Exhibit 10.1


                         PROVIDIAN FINANCIAL CORPORATION
                                       and
                     FIRST CHICAGO TRUST COMPANY OF NEW YORK
                                  Rights Agent

                                Rights Agreement
                            Dated as of June 1, 1997







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                                TABLE OF CONTENTS


                                                                            Page

Section 1.   Certain Definitions...............................................1

Section 2.   Appointment of Rights Agent.......................................8

Section 3.   Issue of Right Certificates.......................................9

Section 4.   Form of Right Certificates.......................................12

Section 5.   Countersignature and Registration................................13

Section 6.   Transfer, Split Up, Combination and Exchange of Right Certificates;
             Mutilated, Destroyed, Lost or Stolen Right Certificates..........14

Section 7.   Exercise of Rights; Purchase Price; Expiration Date of
             Rights...........................................................15

Section 8.   Cancellation and Destruction of Right Certificates...............17

Section 9.   Availability of Preferred Shares.................................18

Section 10.  Preferred Shares Record Date.....................................19

Section 11.  Adjustment of Purchase Price, Number of Shares or
             Number of Rights.................................................20

Section 12.  Certificate of Adjusted Purchase Price or
             Number of Shares.................................................34

Section 13.  Consolidation, Merger or Sale or Transfer
             of Assets or Earning Power.......................................34

Section 14.  Fractional Rights and Fractional Shares..........................36

Section 15.  Rights of Action.................................................38

Section 16.  Agreement of Right Holders.......................................39

Section 17.  Right Certificate Holder Not Deemed a Stockholder................40

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Section 18.  Concerning the Rights Agent......................................41

Section 19.  Merger or Consolidation or Change of Name
             of Rights Agent..................................................42

Section 20.  Duties of Rights Agent...........................................43

Section 21.  Change of Rights Agent...........................................47

Section 22.  Issuance of New Right Certificates...............................48

Section 23.  Redemption.......................................................49

Section 24.  Exchange.........................................................50

Section 25.  Notice of Certain Events.........................................53

Section 26.  Notices..........................................................55

Section 27.  Supplements and Amendments.......................................56

Section 28.  Successors.......................................................56

Section 29.  Benefits of this Rights Agreement................................57

Section 30.  Severability.....................................................57

Section 31.  Governing Law....................................................57

Section 32.  Counterparts.....................................................58

Section 33.  Descriptive Headings.............................................58

Signatures....................................................................59

Exhibit A - Form of Certificate of Designations

Exhibit B - Form of Right Certificate

Exhibit C - Summary of Rights to Purchase
            Preferred Shares


     
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                                RIGHTS AGREEMENT

     Rights Agreement,  dated as of June 1, 1997,  between  Providian  Financial
Corporation,  a Delaware  corporation (the  "Company"),  and First Chicago Trust
Company of New York (the "Rights Agent").

     The Board of  Directors  of the  Company  has  authorized  and  declared  a
dividend of one preferred share purchase right (a "Right") for each Common Share
(as hereinafter  defined) of the Company outstanding at the close of business on
the day prior to the Spinoff (the "Record Date"),  each Right  representing  the
right to  purchase  one  one-hundredth  of a  Preferred  Share  (as  hereinafter
defined),  upon the terms and subject to the conditions  herein set forth,  and
has further  authorized  and  directed the issuance of one Right with respect to
each Common Share that shall become outstanding  between the Record Date and the
earliest of the Distribution  Date, the Redemption Date and the Final Expiration
Date (as such terms are hereinafter defined).

     Accordingly,  in  consideration  of the premises and the mutual  agreements
herein set forth, the parties hereby agree as follows:

     Section 1. Certain Definitions.  For purposes of this Rights Agreement, the
following terms have the meanings indicated:

     (a)  "Acquiring  Person" shall mean any Person who or which,  together with
all Affiliates and Associates of such Person,  shall be the Beneficial  Owner of
15% or more of the Common Shares of the Company then outstanding,  but shall not
include the Company, any Subsidiary of the Company, any employee benefit plan of
the Company or any  Subsidiary  of the  Company,  or any entity  holding  Common
Shares  for or  pursuant  to the  terms of any such  plan.  Notwithstanding  the
foregoing,  no Person  shall  become an  "Acquiring  Person" as the result of an
acquisition  of Common  Shares by the Company  which,  by reducing the number of
shares  outstanding,  increases the proportionate  number of shares beneficially
owned by such  Person to 15% or more of the Common  Shares of the  Company  then
outstanding;  provided,  however,  that if a Person shall become the  Beneficial
Owner of 15% or more of the Common  Shares of the Company  then  outstanding  by
reason of share  purchases by the Company and shall,  after such share purchases
by the Company,  become the Beneficial Owner of any additional  Common Shares of
the  Company,  then such  Person  shall be deemed to be an  "Acquiring  Person."
Notwithstanding  the  foregoing,  if the  Board  of  Directors  of  the  Company
determines  in good  faith that a Person who would  otherwise  be an  "Acquiring
Person," as defined pursuant to the foregoing  provisions of this paragraph (a),
has  become  such  inadvertently,   and  such  Person  divests  as  promptly  as
practicable  a sufficient  number of Common  Shares so that such Person would no
longer be an "Acquiring Person," as defined pursuant to the foregoing provisions
of this  paragraph (a), then such Person shall not be deemed to be an "Acquiring
Person" for any purposes of this Rights Agreement.

     (b)  "Affiliate"  and  "Associate"  shall  have the  respective  meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations  under
the Exchange Act, as in effect on the date of this Rights Agreement.

     (c) A Person shall be deemed the "Beneficial  Owner" of and shall be deemed
to "beneficially own" any securities:

          (i) which such Person or any of such Person's Affiliates or Associates
     beneficially owns, directly or indirectly;

          (ii)  which  such  Person  or  any  of  such  Person's  Affiliates  or
     Associates has (A) the right to acquire  (whether such right is exercisable
     immediately  or only after the passage of time)  pursuant to any agreement,
     arrangement  or  understanding  (other than customary  agreements  with and
     between  underwriters and selling group members with respect to a bona fide
     public offering of securities),  or upon the exercise of conversion rights,
     exchange rights, rights (other than these Rights),  warrants or options, or
     otherwise;  provided,  however,  that a  Person  shall  not be  deemed  the
     Beneficial Owner of, or to beneficially own,  securities  tendered pursuant
     to a tender or exchange offer made by or on behalf of such Person or any of
     such Person's  Affiliates or Associates until such tendered  securities are
     accepted for purchase or exchange; or (B) the right to vote pursuant to any
     agreement,  arrangement or understanding;  provided, however, that a Person
     shall not be deemed the Beneficial  Owner of, or to  beneficially  own, any
     security  if the  agreement,  arrangement  or  understanding  to vote  such
     security (1) arises solely from a revocable  proxy or consent given to such
     Person in response to a public proxy or consent  solicitation made pursuant
     to,  and  in  accordance   with,  the  applicable   rules  and  regulations
     promulgated  under the Exchange Act and (2) is not also then  reportable on
     Schedule  13D  under  the  Exchange  Act (or any  comparable  or  successor
     report); or

     (iii) which are beneficially  owned,  directly or indirectly,  by any other
     Person  with  which  such  Person  or any of such  Person's  Affiliates  or
     Associates has any  agreement,  arrangement  or  understanding  (other than
     customary  agreements  with and  between  underwriters  and  selling  group
     members with respect to a bona fide public  offering of securities) for the
     purpose of acquiring, holding, voting (except to the extent contemplated by
     the proviso to Section  1(c)(ii)(B))  or disposing of any securities of the
     Company.


     Notwithstanding  anything in this definition of Beneficial Ownership to the
contrary,  the phrase "then outstanding," when used with reference to a Person's
Beneficial Ownership of securities of the Company, shall mean the number of such
securities  then  issued  and  outstanding  together  with  the  number  of such
securities not then actually issued and  outstanding  which such Person would be
deemed to own beneficially hereunder.

     (d) "Business Day" shall mean any day other than a Saturday, a Sunday, or a
day on which  banking  institutions  in the State of New York are  authorized or
obligated by law or executive order to close.

     (e) "Close of  Business"  on any given date shall mean 5:00 P.M.,  New York
City time, on such date; provided,  however, that if such date is not a Business
Day it shall mean 5:00 P.M., New York City time, on the next succeeding Business
Day.

     (f) "Common  Shares" when used with reference to the Company shall mean the
shares of common  stock,  par value  $.01 per  share,  of the  Company.  "Common
Shares" when used with reference to any Person other than the Company shall mean
the capital stock (or equity  interest)  with the greatest  voting power of such
other  Person or, if such other Person is a Subsidiary  of another  Person,  the
Person or Persons which ultimately control such first-mentioned Person.

     (g) "Company" shall have the meaning set forth in the preamble hereof.

     (h) "Current  per share  market  price" shall have the meaning set forth in
Section 11(d) hereof.

     (i)  "Distribution  Date" shall have the meaning set forth in Section  3(a)
hereof.

     (j)  "Equivalent  preferred  shares"  shall have the  meaning  set forth in
Section 11(b) hereof.

     (k)  "Exchange  Act" shall mean the  Securities  Exchange  Act of 1934,  as
amended.

     (l)  "Exchange  Ratio"  shall have the meaning  set forth in Section  24(a)
hereof.

     (m) "Final  Expiration  Date"  shall have the  meaning set forth in Section
7(a) hereof.

     (n) "NASDAQ"  shall mean the National  Association  of Securities  Dealers,
Inc. Automated Quotation System.

     (o) "Person" shall mean any individual, firm, corporation or other entity,
and shall include any successor (by merger or otherwise) of such entity.

     (p) "Preferred  Shares" shall mean shares of Series A Junior  Participating
Preferred  Stock, par value $.01 per share, of the Company having the rights and
preferences  set forth in the Form of  Certificate of  Designations  attached to
this Rights Agreement as Exhibit A.

     (q) "Purchase Price" shall have the meaning set forth in Section 4 hereof.

     (r) "Record Date" shall have the meaning set forth in the second  paragraph
hereof.

     (s)  "Redemption  Date" shall have the  meaning  set forth in Section  7(a)
hereof.

     (t)  "Redemption  Price" shall have the meaning set forth in Section  23(a)
hereof.

     (u)  "Right"  shall  have the  meaning  set forth in the  second  paragraph
hereof.

     (v) "Right  Certificate"  shall have the meaning set forth in Section  3(a)
hereof.

     (w) "Rights Agent" shall have the meaning set forth in the preamble hereof.

     (x)  "Shares  Acquisition  Date"  shall  mean  the  first  date  of  public
announcement by the Company or an Acquiring  Person that an Acquiring Person has
become such.

     (y) "Spinoff"  shall mean the  spinoff of the  Company  from its  corporate
parent, Providian Corporation.

     (z)  "Subsidiary"  of any Person shall mean any corporation or other entity
of which a majority  of the  voting  power of the voting  equity  securities  or
equity interest is owned, directly or indirectly, by such Person.

     (aa)  "Summary of Rights"  shall have the meaning set forth in Section 3(b)
hereof.

     (ab)  "Trading  Day" shall  have the  meaning  set forth in  Section  11(d)
hereof.

     Section 2.  Appointment of Rights Agent.  The Company  hereby  appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall, prior to the Distribution Date, also
be the holders of the Common Shares) in accordance with the terms and conditions
hereof,  and the Rights Agent hereby accepts such  appointment.  The Company may
from time to time  appoint  such  co-Rights  Agents as it may deem  necessary or
desirable.

     Section 3. Issue of Right Certificates.

     (a) Until the  earlier  of (i) the tenth day after the  Shares  Acquisition
Date or (ii) the tenth  Business Day (or such later date as may be determined by
action of the Board of Directors of the Company prior to such time as any Person
becomes an Acquiring  Person) after the date of the  commencement  by any Person
other than the Company, any Subsidiary of the Company, any employee benefit plan
of the Company or of any  Subsidiary of the Company or any entity holding Common
Shares for or pursuant to the terms of any such plan) of, or of the first public
announcement  of the  intention  of any  Person  (other  than the  Company,  any
Subsidiary  of the Company,  any employee  benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares for or pursuant to
the  terms of any such  plan)  to  commence,  a tender  or  exchange  offer  the
consummation of which would result in any Person  becoming the Beneficial  Owner
of Common Shares  aggregating 15% or more of the then outstanding  Common Shares
of the Company  (including  any such date which is after the date of this Rights
Agreement  and prior to the  issuance of the  Rights;  the earlier of such dates
being herein  referred to as the  "Distribution  Date"),  (x) the Rights will be
evidenced (subject to the provisions of Section 3(b) hereof) by the certificates
for  Common  Shares  registered  in the  names  of the  holders  thereof  (which
certificates shall also be deemed to be Right  Certificates) and not by separate
Right  Certificates,  and (y) the right to receive  Right  Certificates  will be
transferable  only in connection with the transfer of Common Shares.  As soon as
practicable  after the Distribution  Date, the Company will prepare and execute,
the Rights Agent will countersign, and the Company will send or cause to be sent
(and the  Rights  Agent  will,  if  requested,  send) by  first-class,  insured,
postage-prepaid  mail, to each record holder of Common Shares as of the Close of
Business on the  Distribution  Date,  at the address of such holder shown on the
records  of the  Company,  a Right  Certificate,  in  substantially  the form of
Exhibit B hereto (a "Right  Certificate"),  evidencing one Right for each Common
Share so held. As of the Distribution  Date, the Rights will be evidenced solely
by such Right Certificates.

     (b) On the Record Date, or as soon as practicable  thereafter,  the Company
will  send a copy of a  Summary  of  Rights to  Purchase  Preferred  Shares,  in
substantially  the form of  Exhibit  C hereto  (the  "Summary  of  Rights"),  by
first-class,  postage-prepaid mail, to each record holder of Common Shares as of
the Close of Business on the Record Date, at the address of such holder shown on
the records of the  Company.  With  respect to  certificates  for Common  Shares
outstanding as of the Record Date, until the Distribution  Date, the Rights will
be evidenced by such certificates registered in the names of the holders thereof
together  with a copy of the  Summary  of  Rights  attached  thereto.  Until the
Distribution Date (or the earlier of the Redemption Date or the Final Expiration
Date),  the  surrender  for  transfer  of  any  certificate  for  Common  Shares
outstanding on the Record Date,  with or without a copy of the Summary of Rights
attached  thereto,  shall also constitute the transfer of the Rights  associated
with the Common Shares represented thereby.

     (c)  Certificates  for Common Shares which become  outstanding  (including,
without limitation, reacquired Common Shares referred to in the last sentence of
this  paragraph  (c)) after the  Record  Date but prior to the  earliest  of the
Distribution  Date, the Redemption Date or the Final  Expiration Date shall have
impressed on, printed on, written on or otherwise  affixed to them the following
(or a substantially similar) legend:

     This  certificate  also evidences and entitles the holder hereof to certain
     rights  as set  forth in a Rights  Agreement  between  Providian  Financial
     Corporation  and First Chicago Trust Company of New York,  dated as of June
     1,  1997  (the  "Rights   Agreement"),   the  terms  of  which  are  hereby
     incorporated  herein  by  reference  and a copy of  which is on file at the
     principal  executive  offices  of  Providian  Financial  Corporation  Under
     certain  circumstances,  as set forth in the Rights Agreement,  such Rights
     will be evidenced by separate certificates and will no longer be evidenced
     by this  certificate.  Providian  Financial  Corporation  will  mail to the
     holder of this  certificate a copy of the Rights  Agreement  without charge
     after  receipt of a written  request  therefor.  As described in the Rights
     Agreement,  Rights issued to any Person who becomes an Acquiring Person (as
     defined in the Rights Agreement) shall become null and void.

With respect to such  certificates  containing the foregoing  legend,  until the
Distribution  Date, the Rights associated with the Common Shares  represented by
such  certificates  shall  be  evidenced  by such  certificates  alone,  and the
surrender  for  transfer  of any such  certificate  shall  also  constitute  the
transfer of the Rights associated with the Common Shares represented thereby. In
the event that the Company  purchases  or acquires  any Common  Shares after the
Record Date but prior to the Distribution  Date, any Rights associated with such
Common  Shares shall be deemed  cancelled  and retired so that the Company shall
not be entitled to exercise any Rights  associated  with the Common Shares which
are no longer outstanding.

     Section  4. Form of Right  Certificates.  The Right  Certificates  (and the
forms of election to purchase  Preferred  Shares and of assignment to be printed
on the reverse thereof) shall be substantially  the same as Exhibit B hereto and
may have such marks of identification or designation and such legends, summaries
or endorsements  printed thereon as the Company may deem  appropriate and as are
not  inconsistent  with the  provisions of this Rights  Agreement,  or as may be
required to comply with any applicable  law or with any rule or regulation  made
pursuant  thereto  or with any  rule or  regulation  of any  stock  exchange  or
automated  quotation system on which the Rights may from time to time be listed,
or to conform to usage.  Subject  to the provisions of Section 22 hereof,  the
Right  Certificates shall entitle the holders thereof to purchase such number of
one  one-hundredths  of a Preferred  Share as shall be set forth  therein at the
price  per one  one-hundredth  of a  Preferred  Share  set  forth  therein  (the
"Purchase  Price"),  but the number of such one one-hundredths of a Preferred
Share and the Purchase Price shall be subject to adjustment as provided herein.

     Section 5. Countersignature and Registration.  The Right Certificates shall
be  executed on behalf of the  Company by its  Chairman of the Board,  its Chief
Executive Officer, its President, any of its Vice Presidents,  or its Treasurer,
either  manually  or by  facsimile  signature,  shall have  affixed  thereto the
Company's seal or a facsimile thereof, and shall be attested by the Secretary or
an  Assistant  Secretary  of  the  Company,  either  manually  or  by  facsimile
signature.  The  Right  Certificates  shall  be  countersigned  manually  or  by
facsimile signature by an authorized  signatory of the Rights Agent who may, but
need not, be the same signatory for all the Right  Certificates and shall not be
valid for any purpose unless  countersigned.  In case any officer of the Company
who shall  have  signed  any of the Right  Certificates  shall  cease to be such
officer of the Company before  countersignature by the Rights Agent and issuance
and  delivery by the  Company,  such Right  Certificates,  nevertheless,  may be
countersigned  by the Rights Agent and issued and  delivered by the Company with
the  same  force  and  effect  as  though  the  person  who  signed  such  Right
Certificates  had not ceased to be such  officer of the  Company;  and any Right
Certificate  may be signed on behalf of the  Company by any person  who,  at the
actual  date of the  execution  of such  Right  Certificate,  shall  be a proper
officer of the Company to sign such Right  Certificate,  although at the date of
the execution of this Rights Agreement any such person was not such an officer.

     Following the Distribution  Date, the Rights Agent will keep or cause to be
kept, at its designated office, books for registration and transfer of the Right
Certificates issued hereunder.  Such books shall show the names and addresses of
the respective holders of the Right Certificates, the number of Rights evidenced
on its face by each of the Right  Certificates and the date of each of the Right
Certificates.

     Section  6.  Transfer,   Split  Up,   Combination  and  Exchange  of  Right
Certificates;  Mutilated, Destroyed, Lost or Stolen Right Certificates.  Subject
to the provisions of Section 14 hereof,  at any time after the Close of Business
on the  Distribution  Date,  and at or prior to the  Close  of  Business  on the
earlier  of the  Redemption  Date  or  the  Final  Expiration  Date,  any  Right
Certificate or Right Certificates  (other than Right  Certificates  representing
Rights that have become void pursuant to Section  11(a)(ii)  hereof or that have
been  exchanged  pursuant  to Section 24 hereof) may be  transferred,  split up,
combined,  or exchanged for another  Right  Certificate  or Right  Certificates,
entitling the registered holder to purchase a like number of one  one-hundredths
of a Preferred Share as the Right Certificate or Right Certificates  surrendered
then  entitled  such  holder to  purchase.  Any  registered  holder  desiring to
transfer,  split  up,  combine  or  exchange  any  Right  Certificate  or  Right
Certificates  shall make such request in writing  delivered to the Rights Agent,
and  shall  surrender  the  Right  Certificate  or  Right   Certificates  to  be
transferred,  split up,  combined or exchanged at the  designated  office of the
Rights Agent.  Thereupon the Rights Agent shall  countersign  and deliver to the
Person entitled thereto a Right Certificate or Right  Certificates,  as the case
may be, as so requested.  The Company may require payment of a sum sufficient to
cover any tax or governmental  charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates.

     Upon  receipt by the  Company and the Rights  Agent of evidence  reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate,  and,  in case of  loss,  theft or  destruction,  of  indemnity  or
security  reasonably  satisfactory  to  them,  and,  at the  Company's  request,
reimbursement  to the Company and the Rights  Agent of all  reasonable  expenses
incidental  thereto,  and upon surrender to the Rights Agent and cancellation of
the Right  Certificate  if  mutilated,  the Company  will make and deliver a new
Right  Certificate  of like  tenor  to the  Rights  Agent  for  delivery  to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.  

     Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.

     (a) The registered  holder of any Right Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein), in whole or in part, at
any time after the Distribution  Date, upon surrender of the Right  Certificate,
with the form of election to purchase on the reverse side thereof duly executed,
to the Rights Agent at the designated office of the Rights Agent,  together with
payment of the Purchase  Price (in the manner  specified in Section 7(c) hereof)
for each one  one-hundredth  of a  Preferred  Share as to which the  Rights  are
exercised,  at or prior to the earliest of (i) the Close of Business on June 30,
2007  (the  "Final  Expiration  Date"),  (ii) the time at which the  Rights  are
redeemed as provided in Section 23 hereof (the "Redemption  Date"), or (iii) the
time at which such Rights are exchanged as provided in Section 24 hereof.

     (b) The  Purchase  Price for each one  one-hundredth  of a Preferred  Share
purchasable  pursuant to the exercise of a Right shall  initially  be $150,  and
shall be subject to adjustment  from time to time as provided in Sections 11 and
13 hereof and shall be payable in lawful  money of the United  States of America
in accordance with paragraph (c) below.

     (c) Upon receipt of a Right Certificate  representing  exercisable  Rights,
with the form of election to purchase duly  executed,  accompanied by payment of
the  Purchase  Price for the shares to be  purchased  and an amount equal to any
applicable  transfer  tax  required  to be paid  by the  holder  of  such  Right
Certificate in accordance  with Section 9 hereof by certified  check,  cashier's
check or money order payable to the order of the Company, the Rights Agent shall
thereupon  promptly (i) (A) requisition from any transfer agent of the Preferred
Shares  certificates  for the number of Preferred Shares to be purchased and the
Company hereby irrevocably authorizes its transfer agent to comply with all such
requests,  or (B)  requisition  from the depositary  agent  depositary  receipts
representing such number of one one-hundredths of a Preferred Share as are to be
purchased (in which case  certificates for the Preferred  Shares  represented by
such  receipts  shall be  deposited by the  transfer  agent with the  depositary
agent) and the Company hereby  directs the depositary  agent to comply with such
request, (ii) when appropriate,  requisition from the Company the amount of cash
to be paid in lieu of issuance of fractional  shares in accordance  with Section
14 hereof,  (iii) after receipt of such  certificates  or  depositary  receipts,
cause the same to be delivered to or upon the order of the registered  holder of
such Right Certificate, registered in such name or names as may be designated by
such holder and (iv) when  appropriate,  after receipt,  deliver such cash to or
upon the order of the registered holder of such Right Certificate.

     (d) In case the registered  holder of any Right Certificate shall exercise
less than all the Rights evidenced thereby,  a new Right Certificate  evidencing
Rights equivalent to the Rights  remaining  unexercised  shall be issued by the 
Rights  Agent to the  registered  holder of such  Right  Certificate  or to such
holder's  duly  authorized  assigns,  subject  to the  provisions  of Section 14
hereof.

     Section 8.  Cancellation and Destruction of Right  Certificates.  All Right
Certificates  surrendered  for the  purpose  of  exercise,  transfer,  split up,
combination  or exchange  shall,  if surrendered to the Company or to any of its
agents,  be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered  to the Rights Agent,  shall be cancelled by it, and no Right
Certificates  shall be issued in lieu thereof  except as expressly  permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights  Agent for  cancellation  and  retirement,  and the Rights Agent shall so
cancel and retire,  any other  Right  Certificate  purchased  or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all  cancelled  Right  Certificates  to the  Company,  or shall,  at the written
request of the Company,  destroy such cancelled Right Certificates,  and in such
case shall deliver a certificate of destruction thereof to the Company.

     Section 9.  Availability  of Preferred  Shares.  The Company  covenants and
agrees  that  it  will  cause  to be  reserved  and  kept  available  out of its
authorized  and unissued  Preferred  Shares or any Preferred  Shares held in its
treasury,  the number of Preferred  Shares that will be sufficient to permit the
exercise in full of all  outstanding  Rights in  accordance  with Section 7. The
Company  covenants  and  agrees  that it will  take  all such  action  as may be
necessary to ensure that all Preferred  Shares delivered upon exercise of Rights
shall,  at the time of delivery of the  certificates  for such Preferred  Shares
(subject to payment of the Purchase Price),  be duly and validly  authorized and
issued and fully paid and nonassessable shares.

     The  Company  further  covenants  and agrees  that it will pay when due and
payable any and all federal and state  transfer  taxes and charges  which may be
payable in respect of the issuance or delivery of the Right  Certificates  or of
any  Preferred  Shares  upon the  exercise  of Rights.  The  Company  shall not,
however,  be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right  Certificates  to a Person other than,  or the
issuance or delivery of  certificates  or depositary  receipts for the Preferred
Shares  in a name  other  than  that of,  the  registered  holder  of the  Right
Certificate evidencing Rights surrendered for exercise or to issue or to deliver
any  certificates or depositary  receipts for Preferred Shares upon the exercise
of any  Rights  until  any such tax  shall  have  been  paid (any such tax being
payable by the holder of such Right  Certificate  at the time of  surrender)  or
until it has been established to the Company's  reasonable  satisfaction that no
such tax is due.

     Section 10.  Preferred  Shares  Record Date.  Each Person in whose name any
certificate for Preferred Shares is issued upon the exercise of Rights shall for
all  purposes  be deemed to have  become the  holder of record of the  Preferred
Shares  represented  thereby on, and such  certificate  shall be dated, the date
upon which the Right Certificate evidencing such Rights was duly surrendered and
payment of the  Purchase  Price (and any  applicable  transfer  taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Preferred Shares transfer books of the Company are closed, such Person
shall be deemed to have  become  the record  holder of such  shares on, and such
certificate  shall be  dated,  the next  succeeding  Business  Day on which  the
Preferred  Shares transfer books of the Company are open.  Prior to the exercise
of the Rights evidenced thereby,  the holder of a Right Certificate shall not be
entitled  to any  rights of a holder of  Preferred  Shares  for which the Rights
shall be  exercisable,  including,  without  limitation,  the right to vote,  to
receive dividends or other  distributions or to exercise any preemptive  rights,
and shall not be  entitled  to  receive  any  notice of any  proceedings  of the
Company, except as provided herein.

     Section 11.  Adjustment  of Purchase  Price,  Number of Shares or Number of
Rights. The Purchase Price, the number of Preferred Shares covered by each Right
and the number of Rights outstanding are subject to adjustment from time to time
as provided in this Section 11.

     (a) (i) In the event the  Company  shall at any time after the date of this
Rights  Agreement  (A) declare a dividend  on the  Preferred  Shares  payable in
Preferred Shares,  (B) subdivide the outstanding  Preferred Shares,  (C) combine
the outstanding  Preferred  Shares into a smaller number of Preferred  Shares or
(D) issue any shares of its capital stock in a reclassification of the Preferred
Shares (including any such  reclassification  in connection with a consolidation
or merger in which the  Company is the  continuing  or  surviving  corporation),
except as otherwise provided in this Section 11(a), the Purchase Price in effect
at the time of the record  date for such  dividend or of the  effective  date of
such subdivision,  combination or  reclassification,  and the number and kind of
shares of capital stock issuable on such date, shall be proportionately adjusted
so that the holder of any Right  exercised  after such time shall be entitled to
receive the aggregate  number and kind of shares of capital stock which, if such
Right had been exercised  immediately  prior to such date and at a time when the
Preferred Shares transfer books of the Company were open, such holder would have
owned  upon  such  exercise  and been  entitled  to  receive  by  virtue of such
dividend, subdivision, combination or reclassification;  provided, however, that
in no event shall the consideration to be paid upon the exercise of one Right be
less than the  aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right.

     (ii) Subject to Section 24 of this Rights Agreement,  in the event that any
Person becomes an Acquiring Person, each holder of a Right shall thereafter have
a right to receive,  upon exercise  thereof at a price equal to the then current
Purchase  Price  multiplied by the number of one  one-hundredths  of a Preferred
Share for which a Right is then  exercisable,  in  accordance  with the terms of
this Rights  Agreement  and in lieu of Preferred  Shares,  such number of Common
Shares of the Company as shall equal the result  obtained by (x) multiplying the
then current Purchase Price by the number of one  one-hundredths  of a Preferred
Share for which a Right is then exercisable and dividing that product by (y) 50%
of the then  current  per share  market  price of the  Company's  Common  Shares
(determined  pursuant to Section 11(d) hereof) on the date of the  occurrence of
such event.  In the event that any Person shall be come an Acquiring  Person and
the Rights  shall then be  outstanding,  the  Company  shall not take any action
which would  eliminate or diminish  the benefits  intended to be afforded by the
Rights.

     From and after the  occurrence  of such event,  any Rights that are or were
acquired or  beneficially  owned by any  Acquiring  Person (or any  Associate or
Affiliate of such Acquiring  Person) shall be void and any holder of such Rights
shall  thereafter  have no right to exercise  such Rights under any provision of
this Rights Agreement.  No Right Certificate shall be issued pursuant to Section
3 that represents Rights  beneficially owned by an Acquiring Person whose Rights
would be void pursuant to the  preceding  sentence or any Associate or Affiliate
thereof;  no Right  Certificate shall be issued at any time upon the transfer of
any Rights to an Acquiring  Person  whose  Rights would be void  pursuant to the
preceding  sentence or any  Associate or Affiliate  thereof or to any nominee of
such  Acquiring  Person,  Associate  or  Affiliate;  and any  Right  Certificate
delivered to the Rights  Agent for transfer to an Acquiring  Person whose Rights
would be void pursuant to the preceding sentence shall be cancelled.

     (iii) In the event that there shall not be sufficient  Common Shares issued
but not outstanding or authorized but unissued to permit the exercise in full of
the Rights in accordance with the foregoing subparagraph (ii), the Company shall
take all such action as may be necessary to authorize  additional  Common Shares
for issuance upon exercise of the Rights. In the event the Company shall,  after
good faith  effort,  be unable to take all such  action as may be  necessary  to
authorize such additional Common Shares, the Company shall substitute,  for each
Common Share that would otherwise be issuable upon exercise of a Right, a number
of Preferred  Shares or fraction  thereof such that the current per share market
price of one Preferred  Share  multiplied by such number or fraction is equal to
the  current  per  share  market  price  of one  Common  Share as of the date of
issuance of such Preferred Shares or fraction thereof.

     (b) In case the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of  Preferred  Shares  entitling  them (for a
period expiring within 45 calendar days after such record date) to subscribe for
or purchase  Preferred Shares (or shares having the same rights,  privileges and
preferences  as  the  Preferred  Shares  ("equivalent   preferred  shares"))  or
securities convertible into Preferred Shares or equivalent preferred shares at a
price per Preferred Share or equivalent  preferred share (or having a conversion
price per share, if a security  convertible  into Preferred Shares or equivalent
preferred  shares)  less than the then  current  per share  market  price of the
Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase
Price to be in effect after such record date shall be determined by  multiplying
the  Purchase  Price  in  effect  immediately  prior  to such  record  date by a
fraction,  the  numerator  of which  shall be the  number  of  Preferred  Shares
outstanding  on such record date plus the number of  Preferred  Shares which the
aggregate  offering  price  of the  total  number  of  Preferred  Shares  and/or
equivalent  preferred  shares so to be offered  (and/or  the  aggregate  initial
conversion price of the convertible  securities so to be offered) would purchase
at such current market price and the denominator of which shall be the number of
Preferred  Shares  outstanding on such record date plus the number of additional
Preferred  Shares  and/or   equivalent   preferred  shares  to  be  offered  for
subscription  or purchase  (or into which the  convertible  securities  so to be
offered are initially  convertible);  provided,  however, that in no event shall
the  consideration  to be paid upon the  exercise  of one Right be less than the
aggregate par value of the shares of capital stock of the Company  issuable upon
exercise  of one  Right.  In  case  such  subscription  price  may be  paid in a
consideration part or all of which shall be in a form other than cash, the value
of such  consideration  shall be as  determined  in good  faith by the  Board of
Directors of the Company,  whose determination shall be described in a statement
filed with the Rights Agent.  Preferred  Shares owned by or held for the account
of the  Company  shall not be deemed  outstanding  for the  purpose  of any such
computation.  Such adjustment shall be made successively  whenever such a record
date is fixed; and in the event that such rights, options or warrants are not so
issued,  the  Purchase  Price shall be adjusted to be the  Purchase  Price which
would then be in effect if such record date had not been fixed.

     (c) In case the  Company  shall  fix a  record  date  for the  making  of a
distribution  to all  holders  of  the  Preferred  Shares  (including  any  such
distribution  made in  connection  with a  consolidation  or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Preferred Shares) or subscription  rights or warrants  (excluding those referred
to in Section  11(b)  hereof),  the  Purchase  Price to be in effect  after such
record date shall be  determined  by  multiplying  the Purchase  Price in effect
immediately  prior to such  record date by a fraction,  the  numerator  of which
shall be the then current per share market price of the Preferred Shares on such
record  date,  less the fair market  value (as  determined  in good faith by the
Board of Directors of the Company,  whose  determination shall be described in a
statement filed with the Rights Agent) of the portion of the assets or evidences
of indebtedness so to be distributed or of such subscription  rights or warrants
applicable to one  Preferred  Share and the  denominator  of which shall be such
current per share market price of the Preferred Shares; provided,  however, that
in no event shall the consideration to be paid upon the exercise of one Right be
less than the  aggregate par value of the shares of capital stock of the Company
to be  issued  upon  exercise  of one  Right.  Such  adjustments  shall  be made
successively  whenever  such a record date is fixed;  and in the event that such
distribution  is not so made,  the Purchase  Price shall again be adjusted to be
the  Purchase  Price  which  would then be in effect if such record date had not
been fixed.

     (d) (i) For the purpose of any  computation  hereunder,  the  "current  per
share  market  price" of any  security  (a  "Security"  for the  purpose of this
Section  11(d)(i))  on any date  shall be deemed to be the  average of the daily
closing  prices per share of such Security for the 30  consecutive  Trading Days
immediately prior to such date;  provided,  however,  that in the event that the
current per share  market price of the  Security is  determined  during a period
following the  announcement  by the issuer of such Security of (A) a dividend or
distribution  on such Security  payable in shares of such Security or securities
convertible  into  such  shares,   or  (B)  any   subdivision,   combination  or
reclassification of such Security and prior to the expiration of 30 Trading Days
after the ex-dividend date for such dividend or distribution, or the record date
for such subdivision,  combination or  reclassification,  then, and in each such
case,  the current per share  market  price shall be  appropriately  adjusted to
reflect the current  market price per share  equivalent  of such  Security.  The
closing  price for each day shall be the last sale price,  regular  way,  or, in
case no such sale takes  place on such day,  the  average of the closing bid and
asked  prices,  regular  way,  in either  case,  as  reported  in the  principal
consolidated  transaction  reporting system with respect to securities listed or
admitted to trading on the New York Stock  Exchange  or, if the  Security is not
listed or admitted to trading on the New York Stock Exchange, as reported in the
principal  consolidated  transaction reporting system with respect to securities
listed on the principal  national  securities  exchange on which the Security is
listed or admitted  to trading or, if the  Security is not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-the-counter
market,  as reported by NASDAQ or such other  system then in use,  or, if on any
such date the  Security is not quoted by any such  organization,  the average of
the closing bid and asked  prices as furnished  by a  professional  market maker
making a market  in the  Security  selected  by the  Board of  Directors  of the
Company. The term "Trading Day" shall mean a day on which the principal national
securities  exchange  on which the  Security is listed or admitted to trading is
open for the  transaction  of  business  or, if the  Security  is not  listed or
admitted to trading on any national securities exchange, a Business Day.

     (ii) For the purpose of any computation  hereunder,  the "current per share
market price" of the Preferred Shares shall be determined in accordance with the
method set forth in Section  11(d)(i).  If the Preferred Shares are not publicly
traded,  the "current per share market price" of the  Preferred  Shares shall be
conclusively  deemed to be the  current  per share  market  price of the  Common
Shares as determined  pursuant to Section  11(d)(i)  (appropriately  adjusted to
reflect any stock split, stock dividend or similar  transaction  occurring after
the date hereof),  multiplied  by one hundred.  If neither the Common Shares nor
the  Preferred  Shares are  publicly  held or so listed or traded,  "current per
share market  price" shall mean the fair value per share as  determined  in good
faith by the Board of  Directors of the Company,  whose  determination  shall be
described in a statement filed with the Rights Agent.

     (e) No  adjustment  in the  Purchase  Price shall be  required  unless such
adjustment  would require an increase or decrease of at least 1% in the Purchase
Price;  provided,  however, that any adjustments which by reason of this Section
11(e) are not  required  to be made  shall be  carried  forward  and taken  into
account in any subsequent  adjustment.  All  calculations  under this Section 11
shall be made to the  nearest  cent or to the  nearest  one  one-millionth  of a
Preferred Share or one ten-thousandth of any other share or security as the case
may be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the  transaction  which requires such  adjustment or (ii)
the date of the expiration of the right to exercise any Rights.

     (f) If, as a result of an adjustment made pursuant to Section 11(a) hereof,
the holder of any Right  thereafter  exercised  shall become entitled to receive
any  shares  of  capital  stock of the  Company  other  than  Preferred  Shares,
thereafter  the number of such other shares so  receivable  upon exercise of any
Right shall be subject to adjustment  from time to time in a manner and on terms
as nearly  equivalent  as  practicable  to the  provisions  with  respect to the
Preferred  Shares  contained in Section  11(a) through (c),  inclusive,  and the
provisions  of Sections  7, 9, 10 and 13 with  respect to the  Preferred  Shares
shall apply on like terms to any such other shares.

     (g)  All  Rights  originally  issued  by  the  Company  subsequent  to  any
adjustment  made to the Purchase  Price  hereunder  shall  evidence the right to
purchase,  at the adjusted Purchase Price, the number of one one-hundredths of a
Preferred  Share  purchasable  from time to time  hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.

     (h) Unless the Company  shall have  exercised  its  election as provided in
Section  11(i),  upon each  adjustment of the Purchase  Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding  immediately
prior to the making of such adjustment  shall  thereafter  evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-hundredths of a
Preferred  Share  (calculated  to the nearest one  one-millionth  of a Preferred
Share)  obtained by (A) multiplying  (x) the number of one  one-hundredths  of a
share  covered  by a  Right  immediately  prior  to this  adjustment  by (y) the
Purchase Price in effect  immediately  prior to such  adjustment of the Purchase
Price and (B) dividing  the product so obtained by the Purchase  Price in effect
immediately after such adjustment of the Purchase Price.

     (i) The  Company  may elect on or after the date of any  adjustment  of the
Purchase  Price  to  adjust  the  number  of  Rights,  in  substitution  for any
adjustment in the number of one  one-hundredths of a Preferred Share purchasable
upon  the  exercise  of a  Right.  Each of the  Rights  outstanding  after  such
adjustment  of the number of Rights shall be  exercisable  for the number of one
one-hundredths   of  a  Preferred  Share  for  which  a  Right  was  exercisable
immediately  prior to such  adjustment.  Each Right held of record prior to such
adjustment  of  the  number  of  Rights  shall  become  that  number  of  Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the Purchase
Price in effect  immediately  prior to adjustment  of the Purchase  Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the number of
Rights,  indicating  the record  date for the  adjustment,  and, if known at the
time, the amount of the adjustment to be made.  This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued,  shall be at least 10 days later than the date of
the public  announcement.  If Right  Certificates  have been  issued,  upon each
adjustment of the number of Rights  pursuant to this Section 11(i),  the Company
shall, as promptly as practicable,  cause to be distributed to holders of record
of Right Certificates on such record date Right Certificates evidencing, subject
to Section 14  hereof,  the  additional  Rights to which such  holders  shall be
entitled as a result of such adjustment, or, at the option of the Company, shall
cause  to  be  distributed  to  such  holders  of  record  in  substitution  and
replacement for the Right Certificates held by such holders prior to the date of
adjustment,  and upon surrender thereof,  if required by the Company,  new Right
Certificates  evidencing  all the Rights to which such holders shall be entitled
after such adjustment.  Right Certificates so to be distributed shall be issued,
executed  and  countersigned  in the  manner  provided  for  herein and shall be
registered  in the names of the holders of record of Right  Certificates  on the
record date specified in the public announcement.

     (j)  Irrespective  of any adjustment or change in the Purchase Price or the
number of one  one-hundredths of a Preferred Share issuable upon the exercise of
the  Rights,  the Right  Certificates  theretofore  and  thereafter  issued  may
continue to express the Purchase Price and the number of one one-hundredths of a
Preferred  Share which were expressed in the initial Right  Certificates  issued
hereunder.

     (k) Before  taking any action that would cause an  adjustment  reducing the
Purchase  Price below one  one-hundredth  of the then par value,  if any, of the
Preferred  Shares  issuable upon exercise of the Rights,  the Company shall take
any corporate  action which may, in the opinion of its counsel,  be necessary in
order  that  the  Company   may  validly  and  legally   issue  fully  paid  and
nonassessable  Preferred  Shares  (or the  relevant  fraction  thereof)  at such
adjusted Purchase Price.

     (l) In any case in which this Section 11 shall  require that an  adjustment
in the  Purchase  Price be made  effective  as of a record  date for a specified
event,  the Company may elect to defer  until the  occurrence  of such event the
issuing  to the holder of any Right  exercised  after  such  record  date of the
Preferred  Shares and other capital stock or securities of the Company,  if any,
issuable  upon  such  exercise  over and above the  Preferred  Shares  and other
capital stock or securities of the Company,  if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however,  that the  Company  shall  deliver  to such  holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.

     (m)  Anything  in this  Section  11 to the  contrary  notwithstanding,  the
Company  shall be entitled to make such  reductions  in the Purchase  Price,  in
addition to those adjustments  expressly  required by this Section 11, as and to
the extent that it, in its sole  discretion,  shall determine to be advisable in
order that any  consolidation or subdivision of the Preferred  Shares,  issuance
wholly for cash of any Preferred  Shares at less than the current  market price,
issuance wholly for cash of Preferred  Shares or securities which by their terms
are  convertible  into  or  exchangeable  for  Preferred  Shares,  dividends  on
Preferred Shares payable in Preferred  Shares or issuance of rights,  options or
warrants referred to hereinabove in Section 11(b), hereafter made by the Company
to holders of its Preferred Shares shall not be taxable to such stockholders.

     (n) In the event that at any time after the date of this  Rights  Agreement
and prior to the  Distribution  Date,  the Company  shall (i) declare or pay any
dividend  on the  Common  Shares  payable  in Common  Shares,  or (ii)  effect a
subdivision,   combination   or   consolidation   of  the   Common   Shares  (by
reclassification  or otherwise  than by payment of  dividends in Common  Shares)
into a greater or lesser number of Common Shares,  then in any such case (A) the
number of one  one-hundredths  of a Preferred Share purchasable after such event
upon proper exercise of each Right shall be determined by multiplying the number
of one  one-hundredths of a Preferred Share so purchasable  immediately prior to
such event by a fraction,  the numerator of which is the number of Common Shares
outstanding  immediately  before such event and the  denominator of which is the
number of Common Shares  outstanding  immediately after such event, and (B) each
Common  Share  outstanding  immediately  after such event shall have issued with
respect  to it that  number  of  Rights  which  each  Common  Share  outstanding
immediately  prior to such event had issued with respect to it. The  adjustments
provided for in this Section  11(n) shall be made  successively  whenever such a
dividend is declared or paid or such a subdivision, combination or consolidation
is effected.

     Section 12.  Certificate  of Adjusted  Purchase  Price or Number of Shares.
Whenever  an  adjustment  is made as  provided  in Section 11 or 13 hereof,  the
Company shall promptly (a) prepare a certificate  setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) file with
the  Rights  Agent and with each  transfer  agent for the  Common  Shares or the
Preferred Shares a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Right Certificate in accordance with Section 25 hereof.

    Section 13. Consolidation,  Merger or Sale or Transfer of Assets or Earning
Power.  In the event,  directly or in  directly,  at any time after a Person has
become an Acquiring  Person,  (a) the Company shall  consolidate  with, or merge
with and into,  any other  Person,  (b) any Person  shall  consolidate  with the
Company,  or  merge  with  and into the  Company  and the  Company  shall be the
continuing or surviving  corporation of such merger and, in connection with such
merger,  all or part of the Common Shares shall be changed into or exchanged for
stock or other  securities  of any other  Person (or the Company) or cash or any
other property,  or (c) the Company shall sell or otherwise  transfer (or one or
more of its  Subsidiaries  shall  sell or  otherwise  transfer),  in one or more
transactions,  assets or earning power  aggregating 50% or more of the assets or
earning  power of the  Company  and its  Subsidiaries  (taken as a whole) to any
other  Person  other  than  the  Company  or one  or  more  of its  wholly-owned
Subsidiaries,  then, and in each such case,  proper  provision  shall be made so
that (i) each holder of a Right  (except as  otherwise  provided  herein)  shall
thereafter have the right to receive, upon the exercise thereof at a price equal
to  the  then  current   Purchase   Price   multiplied  by  the  number  of  one
one-hundredths  of a Preferred Share for which a Right is then  exercisable,  in
accordance  with the terms of this  Rights  Agreement  and in lieu of  Preferred
Shares, such number of Common Shares of such other Person (including the Company
as successor thereto or as the surviving  corporation) as shall equal the result
obtained by (a) multiplying the then current Purchase Price by the number of one
one-hundredths  of a Preferred  Share for which a Right is then  exercisable and
dividing  that  product by (b) 50% of the then current per share market price of
the Common  Shares of such other Person  (determined  pursuant to Section  11(d)
hereof)  on the date of  consummation  of such  consolidation,  merger,  sale or
transfer;  (ii) the issuer of such Common Shares shall thereafter be liable for,
and shall assume, by virtue of such consolidation, merger, sale or transfer, all
the  obligations  and duties of the Company  pursuant to this Rights  Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to such issuer; and
(iv) such  issuer  shall take such steps  (including,  but not  limited  to, the
reservation  of a  sufficient  number of its Common  Shares in  accordance  with
Section 9 hereof) in connection  with such  consummation  as may be necessary to
assure that the provisions  hereof shall thereafter be applicable,  as nearly as
reasonably may be, in relation to the Common Shares thereafter  deliverable upon
the  exercise  of  the  Rights.  The  Company  shall  not  consummate  any  such
consolidation,  merger,  sale or transfer  unless prior  thereto the Company and
such issuer shall have executed and delivered to the Rights Agent a supplemental
agreement so providing.  The Company shall not enter into any transaction of the
kind referred to in this Section 13 if at the time of such transaction there are
any rights, warrants, instruments or securities outstanding or any agreements or
arrangements  which, as a result of the consummation of such transaction,  would
eliminate or substantially  diminish the benefits intended to be afforded by the
Rights.  The provisions of this Section 13 shall  similarly  apply to successive
mergers or consolidations or sales or other transfers.

     Section 14. Fractional Rights and Fractional Shares.

     (a) The Company  shall not be required to issue  fractions  of Rights or to
distribute Right Certificates which evidence  fractional Rights. In lieu of such
fractional  Rights,  there shall be paid to the registered  holders of the Right
Certificates  with regard to which such  fractional  Rights  would  otherwise be
issuable,  an amount in cash equal to the same  fraction of the  current  market
value of a whole  Right.  For the purposes of this  Section  14(a),  the current
market  value of a whole Right shall be the closing  price of the Rights for the
Trading Day immediately  prior to the date on which such fractional Rights would
have been  otherwise  issuable.  The closing price for any day shall be the last
sale price,  regular  way, or, in case no such sale takes place on such day, the
average of the  closing  bid and asked  prices,  regular  way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities  listed or admitted to trading on the New York Stock  Exchange or,
if the  Rights  are not  listed or  admitted  to  trading  on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national  securities exchange
on which the Rights are listed or  admitted to trading or, if the Rights are not
listed or  admitted to trading on any  national  securities  exchange,  the last
quoted  price or, if not so  quoted,  the  average of the high bid and low asked
prices in the  over-the-counter  market,  as  reported  by NASDAQ or such  other
system then in use or, if on any such date the Rights are not quoted by any such
organization,  the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board of
Directors of the  Company.  If on any such date no such market maker is making a
market in the Rights, the fair value of the Rights on such date as determined in
good faith by the Board of Directors of the Company shall be used.

     (b) The  Company  shall not be  required to issue  fractions  of  Preferred
Shares (other than fractions which are integral  multiples of one  one-hundredth
of a Preferred Share) upon exercise of the Rights or to distribute  certificates
which  evidence  fractional  Preferred  Shares (other than  fractions  which are
integral  multiples  of one  one-hundredth  of a  Preferred  Share).  In lieu of
fractional Preferred Shares that are not integral multiples of one one-hundredth
of a Preferred Share,  the Company shall pay to the registered  holders of Right
Certificates  at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current  market value of one Preferred
Share.  For the purposes of this Section  14(b),  the current  market value of a
Preferred  Share shall be the closing price of a Preferred  Share (as determined
pursuant to the second sentence of Section  11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise. Fractions of Preferred Shares in
integral  multiples  of one  one-hundredth  of a  Preferred  Share  may,  at the
election of the Company,  be evidenced by  depositary  receipts,  pursuant to an
appropriate agreement between  the  Company  and a  depositary  selected  by it;
provided,  that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they are
entitled  as  beneficial  owners of the  Preferred  Shares  represented  by such
depositary receipts.

     (c) The holder of a Right by the acceptance of the Right  expressly  waives
his right to  receive  any  fractional  Rights  or any  fractional  shares  upon
exercise of a Right (except as provided above).

     Section  15.  Rights of  Action.  All  rights of action in  respect of this
Rights Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective  registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares),  without the consent of the Rights
Agent  or of the  holder  of any  other  Right  Certificate  (or,  prior  to the
Distribution Date, of the Common Shares), may, in his own behalf and for his own
benefit,  enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce,  or otherwise  act in respect of, such  holder's
right to exercise the Rights  evidenced by such Right  Certificate in the manner
provided  in such  Right  Certificate  and in  this  Rights  Agreement.  Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically  acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this  Rights  Agreement  and will be entitled to
specific  performance of the obligations  under,  and injunctive  relief against
actual or threatened  violations of the  obligations  of any Person  subject to,
this Rights Agreement.

     Section  16.  Agreement  of Right  Holders.  Every  holder  of a Right,  by
accepting  the same,  consents  and agrees with the Company and the Rights Agent
and with every other holder of a Right that:

     (a) prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of the Common Shares;

     (b) after the  Distribution  Date, the Right  Certificates are transferable
only on the registry  books of the Rights Agent if surrendered at the designated
office of the Rights Agent,  duly endorsed or accompanied by a proper instrument
of transfer; and

     (c) the Company and the Rights Agent may deem and treat the Person in whose
name the Right  Certificate (or, prior to the Distribution  Date, the associated
Common Shares  certificate)  is registered as the absolute  owner thereof and of
the Rights  evidenced  thereby  (notwithstanding  any  notations of ownership or
writing on the Right  Certificate  or the associated  Common Shares  certificate
made by anyone  other than the  Company or the  Rights  Agent) for all  purposes
whatsoever,  and neither  the Company nor the Rights  Agent shall be affected by
any notice to the contrary.

     Section 17. Right Certificate  Holder Not Deemed a Stockholder.  No holder,
as such, of any Right Certificate  shall be entitled to vote,  receive dividends
or be deemed for any  purpose  the holder of the  Preferred  Shares or any other
securities  of the Company  which may at any time be issuable on the exercise of
the Rights  represented  thereby,  nor shall anything contained herein or in any
Right  Certificate  be  construed  to  confer  upon  the  holder  of  any  Right
Certificate,  as such,  any of the rights of a stockholder of the Company or any
right to vote for the  election of  directors  or upon any matter  submitted  to
stockholders  at any  meeting  thereof,  or to give or  withhold  consent to any
corporate  action,  or to receive notice of meetings or other actions  affecting
stockholders  (except as provided in Section 25 hereof), or to receive dividends
or subscription  rights,  or otherwise,  until the Right or Rights  evidenced by
such  Right  Certificate  shall  have  been  exercised  in  accordance  with the
provisions hereof.

     Section 18.  Concerning the Rights Agent.  The Company agrees to pay to the
Rights Agent reasonable  compensation for all services  rendered by it hereunder
and, from time to time, on demand of the Rights Agent,  its reasonable  expenses
and counsel  fees and other  disbursements  incurred in the  administration  and
execution  of this Rights  Agreement  and the exercise  and  performance  of its
duties hereunder. The Company also agrees to indemnify the Rights Agent for, and
to hold it harmless against, any loss, liability,  or expense,  incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection  with the  acceptance
and administration of this Rights Agreement, including the costs and expenses of
defending against any claim of liability in the premises.

     The Rights Agent shall be protected and shall incur no liability for, or in
respect of any action taken,  suffered or omitted by it in connection  with, its
administration  of this Rights Agreement in reliance upon any Right  Certificate
or certificate for the Preferred Shares or Common Shares or for other securities
of the  Company,  instrument  of  assignment  or  transfer,  power of  attorney,
endorsement,   affidavit,  letter,  notice,  direction,   consent,  certificate,
statement,  or other  paper or  document  believed by it to be genuine and to be
signed, executed and, where necessary,  verified or acknowledged,  by the proper
Person or  Persons,  or  otherwise  upon the  advice of  counsel as set forth in
Section 20 hereof.

     Section 19. Merger or  Consolidation or Change of Name of Rights Agent. Any
corporation  into which the Rights  Agent or any  successor  Rights Agent may be
merged or with which it may be consolidated,  or any corporation  resulting from
any merger or  consolidation  to which the Rights Agent or any successor  Rights
Agent shall be a party, or any  corporation  succeeding to the stock transfer or
corporate  trust  business of the Rights Agent or any  successor  Rights  Agent,
shall be the successor to the Rights Agent under this Rights  Agreement  without
the  execution  or filing of any paper or any  further act on the part of any of
the parties  hereto;  provided,  that such  corporation  would be  eligible  for
appointment  as a  successor  Rights  Agent under the  provisions  of Section 21
hereof.  In case at the time such  successor  Rights Agent shall  succeed to the
agency created by this Rights  Agreement,  any of the Right  Certificates  shall
have been  countersigned but not delivered,  any such successor Rights Agent may
adopt the  countersignature  of the  predecessor  Rights  Agent and deliver such
Right  Certificates so countersigned;  and in case at that time any of the Right
Certificates shall not have been  countersigned,  any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor  Rights Agent;  and in all such cases such
Right  Certificates shall have the full force provided in the Right Certificates
and in this Rights Agreement.

     In case at any time the name of the Rights  Agent  shall be changed  and at
such time any of the Right  Certificates  shall have been  countersigned but not
delivered,  the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been  countersigned,  the Rights Agent may
countersign such Right  Certificates  either in its prior name or in its changed
name;  and in all such cases such Right  Certificates  shall have the full force
provided in the Right Certificates and in this Rights Agreement.

     Section 20. Duties of Rights Agent.  The Rights Agent undertakes the duties
and  obligations  imposed by this Rights  Agreement upon the following terms and
conditions,  by all of which the Company and the holders of Right  Certificates,
by their acceptance thereof, shall be bound:

     (a) The  Rights  Agent may  consult  with legal  counsel  (who may be legal
counsel  for the  Company),  and the opinion of such  counsel  shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.

     (b) Whenever in the  performance of its duties under this Rights  Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or  established  by the Company  prior to taking or suffering  any action
hereunder,  such fact or matter  (unless  other  evidence in respect  thereof be
herein  specifically  prescribed)  may be deemed to be  conclusively  proved and
established by a certificate signed by any one of the Chairman of the Board, the
Chief Executive Officer, the President, any Vice President, the Treasurer or the
Secretary of the Company and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent for any action taken or suffered
in good faith by it under the  provisions  of this Rights  Agreement in reliance
upon such certificate.

     (c) The Rights Agent shall be liable hereunder to the Company and any other
Person only for its own negligence, bad faith or willful misconduct.

     (d) The  Rights  Agent  shall not be liable  for or by reason of any of the
statements  of fact or recitals  contained  in this Rights  Agreement  or in the
Right  Certificates  (except  its  countersignature  thereof)  or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.

     (e) The Rights  Agent shall not be under any  responsibility  in respect of
the validity of this Rights  Agreement  or the  execution  and  delivery  hereof
(except  the due  execution  hereof by the  Rights  Agent) or in  respect of the
validity or  execution  of any Right  Certificate  (except its  countersignature
thereof);  nor shall it be  responsible  for any  breach by the  Company  of any
covenant  or  condition  contained  in this  Rights  Agreement  or in any  Right
Certificate; nor shall it be responsible for any change in the exercisability of
the Rights  (including  the Rights  becoming void pursuant to Section  11(a)(ii)
hereof) or any  adjustment  in the terms of the Rights  (including  the  manner,
method or amount  thereof)  provided  for in Section 3, 11, 13, 23 or 24, or the
ascertaining  of the  existence  of facts that would  require any such change or
adjustment  (except with  respect to the  exercise of Rights  evidenced by Right
Certificates  after actual  notice that such change or  adjustment is required);
nor  shall it by any act  hereunder  be  deemed  to make any  representation  or
warranty as to the  authorization  or reservation of any Preferred  Shares to be
issued  pursuant  to this Rights  Agreement  or any Right  Certificate  or as to
whether any  Preferred  Shares will,  when  issued,  be validly  authorized  and
issued, fully paid and non-assessable.

     (f) The  Company  agrees that it will  perform,  execute,  acknowledge  and
deliver or cause to be performed, executed,  acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying  out or  performing  by the Rights Agent of
the provisions of this Rights Agreement.

     (g)  The  Rights  Agent  is  hereby   authorized  and  directed  to  accept
instructions  with respect to the  performance of its duties  hereunder from any
one of the Chairman of the Board,  the Chief Executive  Officer,  the President,
any Vice President,  the Secretary or the Treasurer of the Company, and to apply
to such officers for advice or instructions  in connection with its duties,  and
it shall not be liable for any action  taken or  suffered by it in good faith in
accordance  with  instructions  of any such  officer  or for any delay in acting
while waiting for those instructions.

     (h) The Rights Agent and any stockholder,  director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other  securities
of the Company or become pecuniarily  interested in any transaction in which the
Company  may be  interested,  or  contract  with or lend money to the Company or
otherwise  act as fully and freely as though it were not Rights Agent under this
Rights Agreement.  Nothing herein shall preclude the Rights Agent from acting in
any other capacity for the Company or for any other legal entity.

     (i) The Rights  Agent may execute and  exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its  attorneys  or  agents,  and the Rights  Agent  shall not be  answerable  or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the  Company  resulting  from any such  act,  default,
neglect or misconduct,  provided  reasonable care was exercised in the selection
and continued employment thereof.

     Section  21.  Change of Rights  Agent.  The Rights  Agent or any  successor
Rights  Agent may resign and be  discharged  from its duties  under this  Rights
Agreement  upon  30-days'  notice in writing  mailed to the  Company and to each
transfer  agent of the  Common  Shares  or  Preferred  Shares by  registered  or
certified mail. The Company may remove the Rights Agent or any successor  Rights
Agent upon 30-days'  notice in writing,  mailed to the Rights Agent or successor
Rights  Agent,  as the case may be,  and to each  transfer  agent of the  Common
Shares or Preferred  Shares by registered or certified mail. If the Rights Agent
shall resign or be removed or shall otherwise  become  incapable of acting,  the
Company shall appoint a successor to the Rights Agent. If the Company shall fail
to make such appointment  within a period of 30 days after giving notice of such
removal  or  after  it has been  notified  in  writing  of such  resignation  or
incapacity by the resigning or incapacitated  Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company),  then the registered holder of any Right Certificate
or the Rights  Agent may apply to any court of  competent  jurisdiction  for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court,  shall be a  corporation  organized and doing
business  under  the laws of the  United  States  or of the State of New York or
California  (or of any  other  state  of the  United  States  so  long  as  such
corporation  is authorized to do business as a banking  institution in the State
of New York or California),  in good standing,  having an office in the State of
New  York or  California,  which  is  authorized  under  such  laws to  exercise
corporate  trust or stock  transfer  powers  and is subject  to  supervision  or
examination  by  federal  or state  authority  and  which has at the time of its
appointment  as Rights  Agent a  combined  capital  and  surplus of at least $50
million. After appointment,  the successor Rights Agent shall be vested with the
same powers,  rights,  duties and  responsibilities as if it had been originally
named as Rights Agent without  further act or deed; but the  predecessor  Rights
Agent shall deliver and transfer to the  successor  Rights Agent any property at
the time held by it  hereunder,  and execute and deliver any further  assurance,
conveyance,  act or deed necessary for the purpose. Not later than the effective
date of any such  appointment  the Company shall file notice  thereof in writing
with the  predecessor  Rights Agent and each transfer agent of the Common Shares
or Preferred Shares. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of the
resignation  or removal of the Rights Agent or the  appointment of the successor
Rights Agent, as the case may be.

     Section 22. Issuance of New Right Certificates.  Notwithstanding any of the
provisions  of this  Rights  Agreement  or of the  Rights to the  contrary,  the
Company may, at its option,  issue new Right  Certificates  evidencing Rights in
such form as may be approved by the Board of Directors of the Company to reflect
any  adjustment or change in the Purchase  Price and the number or kind or class
of  shares  or  other  securities  or  property   purchasable  under  the  Right
Certificates made in accordance with the provisions of this Rights Agreement.

     Section 23. Redemption.

     (a) The Board of Directors  of the Company may, at its option,  at any time
prior to such time as any Person becomes an Acquiring Person, redeem all but not
less  than all the then  outstanding  Rights at a  redemption  price of $.01 per
Right,  appropriately  adjusted to reflect any stock  split,  stock  dividend or
similar  transaction  occurring  after the date of the Spinoff (such  redemption
price being hereinafter  referred to as the "Redemption  Price"). The redemption
of the Rights by the Board of Directors of the Company may be made  effective at
such time,  on such basis and with such  conditions as the Board of Directors in
its sole discretion may establish.

     (b)  Immediately  upon the action of the Board of  Directors of the Company
ordering the redemption of the Rights  pursuant to paragraph (a) of this Section
23, and without any further action and without any notice, the right to exercise
the Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price. The Company shall promptly give public
notice of any such redemption;  provided,  however, that the failure to give, or
any defect in, any such notice shall not affect the validity of such redemption.
After such  action of the Board of  Directors  ordering  the  redemption  of the
Rights,  the Company shall mail a notice of redemption to all the holders of the
then outstanding Rights at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the  Distribution  Date,  on the registry
books of the transfer agent for the Common Shares. Any notice which is mailed in
the manner  herein  provided  shall be deemed  given,  whether or not the holder
receives  the notice.  Each such notice of  redemption  will state the method by
which the payment of the Redemption Price will be made.  Neither the Company nor
any of its  Affiliates or Associates  may redeem,  acquire or purchase for value
any Rights at any time in any manner other than that  specifically  set forth in
this Section 23 or in Section 24 hereof,  and other than in connection  with the
purchase of Common Shares prior to the Distribution Date.

     Section 24. Exchange.

     (a) The Board of Directors  of the Company may, at its option,  at any time
after any Person becomes an Acquiring  Person,  exchange all or part of the then
outstanding  and  exercisable  Rights (which shall not include  Rights that have
become void pursuant to the provisions of Section  11(a)(ii)  hereof) for Common
Shares  at an  exchange  ratio of one  Common  Share  per  Right,  appropriately
adjusted  to reflect any stock  split,  stock  dividend  or similar  transaction
occurring after the date hereof (such exchange ratio being hereinafter  referred
to as the  "Exchange  Ratio").  Notwithstanding  the  foregoing,  the  Board  of
Directors of the Company  shall not be empowered to effect such  exchange at any
time after any Person  (other than the Company,  any  Subsidiary of the Company,
any employee benefit plan of the Company or any such  Subsidiary,  or any entity
holding  Common Shares for or pursuant to the terms of any such plan),  together
with all Affiliates and Associates of such Person,  becomes the Beneficial Owner
of 50% or more of the Common Shares then outstanding.

     (b)  Immediately  upon the action of the Board of  Directors of the Company
ordering the exchange of any Rights pursuant to paragraph (a) of this Section 24
and  without any  further  action and without any notice,  the right to exercise
such Rights shall  terminate  and the only right  thereafter of a holder of such
Rights shall be to receive  that number of Common  Shares equal to the number of
such Rights held by such holder  multiplied by the Exchange  Ratio.  The Company
shall promptly give public notice of any such exchange;  provided, however, that
the failure to give, or any defect in, such notice shall not affect the validity
of such exchange.  The Company promptly shall mail a notice of any such exchange
to all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice which is mailed in the manner
herein  provided shall be deemed given,  whether or not the holder  receives the
notice. Each such notice of exchange will state the method by which the exchange
of the Common  Shares  for  Rights  will be  effected  and,  in the event of any
partial  exchange,  the number of Rights  which will be  exchanged.  Any partial
exchange  shall be effected  pro rata based on the number of Rights  (other than
Rights which have become void pursuant to the  provisions  of Section  11(a)(ii)
hereof) held by each holder of Rights.

     (c) In the event that there shall not be  sufficient  Common  Shares issued
but not  outstanding or authorized but unissued to permit any exchange of Rights
as  contemplated  in accordance with this Section 24, the Company shall take all
such  action as may be  necessary  to  authorize  additional  Common  Shares for
issuance upon exchange of the Rights. In the event the Company shall, after good
faith effort, be unable to take all such action as may be necessary to authorize
such additional  Common Shares,  the Company shall  substitute,  for each Common
Share that would  otherwise be issuable  upon  exchange of a Right,  a number of
Preferred  Shares or fraction  thereof  such that the  current per share  market
price of one Preferred  Share  multiplied by such number or fraction is equal to
the  current  per  share  market  price  of one  Common  Share as of the date of
issuance of such Preferred Shares or fraction thereof.

     (d) The Company  shall not be required to issue  fractions of Common Shares
or to distribute  certificates which evidence  fractional Common Shares. In lieu
of such  fractional  Common  Shares,  the  Company  shall pay to the  registered
holders of the Right  Certificates  with regard to which such fractional  Common
Shares would  otherwise be issuable an amount in cash equal to the same fraction
of the current  market value of a whole Common  Share.  For the purposes of this
paragraph  (d),  the current  market  value of a whole Common Share shall be the
closing price of a Common Share (as determined  pursuant to the second  sentence
of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.

     Section 25. Notice of Certain Events.

     (a) In case the Company  shall  propose (i) to pay any dividend  payable in
stock of any class to the holders of its  Preferred  Shares or to make any other
distribution  to the  holders  of its  Preferred  Shares  (other  than a regular
quarterly cash dividend),  (ii) to offer to the holders of its Preferred  Shares
rights or warrants to  subscribe  for or to purchase  any  additional  Preferred
Shares  or  shares  of stock of any  class or any  other  securities,  rights or
options,  (iii) to effect any  reclassification  of its Preferred  Shares (other
than a reclassification  involving only the subdivision of outstanding Preferred
Shares),  (iv) to effect any  consolidation or merger into or with, or to effect
any sale or other  transfer  (or to permit  one or more of its  Subsidiaries  to
effect any sale or other transfer), in one or more transactions,  of 50% or more
of the assets or earning power of the Company and its  Subsidiaries  (taken as a
whole)  to, any other  Person,  (v) to effect the  liquidation,  dissolution  or
winding up of the Company,  or (vi) to declare or pay any dividend on the Common
Shares  payable  in Common  Shares or to effect a  subdivision,  combination  or
consolidation  of the Common Shares (by  reclassification  or otherwise  than by
payment of dividends in Common  Shares),  then,  in each such case,  the Company
shall give to each holder of a Right Certificate,  in accordance with Section 26
hereof,  a notice of such proposed  action,  which shall specify the record date
for the purposes of such stock dividend, or distribution of rights or warrants,
or the  date  on  which  such  reclassification,  consolidation,  merger,  sale,
transfer, liquidation,  dissolution, or winding up is to take place and the date
of  participation  therein by the holders of the Common Shares and/or  Preferred
Shares,  if any such date is to be fixed,  and such notice  shall be so given in
the case of any  action  covered  by clause  (i) or (ii)  above at least 10 days
prior to the record date for  determining  holders of the  Preferred  Shares for
purposes of such action,  and in the case of any such other action,  at least 10
days  prior to the date of the  taking  of such  proposed  action or the date of
participation  therein  by the  holders of the Common  Shares  and/or  Preferred
Shares, whichever shall be the earlier.

     (b) In case the event set forth in Section  11(a)(ii)  hereof  shall occur,
then the Company shall as soon as practicable  thereafter give to each holder of
a Right  Certificate,  in  accordance  with  Section 26 hereof,  a notice of the
occurrence  of such  event,  which  notice  shall  describe  such  event and the
consequences of such event to holders of Rights under Section 11(a)(ii) hereof.

     Section 26. Notices. Notices or demands authorized by this Rights Agreement
to be  given  or  made  by the  Rights  Agent  or by  the  holder  of any  Right
Certificate to or on the Company shall be sufficiently  given or made if sent by
first-class mail, postage prepaid,  addressed (until another address is filed in
writing with the Rights Agent) as follows:

                           Providian Financial Corporation
                           201 Mission  Street
                           San Francisco, California 94105
                           Attention:  Corporate Secretary


Subject to the provisions of Section 21 hereof,  any notice or demand authorized
by this Rights  Agreement to be given or made by the Company or by the holder of
any Right  Certificate to or on the Rights Agent shall be sufficiently  given or
made if sent by first-class  mail,  postage  prepaid,  addressed  (until another
address is filed in writing with the Company) as follows:

                           First Chicago Trust Company of New York
                           525 Washington Boulevard
                           Suite 4660
                           Jersey City, New Jersey 07310
                           Attention: Tenders and Exchanges Administration

Notices or demands  authorized  by this Rights  Agreement to be given or made by
the Company or the Rights Agent to the holder of any Right  Certificate shall be
sufficiently  given  or  made  if sent by  first-class  mail,  postage  prepaid,
addressed  to such holder at the address of such holder as shown on the registry
books of the Company.

     Section 27.  Supplements and Amendments.  The Company may from time to time
supplement or amend this Rights Agreement without the approval of any holders of
Right Certificates in order to cure any ambiguity,  to correct or supplement any
provision contained herein which may be defective or inconsistent with any other
provisions  herein,  or to make any other  provisions with respect to the Rights
which the  Company may deem  necessary  or  desirable,  any such  supplement  or
amendment  to be  evidenced  by a writing  signed by the  Company and the Rights
Agent; provided, however, that from and after such time as any Person becomes an
Acquiring Person, this Rights Agreement shall not be amended in any manner which
would adversely affect the interests of the holders of Rights.  Without limiting
the  foregoing,  the  Company  may at any time  prior to such time as any Person
becomes an Acquiring  Person amend this Rights Agreement to lower the thresholds
set forth in  Sections  1(a) and 3(a) hereof to not less than the greater of (i)
the sum of .001% and the largest  percent age of the  outstanding  Common Shares
then known by the Company to be beneficially owned by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the Company
or any  Subsidiary of the Company,  or any entity  holding  Common Shares for or
pursuant to the terms of any such plan) and (ii) 10%.

     Section 28.  Successors.  All the covenants  and  provisions of this Rights
Agreement  by or for the benefit of the  Company or the Rights  Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.

     Section 29.  Benefits  of this  Rights  Agreement.  Nothing in this Rights
Agreement shall be construed to give to any Person or corporation other than the
Company,  the Rights Agent and the registered  holders of the Right Certificates
(and, prior to the Distribution  Date, the Common Shares) any legal or equitable
right,  remedy or claim under this Rights  Agreement;  but this Rights Agreement
shall be for the sole and exclusive benefit of the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Shares).

     Section 30. Severability.  If any term, provision,  covenant or restriction
of this Rights  Agreement is held by a court of competent  jurisdiction or other
authority  to be invalid,  void or  unenforceable,  the  remainder of the terms,
provisions,  covenants and restrictions of this Rights Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.

     Section 31. Governing Law. This Rights Agreement and each Right Certificate
issued  hereunder  shall be deemed to be a  contract  made under the laws of the
State of Delaware  and for all  purposes  shall be governed by and  construed in
accordance  with the laws of such State  applicable  to contracts to be made and
performed entirely within such State.

     Section  32.  Counterparts.  This Rights  Agreement  may be executed in any
number of counterparts and each of such  counterparts  shall for all purposes be
deemed to be an original,  and all such counterparts  shall together  constitute
but one and the same instrument.

     Section  33.  Descriptive  Headings.  Descriptive  headings  of the several
Sections of this Rights  Agreement are inserted for  convenience  only and shall
not  control or affect  the  meaning or  construction  of any of the  provisions
hereof.



<PAGE>


     IN WITNESS WHEREOF, the parties hereto have caused this Rights Agreement to
be duly executed and attested,  all as of the day and year first above  written.

                                               PROVIDIAN FINANCIAL CORPORATION

Attest:  

By /s/ Mary Ellen Richey                       By /s/ Shailesh J. Mehta
   ---------------------                          ---------------------
  Name: Mary Ellen Richey                        Name: Shailesh J. Mehta
  Title: Secretary                               Title: Chairman of the Board


                                               FIRST CHICAGO TRUST COMPANY OF
                                               NEW YORK

Attest:  

By /s/ George Dalton                           By /s/ James Kuzmich
   ------------------                             ------------------
  Name: George Dalton                            Name: James Kuzmich
  Title: Assistant Vice President                Title: Assistant Vice President


  
<PAGE>

                                                                       Exhibit A

                                      FORM

                                       of

                           CERTIFICATE OF DESIGNATIONS

                                       of

                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

                                       of


                         PROVIDIAN FINANCIAL CORPORATION


                         (Pursuant to Section 151 of the
                        Delaware General Corporation Law)



     Providian Financial Corporation, a corporation organized and existing under
the General  Corporation  Law of the State of Delaware  (hereinafter  called the
"Corporation"),  hereby  certifies that the following  resolution was adopted by
the Board of  Directors  of the  Corporation  as  required by Section 151 of the
General Corporation Law at a meeting duly called and held on March 27, 1997:

     RESOLVED, that pursuant to the authority granted to and vested in the Board
of Directors of this Corporation (hereinafter called the "Board of Directors" or
the  "Board")  in  accordance   with  the  provisions  of  the   Certificate  of
Incorporation,  the Board of  Directors  hereby  creates  a series of  Preferred
Stock, par value $.01 per share (the "Preferred  Stock"), of the Corporation and
hereby  states the  designation  and number of  shares,  and fixes the  relative
rights, preferences, and limitations thereof as follows:

     Series A Junior Participating Preferred Stock:

     Section 1.  Designation  and  Amount.  The shares of such  series  shall be
designated  as "Series A Junior  Participating  Preferred  Stock" (the "Series A
Preferred  Stock") and the number of shares  constituting the Series A Preferred
Stock shall be 1,000,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors;  provided,  that no decrease  shall reduce
the  number  of shares of  Series A  Preferred  Stock to a number  less than the
number of shares  then  outstanding  plus the  number  of  shares  reserved  for
issuance upon the exercise of  outstanding  options,  rights or warrants or upon
the  conversion  of  any  outstanding   securities  issued  by  the  Corporation
convertible into Series A Preferred Stock.

     Section 2. Dividends and Distributions.

          (A)  Subject to the rights of the  holders of any shares of any series
     of Preferred Stock (or any similar stock) ranking prior and superior to the
     Series A Preferred  Stock with respect to dividends,  the holders of shares
     of Series A Preferred  Stock, in preference to the holders of Common Stock,
     par value $.01 per share (the "Common Stock"),  of the Corporation,  and of
     any other  junior  stock,  shall be entitled to  receive,  when,  as and if
     declared by the Board of Directors out of funds  legally  available for the
     purpose,  quarterly  dividends  payable  in cash on the first day of March,
     June, September and December in each year (each such date being referred to
     herein as a "Quarterly  Dividend  Payment  Date"),  commencing on the first
     Quarterly  Dividend  Payment  Date after the first  issuance  of a share or
     fraction  of a share of Series A  Preferred  Stock,  in an amount per share
     (rounded to the nearest cent) equal to the greater of (a) $1 or (b) subject
     to the  provision  for  adjustment  hereinafter  set  forth,  100 times the
     aggregate  per  share  amount  of all cash  dividends,  and 100  times  the
     aggregate per share amount  (payable in kind) of all non-cash  dividends or
     other  distributions,  other  than a  dividend  payable in shares of Common
     Stock or a  subdivision  of the  outstanding  shares  of  Common  Stock (by
     reclassification  or  otherwise),  declared  on the Common  Stock since the
     immediately  preceding  Quarterly Dividend Payment Date or, with respect to
     the first Quarterly  Dividend Payment Date, since the first issuance of any
     share or fraction of a share of Series A Preferred  Stock. In the event the
     Corporation  shall at any time  declare or pay any  dividend  on the Common
     Stock  payable  in shares  of Common  Stock,  or  effect a  subdivision  or
     combination or consolidation of the outstanding  shares of Common Stock (by
     reclassification  or  otherwise  than by payment of a dividend in shares of
     Common  Stock) into a greater or lesser  number of shares of Common  Stock,
     then in each such case the  amount to which  holders  of shares of Series A
     Preferred Stock were entitled  immediately prior to such event under clause
     (b) of the preceding  sentence shall be adjusted by multiplying such amount
     by a  fraction,  the  numerator  of which is the number of shares of Common
     Stock outstanding immediately after such event and the denominator of which
     is the number of shares of Common Stock that were  outstanding  immediately
     prior to such event.

          (B) The  Corporation  shall declare a dividend or  distribution on the
     Series A  Preferred  Stock as  provided in  paragraph  (A) of this  Section
     immediately  after it  declares a dividend  or  distribution  on the Common
     Stock (other than a dividend  payable in shares of Common Stock);  provided
     that, in the event no dividend or distribution  shall have been declared on
     the Common Stock during the period between any Quarterly  Dividend  Payment
     Date and the next subsequent Quarterly Dividend Payment Date, a dividend of
     $1 per share on the Series A Preferred Stock shall  nevertheless be payable
     on such subsequent Quarterly Dividend Payment Date.

          (C) Dividends  shall begin to accrue and be cumulative on  outstanding
     shares of Series A Preferred Stock from the Quarterly Dividend Payment Date
     next  preceding the date of issue of such shares,  unless the date of issue
     of such shares is prior to the record date for the first Quarterly Dividend
     Payment Date, in which case  dividends on such shares shall begin to accrue
     from the date of issue of such  shares,  or  unless  the date of issue is a
     Quarterly  Dividend Payment Date or is a date after the record date for the
     determination  of holders of shares of Series A Preferred Stock entitled to
     receive a quarterly  dividend and before such  Quarterly  Dividend  Payment
     Date, in either of which events such dividends shall begin to accrue and be
     cumulative from such Quarterly  Dividend  Payment Date.  Accrued but unpaid
     dividends shall not bear interest. Dividends paid on the shares of Series A
     Preferred  Stock in an amount less than the total amount of such  dividends
     at the time accrued and payable on such shares shall be allocated  pro rata
     on a  share-by-share  basis among all such shares at the time  outstanding.
     The  Board of  Directors  may fix a record  date for the  determination  of
     holders of shares of Series A Preferred  Stock entitled to receive  payment
     of a dividend or distribution declared thereon,  which record date shall be
     not more than 60 days prior to the date fixed for the payment thereof.

     Section 3. Voting Rights. The holders of shares of Series A Preferred Stock
shall have the following voting rights:

          (A) Subject to the provision  for  adjustment  hereinafter  set forth,
     each share of Series A Preferred  Stock shall entitle the holder thereof to
     100 votes on all matters  submitted  to a vote of the  stockholders  of the
     Corporation.  In the event the Corporation shall at any time declare or pay
     any  dividend on the Common  Stock  payable in shares of Common  Stock,  or
     effect a subdivision  or combination or  consolidation  of the  outstanding
     shares of Common Stock (by reclassification or otherwise than by payment of
     a dividend in shares of Common  Stock)  into a greater or lesser  number of
     shares of  Common  Stock,  then in each  such case the  number of votes per
     share to which holders of shares of Series A Preferred  Stock were entitled
     immediately  prior to such event  shall be  adjusted  by  multiplying  such
     number by a  fraction,  the  numerator  of which is the number of shares of
     Common Stock  outstanding  immediately after such event and the denominator
     of which is the  number of shares of  Common  Stock  that were  outstanding
     immediately prior to such event.

          (B) Except as otherwise  provided herein,  in any other Certificate of
     Designations  creating a series of Preferred Stock or any similar stock, or
     by law,  the holders of shares of Series A Preferred  Stock and the holders
     of shares of Common Stock and any other  capital  stock of the  Corporation
     having  general  voting  rights  shall  vote  together  as one class on all
     matters submitted to a vote of stockholders of the Corporation.

          (C)  Except as set forth  herein,  or as  otherwise  provided  by law,
     holders of Series A Preferred Stock shall have no special voting rights and
     their consent shall not be required (except to the extent they are entitled
     to vote with  holders of Common  Stock as set forth  herein) for taking any
     corporate action.

     Section 4. Certain Restrictions.

          (A) Whenever  quarterly  dividends or other dividends or distributions
     payable on the Series A  Preferred  Stock as  provided  in Section 2 are in
     arrears,  thereafter  and  until  all  accrued  and  unpaid  dividends  and
     distributions,  whether or not  declared,  on shares of Series A  Preferred
     Stock outstanding shall have been paid in full, the Corporation shall not:

               (i) declare or pay dividends, or make any other distributions, on
          any shares of stock  ranking  junior  (either as to  dividends or upon
          liquidation,  dissolution  or winding  up) to the  Series A  Preferred
          Stock;

               (ii) declare or pay dividends,  or make any other  distributions,
          on any shares of stock ranking on a parity  (either as to dividends or
          upon  liquidation,  dissolution  or  winding  up)  with  the  Series A
          Preferred  Stock,  except  dividends  paid  ratably  on the  Series  A
          Preferred  Stock  and all such  parity  stock on which  dividends  are
          payable or in arrears in  proportion to the total amounts to which the
          holders of all such shares are then entitled;

               (iii) redeem or purchase or otherwise  acquire for  consideration
          shares of any stock  ranking  junior  (either as to  dividends or upon
          liquidation,  dissolution  or winding  up) to the  Series A  Preferred
          Stock, provided that the Corporation may at any time redeem,  purchase
          or otherwise  acquire  shares of any such junior stock in exchange for
          shares of any stock of the  Corporation  ranking  junior (either as to
          dividends  or upon  dissolution,  liquidation  or  winding  up) to the
          Series A Preferred Stock; or

               (iv) redeem or purchase or  otherwise  acquire for  consideration
          any shares of Series A Preferred Stock, or any shares of stock ranking
          on a parity with the Series A Preferred  Stock,  except in  accordance
          with a purchase offer made in writing or by publication (as determined
          by the Board of  Directors)  to all  holders of such  shares upon such
          terms as the Board of Directors, after consideration of the respective
          annual dividend rates and other relative rights and preferences of the
          respective  series and  classes,  shall  determine  in good faith will
          result in fair and equitable  treatment among the respective series or
          classes.

          (B) The Corporation shall not permit any subsidiary of the Corporation
     to purchase or otherwise  acquire for  consideration any shares of stock of
     the Corporation  unless the Corporation  could, under paragraph (A) of this
     Section 4,  purchase or  otherwise  acquire such shares at such time and in
     such manner.

     Section  5.  Reacquired  Shares.  Any  shares of Series A  Preferred  Stock
purchased  or otherwise  acquired by the  Corporation  in any manner  whatsoever
shall be retired and cancelled promptly after the acquisition  thereof. All such
shares shall upon their  cancellation  become  authorized but unissued shares of
Preferred  Stock and may be reissued as part of a new series of Preferred  Stock
subject to the conditions and restrictions on issuance set forth herein,  in the
Certificate  of  Incorporation,  or in any  other  Certificate  of  Designations
creating  a series  of  Preferred  Stock or any  similar  stock or as  otherwise
required by law.

     Section 6.  Liquidation,  Dissolution or Winding-Up.  Upon any liquidation,
dissolution or winding up of the Corporation,  no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or upon
liquidation,  dissolution or winding up) to the Series A Preferred Stock unless,
prior  thereto,  the  holders of shares of Series A  Preferred  Stock shall have
received  $100 per share,  plus an amount equal to accrued and unpaid  dividends
and distributions thereon, whether or not declared, to the date of such payment,
provided  that the  holders  of  shares  of Series A  Preferred  Stock  shall be
entitled to receive an aggregate amount per share,  subject to the provision for
adjustment  hereinafter set forth, equal to 100 times the aggregate amount to be
distributed  per share to  holders  of shares  of  Common  Stock,  or (2) to the
holders of shares of stock  ranking on a parity  (either as to dividends or upon
liquidation,  dissolution  or  winding  up) with the Series A  Preferred  Stock,
except  distributions  made ratably on the Series A Preferred Stock and all such
parity stock in proportion to the total amounts to which the holders of all such
shares are entitled  upon such  liquidation,  dissolution  or winding up. In the
event the  Corporation  shall at any time  declare  or pay any  dividend  on the
Common  Stock  payable in shares of Common  Stock,  or effect a  subdivision  or
combination  or  consolidation  of the  outstanding  shares of Common  Stock (by
reclassification or other wise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common  Stock,  then in each
such case the aggregate  amount to which holders of shares of Series A Preferred
Stock were entitled  immediately prior to such event under the proviso in clause
(1) of the preceding  sentence shall be adjusted by multiplying such amount by a
fraction  the  numerator  of which is the  number  of  shares  of  Common  Stock
outstanding  immediately  after such event and the  denominator  of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

     Section 7. Consolidation,  Merger, etc. In case the Corporation shall enter
into any  consolidation,  merger,  combination or other transaction in which the
shares  of  Common  Stock are  exchanged  for or  changed  into  other  stock or
securities,  cash and/or any other property, then in any such case each share of
Series A  Preferred  Stock  shall at the same  time be  similarly  exchanged  or
changed  into an amount  per  share,  subject to the  provision  for  adjustment
hereinafter  set  forth,  equal to 100  times  the  aggregate  amount  of stock,
securities,  cash and/or any other property  (payable in kind),  as the case may
be, into which or for which each share of Common Stock is changed or  exchanged.
In the event the  Corporation  shall at any time  declare or pay any dividend on
the Common Stock payable in shares of Common Stock,  or effect a subdivision  or
combination  or  consolidation  of the  outstanding  shares of Common  Stock (by
reclassification  or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common  Stock,  then in each
such case the amount set forth in the  preceding  sentence  with  respect to the
exchange  or change of shares of Series A  Preferred  Stock shall be adjusted by
multiplying  such amount by a fraction,  the numerator of which is the number of
shares  of  Common  Stock  outstanding  immediately  after  such  event  and the
denominator  of  which is the  number  of  shares  of  Common  Stock  that  were
outstanding immediately prior to such event.

     Section 8. No Redemption.  The shares of Series A Preferred Stock shall not
be redeemable.

     Section 9. Rank. The Series A Preferred  Stock shall rank,  with respect to
the payment of dividends and the distribution of assets, junior to all series of
any other class of the Corporation's Preferred Stock.

     Section 10. Amendment.  The Certificate of Incorporation of the Corporation
shall not be amended in any manner  which would  materially  alter or change the
powers,  preferences or special rights of the Series A Preferred  Stock so as to
affect them adversely  without the  affirmative  vote of the holders of at least
two-thirds  of the  outstanding  shares  of  Series A  Preferred  Stock,  voting
together as a single class.

   

<PAGE>



     IN WITNESS WHEREOF,  this Certificate of Designations is executed on behalf
of the  Corporation  by its Chairman of the Board and attested by its  Secretary
this 1st day of June, 1997.


                                             --------------------------------
                                                  Chairman of the Board


Attest:


--------------------------
Secretary




<PAGE>

                                                                       Exhibit B

                            Form of Right Certificate

Certificate No. R-                                                  _____ Rights


          NOT EXERCISABLE AFTER June 30, 2007 OR EARLIER IF REDEMPTION
          OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT
          $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE
          RIGHTS AGREEMENT.


                                Right Certificate


                         PROVIDIAN FINANCIAL CORPORATION

     This  certifies  that  ________________,  or  registered  assigns,  is  the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of June 1, 1997 (the "Rights Agreement"),  between Providian
Financial Corporation, a Delaware corporation (the "Company"), and First Chicago
Trust Company of New York (the "Rights Agent"),  to purchase from the Company at
any time  after the  Distribution  Date (as such term is  defined  in the Rights
Agreement)  and prior to 5:00 P.M.,  New York City time, on June 30, 2007 at the
designated  office of the Rights  Agent,  or at the office of its  successor  as
Rights Agent, one one-hundredth of a fully paid non-assessable share of Series A
Junior  Participating  Preferred Stock, par value $.01 per share (the "Preferred
Shares"), of the Company, at a purchase price of $150 per one one-hundredth of a
Preferred Share (the "Purchase Price"),  upon presentation and surrender of this
Right  Certificate  with the Form of  Election to Purchase  duly  executed.  The
number of Rights  evidenced  by this  Right  Certificate  (and the number of one
one-hundredths of a Preferred Share which may be purchased upon exercise hereof)
set forth  above,  and the Purchase  Price set forth  above,  are the number and
Purchase  Price  as of  _________________,  based  on the  Preferred  Shares  as
constituted  at such date.  As provided in the Rights  Agreement,  the  Purchase
Price and the number of one  one-hundredths  of a  Preferred  Share which may be
purchased  upon the exercise of the Rights  evidenced by this Right  Certificate
are subject to modification and adjustment upon the happening of certain events.

     This Right  Certificate  is subject  to all of the  terms,  provisions  and
conditions of the Rights Agreement,  which terms,  provisions and conditions are
hereby  incorporated  herein by  reference  and made a part  hereof and to which
Rights Agreement  reference is hereby made for a full description of the rights,
limitations  of rights,  obligations,  duties and  immunities  hereunder  of the
Rights Agent, the Company and the holders of the Right  Certificates.  Copies of
the  Rights  Agreement  are on file at the  principal  executive  offices of the
Company and the above-mentioned offices of the Rights Agent.

     Right Certificate, with or without other Right Certificates, upon surrender
at the designated office of the Rights Agent, may be exchanged for another Right
Certificate  or Right  Certificates  of like  tenor and date  evidencing  Rights
entitling the holder to purchase a like aggregate  number of Preferred Shares as
the Rights evidenced by the Right Certificate or Right Certificates  surrendered
shall have entitled such holder to purchase.  If this Right Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender hereof
another Right  Certificate or Right  Certificates for the number of whole Rights
not exercised.

     Subject to the provisions of the Rights Agreement,  the Rights evidenced by
this  Certificate  (i) may be redeemed by the Company at a  redemption  price of
$.01 per Right or (ii) may be exchanged in whole or in part for Preferred Shares
or shares of the Company's Common Stock, par value $.01 per share.

     No  fractional  Preferred  Shares will be issued  upon the  exercise of any
Right or Rights  evidenced  hereby  (other  than  fractions  which are  integral
multiples of one one-hundredth of a Preferred Share,  which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.

     No holder of this Right  Certificate  shall be  entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred  Shares or of
any other  securities  of the  Company  which may at any time be issuable on the
exercise hereof,  nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder  hereof,  as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof,  or to give or
withhold  consent to any corporate  action,  or to receive notice of meetings or
other  actions  affecting   stockholders  (except  as  provided  in  the  Rights
Agreement), or to receive dividends or subscription rights, or otherwise,  until
the  Right or  Rights  evidenced  by this  Right  Certificate  shall  have  been
exercised as provided in the Rights Agreement.

     This Right  Certificate  shall not be valid or  obligatory  for any purpose
until it shall have been countersigned by the Rights Agent.

 


<PAGE>


     WITNESS the facsimile  signature of the proper  officers of the Company and
its corporate seal. Dated as of -----------------.


ATTEST:                                          PROVIDIAN FINANCIAL CORPORATION


By__________________________                     By____________________________

Countersigned:


FIRST CHICAGO TRUST COMPANY OF NEW YORK



By ______________________________________
      Authorized Signature




<PAGE>
                                                                       Exhibit B


                    Form of Reverse Side of Right Certificate



                               FORM OF ASSIGNMENT



             (To be executed by the registered holder if such holder
                   desires to transfer the Right Certificate.)


     FOR  VALUE  RECEIVED   ____________________________________  hereby  sells,
assigns and transfers unto ____________________________________________________
_______________________________________________________________________________
                  (Please print name and address of transferee)

_______________________________________________________________________________
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint____________________________ 
Attorney, to transfer the within Right Certificate on the books of the 
within-named Company, with full power of substitution.


Dated:                        ,


                                             -----------------------------------
                                                     Signature
Signature Guaranteed:

     Signatures  must be  guaranteed  by a member firm of a registered  national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.


     The undersigned  hereby  certifies that the Rights  evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).

                                             -----------------------------------
                                                     Signature




<PAGE>


             Form of Reverse Side of Right Certificate -- continued


                          FORM OF ELECTION TO PURCHASE



              (To be executed if holder desires to exercise Rights
                     represented by the Right Certificate.)


To:  Providian Financial Corporation:

     The undersigned hereby irrevocably elects to exercise  ____________  Rights
represented by this Right  Certificate to purchase the Preferred Shares issuable
upon the  exercise  of such  Rights  and  requests  that  certificates  for such
Preferred Shares be issued in the name of:


Please insert social security
or other taxpayer identification number


_______________________________________________________________________________
                         (Please print name and address)
_______________________________________________________________________________



If such  number of Rights  shall not be all the Rights  evidenced  by this Right
Certificate,  a new Right  Certificate for the balance  remaining of such Rights
shall be registered in the name of and delivered to:

Please insert social security
or other taxpayer identification number


_______________________________________________________________________________
                         (Please print name and address)
_______________________________________________________________________________

Dated:___________________________


                                             -----------------------------------
                                                                       Signature

Signature Guaranteed:

Signatures  must  be  guaranteed  by a  member  firm  of a  registered  national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.


<PAGE>



             Form of Reverse Side of Right Certificate - continued

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

The  undersigned  hereby  certifies  that the  Rights  evidenced  by this  Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).

                                             -----------------------------------
                                             Signature

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


                                     NOTICE

     The signature in the Form of Assignment or Form of Election to Purchase, as
the case may be, must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.

     In the event the certification set forth above in the Form of Assignment or
the Form of  Election to  Purchase,  as the case may be, is not  completed,  the
Company  and the  Rights  Agent  will deem the  beneficial  owner of the  Rights
evidenced by this Right Certificate to be an Acquiring Person or an Affiliate or
Associate  thereof (as defined in the Rights  Agreement) and such  Assignment or
Election to Purchase will not be honored.




<PAGE>
                                                                       Exhibit C


                          SUMMARY OF RIGHTS TO PURCHASE
                                PREFERRED SHARES


     On  March  27,  1997,  the  Board  of  Directors  of  Providian   Financial
Corporation (the "Company")  declared a dividend of one preferred share purchase
right (a "Right") for each outstanding share of common stock, par value $.01 per
share  (the  "Common  Shares"),  of the  Company.  The  dividend  is  payable to
stockholders  of record at the close of business on the day prior to the date of
the spinoff of the Company from its corporate parent, Providian Corporation (the
"Record Date").  Each Right entitles the registered  holder to purchase from the
Company one one-hundredth of a share of Series A Junior Participating  Preferred
Stock,  par value $.01 per share (the "Preferred  Shares"),  of the Company at a
price of $150 per one one-hundredth of a Preferred Share (the "Purchase Price"),
subject to adjustment.  The description and terms of the Rights are set forth in
a Rights  Agreement  (the  "Rights  Agreement")  between  the  Company and First
Chicago Trust Company of New York, as Rights Agent (the "Rights Agent").

     Until the earlier to occur of (i) 10 days  following a public  announcement
that a person  or group of  affiliated  or  associated  persons  (an  "Acquiring
Person") have acquired  beneficial  ownership of 15% or more of the  outstanding
Common  Shares or (ii) 10 business days (or such later date as may be determined
by action of the Board of Directors prior to such time as any person or group of
affiliated  persons becomes an Acquiring  Person) following the commencement of,
or  announcement  of an intention to make, a tender offer or exchange  offer the
consummation  of which would result in the  beneficial  ownership by a person or
group of 15% or more of the outstanding Common Shares (the earlier of such dates
being  called the  "Distribution  Date"),  the Rights  will be  evidenced,  with
respect to any of the Common  Share  certificates  outstanding  as of the Record
Date,  by such Common  Share  certificate  with a copy of this Summary of Rights
attached thereto.

     The Rights Agreement provides that, until the Distribution Date (or earlier
redemption or expiration of the Rights), the Rights will be transferred with and
only with the Common Shares.  Until the Distribution Date (or earlier redemption
or expiration  of the Rights),  new Common Share  certificates  issued after the
Record Date upon  transfer  or new  issuance  of Common  Shares  will  contain a
notation incorporating the Rights Agreement by reference. Until the Distribution
Date (or earlier  redemption  or  expiration  of the Rights),  the surrender for
transfer of any  certificates  for Common  Shares  outstanding  as of the Record
Date,  even  without  such  notation or a copy of this  Summary of Rights  being
attached  thereto,  will also  constitute the transfer of the Rights  associated
with the Common Shares  represented by such certificate.  As soon as practicable
following the Distribution  Date,  separate  certificates  evidencing the Rights
("Right  Certificates") will be mailed to holders of record of the Common Shares
as of the close of business on the  Distribution  Date and such  separate  Right
Certificates alone will evidence the Rights.

     The Rights are not exercisable until the Distribution Date. The Rights will
expire  on June 30,  2007  (the  "Final  Expiration  Date"),  unless  the  Final
Expiration  Date is  extended  or unless  the  Rights are  earlier  redeemed  or
exchanged by the Company, in each case, as described below.

     The Purchase  Price  payable,  and the number of Preferred  Shares or other
securities  or  property  issuable,  upon  exercise of the Rights are subject to
adjustment  from time to time to  prevent  dilution  (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or  warrants  to  subscribe  for or  purchase  Preferred  Shares at a price,  or
securities  convertible into Preferred Shares with a conversion price, less than
the  then-current  market  price  of the  Preferred  Shares  or  (iii)  upon the
distribution to holders of the Preferred  Shares of evidences of indebtedness or
assets  (excluding  regular  periodic  cash  dividends  paid out of  earnings or
retained  earnings or dividends  payable in Preferred Shares) or of subscription
rights or warrants (other than those referred to above).

     The number of outstanding  Rights and the number of one one-hundredths of a
Preferred  Share  issuable  upon  exercise  of each  Right are also  subject  to
adjustment  in the  event  of a stock  split  of the  Common  Shares  or a stock
dividend  on the  Common  Shares  payable  in  Common  Shares  or  subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.

     Preferred  Shares  purchasable  upon  exercise  of the  Rights  will not be
redeemable.  Each  Preferred  Share will be entitled  to a minimum  preferential
quarterly  dividend payment of $1 per share but will be entitled to an aggregate
dividend of 100 times the dividend  declared per Common  Share.  In the event of
liquidation,  the holders of the Preferred  Shares will be entitled to a minimum
preferential  liquidation  payment of $100 per share but will be  entitled to an
aggregate payment of 100 times the payment made per Common Share. Each Preferred
Share will have 100 votes,  voting together with the Common Shares.  Finally, in
the event of any merger,  consolidation  or other  transaction  in which  Common
Shares are exchanged, each Preferred Share will be entitled to receive 100 times
the amount  received per Common  Share.  These rights are protected by customary
antidilution provisions.

     Because of the nature of the Preferred  Shares'  dividend,  liquidation and
voting rights, the value of the one one-hundredth  interest in a Preferred Share
purchasable  upon  exercise of each Right  should  approximate  the value of one
Common Share.

     In the event that the  Company is  acquired  in a merger or other  business
combination  transaction  or 50% or more of its  consolidated  assets or earning
power are sold after a person or group has become an  Acquiring  Person,  proper
provision will be made so that each holder of a Right will  thereafter  have the
right to receive,  upon the exercise  thereof at the then current exercise price
of the Right,  that number of shares of common  stock of the  acquiring  company
which at the time of such  transaction will have a market value of two times the
exercise price of the Right. In the event that any person or group of affiliated
or associated  persons becomes an Acquiring  Person,  proper  provision shall be
made so that each holder of a Right, other than Rights beneficially owned by the
Acquiring Person (which will thereafter be void), will thereafter have the right
to receive upon  exercise  that number of Common Shares having a market value of
two times the exercise price of the Right.

     At any time after any person or group becomes an Acquiring Person and prior
to the  acquisition  by such  person or group of 50% or more of the  outstanding
Common  Shares,  the Board of  Directors  of the Company may exchange the Rights
(other than Rights  owned by such person or group which will have become  void),
in  whole  or in  part,  at an  exchange  ratio  of  one  Common  Share,  or one
one-hundredth  of a  Preferred  Share (or of a share of a class or series of the
Company's preferred stock having equivalent rights, preferences and privileges),
per Right (subject to adjustment).

     With  certain  exceptions,  no  adjustment  in the  Purchase  Price will be
required until  cumulative  adjustments  require an adjustment of at least 1% in
such Purchase Price. No fractional  Preferred  Shares will be issued (other than
fractions  which are  integral  multiples  of one  one-hundredth  of a Preferred
Share,  which may, at the  election of the Company,  be evidenced by  depositary
receipts) and in lieu  thereof,  an adjustment in cash will be made based on the
market price of the  Preferred  Shares on the last trading day prior to the date
of exercise.

     At any time prior to the  acquisition by a person or group of affiliated or
associated  persons of  beneficial  ownership of 15% or more of the  outstanding
Common  Shares,  the Board of  Directors of the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the  "Redemption  Price").
The  redemption  of the Rights may be made  effective at such time on such basis
with  such  conditions  as the Board of  Directors  in its sole  discretion  may
establish.  Immediately upon any redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.

     The terms of the Rights may be  amended  by the Board of  Directors  of the
Company without the consent of the holders of the Rights, including an amendment
to lower certain thresholds  described above to not less than the greater of (i)
the sum of .001% and the largest percentage of the outstanding Common Shares
then  known to the  Company to be  beneficially  owned by any person or group of
affiliated or associated  persons and (ii) 10%,  except that from and after such
time as any  person or group of  affiliated  or  associated  persons  becomes an
Acquiring  Person no such  amendment may  adversely  affect the interests of the
holders of the Rights.

     Until a Right is  exercised,  the  holder  thereof,  as such,  will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.

     A copy of the  Rights  Agreement  has been filed  with the  Securities  and
Exchange  Commission as an Exhibit to a Registration  Statement on Form 10 dated
April 17, 1997. A copy of the Rights  Agreement is available free of charge from
the  Company.  This  summary  description  of the Rights  does not purport to be
complete and is qualified in its entirety by reference to the Rights  Agreement,
which is hereby incorporated herein by reference.