EXHIBIT 4(c)
                                                                  Execution Copy




                               AVISTA CORPORATION

                       7.75% FIRST MORTGAGE BONDS DUE 2007

                                   ----------

                   EXCHANGE AND REGISTRATION RIGHTS AGREEMENT

                                                               December 19, 2001

Goldman, Sachs & Co.
BNY Capital Markets, Inc.
Fleet Securities, Inc.
TD Securities (USA) Inc.
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004

Ladies and Gentlemen:

         Avista Corporation, a Washington corporation (the "Company"), proposes
to issue and sell to the Purchasers (as defined herein) upon the terms set forth
in the Purchase Agreement (as defined herein) its 7.75% First Mortgage Bonds due
2007. As an inducement to the Purchasers to enter into the Purchase Agreement
and in satisfaction of a condition to the obligations of the Purchasers
thereunder, the Company agrees with the Purchasers for the benefit of holders
(as defined herein) from time to time of the Registrable Securities (as defined
herein) as follows:

         1. Certain Definitions. For purposes of this Exchange and Registration
Rights Agreement, the following terms shall have the following respective
meanings:

               "Base Interest" shall mean the interest that would otherwise
         accrue on the Securities under the terms thereof and the Mortgage,
         without giving effect to the provisions of this Agreement.

               The term "broker-dealer" shall mean any broker or dealer
         registered with the Commission under the Exchange Act.

               "Closing Date" shall mean the date on which the Securities are
         initially issued.

               "Commission" shall mean the United States Securities and Exchange
         Commission, or any other federal agency at the time administering the
         Exchange Act or the Securities Act, whichever is the relevant statute
         for the particular purpose.

               "Effective Time" in the case of (i) an Exchange Registration,
         shall mean the time and date as of which the Commission declares the
         Exchange Registration Statement effective or as of which the Exchange
         Registration Statement otherwise becomes effective and (ii) a Shelf
         Registration, shall mean the time and date as of which the Commission
         declares the Shelf Registration Statement effective or as of which the
         Shelf Registration Statement otherwise becomes effective.

<PAGE>

               "Electing Holder" shall mean any holder of Registrable Securities
         that has returned a completed and signed Notice and Questionnaire to
         the Company in accordance with Section 3(d)(ii) or 3(d)(iii) hereof.

               "Exchange Act" shall mean the Securities Exchange Act of 1934, or
         any successor thereto, as the same shall be amended from time to time.

               "Exchange Offer" shall have the meaning assigned thereto in
         Section 2(a) hereof.

               "Exchange Registration" shall have the meaning assigned thereto
         in Section 3(c) hereof.

               "Exchange Registration Statement" shall have the meaning assigned
         thereto in Section 2(a) hereof.

               "Exchange Securities" shall have the meaning assigned thereto in
         Section 2(a) hereof.

               The term "holder" shall mean each of the Purchasers and other
         persons who acquire Registrable Securities from time to time (including
         any successors or assigns), in each case for so long as such person
         owns any Registrable Securities.

               "Liquidated Damages" shall have the meaning assigned thereto in
         Section 2(c) hereof.

               "Mortgage" shall mean the Company's Mortgage and Deed of Trust,
         dated as of June 1, 1939, to Citibank, N.A., as Trustee, as amended and
         supplemented and as it will be further supplemented by a supplemental
         indenture establishing the Securities.

               "Notice and Questionnaire" means a Notice of Registration
         Statement and Selling Securityholder Questionnaire substantially in the
         form of Exhibit A hereto.

               The term "person" shall mean a corporation, association,
         partnership, organization, business, individual, government or
         political subdivision thereof or governmental agency.

               "Purchase Agreement" shall mean the Purchase Agreement, dated as
         of December 12, 2001, between the Purchasers and the Company relating
         to the Securities.

               "Purchasers" shall mean the Purchasers named in Schedule I to the
         Purchase Agreement.

               "Registrable Securities" shall mean the Securities; provided,
         however, that a Security shall cease to be a Registrable Security when
         (i) in the circumstances contemplated by Section 2(a) hereof, the
         Security has been exchanged for an Exchange Security in an Exchange
         Offer as contemplated in Section 2(a) hereof (provided that any
         Exchange Security that, pursuant to the next to last sentence of
         Section 2(a), is included in a prospectus for use in connection with
         resales by broker-dealers shall be deemed to be a Registrable Security
         with respect to Sections 5, 6 and 9 until resale of such Registrable
         Security has been effected within the 180-day period referred to in
         Section 2(a)); (ii) in the circumstances contemplated by Section 2(b)
         hereof, a Shelf Registration Statement registering such Security under
         the Securities Act has been declared or becomes effective and such



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<PAGE>

         Security has been sold or otherwise transferred by the holder thereof
         pursuant to and in a manner contemplated by such effective Shelf
         Registration Statement; (iii) such Security is sold pursuant to Rule
         144 under circumstances in which any legend borne by such Security
         relating to restrictions on transferability thereof, under the
         Securities Act or otherwise, is removed by the Company or pursuant to
         the Mortgage; (iv) such Security is eligible to be sold pursuant to
         paragraph (k) of Rule 144; or (v) such Security shall cease to be
         outstanding.

               "Registration Default" shall have the meaning assigned thereto in
         Section 2(c) hereof.

               "Registration Default Period" shall have the meaning assigned
         thereto in Section 2(c) hereof.

               "Registration Expenses" shall have the meaning assigned thereto
         in Section 4 hereof.

               "Resale Period" shall have the meaning assigned thereto in
         Section 2(a) hereof.

               "Restricted Holder" shall mean (i) a holder that is an affiliate
         of the Company within the meaning of Rule 405, (ii) a holder who
         acquires Exchange Securities outside the ordinary course of such
         holder's business, (iii) a holder who has arrangements or
         understandings with any person to participate in the Exchange Offer for
         the purpose of distributing Exchange Securities and (iv) a holder that
         is a broker-dealer, but only with respect to Exchange Securities
         received by such broker-dealer pursuant to an Exchange Offer in
         exchange for Registrable Securities acquired by the broker-dealer
         directly from the Company.

               "Rule 144," "Rule 405" and "Rule 415" shall mean, in each case,
         such rule promulgated under the Securities Act (or any successor
         provision), as the same shall be amended from time to time.

               "Securities" shall mean, collectively, the First Mortgage Bonds,
         7.75% Series due 2007 of the Company to be issued and sold to the
         Purchasers, and securities issued in exchange therefor or in lieu
         thereof pursuant to the Mortgage.

               "Securities Act" shall mean the Securities Act of 1933, or any
         successor thereto, as the same shall be amended from time to time.

               "Shelf Registration" shall have the meaning assigned thereto in
         Section 2(b) hereof.

               "Shelf Registration Statement" shall have the meaning assigned
         thereto in Section 2(b) hereof.

               "Trust Indenture Act" shall mean the Trust Indenture Act of 1939,
         or any successor thereto, and the rules, regulations and forms
         promulgated thereunder, all as the same shall be amended from time to
         time.

         Unless the context otherwise requires, any reference herein to a
"Section" or "clause" refers to a Section or clause, as the case may be, of this
Exchange and Registration Rights Agreement, and the words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Exchange and


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<PAGE>

Registration Rights Agreement as a whole and not to any particular Section or
other subdivision.

         2. Registration Under the Securities Act.

          (a) Except as set forth in Section 2(b) below, the Company agrees to
     file under the Securities Act, as soon as practicable, but no later than 90
     days after the Closing Date, a registration statement relating to an offer
     to exchange (such registration statement, the "Exchange Registration
     Statement", and such offer, the "Exchange Offer") any and all of the
     Securities for a like aggregate principal amount of debt securities issued
     by the Company, which debt securities are substantially identical to the
     Securities (and are entitled to the benefits of a trust indenture which is
     substantially identical to the Mortgage or is the Mortgage and which has
     been qualified under the Trust Indenture Act), except that they have been
     registered pursuant to an effective registration statement under the
     Securities Act and do not contain provisions for the liquidated damages
     contemplated in Section 2(c) below (such new debt securities hereinafter
     called "Exchange Securities"). The Company agrees to use all commercially
     reasonable efforts to cause the Exchange Registration Statement to become
     effective under the Securities Act as soon as practicable, but no later
     than 180 days after the Closing Date. The Exchange Offer will be registered
     under the Securities Act on the appropriate form and will comply with all
     applicable tender offer rules and regulations under the Exchange Act. The
     Company further agrees to use its best efforts to commence and complete the
     Exchange Offer promptly, but no later than 45 days after such registration
     statement has become effective, hold the Exchange Offer open for at least
     30 days and exchange Exchange Securities for all Registrable Securities
     that have been properly tendered and not withdrawn on or prior to the
     expiration of the Exchange Offer. The Exchange Offer will be deemed to have
     been "completed" only if the debt securities received in the Exchange Offer
     by holders other than Restricted Holders are, upon receipt, transferable by
     each such holder without restriction under the Securities Act and the
     Exchange Act and without material restrictions under the blue sky or
     securities laws of a substantial majority of the states of the United
     States of America. The Exchange Offer shall be deemed to have been
     completed upon the earlier to occur of (i) the Company having exchanged the
     Exchange Securities for all outstanding Registrable Securities pursuant to
     the Exchange Offer and (ii) the Company having exchanged, pursuant to the
     Exchange Offer, Exchange Securities for all Registrable Securities that
     have been properly tendered and not withdrawn before the expiration of the
     Exchange Offer, which shall be on a date that is at least 30 days following
     the commencement of the Exchange Offer. The Company agrees (x) to include
     in the Exchange Registration Statement a prospectus for use in any resales
     by any holder of Exchange Securities that is a broker-dealer and (y) to
     keep such Exchange Registration Statement effective for a period (the
     "Resale Period") beginning when Exchange Securities are first issued in the
     Exchange Offer and ending upon the earlier of the expiration of the 180th
     day after the Exchange Offer has been completed or such time as such
     broker-dealers no longer own any Registrable Securities. With respect to
     such Exchange Registration Statement, such holders shall have the benefit
     of the rights of indemnification and contribution set forth in Sections
     6(a), (c), (d) and (e) hereof.

          (b) If (i) on or prior to the time the Exchange Offer is completed,
     existing Commission interpretations are changed such that the debt
     securities received by holders other than Restricted Holders in the
     Exchange Offer are not or would not be, upon receipt, transferable by each
     such holder without restriction under the Securities Act,(ii) the Exchange
     Offer has not been consummated within 225 days following the Closing Date
     or (iii) the Exchange Offer is not available to any holder of the


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<PAGE>

     Securities, the Company shall, in lieu of (or, in the case of clause (iii),
     in addition to) conducting the Exchange Offer contemplated by Section 2(a),
     file under the Securities Act as soon as practicable, but no later than 30
     days after the time such obligation to file arises, a "shelf" registration
     statement providing for the registration of, and the sale on a continuous
     or delayed basis by the holders of, all of the Registrable Securities,
     pursuant to Rule 415 or any similar rule that may be adopted by the
     Commission (such filing, the "Shelf Registration" and such registration
     statement, the "Shelf Registration Statement"). The Company agrees to use
     all commercially reasonable efforts (x) to cause the Shelf Registration
     Statement to become or be declared effective no later than 90 days after
     such Shelf Registration Statement is filed and to keep such Shelf
     Registration Statement continuously effective for a period ending on the
     earlier of the second anniversary of the Effective Time or such time as
     there are no longer any Registrable Securities outstanding, provided,
     however, that no holder shall be entitled to be named as a selling
     securityholder in the Shelf Registration Statement or to use the prospectus
     forming a part thereof for resales of Registrable Securities unless such
     holder is an Electing Holder, and (y) after the Effective Time of the Shelf
     Registration Statement, promptly upon the request of any holder of
     Registrable Securities that is not then an Electing Holder, to take any
     action reasonably necessary to enable such holder to use the prospectus
     forming a part thereof for resales of Registrable Securities, including,
     without limitation, any action necessary to identify such holder as a
     selling securityholder in the Shelf Registration Statement, provided,
     however, that nothing in this Clause (y) shall relieve any such holder of
     the obligation to return a completed and signed Notice and Questionnaire to
     the Company in accordance with Section 3(d)(iii) hereof. The Company
     further agrees to supplement or make amendments to the Shelf Registration
     Statement, as and when required by the rules, regulations or instructions
     applicable to the registration form used by the Company for such Shelf
     Registration Statement or by the Securities Act or rules and regulations
     thereunder for shelf registration, and the Company agrees to furnish to
     each Electing Holder copies of any such supplement or amendment prior to
     its being used or promptly following its filing with the Commission.
     Notwithstanding the foregoing, if the Board of Directors of the Company
     determines in good faith that it is in the best interests of the Company
     not to disclose the existence of or facts surrounding any proposed or
     pending material corporate transaction involving the Company, the Company
     may allow the Shelf Registration Statement to fail to be effective and
     usable as a result of such nondisclosure for up to 60 days during the two
     year period of effectiveness required by Section 2 hereof, but in no event
     for any period in excess of 30 consecutive days.

          (c) In the event that (i) the Company has not filed the Exchange
     Registration Statement or Shelf Registration Statement on or before the
     date on which such registration statement is required to be filed pursuant
     to Section 2(a) or 2(b), respectively, or (ii) such Exchange Registration
     Statement or Shelf Registration Statement has not become effective or been
     declared effective by the Commission on or before the date on which such
     registration statement is required to become or be declared effective
     pursuant to Section 2(a) or 2(b), respectively, or (iii) the Exchange Offer
     has not been completed within 45 days after the initial effective date of
     the Exchange Registration Statement relating to the Exchange Offer (if the
     Exchange Offer is then required to be made) or (iv) any Exchange
     Registration Statement or Shelf Registration Statement required by Section
     2(a) or 2(b) hereof is filed and declared effective but shall thereafter
     either be withdrawn by the Company or shall become subject to an effective
     stop order issued pursuant to Section 8(d) of the Securities Act suspending
     the effectiveness of such registration statement (except as specifically
     permitted herein) without being succeeded immediately by an additional
     registration statement filed and declared effective (each such event
     referred to in clauses (i) through (iv), a "Registration Default" and each


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<PAGE>

     period during which a Registration Default has occurred and is continuing,
     a "Registration Default Period"), then, as liquidated damages for such
     Registration Default, subject to the provisions of Section 9(b), liquidated
     damages ("Liquidated Damages"), in addition to the Base Interest, will be
     (1) with respect to the first 90-day period immediately following the
     occurrence of the first Registration Default, an amount equal to $0.05 per
     week per $1,000 principal amount of Securities outstanding; and (2) an
     additional $0.05 per week per $1,000 principal amount of Securities with
     respect to each subsequent 90-day period, up to a maximum amount of
     Liquidated Damages for all Registration Defaults of $0.20 per week per
     $1,000 principal amount of Securities outstanding, to and including the
     first week in which all Registration Defaults have been cured, but only so
     long as any Securities are Registrable Securities.

          (d) The Company shall take all actions necessary or advisable to be
     taken by it to ensure that the transactions contemplated herein are
     effected as so contemplated.

          (e) Any reference herein to a registration statement as of any time
     shall be deemed to include any document incorporated, or deemed to be
     incorporated, therein by reference as of such time and any reference herein
     to any post-effective amendment to a registration statement as of any time
     shall be deemed to include any document incorporated, or deemed to be
     incorporated, therein by reference as of such time.

         3. Registration Procedures.

         If the Company files a registration statement pursuant to Section 2(a)
or Section 2(b), the following provisions shall apply:

          (a) At or before the Effective Time of the Exchange Registration
     Statement or the Shelf Registration Statement, as the case may be, the
     Company shall qualify the Mortgage under the Trust Indenture Act of 1939 or
     maintain such qualification, as applicable .

          (b) In the event that such qualification would require the appointment
     of a new trustee under the Mortgage, the Company shall appoint a new
     trustee thereunder pursuant to the applicable provisions of the Mortgage.

          (c) In connection with the Company's obligations with respect to the
     registration of Exchange Securities as contemplated by Section 2(a) (the
     "Exchange Registration"), if applicable, the Company shall, as soon as
     practicable (or as otherwise specified):

               (i) prepare and file with the Commission, as soon as practicable
          but no later than 90 days after the Closing Date, an Exchange
          Registration Statement on any form which may be utilized by the
          Company and which shall permit the Exchange Offer and resales of
          Exchange Securities by broker-dealers during the Resale Period to be
          effected as contemplated by Section 2(a), and use commercially
          reasonable efforts to cause such Exchange Registration Statement to
          become effective as soon as practicable thereafter, but no later than
          180 days after the Closing Date;

               (ii) as soon as practicable prepare and file with the Commission
          such amendments and supplements to such Exchange Registration
          Statement and the prospectus included therein as may be necessary to
          effect and maintain the effectiveness of such Exchange Registration
          Statement for the periods and purposes contemplated in Section 2(a)
          hereof and as may be required by the applicable rules and regulations



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<PAGE>

          of the Commission and the instructions applicable to the form of such
          Exchange Registration Statement, and promptly provide each
          broker-dealer holding Exchange Securities with such number of copies
          of the prospectus included therein (as then amended or supplemented),
          in conformity in all material respects with the requirements of the
          Securities Act and the Trust Indenture Act and the rules and
          regulations of the Commission thereunder, as such broker-dealer
          reasonably may request in writing to the Company prior to the
          expiration of the Resale Period, for use in connection with resales of
          Exchange Securities;

               (iii) promptly notify each broker-dealer that has requested or
          received copies of the prospectus included in such registration
          statement, and confirm such advice in writing, (A) when such Exchange
          Registration Statement or the prospectus included therein or any
          prospectus amendment or supplement or post-effective amendment has
          been filed, and, with respect to such Exchange Registration Statement
          or any post-effective amendment, when the same has become effective,
          (B) of any comments by the Commission and by the blue sky or
          securities commissioner or regulator of any state with respect thereto
          or any request by the Commission for amendments or supplements to such
          Exchange Registration Statement or prospectus or for additional
          information, (C) of the issuance by the Commission of any stop order
          suspending the effectiveness of such Exchange Registration Statement
          or the initiation or threatening of any proceedings for that purpose,
          (D) if at any time the representations and warranties of the Company
          contemplated by Section 5 or contained in any underwriting agreement
          or similar agreement relating to the offering cease to be true and
          correct in all material respects, (E) of the receipt by the Company of
          any notification with respect to the suspension of the qualification
          of the Exchange Securities for sale in any jurisdiction or the
          initiation or threatening of any proceeding for such purpose, or (F)
          at any time during the Resale Period when a prospectus is required to
          be delivered under the Securities Act, that such Exchange Registration
          Statement, prospectus, prospectus amendment or supplement or
          post-effective amendment does not conform in all material respects to
          the applicable requirements of the Securities Act and the Trust
          Indenture Act and the rules and regulations of the Commission
          thereunder or contains an untrue statement of a material fact or omits
          to state any material fact required to be stated therein or necessary
          to make the statements therein not misleading in light of the
          circumstances then existing;

               (iv) in the event that the Company would be required, pursuant to
          Section 3(c)(iii)(F) above, to notify any broker-dealers holding
          Exchange Securities, the Company shall without delay prepare and
          furnish to each such holder a reasonable number of copies of a
          prospectus supplemented or amended so that, as thereafter delivered to
          purchasers of such Exchange Securities during the Resale Period, such
          prospectus shall conform in all material respects to the applicable
          requirements of the Securities Act and the Trust Indenture Act and the
          rules and regulations of the Commission thereunder and shall not
          contain an untrue statement of a material fact or omit to state a
          material fact required to be stated therein or necessary to make the
          statements therein not misleading in light of the circumstances then
          existing;

               (v) use commercially reasonable efforts to obtain the withdrawal
          of any order suspending the effectiveness of such Exchange
          Registration Statement or any post-effective amendment thereto at the
          earliest practicable date;


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               (vi) use commercially reasonable efforts to (A) register or
          qualify the Exchange Securities under the securities laws or blue sky
          laws of such jurisdictions as are contemplated by Section 2(a) no
          later than the commencement of the Exchange Offer, (B) keep such
          registrations or qualifications in effect and comply with such laws so
          as to permit the continuance of offers, sales and dealings therein in
          such jurisdictions until the expiration of the Resale Period and (C)
          take any and all other actions as may be reasonably necessary or
          advisable to enable each broker-dealer holding Exchange Securities to
          consummate the disposition thereof in such jurisdictions; provided,
          however, that the Company shall not be responsible for any filing
          obligations that such broker-dealer may incur as such under the laws
          of such jurisdiction; and provided further, that the Company shall not
          be required for any such purpose to (1) qualify as a foreign
          corporation in any jurisdiction wherein it would not otherwise be
          required to qualify but for the requirements of this Section 3(c)(vi),
          (2) consent to general service of process in any such jurisdiction or
          (3) make any changes to its certificate of incorporation or by-laws or
          any agreement between it and its stockholders;

               (vii) use commercially reasonable efforts to obtain the consent
          or approval of each governmental agency or authority, whether federal,
          state or local, which may be required in order for the Company to
          effect the Exchange Registration, the Exchange Offer and the offering
          and sale of Exchange Securities by broker-dealers during the Resale
          Period;

               (viii) provide a CUSIP number for all Exchange Securities, not
          later than the applicable Effective Time;

               (ix) comply with all applicable rules and regulations of the
          Commission, and make generally available to its securityholders as
          soon as practicable but no later than 18 months after the effective
          date of such Exchange Registration Statement, an earning statement of
          the Company and its subsidiaries complying with Section 11(a) of the
          Securities Act (including, at the option of the Company, Rule 158
          thereunder).

          (d) In connection with the Company's obligations with respect to the
     Shelf Registration, if applicable, the Company shall, as soon as
     practicable (or as otherwise specified):

               (i) prepare and file with the Commission, as soon as practicable
          but in any case within the time periods specified in Section 2(b), a
          Shelf Registration Statement on any form which may be utilized by the
          Company and which shall register all of the Registrable Securities for
          resale by the holders thereof in accordance with such method or
          methods of disposition as may be specified by such of the holders as,
          from time to time, may be Electing Holders and use its best efforts to
          cause such Shelf Registration Statement to become effective as soon as
          practicable but in any case within the time periods specified in
          Section 2(b);

               (ii) not less than 30 calendar days prior to the Effective Time
          of the Shelf Registration Statement, mail the Notice and Questionnaire
          to the holders of Registrable Securities; no holder shall be entitled
          to be named as a selling securityholder in the Shelf Registration
          Statement as of the Effective Time, and no holder shall be entitled to
          use the prospectus forming a part thereof for resales of Registrable
          Securities at any time, unless such holder has returned a completed
          and signed Notice and Questionnaire to the Company by the deadline for
          response set forth therein; provided, however, holders of Registrable


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<PAGE>

          Securities shall have at least 28 calendar days from the date on which
          the Notice and Questionnaire is first mailed to such holders to return
          a completed and signed Notice and Questionnaire to the Company;

               (iii) after the Effective Time of the Shelf Registration
          Statement, upon the request of any holder of Registrable Securities
          that is not then an Electing Holder, promptly send a Notice and
          Questionnaire to such holder; provided that the Company shall not be
          required to take any action to name such holder as a selling
          securityholder in the Shelf Registration Statement or to enable such
          holder to use the prospectus forming a part thereof for resales of
          Registrable Securities until such holder has returned a completed and
          signed Notice and Questionnaire to the Company;

               (iv) as soon as practicable prepare and file with the Commission
          such amendments and supplements to such Shelf Registration Statement
          and the prospectus included therein as may be necessary to effect and
          maintain the effectiveness of such Shelf Registration Statement for
          the period specified in Section 2(b) hereof and as may be required by
          the applicable rules and regulations of the Commission and the
          instructions applicable to the form of such Shelf Registration
          Statement, and furnish to the Electing Holders copies of any such
          supplement or amendment simultaneously with or prior to its being used
          or filed with the Commission;

               (v) comply in all material respects with the provisions of the
          Securities Act with respect to the disposition of all of the
          Registrable Securities covered by such Shelf Registration Statement in
          accordance with the intended methods of disposition by the Electing
          Holders provided for in such Shelf Registration Statement;

               (vi) provide (A) the Electing Holders, (B) the underwriters
          (which term, for purposes of this Exchange and Registration Rights
          Agreement, shall include a person deemed to be an underwriter within
          the meaning of Section 2(a)(11) of the Securities Act), if any,
          thereof, (C) any sales or placement agent therefor, (D) not more than
          one counsel for all such underwriters or agents and (E) not more than
          one counsel for all the Electing Holders the opportunity to
          participate in the preparation of such Shelf Registration Statement,
          each prospectus included therein or filed with the Commission and each
          amendment or supplement thereto;

               (vii) for a reasonable period prior to the filing of such Shelf
          Registration Statement, and throughout the period specified in Section
          2(b), make available at reasonable times at the Company's principal
          place of business or such other reasonable place for inspection by the
          persons referred to in Section 3(d)(vi) who shall certify to the
          Company that they have a current intention to sell the Registrable
          Securities pursuant to the Shelf Registration such financial and other
          information and books and records of the Company, and cause the
          officers, employees, counsel and independent certified public
          accountants of the Company to respond to such inquiries, as shall be
          reasonably necessary, in the judgment of the respective counsel
          referred to in such Section, to conduct a reasonable investigation
          within the meaning of Section 11 of the Securities Act; provided,
          however, that each such party shall be required to maintain in
          confidence and not to disclose to any other person any information or
          records reasonably designated by the Company as being confidential,
          until such time as (A) such information becomes a matter of public
          record (whether by virtue of its inclusion in such registration
          statement or otherwise), or (B) such person shall be required so to
          disclose such information pursuant to a subpoena or order of any court
          or other governmental agency or body having jurisdiction over the


                                       9
<PAGE>

          matter (subject to the requirements of such order, and only after such
          person shall have given the Company prompt prior written notice of
          such requirement), or (C) such information is required to be set forth
          in such Shelf Registration Statement or the prospectus included
          therein or in an amendment to such Shelf Registration Statement or an
          amendment or supplement to such prospectus in order that such Shelf
          Registration Statement, prospectus, amendment or supplement, as the
          case may be, complies with applicable requirements of the federal
          securities laws and the rules and regulations of the Commission and
          does not contain an untrue statement of a material fact or omit to
          state therein a material fact required to be stated therein or
          necessary to make the statements therein not misleading in light of
          the circumstances then existing;

               (viii) promptly notify each of the Electing Holders, any sales or
          placement agent therefor and any underwriter thereof (which
          notification may be made through any managing underwriter that is a
          representative of such underwriter for such purpose) and confirm such
          advice in writing, (A) when such Shelf Registration Statement or the
          prospectus included therein or any prospectus amendment or supplement
          or post-effective amendment has been filed, and when such Shelf
          Registration Statement or any post-effective amendment has become
          effective, (B) of any comments by the Commission and by the blue sky
          or securities commissioner or regulator of any state with respect
          thereto or any request by the Commission for amendments or supplements
          to such Shelf Registration Statement or prospectus or for additional
          information, (C) of the issuance by the Commission of any stop order
          suspending the effectiveness of such Shelf Registration Statement or
          the initiation or threatening of any proceedings for that purpose, (D)
          if at any time the representations and warranties of the Company
          contemplated by Section 3(d)(xvii) or Section 5 or contained in any
          underwriting agreement or similar agreement relating to the offering
          cease to be true and correct in all material respects, (E) of the
          receipt by the Company of any notification with respect to the
          suspension of the qualification of the Registrable Securities for sale
          in any jurisdiction or the initiation or threatening of any proceeding
          for such purpose, or (F) if at any time when a prospectus is required
          to be delivered under the Securities Act, that such Shelf Registration
          Statement, prospectus, prospectus amendment or supplement or
          post-effective amendment does not conform in all material respects to
          the applicable requirements of the Securities Act and the Trust
          Indenture Act and the rules and regulations of the Commission
          thereunder or contains an untrue statement of a material fact or omits
          to state any material fact required to be stated therein or necessary
          to make the statements therein not misleading in light of the
          circumstances then existing;

               (ix) use its best efforts to obtain the withdrawal of any order
          suspending the effectiveness of such registration statement or any
          post-effective amendment thereto at the earliest practicable date;

               (x) if requested by any managing underwriter or underwriters, any
          placement or sales agent or any Electing Holder, promptly incorporate
          in a prospectus supplement or post-effective amendment such
          information as is required by the applicable rules and regulations of
          the Commission and as such managing underwriter or underwriters, such
          agent or such Electing Holder specifies should be included therein
          relating to the terms of the sale of such Registrable Securities,
          including information with respect to the principal amount of
          Registrable Securities being sold by such Electing Holder or agent or
          to any underwriters, the name and description of such Electing Holder,
          agent or underwriter, the offering price of such Registrable


                                       10
<PAGE>

          Securities and any discount, commission or other compensation payable
          in respect thereof, the purchase price being paid therefor by such
          underwriters and with respect to any other terms of the offering of
          the Registrable Securities to be sold by such Electing Holder or agent
          or to such underwriters; and make all required filings of such
          prospectus supplement or post-effective amendment promptly after
          notification of the matters to be incorporated in such prospectus
          supplement or post-effective amendment;

               (xi) furnish to each Electing Holder, each placement or sales
          agent, if any, therefor, each underwriter, if any, thereof and the
          respective counsel referred to in Section 3(d)(vi) an executed copy
          (or, in the case of an Electing Holder, a conformed copy) of such
          Shelf Registration Statement, each such amendment and supplement
          thereto (in each case including all exhibits thereto (in the case of
          an Electing Holder of Registrable Securities, upon request) and
          documents incorporated by reference therein) and such number of copies
          of such Shelf Registration Statement (excluding exhibits thereto and
          documents incorporated by reference therein unless specifically so
          requested by such Electing Holder, agent or underwriter, as the case
          may be) and of the prospectus included in such Shelf Registration
          Statement (including each preliminary prospectus and any summary
          prospectus), in conformity in all material respects with the
          applicable requirements of the Securities Act and the Trust Indenture
          Act and the rules and regulations of the Commission thereunder, and
          such other documents, as such Electing Holder, agent, if any, and
          underwriter, if any, may reasonably request in order to facilitate the
          offering and disposition of the Registrable Securities owned by such
          Electing Holder, offered or sold by such agent or underwritten by such
          underwriter and to permit such Electing Holder, agent and underwriter
          to satisfy the prospectus delivery requirements of the Securities Act;
          and the Company hereby consents to the use of such prospectus
          (including such preliminary and summary prospectus) and any amendment
          or supplement thereto by each such Electing Holder and by any such
          agent and underwriter, in each case in the form most recently provided
          to such person by the Company, in connection with the offering and
          sale of the Registrable Securities covered by the prospectus
          (including such preliminary and summary prospectus) or any supplement
          or amendment thereto;

               (xii) use commercially reasonable efforts to (A) register or
          qualify the Registrable Securities to be included in such Shelf
          Registration Statement under such securities laws or blue sky laws of
          such jurisdictions as any Electing Holder and each placement or sales
          agent, if any, therefor and underwriter, if any, thereof shall
          reasonably request and, (B) keep such registrations or qualifications
          in effect and comply with such laws so as to permit the continuance of
          offers, sales and dealings therein in such jurisdictions during the
          period the Shelf Registration is required to remain effective under
          Section 2(b) above and for so long as may be necessary to enable any
          such Electing Holder, agent or underwriter to complete its
          distribution of Securities pursuant to such Shelf Registration
          Statement and (C) take any and all other actions as may be reasonably
          necessary or advisable to enable each such Electing Holder, agent, if
          any, and underwriter, if any, to consummate the disposition in such
          jurisdictions of such Registrable Securities; provided, however, that
          the Company shall not be required for any such purpose to (1) qualify
          as a foreign corporation in any jurisdiction wherein it would not
          otherwise be required to qualify but for the requirements of this
          Section 3(d)(xii), (2) consent to general service of process in any
          such jurisdiction or (3) make any changes to its certificate of
          incorporation or by-laws or any agreement between it and its
          stockholders;


                                       11
<PAGE>

               (xiii) use commercially reasonable efforts to obtain the consent
          or approval of each governmental agency or authority, whether federal,
          state or local, which may be required to effect the Shelf Registration
          or the offering or sale in connection therewith or to enable the
          selling holder or holders to offer, or to consummate the disposition
          of, their Registrable Securities;

               (xiv) Unless any Registrable Securities shall be in book-entry
          only form, cooperate with the Electing Holders and the managing
          underwriters, if any, to facilitate the timely preparation and
          delivery of certificates representing Registrable Securities to be
          sold, which certificates, if so required by any securities exchange
          upon which any Registrable Securities are listed, shall be penned,
          Iithographed or engraved, or produced by any combination of such
          methods, on steel engraved borders, and which certificates shall not
          bear any restrictive legends; and, in the case of an underwritten
          offering, enable such Registrable Securities to be in such
          denominations and registered in such names as the managing
          underwriters may request at least two business days prior to any sale
          of the Registrable Securities;

               (xv) provide a CUSIP number for all Registrable Securities, not
          later than the applicable Effective Time;

               (xvi) enter into one or more underwriting agreements, engagement
          letters, agency agreements, "best efforts" underwriting agreements or
          similar agreements, as appropriate, including customary provisions
          relating to indemnification and contribution, and take such other
          actions in connection therewith as any Electing Holders aggregating at
          least 20% in aggregate principal amount of the Registrable Securities
          at the time outstanding shall request in order to expedite or
          facilitate the disposition of such Registrable Securities;

               (xvii) whether or not an agreement of the type referred to in
          Section 3(d)(xvi) hereof is entered into and whether or not any
          portion of the offering contemplated by the Shelf Registration is an
          underwritten offering or is made through a placement or sales agent or
          any other entity, (A) make such representations and warranties to the
          Electing Holders and the placement or sales agent, if any, therefor
          and the underwriters, if any, thereof in form, substance and scope as
          are customarily made in connection with an offering of debt securities
          pursuant to any appropriate agreement or to a registration statement
          filed on the form applicable to the Shelf Registration; (B) obtain an
          opinion or opinions of counsel to the Company in customary form and
          covering such matters, of the type customarily covered by such an
          opinion, as the managing underwriters, if any, or as any Electing
          Holders of at least 20% in aggregate principal amount of the
          Registrable Securities at the time outstanding may reasonably request,
          addressed to such Electing Holder or Electing Holders and the
          placement or sales agent, if any, therefor and the underwriters, if
          any, thereof and dated the effective date of such Shelf Registration
          Statement (and if such Shelf Registration Statement contemplates an
          underwritten offering of a part or all of the Registrable Securities,
          dated the date of the closing under the underwriting agreement
          relating thereto) (it being agreed that the matters to be covered by
          such opinion shall include the due incorporation and good standing of
          the Company and its subsidiaries; the qualification of the Company and
          its subsidiaries to transact business as foreign corporations; the due
          authorization, execution and delivery of the relevant agreement of the
          type referred to in Section 3(d)(xvi) hereof; the due authorization,
          execution, authentication and issuance, and the validity and
          enforceability, of the Securities; the absence of material legal or
          governmental proceedings involving the Company; the absence of a
          breach by the Company or any of its subsidiaries of, or a default
          under, material agreements binding upon the Company or any subsidiary
          of the Company; the absence of governmental approvals required to be
          obtained in connection with the Shelf Registration, the offering and
          sale of the Registrable Securities, this Exchange and Registration
          Rights Agreement or any agreement of the type referred to in Section
          3(d)(xvi) hereof, except such approvals as may be required under state
          securities or blue sky laws; the material compliance as to form of


                                       12
<PAGE>

          such Shelf Registration Statement and any documents incorporated by
          reference therein and of the Mortgage with the requirements of the
          Securities Act and the Trust Indenture Act and the rules and
          regulations of the Commission thereunder, respectively; and, as of the
          date of the opinion and of the Shelf Registration Statement or most
          recent post-effective amendment thereto, as the case may be, the
          absence from such Shelf Registration Statement and the prospectus
          included therein, as then amended or supplemented, and from the
          documents incorporated by reference therein (in each case other than
          the financial statements and other financial information contained
          therein) of an untrue statement of a material fact or the omission to
          state therein a material fact necessary to make the statements therein
          not misleading (in the case of such documents, in the light of the
          circumstances existing at the time that such documents were filed with
          the Commission under the Exchange Act)); (C) obtain a "cold comfort"
          letter or letters from the independent certified public accountants of
          the Company addressed to the selling Electing Holders, the placement
          or sales agent, if any, therefor or the underwriters, if any, thereof,
          dated (i) the effective date of such Shelf Registration Statement and
          (ii) the effective date of any prospectus supplement to the prospectus
          included in such Shelf Registration Statement or post-effective
          amendment to such Shelf Registration Statement which includes
          unaudited or audited financial statements as of a date or for a period
          subsequent to that of the latest such statements included in such
          prospectus (and, if such Shelf Registration Statement contemplates an
          underwritten offering pursuant to any prospectus supplement to the
          prospectus included in such Shelf Registration Statement or
          post-effective amendment to such Shelf Registration Statement which
          includes unaudited or audited financial statements as of a date or for
          a period subsequent to that of the latest such statements included in
          such prospectus, dated the date of the closing under the underwriting
          agreement relating thereto), such letter or letters to be in customary
          form and covering such matters of the type customarily covered by
          letters of such type; (D) deliver such documents and certificates,
          including officers' certificates, as may be reasonably requested by
          any Electing Holders of at least 20% in aggregate principal amount of
          the Registrable Securities at the time outstanding or the placement or
          sales agent, if any, therefor and the managing underwriters, if any,
          thereof to evidence the accuracy of the representations and warranties
          made pursuant to clause (A) above or those contained in Section 5(a)
          hereof and the compliance with or satisfaction of any agreements or
          conditions contained in the underwriting agreement or other agreement
          entered into by the Company; and (E) undertake such obligations
          relating to expense reimbursement, indemnification and contribution as
          are provided in Section 6 hereof;

               (xviii) notify in writing each holder of Registrable Securities
          of any proposal by the Company to amend or waive any provision of this
          Exchange and Registration Rights Agreement pursuant to Section 9(h)
          hereof and of any amendment or waiver effected pursuant thereto, each
          of which notices shall contain the text of the amendment or waiver
          proposed or effected, as the case may be; and


                                       13
<PAGE>

               (xix) comply in all material respects with all applicable rules
          and regulations of the Commission, and make generally available to its
          securityholders as soon as practicable but in any event not later than
          18 months after the effective date of such Shelf Registration
          Statement, an earning statement of the Company and its subsidiaries
          complying with Section 11(a) of the Securities Act (including, at the
          option of the Company, Rule 158 thereunder).

          (e) In the event that the Company would be required, pursuant to
     Section 3(d)(viii)(F) above, to notify the Electing Holders, the placement
     or sales agent, if any, therefor and the managing underwriters, if any,
     thereof, the Company shall without delay prepare and furnish to each of the
     Electing Holders, to each placement or sales agent, if any, and to each
     such underwriter, if any, a reasonable number of copies of a prospectus
     supplemented or amended so that, as thereafter delivered to purchasers of
     Registrable Securities, such prospectus shall conform in all material
     respects to the applicable requirements of the Securities Act and the Trust
     Indenture Act and the rules and regulations of the Commission thereunder
     and shall not contain an untrue statement of a material fact or omit to
     state a material fact required to be stated therein or necessary to make
     the statements therein not misleading in light of the circumstances then
     existing. Each Electing Holder agrees that upon receipt of any notice from
     the Company pursuant to Section 3(d)(viii)(F) hereof, such Electing Holder
     shall forthwith discontinue the disposition of Registrable Securities
     pursuant to the Shelf Registration Statement applicable to such Registrable
     Securities until such Electing Holder shall have received copies of such
     amended or supplemented prospectus, and if so directed by the Company, such
     Electing Holder shall deliver to the Company (at the Company's expense) all
     copies, other than permanent file copies, then in such Electing Holder's
     possession of the prospectus covering such Registrable Securities at the
     time of receipt of such notice.

          (f) In the event of a Shelf Registration, in addition to the
     information required to be provided by each Electing Holder in its Notice
     Questionnaire, the Company may require such Electing Holder to furnish to
     the Company such additional information regarding such Electing Holder and
     such Electing Holder's intended method of distribution of Registrable
     Securities as may be required in order to comply with the Securities Act.
     Each such Electing Holder agrees to notify the Company as promptly as
     practicable of any inaccuracy or change in information previously furnished
     by such Electing Holder to the Company or of the occurrence of any event in
     either case as a result of which any prospectus relating to such Shelf
     Registration contains or would contain an untrue statement of a material
     fact regarding such Electing Holder or such Electing Holder's intended
     method of disposition of such Registrable Securities or omits to state any
     material fact regarding such Electing Holder or such Electing Holder's
     intended method of disposition of such Registrable Securities required to
     be stated therein or necessary to make the statements therein not
     misleading in light of the circumstances then existing, and promptly to
     furnish to the Company any additional information required to correct and
     update any previously furnished information or required so that such
     prospectus shall not contain, with respect to such Electing Holder or the
     disposition of such Registrable Securities, an untrue statement of a
     material fact or omit to state a material fact required to be stated
     therein or necessary to make the statements therein not misleading in light
     of the circumstances then existing.

          (g) Until the expiration of two years after the Closing Date, the
     Company will not, and will not permit any of its "affiliates" (as defined
     in Rule 144) to, resell any of the Securities that have been reacquired by
     any of them except pursuant to an effective registration statement under
     the Securities Act.


                                       14
<PAGE>

         4. Registration Expenses.

         The Company agrees to bear and to pay or cause to be paid promptly all
expenses incident to the Company's performance of or compliance with this
Exchange and Registration Rights Agreement, including (a) all Commission and any
NASD registration, filing and review fees and expenses including fees and
disbursements of counsel for the placement or sales agent or underwriters in
connection with such registration, filing and review, (b) all fees and expenses
in connection with the qualification of the Securities for offering and sale
under the state securities and blue sky laws referred to in Section 3(d)(xii)
hereof and determination of their eligibility for investment under the laws of
such jurisdictions as any managing underwriters or the Electing Holders may
designate, including any fees and disbursements of counsel for the Electing
Holders or underwriters in connection with such qualification and determination,
(c) all expenses relating to the preparation, printing, production, distribution
and reproduction of each registration statement required to be filed hereunder,
each prospectus included therein or prepared for distribution pursuant hereto,
each amendment or supplement to the foregoing, the expenses of preparing the
Securities for delivery and the expenses of printing or producing any
underwriting agreements, agreements among underwriters, selling agreements and
blue sky or legal investment memoranda and all other documents in connection
with the offering, sale or delivery of Securities to be disposed of (including
certificates representing the Securities), (d) messenger, telephone and delivery
expenses relating to the offering, sale or delivery of Securities and the
preparation of documents referred in clause (c) above, (e) fees and expenses of
the Trustee under the Mortgage, any agent of the Trustee and any counsel for the
Trustee and of any collateral agent or custodian, (f) internal expenses
(including all salaries and expenses of the Company's officers and employees
performing legal or accounting duties), (g) fees, disbursements and expenses of
counsel and independent certified public accountants of the Company (including
the expenses of any opinions or "cold comfort" letters required by or incident
to such performance and compliance), (h) fees, disbursements and expenses of one
counsel for the Electing Holders retained in connection with a Shelf
Registration, as selected by the Electing Holders of a majority in aggregate
principal amount of the Registrable Securities held by Electing Holders (which
counsel shall be reasonably satisfactory to the Company), (i) any fees charged
by securities rating services for rating the Securities, and (j) fees, expenses
and disbursements of any other persons, including special experts, retained by
the Company in connection with such registration (collectively, the
"Registration Expenses"). To the extent that any Registration Expenses are
incurred, assumed or paid by any holder of Registrable Securities or any
placement or sales agent therefor or underwriter thereof, the Company shall
reimburse such person for the full amount of the Registration Expenses so
incurred, assumed or paid promptly after receipt of a request therefor.
Notwithstanding the foregoing, the holders of the Registrable Securities being
registered shall pay all agency fees and commissions and underwriting discounts
and commissions attributable to the sale of such Registrable Securities and the
fees and disbursements of any counsel or other advisors or experts retained by
such holders (severally or jointly), other than the counsel and experts
specifically referred to above.

         5. Representations and Warranties.

         The Company represents and warrants to, and agrees with, each Purchaser
and each of the holders from time to time of Registrable Securities that:

          (a) Each registration statement covering Registrable Securities and
     each prospectus (including any preliminary or summary prospectus) contained
     therein or furnished pursuant to Section 3(d) or Section 3(c) hereof and
     any further amendments or supplements to any such registration statement or
     prospectus, when it becomes effective or is filed with the Commission, as


                                       15
<PAGE>

     the case may be, and, in the case of an underwritten offering of
     Registrable Securities, at the time of the closing under the underwriting
     agreement relating thereto, will conform in all material respects to the
     requirements of the Securities Act and the Trust Indenture Act and the
     rules and regulations of the Commission thereunder and will not contain an
     untrue statement of a material fact or omit to state a material fact
     required to be stated therein or necessary to make the statements therein
     not misleading; and at all times subsequent to the Effective Time when a
     prospectus would be required to be delivered under the Securities Act,
     other than from (i) such time as a notice has been given to holders of
     Registrable Securities pursuant to Section 3(d)(viii)(F) or Section
     3(c)(iii)(F) hereof until (ii) such time as the Company furnishes an
     amended or supplemented prospectus pursuant to Section 3(e) or Section
     3(c)(iv) hereof, each such registration statement, and each prospectus
     (including any summary prospectus) contained therein or furnished pursuant
     to Section 3(d) or Section 3(c) hereof, as then amended or supplemented,
     will conform in all material respects to the requirements of the Securities
     Act and the Trust Indenture Act and the rules and regulations of the
     Commission thereunder and will not contain an untrue statement of a
     material fact or omit to state a material fact required to be stated
     therein or necessary to make the statements therein not misleading in the
     light of the circumstances then existing; provided, however, that this
     representation and warranty shall not apply to any statements or omissions
     made in reliance upon and in conformity with information furnished in
     writing to the Company by a holder of Registrable Securities expressly for
     use therein.

          (b) Any documents incorporated by reference in any prospectus referred
     to in Section 5(a) hereof, when they become or became effective or are or
     were filed with the Commission, as the case may be, will conform or
     conformed in all material respects to the requirements of the Securities
     Act or the Exchange Act, as applicable, and none of such documents will
     contain or contained an untrue statement of a material fact or will omit or
     omitted to state a material fact required to be stated therein or necessary
     to make the statements therein not misleading; provided, however, that this
     representation and warranty shall not apply to any statements or omissions
     made in reliance upon and in conformity with information furnished in
     writing to the Company by a holder of Registrable Securities expressly for
     use therein.

          (c) The compliance by the Company with all of the provisions of this
     Exchange and Registration Rights Agreement and the consummation by the
     Company of the transactions herein contemplated will not result in a breach
     or violation of any of the terms or provisions of, or constitute a default
     under, any indenture, mortgage, deed of trust, loan agreement or other
     agreement or instrument to which the Company is a party or by which any of
     the property or assets of the Company is subject, nor will such action
     result in any violation of the provisions of any statute or the Restated
     Articles of Incorporation, as amended, or the Bylaws, as amended, of the
     Company or any order, rule or regulation of any court or other governmental
     agency or body having jurisdiction over the Company or any of its
     properties; and no consent, approval, authorization, order, registration or
     qualification of or with any court or governmental agency or body is
     required for the consummation by the Company of the transactions
     contemplated by this Exchange and Registration Rights Agreement, except for
     the registration under the Securities Act of the Securities and such
     consents, approvals, authorizations, registrations or qualifications as may
     be required under state securities or Blue Sky laws in connection with the
     offering and distribution of the Securities.

          (d) This Exchange and Registration Rights Agreement has been duly
     authorized, executed and delivered by the Company.


                                       16
<PAGE>

         6. Indemnification.

          (a) Indemnification by the Company. The Company will indemnify and
     hold harmless each of the holders of Registrable Securities included in an
     Exchange Registration Statement, each of the Electing Holders of
     Registrable Securities included in a Shelf Registration Statement and each
     person who participates as a placement or sales agent or as an underwriter
     in any offering or sale of such Registrable Securities against any losses,
     claims, damages or liabilities, joint or several, to which such holder,
     agent or underwriter may become subject under the Securities Act or
     otherwise, insofar as such losses, claims, damages or liabilities (or
     actions in respect thereof) arise out of or are based upon an untrue
     statement or alleged untrue statement of a material fact contained in any
     Exchange Registration Statement or Shelf Registration Statement, as the
     case may be, under which such Registrable Securities were registered under
     the Securities Act, or any preliminary, final or summary prospectus
     contained therein or furnished by the Company to any such holder, Electing
     Holder, agent or underwriter, or any amendment or supplement thereto, or
     arise out of or are based upon the omission or alleged omission to state
     therein a material fact required to be stated therein or necessary to make
     the statements therein not misleading, and will reimburse such holder, such
     Electing Holder, such agent and such underwriter for any legal or other
     expenses reasonably incurred by them in connection with investigating or
     defending any such losses, claims, damages, liabilities or actions as such
     expenses are incurred; provided, however, that the Company shall not be
     liable to any such person in any such case to the extent that any such
     loss, claim, damage or liability arises out of or is based upon an untrue
     statement or alleged untrue statement or omission or alleged omission made
     in such registration statement, or preliminary, final or summary
     prospectus, or amendment or supplement thereto, in reliance upon and in
     conformity with written information furnished to the Company by such person
     expressly for use therein; and provided, further, that the Company shall
     not be liable to any such person with respect to any preliminary prospectus
     to the extent that any such loss, claim, damage or liability of such person
     results from the fact that such person participated in a sale of
     Registrable Securities to a person as to whom it shall be established that
     there was not sent or given, at or prior to the written confirmation of
     such sale, a copy of the final prospectus as then amended or supplemented
     if the Company has previously furnished copies thereof in sufficient
     quantity to such person and sufficiently in advance of the time of delivery
     of such Registrable Securities to allow for distribution by such time of
     delivery and the loss, claim, damage or liability of such person results
     from an untrue statement or omission of a material fact contained in or
     omitted from the preliminary prospectus which was identified in writing at
     such time to person and corrected in the final prospectus as then amended
     or supplemented and each correction would have cured the defect giving rise
     to such loss, claim, damage or liability.

          (b) Indemnification by the Holders and any Agents and Underwriters.
     The Company may require, as a condition to including any Registrable
     Securities in any registration statement filed pursuant to Section 2(b)
     hereof and to entering into any underwriting agreement with respect
     thereto, that the Company shall have received an undertaking reasonably
     satisfactory to it from the Electing Holder of such Registrable Securities
     and from each underwriter named in any such underwriting agreement,
     severally and not jointly, to (i) indemnify and hold harmless the Company,
     and all other holders of Registrable Securities, against any losses,
     claims, damages or liabilities to which the Company or such other holders
     of Registrable Securities may become subject, under the Securities Act or
     otherwise, insofar as such losses, claims, damages or liabilities (or
     actions in respect thereof) arise out of or are based upon an untrue
     statement or alleged untrue statement of a material fact contained in such


                                       17
<PAGE>

     registration statement, or any preliminary, final or summary prospectus
     contained therein or furnished by the Company to any such Electing Holder,
     agent or underwriter, or any amendment or supplement thereto, or arise out
     of or are based upon the omission or alleged omission to state therein a
     material fact required to be stated therein or necessary to make the
     statements therein not misleading, in each case to the extent, but only to
     the extent, that such untrue statement or alleged untrue statement or
     omission or alleged omission was made in reliance upon and in conformity
     with written information furnished to the Company by such Electing Holder
     or underwriter expressly for use therein, and (ii) reimburse the Company
     for any legal or other expenses reasonably incurred by the Company in
     connection with investigating or defending any such losses, claims,
     damages, liabilities or actions as such expenses are incurred; provided,
     however, that no such Electing Holder shall be required to undertake
     liability to any person under this Section 6(b) for any amounts in excess
     of the dollar amount of the proceeds to be received by such Electing Holder
     from the sale of such Electing Holder's Registrable Securities pursuant to
     such registration.

          (c) Notices of Claims, Etc. Promptly after receipt by an indemnified
     party under subsection (a) or (b) above of written notice of the
     commencement of any action, such indemnified party shall, if a claim in
     respect thereof is to be made against an indemnifying party pursuant to the
     indemnification provisions of or contemplated by this Section 6, notify
     such indemnifying party in writing of the commencement of such action; but
     the omission so to notify the indemnifying party shall not relieve it from
     any liability which it may have to any indemnified party otherwise than
     under the indemnification provisions of or contemplated by Section 6(a) or
     6(b) hereof. In case any such action shall be brought against any
     indemnified party and it shall notify an indemnifying party of the
     commencement thereof, such indemnifying party shall be entitled to
     participate therein and, to the extent that it shall wish, jointly with any
     other indemnifying party similarly notified, to assume the defense thereof,
     with counsel reasonably satisfactory to such indemnified party (who shall
     not, except with the consent of the indemnified party, be counsel to the
     indemnifying party), and, after notice from the indemnifying party to such
     indemnified party of its election so to assume the defense thereof, such
     indemnifying party shall not be liable to such indemnified party for any
     legal expenses of other counsel or any other expenses, in each case
     subsequently incurred by such indemnified party, in connection with the
     defense thereof other than reasonable costs of investigation. No
     indemnifying party shall, without the written consent of the indemnified
     party, effect the settlement or compromise of, or consent to the entry of
     any judgment with respect to, any pending or threatened action or claim in
     respect of which indemnification or contribution may be sought hereunder
     (whether or not the indemnified party is an actual or potential party to
     such action or claim) unless such settlement, compromise or judgment (i)
     includes an unconditional release of the indemnified party from all
     liability arising out of such action or claim and (ii) does not include a
     statement as to or an admission of fault, culpability or a failure to act
     by or on behalf of any indemnified party.

          (d) Contribution. If for any reason the indemnification provisions
     contemplated by Section 6(a) or Section 6(b) are unavailable to or
     insufficient to hold harmless an indemnified party in respect of any
     losses, claims, damages or liabilities (or actions in respect thereof)
     referred to therein, then each indemnifying party shall contribute to the
     amount paid or payable by such indemnified party as a result of such
     losses, claims, damages or liabilities (or actions in respect thereof) in
     such proportion as is appropriate to reflect the relative fault of the
     indemnifying party and the indemnified party in connection with the
     statements or omissions which resulted in such losses, claims, damages or
     liabilities (or actions in respect thereof), as well as any other relevant
     equitable considerations. The relative fault of such indemnifying party and
     indemnified party shall be determined by reference to, among other things,
     whether the untrue or alleged untrue statement of a material fact or
     omission or alleged omission to state a material fact relates to
     information supplied by such indemnifying party or by such indemnified
     party, and the parties' relative intent, knowledge, access to information
     and opportunity to correct or prevent such statement or omission. The
     parties hereto agree that it would not be just and equitable if
     contributions pursuant to this Section 6(d) were determined by pro rata
     allocation (even if the holders or any agents or underwriters or all of
     them were treated as one entity for such purpose) or by any other method of
     allocation which does not take account of the equitable considerations
     referred to in this Section 6(d). The amount paid or payable by an
     indemnified party as a result of the losses, claims, damages, or


                                       18
<PAGE>

     liabilities (or actions in respect thereof) referred to above shall be
     deemed to include any legal or other fees or expenses reasonably incurred
     by such indemnified party in connection with investigating or defending any
     such losses, claims, damages, liabilities or actions. Notwithstanding the
     provisions of this Section 6(d), no holder shall be required to contribute
     any amount in excess of the amount by which the dollar amount of the
     proceeds received by such holder from the sale of any Registrable
     Securities (after deducting any fees, discounts and commissions applicable
     thereto) exceeds the amount of any damages which such holder has otherwise
     been required to pay by reason of such untrue or alleged untrue statement
     or omission or alleged omission, and no underwriter shall be required to
     contribute any amount in excess of the amount by which the total price at
     which the Registrable Securities underwritten by it and distributed to the
     public were offered to the public exceeds the amount of any damages which
     such underwriter has otherwise been required to pay by reason of such
     untrue or alleged untrue statement or omission or alleged omission. No
     person guilty of fraudulent misrepresentation (within the meaning of
     Section 11(f) of the Securities Act) shall be entitled to contribution from
     any person who was not guilty of such fraudulent misrepresentation. The
     holders' and any underwriters' obligations in this Section 6(d) to
     contribute shall be several in proportion to the principal amount of
     Registrable Securities registered or underwritten, as the case may be, by
     them and not joint.

          (e) The obligations of the Company under this Section 6 shall be in
     addition to any liability which the Company may otherwise have and shall
     extend, upon the same terms and conditions, to each officer, director and
     partner of each holder, agent and underwriter and each person, if any, who
     controls any holder, agent or underwriter within the meaning of the
     Securities Act; and the obligations of the holders and any agents or
     underwriters contemplated by this Section 6 shall be in addition to any
     liability which the respective holder, agent or underwriter may otherwise
     have and shall extend, upon the same terms and conditions, to each officer
     and director of the Company (including any person who, with his consent, is
     named in any registration statement as about to become a director of the
     Company) and to each person, if any, who controls the Company within the
     meaning of the Securities Act.

         7. Underwritten Offerings.

          (a) Selection of Underwriters. If any of the Registrable Securities
     covered by the Shelf Registration are to be sold pursuant to an
     underwritten offering, the managing underwriter or underwriters thereof
     shall be designated by Electing Holders holding a majority in aggregate
     principal amount of the Registrable Securities to be included in such
     offering, provided that such designated managing underwriter or
     underwriters is or are reasonably acceptable to the Company.


                                       19
<PAGE>


          (b) Participation by Holders. Each holder of Registrable Securities
     hereby agrees with each other such holder that no such holder may
     participate in any underwritten offering hereunder unless such holder (i)
     agrees to sell such holder's Registrable Securities on the basis provided
     in any underwriting arrangements approved by the persons entitled hereunder
     to approve such arrangements and (ii) completes and executes all
     questionnaires, powers of attorney, indemnities, underwriting agreements
     and other documents reasonably required under the terms of such
     underwriting arrangements.

         8. Rule 144.

         The Company covenants to the holders of Registrable Securities that to
the extent it shall be required to do so under the Exchange Act, the Company
shall timely file the reports required to be filed by it under the Exchange Act
or the Securities Act (including the reports under Section 13 and 15(d) of the
Exchange Act referred to in subparagraph (c)(1) of Rule 144 adopted by the
Commission under the Securities Act) and the rules and regulations adopted by
the Commission thereunder, and shall take such further action as any holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such holder to sell Registrable Securities without
registration under the Securities Act within the limitations of the exemption
provided by Rule 144 under the Securities Act, as such Rule may be amended from
time to time, or any similar or successor rule or regulation hereafter adopted
by the Commission. Upon the request of any holder of Registrable Securities in
connection with that holder's sale pursuant to Rule 144, the Company shall
deliver to such holder a written statement as to whether it has complied with
such requirements.

         9. Miscellaneous.

          (a) No Inconsistent Agreements. The Company represents, warrants,
     covenants and agrees that it has not granted, and shall not grant,
     registration rights with respect to Registrable Securities or any other
     securities which would be inconsistent with the terms contained in this
     Exchange and Registration Rights Agreement.

          (b) Specific Performance. The parties hereto acknowledge that there
     would be no adequate remedy at law if the Company fails to perform any of
     its obligations hereunder and that the Purchasers and the holders from time
     to time of the Registrable Securities may be irreparably harmed by any such
     failure, and accordingly agree that the Purchasers and such holders, in
     addition to any other remedy to which they may be entitled at law or in
     equity, shall be entitled to compel specific performance of the obligations
     of the Company under this Exchange and Registration Rights Agreement in
     accordance with the terms and conditions of this Exchange and Registration
     Rights Agreement, in any court of the United States or any State thereof
     having jurisdiction.

          (c) Notices. All notices, requests, claims, demands, waivers and other
     communications hereunder shall be in writing and shall be deemed to have
     been duly given when delivered by hand, if delivered personally or by
     courier, or three days after being deposited in the mail (registered or
     certified mail, postage prepaid, return receipt requested) as follows: if
     to the Company, to it at 1411 East Mission Avenue, Spokane, Washington
     99202, and if to a holder, to the address of such holder set forth in the
     security register or other records of the Company, or to such other address
     as the Company or any such holder may have furnished to the other in


                                       20
<PAGE>

     writing in accordance herewith, except that notices of change of address
     shall be effective only upon receipt.

          (d) Parties in Interest. All the terms and provisions of this Exchange
     and Registration Rights Agreement shall be binding upon, shall inure to the
     benefit of and shall be enforceable by the parties hereto and the holders
     from time to time of the Registrable Securities and the respective
     successors and assigns of the parties hereto and such holders. In the event
     that any transferee of any holder of Registrable Securities shall acquire
     Registrable Securities, in any manner, whether by gift, bequest, purchase,
     operation of law or otherwise, such transferee shall, without any further
     writing or action of any kind, be deemed a beneficiary hereof for all
     purposes and such Registrable Securities shall be held subject to all of
     the terms of this Exchange and Registration Rights Agreement, and by taking
     and holding such Registrable Securities such transferee shall be entitled
     to receive the benefits of, and be conclusively deemed to have agreed to be
     bound by all of the applicable terms and provisions of this Exchange and
     Registration Rights Agreement. If the Company shall so request, any such
     successor, assign or transferee shall agree in writing to acquire and hold
     the Registrable Securities subject to all of the applicable terms hereof.

          (e) Survival. The respective indemnities, agreements, representations,
     warranties and each other provision set forth in this Exchange and
     Registration Rights Agreement or made pursuant hereto shall remain in full
     force and effect regardless of any investigation (or statement as to the
     results thereof) made by or on behalf of any holder of Registrable
     Securities, any director, officer or partner of such holder, any agent or
     underwriter or any director, officer or partner thereof, or any controlling
     person of any of the foregoing, and shall survive delivery of and payment
     for the Registrable Securities pursuant to the Purchase Agreement and the
     transfer and registration of Registrable Securities by such holder and the
     consummation of an Exchange Offer.

          (f) GOVERNING LAW. THIS EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
     SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
     OF NEW YORK.

          (g) Headings. The descriptive headings of the several Sections and
     paragraphs of this Exchange and Registration Rights Agreement are inserted
     for convenience only, do not constitute a part of this Exchange and
     Registration Rights Agreement and shall not affect in any way the meaning
     or interpretation of this Exchange and Registration Rights Agreement.

          (h) Entire Agreement; Amendments. This Exchange and Registration
     Rights Agreement and the other writings referred to herein (including the
     Mortgage and the form of Securities) or delivered pursuant hereto which
     form a part hereof contain the entire understanding of the parties with
     respect to its subject matter. This Exchange and Registration Rights
     Agreement supersedes all prior agreements and understandings between the
     parties with respect to its subject matter. This Exchange and Registration
     Rights Agreement may be amended and the observance of any term of this
     Exchange and Registration Rights Agreement may be waived (either generally
     or in a particular instance and either retroactively or prospectively) only
     by a written instrument duly executed by the Company and the holders of a
     majority in aggregate principal amount of the Registrable Securities at the
     time outstanding. Each holder of any Registrable Securities at the time or
     thereafter outstanding shall be bound by any amendment or waiver effected
     pursuant to this Section 9(h), whether or not any notice, writing or
     marking indicating such amendment or waiver appears on such Registrable
     Securities or is delivered to such holder.


                                       21
<PAGE>

          (i) Inspection. For so long as this Exchange and Registration Rights
     Agreement shall be in effect, this Exchange and Registration Rights
     Agreement and a complete list of the names and addresses of all the holders
     of Registrable Securities shall be made available for inspection and
     copying on any business day by any holder of Registrable Securities for
     proper purposes only (which shall include any purpose related to the rights
     of the holders of Registrable Securities under the Securities, the Mortgage
     and this Agreement) at the offices of the Company at the address thereof
     set forth in Section 9(c) above and at the office of the Trustee under the
     Mortgage.

          (j) Counterparts. This agreement may be executed by the parties in
     counterparts, each of which shall be deemed to be an original, but all such
     respective counterparts shall together constitute one and the same
     instrument.

         If the foregoing is in accordance with your understanding, please sign
and return to us four counterparts hereof, and upon the acceptance hereof by
you, this letter and such acceptance hereof shall constitute a binding agreement
between you and the Company.

                                   Very truly yours,

                                   Avista Corporation


                                   By:   /s/ Christy Burmeister-Smith
                                       ----------------------------------------
                                         Name:  Christy Burmeister-Smith
                                         Title:     Vice President & Controller



Accepted as of the date hereof:

Goldman, Sachs & Co.
BNY Capital Markets, Inc.
Fleet Securities, Inc.
TD Securities (USA) Inc.


By:      /s/ Goldman, Sachs & Co.
       -------------------------------------
                (Goldman, Sachs & Co.)
        On behalf of each of the Purchasers




                                       22
<PAGE>



                                                                       EXHIBIT A

                               AVISTA CORPORATION

                         INSTRUCTION TO DTC PARTICIPANTS
                         -------------------------------

                                (Date of Mailing)

                      URGENT- IMMEDIATE ATTENTION REQUESTED

                         DEADLINE FOR RESPONSE: [DATE]*
                         ------------------------------

The Depository Trust Company ("DTC") has identified you as a DTC Participant
through which beneficial interests in Avista Corporation (the "Company") First
Mortgage Bonds, 7.75% Series due 2007 (the "Securities") are held.

The Company is in the process of registering the Securities under the Securities
Act of 1933 for resale by the beneficial owners thereof. In order to have their
Securities included in the registration statement, beneficial owners must
complete and return the enclosed Notice of Registration Statement and Selling
Securityholder Questionnaire.

It is important that beneficial owners of the Securities receive a copy of the
------------------------------------------------------------------------------
enclosed materials as soon as possible as their rights to have the Securities
--------------------------------------
included in the registration statement depend upon their returning the Notice
and Questionnaire by [DEADLINE FOR RESPONSE]. Please forward a copy of the
enclosed documents to each beneficial owner that holds interests in the
Securities through you. If you require more copies of the enclosed materials or
have any questions pertaining to this matter, please contact Avista Corporation,
1411 East Mission Avenue, Spokane, Washington 99202, Attention:[ ________ ],
Telephone No.[ ____________ ].




----------------------
*    Not less than 28 calendar days from date of mailing.


                                      A-1

<PAGE>



                               AVISTA CORPORATION

                        Notice of Registration Statement
                                       and
                      Selling Securityholder Questionnaire
                      ------------------------------------

                                     (Date)

Reference is hereby made to the Exchange and Registration Rights Agreement (the
"Exchange and Registration Rights Agreement") between Avista Corporation (the
"Company") and the Purchasers named therein. Pursuant to the Exchange and
Registration Rights Agreement, the Company has filed with the United States
Securities and Exchange Commission (the "Commission") a registration statement
on Form [___] (the "Shelf Registration Statement") for the registration and
resale under Rule 415 of the Securities Act of 1933, as amended (the "Securities
Act"), of the Company's First Mortgage Bonds, 7.75% Series due 2007 (the
"Securities"). A copy of the Exchange and Registration Rights Agreement is
attached hereto. All capitalized terms not otherwise defined herein shall have
the meanings ascribed thereto in the Exchange and Registration Rights Agreement.

Each beneficial owner of Registrable Securities (as defined in the Exchange and
Registration Rights Agreement) is entitled to have the Registrable Securities
beneficially owned by it included in the Shelf Registration Statement. In order
to have Registrable Securities included in the Shelf Registration Statement,
this Notice of Registration Statement and Selling Securityholder Questionnaire
("Notice and Questionnaire") must be completed, executed and delivered to the
Company's counsel at the address set forth herein for receipt ON OR BEFORE
[DEADLINE FOR RESPONSE]. Beneficial owners of Registrable Securities who do not
complete, execute and return this Notice and Questionnaire by such date (i) will
not be named as selling securityholders in the Shelf Registration Statement and
(ii) may not use the Prospectus forming a part thereof for resales of
Registrable Securities.

Certain legal consequences arise from being named as a selling securityholder in
the Shelf Registration Statement and related Prospectus. Accordingly, holders
and beneficial owners of Registrable Securities are advised to consult their own
securities law counsel regarding the consequences of being named or not being
named as a selling securityholder in the Shelf Registration Statement and
related Prospectus.



                                      A-2

<PAGE>



                                    ELECTION

The undersigned holder (the "Selling Securityholder") of Registrable Securities
hereby elects to include in the Shelf Registration Statement the Registrable
Securities beneficially owned by it and listed below in Item (3). The
undersigned, by signing and returning this Notice and Questionnaire, agrees to
be bound with respect to such Registrable Securities by the terms and conditions
of this Notice and Questionnaire and the Exchange and Registration Rights
Agreement, including, without limitation, Section 6 of the Exchange and
Registration Rights Agreement, as if the undersigned Selling Securityholder were
an original party thereto.

Upon any sale of Registrable Securities pursuant to the Shelf Registration
Statement, the Selling Securityholder will be required to deliver to the Company
and Trustee the Notice of Transfer set forth in Appendix A to the Prospectus and
as Exhibit B to the Exchange and Registration Rights Agreement.

The Selling Securityholder hereby provides the following information to the
Company and represents and warrants that such information is accurate and
complete:



                                      A-3

<PAGE>



                                  QUESTIONNAIRE

(1)       (a)  Full Legal Name of Selling Securityholder:

               _____________________________________________________________

          (b)  Full Legal Name of Registered Holder (if not the same as in (a)
               above) of Registrable Securities Listed in Item (3) below:

               _____________________________________________________________

          (c)  Full Legal Name of DTC Participant (if applicable and if not the
               same as (b) above) Through Which Registrable Securities Listed in
               Item (3) below are Held:

               _____________________________________________________________

(2)      Address for Notices to Selling Securityholder:

                              _______________________

                              _______________________

                              _______________________

         Telephone:           _______________________

         Fax:                 _______________________

         Contact Person: _______________________

(3)      Beneficial Ownership of Securities:

         Except as set forth below in this Item (3), the undersigned does not
beneficially own any Securities.

          (a)  Principal amount of Registrable Securities beneficially owned:___
               ___________________________-
               CUSIP No(s). of such Registrable Securities: ____________________

          (b)  Principal amount of Securities other than Registrable Securities
               beneficially owned:______________________________________________
               CUSIP No(s). of such other Securities:___________________________

          (c)  Principal amount of Registrable Securities which the undersigned
               wishes to be included in the Shelf Registration Statement:_______
               CUSIP No(s). of such Registrable Securities to be included in the
               Shelf Registration Statement:____________________________________

(4)      Beneficial Ownership of Other Securities of the Company:

         Except as set forth below in this Item (4), the undersigned Selling
         Securityholder is not the beneficial or registered owner of any other
         securities of the Company, other than the Securities listed above in
         Item (3).


                                      A-4


                                       23
<PAGE>


         State any exceptions here:





(5)      Relationships with the Company:

         Except as set forth below, neither the Selling Securityholder nor any
         of its affiliates, officers, directors or principal equity holders (5%
         or more) has held any position or office or has had any other material
         relationship with the Company (or its predecessors or affiliates)
         during the past three years.

         State any exceptions here:





(6)      Plan of Distribution:

         Except as set forth below, the undersigned Selling Securityholder
         intends to distribute the Registrable Securities listed above in Item
         (3) only as follows (if at all): Such Registrable Securities may be
         sold from time to time directly by the undersigned Selling
         Securityholder or, alternatively, through underwriters, broker-dealers
         or agents. Such Registrable Securities may be sold in one or more
         transactions at fixed prices, at prevailing market prices at the time
         of sale, at varying prices determined at the time of sale, or at
         negotiated prices. Such sales may be effected in transactions (which
         may involve crosses or block transactions) (i) on any national
         securities exchange or quotation service on which the Registered
         Securities may be listed or quoted at the time of sale, (ii) in the
         over-the-counter market, (iii) in transactions otherwise than on such
         exchanges or services or in the over-the-counter market, or (iv)
         through the writing of options. In connection with sales of the
         Registrable Securities or otherwise, the Selling Securityholder may
         enter into hedging transactions with broker-dealers, which may in turn
         engage in short sales of the Registrable Securities in the course of
         hedging the positions they assume. The Selling Securityholder may also
         sell Registrable Securities short and deliver Registrable Securities to
         close out such short positions, or loan or pledge Registrable
         Securities to broker-dealers that in turn may sell such securities.

         State any exceptions here:





By signing below, the Selling Securityholder acknowledges that it understands
its obligation to comply, and agrees that it will comply, with the provisions of
the Exchange Act and the rules and regulations thereunder, particularly
Regulation M.

In the event that the Selling Securityholder transfers all or any portion of the
Registrable Securities listed in Item (3) above after the date on which such
information is provided to the Company, the Selling Securityholder agrees to

                                      A-5

<PAGE>

notify the transferee(s) at the time of the transfer of its rights and
obligations under this Notice and Questionnaire and the Exchange and
Registration Rights Agreement.

By signing below, the Selling Securityholder consents to the disclosure of the
information contained herein in its answers to Items (1) through (6) above and
the inclusion of such information in the Shelf Registration Statement and
related Prospectus. The Selling Securityholder understands that such information
will be relied upon by the Company in connection with the preparation of the
Shelf Registration Statement and related Prospectus.

In accordance with the Selling Securityholder's obligation under Section 3(d) of
the Exchange and Registration Rights Agreement to provide such information as
may be required by law for inclusion in the Shelf Registration Statement, the
Selling Securityholder agrees to promptly notify the Company of any inaccuracies
or changes in the information provided herein which may occur subsequent to the
date hereof at any time while the Shelf Registration Statement remains in
effect. All notices hereunder and pursuant to the Exchange and Registration
Rights Agreement shall be made in writing, by hand-delivery, first-class mail,
or air courier guaranteeing overnight delivery as follows:

(i)      To the Company:

                                            ______________________

                                            ______________________

                                            ______________________

                                            ______________________

                                            ______________________

(ii)     With a copy to:

                                            ______________________

                                            ______________________

                                            ______________________

                                            ______________________

                                            ______________________

Once this Notice and Questionnaire is executed by the Selling Securityholder and
received by the Company's counsel, the terms of this Notice and Questionnaire,
and the representations and warranties contained herein, shall be binding on,
shall inure to the benefit of and shall be enforceable by the respective
successors, heirs, personal representatives, and assigns of the Company and the
Selling Securityholder (with respect to the Registrable Securities beneficially
owned by such Selling Securityholder and listed in Item (3) above. This
Agreement shall be governed in all respects by the laws of the State of New
York.

                                      A-6

<PAGE>



IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.

Dated: _______________



     _________________________________________________________________________
     Selling Securityholder
     (Print/type full legal name of beneficial owner of Registrable Securities)



     By: ____________________________________________________________________
     Name:
     Title:


PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON
OR BEFORE[DEADLINE FOR RESPONSE] TO THE COMPANY'S COUNSEL AT:

                                            ______________________

                                            ______________________

                                            ______________________

                                            ______________________

                                            ______________________



                                      A-7

<PAGE>



                                                                       EXHIBIT B

              NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT

Citibank, N.A.
Avista Corporation
c/o Citibank, N.A.
[Address of Trustee]

Attention:  Trust Officer

       Re:  Avista Corporation (the "Company")
            First Mortgage Bonds, 7.75% Series due 2007 (the "Securities")

Dear Sirs:

Please be advised that ____________________________ has transferred
$_______________ aggregate principal amount of the above-referenced Notes
pursuant to an effective Registration Statement on Form [___] (File No. 333-___)
filed by the Company.

We hereby certify that the prospectus delivery requirements, if any, of the
Securities Act of 1933, as amended, have been satisfied and that the above-named
beneficial owner of the Securities is named as a "Selling Holder" in the
Prospectus dated [DATE] or in supplements thereto, and that the aggregate
principal amount of the Securities transferred are the Securities listed in such
Prospectus opposite such owner's name.

Dated:

                                           Very truly yours,


                                                    _________________________
                                                    (Name)

                                           By:      _________________________
                                                    (Authorized Signature)



                                      B-1