Document:

EXHIBIT 4.2

                                 TRUST AGREEMENT

                                     Between

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                         PROVIDIAN FINANCIAL CORPORATION

                                       And

                        FIDELITY MANAGEMENT TRUST COMPANY

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                PROVIDIAN FINANCIAL CORPORATION 401(k) PLAN TRUST

                          Dated as of February 1, 2000

<PAGE>

                                TABLE OF CONTENTS

Section                                                                     Page

 1   Trust.....................................................................2

 2   Exclusive Benefit and Reversion of Sponsor Contributions..................2

 3   Disbursements.............................................................2
     (a) Directions from Administrator
     (b) Limitations

     (a) Administrator Directed Disbursements
     (b) Participant Withdrawal Requests
     (c) Limitations

 4   Investment of Trust.......................................................3
     (a) Selection of Investment Options
     (b) Available Investment Options
     (c) Participant Direction
     (d) Mutual Funds
     (e) Sponsor Stock
     (f) Participant Loans
     (g) BrokerageLink
     (h) Guaranteed Investment Contracts
     (i) Participation in Collective Investment Funds
     (j) Outside Managed Collective Investment Funds
     (k) Outside Managed Separate Investment Funds
     (l) Strategy Funds
     (m) Reliance of Trustee on Directions
     (n) Trustee Powers

 5   Recordkeeping and Administrative Services to Be Performed................24
     (a) General
     (b) Accounts
     (c) Inspection and Audit
     (d) Effect of Plan Amendment
     (e) Returns, Reports and Information

 6   Compensation and Expenses................................................25

 7   Directions and Indemnification...........................................25
     (a) Identity of Administrator and Named Fiduciary
     (b) Directions from Administrator
     (c) Directions from Named Fiduciary
     (d) Co-Fiduciary Liability
     (e) Indemnification
     (f) Survival
                                       -i-

<PAGE>

                                TABLE OF CONTENTS
                                   (Continued)
Section                                                                     Page

 8   Resignation or Removal of Trustee........................................27
     (a) Resignation
     (b) Removal

 9   Successor Trustee........................................................27
     (a) Appointment
     (b) Acceptance
     (c) Corporate Action

10   Termination..............................................................27

11   Resignation, Removal, and Termination Notices............................27

12   Duration.................................................................27

13   Amendment or Modification................................................28

14    Electronic Services.....................................................28

15   General..................................................................29
      (a) Performance by Trustee, its Agents or Affiliates
      (b) Entire Agreement
      (c) Waiver
      (d) Successors and Assigns
      (e) Partial Invalidity
      (f) Section Headings

16   Governing Law............................................................30
      (a) Massachusetts Law Controls
      (b) Trust Agreement Controls

Schedules
   A.   Administrative Services
   B.   Fee Schedule
   C.   Investment Options
   D.   Administrator's Authorization Letter
   E.   Named Fiduciary's Authorization Letter
   F.   IRS Determination Letter or Opinion of Counsel
   G.   Existing GICs
   H.   Exchange Guidelines
   I.   Operational Guidelines for Non-Fidelity Mutual Funds
   J.   Securities that may not be purchased under BrokerageLink
   K.   BrokerageLink Administrative Procedures
   L.   Operating Procedures for Participant Loans for Purchase of
        Primary Residence
                                      -ii-

<PAGE>

         TRUST AGREEMENT,  dated as of the first day of February,  2000, between
PROVIDIAN FINANCIAL CORPORATION a California  corporation,  having an office at
201  Mission  Street,  San  Francisco,  California  94105 (the  "Sponsor"),  and
FIDELITY  MANAGEMENT  TRUST COMPANY,  a Massachusetts  trust company,  having an
office at 82 Devonshire Street, Boston, Massachusetts 02109 (the "Trustee").

                                   WITNESSETH:

         WHEREAS, the Sponsor is the sponsor of the Providian Financial
Corporation 401(k) Plan (the "Plan"); and

         WHEREAS,  the  Sponsor  wishes to  establish a trust to hold and invest
Plan assets under the Plan for the exclusive benefit of participants in the Plan
and their beneficiaries; and

         WHEREAS,  the Sponsor (the "Named Fiduciary") is the named fiduciary of
the Plan (within the meaning of section 402(a) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")); and

         WHEREAS,  the Trustee is willing to hold and invest the aforesaid  Plan
assets  in  trust  among  several  investment  options  selected  by  the  Named
Fiduciary; and

         WHEREAS,  the  Sponsor  wishes  to have  the  Trustee  perform  certain
ministerial recordkeeping and administrative functions under the Plan; and

         WHEREAS, the Sponsor (the "Administrator") is the administrator of the
Plan (within the meaning of section 3(16)(A) of ERISA); and

         WHEREAS,   the  Trustee  is  willing  to  perform   recordkeeping   and
administrative  services for the Plan if the services are  ministerial in nature
and  are  provided  within  a  framework  of  plan  provisions,  guidelines  and
interpretations conveyed in writing to the Trustee by the Administrator.

         NOW,  THEREFORE,  in  consideration  of the foregoing  premises and the
mutual  covenants and  agreements  set forth below,  the Sponsor and the Trustee
agree as follows:

Section 1.  Trust.  The  Sponsor  hereby  establishes  the  Providian  Financial
Corporation  401(k) Plan Trust (the "Trust")  with the Trustee.  The Trust shall
consist of an initial  contribution of money or other property acceptable to the
Trustee  in its sole  discretion,  made by the  Sponsor  or  transferred  from a
previous trustee under the Plan, such additional sums of money and Sponsor Stock
(hereinafter  defined)  as shall from time to time be  delivered  to the Trustee
under the Plan, all  investments  made therewith and proceeds  thereof,  and all
earnings and profits thereon,  less the payments that are made by the Trustee as
provided  herein.  The  Trustee  hereby  accepts  the  Trust  on the  terms  and
conditions set forth in this  Agreement.  In accepting  this Trust,  the Trustee
shall be  accountable  for the assets  received by it,  subject to the terms and
conditions of this Agreement.

Section 2. Exclusive Benefit and Reversion of Sponsor  Contributions.  Except as
provided under applicable law, no part of the Trust may be used for, or diverted
to, purposes other than the exclusive benefit of the participants in the Plan or
their beneficiaries or the reasonable expenses of Plan administration.

Section 3.  Disbursements.
         (a)  Administrator-Directed   Disbursements.  The  Trustee  shall  make
disbursements  in the amounts and in the manner that the  Administrator  directs
from time to time in  writing.  The  Trustee  shall  have no  responsibility  to
ascertain such direction's  compliance with the terms of the Plan (except to the
extent the terms of the Plan have been  communicated  to the Trustee in writing)
or of  any  applicable  law  or the  direction's  effect  for  tax  purposes  or
otherwise;  nor  shall  the  Trustee  have  any  responsibility  to  see  to the
application of any disbursement.

         (b) Participant  Withdrawal Requests.  The Sponsor hereby directs that,
pursuant to the Plan,  a  participant  withdrawal  request  (in-service  or full
withdrawal) may be made by the participant by telephone or such other electronic
means as may be agreed to from time to time by the Sponsor and Trustee,  and the
Trustee shall process such request only after the identity of the participant is
verified by use of a personal  identification number ("PIN") and social security
number.  The Trustee  shall process such  withdrawal in accordance  with written
guidelines  provided by the Sponsor and  documented  in the Plan  Administrative
Manual. In the case of a hardship withdrawal request,  the Trustee shall forward
the  withdrawal  document to the  participant  for execution and  submission for
approval to the Administrator.  The Administrator  shall have the responsibility
for approving the withdrawal and instructing the Trustee to send the proceeds to
the Administrator or to the participant if so directed by the Administrator.

         (c)  Limitations.  The  Trustee  shall  not be  required  to  make  any
disbursement in excess of the net realizable value of the assets of the Trust at
the time of the  disbursement.  The  Trustee  shall make cash  disbursements  in
accordance  with  the  applicable  source  and  fund  withdrawal   hierarchy  as
documented  in the Plan  Administrative  Manual,  unless the  Administrator  has
provided a written direction to the contrary.

Section 4.  Investment of Trust.
         (a)  Selection  of  Investment  Options.  The  Trustee  shall  have  no
responsibility for the selection of investment options under the Trust and shall
not render  investment  advice to any person in connection with the selection of
such options.

         (b) Available  Investment Options. The Named Fiduciary shall direct the
Trustee as to the investment options in which the Trust shall be invested during
the period  beginning on the date of the initial transfer of assets to the Trust
and ending on the date of the  completion of the  reconciliation  of participant
records ("Recordkeeping  Reconciliation  Period"), and the investment options in
which Plan  participants may invest following the  Recordkeeping  Reconciliation
Period.  The Named Fiduciary may determine to offer as investment  options only:
(i) securities issued by the investment companies advised by Fidelity Management
& Research Company  ("Fidelity  Mutual Funds") and certain  securities issued by
investment  companies  not advised by  Fidelity  Management  & Research  Company
("Non-Fidelity  Mutual  Funds")  (collectively,  "Mutual  Funds"),  (ii)  equity
securities issued by the Sponsor or an affiliate which are  publicly-traded  and
which are  "qualifying  employer  securities"  within  the  meaning  of  section
407(d)(5) of ERISA ("Sponsor  Stock"),  and (iii) notes evidencing loans to Plan
participants in accordance with the terms of the Plan.

         The investment  options  initially  selected by the Named Fiduciary are
identified on Schedules "A" and "C" attached hereto. The Named Fiduciary may add
additional  investment  options  with the consent of the Trustee and upon mutual
amendment  of this Trust  Agreement  and the  Schedules  thereto to reflect such
additions.

         (c)  Participant  Direction.  As authorized  under the Plan,  each Plan
participant shall direct the Trustee in which investment option(s) to invest the
assets in the participant's  individual accounts. Such directions may be made by
Plan  participants by use of the telephone  exchange system,  the internet or in
such other manner as may be agreed upon from time to time by the Sponsor and the
Trustee, maintained for such purposes by the Trustee or its agent, in accordance
with written Exchange  Guidelines  attached hereto as Schedule "G". In the event
that the  Trustee  fails to  receive a proper  direction,  the  assets  shall be
invested in the  investment  option set forth for such purpose on Schedule  "C",
until the Trustee receives a proper direction.

         (d) Mutual Funds. The Named Fiduciary hereby  acknowledges  that it has
received from the Trustee a copy of the prospectus for each Fidelity Mutual Fund
selected  by the Named  Fiduciary  as a Plan  investment  option  or  short-term
investment fund. All transactions  involving  Non-Fidelity Mutual Funds shall be
done in accordance with the Operational  Guidelines  attached hereto as Schedule
"H".  Trust  investments  in Mutual  Funds  shall be  subject  to the  following
limitations:

                  (i) Execution of Purchases  and Sales.  Purchases and sales of
Mutual Funds (other than for  exchanges)  shall be made on the date on which the
Trustee  receives  from  the   Administrator  in  good  order  all  information,
documentation and wire transfer of funds (if applicable) necessary to accurately
effect such transactions.  Exchanges of Mutual Funds shall be made in accordance
with the Exchange Guidelines attached hereto as Schedule "G".

                  (ii)  Voting.  At the time of mailing of notice of each annual
or special  stockholders'  meeting of any Mutual Fund,  the Trustee shall send a
copy of the notice and all proxy solicitation materials to each Plan participant
who has  shares of the  Mutual  Fund  credited  to the  participant's  accounts,
together with a voting direction form for return to the Trustee or its designee.
The  participant  shall have the right to direct the Trustee as to the manner in
which the Trustee is to vote the shares credited to the  participant's  accounts
(both vested and unvested). The Trustee shall vote the shares as directed by the
participant.  The  Trustee  shall not vote  shares for which it has  received no
directions from the participant.

         During the  Recordkeeping  Reconciliation  Period,  the Named Fiduciary
shall have the right to direct the Trustee as to the manner in which the Trustee
is to  vote  the  shares  of the  Mutual  Funds  in  the  Trust.  Following  the
Recordkeeping  Reconciliation  Period the Named Fiduciary shall continue to have
the right to direct the Trustee as to the manner in which the Trustee is to vote
the Mutual Funds shares held in a  short-term  liquidity  reserve for a unitized
investment option.

         With  respect to all rights  other than the right to vote,  the Trustee
shall follow the  directions of the  participant  and if no such  directions are
received,  the  directions  of the Named  Fiduciary.  The Trustee  shall have no
further duty to solicit directions from participants or the Named Fiduciary.

         (e) Sponsor Stock. Trust investments in Sponsor Stock shall be made via
the Providian  Stock Fund (the "Stock  Fund").  Dividends  received on shares of
Sponsor  Stock shall be  reinvested  in  additional  shares of Sponsor Stock and
allocated to participants' accounts. Trust investments in Sponsor Stock shall be
subject to the following limitations:

                  (i)      Acquisition Limit.  Pursuant to the Plan, the Trust
may be invested in Sponsor Stock to the extent necessary to comply with
investment directions under this Agreement.

                  (ii) Fiduciary Duty of Named  Fiduciary.  The Named  Fiduciary
shall  continually  monitor the  suitability  under the fiduciary  duty rules of
section  404(a)(1)  of ERISA (as  modified  by  section  404(a)(2)  of ERISA) of
acquiring  and holding  Sponsor  Stock.  The Trustee shall not be liable for any
loss, or expense,  which arises from the directions of the Named  Fiduciary with
respect to the acquisition  and holding of Sponsor Stock,  unless it is clear on
their  face  that  the  actions  to be taken  under  those  directions  would be
prohibited  by the  foregoing  fiduciary  duty rules or would be contrary to the
terms of this Agreement.

Each  participant  with an  interest  in Sponsor  Stock (or, in the event of the
participant's death, his beneficiary) is, for purposes of this Section 4(e)(ii),
hereby  designated  as a  "named  fiduciary"  (within  the  meaning  of  Section
403(a)(1)  of ERISA),  with  respect to a pro rata  portion of (i) the shares of
Sponsor Stock held which are allocated to other participants' accounts but as to
which  directions  are not timely  received by the  Trustee,  (ii) the shares of
Sponsor  Stock not  allocated to  participants'  accounts,  and (iii)  allocated
shares not purchased at the direction of participants,  and such participant (or
beneficiary)  shall  have the right to direct  the  Trustee in writing as to the
manner in which the Trustee is to vote such shares.

                  (iii)    Execution of Purchases and Sales.

                           (A)      Purchases and sales of Sponsor Stock (other
than for  exchanges)  shall be made on the open  market on the date on which the
Trustee  receives  from  the   Administrator  in  good  order  all  information,
documentation,  and  wire  transfer  of  funds  (if  applicable),  necessary  to
accurately effect such transactions. Exchanges of Sponsor Stock shall be made in
accordance  with the Exchange  Guidelines  attached hereto as Schedule "G". Such
general rules shall not apply in the following circumstances:

                                    (1)     If the Trustee is unable to purchase
or sell the total number of shares  required to be purchased or sold on such day
as a result of market conditions; or

                                    (2)     If the Trustee is prohibited by the
Securities and Exchange  Commission,  the New York Stock Exchange,  or any other
regulatory  body from purchasing or selling any or all of the shares required to
be purchased or sold on such day.

In the event of the  occurrence  of the  circumstances  described  in (1) or (2)
above,  the  Trustee  shall  purchase  or sell such  shares as soon as  possible
thereafter  and shall  determine the price of such  purchases or sales to be the
average  purchase  or  sales  price  of  all  such  shares  purchased  or  sold,
respectively.  The Trustee may follow  directions  from the Named  Fiduciary  to
deviate from the above purchase and sale procedures provided that such direction
is made in writing by the Named Fiduciary.

                           (B)      Purchases and Sales from or to Sponsor.  If
directed by the Sponsor in writing  prior to the trading  date,  the Trustee may
purchase or sell Sponsor Stock from or to the Sponsor if the purchase or sale is
for adequate consideration (within the meaning of section 3(18) of ERISA) and no
commission is charged. If Sponsor contributions (employer) or contributions made
by the Sponsor on behalf of the participants (employee) under the Plan are to be
invested in Sponsor  Stock,  the Sponsor may transfer  Sponsor  Stock in lieu of
cash to the Trust.  In either case, the number of shares to be transferred  will
be  determined  by dividing the total amount of Sponsor Stock to be purchased or
sold by the 4:00 p.m.  NYSE  closing  price of the Sponsor  Stock on the trading
date.

                           (C)      Use of an Affiliated Broker.  The Named
Fiduciary hereby directs the Trustee to use Fidelity  Capital Markets  ("Capital
Markets") to provide brokerage  services in connection with any purchase or sale
of Sponsor Stock in accordance with directions from Plan  participants.  Capital
Markets  shall  execute  such  directions  directly  or through  its  affiliate,
National  Financial  Services  Company  ("NFSC").  The  provision  of  brokerage
services shall be subject to the following:

                                    (1) As consideration for such brokerage
services,  the Named Fiduciary  agrees that Capital Markets shall be entitled to
remuneration  under  this  authorization  provision  in the amount of five cents
($.05)  commission  on each  share of  Sponsor  Stock up to  10,000  shares in a
singular  transaction,  four cents  ($.04)  commission  on each share of Sponsor
Stock  from  10,001 to 20,000  shares in a singular  transaction,  and three and
one-half  cents  ($.035)  commission on each share of Sponsor Stock in excess of
20,000 shares in a singular transaction.  Any change in such remuneration may be
made only by a signed agreement between Sponsor and Trustee.

                                    (2) The Trustee will provide the Sponsor
with the  following:  a  description  of Capital  Markets'  brokerage  placement
practices and a form by which the Sponsor may terminate  this direction to use a
broker  affiliated  with the Trustee.  The Trustee will provide the Sponsor with
this  termination  form annually,  as well as quarterly and annual reports which
summarize all securities transaction-related charges incurred by the Plan.

                                    (3) Any successor organization of Capital
Markets, through reorganization,  consolidation, merger or similar transactions,
shall,  upon  consummation of such  transaction,  become the successor broker in
accordance with the terms of this authorization provision.

                                    (4) The Trustee and Capital Markets shall
continue to rely on this direction provision until notified to the contrary. The
Sponsor  reserves the right to terminate  this  direction upon written notice to
Capital  Markets (or its successor) and the Trustee,  in accordance with Section
11 of this Agreement.

                  (iv)  Securities  Law  Reports.  The  Administrator  shall  be
responsible  for filing all reports  required under Federal or state  securities
laws with respect to the Trust's ownership of Sponsor Stock, including,  without
limitation,  any  reports  required  under  section  13 or 16 of the  Securities
Exchange Act of 1934, and shall immediately notify the Trustee in writing of any
requirement  to stop  purchases or sales of Sponsor  Stock pending the filing of
any report.  The Trustee shall provide to the Administrator  such information on
the Trust's  ownership  of Sponsor  Stock as the  Administrator  may  reasonably
request in order to comply with Federal or state securities laws.

                  (v)  Voting  and  Tender  Offers.  Notwithstanding  any  other
provision of this  Agreement  the  provisions  of this Section  shall govern the
voting and tendering of Sponsor  Stock.  The Sponsor shall pay for all printing,
mailing,  tabulation and other costs associated with the voting and tendering of
Sponsor Stock. The Trustee,  after consultation with the Sponsor,  shall prepare
the  necessary  documents  associated  with the voting and  tendering of Sponsor
Stock.

                           (A)      Voting.

                                    (1) When the issuer of Sponsor Stock
prepares for any annual or special meeting, the Sponsor shall notify the Trustee
at least thirty (30) days in advance of the intended record date and shall cause
a copy  of all  proxy  solicitation  materials  to be sent  to the  Trustee.  If
requested  by the  Trustee  the Sponsor  shall  certify to the Trustee  that the
aforementioned   materials  represents  the  same  information   distributed  to
shareholders  of Sponsor  Stock.  Based on these  materials  the  Trustee  shall
prepare  a  voting  instruction  form  and  shall  provide  a copy of all  proxy
solicitation  materials to be sent to each Plan  participant with an interest in
Sponsor Stock held in the Trust,  together with the foregoing voting instruction
form to be  returned  to the  Trustee or its  designee.  The form shall show the
number  of  full  and  fractional  shares  of  Sponsor  Stock  credited  to  the
participant's accounts.

                                    (2) Each participant with an interest in the
Sponsor Stock held in the Trust shall have the right to direct the Trustee as to
the  manner in which the  Trustee  is to vote that  number of shares of  Sponsor
Stock  credited  to the  participant's  accounts  (both  vested  and  unvested).
Directions  from a participant  to the Trustee  concerning the voting of Sponsor
Stock shall be  communicated  in  writing,  or other means as agreed upon by the
Trustee and the Sponsor.  These  directions  shall be held in  confidence by the
Trustee  and shall not be divulged  to the  Sponsor,  or any officer or employee
thereof,  or any other person except to the extent that the consequences of such
directions are reflected in reports regularly communicated to any such person in
the ordinary course of the performance of the Trustee's services hereunder. Upon
its  receipt of the  directions,  the  Trustee  shall vote the shares of Sponsor
Stock as directed by the participant.  Except as otherwise  required by law, the
Trustee  shall not vote  shares of Sponsor  Stock  credited  to a  participant's
account for which it has received no directions from the participant.

                                    (3) Except as otherwise required by law, the
Trustee  shall  vote that  number of shares of  Sponsor  Stock not  credited  to
participants'  accounts in the same  proportion  on each issue as it votes those
shares  credited  to  participants'   accounts  for  which  it  received  voting
directions from participants.

                           (B)      Tender Offers

                                    (1) Upon commencement of a tender offer for
any  securities  held in the Trust that are Sponsor  Stock,  the  Sponsor  shall
timely notify the Trustee in advance of the intended tender date and shall cause
a copy of all materials to be sent to the Trustee.  The Sponsor shall certify to
the Trustee that the  aforementioned  materials  represent the same  information
distributed to shareholders of Sponsor Stock. Based on these materials and after
consultation  with the Sponsor,  the Trustee shall prepare a tender  instruction
form and shall  provide a copy of all tender  materials  to be sent to each plan
participant  with an  interest in the Stock Fund,  together  with the  foregoing
tender  instruction  form,  to be returned to the Trustee or its  designee.  The
tender  instruction form shall show the number of full and fractional  shares of
Sponsor Stock credited to the participants account (both vested and unvested).

                                    (2) Each participant with an interest in the
Stock Fund shall have the right to direct the Trustee to tender or not to tender
some  or all of the  shares  of  Sponsor  Stock  credited  to the  participant's
accounts  (both  vested and  unvested).  Directions  from a  participant  to the
Trustee concerning the tender of Sponsor Stock shall be communicated in writing,
or such other  means as is agreed upon by the  Trustee  and the  Sponsor.  These
directions  shall be held in confidence by the Trustee and shall not be divulged
to the Sponsor,  or any officer or employee thereof,  or any other person except
to the extent that the  consequences of such directions are reflected in reports
regularly  communicated  to any  such  persons  in the  ordinary  course  of the
performance of the Trustee's services hereunder. The Trustee shall tender or not
tender  shares  of  Sponsor  Stock as  directed  by the  participant.  Except as
otherwise  required by law, the Trustee shall not tender shares of Sponsor Stock
credited to a  participant's  accounts for which it has  received no  directions
from the participant.

                                    (3) Except as otherwise required by law, the
Trustee  shall  tender  that number of shares of Sponsor  Stock not  credited to
participants'  accounts in the same  proportion as the total number of shares of
Sponsor  Stock  credited  to  participants'   accounts  for  which  it  received
instructions from Participants.

                                    (4) A participant who has directed the
Trustee to tender  some or all of the shares of Sponsor  Stock  credited  to the
participant's  accounts  may, at any time prior to the tender  offer  withdrawal
date, direct the Trustee to withdraw some or all of the tendered shares, and the
Trustee shall withdraw the directed number of shares from the tender offer prior
to the tender offer withdrawal deadline.  Prior to the withdrawal  deadline,  if
any shares of Sponsor  Stock not credited to  participants'  accounts  have been
tendered,  the Trustee shall  redetermine  the number of shares of Sponsor Stock
that would be tendered under Section  4(e)(v)(B)(3) if the date of the foregoing
withdrawal  were the date of  determination,  and withdraw from the tender offer
the number of shares of Sponsor  Stock not  credited to  participants'  accounts
necessary  to reduce  the  amount of  tendered  Sponsor  Stock not  credited  to
participants' accounts to the amount so redetermined. A participant shall not be
limited  as to  the  number  of  directions  to  tender  or  withdraw  that  the
participant may give to the Trustee.

                                    (5) A direction by a participant to the
Trustee to tender shares of Sponsor Stock credited to the participant's accounts
shall not be considered a written  election under the Plan by the participant to
withdraw,  or  have  distributed,  any or all of his  withdrawable  shares.  The
Trustee shall credit to each account of the participant  from which the tendered
shares were taken the  proceeds  received  by the  Trustee in  exchange  for the
shares  of  Sponsor  Stock  tendered  from  that  account.  Pending  receipt  of
directions  (through  the  Administrator)  from  the  participant  or the  Named
Fiduciary,  as provided  in the Plan,  as to which of the  remaining  investment
options  the  proceeds  should be  invested  in, the  Trustee  shall  invest the
proceeds in the investment option described in Schedule "C".

                           (vi)     General.  With respect to all rights other
than the right to vote,  the right to tender,  and the right to withdraw  shares
previously  tendered,  in the case of Sponsor Stock credited to a  participant's
accounts,  the Trustee shall follow the directions of the  participant and if no
such directions are received, the directions of the Named Fiduciary. The Trustee
shall have no duty to solicit directions from participants.  With respect to all
rights  other  than the  right to vote and the right to  tender,  in the case of
Sponsor Stock not credited to participants'  accounts,  the Trustee shall follow
the directions of the Named Fiduciary.

                           (vii)    Conversion.  All provisions in this Section
4(e) shall also apply to any securities  received as a result of a conversion of
Sponsor Stock.

         (f)  Participant  Loans for the  Purchase of a Primary  Residence.  The
Administrator  shall act as the  Trustee's  agent for the purpose of holding all
trust  investments in participant  loan notes and related  documentation  and as
such shall (i) hold  physical  custody of and keep safe the notes and other loan
documents,  (ii)  separately  account for  repayments  of such loans and clearly
identify  such assets as Plan assets,  (iii) collect and remit all principal and
interest  payments to the Trustee,  and (iv) cancel and  surrender the notes and
other  loan  documentation  when a loan has been paid in full.  To  originate  a
participant  loan, the Plan participant  shall direct the Trustee as to the type
of loan to be made from the participant's  individual  account.  Such directions
shall be made by Plan  participants  by use of the  system  maintained  for such
purpose by the Trustee or its agent. The Trustee shall  determine,  based on the
current value of the participant's  account,  the amount available for the loan.
Based on the interest rate supplied by the Sponsor in accordance  with the terms
of the Plan, the Trustee shall advise the  participant of such interest rate, as
well as the  installment  payment  amounts.  The Trustee  shall forward the loan
document to the  participant  for execution and  submission  for approval to the
Administrator. The Administrator shall have the responsibility for approving the
loan and instructing the Trustee to send the loan proceeds to the  Administrator
or to the  participant  if so  directed  by  the  Administrator.  In all  cases,
approval or  disapproval by the  Administrator  shall be made within thirty (30)
days of the participant's initial request (the origination date).

         (g) All Other  Participant  Loans. The  Administrator  shall act as the
Trustee's agent for participant  loans and as such shall (i) separately  account
for repayments of such loans and clearly identify such assets as Plan assets and
(ii) collect and remit all  principal and interest  payments to the Trustee.  To
originate a participant  loan, the Plan participant  shall direct the Trustee as
to the term and amount of the loan to be made from the participant's  individual
account. Such directions shall be made by Plan participants by use of the system
maintained  for such  purpose by the  Trustee or its agent.  The  Trustee  shall
determine,  based on the current value of the participant's  account on the date
of the request and any guidelines provided by the Sponsor,  the amount available
for the loan.  Based on the interest  rate supplied by the Sponsor in accordance
with the terms of the Plan,  the Trustee  shall advise the  participant  of such
interest rate, as well as the  installment  payment  amounts.  The Trustee shall
distribute the Participant loan agreement and  truth-in-lending  disclosure with
the proceeds check to the participant. To facilitate recordkeeping,  the Trustee
may destroy the original of any proceeds check made in connection with a loan to
a  participant  under the Plan,  provided  that the  Trustee or its agent  first
creates a duplicate  by a  photographic  or optical  scanning  or other  process
yielding  a  reasonable   facsimile  of  the   promissory   note  and  the  Plan
participant's  signature thereon,  which duplicate may be reduced or enlarged in
size from the actual size of the original promissory note.

         (h)      Reliance of Trustee on Directions.

                  (i) The  Trustee  shall not be liable  for any loss or expense
which arises from any  participant's  exercise or  non-exercise  of rights under
this Section 4 over the assets in the participant's accounts.

                  (ii) The Trustee  shall not be liable for any loss or expense,
which arises from the Named Fiduciary's exercise or non-exercise of rights under
this  Section 4,  unless it was clear on their face that the actions to be taken
under the Named  Fiduciary's  directions  were  prohibited by the fiduciary duty
rules of section  404(a) of ERISA or were  contrary  to the terms of the Plan as
communicated in writing to the Trustee.

         (i)      Trustee Powers.  The Trustee shall have the following powers
and authority:

                  (i) Subject to  paragraphs  (b) and (c) of this  Section 4, to
sell, exchange,  convey,  transfer, or otherwise dispose of any property held in
the Trust, by private contract or at public auction.  No person dealing with the
Trustee shall be bound to see to the  application of the purchase money or other
property  delivered to the Trustee or to inquire into the validity,  expediency,
or propriety of any such sale or other disposition.

                  (ii) To cause any securities or other property held as part of
the Trust to be registered in the Trustee's own name, in the name of one or more
of its nominees,  or in the Trustee's  account with the Depository Trust Company
of New York and to hold any  investments  in  bearer  form,  but the  books  and
records of the  Trustee  shall at all times show that all such  investments  are
part of the Trust.

                  (iii)  To  keep  that  portion  of the  Trust  in cash or cash
balances as the Named Fiduciary or Administrator may, from time to time, deem to
be in the best interest of the Trust.

                  (iv) To make,  execute,  acknowledge,  and deliver any and all
documents of transfer or conveyance and to carry out the powers herein granted.

                  (v) To  borrow  funds  from a bank  not  affiliated  with  the
Trustee in order to provide sufficient liquidity to process Plan transactions in
a timely fashion; provided that the cost of such borrowing shall be allocated in
a reasonable fashion to the investment fund(s) in need of liquidity.

                  (vi) To  settle,  compromise,  or  submit to  arbitration  any
claims,  debts,  or damages  due to or arising  from the Trust;  to  commence or
defend suits or legal or administrative  proceedings;  to represent the Trust in
all  suits  and legal and  administrative  hearings;  and to pay all  reasonable
expenses  arising  from  any  such  action,  from  the  Trust if not paid by the
Sponsor.

                  (vii)  To  employ  legal,  accounting,   clerical,  and  other
assistance as may be required in carrying out the  provisions of this  Agreement
and to pay their reasonable expenses and compensation from the Trust if not paid
by the Sponsor.

                  (viii) To invest all or any part of the assets of the Trust in
GICs and short term  investments  (including  interest bearing accounts with the
Trustee or money market  mutual funds  advised by affiliates of the Trustee) and
in any  collective  investment  trust or group trust,  including any  collective
investment trust or group trust  maintained by the Trustee,  which then provides
for the pooling of the assets of plans  described  in Section  401(a) and exempt
from tax under  Section  501(a) of the Internal  Revenue Code  ("Code"),  or any
comparable  provisions of any future  legislation that amends,  supplements,  or
supersedes  those sections,  provided that such collective  investment  trust or
group trust is exempt from tax under the Code or  regulations  or rulings issued
by the Internal Revenue Service.  The provisions of the document  governing such
collective  investment trusts or group trusts, as it may be amended from time to
time,  shall  govern any  investment  therein and are hereby made a part of this
Trust Agreement.

                  (ix) To do all other acts, although not specifically mentioned
herein,  as the Trustee  may deem  necessary  to carry out any of the  foregoing
powers and the purposes of the Trust.

Section 5.  Recordkeeping and Administrative Services to Be Performed.

         (a)  General.   The  Trustee  shall  perform  those  recordkeeping  and
administrative  functions  described  in Schedule  "A"  attached  hereto.  These
recordkeeping  and  administrative  functions  shall  be  performed  within  the
framework  of  the  Administrator's  written  directions  regarding  the  Plan's
provisions, guidelines and interpretations.

         (b)  Accounts.   The  Trustee  shall  keep  accurate  accounts  of  all
investments,  receipts,  disbursements,  and other transactions  hereunder,  and
shall  report  the value of the  assets  held in the Trust as of the last day of
each fiscal quarter of the Plan and, if not on the last day of a fiscal quarter,
the date on which the Trustee  resigns or is removed as provided in Section 8 of
this  Agreement  or is  terminated  as  provided  in Section 10 (the  "Reporting
Date").  Within thirty (30) days  following  each Reporting Date or within sixty
(60) days in the case of a Reporting  Date caused by the  resignation or removal
of the Trustee,  or the  termination of this  Agreement,  the Trustee shall file
with  the  Administrator  a  written  account  setting  forth  all  investments,
receipts,  disbursements, and other transactions effected by the Trustee between
the Reporting Date and the prior  Reporting Date, and setting forth the value of
the Trust as of the Reporting  Date.  Except as otherwise  required under ERISA,
upon the  expiration of twelve (12) months from the date of filing such account,
the Trustee  shall have no liability or further  accountability  with respect to
the propriety of its acts or  transactions  shown in such  account,  except with
respect to such acts or transactions as to which a written  objection shall have
been filed with the Trustee within such twelve (12) month period.

         (c)  Inspection  and Audit.  All  records  generated  by the Trustee in
accordance  with  paragraphs  (a) and (b) shall be open to inspection and audit,
during the Trustee's  regular  business  hours prior to the  termination of this
Agreement,  by the Administrator or any person designated by the  Administrator.
Upon the  resignation  or removal  of the  Trustee  or the  termination  of this
Agreement, the Trustee shall provide to the Administrator,  at no expense to the
Sponsor,  in the format regularly provided to the Administrator,  a statement of
each participant's accounts as of the resignation,  removal, or termination, and
the Trustee shall provide to the  Administrator  or the Plan's new  recordkeeper
such further records as are reasonable, at the Sponsor's expense.

         (d) Effect of Plan Amendment.  A confirmation of the current  qualified
status of the Plan is attached  hereto as Schedule "F". The Trustee's  provision
of the  recordkeeping  and  administrative  services set forth in this Section 5
shall be  conditioned  on the  Sponsor  delivering  to the Trustee a copy of any
amendment  to the  Plan as  soon  as  administratively  feasible  following  the
amendment's  adoption,  with, if requested,  an IRS  determination  letter or an
opinion of counsel  substantially  in the form of  Schedule  "F"  covering  such
amendment, and on the Administrator providing the Trustee on a timely basis with
all the information the Administrator deems necessary for the Trustee to perform
the recordkeeping and administrative  services and such other information as the
Trustee may reasonably request.

         (e) Returns,  Reports and Information.  Except as set forth on Schedule
"A", the  Administrator  shall be responsible  for the preparation and filing of
all returns,  reports, and information required of the Trust or Plan by law. The
Trustee  shall  provide  the   Administrator   with  such   information  as  the
Administrator  may reasonably  request to make these filings.  The Administrator
shall also be responsible for making any disclosures to Participants required by
law,  except  such  disclosure  as  may  be  required  under  federal  or  state
truth-in-lending  laws with regard to Participant loans, which shall be provided
by the Trustee.

Section 6. Compensation and Expenses.  Sponsor shall pay to Trustee the fees for
services in accordance  with  Schedule  "B". Fees for services are  specifically
outlined  in  Schedule  "B" and are based on all of the  assumptions  identified
therein.  To reflect increased  operating costs,  Trustee may once each calendar
year, amend Schedule B without the Sponsor's consent upon ninety (90) days prior
notice to the Sponsor.

         All reasonable expenses of plan administration as shown on Schedule "B"
attached  hereto,  as amended from time to time,  shall be a charge  against and
paid from the appropriate plan participants' accounts, except to the extent such
amounts are paid by the Plan Sponsor in a timely manner.

         All expenses of the Trustee  relating  directly to the  acquisition and
disposition of investments  constituting part of the Trust, and all taxes of any
kind  whatsoever  that may be levied or assessed  under  existing or future laws
upon or in respect of the Trust or the income thereof, shall be a charge against
and paid from the appropriate Participants' accounts.

Section 7.  Directions and Indemnification.
         (a) Identity of Administrator and Named Fiduciary. The Trustee shall be
fully  protected  in  relying  on the fact  that  the  Named  Fiduciary  and the
Administrator  under the Plan are the individuals or persons named as such above
or such other  individuals  or persons as the  Sponsor may notify the Trustee in
writing.

         (b) Directions from Administrator.  Whenever the Administrator provides
a direction  to the  Trustee,  the  Trustee  shall not be liable for any loss or
expense  arising  from the  direction  (i) if the  direction  is  contained in a
writing  (or is oral and  immediately  confirmed  in a  writing)  signed  by any
individual  whose name and signature  have been submitted (and not withdrawn) in
writing  to the  Trustee by the  Administrator  in the form  attached  hereto as
Schedule "D", and (ii) if the Trustee  reasonably  believes the signature of the
individual to be genuine,  unless it is clear on the  direction's  face that the
actions to be taken under the  direction  would be  prohibited  by the fiduciary
duty rules of Section  404(a) of ERISA or would be contrary to the terms of this
Agreement.  For purposes of this Section, such direction may also be made by any
individual  whose name and signature  have been submitted (and not withdrawn) in
writing  to the  Trustee by the  Administrator  in the form  attached  hereto as
Schedule "D" via  electronic  data transfer (EDT) or other  electronic  means in
accordance  with  procedures  agreed to by the  Administrator  and the  Trustee;
provided,  however, that the Trustee shall be fully protected in relying on such
direction as if it were a direction made in writing by the Administrator.

         (c) Directions  from Named  Fiduciary.  Whenever the Named Fiduciary or
Sponsor provides a direction to the Trustee, the Trustee shall not be liable for
any loss or expense arising from the direction (i) if the direction is contained
in a writing (or is oral and  immediately  confirmed in a writing) signed by any
individual  whose name and signature  have been submitted (and not withdrawn) in
writing to the Trustee by the Named  Fiduciary  in the form  attached  hereto as
Schedule "E" and (ii) if the Trustee  reasonably  believes the  signature of the
individual to be genuine,  unless it is clear on the  direction's  face that the
actions to be taken under the  direction  would be  prohibited  by the fiduciary
duty rules of Section  404(a) of ERISA or would be contrary to the terms of this
Agreement.  Such  direction  may also be made by any  individual  whose name and
signature  have been  submitted (and not withdrawn) in writing to the Trustee by
the  Administrator  in the form attached hereto as Schedule "E" via EDT or other
electronic means in accordance with procedures  agreed to by the Named Fiduciary
and the Trustee; provided, however, that the Trustee shall be fully protected in
relying on such direction as if it were a direction made in writing by the Named
Fiduciary.

         (d) Co-Fiduciary Liability. In any other case, the Trustee shall not be
liable  for any loss or  expense  arising  from any act or  omission  of another
fiduciary under the Plan except as provided in section 405(a) of ERISA.

         (e)  Indemnification.  The Sponsor shall indemnify the Trustee against,
and  hold  the  Trustee  harmless  from,  any and  all  loss,  damage,  penalty,
liability,   cost,  and  expense,   including  without  limitation,   reasonable
attorneys'  fees and  disbursements,  that may be incurred by,  imposed upon, or
asserted against the Trustee by reason of any claim,  regulatory proceeding,  or
litigation  arising from any act done or omitted to be done by any individual or
person with respect to the Plan or Trust, excepting only any and all loss, etc.,
arising from the Trustee's negligence or bad faith.

         (f)      Survival.  The provisions of this Section 7 shall survive the
termination of this Agreement.

Section 8.  Resignation or Removal of Trustee.
         (a)  Resignation.  The  Trustee  may resign at any time upon sixty (60)
days'  notice in writing to the  Sponsor,  unless a shorter  period of notice is
agreed upon by the Sponsor.

         (b) Removal.  The Sponsor may remove the Trustee at any time upon sixty
(60) days' notice in writing to the Trustee,  unless a shorter  period of notice
is agreed upon by the Trustee.

Section 9.  Successor Trustee.
         (a)  Appointment.  If the  office of  Trustee  becomes  vacant  for any
reason,  the  Sponsor  may in writing  appoint a  successor  trustee  under this
Agreement.  The  successor  trustee  shall  have  all  of  the  rights,  powers,
privileges,  obligations,  duties,  liabilities,  and immunities  granted to the
Trustee under this  Agreement.  The successor  trustee and  predecessor  trustee
shall not be liable for the acts or  omissions  of the other with respect to the
Trust.

         (b)  Acceptance.  When the successor  trustee  accepts its  appointment
under  this  Agreement,  title  to and  possession  of the  Trust  assets  shall
immediately vest in the successor trustee without any further action on the part
of  the  predecessor   trustee.   The  predecessor  trustee  shall  execute  all
instruments  and do all acts that  reasonably may be necessary or reasonably may
be requested in writing by the Sponsor or the successor trustee to vest title to
all Trust assets in the successor  trustee or to deliver all Trust assets to the
successor trustee.

         (c)  Corporate  Action.  Any  successor  of the  Trustee  or  successor
trustee,  through  sale or transfer of the business or trust  department  of the
Trustee or  successor  trustee,  or through  reorganization,  consolidation,  or
merger, or any similar transaction, shall, upon consummation of the transaction,
become the successor trustee under this Agreement.

Section 10.  Termination.  This  Agreement  may be terminated at any time by the
Sponsor upon sixty (60) days'  notice in writing to the Trustee.  On the date of
the  termination of this  Agreement,  the Trustee shall  forthwith  transfer and
deliver to such  individual or entity as the Sponsor shall  designate,  all cash
and assets then constituting the Trust. If, by the termination date, the Sponsor
has not notified the Trustee in writing as to whom the assets and cash are to be
transferred  and  delivered,  the  Trustee  may bring an  appropriate  action or
proceeding  for leave to deposit  the  assets  and cash in a court of  competent
jurisdiction.  The Trustee  shall be reimbursed by the Sponsor for all costs and
expenses of the action or proceeding including,  without limitation,  reasonable
attorneys' fees and disbursements.

Section  11.  Resignation,  Removal,  and  Termination  Notices.  All notices of
resignation, removal, or termination under this Agreement must be in writing and
mailed  to the  party to  which  the  notice  is being  given  by  certified  or
registered   mail,   return   receipt   requested,   to  the  Sponsor  c/o  Plan
Administrator,  Providian Financial Group, 201 Mission Street, San Francisco, CA
94105,  and  to  the  Trustee  c/o  Legal  Department,   ERISA  Group,  Fidelity
Investments, 82 Devonshire Street, Boston, Massachusetts 02109, or to such other
addresses as the parties have notified each other of in the foregoing manner.

Section 12.  Duration.  This Trust shall continue in effect without limit as to
time, subject, however, to the provisions of this

Agreement relating to amendment, modification, and termination thereof.

Section 13.  Amendment or Modification.  This Agreement may be amended or
modified  at any time and from time to time only by an  instrument  executed  by
both the Sponsor and the Trustee.

Section 14.  Electronic Services.
         (a) The Trustee may provide  communications and services via electronic
medium  ("Electronic  Services"),  including,  but not limited to, Fidelity Plan
Sponsor  WebStation,   Client  Intranet,  Client  e-mail,  interactive  software
products or any other information provided in an electronic format. The Sponsor,
its agents and  employees  agree to keep  confidential  and not  publish,  copy,
broadcast,   retransmit,    reproduce,   commercially   exploit   or   otherwise
redisseminate the data, information,  software or services without the Trustee's
written consent.

         (b) The Sponsor shall be responsible for installing and maintaining all
Electronic  Services on its computer  network and/or  Intranet upon receipt in a
manner so that the information  provided via the Electronic  Service will appear
in the same form and content as it appears on the form of delivery,  and for any
programming required to accomplish the installation.  Materials provided for the
Sponsor's  Intranet  web sites  shall be  installed  by the Sponsor and shall be
clearly  identified  as  originating  from Trustee.  The Sponsor shall  promptly
remove Electronic Services from its computer network and/or Intranet, or replace
the Electronic  Service with an updated  service  provided by the Trustee,  upon
written  notification  (including  written  notification  via  facsimile) by the
Trustee.

         (c) All Electronic  Services  shall be provided to the Sponsor  without
any express or implied legal  warranties or acceptance of legal liability by the
Trustee  relative to the use of material or Electronic  Services by the Sponsor.
No rights are conveyed to any  property,  intellectual  or tangible,  associated
with the contents of the Electronic Services and related material.

         (d) To  the  extent  that  any  Electronic  Services  utilize  Internet
services to transport  data or  communications,  the Trustee will take,  and the
Sponsor agrees to follow, reasonable security precautions;  however, the Trustee
disclaims any liability for interception of any such data or communications. The
Trustee shall not be responsible for, and makes no warranties  regarding access,
speed or availability of Internet or network services.  The Trustee shall not be
responsible  for any loss or damage  related to or resulting from any changes or
modifications to the electronic material after delivering it to the Sponsor.

Section 15.  General.
         (a)  Performance  by  Trustee,  its Agents or  Affiliates.  The Sponsor
acknowledges  and  authorizes  that  the  services  to be  provided  under  this
Agreement shall be provided by the Trustee, its agents or affiliates,  including
Fidelity Investments  Institutional  Operations Company,  Inc. or its successor,
and that certain of such services may be provided  pursuant to one or more other
contractual agreements or relationships.

         (b)  Entire  Agreement.  This  Agreement  together  with the  schedules
attached hereto, which are hereby incorporated herein, contains all of the terms
agreed upon between the parties with respect to the subject matter hereof.

         (c)  Waiver.  No waiver by either  party of any  failure  or refusal to
comply  with an  obligation  hereunder  shall be deemed a waiver of any other or
subsequent failure or refusal to so comply.

         (d)      Successors and Assigns.  The stipulations in this Agreement
shall inure to the benefit of, and shall bind, the successors and assigns of the
respective parties.

         (e) Partial  Invalidity.  If any term or provision of this Agreement or
the application thereof to any person or circumstances  shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term or provision to persons or circumstances  other than those as to which
it is held invalid or  unenforceable,  shall not be affected  thereby,  and each
term and  provision  of this  Agreement  shall be valid and  enforceable  to the
fullest extent permitted by law.

         (f)  Section  Headings.  The  headings  of  the  various  sections  and
subsections  of this  Agreement  have been  inserted  only for the  purposes  of
convenience  and are not part of this  Agreement  and shall not be deemed in any
manner to modify,  explain,  expand or restrict  any of the  provisions  of this
Agreement.

Section 16.  Governing Law.
         (a)   Controlling   Law.  The   validity,   construction,   effect  and
administration  of this  Agreement  shall  be  governed  by and  interpreted  in
accordance with the laws of the Commonwealth of Massachusetts to the extent they
govern the  activities of the Trustee and otherwise in accordance  with the laws
of California,  except to the extent those laws are superseded under section 514
of ERISA.

         (b)      Trust Agreement Controls.  The Trustee is not a party to the
Plan,  and in the event of any conflict  between the  provisions of the Plan and
the  provisions  of this  Agreement,  the  provisions  of this  Agreement  shall
control.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed  by their duly  authorized  officers as of the day and year first above
written.

                                            PROVIDIAN FINANCIAL CORPORATION

Attest:                                     By:
         ---------------------                     ----------------------------
         Secretary
                                            Name:
                                                   ----------------------------

                                            Title:
                                                   ----------------------------

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

                                            FIDELITY MANAGEMENT TRUST COMPANY

Attest:                                     By:
         ---------------------                     ----------------------------
         Assistant Clerk
                                            Name:
                                                   ----------------------------

                                            Title:
                                                   ----------------------------

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

<PAGE>

                                  Schedule "A"

                             ADMINISTRATIVE SERVICES

Administration

* Establishment and maintenance of participant account and election percentages.

* Maintenance of the following Plan investment options:

     o    Providian Stock
     o    Fidelity Balanced Fund
     o    Fidelity Blue Chip Growth Fund
     o    Fidelity Diversified International Fund
     o    Fidelity Equity Income Fund
     o    Fidelity Freedom 2000 Fund
     o    Fidelity Freedom 2010 Fund
     o    Fidelity Freedom 2020 Fund
     o    Fidelity Freedom 2030 Fund
     o    Fidelity Freedom Income Fund
     o    Fidelity Low-Priced Stock Fund
     o    Fidelity Money Market Trust: Retirement Money Market Portfolio
     o    Spartan U.S. Equity Index Fund
     o    Alger Small Cap Fund
     o    Domini Social Equity Index
     o    PIMCO Total Return Fund - Administrative Class
     o    Templeton World Fund

* Maintenance of the following money classifications:

     o    Pre-Tax Contributions
     o    After-Tax Contributions
     o    Rollover
     o    Employer Matching Contributions
     o    Retirement Contributions
     o    Flex Credits

*    The Trustee will provide the recordkeeping and administrative  services set
     forth on this  Schedule  "A" or as otherwise  agreed to in writing  between
     Sponsor and Trustee.

A)   Participant Telephone Services

     1.   Participant  service  representatives  are available each business day
          from 8:30 a.m.  ET - 8:00 p.m. in the  participant's  time zone in the
          continental  United States to provide toll free telephone  service for
          participant inquiries and transactions.

     2.   Through the automated voice response system and on-line account access
          via the World  Wide Web,  participants  also  have  virtually  24 hour
          account inquiry and transaction capabilities.

     3.   For security  purposes,  all calls are recorded and  maintained by the
          Trustee for not less than five (5) years. In addition,  several levels
          of security are  available  including the  verification  of a Personal
          Identification  Number (PIN) and/or any other indicative data resident
          on the system.

     4.   The following telephone services are available:

          o    Enroll new  participants via telephone;  provide  confirmation of
               enrollment within five (5) calendar days of the request.

          o    Provide Plan investment option information.

          o    Provide and  maintain  information  and  explanations  about Plan
               provisions.

          o    Respond to requests for literature.

          o    Allow   participants  to  change  their  deferral  and  after-tax
               percentages  and provide updates via EDT for the Sponsor to apply
               to its payrolls accordingly.

          o    Maintain  and  process  changes  to  participants'   contribution
               allocations for all money sources.

          o    Process exchanges  (transfers)  between  investment  options on a
               daily basis.

          o    Process hardship  withdrawal requests as approved and directed by
               the Sponsor.

          o    Process  in-service  and full  withdrawal  requests  according to
               written direction provided by the Sponsor.

          o    Consult with  participants on various loan scenarios and generate
               all documentation.

          o    Process loan requests  according to written direction provided by
               the Sponsor.

B)   Plan Accounting

     1.   Process consolidated payroll contributions  according to the Sponsor's
          payroll frequency via EDT, consolidated magnetic tape or diskette. The
          data format will be provided by Trustee.

     2.   Maintain  and  update   employee   data   necessary  to  support  plan
          administration.  The  data  will be  submitted  according  to  payroll
          frequency.

     3.   Provide  daily  Plan and  participant  level  accounting  for all Plan
          investment options.

     4.   Provide  daily Plan and  participant  level  accounting  for all money
          classifications for the Plan.

     5.   Audit and reconcile the Plan and participant accounts daily.

     6.   Reconcile   and   process   participant    withdrawal   requests   and
          distributions  as approved and  directed by the Sponsor.  All requests
          are paid based on the current market values of participants' accounts,
          not advanced or estimated values. A distribution report will accompany
          each check.

     7.   Track  individual   participant   loans;   process  loan  withdrawals;
          re-invest  loan  repayments;  and prepare  and  deliver  comprehensive
          reports to the Sponsor to assist in the  administration of participant
          loans.

     8.   Maintain and process changes to participants'  deferral percentage and
          prospective and existing investment mix elections.

C)   Participant Reporting

     1.   Mail  confirmation  to  participants  of  all  participant   initiated
          transactions  within three to five calendar  days of the  transaction.
          Records of participant  initiated  transactions  are held on Trustee's
          electronic systems indefinitely.

     2.   Prepare and mail via first class to each Plan  participant a quarterly
          detailed participant statement reflecting all activity for the period.
          Statements  will be mailed not later than  twenty (20)  calendar  days
          after the end of each month in the absence of unusual circumstances.

     3.   Mail required 402(f) notification for distribution from the Plan. This
          notice  advises  participants  of the tax  consequences  of their Plan
          distributions.

D)   Plan Reporting

     1.   Prepare,   reconcile  and  deliver  a  monthly  Trial  Balance  Report
          presenting all money classes and investments.  This report is based on
          the market value as of the last business day of the month.  The report
          will be delivered  not later than twenty (20)  calendar days after the
          end of each month in the absence of unusual circumstances.

     2.   Prepare,  reconcile  and  deliver a  Quarterly  Administrative  Report
          presenting  both on a  participant  and a total  Plan  basis all money
          classes,  investment  positions  and a summary of all  activity of the
          participant  and Plan as of the last business day of the quarter.  The
          report will be  delivered  not later than twenty  (20)  calendar  days
          after the end of each quarter in the absence of unusual circumstances.

E)   Government Reporting

     1.   Process  year-end  tax reports for  participants  - 1099R,  as well as
          preparation  of Form 5500 in accordance  with the procedures set forth
          in Schedule "A-1" attached hereto.

F)   Communication & Education Services

     1.   Trustee designs,  produces and distributes a customized  comprehensive
          communications   program  for  employees.   The  program  may  include
          multimedia informational materials,  investment education and planning
          materials,  access to  Fidelity's  homepage on the Internet and STAGES
          magazine.  Additional  fees for such services as mutually  agreed upon
          between Sponsor and Trustee.

     2.   Fidelity  Portfolio  Planner  (SM), is an  internet-based  educational
          service for participants  that generates target asset  allocations and
          recommended model portfolios  customized to investment options in your
          Plan(s) based upon methodology  provided by Strategic Advisers,  Inc.,
          an  affiliate  of the Trustee.  The Sponsor  acknowledges  that it has
          received the ADV Part II for  Strategic  Advisers,  Inc.  more than 48
          hours prior to executing the Trust Agreement.

G)   Other

     1.   Perform  non-discrimination  limitation testing upon request. In order
          to obtain this  service,  the client  shall be required to provide the
          information identified in the Fidelity  Discrimination Testing Package
          Guidelines.  Any fees and  restrictions  associated  with this testing
          service shall be addressed in such Guidelines.

     2.   Monitor and process required minimum  distribution  amounts ("MRD") as
          follows:  the  Trustee  will  notify  the MRD  participant  and,  upon
          notification from the MRD participant,  will use the MRD participant's
          information to process the  distribution.  If the MRD participant does
          not respond to the  Trustee's  notification,  the Sponsor  directs the
          Trustee  to  automatically  begin the  required  distribution  for the
          participant.

     3.   The Fidelity Participant  Recordkeeping System is available on-line to
          the  Sponsor  via  the  Plan  Sponsor  Webstation  ("PSW").  PSW  is a
          graphical,  Windows-based  application  that provides current plan and
          participant-level  information,  including  indicative  data,  account
          balances, activity and history.

     4.   De Minimis  Distributions:  After a participant  terminates employment
          and is eligible for a  distribution,  Fidelity will determine  whether
          the vested account  balance  exceeds  $5,000,  exceeded  $5,000 at any
          prior  distribution  or  in-service  withdrawal  date  in the  account
          history  at  Fidelity,  or  exceeds  $5,000 at the end of the  warning
          period  (at  least  30  days,  but not  more  than 70  days,  from the
          determination  date).  If not,  Fidelity  will process a mandatory and
          immediate cashout, subject only to the requirement to offer a rollover
          opportunity. The $5,000 threshold will increase or decrease as the IRS
          may from time to time amend this  threshold  in Internal  Revenue Code
          Section 411(a)(11).

     5.   Roll-In  Processing.  The Trustee shall process the  qualification  of
          rollover  contributions  to the Trust. The procedures for qualifying a
          rollover are  directed by the Sponsor and the Trustee  shall accept or
          deny each  rollover  based upon the Plan's  written  criteria  and any
          written guidelines provided by the Administrator and documented in the
          Plan Administrative Manual, or, if none, as set forth below:

          To  process  a  rollover  request  the  participant  must  obtain  the
          signature from the  distributing  plan,  trustee or custodian,  on the
          designated  form,  certifying that the monies  distributed  originally
          came  from a  qualified  plan and have  not been  commingled  with any
          non-eligible  money. If a signature cannot be obtained a signed letter
          from the  distributing  plan,  trustee or  custodian  on it's  Company
          letterhead will also be acceptable.

          Requests that do not meet the  specified  criteria will be returned to
          the participant with further  explanation as to why the request cannot
          be processed.  If the Sponsor or the Trustee  determine that a request
          is not a valid  rollover,  the full amount of the  requested  rollover
          will be distributed to the participant.

PROVIDIAN FINANCIAL                         FIDELITY MANAGEMENT
CORPORATION                                 COMPANY

By:                                         By:
    ----------------------------                -------------------------------
                            Date                Vice President             Date

<PAGE>

                                 Schedule "A-1"

                                FORM 5500 SERVICE

Effective for Form 5500s and Summary Annual Reports  ("SARs")  prepared for plan
year ending  December 31, 2000 and  thereafter,  Fidelity  agrees to provide its
Signature Ready Form 5500 Service ("Service"), in accordance with the following:

1.   The Sponsor hereby agrees to:

     a. Use  Fidelity's  Non  Discrimination  Testing  Services,  which  will be
     performed  pursuant  to a  separate  Non  Discrimination  Testing  Services
     Agreement;

     b. Prior to the  commencement of the Service,  provide Fidelity with a copy
     of the most  recent  Form 5500  filed  with the  Internal  Revenue  Service
     ("IRS") and a copy of any prior year's return and/or independent  auditor's
     report, as requested by Fidelity;

     c. Provide  Fidelity  with  complete and accurate plan data in the required
     format, including a completed plan questionnaire  ("Questionnaire") as soon
     as possible after the plan year end;

     d. In the  event  that  Fidelity  has not  received  all data  required  to
     complete a Form 5500  within  three and one half (3 1/2)  months  after the
     plan year end,  the  Sponsor  hereby  authorizes  Fidelity  to prepare  and
     execute IRS Form 5558  (Application  for  Extension)  on behalf of the Plan
     Administrator  and file  Form  5558  with the IRS in  order  to  obtain  an
     extension of the filing deadline;

     e. Review, sign and mail the Form 5500 prepared by Fidelity to the IRS in a
     timely manner;

     f. In instances  where the Sponsor is responsible  for  distributing  SARs,
     distribute or have distributed SARs to participants
         and beneficiaries in a timely manner; and

     g. Elect the  Service  prior to the last day of the plan year for which the
     Form 5500 would be required.

2.   Fidelity hereby agrees to:

     a.  Provide the Sponsor with the  Questionnaire  within one and one-half (1
     1/2) months after the plan year end.  Fidelity shall have no responsibility
     for verifying  the  authenticity  or accuracy of the data  submitted by the
     Sponsor to Fidelity on the Questionnaire;

     b. File Form 5558 to request an  extension of time to file Form 5500 if all
     required data is not received from the Sponsor within three and one half (3
     1/2) months after the plan year end, as specified  above.  If the requested
     information  is not received at least two and one half (2 1/2) months prior
     to the filing  deadline,  Fidelity  will  provide the Sponsor with the Form
     5500 that has been completed to date.  The Sponsor will be responsible  for
     supplying the missing  information  and completing the Form 5500 for filing
     with the IRS.  Fidelity shall not be held  responsible for any late fees or
     penalties  caused by the Sponsor's  delay,  in the event that Fidelity does
     not  receive  the  required  information  at least two and one half (2 1/2)
     months prior to the filing deadline,

     c.  Provide the Sponsor with  signature  ready Form 5500s at least ten (10)
     days  prior to the  required  filing  date and SARs at least  ten (10) days
     prior to the required mailing date;

     d. In  instances  where  Fidelity is  responsible  for  distributing  SARs,
     distribute or have distributed such SARs to participants and  beneficiaries
     in a timely manner; and

     e.  Respond to inquiries  from the IRS received by the Sponsor,  related to
     any Form 5500 prepared by Fidelity.

3.   Any  fees  related  to this  service  are set  out on  Schedule  "B" to the
Agreement to which this schedule is attached.

PROVIDIAN FINANCIAL                         FIDELITY MANAGEMENT TRUST
CORPORATION                                 COMPANY

By:                                         By:
    --------------------------                  -------------------------------
                          Date                  Vice President             Date

<PAGE>

                                  Schedule "B"

                                  FEE SCHEDULE

Annual Participant Fee:                                 Fee waived.

Enrollments by Phone:                                   Fee waived.

Loan Fee:                                               Establishment fee of
                                                        $35.00 per loan account;
                                                        annual fee of $15.00 per
                                                        loan account.

Minimum Required Distribution:                          $25.00 per participant
                                                        per MRD Withdrawal.

In-Service Withdrawals by Phone:                        $20.00 per withdrawal.

Plan Sponsor Webstation (PSW):                          Three User I.D.'s
                                                        provided free of charge.
                                                        Each additional I.D.,
                                                        $500.00 per year.

Return of Excess Contribution Fee:                      $25.00 per participant,
                                                        one-time charge per
                                                        calculation and check
                                                        generation.

Non-Fidelity Mutual Funds:                              Non-Fidelity Mutual Fund
                                                        vendors shall pay
                                                        service fees directly to
                                                        Fidelity Institutional
                                                        Retirement Services
                                                        Company equal to a
                                                        percentage (generally 25
                                                        or 35 basis points) of
                                                        plan assets invested in
                                                        such Non-Fidelity
                                                        Mutual Funds.

-    Other Fees:  separate  charges  for  optional  non-discrimination  testing,
     extraordinary  expenses resulting from large numbers of simultaneous manual
     transactions,  from errors not caused by Fidelity, reports not contemplated
     in this Agreement,  corporate  actions,  or the provision of communications
     materials  in hard  copy  which are also  accessible  to  participants  via
     electronic  services in the event that the  provision  of such  material in
     hard copy would result in an additional expense deemed to be material.  The
     Administrator may direct Trustee to withdraw reasonable administrative fees
     from the Trust by written direction to the Trustee.

Trustee Fee

     To the extent that  assets are  invested  in Sponsor  Stock,  0.10% of such
     assets in the Trust payable pro rata  quarterly on the basis of such assets
     as of the calendar  quarter's last valuation date, but no less than $10,000
     nor more than $35,000 per year.

<PAGE>

Note:  These fees have been  negotiated and accepted based on the following Plan
characteristics: current Plan assets of $127.9 million, current participation of
5,300  participants,  current  stock  assets of $49.1  million,  total  Fidelity
actively   managed  Mutual  Fund  assets  of  $49.7   million,   total  Fidelity
non-actively  managed  Mutual Fund assets of $5.4  million,  total  Non-Fidelity
Mutual  Fund  assets of $23.7  million,  and  projected  net cash flows of $15.1
million per year. Fees will be subject to revision if these Plan characteristics
change  significantly by either falling below or exceeding  current or projected
levels. Fees also have been based on the use of up to 17 investment options, and
such fees will be subject to  revision  if  additional  investment  options  are
added.

PROVIDIAN FINANCIAL                         FIDELITY MANAGEMENT TRUST
CORPORATION                                 COMPANY

By:                                          By:
    ---------------------------                   ------------------------------
                           Date                   Vice President            Date

<PAGE>

                                  Schedule "C"

                               INVESTMENT OPTIONS

     In accordance  with Section 4(b),  the Named  Fiduciary  hereby directs the
Trustee that participants' individual accounts may be invested in the following
investment options:

     o    Providian Stock
     o    Fidelity Balanced Fund
     o    Fidelity Blue Chip Growth Fund
     o    Fidelity Diversified International Fund
     o    Fidelity Equity Income Fund
     o    Fidelity Freedom 2000 Fund
     o    Fidelity Freedom 2010 Fund
     o    Fidelity Freedom 2020 Fund
     o    Fidelity Freedom 2030 Fund
     o    Fidelity Freedom Income Fund
     o    Fidelity Low-Priced Stock Fund
     o    Fidelity Money Market Trust: Retirement Money Market Portfolio
     o    Spartan U.S. Equity Index Fund
     o    Alger Small Cap Fund
     o    Domini Social Equity Index
     o    PIMCO Total Return Fund - Administrative Class
     o    Templeton World Fund

     The named Fiduciary hereby directs that the investment option referred
to in Section  4(c) and Section  4(e)(vi)(B)(5)  shall be Fidelity  Money Market
Trust: Retirement Money Market Portfolio.

PROVIDIAN FINANCIAL CORPORATION

By
    ---------------------------
                           Date

<PAGE>

                                  Schedule "D"

                          [Administrator's Letterhead]
                                                                          [Date]

Ms. Carolyn Redden
Fidelity Investments Institutional Operations Company, Inc.
82 Devonshire Street- MM3H
Boston, Massachusetts 02109

                                 [Name of Plan]

              *** NOTE:  This schedule  should  contain names and signatures for
              ALL  individuals  who will be  providing  directions  to  Fidelity
              representatives in connection with the Plan.

              Fidelity  representatives will be unable to accept directions from
              any individual whose name does not appear on this schedule.***

Dear Ms. Redden:

         This letter is sent to you in accordance with Section 7(b) of the Trust
Agreement,  dated as of [date],  between  [name of Plan  Sponsor]  and  Fidelity
Management Trust Company. [I or We] hereby designate [name of individual], [name
of  individual],  and [name of  individual],  as the individuals who may provide
directions on behalf of the administrator  upon which Fidelity  Management Trust
Company  shall be fully  protected  in relying.  Only one such  individual  need
provide any direction.  The signature of each designated individual is set forth
below and certified to be such.

         You may rely upon each designation and  certification set forth in this
letter  until [I or we]  deliver to you  written  notice of the  termination  of
authority of a designated individual.

                                    Very truly yours,

                                    [ADMINISTRATOR]

                                    By

[signature of designated individual]
-----------------------------------
[name of designated individual]

[signature of designated individual]
-----------------------------------
[name of designated individual]

[signature of designated individual]
-----------------------------------
[name of designated individual]

<PAGE>

                                  Schedule "E"

                         [Named Fiduciary's Letterhead]
                                                                          [Date]

Ms. Carolyn Redden
Fidelity Investments Institutional Operations Company, Inc.
82 Devonshire Street - MM3H
Boston, Massachusetts 02109

                                 [Name of Plan]

Dear Ms. Redden:

         This letter is sent to you in accordance with Section 7(c) of the Trust
Agreement,  dated as of [date],  between  [name of Plan  Sponsor]  and  Fidelity
Management Trust Company. [I or We] hereby designate [name of individual], [name
of  individual],  and [name of  individual],  as the individuals who may provide
directions on behalf of the named fiduciary upon which Fidelity Management Trust
Company  shall be fully  protected  in relying.  Only one such  individual  need
provide any direction.  The signature of each designated individual is set forth
below and certified to be such.

         You may rely upon each designation and  certification set forth in this
letter  until [I or we]  deliver to you  written  notice of the  termination  of
authority of a designated individual.

                                    Very truly yours,

                                    [NAMED FIDUCIARY]

                                    By

[signature of designated individual]
-----------------------------------
[name of designated individual]

[signature of designated individual]
-----------------------------------
[name of designated individual]

[signature of designated individual]
-----------------------------------
[name of designated individual]

<PAGE>

                                  Schedule "F"
                              [Law Firm Letterhead]

**Note:  May substitute the Plan's IRS determination  letter if the letter is no
more that two years old.

Ms. Carolyn Redden
Fidelity Investments Institutional Operations Company, Inc.
82 Devonshire Street - MM3H
Boston, MA  02109
                                 [Name of Plan]
Dear Ms. Redden

         In  accordance  with your  request,  this letter sets forth our opinion
with  respect to the  qualified  status  under  section  401(a) of the  Internal
Revenue  Code of 1986  (including  amendments  made by the  Employee  Retirement
Income Security Act of 1974) (the "Code"),  of the [name of plan], as amended to
the date of this letter (the "Plan").

         The material  facts  regarding  the Plan as we  understand  them are as
follows.  The  most  recent  favorable  determination  letter  as to the  Plan's
qualified status under section 401(a) of the Code was issued by the [location of
Key District]  District  Director of the Internal  Revenue Service and was dated
[date] (copy  enclosed).  The version of the Plan submitted by [name of company]
(the  "Company")  for the District  Director's  review in  connection  with this
determination  letter did not contain  amendments  made  effective as of [date].
These  amendments,  among other  matters,  [brief  description  of  amendments].
[Subsequent  amendments were made on [date] to amend the provisions dealing with
[brief description of amendments].]

         The Company  has  informed us that it intends to submit the Plan to the
[location of Key District] District Director of the Internal Revenue Service and
to request from him a favorable  determination letter as to the Plan's qualified
status  under  section  401(a) of the Code.  The  Company  may have to make some
modifications  to the Plan at the  request of the  Internal  Revenue  Service in
order to obtain this favorable determination letter, but we do not expect any of
these  modifications  to be  material.  The Company has informed us that it will
make these modifications.

         Based on the foregoing  statements of the Company and our review of the
provisions of the Plan, it is our opinion that the Internal Revenue Service will
issue a favorable  determination  letter as to the qualified status of the Plan,
as modified at the request of the Internal Revenue Service, under section 401(a)
of the Code, subject to the customary condition that continued  qualification of
the Plan, as modified, will depend on its effect in operation.

         [Furthermore,  in that the assets are in part  invested in common stock
issued by the Company or an  affiliate,  it is our  opinion  that the Plan is an
"eligible individual account plan" (as defined under Section 407(d)(3) of ERISA)
and that the  shares of common  stock of the  Company  held and to be  purchased
under the Plan are "qualifying employer securities" (as

<PAGE>

defined  under  Section  407(d)(5)  of ERISA).  Finally,  it is our opinion that
interests in the Plan are not required to be registered under the Securities Act
of 1933, as amended,  or, if such registration is required,  that such interests
are effectively registered under said Act.]

                                    Sincerely,
                                    [name of law firm]

                                    By [signature]
                                      ----------------
                                       [name of partner]

<PAGE>

                                  Schedule "G"

                               EXCHANGE GUIDELINES

The following exchange guidelines are currently employed by Fidelity Investments
Institutional Operations Company, Inc. (FIIOC).

Exchange hours, via a Fidelity participant service representative, are 8:30 a.m.
(ET) 8:00 p.m. in the participant's  time zone in the continental  United States
on each  business  day. A "business  day" is any day on which the New York Stock
Exchange (NYSE) is open.

Exchanges via Voice Response System ("VRS") and the internet ("NetBenefits") may
be made virtually 24 hours a day.

FIIOC reserves the right to change these exchange guidelines at its discretion.

Note:  The NYSE's normal  closing time is 4:00 p.m.  (ET); in the event the NYSE
alters its closing time, all  references  below to 4:00 p.m. (ET) shall mean the
NYSE closing time as altered.

                                  Mutual Funds

         Exchanges Between Mutual Funds

         Participants  may call on any  business  day to  exchange  between  the
         mutual  funds.  If the request is confirmed  before 4:00 p.m.  (ET), it
         will receive that day's trade date.  Requests confirmed after 4:00 p.m.
         (ET) will be processed on a next business day basis.

                                  Sponsor Stock

I.       Exchanges from Mutual Funds into Sponsor Stock

         No exchanges from Mutual Funds into Sponsor Stock are permitted.

II.      Exchanges from Sponsor Stock into Mutual Funds

         Participants  who wish to  exchange  out of Sponsor  Stock into  mutual
         funds may call on any business day. Calls received after 4:00 p.m. (ET)
         will be processed as if received on the following business day.

         The Sponsor Stock is sold on the business day  following the call.  The
         subsequent  purchase  into mutual fund shares will take place three (3)
         business  days later (call date plus 4) to allow for  settlement of the
         stock trade at the custodian and the  corresponding  transfer of assets
         to  Fidelity.  The mutual fund shares will appear in the  participant's
         account on the following business day (call date plus 5).

PROVIDIAN FINANCIAL CORPORATION

By
   ----------------------------
                           Date

<PAGE>

                                  Schedule "H"

              OPERATIONAL GUIDELINES FOR NON-FIDELITY MUTUAL FUNDS

     Pricing
     By 7:00 p.m. Eastern Time ("ET") each Business Day, the Non-Fidelity Mutual
     Fund Vendor (Fund  Vendor)  will input the  following  information  ("Price
     Information") into the Fidelity  Participant  Recordkeeping System ("FPRS")
     via the remote access price screen that Fidelity Investments  Institutional
     Operations  Company,  Inc.  ("FIIOC"),  an affiliate  of the  Trustee,  has
     provided to the Fund  Vendor:  (1) the net asset value for each Fund at the
     Close of  Trading,  (2) the change in each  Fund's net asset value from the
     Close of  Trading  on the  prior  Business  Day,  and (3) in the case of an
     income fund or funds,  the daily  accrual for  interest  rate factor  ("mil
     rate"). FIIOC must receive Price Information each Business Day (a "Business
     Day" is any day the New York Stock  Exchange is open).  If on any  Business
     Day the Fund Vendor does not provide such Price Information to FIIOC, FIIOC
     shall pend all associated  transaction activity in the Fidelity Participant
     Recordkeeping  System ("FPRS") until the relevant Price Information is made
     available by Fund Vendor.

     Trade Activity and Wire Transfers
     By 7:00 a.m. ET each  Business Day  following  Trade Date ("Trade Date plus
     One"), FIIOC will provide, via facsimile, to the Fund Vendor a consolidated
     report of net purchase or net redemption  activity that occurred in each of
     the Funds up to 4:00 p.m.  ET on the prior  Business  Day.  The report will
     reflect the dollar  amount of assets and shares to be invested or withdrawn
     for each Fund.  FIIOC will  transmit  this  report to the Fund  Vendor each
     Business Day,  regardless of  processing  activity.  In the event that data
     contained in the 7:00 a.m. ET facsimile  transmission  represents estimated
     trade activity, FIIOC shall provide a final facsimile to the Fund Vendor by
     no later than 9:00 a.m. ET. Any resulting adjustments shall be processed by
     the Fund Vendor at the net asset value for the prior Business Day.

     The Fund Vendor shall send via regular mail to FIIOC  transaction  confirms
     for all daily  activity in each of the Funds.  The Fund  Vendor  shall also
     send via regular  mail to FIIOC,  by no later than the fifth  Business  Day
     following  calendar month close, a monthly  statement for each Fund.  FIIOC
     agrees to notify the Fund Vendor of any balance discrepancies within twenty
     (20) Business Days of receipt of the monthly statement.

     For  purposes  of wire  transfers,  FIIOC  shall  transmit a daily wire for
     aggregate purchase activity and the Fund Vendor shall transmit a daily wire
     for  aggregate  redemption  activity,  in each case  including all activity
     across all Funds occurring on the same day.

     Prospectus Delivery
     FIIOC shall be responsible for the timely delivery of Fund prospectuses and
     periodic Fund reports  ("Required  Materials")  to Plan  participants,  and
     shall retain the services of a third-party  vendor to handle such mailings.
     The Fund Vendor  shall be  responsible  for all  materials  and  production
     costs,  and  hereby  agrees  to  provide  the  Required  Materials  to  the
     third-party  vendor selected by FIIOC. The Fund Vendor shall bear the costs
     of mailing annual Fund reports to Plan  participants.  FIIOC shall bear the
     costs of mailing prospectuses to Plan participants.

     Proxies
     The Fund Vendor  shall be  responsible  for all costs  associated  with the
     production  of proxy  materials.  FIIOC  shall  retain  the  services  of a
     third-party  vendor  to  handle  proxy   solicitation   mailings  and  vote
     tabulation. Expenses associated with such services shall be billed directly
     to the Fund Vendor by the third-party vendor.

     Participant Communications
     The  Fund  Vendor  shall  provide   internally-prepared   fund  descriptive
     information  approved by the Funds'  legal  counsel for use by FIIOC in its
     written participant communication materials. FIIOC shall utilize historical
     performance data obtained from third-party vendors (currently  Morningstar,
     Inc., FACTSET Research Systems and Lipper Analytical Services) in telephone
     conversations   with  plan   participants  and  in  quarterly   participant
     statements.  The Sponsor  hereby  consents to FIIOC's use of such materials
     and  acknowledges  that FIIOC is not  responsible  for the accuracy of such
     third-party  information.  FIIOC shall seek the approval of the Fund Vendor
     prior to  retaining  any other  third-party  vendor to render  such data or
     materials under this Agreement.

     Compensation
     FIIOC shall be entitled to fees as set forth in a separate  agreement  with
     the Fund Vendor.<PAGE> 1
                     DATED                             1999

(1)  NEWSHELF 126 (PROPRIETARY) LIMITED (whose name is in the course of being
changed to JLM INDUSTRIES (SOUTH AFRICA) (PROPRIETARY) LIMITED)

(2)  JLM INDUSTRIES INC

(3)  ICI SOUTH AFRICA (PROPRIETARY) LIMITED

(4)  IMPERIAL CHEMICAL INDUSTRIES PLC

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

                               SALE AGREEMENT

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

<PAGE> 2
                                    INDEX

1 INTERPRETATION
2. PREAMBLE
3 SALE OF BUSINESS
4 PRICE
5 PAYMENT
6 CLOSING ACCOUNTS
7 VAT                                                                    10
8 POSSESSION                                                             11
9 BOOKS, RECORDS AND CUSTOMERS
10 CONDITIONS PRECEDENT
11 ASSIGNMENT OF CONTRACTS                                               13
12 DEBTORS                                                               14
13 STOCKTAKING
14 LEASEHOLD INTERESTS                                                   15
15 EMPLOYEES
16 LICENCES                                                              18
17 WARRANTIES
18 VOETSTOOTS
19 PUBLICATION                                                           19
20 NAME                                                                  19
21 INTELLECTUAL PROPERTY RIGHTS
22 ANNOUNCEMENTS                                                         20
23 INDEMNITY                                                             20
24 AGENTS COMMISSION
25 RESTRAINT
26 BREACH
27 DISPUTES
28 APPLICABLE LAW AND JURISDICTION                                       24
29 CONFIDENTIALITY                                                       24
30 TRANSITIONAL SERVICES                                                 24
31 AUTHORITY                                                             25
32 DOMICILIUM AND NOTICES
33 GENERAL                                                               27
34 COSTS

<PAGE> 3
                               SALE AGREEMENT

                                  between

(1)  NEWSHELF 126 (PROPRIETARY) LIMITED (whose name is in the process of
     being changed to JLM INDUSTRIES (SOUTH AFRICA) (PROPRIETARY) LIMITED)

(2)  JLM INDUSTRIES INC

(3)  ICI SOUTH AFRICA (PROPRIETARY) LIMITED

(4)  IMPERIAL CHEMICAL INDUSTRIES PLC

1  INTERPRETATION
         In this agreement -

1.1   Clause headings are for convenience and shall not be used in its
      interpretation;

1.2   unless the context clearly indicates a contrary intention -

1.2.1   an expression which denotes -

1.2.1.1   any gender includes the other genders;

1.2.1.2   a natural person includes an artificial person and vice versa;

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1.2.1.3   the singular includes the plural and vice versa;

1.2.2   the following expressions shall bear the meanings assigned to them
        below and cognate expressions bear corresponding meanings -

1.2.2.1   "Auditors" -  KPMG or such other Auditors as may be appointed by
          the Seller acting in its sole discretion from time to time;

1.2.2.2   "Bank" - First National Bank of South Africa Limited;

1.2.2.3   "Business"  - the Colours and Industrial Chemicals Division of
          the Seller as at the Effective Date being the Sale Assets but, for
          the avoidance of doubt, excluding the Uniqema businesses of
          surfactants, lubricants and textile auxiliaries;

1.2.2.4   "Business Assets" - the Contracts, Debts, Fixed Assets, Goodwill
          and Stock;

1.2.2.5   "Closing Date" - 5pm (South African time) on 31 August 1999;

1.2.2.6   "Conditions" - the Conditions precedent set out in Clause 10;

1.2.2.7   "Contracts" - those Contracts relevant to the conduct of the
          Business more fully detailed in Part I of Schedule A but
          excluding those Contracts more fully detailed in Part II of
          Schedule "A";

<PAGE> 5
1.2.2.8   "Debts" - all claims of the Seller against the debtors of the
          Business as at the Closing Date;

1.2.2.9   "Effective Date" - the date of signature of this agreement by the
          last signing party;

1.2.2.10   "Field of Activity" - provision of the service of, or the
           setting up of, a business for the distribution of the Restricted
           Products (or any of them) in competition with the Business;

1.2.2.101   "Fixed Assets" - the Fixed Assets more fully detailed in the
            schedule annexed marked "B";

1.2.2.11   "Goodwill" - the Goodwill of the Business as at the Closing
           Date;

1.2.2.13   "Group" - in relation to either party means all companies that
           are for the time being a subsidiary or holding company of the
           party concerned or a subsidiary of that party's holding
           company;

1.2.2.14   "ICI PLC" - Imperial Chemical Industries PLC (Company Number
           218019), a company incorporated under the laws of England and
           Wales and having its principal place of business at 9
           Millbank London SW1P 3JF;

1.2.2.12   "Initial Purchase Price" - the initial purchase price determined
           in accordance with the provisions of Clause 4;

<PAGE> 6
1.2.2.16   "Intellectual Property Rights" - any intellectual property
           including, without limitation, patents, trademarks, copyrights,
           registered designs, right of confidence in know-how or technical
           or commercial information generally;

1.2.2.17   "JLM" - means JLM Industries Inc, a company incorporated under the
           laws of the United States of America and having its principal
           place of business at  8675 Hidden River Parkway, Tampa, Florida
           33637, United States of America;

1.2.2.18   "Liabilities" - (save as otherwise specifically referred to herein)
           all actual liabilities of the Seller relating to the Business,
           as at the Closing Date,  as set forth in the Closing Balance
           Sheet (including without limitation all trade creditors), together
           with those other liabilities more specifically referred to in the
           schedule attached hereto and marked "Schedule I" as such schedule
           may be amended from time to time;

1.2.2.139   "Leasehold Interests" - collectively means  -

1.2.2.19.1   Lakeland Shareblock - Unit 20; Hartbeespoort Dam;

1.2.2.19.2   Sable River Timeshare (3 weeks);

1.2.2.19.3   Fancourt Timeshare Lodge 746 Durban (4 weeks);

<PAGE> 7
1.2.2.20   "Purchaser" - Newshelf 126 (Proprietary) Limited (whose name is in
           the process of being changed to JLM INDUSTRIES (SOUTH AFRICA)
           (PROPRIETARY) LIMITED), a company incorporated under the laws of
           South Africa with company number 96/09440/07 and having its
           principal place of business at Building No 3, Harrowdene Office
           ark, Western Service Road, Woodmead, Sandton, South Africa;

1.2.2.21   "Reserve Bank" - The Reserve Bank of South Africa;

1.2.2.22   "Restricted Products" - those products distributed by the Business
           by virtue of the contracts listed in Schedule A Part I
           ("Included Contracts") and the Supply Agreements and any other
           product distributed by the Business at the Closing Date but, for
           the avoidance of doubt, excluding the those contracts listed in
           Schedule A Part II ("Excluded Contracts") and the excluded
           relationships listed in Schedule G ("Excluded Relationships");

1.2.2.23   "Sale Assets" - the Contracts, Debts, Fixed Assets, Goodwill,
           Leasehold Interests and Stock;

1.2.2.24   "Seller" - ICI  South Africa (Proprietary) Limited (Registration
           No. 94/10248/07) a company incorporated under the laws of the
           Republic of South Africa and having its principal place of
           business at Building No 3, Harrowdene Office Park, Western
           Service Road, Woodmead, Sandton, South Africa;

<PAGE> 8
1.2.2.25   "Stock" - the stock-in-trade of the Business as at the Closing
           Date, including goods in transit (being Stock of the Business
           purchased by the Seller prior to the Closing Date but not yet
           delivered at that date) but excluding Stock sold by the Seller
           and not delivered to the buyer thereof at the Closing Date;

1.2.2.26   "Supply Agreements" - those distribution and/or supply arrangements
           between the Seller and any other member of the Seller's Group
           for such of those products listed in Schedule H (as may be
           modified by the Seller from time to time) as may be reflected by
           written agreement executed as at the Closing Date, such written
           agreements to reflect, and be no more onerous to the Business
           than, the usual and customary commercial terms of the Seller or
           any other relevant member of the Seller's Group;

1.2.2.27   "Territory" - means the Republic of South Africa and Mozambique.

2.   PREAMBLE

The Purchaser wishes to acquire the Business as hereinafter provided.

3   SALE OF BUSINESS

3.1     Notwithstanding the date of signature of this agreement, and subject
        to fulfilment of the Conditions precedent and closing, the Seller
        sells to the Purchaser which indivisibly purchases the Business as a
        going concern, with effect from the Closing Date, on which date all
        risk in and benefits attaching to the Business shall pass to the
        Purchaser.

<PAGE> 9
3.2   With effect from the Closing Date, the Purchaser shall assume
      responsibility for and undertakes to settle the Liabilities, as and when
      they fall due for payment.  Should the Purchaser fail to pay any such
      liability on due date, then, without prejudice to the Seller's rights, the
      Seller shall be entitled, at its discretion, to pay same, on behalf of the
      Purchaser, and to recover from the Purchaser all amounts so paid, and
      interest thereon at the rate charged by the Bank to its prime customers on
      overdraft from time to time plus three percent, subject to the maximum
      rate permitted by law from time to time.  Such rate of interest may be
      evidenced by a certificate to be issued by any manager of the Bank and it
      shall not be necessary to prove his appointment.

4   PRICE

4.1   The price payable by the Purchaser to the Seller for the Business Assets
      shall be R26,515,000.00 consisting of the values for net current assets,
      net fixed assets and goodwill as more fully detailed in part 1 of the
      schedule annexed marked "C".

4.2   The price payable by the Purchaser to the Seller for the Leasehold
      Interests shall be R754,500.00 as more  fully detailed in part 2 of the
      schedule annexed marked "C".

4.3   The price payable for the Business Assets and Leasehold Interests shall
      together represent the Initial Purchase Price of R27,269,500.00.

5   PAYMENT

5.1   Notwithstanding the assumption of  liabilities by the Purchaser pursuant
      to the provisions of Clause 3.2, and in addition thereto, the Purchaser
      shall pay the Initial Purchase Price to the Seller at the Closing Date.

<PAGE> 10
5.2   After Closing, the Initial Purchase Price shall be adjusted by a closing
      account in accordance with Clause 6 and the balance paid to the relevant
      party in accordance with that Clause 6.

5.3   In the event that the Purchaser fails to pay the sum of R27,269,500.00 to
      the Seller on the Closing Date, the Seller shall be entitled, in its
      discretion, and by written notice to the Purchaser to that effect, to
      summarily cancel this agreement, without the Purchaser being afforded
      notice of breach, and the Purchaser shall have no claim against the Seller
      arising out of any such cancellation.

5.4   Without limiting the provisions of Clause 5.2, any balance of the purchase
      price outstanding from time to time shall accrue interest at the rate
      charged by the Bank to its prime customers on overdraft from time to time
      plus three percent, subject to the maximum rate permitted by law from time
      to time.  Such rate of interest may be evidenced by a certificate to be
      issued by any manager of the Bank and it shall not be necessary to prove
      his appointment.

6   CLOSING ACCOUNTS

6.1   Within 6 weeks of the Closing Date, the Seller shall provide a post
      completion audited balance sheet (to include the Leasehold Interests
      represented at the values more specifically set out in Schedule C annexed
      hereto) and an adjustment account (together "the Closing Accounts") in
      accordance with the provisions of this Clause 6. The balance on the
      Closing Account shall represent the final purchase price to be paid for
      the Business Assets and the Leasehold Interests ("the Final Purchase
      Price").

6.2   The Seller shall prepare a balance sheet of the Business as at the Closing
      Date  ("the Closing Balance Sheet") and procure it to be audited by the
      Auditors, such accounts to be prepared and audited on the basis of
      accounting policies and practices set out in the ICI Controllers Manual,
      the terms of which comply with and are at least as onerous as the
      generally accepted accounting standards of the Republic of South Africa.

<PAGE> 11
6.3   The Seller shall prepare an adjustment account in respect of the Business
      and shall procure its certification by the Auditors ("the Adjustment
      Account"). The Adjustment Account shall reflect as -

6.3.1   credits - that proportion of any amount paid before the Closing Date
        that relate to any period after the Closing Date in respect of those
        matters more fully detailed in Clause 6.3.2 which the broken portion of
        that period commencing at the Closing Date bears to the entire period
        for which the payment was made and any other amount paid before the
        Closing Date which may be recoverable after the Closing Date;

        debits - that proportion of any item referred to in Clause 6.3.2 owing
        at the Closing Date that relate to any period prior to the Closing Date
        which the broken portion of that period ending at the Closing Date bears
        to the entire period for which the item is owed.

6.3.2   The Adjustment Account shall be in respect of inter alia rates and
        taxes, electricity, water, sewerage, effluent disposal and insurance
        premiums, deposits paid to any local authority in respect of
        electricity, water or any other services, and rental in respect of any
        of the premises utilised for purposes of conducting the Business.

6.4   For the avoidance of doubt, the Purchaser shall be entitled, at its own
      cost, to review the Closing Accounts.

6.5   The Seller and the Purchaser shall use all reasonable endeavors to agree
      the Closing Accounts within 7 days of their delivery to the Purchaser. If
      the parties fail to agree the Closing Accounts within this time, the
      matters in dispute shall be dealt with in accordance with Clause 27.

<PAGE> 12
6.6   Any net credit balance between the Initial Purchase Price and the Final
      Purchase Price shall be paid by the Purchaser to the Seller and any net
      debit balance between the same shall be paid by the Seller to the
      Purchaser, within seven days of the Closing Accounts being finalized ,
      either by agreement between the Seller and the Purchaser or by the
      decision of the Auditors in accordance with Clause 27. Interest shall
      accrue on the balance of any late payment due under this Clause in
      accordance with Clause 5.4.

7   VAT

7.1   It is recorded that as -

7.1.1   the parties agree that the Business is -

7.1.1.1   an enterprise capable of separate operation;

7.1.1.2   being sold as a going concern;

7.1.2   the parties agree that the aforesaid enterprise will constitute an
        income earning activity on the Effective Date and Closing Date; and

7.1.3   the assets necessary to carry on the enterprise are being disposed of by
        the Seller to the Purchaser;

7.1.4   the sale contained in this agreement falls within the ambit of Section
        11(1)(e) of the VAT Act, and therefore VAT is payable at the rate of
        zero percent.

7.2   Should the South African Commissioner for Inland Revenue rule that VAT is
      payable at any rate other than zero percent in respect of the sale of the
      Business, the Purchaser shall pay such VAT to the Seller when the Seller
      is required to make payment thereof, against the delivery of a tax invoice
      to the Purchaser.

<PAGE> 13
7.3   Each of the Seller and the Purchaser warrants in favor of the other that
      it will be registered as a vendor in terms of the VAT Act, as at the
      Closing Date.

8   POSSESSION

     On the Closing Date, and subject to compliance by the Purchaser with the
provisions of Clause 5, the Seller shall place the Purchaser in possession of
the Business.

9   BOOKS, RECORDS AND CUSTOMERS

9.1   Notwithstanding the provisions of Clause 8, it is expressly acknowledged
      and agreed by the Purchaser that ownership of all books and records
      relating to the Business shall remain with the Seller, the Purchaser being
      entitled to have reasonable access thereto, from time to time, on
      reasonable notice to the Seller, provided that such access shall be
      limited to the affairs of the Business and only in respect of matters
      arising in the ordinary course of the Business.

9.2   Following upon signature of this agreement, the Purchaser shall be
      entitled to visit customers and suppliers of the Seller on reasonable
      notice and subject to the consent of any such customers and suppliers,
      provided that the Seller is given reasonable notice of such visit, the
      Seller or its duly authorized representative or nominee being entitled to
      attend any such visit.

10   CONDITIONS PRECEDENT

10.1   Closing is conditional upon the fulfillment of the following Conditions
       precedent, namely -

<PAGE> 14
10.1.1   the obtaining of all such Exchange Control approvals as may be required
         of the Exchange Control authorities of the Reserve Bank for the
         purposes of implementing this transaction;

10.1.2   the signing of a Sale of Shares Agreement (and such agreement itself
         becoming unconditional) in the form of the agreement annexed hereto
         marked "D";

10.1.3   this transaction being approved by the  Boards of Directors of the
         Seller and the Purchaser;

10.1.4   the Purchaser confirming the relationship between the Seller and its
         material suppliers and customers, and the Purchaser further satisfying
         itself that subsequent to closing, a substantial portion of the
         material distribution and/or agency agreements currently in place with
         the Seller's material suppliers as listed in Schedule A Part II will be
         transferred to the Purchaser;

10.1.5   the Purchaser obtaining a credit facility and other necessary financial
         requirements (including cash on closing) on terms and conditions
         satisfactory to it in its sole discretion but sufficient for it to
         fulfill its obligations under this Agreement;

10.1.6   the Seller carrying out such due diligence as it requires as regards
         the background and financial strength of the Purchaser, as they may
         affect the Purchaser's ability to complete this transaction;

10.1.7   the Seller assigning the benefit of the Supply Agreements to the
         Purchaser.

<PAGE> 15
10.2   Each of the parties shall use reasonable endeavors to procure the
       fulfillment of the Conditions in Clause 10.1 by not later than 23 August
       1999.

10.3   If any of the Conditions in Clause 10.1 fail (and fulfillment thereof is
       not waived by the parties in writing  by 23 August 1999 or such later
       date as may be agreed in writing between the parties) this agreement
       shall cease to be of any further force and effect.

11   ASSIGNMENT OF CONTRACTS

11.1   The Seller hereby cedes, assigns and delegates all its rights and
       obligations under the Contracts and the Supply Agreements to the
       Purchaser with effect from the Closing Date, and the Purchaser hereby
       accepts such cession, assignment and delegation, the Purchaser
       undertaking to assume, from the Closing Date, all future performance
       obligations under the Contracts and the Supply Agreements.

11.2   The parties undertake to co-operate with each other in order to procure
       any approvals required of the Reserve Bank in order to give effect to the
       provisions of Clause 11.1.

11.3   The following shall apply to the provisions of Clause 11.1 -

11.3.1   this agreement shall not constitute an assignment of the relevant
         contract if the assignment would constitute a breach of the relevant
         contract;

11.3.2   the parties shall use their respective reasonable endeavors to obtain
         any consent required to give effect to any such assignment;

11.3.3   after closing and until the necessary consent is obtained, the
         Purchaser shall perform all the obligations as agent for the Seller and
         the Purchaser hereby indemnifies and holds the Seller harmless against
         all such liabilities.

<PAGE> 16
11.4   The Purchaser indemnifies and holds the Seller harmless against any
       claims arising out of the operation of any of the Contracts after the
       Closing Date.

11.5   The foregoing provisions of this Clause 11 shall apply without limitation
       to the agreement for the supply of computer services concluded between
       the Seller and Zeneca Pharmaceuticals, a division of Zeneca South Africa
       (Proprietary) Limited on 17 February 1998.

12   DEBTORS

12.1   The sale to the Purchaser of the Debts is subject to the condition that
       if any of the Debts are not paid within one hundred and twenty days after
       the Closing Date, those unpaid Debts which the Purchaser cedes to the
       Seller in terms of Clause 12.2 will revert to the Seller.

12.2   Following upon expiry of the said one hundred and twenty day period, the
       Purchaser shall be entitled in writing to cede to the Seller any of those
       unpaid Debts.

12.3   Against receipt by the Seller of such cession, the Seller shall pay to
       the Purchaser an amount equal to the face value of the Debts ceded.
       Where any payments still require to be made by the Purchaser to the
       Seller pursuant to the provisions of this agreement, then the amount
       owing shall be set-off against such payments, it being deemed that the
       Purchase Price shall have been reduced by a like amount.

13   STOCKTAKING

13.1   The Seller and the Purchaser shall procure a stock take prior to closing,
       and on completion of the stocktaking, stock sheets reflecting the
       quantity of the Stock to be transferred shall be signed by the Seller and
       the Purchaser. Any disputes arising in relation to the stock take shall
       be settled between the parties, failing which they shall be referred to
       arbitration in accordance with Clause 27.

<PAGE> 17
13.2   The value of the Stock will be deemed the lower of into store cost price
       of the Stock and the market value thereof.   However, if the parties by
       mutual agreement determine that any Stock is worthless, or is otherwise
       hazardous, and requiring disposal, then the Seller shall bear the cost of
       any such disposal.

14   LEASEHOLD INTERESTS

14.1   The parties undertake to do all such things and sign all such documents
       as may be requisite or necessary for purposes of transferring the
       Leasehold Interests to the Purchaser within a reasonable period following
       upon signature of this agreement.

14.2   Notwithstanding the provisions of Clause 14.1, risk and benefit in and to
       the Leasehold Interests shall pass to the Purchaser with effect from the
       Closing Date.

15   EMPLOYEES

15.1   The Purchaser and the Seller agree that the employees of the Business
       detailed in the schedule annexed hereto and marked "E" shall transfer to
       the Purchaser on the Closing Date.

15.2   The Purchaser will have the option to use the services of the non-
       transferring employees for a period of ninety days following the Closing
       Date in order to implement its organizational strategy.  The Purchaser
       will, however, compensate the Seller for the actual labor and benefit
       costs of the non-transferring employees during the said ninety day
       implementation period, but will not be responsible for any severance,
       pension or related costs of employees not ultimately retained by the
       Purchaser.

<PAGE> 18
15.3.1   Save as provided in Clause 15.3.2 below, the Seller shall be
         responsible for the redundancy of any non-transferring employees ("the
         Redundant Employees"), which shall be carried out in accordance with
         the Seller's usual practice of giving three month's notice of
         termination ("the Notice Period") and will pay all redemption
         (severance) payments and pension makeup.

15.3.2   The Seller shall be responsible for notice period payments of the
         Redundant Employees during such proportion of the Notice Period (which
         may be all or part) which falls before the Closing Date. The Purchaser
         shall be responsible for notice period payments of the Redundant
         Employees during such proportion of the Notice Period (which may be all
         or part) which falls after the Closing Date.

15.4.1   Save as provided in Clauses 15.2 and 15.3 above, employees not
         transferring will be the sole responsibility of the Seller, and
         transferring employees will, from the Closing Date, be the sole
         responsibility of the Purchaser.   All compensation (including without
         limitation pension and any other deferred compensation) of both
         transferring and non-transferring employees shall remain the
         responsibility of the Seller until the day prior to the Closing Date.

15.4.2   For the avoidance of doubt, any claims brought by the transferring
         employees in relation to the terms of their transfer shall be the sole
         responsibility of the Purchaser.

15.5   The Purchaser undertakes that -

15.5.1   for a period of one year calculated from the Closing Date, there will
         be no redundancy of transferring employees directly as a result of this
         transaction; and

<PAGE> 19
15.5.2   for a period of three years after the Closing Date, the contractual
         remuneration and benefits, (including without limitation substantially
         equivalent retirement benefits and medical benefits), of transferring
         employees will be maintained.

15.6   The Purchaser will assume responsibility for all accrued leave
       obligations of the transferring employees, hereby indemnifying and
       holding, jointly and severally with JLM, the Seller harmless against all
       such claims.

15.7   Any employee who takes up employment with the Purchaser and is a member
       of any pension fund, provident fund or retirement fund as at the Closing
       Date and consents to the transfer of his right to such funds shall be
       transferred to a substantially equivalent pension, provident or
       retirement fund nominated or established by the Purchaser, at the cost of
       the Purchaser and the parties undertake to co-operate in order to give
       effect thereto in accordance with the principles set out in clause 15.8
       below. For the avoidance of doubt, the Seller shall have the right to
       review the proposed pension plans of the Purchaser prior to the Closing
       Date (or such other date as may be relevant) and to be consulted on the
       implementation of any such plan.

15.8   In relation to the AECI Defined Benefit Fund the Seller shall procure
       that the trustees of such fund shall transfer an amount equal to the
       Accrued Service Actuarial Reserve referable to the transferring employees
       consenting to such transfer who are members of such fund under the scheme
       rules.

15.9   In relation to the ICI South Africa Defined Contribution Fund the Seller
       shall procure that the trustees of such fund shall transfer an amount of
       the fund referable to the transferring employees consenting to such
       transfer who are members of such fund under the scheme rules.

15.10   The Seller shall procure the novation for the benefit of the Purchaser
        of the agreement between the Seller and Southern Life governing the
        funding of supplementary pension benefits for employees who commenced
        employment with the Seller prior to 1 August 1992.

<PAGE> 20
15.11   The parties shall use all reasonable endeavors to secure the transfer of
        such funds as soon as practicable after the Closing Date.

15.12   The Seller shall have no liability to the Purchaser in relation to the
        funds referred to in Clauses 15.8, 15.9 and 15.10 or for the pension
        rights of the transferring employees save as set out in these Clauses
        15.8 to 15.12.

15.13   In the event of a dispute arising regarding the interpretation or
        implementation of the provisions of Clause 15.2, then the provisions of
        Clause 27.1 shall apply thereto, mutatis mutandis.

16   LICENCES

16.1   The parties undertake to co-operate and use all reasonable endeavors in
       procuring that all trade and other licenses and registrations of any kind
       in relation to the Business presently held by the Seller are transferred
       to and/or granted in favor of the Purchaser, at the cost of the
       Purchaser.

16.2   The Seller does not warrant that any such licenses and registrations will
       be transferred to and/or granted in favor of the Purchaser or that any
       such licenses and registrations will be renewed.  Failing any such
       transfer, grant or renewal, the Purchaser will have no claim against the
       Seller, hereby irrevocably waiving such claims.

17   WARRANTIES

The Seller and ICI PLC jointly and severally give the Purchaser the warranties
more fully detailed in the scheduled annexed marked "F".

<PAGE> 21
18   VOETSTOOTS

The Purchaser acknowledges and agrees that save in respect of the warranties
more fully detailed in annexure "F", the Business and the Sale Assets are sold
voetstoots, and the Seller is not bound by any warranties, representations,
undertakings or the like, written or oral, express or implied, with regard to
the Business and the Sale Assets, the turnover or profits of the Business or any
other matter affecting the Business, other than those expressly set out herein.

19   PUBLICATION

The parties agree to dispense with the necessity for publishing in any way the
sale of the Business in terms of section 34 of the Insolvency Act 1936 ("the
Insolvency Act"), as amended.  The Seller and ICI PLC jointly and severally
hereby indemnify and hold the Purchaser harmless against any claim arising out
of the failure to publish notice of the sale in terms of section 34 of the
Insolvency Act.

20   NAME

20.1   The Purchaser undertakes not to use the name "ICI" in any manner
       whatsoever, including without limitation in its trading name, without the
       prior written consent of the Seller first having been obtained, and with
       effect from the Closing Date.

<PAGE> 22
20.2   For the avoidance of doubt, no rights have been granted to or acquired by
       the Purchaser to use the registered trade mark "ICI Roundel" owned by
       Imperial Chemical Industries PLC without the prior express written
       authority of the Seller.

21   INTELLECTUAL PROPERTY RIGHTS

21.1   Without limiting the provisions of Clause 20 the Purchaser undertakes not
       to use any trademark containing the letters "ICI', without the prior
       written consent of the Seller first having been obtained.

21.2   For the avoidance of doubt, it is recorded that no Intellectual Property
       Rights will be acquired by the Purchaser in respect of the Business.

22   ANNOUNCEMENTS

Announcement of this transaction through any of the media, shall not be
published without prior consultation and agreement between the parties.

23   INDEMNITY

23.1   Save as otherwise set out herein, the Seller and ICI PLC hereby jointly
       and severally indemnify the Purchaser against all loss, liability,
       damage, claim or expense which the Purchaser may suffer as a result of or
       which may be attributable to any liabilities (whether constituting
       Liabilities or otherwise) of the Business arising prior to or referable
       to an act or default prior to the Closing Date.

23.2   With effect from the Closing Date (and in relation to sub-Clauses 23.2.3
       and 23.2.4 below, during any period of employee consultation between the
       Effective Date and the Closing Date, which for the avoidance of doubt may
       only take place with the consent of the Seller), the Purchaser and JLM
       jointly and severally indemnify the Seller against all loss, liability,
       damage, claim or expense which the Seller may suffer arising out of:

23.2.1   the Liabilities;

23.2.2   the performance of the Contracts and the Supply Agreements;

<PAGE> 23
23.2.3   any contravention of the provisions of Chapter 8 of the Labour
         Relations Act No 66 of 1995;

23.2.4   the operation of the Business after the Closing Date.

23.3   As soon as practicable upon becoming aware of any claim under this Clause
       23, the claiming party shall serve written notice on the other setting
       out such information as may be required to validate the claim. The party
       receiving such notice shall within 31 days either:

23.3.1   pay the amount claimed (in full or in such proportion as may be agreed
         in writing between the parties); or

23.3.2   refer the matter to arbitration in accordance with Clause 27.2 below.

23.4   Notwithstanding anything to the contrary herein, the indemnities given in
       this Clause 23 shall remain in full force and effect notwithstanding any
       cancellation or termination of this Agreement.

24   AGENTS COMMISSION

For the avoidance of doubt the parties agree that the Seller shall not be
responsible for paying the fees of any agents appointed by the Purchaser.

25   RESTRAINT

25.1   For the purpose of assuring to the Purchaser the full benefit of the
       Business and the Goodwill and subject to the remaining provisions of this
       Clause 25, the Seller covenants with the Purchaser that neither the
       Seller nor any member of the Seller's Group will for a period of five
       years from the Closing Date carry on or be engaged or involved in the
       Field of Activity within the Territory.

<PAGE> 24
25.2   Furthermore, the Seller covenants with the Purchaser that neither the
       Seller not any member of the Seller's Group will for a period of five
       years from the Closing Date set up or acquire a rival distribution
       company which is involved in the Field of Activity.

25.3   For the avoidance of doubt, nothing in this Clause 25 shall in any way
       whatsoever prevent or restrict the ability of the Seller or any member of
       the Seller's Group to continue to conduct or carry out the normal
       operation of its existing businesses within the Field of Activity in the
       Territory in an unfettered manner and to conduct and carry out the
       Excluded Relationships.

25.4   Furthermore, the parties acknowledge that the relationship between the
       Purchaser and any member of the Seller's Group under which the Purchaser
       continues to distribute products for the Seller's Group after the Closing
       Date will be governed solely by such individual agreements as may be in
       force between the parties from time to time and to this extent nothing
       whatsoever in Clause 25.1 or 25.2 above shall apply (either for the
       duration of the individual agreements or at any time thereafter).

26   BREACH

26.1   Save as elsewhere provided herein, should either party commit a breach of
       any provision of this agreement and fail to remedy such breach within ten
       days after receiving written notice from the other party requiring it to
       do so, then the party aggrieved by such breach shall be entitled, without
       prejudice to its other rights in law, to cancel this agreement or to
       claim specific performance of all of the defaulting party's obligations
       whether or not such obligations would otherwise then have fallen due for
       performance, in either event without prejudice to the aggrieved party's
       right to claim damages.

<PAGE> 25
26.2   Notwithstanding the provisions of Clause 26.1 the Purchaser shall not be
       entitled to cancel this agreement as a consequence of any breach by the
       Seller of any of its obligations hereunder unless the breach is a
       material breach of a material warranty or obligation and the breach is
       incapable of being remedied by payment of fair and reasonable
       compensation or, if it is capable of being remedied by payment of fair
       and reasonable compensation, the Seller fails to pay the Purchaser such
       compensation within thirty days of the amount thereof being determined by
       agreement between the parties.

26.3   The Purchaser shall not have any claim against the Seller in respect of
       any action arising out of a breach of warranty or otherwise arising in
       terms of this agreement unless -

26.3.1   the aggregate of the amounts payable as a result of all such breaches
         exceed the sum of R150 000.  Any such claim shall further be limited to
         the amount in excess of the said sum of R150 000 but shall not exceed
         the purchase price in  aggregate;

26.3.2   such claim is notified by the Purchaser to the Seller in writing prior
         to the second anniversary of the Effective Date.

27   DISPUTES

27.1   Should any dispute arise between the parties regarding the determination
       of the purchase price or under Clause 15.2, then such dispute may be
       referred for determination, to the Auditors together with such auditors
       as may be appointed by the Purchaser from time to time, acting jointly as
       experts and not as arbitrators, and their determination shall be final
       and binding on the parties and failing determination by them be referred
       to an independent auditor to be appointed by the President for the time
       being of the Law Society of Transvaal, whose decision shall be subject to
       appeal.

<PAGE> 26
27.2   Save as provided in Clause 27.1, any other dispute arising from or in
       connection with this agreement, including its interpretation and
       implementation, may be finally settled in accordance with the Rules of
       the Arbitration Foundation of Southern Africa, provided that -

27.2.1   the arbitrator shall be agreed between the parties, and failing
         agreement within ten days of either party calling upon the other to
         agree such arbitrator, such arbitrator shall be nominated by the
         President for the time being of the Law Society of Transvaal (or its
         successor in title);

27.2.2   the decision of the arbitrator shall be subject to appeal.

28   APPLICABLE LAW AND JURISDICTION

28.1   All matters arising out of or in connection with the interpretation,
       implementation, termination or cancellation of this agreement shall be
       governed in accordance with the laws of the Republic of South Africa
       applicable from time to time and the laws of the Republic of South Africa
       shall be deemed for all purposes to be the proper law of this agreement.

28.2   The parties hereby irrevocably consent to the exclusive jurisdiction of
       the courts of the Republic of South Africa and England, in respect of any
       appeal to be conducted in accordance with the provisions of Clause
       27.2.2.

29   CONFIDENTIALITY

29.1   The Purchaser agrees that it will keep confidential all information
       (whether in oral, written or electronic form) concerning the  Seller
       (including without limitation commercial, financial and contractual
       information) which may come to the Purchaser's knowledge as a result of
       this transaction  ("the information")  and the Purchaser undertakes not
       to disclose this Information to third parties without the prior written
       consent of the Seller for a period of five years from the Closing Date.

<PAGE> 27
29.2   Information shall not include that which is required to be disclosed by
       law, regulation or any relevant authority, that which is previously known
       to the Purchaser or becomes known to it through no breach of these
       confidentiality undertakings by the Purchaser, or is in respect of
       Information which enters into the public domain through no fault of the
       Purchaser.

30   TRANSITIONAL SERVICES

The parties acknowledge and agree that business services support will be
supplied by the Seller to the Purchaser and the Purchaser to the Seller as and
when reasonably required and at the cost price thereof for a period of three
months after the Closing Date or until such later date as may be agreed in
writing between the parties.

31   AUTHORITY

31.1   All requisite internal and external authorities necessary for the
       completion of this transaction shall be obtained by both parties, in
       accordance with all applicable laws and regulations.

31.2   In addition to Clause 14, the Seller shall use all reasonable endeavours
       to ensure that all assignments, orders, approvals, permits and
       qualifications necessary to complete this transaction, including the
       transfer of the Business Assets and Leasehold Interests, and which are
       material to the operation of the Business, shall have been or will be
       obtained.

32   DOMICILIUM AND NOTICES

32.1   The parties choose domicilium citandi et executandi for all purposes of
       the giving of any notice, the payment of any sum, the serving of any
       process and for any other purpose arising from this agreement, as follows
       -
<PAGE> 28
32.1.1   the Seller - c/o The Company Secretary
                          ICI Plc
                          9 Millbank
                          London SW1 P3JF
                          England

telefacsimile  - (0944) 171 798 5877

32.1.2   the Purchaser - c/o Mr Richard Kernick
                             Building No 3 Harrowdene Office Park
                             Western Service Road
                             Woodmead
                             Sandton
                             South Africa

telefacsimile  - (27) (11) 804 7246

     with copies of the Purchaser's notice to go to John T White Esq of JLM
Industries Inc, 8675 Hidden River Parkway, Tampa, Florida 33637, United States
of America (fax (813) 632 3301) and Mark Treisman Esq of Edward Nathan &
Friedland Inc of 4th Floor The Forum 2 Maude Street Sandown Sandton 2196 South
Africa (fax (27) (11) 269 7899.

32.2   Each of the parties shall be entitled from time to time, by written
       notice to the other, to vary its domicilium to any other physical address
       within England or the Republic of South Africa and/or its facsimile
       number.

32.3   Any notice given and any payment made by any party to the other which -

32.3.1   is delivered by hand during the normal business hours of the addressee
         at the addressee's domicilium for the time being shall be rebuttably
         presumed to have been received by the addressee at the time of
         delivery;

<PAGE> 29
32.3.2   is transmitted by facsimile to the addressee at the addressee's
         facsimile address for the time being shall be presumed, until the
         contrary is proved by the addressee, to have been received by the
         addressee on the first business day following upon the date of
         successful transmission thereof;

32.3.3   is posted by prepaid registered post from an address within England or
         the Republic of South Africa to the addressee at the addressee's
         domicilium for the time being shall be rebuttably presumed to have been
         received by the addressee on the fourteenth day after the date of
         posting.  Any notice posted by prepaid registered post shall only be
         valid if such notice is simultaneously telefaxed to the addressee.

33   GENERAL

33.1   This agreement, together with the appendices thereto, constitutes the
       sole record of the agreement between the parties in regard to the subject
       matter thereof.

33.2   Neither party shall be bound by any representation, express or implied
       term, warranty, promise or the like not recorded herein or reduced to
       writing and signed by the parties or their authorized representatives.

33.3   No addition to, variation, or agreed cancellation of this agreement or
       any of the appendices hereto shall be of any force or effect unless in
       writing and signed by or on behalf of the parties.

33.4   No indulgence which either party may grant to the other shall constitute
       a waiver of any of the rights of the grantor.

34   COSTS

Each party shall bear its own costs of and incidental to the drawing and
preparation of this agreement.

<PAGE> 30
Signed at on 2000

for ICI South Africa (Proprietary) Limited

/s/  Iain M. Macfarlane
----------------------------------------------
who warrants that he is duly authorised hereto

Signed at on 2000

for Imperial Chemical Industries PLC

----------------------------------------------
who warrants that he is duly authorised hereto

Signed at on2000

for Newshelf 126 (Proprietary) Limited
(whose name is in the process of being changed to JLM INDUSTRIES (SOUTH AFRICA)
(PROPRIETARY) LIMITED)

/s/  John T. White
----------------------------------------------
who warrants that he is duly authorised hereto

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