Exhibit 1
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                                   ENZON, INC.

                                       and

                   CONTINENTAL STOCK TRANSFER & TRUST COMPANY
                                 as Rights Agent

                                RIGHTS AGREEMENT

                            Dated as of May 17, 2002







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                                Table of contents
                                -----------------

                                                                          Page
                                                                          ----

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

Section 2.  Appointment of Right Agent.......................................5

Section 3.  Issue of Right Certificates......................................5

Section 4.  Form of Right Certificates.......................................6

Section 5.  Countersignature and Registration................................7

Section 6.  Transfer, Split Up, Combination and Exchange of Right
            Certificates; Mutilated, Destroyed, Lost or Stolen Right
            Certificates.....................................................7

Section 7.  Exercise of Rights; Purchase Price; Expiration Date of Rights....8

Section 8.  Cancellation and Destruction of Right Certificates...............9

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

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

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

Section 12. Certificate of Adjusted Purchase Price or Number of Shares......16

Section 13. Consolidation, Merger or Sale or Transfer of Assets or
            Earning Power...................................................16

Section 14. Fractional Rights and Fractional Shares.........................19

Section 15. Rights of Action................................................19

Section 16. Agreement of Right Holders......................................20

Section 17. Right Certificate Holder Not Deemed a Shareholder...............20

Section 18. Concerning the Rights Agent.....................................20

Section 19. Merger or Consolidation or Change of Name of Rights Agent.......21

Section 20. Duties of Rights Agent..........................................22

Section 21. Change of Rights Agent..........................................23




Section 22. Issuance of New Right Certificates..............................24

Section 23. Redemption......................................................24

Section 24. Exchange........................................................25

Section 25. Notice of Certain Events........................................26

Section 26. Notices.........................................................27

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

Section 28. Successors......................................................27

Section 29. Benefits of this Agreement; No Liability........................28

Section 30. Severability....................................................28

Section 31. Governing Law...................................................28

Section 32. Counterparts....................................................28

Section 33. Descriptive Headings............................................28


Form of Certificate of Designation, Preferences and Rights of
Series B Preferred Stock of Enzon, Inc......................................A-1

Form of Right Certificate...................................................B-1

Summary of Rights to Purchase Preferred Shares..............................C-1


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                                RIGHTS AGREEMENT

      This Rights Agreement dated as of May 17, 2002 is between Enzon, Inc., a
Delaware corporation (the "Company"), and Continental Stock Transfer & Trust
Company, as rights agent (the "Rights Agent").

                                    RECITALS:

      WHEREAS, effective May 17, 2002, the Board of Directors of the Company
authorized and declared a dividend of one preferred share purchase right (a
"Right") for each Common Share (as hereinafter defined) of the Company
outstanding on June 3, 2002 (the "Record Date"), each Right representing the
right to purchase one one-thousandth of a Preferred Share (as hereinafter
defined), upon the terms and subject to the conditions herein set forth, and has
further authorized and directed the issuance of one Right with respect to each
Common Share that shall become outstanding between the Record Date and the
earliest of the Distribution Date, the Redemption Date, the Exchange Date and
the Final Expiration Date (as such terms are hereinafter defined).

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

      Section 1. Certain Definitions.

      For purposes of this Agreement, the following terms have the meanings
indicated:

      "Acquiring Person" shall mean any Person who or which, together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of the
Threshold Percentage or more of the Common Shares of the Company then
outstanding, other than as a result of a Permitted Offer, but shall not include
any Exempt Person.

      "Affiliate" and "Associate" shall have the respective meanings ascribed to
such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange
Act.

      "Agreement" shall mean this Rights Agreement as originally executed or as
it may from time to time be supplemented, amended, renewed, restated or extended
pursuant to the applicable provisions hereof.

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

            (i) which such Person or any of such Person's Affiliates or
      Associates, beneficially owns, directly or indirectly, including without
      limitation securities with respect to which such Person or any such
      Person's Affiliates or Associates has "beneficial ownership" pursuant to
      Rule 13d-3 of the General Rules and Regulations under the Exchange Act, as
      in effect on the date of this Agreement;

            (ii) which such Person or any of such Person's Affiliates or
      Associates has (A) the right to acquire (whether such right is exercisable
      immediately or only after the passage of time) pursuant to any agreement,
      arrangement or understanding (other than




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

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

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

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

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

      "Closing Price" with respect to a security on any given date shall mean
the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Security is not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Security is listed or admitted to trading or,
if the Security is not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities


                                       2


Dealers, Inc. Automated Quotations System or such other system then in use, or,
if on any such date the Security is not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Security selected by the Board of Directors
of the Company. If on any such day no market maker is making a market in the
Common Shares, the fair value of such share on such day as determined in good
faith by the Board of Directors of the Company shall be used in lieu of the
Closing Price for such day.

      "Common Shares," when used with reference to the Company, shall mean the
shares of Common Stock, par value $0.01 per share, of the Company. "Common
Shares," when used with reference to any Person other than the Company, shall
mean the capital stock (or equity interest) with the greatest voting power of
such other Person or, if such other Person is a Subsidiary of any other Person,
the Person or Persons that ultimately control such first mentioned Person.

      The "Current Per Share Market Price" of a security shall mean the average
of the daily Closing Prices per share of such security for the 30 consecutive
Trading Days immediately prior to such date; provided, however, that in the
event that the Current Per Share Market Price of such security is determined
during a period following the announcement by the issuer of the security of (A)
a dividend or distribution on the security payable in shares of such security or
securities convertible into such shares, or (B) any subdivision, combination or
reclassification of such security and prior to the expiration of 30 Trading Days
after the ex-dividend date for such dividend or distribution, or the record date
for such subdivision, combination or reclassification, then, and in each such
case, the Current Per Share Market Price shall be appropriately adjusted to
reflect the Current Per Share Market Price per share equivalent of such
security. With respect to the Preferred Shares of the Company, if such Preferred
Shares are not publicly traded, then the Current Per Share Market Price of such
Preferred Shares shall be deemed conclusively to be the Current Per Share Market
Price of the Common Shares (appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof),
multiplied by 1,000. If neither the Common Shares nor the Preferred Shares are
publicly held or so listed or traded, "Current Per Share Market Price" of the
Preferred Shares shall mean the fair value per share as determined in good faith
by the Board of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent.

      "Distribution Date" shall mean the earlier of (i) the Close of Business on
the day after the Shares Acquisition Date or (ii) the Close of Business on the
day (or such later date as may be determined by action of the Board of Directors
prior to such time as any Person becomes an Acquiring Person) after the date of
the commencement by any Person (other than an Exempt Person) of, or of the first
public announcement of the intention of any Person (other than an Exempt Person)
to commence, a tender or exchange offer, the consummation of which would result
in any Person becoming an Acquiring Person.

      "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time.

      "Exchange Date" shall mean the time at which the Rights are exchanged as
provided in Section 24 hereof.

      "Exchange Ratio" shall have the meaning set forth in Section 24 hereof.


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      "Exempt Person" shall mean (i) the Company, (ii) any Subsidiary of the
Company, (iii) any employee benefit plan of the Company or of any Subsidiary of
the Company, (iv) any Person or entity organized, appointed or established by
the Company for or pursuant to the terms of any such employee benefit plan, (v)
any Person who becomes the Beneficial Owner of the Threshold Percentage or more
of the Common Shares of the Company then outstanding by reason of share
purchases by the Company, unless and until such time as such Person shall
increase the number of Common Shares of the Company beneficially owned by such
Person above the number of Common Shares of the Company beneficially owned by
such Person at the time of the share purchase by the Company that caused such
Person to exceed the Threshold Percentage, and (vi) any Person who otherwise
would be an Acquiring Person but whom the Board of Directors determines, in good
faith, to have become such inadvertently (including, without limitation, because
(A) such person was unaware that he or it was the Beneficial Owner of a
percentage of Common Shares that otherwise would cause such person to be an
Acquiring Person, or (B) such Person was aware of the extent to which he or it
is the Beneficial Owner of Common Shares but had no actual knowledge of the
consequences of being such a Beneficial Owner under this Agreement) and without
any intention of changing or influencing control of the Company, and if such
Person, after being advised of such determination and within a period of time
set by the Board of Directors, divests himself or itself of a sufficient number
of Common Shares so that such Person would no longer be the Beneficial Owner of
the Threshold Percentage or more of the Common Shares of the Company then
outstanding, then such Person shall not be deemed to be or to have become an
Acquiring Person for any purposes of this Agreement; and during any period of
time (x) prior to the time the Board of Directors shall have become aware that
such Person would have become an Acquiring Person but for the provisions of this
clause (vi), (y) during which the Board of Directors is making the determination
called for under this clause (vi), and (z) during which such Person is divesting
himself or itself of a sufficient number of Common Shares so that such Person no
longer would be the Beneficial Owner of the Threshold Percentage or more of the
Common Shares of the Company then outstanding, such Person shall not be deemed
to be or to have become an Acquiring Person for any purpose under this
Agreement.

      "Final Expiration Date" shall mean the Close of Business on May 16, 2012.

      "Permitted Offer" shall mean a tender offer or an exchange offer for all
outstanding Common Shares of the Company determined by the Board of Directors of
the Company, after receiving such advice as it deems necessary and giving due
consideration to all relevant factors, to be in the best interests of the
Company and its stockholders.

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

      "Preferred Shares" shall mean shares of Series B Preferred Stock, par
value $0.01 per share, of the Company having the rights and preferences set
forth in the Form of Certificate of Designation attached to this Agreement as
Exhibit A.

      "Principal Party" shall have the meaning set forth in Section 13(b)
hereof.

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


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      "Record Date" shall have the meaning set forth in the recitals hereto.

      "Redemption Date" shall mean the time at which the Rights are redeemed as
provided in Section 23 hereof.

      "Right" shall have the meaning set forth in the recitals hereto.

      "Right Certificate" shall mean a certificate substantially in the form of
Exhibit B hereto.

      "Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.

      "Shares Acquisition Date" shall mean the first date of public announcement
(which, for purposes of this definition, shall include, without limitation, a
report filed pursuant to Section 13(d) of the Exchange Act) by the Company or
any Person that such Person has become an Acquiring Person.

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

      "Summary of Rights" shall mean a summary of this Agreement, in
substantially the form of Exhibit C hereto.

      "Threshold Percentage" shall mean 15%.

      "Trading Day" shall mean a day on which the principal national securities
exchange on which a security is listed or admitted to trading is open for the
transaction of business or, if a security is not listed or admitted to trading
on any national securities exchange, a Business Day.

      Section 2. Appointment of Right Agent.

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

      Section 3. Issue of Right Certificates.

      (a) Until the Distribution Date, (i) the Rights will be evidenced (subject
to the provisions of Section 3(b) hereof) by the certificates for Common Shares
registered in the names of the holders thereof (which certificates shall also be
deemed to be Right Certificates) and not by separate Right Certificates, and
(ii) the right to receive Right Certificates will be transferable only in
connection with the transfer of Common Shares. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights Agent will
countersign, and the Company will send or cause to be sent (and the Rights Agent
will, if requested, send) by first-class, postage-prepaid mail to each record
holder of Common Shares as of the Distribution Date, at the address of such
holder shown on the records of the Company, a Right Certificate


                                       5


evidencing one Right for each Common Share so held. As of the Distribution Date,
the Rights will be evidenced solely by such Right Certificates.

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

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

      This certificate also evidences and entitles the holder hereof to certain
      rights as set forth in a Rights Agreement between Enzon, Inc. and
      Continental Stock Transfer & Trust Company, dated as of May 17, 2002 (the
      "Rights Agreement"), the terms of which are hereby incorporated herein by
      reference and a copy of which is on file at the principal executive
      offices of Enzon, Inc. Under certain circumstances, as set forth in the
      Rights Agreement, such Rights will be evidenced by separate certificates
      and will no longer be evidenced by this certificate. Enzon, Inc. will mail
      to the holder of this certificate a copy of the Rights Agreement without
      charge after receipt of a written request therefor. Under certain
      circumstances, as set forth in the Rights Agreement, Rights issued to any
      Person who becomes an Acquiring Person or an Associate or Affiliate
      thereof (as defined in the Rights Agreement), or certain transferees of
      such Person, may become null and void.

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

      Section 4. Form of Right Certificates.

      The Right Certificates (and the forms of election to purchase Preferred
Shares and of assignment to be printed on the reverse thereof)


                                       6


shall be substantially the same as Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage. Subject to the provisions of Section 11
and Section 22 hereof, the Right Certificates shall entitle the holders thereof
to purchase such number of one one-thousandths of a Preferred Share as shall be
set forth therein at the price per one one-thousandth of a Preferred Share set
forth therein (the "Purchase Price"), but the number of such one one-thousandths
of a Preferred Share and the Purchase Price shall be subject to adjustment as
provided herein.

      Section 5. Countersignature and Registration.

      The Right Certificates shall be executed on behalf of the Company by any
of its Chairman of the Board, its Vice Chairman, its President, its Executive
Vice President, any of its Vice Presidents, its Treasurer or its Controller
either manually or by facsimile signature and shall be attested by the Secretary
or an Assistant Secretary of the Company, either manually or by facsimile
signature. The Right Certificates shall be countersigned by the Rights Agent,
either manually or by facsimile signature, for purposes of authorization only
and shall not be valid for any purpose unless countersigned. In case any officer
of the Company who shall have signed any of the Right Certificates shall cease
to be such officer of the Company before countersignature by the Rights Agent
and issuance and delivery by the Company, such Right Certificates, nevertheless,
may be countersigned by the Rights Agent and issued and delivered by the Company
with the same force and effect as though the Person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any Person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such Person was not such an officer.

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

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

      Subject to the provisions of Section 14 hereof, at any time after the
Close of Business on the Distribution Date, and at or prior to the Close of
Business on the earlier of the Redemption Date, the Exchange Date or the Final
Expiration Date, any Right Certificate or Right Certificates (other than Right
Certificates representing Rights that have become void pursuant to Section
11(a)(ii) hereof) may be transferred, split up, combined or exchanged for
another Right Certificate or Right Certificates, entitling the registered holder
to purchase a like number of one one-thousandths of a Preferred Share as the
Right Certificate or Right Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Right Certificate or Right Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the Right Certificate
or Right Certificates to be transferred, split up,


                                       7


combined or exchanged at the principal office of the Rights Agent. Thereupon the
Rights Agent shall countersign and deliver to the Person entitled thereto a
Right Certificate or Right Certificates, as the case may be, as so requested.
The Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Right Certificates.

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

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

      (a) The registered holder of any Right Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein) in whole or in part at
any time after the Distribution Date upon surrender of the Right Certificate,
with the form of election to purchase on the reverse side thereof duly executed,
to the Rights Agent at the office or offices of the Rights Agent designated for
such purpose, together with payment of the Purchase Price for each one
one-thousandth of a Preferred Share as to which the Rights are exercised, at or
prior to the earliest of the Final Expiration Date, the Redemption Date or the
Exchange Date.

      (b) The Purchase Price for each one one-thousandth of a Preferred Share
pursuant to the exercise of a Right shall be $190.00 (One Hundred Ninety
Dollars), shall be subject to adjustment from time to time as provided in
Sections 11 and 13 hereof and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.

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


                                       8


designated by such holder and (iv) when appropriate, after receipt, deliver such
cash to or upon the order of the registered holder of such Right Certificate.

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

      (e) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section unless such registered holder shall have (i) duly
completed and executed the form of election to purchase set forth on the reverse
side of the Right Certificate surrendered for such exercise and (ii) provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) of such Right Certificate or Affiliates or Associates thereof
as the Company shall reasonably request.

      Section 8. Cancellation and Destruction of Right Certificates.

      All Right Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or to any
of its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Rights Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company, or, at the written request of
the Company, may (but shall not be required to) destroy such cancelled Right
Certificates, and, if such cancelled Right Certificates are destroyed, shall
deliver to the Company a certificate of destruction.

      Section 9. Availability of Preferred Shares.

      (a) The Company covenants and agrees that it will cause to be reserved and
kept available out of its authorized and unissued Preferred Shares, the number
of Preferred Shares that will be sufficient to permit the exercise in full of
all outstanding Rights.

      (b) At such time, if any, as the Preferred Shares issuable upon the
exercise of Rights may be listed on any national securities exchange, the
Company shall use its best efforts to cause, from and after such time as the
Rights become exercisable (but only to the extent that it is reasonably likely
that the Rights will be exercised), all shares reserved for such issuance to be
listed on such exchange upon official notice of issuance upon such exercise.

      (c) The Company will prepare and file, as soon as practicable following
expiration of the Company's right of redemption pursuant to Section 23, a
registration statement under the Securities Act with respect to the Rights and
the securities purchasable upon exercise of the Rights on an appropriate form,
and use its best efforts to cause such registration statement to (i) become
effective as soon as practicable after such filing, and (ii) remain effective
(with a


                                       9


prospectus at all times meeting the requirements of the Securities Act) until
the earlier of (A) the date as of which the Rights are no longer exercisable for
such securities or (B) the Final Expiration Date. The Company will also take
such action as may be appropriate under, or to ensure compliance with, the
securities or "blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily suspend, for a period
of time not to exceed 90 days after the date the registration statement is
filed, the exercisability of the Rights in order to permit the registration
statement to become effective. Upon any such suspension, the Company shall issue
a public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualification in such jurisdiction shall not have
been obtained or the exercise thereof is not permitted under applicable law.

      (d) The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all Preferred Shares delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such Preferred
Shares (subject to payment of the Purchase Price and any applicable transfer
taxes), be duly and validly authorized and issued and fully paid and
nonassessable shares.

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

      Section 10. Preferred Shares Record Date.

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


                                       10


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

      The Purchase Price, the number and kind of shares covered by each Right
and the number of Rights outstanding are subject to adjustment from time to time
as provided in this Section 11.

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

            (ii) Subject to Section 24 of this Agreement, in the event any
      Person becomes an Acquiring Person, unless the event by which such Person
      became an Acquiring Person is a transaction described in Section 13(a)
      hereof, each holder of a Right shall thereafter have a right to receive,
      upon exercise thereof at a price equal to the then current Purchase Price
      multiplied by the number of one one-thousandths of a Preferred Share for
      which a Right is then exercisable, in accordance with the terms of this
      Agreement and in lieu of Preferred Shares, such number of Common Shares of
      the Company as shall equal the result obtained by (x) multiplying the then
      current Purchase Price by the number of one one-thousandths of a Preferred
      Share for which a Right is then exercisable and dividing that product by
      (y) 50% of the Current Per Share Market Price of the Company's Common
      Shares on the date that such Person becomes an Acquiring Person. In the
      event that any Person shall become an Acquiring Person and the Rights
      shall then be outstanding, the Company shall not take any action which
      would eliminate or diminish the benefits intended to be afforded by the
      Rights.

            From and after the date that such Person becomes an Acquiring
      Person, any Rights that are or were acquired or beneficially owned by any
      Acquiring Person (or any Associate or Affiliate of such Acquiring Person)
      shall be void and any holder of such Rights shall thereafter have no right
      to exercise such Rights under any provision of this Agreement. No Right
      Certificate shall be issued pursuant to Section 3 that represents


                                       11


      Rights beneficially owned by an Acquiring Person (or any Associate or
      Affiliate of such Acquiring Person) whose Rights would be void pursuant to
      the preceding sentence; no Right Certificate shall be issued at any time
      upon the transfer of any Rights to an Acquiring Person (or any Associate
      or Affiliate of such Acquiring Person) whose Rights would be void pursuant
      to the preceding sentence or to any nominee of such Acquiring Person,
      Associate or Affiliate; and any Rights Certificate delivered to the Rights
      Agent for transfer to an Acquiring Person (or any Associate or Affiliate
      of such Acquiring Person) whose Rights would be void pursuant to the
      preceding sentence shall be cancelled.

            (iii) In the event that there shall not be sufficient Common Shares
      authorized but unissued to permit the exercise in full of the Rights in
      accordance with Section 11(a)(ii) hereof, the Company shall take all such
      action as may be necessary to authorize additional Common Shares for
      issuance upon exercise of the Rights. In the event the Company shall,
      after good faith effort, be unable to take all such action as may be
      necessary to authorize such additional Common Shares, the Company shall
      substitute, for each Common Share that otherwise would be issuable upon
      exercise of a Right, a number of Preferred Shares or fraction thereof such
      that the Current Per Share Market Price of one Preferred Share multiplied
      by such number or fraction is equal to the Current Per Share Market Price
      of one Common Share as of the date of issuance of such Preferred Share or
      fraction thereof.

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


                                       12


record date is fixed; and in the event that such rights, options or
warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not been
fixed.

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

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

      (e) If as a result of an adjustment made pursuant to Section 11(a) and
13(a) hereof, the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock of the Company other than Preferred
Shares, thereafter the number of such other shares so receivable upon exercise
of any Right shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
Preferred Shares contained in Section 11(a) through 11(c), inclusive, and the
provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred Shares
shall apply on like terms to any such other shares.

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


                                       13


      (g) Unless the Company shall have exercised its election as provided in
Section 11(h), subject to the provisions of Sections 11(a) and 13 hereof, upon
each adjustment of the Purchase Price as a result of the calculations made in
Sections 11(b) and (c), each Right outstanding immediately prior to the making
of such adjustment shall thereafter evidence the right to purchase, at the
adjusted Purchase Price, that number of one one-thousandths of a Preferred Share
(calculated to the nearest one one-millionth of a Preferred Share) obtained by
(i) multiplying (x) the number of one one-thousandths of a share covered by a
Right immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.

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

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

      (j) Before taking any action that would cause an adjustment reducing the
Purchase Price below one one-thousandth of the then par value, if any, of the
Preferred Shares issuable upon exercise of the Rights, the Company shall take
any corporate action which may, in the


                                       14


opinion of its counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable Preferred Shares at such adjusted
Purchase Price.

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

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

      (m) The Company covenants and agrees that, after the Distribution Date, it
will not, except as permitted by Section 23, 24 or 27, take (or permit any
Subsidiary of the Company to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish substantially
or otherwise eliminate the benefits intended to be afforded by the Rights.

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


                                       15


this Section 11(n), the adjustments provided for in this Section 11(n) shall be
in addition and prior to any adjustment required pursuant to Section 11(a)(ii).

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

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

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

      (a) In the event, directly or indirectly, at any time after there is an
      Acquiring Person,

            (w) the Company shall consolidate with, or merge with and into, any
      other Person (other than a wholly owned Subsidiary of the Company in a
      transaction that complies with Section 11(m) hereof) and the Company shall
      not be the continuing or surviving corporation of such consolidation or
      merger,

            (x) any Person (other than a Subsidiary of the Company in a
      transaction that complies with Section 11(m) hereof) shall consolidate
      with, or merge with and into, the Company and the Company shall be the
      continuing or surviving corporation of such consolidation or merger and,
      in connection with such consolidation or merger, all or part of the
      outstanding Common Shares of the Company held by existing stockholders of
      the Company shall be changed into or exchanged for stock or other
      securities of any other Person (or the Company) or cash or any other
      property,

            (y) the Company shall effect a statutory share exchange with the
      outstanding Common Shares of the Company being exchanged for stock or
      other securities of any other Person, cash or property, or

            (z) the Company shall sell or otherwise transfer (or one or more of
      its Subsidiaries shall sell or otherwise transfer), in one or more
      transactions, assets or earning power aggregating 50% or more of the
      assets or earning power, respectively, of the Company and its Subsidiaries
      (taken as a whole) to any other Person other than the Company or one or
      more of its wholly owned Subsidiaries,

then, and in each such case, except as contemplated by Section 13(e), proper
provision shall be made so that (i) each holder of a Right (except as otherwise
provided in this Agreement) shall thereafter have the right to receive, upon the
exercise thereof by payment of the amount equal to the product of the number of
one one-thousandths of a Preferred Share which would otherwise be issuable upon
exercise of a Right and the then current Purchase Price in accordance with the
terms of this Agreement and in lieu of Preferred Shares, such number of validly
authorized and issued, fully paid, nonassessable and freely tradeable Common
Shares of the Principal Party, not subject to any liens, encumbrances, rights of
first refusal or adverse claims, as shall be equal to the result obtained by (x)
multiplying the then current Purchase Price by the number of one one-thousandths
of a Preferred Share for which a Right is, immediately prior to the first
occurrence


                                       16


of a consolidation, merger, statutory share exchange, sale or transfer with a
Principal Party, exercisable and (y) dividing that product by 50% of the Current
Per Share Market Price of the Common Shares of such Principal Party (determined
on the date of consummation of such consolidation, merger, statutory share
exchange, sale or transfer); (ii) such Principal Party shall thereafter be
liable for, and shall assume, by virtue of such merger, consolidation, statutory
share exchange, sale or transfer, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term "Company" shall thereafter be deemed
to refer to such Principal Party; and (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
its Common Shares to permit the exercise of all outstanding Rights) in
connection with the consummation of any such transaction as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to its Common Shares thereafter deliverable upon
the exercise of the Rights.

      (b) "Principal Party" shall mean:

            (i) in the case of any transaction described in clauses (w), (x) or
      (y) of the first sentence of Section 13(a), the Person that is the issuer
      of any securities into which Common Shares of the Company are converted in
      such merger, consolidation or exchange, or if no securities are so issued,
      the Person that is the other party to such merger, consolidation or
      exchange; and

            (ii) in the case of any transaction described in clause (z) of the
      first sentence of Section 13(a), the Person that is the party receiving
      the greatest portion of the assets or earning power transferred pursuant
      to such transaction or transactions; provided, however, that in any such
      case, (1) if the Common Shares of such Person are not at such time or have
      not been continuously over the preceding 12-month period registered under
      Section 12 of the Exchange Act, and such Person is a direct or indirect
      Subsidiary of another Person the Common Shares of which are and have been
      so registered, "Principal Party" shall refer to such other Person, and (2)
      in case such Person is a Subsidiary, directly or indirectly, of more than
      one Person, the Common Shares of two or more of which are and have been so
      registered, "Principal Party" shall refer to whichever of such Persons is
      the issuer of the Common Shares having the greatest aggregate market
      value.

      (c) The Company shall not consummate any consolidation, merger, statutory
share exchange, sale or transfer described in Section 13(a) above with a
Principal Party unless such Principal Party shall have a sufficient number of
authorized, unreserved Common Shares which have not been issued or are held in
treasury to permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this Section 13
and further providing that, as soon as practicable after the date of any such
consolidation, merger, share exchange, sale or transfer, the Principal Party
will:

            (i) prepare and file a registration statement under the Securities
      Act, with respect to the Rights and the securities purchaseable upon
      exercise of the Rights, on an appropriate form, and use its best efforts
      to cause such registration statement to (A) become effective as soon as
      practicable after such filing and (B) remain effective


                                       17


      (with a prospectus at all times meeting the requirements of the Securities
      Act) until the earlier of (1) the date as of which the Rights are no
      longer exercisable for such securities or (2) the Final Expiration Date;

            (ii) take such action as may be appropriate under, or to ensure
      compliance with, the securities or "blue sky" laws of the various states
      in connection with the exercisability of the Rights; and

            (iii) deliver to holders of the Rights historical financial
      statements for the Principal Party and each of its Affiliates which comply
      in all respects with the requirements for registration on Form 10 under
      the Exchange Act.

      (d) The Company shall not enter into any transaction of the kind referred
to in this Section 13 if at the time of such transaction there are any rights,
warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights. Without limiting the generality of the preceding
sentence, in case the Principal Party which is to be a party to a transaction of
the kind referred to in this Section 13 has a provision in any of its authorized
securities or in its articles of incorporation or bylaws or other instrument
governing its corporate affairs, which provision would have the effect of (i)
causing such Principal Party to issue, in connection with, or as a consequence
of, the consummation of a transaction of the kind referred to in this Section
13, Common Shares of such Principal Party at less than the then Current Per
Share Market Price or securities exercisable for or convertible into Common
Shares of such Principal Party at less than such then Current Per Share Market
Price (other than to holders of Rights pursuant to this Section 13) or (ii)
providing for any special payment, tax or similar provisions in connection with
the issuance of Common Shares of such Principal Party pursuant to the provisions
of Section 13; then, in such event, the Company shall

not consummate any such transaction unless prior thereto the provision in
question of such Principal Party shall have been cancelled, waived or amended so
as to avoid any of the effects referred to in clauses (i) and (ii), or the
authorized securities shall have been redeemed, so that the applicable provision
will have no effect in connection with, or as a consequence of, the consummation
of the proposed transaction.

      (e) Notwithstanding anything in this Agreement to the contrary, Section 13
shall not be applicable to a transaction described in subparagraphs (w), (x) and
(y) of Section 13(a) if (i) such transaction is consummated with a Person or
Persons who acquired Common Shares pursuant to a Permitted Offer (or a wholly
owned Subsidiary of any such Person or Persons), (ii) the price per Common Share
offered in such transaction is not less than the price per Common Share paid to
all holders of Common Shares whose shares were purchased pursuant to such
Permitted Offer and (iii) the form of consideration being offered to the
remaining holders of Common Shares pursuant to such transaction is the same as
the form of consideration paid pursuant to such Permitted Offer. Upon
consummation of any such transaction contemplated by this Section 13(e), all
Rights hereunder shall expire.

      (f) The provisions of this Section 13 shall similarly apply to successive
mergers, consolidations, statutory share exchanges or sale or other transfers.


                                       18


      Section 14. Fractional Rights and Fractional Shares.

      (a) The Company shall not be required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights otherwise would be
issuable an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the Closing Price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable.

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

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

      Section 15. Rights of Action.

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


                                       19


      Section 16. Agreement of Right Holders.

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

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

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

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

      (d) notwithstanding anything in this Agreement or the Rights to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligation; provided, however, that the Company must use its
best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.

      Section 17. Right Certificate Holder Not Deemed a Shareholder.

      No holder, as such, of any Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or any other securities of the Company which may at any time be issuable
on the exercise of the Rights represented thereby, nor shall anything contained
herein or in any Right Certificate be construed to confer upon the holder of any
Right Certificate, as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.

      Section 18. Concerning the Rights Agent.

      (a) The Company agrees to pay to the Rights Agent reasonable compensation
for all services rendered by it hereunder and, from time to time, on demand of
the Rights Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of this Agreement and
the exercise and performance of its duties hereunder. The


                                       20


Company also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, or expense, incurred without gross negligence, bad
faith or willful misconduct on the part of the Rights Agent, for anything done
or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending
against any claim of liability in the premises. The Company's reimbursement and
indemnification obligations described in this Section 18(a) shall survive the
termination of this Agreement.

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

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

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

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


                                       21


      Section 20. Duties of Rights Agent.

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

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

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

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

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

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

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


                                       22


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

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

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

      (j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties under this Agreement or in the exercise of its
rights or powers if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.

      (k) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the form of assignment or form of election to
purchase, as the case may be, has either not been duly completed and executed or
indicates an affirmative response to enumerated clause (1) and/or (2) on the
reverse side of the applicable Right Certificate, the Rights Agent shall not
take any further action with respect to such requested exercise or transfer
without first consulting with the Company.

      Section 21. Change of Rights Agent.

      The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Agreement upon 30 days' notice in writing
mailed to the Company and to each transfer agent of the Common Shares or
Preferred Shares by registered or certified mail. The Company may remove the
Rights Agent or any successor Rights Agent upon 30 days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be, and to
each transfer agent of the Common Shares or Preferred Shares by registered or
certified mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then


                                       23


the Rights Agent or the registered holder of any Right Certificate may apply to
any court of competent jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the Company or by such a court,
shall be (a) a corporation organized and doing business under the laws of the
United States or of the State of New Jersey or New York (or of any other state
of the United States so long as such corporation is authorized to do business as
a banking institution in the State of New Jersey or New York), in good standing,
having an office in the State of New Jersey or New York, which is authorized
under such laws to exercise corporate trust or stock transfer powers and is
subject to supervision or examination by federal or state authority and which
has or is a subsidiary of a corporation which has at the time of its appointment
as Rights Agent a combined capital and surplus of at least $100 million or (b)
an affiliate of a corporation described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares or
Preferred Shares, and mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.

      Section 22. Issuance of New Right Certificates.

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

      Section 23. Redemption.

      (a) The Board of Directors of the Company may, at its option, at any time
prior to such time as any Person becomes an Acquiring Person, redeem all but not
less than all of the then outstanding Rights at a redemption price of $.0l per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date of this Agreement (such redemption
price being hereinafter referred to as the "Redemption Price"). The Company may,
at its option, pay the Redemption Price in cash, Common Shares of the Company
(based on the Current Per Share Market Price of the Common Shares at the time of
redemption) or any other form of consideration deemed appropriate by the Board
of Directors. The redemption of the Rights by the Board of Directors may be made
effective at such time and on such basis and with such conditions as the Board
of Directors in its sole discretion may establish.

      (b) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights pursuant to paragraph (a) of this Section
23, and without any further action and without any notice, the right to exercise
the Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price. The Company shall

                                       24


promptly give public notice of any such redemption; provided, however, that the
failure to give, or any defect in, any such notice shall not affect the validity
of such redemption. Within 10 days after such action of the Board of Directors
ordering the redemption of the Rights, the Company shall mail a notice of
redemption to all the holders of the then outstanding Rights at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Shares. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made. Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any manner other
than that specifically set forth in this Section 23 or in Section 24 hereof, and
other than in connection with the purchase of Common Shares prior to the
Distribution Date.

      Section 24. Exchange.

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

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

      (c) In the event that there shall not be sufficient Common Shares
authorized but unissued and unreserved to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company shall take all such
action as may be necessary to authorize additional Common Shares for issuance
upon exchange of the Rights. In the event the Company shall, after good faith
effort, be unable to take all such action as may be necessary to authorize


                                       25


such additional Common Shares, the Company shall substitute, for each Common
Share that otherwise would be issuable upon exchange of a Right, a number of
Preferred Shares or fraction thereof such that the Current Per Share Market
Price of one Preferred Share multiplied by such number or fraction is equal to
the Current Per Share Market Price of one Common Share as of the date of
issuance of such Preferred Shares or fraction thereof.

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

      Section 25. Notice of Certain Events.

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

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


                                       26


describe such event and the consequences of such event to holders of Rights
under Section 11(a)(ii) hereof.

      Section 26. Notices.

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

            Enzon, Inc.
            20 Kingsbridge Road
            Piscataway, NJ  08854-3998
            Attention:  General Counsel

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

            Continental Stock Transfer & Trust Company
            17 Battery Place
            New York, NY  10004
            Attention:  Compliance Department

      Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if published by press release and promptly thereafter
is filed with the Securities and Exchange Commission on a Current Report on Form
8-K, or if sent by first-class mail, postage prepaid, addressed to such holder
at the address of such holder as shown on the registry books of the Company.

      Section 27. Supplements and Amendments.

      The Company may from time to time supplement or amend this Agreement
without the approval of any holders of Right Certificates in order (i) to extend
the Final Expiration Date or, provided that at the time of such amendment no
Person has become an Acquiring Person, the period during which the Rights may be
redeemed, (ii) to cure any ambiguity, to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions of this Agreement, (iii) prior to the time that any Person becomes an
Acquiring Person, to otherwise change or supplement any provision in this
Agreement in any manner which the Company may deem necessary or desirable, or
(iv) subject to clause (i) of this Section 27, from and after the time that any
Person becomes an Acquiring Person, to otherwise change or supplement any
provision in this Agreement in any manner which the Company may deem necessary
or desirable and which shall not adversely affect the interests of the holders
of Right Certificates (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person).

      Section 28. Successors.

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


                                       27


      Section 29. Benefits of this Agreement; No Liability.

      Nothing in this Agreement shall be construed to give to any Person other
than the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares) any legal
or equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Shares). Notwithstanding anything to the contrary in this
Agreement, none of the Company, the Rights Agent or the Board of Directors shall
have any liability to, nor be subject to any claim of, any holder of the Common
Shares of the Company or the Rights by reason of any failure of the Company to
comply with the provisions of this Agreement prior to the time the Board of
Directors has actual knowledge of the existence of an Acquiring Person or during
the period allowed for a potentially inadvertent Acquiring Person to divest
himself or itself of Common Shares of the Company as provided in Section 1
hereof or by reason of the failure of any such potentially inadvertent Acquiring
Person to accomplish such divestiture.

      Section 30. Severability.

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

      Section 31. Governing Law.

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

      Section 32. Counterparts.

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

      Section 33. Descriptive Headings.

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


                                       28


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

                                          ENZON, INC.

Attest:

By    /s/ Kenneth J. Zuerblis             By  /s/ Arthur J. Higgins
      -------------------------               ----------------------------
          Kenneth J. Zuerblis                     Arthur J. Higgins
      Its Vice President, Finance             Its President and Chief Executive
          and Chief Financial Officer             Officer


                                          CONTINENTAL STOCK TRANSFER &
                                            TRUST COMPANY, Transfer Agent
Attest:

By    /s/ Thomas Jennings                 By  /s/ William F. Seegraber
      -------------------------               ----------------------------
          Thomas Jennings                         William F. Seegraber
      Its Asst. Secretary                     Its Vice President


                                       29


                                                                       Exhibit A

                                     FORM OF

              CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS OF

                            SERIES B PREFERRED STOCK

                                       OF

                                   ENZON, INC.

                         Pursuant to Section 151 of the
                General Corporation Law of the State of Delaware

      Enzon, Inc. (the "Corporation"), a corporation organized and existing
under the laws of the State of Delaware, does hereby certify that, pursuant to
the authority conferred on the Board of Directors of the Corporation by the
Certificate of Incorporation, as amended, of the Corporation and in accordance
with Section 151 of the General Corporation Law of the State of Delaware, the
Board of Directors of the Corporation adopted the following resolution amending
and restating the preferences and rights of its series of 600,000 shares of
Preferred Stock, no shares of which have been issued, designated as "Series B
Preferred Stock."

      RESOLVED, that pursuant to the authority vested in the Board of Directors
of this Corporation in accordance with the provisions of its Certificate of
Incorporation, as amended, the preferences and rights of the series of Preferred
Stock of the Corporation, designated as "Series B Preferred Stock," be and are
hereby amended and restated in their entirety, and that the designation and
amount of such series and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of such series,
and the qualifications, limitations or restrictions thereof are as follows:

            (a) Designation and Amount.

      The shares of such series shall be designated as "Series B Preferred
Stock" (the "Series B Preferred Stock") and the number of shares constituting
the Series B Preferred Stock shall be six hundred thousand (600,000). Such
number of shares may be increased or decreased by resolution of the Board of
Directors; provided, that no decrease shall reduce the number of shares of
Series B Preferred Stock to a number less than the number of shares then
outstanding plus the number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conversion of any
outstanding securities issued by the Corporation convertible into Series B
Preferred Stock.

            (b) Dividends and Distributions.

                  (i) Subject to the rights of the holders of any shares of any
            series of preferred stock (or any similar stock) ranking prior and
            superior to the Series B Preferred Stock with respect to dividends,
            the holders of shares of Series B Preferred Stock, in preference to
            the holders of Common Stock, par value $.01 (the "Common Stock"), of
            the Corporation, and of any other junior stock, shall be entitled to
            receive, when, as and if declared by the Board of Directors out of
            funds




            legally available for the purpose, quarterly dividends payable in
            cash on the first day of March, June, September and December in each
            year (each such date being referred to herein as a "Quarterly
            Dividend Payment Date"), commencing on the first Quarterly Dividend
            Payment Date after the first issuance of a share or fraction of a
            share of Series B Preferred Stock, in an amount per share (rounded
            to the nearest rent) equal to the greater of (a) $1.00 or (b)
            subject to the provision for adjustment hereinafter set forth, 1,000
            times the aggregate per share amount of all cash dividends, and
            1,000 times the aggregate per share amount (payable in kind) of all
            non-cash dividends or other distributions, other than a dividend
            payable in shares of Common Stock or a subdivision of the
            outstanding shares of Common Stock (by reclassification or
            otherwise), declared on the Common Stock since the immediately
            preceding Quarterly Dividend Payment Date or, with respect to the
            first Quarterly Dividend Payment Date, since the first issuance of
            any share or fraction of a share of Series B Preferred Stock. In the
            event the Corporation shall at any time after June 3, 2002, declare
            or pay any dividend on the Common Stock payable in shares of Common
            Stock, or effect a subdivision or combination or consolidation of
            the outstanding shares of Common Stock (by reclassification or
            otherwise) into a greater or lesser number of shares of Common
            Stock, then in each such case the amount to which holders of shares
            of Series B Preferred Stock were entitled immediately prior to such
            event under clause (b) of the preceding sentence shall be adjusted
            by multiplying such amount by a fraction, the numerator of which is
            the number of shares of Common Stock outstanding immediately after
            such event and the denominator of which is the number of shares of
            Common Stock that were outstanding immediately prior to such event.

                  (ii) The Corporation shall declare a dividend or distribution
            on the Series B Preferred Stock as provided in paragraph (A) of this
            Section immediately after it declares a dividend or distribution on
            the Common Stock (other than a dividend payable in shares of Common
            Stock or a subdivision of the outstanding Common Stock); provided
            that, in the event no dividend or distribution shall have been
            declared on the Common Stock during the period between any Quarterly
            Dividend Payment Date and the next subsequent Quarterly Dividend
            Payment Date, a dividend of $1.00 per share on the Series B
            Preferred Stock shall nevertheless be payable, out of funds legally
            available for such purpose, on such subsequent Quarterly Dividend
            Payment Date.

                  (iii) Dividends shall begin to accrue and be cumulative on
            outstanding shares of Series B Preferred Stock from the Quarterly
            Dividend Payment Date next preceding the date of issue of such
            shares, unless the date of issue of such shares is prior to the
            record date for the first Quarterly Dividend Payment Date, in which
            case dividends on such shares shall begin to accrue from the date of
            issue of such shares, or unless the date of issue is a Quarterly
            Dividend Payment Date or is a date after the record date for the
            determination of holders of shares of Series B Preferred Stock
            entitled to receive a quarterly dividend and before such Quarterly
            Dividend Payment Date, in either of which events such dividends
            shall begin to accrue and be cumulative from such Quarterly Dividend
            Payment Date. Accrued but unpaid dividends shall not bear interest.
            Dividends paid on the shares


                                      A-2


            of Series B Preferred Stock in an amount less than the total amount
            of such dividends at the time accrued and payable on such shares
            shall be allocated pro rata on a share-by-share basis among all such
            shares at the time outstanding. The Board of Directors may fix a
            record date for the determination of holders of shares of Series B
            Preferred Stock entitled to receive payment of a dividend or
            distribution declared thereon, which record date shall be not more
            than 60 days prior to the date fixed for the payment thereof.

            (c) Voting Rights.

      The holders of shares of Series B Preferred Stock shall have the following
voting rights:

                  (i) Subject to the provision for adjustment hereinafter set
            forth, each share of Series B Preferred Stock shall entitle the
            holder thereof to 1,000 votes on all matters submitted to a vote of
            the stockholders of the Corporation. In the event the Corporation
            shall at any time after June 3, 2002, declare or pay any dividend on
            the Common Stock payable in shares of Common Stock, or effect a
            subdivision or combination or consolidation of the outstanding
            shares of Common Stock (by reclassification or otherwise) into a
            greater or lesser number of shares of Common Stock, then in each
            such case the number of votes per share to which holders of shares
            of Series B Preferred Stock were entitled immediately prior to such
            event shall be adjusted by multiplying such number by a fraction,
            the numerator of which is the number of shares of Common Stock
            outstanding immediately after such event and the denominator of
            which is the number of shares of Common Stock that were outstanding
            immediately prior to such event.

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

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

            (d) Certain Restrictions.

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


                                      A-3


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

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

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

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

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

            (e) Reacquired Shares.

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

            (f) Liquidation, Dissolution or Winding Up.

      Upon any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series B Preferred Stock unless, prior thereto, the holders of shares of Series
B Preferred Stock shall have received the greater of (i) $1,000 per share, plus
an amount equal to


                                      A-4


accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, or (ii) an aggregate amount per share, subject to
the provision for adjustment hereinafter set forth, equal to 1,000 times the
aggregate amount to be distributed per share to holders of shares of Common
Stock, or (2) to the holders of shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the Series B
Preferred Stock, except distributions made ratably on the Series B Preferred
Stock and all such parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation, dissolution or
winding up. In the event the Corporation shall at any time after June 3, 2002,
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Series B Preferred Stock were
entitled immediately prior to such event under clause (1)(ii) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.

            (g) Consolidation, Merger, Etc.

      In case the Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other
property, then in any such case each share of Series B Preferred Stock shall at
the same time be similarly exchanged or changed into an amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 1,000
times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the Corporation shall at any
time after June 3, 2002, declare or pay any dividend on the Common Stock payable
in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise) into a greater or lesser number of shares of Common Stock, then in
each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series B Preferred Stock shall be adjusted
by multiplying such amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

            (h) No Redemption.

      The shares of Series B Preferred Stock shall not be redeemable.

            (i) Rank.

      The Series B Preferred Stock shall rank, with respect to the payment of
dividends and the distribution of assets, junior to all series of any other
class of the Corporation's preferred stock.

            (j) Fractional Shares.

      Series B Preferred Stock may be issued in fractions of a share which shall
entitle the holder, in proportion to such holder's fractional shares, to receive
dividends, participate in distributions and to have the benefit of all other
rights of holders of Series B Preferred Stock.


                                      A-5


            (k) Amendment.

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

      IN WITNESS WHEREOF, the undersigned has executed this Certificate of

Designation, Preferences and Rights on behalf of the Corporation this ___ day of
May, 2002.


                                              ----------------------------------
                                              Arthur J. Higgins
                                              President, Chief Executive Officer


                                      A-6




                                                                       Exhibit B


                            FORM OF RIGHT CERTIFICATE


Certificate No. R-  _______________ Rights

      NOT EXERCISABLE AFTER MAY 16, 2012 OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT (SUBJECT TO
ADJUSTMENT) AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
BENEFICIALLY OWNED BY A PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT) AND SUBSEQUENT HOLDERS OF SUCH RIGHTS MAY BECOME NULL AND
VOID.

                                RIGHT CERTIFICATE

                                   ENZON, INC.


      This certifies that _________________________________, or registered
assigns, is the registered owner of the number of rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of May 17, 2002 (the "Rights
Agreement"), between Enzon, Inc., a Delaware corporation (the "Company"), and
Continental Stock Transfer & Trust Company (the "Rights Agent"), to purchase
from the Company at any time after the Distribution Date (as such term is
defined in the Rights Agreement) and prior to 5:00 P.M., New York, New York
time, on May 16, 2012, at the office or offices of the Rights Agent designated
for such purpose, or of its successor as Rights Agent, one one-thousandth of a
fully paid nonassessable share of Series B Preferred Stock, par value $0.01 per
share (the "Preferred Shares"), of the Company, at a purchase price of $190.00
(the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the form of Election to Purchase duly executed. The number of
Rights evidenced by this Right Certificate (and the number of one
one-thousandths of a Preferred Share which may be purchased upon exercise
hereof) set forth above, and the Purchase Price set forth above, are the number
and Purchase Price as of June 3, 2002, based on the Preferred Shares as
constituted at such date. As provided in the Rights Agreement, the Purchase
Price and the number of one one-thousandths of a Preferred Share which may be
purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain events.

      This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates (which
limitations of rights include the suspension of the exercisability of the Rights
under certain circumstances





specified in the Rights Agreement). Copies of the Rights Agreement are on file
at the principal executive offices of the Company and the above-mentioned
office(s) of the Rights Agent and will be mailed without charge by the Company
or the Rights Agent to the holder of this certificate promptly following receipt
by the Company or the Rights Agent of a written request therefor.

      If any Person or group of affiliated or associated Persons becomes an
Acquiring Person, any Rights evidenced by this Right Certificate that are or
were acquired or beneficially owned by any Acquiring Person (or any Associate or
Affiliate, as such terms are defined in the Rights Agreement, of such Acquiring
Person) shall be void and any holder of such Rights shall thereafter have no
right to exercise such Rights; and any Right Certificates delivered to the
Rights Agent for transfer to an Acquiring Person (or any Associate or Affiliate
of such Acquiring Person) whose Rights would be void pursuant to this sentence
shall be cancelled.

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

      Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate (i) may, but are not required to, be redeemed by the Company at
a redemption price of $.01 per Right, subject to adjustment as provided in the
Rights Agreement, payable in cash, Common Shares (as such term is defined in the
Rights Agreement) or any other form of consideration deemed appropriate by the
Board of Directors, and (ii) may, but are not required to, be exchanged by the
Company in whole or in part for Common Shares.

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

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


                                      B-2


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

      WITNESS the manual or facsimile signature of the proper officer of the
Company.


Dated as of_____________


                                          Enzon, Inc.


                                          By
                                             -----------------------------------
                                          Its
                                              ----------------------------------


Countersigned
CONTINENTAL STOCK TRANSFER
  & TRUST COMPANY, as Rights Agent


By
   ----------------------------------
Its
    ---------------------------------


                                      B-3


                    Form of Reverse Side of Right Certificate

                               FORM OF ASSIGNMENT

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


      FOR VALUE RECEIVED _________________________________________ hereby sells,
assigns and transfers unto (Please print name and address of transferee)
______________________________________________________________________ this
Right Certificate, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint____________ Attorney, to transfer the
within Right Certificate on the books of the within-named Company, with full
power of substitution.

Please insert social security
number, taxpayer identification
number or other identifying number: ___________________


Dated:__________, 20__


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


Signature Guaranteed:

- ------------------------------------
Signatures must be guaranteed.


                                      B-4


              Form of Reverse Side of Right Certificate--continued

                                   CERTIFICATE

     The undersigned hereby certifies (after due inquiry and to the best of
its knowledge) by checking the appropriate boxes that:

                  (A) this Right Certificate

                                    [ ] is
                                        or
                                    [ ] is not

being sold, assigned and transferred by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such
terms are defined in the Rights Agreement); and

                  (B) the undersigned

                                    [ ] did
                                        or
                                    [ ] did not

acquire the Rights evidenced by this Right Certificate from any Person who is,
was or subsequently became an Acquiring Person or an Affiliate or Associate of
an Acquiring Person.


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


                                     NOTICE

      The signature of the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Right Certificate in every
particular, with out alteration or enlargement or any change whatsoever.


                                      B-5


              Form of Reverse Side of Right Certificate--continued

                          FORM OF ELECTION TO PURCHASE

      (To be executed if holder desires to exercise the Right Certificate)


To Enzon, Inc.:

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

Please insert social security
number, taxpayer identification
number or other identifying number:______________________

- ------------------------------------------------------------------------------
                         (Please print name and address)

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

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

Please insert social security
taxpayer identification number
or other identifying number: _____________________

- ------------------------------------------------------------------------------
                         (Please print name and address)

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

Dated:________, 20__


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


Signature Guaranteed:

- --------------------------------
Signatures must be guaranteed.


                                      B-6


              Form of Reverse Side of Right Certificate--continued

                                   CERTIFICATE

      The undersigned hereby certifies (after due inquiry and to the best of its
knowledge) by checking the appropriate boxes that:

                  (C) this Right Certificate

                                    [ ] is
                                        or
                                    [ ] is not

being sold, assigned and transferred by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such
terms are defined in the Rights Agreement); and

                  (D) the undersigned

                                    [ ] did
                                        or
                                    [ ] did not

acquire the Rights evidenced by this Right Certificate from any Person who is,
was or subsequently became an Acquiring Person or an Affiliate or Associate of
an Acquiring Person.


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


                                     NOTICE

      The signature of the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, with out alteration or enlargement or any change whatsoever.

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


                                      B-7


                                                                       Exhibit C

                                   ENZON, INC.

                          SUMMARY OF RIGHTS TO PURCHASE

                                PREFERRED SHARES

      On May 17, 2002 the Board of Directors of Enzon, Inc. (the "Company"),
declared a dividend of one preferred share purchase right (a "Right") per share
for each outstanding share of Common Stock, par value $0.01 (the "Common
Shares"), of the Company. The dividend will be payable on June 3, 2002 (the
"Record Date") to holders of record of the Common Shares on that date.

      Each Right entitles the registered holder to purchase from the Company one
one-thousandth of a share of Series B Preferred Stock, par value $0.01 (the
"Preferred Shares"), of the Company at a price of $190.00 per one-thousandth of
a Preferred Share (the "Purchase Price"), subject to adjustment; provided,
however, under the circumstances described below, holders will receive Common
Shares instead of Preferred Shares. The description and terms of the Rights are
set forth in the Rights Agreement, dated as of May 17, 2002 (the "Rights
Agreement"), between the Company and Continental Stock Transfer & Trust Company,
as Rights Agent (the "Rights Agent"). Capitalized terms used herein but not
defined shall have the meaning assigned to them in the Rights Agreement.

      Initially, the Rights will attach to all certificates representing Common
Shares then outstanding and no separate Right Certificates (as defined herein)
will be distributed. The Rights will separate from the Common Shares, and a
Distribution Date for the Rights will occur upon the earlier of:

                        (2) the close of business on the day following a public
                  announcement that a person or group of affiliated or
                  associated persons has become an "Acquiring Person" (i.e., has
                  become, subject to certain exceptions, the Beneficial Owner of
                  15% (the "Threshold Percentage") or more of the outstanding
                  Common Shares); and

                        (3) the close of business on the day following the
                  commencement or public announcement of the intention to
                  commence a tender offer or exchange offer, the consummation of
                  which would result in a person or group of affiliated or
                  associated persons becoming, subject to certain exceptions,
                  the Beneficial Owner of the Threshold Percentage or more of
                  the outstanding Common Shares (or such later date as may be
                  determined by the Board of Directors of the Company prior to a
                  person or group of affiliated or associated persons becoming
                  an Acquiring Person).

      A Person will not be an Acquiring Person if the Board of Directors of the
Company determines that such Person became the Beneficial Owner of the Threshold
Percentage or more of the Common Shares of the Company then outstanding
inadvertently and such Person divests itself, within a reasonable period of time
as determined by the Board of Directors, of a sufficient number of Common Shares
so that such Person is no longer the Beneficial Owner of the Threshold
Percentage or more of the Common Shares of the Company then outstanding.




      Until the Distribution Date,

            (i) the Rights will be evidenced by the Common Share certificates
      and will be transferred with and only with the Common Shares,

            (ii) new Common Share certificates issued after the Record Date upon
      transfer or new issuance of the Common Shares will contain a notation
      incorporating the Rights Agreement by reference, and

            (iii) the surrender for transfer of any Common Share certificate,
      even without such notation or a copy of the Summary of Rights distributed
      to stockholders of record as of the Record Date, also will constitute the
      transfer of the Rights associated with the Common Shares represented by
      such certificate.

      As promptly as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date, and such separate Right Certificates alone will evidence the
Rights.

      The Rights are not exercisable until the Distribution Date. The Rights
will expire on May 16, 2012, unless extended or earlier redeemed or exchanged by
the Company as described below.

      The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable upon exercise of the Rights, are subject to
adjustment from time to time to prevent dilution:

            (i) in the event of a stock dividend on, or a subdivision,
      combination or reclassification of, the Preferred Shares,

            (ii) upon the grant to holders of the Preferred Shares of certain
      rights, options or warrants to subscribe for or purchase Preferred Shares
      or securities convertible into Preferred Shares or preferred share
      equivalents at less than the then current market price of the Preferred
      Shares, or

            (iii) upon the distribution to holders of the Preferred Shares of
      evidences of indebtedness or assets (excluding regular periodic cash
      dividends or dividends payable in Preferred Shares) or of subscription
      rights or warrants (other than those described in clause (ii) of this
      paragraph).

      With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
the Purchase Price. No fraction of a Preferred Share will be issued (other than
fractional shares which are integral multiples of one one-thousandth of a
Preferred Share, which may, at the election of the Company, be evidenced by
depositary receipts) if in lieu thereof, a payment in cash is made based on the
closing price (prorated for the fraction) of a Preferred Share on the last
trading date prior to the date of exercise.

      The number of outstanding Rights and the number of one one-thousandths of
a Preferred Share issuable upon exercise of each Right also are subject to
adjustment in the event of a stock


                                      C-2


split of the Common Shares, a stock dividend on the Common Shares payable in
Common Shares, or subdivisions, consolidations or combinations of the Common
Shares occurring, in any such case, prior to the Distribution Date.

      Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of the greater of (a) $1.00 or (b) subject to the
provision for adjustment, 1,000 times the aggregate per share amount of all cash
dividends, and 1,000 times the aggregate per share amount (payable in kind) of
all non-cash dividends or other distributions declared on the Common Shares
since the immediately preceding Quarterly Dividend Payment Date or, with respect
to the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of the Preferred Shares. In the event of
liquidation, the holders of the Preferred Shares would be entitled to receive a
preferential liquidation payment of the greater of (i) $1,000 per share, plus an
amount equal to accrued and unpaid dividends and distributions thereon, whether
or not declared, to the date of such payment, or (ii) an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
1,000 times the aggregate amount to be distributed per share to holders of
Common Shares, or to the holders of shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up) with the
Preferred Shares. Each Preferred Share will have 1,000 votes, voting together
with the Common Shares. Finally, in the event of any merger, consolidation or
other transaction in which Common Shares are exchanged, each Preferred Share
will be entitled to receive 1,000 times the amount received per Common Share.
These rights are protected by customary antidilution provisions.

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

      If any person or group of affiliated or associated persons becomes an
Acquiring Person (unless the event by which such Person became an Acquiring
Person is a Permitted Offer described in the following paragraph), then each
holder of a Right, other than Rights beneficially owned by the Acquiring Person
and certain transferees thereof (which will thereafter be void), will thereafter
have the right to receive, upon exercise thereof at the then current Purchase
Price of the Right, that number of Common Shares having a market value of two
times such Purchase Price of the Right, subject to certain possible adjustments.

      If, at any time after there is an Acquiring Person, the Company is
acquired in certain mergers or other business combination transactions (other
than certain transactions with a subsidiary of the Company or a transaction with
a person who acquired Common Shares through a tender offer or exchange offer for
all outstanding Common Shares of the Company determined by the Board of
Directors to be in the best interests of the Company and its stockholders (a
"Permitted Offer") or 50% or more of the assets or earning power of the Company
and its subsidiaries (taken as a whole) are sold, each holder of a Right (other
than Rights which have become void under the terms of the Rights Agreement) will
thereafter have the right to receive, upon exercise thereof at the then current
Purchase Price of the Right, that number of Common Shares of the acquiring
company (or, in certain cases, one of its affiliates) having a market value of
two times such Purchase Price of the Right.


                                      C-3


      In certain events specified in the Rights Agreement, the Company is
permitted temporarily to suspend the exercisability of the Rights.

      At any time after a person or group of affiliated or associated persons
becomes an Acquiring Person, and prior to the acquisition by a person or group
of affiliated or associated persons of 50% or more of the outstanding Common
Shares, the Board of Directors of the Company may exchange all or part of the
Rights (other than Rights which have become void under the terms of the Rights
Agreement) for Common Shares at an exchange ratio of one Common Share per Right,
subject to adjustment.

      At any time prior to such time as any Person becomes an Acquiring Person,
the Board of Directors of the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right, subject to adjustment, payable in cash,
Common Shares or any other form of consideration deemed appropriate by the Board
of Directors. The period of time during which the Rights may be redeemed may be
extended if no person has become an Acquiring Person. The redemption of the
Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.

      Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including without limitation, the right
to vote or to receive dividends. In addition, the Company will have no liability
to holders of Rights or of the Common Shares for any failure to comply with the
Rights Agreement during any period the Board of Directors is unaware of the
existence of the Acquiring Person.

      A copy of the Rights Agreement, dated as of May 17, 2002, has been filed
with the Securities and Exchange Commission as an exhibit to Form 8-A dated May
17, 2002. A copy of the Rights Agreement is available free of charge from the
Company at the following address: Enzon, Inc., 20 Kingsbridge Road, Piscataway,
NJ 08854-3998, Attention: General Counsel. This summary does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is incorporated in this summary by reference.


                                      C-4