Exhibit 4(a)(4)






                              AVA CAPITAL TRUST III



                              AMENDED AND RESTATED

                              DECLARATION OF TRUST



                                      AMONG



                         AVISTA CORPORATION, AS SPONSOR,

            UNION BANK OF CALIFORNIA, N.A., AS INSTITUTIONAL TRUSTEE,

              SUNTRUST DELAWARE TRUST COMPANY, AS DELAWARE TRUSTEE,



                                       AND



                     MALYN K. MALQUIST AND DIANE C. THOREN,

                               AS REGULAR TRUSTEES



                           DATED AS OF ________, 2004

<PAGE>


                                Table of Contents

                                                                            PAGE




ARTICLE I DEFINED TERMS .....................................................  2
            SECTION 1.01.    Definitions ....................................  2

ARTICLE II ESTABLISHMENT OF THE TRUST ....................................... 11
            SECTION 2.01.    Name ........................................... 11
            SECTION 2.02.    Offices of the Trustees; Principal Place
                                 of Business ................................ 11
            SECTION 2.03.    Initial Contribution of Trust Property;
                                 Organizational Expenses .................... 11
            SECTION 2.04.    Issuance of the Preferred Securities ........... 12
            SECTION 2.05.    Subscription and Purchase of Subordinated
                                 Debt Securities; Issuance of the
                                 Common Securities .......................... 12
            SECTION 2.06.    Declaration of Trust ........................... 12
            SECTION 2.07.    Authorization to Enter into Certain
                                 Transactions ............................... 12
            SECTION 2.08.    Assets of Trust ................................ 18
            SECTION 2.09.    Title to Trust Property ........................ 18
            SECTION 2.10.    Mergers and Consolidations of the Trust ........ 18

ARTICLE III PAYMENT ACCOUNT ................................................. 19
            SECTION 3.01.    Payment Account ................................ 19

ARTICLE IV DISTRIBUTIONS; REDEMPTION ........................................ 19
            SECTION 4.01.    Distributions .................................. 19
            SECTION 4.02.    Distribution Rate .............................. 21
            SECTION 4.03.    Distribution Periods ........................... 25
            SECTION 4.04.    Redemption ..................................... 25
            SECTION 4.05.    Subordination of Common Securities and
                                 Distributions .............................. 27
            SECTION 4.06.    Payment Procedures ............................. 27
            SECTION 4.07.    Tax Returns and Reports ........................ 28
            SECTION 4.08.    Exchange ....................................... 28

ARTICLE V TRUST SECURITIES CERTIFICATES ..................................... 29
            SECTION 5.01.    Initial Ownership .............................. 29
            SECTION 5.02.    The Trust Securities Certificates .............. 29

<PAGE>


            SECTION 5.03.    Authentication of Trust Securities
                                 Certificates ............................... 29
            SECTION 5.04.    Registration of Transfer and Exchange of
                                 Preferred Securities Certificates .......... 29
            SECTION 5.05.    Mutilated, Destroyed, Lost or Stolen Trust
                                 Securities Certificates .................... 30
            SECTION 5.06.    Persons Deemed Securityholders ................. 31
            SECTION 5.07.    Access to List of Securityholders' Names
                                 and Addresses .............................. 31
            SECTION 5.08.    Maintenance of Office or Agency ................ 31
            SECTION 5.09.    Appointment of Paying Agent .................... 31
            SECTION 5.10.    Ownership of Common Securities by Sponsor ...... 32
            SECTION 5.11.    Book-Entry Preferred Securities
                                 Certificates; Common Securities
                                 Certificate ................................ 32
            SECTION 5.12.    Notices to Clearing Agency ..................... 33
            SECTION 5.13.    Definitive Preferred Securities
                                 Certificates ............................... 34
            SECTION 5.14.    Rights of Securityholders ...................... 34

ARTICLE VI ACTS OF SECURITYHOLDERS; MEETINGS; VOTING ........................ 34
            SECTION 6.01.    Limitations on Voting Rights ................... 34
            SECTION 6.02.    Notice of Meetings ............................. 38
            SECTION 6.03.    Meetings of Holders of Preferred Securities .... 38
            SECTION 6.04.    Voting Rights .................................. 38
            SECTION 6.05.    Proxies, etc ................................... 38
            SECTION 6.06.    Securityholder Action by Written Consent ....... 39
            SECTION 6.07.    Record Date for Voting and Other Purposes ...... 39
            SECTION 6.08.    Acts of Securityholders ........................ 39
            SECTION 6.09.    Inspection of Records .......................... 40

ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE TRUSTEES .................. 40
            SECTION 7.01.    Representations and Warranties of the
                                 Trustees ................................... 40

ARTICLE VIII THE TRUSTEES ................................................... 41
            SECTION 8.01.    Certain Duties and Responsibilities ............ 41
            SECTION 8.02.    Notice of Defaults ............................. 42
            SECTION 8.03.    Certain Rights of Institutional Trustee ........ 42
            SECTION 8.04.    Not Responsible for Recitals or Issuance
                                 of Securities .............................. 44

<PAGE>


            SECTION 8.05.    May Hold Securities ............................ 44
            SECTION 8.06.    Compensation; Fees; Indemnity .................. 44
            SECTION 8.07.    Trustees Required; Eligibility ................. 45
            SECTION 8.08.    Conflicting Interests .......................... 45
            SECTION 8.09.    Co-Trustees and Separate Trustee ............... 45
            SECTION 8.10.    Resignation and Removal; Appointment of
                                 Successor .................................. 47
            SECTION 8.11.    Acceptance of Appointment by Successor ......... 48
            SECTION 8.12.    Merger, Conversion, Consolidation or
                                 Succession to Business ..................... 48
            SECTION 8.13.    Preferential Collection of Claims Against
                                 Sponsor or Trust ........................... 49
            SECTION 8.14.    Reports by Institutional Trustee ............... 49
            SECTION 8.15.    Reports to the Institutional Trustee ........... 49
            SECTION 8.16.    Evidence of Compliance with Conditions
                                 Precedent .................................. 50
            SECTION 8.17.    Number of Trustees ............................. 50
            SECTION 8.18.    Delegation of Power ............................ 50
            SECTION 8.19.    Enforcement of Rights of Institutional
                                 Trustee by Securityholders ................. 50
            SECTION 8.20.    Delaware Trustee ............................... 51

ARTICLE IX DISSOLUTION AND LIQUIDATION ...................................... 52
            SECTION 9.01.    Dissolution Upon Expiration Date ............... 52
            SECTION 9.02.    Early Termination .............................. 52
            SECTION 9.03.    Termination .................................... 52
            SECTION 9.04.    Liquidation .................................... 52
            SECTION 9.05.    Bankruptcy ..................................... 53
            SECTION 9.06.    Certificate of Cancellation .................... 54

ARTICLE X REMARKETING PROCEDURES ............................................ 54
            SECTION 10.01.   Election to Remarket ........................... 54
            SECTION 10.02.   Notice of Election ............................. 54
            SECTION 10.03.   Determination of Distribution Rate ............. 55

ARTICLE XI MISCELLANEOUS PROVISIONS ......................................... 57
            SECTION 11.01.   Guarantee by the Sponsor ....................... 57
            SECTION 11.02.   Limitation of Rights of Securityholders ........ 57
            SECTION 11.03.   Amendment ...................................... 57
            SECTION 11.04.   Separability ................................... 59
            SECTION 11.05.   Governing Law .................................. 59
            SECTION 11.06.   Successors ..................................... 59
            SECTION 11.07.   Headings ....................................... 59
            SECTION 11.08.   Notice and Demand .............................. 59
            SECTION 11.09.   Agreement Not to Petition ...................... 60
            SECTION 11.10.   Conflict with Trust Indenture Act .............. 60

<PAGE>


                              AVA CAPITAL TRUST III

            Certain Sections of this Declaration of Trust relating to

                         Sections 310 through 318 of the

                          Trust Indenture Act of 1939:

TRUST INDENTURE ACT SECTION                         DECLARATION OF TRUST SECTION
---------------------------                         ----------------------------

Section 310(a)(1) ..................................................8.07
       (a)(2) ......................................................8.07
       (a)(3) ......................................................8.09
       (a)(4) ............................................Not Applicable
       (b) .........................................................8.08
Section 311(a) .....................................................8.13
       (b) .........................................................8.13
Section 312(a) .....................................................5.07
       (b) .........................................................5.07
       (c) .........................................................5.07
Section 313(a) ..................................................8.14(a)
       (a)(4) ...................................................8.14(b)
       (b) ......................................................8.14(b)
       (c) ......................................................8.14(a)
       (d) .............................................8.14(a), 8.14(b)
Section 314(a) .....................................................8.15
       (b) ...............................................Not Applicable
       (c)(1) ................................................8.15, 8.16
       (c)(2) ......................................................8.16
       (c)(3) ......................................................8.16
       (d) ...............................................Not Applicable
       (e) .........................................................8.16
Section 315(a) .....................................................8.01
       (b) ................................................8.02, 8.14(b)
       (c) ......................................................8.01(a)
       (d) ...................................................8.01, 8.03
       (e) ...............................................Not Applicable
Section 316(a) ...........................................Not Applicable
       (a)(1)(A) ...................................................8.19
       (a)(1)(B) ...................................................8.19
       (a)(2) ............................................Not Applicable
       (b) ...............................................Not Applicable
       (c) ...............................................Not Applicable
Section 317(a)(1) ........................................Not Applicable
       (a)(2) ............................................Not Applicable
       (b) .........................................................5.09
Section 318(a) ....................................................11.10

--------------
Note: This Cross Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms and provisions.

<PAGE>


                    AMENDED AND RESTATED DECLARATION OF TRUST

       THIS AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") is made as
of _____, 2004, by and among (i) Avista  Corporation,  a Washington  corporation
(the "Sponsor" or the "Company");  (ii) Union Bank of California,  N.A., banking
corporation  duly  organized and existing under the laws of the United States of
America, as trustee (the "Institutional  Trustee" and, in its separate corporate
capacity  and not in its  capacity  as  Trustee,  the  "Bank");  (iii)  SunTrust
Delaware Trust Company, a banking  corporation duly organized and existing under
the laws of the State of Delaware,  as Delaware trustee (the "Delaware  Trustee"
and, in its  separate  corporate  capacity  and not in its  capacity as Delaware
Trustee, the "Delaware Bank"); (iv) Malyn K. Malquist, an individual,  and Diane
C. Thoren,  an individual,  as regular  trustees  (each a "Regular  Trustee" and
together  the  "Regular  Trustees")  (the  Institutional  Trustee,  the Delaware
Trustee and the Regular  Trustees  referred to collectively as the  "Trustees");
and (v) the several Holders, as hereinafter defined.

                              W I T N E S S E T H :

       WHEREAS, a statutory trust has been declared and established  pursuant to
the Delaware  Statutory  Trust Act by entering into that certain  Declaration of
Trust,  dated as of  November  4,  1996  (the  "1996  Declaration"),  and by the
execution and filing by the Trustees with the Secretary of State of the State of
Delaware of the Certificate of Trust, dated November 4, 1996;

       WHEREAS, pursuant to the Removal and Appointment of Trustee and Amendment
of the Declaration of Trust of the Trust, entered into by the Sponsor, the Bank,
the  Delaware  Bank and a  Regular  Trustee,  dated as of _____,  2004,  (i) the
Sponsor removed Wilmington Trust Company as a trustee of the Trust and appointed
the Bank and the  Delaware  Bank as  trustees  of the  Trust;  (ii) the  Sponsor
removed  Lawrence  J.  Pierce as a trustee of the Trust and  appointed  Malyn K.
Malquist  and  Diane C.  Thoren as  trustees  of the  Trust;  and (iii) the 1996
Declaration was amended by changing the name of the Trust from Washington  Water
Power Capital III to AVA Capital Trust III. The 1996 Declaration,  as amended by
the Removal and Appointment of Trustee and Amendment of the Declaration of Trust
is referred to as the "Original Declaration."

       WHEREAS, _____ executed and filed the Amended and Restated Certificate of
Trust of the  Trust  with the  Secretary  of State of the State of  Delaware  on
_____, 2004;

       WHEREAS,  the parties  hereto  desire to amend and  restate the  Original
Declaration  in its  entirety as set forth  herein to provide  for,  among other
things,  (i) the  acquisition by the Trust from the Sponsor of all of the right,
title and interest in the Subordinated Debt Securities; (ii) the issuance of the
Common  Securities by the Trust to the Sponsor;  and (iii) the issuance and sale
of the Preferred Securities by the Trust pursuant to the Underwriting Agreement.

       NOW THEREFORE,  in  consideration  of the agreements and  obligations set
forth herein and for other good and valuable  consideration,  the sufficiency of
which is hereby  acknowledged,  each party, for the benefit of the other parties
and for the  benefit of the  Securityholders,  hereby  amends and  restates  the
Original Declaration in its entirety and agrees as follows:

<PAGE>


                                   ARTICLE I
                                  DEFINED TERMS

       SECTION 1.01.        DEFINITIONS

       For all  purposes  of this  Declaration,  except as  otherwise  expressly
provided or unless the context otherwise requires:

              (a)    the  terms  defined  in  this  Article  have  the  meanings
assigned to them in this Article and include the plural as well as the singular;

              (b)    all other  terms used  herein that are defined in the Trust
Indenture  Act,  either  directly or by  reference  therein,  have the  meanings
assigned to them therein;

              (c)    unless the context otherwise requires,  any reference to an
"Article" or a "Section" refers to an Article or a Section,  as the case may be,
of this Declaration; and

              (d)    the words  "herein,"  "hereof"  and  "hereunder"  and other
words of  similar  import  refer to this  Declaration  as a whole and not to any
particular Article, Section or other subdivision.

       "Act" has the meaning specified in Section 6.08.

       "Affiliate"  of any specified  Person means any other Person  directly or
indirectly  controlling  or  controlled  by or under  direct or indirect  common
control  with  such  specified  Person.  For the  purposes  of this  definition,
"control"  when used with  respect to any  specified  Person  means the power to
direct the  management  and  policies of such  Person,  directly or  indirectly,
whether  through the ownership of voting  securities,  by contract or otherwise;
and the terms  "controlling" and "controlled"  have meanings  correlative to the
foregoing.

       "Bank" has the meaning specified in the preamble to this Declaration.

       "Bankruptcy Event" means, with respect to any Person:

                     (i)    the  entry  of a decree  or order by a court  having
              jurisdiction  in the  premises  judging  such Person a bankrupt or
              insolvent,  or  approving  as  properly  filed a petition  seeking
              reorganization,  arrangement, adjudication or composition of or in
              respect of such Person under federal  bankruptcy  law or any other
              applicable  federal  or  state  law,  or  appointing  a  receiver,
              liquidator,  assignee,  trustee,  sequestrator  or  other  similar
              official  of  such  Person  or of  any  substantial  part  of  its
              property,  or  ordering  the  winding  up or  liquidation  of  its
              affairs,  and the continuance of such decree or order unstayed and
              in effect for a period of 60 consecutive days; or

                     (ii)   the  institution by such Person of proceedings to be
              adjudicated a bankrupt or  insolvent,  or the consent by it to the
              institution of bankruptcy or insolvency proceedings against it, or
              the filing by it of a petition or answer or


                                       2
<PAGE>


              consent seeking  reorganization or relief under federal bankruptcy
              law or any other  applicable  federal or state law, or the consent
              by it to the filing of such  petition or to the  appointment  of a
              receiver,  liquidator,  assignee, trustee, sequestrator or similar
              official  of  such  Person  or of  any  substantial  part  of  its
              property,  or the making by it of an assignment for the benefit of
              creditors,  or the  admission by it in writing of its inability to
              pay its debts  generally  as they  become  due,  or the  taking of
              action by such Person in furtherance of any such action.

       "Bankruptcy Laws" has the meaning specified in Section 11.09.

       "Board  Resolution"  means  a  copy  of a  resolution  certified  by  the
Secretary or an Assistant  Secretary of the Sponsor to have been duly adopted by
the Sponsor's Board of Directors or a duly authorized  committee  thereof and to
be in full force and effect on the date of such certification,  and delivered to
the Trustees.

       "Book-Entry   Preferred   Securities   Certificates"  means  certificates
representing Preferred Securities issued in global, fully registered form to the
Clearing Agency as described in Section 5.11.

       "Business Day" means a day other than (i) a Saturday or a Sunday;  (ii) a
day on which banks in New York,  New York are  authorized or obligated by law or
executive  order  to  remain  closed;  or  (iii) a day on  which  the  Indenture
Trustee's corporate trust office is closed for business.

       "Calculation  Agent"  means  Union Bank of  California,  N.A.,  acting as
calculation agent, or its successor appointed by the Company and the Trust.

       "Calculation Agent Agreement" means the agreement among the Company,  the
Trust and Union Bank of  California,  N.A., as  calculation  agent,  dated as of
_____, 2004.

       "Certificate  Depository  Agreement" means the agreement among the Trust,
the  Institutional  Trustee and The  Depository  Trust  Company,  as the initial
Clearing  Agency,  dated  _____,  2004,  relating  to the  Preferred  Securities
Certificates.

       "Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act. The  Depository  Trust Company will
be the initial Clearing Agency.

       "Clearing  Agency  Participant"  means  a  broker,  dealer,  bank,  other
financial  institution  or other  Person  for whom from time to time a  Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.

       "Code" means the Internal Revenue Code of 1986, as amended.

       "Commission" means the Securities and Exchange  Commission,  as from time
to time  constituted,  created  under the Exchange Act, or, if at any time after
the execution of this  instrument such Commission is not existing and performing
the duties  now  assigned  to it under the Trust  Indenture  Act,  then the body
performing such duties at such time.

                                       3
<PAGE>


       "Common Security" means an undivided beneficial interest in the assets of
the Trust having a Liquidation  Amount of $1,000 and having the rights  provided
therefor in this Declaration, including the right to receive Distributions and a
Liquidation Distribution as provided herein.

       "Common Securities  Certificate" means a certificate evidencing ownership
of a Common  Security  or  Securities,  substantially  in the form  attached  as
Exhibit C.

       "Company" means Avista Corporation.

       "Declaration"  means this Amended and Restated  Declaration of Trust,  as
the same  may be  modified,  amended  or  supplemented  in  accordance  with the
applicable provisions hereof, including all exhibits hereto,  including, for all
purposes of this Amended and Restated Declaration of Trust and any modification,
amendment or  supplement,  the  provisions  of the Trust  Indenture Act that are
deemed to be a part of and govern this Amended and Restated Declaration of Trust
and any such modification, amendment or supplement, respectively.

       "Definitive  Preferred Securities  Certificates" means either or both (as
the  context  requires)  of (i)  Preferred  Securities  Certificates  issued  in
certificated,  fully  registered  form as provided  in Section  5.11(a) and (ii)
Preferred Securities Certificates issued in certificated,  fully registered form
as provided in Section 5.13.

       "Delaware  Bank"  has  the  meaning  specified  in the  preamble  to this
Declaration.

       "Delaware  Statutory  Trust  Act"  means  Chapter  38 of  Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from time
to time.

       "Delaware  Trustee"  means the  commercial  bank or trust  company or any
other Person identified as the "Delaware  Trustee" and has the meaning specified
in the preamble to this  Declaration  solely in its capacity as Delaware Trustee
of the Trust and not in its individual capacity, or its successor in interest in
such capacity, or any successor Delaware Trustee appointed as herein provided.

       "Designated  CMT Maturity Index" means the original period to maturity of
the U.S.  Treasury  securities  (10 years)  with  respect  to which the  10-year
Treasury CMT will be calculated.

       "Distribution  Payment  Date" means each day on which  Distributions  are
payable determined based on the prevailing Distribution Rate.

       "Distribution Period" means each semiannual period in a Fixed Rate Period
and each quarterly period in a Floating Rate Period for which  Distributions are
payable.

       "Distribution  Rate" means the rate at which Distributions will accrue in
respect of any Distribution  Period, as determined pursuant to the terms of this
Declaration, whether by Remarketing or otherwise.

                                       4
<PAGE>


       "Distributions"  means amounts payable in respect of the Trust Securities
as provided in Section 4.01.

       "Election Date" means a date that is no later than the fifth Business Day
prior to the proposed Remarketing Date.

       "Event of Default"  means any one of the following  events  (whatever the
reason  for  such  Event of  Default  and  whether  it  shall  be  voluntary  or
involuntary  or be effected  by  operation  of law or pursuant to any  judgment,
decree  or  order  of  any  court  or  any  order,  rule  or  regulation  of any
administrative or governmental body):

              (a)    the occurrence of an Indenture Event of Default;

              (b)    default  by the Trust in the  payment  of any  Distribution
when it becomes due and payable,  and  continuation of such default for a period
of 60 days;

              (c)    default by the Trust in the payment of any Redemption Price
of any Trust Security when it becomes due and payable;

              (d)    default  in the  performance,  or breach,  in any  material
respect,  of any  covenant  or  warranty  of the  Institutional  Trustee and the
Delaware  Trustee  in this  Declaration  (other  than a covenant  or  warranty a
default  in the  performance  of which or the  breach of which is dealt  with in
clause (b) or (c) above) and continuation of such default or breach for a period
of 60 days after there has been give, by  registered  or certified  mail, to the
appropriate trustees and the Sponsor by the Holders of at least 33% in aggregate
Liquidation  Amount of the Outstanding  Preferred  Securities,  a written notice
specifying  such  default or breach and  requiring it to be remedied and stating
that such notice is a "Notice of Default" hereunder;

              (e)    the occurrence of any Bankruptcy  Event with respect to the
Institutional Trustee or all or substantially all of its property if a successor
Institutional Trustee has not been appointed within a period of 90 days thereof;
or

              (f)    the occurrence of any Bankruptcy  Event with respect to the
Trust.

       "Exchange Act" means the Securities Exchange Act of 1934, as amended.

       "Expense  Agreement"  means the Agreement as to Expenses and  Liabilities
between the Company and the Trust, substantially in the form attached as Exhibit
B, as amended from time to time.

       "Extension Period" has the meaning specified in Section 4.01(d).

       "Federal  Reserve  Board"  means the Board of  Governors  of the  Federal
Reserve System.

       "Fixed  Rate" means the  Distribution  Rate during a Fixed Rate Period as
determined by a Remarketing.

                                       5
<PAGE>


       "Fixed Rate Period"  means the Initial  Fixed Rate Period and each period
set by the Company and the Regular  Trustees  during a Remarketing for which the
Fixed Rate determined in such Remarketing will apply; provided,  however, that a
Fixed Rate Period must be for a duration of at least six months,  may not extend
beyond the stated maturity of the  Subordinated  Debt Securities and may not end
on a day other than a day immediately preceding a Distribution Payment Date.

       "Floating Rate" means the Distribution Rate during a Floating Rate Period
calculated pursuant to Section 4.02(e).

       "Floating Rate  Determination  Date" means the second London Business Day
immediately  preceding the first day of the relevant  Distribution Period in the
Floating Rate Period.

       "Floating  Rate Period"  means any period during which a Floating Rate is
in effect.

       "Guarantee" means the Guarantee  Agreement  executed and delivered by the
Company   and  Union  Bank  of   California,   N.A.,   as   Guarantee   Trustee,
contemporaneously  with the execution and delivery of this Declaration,  for the
benefit of the Holders of the Trust Securities, as amended from time to time.

       "Indenture  Event of  Default"  means an "Event of Default" as defined in
the Subordinated Indenture.

       "Indenture  Redemption Date" means  "Redemption  Date," as defined in the
Subordinated Indenture.

       "Indenture Trustee" means the trustee under the Subordinated Indenture.

       "Initial Distribution Rate" means _____% per annum.

       "Initial Fixed Rate Period" means the Issue Date through _____, 2009.

       "Institutional  Trustee"  means  the  commercial  bank or  trust  company
identified as the  "Institutional  Trustee" in the preamble to this  Declaration
solely in its  capacity  as  Institutional  Trustee  of the Trust and not in its
individual  capacity,  or its  successor  in interest in such  capacity,  or any
successor "Institutional Trustee" as herein provided.

       "Investment  Company Act" means the  Investment  Company Act of 1940,  as
amended.

       "Issue Date" means the date of the delivery of the Trust Securities.

       "Lien" means any lien, pledge,  charge,  encumbrance,  mortgage,  deed of
trust, adverse ownership interest, hypothecation,  assignment, security interest
or preference,  priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.

       "Like Amount"  means (i) Trust  Securities  having a  Liquidation  Amount
equal  to  the  principal   amount  of   Subordinated   Debt  Securities  to  be
contemporaneously redeemed or repaid

                                       6
<PAGE>


in accordance with the Subordinated  Indenture and the proceeds of which will be
used to pay the Redemption Price of such Trust Securities and (ii)  Subordinated
Debt Securities having a principal amount equal to the Liquidation Amount of the
Trust  Securities of the Holder to whom such  Subordinated  Debt  Securities are
distributed.

       "Liquidation  Amount"  means  the  stated  amount  of  $1,000  per  Trust
Security.

       "Liquidation  Date" means the date on which  Subordinated Debt Securities
are to be  distributed  to  Holders of Trust  Securities  in  connection  with a
dissolution and liquidation of the Trust pursuant to Section 9.04.

       "Liquidation Distribution" has the meaning specified in Section 9.05.

       "London  Business  Day" means a day that is a  Business  Day and a day on
which dealings in deposits in U.S.  dollars are  transacted,  or with respect to
any future date are expected to be transacted, in the London interbank market.

       "Maturity  Date  of  the  Subordinated  Debt  Securities"  means  "Stated
Maturity" as defined in the Subordinated Indenture.

       "Majority in Liquidation Amount of the Preferred Securities" or "Majority
in Liquidation Amount of the Common Securities" means, except as provided by the
Trust Indenture Act, Preferred Securities or Common Securities,  as the case may
be,  representing more than 50% of the aggregate  Liquidation Amount of all then
Outstanding Preferred Securities or Common Securities, as the case may be.

       "Officers' Certificate" means a certificate signed by the Chairman of the
Board,  the President or a Vice  President,  and by the Treasurer,  an Assistant
Treasurer,  the  Secretary  or an  Assistant  Secretary,  of  the  Sponsor,  and
delivered to the appropriate  Trustee.  One of the officers signing an Officers'
Certificate  given  pursuant to Section 8.16 shall be the  principal  executive,
financial  or  accounting  officer  of the  Sponsor.  An  Officers'  Certificate
delivered with respect to compliance  with a condition or covenant  provided for
in this Declaration shall include:

              (a)    a  statement  that  each  officer   signing  the  Officers'
Certificate  has read the covenant or  condition  and the  definitions  relating
thereto;

              (b)    a  brief   statement   of  the  nature  and  scope  of  the
examination  or  investigation  undertaken  by each  officer  in  rendering  the
Officers' Certificate;

              (c)    a   statement   that  each  such   officer  has  made  such
examination or  investigation  as is necessary,  in such officer's  opinion,  to
express an informed  opinion as to whether or not such covenant or condition has
been complied with; and

              (d)    a  statement  as to  whether,  in the  opinion of each such
officer, such condition or covenant has been complied with.

       "Opinion  of  Counsel"  means a written  opinion of  counsel,  who may be
counsel for the Trust,  the Trustees or the Sponsor,  but not an employee of the
Trust or the Trustees, and who

                                       7
<PAGE>


shall be reasonably  acceptable  to the  Institutional  Trustee.  Any Opinion of
Counsel  pertaining to federal income tax matters may rely on published  rulings
of the Internal Revenue Service.

       "Original Declaration of Trust" has the meaning specified in the recitals
to this Declaration.

       "Outstanding",  when used with respect to Preferred Securities, means, as
of the date of determination, all Preferred Securities theretofore authenticated
and delivered under this Declaration, except:

                     (i)    Preferred  Securities  theretofore  canceled  by the
              Regular   Trustees  or  delivered  to  the  Regular  Trustees  for
              cancellation;

                     (ii)   Preferred Securities for whose payment or redemption
              money in the necessary amount has been theretofore  deposited with
              the  Institutional  Trustee or any Paying Agent for the Holders of
              such  Preferred  Securities;   provided  that  if  such  Preferred
              Securities are to be redeemed,  notice of such redemption has been
              duly given pursuant to this Declaration; and

                     (iii)  Preferred  Securities  in exchange for or in lieu of
              which  other  Preferred  Securities  have been  authenticated  and
              delivered pursuant to this Declaration;

provided,  however,  that in  determining  whether the Holders of the  requisite
Liquidation  Amount  of the  Outstanding  Preferred  Securities  have  given any
request, demand, authorization,  direction, notice, consent or waiver hereunder,
Preferred  Securities owned by the Sponsor, the Holder of the Common Securities,
any Trustee or any Affiliate of the Sponsor or any Trustee shall be  disregarded
and deemed not to be  Outstanding,  except that (a) in  determining  whether any
Trustee  shall  be  protected  in  relying  upon  any  such   request,   demand,
authorization,  direction,  notice, consent or waiver, only Preferred Securities
which such  Trustee  knows to be so owned  shall be so  disregarded  and (b) the
foregoing  shall  not apply at any time  when all of the  outstanding  Preferred
Securities are owned by the Sponsor, the Holder of the Common Securities, one or
more Trustees  and/or any such  Affiliate.  Preferred  Securities so owned which
have been  pledged in good faith may be regarded as  Outstanding  if the pledgee
establishes to the  satisfaction of the Regular  Trustees the pledgee's right so
to act with respect to such Preferred Securities and that the pledgee is not the
Sponsor or any Affiliate of the Sponsor.

       "Owner"  means each Person who is the  beneficial  owner of a  Book-Entry
Preferred  Securities  Certificate  as  reflected in the records of the Clearing
Agency or, if a Clearing Agency  Participant is not the Owner, then as reflected
in the records of a Person  maintaining  an account  with such  Clearing  Agency
(directly or indirectly, in accordance with the rules of such Clearing Agency).

       "Paying  Agent"  means any  paying  agent or  co-paying  agent  appointed
pursuant to Section 5.09 and shall initially be the Institutional Trustee.

                                       8
<PAGE>


       "Payment Account" means a segregated non-interest-bearing corporate trust
account  maintained  by  the  Institutional  Trustee  for  the  benefit  of  the
Securityholders  in which all amounts paid in respect of the  Subordinated  Debt
Securities  will be held and from  which the  Institutional  Trustee  shall make
payments to the Securityholders in accordance with Section 4.01.

       "Person" means an individual,  corporation,  partnership,  joint venture,
trust, limited liability company or corporation,  unincorporated organization or
government or any agency or political subdivision thereof.

       "Preferred  Securities   Certificate"  means  a  certificate   evidencing
ownership  of a Preferred  Security  or  Securities,  substantially  in the form
attached as Exhibit A.

       "Preferred Security" means an undivided beneficial interest in the assets
of the Trust having a Liquidation  Amount of $1,000 and having  rights  provided
therefor in this Declaration, including the right to receive Distributions and a
Liquidation Distribution as provided herein.

       "Record  Date"  means  the  opening  of  business  on  the  Business  Day
immediately preceding the relevant Distribution Payment Date.

       "Redemption  Date"  means,  with  respect  to any  Trust  Security  to be
redeemed, the date fixed for such redemption by or pursuant to this Declaration;
provided  that  each  Indenture  Redemption  Date and the  Maturity  Date of the
Subordinated  Debt  Securities  shall be a Redemption  Date for a Like Amount of
Trust Securities.

       "Redemption  Price" means,  with respect to any date fixed for redemption
of any Trust  Security,  the  Liquidation  Amount of such Trust  Security,  plus
accrued and unpaid Distributions to such date.

       "Relevant Trustee" shall have the meaning specified in Section 8.10.

       "Remarketing" means the conduct by which a Fixed Rate shall be determined
in accordance with the Remarketing Procedures.

       "Remarketing  Agent"  means  Lehman  Brothers  Inc.,  its  successors  or
assigns,  or such other  remarketing  agent  appointed  to such  capacity by the
Company and the Regular Trustees.

       "Remarketing  Agreement" means the agreement among the Company, the Trust
and Lehman Brothers Inc., as remarketing agent, dated as of _____, 2004.

       "Remarketing  Date"  means  any  Business  Day no later  than  the  third
Business Day prior to any Remarketing Settlement Date.

       "Remarketing Procedures" means those procedures set forth in Article X.

       "Remarketing  Settlement Date" means, to the extent  applicable,  (i) the
first Business Day of the next  Distribution  Period following the expiration of
the Initial  Fixed Rate Period and any  subsequent  Fixed Rate Period;  (ii) any
Distribution Payment Date during a Floating Rate Period;

                                       9
<PAGE>


or  (iii)  any  Distribution  Payment  Date  during  a time in  which  Preferred
Securities are redeemable in a Fixed Rate Period subsequent to the Initial Fixed
Rate Period.

       "Regular Trustee" means each of the individuals  identified as a "Regular
Trustee"  in the  preamble to this  Declaration  solely in their  capacities  as
Regular  Trustees of the Trust formed and  continued  hereunder and not in their
individual  capacities,  or such  trustee's  successor(s)  in  interest  in such
capacity, or any successor "Regular Trustee" appointed as herein provided.

       "Securities Register" and "Securities Registrar" are described in Section
5.04.

       "Securityholder"  or  "Holder"  means  a  Person  in  whose  name a Trust
Security or Securities is registered in the  Securities  Register;  and any such
Person who is a beneficial  owner  within the meaning of the Delaware  Statutory
Trust Act.

       "Sponsor"  means Avista  Corporation,  in its capacity as "Sponsor" under
this Declaration.

       "Subordinated  Debt  Securities"  means the $______  aggregate  principal
amount of the Sponsor's  Subordinated Debt Securities due _____, issued pursuant
to the Subordinated Indenture.

       "Subordinated  Indenture" means the Indenture,  dated as of _____,  2004,
between the  Sponsor and the  Indenture  Trustee,  as the same may be  modified,
amended or supplemented in accordance with the applicable provisions thereof.

       "Telerate  Page  3750"  means  the  display  designated  on page  3750 on
MoneyLine  Telerate  (or such  other  page as may  replace  the 3750 page on the
service  or such other  service  as may be  nominated  by the  British  Bankers'
Association  for the purpose of displaying  London  interbank  offered rates for
U.S. dollar deposits).

       "Telerate  Page 7051" means the  display on  MoneyLine  Telerate  (or any
successor service),  on such page (or any other page as may replace such page on
that service),  for the purpose of displaying  Treasury  Constant  Maturities as
reported in H.15(519).

       "10-year Treasury CMT" has the meaning set forth in Section 4.02(e).

       "30-year Treasury CMT" has the meaning set forth in Section 4.02(e).

       "3-month LIBOR Rate" has the meaning set forth in Section 4.02(e).

       "Trust"  means  the  Delaware   statutory  trust  continued   hereby  and
identified on the cover page to this Declaration.

       "Trustees" means the Persons  identified as "Trustees" in the preamble to
this Declaration  solely in their capacities as Trustees of the Trust and not in
their individual capacities, or their successor in interest in such capacity, or
any successor trustee appointed as herein provided.

       "Trust  Indenture Act" means the Trust  Indenture Act of 1939 as in force
at the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act

                                       10
<PAGE>


of 1939 is amended after such date,  "Trust  Indenture Act" means, to the extent
required by any such amendment, the Trust Indenture Act of 1939 as so amended.

       "Trust  Property" means (i) the Subordinated  Debt  Securities;  (ii) any
cash on deposit in, or owing to, the Payment Account; and (iii) all proceeds and
rights in respect of the  foregoing  and any other  property  and assets for the
time being held or deemed to be held by the  Institutional  Trustee  pursuant to
this Declaration.

       "Trust  Securities  Certificate"  means any one of the Common  Securities
Certificates or the Preferred Securities Certificates.

       "Trust Security" means any one of the Common  Securities or the Preferred
Securities.

       "Underwriting  Agreement" means the Underwriting Agreement,  dated _____,
2004, among the Trust, the Sponsor and the underwriters named therein.

                                   ARTICLE II
                           ESTABLISHMENT OF THE TRUST

       SECTION 2.01.        NAME

       The Trust continued  hereby shall be known as "AVA Capital Trust III", in
which name the Trustees may conduct the business of the Trust,  make and execute
contracts and other  instruments on behalf of the Trust and sue and be sued. The
Regular  Trustees  may change the name of the Trust from time to time  following
written notice to the Holders.

       SECTION 2.02.        OFFICES OF THE TRUSTEES; PRINCIPAL PLACE OF BUSINESS

       The  address of the  Institutional  Trustee is 475 Sansome  Street,  12th
Floor,  San  Francisco,  California  94111,  or at  such  other  address  as the
Institutional Trustee may designate by written notice to the Securityholders and
the Sponsor.  The  principal  place of business of the  Delaware  Trustee is c/o
_____,  _____, or at such other address in Delaware as the Delaware  Trustee may
designate by notice to the Sponsor.  The address of the Regular  Trustees is c/o
Avista  Corporation,  1411  East  Mission  Avenue,  Spokane,  Washington  99202,
Attention: Treasurer. The principal place of business of the Trust is c/o Avista
Corporation,  1411 East Mission Avenue,  Spokane,  Washington 99202. The Sponsor
may change the  principal  place of  business of the Trust at any time by giving
notice thereof to the Trustees.

       SECTION 2.03.        INITIAL CONTRIBUTION OF TRUST PROPERTY;
ORGANIZATIONAL EXPENSES

         The Trust  received  from the Sponsor in  connection  with the Original
Declaration of the sum of $10, which constituted the initial Trust Property. The
Sponsor, as obligor of the Subordinated Debt Securities, shall pay all costs and
expenses of the Trust as they arise  (including,  but not limited to,  costs and
expenses  relating to the  organization  of the Trust,  issuance and sale of the
Preferred  Securities,  the fees and expenses (including reasonable counsel fees
and expenses) of the Trustees) or shall, upon request of the Trustees,  promptly
reimburse the

                                       11
<PAGE>


Trustees for any such expenses  paid by the Trustees.  The Sponsor shall make no
claim upon the Trust Property for the payment of such expenses.

       SECTION 2.04.        ISSUANCE OF THE PREFERRED SECURITIES

       The Regular Trustees,  on behalf of the Trust,  shall execute and deliver
to the underwriters  named in the Underwriting  Agreement  Preferred  Securities
Certificates,  registered  in the name of the  nominee of the  initial  Clearing
Agency, in an aggregate amount of _____ Preferred Securities having an aggregate
Liquidation Amount of $_____, against receipt of the aggregate purchase price of
such  Preferred  Securities of $_____,  which amount the Regular  Trustees shall
promptly deliver to the Institutional Trustee.

       SECTION 2.05.        SUBSCRIPTION AND PURCHASE OF SUBORDINATED DEBT
SECURITIES; ISSUANCE OF THE COMMON SECURITIES

       The Regular Trustees,  on behalf of the Trust,  shall execute and deliver
to the Sponsor  Common  Securities  Certificates,  registered in the name of the
Sponsor,  in an aggregate amount of ____ Common  Securities  having an aggregate
Liquidation Amount of $____ against payment by the Sponsor of such amount, which
amount   shall   be   promptly   delivered   to   the   Institutional   Trustee.
Contemporaneously therewith, the Regular Trustees, on behalf of the Trust, shall
subscribe  to and  purchase  from  the  Sponsor  Subordinated  Debt  Securities,
registered in the name of the Institutional  Trustee, on behalf of the Trust and
the Holders,  and having an aggregate  principal amount equal to $_____, and, in
satisfaction of the purchase price for such  Subordinated  Debt Securities,  the
Institutional  Trustee, on behalf of the Trust, shall deliver to the Sponsor the
sum of $_____.

       SECTION 2.06.        DECLARATION OF TRUST

       The  exclusive  purposes and  functions of the Trust are (i) to issue and
sell the Trust  Securities  and use the  proceeds  from such sale to acquire the
Subordinated Debt Securities, (ii) to maintain its status as a grantor trust for
federal income tax purposes; (iii) to make Distributions,  and (iv) to engage in
those activities necessary,  incidental,  appropriate or convenient thereto. The
Sponsor hereby  confirms each of the Bank, the Delaware Bank,  Malyn K. Malquist
and Diane C. Thoren as trustees of the Trust, to have all the rights, powers and
duties to the extent set forth herein. The Institutional Trustee hereby declares
that it will hold the Trust Property in trust upon and subject to the conditions
set forth  herein  for the  benefit  of the Trust and the  Securityholders.  The
Trustees  shall have all  rights,  powers  and  duties  set forth  herein and in
accordance with applicable law with respect to accomplishing the purposes of the
Trust.  The Delaware  Trustee shall not be entitled to exercise any powers,  nor
shall the Delaware Trustee have any of the duties and  responsibilities,  of the
Institutional  Trustee or the Regular  Trustees set forth  herein.  The Delaware
Trustee  shall  be one of the  Trustees  for the  sole and  limited  purpose  of
fulfilling the requirements of the Delaware Statutory Trust Act.

       SECTION 2.07.        AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS

       The Trustees  shall conduct the affairs of the Trust in  accordance  with
the terms of this Declaration. Subject to the limitations set forth in paragraph
(c) of this Section,  and in

                                       12
<PAGE>


accordance  with the following  paragraphs  (a) and (b), the Trustees shall have
the authority to enter into all  transactions  and agreements  determined by the
Trustees to be  appropriate  in exercising  the  authority,  express or implied,
otherwise  granted to the Trustees  under this  Declaration,  and to perform all
acts in furtherance thereof, including without limitation, the following:

              (a)    As among the Trustees, the Regular Trustees,  acting singly
or jointly,  shall have the exclusive power, duty and authority to act on behalf
of the Trust with respect to the following matters:

                     (i)    to acquire the Subordinated Debt Securities with the
              proceeds of the sale of the Trust Securities;  provided,  however,
              the  Regular  Trustees  shall  cause  legal  title  to  all of the
              Subordinated Debt Securities to be vested in, and the Subordinated
              Debt  Securities  to be  held  of  record  in  the  name  of,  the
              Institutional  Trustee for the benefit of the Trust and Holders of
              the Trust Securities;

                     (ii)   to give the  Sponsor and the  Institutional  Trustee
              prompt  written  notice of the occurrence of any Special Event (as
              defined in the Subordinated Indenture) and to take any ministerial
              actions  in  connection  therewith;  provided,  that  the  Regular
              Trustees  shall  consult  with the Sponsor  and the  Institutional
              Trustee before taking or refraining to take any ministerial action
              in relation to a Special Event;

                     (iii)  to  establish  a record  date  with  respect  to all
              actions  to be taken  hereunder  that  require  a  record  date be
              established, including for the purposes of ss. 316(c) of the Trust
              Indenture Act and with respect to  Distributions,  voting  rights,
              redemptions,  and  exchanges,  and to issue  relevant  notices  to
              Holders of the Trust  Securities as to such actions and applicable
              record dates;

                     (iv)   to  bring  or  defend,  pay,  collect,   compromise,
              arbitrate,  resort to legal action,  or otherwise adjust claims or
              demands of or against the Trust ("Legal Action"),  unless pursuant
              to Section  2.07(b)(v),  the Institional  Trustee has the power to
              bring such Legal Action;

                     (v)    to employ or otherwise  engage  employees and agents
              (who may be  designated  as officers  with  titles) and  managers,
              contractors,   advisors,   and   consultants  and  pay  reasonable
              compensation for such services;

                     (vi)   to cause  the  Trust  to  comply  with  the  Trust's
              obligations under the Trust Indenture Act;

                     (vii)  to give the certificate to the Institutional Trustee
              required  by ss.  314(a)(4)  of the  Trust  Indenture  Act,  which
              certificate may be executed by any Regular Trustee;

                                       13
<PAGE>


                     (viii) to take all actions  and perform  such duties as may
              be required of the Regular Trustees  pursuant to the terms of this
              Declaration,  the Remarketing  Agreement and the Calculation Agent
              Agreement;

                     (ix)   to  take  all  action  that  may  be   necessary  or
              appropriate  for  the  preservation  and the  continuation  of the
              Trust's valid  existence,  rights,  franchises and privileges as a
              statutory  trust  under the laws of the State of  Delaware  and of
              each other  jurisdiction  in which such  existence is necessary to
              protect  the  limited  liability  of  the  Holders  of  the  Trust
              Securities or to enable the Trust to effect the purposes for which
              the Trust has been created;

                     (x)    to take all action necessary to cause all applicable
              tax returns and tax  information  reports  that are required to be
              filed with  respect to the Trust to be duly  prepared and filed by
              the Regular Trustees, on behalf of the Trust;

                     (xi)   to  execute  and  deliver  the Trust  Securities  on
              behalf of the Trust;

                     (xii)  to cause the Trust to enter  into,  and to  execute,
              deliver  and  perform  on behalf  of the  Trust,  the  Remarketing
              Agreement,  the Calculation Agent Agreement, the Expense Agreement
              and the Certificate Depository Agreement and such other agreements
              as  may  be  necessary  or  desirable  in   connection   with  the
              consummation hereof;

                     (xiii) to  assist  in the  registration  of  the  Preferred
              Securities under the Securities Act of 1933, as amended, and under
              state  securities or blue sky laws, and the  qualification of this
              Declaration as a trust indenture under the Trust Indenture Act;

                     (xiv)  to assist in the listing of the Preferred Securities
              upon such  securities  exchange or exchanges,  if necessary and as
              shall be determined by the Sponsor,  and the  registration  of the
              Preferred  Securities  under the Exchange Act, and the preparation
              and filing of all periodic and other  reports and other  documents
              pursuant to the foregoing;

                     (xv)   to send notices  (other than notices of default) and
              other   information   regarding  the  Trust   Securities  and  the
              Subordinated Debt Securities to the  Securityholders in accordance
              with  this   Declaration,   the  Remarketing   Agreement  and  the
              Calculation Agent Agreement;

                     (xvi)  to appoint a Paying Agent (subject to Section 5.09),
              authenticating  agent,  Remarketing  Agent,  Calculation Agent and
              Securities Registrar in accordance with this Declaration;

                     (xvii) to elect to remarket the  Preferred  Securities  and
              determine the length of any Fixed Rate Period in  accordance  with
              this  Declaration,  including  redemption  dates applicable to any
              Fixed Rate Period;

                                       14
<PAGE>


                     (xviii) to register transfers  of the Trust  Securities  in
              accordance with this Declaration;

                     (xix)  to  assist  in,  to  the  extent  provided  in  this
              Declaration,  the winding up of the affairs of and  termination of
              the  Trust  and  the  preparation,  execution  and  filing  of the
              certificate  of  cancellation  with the  Secretary of State of the
              State of Delaware;  and (xx) to take any action  incidental to the
              foregoing as the Regular  Trustees may from time to time determine
              is necessary, appropriate,  convenient or advisable to protect and
              conserve the Trust Property for the benefit of the Securityholders
              (without  consideration  of the  effect of any such  action on any
              particular Securityholder).

              (b)    As among the Trustees, the Institutional Trustee shall have
the  exclusive  power,  duty and  authority  to act on behalf of the Trust  with
respect to the following matters:

                     (i)    engage in such  ministerial  activities  as shall be
              necessary or appropriate to effect  promptly the redemption of the
              Trust  Securities to the extent the  Subordinated  Debt Securities
              are redeemed, mature or otherwise repaid;

                     (ii)   upon a distribution of Subordinated  Debt Securities
              in accordance with the terms of this  Declaration,  engage in such
              ministerial  activities  as shall be necessary or  appropriate  to
              effect promptly the  distribution of Subordinated  Debt Securities
              to  Holders  of Trust  Securities  pursuant  to the  terms of this
              Declaration;

                     (iii)  subject  to the terms  hereof,  exercise  all of the
              rights, powers and privileges of a holder of the Subordinated Debt
              Securities  under the  Subordinated  Indenture and, if an Event of
              Default  occurs and is  continuing,  shall enforce for the benefit
              of,  and  subject  to the  rights  of,  the  Holders  of the Trust
              Securities,   its  rights  as  holder  of  the  Subordinated  Debt
              Securities under the Subordinated Indenture;

                     (iv)   take all actions  and perform  such duties as may be
              specifically required of the Institutional Trustee pursuant to the
              terms of this Declaration;

                     (v)    take any Legal Action  specifically  required of the
              Institutional  Trustee  pursuant to the terms of this  Declaration
              which arises out of or in  connection  with an Event of Default or
              the  Institutional  Trustee's  duties and  obligations  under this
              Declaration,  the  Delaware  Statutory  Trust  Act  or  the  Trust
              Indenture Act;

                     (vi)   the  establishment  and  maintenance  of the Payment
              Account;

                     (vii)  the  receipt of and  holding  of legal  title to the
              Subordinated Debt Securities as described herein;

                                       15
<PAGE>


                     (viii) the collection of interest,  principal and any other
              payments made in respect of the  Subordinated  Debt  Securities in
              the Payment Account;

                     (ix)   the    distribution   of   amounts   owed   to   the
              Securityholders in respect of the Trust Securities;

                     (x)    the   sending  of  notices  of  default   and  other
              information  regarding the Trust  Securities and the  Subordinated
              Debt  Securities to the  Securityholders  in accordance  with this
              Declaration;

                     (xi)   the distribution of the Trust Property in accordance
              with the terms of this Declaration;

                     (xii)  as provided in this  Declaration,  the winding up of
              the affairs of and termination of the Trust; and

                     (xiii) the taking of any action incidental to the foregoing
              as the  Institutional  Trustee may from time to time  determine is
              necessary,  appropriate,  convenient  or  advisable to protect and
              conserve the Trust Property for the benefit of the Securityholders
              (without  consideration  of the  effect of any such  action on any
              particular Securityholder).

              (c)    So long as this  Declaration  remains in effect,  the Trust
(or the  Trustees  acting on  behalf  of the  Trust)  shall  not  undertake  any
business,  activities  or  transaction  except as expressly  provided  herein or
contemplated  hereby.  In  particular,  the  Trustees  shall not (i) acquire any
investments or engage in any activities not authorized by this Declaration; (ii)
sell, assign, transfer, exchange, pledge, set-off or otherwise dispose of any of
the Trust Property or interests therein, including to Securityholders, except as
expressly  provided herein;  (iii) take any action that would cause the Trust to
fail or cease to qualify as a grantor trust for United States federal income tax
purposes; (iv) incur any indebtedness for borrowed money; (v) take or consent to
any action  that  would  result in the  placement  of a Lien on any of the Trust
Property;  (vi) issue any securities other than the Trust  Securities;  or (vii)
have any power to, or agree to any action by the Sponsor  that  would,  vary the
investment (within the meaning of Treasury Regulation Section  301.7701-4(c)) of
the Trust or of the  Securityholders.  The Trustees  shall defend all claims and
demands  of all  Persons  at any  time  claiming  any  Lien on any of the  Trust
Property  adverse to the interest of the Trust or the  Securityholders  in their
capacity as Securityholders.

              (d)    In  connection  with the  issue  and sale of the  Preferred
Securities,  the Sponsor, as obligor of the Subordinated Debt Securities,  shall
have the right and responsibility to assist the Trust with respect to, or effect
on behalf of the Trust,  the following  (and any actions taken by the Sponsor in
furtherance of the following  prior to the date of this  Declaration  are hereby
ratified and confirmed in all respects):

                     (i)    to  prepare   for  filing  by  the  Trust  with  the
              Commission,  and  execute on behalf of the Trust,  a  registration
              statement  on Form  S-3  under  the  Securities

                                       16
<PAGE>


              Act of 1933, as amended, in relation to the Preferred  Securities,
              including any amendments thereto;

                     (ii)   to determine the states in which to take appropriate
              action  to  qualify  or  register  for  sale  all or  part  of the
              Preferred  Securities and to do any and all such acts,  other than
              actions  which  must be taken by or on  behalf of the  Trust,  and
              advise the  Trustees  of  actions  they must take on behalf of the
              Trust,  and prepare for  execution  and filing any documents to be
              executed and filed by the Trust or on behalf of the Trust,  as the
              Sponsor  deems  necessary or advisable in order to comply with the
              applicable laws of any such States;

                     (iii)  to prepare  for filing by the Trust,  and execute on
              behalf of the Trust, an application to the New York Stock Exchange
              or any other national stock exchange or the Nasdaq National Market
              for listing upon notice of issuance of any  Preferred  Securities,
              if applicable;

                     (iv)   to prepare  for filing by the Trust,  and execute on
              behalf of the Trust, with the Commission a registration  statement
              on  Form  8-A  relating  to  the  registration  of  the  Preferred
              Securities under Section 12(b) of the Exchange Act,  including any
              amendments thereto;

                     (v)    to negotiate  the terms of, and execute on behalf of
              the Trust,  the Underwriting  Agreement  providing for the sale of
              the Preferred  Securities and to execute,  deliver and perform the
              Underwriting Agreement on behalf of the Trust;

                     (vi)   to negotiate  the terms of, and execute on behalf of
              the Trust, the Remarketing  Agreement  providing for the retention
              of  the  Remarketing   Agent  and  the  establishment  of  certain
              procedures relating to Remarketings;

                     (vii)  to negotiate  the terms of, and execute on behalf of
              the Trust,  the  Calculation  Agent  Agreement  providing  for the
              retention of the Calculation Agent;

                     (viii) to elect to remarket the  Preferred  Securities  and
              determine the length of any Fixed Rate Period in  accordance  with
              this  Declaration,  including  redemption  dates applicable to any
              Fixed Rate Period; and

                     (ix)   to take any  other  actions  necessary,  incidental,
              appropriate  or  convenient  to  carry  out  any of the  foregoing
              activities.

              (e)    Notwithstanding   anything  herein  to  the  contrary,  the
Regular Trustees are authorized and directed to conduct the affairs of the Trust
and to  operate  the  Trust  so that  the  Trust  will  not be  deemed  to be an
"investment  company" required to be registered under the Investment Company Act
of 1940,  as amended,  or taxed as other than a grantor  trust for United States
federal income tax purposes and so that the Subordinated Debt Securities will be
treated as  indebtedness  of the Sponsor for United  States  federal  income tax
purposes.  In  this  connection,  the  Sponsor  and  the  Regular  Trustees  are
authorized to take any action, not inconsistent with

                                       17
<PAGE>


applicable law, the Certificate of Trust or this  Declaration,  that each of the
Sponsor and the Regular Trustees determines in its discretion to be necessary or
desirable  for such  purposes,  as long as such action does not  materially  and
adversely affect the interests of the Holders of the Preferred Securities.

       SECTION 2.08.        ASSETS OF TRUST

       The assets of the Trust shall consist of the Trust Property.

       SECTION 2.09.        TITLE TO TRUST PROPERTY

       Legal  title to all  Trust  Property  shall be vested at all times in the
Institutional  Trustee  (in  its  capacity  as  such)  and  shall  be  held  and
administered by the Institutional Trustee for the benefit of the Securityholders
and the Trust in accordance with this Declaration. The right, title and interest
of the  Institutional  Trustee to the  Subordinated  Debt Securities  shall vest
automatically  in each Person who may  thereafter be appointed as  Institutional
Trustee in accordance with the terms hereof. Such vesting and cessation of title
shall be effective whether or not conveyancing  documents have been executed and
delivered.

       SECTION 2.10.        MERGERS AND CONSOLIDATIONS OF THE TRUST

       The Trust  may not merge  with or into,  consolidate,  amalgamate,  or be
replaced  by,  or  convey,   transfer  or  lease  its   properties   and  assets
substantially  as an entirety  to, any entity,  except  pursuant to this Section
2.10 or Section 9.04. Upon the approval of the Holders of the Common Securities,
and  without  the  consent of the  Holders of the  Preferred  Securities  or the
Trustees,  the Trust  may merge  with or into,  consolidate,  amalgamate,  or be
replaced by or convey, transfer or lease its properties and assets substantially
as an  entirety  to a trust  organized  as such  under  the  laws of any  state;
provided,  however,  that (i) such successor entity either (a) expressly assumes
all of the obligations of the Trust with respect to the Preferred  Securities or
(b)  substitutes  for  the  Preferred   Securities   other   securities   having
substantially  the  same  terms  as the  Preferred  Securities  (the  "Successor
Preferred  Securities") so long as the Successor  Preferred  Securities have the
same  priority as the Preferred  Securities  with respect to  distributions  and
payments upon  liquidation,  redemption  and  otherwise;  (ii) a trustee of such
successor  entity  possessing  the same  powers and duties as the  Institutional
Trustee  is  appointed  to hold the  Subordinated  Debt  Securities;  (iii) such
merger, consolidation,  amalgamation, replacement, conveyance, transfer or lease
does not cause the  Preferred  Securities  (including  any  Successor  Preferred
Securities) to be downgraded by any  nationally  recognized  statistical  rating
organization;   (iv)  the  Preferred   Securities  or  any  Successor  Preferred
Securities are listed or quoted, or any Successor  Preferred  Securities will be
listed or quoted upon  notification  of  issuance,  on any  national  securities
exchange or with another  organization  on which  Preferred  Securities are then
listed or quoted;  (v) such merger,  consolidation,  amalgamation,  replacement,

                                       18
<PAGE>


conveyance,  transfer or lease does not adversely affect the rights, preferences
and  privileges  of the  holders  of the  Preferred  Securities  (including  any
Successor  Preferred  Securities) in any material  respect;  (vi) such successor
entity has a purpose  substantially  identical to that of the Trust; (vii) prior
to such merger, consolidation,  amalgamation,  replacement, conveyance, transfer
or lease,  the  Institutional  Trustee has  received an Opinion of Counsel  from
independent  counsel  experienced  in such  matters to the effect  that (a) such
merger, consolidation,  amalgamation, replacement, conveyance, transfer or lease
does not adversely affect the rights,  preferences and privileges of the holders
of the Preferred  Securities  (including any Successor Preferred  Securities) in
any  material   respect,   and  (b)   following   such  merger,   consolidation,
amalgamation,  replacement, conveyance, transfer or lease, neither the Trust nor
such successor  entity will be required to register as an  "investment  company"
under the  Investment  Company  Act;  and  (viii) the  Sponsor or any  permitted
transferee to whom it has transferred the Common  Securities  hereunder owns all
of the common securities of such successor entity and guarantees the obligations
of such successor  entity under the Successor  Preferred  Securities at least to
the extent provided by the Guarantee.  Notwithstanding the foregoing,  the Trust
shall not,  except with the consent of Holders of 100% in aggregate  Liquidation
Amount of the Preferred Securities, consolidate, amalgamate, merge with or into,
or be  replaced  by or  convey,  transfer  or lease its  properties  and  assets
substantially  as an entirety to, any other entity or permit any other entity to
consolidate,   amalgamate,   merge   with  or  into,   or  replace  it  if  such
consolidation,  amalgamation, merger, replacement, conveyance, transfer or lease
would  cause the Trust or the  successor  entity to be  taxable  other than as a
grantor  trust for United  States  federal  income tax  purposes.  Any merger or
similar  agreement  shall be executed  by the Regular  Trustees on behalf of the
Trust.

                                  ARTICLE III
                                 PAYMENT ACCOUNT

       SECTION 3.01.        PAYMENT ACCOUNT

              (a)    On or prior to the Issue Date,  the  Institutional  Trustee
shall establish the Payment Account.  The Institutional  Trustee and an agent of
the  Institutional  Trustee  shall  have  exclusive  control  and sole  right of
withdrawal  with  respect  to the  Payment  Account  for the  purpose  of making
deposits in and  withdrawals  from the Payment  Account in accordance  with this
Declaration.  All monies and other property  deposited or held from time to time
in the Payment Account shall be held by the Institutional Trustee in the Payment
Account for the exclusive benefit of the Securityholders and for distribution as
herein  provided,  including (and subject to) any priority of payments  provided
for herein.

              (b)    The  Institutional  Trustee  shall  deposit in the  Payment
Account,  promptly upon  receipt,  all payments of principal or interest on, and
any other payments or proceeds with respect to, the Subordinated Debt Securities
and any amounts paid to the  Institutional  Trustee  pursuant to the  Guarantee.
Amounts held in the Payment  Account shall not be invested by the  Institutional
Trustee pending distribution thereof.

                                   ARTICLE IV
                            DISTRIBUTIONS; REDEMPTION

       SECTION 4.01.        DISTRIBUTIONS

              (a)    Distributions  shall  accrue  from the Issue Date until the
Redemption  Date.  During the Initial Fixed Rate Period,  Distributions  will be
payable  semiannually in arrears on _____ and _____ of each year,  commencing on
_____, 2004. During any Fixed Rate Period,

                                       19
<PAGE>


other  than  the  Initial  Fixed  Rate  Period,  Distributions  will be  payable
semiannually in arrears on the first day of the first month that begins at least
six months  after the first day of the Fixed Rate Period and on the first day of
each six month period thereafter  during such Fixed Rate Period.  Any Fixed Rate
Period  may  not  end  on a  day  other  than  a  day  immediately  preceding  a
Distribution  Payment Date. During any Floating Rate Period,  Distributions will
be payable quarterly in arrears on _____,  _____,  _____ and _____ of each year.

              (b)    If any  Distribution  Payment  Date with respect to a Fixed
Rate  Period is not a  Business  Day,  Distributions  will be  payable,  without
interest,  on the immediately  succeeding  Business Day, with the same force and
effect as if payment was made on the date such  payment was  originally  payable
(and  without the accrual of any  additional  amount of  Distributions).  If any
Distribution  Payment  Date with  respect  to a  Floating  Rate  Period is not a
Business Day, then Distributions  will be payable on the immediately  succeeding
Business Day and  Distributions  shall accrue to the actual payment date (except
for a Distribution Payment Date that coincides with the Redemption Date).

              (c)    The amount of  Distributions  payable on each  Distribution
Payment Date  relating to a Fixed Rate Period will be computed on the basis of a
360-day year of twelve 30-day  months.  The amount of  Distributions  payable on
each  Distribution  Payment  Date  relating  to a Floating  Rate  Period will be
computed  by  multiplying  the per annum  Distribution  Rate in effect  for such
Distribution  Period by a fraction,  the  numerator  of which will be the actual
number of days in such Distribution  Period (or portion thereof)  (determined by
including  the  first  day  thereof  and  excluding  the last  thereof)  and the
denominator  of which  will be 360,  and  multiplying  the rate so  obtained  by
$1,000.

              (d)    The Company has the right under the Subordinated  Indenture
to defer payments of interest on the  Subordinated  Debt Securities by extending
the interest  period from time to time on the  Subordinated  Debt Securities (an
"Extension  Period")  which,  if  exercised,  would defer  Distributions  on the
Preferred   Securities  during  any  Extension  Period.   The  payment  of  such
Distributions,  together with any interest  thereon,  will be distributed to the
Holders of Trust Securities as received at the end of any Extension Period.

              (e)    Distributions  on the  Trust  Securities  shall be made and
shall be deemed  payable on each  Distribution  Payment  Date only to the extent
that the  Trust  has  available  funds on hand in the  Payment  Account  for the
payment of such Distributions.

              (f)    Distributions on the Trust Securities on each  Distribution
Date shall be payable to the Holders  thereof as they  appear on the  Securities
Register for the Trust Securities on the relevant Record Date.

       Each Trust Security upon  registration  of transfer of or in exchange for
or in lieu of any other Trust Security  shall carry the rights of  Distributions
accrued  and  unpaid,  and to  accrue,  which were  carried by such other  Trust
Security.

                                       20
<PAGE>


       SECTION 4.02.        DISTRIBUTION RATE

              (a)    During the Initial Fixed Rate Period, the Distribution Rate
shall be the Initial Distribution Rate.

              (b)    Prior to the  expiration  of the Initial  Fixed Rate Period
and any subsequent  Fixed Rate Period,  prior to any  Distribution  Payment Date
with respect to a Floating Rate Period or prior to any Distribution Payment Date
in a Fixed  Rate  Period  during a time in which the  Preferred  Securities  are
redeemable in such Fixed Rate Period,  the Company and the Regular Trustees will
have the option to remarket the  Preferred  Securities  to establish a new Fixed
Rate for a new Fixed Rate Period (to be in effect  after the  expiration  of the
then current Distribution Period). If the Company and the Regular Trustees elect
to  conduct  a  Remarketing  of the  Preferred  Securities  for the  purpose  of
establishing a new Fixed Rate for a new Fixed Rate Period,  the Trust shall, not
less than 20 nor more than 35 Business Days prior to the related  Election Date,
notify in writing the Clearing Agency, the Institutional  Trustee, the Indenture
Trustee,  the  Calculation  Agent and the  Remarketing  Agent.  If the Preferred
Securities  are not  issued in global,  fully  registered  form to the  Clearing
Agency or its nominee,  such notice shall be delivered to the Owners  instead of
the Clearing  Agency.  Such notice  shall  describe  the  Remarketing  and shall
indicate  the  length  of the  proposed  new Fixed  Rate  Period,  the  proposed
Remarketing  Date and any redemption  provisions that will apply during such new
Fixed Rate Period.  The Company and the Regular Trustees shall have the right to
terminate a Remarketing at any time prior to the Election Date by written notice
of such termination to the Clearing Agency (or the Owners,  as applicable),  the
Remarketing  Agent, the  Institutional  Trustee,  the Indenture  Trustee and the
Calculation Agent.

              (c)    If the  Remarketing  Agent has  determined  that it will be
able to  remarket  all  Preferred  Securities  tendered or deemed  tendered  for
purchase  in the  Remarketing  at a Fixed  Rate  and at a price  of  $1,000  per
Preferred  Security,  on any Remarketing Date, the Distribution Rate for the new
Fixed Rate Period will be the Fixed Rate  determined by the  Remarketing  Agent,
which will be the rate per annum (rounded to the nearest  one-thousandth (0.001)
of one percent per annum) which the Remarketing  Agent  determines,  in its sole
judgment,  to be the lowest Fixed Rate per annum that will enable it to remarket
all Preferred  Securities tendered or deemed tendered for Remarketing at a price
of $1,000 per Preferred Security.

              (d)    If the  Company  and the  Regular  Trustees do not elect to
remarket the Preferred Securities pursuant to Section 4.02(b) or have terminated
a  Remarketing  or if the  Remarketing  Agent is unable to  remarket  all of the
Preferred  Securities tendered or deemed tendered for a purchase price of $1,000
per Preferred Security pursuant to the Remarketing Procedures,  the Distribution
Rate for the next  Distribution  Period shall be the  Floating  Rate and the new
Distribution Period shall be a Floating Rate Period.

              (e)    The Calculation  Agent shall calculate the Floating Rate on
the Floating Rate Determination Date as follows:

       Except as provided below,  the Floating Rate for any Floating Rate Period
for the Preferred  Securities  will be equal to the Adjustable  Rate (as defined
below) plus ____%.  The "Adjustable  Rate" for any  Distribution  Period will be
equal to the highest of the 3-month LIBOR


                                       21
<PAGE>


Rate,  the 10-year  Treasury  CMT and the 30-year  Treasury CMT (each as defined
below  and  collectively   referred  to  as  the  "Benchmark  Rates")  for  such
Distribution  Period  during the  Floating  Rate  Period.  In the event that the
Calculation Agent determines in good faith that for any reason:

                     (1)    any one of the Benchmark  Rates cannot be determined
                            for any Distribution Period, the Adjustable Rate for
                            such Distribution Period will be equal to the higher
                            of whichever two of such rates can be so determined;

                     (2)    only one of the  Benchmark  Rates can be  determined
                            for any Distribution Period, the Adjustable Rate for
                            such Distribution  Period will be equal to whichever
                            such rate can be so determined; or

                     (3)    none of the Benchmark  Rates can be  determined  for
                            any Distribution Period, the Adjustable Rate for the
                            preceding  Distribution Period will be continued for
                            such Distribution Period.

       The  "3-month  LIBOR  Rate"  means,  for each  Distribution  Period,  the
arithmetic  average of the two most recent  weekly  quotes for deposits for U.S.
Dollars having a term of three months, as published on the first Business Day of
each week immediately  preceding the Distribution  Period for which the Floating
Rate is being  determined.  Such quotes will be taken from Telerate Page 3750 at
approximately 11:00 a.m. London time on the relevant date. If such rate does not
appear on  Telerate  Page 3750 on the  Floating  Rate  Determination  Date,  the
3-month  LIBOR  Rate will be the  arithmetic  mean of the rates  quoted by three
major banks in New York City selected by the Calculation Agent, at approximately
11:00 a.m.,  New York City time,  on the Floating  Rate  Determination  Date for
loans in U.S. Dollars to leading European banks for a period of three months.

       "The 10-year  Treasury CMT" means the rate  determined in accordance with
the following provisions:

                     (1)    With respect to any Floating Rate Determination Date
                            and the Distribution  Period that begins immediately
                            thereafter,  the 10-year Treasury CMT means the rate
                            displayed on Telerate  Page 7051 under the caption "
                            ...Treasury Constant  Maturities...  Federal Reserve
                            Board  Release H.15  ...Mondays  Approximately  3:45
                            P.M.",  under  the  column  for the  Designated  CMT
                            Maturity Index (as defined below).

                     (2)    If such rate is no longer  displayed on the relevant
                            page, or is not so displayed by 3:00 P.M.,  New York
                            City  time,   on  the   applicable   Floating   Rate
                            Determination  Date,  then the 10-year  Treasury CMT
                            for such  Floating Rate  Determination  Date will be
                            such  treasury   constant   maturity  rate  for  the
                            Designated  CMT  Maturity  Index as is  published in
                            H.15(519).

                                       22
<PAGE>


                     (3)    If such rate is no longer  displayed on the relevant
                            page,  or if not  published  by 3:00 P.M.,  New York
                            City  time,   on  the   applicable   Floating   Rate
                            Determination  Date,  then the 10-year  Treasury CMT
                            for such  Floating Rate  Determination  Date will be
                            such  constant   maturity   treasury  rate  for  the
                            Designated  CMT  Maturity  Index  (or  other  United
                            States Treasury rate for the Designated CMT Maturity
                            Index)   for   the    applicable    Floating    Rate
                            Determination Date with respect to such Distribution
                            reset  date as may then be  published  by either the
                            Board of Governors of the Federal  Reserve System or
                            the United  States  Department  of the Treasury that
                            the Calculation Agent determines to be comparable to
                            the rate  formerly  displayed on the  Telerate  Page
                            7051 and published in H.15(519).

                     (4)    If such  information  is not  provided by 3:00 P.M.,
                            New York City time, on the applicable  Floating Rate
                            Determination  Date,  then the 10-year  Treasury CMT
                            for such  Floating Rate  Determination  Date will be
                            calculated  by the  Calculation  Agent and will be a
                            yield to maturity,  based on the arithmetic  mean of
                            the   secondary   market   offered   rates   as   of
                            approximately 3:30 P.M., New York City time, on such
                            Floating Rate Determination Date reported, according
                            to their written  records,  by three leading primary
                            United States government  securities  dealers in The
                            City  of  New  York  (each,  a  "Reference  Dealer")
                            selected  by the  Calculation  Agent (from five such
                            Reference  Dealers selected by the Calculation Agent
                            and  eliminating  the highest  quotation (or, in the
                            event  of  equality,  one of the  highest)  and  the
                            lowest quotation (or, in the event of equality,  one
                            of the lowest)), for the most recently issued direct
                            noncallable  fixed  rate  obligations  of the United
                            States  ("Treasury  Debentures")  with  an  original
                            maturity  of   approximately   the   Designated  CMT
                            Maturity  Index and a remaining  term to maturity of
                            not less than such  Designated  CMT  Maturity  Index
                            minus one year.

                     (5)    If the  Calculation  Agent is unable to obtain three
                            such  Treasury  Debentures  quotations,  the 10-year
                            Treasury  CMT  for  the  applicable   Floating  Rate
                            Determination   Date  will  be   calculated  by  the
                            Calculation  Agent  and will be a yield to  maturity
                            based on the arithmetic mean of the secondary market
                            offered  rates as of  approximately  3:30 P.M.,  New
                            York City  time,  on the  applicable  Floating  Rate
                            Determination Date of three Reference Dealers in The
                            City of New York (from five such  Reference  Dealers
                            selected


                                       23
<PAGE>


                            by the Calculation Agent and eliminating the highest
                            quotation (or, in the event of equality,  one of the
                            highest) and the lowest  quotation (or, in the event
                            of  equality,  one of  the  lowest)),  for  Treasury
                            Debentures  with an original  maturity of the number
                            of years that is the next highest to the  Designated
                            CMT Maturity  Index and a remaining term to maturity
                            closest to the  Designated CMT Maturity Index and in
                            an amount of at least $100 million.

                     (6)    If three or four  (and not  five) of such  Reference
                            Dealers  are  quoting as set forth  above,  then the
                            10-year Treasury CMT will be based on the arithmetic
                            mean of the offered  rates  obtained and neither the
                            highest   nor   lowest  of  such   quotes   will  be
                            eliminated;  provided,  however,  that if fewer than
                            three Reference  Dealers selected by the Calculation
                            Agent are  quoting as set forth  above,  the 10-year
                            Treasury CMT with respect to the applicable Floating
                            Rate  Determination  Date will  remain  the  10-year
                            Treasury CMT for the immediately  preceding interest
                            period. If two Treasury  Debentures with an original
                            maturity  as  described  in  the  second   preceding
                            sentence have  remaining  terms to maturity  equally
                            close to the Designated CMT Maturity Index, then the
                            quotes for the Treasury  Debentures with the shorter
                            remaining term to maturity will be used.

       The "30-year Treasury CMT" has the meaning specified under the definition
of 10-year  Treasury CMT,  except that the Designated CMT Maturity Index for the
30-year Treasury CMT shall be 30 years.

       The 3-month LIBOR Rate, the 10-year Treasury CMT and the 30-year Treasury
CMT shall each be rounded to the nearest hundredth of a percent.

       The  Floating  Rate with  respect to each  Floating  Rate  Period will be
calculated as promptly as practicable by the Calculation  Agent according to the
appropriate method described above.

              (f)    If the Company elects to defer interest during a Fixed Rate
Period,  Distributions will continue to accrue and be compounded semiannually at
the Fixed  Rate until the  expiration  of the Fixed  Rate  Period.  Prior to the
expiration of such Fixed Rate Period and any subsequent Fixed Rate Period during
the Extension Period,  the Company and the Regular Trustees will have the option
to remarket the Preferred Securities for a new Fixed Rate Period (to take effect
upon expiration of such Fixed Rate Period).  If the Company and the Trust do not
remarket the Preferred Securities, the Floating Rate during the Extension Period
shall be  determined  as provided  herein,  but shall not be less than the Fixed
Rate for the Fixed  Rate  Period  just  ended.  If the  Company  elects to defer
interest  during a Floating Rate Period,  Distributions  will continue to accrue
and be compounded  quarterly at the applicable  Floating Rate,  reset quarterly,
subject to the right of the  Company and the  Regular  Trustees to remarket  the
Preferred

                                       24
<PAGE>


Securities  prior to any  Distribution  Payment Date in order to establish a new
Fixed Rate for a new Fixed Rate Period in accordance  with this Section 4.02 and
the Remarketing Procedures.

       SECTION 4.03.        DISTRIBUTION PERIODS

       In  accordance  with Section  4.02 and the  Remarketing  Procedures,  the
Company  and the  Regular  Trustees,  on behalf of the Trust  may,  prior to the
expiration  of the  Initial  Fixed  Rate  Period and any  subsequent  Fixed Rate
Period,  prior to any Distribution  Payment Date in a Fixed Rate Period during a
time in which the Preferred  Securities are redeemable in such Fixed Rate Period
or prior to any  Distribution  Payment  Date with  respect  to a  Floating  Rate
Period, elect to remarket the Preferred Securities to establish a new Fixed Rate
for a new Fixed Rate Period (to be in effect after the then current Distribution
Period).  A Fixed Rate Period must be for a duration of at least six months, may
not extend beyond the stated  maturity of the  Subordinated  Debt Securities and
may not end on a day  other  than a day  immediately  preceding  a  Distribution
Payment  Date.  If a new  Fixed  Rate for a new  Fixed  Rate  Period is set in a
Remarketing,  a new Fixed Rate Period shall commence following the expiration of
the then current  Distribution  Period. If a new Fixed Rate for a new Fixed Rate
Period is not set, for any reason, including after the expiration of the Initial
Fixed Rate Period, in accordance with the terms of this Declaration,  a Floating
Rate  Period and the  Floating  Rate reset  quarterly  shall be in effect if and
until the Company and the Regular Trustees remarket the Preferred Securities and
set a new Fixed Rate for a new Fixed Rate Period in accordance with Section 4.02
and the Remarketing Procedures.

       SECTION 4.04.        REDEMPTION

              (a)    On each Indenture  Redemption Date and the Maturity Date of
the Subordinated  Debt  Securities,  the Trust will be required to redeem a Like
Amount of Trust Securities at the Redemption Price.

              (b)    Notice of  redemption  shall be given by the  Institutional
Trustee by first class mail,  postage prepaid,  mailed not less than 30 nor more
than 60 days prior to the Redemption Date to each Holder of Trust  Securities to
be redeemed, at such Holder's address appearing in the Securities Register.  All
notices of redemption shall state:

                     (i)    the Redemption Date;

                     (ii)   the Redemption Price;

                     (iii)  the CUSIP number or CUSIP  numbers of the  Preferred
              Securities affected;

                     (iv)   that on the  Redemption  Date the  Redemption  Price
              will  become due and payable  upon each such Trust  Security to be
              redeemed and that  Distributions  thereon will cease to accumulate
              on and after  said date,  except as  provided  in Section  4.04(e)
              below; and

                                       25
<PAGE>


                     (v)    the place or places where Trust Securities are to be
              surrendered for the payment of the Redemption Price.

              (c)    The Trust in issuing the Trust  Securities  may use "CUSIP"
or "private  placement"  numbers  (if then  generally  in use),  and, if so, the
Institutional  Trustee shall indicate the "CUSIP" or "private placement" numbers
of the Trust  Securities  in notices of  redemption  and related  materials as a
convenience  to  Holders;  provided,  that any such  notice  may  state  that no
representation  is made as to the  correctness of such numbers either as printed
on the Trust  Securities or as contained in any notice of redemption and related
material.

              (d)    The Trust Securities redeemed on each Redemption Date shall
be  redeemed  at the  Redemption  Price with the  applicable  proceeds  from the
contemporaneous   redemption  or  repayment  of  Subordinated  Debt  Securities.
Redemptions of the Trust Securities shall be made and the Redemption Price shall
be payable on each  Redemption  Date only to the extent that the Trust has funds
then on hand and  available  in the  Payment  Account  for the  payment  of such
Redemption Price.

              (e)    If the Trust gives a notice of redemption in respect of any
Preferred Securities,  then by 12:00 noon, New York City time, on the Redemption
Date,  subject to this Section  4.04(e),  the  Institutional  Trustee will, with
respect to Preferred  Securities held in global form,  irrevocably  deposit with
the  Clearing  Agency for such  Preferred  Securities,  to the extent  available
therefor,  funds sufficient to pay the applicable Redemption Price and will give
such  Clearing  Agency  irrevocable   instructions  and  authority  to  pay  the
Redemption  Price to the Holders of the  Preferred  Securities.  With respect to
Preferred  Securities  that  are not  held in  global  form,  the  Institutional
Trustee,  subject to Section this  4.04(e),  will  irrevocably  deposit with the
Paying Agent,  to the extent  available  therefor,  funds  sufficient to pay the
applicable   Redemption  Price  and  will  give  the  Paying  Agent  irrevocable
instructions  and  authority to pay the  Redemption  Price to the Holders of the
Preferred Securities upon surrender of their Preferred Securities  Certificates.
Notwithstanding  the  foregoing,  Distributions  payable  on  or  prior  to  the
Redemption Date for any Trust Securities  called for redemption shall be payable
to the  Holders  of such  Trust  Securities  as they  appear  on the  Securities
Register for the Trust  Securities on the relevant  Record Dates for the related
Distribution  Dates.  If notice of  redemption  shall have been given (or if the
Sponsor has given irrevocable  instructions to the Institutional Trustee to give
notice of redemption)  and funds  deposited as required,  then, upon the date of
such  deposit,  all rights of Holders  holding  Trust  Securities  so called for
redemption  will  cease,  except  the  right  of such  Holders  to  receive  the
Redemption Price and any Distribution payable in respect of the Trust Securities
on or prior  to the  Redemption  Date,  but  without  interest,  and such  Trust
Securities will cease to be Outstanding. In the event that any date on which any
applicable  Redemption  Price is payable is not a Business  Day, then payment of
the  applicable  Redemption  Price payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay),  except that,  if such  Business Day falls in the
next  calendar  year,  such  payment will be made on the  immediately  preceding
Business  Day,  in each case,  with the same force and effect as if made on such
date. In the event that payment of the Redemption  Price in respect of any Trust
Securities called for redemption is improperly  withheld or refused and not paid
either by the Trust or by the Sponsor  pursuant to the Guarantee,  Distributions
on such Trust Securities will continue to accumulate, as set forth in

                                       26
<PAGE>


Section 4.01 and in  accordance  with the  continued  accrual of interest on the
Subordinated Debt Securities, from the Redemption Date originally established by
the Trust for such Trust Securities to the date such applicable Redemption Price
is actually  paid, in which case the actual  payment date will be the date fixed
for redemption for purposes of calculating the applicable Redemption Price.

       SECTION 4.05.        SUBORDINATION OF COMMON SECURITIES AND DISTRIBUTIONS

              (a)    Payment of  Distributions  on, and the Redemption Price of,
the  Trust  Securities,  as  applicable,  shall be made  pro  rata  based on the
Liquidation Amount of the Trust Securities;  provided,  however,  that if on any
Distribution Payment Date or Redemption Date an Indenture Event of Default shall
have  occurred  and be  continuing,  no  payment  of  any  Distribution  on,  or
Redemption Price of, any Common Security, and no other payment on account of the
redemption, liquidation or other acquisition of Common Securities, shall be made
unless payment in full in cash of all  accumulated and unpaid  Distributions  on
all Outstanding Preferred Securities for all Distribution Periods terminating on
or prior  thereto,  or in the case of payment of the  Redemption  Price the full
amount of such Redemption Price on all Outstanding Preferred  Securities,  shall
have been made or  provided  for,  and all funds  immediately  available  to the
Institutional  Trustee  shall first be applied to the payment in full in cash of
all Distributions on, or Redemption Price of, Preferred  Securities then due and
payable.

              (b)    In the case of the  occurrence  of any  Indenture  Event of
Default, the Holder of Common Securities will be deemed to have waived any right
to act with respect to such Event of Default  under this  Declaration  until the
effect of all such Events of Default  with respect to the  Preferred  Securities
have  been  cured,  waived or  otherwise  eliminated.  Until any such  Events of
Default under this  Declaration  with respect to the Preferred  Securities  have
been so cured, waived or otherwise  eliminated,  the Institutional Trustee shall
act solely on behalf of the  Holders  of the  Preferred  Securities  and not the
Holder  of the  Common  Securities,  and  only  the  Holders  of  the  Preferred
Securities  will have the right to direct  the  Institutional  Trustee to act on
their behalf.

              (c)    Distributions on the Common  Securities shall be payable at
the same Distribution Rates, on the same Distribution  Payment Dates and for the
same  Distribution  Periods and to holders as of the same Record Date as for the
Preferred Securities.

       SECTION 4.06.        PAYMENT PROCEDURES

       Payments of Distributions in respect of the Preferred Securities shall be
made by check  mailed to the  address  of the  Person  entitled  thereto as such
address shall appear on the Securities Register or, if the Preferred  Securities
are held by a Clearing Agency,  such Distributions shall be made to the Clearing
Agency,  which shall  credit the  relevant  Persons'  accounts at such  Clearing
Agency on the applicable  Distribution  Payment Dates. Payment of the Redemption
Price of or Liquidation  Distribution on the Preferred  Securities shall be made
in  immediately  available  funds upon  surrender  of the  Preferred  Securities
Certificates  representing  such  Preferred  Securities at the  corporate  trust
office of the Institutional  Trustee or, if the Preferred Securities are held by
the  Clearing  Agency  or its  nominee,  such  Redemption  Price or  Liquidation
Distribution  shall  be  made  to  the  Clearing  Agency  by  wire  transfer  in
immediately  available funds. Payments in

                                       27
<PAGE>


respect  of the  Common  Securities  shall  be made in such  manner  as shall be
mutually agreed between the  Institutional  Trustee and the Holder of the Common
Securities.

       SECTION 4.07.        TAX RETURNS AND REPORTS

       The Regular  Trustee(s)  shall prepare (or cause to be prepared),  at the
Sponsor's expense,  and file all United States federal,  state and local tax and
information  returns  and  reports  required to be filed by or in respect of the
Trust. The Regular  Trustee(s) shall provide or cause to be provided on a timely
basis to each  Holder  any  Internal  Revenue  Service  form  required  to be so
provided in respect of the Trust Securities.

       SECTION 4.08.        EXCHANGE

              (a)    If at any time the  Sponsor  or any of its  Affiliates  (in
either case, a "Sponsor Affiliated  Owner/Holder") is the Owner or Holder of any
Preferred Securities,  such Sponsor Affiliated Owner/Holder shall have the right
to deliver to the  Institutional  Trustee all or such  portion of its  Preferred
Securities  as it elects and receive,  in exchange  therefore,  a like amount of
Subordinated Debt Securities.  Such election (i) shall be exercisable  effective
on any  Distribution  Payment  Date  by  such  Sponsor  Affiliated  Owner/Holder
delivering  to the  Institutional  Trustee  a written  notice  of such  election
specifying the liquidation amount of Preferred  Securities with respect to which
such  election  is being made and the  Distribution  Payment  Date on which such
exchange shall occur, which Distribution Payment Date shall be not less than ten
Business  Days  after the date of receipt  by the  Institutional  Trustee or its
designee  the  Preferred  Securities  which are the subject of such  election by
10:00  A.M.  New York  time,  on the  Distribution  Payment  Date on which  such
exchange is to occur.  After the exchange,  such  Preferred  Securities  will be
canceled  and will no longer be deemed to be  outstanding  and all rights of the
Sponsor or its  Affiliate(s)  with  respect to such  Preferred  Securities  will
cease.

              (b)    In the case of an exchange  described  in Section  4.08(a),
the  Trust  will,  on the  date of such  exchange,  exchange  Subordinated  Debt
Securities having a principal amount equal to the aggregate  liquidation  amount
of the outstanding Common  Securities,  multiplied by the ratio of the aggregate
liquidation  amount of the Preferred  Securities  exchanged  pursuant to Section
4.08(a) divided by the aggregate  liquidation amount of the Preferred Securities
outstanding  immediately prior to such exchange, for such proportional amount of
Common Securities held by the Sponsor (which contemporaneously shall be canceled
and no longer be deemed to be outstanding);  provided, that the Sponsor delivers
or caused to be  delivered  to the  Institutional  Trustee or its  designee  the
required  amount of Common  Securities  to be  exchanged  by 10:00 A.M. New York
time, on the Distribution Payment Date on which such exchange is to occur.

                                       28
<PAGE>


                                   ARTICLE V
                          TRUST SECURITIES CERTIFICATES

       SECTION 5.01.        INITIAL OWNERSHIP

       Upon  the  creation  of the  Trust  by the  contribution  by the  Sponsor
pursuant to Section 2.03 and until the issuance of the Trust Securities,  and at
any time during which no Trust Securities are outstanding,  the Sponsor shall be
the sole beneficial owner of the Trust.

       SECTION 5.02.        THE TRUST SECURITIES CERTIFICATES

       Each of the Preferred and Common Securities  Certificates shall be issued
in minimum denominations of $1,000 and integral multiples in excess thereof. The
Trust Securities Certificates shall be executed on behalf of the Trust by manual
or  facsimile  signature  of at least  one  Regular  Trustee.  Trust  Securities
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures shall have been affixed,  authorized to sign on
behalf of the Trust,  shall be validly  issued and  entitled to the  benefits of
this  Declaration,  notwithstanding  that such  individuals or any of them shall
have ceased to be so authorized prior to the authentication and delivery of such
Trust  Securities  Certificates  or did not  hold  such  offices  at the date of
authentication and delivery of such Trust Securities Certificates.  A transferee
of a Trust Securities  Certificate shall become a  Securityholder,  and shall be
entitled  to the  rights  and  subject to the  obligations  of a  Securityholder
hereunder,  upon due registration of such Trust  Securities  Certificate in such
transferee's name pursuant to Section 5.04.

       SECTION 5.03.        AUTHENTICATION OF TRUST SECURITIES CERTIFICATES

       On the Issue Date,  the  Regular  Trustees  shall cause Trust  Securities
Certificates,  in an aggregate  Liquidation  Amount as provided in Sections 2.04
and 2.05, to be executed on behalf of the Trust,  authenticated and delivered to
or upon the written  order of the Sponsor  signed by its  Chairman of the Board,
its President or any Vice  President,  without further  corporate  action by the
Sponsor,  in authorized  denominations.  No Trust Securities  Certificate  shall
entitle its holder to any benefit under this Declaration,  or shall be valid for
any purpose,  unless there shall appear on such Trust  Securities  Certificate a
certificate of  authentication  substantially in the form set forth in Exhibit A
or Exhibit C, as  applicable,  executed by the  Institutional  Trustee by manual
signature;  such authentication  shall constitute  conclusive evidence that such
Trust Securities  Certificate  shall have been duly  authenticated and delivered
hereunder.  All Trust Securities  Certificates  shall be dated the date of their
authentication.

       SECTION  5.04.       REGISTRATION  OF TRANSFER  AND EXCHANGE OF PREFERRED
SECURITIES CERTIFICATES

       The Securities Registrar shall keep or cause to be kept, at the office or
agency  maintained  pursuant to Section  5.08, a  Securities  Register in which,
subject to such  reasonable  regulations  as it may  prescribe,  the  Securities
Registrar   shall  provide  for  the   registration   of  Preferred   Securities
Certificates and the Common Securities  Certificates (subject to Section 5.10 in
the case of the Common  Securities  Certificates)  and registration of transfers
and exchanges of Preferred

                                       29
<PAGE>


Securities  Certificates as herein provided.  The Institutional Trustee shall be
the initial Securities Registrar.

       Upon surrender for  registration of transfer of any Preferred  Securities
Certificate at the office or agency maintained  pursuant to Section 5.08, one or
more of the Regular Trustees shall execute, and the Institutional  Trustee shall
authenticate and deliver in the name of the designated transferee or transferees
one or more new Preferred Securities Certificates in authorized denominations of
a like  aggregate  Liquidation  Amount dated the date of  authentication  by the
Institutional  Trustee.  The  Securities  Registrar  shall  not be  required  to
register  the  transfer of any  Preferred  Securities  that have been called for
redemption.  At the option of a Holder, Preferred Securities Certificates may be
exchanged   for  other   Preferred   Securities   Certificates   in   authorized
denominations of the same class and of a like aggregate  Liquidation Amount upon
surrender of the Preferred Securities Certificates to be exchanged at the office
or agency maintained pursuant to Section 5.08.

       Every  Preferred  Securities  Certificate  presented or  surrendered  for
registration  of  transfer  or  exchange  shall  be  accompanied  by  a  written
instrument of transfer in form  satisfactory  to the Trustees and the Securities
Registrar  duly  executed  by the  Holder or his  attorney  duly  authorized  in
writing. Each Preferred Securities  Certificate  surrendered for registration of
transfer  or  exchange  shall be canceled  and  subsequently  disposed of by the
Securities Registrar in accordance with its customary practice.

       No service  charge  shall be made for any  registration  of  transfer  or
exchange of Preferred Securities  Certificates,  but the Securities Registrar or
the Regular Trustees may require payment of a sum sufficient to cover any tax or
governmental  charge  that may be imposed in  connection  with any  transfer  or
exchange of Preferred Securities Certificates.

       SECTION  5.05.       MUTILATED, DESTROYED, LOST OR STOLEN TRUST
SECURITIES CERTIFICATES

       If (a) any mutilated Trust Securities Certificate shall be surrendered to
the Securities Registrar,  or if the Securities Registrar shall receive evidence
to its  satisfaction of the  destruction,  loss or theft of any Trust Securities
Certificate and (b) there shall be delivered to the Securities Registrar and the
Regular  Trustees  such security or indemnity as may be required by them to save
each of them harmless,  then in the absence of notice that such Trust Securities
Certificate  shall have been  acquired  by a bona fide  purchaser,  the  Regular
Trustees  or any one of them on  behalf  of the  Trust  shall  execute,  and the
Institutional  Trustee shall  authenticate  and make available for delivery,  in
exchange for or in lieu of any such mutilated,  destroyed,  lost or stolen Trust
Securities Certificate,  a new Trust Securities Certificate of like class, tenor
and  denomination.  In connection with the issuance of any new Trust  Securities
Certificate under this Section, the Regular Trustees or the Securities Registrar
may  require  the  payment  of a sum  sufficient  to  cover  any  tax  or  other
governmental charge that may be imposed in connection  therewith.  Any duplicate
Trust  Securities  Certificate  issued pursuant to this Section shall constitute
conclusive  evidence of an  ownership  interest in the Trust,  as if  originally
issued,   whether  or  not  the  lost,  stolen  or  destroyed  Trust  Securities
Certificate shall be found at any time.

                                       30
<PAGE>


       SECTION 5.06.      PERSONS DEEMED SECURITYHOLDERS

       Prior  to  due  presentation  of  a  Trust  Securities   Certificate  for
registration of transfer,  the Trustees or the Securities  Registrar shall treat
the Person in whose name any Trust Securities Certificate shall be registered in
the Securities  Register as the owner of such Trust  Securities  Certificate for
the purpose of receiving  Distributions (subject to Section 4.01(d)) and for all
other purposes whatsoever, and neither the Trustees nor the Securities Registrar
shall be bound by any notice to the contrary.

       SECTION 5.07.      ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND ADDRESSES

       In the event that the  Institutional  Trustee is no longer the Securities
Registrar,  the Regular  Trustees  shall furnish or cause to be furnished to (i)
the Sponsor and the Institutional  Trustee  semi-annually,  not later than _____
and _____ in each year, and (ii) the Sponsor or the  Institutional  Trustee,  as
the case may be,  within 15 days  after  receipt  by any  Regular  Trustee  of a
request therefor from the Sponsor or the Institutional  Trustee, as the case may
be,  in  writing,  a list,  in such  form as the  Sponsor  or the  Institutional
Trustee,  as the case may be, may reasonably require, of the names and addresses
of the Securityholders as of a date not more than 15 days prior to the time such
list is furnished.  If three or more  Securityholders  or one or more Holders of
Trust  Securities  Certificates  evidencing not less than 25% of the outstanding
Liquidation  Amount  apply  in  writing  to  the  Regular  Trustees,   and  such
application  states  that  the  applicants  desire  to  communicate  with  other
Securityholders with respect to their rights under this Declaration or under the
Trust  Securities  Certificates and such application is accompanied by a copy of
the  communication  that such applicants  propose to transmit,  then the Regular
Trustees shall, within five Business Days after the receipt of such application,
afford such  applicants  access during normal business hours to the current list
of  Securityholders.  Each Holder,  by receiving and holding a Trust  Securities
Certificate,  shall  be  deemed  to have  agreed  not to hold the  Sponsor,  the
Institutional  Trustee  or the  Regular  Trustees  accountable  by reason of the
disclosure  of its name and  address,  regardless  of the source from which such
information was derived.

       SECTION 5.08.      MAINTENANCE OF OFFICE OR AGENCY

       The Regular  Trustees  shall  maintain in the Borough of  Manhattan,  New
York,  an office or offices or agency or  agencies  where  Preferred  Securities
Certificates  may be surrendered  for  registration  of transfer or exchange and
where  notices  and  demands  to or upon the  Trustees  in  respect of the Trust
Securities  Certificates may be served. The Regular Trustees initially designate
Union Bank of California,  N.A., 475 Sansome Street,  12th Floor, San Francisco,
California  94111,  as its  principal  agency  for such  purposes.  The  Regular
Trustees   shall  give  prompt   written  notice  to  the  Sponsor  and  to  the
Securityholders of any change in the location of the Securities  Register or any
such office or agency.

       SECTION 5.09.      APPOINTMENT OF PAYING AGENT

       The Paying Agent shall make  Distributions  and other  payments  provided
hereby to Securityholders  from the Payment Account and shall report the amounts
of such Distributions and payments to the Institutional  Trustee and the Regular
Trustees. Any Paying Agent shall

                                       31
<PAGE>


have the  revocable  power to withdraw  funds from the  Payment  Account for the
purpose of making the Distributions  and payments  provided hereby.  The Regular
Trustees  may revoke  such power and  remove the Paying  Agent if such  Trustees
determine  in their sole  discretion  that the Paying Agent shall have failed to
perform its obligations under this Agreement in any material  respect,  provided
that  such  revocation  and  removal  shall  not  become   effective  until  the
appointment   of  a  successor.   The  Paying  Agent  shall   initially  be  the
Institutional  Trustee, and it may choose any co-paying agent that is acceptable
to the Regular Trustees and the Sponsor. Any Person acting as Paying Agent shall
be  permitted  to resign as Paying  Agent  upon 30 days'  written  notice to the
Regular Trustees and the Institutional  Trustee,  provided that such resignation
shall not become  effective until the  appointment of a successor.  In the event
that a Paying Agent shall resign or be removed, the Institutional  Trustee shall
appoint a successor that is acceptable to the Regular  Trustees to act as Paying
Agent (which shall be a bank or trust company).  The Institutional Trustee shall
cause such successor  Paying Agent or any additional  Paying Agent  appointed by
the  Institutional  Trustee to execute and deliver to the Trustees an instrument
in which such successor Paying Agent or additional Paying Agent shall agree with
the Trustees that as Paying  Agent,  such  successor  Paying Agent or additional
Paying  Agent  will  hold  all  sums,  if  any,  held by it for  payment  to the
Securityholders in trust for the benefit of the Securityholders entitled thereto
until such sums shall be paid to such  Securityholders.  The Paying  Agent shall
return all unclaimed  funds to the  Institutional  Trustee and upon removal of a
Paying Agent such Paying Agent shall also return all funds in its  possession to
the Institutional  Trustee. The provisions of Sections 8.01, 8.03 and 8.06 shall
apply to the Institutional Trustee also in its role as Paying Agent, for so long
as the  Institutional  Trustee  shall act as Paying  Agent  and,  to the  extent
applicable, to any other paying agent appointed hereunder. Any reference in this
Agreement  to the Paying  Agent shall  include any  co-paying  agent  unless the
context requires otherwise.

       SECTION 5.10.        OWNERSHIP OF COMMON SECURITIES BY SPONSOR

       On the Issue Date,  the Sponsor shall  acquire,  and  thereafter  retain,
beneficial and record ownership of the Common Securities.  To the fullest extent
permitted by law, any attempted  transfer of the Common  Securities,  except for
transfers  by  operation of law or to an Affiliate of the Sponsor or a permitted
successor under Article Ten of the  Subordinated  Indenture,  shall be void. The
Regular Trustees shall cause each Common  Securities  Certificate  issued to the
Sponsor to contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT
AS PROVIDED IN THE DECLARATION OF TRUST REFERRED TO HEREIN".

       SECTION  5.11.       BOOK-ENTRY PREFERRED SECURITIES CERTIFICATES; COMMON
SECURITIES CERTIFICATE

              (a)    The  Preferred  Securities   Certificates,   upon  original
issuance,  will  be  issued  in  the  form  of a  typewritten  global  Preferred
Securities  Certificate  or  Certificates   representing   Book-Entry  Preferred
Securities  Certificates,  to be delivered to The Depository Trust Company,  the
initial Clearing Agency,  or its custodian,  by or on behalf of, the Trust. Such
Preferred  Securities  Certificate or Certificates shall initially be registered
on the Securities Register in the name of Cede & Co., the nominee of the initial
Clearing  Agency,  and no Owner will receive a definitive  Preferred  Securities
Certificate representing such beneficial owner's

                                       32
<PAGE>


interest in such  Preferred  Securities,  except as  provided  in Section  5.13.
Unless and until Definitive Preferred  Securities  Certificates have been issued
to Owners pursuant to Section 5.13:

                     (i)    the  provisions of this Section  5.11(a) shall be in
              full force and effect;

                     (ii)   the  Securities  Registrar and the Trustees shall be
              entitled to deal with the Clearing Agency for all purposes of this
              Declaration   relating  to  the  Book-Entry  Preferred  Securities
              Certificates   (including   the  payment  of   principal   of  and
              Distributions  on the  Book-Entry  Preferred  Securities  and  the
              giving of  instructions  or  directions  to  Owners of  Book-Entry
              Preferred  Securities) as the sole Holder of Book-Entry  Preferred
              Securities and shall have no obligations to the Owners thereof;

                     (iii)  to the extent that the  provisions  of this  Section
              conflict  with  any  other  provisions  of this  Declaration,  the
              provisions of this Section shall control; and

                     (iv)   the rights of the Owners of the Book-Entry Preferred
              Securities  Certificates  shall  be  exercised  only  through  the
              Clearing  Agency and shall be limited to those  established by law
              and agreements  between such Owners and the Clearing Agency and/or
              the  Clearing  Agency  Participants.  Pursuant to the  Certificate
              Depository  Agreement,   unless  and  until  Definitive  Preferred
              Securities  Certificates  are issued pursuant to Section 5.13, the
              Clearing Agency will make book-entry  transfers among the Clearing
              Agency  Participants  and  receive  and  transmit  payments on the
              Preferred Securities to such Clearing Agency Participants.

                     (v)    The Clearing Agency will make  book-entry  transfers
              among the Clearing Agency Participants;  provided, that solely for
              the purposes of  determining  whether the Holders of the requisite
              amount of Preferred  Securities  have voted on any matter provided
              for  in  this  Declaration,   so  long  as  Definitive   Preferred
              Securities  Certificates  have not been  issued,  the Trustees may
              conclusively  rely on, and shall be fully protected in relying on,
              any  written  instrument  (including  a  proxy)  delivered  to the
              Trustees by the Clearing Agency setting forth the Owners' votes or
              assigning  the right to vote on any  matter  to any  other  Person
              either in whole or in part.

              (b)    A single Common  Securities  Certificate  representing  the
Common  Securities  shall be issued to the  Sponsor in the form of a  definitive
Common Securities Certificate.

       SECTION 5.12.        NOTICES TO CLEARING AGENCY

       To the extent a notice or other  communication  to the Owners is required
under  this  Declaration,  unless  and  until  Definitive  Preferred  Securities
Certificates  shall have been  issued to Owners  pursuant to Section  5.13,  the
Trustees shall give all such notices and communications

                                       33
<PAGE>


specified herein to be given to Owners to the Clearing Agency, and shall have no
obligations to the Owners.

       SECTION 5.13.        DEFINITIVE PREFERRED SECURITIES CERTIFICATES

       If (i) the Sponsor  advises the  Trustees  in writing  that the  Clearing
Agency is no longer willing or able to properly  discharge its  responsibilities
with respect to the Preferred Securities Certificates, and the Sponsor is unable
to locate a  qualified  successor  within 90 days,  or (ii) the  Sponsor  at its
option  advises  the  Trustees  in  writing  that it  elects  to  terminate  the
book-entry  system through the Clearing Agency,  then the Regular Trustees shall
notify  the  Clearing  Agency  and  Holders of the  Preferred  Securities.  Upon
surrender  to the  Regular  Trustees  of the  typewritten  Preferred  Securities
Certificate or Certificates  representing  the Book-Entry  Preferred  Securities
Certificates by the Clearing Agency,  accompanied by registration  instructions,
the Regular  Trustees or any one of them shall  execute,  and the  Institutional
Trustee shall authenticate,  the Definitive Preferred Securities Certificates in
accordance with the instructions of the Clearing Agency.  Neither the Securities
Registrar  nor the  Trustees  shall be liable for any delay in  delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such  instructions.   Upon  the  issuance  of  Definitive  Preferred  Securities
Certificates,  the  Trustees  shall  recognize  the  Holders  of the  Definitive
Preferred Securities  Certificates as Securityholders.  The Definitive Preferred
Securities  Certificates  shall be printed,  lithographed  or engraved or may be
produced  in any  other  manner  as is  reasonably  acceptable  to  the  Regular
Trustees,  as evidenced by the execution  thereof by the Regular Trustees or any
one of them.

       SECTION 5.14.        RIGHTS OF SECURITYHOLDERS

       The  legal  title to the Trust  Property  is  vested  exclusively  in the
Institutional Trustee (in its capacity as such) in accordance with Section 2.09,
and the Securityholders  shall not have any right or title therein other than an
undivided  beneficial  interest  in the assets of the Trust  conferred  by their
Trust  Securities,  and they  shall have no right to call for any  partition  or
division of property,  profits or rights of the Trust except as described below.
The  Trust  Securities  shall  be  personal  property  giving  only  the  rights
specifically  set forth therein and in this  Declaration.  The Trust  Securities
shall have no preemptive  or other similar  rights and when issued and delivered
to  Securityholders  against payment of the purchase price  therefor,  except as
otherwise  provided in the Expense  Agreement and Section 11.01 hereof,  will be
fully paid and nonassessable by the Trust.  Except as otherwise  provided in the
Expense Agreement and Section 11.01 hereof,  the Holders of the Trust Securities
shall be  entitled to the same  limitation  of  personal  liability  extended to
stockholders  of private  corporations  for profit  organized  under the General
Corporation Law of the State of Delaware.

                                   ARTICLE VI
                    ACTS OF SECURITYHOLDERS; MEETINGS; VOTING

       SECTION 6.01.        LIMITATIONS ON VOTING RIGHTS

              (a)    Except as provided in this  Section,  in Section  2.10,  in
Section  8.10 or in  Section  11.03  of this  Declaration,  in the  Subordinated
Indenture, and as otherwise required by

                                       34
<PAGE>


law, no Holder of  Preferred  Securities  shall have any right to vote or in any
manner  otherwise  control the  administration,  operation and management of the
Trust or the  obligations of the parties  hereto,  nor shall anything herein set
forth,  or  contained  in the terms of the  Trust  Securities  Certificates,  be
construed so as to constitute the Securityholders  from time to time as partners
or members of an association.

              (b)    So long as any Subordinated Debt Securities are held by the
Institutional  Trustee on behalf of the Trust, the  Institutional  Trustee shall
not (i) direct the time,  method and place of conducting  any proceeding for any
remedy  available  to the  Indenture  Trustee,  or  execute  any  trust or power
conferred on the  Institutional  Trustee with respect to such  Subordinated Debt
Securities;  (ii) waive any past default that may be waived under Section 713 of
the  Subordinated  Indenture;  (iii)  exercise  any right to  rescind or annul a
declaration that the principal of all the Subordinated  Debt Securities shall be
due and payable;  or (iv) consent to any amendment,  modification or termination
of the Subordinated  Indenture or the Subordinated  Debt Securities,  where such
consent shall be required,  without, in each case,  obtaining the prior approval
of the Holders of at least a Majority  in  Liquidation  Amount of the  Preferred
Securities;  provided,  however,  that  where a consent  under the  Subordinated
Indenture  would  require  the  consent  of each  holder  of  Subordinated  Debt
Securities affected thereby, no such consent shall be given by the Institutional
Trustee   without  the  prior  written  consent  of  each  Holder  of  Preferred
Securities.  The  Institutional  Trustee shall not revoke any action  previously
authorized or approved by a vote of the Holders of Preferred Securities,  except
by a subsequent vote of the Holders of Preferred Securities.  Subject to Section
8.02,  the  Institutional  Trustee  shall  notify all  Holders of the  Preferred
Securities of any notice of default  received  with respect to the  Subordinated
Debt Securities. In addition to obtaining the foregoing approvals of the Holders
of the Preferred  Securities,  prior to taking any of the foregoing actions, the
Institutional Trustee shall, at the expense of the Sponsor, obtain an Opinion of
Counsel  experienced  in such  matters to the effect  that such  action will not
cause the Trust to be taxable  other than as a grantor  trust for United  States
federal income tax purposes.

              (c)    If any proposed amendment to the Declaration  provides for,
or the Trust otherwise  proposes to effect,  (i) any action that would adversely
affect in any material  respect the  interests,  powers,  preferences or special
rights  of  the  Preferred  Securities,  whether  by  way  of  amendment  to the
Declaration or otherwise, or (ii) the dissolution,  winding-up or termination of
the  Trust,  other  than  pursuant  to the terms of this  Declaration,  then the
Holders of Outstanding  Trust  Securities as a class will be entitled to vote on
such amendment or proposal and such amendment or proposal shall not be effective
except with the  approval  of the Holders of at least a Majority in  Liquidation
Amount of the  Preferred  Securities;  except as  otherwise  provided in Section
11.03(c).  Notwithstanding any other provision of this Declaration, no amendment
to this  Declaration  may be made if,  as a result of such  amendment,  it would
cause the Trust to be taxable  other than as a grantor  trust for United  States
federal income tax purposes.

              (d)    Holders  of  a  Majority  in  Liquidation   Amount  of  the
Preferred  Securities  may,  on  behalf  of the  Holders  of all  the  Preferred
Securities,  waive any past  Event of  Default  and its  consequences,  except a
default  described in clause (b) or (c) of the  definition of "Event of Default"
contained in Section 1.01, a default in respect of a covenant or provision which
under this Declaration  cannot be modified or amended without the consent of the
Holder of each

                                       35
<PAGE>


Outstanding Preferred Security or an Indenture Event of Default that the Holders
of a Majority in  Liquidation  Amount of the Preferred  Securities  would not be
entitled to waive pursuant to Section 6.01(e).

       Upon any such waiver, any such Event of Default shall cease to exist, and
any Event of Default  arising  therefrom  shall be deemed to have been cured for
every  purpose  of this  Declaration;  but no such  waiver  shall  extend to any
subsequent or other  default or Event of Default or impair any right  consequent
thereon.  Any waiver by the Holders of the  Preferred  Securities of an Event of
Default with respect to Preferred  Securities shall also be deemed to constitute
a waiver by the Holders of Common Securities for all purposes of the Declaration
without any further act, vote or consent of the Holders of Common Securities.

              (e)    For so long as any Preferred Securities remain Outstanding,
if, upon an Indenture Event of Default, the Indenture Trustee and the holders of
the  outstanding  Subordinated  Debt  Securities  have  failed  to  declare  the
principal of all of the  Subordinated  Debt Securities to be immediately due and
payable,  the  Holders of at least 33% in  aggregate  Liquidation  Amount of the
Preferred  Securities  then  Outstanding  shall  have  such  right to make  such
declaration by a notice in writing to the Institutional Trustee, the Sponsor and
the Indenture Trustee.

       At any time after such a declaration of acceleration  with respect to the
Subordinated  Debt  Securities has been made and before a judgment or decree for
payment of the money due has been obtained by the Indenture  Trustee as provided
in the Subordinated  Indenture,  the Holders of a Majority in Liquidation Amount
of the Preferred Securities, by written notice to the Institutional Trustee, the
Sponsor and the Indenture  Trustee,  may rescind and annul such  declaration and
its consequences if:

                     (i)    the Sponsor has paid or deposited with the Indenture
              Trustee a sum sufficient to pay

                            (1)    all overdue  installments  of interest on all
                     of the Subordinated Debt Securities,

                            (2)    the  principal  of  any   Subordinated   Debt
                     Securities  which have  become due  otherwise  than by such
                     declaration  of  acceleration  and interest  thereon at the
                     rate borne by the Subordinated Debt Securities, and

                            (3)    all sums paid or  advanced  by the  Indenture
                     Trustee under the Subordinated Indenture and the reasonable
                     compensation,  expenses,  disbursements and advances of the
                     Indenture  Trustee  and the  Institutional  Trustee,  their
                     agents and counsel; and

                     (ii)   all  Indenture  Events of  Default,  other  than the
              non-payment of the principal of the  Subordinated  Debt Securities
              which has become due solely by such acceleration,  have been cured
              or  waived  as  provided  in  Section  713  of  the   Subordinated
              Indenture.

                                       36
<PAGE>


       The Holders of at least a Majority in Liquidation Amount of the Preferred
Securities may, on behalf of the Holders of all the Preferred Securities,  waive
any past  default  under the  Subordinated  Indenture,  except a default  in the
payment of principal  or interest  (unless such default has been cured and a sum
sufficient  to pay all  matured  installments  of  interest  and  principal  due
otherwise than by acceleration has been deposited with the Indenture Trustee) or
a default in respect of a covenant or  provision  which  under the  Subordinated
Indenture  cannot be  modified  or amended  without the consent of the holder of
each outstanding  Subordinated Debt Securities.  No such rescission shall affect
any subsequent default or impair any right consequent thereon.

       Upon receipt by the  Institutional  Trustee of written  notice  declaring
such an  acceleration,  or rescission and annulment  thereof,  by Holders of the
Preferred Securities all or part of which is represented by Book-Entry Preferred
Securities  Certificates,  a record date shall be  established  for  determining
Holders of  Outstanding  Preferred  Securities  entitled to join in such notice,
which record date shall be at the close of business on the day the Institutional
Trustee  receives  such notice.  The Holders on such record date,  or their duly
designated  proxies,  and only such  Persons,  shall be entitled to join in such
notice,  whether or not such  Holders  remain  Holders  after such record  date;
provided,  that,  unless such  declaration  of  acceleration,  or rescission and
annulment,  as the case may be,  shall have  become  effective  by virtue of the
requisite  percentage  having joined in such notice prior to the day which is 90
days after such record date,  such notice of  declaration  of  acceleration,  or
rescission and annulment,  as the case may be, shall  automatically  and without
further  action by any Holder be canceled and of no further  effect.  Nothing in
this  paragraph  shall  prevent a Holder,  or a proxy of a Holder,  from giving,
after  expiration of such 90-day period,  a new written notice of declaration of
acceleration,  or rescission and annulment thereof,  as the case may be, that is
identical to a written notice which has been canceled pursuant to the proviso to
the preceding  sentence,  in which event a new record date shall be  established
pursuant to the provisions of this Section 6.01(e).

              (f)    Except as set forth in Section  6.01(e) and  Section  8.19,
the Holders of Preferred Securities shall have no right to exercise directly any
right or remedy  available to the holders of, or in respect of, the Subordinated
Debt Securities.

       The  Holders  of a  Majority  in  Liquidation  Amount  of  the  Preferred
Securities  at the time  Outstanding  shall  have the right to direct  the time,
method and place of conducting any  proceeding  for any remedy  available to the
Institutional  Trustee,  or  exercising  any  trust  or power  conferred  on the
Institutional  Trustee  with  respect  to the  Preferred  Securities;  provided,
however,  that,  the  Institutional  Trustee  shall have the right to decline to
follow any such direction if the Institutional  Trustee being advised by counsel
determines  that the action so directed  may not  lawfully  be taken,  or if the
Institutional  Trustee in good faith shall  determine  that the  proceedings  so
directed  would be  illegal or involve  it in  personal  liability  or be unduly
prejudicial to the rights of Holders of Preferred Securities not parties to such
direction,  and provided further that nothing in this  Declaration  shall impair
the right of the  Institutional  Trustee to take any action deemed proper by the
Institutional  Trustee and which is not inconsistent with such direction by such
Holders.

                                       37
<PAGE>


       SECTION 6.02.        NOTICE OF MEETINGS

       Notice of all  meetings of the Holders of Preferred  Securities,  stating
the time,  place  and  purpose  of the  meeting,  shall be given by the  Regular
Trustees  pursuant to Section  11.08 to each Holder of Preferred  Securities  of
record,  at his registered  address,  at least 15 days and not more than 90 days
before the  meeting.  At any such  meeting,  any  business  properly  before the
meeting may be so considered whether or not stated in the notice of the meeting.
Any adjourned meeting may be held as adjourned without further notice.

       SECTION 6.03.        MEETINGS OF HOLDERS OF PREFERRED SECURITIES

       No annual meeting of  Securityholders is required to be held. The Regular
Trustees, however, shall call a meeting of Securityholders to vote on any matter
upon the written request of the Holders of Preferred  Securities of record of at
least 33% of the Preferred  Securities (based upon their Liquidation Amount) and
the Regular  Trustees  or the  Institutional  Trustee  may, at any time in their
discretion,  call a meeting of Holders of  Preferred  Securities  to vote on any
matters as to which Holders of Preferred Securities are entitled to vote.

       Holders  of  Preferred  Securities  of  record  of at  least  50%  of the
Preferred Securities (based upon their Liquidation Amount), present in person or
by proxy,  shall  constitute  a quorum at any  meeting of  Holders of  Preferred
Securities.

       If a quorum is present at a meeting,  an affirmative  vote by the Holders
of Preferred  Securities of record present, in person or by proxy,  holding more
than 66-2/3% of the Preferred  Securities (based upon their Liquidation  Amount)
held by the Holders of Preferred Securities of record present,  either in person
or by proxy, at such meeting shall constitute the action of the Securityholders,
unless this Declaration requires a greater number of affirmative votes.

       SECTION 6.04.        VOTING RIGHTS

       Securityholders  shall  be  entitled  to one  vote  for  each  $1,000  of
Liquidation  Amount  represented  by their  Trust  Securities  in respect of any
matter as to which such Securityholders are entitled to vote; provided, however,
any  Preferred  Securities  that are  owned by the  Company,  the  Institutional
Trustee or the Delaware  Trustee will,  for purposes of any vote or consent,  be
treated as if they were not outstanding.

       SECTION 6.05.        PROXIES, ETC.

       At any meeting of  Securityholders,  any Securityholder  entitled to vote
may vote by proxy,  provided that no proxy shall be voted at any meeting  unless
it shall have been placed on file with the Regular Trustees,  or with such other
officer  or  agent  of the  Trust  as  the  Regular  Trustees  may  direct,  for
verification prior to the time at which such vote shall be taken.  Pursuant to a
resolution of the Institutional Trustee, proxies may be solicited in the name of
the Institutional Trustee or one or more officers of the Institutional  Trustee.
Only  Securityholders of record shall be entitled to vote. When Trust Securities
are held jointly by several Persons,  any one of them may vote at any meeting in
person or by proxy in respect of such Trust Securities,  but if more than one of
them shall be present at such meeting in person or by proxy, and such

                                       38
<PAGE>


joint  owners or their  proxies so present  disagree  as to any vote to be cast,
such vote shall not be  received  in respect of such Trust  Securities.  A proxy
purporting  to be executed by or on behalf of a  Securityholder  shall be deemed
valid unless  challenged at or prior to its exercise,  and the burden of proving
invalidity shall rest on the challenger. No proxy shall be valid more than three
years after its date of execution.

       SECTION 6.06.        SECURITYHOLDER ACTION BY WRITTEN CONSENT

       Any  action  which may be taken by  Securityholders  at a meeting  may be
taken without a meeting and without prior notice if  Securityholders  holding at
least 66-2/3% of all outstanding Trust Securities entitled to vote in respect of
such  action  (or such other  proportion  thereof  as shall be  required  by any
express  provision of this  Declaration)  shall consent to the action in writing
(based upon their Liquidation Amount).

       SECTION 6.07.        RECORD DATE FOR VOTING AND OTHER PURPOSES

       For the purposes of determining the  Securityholders  who are entitled to
notice of and to vote at any meeting or by written consent, or to participate in
any  Distribution  on the Trust  Securities in respect of which a record date is
not otherwise provided for in this Declaration,  or for the purpose of any other
action,  the Regular Trustees may from time to time fix a date, not more than 90
days  prior to the date of any  meeting  of  Securityholders  or the  payment of
Distribution  or other  action,  as the case  may be,  as a record  date for the
determination  of the  identity  of  the  Securityholders  of  record  for  such
purposes.

       SECTION 6.08.        ACTS OF SECURITYHOLDERS

       Any request, demand, authorization, direction, notice, consent, waiver or
other  action  provided or permitted by this  Declaration  to be given,  made or
taken  by  Securityholders  may be  embodied  in and  evidenced  by one or  more
instruments of  substantially  similar tenor signed by such  Securityholders  in
person or by an agent appointed in writing;  and, except as otherwise  expressly
provided  herein,  such action shall become  effective  when such  instrument or
instruments  are  delivered  to  the  Regular   Trustees.   Such  instrument  or
instruments (and the action embodied  therein and evidenced  thereby) are herein
sometimes  referred  to  as  the  "Act"  of  the  Securityholders  signing  such
instrument  or  instruments.  Proof of execution of any such  instrument or of a
writing  appointing  any such agent shall be sufficient  for any purpose of this
Declaration  and (subject to Section 8.01)  conclusive in favor of the Trustees,
if made in the manner provided in this Section.

       The fact and date of the  execution by any Person of any such  instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate  of a notary  public  or  other  officer  authorized  by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a  signer  acting  in a  capacity  other  than  his  individual  capacity,  such
certificate  or  affidavit  shall  also  constitute   sufficient  proof  of  his
authority. The fact and date of the execution of any such instrument or writing,
or the  authority of the Person  executing  the same,  may also be proved in any
other manner which the Trustees deem sufficient.

                                       39
<PAGE>


       The ownership of Preferred  Securities  shall be proved by the Securities
Register. Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the  Securityholder of every Trust
Security  issued  upon the  registration  of  transfer  thereof  or in  exchange
therefor or in lieu thereof in respect of anything done,  omitted or suffered to
be done by the  Trustees  or the  Trust  in  reliance  thereon,  whether  or not
notation of such action is made upon such Trust Security.

       Without limiting the foregoing,  a Securityholder  entitled  hereunder to
take any action hereunder with regard to any particular Trust Security may do so
with regard to all or any part of the Liquidation  Amount of such Trust Security
or by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such Liquidation Amount.

       If any dispute shall arise between the  Securityholders  and the Trustees
with  respect to the  authenticity,  validity or binding  nature of any request,
demand,  authorization,   direction,  consent,  waiver  or  other  Act  of  such
Securityholder  or Trustee under this Article VI, then the determination of such
matter by the  Institutional  Trustee shall be  conclusive  with respect to such
matter.

       SECTION 6.09.        INSPECTION OF RECORDS

       Upon reasonable notice to the Trustees, the records of the Trust shall be
open to  inspection by  Securityholders  during  normal  business  hours for any
purpose   reasonably   related   to   such   Securityholder's   interest   as  a
Securityholder.

                                  ARTICLE VII
                 REPRESENTATIONS AND WARRANTIES OF THE TRUSTEES

       SECTION 7.01.        REPRESENTATIONS AND WARRANTIES OF THE TRUSTEES

       The Bank, the Delaware Bank, the  Institutional  Trustee and the Delaware
Trustee,  each on behalf of and as to itself, hereby represents and warrants for
the benefit of the Sponsor and the Securityholders that:

              (a)    the Bank is a banking  corporation  or trust  company  duly
organized,  validly  existing and in good standing  under the laws of the United
States of  America,  and the  Delaware  Bank is a banking  corporation  or trust
company, duly organized, validly existing and in good standing under the laws of
the State of Delaware;

              (b)    each of the Bank and the Delaware  Bank has full  corporate
power,  authority  and  legal  right  to  execute,  deliver  and  perform  their
obligations  under  this  Declaration  and has  taken  all  necessary  action to
authorize the execution, delivery and performance by it of this Declaration;

                                       40
<PAGE>


              (c)    this  Declaration  has been duly  authorized,  executed and
delivered by each of the Bank and the Delaware  Bank and  constitutes  the valid
and  legally  binding  agreement  of each of the  Bank  and the  Delaware  Bank,
enforceable  against it in  accordance  with its terms,  subject to  bankruptcy,
insolvency, fraudulent transfer, reorganization,  moratorium and similar laws of
general applicability  relating to or affecting creditors' rights and to general
equity principles;

              (d)    the execution, delivery and performance by each of the Bank
and the  Delaware  Bank of this  Declaration  have been duly  authorized  by all
necessary  corporate action on the part of the Bank, the Institutional  Trustee,
the Delaware  Bank and the  Delaware  Trustee and do not require any approval of
stockholders of the Bank or the Delaware Bank and such  execution,  delivery and
performance  will not (i) violate the Bank's or the Delaware  Bank's  Charter or
By-laws, or (ii) violate any law,  governmental rule or regulation of the United
States or the State of New York or Delaware,  as the case may be,  governing the
banking  or  trust  powers  of the  Bank and the  Institutional  Trustee  or the
Delaware  Bank and the  Delaware  Trustee,  or any  order,  judgment  or  decree
applicable  to the Bank,  the  Institutional  Trustee,  the Delaware Bank or the
Delaware Trustee; and

              (e)    neither  the  authorization,  execution  or delivery by the
Bank or the Delaware Bank of this  Declaration,  nor the  consummation of any of
the transactions by the Bank, the  Institutional  Trustee,  the Delaware Bank or
the Delaware Trustee (as appropriate in context) contemplated herein or therein,
require the consent or  approval  of, the giving of notice to, the  registration
with  or the  taking  of any  other  action  with  respect  to any  governmental
authority  or agency  under  any  existing  federal,  New York or  Delaware  law
governing the banking or trust powers of the Bank or the Delaware Bank.

                                  ARTICLE VIII
                                  THE TRUSTEES

       SECTION 8.01.        CERTAIN DUTIES AND RESPONSIBILITIES

              (a)    The rights,  duties and  responsibilities  of the  Trustees
shall be as provided by this Declaration  and, in the case of the  Institutional
Trustee, the Trust Indenture Act. The Institutional  Trustee,  other than during
the occurrence and  continuation  of an Event of Default,  undertakes to perform
only such duties as are  specifically set forth in this Declaration and, upon an
Event of Default,  must  exercise the same degree of care and skill as a prudent
person would exercise or use in the conduct of his/her own affairs. The Trustees
shall have all the  privileges,  rights and immunities  provided by the Delaware
Statutory  Trust  Act.  Notwithstanding  the  foregoing,  no  provision  of this
Declaration  shall  require  the  Trustees  to expend or risk their own funds or
otherwise  incur any  financial  liability  in the  performance  of any of their
duties  hereunder,  or in the exercise of any of their rights or powers, if they
shall have  reasonable  grounds for  believing  that  repayment of such funds or
adequate  indemnity against such risk or liability is not reasonably  assured to
them.  Whether or not therein  expressly  so provided,  every  provision of this
Declaration  relating to the conduct or affecting  the liability of or affording
protection to the Trustees  shall be subject to the  provisions of this Section.
To the extent  that,  at law or in equity,  each  Trustee has duties  (including
fiduciary duties) and liabilities relating

                                       41
<PAGE>


thereto to the Trust or to the Securityholders, each Trustee shall not be liable
to the Trust or to any  Securityholder for such Trustee's good faith reliance on
the provisions of this Declaration.  The provisions of this Declaration,  to the
extent that they restrict the duties and  liabilities of each Trustee  otherwise
existing at law or in equity, are agreed by the Sponsor and the  Securityholders
to replace such other duties and liabilities of such Trustee.

              (b)    All payments made by the  Institutional  Trustee in respect
of the Trust Securities shall be made only from the income and proceeds from the
Trust  Property and only to the extent that there shall be sufficient  income or
proceeds  from the Trust  Property to enable the  Institutional  Trustee to make
payments  in  accordance  with the terms  hereof.  Each  Securityholder,  by its
acceptance  of a Trust  Security,  agrees that it will look solely to the income
and proceeds from the Trust Property to the extent available for distribution to
it as herein provided and that the Trustees are not personally  liable to it for
any  amount  distributable  in respect  of any Trust  Security  or for any other
liability in respect of any Trust Security.  This Section 8.01(b) does not limit
the liability of the Trustees  expressly set forth elsewhere in this Declaration
or, in the case of the Institutional Trustee, in the Trust Indenture Act.

       SECTION 8.02.        NOTICE OF DEFAULTS

       Within 90 days after the  occurrence  of any default,  the  Institutional
Trustee  shall  transmit,  in the manner and to the extent  provided  in Section
11.08, notice of any default actually known to the Institutional  Trustee to the
Securityholders, the Regular Trustees and the Sponsor, unless such default shall
have been cured or waived  before the giving of such notice,  provided  that the
Institutional  Trustee shall be protected in  withholding  such notice if and so
long as the board of directors, the executive committee, or a trust committee of
directors and/or responsible officers of the Institutional Trustee in good faith
determines  that the  withholding  of such  notice  is in the  interests  of the
Securityholders.  For the purpose of this Section,  the term "default" means any
event which is, or after notice or lapse of time or both would become,  an Event
of Default.

       SECTION 8.03.        CERTAIN RIGHTS OF INSTITUTIONAL TRUSTEE

       Subject to the provisions of Section 8.01 and except as provided by law:

              (a)    the  Institutional  Trustee may rely and shall be protected
in acting or refraining from acting in good faith upon any  resolution,  Opinion
of  Counsel,  certificate,  written  representation  of a Holder or  transferee,
certificate  of  auditors  or  any  other  certificate,  statement,  instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other paper
or document believed by it to be genuine and to have been signed or presented by
the proper party or parties;

              (b)    if (i) in performing its duties under this  Declaration the
Institutional  Trustee is  required  to decide  between  alternative  courses of
action,  or (ii) in construing  any of the  provisions in this  Declaration  the
Institutional  Trustee finds the same ambiguous or  inconsistent  with any other
provisions contained herein, or (iii) the Institutional Trustee is unsure of the
application of any provision of this Declaration,  then, except as to any matter
as to which the Holders of Preferred  Securities  are entitled to vote under the
terms of this Declaration, the

                                       42
<PAGE>


Institutional  Trustee shall deliver a notice to the Sponsor  requesting written
instructions  of the  Sponsor  as to the  course  of  action  to be  taken.  The
Institutional  Trustee  shall take such  action,  or refrain  from  taking  such
action, as the Institutional  Trustee shall be instructed in writing to take, or
to  refrain  from  taking,  by  the  Sponsor;  provided,  however,  that  if the
Institutional  Trustee does not receive such  instructions of the Sponsor within
ten Business Days after it has delivered such notice, or such reasonably shorter
period of time set forth in such notice (which to the extent  practicable  shall
not be less than two Business Days), it may, but shall be under no duty to, take
or refrain from taking such action not inconsistent  with this Declaration as it
shall deem advisable and in the best interests of the Securityholders,  in which
event the  Institutional  Trustee shall have no liability except for its own bad
faith, negligence or willful misconduct;

              (c)    the Institutional Trustee may consult with counsel or other
experts of its selection and the written advice of such counsel or other experts
or any  Opinion  of  Counsel  shall  be  full  and  complete  authorization  and
protection in respect of any action  taken,  suffered or omitted by it hereunder
in good faith and in reliance thereon;

              (d)    the  Institutional  Trustee shall be under no obligation to
exercise  any of the rights or powers  vested in it by this  Declaration  at the
request or direction of any of the Securityholders pursuant to this Declaration,
unless such  Securityholders  shall have  offered to the  Institutional  Trustee
reasonable  security or indemnity  against the costs,  expenses and  liabilities
which might be incurred by it in compliance with such request or direction;

              (e)    the  Institutional  Trustee  shall not be bound to make any
investigation  into the facts or matters stated in any resolution,  certificate,
statement,   instrument,  opinion,  report,  notice,  request,  consent,  order,
approval,  bond  or  other  document,  but  the  Institutional  Trustee,  in its
discretion,  may make such further inquiry or  investigation  into such facts or
matters as it may see fit;

              (f)    the Institutional  Trustee may execute any of the trusts or
powers  hereunder  or perform  any duties  hereunder  either  directly  or by or
through its agents or attorneys;  provided that the Institutional  Trustee shall
be responsible for its own negligence or recklessness  with respect to selection
of any agent or attorney appointed by it hereunder;

              (g)    the  Institutional  Trustee  shall  not be  liable  for any
action  taken,  suffered,  or  omitted  to be  taken  by it in  good  faith  and
reasonably believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Declaration;

              (h)    the  Institutional  Trustee  shall  not be  deemed  to have
notice of any default or Event of Default unless an officer of the Institutional
Trustee assigned to its Corporate Trust Division has actual knowledge thereof or
unless  written  notice of any event which is in fact such a default is received
by the  Institutional  Trustee at its corporate  trust  office,  and such notice
references the Trust Securities and this Declaration; and

              (i)    the  rights,   privileges,   protections,   immunities  and
benefits given to the Institutional Trustee, including,  without limitation, its
right to be  indemnified,  are  extended  to, and shall be  enforceable  by, the
Institutional  Trustee in each of its respective  capacities  hereunder,  and to
each agent, custodian and other Person employed to act hereunder.

                                       43
<PAGE>


       SECTION 8.04.        NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES

       The recitals  contained herein and in the Trust  Securities  Certificates
shall be taken as the  statements  of the Trust,  and the Trustees do not assume
any responsibility for their correctness.  The Trustees shall not be accountable
for the use or application by the Trust of the proceeds of the Trust  Securities
in accordance with Section 2.05.

       The Institutional  Trustee may conclusively assume that any funds held by
it  hereunder  are  legally  available  unless an officer  of the  Institutional
Trustee  assigned to its  Institutional  Trust  Services  Department  shall have
received  written notice from the Company,  any Holder or any other Trustee that
such funds are not legally available.

       The  Institutional  Trustee makes no  representations  as to the value or
condition of the property of the Trust or any part  thereof.  The  Institutional
Trustee  makes no  representations  as to the  validity or  sufficiency  of this
Declaration or the Trust Securities.

       SECTION 8.05.        MAY HOLD SECURITIES

       Any  Trustee or any other  agent of the  Trustees  or the  Trust,  in its
individual or any other  capacity,  and except as provided in the  definition of
the term  "Outstanding"  in  Article I, may become the owner or pledgee of Trust
Securities  and may otherwise  deal with the Trust with the same rights it would
have if it were not a Trustee or such other agent.

       SECTION 8.06.        COMPENSATION; FEES; INDEMNITY

       The Sponsor, as obligor of the Subordinated Debt Securities, agrees:

              (a)    to  pay  to the  Trustees  from  time  to  time  reasonable
compensation  for  all  services  rendered  by  the  Trustees  hereunder  (which
compensation  shall  not be  limited  by any  provision  of law in regard to the
compensation of a trustee of an express trust);

              (b)    except as otherwise expressly provided herein, to reimburse
the  Trustees  upon  request  for all  reasonable  expenses,  disbursements  and
advances  incurred or made by the Trustees in  accordance  with any provision of
this  Declaration  (including the reasonable  compensation  and the expenses and
disbursements   of  their  agents  and   counsel),   except  any  such  expense,
disbursement  or advance as may be  attributable  to their  willful  misconduct,
negligence  or bad faith  (or,  in the case of the  Delaware  Trustee,  any such
expense,  disbursement or advance as shall have been caused by his/her own gross
negligence); and

              (c)    to indemnify  each of the Trustees for, and to hold each of
the Trustees harmless against,  any and all loss, damage,  claims,  liability or
expense incurred without willful  misconduct,  negligence (gross negligence,  in
the case of the Delaware Trustee) or bad faith on their part,  arising out of or
in  connection  with  the  acceptance  or  administration  of this  Declaration,
including  the costs and  expenses  of  defending  themselves  against any claim
(whether by the Sponsor, any Securityholder or any other person) or liability in
connection  with the  exercise or  performance  of any of their powers or duties
hereunder.

       The provisions of this Section 8.06 shall survive the termination of this
Declaration.

                                       44
<PAGE>


       SECTION 8.07.        TRUSTEES REQUIRED; ELIGIBILITY

              (a)    There  shall  at  all  times  be an  Institutional  Trustee
hereunder with respect to the Trust Securities.  The Institutional Trustee shall
be a Person that has a combined capital and surplus of at least $50,000,000.  If
any such Person  publishes  reports of condition at least annually,  pursuant to
law or to the requirements of its supervising or examining  authority,  then for
the purposes of this  Section,  the combined  capital and surplus of such Person
shall be deemed to be its combined  capital and surplus as set forth in its most
recent  report  of  condition  so  published.  If at any time the  Institutional
Trustee  with  respect to the Trust  Securities  shall  cease to be  eligible in
accordance with the provisions of this Section,  it shall resign  immediately in
the manner and with the effect hereinafter specified in this Article.

              (b)    There  shall at all times be one or more  Regular  Trustees
hereunder with respect to the Trust  Securities.  Each Regular  Trustee shall be
either a natural  person who is at least 21 years of age or a legal  entity that
shall act through one or more persons authorized to bind such entity.

              (c)    There shall at all times be a Delaware Trustee with respect
to the Trust  Securities.  The  Delaware  Trustee  shall either be (i) a natural
person who is at least 21 years of age and a resident  of the State of  Delaware
or (ii) a legal  entity  authorized  to  conduct a trust  business  and with its
principal  place of business in the State of Delaware that shall act through one
or more persons authorized to bind such entity.

       SECTION 8.08.        CONFLICTING INTERESTS

       If the Institutional  Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the  Institutional  Trustee shall
either  eliminate  such  interest  or  resign,  to the  extent and in the manner
provided by, and subject to the provisions of, the Trust  Indenture Act and this
Declaration.   To  the  extent   permitted  by  the  Trust  Indenture  Act,  the
Institutional  Trustee  shall not be deemed to have a  conflicting  interest  by
virtue of being trustee under the Guarantee.

       SECTION 8.09.        CO-TRUSTEES AND SEPARATE TRUSTEE

       At any time or times,  for the purpose of meeting the legal  requirements
of the Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Holder of the Common Securities and the
Institutional  Trustee shall have power to appoint, and upon the written request
of the Institutional  Trustee,  the Sponsor shall for such purpose join with the
Institutional  Trustee  in  the  execution,  delivery  and  performance  of  all
instruments and agreements  necessary or proper to appoint,  one or more Persons
approved by the Institutional Trustee either to act as co-trustee,  jointly with
the Institutional  Trustee, of all or any part of such Trust Property, or to act
as separate trustee of any such Trust Property,  in either case with such powers
as may be provided in the instrument of appointment,  and to vest in such Person
or Persons in the capacity aforesaid, any property, title, right or power deemed
necessary or desirable,  subject to the other provisions of this Section. If the
Sponsor does not join in such appointment within 15 days after the receipt by it
of a request so to do, or in case an Indenture Event of Default has occurred and
is continuing, the Institutional Trustee alone shall have power

                                       45
<PAGE>


to make such appointment.  Any co-trustee or separate trustee appointed pursuant
to this Section shall satisfy the requirements of Section 8.07.

       Should  any  written  instrument  from the  Sponsor  be  required  by any
co-trustee or separate  trustee so appointed  for more fully  confirming to such
co-trustee or separate  trustee such property,  title,  right, or power, any and
all such instruments shall, on request, be executed, acknowledged, and delivered
by the Sponsor.

       Every  co-trustee or separate  trustee shall, to the extent  permitted by
law,  but to such extent  only,  be appointed  subject to the  following  terms,
namely:

                     (i)    The   Trust    Securities    shall   be    executed,
              authenticated and delivered and all rights,  powers,  duties,  and
              obligations  hereunder  in respect of the  custody of  securities,
              cash and  other  personal  property  held by,  or  required  to be
              deposited  or  pledged  with,  the  Trustees  hereunder,  shall be
              exercised, solely by the Trustees.

                     (ii)   The rights,  powers,  duties, and obligations hereby
              conferred or imposed upon the Institutional  Trustee in respect of
              any  property  covered by such  appointment  shall be conferred or
              imposed  upon and  exercised  or  performed  by the  Institutional
              Trustee or by the  Institutional  Trustee and such  co-trustee  or
              separate trustee  jointly,  as shall be provided in the instrument
              appointing  such  co-trustee  or separate  trustee,  except to the
              extent  that  under  any  law of any  jurisdiction  in  which  any
              particular act is to be performed, the Institutional Trustee shall
              be  incompetent or unqualified to perform such act, in which event
              such rights,  powers,  duties,  and obligations shall be exercised
              and performed by such co-trustee or separate trustee.

                     (iii)  The  Institutional  Trustee,  at  any  time,  by  an
              instrument in writing executed by it, with the written concurrence
              of the  Sponsor,  may  accept  the  resignation  of or remove  any
              co-trustee or separate trustee appointed under this Section,  and,
              in  case  an  Indenture  Event  of  Default  has  occurred  and is
              continuing,  the Institutional  Trustee shall have power to accept
              the  resignation  of, or remove,  any such  co-trustee or separate
              trustee without the  concurrence of the Sponsor.  Upon the written
              request of the Institutional  Trustee, the Sponsor shall join with
              the  Institutional  Trustee  in  the  execution,   delivery,   and
              performance of all instruments and agreements  necessary or proper
              to  effectuate  such  resignation  or removal.  A successor to any
              co-trustee  or  separate  trustee so  resigned  or removed  may be
              appointed in the manner provided in this Section.

                     (iv)   No co-trustee or separate trustee hereunder shall be
              personally  liable  by  reason  of  any  act  or  omission  of the
              Institutional Trustee, or any other such trustee hereunder.

                     (v)    The  Trustees  shall  not be liable by reason of any
              act of a co-trustee or separate trustee.

                                       46
<PAGE>


                     (vi)   Any Act of Holders  delivered  to the  Institutional
              Trustee  shall be  deemed  to have  been  delivered  to each  such
              co-trustee and separate trustee.

       SECTION 8.10.        RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR

       No resignation or removal of any Trustee (the "Relevant  Trustee") and no
appointment  of a successor  Relevant  Trustee  pursuant to this  Article  shall
become  effective until the acceptance of appointment by the successor  Relevant
Trustee in accordance with the applicable requirements of Section 8.11.

       The  Relevant  Trustee  may resign at any time by giving  written  notice
thereof to the Securityholders,  the Sponsor and the other Trustees, except that
notice is only required to be delivered to the Securityholders in the event that
the  Institutional  Trustee or the Delaware  Trustee is the  resigning  Relevant
Trustee.  If the  instrument  of  acceptance  by a  successor  Relevant  Trustee
required by Section 8.11 shall not have been delivered to the resigning Relevant
Trustee  within 30 days  after the  giving of such  notice of  resignation,  the
resigning Relevant Trustee may petition any court of competent  jurisdiction for
the appointment of a successor Relevant Trustee.

       Unless  an  Indenture  Event  of  Default  shall  have  occurred  and  be
continuing, the Relevant Trustee may be removed at any time by Act of the Holder
of the Common  Securities.  If an Indenture Event of Default shall have occurred
and be  continuing,  the Relevant  Trustee may be removed at such time by Act of
the  Securityholders  of a  Majority  in  Liquidation  Amount  of the  Preferred
Securities, delivered to the Relevant Trustee (in its individual capacity and on
behalf of the Trust).

       If the Relevant  Trustee shall resign,  be removed or become incapable of
continuing to act as Trustee at a time when no Indenture  Event of Default shall
have occurred and be continuing,  the Holder of the Common Securities, by Act of
the Holder of the Common  Securities  delivered to the  retiring  and  successor
Relevant  Trustees,  shall  promptly  appoint a  successor  Relevant  Trustee or
Trustees,  and the retiring  Relevant  Trustee shall comply with the  applicable
requirements of Section 8.11. If the Relevant  Trustee shall resign,  be removed
or become  incapable of continuing to act as the Relevant Trustee at a time when
an Indenture Event of Default shall have occurred and be continuing, the Holders
of  Preferred  Securities,  by Act  of  the  Securityholders  of a  Majority  in
Liquidation Amount of the Preferred Securities then outstanding delivered to the
retiring and successor  Relevant  Trustee,  shall  promptly  appoint a successor
Relevant  Trustee or Trustees,  and the Relevant  Trustee  shall comply with the
applicable  requirements of Section 8.11. If no successor Relevant Trustee shall
have been so  appointed  in  accordance  with  this  Section  8.10 and  accepted
appointment in the manner required by Section 8.11, any  Securityholder  who has
been a Securityholder of Trust Securities for at least six months may, on behalf
of himself and all others  similarly  situated,  petition any court of competent
jurisdiction for the appointment of a successor Relevant Trustee.

       The retiring  Relevant  Trustee shall give notice of each resignation and
each  removal of the  Relevant  Trustee,  and each  appointment  of a  successor
Trustee to all Securityholders in the manner provided in Section 11.08 and shall
give notice to the Sponsor,  except that notice is only required to be delivered
to the  Securityholders  in the  event  that the  Institutional  Trustee  or the

                                       47
<PAGE>


Delaware Trustee is the resigning or removed Relevant Trustee. Each notice shall
include  the name of the  successor  Relevant  Trustee  and the  address  of its
corporate trust office if it is the Institutional Trustee.

       Notwithstanding the foregoing or any other provision of this Declaration,
in the event any Regular  Trustee or a Delaware  Trustee who is a natural person
dies or becomes incompetent or incapacitated, the vacancy created by such death,
incompetence or incapacity may be filled by (i) the act of the remaining Regular
Trustee or (ii)  otherwise by the Sponsor (with the successor in each case being
an individual who satisfies the eligibility requirement for Regular Trustees set
forth in Section 8.07). Additionally, notwithstanding the foregoing or any other
provision  of this  Declaration,  in the event  the  Sponsor  believes  that any
Regular Trustee has become incompetent or incapacitated,  the Sponsor, by notice
to the remaining Trustees, may terminate the status of such Person as an Regular
Trustee (in which case the vacancy so created will be filled in accordance  with
the preceding sentence).

       SECTION 8.11.        ACCEPTANCE OF APPOINTMENT BY SUCCESSOR

       In case of the  appointment  hereunder of a successor  Relevant  Trustee,
every such successor  Relevant  Trustee so appointed shall execute,  acknowledge
and  deliver to the Trust and to the  retiring  Relevant  Trustee an  instrument
accepting  such  appointment,  and thereupon the  resignation  or removal of the
retiring  Relevant  Trustee shall become  effective and such successor  Relevant
Trustee,  without any further act, deed or conveyance,  shall become vested with
all the rights, powers, trusts and duties of the retiring Relevant Trustee; but,
on the request of the Sponsor or the successor  Relevant Trustee,  such retiring
Relevant  Trustee  shall,  upon payment of its  charges,  execute and deliver an
instrument  transferring  to such  successor  Relevant  Trustee  all the rights,
powers and  trusts of the  retiring  Relevant  Trustee  and shall  duly  assign,
transfer and deliver to such successor  Relevant  Trustee all property and money
held by such retiring Relevant Trustee hereunder.

       Upon  request  of any  such  successor  Relevant  Trustee,  the  retiring
Relevant  Trustee  shall  execute  any and all  instruments  for more  fully and
certainly vesting in and confirming to such successor  Relevant Trustee all such
rights, powers and trusts referred to in the preceding paragraph.

       No successor  Relevant Trustee shall accept its appointment unless at the
time of such acceptance such successor  Relevant  Trustee shall be qualified and
eligible under this Article.

       SECTION 8.12.        MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS

       Any Person into which the Institutional Trustee,  Delaware Trustee or any
Regular Trustee which is not a natural person may be merged or converted or with
which  it  may be  consolidated,  or  any  Person  resulting  from  any  merger,
conversion or  consolidation to which such Relevant Trustee shall be a party, or
any Person  succeeding to all or substantially  all the corporate trust business
of such  Relevant  Trustee,  shall be the  successor  of such  Relevant  Trustee
hereunder;  provided such Person shall be otherwise qualified and eligible under
this Article, without the execution or filing of any paper or any further act on
the part of any of the parties hereto.

                                       48
<PAGE>


       SECTION 8.13.        PREFERENTIAL COLLECTION OF CLAIMS AGAINST SPONSOR OR
TRUST

       If and when the  Institutional  Trustee  shall be or become a creditor of
the  Sponsor  or the Trust  (or any other  obligor  upon the  Subordinated  Debt
Securities or the Trust Securities),  the Institutional Trustee shall be subject
to the provisions of the Trust  Indenture Act regarding the collection of claims
against  the  Sponsor  or Trust (or any such other  obligor).  For  purposes  of
Section 311(b)(4) and (6) of the Trust Indenture Act:

              (a)    "cash  transaction"  means any  transaction  in which  full
payment for goods or securities sold is made within seven days after delivery of
the goods or  securities  in  currency or in checks or other  orders  drawn upon
banks or bankers and payable upon demand; and

              (b)    "self-liquidating paper" means any draft, bill of exchange,
acceptance or  obligation  which is made,  drawn,  negotiated or incurred by the
Sponsor or the Trust (or any such  obligor)  for the  purpose of  financing  the
purchase, processing,  manufacturing,  shipment, storage or sale of goods, wares
or merchandise and which is secured by documents evidencing title to, possession
of, or a lien upon,  the  goods,  wares or  merchandise  or the  receivables  or
proceeds  arising from the sale of the goods,  wares or  merchandise  previously
constituting   the   security;   provided   the  security  is  received  by  the
Institutional   Trustee   simultaneously  with  the  creation  of  the  creditor
relationship  with the Sponsor or the Trust (or any such  obligor)  arising from
the making,  drawing,  negotiating or incurring of the draft,  bill of exchange,
acceptance or obligation.

       SECTION 8.14.        REPORTS BY INSTITUTIONAL TRUSTEE

              (a)    Within 60 days  after  _____ of each year  commencing  with
_____,  2004,  if required by Section  313(a) of the Trust  Indenture  Act,  the
Institutional  Trustee shall transmit a brief report dated as of such _____ with
respect to any of the events  specified  in such  Section  313(a)  that may have
occurred since the later of the date of this Declaration or the preceding ____.

              (b)    The Institutional Trustee shall transmit to Securityholders
the reports  required by Section 313(b) of the Trust  Indenture Act at the times
specified therein.

              (c)    Reports  pursuant to this Section shall be  transmitted  in
the manner and to the Persons  required by Sections  313(c) and (d) of the Trust
Indenture Act.

       SECTION 8.15.        REPORTS TO THE INSTITUTIONAL TRUSTEE

       The Sponsor and the Regular Trustees on behalf of the Trust shall provide
to the Institutional Trustee such documents, reports and information as required
by Section 314 of the Trust  Indenture  Act (if any) and,  within 120 days after
the end of each fiscal year of the Sponsor, the compliance  certificate required
by Section  314(a)(4) of the Trust  Indenture  Act in the form and in the manner
required by Section 314 of the Trust Indenture Act.

       Delivery of such reports,  information and documents to the Institutional
Trustee  is for  informational  purposes  only and the  Institutional  Trustee's
receipt of such shall not constitute

                                       49
<PAGE>


constructive  notice of any information  contained  therein or determinable from
information contained therein.

       SECTION 8.16.        EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT

       Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the  Institutional  Trustee  such  evidence  of  compliance  with any
conditions  precedent,  if any, provided for in this  Declaration,  including an
Officers'  Certificate  and an  Opinion  of  Counsel  that  relate to any of the
matters set forth in Section 314(c) of the Trust  Indenture Act. Any certificate
or  opinion  required  to be given  pursuant  to  Section  314(c)  of the  Trust
Indenture Act shall comply with Section 314(e) of the Trust Indenture Act.

       SECTION 8.17.        NUMBER OF TRUSTEES

              (a)    The number of Trustees  shall  initially be four;  provided
that the Sponsor by written  instrument  may  increase or decrease the number of
Regular Trustees.

              (b)    If a Trustee  ceases to hold  office for any reason and the
number of Regular Trustees is not reduced pursuant to Section 8.17(a), or if the
number of Trustees is increased  pursuant to Section  8.17(a),  a vacancy  shall
occur.  The vacancy shall be filled with a Trustee  appointed in accordance with
Section 8.10.

              (c)    Except as provided in Section 9.02, the death, resignation,
retirement,  removal,  bankruptcy,  incompetence  or  incapacity  to perform the
duties of a Trustee shall not operate to annul, dissolve or terminate the Trust.
Whenever a vacancy in the number of Regular  Trustees  shall  occur,  until such
vacancy is filled by the  appointment of an Regular  Trustee in accordance  with
Section 8.10,  the Regular  Trustees in office,  regardless of their number (and
notwithstanding any other provision of this Declaration),  shall have all powers
granted to the Regular  Trustees and shall discharge the duties imposed upon the
Regular Trustees by this Declaration.

       SECTION 8.18.        DELEGATION OF POWER

              (a)    Any Regular  Trustee  may, by power of attorney  consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purpose of executing any documents  contemplated in Section
2.07(a),  including any registration  statement or amendment  thereto filed with
the Commission, or making any other governmental filing; and

              (b)    The Regular Trustees shall have power to delegate from time
to time to such of their  number the doing of such things and the  execution  of
such  instruments  either in the name of the  Trust or the names of the  Regular
Trustees or otherwise as the Regular Trustees may deem expedient,  to the extent
such  delegation  is  not  prohibited  by  applicable  law  or  contrary  to the
provisions of the Trust, as set forth herein.

       SECTION 8.19.        ENFORCEMENT OF RIGHTS OF INSTITUTIONAL TRUSTEE BY
SECURITYHOLDERS

       If (i) the  Trust  fails to pay  Distributions  in full on the  Preferred
Securities  for more than  five  consecutive  years at any one time,  or (ii) an
Event of Default occurs and is continuing, then

                                       50
<PAGE>


the  Holders  of  Preferred  Securities  will  rely  on the  enforcement  by the
Institutional  Trustee of its rights  against  the  Company as the holder of the
Subordinated  Debt  Securities.  In  addition,  the  Holders  of a  majority  in
aggregate  Liquidation Amount of the Preferred Securities will have the right to
direct the time,  method,  and place of conducting any proceeding for any remedy
available to the Institutional Trustee or to direct the exercise of any trust or
power conferred upon the Institutional Trustee under this Declaration, including
the right to direct the Institutional Trustee to exercise the remedies available
to it as a holder  of the  Subordinated  Debt  Securities;  provided  that  such
direction  shall  not  be in  conflict  with  any  rule  of  law  or  with  this
Declaration,  and  could not  involve  the  Institutional  Trustee  in  personal
liability in circumstances where reasonable indemnity would not be adequate.  If
the  Institutional  Trustee  fails to enforce its rights under the  Subordinated
Debt  Securities,  a Holder of Preferred  Securities  may, to the fullest extent
permitted by applicable law, institute a legal proceeding against the Company to
enforce its rights under this  Declaration  without first  instituting any legal
proceeding against the Institutional Trustee or any other Person,  including the
Trust;  it being  understood  and  intended  that no one or more of such Holders
shall have any right in any manner  whatsoever  by virtue of, or by availing of,
any provision of this Declaration to affect,  disturb or prejudice the rights of
any  other  of such  Holders  or to  obtain  or to seek to  obtain  priority  or
preference  over any other of such  Holders or to enforce  any right  under this
Declaration,  except in the manner herein provided and for the equal and ratable
benefit  of all  such  Holders.  Notwithstanding  the  foregoing,  a  Holder  of
Preferred  Securities  may  institute a legal  proceeding  directly  against the
Company,  without first instituting a legal proceeding  against or requesting or
directing that action be taken by the Institutional Trustee or any other Person,
for  enforcement  of payment to such Holder of  principal  of or interest on the
Subordinated  Debt Securities  having a principal  amount equal to the aggregate
stated liquidation amount of the Preferred Securities of such Holder on or after
the due dates  therefor  specified  or  provided  for in the  Subordinated  Debt
Securities.  The  Company  shall be  subrogated  to all rights of the Holders of
Preferred  Securities  in respect  of any  amounts  paid to such  Holders by the
Company pursuant to this Section.

       SECTION 8.20.        DELAWARE TRUSTEE

              (a)    Notwithstanding  any other  provision of this  Declaration,
the Delaware Trustee shall not be entitled to exercise any powers, nor shall the
Delaware  Trustee  have any of the duties and  responsibilities  of the  Regular
Trustees  or the  Institutional  Trustee  described  in  this  Declaration.  The
Delaware  Trustee  shall  be a  trustee  for the  sole and  limited  purpose  of
fulfilling the requirements of ss.3807 of the Delaware Statutory Trust Act.

              (b)    It is expressly understood and agreed by the parties hereto
that in fulfilling its  obligations as Delaware  Trustee  hereunder on behalf of
the Trust (i) each of the  representations,  undertakings and agreements  herein
made on the  part of the  Trust  is made and  intended  not as  representations,
warranties,  covenants,  undertakings and agreements by SunTrust  Delaware Trust
Company in its  individual  capacity but is made and intended for the purpose of
binding only the Trust, and (ii) under no circumstances  shall SunTrust Delaware
Trust Company in its individual capacity be personally liable for the payment of
any indebtedness or expenses of the Trust or be liable for the breach or failure
of any  obligation,  representation,  warranty or covenant made or undertaken by
the Trust under this Declaration, except if such breach or failure is due to any
gross negligence or willful misconduct of the Delaware Trustee.

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                                   ARTICLE IX
                           DISSOLUTION AND LIQUIDATION

       SECTION 9.01.        DISSOLUTION UPON EXPIRATION DATE

       The  Trust  shall  automatically   dissolve  on  December  1,  2044  (the
"Expiration Date") or earlier pursuant to Section 9.02.

       SECTION 9.02.        EARLY TERMINATION

       Upon  the  first  to occur of any of the  following  events  (such  first
occurrence,  an "Early  Termination  Event"),  the Trust shall be  dissolved  in
accordance with the terms hereof:

                     (i)    the  occurrence of a Bankruptcy  Event in respect of
              the Sponsor,  dissolution or  liquidation  of the Sponsor,  or the
              dissolution of the Trust pursuant to judicial decree;

                     (ii)   the   delivery   of   written   direction   to   the
              Institutional  Trustee by the Sponsor at any time (which direction
              is optional and wholly  within the  discretion  of the Sponsor) to
              dissolve the Trust and distribute the Subordinated Debt Securities
              to Securityholders as provided in Section 9.04; and

                     (iii)  the payment at maturity or  redemption of all of the
              Junior Subordinated Debt Securities, and the consequent redemption
              of all of the Preferred Securities.

       SECTION 9.03.        TERMINATION

       The  respective  obligations  and  responsibilities  of the Trust and the
Trustees  created  hereby  shall  terminate  upon  the  latest  to  occur of the
following:  (a) the distribution by the Institutional Trustee to Securityholders
upon the  liquidation of the Trust pursuant to Section 9.04 or 9.05, or upon the
redemption  of all of the Trust  Securities  pursuant  to Section  4.04,  of all
amounts or  instruments  required  to be  distributed  hereunder  upon the final
payment of the Trust  Securities;  (b) the payment of any  expenses  owed by the
Trust;  and  (c) the  discharge  of all  administrative  duties  of the  Regular
Trustees,  including  the  performance  of any tax  reporting  obligations  with
respect to the Trust or the Securityholders.

       SECTION 9.04.        LIQUIDATION

              (a)    If any Early  Termination Event specified in clause (ii) of
Section 9.02 occurs, the Trust shall be liquidated and the Institutional Trustee
shall  distribute the  Subordinated  Debt Securities to the  Securityholders  as
provided in this Section 9.04.

              (b)    In connection with a distribution of the Subordinated  Debt
Securities,  each Holder of Trust Securities shall be entitled to receive, after
the  satisfaction  of  liabilities  to creditors of the Trust (as evidenced by a
certificate  of the  Regular  Trustees),  a Like  Amount  of  Subordinated  Debt
Securities. Notice of liquidation shall be given by the Institutional Trustee by

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<PAGE>


first-class  mail,  postage  prepaid,  mailed not later than 30 nor more than 60
days prior to the  Liquidation  Date to each Holder of Trust  Securities at such
Holder's  address  appearing  in  the  Securities   Register.   All  notices  of
liquidation shall:

                     (i)    state the Liquidation Date;

                     (ii)   state that from and after the Liquidation  Date, the
              Trust  Securities  will no longer be deemed to be Outstanding  and
              any Trust  Securities  Certificates  not  surrendered for exchange
              will be deemed to  represent  a Like Amount of  Subordinated  Debt
              Securities; and

                     (iii)  provide  such   information   with  respect  to  the
              mechanics  by  which   Holders  may  exchange   Trust   Securities
              Certificates  for  Subordinated  Debt  Securities  as the  Regular
              Trustees or the Institutional Trustee shall deem appropriate.

              (c)    In  order  to  effect  the  liquidation  of the  Trust  and
distribution  of  the  Subordinated  Debt  Securities  to  Securityholders,  the
Institutional Trustee shall establish a record date for such distribution (which
shall be not more than 45 days prior to the Liquidation Date) and, either itself
acting as  exchange  agent or through  the  appointment  of a separate  exchange
agent,  shall establish such  procedures as it shall deem  appropriate to effect
the distribution of Subordinated Debt Securities in exchange for the Outstanding
Trust Securities Certificates.

              (d)    After the Liquidation  Date, (i) the Trust  Securities will
no longer be deemed to be  Outstanding,  (ii)  certificates  representing a Like
Amount of  Subordinated  Debt  Securities  will be issued  to  Holders  of Trust
Securities  Certificates,  upon  surrender of such  certificates  to the Regular
Trustees or their agent for exchange,  (iii) any Trust  Securities  Certificates
not so  surrendered  for  exchange  will be deemed to represent a Like Amount of
Subordinated Debt Securities,  accruing interest at the rate provided for in the
Subordinated Debt Securities from the last Distribution  Payment Date on which a
Distribution was made on such Trust  Certificates until such certificates are so
surrendered  (and until such  certificates  are so  surrendered,  no payments of
interest or principal will be made to Holders of Trust  Securities  Certificates
with  respect  to such  Subordinated  Debt  Securities)  and (iv) all  rights of
Securityholders  holding Trust  Securities will cease,  except the right of such
Securityholders to receive  Subordinated Debt Securities upon surrender of Trust
Securities Certificates.

              (e)    The  Sponsor   will  use  its  best  efforts  to  have  the
Subordinated  Debt Securities that are distributed in exchange for the Preferred
Securities to be listed on such securities exchange as the Preferred  Securities
are then listed.  The Sponsor may elect to have the Subordinated Debt Securities
issued in book-entry  form to the Clearing  Agency or its nominee  pursuant to a
Certificate Depository Agreement.

       SECTION 9.05.        BANKRUPTCY

       If an Early Termination Event specified in clause (i) of Section 9.02 has
occurred,  the  Trust  shall be  liquidated.  The  Institutional  Trustee  shall
distribute the Subordinated Debt Securities to the  Securityholders  as provided
in Section 9.04,  unless such distribution is

                                       53
<PAGE>


determined  by the  Regular  Trustees  not to be  practical,  in which event the
Holders will be entitled to receive out of the assets of the Trust available for
distribution to Securityholders, after satisfaction of liabilities to creditors,
an amount equal to the  Liquidation  Amount per Trust  Security plus accrued and
unpaid  Distributions  thereon to the date of  payment  (such  amount  being the
"Liquidation  Distribution").  If such Liquidation Distribution can be paid only
in part because the Trust has  insufficient  assets available to pay in full the
aggregate  Liquidation  Distribution,  then,  subject  to  the  next  succeeding
sentence, the amounts payable by the Trust on the Trust Securities shall be paid
on a pro rata basis (based upon Liquidation  Amounts).  The Holder of the Common
Securities will be entitled to receive  Liquidation  Distributions upon any such
dissolution,  winding-up or termination pro rata  (determined as aforesaid) with
Holders of Preferred  Securities,  except that, if an Indenture Event of Default
has occurred and is continuing,  the Preferred  Securities shall have a priority
over the Common Securities.

       SECTION 9.06.        CERTIFICATE OF CANCELLATION

       A Certificate of Cancellation  ("Certificate") to terminate the Trust (as
permitted  hereby) may be signed by any Regular Trustee,  individually,  in such
capacity so long as such Certificate fully complies with all legal requirements.

                                   ARTICLE X
                             REMARKETING PROCEDURES

       SECTION 10.01.       ELECTION TO REMARKET

       If the Company,  and the Regular  Trustees acting at the direction of the
Company,  elect to conduct a Remarketing,  the Trust,  not less than 20 nor more
than 35 Business Days prior to the related  Election Date, is required  pursuant
to Section  4.02(b) to give the written  notice of proposed  Remarketing  of the
Preferred  Securities to the Clearing Agency,  the  Institutional  Trustee,  the
Indenture  Trustee,  the  Remarketing  Agent and the  Calculation  Agent. If the
Preferred  Securities  are not issued in global,  fully  registered  form to the
Clearing  Agency,  such notice shall be delivered to the Holders  instead of the
Clearing Agency.  As required by Section 4.02(b),  such notice will describe the
Remarketing  and will indicate the length of the proposed new Fixed Rate Period,
the proposed  Remarketing  Date and any  redemption  provisions  that will apply
during such new Fixed Rate Period.  At any time prior to the Election  Date, the
Company and the Regular  Trustees may elect to terminate a Remarketing by giving
the Clearing Agency (or the Holders, as applicable),  the Remarketing Agent, the
Institutional  Trustee,  the Indenture Trustee and the Calculation Agent written
notice of such termination.

       SECTION 10.02.       NOTICE OF ELECTION

              (a)    Not  later  than  4:00  P.M.,  New York  City  time,  on an
Election  Date,  each  Holder of  Preferred  Securities  may give,  through  the
facilities of the Clearing Agency in the case of Book-Entry Preferred Securities
Certificates,  a written  notice to the  Institutional  Trustee of its  election
("Notice of  Election")  (i) to retain and not to have all or any portion of the
Preferred Securities owned by it remarketed in the Remarketing or (ii) to tender
all or any portion of such Preferred  Securities for purchase in the Remarketing
(such portion, in either case, is to be in the

                                       54
<PAGE>


Liquidation  Amount of $1,000 or any integral multiple  thereof).  Any Notice of
Election given to the  Institutional  Trustee will be irrevocable and may not be
conditioned  upon the  level at  which  the  Fixed  Rate is  established  in the
Remarketing.  Promptly  after 4:30 P.M.,  New York City time,  on such  Election
Date, the Institutional Trustee, based on the Notices of Election received by it
through  the  Clearing  Agency (or from the  Holders,  if  Definitive  Preferred
Securities  Certificates  have been issued) prior to such time,  will notify the
Regular  Trustees,  the  Company  and the  Remarketing  Agent of the  number  of
Preferred  Securities to be retained by holders of Preferred  Securities and the
number of Preferred Securities tendered for purchase in the Remarketing.

              (b)    If any  Holder of  Preferred  Securities  gives a Notice of
Election to tender Preferred Securities as described in 10.02(a),  the Preferred
Securities  so subject to such Notice of Election  will be deemed  tendered  for
purchase  in the  Remarketing,  notwithstanding  any  failure by such  Holder to
deliver or properly deliver such Preferred  Securities to the Remarketing  Agent
for purchase.  If any Holder of Preferred  Securities  fails timely to deliver a
Notice of Election, as described above, such Preferred Securities will be deemed
tendered for purchase in such Remarketing,  notwithstanding  such failure or the
failure by such Holder to deliver or properly deliver such Preferred  Securities
to the Remarketing Agent for purchase.

              (c)    The right of each Holder of  Preferred  Securities  to have
Preferred  Securities  tendered for purchase in the Remarketing shall be limited
to the extent that (i) the Remarketing Agent conducts a Remarketing  pursuant to
the terms of the Remarketing Agreement,  (ii) Preferred Securities tendered have
not been called for redemption,  (iii) the  Remarketing  Agent is able to find a
purchaser or purchasers  for tendered  Preferred  Securities at a Fixed Rate and
(iv) such  purchaser or purchasers  deliver the purchase  price  therefor to the
Remarketing Agent.

              (d)    Any Holder of Preferred Securities that desires to continue
to retain a number of  Preferred  Securities,  but only if the Fixed Rate is not
less than a  specified  rate per annum,  shall  submit a Notice of  Election  to
tender such Preferred  Securities  pursuant to this Section 10.02 and separately
notify the Remarketing  Agent of its interest at the telephone  number set forth
in the notice of Remarketing delivered pursuant to Section 10.01. If such Holder
so notifies the Remarketing  Agent, the Remarketing  Agent will give priority to
such Holder's purchase of such number of Preferred Securities in the Remarketing
providing that the Fixed Rate is not less than such specified rate.

       SECTION 10.03.       DETERMINATION OF DISTRIBUTION RATE

              (a)    If Holders  submit Notices of Election to retain all of the
Preferred  Securities  then  outstanding,  the  Fixed  Rate  will  be  the  rate
determined by the Remarketing  Agent, in its sole  discretion,  as the rate that
would  have  been  established  had a  Remarketing  been  held  on  the  related
Remarketing Date.

              (b)    On any  Remarketing  Date on which the Remarketing is to be
conducted,  the Remarketing  Agent will use commercially  reasonable  efforts to
remarket, at a price equal to 100% of the Liquidation Amount thereof,  Preferred
Securities  tendered  or deemed  tendered  for  purchase.  Except as provided in
Section 10.03(a), if, as a result of such efforts, on any

                                       55
<PAGE>


Remarketing  Date, the Remarketing  Agent has determined that it will be able to
remarket all Preferred  Securities  tendered or deemed  tendered for purchase in
the Remarketing at a Fixed Rate and at a price of $1,000 per Preferred Security,
prior  to 4:00  P.M.,  New  York  City  time,  on  such  Remarketing  Date,  the
Remarketing  Agent will  determine  the Fixed  Rate,  which will be the rate per
annum (rounded to the nearest  one-thousandth  (0.001) of one percent per annum)
which the Remarketing Agent determines,  in its sole judgment,  to be the lowest
Fixed Rate per annum that will enable it to remarket  all  Preferred  Securities
tendered or deemed  tendered for  Remarketing at a price of $1,000 per Preferred
Security.

              (c)    If the  Remarketing  Agent is  unable to  remarket  by 4:00
P.M.,  New York  City time on the third  Business  Day prior to the  Remarketing
Settlement  Date,  all Preferred  Securities  tendered or deemed  tendered for a
purchase at a price of $1,000 per Preferred Security,  the Distribution Rate for
the next Distribution Period shall be the Floating Rate and the new Distribution
Period shall be a Floating Rate Period.  In such case,  no Preferred  Securities
will be sold in the  Remarketing  and  each  Holder  will  continue  to hold its
Preferred Securities at such Floating Rate during such Floating Rate Period.

              (d)    All Preferred Securities tendered or deemed tendered in the
Remarketing  will be  automatically  delivered to the account of the Remarketing
Agent  through the  facilities  of the Clearing  Agency  against  payment of the
purchase  price therefor on the  Remarketing  Settlement  Date. The  Remarketing
Agent will make payment to the Clearing  Agency  Participant  of each  tendering
holder of Preferred  Securities in the Remarketing through the facilities of the
Clearing Agency by the close of business on the Remarketing Settlement Date.

       In  accordance  with the  Clearing  Agency's  normal  procedures,  on the
Remarketing  Settlement  Date, the  transaction  described above with respect to
each Preferred  Security  tendered for purchase and sold in the Remarketing will
be  executed  through  the  Clearing  Agency  Participants,  will be debited and
credited and such Preferred  Securities  delivered by book entry as necessary to
effect purchases and sales of such Preferred Securities.  The Clearing Agency is
expected to make payment in accordance with its normal procedures.

       This Section 10.03(d) shall not apply if Definitive  Preferred Securities
Certificates have been issued.

              (e)    If  any  Holder   selling   Preferred   Securities  in  the
Remarketing  fails to deliver such  Preferred  Securities,  the Clearing  Agency
Participant  of such  selling  Holder and of any other  person  that was to have
purchased Preferred  Securities in the Remarketing may deliver to any such other
person a  number  of  Preferred  Securities  that is less  than  the  number  of
Preferred  Securities that otherwise was to be purchased by such person. In such
event, the number of Preferred  Securities to be so delivered will be determined
by such  Clearing  Agency  Participant  and  delivery of such  lesser  number of
Preferred  Securities will  constitute  good delivery.  This paragraph shall not
apply if Definitive Preferred Securities Certificates have been issued.

              (f)    The  Remarketing  Agent is not  obligated  to purchase  any
Preferred  Securities  that  would  otherwise  remain  unsold in a  Remarketing.
Neither the Trust, any Trustee,

                                       56
<PAGE>


the Company nor the Remarketing  Agent shall be obligated in any case to provide
funds to make payment upon tender of Preferred Securities for Remarketing.

                                   ARTICLE XI
                            MISCELLANEOUS PROVISIONS

       SECTION 11.01.       GUARANTEE BY THE SPONSOR

       Subject to the terms and conditions  hereof,  the Sponsor,  as obligor of
the Subordinated Debt Securities,  irrevocably and unconditionally guarantees to
each  Person to whom the Trust is now or  hereafter  becomes  indebted or liable
(the  "Beneficiaries")  the  full  payment,  when  and as  due,  of any  and all
Obligations  (as  hereinafter  defined) to such  Beneficiaries.  As used herein,
"Obligations"  means any  indebtedness,  expenses or  liabilities  of the Trust,
other  than  obligations  of  the  Trust  to  pay to  Holders  of any  Preferred
Securities,  Common  Securities  or other  similar  interests  in the  Trust the
amounts  due such  Holders  pursuant to the terms of the  Preferred  Securities,
Common  Securities  or such other  similar  interests,  as the case may be. This
guarantee  is intended to be for the benefit of, and to be  enforceable  by, all
such  Beneficiaries,  whether or not such  Beneficiaries  have  received  notice
hereof.

       SECTION 11.02.       LIMITATION OF RIGHTS OF SECURITYHOLDERS

       The death or incapacity  of any Person having an interest,  beneficial or
otherwise,  in a Trust Security shall not operate to terminate this Declaration,
nor  entitle  the  legal   representatives  or  heirs  of  such  Person  or  any
Securityholder for such Person, to claim an accounting, take any action or bring
any  proceeding  in and  for a  partition  or  winding  up of  the  arrangements
contemplated   hereby,   nor  otherwise  affect  the  rights,   obligations  and
liabilities of the parties hereto or any of them.

       SECTION 11.03.       AMENDMENT

              (a)    This  Declaration  may be amended  from time to time by the
Institutional Trustee and the Holders of a Majority in Liquidation Amount of the
Common Securities, without the consent of any Holder of the Preferred Securities
(i) to cure any ambiguity,  correct or supplement any provision  herein that may
be defective or inconsistent  with any other provision  herein, or to make other
changes to the  provisions  with respect to matters or questions  arising  under
this  Declaration;  provided,  however,  that such amendment shall not adversely
affect in any material respect the interests of any Holder of Trust  Securities;
(ii) to facilitate  the tendering,  remarketing  and settlement of the Preferred
Securities,  as herein  contemplated;  (iii) to modify,  eliminate or add to any
provisions  of this  Declaration  to such extent as shall be necessary to ensure
that the Trust  will not be  taxable  other  than as a grantor  trust for United
States  federal  income tax purposes at any time that any Trust  Securities  are
Outstanding  or to ensure  that the Trust will not be required to register as an
investment  company under the Investment Company Act; or (iv) in accordance with
the  requirements  of Section  8.11.  Without  limiting  the  generality  of the
foregoing,  if the Trust Indenture Act as in effect at the date of the execution
and delivery of this  Declaration or at any time thereafter shall be amended and
(x) if any such  amendment  shall require one or more changes to any  provisions
hereof or the inclusion herein of any

                                       57
<PAGE>


additional  provisions,  or shall by  operation  of law be deemed to effect such
changes  or  incorporate  such  provisions  by  reference  or  otherwise,   this
Declaration  shall be deemed  to have  been  amended  so as to  conform  to such
amendment to the Trust  Indenture  Act,  and the Company and the  Trustees  may,
without the consent of any  Holders,  amend this  Declaration  to evidence  such
amendment  hereof; or (y) if any such amendment shall permit one or more changes
to, or the  elimination  of, any  provisions  hereof  which,  at the date of the
execution  and delivery  hereof or at any time  thereafter,  are required by the
Trust  Indenture Act to be contained  herein or are contained  herein to reflect
any  provisions  of the Trust  Indenture  Act as in effect  at such  date,  this
Declaration  shall be deemed to have been  amended  to effect  such  changes  or
elimination,  and the Company and the Trustees  may,  without the consent of any
Holders, amend this Declaration to evidence such amendment.

              (b)    Except  as  provided  in  Section  11.03(c)   hereof,   any
provision of this  Declaration may be amended by the  Institutional  Trustee and
the Holders of a Majority in Liquidation  Amount of the Common  Securities  with
(i) the consent of Holders of at least a Majority in  Liquidation  Amount of the
Preferred Securities,  and (ii) receipt by the Trustees of an Opinion of Counsel
to the effect that such  amendment or the  exercise of any power  granted to the
Trustees in  accordance  with such  amendment  will not affect the Trust's being
taxable as a grantor trust for United States  federal income tax purposes or the
Trust's  exemption from status of an  "investment  company" under the Investment
Company Act.

              (c)    In addition to and  notwithstanding  any other provision in
this  Declaration,  without the consent of each  affected  Securityholder,  this
Declaration  may not be  amended  to (i)  change  the  amount  or  timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution  required to be made in respect of the Trust Securities as of a
specified  date; (ii) restrict the right of a  Securityholder  to institute suit
for the  enforcement  of any such payment on or after such date; or (iii) change
the consent required pursuant to this Section 11.03.

              (d)    Notwithstanding  any other provisions of this  Declaration,
the  Trustees  shall  not  enter  into  or  consent  to any  amendment  to  this
Declaration  which  would  cause the Trust to fail or cease to  qualify  for the
exemption  from status of an "investment  company" under the Investment  Company
Act of 1940, as amended, afforded by Rule 3a-5 thereunder.

              (e)    Without the consent of the Sponsor,  the Calculation  Agent
or the Remarketing  Agent, this Declaration may not be amended in a manner which
imposes any additional  obligation on the Sponsor,  the Calculation Agent or the
Remarketing Agent, as the case may be.  Notwithstanding  any other provisions of
this Declaration, the consent of the Delaware Trustee shall be required to amend
any provision of, or add any  provision to, this  Declaration  which affects the
Delaware  Trustee's rights,  duties,  immunities,  liabilities or otherwise.  In
executing any amendment  permitted by this  Declaration,  the Trustees  shall be
entitled to receive,  and (subject to Section 8.01) shall be fully  protected in
relying upon an Officer's Certificate and an Opinion of Counsel stating that the
execution of such amendment is authorized or permitted by this Declaration.  Any
Trustee may, but shall not be obligated to, enter into any such amendment  which
affects such Trustee's own rights, duties,  immunities or liabilities under this
Declaration or otherwise.

                                       58
<PAGE>


              (f)    In the event  that any  amendment  to this  Declaration  is
made, the Regular  Trustees shall promptly provide to the Sponsor a copy of such
amendment.

       SECTION 11.04.       SEPARABILITY

       In case any  provision  in this  Declaration  or in the Trust  Securities
Certificates shall be invalid, illegal or unenforceable,  the validity, legality
and enforceability of the remaining  provisions shall not in any way be affected
or impaired thereby.

       SECTION 11.05.       GOVERNING LAW

       THIS   DECLARATION  AND  THE  RIGHTS  AND  OBLIGATIONS  OF  EACH  OF  THE
SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT TO THIS DECLARATION AND
THE TRUST  SECURITIES  SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF DELAWARE.

       SECTION 11.06.       SUCCESSORS

       This Declaration  shall be binding upon and shall inure to the benefit of
any  successor to both the Trust and the  Trustees,  including  any successor by
operation of law.

       SECTION 11.07.       HEADINGS

       The Article and Section  headings are for convenience  only and shall not
affect the construction of this Declaration.

       SECTION 11.08.       NOTICE AND DEMAND

       Any notice,  demand or other communication which by any provision of this
Declaration  is  required  or  permitted  to be given or  served  to or upon any
Securityholder  or the  Sponsor  may be given or served in  writing  by  deposit
thereof,  first-class  postage prepaid, in the United States mail, hand delivery
or facsimile transmission, in each case, addressed, (i) in the case of a Holders
of  Preferred  Securities,  to such  Holders  of  Preferred  Securities  as such
Securityholder's name and address appear on the Securities Register and, (ii) in
the  case  of the  Holders  of  Common  Securities  or the  Sponsor,  to  Avista
Corporation,  1411 East Mission Avenue,  Spokane,  Washington 99202,  Attention:
Treasurer, Facsimile No. (509) 495-4361, or to such other address as the Holders
of Common  Securities  or the Sponsor  may give  notice of to the  Institutional
Trustee and the Delaware Trustee.  Such notice, demand or other communication to
or upon a  Securityholder  shall be deemed to have  been  sufficiently  given or
made, for all purposes, upon hand delivery, mailing or transmission.

       Any notice,  demand or other communication which by any provision of this
Declaration  is required or permitted to be given or served to or upon the Trust
or the Trustees shall be given in writing addressed as follows: (i) with respect
to the Institutional Trustee and the Delaware Trustee, Union Bank of California,
N.A.,  475  Sansome  Street,  12th  Floor,  San  Francisco,   California  94111,
Attention:  Corporate  Trust Services,  Facsimile No. (415)  296-6754;  SunTrust
Delaware Trust Company,  _____, Attention:  Corporate Trust Services,  Facsimile
No. (___) ___-

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<PAGE>


____, as the case may be, or to such other address as the Institutional  Trustee
or the Delaware Trustee may give notice of to the Sponsor; and (ii) with respect
to the  Regular  Trustees,  to them at the  address  above  for  notices  to the
Sponsor,  marked  Attention:  Regular  Trustees  of AVA Capital  Trust III,  c/o
Treasurer.  Such notice,  demand or other  communication to or upon the Trust or
the Trustees shall be deemed to have been  sufficiently  given or made only upon
actual receipt of the writing by the applicable Trustee.

       Any notice,  demand or other communication which by any provision of this
Declaration is required or permitted to be served upon the Calculation  Agent or
the  Remarketing  Agreement  shall be given in accordance  with the  Calculation
Agent Agreement or the Remarketing Agreement, respectively.

       SECTION 11.09.       AGREEMENT NOT TO PETITION

       Each of the  Trustees  and the  Sponsor  agrees  for the  benefit  of the
Securityholders  that,  until at least  one year and one day after the Trust has
been terminated in accordance with Article IX, it shall not file, or join in the
filing of, a petition  against the Trust under any  bankruptcy,  reorganization,
arrangement,  insolvency,  liquidation or other similar law (including,  without
limitation, the United States Bankruptcy Code) (collectively, "Bankruptcy Laws")
or otherwise join in the commencement of any proceeding  against the Trust under
any  Bankruptcy  Law. In the event the Sponsor takes action in violation of this
Section  11.09,   the   Institutional   Trustee  agrees,   for  the  benefit  of
Securityholders,  that it shall  file an  answer  with the  bankruptcy  court or
otherwise  properly  contest the filing of such petition by the Sponsor  against
the Trust or the  commencement  of such  action and raise the  defense  that the
Sponsor  has agreed in writing not to take such action and should be stopped and
precluded therefrom and such other defenses, if any, as counsel for the Trustees
or the Trust may assert.  The provisions of this Section 11.09 shall survive the
termination of this Declaration.

       SECTION 11.10.       CONFLICT WITH TRUST INDENTURE ACT

              (a)    This  Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.

              (b)    The  Institutional  Trustee shall be the only Trustee which
is a Trustee for the purposes of the Trust Indenture Act.

              (c)    If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in this Declaration by
any of the provisions of the Trust Indenture Act, such required  provision shall
control.

              (d)    The   application  of  the  Trust  Indenture  Act  to  this
Declaration  shall not  affect  the  nature of the  Trust  Securities  as equity
securities  representing  undivided  beneficial  interests  in the assets of the
Trust.

       THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY
OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL

                                       60
<PAGE>


OWNER,  WITHOUT  ANY  SIGNATURE  OR  FURTHER   MANIFESTATION  OF  ASSENT,  SHALL
CONSTITUTE THE  UNCONDITIONAL  ACCEPTANCE BY THE  SECURITYHOLDER  AND ALL OTHERS
HAVING A  BENEFICIAL  INTEREST  IN SUCH  TRUST  SECURITY  OF ALL THE  TERMS  AND
PROVISIONS OF THIS DECLARATION AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND
OTHER TERMS OF THE GUARANTEE AND THE SUBORDINATED INDENTURE AND THE AGREEMENT OF
THE TRUST, SUCH  SECURITYHOLDER  AND SUCH OTHERS THAT THOSE TERMS AND PROVISIONS
SHALL BE  BINDING,  OPERATIVE  AND  EFFECTIVE  AS  BETWEEN  THE  TRUST  AND SUCH
SECURITYHOLDER AND SUCH OTHERS.



                                       61
<PAGE>


IN WITNESS  WHEREOF,  the parties hereto have executed this  Declaration or have
caused this  Declaration  to be executed on their behalf,  all as of the day and
year first above written.


                                    AVISTA CORPORATION,
                                             as Sponsor


                                    By:
                                         ---------------------------------------
                                    Name:
                                    Title:


                                    UNION BANK OF CALIFORNIA, N.A.,
                                             as Institutional Trustee


                                    By:
                                         ---------------------------------------
                                    Name:
                                    Title:


                                    SUNTRUST DELAWARE TRUST COMPANY,
                                             as Delaware Trustee


                                    By:
                                         ---------------------------------------
                                    Name:
                                    Title:



                                    --------------------------------------------
                                                  Malyn K. Malquist
                                                 as Regular Trustee


                                    --------------------------------------------
                                                   Diane C. Thoren
                                                 as Regular Trustee

<PAGE>


                                    EXHIBIT A

       This  Security  is  a  Global  Certificate  within  the  meaning  of  the
Declaration  hereinafter  referred  to and is  registered  in  the  name  of the
Depository  Trust  Company  ("DTC")  or a  nominee  of  DTC.  This  Security  is
exchangeable for Securities registered in the name of a person other than DTC or
its nominee only in the limited  circumstances  described in the Declaration and
no transfer of this Security  (other than a transfer of this Security as a whole
by DTC to a nominee of DTC or by a nominee  of DTC to DTC or another  nominee of
DTC) may be registered except in limited circumstances.

       Unless this certificate is presented by an authorized  representative  of
DTC,  to AVA  Capital  Trust  III or its  agent for  registration  of  transfer,
exchange or payment,  and any  certificate  issued is  registered in the name of
Cede & Co. or in such other name as is requested by an authorized representative
of DTC  (and  any  payment  made to Cede & Co.  or to such  other  entity  as is
requested by an authorized representative of DTC), any transfer, pledge or other
use hereof for value or  otherwise  by or to any person is wrongful  inasmuch as
the registered owner thereof, Cede & Co., has an interest herein.*

Certificate Number                             Number of Preferred Securities

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

      P-_                                              CUSIP NO. _____

                   Certificate Evidencing Preferred Securities
                                       of
                              AVA Capital Trust III

                       Flexible Trust Preferred Securities
                      (Five Year Initial Fixed Rate Period)
               (Liquidation Amount $1,000 per Preferred Security)

              AVA Capital Trust III, a statutory trust created under the laws of
the State of Delaware  (the  "Trust"),  hereby  certifies  that Cede & Co.* (the
"Holder") is the registered owner of _____ (_______) preferred securities of the
Trust representing undivided beneficial interests in the assets of the Trust and
designated the AVA Capital Trust III Flexible Trust Preferred  Securities  (Five
Year  Initial  Fixed Rate  Period)  (Liquidation  Amount  $1,000  per  Preferred
Security)   (the   "Preferred   Securities").   The  Preferred   Securities  are
transferable  on the  books and  records  of the  Trust,  in person or by a duly
authorized  attorney,  upon surrender of this  certificate  duly endorsed and in
proper form for  transfer as provided  in Section  5.04 of the  Declaration  (as
defined below). The designations, rights, privileges, restrictions,  preferences
and other terms and provisions of the Preferred Securities are set forth in, and
this certificate and the Preferred Securities  represented hereby are issued and
shall in all respects be subject to the terms and provisions of, the Amended and
Restated Declaration of Trust of the Trust, dated as of _____, 2004, as the same
may be amended from time to time (the "Declaration"),  including the designation
of the terms of Preferred  Securities as set forth  therein.  The holder of this
certificate

                                      A-1
<PAGE>


is entitled to the benefits of a guarantee by Avista  Corporation,  a Washington
corporation  (the  "Company"),  pursuant  to a Guarantee  Agreement  between the
Company and Union Bank of California,  N.A., as guarantee  trustee,  dated as of
_____, 2004, as the same may be amended from time to time (the "Guarantee"),  to
the extent  provided  therein.  The Trust will furnish a copy of the Declaration
and the Guarantee to the holder of this certificate  without charge upon written
request to the Trust at its principal place of business or registered office.

       Upon receipt of this certificate, the holder of this certificate is bound
by the Declaration and is entitled to the benefits thereunder.

*Insert in Book-Entry Preferred Securities Certificates only


       IN WITNESS WHEREOF, the Trust has executed this certificate this ____ day
of _______, 2004.

                                        AVA CAPITAL TRUST III


                                        By:
                                             -----------------------------------
                                             As Regular Trustee



                          CERTIFICATE OF AUTHENTICATION

              This  is  one  of  the  Preferred  Securities  referred  to in the
within-mentioned Declaration.



                                             -----------------------------------
                                             as Institutional Trustee


                                      A-2
<PAGE>


                                   ASSIGNMENT

FOR VALUE  RECEIVED,  the  undersigned  assigns  and  transfers  this  Preferred
Security to:

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

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

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

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


(Insert assignee's social security or tax identification number)

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

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

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

(Insert address and zip code of assignee)
and irrevocably appoints

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

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

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

agent to transfer  this  Preferred  Securities  Certificate  on the books of the
Trust. The agent may substitute another to act for him or her.

Date:
                  -----------------------------------------------------

Signature:
                  -----------------------------------------------------

(Sign  exactly  as your  name  appears  on the  other  side  of  this  Preferred
Securities Certificate)


                                      A-3
<PAGE>


                                    EXHIBIT B

                    AGREEMENT AS TO EXPENSES AND LIABILITIES


       THIS AGREEMENT AS TO EXPENSES AND LIABILITIES (this  "Agreement") is made
as of _____, 2004,  between Avista  Corporation,  a Washington  corporation (the
"Company"), and AVA Capital Trust III, a Delaware statutory trust (the "Trust").

       WHEREAS,  the Trust intends to issue its Common  Securities  (the "Common
Securities  and its AVA Capital Trust III Flexible  Trust  Preferred  Securities
(the "Preferred Securities"),  with such powers,  preferences and special rights
and  restrictions  as are set forth in the Amended and Restated  Declaration  of
Trust of the Trust dated as of _____,  2004 as the same may be amended from time
to time (the "Declaration"),  and with the proceeds thereof to purchase from the
Company its Subordinated Debt Securities,  Series ____ (the  "Subordinated  Debt
Securities"); and

       NOW,  THEREFORE,  in  consideration of the purchase by each holder of the
Preferred Securities, which purchase the Company hereby agrees shall benefit the
Company and which  purchase  the Company  acknowledges  will be made in reliance
upon the  execution  and delivery of this  Agreement,  the Company and the Trust
hereby agree as follows:


                                    ARTICLE I

       Section  1.01.  AGREEMENT  OF  THE  COMPANY.  Subject  to the  terms  and
conditions  hereof, the Company hereby  irrevocably and  unconditionally  agrees
with the  Trust,  and with  each  person  or  entity to whom the Trust is now or
hereafter  becomes  indebted or liable (the  "Beneficiaries"),  that the Company
shall  make  full  payment,  when  and as  due,  of any  and  all  Expenses  (as
hereinafter defined) to such Beneficiaries and shall reimburse the Trust for any
Expenses paid by it. As used herein, "Expenses" means any expenses, indebtedness
or liabilities of the Trust, including,  without limitation,  any and all taxes,
duties, assessments or other governmental charges of whatever nature (other than
United States  federal  withholding  taxes)  imposed by the United States or any
other taxing  authority;  it being  understood (a) that "Expenses"  shall not be
deemed to  include  amounts  to be  distributed  to the  holders  of the  Common
Securities  and the Preferred  Securities  pursuant to the terms thereof and (b)
that the  intention  of this  covenant  is that  the net  amounts  received  and
retained by the Trust after paying all Expenses will be equal to the amounts the
Trust would have  received and retained had no such Expenses been incurred by or
imposed on the Trust.  This  Agreement is intended to be for the benefit of, and
to be enforceable  by, the Trust and by all such  Beneficiaries,  whether or not
such Beneficiaries have received notice hereof.

       Section 1.02.   TERM OF AGREEMENT.  This Agreement shall terminate and be
of no further force and effect upon the date on which there are no Beneficiaries
remaining; provided, however, that this Agreement shall continue to be effective
or  shall be  reinstated,  as the case  may be,  if at any  time any  holder  of
Preferred  Securities or any  Beneficiary  must restore payment of any sums paid

                                      B-1
<PAGE>


under the Preferred Securities, any Expense, under the Guarantee Agreement dated
the date hereof by the Company and Union Bank of California,  N.A., as guarantee
trustee,  or under this Agreement for any reason  whatsoever.  This Agreement is
continuing, irrevocable, unconditional and absolute.

       Section 1.03.   WAIVER OF NOTICE.  The Company  hereby  waives  notice of
acceptance of this  Agreement and of any payment of Expenses to which it applies
or may apply,  and the Company  hereby waives  presentment,  demand for payment,
protest, notice of nonpayment,  notice of dishonor, notice of redemption and all
other notices and demands.

       Section 1.04.   NO IMPAIRMENT.   The obligations,  covenants,  agreements
and duties of the Company  under this  Agreement  shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:

              (a)    the  extension  of time for the payment by the Trust of all
       or any  portion  of the  Expenses  or for the  performance  of any  other
       obligation under, arising out of, or in connection with, the Expenses;

              (b)    any  failure,  omission,  delay or lack of diligence on the
       part of the  Beneficiaries  to  enforce,  assert or  exercise  any right,
       privilege, power or remedy conferred on the Beneficiaries with respect to
       the Expenses or any action on the part of the Trust  granting  indulgence
       or extension of any kind; or

              (c)    the voluntary or involuntary liquidation, dissolution, sale
       of any collateral,  receivership,  insolvency, bankruptcy, assignment for
       the benefit of creditors,  reorganization,  arrangement,  composition  or
       readjustment  of debt of, or other  similar  proceedings  affecting,  the
       Trust or any of the assets of the Trust.

There shall be no obligation of the  Beneficiaries  to give notice to, or obtain
the  consent  of,  the  Company  with  respect  to the  happening  of any of the
foregoing.

       Section 1.05.  ENFORCEMENT.   A  Beneficiary  may enforce this  Agreement
directly  against  the  Company  and the  Company  waives any right or remedy to
require  that any action be  brought  against  the Trust or any other  person or
entity before proceeding against the Company.

                                   ARTICLE II

       Section 2.01.   BINDING EFFECT.   All guarantees and agreements contained
in this Agreement shall bind the successors,  assigns,  receivers,  trustees and
representatives   of  the  Company  and  shall  inure  to  the  benefit  of  the
Beneficiaries.

       Section 2.02.   AMENDMENT.  So long as there remains any  Beneficiary  or
any Preferred Securities of any series are outstanding, this Agreement shall not
be  modified  or  amended in any manner  adverse to such  Beneficiary  or to the
holders of the Preferred Securities.

       Section 2.03.   NOTICES.   Any notice,  request  or  other  communication
required  or  permitted  to be given  hereunder  shall be  given in  writing  by
delivering the same against receipt therefor by

                                      B-2
<PAGE>


facsimile transmission  (confirmed by mail), telex or by registered or certified
mail,  addressed as follows (and if so given,  shall be deemed given when mailed
or upon receipt of an answer-back, if sent by telex), to-wit:

                  AVA Capital Trust III
                  c/o Union Bank of California, N.A.
                  475 Sansome Street, 12th Floor
                  San Francisco, California 94111
                  Facsimile No.: (415) 296-6757
                  Attention:  Corporate Trust Services

                  Avista Corporation
                  1411 East Mission Avenue
                  Spokane, Washington 99202
                  Facsimile No.: [(509) 482-4879]
                  Attention:   [Treasurer]

       Section 2.04.   THIS  AGREEMENT  SHALL BE GOVERNED BY AND  CONSTRUED  AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

       THIS AGREEMENT is executed as of the date and year first above written.

                                    AVISTA CORPORATION


                                    By:
                                             -----------------------------------
                                             Name:
                                             Title:

                                    AVA CAPITAL TRUST III


                                    By:
                                             -----------------------------------
                                             as Regular Trustee

                                      B-3
<PAGE>


                                    EXHIBIT C

         THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS PROVIDED IN THE
                    DECLARATION OF TRUST REFERRED TO HEREIN


Certificate Number C-1                               Number of Common Securities

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


                    Certificate Evidencing Common Securities
                                       of
                              AVA Capital Trust III

                                Common Securities
                 (Liquidation Amount $1,000 per Common Security)


       AVA Capital  Trust III, a statutory  trust  created under the laws of the
State of Delaware (the "Trust"),  hereby certifies that Avista  Corporation (the
"Holder") is the registered owner of _____________  (_______) common  securities
of the Trust representing  undivided  beneficial  interests in the assets of the
Trust and  designated the AVA Capital Trust III Common  Securities  (Liquidation
Amount $1,000 per Common Security) (the "Common Securities"). In accordance with
Section 5.10 of the Declaration (as defined  below),  the Common  Securities are
not  transferable,  except as permitted by the  Declaration  referred to herein,
and, to the fullest extent permitted by law, any attempted transfer hereof shall
be void. The designations,  rights,  privileges,  restrictions,  preferences and
other terms and  provisions of the Common  Securities are set forth in, and this
certificate and the Common Securities represented hereby are issued and shall in
all respects be subject to the terms and provisions of, the Amended and Restated
Declaration  of Trust of the Trust dated as of _____,  2004,  as the same may be
amended from time to time (the "Declaration"),  including the designation of the
terms  of the  Common  Securities  as set  forth  therein.  The  holder  of this
certificate is entitled to the benefits of a guarantee by Avista Corporation,  a
Delaware corporation (the "Company"),  pursuant to a Guarantee Agreement between
the Company and Union Bank of California,  N.A., as guarantee trustee,  dated as
of _____,  2004, as the same may be amended from time to time (the "Guarantee"),
to the extent provided therein. The Trust will furnish a copy of the Declaration
and the Guarantee to the Holder without charge upon written request to the Trust
at its principal place of business or registered office.

       Upon receipt of this certificate,  the Holder is bound by the Declaration
and is entitled to the benefits thereunder.

<PAGE>


       IN WITNESS WHEREOF, the Trust has executed this certificate this ____ day
of __________, 2004.

                                     AVA Capital Trust III


                                     By:
                                        ---------------------------------------,
                                     as Regular Trustee



                          CERTIFICATE OF AUTHENTICATION

This  is  one of  the  Common  Securities  referred  to in the  within-mentioned
Declaration.



                                        ---------------------------------------,
                                        as Institutional Trustee


                                      C-2