to a limitation on Liens as described
      therein.

    

    The
      Indenture contains provisions permitting the Company and the Trustee, with
      the
      consent of the Holders of not less than a majority in aggregate principal amount
      of the Notes of each series affected at the time outstanding, as defined in
      the
      Indenture, to execute supplemental indentures for the purpose of adding any
      provisions to or changing in any manner or eliminating any of the provisions
      of
      the Indenture or of any supplemental indenture or of modifying in any manner
      the
      rights of the Holders of the Notes; provided, however, that no such supplemental
      indenture shall (i) extend the fixed maturity of any Notes of any series, or
      reduce the principal amount thereof, or reduce the rate or extend the time
      of
      payment of interest thereon, or reduce any premium payable upon the redemption
      thereof, or reduce the amount of the principal of a Discount Security that
      would
      be due and payable upon a declaration of acceleration of the maturity thereof
      pursuant to the Indenture, without the consent of the holder of each Note then
      outstanding and affected; (ii) reduce the aforesaid percentage of Notes, the
      holders of which are required to consent to any such supplemental indenture,
      or
      reduce the percentage of Notes, the holders of which are required to waive
      any
      default and its consequences, without the consent of the holder of each Note
      then outstanding and affected thereby; or (iii) modify any provision of Section
      6.01(c) of the Indenture (except to increase the percentage of principal amount
      of securities required to rescind and annul any declaration of amounts due
      and
      payable under the Notes), without the consent of the holder of each Note then
      outstanding and affected thereby. The Indenture also contains provisions
      permitting the Holders of a majority in aggregate principal amount of the Notes
      of all series at the time outstanding affected thereby, on behalf of the Holders
      of the Notes of such series, to waive any past default in the performance of
      any
      of the covenants contained in the Indenture, or established pursuant to the
      Indenture with respect to such series, and its consequences, except a default
      in
      the payment of the principal of or premium, if any, or interest on any of the
      Notes of such series. Any such consent or waiver by the registered Holder of
      this Note (unless revoked as pro-vided in the Indenture) shall be conclusive
      and
      binding upon such Holder and upon all future Holders and owners of this Note
      and
      of any Note issued in exchange herefor or in place hereof (whether by
      registration of transfer or otherwise), irrespective of whether or not any
      notation of such consent or waiver is made upon this Note.

    

    No
      reference herein to the Indenture and no provision of this Note or of the
      Indenture shall alter or impair the obligation of the Company, which is absolute
      and unconditional, to pay the principal of and premium, if any, and interest
      on
      this Note at the time and place and at the rate and in the money herein
      prescribed.

    

    As
      provided in the Indenture and subject to certain limitations therein set forth,
      this Note is transferable by the registered holder hereof on the Note Register
      of the Company, upon surrender of this Note for registration of transfer at
      the
      office or agency of the Company as may be designated by the Company accompanied
      by a written instrument or instruments of transfer in form satisfactory to
      the
      Company or the Trustee duly executed by the registered Holder hereof or his
      or
      her attorney duly authorized in writing, and thereupon one or more new Notes
      of
      authorized denominations and for the same aggregate principal amount and series
      will be issued to the designated transferee or transferees. No service charge
      will be made for any such trans-fer, but the Company may require payment of
      a
      sum sufficient to cover any tax or other governmental charge payable in relation
      thereto.

    

    Prior
      to
      due presentment for registration of transfer of this Note, the Company, the
      Trustee, any paying agent and any Note Registrar may deem and treat the
      registered Holder hereof as the absolute owner hereof (whether or not this
      Note
      shall be overdue and notwithstanding any notice of ownership or writing hereon
      made by anyone other than the Note Registrar) for the purpose of receiving
      payment of or on account of the principal hereof and premium, if any, and
      interest due hereon and for all other purposes, and neither the Company nor
      the
      Trustee nor any paying agent nor any Note Registrar shall be affected by any
      notice to the contrary.

    

    No
      recourse shall be had for the payment of the principal of or the interest on
      this Note, or for any claim based hereon, or otherwise in respect hereof, or
      based on or in respect of the Indenture, against any incorporator, stockholder,
      officer or director, past, present or future, as such, of the Company or of
      any
      predecessor or successor corporation, whether by virtue of any constitution,
      statute or rule of law, or by the enforcement of any assessment or penalty
      or
      otherwise, all such liability being, by the acceptance hereof and as part of
      the
      consideration for the issuance hereof, expressly waived and
      released.

    

    The
      Notes
      of this series are issuable only in registered form without coupons in
      denominations of $1,000 and any integral multiple thereof. As provided in the
      Indenture and subject to certain limitations, Notes of this series are
      exchangeable for a like aggregate principal amount of Notes of this series
      of a
      different authorized denomination, as requested by the Holder surrendering
      the
      same.

    

    All
      terms
      used in this Note which are defined in the Indenture shall have the meanings
      assigned to them in the Indenture.

    

    This
      Note
      shall not be entitled to any benefit under the Indenture hereinafter referred
      to, be valid or become obligatory for any purpose until the Certificate of
      Authentication hereon shall have been signed by or on behalf of the
      Trustee.

    

    IN
      WITNESS WHEREOF, the Company has caused this Instrument to be
      executed.

    

    APPALACHIAN
      POWER COMPANY

     

    By:
      /s/ Stephan T. Haynes

    Assistant
      Treasurer

    Attest:

     

    By:
      /s/ Thomas G. Berkemeyer

    Assistant
      Secretary

    
      
        
          

        

      

    

    CERTIFICATE
      OF AUTHENTICATION

    

    This
      is
      one of the Notes of the series of Notes designated in accordance with, and
      referred to in, the within-mentioned Indenture.

    

    Dated
      June 7, 2005

    

    THE
      BANK
      OF NEW YORK

    

    By:
      /s/ Joseph Lloret

    Authorized
      Signatory

    
      
        
          

        

      

    

    Exhibit
      2

     

    Unless
      this certificate is presented by an authorized representative of The Depository
      Trust Company (55 Water Street, New York, New York) to the issuer or its agent
      for registration of transfer, exchange or payment, and any certificate to be
      issued is registered in the name of Cede & Co. or in such other name as is
      requested by an authorized representative of The Depository Trust Company and
      any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
      FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
      registered owner hereof, Cede & Co., has an interest herein. Except as
      otherwise provided in Section 2.11 of the Indenture, this Security may be
      transferred, in whole but not in part, only to another nominee of the Depository
      or to a successor Depository or to a nominee of such successor
      Depository.

    

    No.
      R1

     

    APPALACHIAN
      POWER COMPANY

    5%
      Senior
      Notes, Series K, due 2017

    

    CUSIP:
      037735 CD 7     
      Original
      Issue Date: June 7, 2005

    

    Stated
      Maturity: June 1, 2017      Interest
      Rate: 5%

    

    Principal
      Amount: $250,000,000

     

    
      Redeemable:  Yes   X    No 

      In
        Whole:   Yes   X    No
        

      In
        Part:     Yes    X     No
        

    APPALACHIAN
      POWER COMPANY, a corporation duly organized and existing under the laws of
      the
      Commonwealth of Virginia (herein referred to as the “Company”, which term
      includes any successor corporation under the Indenture hereinafter referred
      to),
      for value received, hereby promises to pay to CEDE & CO. or registered
      assigns, the Principal Amount specified above on the Stated Maturity specified
      above, and to pay interest on said Principal Amount from the Original Issue
      Date
      specified above or from the most recent interest payment date (each such date,
      an “Interest Payment Date”) to which interest has been paid or duly provided
      for, semi-annually in arrears on June 1 and December 1 in each year, commencing
      on December 1, 2005, at the Interest Rate per annum specified above, until
      the
      Principal Amount shall have been paid or duly provided for. Interest shall
      be
      computed on the basis of a 360-day year of twelve 30-day months.

    

    The
      interest so payable, and punctually paid or duly provided for, on any Interest
      Payment Date, as provided in the Indenture, as hereinafter defined, shall be
      paid to the Person in whose name this Note (or one or more Predecessor
      Securities) shall have been registered at the close of business on the Regular
      Record Date with respect to such Interest Payment Date, which shall be the
      May
      15 or November 15 (whether or not a Business Day) prior to such Interest Payment
      Date, provided that interest payable on the Stated Maturity or any redemption
      date shall be paid to the Person to whom principal is paid. Any such interest
      not so punctually paid or duly provided for shall forthwith cease to be payable
      to the Holder on such Regular Record Date and shall be paid as provided in
      said
      Indenture.

    

    If
      any
      Interest Payment Date, any redemption date or Stated Maturity is not a Business
      Day, then payment of the amounts due on this Note on such date will be made
      on
      the next succeeding Business Day, and no interest shall accrue on such amounts
      for the period from and after such Interest Payment Date, redemption date or
      Stated Maturity, as the case may be, with the same force and effect as if made
      on such date. The principal of (and premium, if any) and the interest on this
      Note shall be payable at the office or agency of the Company maintained for
      that
      purpose in the Borough of Manhattan, the City of New York, New York, in any
      coin
      or currency of the United States of America which at the time of payment is
      legal tender for payment of public and private debts; provided, however, that
      payment of interest (other than interest payable on the Stated Maturity or
      any
      redemption date) may be made at the option of the Company by check mailed to
      the
      registered holder at such address as shall appear in the Security
      Register.

    

    This
      Note
      is one of a duly authorized series of Notes of the Company (herein sometimes
      referred to as the “Notes”), specified in the Indenture, all issued or to be
      issued in one or more series under and pursuant to an Indenture dated as of
      January 1, 1998 duly executed and delivered between the Company and The Bank
      of
      New York, a corporation organized and existing under the laws of the State
      of
      New York, as Trustee (herein referred to as the “Trustee”) (such Indenture, as
      originally executed and delivered and as thereafter supplemented and amended
      being hereinafter referred to as the “Indenture”), to which Indenture and all
      indentures supplemental thereto or Company Orders reference is hereby made
      for a
      description of the rights, limitations of rights, obligations, duties and
      immunities thereunder of the Trustee, the Company and the holders of the Notes.
      By the terms of the Indenture, the Notes are issuable in series which may vary
      as to amount, date of maturity, rate of interest and in other respects as in
      the
      Indenture provided. This Note is one of the series of Notes designated on the
      face hereof.

    

    This
      Note
      may be redeemed by the Company at its option, in whole at any time or in part
      from time to time, upon not less than thirty but not more than sixty days’
previous notice given by mail to the registered owners of the Note at a
      redemption price equal to the greater of (i) 100% of the principal amount of
      the
      Note being redeemed and (ii) the sum of the present values of the remaining
      scheduled payments of principal and interest on the Note being redeemed
      (excluding the portion of any such interest accrued to the date of redemption)
      discounted (for purposes of determining present value) to the redemption date
      on
      a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months)
      at the Treasury Rate (as defined below) plus 20 basis points, plus, in each
      case, accrued interest thereon to the date of redemption.

    

    “Treasury
      Rate” means, with respect to any redemption date, the rate per annum equal to
      the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
      assuming a price for the Comparable Treasury Issue (expressed as a percentage
      of
      its principal amount) equal to the Comparable Treasury Price for such redemption
      date.

    

    “Comparable
      Treasury Issue” means the United States Treasury security selected by an
      Independent Investment Banker as having a maturity comparable to the remaining
      term of the Notes that would be utilized, at the time of selection and in
      accordance with customary financial practice, in pricing new issues of corporate
      debt securities of comparable maturity to the remaining term of the
      Notes.

    

    “Comparable
      Treasury Price” means, with respect to any redemption date, (1) the average of
      the Reference Treasury Dealer Quotations for such redemption date, after
      excluding the highest and lowest such Reference Treasury Dealer Quotations,
      or
      (2) if fewer than four such Reference Treasury Dealer Quotations are obtained,
      the average of all such quotations.

    

    “Independent
      Investment Banker” means one of the Reference Treasury Dealers appointed by the
      Company and reasonably acceptable to the Trustee.

    

    “Reference
      Treasury Dealer” means a primary U. S. government securities dealer in New York
      City selected by the Company and reasonably acceptable to the
      Trustee.

    

    “Reference
      Treasury Dealer Quotation” means, with respect to the Reference Treasury Dealer
      and any redemption date, the average, as determined by the Trustee, of the
      bid
      and asked prices for the Comparable Treasury Issue (expressed in each case
      as a
      percentage of its principal amount) quoted in writing to the Trustee by such
      Reference Treasury Dealer at or before 5:00 p.m., New York City time, on the
      third Business Day preceding such redemption date.

    

    The
      Company shall not be required to (i) issue, exchange or register the transfer
      of
      any Notes during a period beginning at the opening of business 15 days before
      the day of the mailing of a notice of redemption of less than all the
      outstanding Notes of the same series and ending at the close of business on
      the
      day of such mailing, nor (ii) register the transfer of or exchange of any Notes
      of any series or portions thereof called for redemption. This Global Note is
      exchangeable for Notes in definitive registered form only under certain limited
      circumstances set forth in the Indenture.

    

    In
      the
      event of redemption of this Note in part only, a new Note or Notes of this
      series, of like tenor, for the unredeemed portion hereof will be issued in
      the
      name of the Holder hereof upon the surrender of this Note.

    

    In
      case
      an Event of Default, as defined in the Indenture, shall have occurred and be
      continuing, the principal of all of the Notes may be declared, and upon such
      declaration shall become, due and payable, in the manner, with the effect and
      subject to the conditions provided in the Indenture.

    

    The
      Indenture contains provisions for defeasance at any time of the entire
      indebtedness of this Note upon compliance by the Company with certain conditions
      set forth therein.

    

    As
      described in the Company Order and Officers’ Certificate, so long as this Note
      is outstanding, the Company is subject to a limitation on Liens as described
      therein.

    

    The
      Indenture contains provisions permitting the Company and the Trustee, with
      the
      consent of the Holders of not less than a majority in aggregate principal amount
      of the Notes of each series affected at the time outstanding, as defined in
      the
      Indenture, to execute supplemental indentures for the purpose of adding any
      provisions to or changing in any manner or eliminating any of the provisions
      of
      the Indenture or of any supplemental indenture or of modifying in any manner
      the
      rights of the Holders of the Notes; provided, however, that no such supplemental
      indenture shall (i) extend the fixed maturity of any Notes of any series, or
      reduce the principal amount thereof, or reduce the rate or extend the time
      of
      payment of interest thereon, or reduce any premium payable upon the redemption
      thereof, or reduce the amount of the principal of a Discount Security that
      would
      be due and payable upon a declaration of acceleration of the maturity thereof
      pursuant to the Indenture, without the consent of the holder of each Note then
      outstanding and affected; (ii) reduce the aforesaid percentage of Notes, the
      holders of which are required to consent to any such supplemental indenture,
      or
      reduce the percentage of Notes, the holders of which are required to waive
      any
      default and its consequences, without the consent of the holder of each Note
      then outstanding and affected thereby; or (iii) modify any provision of Section
      6.01(c) of the Indenture (except to increase the percentage of principal amount
      of securities required to rescind and annul any declaration of amounts due
      and
      payable under the Notes), without the consent of the holder of each Note then
      outstanding and affected thereby. The Indenture also contains provisions
      permitting the Holders of a majority in aggregate principal amount of the Notes
      of all series at the time outstanding affected thereby, on behalf of the Holders
      of the Notes of such series, to waive any past default in the performance of
      any
      of the covenants contained in the Indenture, or established pursuant to the
      Indenture with respect to such series, and its consequences, except a default
      in
      the payment of the principal of or premium, if any, or interest on any of the
      Notes of such series. Any such consent or waiver by the registered Holder of
      this Note (unless revoked as pro-vided in the Indenture) shall be conclusive
      and
      binding upon such Holder and upon all future Holders and owners of this Note
      and
      of any Note issued in exchange herefor or in place hereof (whether by
      registration of transfer or otherwise), irrespective of whether or not any
      notation of such consent or waiver is made upon this Note.

    

    No
      reference herein to the Indenture and no provision of this Note or of the
      Indenture shall alter or impair the obligation of the Company, which is absolute
      and unconditional, to pay the principal of and premium, if any, and interest
      on
      this Note at the time and place and at the rate and in the money herein
      prescribed.

    

    As
      provided in the Indenture and subject to certain limitations therein set forth,
      this Note is transferable by the registered holder hereof on the Note Register
      of the Company, upon surrender of this Note for registration of transfer at
      the
      office or agency of the Company as may be designated by the Company accompanied
      by a written instrument or instruments of transfer in form satisfactory to
      the
      Company or the Trustee duly executed by the registered Holder hereof or his
      or
      her attorney duly authorized in writing, and thereupon one or more new Notes
      of
      authorized denominations and for the same aggregate principal amount and series
      will be issued to the designated transferee or transferees. No service charge
      will be made for any such trans-fer, but the Company may require payment of
      a
      sum sufficient to cover any tax or other governmental charge payable in relation
      thereto.

    

    Prior
      to
      due presentment for registration of transfer of this Note, the Company, the
      Trustee, any paying agent and any Note Registrar may deem and treat the
      registered Holder hereof as the absolute owner hereof (whether or not this
      Note
      shall be overdue and notwithstanding any notice of ownership or writing hereon
      made by anyone other than the Note Registrar) for the purpose of receiving
      payment of or on account of the principal hereof and premium, if any, and
      interest due hereon and for all other purposes, and neither the Company nor
      the
      Trustee nor any paying agent nor any Note Registrar shall be affected by any
      notice to the contrary.

    

    No
      recourse shall be had for the payment of the principal of or the interest on
      this Note, or for any claim based hereon, or otherwise in respect hereof, or
      based on or in respect of the Indenture, against any incorporator, stockholder,
      officer or director, past, present or future, as such, of the Company or of
      any
      predecessor or successor corporation, whether by virtue of any constitution,
      statute or rule of law, or by the enforcement of any assessment or penalty
      or
      otherwise, all such liability being, by the acceptance hereof and as part of
      the
      consideration for the issuance hereof, expressly waived and
      released.

    

    The
      Notes
      of this series are issuable only in registered form without coupons in
      denominations of $1,000 and any integral multiple thereof. As provided in the
      Indenture and subject to certain limitations, Notes of this series are
      exchangeable for a like aggregate principal amount of Notes of this series
      of a
      different authorized denomination, as requested by the Holder surrendering
      the
      same.

    

    All
      terms
      used in this Note which are defined in the Indenture shall have the meanings
      assigned to them in the Indenture.

    

    This
      Note
      shall not be entitled to any benefit under the Indenture hereinafter referred
      to, be valid or become obligatory for any purpose until the Certificate of
      Authentication hereon shall have been signed by or on behalf of the
      Trustee.

    

    IN
      WITNESS WHEREOF, the Company has caused this Instrument to be
      executed.

    

    APPALACHIAN
      POWER COMPANY

    

    By:_/s/
      Stephan T. Haynes

    Assistant
      Treasurer

    Attest:

    

    By:
      /s/ Thomas G. Berkemeyer

    Assistant
      Secretary

    
      

    

    

    CERTIFICATE
      OF AUTHENTICATION

    

    This
      is
      one of the Notes of the series of Notes designated in accordance with, and
      referred to in, the within-mentioned Indenture.

    

    Dated
      June 7, 2005

    

    THE
      BANK
      OF NEW YORK

    

    By:
      /s/ Joseph Lloret

    Authorized
      Signatory

    
      
        
          

        

      

    

    FOR
      VALUE
      RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
      unto

    

    (PLEASE
      INSERT SOCIAL SECURITY OR OTHER

    IDENTIFYING
      NUMBER OF ASSIGNEE)

     

    ______________________________________

    

    ________________________________________________________________

    

    ________________________________________________________________

    (PLEASE
      PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF

    ________________________________________________________________

    ASSIGNEE)
      the within Note and all rights thereunder, hereby

    ________________________________________________________________

    irrevocably
      constituting and appointing such person attorney to 

    ________________________________________________________________

    transfer
      such Note on the books of the Issuer, with full

    ________________________________________________________________

    power
      of
      substitution in the premises.

     

    

    Dated:________________________  _________________________

    

    NOTICE: The
      signature to this assignment must correspond with the name as written upon
      the
      face of the within Note in every particular, without alteration or enlargement
      or any change whatever and NOTICE: Signature(s) must be guaranteed by a
      financial institution that is a member of the Securities Transfer Agents
      Medallion Program (“STAMP”), the Stock Exchange Medallion Program (“SEMP”) or
      the New York Stock Exchange, Inc. Medallion Signature Program
      (“MSP”).

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