Document:

ex4aordercertificate.htm

    EXHIBIT
      4(a)

     

    August
      17, 2007

    

    

    Company
      Order and Officers' Certificate

    5.65%
      Senior Notes, Series O, due 2012

    6.70%
      Senior Notes, Series P, due 2037

    

    

    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 January 25, 2007, 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 5.65% Senior Notes, Series O, due 2012 (the "Series O Notes")
                and 6.70% Senior Notes, Series P, due 2037 (the "Series P Notes")
                are
                hereby established.  The Series O Notes and the Series P 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 $250,000,000
                for the Series O Notes and $250,000,000 for the Series P 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 O
                Notes
                and all Series P 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 O Notes shall be payable
                shall
                be August 15, 2012 and the date on which the principal of the Series
                P
                Notes shall be payable shall be August 15, 2037;

            
	 	 	 
	 	
              (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 February
                15
                and August 15, and the Regular Record Date for the determination
                of
                holders to whom interest is payable on any such Interest Payment
                Date
                shall be the February 1 or August 1 preceding the relevant Interest
                Payment Date; provided that the first Interest Payment Date shall
                be
                February 15, 2008 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 O Notes shall bear interest shall
                be
                5.65% per annum and the interest rate at which the Series P Notes
                shall
                bear interest shall be 6.70% 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 20 basis points for the Series
                O
                Notes and 25 basis points for the Series P 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 Global Notes; (b) the Depositary
                for such Global Notes 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 forms of Note attached hereto;

            
	 	 	 
	 	
              (vii)

            	
              the
                title of the Series O Notes shall be "5.65% Senior Notes, Series
                O, due
                2012" and the title of the Series P Notes shall be "6.70% Senior
                Notes,
                Series P, due 2037";

            
	 	 	 
	 	
              (viii)

            	
              the
                forms 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 $250,000,000 aggregate principal
                amount of 5.65% Senior Notes, Series O, due 2012 and $250,000,000
                aggregate principal amount of 6.70% Senior Notes, Series P, due 2037,
                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.

    

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

    

    
      	
              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/ Mary LaGumina

            
	
                      Authorized
                Signatory

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        EXHIBIT
          4(a)

      

    

    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

    5.65%
      Senior Notes, Series O, due 2012

    

    
      	
              CUSIP:                                037735
                CH 8

            	
              Original
                Issue
                Date:                                           August
                17, 2007

            
	 	 
	
              Stated
                Maturity:                                           August
                15, 2012

            	
              Interest
                Rate                                :                      5.65%

            
	 	 
	
              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 February 15 and August 15 in each year, commencing
      on February 15, 2008, 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 February 1 or August 1 (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 pro­vided 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 trans­fer, 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:

            	 
	 	 	
                  Assistant
                Treasurer

            
	
              Attest:

            	 	 
	 	 	 
	
              By:

            	 	 
	
              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
      August 17, 2007

    

    THE
      BANK
      OF NEW YORK

    

    

    By:___________________________

    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”).

            

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    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

    6.70%
      Senior Notes, Series P, due 2037

    

    
      	
              CUSIP:                                037735
                CK 1

            	
              Original
                Issue
                Date:                                           August
                17, 2007

            
	 	 
	
              Stated
                Maturity:                                           August
                15, 2037

            	
              Interest
                Rate                                :                      6.70%

            
	 	 
	
              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 February 15 and August 15 in each year, commencing
      on February 15, 2008, 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 February 1 or August 1 (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 25 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 pro­vided 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 trans­fer, 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:

            	 
	 	 	
                  Assistant
                Treasurer

            
	
              Attest:

            	 	 
	 	 	 
	
              By:

            	 	 
	
              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
      August 17, 2007

    

    THE
      BANK
      OF NEW YORK

    

    

    By:___________________________

    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”).ex101sepagreement.htm

    
       

    

    Exhibit
      10.1

    

    EXECUTIVE
      SEPARATION AGREEMENT AND RELEASE

    

    

    THIS
      EXECUTIVE SEPARATION
      AGREEMENT AND RELEASE (the “Agreement”), by and
      between INSITUFORM TECHNOLOGIES, INC., a Delaware corporation
      (“Employer”), and Thomas S. Rooney, Jr.
      (“Executive”), is entered into and effective as of this 13th
      day of August,
      2007.

    

    Preliminary
      Statement

    

    A.           Executive
      has resigned his officer and director positions with Employer and its
      subsidiaries, with such resignation and the termination of Executive from such
      officer and director positions effective as of August 13, 2007 (the
“Resignation Effective Date”).

    

    B.           Executive
      will continue to be employed as a non-officer employee of Employer through
      the
      close of business on August 31, 2007 (the “Employment Termination
      Date”) on the terms described below, and has voluntarily and
      irrevocably resigned his employment with Employer and its subsidiaries as of
      the
      Employment Termination Date, at which time and upon which date, Executive’s
      employment with Employer and its subsidiaries will terminate.

    

    C.           Without
      any admission as to fault, liability or wrongdoing, to ensure an effective
      and
      smooth transition in leadership, and to avoid the time, distractions and
      resource expenditures potentially associated with Executive’s departure,
      Employer and Executive desire to resolve all matters relating to or arising
      out
      of Executive’s employment by Employer and Executive’s resignation of his officer
      and director positions and the termination of Executive’s employment with
      Employer on the terms described below.

    

    D.           Executive
      has been (and hereby is) advised in writing to consult with an attorney prior
      to
      finally accepting this Agreement.

    

    NOW,
      THEREFORE, in
      consideration of the mutual agreements and promises contained herein and other
      good and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, the parties hereto agree as follows:

    

    1.  Resignation
      by Executive from All Officer and Director Positions; Termination of Executive’s
      Employment.

    

    (a)           Resignation
      from Officer and Director Positions.  Executive voluntarily
      resigned from his officer and director positions with Employer and any of its
      subsidiaries and from all positions with any employee benefit plans sponsored
      by
      Employer or any of its subsidiaries on the Resignation Effective
      Date.  These resignations were effected by means of a separate
      resignation letters in the forms attached to this Agreement as Exhibit
      A,Exhibit B and Exhibit C, signed and delivered by Executive
      and accepted by Employer on the Resignation Effective Date.

     

    (b)           Resignation
      of Employment with Employer.  Executive likewise has
      voluntarily and irrevocably resigned his employment with Employer and any of
      its
      subsidiaries effective as of the Employment Termination Date, and will be
      employed by Employer during the period from the date of this Agreement until
      the
      Employment Termination Date on the terms described below. The employment of
      Executive by Employer, in any capacity whatsoever, will terminate and cease
      as
      of the Employment Termination Date, although any and all right or authority
      of
      Executive to act as an agent of Employer, in any manner whatsoever, terminated
      on the Resignation Effective Date.  Executive shall be on an unpaid
      leave of absence during the period beginning with the Resignation Effective
      Date
      and ending on the Employment Termination Date (the “Leave Period”), and during
      such Leave Period Executive shall not be responsible for any day-to-day duties
      with Employer, have any access to Employer’s information systems, files or other
      confidential records or information, or act for or on behalf of the
      Employer.  During the Leave Period, Executive shall not be authorized
      to enter, or be present at, any facility owned or leased by
      Employer.  Executive will be eligible during the Leave Period to
      continue participation in all employee benefit plans and programs of Employer
      in
      which Executive participated as of his Resignation Effective Date, but Executive
      will not be eligible to receive any salary, compensation, or other cash payments
      (other than those to be received pursuant to the terms of this Agreement),
      or
      accrue any paid time off, for or on account of his employment during the Leave
      Period.

     

    2.           Separation
      Benefits.  In consideration for the
      representations, warranties, covenants and agreements made by Executive and
      contained in this Agreement, Employer will deem Executive’s resignation from his
      positions with Employer and its subsidiaries as a termination by Employer
      without cause, and Employer will pay Executive an aggregate of $1,015,133 (the
      Severance Payment”) payable as follows: (a) a lump-sum payment equal to $676,755
      within five (5) business days after the date of this Agreement and (b) an
      additional payments in the aggregate amount of $338,378 payable in equal monthly
      payments over the twelve months beginning in September 2007 and ending in August
      2008.  The payments are subject to modification with the approval of
      Executive to comply with Section 409A of the Internal Revenue Code of 1986,
      as
      amended.

    

    The
      Severance Payment shall be paid or
      provided subject to any applicable federal, state and local income tax or other
      appropriate withholding requirements.

    

    Whether
      or not Executive signs this
      Agreement, he will receive wages or other compensation for all time worked
      through the Resignation Effective Date, accrued vacation, and any other accrued
      leave time which Executive is entitled to under applicable law, through the
      Resignation Effective Date.  Except as provided in this Agreement, no
      payment, compensation, leave time, insurance or other benefits, will be
      furnished or paid to Executive.  Executive acknowledges that Employer
      may change payroll dates, schedules or amounts, insurance carriers or benefit
      plans or otherwise modify its payroll or benefit plans for its active
      executives, and those changes will be applied to Executive as well where
      applicable. In addition, Executive shall continue to be entitled to all rights
      of indemnification provided to officers and directors of Employer as of this
      date, to the same extent as other officers and directors of
      Employer.

    

    3.           Treatment
      of Outstanding Equity Awards.  Executive has outstanding
      stock options, restricted stock, restricted stock units and deferred stock
      units.  For purposes of these equity awards, Employer will deem
      Executive’s resignation from his positions with Employer and its subsidiaries as
      a termination by Employer without cause for purposes of the award agreements
      and
      Executive’s rights and benefits at and after Executive’s termination of
      employment with Employer will be as set forth in the respective award agreements
      for each of these outstanding equity awards, except as modified with the
      approval of Executive to comply with Section 409A of the Internal Revenue Code
      of 1986, as amended.  For purposes of these outstanding equity awards,
      the Employment Termination Date will be the date that Executive’s employment
      with Employer will be deemed to be terminated.

     

    4.           Prior
      Agreements Superseded; Representations and
      Releases.

    

    (a)  Prior
      Agreements, Practices, Policies and Procedures Regarding Severance or Separation
      Benefits Superseded.  In consideration for the Severance
      Payment to be paid or received by Executive under this Agreement and subject
      to
Section 10 hereof, Executive agrees that the Employment Letter, and any
      other agreement between Employer and Executive with respect to severance or
      separation payments, is terminated as of the Resignation Effective Date and
      any
      such agreement or any other severance practice, policy or procedure of Employer
      is superseded in its entirety by the terms of this Agreement in all
      respects.  Executive will have no further rights, and Employer will
      have no further obligations, under any such agreement, practice, policy or
      procedure.  Notwithstanding anything contained herein to the contrary,
      this Agreement shall not supersede or affect any outstanding equity award
      agreements between Executive and Employer for stock options, restricted stock,
      restricted stock units and deferred stock units.

    

    (b)  Representations.  Executive
      represents and warrants to Employer that (i) Executive (A) has not filed any
      suit, action, claim, allegation or other proceeding at law or in equity, before
      any court, governmental agency, arbitration panel or other forum of any nature
      (an “Action”) with respect to the matters released below or (B)
      will not prosecute, and will immediately dismiss with prejudice, any pending
      Action with respect to the matters released below; (ii) Executive has not
      assigned to any other person or entity any right(s) or claim(s) Executive may
      have against Employer; (iii) in deciding to execute this Agreement (A) no fact,
      evidence, event or transaction currently unknown to Executive, but which may
      hereinafter become known to Executive, shall affect in any way or any manner
      the
      final or unconditional nature of this Agreement; (B) Executive’s execution of
      this Agreement is a knowing and voluntary act on Executive’s part; (C) Executive
      has read and fully understands the terms of this Agreement, including the final
      and binding nature and effect of Executive’s waiver of rights by execution of
      this Agreement and was advised in writing to consult with an attorney before
      signing the Agreement at the time Executive first received this Agreement;
      (D)
      Executive has been provided with a reasonable and adequate period of time to
      consider this Agreement and consult with his attorneys and advisors concerning
      this Agreement before signing it; and (E) Executive has not been promised
      anything or provided any consideration for entering into this Agreement that
      is
      not specified in this Agreement.  In addition, Executive hereby
      represents and warrants that, to the best of his knowledge, Executive has
      disclosed to Employer’s Board of Directors, on or prior to the Resignation
      Effective Date and on or prior to the Employment Termination Date, any material
      violation of federal, state, foreign or local criminal law or regulation that
      is
      applicable to Employer, any threatened or pending federal, state, foreign or
      local governmental criminal investigation against Employer and any practice
      or
      policy of Employer that may be unlawful under applicable federal, state, foreign
      or local criminal law.

    

    (c)  Waiver
      and Release.

    

    (1)           
      Executive hereby releases, gives up and waives any and all known and unknown
      rights, causes of action, lawsuits and claims for liability Executive may now
      or
      in the future have against any of the Employer Parties (defined below) in any
      way arising out of, based upon or relating to (i) Executive’s employment with
      Employer or any of its subsidiaries, or the termination of or resignation from
      such employment, (ii) any promise, policy, agreement, action or conduct of
      any
      of the Employer Parties to date, or (iii) any fact occurring prior to this
      date.  Executive acknowledges that this means that, among other
      claims, he is releasing the Employer Parties from and may not bring claims
      against any of them under  (i) Title VII of the Civil Rights Act of
      1964 or Sections 1981 and 1983 of the Civil Rights Act of 1866, which prohibit
      discrimination based on race, color, national origin, ancestry, religion, or
      sex; (ii) the Age Discrimination in Employment Act, which prohibits
      discrimination based on age; (iii) the Equal Pay Act, which prohibits paying
      men
      and women unequal pay for equal work; (iv) the Americans with Disabilities
      Act
      and Sections 503 and 504 of the Rehabilitation Act of 1973, which prohibit
      discrimination based on disability; (v) the WARN Act, which requires that
      advance notice be given of certain workforce reductions; (vi) the Employee
      Retirement Income Security Act, which among other things, protects employee
      benefits; (vii)  the Family and Medical Leave Act of 1993, which
      requires employers to provide leaves of absence under certain circumstances;
      (viii) the Sarbanes-Oxley Act of 2002, which, among other things, provides
      “whistleblower” protection; (ix) the National Labor Relations Act, (x) the
      Missouri Human Rights Act; (xi) the Missouri Service Letter Statute; (xii)
      any
      applicable federal, state or local law prohibiting any form
      of  discrimination or retaliation; (xiii) any law prohibiting
      retaliation based on exercise by Executive of rights under any law, providing
      “whistleblower” protection, providing workers’ compensation benefits, protecting
      union activity, mandating leaves of absence, prohibiting discrimination based
      on
      veteran status or military service, restricting an employer’s right to terminate
      employees or otherwise regulating employment, (xiv) any law or decision
      enforcing express or implied employment contracts, requiring an employer to
      deal
      with employees fairly or in good faith, providing recourse for alleged wrongful
      discharge, tort, physical or personal injury, emotional distress, fraud,
      negligent misrepresentation, defamation, and similar or related claims, and
      any
      other law or decision relating to salary, commission, compensation, benefits,
      and other matters.  Except to the extent provided otherwise elsewhere
      in this Agreement, Executive further hereby releases, gives up and waives any
      and all rights and claims he had, has or will have to any bonus or payment
      under
      any bonus or incentive plan or program of Employer, including, among others,
      Employer’s 2007 Annual Incentive Plan and Employer’s Long-Term Incentive Plan
      for any plan periods not yet completed, and also hereby surrenders to Employer,
      as of the Employment Termination Date, any restricted stock, restricted stock
      units and deferred stock units subject to forfeiture upon termination of
      Executive’s employment at the Employment Termination Date and stock options that
      have not yet become exercisable at the Employment Termination
      Date.  Executive specifically represents that he has not been treated
      adversely on account of age or gender, or in retaliation for exercising any
      legal rights or reporting any alleged violation of law, nor has he otherwise
      been treated wrongfully in connection with his employment with Employer or
      his
      separation from employment and that he has no claim under the Age Discrimination
      in Employment Act, or any other federal, state or local law, decision, order
      or
      regulation concerning discrimination or retaliation.  Except to the
      extent provided otherwise elsewhere in this Agreement, Executive is not eligible
      for severance under any agreement, severance plan, program, policy or
      arrangement of Employer or any of its subsidiaries or affiliates and Executive
      specifically waives any right he may have to receive benefits under any such
      agreement, severance plan, program, policy or arrangement.  Executive
      acknowledges that Employer relied on the representations and promises in this
      Agreement in agreeing to pay Executive the amounts described in Section 2
      and to continue the equity awards in accordance with their respective award
      agreements as described in Section 3.  Executive understands
      that he is releasing claims for events that have occurred prior to his signing
      this Agreement that he may not know about.  Notwithstanding anything
      contained herein to the contrary, this release does not include (and Executive
      does not release) claims arising after the date Executive signs this Agreement,
      claims for vested benefits under any Employer benefit plan based upon
      Executive’s service until and ending on the Employment Termination Date, any
      claim for breach of this Agreement or any equity award agreement, or any pending
      claims for workers compensation that have already been filed or for on-the-job
      injuries that have already been reported.  In addition,
      Executive understands that by signing this Agreement Executive waives and
      gives up, among other claims, the right to file a lawsuit seeking monetary
      damages from the Employer Parties for discrimination claims, but that this
      Agreement and release does not prohibit Executive from making an administrative
      complaint of employment discrimination against any of the Employer Parties
      with
      a governing federal, state or local agency.

    

    For
      purposes of this Agreement, the
      term “Employer Parties” means (1) Employer and any of its present or former
      direct or indirect subsidiaries, affiliates, and any joint venture or other
      entity in which Employer or any such entity has any ownership interest, (2)
      any
      employee benefit plans or trusts sponsored, established or maintained by
      Employer or any other entity described in (1) above, (3) the present and former
      directors, officers, employees, agents, administrators, trustees and fiduciaries
      of each entity described in (1) or (2) above, and (4) the respective insurers,
      successors and assigns of each person or entity described in (1), (2) or (3)
      above.

    

    (2)           
      Employer hereby releases, gives up and waives any and all known and unknown
      rights, causes of action, lawsuits and claims for liability Employer may now
      or
      in the future have against Executive in any way arising out of, based upon
      or
      relating to (i) Executive’s employment with Employer or any of its subsidiaries,
      or the termination of or resignation from such employment, (ii) any promise,
      policy, agreement, action or conduct of Executive to date, or (iii) any fact
      occurring prior to this date, except for rights, claims, causes of action and
      claims for liability against Executive in any way based on any violation by
      Executive of the Employer’s Code of Conduct, any criminal conduct by Executive,
      any knowing or intentional violation of law by Executive, or any fraud or breach
      of fiduciary duty by Executive (“Retained Claims”). Notwithstanding anything
      contained herein to the contrary, this release does not include (and Employer
      does not release) any Retained Claims, any claim for breach of this Agreement
      or
      any confidentiality, non-solicitation or non-competition agreement signed by
      Executive, or any claims arising after this date.

    

    (d)           
      Nature of Release.  It is expressly understood and agreed
      that this Agreement is intended to cover and does cover not only all known
      losses and damages but any future losses and damages not now known or
      anticipated but which may later develop or be discovered, including the effects
      and consequences thereof.  It is further expressly understood and
      agreed that this Agreement may be pleaded as a counterclaim to or as a defense
      in bar or abatement of any action taken by or on behalf of either Employer
      or
      Executive.  Executive agrees that neither this Agreement nor
      performance hereunder constitutes or should be construed as an admission by
      Employer or any of the Employer Parties of any fault, liability, wrongdoing,
      or
      violation of any Employer policy, any federal, state, foreign or local law
      or
      regulation, common law, or any breach of any contract or any other wrongdoing
      of
      any type, all of which are expressly denied. Likewise, Employer agrees that
      neither this Agreement nor performance hereunder constitutes or should be
      construed as an admission by Executive of any fault, liability, wrongdoing,
      or
      violation of any Employer policy, any federal, state, foreign or local law
      or
      regulation, common law, or any breach of any contract or any other wrongdoing
      of
      any type, all of which are expressly denied by Executive.

    

    5.           Covenant
      Not To Sue;
      Indemnification.  Executive and
      Employer each agree not to enter into any suit, action or other proceeding
      at
      law or in equity (including administrative actions), or to prosecute further
      any
      existing suit or action that might presently exist, or to make any claim or
      demand of any kind or nature against any of the Employer Parties or Executive
      (as the case may be), in any such case asserting any claim released by Executive
      or Employer (as the case may be) by Section 4(c)(1) and (2) of this
      Agreement.  If Employer or Executive enters into any such suit, action
      or other proceeding in violation of this Section 5, the party who does so
      shall (i) indemnify, defend and hold the other (which, in the case of
      Employer shall include all the Employer Parties) harmless from and against
      any
      and all liabilities, obligations, losses, damages, penalties, claims, action,
      suits, costs, expenses and disbursements (including attorneys’ fees and expenses
      and court costs whether or not litigation is commenced and, if litigation is
      commenced, during all trial and appellate phases of such litigation) of any
      kind
      and nature whatsoever which may be imposed on, incurred by or asserted against
      any such person in any way relating to, arising out of, connected with or
      resulting from such actions, including any of the matters released hereunder
      and
      (ii) (in the case of Executive) immediately return the Severance Payment to
      Employer.

    
       

    

    6.         Restrictive
      Covenants.

    

    (a)           Confidentiality.  Executive
      acknowledges that, as an executive of Employer, he has had access to
      confidential, proprietary and trade secret information of
      Employer.  In addition, Executive acknowledges the competitive nature
      of Employer’s business and agrees and reaffirms that any information that is not
      public (by lawful means) or otherwise readily accessible by the public through
      lawful means acquired by Executive regarding Employer’s business, its finances,
      costs, pricing, contracts, customers, prospects, plans, products, manufacturing
      methods, technology, legal proceedings, personnel, directors and officers
      (whether or not such information is marked confidential) shall be considered
      Employer’s confidential information.  In furtherance and not
      limitation of any prior agreements, to the extent that any of the following
      is
      not public  (by lawful means) or otherwise readily accessible by the
      public through lawful means regarding confidentiality, Executive agrees not
      to
      disclose to anyone (other than Employer), or use for Executive’s benefit or the
      benefit of any other person (other than Employer), any trade secrets, marketing
      documents or information, financial statements, reports, salary information,
      product cost or price information, technical information, financial information,
      manufacturing methods, technology, any information relating to customers,
      production, prospects, bids, proposals or sales or any other information
      acquired by Executive regarding Employer or its business, directors, officers
      and employees (whether or not such information is marked
      confidential).  With respect to this covenant, Executive agrees to
      allow a representative of Employer access to his personal computers for purposes
      of removing any Employer-owned or licensed software and any Employer files
      from
      such computers; such access shall occur under the supervision of a
      representative of Executive within seven (7) days of the date of this
      Agreement.  Furthermore, Executive agrees to immediately return to
      Employer all Employer property and any information (including any copies
      thereof, electronic or otherwise) that Executive has received, prepared or
      helped to prepare during the course of Executive’s employment with
      Employer.  Executive agrees to return the Employer-owned Blackberry
      that had been provided by Employer for his use on or before the close of
      business on August 17, 2007.

    

    (b)           Non-Solicitation.  In
      consideration of the Severance Payment, and in furtherance and not limitation
      of
      any prior agreement between Executive and Employer with respect to
      non-solicitation matters, Executive acknowledges and agrees that, during the
      period from the Resignation Effective Date through and ending February 13, 2009:
      (1) Executive will not directly or indirectly recruit any employee, sales
      representative or other personnel of Employer or any of its subsidiaries or
      affiliates (other than secretarial, custodial and clerical employees) to work
      for another company or business; nor will Executive assist anyone else in
      recruiting or hiring any such employee to work for another company or business
      or discuss with any such person his or her leaving the employ of Employer or
      any
      of its subsidiaries or affiliates to engage in a business activity in
      competition with Employer or any of its subsidiaries or affiliates; and (2)
      Executive will not directly or indirectly (i) solicit or encourage any person,
      firm, corporation or other business entity to cease doing business, or reduce
      the level of business that could be done, with Employer or any of its
      subsidiaries or affiliates, or discuss doing so with any such person, firm,
      corporation or entity; or (ii) take away or procure for the benefit of any
      competitor of Employer or any of its subsidiaries or affiliates, any business
      of
      the type provided by or competitive with a product or service offered by
      Employer or any of its subsidiaries or affiliates.

    

    (c)           Non-Compete.  In
      consideration of the Severance Payment, and in furtherance and not limitation
      of
      any prior agreement between Executive and Employer with respect to non-compete
      matters, Executive agrees that during the period from the Resignation Effective
      Date through and ending February 13, 2009, Executive will not act as a
      consultant, advisor, independent contractor, officer, manager, employee,
      principal, agent, director or trustee of, or provide any services or advice
      to,
      any corporation, partnership, limited liability company, association or other
      entity that was or is engaged in a Competing Business anywhere in the world,
      engage in a Competing Business anywhere in the world, or directly or indirectly
      own more than one percent (1%) of the outstanding equity of any such entity
      which is engaged in a Competing Business anywhere in the world.  For
      purposes of this Section 6(c), a “Competing Business” is any business
      that competes with (or offers or markets any products or services of a type
      marketed by or competitive with) any products or services marketed by Employer
      or any of its subsidiaries or affiliates.  Executive acknowledges that
      Employer and its subsidiaries and affiliates do business throughout the
      world.

    

    (d)           Standstill.  In
      consideration of the Severance Payment and in recognition of Executive’s unique
      position with Employer and access to confidential information regarding
      Employer, Executive agrees that from the Resignation Effective Date through
      February 13, 2009, Executive will not (i) acquire, offer to acquire, or agree
      to
      acquire, directly or indirectly by purchase or otherwise, in excess of five
      percent (5%) of the voting securities or direct or indirect right to acquire
      in
      excess of five (5%) of the voting securities of Employer; (ii) make or in any
      way participate, directly or indirectly, in any “solicitation” of “proxies” to
      vote (as such terms are used in the rules and regulations of the Securities
      and
      Exchange Commission), or seek to advise or influence any person or entity with
      respect to the voting of any voting securities of Employer; (iii) make any
      public announcement with respect to, or submit a proposal for, or offer of
      (with
      or without conditions) any extraordinary transaction involving Employer or
      any
      of its securities or assets; (iv) form, join or in any way participate in a
      “group” as defined in Section 13(d)(3) of the Securities Exchange Act of 1934,
      as amended, in connection with any of the foregoing actions; or (v) request
      that
      Employer, directly or indirectly, amend or waive any provisions of this
Section 6(d).

    

    (e)           Equitable
      Relief.  Executive acknowledges and agrees that (i) any
      breach of this Agreement by Executive, including any breach of the terms of
      this
Section 6, will cause Employer irreparable injury and damage, (ii) the
      provisions of this Agreement are necessarily of a special, unique and
      extraordinary nature and (iii) if Executive breaches or threatens to breach
      any
      such provisions, Employer shall be entitled, in addition to any other remedies
      and damages Employer could recover as a result of any such breach, to obtain
      equitable relief, including restraining orders or injunctions, both temporary
      and permanent, in order to prevent future violation thereof by Executive or
      any
      person with whom Executive may be affiliated.  Further, Executive
      waives any requirement for Employer to post a bond in connection with any action
      relating to this Agreement.

    

    (f)           Existing
      Obligations.  Executive agrees to remain bound by and to
      comply with, and reaffirms Executive’s obligations under, any agreement or
      policy relating to confidential information, invention, non-solicitation,
      non-competition or similar matters to which Executive is now subject,
      notwithstanding the reasons why Executive’s employment terminated or any conduct
      occurring prior to this date. The covenants and agreements set out in this
      Section 6 above are in addition to, and do not in any way cancel or
      supersede, any of such obligations or agreements.

    

    (g)           Survival.  The
      provisions of this Section 6 shall survive any termination of this
      Agreement.

    

    (h)           Reformation.  To
      the extent that any covenant set forth in this Section 6 shall be
      determined to be invalid or unenforceable in any respect or to any extent,
      the
      covenant shall not be rendered invalid, but instead shall be automatically
      amended for such lesser term or to such lesser extent, or in such other degree,
      as may grant Employer the maximum protection and restrictions on Executive’s
      activities permitted by applicable law in such circumstances.

    

    7.           Non-Disparagement;
      Non-Contact; No Re-Employment.

    

    (a)           Non-Disparagement.

    

    (1)           
      Executive agrees to conduct himself in a professional and positive manner in
      all
      of his dealings, communications and contacts concerning Employer, his employment
      or his separation from employment.  Executive agrees not to denigrate,
      disparage, or make any derogatory or negative statements about Employer or
      its
      subsidiaries or affiliates or any of their respective present or former
      directors, officers, or employees.  In particular, Executive agrees
      not to make any derogatory or negative statements about Employer (including
      any
      subsidiaries or affiliates), its business plans, policies and practices, or
      about any of its present or former officers, directors, or employees to
      customers, competitors, suppliers, employees, former employees, members of
      the
      public (including but not limited to in any internet publication, posting,
      message board or weblog), members of the media, or any other person, nor shall
      Executive take any action to harm or adversely affect the reputation or goodwill
      of Employer.  Nothing in this Section 7(a)(1) shall prevent
      Executive from giving truthful testimony or information to law enforcement
      entities, administrative agencies or courts or in any other legal proceedings
      as
      required by law, including but not limited to assisting in the prosecution
      of
      claims not released by this Agreement or assisting in an investigation or
      proceeding brought by any governmental or regulatory body.

    

    (2)           Employer
      will direct its directors, officers and upper management to conduct themselves
      in a professional and positive manner in all of their dealings, communications
      and contacts concerning Executive, his employment, and his separation from
      employment, and not denigrate, disparage, or make any derogatory or negative
      statements about Executive to others outside Employer, or instruct anyone else
      to do so.  In particular, the directors, officers and upper management
      will be directed not to make any derogatory or negative statements about
      Executive, or his performance, to customers, competitors, suppliers, former
      employees, members of the public (including but not limited to in any internet
      publication, posting, message board or weblog), members of the media, or any
      other person outside Employer. Nothing in this paragraph shall prevent Employer
      representatives from giving truthful testimony or information to law enforcement
      entities, administrative agencies or courts or in any other legal proceedings
      as
      required by law, including, but not limited to, assisting in an investigation
      or
      proceeding brought by any governmental or regulatory body or official related
      to
      alleged violations of any law relating to fraud or any rule or regulation of
      the
      Securities and Exchange Commission, or from making any truthful statements
      or
      comments in connection with any securities filings or in order to comply with
      any obligations under federal, state or local laws (including without
      limitation, any federal securities laws).

     

    (b)           Non-Contact.    During
      the period from the Resignation Effective Date through February 13, 2009,
      Executive shall not communicate with (including in response to any
      communications initiated by others) or contact any directors, employees, or
      joint venture partners of the Employer or any of its subsidiaries or affiliates
      as of the date of this Agreement; provided, however, that the prohibition set
      for in this Section 7(b) shall not apply to communications between Executive
      and
      the Company’s Chairman of the Board or General Counsel.

     

    (c)           No
      Re-Employment.    Executive will never apply for or
      seek employment with Employer or any of its subsidiaries or affiliates, or
      be
      employed by any such entity, and agrees that Employer or such subsidiary or
      affiliate may refuse to employ him (or, if he has already been employed, dismiss
      him following discovery of that fact) without liability.

    

    8.           Legal
      Proceedings.  Executive agrees to cooperate with Employer or
      any of its subsidiaries or affiliates and their legal counsel, and to furnish
      any and all complete and truthful information, testimony or affidavits, in
      connection with any matter that arose during his employment with Employer,
      or in
      connection with any litigation, governmental proceeding or investigation,
      arbitration or claim, that in any way relates to the business or operations
      of
      Employer or of any of its subsidiaries or affiliates, or of which Executive
      may
      have any knowledge or involvement. Executive will make his best efforts to
      consult with and provide information to Employer or any of its subsidiaries
      or
      affiliates and their legal counsel concerning all such matters, and appear
      as
      and when requested to provide any such information, assistance or testimony
      on
      reasonable notice. The parties will make their best efforts to have such
      cooperation performed at reasonable times and places and in a manner as not
      to
      unreasonably interfere with any other employment or other business activity
      in
      which Executive may then be engaged.  Nothing in this Agreement shall
      be construed or interpreted as requiring Executive to provide any testimony,
      sworn statement or declaration that is not complete and truthful. If Employer
      or
      any of its subsidiaries or affiliates requires Executive to travel outside
      the
      metropolitan area in the United States where he then resides to provide any
      testimony or otherwise provide any such assistance, then Employer agrees to
      reimburse Executive for any reasonable, customary and necessary travel and
      lodging expenses incurred by him to do so provided Executive submits all
      documentation required under Employer’s reimbursement policies and as otherwise
      may be required to satisfy any requirements under applicable tax laws for
      Employer to deduct those expenses. Nothing in this Agreement shall prevent
      Executive from giving truthful testimony or information to law enforcement
      entities, administrative agencies or courts or in any other legal proceedings
      as
      required by law, including, but not limited to, assisting in an investigation
      or
      proceeding brought by any governmental or regulatory body or official related
      to
      alleged violations of any law relating to fraud or any rule or regulation of
      the
      Securities and Exchange Commission.

    

    9.           General
      Provisions.

     

    (a)           Entire
      Agreement.  This Agreement incorporates by this reference the
      Preliminary Statement hereto.  Each party represents and warrants that
      any facts relating to such party that are contained in the Preliminary Statement
      are true.  This Agreement and any agreement, instrument or document to
      be executed in connection herewith (as referenced herein) contain the parties’
entire understanding and agreement with respect to the subject matter hereof
      (the termination of Executive’s employment and directorships with Employer and
      its subsidiaries and affiliates, the Severance Payment and the treatment of
      the
      outstanding equity awards currently held by Executive and the release of any
      potential related claims).  Any discussions, agreements, promises,
      representations, warranties or statements between the parties or their
      representatives (whether or not conflicting or inconsistent) that are not
      expressly contained or incorporated herein shall be null and void and are merged
      into this Agreement, except that any confidentiality agreement, non-solicitation
      agreement, non-compete agreement, invention assignment, equity award agreement
      or other agreement between Employer and Executive, expressly covering a party’s
      rights after termination of employment, shall remain in full force and effect,
      in accordance with its terms, after the execution of this Agreement, except
      to
      the extent specified in this Agreement.  In case of any conflict
      between Executive’s rights under any such agreement and this Agreement, the
      terms of this Agreement will control.

    

    (b)           Modification,
      Amendment and Waiver.  Neither this Agreement, nor any part
      hereof, may be modified or amended orally, by trade usage or by course of
      conduct or dealing, but only by and pursuant to an instrument in writing duly
      executed and delivered by the party sought to be charged
      therewith.  No covenant or condition of this Agreement can be waived,
      except by the written consent of the party entitled to receive the benefit
      thereof.  Forbearance or indulgence by a party in any regard
      whatsoever shall not constitute a waiver of a covenant or condition to be
      performed by the other party to which the same may apply, and, until complete
      performance by such other party of such covenant or condition, the party
      entitled to receive the benefit thereof shall be entitled to invoke any remedy
      available to it under this Agreement, at law, in equity, by statute or
      otherwise, despite such forbearance or indulgence.

    

    (c)           Successors,
      Assigns and Third Party Beneficiaries.  This Agreement shall
      be binding upon, and inure to the benefit of, the parties hereto and their
      respective successors and permitted assigns and is freely assignable by
      Employer. Except as expressly provided herein, neither this Agreement nor any
      rights hereunder may be assigned or transferred, and no duties may be delegated,
      by any party hereto without the prior written consent of the other party
      hereto.  Each subsidiary or affiliate of Employer (and their
      predecessors, successors and assigns) shall be a third-party beneficiary of
      this
      Agreement, as if such subsidiary or affiliate was the “Employer”
hereunder.

    

    (d)           Construction.  This
      Agreement shall not be construed more strictly against one party than against
      another party merely by virtue of the fact that this Agreement may have been
      physically prepared by such party, or such party’s counsel, it being agreed that
      all parties, and their respective counsel, have mutually participated in the
      negotiation and preparation of this Agreement.  Unless the context of
      this Agreement clearly requires otherwise:  (i) references to the
      plural include the singular and vice versa; (ii) references to any
      person include such person’s successors and assigns but, if applicable, only if
      such successors and assigns are permitted by this Agreement; (iii) references
      to
      one gender include all genders; (iv) “including” is not limiting; (v) “or” has
      the inclusive meaning represented by the phrase “and/or”; (vi) the words
“hereof”, “herein”, “hereby”, “hereunder” and similar terms in this Agreement
      refer to this Agreement as a whole and not to any particular provision of this
      Agreement; (vii) article, section, subsection, clause, exhibit and schedule
      references are to this Agreement unless otherwise specified; (viii) reference
      to
      any agreement (including this Agreement), document or instrument means such
      agreement, document or instrument as amended or modified and in effect from
      time
      to time in accordance with the terms thereof and, if applicable, the terms
      hereof; and (ix) general or specific references to any law means such law as
      amended, modified, codified or re-enacted, in whole or in part, and in effect
      from time to time.

    

    (e)           Governing
      Law.  This Agreement is deemed to have been entered into and
      accepted in the State of Missouri, and all questions with respect to the
      formation and construction of this Agreement, and the rights and obligations
      of
      the parties hereto, shall be governed by and determined in accordance with
      the
      laws of the State of Missouri, which are applicable to agreements entered into
      and performed entirely within such State, without giving effect to the choice
      or
      conflicts of law provisions thereof.  Each of Employer and Executive
      hereby agree that all claims, actions, suits and proceedings between the parties
      hereto relating to this Agreement may be filed, tried and litigated in the
      Circuit Court of Saint Louis County, Missouri or (if federal jurisdiction
      exists) the United States District Court for the Eastern District of
      Missouri.  In connection with the foregoing, the parties hereto
      consent to the jurisdiction and venue of such courts and expressly waive any
      claims or defenses of lack of personal jurisdiction of or proper venue by such
      courts, and any claim that either such forum is not a convenient or the most
      convenient forum.  In the event of a breach of this Agreement, the
      breaching party agrees to pay all costs of enforcement and collection of any
      and
      all remedies and damages, including reasonable attorneys’ fees.

    

    (f)           Severability.  If
      any Section (or part thereof) of this Agreement is found by a court of competent
      jurisdiction to be contrary to, prohibited by or invalid under any applicable
      law, such court may modify such Section (or part thereof) so, as modified,
      such
      Section (or part thereof) will be enforceable and will to the maximum extent
      possible comply with the apparent intent of the parties in drafting such Section
      (or part thereof).  No such modification or omission of a Section (or
      part thereof) shall in any way affect or impair such Section (or part thereof)
      in any other jurisdiction.  If, in the sole judgment of Employer, a
      Section (or part thereof) of this Agreement is so modified or omitted in a
      manner which eliminates a substantial part of the benefit intended to be
      received by Employer hereunder, then Employer may rescind this Agreement and
      Executive shall immediately return to Employer the Severance Payment
      hereunder.

    

    (g)           Captions.  The
      captions, headings and titles of the various Sections of this Agreement are
      for
      convenience of reference only, and shall not be deemed or construed to limit
      or
      expand the substantive provisions of such Sections.

    

    (h)           Counterparts.  This
      Agreement may be executed in two or more counterparts, each of which shall
      constitute an original, but all of which together shall constitute a single
      agreement.  A facsimile signature is as good as an
      original.

    

    10.           Execution
      and Delivery.  This Agreement was presented to Executive on
      August 10, 2007.  Executive has been advised to take this Agreement
      home, read it, and carefully consider all of its provisions before signing
      it
      and consult with an attorney or attorneys of his choice.  Executive
      will have until 5:00 P.M., Central Daylight Time, on August 13, 2007 to
      consider, sign  and return this Agreement to Robert M. LaRose,
      Thompson Coburn LLP, One US Bank Plaza, St. Louis, Missouri 63101.  If
      Executive fails to return this Agreement on a timely basis, the payments
      described in this Agreement and the benefits agreed upon will not be paid or
      provided and this Agreement shall be null, void and of no force or effect with
      respect to either Executive or Employer.

    

    

    [Remainder
      of page intentionally left blank]

    

    
      
                 

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the parties have executed this Agreement on the day, month and year written
      below.

    

    

    

    
      	
              EXECUTIVE:

            	 	
              EMPLOYER:

            
	 	 	 
	 	 	
              INSITUFORM
                TECHNOLOGIES, INC.

               

            
	 	 	 
	/s/
              Thomas S. Rooney,
              Jr.                             
              	 	By: 
              /s/ Alfred L.
              Woods                                   
              
	
              Name:  Thomas
                S. Rooney, Jr.

            	 	
              Name:   Alfred
                L.
                Woods                                          

            
	 	 	
              
                Title:    
                  Chairman of the Board of Directors

              

            
	 	 	 
	 Date:  
              August 13, 2007	 	 Date: 
              August 13, 2007

    

                                                                                                    

    
      	 	 	 

    

    
      
              

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      A

    

    FORM
      OF RESIGNATION LETTER

    

    

    August
      13, 2007

    

    

    Board
      of
      Directors

    Insituform
      Technologies, Inc.

    17988
      Edison Avenue

    Chesterfield,
      Missouri 63005-1195

    

    

    Ladies
      and Gentlemen:

    

    Effective
      immediately, I hereby resign as President and Chief Executive Officer and
      director of Insituform Technologies, Inc. (the “Company”).  I also
      resign, effective immediately, from the offices and directorships (or similar
      positions) of the Company’s subsidiaries and affiliates as listed on Appendix
      A hereto.  In addition, I am terminating my employment with the
      Company effective at the close of business on August 31, 2007 and with each
      of
      the subsidiaries and affiliates of the Company effective
      immediately.

    

    

    Very
      truly yours,

    

    

    

    Thomas
      S.
      Rooney, Jr.

    

    

    APPROVED
      AND ACCEPTED:

    

    

    

    __________________________________

    Alfred
      L.
      Woods

    Chairman
      of the Board

    

     

    
      
        
          

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Appendix
      A

    

    

    Offices
      and Directorships of Thomas S. Rooney, Jr.

    With
      Insituform Technologies, Inc. Subsidiaries

    

    
      	 	 	 
	
              Company

               

            	
              Jurisdiction
                of Incorporation

            	
              Offices
                and Directorships

            
	
              Affholder,
                Inc.

            	
              Missouri

            	
              Director

            
	
              INA
                Acquisition Corp.

            	
              Delaware

            	
              Director,
                President and CEO

            
	
              Insituform
                Technologies USA, Inc.

            	
              Delaware

            	
              Director,
                President and CEO

            
	
              ITI
                International Services, Inc.

            	
              Delaware

            	
              Director,
                President and CEO

            
	
              Kinsel
                Industries, Inc.

            	
              Texas

            	
              Director,
                President and CEO

            
	
              Mississippi
                Textiles Corporation

            	
              Mississippi

            	
              Director

            
	
              Insituform
                Technologies Limited

            	
              Canada

            	
              CEO

            

    

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

    

    FORM
      OF RESIGNATION LETTER

    

    

    August
      13, 2007

    

    

    Insituform
      Europe SAS

    30
      Boulevard de Bellerive

    92500
      Rueil Malmaison

    Paris,
      France

    

    Ladies
      and Gentlemen:

    

    Effective
      immediately, I hereby resign as Chairman and President of Insituform Europe
      SAS.

    

    

    Very
      truly yours,

    

    

    

    Thomas
      S.
      Rooney, Jr.

    

    

    
      
                 

        
        

      

      
        
        

        
          

        

      

       

    

    
 

    EXHIBIT
      C

    

    FORM
      OF RESIGNATION LETTER

    

    

    August
      13, 2007

    

    

    Insituform
      (Netherlands) B.V.

    Weena
      340

    3012
      NJ
      Rotterdam

    The
      Netherlands

    

    Ladies
      and Gentlemen:

    

    Effective
      immediately, I hereby resign as Managing Director of Insituform (Netherlands)
      B.V.

    

    

    Very
      truly yours,

    

    

    

    Thomas
      S.
      Rooney, Jr.

    

    

    APPROVED
      AND ACCEPTED:

    

    

    

    __________________________________

    David
      F.
      Morris

    Managing
      Director

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