As filed with the Securities and Exchange Commission on August 14, 2001
Registration No. 333-____
===============================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
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REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

ENZON, INC.
(Exact name of registrant as specified in its charter)

Delaware                                         2836
(State or other jurisdiction of                 (Primary Standard Industrial
incorporation or organization)                      Classification Code)

22-2372868

(I.R.S. Employer Identification No.)

20 Kingsbridge Road
Piscataway, New Jersey 08854
(732) 980-4500
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)

Arthur J. Higgins
President and Chief Executive Officer
Enzon, Inc.
20 Kingsbridge Road
Piscataway, New Jersey 08854
(732) 980-4500
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

Copies to:

Kevin T. Collins, Esq.
Dorsey & Whitney LLP
250 Park Avenue
New York, New York 10177
(212) 415-9319
Facsimile: (212) 953-7201

Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box: |_|

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box: |X|

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: |_|

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earliest effective registration statement
for the same offering: |_|

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: |_|

CALCULATION OF REGISTRATION FEE

Proposed
Maximum        Proposed Maximum
Title of Each Class of                                   Amount to be      Offering Price    Aggregate Offering       Amount of
Securities to be Registered                           Registered (1)(2)       Per Note           Price (1)        Registration Fee
-----------------------------------------------------------------------------------------------------------------------------------

4 1/2% Convertible Subordinated Notes due 2008....      $400,000,000           100%            $400,000,000          $100,000
-----------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $0.01 per share(2)........    5,635,390 shares          --                  --                  --
-----------------------------------------------------------------------------------------------------------------------------------

(1) Equals the aggregate principal amount of the securities being registered.

(2) Such number represents the number of shares of common stock that are
currently issuable upon conversion of the notes; pursuant to Rule 416 under
the Securities Act of 1933, as amended, the registrant is also registering
such indeterminate number of shares of common stock as may be issued from
time to time upon conversion of the notes as a result of the antidilution
protection of the notes. Pursuant to Rule 457(i), no registration fee is
required for these shares.
----------------
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
===============================================================================

PROSPECTUS (Subject to Completion)
Dated August 14, 2001

$400,000,000

ENZON, Inc.

4 1/2% CONVERTIBLE SUBORDINATED NOTES DUE 2008

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

Certain securityholders of Enzon, Inc. may offer for sale 4 1/2% Convertible
Subordinated Notes due 2008 of Enzon, and the shares of common stock of Enzon
into which the notes are convertible, at various times at market prices
prevailing at the time of sale or at privately negotiated prices. The selling
holders may sell the notes or the common stock to or through underwriters,
broker-dealers or agents, who may receive compensation in the form of
discounts, concessions or commissions.

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

Interest on the notes is payable in arrears on January 1 and July 1 of each
year, beginning on January 1, 2002. The notes will mature on July 1, 2008
unless earlier converted or redeemed.

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

The holders of the notes may convert any portion of a note (in multiples of
$1,000) into common stock at any time on or before July 1, 2008, at a
conversion price of $70.98 per share, subject to adjustment in certain events.

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

On or after July 7, 2004, we may redeem any of the notes at the redemption
prices set forth herein plus accrued interest.

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

The notes are subordinated in right of payment to all of our senior
indebtedness. As of June 30, 2001, we had no senior indebtedness outstanding.

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

For a more detailed description of the notes, see "Description of Notes,"
beginning on page 18.

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

The common stock is quoted on the Nasdaq National Market under the symbol
"ENZN." On August 13, 2001, the reported last sale price of the common stock
on the Nasdaq National Market was $66.32 per share.

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

We will not receive any proceeds from the sale of the notes and the common
stock into which the notes are convertible by the selling holders. We will pay
all expenses (other than selling commissions and fees and stock transfer
taxes) of the registration and sale of the notes and the common stock.

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

Investing in the notes or the common stock into which the notes are
convertible involves a high degree of risk. See "Risk Factors" beginning on
page 5.

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

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is
a criminal offense.

_____________, 2001

The information in this preliminary prospectus is not complete and may be
changed. These securities may not be sold until the registration statement
filed with the Securities and Exchange Commission is effective. This
preliminary prospectus is not an offer to sell and we are not soliciting
offers to buy these securities in any jurisdiction where the offer or sale is
not permitted.

TABLE OF CONTENTS

Page
----

Our Company .............................................................      3
Risk Factors ............................................................      5
Special Note Regarding Forward-Looking Statements .......................     15
Ratio of Earnings to Fixed Charges ......................................     16
Use of Proceeds .........................................................     16
Description of Notes ....................................................     17
Description of Capital Stock ............................................     27

Page
----

Certain United States and Federal Income Tax Considerations .............     29
Selling Holders .........................................................     35
Plan of Distribution ....................................................     35
Legal Matters ...........................................................     36
Experts .................................................................     36
Where You Can Find More Information .....................................     37

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

In this prospectus, "Enzon," "company," "we," "us," "our" and "ours" refer
to Enzon, Inc., and "common stock" refers to Enzon's common stock, par value
$0.01 per share, in each case except where the context otherwise requires or
as otherwise indicated.
----------------

You should only rely on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not
authorized anyone to provide you with different information. The selling
holders are not making an offer of these securities in any state where the
offer is not permitted. You should not assume that the information in this
prospectus or any prospectus supplement is accurate as of any date other than
the date on the front of the document.

2

OUR COMPANY

We are a biopharmaceutical company that develops and commercializes enhanced
therapeutics for life- threatening diseases through the application of our two
proprietary platform technologies: PEG and single-chain antibodies. We apply
our PEG, or polyethylene glycol, technology to improve the delivery, safety
and efficacy of proteins and small molecules with known therapeutic efficacy.
We apply our single-chain antibody, or SCA, technology to discover and produce
antibody-like molecules that offer many of the therapeutic benefits of
monoclonal antibodies while addressing some of their limitations.

PEG Products

PEG-INTRON(TM) is a PEG-enhanced version of Schering-Plough's alpha-
interferon product, INTRON(R) A. We have designed PEG-INTRON to allow for less
frequent dosing and to yield greater efficacy as compared to INTRON A. Our
worldwide partner for PEG-INTRON, Schering-Plough, received approval for the
treatment of adult patients with chronic hepatitis C during May 2000 in the
European Union and in the United States in January 2001. PEG-INTRON is also
approved for use in combination with REBETOL (ribavirin, USP) Capsules for the
treatment of chronic hepatitis C in adult patients not previously treated. A
Phase III clinical trial is also being conducted for PEG-INTRON for the
treatment of malignant melanoma, and earlier stage clinical trials of PEG-
INTRON are being conducted for other indications, including HIV. Schering-
Plough's worldwide sales of INTRON A, REBETRON Combination Therapy and PEG-
INTRON for all indications in 2000 totaled $1.4 billion.

PROTHECAN is a PEG-enhanced version of camptothecin, a compound in the class
of molecules called topoisomerase inhibitors. Camptothecin has been shown in
clinical testing to be potent against certain tumor types, but it possesses
limited clinical utility due to significant side effects and poor solubility.
We have shown in pre-clinical studies that PROTHECAN has reduced side effects
compared to camptothecin as well as other topoisomerase inhibitors and that it
preferentially accumulates in tumors. In July 2001, we initiated a Phase II
clinical trial in patients with small-cell lung cancer.

PEG-paclitaxel is a PEG-modified version of paclitaxel. Preclinical animal
studies have demonstrated that PEG-paclitaxel can be dosed at higher levels
than TAXOL(R) (paclitaxel). We filed an Investigational New Drug, or IND,
application with the FDA for PEG-paclitaxel in December 2000. In May 2001, we
initiated the patient dosing in a Phase I clinical trial for PEG-paclitaxel.
The trial is designed to determine the safety, tolerability and pharmacology
of PEG-paclitaxel in patients with advanced solid tumors and lymphomas.

We have commercialized two additional products based on our PEG technology:
ADAGEN for the treatment of a congenital enzyme deficiency disease called
SCID, and ONCASPAR for the treatment of acute lymphoblastic leukemia. Each of
these products is a PEG-enhanced version of a naturally occurring enzyme. Both
products have been on the market for several years and have demonstrated the
safe and effective application of our PEG technology.

Single-Chain Antibodies

SCAs are genetically engineered proteins which possess the binding
specificity and affinity of monoclonal antibodies and are designed to expand
on the therapeutic and diagnostic applications possible with monoclonal
antibodies. Preclinical studies have shown that SCAs allow for greater tissue
penetration and faster clearance from the body. We believe that we possess
strong intellectual property in the area of SCAs. The most clinically advanced
SCAs based on our technology are being developed by one of our licensees,
Alexion Pharmaceuticals, for complications arising during cardiopulmonary
bypass, for which a Phase IIb clinical trial has been completed, and
myocardial infarction, for which Phase II clinical trials are ongoing.

3

Strategy

To further realize the potential value of our PEG and SCA technologies, we
intend to pursue the following strategic initiatives:

o continue to identify proteins and small molecules of known therapeutic
value that we believe can be improved by our PEG technology and develop
PEG-enhanced versions of such compounds;

o acquire technologies and companies which are complementary to our
technologies and clinical focus;

o enter into license agreements with third parties to apply our PEG
technology to their existing compounds; and

o advance our SCA technology through in-licensing, collaborations and
entering into license agreements with third parties.

Corporate Information

Enzon, Inc. was incorporated in Delaware in 1981. Our principal executive
offices are located at 20 Kingsbridge Road, Piscataway, New Jersey, 08854. Our
telephone number at this location is (732) 980-4500. Our web site is located
at http://www.enzon.com. The information contained on our web site is not a
part of this registration statement.

---------------
ADAGEN(R), ONCASPAR(R) and PROTHECAN(R) are our registered trademarks. Other
trademarks and trade names used in this registration statement are the
property of their respective owners.

4

RISK FACTORS

You should carefully consider the risks described below before making an
investment decision. The risks described below are not the only ones facing
our company. Additional risks not presently known to us or that we currently
deem immaterial may also impair our business operations.

Our business, financial condition or results of operations could be
materially adversely affected by any of these risks. The trading price of the
notes and our common stock could decline due to any of these risks, and you
may lose all or part of your investment.

This prospectus also contains and incorporates by reference forward-looking
statements that involve risks and uncertainties. Our actual results could
differ materially from those anticipated in these forward-looking statements
as a result of certain factors, including the risks faced by us described
below and elsewhere in and incorporated by reference in this prospectus.

Risks Related To Our Company

Our near term success is heavily dependent on Schering-Plough's effective
marketing of PEG-INTRON.

In the near term, our results of operations are heavily dependent on
Schering-Plough's sales of PEG-INTRON. Under our agreement with Schering-
Plough, pursuant to which we applied our PEG technology to develop a modified
form of Schering-Plough's INTRON A, we will receive royalties on worldwide
sales of PEG-INTRON. Schering-Plough is responsible for conducting and funding
the clinical studies, obtaining regulatory approval and marketing the product
worldwide on an exclusive basis. Schering-Plough has received a Marketing
Authorization for PEG-INTRON in the United States in January 2001 and in the
European Union in May 2000 for the treatment of hepatitis C. Schering-Plough
has also been granted marketing approval for the sale of PEG-INTRON and
REBETOL Capsules as combination therapy for the treatment of hepatitis C.  If
Schering-Plough fails to effectively market PEG-INTRON or discontinues the
marketing of PEG-INTRON for these indications this would have a material
adverse effect on our business, financial condition and results of operation.

Even though the use of PEG-INTRON as a stand alone therapy or as combination
therapy with REBETOL received FDA approval, we cannot assure you that
Schering-Plough will be successful in marketing PEG-INTRON or that Schering-
Plough will not continue to market INTRON A, either as a stand-alone product
or in combination therapy with REBETOL. The amount and timing of resources
dedicated by Schering-Plough to the marketing of PEG-INTRON is not within our
control. If Schering-Plough breaches or terminates its agreement with us, the
commercialization of PEG-INTRON could be slowed or blocked completely. Our
revenues will be negatively affected if Schering-Plough continues to market
INTRON A in competition with PEG-INTRON or if it cannot meet the manufacturing
demands of the market. If Schering-Plough breaches the agreement, a dispute
may arise between us. A dispute would be both expensive and time-consuming and
may result in delays in the development and commercialization of PEG-INTRON,
which would likely have a material adverse effect on our business, financial
condition and results of operations.

We have a history of losses and we may not sustain profitability.

We have incurred substantial losses since our inception. As of March 31,
2001, we had an accumulated deficit of approximately $122 million. Although we
earned a profit for the nine months ended March 31, 2001, we cannot assure you
that we will be able to remain profitable. Our ability to remain profitable
will depend primarily on Schering-Plough's effective marketing of PEG-INTRON,
as well as on the rate of growth in our other product sales or royalty revenue
and on the level of our expenses. Our ability to achieve long-term
profitability will depend upon our or our licensees' ability to obtain
regulatory approvals for additional product candidates. Even if our product
candidates receive regulatory approval, we cannot assure you that our products
will achieve market acceptance or will be commercialized successfully or that
our operations will sustain profitability.

5

We are subject to extensive regulation. Compliance with these regulations
can be costly, time consuming and subject us to unanticipated delays in
developing our products.

The manufacturing and marketing of pharmaceutical products in the United
States and abroad are subject to stringent governmental regulation. The sale
of any of our products for use in humans in the United States will require the
prior approval of the FDA. Similar approvals by comparable agencies are
required in most foreign countries. The FDA has established mandatory
procedures and safety standards that apply to the clinical testing,
manufacture and marketing of pharmaceutical products. Obtaining FDA approval
for a new therapeutic product may take several years and involve substantial
expenditures. ADAGEN was approved by the FDA in 1990. ONCASPAR was approved in
the United States and in Germany in 1994, and in Canada in 1997, in each case
for patients with acute lymphoblastic leukemia who are hypersensitive to
native forms of L-asparaginase. ONCASPAR was approved in Russia in April 1993
for therapeutic use in a broad range of cancers. PEG-INTRON was approved in
Europe and the United States for the treatment of hepatitis C in May 2000 and
January 2001, respectively. Except for these approvals, none of our other
products has been approved for sale and use in humans in the United States or
elsewhere.

We cannot assure you that we or our licensees will be able to obtain FDA or
other relevant marketing approval for any of our other products. In addition,
any approved products are subject to continuing regulation. If we or our
licensees fail to comply with applicable requirements it could result in:

o criminal penalties,

o civil penalties,

o fines,

o recall or seizure,

o injunctions requiring suspension of production,

o orders requiring ongoing supervision by the FDA, or

o refusal by the government to approve marketing or export applications or
to allow us to enter into supply contracts.

If we or our licensees fail to obtain or maintain requisite governmental
approvals or fail to obtain or maintain approvals of the scope requested, it
will delay or preclude us or our licensees or marketing partners from
marketing our products. It could also limit the commercial use of our
products. Any such failure or limitation may have a material adverse effect on
our business, financial condition and results of operations.

We have experienced problems complying with the FDA's regulations for
manufacturing our products, and we may not be able to resolve these problems.

Manufacturers of drugs also must comply with the applicable FDA good
manufacturing practice regulations, which include quality control and quality
assurance requirements as well as the corresponding maintenance of records and
documentation. Manufacturing facilities are subject to ongoing periodic
inspection by the FDA and corresponding state agencies, including unannounced
inspections, and must be licensed as part of the product approval process
before they can be used in commercial manufacturing. We or our present or
future suppliers may be unable to comply with the applicable good
manufacturing practice regulations and other FDA regulatory requirements. We
manufacture ONCASPAR and ADAGEN, and Schering-Plough is responsible for the
manufacture of PEG-INTRON.

During 1998, we began to experience manufacturing problems with one of our
FDA-approved products, ONCASPAR. The problems were due to increased levels of
white particulates in batches of ONCASPAR, which resulted in an increased
rejection rate for this product. During fiscal 1999, we agreed with the FDA to
temporary labeling and distribution restrictions for ONCASPAR and instituted
additional inspection and labeling procedures prior to distribution. During
May 1999, the FDA required us to limit distribution of ONCASPAR to only those
patients who are hypersensitive to native L-asparaginase. In November 1999,
the FDA withdrew this distribution restriction.

6

In July 1999, the FDA conducted an inspection of our manufacturing facility
in connection with our product license for ADAGEN. Following that inspection,
the FDA documented several deviations from Current Good Manufacturing
Practices, known as cGMP, in a Form 483 report. We provided the FDA with a
corrective action plan. In November 1999, the FDA issued a warning letter
citing the same cGMP deviations listed in the July 1999 Form 483, but it also
stated that the FDA was satisfied with our proposed corrective actions. As a
result of the deviations, the FDA decided not to approve product export
requests from us for ONCASPAR until it determined that all noted cGMP
deviations were either corrected or in the process of being corrected. This
restriction was removed in August 2000.

Since January 2000, the FDA has conducted follow-up inspections as well as
routine inspections of our manufacturing facility related to ONCASPAR and
ADAGEN. Following certain of these inspections, the FDA issued Form 483 reports,
citing deviations from cGMP. We have or are in the process of responding to such
reports with corrective action plans and are currently in discussion with the
FDA concerning some observations set forth in the Form 483s.

In March 2001, we voluntarily replaced a batch of ADAGEN that was found to
have an impurity which we believe was introduced in the filling process.

If we or our licensees face additional manufacturing problems in the future
or we or our licensees are unable to satisfactorily resolve these problems,
the FDA could require us or our licensees to discontinue the distribution of
our products or to delay continuation of clinical trials. If we or our
licensees cannot market and distribute our products for an extended period,
sales of the products will suffer, which would adversely affect our financial
results.

Our clinical trials could take longer to complete and cost more than we
expect.

We will need to conduct significant additional clinical studies of all of
our product candidates which have not yet been approved for sale. These
studies are costly, time consuming and unpredictable. Any unanticipated costs
or delays in our clinical studies could harm our business, financial condition
and results of operations.

A Phase III clinical trial is being conducted for PEG-INTRON for one cancer
indication. Schering-Plough is also in early stage clinical trials for PEG-
INTRON in other cancer indications. We are currently conducting early stage
clinical trials of our two other PEG products, PROTHECAN currently in Phase II
and PEG-paclitaxel currently in Phase I. The rate of completion of clinical
trials depends upon many factors, including the rate of enrollment of
patients. If we or the other sponsors of these clinical trials are unable to
accrue sufficient clinical patients in our respective trials during the
appropriate period, such trials may be delayed and will likely incur
significant additional costs. In addition, FDA or institutional review boards
may require us to delay, restrict, or discontinue our clinical trials on
various grounds, including a finding that the subjects or patients are being
exposed to an unacceptable health risk.

The cost of human clinical trials varies dramatically based on a number of
factors, including:

o the order and timing of clinical indications pursued,

o the extent of development and financial support from corporate
collaborators,

o the number of patients required for enrollment,

o the difficulty of obtaining clinical supplies of the product candidate,
and

o the difficulty in obtaining sufficient patient populations and
clinicians.

All statutes and regulations governing the conduct of clinical trials are
subject to change in the future, which could affect the cost of our clinical
trials. Any unanticipated costs or delays in our clinical studies could harm
our business, financial condition and results of operations.

7

In some cases, we rely on corporate collaborators or academic institutions
to conduct some or all aspects of clinical trials involving our product
candidates. We will have less control over the timing and other aspects of
these clinical trials than if we conducted them entirely on our own. We cannot
assure you that these trials will commence or be completed as we expect or
that they will be conducted successfully.

If pre-clinical and clinical trials do not yield positive results, our
product candidates will fail.

If pre-clinical and clinical testing of one or more of our product
candidates do not demonstrate the safety and efficacy of the desired
indications, those potential products will fail. Numerous unforeseen events
may arise during, or as a result of, the testing process, including the
following:

o the results of pre-clinical studies may be inconclusive, or they may not
be indicative of results that will be obtained in human clinical trials,

o potential products may not have the desired effect or may have
undesirable side effects or other characteristics that preclude
regulatory approval or limit their commercial use if approved,

o results attained in early human clinical trials may not be indicative of
results that are obtained in later clinical trials, and

o after reviewing test results, we or our corporate collaborators may
abandon projects which we might previously have believed to be promising.

Clinical testing is very costly and can take many years. The failure to
adequately demonstrate the safety and efficacy of a therapeutic product under
development would delay or prevent regulatory approval, which could adversely
affect our business and financial performance.

In June 2001, we reported that Schering-Plough completed its Phase III
clinical trial which compared PEG-INTRON to INTRON A in patients with newly
diagnosed chronic myelogenous leukemia, or CML. In the study, although PEG-
INTRON demonstrated clinical comparability and a comparable safety profile
with INTRON A, the efficacy results for PEG-INTRON did not meet the protocol-
specified statistical criteria for non-inferiority--the primary endpoint of
the study. The results of this Phase III study have not yet been presented or
published, and are not publicly available at this time. We cannot assure you
that those results will support any marketing approval of PEG-INTRON for the
treatment of CML.

Even if we obtain regulatory approval for our products, they may not be
accepted in the marketplace.

The commercial success of our products will depend upon their acceptance by
the medical community and third-party payors as clinically useful, cost-
effective and safe. Even if our products obtain regulatory approval, we cannot
assure you that they will achieve market acceptance of any kind. The degree of
market acceptance will depend on many factors, including:

o the receipt, timing and scope of regulatory approvals,

o the timing of market entry in comparison with potentially competitive
products,

o the availability of third-party reimbursement, and

o the establishment and demonstration in the medical community of the
clinical safety, efficacy and cost-effectiveness of drug candidates, as
well as their advantages over existing technologies and therapeutics.

If any of our products do not achieve market acceptance, we will likely lose
our entire investment in that product.

We depend on our collaborative partners. If we lose our collaborative
partners or they do not apply adequate resources to our collaborations, our
product development and financial performance may suffer.

We rely heavily and will depend heavily in the future on collaborations with
corporate partners, primarily pharmaceutical companies, for one or more of the
research, development, manufacturing, marketing and other commercialization
activities relating to many of our product candidates. If we lose our
collaborative partners, or if they do not apply adequate resources to our
collaborations, our product development and financial performance may suffer.

8

The amount and timing of resources dedicated by our collaborators to their
collaborations with us is not within our control. If any collaborator breaches
or terminates its agreements with us, or fails to conduct its collaborative
activities in a timely manner, the commercialization of our product candidates
could be slowed or blocked completely. We cannot assure you that our
collaborative partners will not change their strategic focus or pursue
alternative technologies or develop alternative products as a means for
developing treatments for the diseases targeted by these collaborative
programs. Our collaborators could develop competing products. In addition, our
revenues will be affected by the effectiveness of our corporate partners in
marketing any successfully developed products.

We cannot assure you that our collaborations will be successful. Disputes
may arise between us and our collaborators as to a variety of matters,
including financing obligations under our agreements and ownership of
intellectual property rights. These disputes may be both expensive and time-
consuming and may result in delays in the development and commercialization of
products.

We are dependent upon a single outside supplier for each of the crucial raw
materials necessary to the manufacture of each of our products and product
candidates.

We cannot assure you that sufficient quantities of our raw material
requirements will be available to support the continued research, development or
manufacture of our products. We purchase the unmodified compounds utilized in
our approved products and products under development from outside suppliers. We
may be required to enter into supply contracts with outside suppliers for
certain unmodified compounds. We do not produce the unmodified adenosine
deaminase used in the manufacture of ADAGEN or the unmodified forms of
L-asparaginase used in the manufacture of ONCASPAR. We have a supply contract
with an outside supplier for the supply of each of these unmodified compounds.
If we experience a delay in obtaining or are unable to obtain any unmodified
compound, including unmodified adenosine deaminase or unmodified L-asparagi-
nase, on reasonable terms, or at all, it could have a material adverse effect on
our business, financial condition and results of operations.

If we are required to obtain an alternate source for an unmodified compound
utilized in a product, the FDA and relevant foreign regulatory agencies will
likely require that we perform additional testing to demonstrate that the
alternate material is biologically and chemically equivalent to the unmodified
compound previously used in our clinical trials. This testing could delay or
stop development of a product, limit commercial sales of an approved product
and cause us to incur significant additional expenses. If we are unable to
demonstrate that the alternate material is chemically and biologically
equivalent to the previously used unmodified compound, we will likely be
required to repeat some or all of the pre-clinical and clinical trials
conducted for the compound. The marketing of an FDA approved drug could be
disrupted while such tests are conducted. Even if the alternate material is
shown to be chemically and biologically equivalent to the previously used
compound, the FDA or relevant foreign regulatory agency may require that we
conduct additional clinical trials with the alternate material.

There is one FDA-approved supplier of the adenosine deaminase enzyme, or
ADA, in ADAGEN. The ADA enzyme, until recently, was obtained by our supplier
from bovine intestines in cattle of German origin. Bovine spongiform
encephalopathy (BSE or mad cow disease) has been detected in cattle herds in
Germany after we acquired the ADA enzyme and at a time when the herds were
identified by the supplier as BSE-free. The FDA has advised us that we may
continue to distribute our current inventory of ADAGEN which contains the ADA
enzyme obtained from cattle of German origin until such time as we are able to
obtain FDA approval of the use of the ADA enzyme obtained from cattle of New
Zealand origin. We cannot assure you that the FDA will approve the use of the
ADA obtained in New Zealand prior to the time that our current inventory of
ADAGEN is exhausted. If we do not receive such timely approval, we will be
unable to distribute ADAGEN.

The United States and foreign patents upon which our original PEG technology
was based have expired. We depend on patents and proprietary rights, which may
offer only limited protection against potential infringement and the
development by our competitors of competitive products.

Research Corporation Technologies, Inc. held the patent upon which our
original PEG technology was based and had granted us a license under such
patent. Research Corporation's patent contained broad claims covering the
attachment of PEG to polypeptides. However, this United States patent and its
corresponding foreign patents

9

have expired. Based upon the expiration of the Research Corporation patent,
other parties will be permitted to make, use or sell products covered by the
claims of the Research Corporation patent, subject to other patents, including
those which we hold. We have obtained several patents with claims covering
improved methods of attaching or linking PEG to therapeutic compounds. We
cannot assure you that any of these patents will enable us to prevent
infringement or that competitors will not develop alternative methods of
attaching PEG to compounds potentially resulting in competitive products
outside the protection that may be afforded by our patents. We are aware that
others have also filed patent applications and have been granted patents in
the United States and other countries with respect to the application of PEG
to proteins and other compounds. We cannot assure you that the expiration of
the Research Corporation patent or other patents related to PEG that have been
granted to third parties will not have a material adverse effect on our
business, financial condition and results of operations.

The pharmaceutical industry places considerable importance on obtaining
patent and trade secret protection for new technologies, products and
processes. Our success depends, in part, on our ability to develop and
maintain a strong patent position for our products and technologies both in
the United States and in other countries. We have been licensed, and been
issued, a number of patents in the United States and other countries, and we
have other patent applications pending to protect our proprietary technology.
Although we believe that our patents provide certain protection from
competition, we cannot assure you that such patents will be of substantial
protection or commercial benefit to us, will afford us adequate protection
from competing products, or will not be challenged or declared invalid. In
addition we cannot assure you that additional United States patents or foreign
patent equivalents will be issued to us. The scope of patent claims for
biotechnological inventions is uncertain, and our patents and patent
applications are subject to this uncertainty.

To facilitate development of our proprietary technology base, we may need to
obtain licenses to patents or other proprietary rights from other parties. If
we are unable to obtain such licenses, our product development efforts may be
delayed or blocked.

We are aware that certain organizations are engaging in activities that
infringe certain of our PEG and SCA technology patents. We cannot assure you
that we will be able to enforce our patent and other rights against such
organizations.

We expect that there will continue to be significant litigation in the
biotechnology and pharmaceutical industries regarding patents and other
proprietary rights. We have become involved in patent litigation, and we may
likely become involved in additional patent litigation in the future. We may
incur substantial costs in asserting any patent rights and in defending suits
against us related to intellectual property rights. Such disputes could
substantially delay our product development or commercialization activities
and could have a material adverse effect on our business, financial condition
and results of operations. There is one pending litigation matter involving
our patents.

We also rely on trade secrets, know-how and continuing technological
advancements to protect our proprietary technology. We have entered into
confidentiality agreements with our employees, consultants, advisors and
collaborators. However, these parties may not honor these agreements, and we
may not be able to successfully protect our rights to unpatented trade secrets
and know-how. Others may independently develop substantially equivalent
proprietary information and techniques or otherwise gain access to our trade
secrets and know-how.

We have limited sales and marketing experience, which makes us dependent on
our marketing partners.

Other than ADAGEN, which we market on a worldwide basis to a small patient
population, we have not engaged in the direct commercial marketing of any of
our products and therefore we do not have significant experience in sales,
marketing or distribution. For some of our products, we have provided
exclusive marketing rights to our corporate partners in return for milestone
payments and royalties to be received on sales. To the extent that we enter
into licensing arrangements for the marketing and sale of our products, any
revenues we receive will depend primarily on the efforts of these third
parties. We will not control the amount and timing of marketing resources that
such third parties devote to our products. In addition, if we market products
directly, significant additional expenditures and management resources would
be required to increase the size of our internal sales force. In any sales or
marketing effort, we would compete with many other companies that currently

10

have extensive and well-funded sales operations. Our marketing and sales
efforts may be unable to compete successfully against other such companies.

We may acquire other companies and may be unable to successfully integrate
such companies with our operations.

We may expand and diversify our operations with acquisitions. If we are
unsuccessful in integrating any such company with our operations, or if
integration is more difficult than anticipated, we may experience disruptions
that could have a material adverse effect on our business, financial condition
and results of operations. Some of the risks that may affect our ability to
integrate or realize any anticipated benefits from any acquisition include
those associated with:

o unexpected losses of key employees or customers of the acquired company;

o conforming the acquired company's standards, processes, procedures and
controls with our operations;

o coordinating our new product and process development;

o diversion of existing management relating to the integration and
operation of the acquired company;

o hiring additional management and other critical personnel; and

o increasing the scope, geographic diversity and complexity of our
operations.

We may need to obtain additional financing to meet our future capital needs,
and this financing may not be available when we need it.

Our current development projects require substantial capital. We may require
substantial additional funds to conduct research activities, pre-clinical
studies, clinical trials and other activities relating to the successful
commercialization of potential products. In addition, we may seek to acquire
additional technologies. We do not expect to achieve significant sales or
royalty revenue from our current FDA-approved products, ADAGEN and ONCASPAR.
In addition, we cannot be sure that we will be able to obtain significant
revenue from PEG-INTRON. Additional funds from other sources may not be
available on acceptable terms, if at all. If adequate funds are unavailable
from operations or additional sources of financing, we may have to delay,
reduce the scope of or eliminate one or more of our research or development
programs which would materially and adversely affect our business, financial
condition and operations.

While we believe that our cash, cash equivalents and investments will be
adequate to satisfy our capital needs for the foreseeable future, our actual
capital requirements will depend on many factors, including:

o the level of revenues we receive from our FDA-approved products and
product candidates,

o continued progress of our research and development programs,

o our ability to establish additional collaborative arrangements,

o changes in our existing collaborative relationships,

o progress with pre-clinical studies and clinical trials,

o the time and costs involved in obtaining regulatory clearance for our
products,

o the costs involved in preparing, filing, prosecuting, maintaining and
enforcing patent claims,

o competing technological and market developments, and

o our ability to market and distribute our products and establish new
collaborative and licensing arrangements.

We may seek to raise any necessary additional funds through equity or debt
financings, collaborative arrangements with corporate partners or other
sources which may be dilutive to existing stockholders. We cannot assure you
that we will be able to obtain additional funds on acceptable terms, if at
all. If adequate funds are not available, we may be required to:

11

o delay, reduce the scope or eliminate one or more of our development
projects,

o obtain funds through arrangements with collaborative partners or others
that may require us to relinquish rights to technologies, product
candidates or products that we would otherwise seek to develop or
commercialize ourselves, or

o license rights to technologies, product candidates or products on terms
that are less favorable to us than might otherwise be available.

We depend on key personnel and may not be able to retain these employees or
recruit additional qualified personnel, which would harm our business.

Because of the specialized scientific nature of our business, we are highly
dependent upon qualified scientific, technical and managerial personnel. There
is intense competition for qualified personnel in the pharmaceutical field.
Therefore, we may not be able to attract and retain the qualified personnel
necessary for the development of our business. The loss of the services of
existing personnel, as well as the failure to recruit additional key
scientific, technical and managerial personnel in a timely manner, would harm
our research and development programs and our business.

Risks Related To Our Industry

We face rapid technological change and intense competition, which could harm
our business and results of operations.

The biopharmaceutical industry is characterized by rapid technological
change. Our future success will depend on our ability to maintain a
competitive position with respect to technological advances. Rapid
technological development by others may result in our products and
technologies becoming obsolete.

We face intense competition from established biotechnology and
pharmaceutical companies, as well as academic and research institutions that
are pursuing competing technologies and products. We know that competitors are
developing or manufacturing various products that are used for the prevention,
diagnosis or treatment of diseases that we have targeted for product
development. Many of our competitors have substantially greater research and
development capabilities and experiences and greater manufacturing, marketing
and financial resources than we do. Accordingly, our competitors may develop
technologies and products that are superior to those we or our collaborators
are developing and render our technologies and products or those of our
collaborators obsolete and noncompetitive. In addition, many of our
competitors have much more experience than we do in pre-clinical testing and
human clinical trials of new drugs, as well as obtaining FDA and other
regulatory approval. If we cannot compete effectively, our business and
financial performance would suffer.

We may be sued for product liability.

Because our products and product candidates are new treatments with limited,
if any, past use on humans, their use during testing or after approval could
expose us to product liability claims. We maintain product liability insurance
coverage in the total amount of $40.0 million for claims arising from the use
of our products in clinical trials prior to FDA approval and for claims
arising from the use of our products after FDA approval. We cannot assure you
that we will be able to maintain our existing insurance coverage or obtain
coverage for the use of our other products in the future. Also, this insurance
coverage and our resources may not be sufficient to satisfy any liability
resulting from product liability claims, and a product liability claim may
have a material adverse effect on our business, financial condition or results
of operations.

Sales of our products could be adversely affected if the costs for these
products are not reimbursed by third-party payors.

In recent years, there have been numerous proposals to change the health
care system in the United States. Some of these proposals have included
measures that would limit or eliminate payments for medical procedures and
treatments or subject the pricing of pharmaceuticals to government control. In
addition, government and private third-party payors are increasingly
attempting to contain health care costs by limiting both the coverage and the
level of reimbursement of drug products. Consequently, significant uncertainty
exists as to the reimbursement status of newly-approved health care products.

12

Our ability to commercialize our products will depend, in part, on the
extent to which reimbursement for the cost of the products and related
treatments will be available from third-party payors. If we or any of our
collaborators succeeds in bringing one or more products to market, we cannot
assure you that third-party payors will establish and maintain price levels
sufficient for realization of an appropriate return on our investment in
product development. In addition, lifetime limits on benefits included in most
private health plans may force patients to self-pay for treatment. For
example, patients who receive ADAGEN are expected to require injections for
their entire lives. The cost of this treatment may exceed certain plan limits
and cause patients to self-fund further treatment. Furthermore, inadequate
third-party coverage may lead to reduced market acceptance of our products.
Significant changes in the health care system in the United States or
elsewhere could have a material adverse effect on our business and financial
performance.

Risks Related To The Notes and Our Common Stock

The notes are subordinated.

The notes are unsecured and subordinated in right of payment to all of our
existing and future senior indebtedness. In the event of our bankruptcy,
liquidation or reorganization, or upon acceleration of the notes due to an
event of default under the indenture and in certain other events, our assets
will be available to pay obligations on the notes only after all senior
indebtedness has been paid. As a result, there may not be sufficient assets
remaining to pay amounts due on any or all of the outstanding notes. We are
not prohibited from incurring debt, including senior indebtedness, under the
indenture. If we were to incur additional debt or liabilities, our ability to
pay our obligations on the notes could be adversely affected. As of June 30,
2001, we had no senior indebtedness outstanding. See "Description of Notes--
Subordination of Notes."

The price of our common stock has been, and may continue to be, volatile
which may significantly affect the trading price of the notes.

Historically, the market price of our common stock has fluctuated over a
wide range, and it is likely that the price of our common stock will fluctuate
in the future. The market price of our common stock could be impacted due to a
variety of factors, including:

o the results of pre-clinical testing and clinical trials by us, our
corporate partners or our competitors,

o announcements of technical innovations or new products by us, our
corporate partners or our competitors,

o the status of corporate collaborations and supply arrangements,

o regulatory approvals,

o government regulation,

o developments in patent or other proprietary rights,

o public concern as to the safety and efficacy of products developed by us
or others,

o litigation, and

o general market conditions in our industry.

In addition, due to one or more of the foregoing factors in one or more
future quarters, our results of operations may fall below the expectations of
securities analysts and investors. In that event, the market price of our
common stock could be materially and adversely affected.

The stock market has recently experienced extreme price and volume
fluctuations. These fluctuations have especially affected the market price of
the stock of many high technology and healthcare-related companies. Such
fluctuations have often been unrelated to the operating performance of these
companies. Nonetheless, these broad market fluctuations may negatively affect
the market price of our common stock.

We may be unable to redeem the notes upon a fundamental change.

We may be unable to redeem the notes in the event of a fundamental change.
Upon a fundamental change, holders of the notes may require us to redeem all
or a portion of the notes. If a fundamental change were to occur,

13

we may not have enough funds to pay the redemption price for all tendered
notes. Any future credit agreements or other agreements relating to our
indebtedness may contain similar provisions, or expressly prohibit the
repurchase of the notes upon a fundamental change or may provide that a
fundamental change constitutes an event of default under that agreement. If a
fundamental change occurs at a time when we are prohibited from purchasing or
redeeming notes, we could seek the consent of our lenders to redeem the notes
or could attempt to refinance this debt. If we do not obtain a consent, we
could not purchase or redeem the notes. Our failure to redeem tendered notes
would constitute an event of default under the indenture. In such
circumstances, or if a fundamental change would constitute an event of default
under our senior indebtedness, the subordination provisions of the indenture
would restrict payments to the holders of notes. The term "fundamental change"
is limited to certain specified transactions and may not include other events
that might adversely affect our financial condition or the market value of the
notes or our common stock. Our obligation to offer to redeem the notes upon a
fundamental change would not necessarily afford holders of the notes
protection in the event of a highly leveraged transaction, reorganization,
merger or similar transaction involving us. See "Description of Notes--
Redemption at Option of the Holder."

A public market for the notes may fail to develop or be sustained.

The initial purchasers of the notes, although they have advised us that they
intend to make a market in the notes, are not obligated to do so and may
discontinue this market making activity at any time without notice. In
addition, market making activity by the initial purchasers will be subject to
the limits imposed by the Securities Act of 1933, as amended and the Exchange
Act of 1934, as amended. As a result, we cannot assure you that any market for
the notes will develop or, if one does develop, that it will be maintained. If
an active market for the notes fails to develop or be sustained, the trading
price of the notes could be materially adversely affected.

Events with respect to our share capital could cause the price of our common
stock to decline.

Sales of substantial amounts of our common stock in the open market, or the
availability of such shares for sale, could adversely affect the price of our
common stock. An adverse effect on the price of our common stock may adversely
affect the trading price of the notes. We had 41,990,859 shares of common
stock outstanding as of June 30, 2001. The following securities that may be
exercised for, or are convertible into, shares of our common stock were issued
and outstanding as of June 30, 2001:

o Options. Stock options to purchase 3,283,817 shares of our common stock at
a weighted average exercise price of approximately $24.98 per share; of
this total, 1,939,502 were exercisable at a weighted average exercise
price of $6.23 per share as of such date.

o Series A Preferred Stock. 7,000 shares of our Series A preferred stock are
outstanding, all of which were convertible into 15,909 shares of our
common stock as of such date.

The shares of our common stock that may be issued under the options are
currently registered with the SEC. The shares of common stock that may be
issued upon conversion of the Series A preferred stock are eligible for sale
without any volume limitations pursuant to Rule 144(k) under the Securities
Act.

The notes represent a significant amount of indebtedness.

As a result of the initial offering of the notes, our long-term debt is
$400,000,000. This indebtedness has affected us by:

o significantly increasing our interest expense and related debt service
costs, and

o making it more difficult to obtain additional financing.

We may not generate sufficient cash flow from operations to satisfy the
annual debt service payments that will be required under the notes. This may
require us to use a portion of the proceeds of the notes to pay interest or
borrow additional funds or sell additional equity to meet our debt service
obligations. If we are unable to satisfy our debt service requirements,
substantial liquidity problems could result, which would negatively impact our
future prospects.

The market for unrated debt is subject to disruptions, which could have an
adverse effect on the market price of the notes.

14

The notes have not been rated. As a result, holders of the notes have the
risks associated with an investment in unrated debt. Historically, the market
for unrated debt has been subject to disruptions that have caused substantial
volatility in the prices of such securities and greatly reduced liquidity for
the holders of such securities. If the notes are traded, they may trade at a
discount from their initial offering price, depending on, among other things,
prevailing interest rates, the markets for similar securities, general
economic conditions and our financial condition, results of operations and
prospects. The liquidity of, and trading markets for, the notes also may be
adversely affected by general declines in the market for unrated debt. Such
declines may adversely affect the liquidity of, and trading markets for, the
notes, independent of our financial performance or prospects. In addition,
certain regulatory restrictions prohibit certain types of financial
institutions from investing in unrated debt, which may further suppress demand
for such securities. We cannot assure you that the market for the notes will
not be subject to similar disruptions. Any such disruptions may have an
adverse effect on the holders of the notes.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some statements incorporated by reference or contained in this prospectus
discuss our future expectations, contain projections of our results of
operations or financial condition or include other "forward-looking"
information within the meaning of Section 27A of the Securities Act. Our
actual results may differ materially from those expressed in forward-looking
statements made or incorporated by reference in this prospectus. Forward-
looking statements that express our beliefs, plans, objectives, assumptions or
future events or performance may involve estimates, assumptions, risks and
uncertainties. Therefore, our actual results and performance may differ
materially from those expressed in the forward-looking statements. Forward-
looking statements often, although not always, include words or phrases such
as the following:

o "will likely result"

o "are expected to"

o "will continue"

o "is anticipated"

o "estimate"

o "intends"

o "plans"

o "projection"

o "outlook"

You should not unduly rely on forward-looking statements contained or
incorporated by reference in this prospectus. Actual results or outcomes may
differ materially from those predicted in our forward-looking statements due
to the risks and uncertainties inherent in our business, including risks and
uncertainties in:

o clinical trial results

o obtaining and maintaining regulatory approval of our products

o market acceptance of and continuing demand for our products

o the impact of competitive products and pricing

o our ability to obtain additional financing to support our operations

o factors discussed in the documents listed below

You should read and interpret any forward-looking statement together with
the following documents:

o our most recent annual report on Form 10-K

15

o our quarterly reports on Form 10-Q

o the risk factors contained in this prospectus under the caption "Risk
Factors"

o our other filings with the Securities and Exchange Commission

Any forward-looking statement speaks only as of the date on which that
statement is made. We will not update any forward-looking statement to reflect
events or circumstances that occur after the date on which such statement is
made.

RATIO OF EARNINGS TO FIXED CHARGES

The ratio of earnings to fixed charges was negative for all periods
presented, other than the nine months ended March 31, 2001, because of net
losses incurred by Enzon. The dollar amounts of the deficiencies for these
periods and the March 31, 2001 ratio are disclosed below (dollars in thousands):

Nine Months
Ended March 31,                 Year Ended June 30,
---------------    --------------------------------------------
2001          2000     1999      1998      1997     1996

Ratio of earnings to fixed charges* .......        34:1            N/A      N/A       N/A       N/A      N/A
Deficiency of earnings available to
cover fixed charges*.....................         N/A        $(6,306) $(4,919)  $(3,617)  $(4,557) $(5,175)

---------------
*   Earnings consist of net income (loss) plus fixed charges less capitalized
interest and preferred stock dividends paid. Fixed charges consist of
interest expenses, including amortization of debt issuance costs and that
portion of rental expense we believe to be representative of interest.

USE OF PROCEEDS

All of the securities offered pursuant to this prospectus are being offered
by the selling holders listed under "Selling Holders." We will not receive any
proceeds from the sale by the selling holders of the notes or the underlying
common stock.

16

DESCRIPTION OF NOTES

The notes were issued under an indenture dated as of June 26, 2001, between
Enzon, as issuer, and Wilmington Trust Company, as trustee. You may request a
copy of the indenture from the trustee.

The following description is a summary of the material provisions of the
notes and the indenture. It does not purport to be complete. This summary is
subject to and is qualified by reference to all the provisions of the
indenture, including the definitions of certain terms used in the indenture.
Wherever particular provisions or defined terms of the indenture or form of
note are referred to, these provisions or defined terms are incorporated in
this prospectus by reference.

As used in this "Description of Notes" section, references to "Enzon," "we,"
"our" or "us" refer solely to Enzon and not to our subsidiaries.

General

The notes are general unsecured obligations of Enzon, subordinate in right
of payment to certain current and future indebtedness as described under "--
Subordination of Notes." The notes are convertible into common stock as
described under "--Conversion of Notes." The notes are limited to $400,000,000
aggregate principal amount. The notes are issued only in denominations of
$1,000 and multiples of $1,000. The notes will mature on July 1, 2008 unless
earlier converted, redeemed at our option or redeemed at the holder's option
upon a fundamental change.

Neither we nor any of our subsidiaries are subject to any financial
covenants under the indenture. In addition, neither we nor any of our
subsidiaries are restricted under the indenture from paying dividends,
incurring debt (including senior indebtedness), or issuing or repurchasing our
securities.

Holders of notes are not afforded protection under the indenture in the
event of a highly leveraged transaction or a change in control of us except to
the extent described below under "--Redemption at Option of the Holder."

We pay interest in arrears on January 1 and July 1 of each year, beginning
January 1, 2002, to record holders at the close of business on the preceding
December 15 and June 15, as the case may be, except:

o that interest payable upon redemption will be paid to the person to whom
principal is payable, unless the redemption date is an interest payment
date; and

o as set forth in the next sentence.

In the case of any note, or portion of any note, which is converted into
common stock during the period after any record date for any interest payment
but prior to the next interest payment date:

o if the note has been called for redemption on a redemption date that
occurs during this period, we will not be required to pay interest on the
interest payment date;

o if the note is to be redeemed in connection with a fundamental change on
a redemption date that occurs during this period, we will not be required
to pay interest on the interest payment date; or

o if otherwise, any note not called for redemption that is submitted for
conversion during this period must also be accompanied by an amount equal
to the interest due on the interest payment date on the converted
principal amount, unless at the time of conversion there is a default in
the payment of interest on the notes. See "--Conversion of Notes."

We will maintain an office in the Borough of Manhattan, the City of New
York, for the payment of interest, which shall initially be an office or
agency of the trustee. We may pay interest either:

o by check mailed to your address as it appears in the note register,
provided that if you are a holder of the notes with an aggregate
principal amount in excess of $2.0 million, you shall be paid, at your
written election, by wire transfer in immediately available funds; or

o by wire transfer to an account maintained by such holder in the United
States.

17

However, payments to The Depository Trust Company, New York, New York, which
we refer to as DTC, will be made by wire transfer of immediately available
funds to the account of DTC or its nominee. Interest will be computed on the
basis of a 360-day year composed of twelve 30-day months.

Conversion of Notes

Holders of the notes may convert their notes, in whole or in part, into
common stock through the final maturity date of the notes, subject to prior
redemption of the notes. If we call notes for redemption, holders may convert
the notes only until the close of business on the business day prior to the
redemption date unless we fail to pay the redemption price. If holders have
submitted their notes for redemption upon a fundamental change, then holders
may only convert their notes upon the withdrawal of their redemption election.
Holders may convert their notes in part so long as this part is $1,000 in
principal amount or an integral multiple of $1,000. If any notes not called
for redemption are converted after a record date for any interest payment date
and prior to the next interest payment date, the notes so converted must be
accompanied by an amount equal to the interest payable on the interest payment
date on the converted principal amount unless a default in the payment of
interest exists at the time of conversion.

The initial conversion price for the notes is $70.98 per share of common
stock, subject to adjustment as described below. We will not issue fractional
shares of common stock upon conversion of notes. Instead, we will pay cash
equal to the market price of the common stock on the business day prior to the
conversion date. Except as described below, holders of notes will not receive
any accrued interest or dividends upon conversion.

To convert a note into common stock a holder must:

o complete and manually sign the conversion notice on the back of the note
or facsimile of the conversion notice and deliver this notice to the
conversion agent;

o surrender the note to the conversion agent;

o if required, furnish appropriate endorsements and transfer documents;

o if required, pay all transfer or similar taxes; and

o if required, pay funds equal to interest payable on the next interest
payment date.

The date the holder complies with these requirements is the conversion date
under the indenture.

We will adjust the conversion price if any of the following events occurs:

(1) we issue common stock as a dividend or distribution on our common
stock;

(2) we issue to all holders of common stock certain rights or warrants to
purchase our common stock;

(3) we subdivide or combine our common stock;

(4) we distribute to all holders of our common stock, shares of our
capital stock, evidences of indebtedness or assets, including securities but
excluding:

o rights or warrants listed in (2) above;

o dividends or distributions listed in (1) above; and

o cash distributions listed in (5) below;

(5) we distribute cash, excluding any dividend or distribution in
connection with our liquidation, dissolution or winding up or any quarterly
cash dividend on our common stock to the extent that the aggregate cash
dividend per share of common stock in any quarter does not exceed the
greater of:

o the amount per share of common stock of the next preceding quarterly
cash dividend on the common stock to the extent that the preceding
quarterly dividend did not require an adjustment of the conversion
price pursuant to this clause (5), as adjusted to reflect subdivisions
or combinations of the common stock; and

18

o 3.75% of the average of the last reported sale price of the common stock
during the ten trading days immediately prior to the declaration date of
the dividend.

If an adjustment is required to be made under this clause (5) as a result
of a distribution that is a quarterly dividend, the adjustment would be
based upon the amount by which the distribution exceeds the amount of the
quarterly cash dividend permitted to be excluded pursuant to this clause
(5). If an adjustment is required to be made under this clause (5) as a
result of a distribution that is not a quarterly dividend, the adjustment
would be based upon the full amount of the distribution;

(6) we or one of our subsidiaries makes a payment in respect of a tender
offer or exchange offer for our common stock to the extent that the cash and
value of any other consideration included in the payment per share of common
stock exceeds the current market price per share of common stock on the
trading day next succeeding the last date on which tenders or exchanges may
be made pursuant to such tender or exchange offer; and

(7) someone other than us or one of our subsidiaries makes a payment in
respect of a tender offer or exchange offer in which, as of the closing date
of the offer, our board of directors is not recommending rejection of the
offer. The adjustment referred to in this clause (7) will only be made if:

o the tender offer or exchange offer is for an amount that increases the
offeror's ownership of common stock to more than 25% of the total
shares of common stock outstanding; and

o the cash and value of any other consideration included in the payment
per share of common stock exceeds the current market price per share of
common stock on the business day next succeeding the last date on which
tenders or exchanges may be made pursuant to the tender or exchange
offer.

However, the adjustment referred to in this clause (7) will generally not be
made if as of the closing of the offer, the offering documents disclose a plan
or an intention to cause us to engage in a consolidation or merger or a sale
of all or substantially all of our assets.

To the extent that we have a rights plan in effect upon conversion of the
notes into common stock, holders will receive, in addition to the common
stock, the rights under the rights plan whether or not the rights have
separated from the common stock at the time of conversion, subject to limited
exceptions.

In the event of:

o any reclassification of our common stock;

o a consolidation, merger or combination involving us; or

o a sale or conveyance to another person or entity of all or substantially
all of our property and assets;

in which holders of our common stock would be entitled to receive stock, other
securities, other property, assets or cash for their common stock, upon
conversion of holders of the notes will be entitled to receive the same type
of consideration which they would have been entitled to receive if they had
converted the notes into our common stock immediately prior to any of these
events.

You may in certain situations be deemed to have received a distribution
subject to United States federal income tax as a dividend in the event of any
taxable distribution to holders of common stock or in certain other situations
requiring a conversion price adjustment. See "United States Federal Tax
Considerations."

We may, from time to time, reduce the conversion price for a period of at
least 20 days if our board of directors has made a determination that this
reduction would be in our best interests. Any such determination by our board
will be conclusive. We would give holders at least 15 days' notice of any
reduction in the conversion price. In addition, we may reduce the conversion
price if our board of directors deems it advisable to avoid or diminish any
income tax to holders of common stock resulting from any stock or rights
distribution. See "United States Federal Tax Considerations."

We will not be required to make an adjustment in the conversion price unless
the adjustment would require a change of at least 1% in the conversion price.
However, we will carry forward any adjustments that are less than one percent
of the conversion price. Except as described above in this section, we will
not adjust the conversion

19

price for any issuance of our common stock or convertible or exchangeable
securities or rights to purchase our common stock or convertible or
exchangeable securities.

Optional Redemption by Enzon

The notes are not entitled to any sinking fund. At any time on or after July
7, 2004, we may redeem the notes in whole or in part at the following prices
expressed as a percentage of the principal amount:

Redemption Period                                                         Price
-----------------                                                         -----

Beginning on July 7, 2004 and ending on June 30, 2005................    102.571%
Beginning on July 1, 2005 and ending on June 30, 2006................    101.929%
Beginning on July 1, 2006 and ending on June 30, 2007................    101.286%
Beginning on July 1, 2007 and ending on June 30, 2008................    100.643%

and 100 percent if redeemed at July 1, 2008. In each case, we will pay
interest to, but excluding, the redemption date. If the redemption date is an
interest payment date, interest shall be paid to the record holder on the
relevant record date. We are required to give notice of redemption by mail to
holders not more than 60 days but not less than 30 days prior to the
redemption date.

If less than all of the outstanding notes are to be redeemed, the trustee
will select the notes to be redeemed in principal amounts of $1,000 or
multiples of $1,000 by lot, pro rata or by another method the trustee
considers fair and appropriate. If a portion of your notes is selected for
partial redemption and you convert a portion of your notes, the converted
portion will be deemed to be of the portion selected for redemption.

We may not redeem the notes if we have failed to pay interest on the notes
and such failure to pay is continuing. We will issue a press release if we
redeem the notes.

Redemption at Option of the Holder

If a fundamental change of Enzon occurs prior to July 1, 2008, holders of
notes may require us to redeem their notes, in whole or in part, on a
repurchase date that is 30 days after the date of our notice of the
fundamental change. The notes will be redeemable in integral multiples of
$1,000 principal amount.

We will redeem the notes at a price equal to 100 percent of the principal
amount to be redeemed, plus accrued interest to, but excluding, the repurchase
date. If the repurchase date is an interest payment date, we will pay interest
to the record holder on the relevant record date.

We will mail to all record holders a notice of a fundamental change of Enzon
within 10 days after it has occurred. We are also required to deliver to the
trustee a copy of the fundamental change notice. If a holder elects to redeem
their notes, they must deliver to us or our designated agent, on or before the
30th day after the date of our fundamental change notice, their redemption
notice and any notes to be redeemed, duly endorsed for transfer. We will
promptly pay the redemption price for notes surrendered for redemption
following the repurchase date.

A "fundamental change" of Enzon is any transaction or event (whether by
means of an exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization or otherwise) in connection
with which all or substantially all of our common stock is exchanged for,
converted into, acquired for or constitutes solely the right to receive,
consideration which is not all or substantially all common stock that:

o is listed on, or immediately after the transaction or event will be
listed on, a United States national securities exchange, or

o is approved, or immediately after the transaction or event will be
approved, for quotation on the Nasdaq National Market or any similar
United States system of automated dissemination of quotations of
securities prices.

We will comply with any applicable provisions of Rule 13e-4 and any other
tender offer rules under the Exchange Act in the event of a fundamental
change.

These fundamental change redemption rights could discourage a potential
acquiror of Enzon. However, this fundamental change redemption feature is not
the result of management's knowledge of any specific effort to

20

obtain control of Enzon by means of a merger, tender offer or solicitation, or
part of a plan by management to adopt a series of anti-takeover provisions.
The term "fundamental change" is limited to specified transactions and may not
include other events that might adversely affect our financial condition or
business operations. Our obligation to offer to redeem the notes upon a
fundamental change would not necessarily afford holders protection in the
event of a highly leveraged transaction, reorganization, merger or similar
transaction involving Enzon.

We may be unable to redeem the notes in the event of a fundamental change.
If a fundamental change were to occur, we may not have enough funds to pay the
redemption price for all tendered notes. Any future credit agreements or other
agreements relating to our indebtedness may contain provisions prohibiting
redemption of the notes under certain circumstances, or expressly prohibit our
repurchase of the notes upon a fundamental change or may provide that a
fundamental change constitutes an event of default under that agreement. If a
fundamental change occurs at a time when we are prohibited from purchasing or
redeeming notes, we could seek the consent of our lenders to redeem the notes
or attempt to refinance this debt. If we do not obtain consent, we would not
be permitted to purchase or redeem the notes. Our failure to redeem tendered
notes would constitute an event of default under the indenture, which might
constitute a default under the terms of our other indebtedness. In these
circumstances, or if a fundamental change would constitute an event of default
under our senior indebtedness, the subordination provisions of the indenture
would restrict payments to the holders of notes.

Subordination of Notes

Payment on the notes will, to the extent provided in the indenture, be
subordinated in right of payment to the prior payment in full of all of our
senior indebtedness. The notes also are effectively subordinated to all debt
and other liabilities, including trade payables and lease obligations, if any,
of our subsidiaries.

Upon any distribution of our assets upon any dissolution, winding up,
liquidation or reorganization, the payment of the principal of, or premium, if
any, interest, and liquidated damages, if any, on the notes will be
subordinated in right of payment to the prior payment in full in cash or other
payment satisfactory to the holders of senior indebtedness of all senior
indebtedness. In the event of any acceleration of the notes because of an
event of default, the holders of any outstanding senior indebtedness would be
entitled to payment in full in cash or other payment satisfactory to the
holders of senior indebtedness of all senior indebtedness obligations before
the holders of the notes are entitled to receive any payment or distribution.
We are required under the indenture to promptly notify holders of senior
indebtedness, if payment of the notes is accelerated because of an event of
default.

We may not make any payment on the notes if:

o a default in the payment of designated senior indebtedness occurs and is
continuing beyond any applicable period of grace (called a "payment
default"); or

o a default other than a payment default on any designated senior
indebtedness occurs and is continuing that permits holders of designated
senior indebtedness to accelerate its maturity, or in the case of a
lease, a default occurs and is continuing that permits the lessor to
either terminate the lease or require us to make an irrevocable offer to
terminate the lease following an event of default under the lease, and
the trustee receives a notice of such default (called "payment blockage
notice") from us or any other person permitted to give such notice under
the indenture (called a "non-payment default").

We may resume payments and distributions on the notes:

o in case of a payment default, upon the date on which such default is
cured or waived or ceases to exist; and

o in case of a non-payment default, the earlier of the date on which such
nonpayment default is cured or waived or ceases to exist or 179 days
after the date on which the payment blockage notice is received, if the
maturity of the designated senior indebtedness has not been accelerated,
or in the case of any lease, 179 days after notice is received if we have
not received notice that the lessor under such lease has exercised its
right to terminate the lease or require us to make an irrevocable offer
to terminate the lease following an event of default under the lease.

21

No new period of payment blockage may be commenced pursuant to a payment
blockage notice unless 365 days have elapsed since the initial effectiveness
of the immediately prior payment blockage notice. No non-payment default that
existed or was continuing on the date of delivery of any payment blockage
notice shall be the basis for any later payment blockage notice.

If the trustee or any holder of the notes receives any payment or
distribution of our assets in contravention of the subordination provisions on
the notes before all senior indebtedness is paid in full in cash or other
payment satisfactory to holders of senior indebtedness, then such payment or
distribution will be held in trust for the benefit of holders of senior
indebtedness or their representatives to the extent necessary to make payment
in full cash or payment satisfactory to the holders of senior indebtedness of
all unpaid senior indebtedness.

Because of the subordination provisions discussed above, in the event of our
bankruptcy, dissolution or reorganization, holders of senior indebtedness may
receive more, ratably, and holders of the notes may receive less, ratably,
than our other creditors. This subordination will not prevent the occurrence
of any event of default under the indenture.

The notes are exclusively obligations of Enzon. A substantial portion of our
operations are conducted through our subsidiaries. As a result, our cash flow
and our ability to service our debt, including the notes, is dependent upon
the earnings of our subsidiaries. In addition, we are dependent on the
distribution of earnings, loans or other payments from our subsidiaries. In
addition, any payment of dividends, distributions, loans or advances by our
subsidiaries to us could be subject to statutory or contractual restrictions.
Payments to us by our subsidiaries will also be contingent upon our
subsidiaries' earnings and business considerations.

Our right to receive any assets of any of our subsidiaries upon their
liquidation or reorganization, and therefore the right of the holders to
participate in those assets, will be effectively subordinated to the claims of
that subsidiary's creditors, including trade creditors. In addition, even if
we were a creditor to any of our subsidiaries, our rights as a creditor would
be subordinate to any security interest in the assets of our subsidiaries and
any indebtedness of our subsidiaries senior to that held by us.

The term "senior indebtedness" is defined in the indenture and includes
principal, premium, interest, rent, fees, costs, expenses and other amounts
accrued or due on our existing or future indebtedness, as defined below, or
any existing or future indebtedness guaranteed or in effect guaranteed by us,
subject to certain exceptions. The term does not include:

o any indebtedness that by its express terms is not senior to the notes or
is pari passu or junior to the notes; or

o any indebtedness we owe to any of our majority-owned subsidiaries; or

o the notes.

The term "indebtedness" is also defined in the indenture and includes, in
general terms, our liabilities in respect of borrowed money, notes, bonds,
debentures, letters of credit, bank guarantees, bankers' acceptances, capital
and certain other leases, interest rate and foreign currency derivative
contracts or similar arrangements, guarantees and certain other obligations
described in the indenture, subject to certain exceptions. The term does not
include, for example, any account payable or other accrued current liability
or obligation incurred in the ordinary course of business in connection with
the obtaining of materials or services.

The term "designated senior indebtedness" is defined in the indenture and
includes, in general terms, any senior indebtedness that by its terms
expressly provides that it is "designated senior indebtedness" for purposes of
the indenture.

As of May 31, 2001, we had no senior indebtedness outstanding and our
subsidiaries had no significant indebtedness. Neither we nor our subsidiaries
are prohibited from incurring debt, including senior indebtedness, under the
indenture. We may from time to time incur additional debt, including senior
indebtedness. Our subsidiaries may also from time to time incur additional
debt and liabilities.

We are obligated to pay reasonable compensation to the trustee and to
indemnify the trustee against certain losses, liabilities or expenses incurred
by the trustee in connection with its duties relating to the notes. The

22

trustee's claims for these payments will generally be senior to those of
noteholders in respect of all funds collected or held by the trustee.

Events of Default; Notice and Waiver

The following will be events of default under the indenture:

o we fail to pay principal or premium, if any, when due upon redemption or
otherwise on the notes, whether or not the payment is prohibited by
subordination provisions;

o we fail to pay any interest and liquidated damages, if any, on the notes,
when due and such failure continues for a period of 30 days, whether or
not the payment is prohibited by subordination provisions of the
indenture;

o we fail to perform or observe any of the covenants in the indenture for
60 days after notice; or

o certain events involving our bankruptcy, insolvency or reorganization.

The trustee may withhold notice to the holders of the notes of any default,
except defaults in payment of principal, premium, interest or liquidated
damages, if any, on the notes. However, the trustee must consider it to be in
the interest of the holders of the notes to withhold this notice.

If an event of default occurs and continues, the trustee or the holders of
at least 25% in principal amount of the outstanding notes may declare the
principal, premium, if any, and accrued interest and liquidated damages, if
any, on the outstanding notes to be immediately due and payable. In case of
certain events of bankruptcy or insolvency involving us, the principal,
premium, if any, and accrued interest and liquidated damages, if any, on the
notes will automatically become due and payable. However, if we cure all
defaults, except the nonpayment of principal, premium, if any, interest or
liquidated damages, if any, that became due as a result of the acceleration,
and meet certain other conditions, with certain exceptions, this declaration
may be cancelled and the holders of a majority of the principal amount of
outstanding notes may waive these past defaults. Payment of principal,
premium, if any, or interest on the notes that are not made when due will
accrue interest at the annual rate of 4 1/2% from the required payment date.

The holders of a majority of outstanding notes will have the right to direct
the time, method and place of any proceedings for any remedy available to the
trustee, subject to limitations specified in the indenture.

No holder of the notes may pursue any remedy under the indenture, except in
the case of a default in the payment of principal, premium or interest on the
notes, unless:

o the holder has given the trustee written notice of an event of default;

o the holders of at least 25% in principal amount of outstanding notes make
a written request, and offer reasonable indemnity, to the trustee to
pursue the remedy;

o the trustee does not receive an inconsistent direction from the holders
of a majority in principal amount of the notes; and

o the trustee fails to comply with the request within 60 days after
receipt.

Modification and Waiver

The consent of the holders of a majority in principal amount of the
outstanding notes is required to modify or amend the indenture. However, a
modification or amendment requires the consent of the holder of each
outstanding note if it would:

o extend the fixed maturity of any note;

o reduce the rate or extend the time for payment of interest of any note;

o reduce the principal amount or premium of any note;

o reduce any amount payable upon redemption of any note;

23

o adversely change our obligation to redeem any note upon a fundamental
change;

o impair the right of a holder to institute suit for payment on any note;

o change the currency in which any note is payable;

o impair the right of a holder to convert any note;

o adversely modify, in any material respect, the subordination provisions
of the indenture; or

o reduce the percentage of notes required for consent to any modification
of the indenture.

We are permitted to modify certain provisions of the indenture without the
consent of the holders of the notes.

Form, Denomination and Registration

The notes will be:

o in fully registered form;

o without interest coupons; and

o in denominations of $1,000 principal amount and integral multiples of
$1,000.

Except as indicated below, the notes will be evidenced by one or more global
notes. We will deposit the global note or notes with DTC and register the
global notes in the name of Cede & Co. as DTC's nominee. Except as set forth
below, a global note may be transferred, in whole or in part, only to another
nominee of DTC or to a successor of DTC or its nominee.

Holders of notes may hold their interests in a global note directly through
DTC if such holder is a participant in DTC, or indirectly through
organizations that are participants in DTC (called "participants"). Transfers
between participants will be effected in the ordinary way in accordance with
DTC rules and will be settled in clearing house funds. The laws of some states
require that certain persons take physical delivery of securities in
definitive form. As a result, the ability to transfer beneficial interests in
the global note to such persons may be limited.

Holders of notes who are not participants may beneficially own interests in
a global note held by DTC only through participants, or certain banks,
brokers, dealers, trust companies and other parties that clear through or
maintain a custodial relationship with a participant, either directly or
indirectly (called "indirect participants"). So long as Cede & Co., as the
nominee of DTC, is the registered owner of a global note, Cede & Co. for all
purposes will be considered the sole holder of such global note. Except as
provided below, owners of beneficial interests in a global note will:

o not be entitled to have certificates registered in their names;

o not receive physical delivery of certificates in definitive registered
form; and

o not be considered holders of the global note.

We will pay interest on and the redemption price of a global note to Cede &
Co., as the registered owner of the global note, by wire transfer of
immediately available funds on each interest payment date or the redemption or
repurchase date, as the case may be. Neither we, the trustee nor any paying
agent will be responsible or liable:

o for the records relating to, or payments made on account of, beneficial
ownership interests in a global note; or

o for maintaining, supervising or reviewing any records relating to the
beneficial ownership interests.

We have been informed that DTC's practice is to credit participants'
accounts on that payment date with payments in amounts proportionate to their
respective beneficial interests in the principal amount represented by a
global note as shown in the records of DTC, unless DTC has reason to believe
that it will not receive payment on that payment date. Payments by
participants to owners of beneficial interests in the principal amount

24

represented by a global note held through participants will be the
responsibility of the participants, as is now the case with securities held
for the accounts of customers registered in "street name."

Because DTC can only act on behalf of participants, who in turn act on
behalf of indirect participants, the ability of a person having a beneficial
interest in the principal amount represented by the global note to pledge such
interest to persons or entities that do not participate in the DTC system, or
otherwise take actions in respect of such interest, may be affected by the
lack of a physical certificate evidencing its interest.

Neither we, the trustee, registrar, paying agent nor conversion agent will
have any responsibility for the performance by DTC or its participants or
indirect participants of their respective obligations under the rules and
procedures governing their operations. DTC has advised us that it will take
any action permitted to be taken by a holder of notes, including the
presentation of notes for exchange, only at the direction of one or more
participants to whose account with DTC interests in the global note are
credited, and only in respect of the principal amount of the notes represented
by the global note as to which the participant or participants has or have
given such direction.

DTC has advised us that it is:

o a limited purpose trust company organized under the laws of the State of
New York, and a member of the Federal Reserve System;

o a "clearing corporation" within the meaning of the Uniform Commercial
Code; and

o a "clearing agency" registered pursuant to the provisions of Section 17A
of the Exchange Act.

DTC was created to hold securities for its participants and to facilitate
the clearance and settlement of securities transactions between participants
through electronic book-entry changes to the accounts of its participants.
Participants include securities brokers, dealers, banks, trust companies and
clearing corporations and other organizations. Some of the participants or
their representatives, together with other entities, own DTC. Indirect access
to the DTC system is available to others such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly.

DTC has agreed to the foregoing procedures to facilitate transfers of
interests in a global note among participants. However, DTC is under no
obligation to perform or continue to perform these procedures, and may
discontinue these procedures at any time. If DTC is at any time unwilling or
unable to continue as depositary and a successor depositary is not appointed
by us within 90 days, we will issue notes in certificated from in exchange for
global notes.

Registration Rights of the Noteholders

Under a registration rights agreement, we are required to use our reasonable
efforts to cause a shelf registration statement, of which this prospectus is a
part, to become effective and to use reasonable efforts to keep the shelf
registration statement effective until the earlier of:

o all of the registrable securities have been sold pursuant to the shelf
registration statement; or

o the expiration of the holding period under Rule 144(k) under the
Securities Act, or any successor provision.

When we use the term "registrable securities" in this section, we are
referring to the notes and the common stock issuable upon conversion of the
notes until the earliest of:

o the effective registration under the Securities Act and the resale of the
securities in accordance with the registration statement;

o the expiration of the holding period under Rule 144(k) under the
Securities Act; and

o the sale to the public pursuant to Rule 144 under the Securities Act, or
any similar provision then in force, but not Rule 144A.

We may suspend the use of the prospectus under certain circumstances
relating to pending corporate developments, public filings with the SEC and
similar events. Any suspension period shall not:

25

o exceed 30 days in any three-month period; or

o an aggregate of 90 days for all periods in any 12-month period.

Notwithstanding the foregoing, we will be permitted to suspend the use of
the prospectus for up to 60 days in any 3-month period under certain
circumstances, relating to possible acquisitions, financings or other similar
transactions.

We will pay predetermined liquidated damages if the shelf registration
statement is not timely filed or made effective or if the prospectus is
unavailable for periods in excess of those permitted above:

o on the notes at an annual rate equal to 0.5% of the aggregate principal
amount of the notes outstanding until the registration statement is filed
or made effective or during the additional period the prospectus is
unavailable; and

o on the common stock that has been converted, at an annual rate equal to
0.5% of the conversion price during such periods.

A holder who elects to sell registrable securities pursuant to the shelf
registration statement will be required to:

o be named as a selling stockholder in the related prospectus;

o deliver a prospectus to purchasers; and

o be subject to the provisions of the registration rights agreement,
including indemnification provisions.

The summary of the registration rights agreement is not complete. This
summary is subject to, and is qualified in its entirety by reference to, all
the provisions of the registration rights agreement.

Information Concerning the Trustee

We have appointed Wilmington Trust Company, the trustee under the indenture,
as paying agent, conversion agent, note registrar and custodian for the notes.
The trustee or its affiliates may provide banking and other services to us in
the ordinary course of their business.

The indenture contains certain limitations on the rights of the trustee, if
it or any of its affiliates is then our creditor, to obtain payment of claims
in certain cases or to realize on certain property received on any claim as
security or otherwise. The trustee and its affiliates will be permitted to
engage in other transactions with us. However, if the trustee or any affiliate
continues to have any conflicting interest and a default occurs with respect
to the notes, the trustee must eliminate such conflict or resign.

26

DESCRIPTION OF CAPITAL STOCK

Our authorized capital stock consists of 60,000,000 shares of common stock,
par value $.01 per share, and 3,000,000 shares of preferred stock, par value
$.01 per share. Unless otherwise designated by our board of directors, all
issued shares shall be deemed common stock with equal rights and preferences.

Common Stock

As of June 30, 2001, there were 41,990,859 shares of our common stock
outstanding. In addition, as of June 30, 2001, there were stock options
outstanding to purchase an aggregate of 3,283,817 shares of common stock.

Holders of our common stock are entitled to one vote for each share held on
all matters submitted to a vote of stockholders and do not have cumulative
voting rights. Directors are elected by a plurality of the votes of the shares
present in person or represented by proxy at the annual meeting and entitled
to vote in such election. Holders of our common stock are entitled to receive
ratably the dividends, if any, as may be declared by the board of directors
out of legally available funds. These rights are subject to the prior rights
of any preferred stock then outstanding.

Upon our liquidation, dissolution or winding up, the holders of common stock
are entitled to receive ratably our net assets available after the payment of
all debts and other liabilities, and after the satisfaction of the rights of
any outstanding preferred stock. Holders of the common stock have no
preemptive, subscription, redemption or conversion rights, nor are they
entitled to the benefit of any sinking fund. The outstanding shares of common
stock are validly issued, fully paid and non-assessable. The rights, powers,
preferences and privileges of holders of common stock are subordinate to, and
may be adversely affected by, the rights of the holders of shares of any
series of preferred stock whether outstanding or issued in the future.

Preferred Stock

Our board of directors has the authority to issue up to 3,000,000 shares of
preferred stock in one or more series and to fix the powers, designations,
preferences and relative rights thereof without any further vote of
shareholders. The voting powers of holders of common stock could be diluted by
the issuance of this preferred stock. The issuance of this preferred stock
could also have the effect of delaying, deferring or preventing a change in
our control. The issuance of this preferred stock could decrease the amount of
earnings and assets available for distribution to holders of our common stock
or adversely affect the rights and powers, including voting rights, of the
holders of our common stock.

Series A Preferred Stock

As of June 30, 2001, there were 7,000 shares of our Series A preferred stock
outstanding. Shares of our Series A preferred stock are convertible into
common stock at a conversion price of $11.00 per share. The value of the
shares of Series A preferred stock for conversion purposes is $25.00 per
share. Holders of the Series A preferred stock are entitled to an annual
dividend of $2.00 per share, payable semiannually, but only when and if
declared by our board of directors, out of funds legally available. Dividends
on the Series A preferred stock are cumulative and accrue and accumulate but
will not be paid, except in liquidation or upon conversion, until such time as
the board of directors deems it appropriate in light of our then current
Financial condition. No dividends are to be paid or set apart for payment on
our common stock, nor are any shares of common stock to be redeemed, retired
or otherwise acquired for valuable consideration unless we have paid in full
or made appropriate provision for the payment in full of all dividends which
have then accumulated on the Series A preferred stock. Holders of the Series A
preferred stock are entitled to one vote per share on matters to be voted upon
by our stockholders and except as required by Delaware law, our Series A
preferred stock votes together with our common stock as a single class on all
matters which come to a vote of our stockholders. As of June 30, 2001,
undeclared accrued dividends in arrears were $157,811 or $22.54 per share of
Series A preferred stock. All shares of common stock are junior in rank to the
Series A preferred stock with respect to the preferences as to dividends,
distributions and payments upon our liquidation, dissolution or winding up.

27

Registration Rights

We have granted Schering-Plough piggyback and demand registration rights
with respect to 847,489 shares of our common stock that were issued in June
1995. In addition, there are demand and/or piggyback registration rights on
240,323 shares of common stock. Two persons affiliated with Evolution Capital
have piggyback and demand registration rights with respect to 188,779 shares
of our common stock issued upon the exercise of warrants. The demand rights
give these warrant holders a one-time right to require us to register, upon
their request. In addition, transferees of the Carson Group, Inc. and two of
its principals have piggyback registration rights with respect to an aggregate
of 51,147 shares of our common stock issued upon exercise of warrants as
consideration for finder's services that were provided to us. Transferees of
Clearwater Fund IV were also granted piggyback registration rights under a
registration rights agreement with us with respect to the 206,227 shares of
common stock issued upon exercise of the warrants they held, which shares are
currently covered by an effective registration statement. Absent any
contractual limitations, the holders of these rights could cause a significant
number of shares of our common stock to be registered and sold in the public
market. Such sales, or the perception that these sales could occur, may have
an adverse effect on the market price for our common stock and could impair
our ability to raise capital through an offering of equity securities. We have
obtained waivers of all such piggyback registration rights applicable to this
offering, except rights with respect to an aggregate of 17,500 shares of our
common stock.

We originally registered the resale of approximately 3,983,000 shares of our
common stock owned by stockholders who purchased such shares in a private
placement of shares of our common stock that closed in July 1998.

We originally registered the resale of approximately 4,122,317 shares of our
common stock owned by stockholders who purchased such shares in a private
placement of shares of our common stock that closed in January and March 1996.
We are required to maintain the effectiveness of this registration statement
until the earlier of the date that all of the shares are sold or March 15,
2004.

Indemnification and Limitation of Liability

Our charter documents provide that our directors and officers shall be
indemnified by us to the fullest extent permitted by Delaware law, as it now
exists or may in the future be amended, against all expenses and liabilities
reasonably incurred in connection with their service for or on behalf of us.
In addition, our certificate of incorporation provides that our directors will
not be personally liable for monetary damages to us for breaches of their
fiduciary duty as directors, unless they violated their duty of loyalty to
either us or our stockholders, acted in bad faith, knowingly or intentionally
violated the law, authorized illegal dividends or redemptions or derived an
improper personal benefit from their action as directors. We have insurance
which insures our directors and officers against certain losses and which
insures us against our obligations to indemnify our directors and officers.
Our officers and directors have executed indemnity agreements with us which
supplement the protections provided by our certificate of incorporation and
by-laws.

These agreements require us to pay for any damages, judgments, settlements,
costs and expenses for the defense of legal actions, claims, proceedings and
appeals due to any actual or alleged breach of duty, neglect, error,
misstatement, misleading statement, omission or other act done, suffered or
wrongfully attempted by the officer or director. If we do not pay such costs
and expenses within 90 days after we receive a written claim, such officers or
directors may bring a suit against us to recover the unpaid amount of the
claim. If such officer or director is successful, we will be required to pay
for the expenses incurred relating to the claim.

Provisions of our Certificate of Incorporation, By-laws and State Law
Provisions with Potential Antitakeover Effects

Certain provisions of our certificate of incorporation and by-laws, as well
as Delaware law, may operate in a manner that could discourage or render more
difficult a takeover of our company or the removal of our management or may
limit the price certain investors may be willing to pay for shares of our
common stock.

Our by-laws provide for the division of the board of directors into three
classes as nearly equal in size as possible with staggered three-year terms.
In addition, it provides that directors may be removed only for cause by

28

the affirmative vote of the holders of a majority of our outstanding shares of
capital stock entitled to vote. Any vacancy on the board of directors, however
occurring, including a vacancy resulting from an enlargement of the Board, may
only be filled by vote of a majority of the directors then in office. The
likely effect of the classification of the board of directors and the
limitations on the removal of directors and filling of vacancies is an
increase in the time required for the stockholders to change the composition
of the board of directors. For example, because only three directors may be
replaced by stockholder vote at each annual meeting of stockholders,
stockholders seeking to replace a majority of the members of the board of
directors will need at least two annual meetings of stockholders to effect
this change. In addition, our board of directors has the authority to issue up
to 3,000,000 shares of preferred stock in one or more series and to fix the
powers, designations, preferences and relative rights thereof without any
further vote of our stockholders. The voting powers of holders of our common
stock could be diluted by the issuance of this preferred stock. The issuance
of this preferred stock could also have the effect of delaying, deferring or
preventing a change in control. In addition, the issuance of this preferred
stock could decrease the amount of earnings and assets available for
distribution to holders of our common stock or adversely affect the rights and
powers, including voting rights, of the holders of our common stock.

The provisions of Section 203 of the General Corporation Law of Delaware
will prohibit us from engaging in a "business combination" with an "interested
stockholder" for a period of three years after the date of the transaction in
which the person became an interested stockholder, unless:

o before such person became an interested stockholder, the board of
directors of the corporation approved the transaction in which the
interested stockholder became an interested stockholder or approved the
business combination,

o upon the closing of the transaction that resulted in the interested
stockholder becoming such, the interested stockholder owned at least 85%
of the voting stock of the corporation outstanding at the time the
transaction commenced, excluding shares held by directors who are also
officers of the corporation and shares held by employee stock plans, or

o following the transaction in which such person became an interested
stockholder, the business combination is approved by the board of
directors of the corporation and authorized at a meeting of stockholders
by the affirmative vote of the holders of at least two-thirds of the
outstanding voting stock of the corporation not owned by the interested
stockholder.

A "business combination" includes mergers, asset sales, consolidations and
other transactions resulting in a financial benefit to the interested
stockholder. An "interested stockholder" is defined as a person who, at the
time of determination of whether a person is an interested stockholder:

o beneficially owns 15% or more of our common stock, or

o is an affiliate or associate of ours and beneficially owned 15% or more
of our common stock at any time within three years of the date of
determination.

A Delaware corporation may "opt out" of Section 203 with an express
provision in its original certificate of incorporation or an express provision
in its certificate of incorporation or by-laws resulting from an amendment
approved by holders of at least a majority of the outstanding voting stock.
Neither our certificate nor our by-laws contain any such exclusion.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is Continental Stock
Transfer & Trust Company. Its address is Two Broadway, 19th Floor, New York,
New York 10004.

CERTAIN UNITED STATES AND FEDERAL INCOME TAX CONSIDERATIONS

The following is a summary of the material U.S. federal income tax
considerations relating to the purchase, ownership and disposition of the
notes and common stock into which the notes may be converted, but does not
purport to be a complete analysis of all the potential tax considerations
relating thereto. This summary is based on

29

laws, regulations, rulings and decisions now in effect, all of which are
subject to change or differing interpretation possibly with retroactive
effect. Except as specifically discussed below with regard to non-U.S. holders
(as defined below), this summary applies only to U.S. holders (as defined
below) that are beneficial owners of the notes and that will hold the notes
and common stock into which the notes may be converted as "capital assets"
(within the meaning of Section 1221 of the Internal Revenue Code of 1986, as
amended (the "Code")).

For purposes of this summary, U.S. holders include (1) individual citizens
or residents of the U.S., including an alien individual who is a lawful
permanent resident of the United States or who meets the substantial presence
residency test under the federal income tax laws, (2) corporations or
partnerships (including any entity treated as a corporation or a partnership
for U.S. tax purposes) created or organized in or under the laws of the U.S.,
any State of the United States or the District of Columbia, (3) estates, the
incomes of which are subject to U.S. federal income taxation regardless of the
source of such income or (4) trusts subject to the primary supervision of a
U.S. court and the control of one or more U.S. persons. Persons other than
U.S. holders ("non-U.S. holders") are subject to special U.S. federal income
tax considerations, some of which are discussed below.

If a partnership (including for this purpose any entity treated as a
partnership for U.S. tax purposes) is a beneficial owner of the notes or
common stock into which the notes may be converted, the U.S. tax treatment of
a partner in the partnership will generally depend on the status of the
partner and the activities of the partnership. A holder of the notes or common
stock into which the notes may be converted that is a partnership and partners
in such partnership should consult their individual tax advisors about the
U.S. federal income tax consequences of holding and disposing of the notes and
the common stock into which the notes may be converted.

This discussion does not address tax considerations applicable to an
investor's particular circumstances or to investors that may be subject to
special tax rules such as (1) banks, thrifts, regulated investment companies,
or other financial institutions or financial service companies, (2) S
corporations, (3) holders subject to the alternative minimum tax, (4) tax-
exempt organizations, (5) insurance companies, (6) foreign persons or entities
(except to the extent specifically set forth below), (7) brokers or dealers in
securities or currencies, (8) holders whose "functional currency" is not the
U.S. dollar, or (9) persons that will hold the notes as a position in a
hedging transaction, "straddle," "conversion transaction" (as defined for tax
purposes) or persons deemed to sell the notes or common stock under the
constructive sale provisions of the Code.

This summary discusses the tax considerations applicable to the initial
purchasers of the notes who purchase the notes at their "issue price" as
defined in Section 1273 of the Code and the regulations thereunder and does
not discuss the tax considerations applicable to subsequent purchasers of the
notes. We have not sought any ruling from the Internal Revenue Service, or
IRS, or an opinion of counsel with respect to the statements made and the
conclusions reached in the following summary, and there can be no assurance
that the IRS will agree with such statements and conclusions. In addition, the
IRS is not precluded from successfully adopting a contrary position. This
summary does not consider the effect of the federal estate or gift tax laws
(except as set forth below with respect to non-U.S. holders) or the tax laws
of any applicable foreign, state, local or other jurisdiction. This summary
also assumes that the IRS will respect the classification of the notes as
indebtedness for federal income tax purposes.

INVESTORS CONSIDERING THE PURCHASE OF NOTES SHOULD CONSULT THEIR TAX
ADVISORS WITH RESPECT TO THE APPLICATION OF THE UNITED STATES FEDERAL INCOME
TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES
ARISING UNDER THE FEDERAL ESTATE OR GIFT TAX RULES OR UNDER THE LAWS OF ANY
STATE, LOCAL OR FOREIGN TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX
TREATY.

U.S. Holders

Taxation of Interest

Interest paid on the notes will be included in the income of a U.S. holder
as ordinary income at the time it is treated as received or accrued, in
accordance with such holder's regular method of accounting for U.S. federal
income tax purposes. Under Treasury Regulations, the possibility of an
additional payment under a note may be disregarded for purposes of determining
the amount of interest or original issue discount income to be recognized by
the holder in respect of such note (or the timing of such recognition) if the
likelihood of the payment, as of the

30

date the notes are issued, is remote. Failure of Enzon to file or cause to be
declared effective a shelf registration statement as described under
"Description of Notes--Registration Rights of the Noteholders" may result in
the payment of predetermined liquidated damages in the manner described in
that section of this prospectus. In addition, holders may require Enzon to
redeem any and all of their notes in the event of a fundamental change, and
Enzon may redeem some or all of the notes on or after July 7, 2004 subject to
certain conditions. Enzon believes that the likelihood of a liquidated damages
payment with respect to the notes is remote and does not intend to treat such
possibility as affecting the yield to maturity of any note. Similarly, Enzon
intends to take the position that a "fundamental change" or a redemption is
remote under the Treasury Regulations, and likewise does not intend to treat
the possibility of a "fundamental change" or a redemption as affecting the
yield to maturity of any note. In the event any of these contingencies occurs,
it may affect the amount and timing of the income that must be recognized by a
U.S. holder of notes.

Sale, Exchange or Redemption of the Notes

Upon the sale, exchange (other than a conversion) or redemption of a note, a
U.S. holder generally will recognize capital gain or loss equal to the
difference between (1) the amount of cash proceeds and the fair market value
of any property received on the sale, exchange or redemption (except to the
extent such amount is attributable to accrued interest income not previously
included in income, which will be taxable as ordinary income, or is
attributable to accrued interest that was previously included in income, which
amount may be received without generating further income) and (2) such
holder's adjusted tax basis in the note. A U.S. holder's adjusted tax basis in
a note generally will equal the cost of the note to such holder less any
principal payments received by you. Such capital gain or loss will be long-
term capital gain or loss if the U.S. holder's holding period in the note is
more than one year at the time of sale, exchange or redemption. Long-term
capital gains recognized by some noncorporate U.S. holders, including
individuals, will generally be subject to taxation at reduced rates. The
deductibility of capital losses is subject to limitations.

Conversion of the Notes

A U.S. holder generally will not recognize any income, gain or loss upon
conversion of a note into common stock except with respect to cash received in
lieu of a fractional share of common stock or common stock that is
attributable to accrued interest not previously included in income. Cash
received in lieu of a fractional share of common stock upon conversion will be
treated as a payment in exchange for the fractional share of common stock.
Accordingly, the receipt of cash in lieu of a fractional share of common stock
generally will result in capital gain or loss (measured by the difference
between the cash received for the fractional share and the holder's adjusted
tax basis in the fractional share). Common stock received upon conversion that
is attributable to accrued interest not previously included in income will be
subject to the rules described above with respect to taxation of interest. See
"U.S. Holders--Taxation of Interest" above.

A U.S. holder's tax basis in the common stock received on conversion of a
note will be the same as such holder's adjusted tax basis in the note at the
time of conversion (reduced by any basis allocable to a fractional share
interest), and the holding period for the common stock received on conversion
will generally include the holding period of the note converted. However, a
U.S. holder's tax basis in shares of common stock considered attributable to
accrued interest not previously included in income (or to cash tendered with
notes converted after a record date for a particular interest payment date and
prior to such interest payment date) generally will equal the amount of such
accrued interest (and/or cash), and the holding period for such shares shall
begin on the date of conversion.

Distributions on Common Stock

Distributions, if any, made on the common stock after a conversion generally
will be included in the income of a U.S. holder as ordinary dividend income to
the extent of our current or accumulated earnings and profits. A dividend
distribution to a corporate U.S. holder may qualify for a dividends-received
deduction; however, certain holding period requirements, taxable income and
other limitations may apply. Distributions in excess of our current and
accumulated earnings and profits will be treated as a non-taxable return of
capital that reduces the U.S. holder's basis in the common stock dollar-for-
dollar until the basis has been reduced to zero, and thereafter as capital
gain.

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Holders of convertible debt instruments such as the notes may, in some
circumstances, be deemed to have received distributions of stock if the
conversion price of such instruments is adjusted to the extent the adjustment
results in an increase in the holder's proportionate interest in the earnings
and profits or assets of Enzon. However, adjustments to the conversion price
made pursuant to a bona fide, reasonable adjustment formula which has the
effect of preventing the dilution of the interest of the holders of the debt
instruments will generally not be considered to result in a constructive
distribution of stock. Some of the possible adjustments provided in the notes
(including, without limitation, adjustments in respect of taxable dividends to
our stockholders or adjustments at our discretion) will not qualify as being
pursuant to a bona fide reasonable adjustment formula. If such adjustments are
made, U.S. holders of notes will be deemed to have received constructive
distributions taxable as dividends to the extent of our current and
accumulated earnings and profits even though they have not received any cash
or property as a result of such adjustments. A holder's tax basis in a note,
however, generally will be increased by the amount of any constructive
dividend included in taxable income. In addition, in some circumstances, an
adjustment or the failure to provide for an adjustment may result in taxable
dividend income to the holders of common stock.

Sale, Exchange or Redemption of Common Stock

Upon the sale, exchange or redemption of common stock a U.S. holder
generally will recognize capital gain or loss equal to the difference between
(1) the amount of cash and the fair market value of any property received upon
the sale or exchange and (2) such U.S. holder's adjusted tax basis in the
common stock. Such capital gain or loss will be long-term capital gain or loss
if the U.S. holder's holding period in common stock is more than one year at
the time of the sale, exchange or redemption. Long-term capital gains
recognized by some non-corporate U.S. holders, including individuals, will
generally be subject to taxation at reduced rates. A U.S. holder's basis and
holding period in common stock received upon conversion of a note are
determined as discussed above under "Conversion of the Notes." The
deductibility of capital losses is subject to limitations.

Backup Withholding and Information Reporting

Backup withholding of U.S. federal income tax at a rate currently of 31
percent may apply to payments pursuant to the terms of a note or common stock
(including proceeds received upon the sale, exchange, redemption, retirement
or other disposition of the notes or common stock) to a U.S. holder that is
not an "exempt recipient" and that fails to provide required identifying
information (such as the holder's U.S. taxpayer identification number, or
"TIN") in the manner required. Generally, individuals are not exempt
recipients. Corporations are generally exempt recipients, whereas other
entities may be exempt recipients. Payments made in respect of a note or
common stock (including proceeds received upon the sale, exchange, redemption,
retirement or other disposition of the notes or common stock) must be reported
to the IRS, unless the U.S. holder is an exempt recipient or otherwise
establishes an exemption. Any amounts withheld from a payment to a U.S. holder
under the backup withholding rules is allowable as a refund or credit against
the holder's U.S. federal income tax, provided that the required information
is furnished to the IRS in a timely manner.

Non-U.S. Holders

In general, subject to the discussion below concerning backup withholding:

Taxation of Interest

Payments of interest on the notes by us or any paying agent to a beneficial
owner of a note that is a non-U.S. holder generally will not be subject to
U.S. withholding tax, provided that (l) such non-U.S. holder does not own,
actually or constructively pursuant to the conversion feature of the notes or
otherwise, 10 percent or more of the total combined voting power of all
classes of our stock entitled to vote within the meaning of Section 871(h)(3)
of the Code, (2) such non-U.S. holder is not a "controlled foreign
corporation" within the meaning of Section 957(a) of the Code with respect to
which we are a "related person" within the meaning of Section 864(d)(4) of the
Code, (3) such non-U.S. holder is not a bank receiving interest described in
Section 881(c)(3)(A) of the Code, and (4) the certification requirements under
Section 871(h) or Section 881(c) of the Code and Treasury Regulations
thereunder are satisfied.

To satisfy the certification requirements referred to in (4) above, Sections
871(h) and 881(c) of the Code and currently effective Treasury regulations
thereunder require that either (1) the beneficial owner of a note must

32

certify, under penalties of perjury, to us or our paying agent, as the case
may be, that such owner is a non-U.S. holder and must provide such owner's
name and address, and TIN, if any, on Form W-8BEN (or a suitable substitute
form) or (2) a securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary course of its
trade or business (a "Financial Institution") and holds the note on behalf of
the beneficial owner thereof must certify, under penalties of perjury, to us
or our paying agent, as the case may be, that a Form W-8BEN (or a suitable
substitute form) has been received from the beneficial owner or a qualifying
intermediary and must furnish the payor with a copy thereof.

Interest on notes not excluded from U.S. withholding tax as described above
and not effectively connected with a United States trade or business generally
will be subject to U.S. withholding tax at a 30 percent rate, except where an
applicable U.S. income tax treaty provides for the reduction or elimination of
such withholding tax.

Sale, Exchange or Redemption of the Notes or Common Stock

A non-U.S. holder of a note or common stock will not be subject to U.S.
federal income tax on gains realized on the sale, exchange or redemption of
such note or common stock unless (1) such non-U.S. holder is an individual who
is present in the United States for 183 days or more in the taxable year of
sale, exchange or other disposition, and other required conditions are met,
(2) such gain is effectively connected with the conduct by the non-U.S. holder
of a trade or business in the United States and, if an applicable U.S. income
tax treaty requires, is attributable to a U.S. permanent establishment
maintained by the non-U.S. holder, (3) the non-U.S. holder is subject to Code
provisions applicable to some U.S. expatriates, or (4) in certain
circumstances, if we are, or have been at any time within the shorter of the
five-year period preceding such sale or other disposition or the period such
non-U.S. holder held the common stock or note, a U.S. real property holding
corporation (a "USRPHC") within the meaning of Section 897(c)(2) of the Code
for U.S. federal income tax purposes. We do not believe that we are currently
a USRPHC or that we will become one in the future.

Conversion of the Notes

A non-U.S. holder generally should not be subject to U.S. federal income tax
on the conversion of a note into common stock. To the extent a non-U.S. holder
receives cash in lieu of a fractional share of common stock upon conversion,
such cash may give rise to gain that would be subject to the rules described
above with respect to the sale, exchange or redemption of a note or common
stock. See "Non-U.S. holders-Sale, Exchange or Redemption of the Notes or
Common Stock" above. To the extent a non-U.S. holder receives upon conversion
common stock that is attributable to accrued interest not previously included
in income, such stock may give rise to income that would be subject to the
rules described above with respect to the taxation of interest. See "Non-U.S.
Holders--Taxation of Interest" above.

Distributions on Common Stock

Distributions on common stock after conversion will constitute a dividend
for U.S. federal income tax purposes to the extent of our current or
accumulated earnings and profits as determined under U.S. federal income tax
principles. Dividends paid on common stock held by a non-U.S. holder generally
will be subject to U.S. withholding tax at a 30 percent rate, except where an
applicable U.S. income tax treaty provides for the reduction or elimination of
such withholding tax or where the dividends are effectively connected with the
holder's conduct of a trade or business in the United States and are taxable
as described below. A non-U.S. holder may be required to satisfy specific
requirements in order to claim a reduction or exemption from withholding under
the foregoing rules.

Distributions in excess of our current and accumulated earnings and profits
as determined under U.S. federal income tax principles will be treated as a
non-taxable return of capital that reduces the non-U.S. holder's basis in the
common stock dollar-for-dollar until the basis has been reduced to zero, and
therafter as capital gain. Such capital gain will generally not be taxable to
a non-U.S. holder except under the circumstances described above under "Non-
U.S. Holders-Sale, Exchange or Redemption of the Notes or Common Stock."

The conversion price of the notes is subject to adjustment in some
circumstances. Any such adjustment or failure to make an adjustment could, in
some circumstances, give rise to a deemed distribution to non-U.S. holders of
the notes or common stock that is taxable as a dividend to the extent of our
accumulated earnings and

33

profits. See "U.S. Holders-Distributions on Common Stock" above. In such case,
the deemed distribution would be subject to the rules described above
regarding U.S. withholding tax on dividends.

Income or Gains Effectively Connected With A U.S. Trade or Business

If a non-U.S. holder of a note or common stock is engaged in a trade or
business in the U.S. and if interest on the note, dividends on the common
stock, or gain realized on the sale, exchange or other disposition of the note
or common stock is effectively connected with the conduct of such trade or
business (and, if applicable tax treaty requires, is attributable to a U.S.
permanent establishment maintained by the non-U.S. holder in the U.S.), the
non-U.S. holder, although exempt from U.S. withholding tax (provided that the
certification requirements discussed in the next sentence are met), will
generally be subject to U.S. federal income tax on such interest, dividends or
gain on a net income basis in the same manner as if it were a U.S. holder. The
non-U.S. holder will be required, under currently effective Treasury
Regulations, to provide us with a properly executed IRS Form W-8ECI or
successor form in order to claim an exemption from U.S. withholding tax. In
addition, if such non-U.S. holder is a foreign corporation, it may be subject
to a branch profits tax equal to 30% (or such lower rate provided by an
applicable U.S. income tax treaty) of a portion of its effectively connected
earnings and profits for the taxable year.

U.S. Federal Estate Tax

A note held by an individual who at the time of death is not a citizen or
resident of the U.S. (as specially defined for U.S. federal estate tax
purposes) will not be subject to U.S. federal estate tax with respect to the
note if the individual did not actually or constructively own 10 percent or
more of the total combined voting power of all classes of our stock and, at
the time of the individual's death, payments with respect to such note would
not have been effectively connected with the conduct by such individual of a
trade or business in the U.S. Common stock held by an individual, actually or
constructively, who at the time of death is not a citizen or resident of the
U.S. (as specially defined for U.S. federal estate tax purposes) will be
included in such individual's estate for U.S. federal estate tax purposes,
unless an applicable estate tax treaty otherwise provides.

Non-U.S. holders should consult with their tax advisors regarding U.S.
federal, state and local and foreign income and estate tax consequences with
respect to the notes and common stock.

Backup Withholding and Information Reporting

A non-U.S. holder may have to comply with specific certification procedures
to establish that he is not a U.S. person in order to avoid information
reporting and backup withholding tax requirements with respect to our payments
of principal and interest on the notes. In addition, we must report annually
to the IRS and to each non-U.S. holder the amount of any dividends paid to,
and the tax withheld with respect to, such holder, regardless of whether any
tax was actually withheld. Copies of these information returns may also be
made available under the provisions of a specific treaty or agreement to the
tax authorities of the country in which the non-U.S. holder resides. Any
amounts withheld under the backup withholding rules from a payment to a non-
U.S. holder of a note or common stock will be allowed as a refund or credit
against such holder's U.S. federal income tax provided that the required
information is furnished to the IRS in a timely manner. Non-U.S. holders of
the notes or our common stock should consult their tax advisors regarding the
application of information reporting and backup withholding in their
particular situations, the availability of exemptions and the procedure for
obtaining any available exemption.

THE PRECEDING DISCUSSION OF THE MATERIAL U.S. FEDERAL INCOME TAX
CONSIDERATIONS IS FOR GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE.
ACCORDINGLY, EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS TAX ADVISOR AS TO
THE PARTICULAR U.S. FEDERAL, STATE, AND LOCAL TAX CONSEQUENCES OF PURCHASING,
HOLDING AND DISPOSING OF THE NOTES AND OUR COMMON STOCK. TAX ADVISORS SHOULD
ALSO BE CONSULTED AS TO THE U.S. ESTATE AND GIFT TAX CONSEQUENCES AND THE
FOREIGN TAX CONSEQUENCES OF PURCHASING, HOLDING AND DISPOSING OF THE NOTES AND
OUR COMMON STOCK, AS WELL AS THE CONSEQUENCES OF ANY PROPOSED CHANGE IN
APPLICABLE LAWS.

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SELLING HOLDERS

The notes were originally issued by Enzon and sold by Morgan Stanley & Co.
Incorporated, CIBC World Markets Corp., SG Cowen Securities Corporation and
Legg Mason Wood Walker Incorporated, as initial purchasers, in a transaction
exempt from the registration requirements of the Securities Act to persons
reasonably believed by such initial purchasers to be "qualified institutional
buyers" (as defined in Rule 144A under the Securities Act). Selling holders,
which term includes their transferees, pledges or donees or their successors,
may from time to time offer and sell pursuant to this prospectus any or all of
the notes and the underlying common stock.

Prior to any use of this prospectus in connection with an offering of the
notes and the underlying common stock, this prospectus will be supplemented to
set forth the name of the selling holder and the number of notes and shares of
underlying common stock beneficially owned by such holder. The prospectus
supplement will also disclose whether any selling holder has held any position
of office with, been employed by or otherwise had material relationship with,
the company or any of its affiliates during the three years prior to the date
of the prospectus supplement.

PLAN OF DISTRIBUTION

The selling holders and their successors (which term includes their
transferees, pledgees or donees or their successors) may sell the notes and
the common stock into which the notes are convertible directly to purchasers
or through underwriters, broker-dealers or agents, who may receive
compensation in the form of discounts, concessions or commissions from the
selling holders or the purchasers (which discounts, concessions or commissions
as to any particular underwriter, broker-dealer or agent may be in excess of
those customary in the types of transactions involved).

The notes and the common stock into which the notes are convertible may be
sold in one or more transactions at fixed prices, at prevailing market prices
at the time of sale, at prices related to such prevailing market prices, at
varying prices determined at the time of sale, or at negotiated prices. Such
sales may be effected in transactions (which may involve crosses or block
transactions) (1) on any national securities exchange or quotation service on
which the notes or the common stock may be listed or quoted at the time of
sale, (2) in the over-the-counter market, (3) in transactions otherwise than
on such exchanges or services or in the over-the-counter market, (4) through
the writing of options (whether such options are listed on an options exchange
or otherwise), (5) through the settlement of short sales or (6) through the
combination of the above. In connection with the sale of the notes and the
common stock into which the notes are convertible or otherwise, the selling
holders may enter into hedging transactions with broker-dealers or other
financial institutions which may in turn engage in short sales of the notes or
the common stock into with the notes are convertible and deliver these
securities to close out such short positions, or loan or pledge the notes or
the common stock into which the notes are convertible to broker-dealers that
in turn may sell these securities.

The aggregate proceeds to the selling holders from the sale of the notes or
common stock into which the notes are convertible offered by them hereby will
be the purchase price of such notes or common stock less discounts and
commissions, if any. Each of the selling holders reserves the right to accept
and, together with their agents from time to time, to reject, in whole or in
part, any proposed purchase of notes or common stock to be made directly or
through agents. We will not receive any of the proceeds from the sale of the
notes or the underlying common stock covered by this prospectus.

Our outstanding common stock is listed for trading on the Nasdaq National
Market. We do not intend to list the notes for trading on any national
securities exchange or on the Nasdaq National Market and can give no assurance
about the development of any trading market for the notes.

In order to comply with the securities laws of some states, if applicable,
the notes and common stock into which the notes are convertible may be sold in
such jurisdictions only through registered or licensed brokers or dealers. In
addition, in some states the notes and common stock into which the notes are
convertible may not be sold unless they have been registered or qualified for
sale or an exemption from registration or qualification requirements is
available and is complied with.

35

The selling holders and any underwriters, broker-dealers or agents that
participate in the sale of the notes and common stock into which the notes are
convertible may be "underwriters" within the meaning of Section 2(11) of the
Securities Act. Any discounts, commissions, concessions or profit they earn on
any resale of the shares may be underwriting discounts and commissions under
the Securities Act. Selling holders who are "underwriters" within the meaning
of Section 2(11) of the Securities Act will be subject to the prospectus
delivery requirements of the Securities Act. The selling holders have
acknowledged that they understand their obligations to comply with the
provisions of the Exchange Act and the rules thereunder relating to stock
manipulation, particularly Regulation M, and have agreed that they will not
engage in any transaction in violation of such provisions.

In addition, any securities covered by this prospectus which qualify for
sale pursuant to Rule 144 or Rule 144A of the Securities Act may be sold under
Rule 144 or Rule 144A rather than pursuant to this prospectus. We cannot
assure you that a selling holder will not sell any notes or common stock
described herein or will not transfer, devise or gift such securities by other
means not described in this prospectus.

To the extent required, the specific notes or common stock to be sold, the
name of the selling holders, the respective purchase prices and public
offering prices, the names of any agent, dealer or underwriter, and any
applicable commissions or discounts with respect to a particular offer will be
set forth in an accompanying prospectus supplement or, if appropriate, a post-
effective amendment to the registration statement of which this prospectus is
a part.

We entered into a registration rights agreement for the benefit of holders
of the notes to register their notes and common stock under applicable federal
and state securities laws under certain circumstances and at certain times.
The registration rights agreement provides for cross-indemnification of the
selling holders and Enzon and their respective directors, officer and
controlling persons against certain liabilities in connection with the offer
and sale of the notes and common stock, including liabilities under the
Securities Act. Enzon will pay substantially all of the expenses incurred by
the selling holders and Enzon incident to the offering and sale of the notes
and the common stock, provided that each selling holder will be responsible
for payment of commission, concessions and discounts of underwriters, broker-
dealers or agents.

LEGAL MATTERS

Certain legal matters relating to the notes and the underlying common stock
will be passed upon for Enzon by Dorsey & Whitney LLP, New York, New York.

EXPERTS

The consolidated financial statements of Enzon, Inc. and subsidiaries as of
June 30, 2000 and 1999, and for each of the years in the three-year period
ended June 30, 2000, have been incorporated by reference in this prospectus
and in the registration statement in reliance upon the report of KPMG LLP,
independent certified public accountants, and upon the authority of said firm
as experts in accounting and auditing.

36

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the Securities and Exchange Commission a registration
statement on Form S-3 with respect to the notes and the common stock offered
by this prospectus. This prospectus, which constitutes a part of the
registration statement, does not contain all of the information set forth in
the registration statement or the exhibits and schedules which are a part of
the registration statement. For further information about us, the notes and
our common stock, you should review the registration statement and exhibits
and schedules thereto. We file annual, quarterly and special reports, proxy
statements and other information with the Securities and Exchange Commission.
You may read and copy materials that we have filed with the Securities and
Exchange Commission at the following Securities and Exchange Commission public
reference rooms:

450 Fifth Street, N.W.       7 World Trade Center      500 West Madison Street
Room 1024                   Suite 1300                 Suite 1400
Washington, D.C. 20549     New York, New York 10048    Chicago, Illinois 60661

Please call the Securities and Exchange Commission at 1-800-SEC-0330 for
further information on the public reference rooms.

Our common stock is quoted on the Nasdaq National Market under the symbol
"ENZN," and our Securities and Exchange Commission filings can also be read at
the following Nasdaq address:

Nasdaq Operations,
1735 K Street, N.W.
Washington, D.C. 20006

Our Securities and Exchange Commission filings are also available to the
public on the Securities and Exchange Commission's Internet website at
http://www.sec.gov.

We incorporate by reference into this prospectus the documents listed below
and any future filings we make with the Securities and Exchange Commission
under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act,
including any filings after the date of this prospectus, until either of the
following has occurred: (1) all the notes have been sold, or (2) the holding
period applicable to the notes and the underlying common stock under Rule
144(k) under the Securities Act, or any successor provision, has expired. The
information incorporated by reference is an important part of this prospectus.
Any statement in a document incorporated by reference into this prospectus
will be deemed to be modified or superseded to the extent a statement
contained in (x) this prospectus or (y) any other subsequently filed document
that is incorporated by reference into this prospectus modifies or supersedes
such statement.

o Our Annual Report on Form 10-K and 10-K/A for our fiscal year ended June
30, 2000.

o Our Quarterly Reports on Form 10-Q for our fiscal quarters ended
September 30, 2000, December 31, 2000 and March 31, 2001.

o Our definitive proxy statement filed with the Securities and Exchange
Commission for our Annual Meeting of Stockholders held on December 5,
2000.

o Our Reports on Form 8-K filed on August 17, 2000, September 18, 2000,
November 2, 2000, November 6, 2000, November 7, 2000, November 8, 2000,
December 19, 2000, December 21, 2000, January 22, 2001, February 6, 2001,
February 16, 2001, February 22, 2001, March 26, 2001, March 30, 2001, May
7, 2001, May 9, 2001, May 23, 2001, May 24, 2001, June 13, 2001, June 14,
2001, June 21, 2001, July 17, 2001; July 27, 2001, August 9, 2001 and
August 13, 2001.

You may request a copy of these filings, at no cost, by writing to us at the
following address or telephoning us at (732) 980-4500 between the hours of
9:00 a.m. and 4:00 p.m., Eastern Standard time:

Enzon, Inc.,
Attention: Investor Relations
20 Kingsbridge Road
Piscataway, NJ 08854

37

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution

The following table sets forth the costs and expenses payable by the
Registrant in connection with the sale of securities being registered hereby.
All amounts are estimates except for the registration fee.

Amount
to be Paid
----------

Registration Fee ..................................................    $100,000
Legal fees and expenses ...........................................      50,000
Accounting fees and expenses ......................................      25,000
Printing Expenses .................................................      25,000
Miscellaneous .....................................................      10,000
--------
TOTAL............................................................    $210,000
========

Item 15. Indemnification of Officers and Directors

Section 145 of the Delaware General Corporation Law contains detailed
provisions for indemnification of directors and officers of Delaware
corporations against expenses, judgments, fines and settlements in connection
with litigation.

In accordance with the DGCL, Article 10 of our certificate of incorporation
provides that a director shall not be liable to us:

o for any breach of the director's duty of loyalty to us or our
stockholders;

o for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;

o under section 174 of the DGCL providing for liability of directors for
unlawful payment of dividends or unlawful stock purchases or redemptions;

o for any transaction from which a director derived an improper benefit; or

o for any act or omission occurring prior to the date when said Article 10
became effective.

Section 8.1 of our bylaws provides for the indemnification, to the fullest
extent authorized by law, of any person made, or threatened to be made, a
party to an action or proceeding, whether criminal, civil, administrative or
investigative, against expenses, judgments, fines, and amounts paid in
settlement incurred in connection with such action or proceeding, by reason of
the fact that such person is or was a director or officer of Enzon. Enzon's
Directors' and Officers' Liability Insurance, which is provided for under
Section 8.3 of our bylaws, insures our directors and officers against any
liability arising out of such person's status as a director or officer, and
insures us against our obligations to indemnify our directors and officers.

Our officers and directors have executed indemnity agreements with us which
supplement the protections provided by our certificate of incorporation and
bylaws. These agreements require us to pay for any damages, judgments,
settlements, costs and expenses for the defense of legal actions, claims,
proceedings and appeals due to any actual or alleged breach of duty, neglect,
error, misstatement, misleading statement, omission or other act done,
suffered or wrongfully attempted by the officer or director. If we do not pay
such costs and expenses within 90 days after we receive a written claim, such
officers or directors may bring a suit against us to recover the unpaid amount
of the claim. If such officer or director is successful, we will be required
to pay for the expenses incurred relating to the claim.

II-1

Item 16. Exhibits

(a) The following exhibits are filed as part of this Registration Statement:

Exhibit
Number                            Description of Exhibit

4.1      Indenture, dated as of June 26, 2001, between the Registrant and
Wilmington Trust Company, as trustee, including the form of 4 1/2%
Convertible Subordinated Note due 2008 attached as Exhibit A thereto

4.2      Registration Rights Agreement between the Registrant and the initial
purchasers, dated as of June 26, 2001

5.1      Opinion of Dorsey & Whitney LLP

12.1      Computation of Ratio of Earnings to Fixed Charges

23.1      Consent of KPMG LLP, Independent Certified Public Accountants

23.2      Consent of Dorsey & Whitney LLP (included in Exhibit 5.1)

24.1      Power of Attorney (included on the signature page of the
Registration Statement)

25.1      Form T-1 Statement of Eligibility of the Wilmington Trust Company to
act as trustee under the indenture

Item 17. Undertakings

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:

(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act,

(b) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement,

(c) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;

provided, however, that clauses (a) and (b) do not apply if the information
required to be included in a post-effective amendment by such clauses is
contained in periodic reports filed with or furnished to the Securities and
Exchange Commission by the Registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act") that
are incorporated by reference in the Registration Statement.

(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.

(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.

(4) That, for purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to Section 13(a)
of Section 15(d) of the Exchange Act that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.

II-2

Insofar as the indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions referenced in Item 15 of this
Registration Statement, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer, or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered hereunder, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question of whether such indemnification
by it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

II-3

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant certifies
that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Piscataway, State of New Jersey, on August 14,
2001.

ENZON, INC.

By:  /s/ ARTHUR J. HIGGINS

Arthur J. Higgins
President, Chief Executive Officer
and Director

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Arthur J. Higgins and Kenneth J. Zuerblis, and
each of them, his or her true and lawful attorney-in-fact and agent, with full
power of substitution, for him or her and in his or her name, place and stead,
in any and all capacities, to sign any and all amendments (including post-
effective amendments) to this Registration Statement (or any other
registration statement for the same offering that is effective upon filing
pursuant to Rule 462(b) under the Securities Act of 1933) and to file the
same, with all exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, hereby ratifying and confirming
all that each of said attorneys-in-fact and agents, or his or her substitute
or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the indicated capacities
on the dates indicated.

Signature                           Title                                           Date
---------                           -----                                           ----

/s/ ARTHUR J. HIGGINS    President, Chief Executive Officer and Director        August 14, 2001
-------------------------  (principal executive officer)
Arthur J. Higgins

/s/ KENNETH J. ZUERBLIS   Vice President, Finance, Chief Financial Officer and   August 14, 2001
-------------------------  Secretary
Kenneth J. Zuerblis     (principal financial and accounting officer)

Chairman of the Board
-------------------------
Randy H. Thurman

/s/ DAVID S. BARLOW     Director                                               August 14, 2001
-------------------------
David S. Barlow

/s/ ROLF A. CLASSON     Director                                               August 14, 2001
-------------------------
Rolf A. Classon

Director
-------------------------
Rosina B. Dixon, M.D.

/s/ DAVID W. GOLDE, M.D.  Director                                               August 14, 2001
-------------------------
David W. Golde, M.D.

/s/ ROBERT LEBUHN      Director                                               August 14, 2001
-------------------------
Robert LeBuhn

II-4

EXHIBIT INDEX

Exhibit
Number                            Description of Exhibit

4.1      Indenture, dated as of June 26, 2001, between the Registrant and
Wilmington Trust Company, as trustee, including the form of 4 1/2%
Convertible Subordinated Note due 2008 attached as Exhibit A thereto

4.2      Registration Rights Agreement between the Registrant and the initial
purchasers, dated as of June 26, 2001

5.1      Opinion of Dorsey & Whitney LLP

12.1      Computation of Ratio of Earnings to Fixed Charges

23.1      Consent of KPMG LLP, Independent Certified Public Accountants

23.2      Consent of Dorsey & Whitney LLP (included in Exhibit 5.1)

24.1      Power of Attorney (included on the signature page of the
Registration Statement)

25.1      Form T-1 Statement of Eligibility of the Wilmington Trust Company to
act as trustee under the indenture

Exhibit 4.1

TABLE OF CONTENTS

Page
----

ARTICLE I  DEFINITIONS                                                                                          3

Section 1.1       Definitions..................................................................      3

ARTICLE TWO ISSUE, DESCRIPTION, EXECUTION, REGISTRATION                                                        
AND EXCHANGE OF NOTES......................................................................................      9

Section 2.1.      Designation Amount and Issue of Notes........................................      9
Section 2.2       Form of Notes................................................................      9
Section 2.3       Date and Denomination of Notes; Payments of Interest.........................     10
Section 2.4       Execution of Notes...........................................................     11
Section 2.5       Exchange and Registration of Transfer of Notes; Restrictions                     
on Transfer; Depositary......................................................     11
Section 2.6       Mutilated, Destroyed, Lost or Stolen Notes...................................     18
Section 2.7.      Temporary Notes..............................................................     19
Section 2.8.      Cancellation of Notes Paid, Etc..............................................     19
Section 2.9       CUSIP Numbers................................................................     19

ARTICLE THREE REDEMPTION OF NOTES..........................................................................     19

Section 3.1.      Initial Prohibition on Redemption............................................     19
Section 3.2.      Notice of Redemptions; Selection of Notes....................................     20
Section 3.3.      Payment of Notes Called for Redemption.......................................     21
Section 3.4.      Conversion Arrangement on Call for Redemption................................     22
Section 3.5.      Redemption at Option of Holders..............................................     22

ARTICLE FOUR SUBORDINATION OF NOTES........................................................................     24

Section 4.1.      Agreement of Subordination...................................................     24
Section 4.2       Payments to Noteholders......................................................     24
Section 4.3.      Subrogation of Notes.........................................................     27
Section 4.4       Authorization to Effect Subordination........................................     27
Section 4.5.      Notice to Trustee............................................................     28
Section 4.6.      Trustee's Relation to Senior Indebtedness....................................

28
Section 4.7.      No Impairment of Subordination...............................................     29
Section 4.8       Certain Conversions Not Deemed Payment.......................................     29
Section 4.9.      Article Applicable to Paying Agents..........................................     29
Section 4.10      Senior Indebtedness Entitled to Rely.........................................     29
Section 4.11      Reliance on Judicial Order or Certificate of Liquidating Agent...............     29

ARTICLE FIVE PARTICULAR COVENANTS OF THE COMPANY...........................................................     30

Section 5.1.      Payment of Principal, Premium and Interest...................................     30
Section 5.2.      Maintenance of Office or Agency..............................................     30
Section 5.3.      Appointments to Fill Vacancies in Trustee's Office...........................     31
Section 5.4       Provisions as to Paying Agent................................................     31
Section 5.5.      Existence....................................................................     32
Section 5.6.      Maintenance of Properties....................................................     32
Section 5.7.      Payment of Taxes and Other Claims............................................     32

i

Section 5.8.      Rule 144A Information Requirement............................................     32
Section 5.9.      Stay, Extension and Usury Laws...............................................     32
Section 5.10.     Compliance Certificate.......................................................     33
Section 5.11.     Liquidated Damages Notice....................................................     33

ARTICLE SIX  NOTEHOLDERS LIST AND REPORTS BY THE COMPANY                                                        
AND THE TRUSTEE............................................................................................     33

Section 6.1.      Noteholders' Lists...........................................................     33
Section 6.2.      Preservation and Disclosure of Lists.........................................     34
Section 6.3.      Reports by Trustee...........................................................     34
Section 6.4.      Reports by Company...........................................................     34

ARTICLE SEVEN REMEDIES OF THE TRUSTEE AND NOTEHOLDERS ON                                                       
AN EVENT OF DEFAULT........................................................................................     35

Section 7.1.      Events of Default............................................................     35
Section 7.2.      Payments of Notes on Default; Suit Therefor..................................     36
Section 7.3.      Application of Monies Collected by Trustee...................................     37
Section 7.4.      Proceedings by Noteholder....................................................     38
Section 7.5.      Proceedings by Trustee.......................................................     39
Section 7.6.      Remedies Cumulative and Continuing...........................................     39
Section 7.7.      Direction of Proceedings and Waiver of Defaults by                                
Majority of Noteholders......................................................     39
Section 7.8.      Notice of Defaults...........................................................     40
Section 7.9.      Undertaking to Pay Costs.....................................................     40

ARTICLE EIGHT THE TRUSTEE..................................................................................     40

Section 8.1.      Duties and Responsibilities of Trustee.......................................     41
Section 8.2.      Reliance on Documents, Opinions, Etc.........................................     42
Section 8.3.      No Responsibility for Recitals, Etc..........................................     42
Section 8.4.      Trustee, Paying Agents, Conversion Agents or Registrar May                        
Own Notes....................................................................     42
Section 8.5.      Monies to be Held in Trust...................................................     42
Section 8.6.      Compensation and Expenses of Trustee.........................................     42
Section 8.7.      Officers' Certificate as Evidence............................................     43
Section 8.8.      Conflicting Interests of Trustee.............................................     43
Section 8.9.      Eligibility of Trustee.......................................................     43
Section 8.10.     Resignation or Removal of Trustee............................................     43
Section 8.11.     Acceptance by Successor Trustee..............................................     44
Section 8.12.     Succession by Merger, Etc....................................................     45
Section 8.13.     Preferential Collection of Claims............................................     45
Section 8.14.     Trustee's Application for Instructions from the Company......................     45

ARTICLE NINE THE NOTEHOLDERS...............................................................................     46

Section 9.1.      Action by Noteholders........................................................     46
Section 9.2.      Proof of Execution by Noteholders............................................     46
Section 9.3.      Who Are Deemed Absolute Owners...............................................     46
Section 9.4.      Company-Owned Notes Disregarded..............................................     46
Section 9.5.      Revocation of Consents; Future Holders Bound.................................     47

ARTICLE TEN MEETING OF NOTEHOLDERS.........................................................................     47

Section 10.1.     Purpose of Meetings..........................................................     47

ii

Section 10.2.     Call of Meetings by Trustee..................................................     47
Section 10.3.     Call of Meetings by Company or Noteholders...................................     48
Section 10.4.     Qualifications for Voting....................................................     48
Section 10.5.     Regulations..................................................................     48
Section 10.6.     Voting.......................................................................     49
Section 10.7.     No Delay of Rights by Meeting................................................     49

ARTICLE ELEVEN SUPPLEMENTAL INDENTURES.....................................................................     49

Section 11.1.     Supplemental Indentures Without Consent of Noteholders.......................     49
Section 11.2.     Supplemental Indenture with Consent of Noteholders...........................     50
Section 11.3.     Effect of Supplemental Indenture.............................................     51
Section 11.4.     Notation on Notes............................................................     51
Section 11.5.     Evidence of Compliance of Supplemental Indenture to be                            
Furnished to Trustee.........................................................     51

ARTICLE TWELVE CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE...........................................     52

Section 12.1.     Company May Consolidate, Etc on Certain Terms................................     52
Section 12.2.     Successor Corporation to be Substituted......................................     52
Section 12.3.     Opinion of Counsel to be Given Trustee.......................................     52

ARTICLE THIRTEEN SATISFACTION AND DISCHARGE OF INDENTURE...................................................     53

Section 13.1.     Discharge of Indenture.......................................................     53
Section 13.2.     Deposited Monies to be Held in Trust by Trustee..............................     53
Section 13.3.     Paying Agent to Repay Monies Held............................................     53
Section 13.4.     Return of Unclaimed Monies...................................................     53
Section 13.5.     Reinstatement................................................................     54

ARTICLE THIRTEEN IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS...........................     54

Section 14.1.     Indenture and Notes Solely Corporate Obligations.............................     54

ARTICLE FIFTEEN CONVERSION OF NOTES........................................................................     54

Section 15.1.     Right to Convert.............................................................     54
Section 15.2.     Exercise of Conversion Privilege; Issuance of Common Stock on Conversion;         
No Adjustment for Interest or Dividends......................................     55
Section 15.3.     Cash Payments in Lieu of Fractional Shares...................................     56
Section 15.4.     Conversion Price.............................................................     56
Section 15.5.     Adjustment of Conversion Price...............................................     56
Section 15.6.     Effect of Reclassification, Consolidation, Merger or Sale....................     64
Section 15.7.     Taxes on Shares Issued.......................................................     64
Section 15.8.     Reservation of Shares; Shares to be Fully Paid; Compliance with                   
Governmental Requirements; Listing of Common Stock...........................     65
Section 15.9.     Responsibility of Trustee....................................................     65
Section 15.10.    Notice to Holders Prior to Certain Actions...................................     66

ARTICLE SIXTEEN  MISCELLANEOUS.............................................................................     66

Section 16.1.     Provisions Binding on Company's Successors...................................     66
Section 16.2.     Official Acts by Successor Corporation.......................................     66
Section 16.3.     Addresses for Notices, Etc...................................................     67
Section 16.4.     Governing Law................................................................     67

iii

Section 16.5.     Evidence of Compliance with Conditions Precedent;                                 
Certificates to Trustee......................................................     67
Section 16.6.     Legal Holidays...............................................................     67
Section 16.7.     Trust Indenture Act..........................................................     68
Section 16.8.     No Security Interest Created.................................................     68
Section 16.9.     Benefits of Indenture........................................................     68
Section 16.10.    Table of Contents, Headings, Etc.............................................     68
Section 16.11.    Authenticating Agent.........................................................     68
Section 16.12.    Execution in Counterparts....................................................     69
Section 16.13.    Severability.................................................................     69

iv

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

Enzon, Inc.

To

Wilmington Trust Company
as Trustee

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

INDENTURE

Dated as of
June 26, 2001

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

4 1/2% Convertible Subordinated Notes due 2008

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

Reconciliation and Tie Between the Trust Indenture Act of 1939 and Indenture,
dated as of June 26, 2001, between Enzon, Inc. and Wilmington Trust Company as
Trustee.

TRUST INDENTURE ACT SECTION                              INDENTURE SECTION 
Section 310(a)(1)......................................................8.9
(a)(2)......................................................8.9
(a)(3).....................................................N.A.
(a)(4).....................................................N.A.
(a)(5)......................................................8.9
(b)........................................8.8; 8.9; 8.10; 8.11
Section 311(a)........................................................8.13
(b)........................................................8.13
(b)(2).....................................................8.13
Section 312(a).................................................6.1; 6.2(a)
(b)......................................................6.2(b)
(c)......................................................6.2(c)
Section 313(a)......................................................6.3(a)
(b)......................................................6.3(a)
(c)......................................................6.3(a)
(d)......................................................6.3(b)
Section 314(a).........................................................6.4
(b)........................................................N.A.
(c)(1).....................................................16.5
(c)(2).....................................................16.5
(c)(3).....................................................N.A.
(d)........................................................N.A.
(e)........................................................16.5
Section 315(a).........................................................8.1
(b).........................................................7.8
(c).........................................................8.1
(d).........................................................8.1
(d)(1)...................................................8.1(a)
(d)(2)...................................................8.1(b)
(d)(3)...................................................8.1(c)
(e).........................................................7.9
Section 316(a).........................................................7.7
(a)(1)(A)...................................................7.7
(a)(1)(B)...................................................7.7
(a)(2).....................................................N.A.
(b).........................................................7.4
Section 317(a)(1)......................................................7.5
(a)(2)......................................................7.5
(b).........................................................5.4
Section 318(a)........................................................16.7

-----------
*    Note:  This reconciliation and tie shall not, for any purpose, be deemed 
to be a part of the Indenture.
**   Note:  N.A. means Not Applicable.

2

INDENTURE

INDENTURE, dated as of June 26, 2001, between Enzon, Inc., a Delaware
corporation (hereinafter called the "Company"), having its principal office at
20 Kingsbridge Road, Piscataway, New Jersey 08854, and Wilmington Trust Company,
as trustee hereunder (hereinafter called the "Trustee"), having its principal
corporate trust office at Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890.

W I T N E S S E T H:

WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its 4 1/2% Convertible Subordinated Notes due 2008
(hereinafter called the "Notes"), in an aggregate principal amount not to exceed
$400,000,000, plus additional Notes not to exceed $60,000,000 at the option of
the Initial Purchasers pursuant to Section 2 of the Purchase Agreement, and, to
provide the terms and conditions upon which the Notes are to be authenticated,
issued and delivered, the Company has duly authorized the execution and delivery
of this Indenture; and

WHEREAS, the Notes, the certificate of authentication to be borne by
the Notes, a form of assignment, a form of option to elect repayment upon a
Fundamental Change, and a form of conversion notice to be borne by the Notes are
to be substantially in the forms hereinafter provided for; and

WHEREAS, all acts and things necessary to make the Notes, when executed
by the Company and authenticated and delivered by the Trustee or a duly
authorized authenticating agent, as in this Indenture provided, the valid,
binding and legal obligations of the Company, and to constitute this Indenture a
valid agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Notes have in all
respects been duly authorized.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

That in order to declare the terms and conditions upon which the Notes
are, and are to be, authenticated, issued and delivered, and in consideration of
the premises and of the purchase and acceptance of the Notes by the holders
thereof, the Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time of the Notes
(except as otherwise provided below), as follows:

ARTICLE I

DEFINITIONS

Section 1.1.   Definitions. The terms defined in this Section 1.1
(except as herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section 1.1. All
other terms used in this Indenture that are defined in the Trust Indenture Act
or which are by reference therein defined in the Securities Act (except as
herein otherwise expressly provided or unless the context otherwise requires)
shall have the meanings assigned to such terms in said Trust Indenture Act and
in said Securities Act as in force at the date of the execution of this
Indenture. The words "herein", "hereof", "hereunder", and words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other Subdivision. The terms defined in this Article include the
plural as well as the singular.

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

"Board of Directors" means the Board of Directors of the Company or a
committee of such Board duly authorized to act for it hereunder.

"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which the banking institutions in The City of New
York or the city in which the Corporate Trust Office is located are authorized
or obligated by law or executive order to close or be closed.

"Closing Price" has the meaning specified in Section 15.5(h)(1).

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

"Common Stock" means any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company. Subject to the provisions
of Section 15.6, however, shares issuable on conversion of Notes shall include
only shares of the class designated as common stock of the Company at the date
of this Indenture (namely, the Common Stock, par value $.01 per share) or shares
of any class or classes resulting from any reclassification or reclassifications
thereof and which have no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company and which are not subject to redemption by the
Company; provided, however, that if at any time there shall be more than one
such resulting class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of shares of
all such classes resulting from all such reclassifications.

"Company" means the corporation named as the "Company" in the first
paragraph of this Indenture, and, subject to the provisions of Article Twelve,
shall include its successors and assigns.

"Company Notice" has the meaning specified in Section 3.5(b).

"Conversion Price" has the meaning specified in Section 15.4.

"Corporate Trust Office" or other similar term, means the designated
office of the Trustee at which at any particular time its corporate trust
business shall be administered, which office is, at the date as of which this
Indenture is dated, located at Wilmington Trust Company, Rodney Square North,
1100 North Market Street, Wilmington, Delaware 19890, Attention: Corporate Trust
Division (Enzon, Inc., 4 1/2% Convertible Subordinated Notes due 2008).

"Custodian" means Wilmington Trust Company, as custodian with respect
to the Notes in global form, or any successor entity thereto.

4

"Default" means any event that is, or after notice or passage of time,
or both, would be, an Event of Default.

"Defaulted Interest" has the meaning specified in Section 2.3.

"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.5(d) as the
Depositary with respect to such Notes, until a successor shall have been
appointed and become such pursuant to the applicable provisions of this
Indenture, and thereafter, "Depositary" shall mean or include such successor.

"Designated Senior Indebtedness" means all Indebtedness existing on the
date hereof and the Company's obligations hereafter incurred or existing under
any other particular Senior Indebtedness in which the instrument or agreement
creating or evidencing the same or the assumption or guarantee thereof (or
related agreements or documents to which the Company is a party) expressly
provides that such Senior Indebtedness shall be "Designated Senior Indebtedness"
for purposes of this Indenture (provided that such instrument, agreement or
other document may place limitations and conditions on the right of such Senior
Indebtedness to exercise the rights of Designated Senior Indebtedness). If any
payment made to any holder of any Designated Senior Indebtedness or its
Representative with respect to such Designated Senior Indebtedness is rescinded
or must otherwise be returned by such holder or Representative upon the
insolvency, bankruptcy or reorganization of the Company or otherwise, the
reinstated Indebtedness of the Company arising as a result of such rescission or
return shall constitute Designated Senior Indebtedness effective as of the date
of such rescission or return.

"Event of Default" means any event specified in Section 7.1(a), (b),
(c), (d) or (e).

"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder, as in effect from time to
time.

"Fundamental Change" means the occurrence of any transaction or event
in connection with which all or substantially all of the Common Stock is
exchanged for, converted into, acquired for or constitutes solely the right to
receive consideration (whether by means of an exchange offer, liquidation,
tender offer, consolidation, merger, combination, reclassification,
recapitalization or otherwise) which consideration is not all or substantially
all common stock (a) listed on, or will be listed on or immediately after the
transaction or event, on a United States national securities exchange or (b)
approved, or immediately after the transaction or event will be approved, for
quotation on the Nasdaq National Market or any similar United States system of
automated dissemination of quotations of securities prices.

"Global Note" has the meaning set forth in Section 2.5(b).

"Indebtedness" means, with respect to any Person, and without
duplication, (a) all indebtedness, obligations and other liabilities (contingent
or otherwise) of such Person for borrowed money (including obligations of the
Company in respect of overdrafts, foreign exchange contracts, currency exchange
agreements, interest rate protection agreements, and any loans or advances from
banks, whether or not evidenced by notes or similar instruments) or evidenced by
bonds, debentures, notes or similar instruments (whether or not the recourse of
the lender is to the whole of the assets of such Person or to only a portion
thereof), other than any account payable or other accrued current liability or
obligation incurred in the ordinary course of business in connection with the
obtaining of materials or services; (b) all reimbursement obligations and other
liabilities (contingent or otherwise) of such Person with respect to letters of
credit, bank guarantees or bankers' acceptances; (c) all obligations and
liabilities (contingent or otherwise) in respect of real or personal property
leases of such Person required, in conformity with generally accepted accounting
principles, to be accounted for as capitalized lease 

5

obligations on the balance sheet of such Person and all obligations and other
liabilities (contingent or otherwise) under any lease or related document
(including a purchase agreement) in connection with the lease of real property
which provides that such Person is contractually obligated to purchase or cause
a third party to purchase the leased property and thereby guarantee a minimum
residual value of the leased property to the lessor and the obligations of such
Person under such lease or related document to purchase or to cause a third
party to purchase such leased property; (d) all obligations of such Person
(contingent or otherwise) with respect to an interest rate or other swap, cap or
collar agreement or other similar instrument or agreement or foreign currency
hedge, exchange, purchase or similar instrument or agreement; (e) all direct or
indirect guaranties or similar agreements by such Person in respect of, and
obligations or liabilities (contingent or otherwise) of such Person to purchase
or otherwise acquire or otherwise assure a creditor against loss in respect of,
indebtedness, obligations or liabilities of another Person of the kind described
in clauses (a) through (d); (f) any indebtedness or other obligations described
in clauses (a) through (e) secured by any mortgage, pledge, lien or other
encumbrance existing on property which is owned or held by such Person,
regardless of whether the indebtedness or other obligation secured thereby shall
have been assumed by such Person; and (g) any and all deferrals, renewals,
extensions and refundings of, or amendments, modifications or supplements to,
any indebtedness, obligation or liability of the kind described in clauses (a)
through (f).

"Indenture" means this instrument as originally executed or, if amended
or supplemented as herein provided, as so amended or supplemented.

"Initial Purchasers" means Morgan Stanley & Co. Incorporated, CIBC
World Markets Corp., SG Cowen Securities Corporation and Legg Mason Wood Walker
Incoporated.

"Institutional Accredited Investor" means an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.

"Liquidated Damages" has the meaning specified for "Liquidated Damages
Amount" in Section 2(e) of the Registration Rights Agreement.

"Non-Payment Default" has the meaning specified in Section 4.2(ii).

"Non-U.S. Person" means a Person other than a U.S. Person (as defined
in Regulation S).

"Note" or "Notes" means any Note or Notes, as the case may be,
authenticated and delivered under this Indenture, including the Global Note.

"Note register" has the meaning specified in Section 2.5(a).

"Note registrar" has the meaning specified in Section 2.5(a).

"Noteholder" or "holder" as applied to any Note, or other similar terms
(but excluding the term "beneficial holder"), means any Person in whose name at
the time a particular Note is registered on the Note registrar's books.

"Notice Date" has the meaning specified in Section 3.1(b).

"Officers' Certificate", when used with respect to the Company, means a
certificate signed by both (a) the Chairman of the Board, the Chief Executive
Officer, the President or any Vice President (whether or not designated by a
number or numbers or word or words added before or after the title "Vice

6

President") and (b) the Treasurer or any Assistant Treasurer, the Controller or
any Assistant Controller, or the Secretary or any Assistant Secretary of the
Company.

"Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company, or other counsel
reasonably acceptable to the Trustee (it being understood that Dorsey & Whitney
LLP shall be deemed acceptable).

"Optional Redemption" has the meaning specified in Section 3.1(b).

"Outstanding", when used with reference to Notes and subject to the
provisions of Section 9.4, means, as of any particular time, all Notes
authenticated and delivered by the Trustee under this Indenture, except:

(a) Notes theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;

(b) Notes, or portions thereof, (i) for the redemption of
which monies in the necessary amount shall have been deposited in trust
with the Trustee or with any paying agent (other than the Company) or
(ii) which shall have been otherwise defeased in accordance with
Article Thirteen;

(c) Notes in lieu of which, or in substitution for which,
other Notes shall have been authenticated and delivered pursuant to the
terms of Section 2.6; and

(d) Notes converted into Common Stock pursuant to Article
Fifteen and Notes deemed not outstanding pursuant to Article Three.

"Payment Blockage Notice" has the meaning specified in Section 4.2(ii).

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

"Portal Market" means The Portal Market operated by the National
Association of Securities Dealers, Inc. or any successor thereto.

"Predecessor Note" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note, and, for the purposes of this definition, any Note
authenticated and delivered under Section 2.6 in lieu of a lost, destroyed or
stolen Note shall be deemed to evidence the same debt as the lost, destroyed or
stolen Note that it replaces.

"Purchase Agreement" means that certain Purchase Agreement, dated as of
June 20, 2001 among the Company and the Initial Purchasers, as amended from time
to time in accordance with its terms.

"QIB" means a "qualified institutional buyer" as defined in Rule 144A.

"Registration Rights Agreement" means that certain Registration Rights
Agreement, dated as of June 26, 2001, among the Company and the Initial
Purchasers, as amended from time to time in accordance with its terms.

"Regulation S" means Regulation S as promulgated under the Securities
Act.

7

"Representative" means (a) the indenture trustee or other trustee,
agent or representative for holders of Senior Indebtedness or (b) with respect
to any Senior Indebtedness that does not have any such trustee, agent or other
representative, (i) in the case of such Senior Indebtedness issued pursuant to
an agreement providing for voting arrangements as among the holders or owners of
such Senior Indebtedness, any holder or owner of such Senior Indebtedness acting
with the consent of the required persons necessary to bind such holders or
owners of such Senior Indebtedness and (ii) in the case of all other such Senior
Indebtedness, the holder or owner of such Senior Indebtedness.

"Responsible Officer", when used with respect to the Trustee, means an
officer of the Trustee in the Corporate Trust Office assigned and duly
authorized by the Trustee to administer this Indenture.

"Restricted Securities" has the meaning specified in Section 2.5(d).

"Rule 144A" means Rule 144A as promulgated under the Securities Act.

"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, as in effect from time to time.

"Senior Indebtedness" means the principal of, premium, if any, interest
(including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding) and rent payable on or
in connection with, and all fees, costs, expenses and other amounts accrued or
due on or in connection with, Indebtedness of the Company, whether outstanding
on the date of this Indenture or thereafter created, incurred, assumed,
guaranteed or in effect guaranteed by the Company (including all deferrals,
renewals, extensions or refundings of, or amendments, modifications or
supplements to, the foregoing), unless in the case of any particular
Indebtedness the instrument creating or evidencing the same or the assumption or
guarantee thereof expressly provides that such Indebtedness shall not be senior
in right of payment to the Notes or expressly provides that such Indebtedness is
"pari passu" or "junior" to the Notes. Notwithstanding the foregoing, the term
Senior Indebtedness shall not include any Indebtedness of the Company to any
Subsidiary of the Company. If any payment made to any holder of any Senior
Indebtedness or its Representative with respect to such Senior Indebtedness is
rescinded or must otherwise be returned by such holder or Representative upon
the insolvency, bankruptcy or reorganization of the Company or otherwise, the
reinstated Indebtedness of the Company arising as a result of such rescission or
return shall constitute Senior Indebtedness effective as of the date of such
rescission or return.

"Significant Subsidiary" means, as of any date of determination, a
Subsidiary of the Company, if as of such date of determination either (a) the
assets of such subsidiary equal 10% or more of the Company's total consolidated
assets or (b) the total revenue of which represented 10% or more of the
Company's consolidated total revenue for the most recently completed fiscal
year.

"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of capital stock or other equity interest entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other subsidiaries
of that Person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or managing general partner of which is such Person or a
subsidiary of such Person or (b) the only general partners of which are such
Person or of one or more subsidiaries of such Person (or any combination
thereof).

"Trading Day" has the meaning specified in Section 15.5(h)(5).

8

"Trigger Event" has the meaning specified in Section 15.5(d).

"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, as it was in force at the date of this Indenture, except as provided in
Sections 11.3 and 15.6; provided, however, that, in the event the Trust
Indenture Act of 1939 is amended after the date hereof, the term "Trust
Indenture Act" shall mean, to the extent required by such amendment, the Trust
Indenture Act of 1939 as so amended.

"Trustee" means Wilmington Trust Company and its successors and any
corporation resulting from or surviving any consolidation or merger to which it
or its successors may be a party and any successor trustee at the time serving
as successor trustee hereunder.

The definitions of certain other terms are as specified in Sections 2.5
and 3.5 and Article Fifteen.

ARTICLE TWO

ISSUE, DESCRIPTION, EXECUTION,
REGISTRATION AND EXCHANGE OF NOTES

Section 2.1.    Designation Amount and Issue of Notes. The Notes
shall be designated as "4 1/2% Convertible Subordinated Notes due 2008". Notes
not to exceed the aggregate principal amount of $400,000,000 (or $460,000,000 if
the option set forth in Section 2 of the Purchase Agreement is exercised in full
by the Initial Purchasers) (except pursuant to Sections 2.5, 2.6, 3.3, 3.5 and
15.2 hereof) upon the execution of this Indenture, or from time to time
thereafter, may be executed by the Company and delivered to the Trustee for
authentication, and the Trustee shall thereupon authenticate and deliver said
Notes to or upon the written order of the Company, signed by (a) its Chairman of
the Board, Chief Executive Officer, President or any Vice President (whether or
not designated by a number or numbers or word or words added before or after the
title "Vice President") and (b) its Treasurer or any Assistant Treasurer, its
Controller or any Assistant Controller or its Secretary or any Assistant
Secretary, without any further action by the Company hereunder.

Section 2.2.    Form of Notes. The Notes and the Trustee's
certificate of authentication to be borne by such Notes shall be substantially
in the form set forth in Exhibit A, which is incorporated in and made a part of
this Indenture.

Any of the Notes may have such letters, numbers or other marks of
identification and such notations, legends and endorsements as the officers
executing the same may approve (execution thereof to be conclusive evidence of
such approval) and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Notes may be
listed, or to conform to usage.

Any Global Note shall represent such of the outstanding Notes as shall
be specified therein and shall provide that it shall represent the aggregate
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate amount of outstanding Notes represented thereby may from time to time
be increased or reduced to reflect transfers or exchanges permitted hereby. Any
endorsement of a Global Note to reflect the amount of any increase or decrease
in the amount of outstanding Notes represented thereby shall be made by the
Trustee or the Custodian, at the direction of the Trustee, in such manner and
upon instructions given by the holder of such Notes in accordance with this
Indenture. Payment of principal of and interest and premium, if any, on any
Global Note shall be made to the holder of such Note.

9

The terms and provisions contained in the form of Note attached as
Exhibit A hereto shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.

Section 2.3.     Date and Denomination of Notes; Payments of
Interest. The Notes shall be issuable in registered form without coupons in
denominations of $1,000 principal amount and integral multiples thereof. Every
Note shall be dated the date of its authentication and shall bear interest from
the applicable date in each case as specified on the face of the form of Note
attached as Exhibit A hereto. Interest on the Notes shall be computed on the
basis of a 360-day year comprised of twelve (12) 30-day months.

The Person in whose name any Note (or its Predecessor Note) is
registered on the Note register at the close of business on any record date with
respect to any interest payment date shall be entitled to receive the interest
payable on such interest payment date, except (i) that the interest payable upon
redemption (unless the date of redemption is an interest payment date) will be
payable to the Person to whom principal is payable and (ii) as set forth in the
next succeeding sentence. In the case of any Note (or portion thereof) that is
converted into Common Stock during the period from (but excluding) a record date
to (but excluding) the next succeeding interest payment date either (x) if such
Note (or portion thereof) has been called for redemption pursuant to Section 3.2
on a redemption date which occurs during such period, or is to be redeemed in
connection with a Fundamental Change on a Repurchase Date (as defined in Section
3.5) that occurs during such period, the Company shall not be required to pay
interest on such interest payment date in respect of any such Note (or portion
thereof) except to the extent required to be paid upon redemption of such Note
or portion thereof pursuant to Section 3.3 or 3.5 hereof or (y) if such Note (or
portion thereof) has not been called for redemption on a redemption date that
occurs during such period and is not to be redeemed in connection with a
Fundamental Change on a Repurchase Date that occurs during such period, such
Note (or portion thereof) that is submitted for conversion during such period
shall be accompanied by funds equal to the interest payable on such succeeding
interest payment date on the principal amount so converted, as provided in the
penultimate paragraph of Section 15.2 hereof. Interest shall be payable at the
office of the Company maintained by the Company for such purposes in the Borough
of Manhattan, the city of New York, which shall initially be an office or agency
of the Trustee and may, as the Company shall specify to the paying agent in
writing by each record date, be paid either (i) by check mailed to the address
of the Person entitled thereto as it appears in the Note register (provided that
the holder of Notes with an aggregate principal amount in excess of $2,000,000
shall, at the written election of such holder, be paid by wire transfer in
immediately available funds) or (ii) by transfer to an account maintained by
such Person located in the United States; provided, however, that payments to
the Depositary will be made by wire transfer of immediately available funds to
the account of the Depositary or its nominee. The term "record date" with
respect to any interest payment date shall mean the December 15 or June 15
preceding the relevant January 1 or July 1, respectively.

Any interest on any Note which is payable, but is not punctually paid
or duly provided for, on any January 1 or July 1 (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Noteholder on the relevant
record date by virtue of his having been such Noteholder, and such Defaulted
Interest shall be paid by the Company, at its election in each case, as provided
in clause (1) or (2) below:

(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Notes (or their respective
Predecessor Notes) are registered at the close of business on a special
record date for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest to be paid on each Note and
the date of the payment (which shall be not less 

10

than twenty-five (25) days after the receipt by the Trustee of such
notice, unless the Trustee shall consent to an earlier date), and at
the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the
Person entitled to such Defaulted Interest as in this clause provided.
Thereupon the Trustee shall fix a special record date for the payment
of such Defaulted Interest which shall be not more than fifteen (15)
days and not less than ten (10) days prior to the date of the proposed
payment, and not less than ten (10) days after the receipt by the
Trustee of the notice of the proposed payment, the Trustee shall
promptly notify the Company of such special record date and, in the
name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the special record date
therefor to be mailed, first-class postage prepaid, to each Noteholder
at his address as it appears in the Note register, not less than ten
(10) days prior to such special record date. Notice of the proposed
payment of such Defaulted Interest and the special record date therefor
having been so mailed, such Defaulted Interest shall be paid to the
Persons in whose names the Notes (or their respective Predecessor
Notes) were registered at the close of business on such special record
date and shall no longer be payable pursuant to the following clause
(2) of this Section 2.3.

(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange or automated quotation system on which the Notes
may be listed or designated for issuance, and upon such notice as may
be required by such exchange or automated quotation system, if, after
notice given by the Company to the Trustee of the proposed payment
pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.

Section 2.4 Execution of Notes. The Notes shall be signed in the name
and on behalf of the Company by the manual or facsimile signature of its
Chairman of the Board, Chief Executive Officer, President or any Vice President
(whether or not designated by a number or numbers or word or words added before
or after the title "Vice President") and attested by the manual or facsimile
signature of its Secretary or any of its Assistant Secretaries or its Treasurer
or any of its Assistant Treasurers (which may be printed, engraved or otherwise
reproduced thereon, by facsimile or otherwise). Only such Notes as shall bear
thereon a certificate of authentication substantially in the form set forth on
the form of Note attached as Exhibit A hereto, manually executed by the Trustee
(or an authenticating agent appointed by the Trustee as provided by Section
16.11), shall be entitled to the benefits of this Indenture or be valid or
obligatory for any purpose. Such certificate by the Trustee (or such an
authenticating agent) upon any Note executed by the Company shall be conclusive
evidence that the Note so authenticated has been duly authenticated and
delivered hereunder and that the holder is entitled to the benefits of this
Indenture.

In case any officer of the Company who shall have signed any of the
Notes shall cease to be such officer before the Notes so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Notes nevertheless may be authenticated and delivered or disposed of as though
the person who signed such Notes had not ceased to be such officer of the
Company, and any Note may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Note, shall be the proper officers
of the Company, although at the date of the execution of this Indenture any such
person was not such an officer.

Section 2.5     Exchange and Registration of Transfer of Notes; 
Restrictions on Transfer; Depositary.

11

(a) The Company shall cause to be kept at the Corporate Trust
Office a register (the register maintained in such office and in any other
office or agency of the Company designated pursuant to Section 5.2 being herein
sometimes collectively referred to as the "Note register") in which, subject to
such reasonable regulations as it may prescribe, the Company shall provide for
the registration of Notes and of transfers of Notes. The Note register shall be
in written form or in any form capable of being converted into written form
within a reasonably prompt period of time. The Trustee is hereby appointed "Note
registrar" for the purpose of registering Notes and transfers of Notes as herein
provided. The Company may appoint one or more co-registrars in accordance with
Section 5.2.

Upon surrender for registration of transfer of any Note to the Note
registrar or any co-registrar, and satisfaction of the requirements for such
transfer set forth in this Section 2.5, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Notes of any authorized denominations and of a
like aggregate principal amount and bearing such restrictive legends as may be
required by this Indenture.

Notes may be exchanged for other Notes of any authorized denominations
and of a like aggregate principal amount upon surrender of the Notes to be
exchanged at any such office or agency maintained by the Company pursuant to
Section 5.2. Whenever any Notes are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Notes which
the Noteholder making the exchange is entitled to receive bearing registration
numbers not contemporaneously outstanding.

All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.

All Notes presented or surrendered for registration of transfer or for
exchange, redemption or conversion shall be duly endorsed, or be accompanied by
a written instrument or instruments of transfer in form satisfactory to the
Company, and the Notes shall be duly executed by the Noteholder thereof or his
attorney duly authorized in writing.

No service charge shall be made to any holder for any registration of
transfer or exchange of Notes, but the Company or the Trustee may require
payment by the holder of a sum sufficient to cover any tax, assessment or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Notes.

Neither the Company nor the Trustee nor any Note registrar shall be
required to exchange or register a transfer of (a) any Notes or portions thereof
for a period of fifteen (15) days next preceding any selection of Notes to be
redeemed, (b) any Notes or portions thereof called for redemption pursuant to
Section 3.2, (c) any Notes or portions thereof surrendered for conversion
pursuant to Article Fifteen or (d) any Notes or portions thereof tendered for
redemption (and not withdrawn) pursuant to Section 3.5.

(b) So long as the Notes are eligible for book-entry
settlement with the Depositary, or unless otherwise required by law, all Notes
that, upon initial issuance are beneficially owned by QIBs or as a result of a
sale or transfer after initial issuance are beneficially owned by QIBs or by
Non-U.S. Persons who acquired such notes in accordance with Regulation S, will
be represented by one or more Notes in global form registered in the name of the
Depositary or the nominee of the Depositary (the "Global Note"), except as
otherwise specified below. The transfer and exchange of beneficial interests in
any such Global Note shall be effected through the Depositary in accordance with
this Indenture and the procedures of the Depositary therefor. The Trustee shall,
or shall direct the Custodian to, make appropriate endorsements to reflect
increases or decreases in the principal amounts of any such Global 

12

Note as set forth on the face of the Note ("Principal Amount") to reflect any
such transfers. Except as provided below, beneficial owners of a Global Note
shall not be entitled to have certificates registered in their names, will not
receive or be entitled to receive physical delivery of certificates in
definitive form and will not be considered holders of such Global Note.

(c) So long as the Notes are eligible for book-entry
settlement with the Depositary, or unless otherwise required by law, upon any
transfer of a definitive Note (other than a Global Note) to a QIB in accordance
with Rule 144A or to a Non-U.S. Person in accordance with Regulation S, and upon
receipt of the definitive Note or Notes being so transferred, together with a
certification, substantially in the form on the reverse of the Note, from the
transferor that the transfer is being made in compliance with Rule 144A (or
other evidence satisfactory to the Trustee), the Trustee shall, or shall direct
the Custodian to, make an endorsement on the Global Note to reflect an increase
in the aggregate Principal Amount of the Notes represented by such Global Note,
and the Trustee shall cancel such definitive Note or Notes in accordance with
the standing instructions and procedures of the Depositary; provided, however,
that no definitive Note, or portion thereof, in respect of which the Company or
an Affiliate of the Company held any beneficial interest shall be included in
such Global Note until such definitive Note is freely tradable in accordance
with Rule 144(k) under the Securities Act, provided further that the Trustee
shall issue Notes in definitive form upon any transfer of a beneficial interest
in the Global Note to the Company or any Affiliate of the Company.

Upon any sale or transfer of a Note to an Institutional Accredited
Investor (other than pursuant to a registration statement that has been declared
effective under the Securities Act), such Institutional Accredited Investor
shall, prior to such sale or transfer, furnish to the Company and/or the Trustee
a signed letter containing representations and agreements relating to
restrictions on transfer substantially in the form set forth in Exhibit B to
this Indenture. Upon any transfer of a beneficial interest in the Global Note to
an Institutional Accredited Investor, the Trustee shall, or shall direct the
Custodian to, make an endorsement on the Global Note to reflect a decrease in
the aggregate Principal Amount of the Notes represented by such Global Note, and
the Company shall execute a definitive Note or Notes in exchange therefore, and
the Trustee, upon receipt of such definitive Note or Notes and the written order
of the Company, shall authenticate and deliver such, definitive Note or Notes.

Any Global Note may be endorsed with or have incorporated in the text
thereof such legends or recitals or changes not inconsistent with the provisions
of this Indenture as may be required by the Custodian, the Depositary or by the
National Association of Securities Dealers, Inc. in order for the Notes to be
tradable on The Portal Market or as may be required for the Notes to be tradable
on any other market developed for trading of securities pursuant to Rule 144A or
required to comply with any applicable law or any regulation thereunder or with
the rules and regulations of any securities exchange or automated quotation
system upon which the Notes may be listed or traded or to conform with any usage
with respect thereto, or to indicate any special limitations or restrictions to
which any particular Notes are subject.

(d) Every Note that bears or is required under this Section
2.5(d) to bear the legend set forth in this Section 2.5(d) (together with any
Common Stock issued upon conversion of the Notes and required to bear the legend
set forth in Section 2.5(e), collectively, the "Restricted Securities") shall be
subject to the restrictions on transfer set forth in this Section 2.5(d)
(including those set forth in the legend set forth below) unless such
restrictions on transfer shall be waived by written consent of the Company, and
the holder of each such Restricted Security, by such Noteholder's acceptance
thereof, agrees to be bound by all such restrictions on transfer. As used in
Sections 2.5(d) and 2.5(e) the term "transfer" encompasses any sale, pledge,
loan, transfer or other disposition whatsoever of any Restricted Security. The
Trustee shall refuse to register any transfer of any Note if it has actual
knowledge that such transfer is in violation of the restrictions contained in
the legend set forth in this Section 2.5(d).

13

Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), any
certificate evidencing such Note (and all securities issued in exchange therefor
or substitution thereof, other than Common Stock, if any, issued upon conversion
thereof, which shall bear the legend set forth in Section 2.5(e), if applicable)
shall bear a legend in substantially the following form, unless such Note has
been sold pursuant to a registration statement that has been declared effective
under the Securities Act (and which continues to be effective at the time of
such transfer), or unless otherwise agreed by the Company in writing, with
written notice thereof to the Trustee:

THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE.
BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT)
("INSTITUTIONAL ACCREDITED INVESTOR"); (2) AGREES THAT IT WILL NOT,
PRIOR TO EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE
NOTE EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR
ANY SUCCESSOR PROVISION), RESELL OR OTHERWISE TRANSFER THIS NOTE OR THE
COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE EXCEPT (A) TO ENZON,
INC. OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO
WILMINGTON TRUST COMPANY AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE) A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE NOTES (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR A SUCCESSOR
TRUSTEE, AS APPLICABLE), (D) OUTSIDE THE UNITED STATES IN COMPLIANCE
WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION
FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
APPLICABLE) OR (F) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER); (3) AGREES THAT PRIOR TO SUCH
TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (2)(F) ABOVE), IT
WILL FURNISH TO WILMINGTON TRUST COMPANY, AS TRUSTEE (OR A SUCCESSOR
TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS THE TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES 

14

ACT; AND (4) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE PRIOR TO THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THIS NOTE UNDER
RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE
HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO
WILMINGTON TRUST COMPANY, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE). IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED
INVESTOR OR IS A PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO WILMINGTON TRUST COMPANY, AS TRUSTEE
(OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS SUCH TRUSTEE MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE
TRANSFER OF THIS NOTE PURSUANT TO CLAUSE (2)(F) ABOVE OR UPON ANY
TRANSFER OF THIS NOTE UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR
ANY SUCCESSOR PROVISION). AS USED HEREIN, THE TERMS "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.

Any Note (or security issued in exchange or substitution therefor) as
to which such restrictions on transfer shall have expired in accordance with
their terms or as to conditions for removal of the foregoing legend set forth
therein have been satisfied may, upon surrender of such Note for exchange to the
Note registrar in accordance with the provisions of this Section 2.5, be
exchanged for a new Note or Notes, of like tenor and aggregate principal amount,
which shall not bear the restrictive legend required by this Section 2.5(d).

Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in the second paragraph of Section 2.5(c) and in this
Section 2.5(d)), a Global Note may not be transferred as a whole or in part
except by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary.

The Depositary shall be a clearing agency registered under the Exchange
Act. The Company initially appoints The Depository Trust Company to act as
Depositary with respect to the Notes in global form. Initially, the Global Note
shall be issued to the Depositary, registered in the name of Cede & Co., as the
nominee of the Depositary, and deposited with the Custodian for Cede & Co.

If at any time the Depositary for a Global Note notifies the Company
that it is unwilling or unable to continue as Depositary for such Note, the
Company may appoint a successor Depositary with respect to such Note. If a
successor Depositary is not appointed by the Company within ninety (90) days
after the Company receives such notice, the Company will execute, and the
Trustee, upon receipt of an Officers' Certificate for the authentication and
delivery of Notes, will authenticate and deliver, Notes in certificated form, in
aggregate principal amount equal to the principal amount of such Global Note, in
exchange for such Global Note.

15

If a Note in certificated form is issued in exchange for any portion of
a Global Note on or after the close of business at the office or agency where
such exchange occurs on any record date and before the opening of business at
such office or agency on the next succeeding interest payment date, interest
will not be payable on such interest payment date in respect of such
certificated Note, but will be payable on such interest payment date, subject to
the provisions of Section 2.3, only to the Person to whom interest in respect of
such portion of such Global Note is payable in accordance with the provisions of
this Indenture.

Notes in certificated form issued in exchange for all or a part of a
Global Note pursuant to this Section 2.5 shall be registered in such names and
in such authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Trustee. Upon execution and authentication, the Trustee shall deliver such Notes
in certificated form to the Persons in whose names such Notes in certificated
form are so registered.

At such time as all interests in a Global Note have been redeemed,
converted, canceled, exchanged for Notes in certificated form, or transferred to
a transferee who receives Notes in certificated form thereof, such Global Note
shall, upon receipt thereof, be canceled by the Trustee in accordance with
standing procedures and instructions existing between the Depositary and the
Custodian. At any time prior to such cancellation, if any interest in a Global
Note is exchanged for Notes in certificated form, redeemed, converted,
repurchased or canceled, or transferred to a transferee who receives Notes in
certificated form therefor or any Note in certificated form is exchanged or
transferred for part of a Global Note, the principal amount of such Global Note
shall, in accordance with the standing procedures and instructions existing
between the Depositary and the Custodian, be appropriately reduced or increased,
as the case may be, and an endorsement shall be made on such Global Note, by the
Trustee or the Custodian, at the direction of the Trustee, to reflect such
reduction or increase.

(e) Until the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
provision), any stock certificate representing Common Stock issued upon
conversion of any Note shall bear a legend in substantially the following form,
unless such Common Stock has been sold pursuant to a registration statement that
has been declared effective under the Securities Act (and which continues to be
effective at the time of such transfer) or such Common Stock has been issued
upon conversion of Notes that have been transferred pursuant to a registration
statement that has been declared effective under the Securities Act, or unless
otherwise agreed by the Company in writing with written notice thereof to the
transfer agent:

THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. THE HOLDER HEREOF AGREES THAT, UNTIL THE EXPIRATION
OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), (1) IT WILL NOT RESELL OR OTHERWISE TRANSFER THE COMMON
STOCK EVIDENCED HEREBY EXCEPT (A) TO ENZON, INC. OR ANY SUBSIDIARY
THEREOF, (B) INSIDE THE UNITED STATES TO A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN COMPLIANCE
WITH RULE 144A, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN

16

RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) THAT PRIOR TO
SUCH TRANSFER, FURNISHES TO CONTINENTAL STOCK TRANSFER AND TRUST
COMPANY, AS TRANSFER AGENT (OR A SUCCESSOR TRANSFER AGENT, AS
APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE COMMON STOCK
EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH
TRANSFER AGENT OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE), (D)
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES LAWS (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF APPLICABLE), OR (F)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE
TIME OF SUCH TRANSFER); (2) PRIOR TO SUCH TRANSFER (OTHER THAN A
TRANSFER PURSUANT TO CLAUSE (1)(F) ABOVE), IT WILL FURNISH TO
CONTINENTAL STOCK TRANSFER AND TRUST COMPANY, AS TRANSFER AGENT (OR A
SUCCESSOR TRANSFER AGENT, AS APPLICABLE) SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT; AND (3) IT WILL DELIVER TO EACH
PERSON TO WHOM THE COMMON STOCK EVIDENCED HEREBY IS TRANSFERRED (OTHER
THAN A TRANSFER PURSUANT TO CLAUSE 1(F) ABOVE) A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. IF THE PROPOSED TRANSFEREE IS AN
INSTITUTIONAL ACCREDITED INVESTOR OR IS A PURCHASER WHO IS NOT A U.S.
PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO CONTINENTAL
STOCK TRANSFER AND TRUST COMPANY (OR A SUCCESSOR TRANSFER AGENT, AS
APPLICABLE) SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE
REMOVED UPON THE EARLIER OF THE TRANSFER OF THE COMMON STOCK EVIDENCED
HEREBY PURSUANT TO CLAUSE (1)(F) ABOVE OR UPON ANY TRANSFER OF THE
COMMON STOCK EVIDENCED HEREBY AFTER THE EXPIRATION OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE
144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION). AS USED
HEREIN, THE TERMS "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.

Any such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms or as to which the conditions for
removal of the foregoing legend set forth therein have been satisfied may, upon
surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be 

17

exchanged for a new certificate or certificates for a like number of shares of
Common Stock, which shall not bear the restrictive legend required by this
Section 2.5(e).

(f) Any Note or Common Stock issued upon the conversion or
exchange of a Note that, prior to the expiration of the holding period
applicable to sales thereof under Rule 144(k) under the Securities Act (or any
successor provision), is purchased or owned by the Company or any Affiliate
thereof may not be resold by the Company or such Affiliate unless registered
under the Securities Act or resold pursuant to an exemption from the
registration requirements of the Securities Act in a transaction which results
in such Notes or Common Stock, as the case may be, no longer being "restricted
securities" (as defined under Rule 144).

Section 2.6 Mutilated, Destroyed, Lost or Stolen Notes. In case any
Note shall become mutilated or be destroyed, lost or stolen, the Company in its
discretion may execute, and upon the Company's written request the Trustee or an
authenticating agent appointed by the Trustee shall authenticate and make
available for delivery, a new Note, bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated Note, or in lieu of
and in substitution for the Note so destroyed, lost or stolen. In every case the
applicant for a substituted Note shall furnish to the Company, to the Trustee
and, if applicable, to such authenticating agent such security or indemnity as
may be required by them to save each of them harmless for any loss, liability,
cost or expense caused by or connected with such substitution, and, in every
case of destruction, loss or theft, the applicant shall also furnish to the
Company, to the Trustee and, if applicable, to such authenticating agent
evidence to their satisfaction of the destruction, loss or theft of such Note
and of the ownership thereof.

Following receipt by the Trustee or such authenticating agent, as the
case may be, of satisfactory security or indemnity and evidence, as described in
the preceding paragraph, the Trustee or such authenticating agent may
authenticate any such substituted Note and make available for delivery such
Note. Upon the issuance of any substituted Note, the Company may require the
payment by the holder of a sum sufficient to cover any tax, assessment or other
governmental charge that may be imposed in relation thereto and any other
expenses connected therewith. In case any Note which has matured or is about to
mature or has been called for redemption or has been tendered for redemption
(and not withdrawn) or is to be converted into Common Stock shall become
mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a
substitute Note, pay or authorize the payment of or convert or authorize the
conversion of the same (without surrender thereof except in the case of a
mutilated Note), as the case may be, if the applicant for such payment or
conversion shall furnish to the Company, to the Trustee and, if applicable, to
such authenticating agent such security or indemnity as may be required by them
to save each of them harmless for any loss, liability, cost or expense caused by
or connected with such substitution, and, in every case of destruction, loss or
theft, the applicant shall also furnish to the Company, the Trustee and, if
applicable, any paying agent or conversion agent evidence to their satisfaction
of the destruction, loss or theft of such Note and of the ownership thereof.

Every substitute Note issued pursuant to the provisions of this Section
2.6 by virtue of the fact that any Note is destroyed, lost or stolen shall
constitute, solely as between the Company and the Noteholder of the substitute
Note, an additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Note shall be found at any time, and shall be entitled
to all the benefits of (but shall be subject to all the limitations set forth
in) this Indenture equally and proportionately with any and all other Notes duly
issued hereunder. To the extent permitted by law, all Notes shall be held and
owned upon the express condition that the foregoing provisions are exclusive
with respect to the replacement or payment or conversion of mutilated,
destroyed, lost or stolen Notes and shall preclude any and all other rights or
remedies notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment or conversion of negotiable
instruments or other securities without their surrender.

18

Section 2.7. Temporary Notes. Pending the preparation of Notes in
certificated form, the Company may execute and the Trustee or an authenticating
agent appointed by the Trustee shall, upon the written request of the Company,
authenticate and deliver temporary Notes (printed or lithographed). Temporary
Notes shall be issuable in any authorized denomination, and substantially in the
form of the Notes in certificated form, but with such omissions, insertions and
variations as may be appropriate for temporary Notes, all as may be determined
by the Company. Every such temporary Note shall be executed by the Company and
authenticated by the Trustee or such authenticating agent upon the same
conditions and in substantially the same manner, and with the same effect, as
the Notes in certificated form. Without unreasonable delay the Company will
execute and deliver to the Trustee or such authenticating agent Notes in
certificated form (other than in the case of Notes in global form) and thereupon
any or all temporary Notes (other than any such Global Note) shall be
surrendered in exchange therefor, at each office or agency maintained by the
Company pursuant to Section 5.2 and the Trustee or such authenticating agent
shall authenticate and make available for delivery in exchange for such
temporary Notes an equal aggregate principal amount of Notes in certificated
form. Such exchange shall be made by the Company at its own expense and without
any charge therefor. Until so exchanged, the temporary Notes shall in all
respects be entitled to the same benefits and subject to the same limitations
under this Indenture as Notes in certificated form authenticated and delivered
hereunder.

Section 2.8. Cancellation of Notes Paid, Etc. All Notes surrendered for
the purpose of payment, redemption, conversion, exchange or registration of
transfer shall, if surrendered to the Company or any paying agent or any Note
registrar or any conversion agent, be surrendered to the Trustee and promptly
canceled by it, or, if surrendered to the Trustee, shall be promptly canceled by
it, and no Notes shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Indenture. The Trustee shall dispose of such
canceled Notes in accordance with its customary procedures. If the Company shall
acquire any of the Notes, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Notes unless and until the
same are delivered to the Trustee for cancellation.

Section 2.9 CUSIP Numbers. The Company in issuing the Notes may use
"CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Noteholders;
provided, however, that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Notes or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Notes, and any such redemption
shall not be affected by any defect in or omission of such numbers. The Company
will promptly notify the Trustee of any change in the "CUSIP" numbers.

ARTICLE THREE

REDEMPTION OF NOTES

Section 3.1. (a) Initial Prohibition on Redemption. Except as otherwise
provided in Section 3.5, the Notes may not be redeemed by the Company, in whole
or in part, at any time prior to July 7, 2004.

(b) Optional Redemption by the Company. At any time on or
after July 7, 2004, and prior to maturity, the Notes may be redeemed at the
option of the Company, in whole or in part, upon notice as set forth in Section
3.2, at the following redemption prices (expressed as percentages of the
principal amount), together in each case with accrued and unpaid interest, if
any (including Liquidated Damages, if any) to, but excluding, the date fixed for
redemption:

19

Period                                                                                Redemption Price
------                                                                                ----------------

Beginning on July 7, 2004 and ending on June 30, 2005...............................     102.571%
Beginning on July 1, 2005 and ending on June 30, 2006...............................     101.929
Beginning on July 1, 2006 and ending on June 30, 2007...............................     101.286
Beginning on July 1, 2007 and ending on June 30, 2008...............................     100.643

and 100% on July 1, 2008; provided, however, that if the date fixed for
redemption is on a January 1 or July 1, then the interest payable on such date
shall be paid to the holder of record on the preceding December 15 or June 15,
respectively.

Section 3.2. Notice of Redemptions; Selection of Notes. In case the
Company shall desire to exercise the right to redeem all or, as the case may be,
any part of the Notes pursuant to Section 3.1, it shall fix a date for
redemption and it or, at its written request received by the Trustee not fewer
than forty-five (45) days prior (or such shorter period of time as may be
acceptable to the Trustee) to the date fixed for redemption, the Trustee in the
name of and at the expense of the Company, shall mail or cause to be mailed a
notice of such redemption not fewer than thirty (30) nor more than sixty (60)
days prior to the date fixed for redemption to the holders of Notes so to be
redeemed as a whole or in part at their last addresses as the same appear on the
Note register; provided, however, that if the Company shall give such notice, it
shall also give written notice, and written notice of the Notes to be redeemed,
to the Trustee. Such mailing shall be by first class mail. The notice, if mailed
in the manner herein provided, shall be conclusively presumed to have been duly
given, whether or not the holder receives such notice. In any case, failure to
give such notice by mail or any defect in the notice to the holder of any Note
designated for redemption as a whole or in part shall not affect the validity of
the proceedings for the redemption of any other Note. Concurrently with the
mailing of any such notice of redemption, the Company shall issue a press
release announcing such redemption, the form and content of which press release
shall be determined by the Company in its sole discretion. The failure to issue
any such press release or any defect therein shall not affect the validity of
the redemption notice or any of the proceedings for the redemption of any Note
called for redemption.

Each such notice of redemption shall specify the aggregate principal
amount of Notes to be redeemed, the CUSIP number or numbers of the Notes being
redeemed, the date fixed for redemption (which shall be a Business Day), the
redemption price at which Notes are to be redeemed, the place or places of
payment, that payment will be made upon presentation and surrender of such
Notes, that interest accrued to the date fixed for redemption will be paid as
specified in said notice, and that on and after said date interest thereon or on
the portion thereof to be redeemed will cease to accrue. Such notice shall also
state the current Conversion Price and the date on which the right to convert
such Notes or portions thereof into Common Stock will expire. If fewer than all
the Notes are to be redeemed, the notice of redemption shall identify the Notes
to be redeemed (including CUSIP numbers, if any). In case any Note is to be
redeemed in part only, the notice of redemption shall state the portion of the
principal amount thereof to be redeemed and shall state that, on and after the
date fixed for redemption, upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion thereof will be issued.

On or prior to the Business Day next preceding the redemption date
specified in the notice of redemption given as provided in this Section 3.2, the
Company will deposit with the Trustee or with one or more paying agents (or, if
the Company is acting as its own paying agent, set aside, segregate and hold in
trust as provided in Section 5.4) an amount of money in immediately available
funds sufficient to redeem on the redemption date all the Notes (or portions
thereof) so called for redemption (other than those theretofore surrendered for
conversion into Common Stock) at the appropriate redemption price, together with
accrued interest to, but excluding, the date fixed for redemption. The Company
shall be entitled to retain any interest, yield or gain on amounts deposited
with the Trustee or any paying agent 

20

pursuant to this Section 3.2 in excess of amounts required hereunder to pay the
redemption price together with accrued interest to, but excluding, the date
fixed for redemption. If any Note called for redemption is converted pursuant
hereto prior to such redemption, any money deposited with the Trustee or any
paying agent or so segregated and held in trust for the redemption of such Note
shall be paid to the Company upon its written request, or, if then held by the
Company, shall be discharged from such trust. Whenever any Notes are to be
redeemed, the Company will give the Trustee written notice in the form of an
Officers' Certificate not fewer than forty-five (45) days (or such shorter
period of time as may be acceptable to the Trustee) prior to the redemption date
as to the aggregate principal amount of Notes to be redeemed.

If less than all of the outstanding Notes are to be redeemed, the
Trustee shall select the Notes or portions thereof of the Global Note or the
Notes in certificated form to be redeemed (in principal amounts of $1,000 or
integral multiples thereof) by lot, on a pro rata basis or by another method the
Trustee deems fair and appropriate. If any Note selected for partial redemption
is submitted for conversion in part after such selection, the portion of such
Note submitted for conversion shall be deemed (so far as may be) to be the
portion to be selected for redemption. The Notes (or portions thereof) so
selected shall be deemed duly selected for redemption for all purposes hereof,
notwithstanding that any such Note is submitted for conversion in part before
the mailing of the notice of redemption.

Upon any redemption of less than all of the outstanding Notes, the
Company may (and the Trustee shall, unless otherwise directed by the Company),
solely for purposes of determining the pro rata allocation among such Notes as
are unconverted and outstanding at the time of redemption, treat as outstanding
any Notes surrendered for conversion during the period of fifteen (15) days next
preceding the mailing of a notice of redemption and may (but need not) treat as
outstanding any Note authenticated and delivered during such period in exchange
for the unconverted portion of any Note converted in part during such period.

Section 3.3. Payment of Notes Called for Redemption. If notice of
redemption has been given as above provided, the Notes or portion of Notes with
respect to which such notice has been given shall, unless converted into Common
Stock pursuant to the terms hereof, become due and payable on the date fixed for
redemption and at the place or places stated in such notice at the applicable
redemption price, together with interest accrued to (but excluding) the date
fixed for redemption, and on and after said date (unless the Company shall
default in the payment of such Notes at the redemption price, together with
interest accrued to said date) interest on the Notes or portion of Notes so
called for redemption shall cease to accrue and, after the close of business on
the Business Day next preceding the date fixed for redemption, such Notes shall
cease to be convertible into Common Stock and, except as provided in Sections
8.5 and 13.4, to be entitled to any benefit or security under this Indenture,
and the holders thereof shall have no right in respect of such Notes except the
right to receive the redemption price thereof and unpaid interest to (but
excluding) the date fixed for redemption. On presentation and surrender of such
Notes at a place of payment in said notice specified, the said Notes or the
specified portions thereof shall be paid and redeemed by the Company at the
applicable redemption price, together with interest accrued thereon to (but
excluding) the date fixed for redemption; provided, however, that if the
applicable redemption date is an interest payment date, the semi-annual payment
of interest becoming due on such date shall be payable to the holders of such
Notes registered as such on the relevant record date instead of the holders
surrendering such Notes for redemption on such date.

Upon presentation of any Note redeemed in part only, the Company shall
execute and the Trustee shall authenticate and make available for delivery to
the holder thereof, at the expense of the Company, a new Note or Notes, of
authorized denominations, in principal amount equal to the unredeemed portion of
the Notes so presented.

21

Notwithstanding the foregoing, the Trustee shall not redeem any Notes
or mail any notice of redemption during the continuance of a default in payment
of interest or premium, if any, on the Notes. If any Note called for redemption
shall not be so paid upon surrender thereof for redemption, the principal and
premium, if any, shall, until paid or duly provided for, bear interest from the
date fixed for redemption at the rate borne by the Note and such Note shall
remain convertible into Common Stock until the principal and premium, if any,
and interest shall have been paid or duly provided for.

Section 3.4. Conversion Arrangement on Call for Redemption. In
connection with any redemption of Notes under this Article Three, the Company
may arrange for the purchase and conversion of any Notes by an agreement with
one or more investment bankers or other purchasers to purchase such Notes by
paying to the Trustee in trust for the Noteholders, on or before the date fixed
for redemption, an amount not less than the applicable redemption price,
together with interest accrued to (but excluding) the date fixed for redemption,
of such Notes. Notwithstanding anything to the contrary contained in this
Article Three, the obligation of the Company to pay the redemption price of such
Notes, together with interest accrued to (but excluding) the date fixed for
redemption, shall be deemed to be satisfied and discharged to the extent such
amount is so paid by such purchasers. If such an agreement is entered into, a
copy of which will be filed with the Trustee prior to the date fixed for
redemption, any Notes not duly surrendered for conversion by the holders thereof
may, at the option of the Company, be deemed, to the fullest extent permitted by
law, acquired by such purchasers from such holders and (notwithstanding anything
to the contrary contained in Article Fifteen) surrendered by such purchasers for
conversion, all as of immediately prior to the close of business on the date
fixed for redemption (and the right to convert any such Notes shall be extended
through such time), subject to payment of the above amount as aforesaid. At the
direction of the Company, the Trustee shall hold and dispose of any such amount
paid to it in the same manner as it would monies deposited with it by the
Company for the redemption of Notes. Without the Trustee's prior written
consent, no arrangement between the Company and such purchasers for the purchase
and conversion of any Notes shall increase or otherwise affect any of the
powers, duties, responsibilities or obligations of the Trustee as set forth in
this Indenture.

Section 3.5.      Redemption at Option of Holders.

(a) If there shall occur a Fundamental Change at any time
prior to maturity of the Notes, then each Noteholder shall have the right, at
such holder's option, to require the Company to redeem all of such holder's
Notes, or any portion thereof that is an integral multiple of $1,000 principal
amount, on the date (the "Repurchase Date") that is thirty (30) days after the
date of the Company Notice (as defined in Section 3.5(b) below) of such
Fundamental Change (or, if such 30th day is not a Business Day, the next
succeeding Business Day) at a redemption price equal to 100% of the principal
amount thereof, together with accrued interest to (but excluding) the Repurchase
Date; provided, however, that, if such Repurchase Date is a January 1 or July 1,
then the interest payable on such date shall be paid to the holders of record of
the Notes on the next preceding December 15 or June 15, respectively.

Upon presentation of any Note redeemed in part only, the Company shall
execute and, upon the Company's written direction to the Trustee, the Trustee
shall authenticate and deliver to the holder thereof, at the expense of the
Company, a new Note or Notes, of authorized denominations, in principal amount
equal to the unredeemed portion of the Notes so presented.

(b) On or before the tenth day after the occurrence of a
Fundamental Change, the Company or at its written request (which must be
received by the Trustee at least five (5) Business Days prior to the date the
Trustee is requested to give notice as described below, unless the Trustee shall
agree in writing to a shorter period), the Trustee, in the name of and at the
expense of the Company, shall mail or cause to be mailed to all holders of
record on the date of the Fundamental Change a notice (the "Company Notice") of
the occurrence of such Fundamental Change and of the redemption right at the

22

option of the holders arising as a result thereof. Such notice shall be mailed
in the manner and with the effect set forth in the first paragraph of Section
3.2 (without regard for the time limits set forth therein). If the Company shall
give such notice, the Company shall also deliver a copy of the Company Notice to
the Trustee at such time as it is mailed to Noteholders. Concurrently with the
mailing of any Company Notice, the Company shall, if it has not previously done
so, issue a press release announcing such Fundamental Change referred to in the
Company Notice, the form and content of which press release shall be determined
by the Company in its sole discretion. The failure to issue any such press
release or any defect therein shall not affect the validity of the Company
Notice or any proceedings for the redemption of any Note which any Noteholder
may elect to have the Company redeem as provided in this Section 3.5.

Each Company Notice shall specify the circumstances constituting the
Fundamental Change, the Repurchase Date, the price at which the Company shall be
obligated to redeem Notes, that the holder must exercise the redemption right on
or prior to the close of business on the Repurchase Date (the "Fundamental
Change Expiration Time"), that the holder shall have the right to withdraw any
Notes surrendered prior to the Fundamental Change Expiration Time, a description
of the procedure which a Noteholder must follow to exercise such redemption
right and to withdraw any surrendered Notes, the place or places where the
holder is to surrender such holder's Notes, the amount of interest accrued on
each Note to the Repurchase Date and the "CUSIP" number or numbers of the Notes
(if then generally in use).

No failure of the Company to give the foregoing notices and no defect
therein shall limit the Noteholders' redemption rights or affect the validity of
the proceedings for the redemption of the Notes pursuant to this Section 3.5.

(c) For a Note to be so redeemed at the option of the holder,
the Company must receive at the office or agency of the Company maintained for
that purpose or, at the option of such holder, the Corporate Trust Office, such
Note with the form entitled "Option to Elect Repayment Upon A Fundamental
Change" on the reverse thereof duly completed, together with such Notes duly
endorsed for transfer, on or before the Fundamental Change Expiration Time. All
questions as to the validity, eligibility (including time of receipt) and
acceptance of any Note for repayment shall be determined by the Company, whose
determination shall be final and binding absent manifest error.

(d) On or prior to the Repurchase Date, the Company will
deposit with the Trustee or with one or more paying agents (or, if the Company
is acting as its own paying agent, set aside, segregate and hold in trust as
provided in Section 5.4) an amount of money sufficient to redeem on the
Repurchase Date all the Notes to be redeemed on such date at the appropriate
redemption price, together with accrued interest to (but excluding) the
Repurchase Date. Payment for Notes surrendered for redemption (and not
withdrawn) prior to the Fundamental Change Expiration Time will be made promptly
(but in no event more than five (5) Business Days) following the Repurchase Date
either (i) by mailing checks for the amount payable to the holders of such Notes
entitled thereto as they shall appear on the registry books of the Company or
(ii) by wire transfer to an account maintained by such holders located in the
United States; provided, however, that payments to the Depositary will be made
by wire transfer of immediately available funds to the account of the Depositary
or its nominee.

(e) In the case of a reclassification, change, consolidation,
merger, combination, sale or conveyance to which Section 15.6 applies, in which
the Common Stock of the Company is changed or exchanged as a result into the
right to receive stock, securities or other property or assets (including cash),
which includes shares of Common Stock of the Company or shares of common stock
of another Person that are, or upon issuance will be, tradable on a United
States national securities exchange or approved for trading on an established
automated over-the-counter trading market in the United States and such shares

23

constitute at the time such change or exchange becomes effective in excess of
50% of the aggregate fair market value of such stock, securities or other
property or assets (including cash) (as determined by the Company, which
determination shall be conclusive and binding), then the Person formed by such
consolidation or resulting from such merger or which acquires such assets, as
the case may be, shall execute and deliver to the Trustee a supplemental
indenture (accompanied by an Opinion of Counsel that such supplemental indenture
complies with the Trust Indenture Act as in force at the date of execution of
such supplemental indenture) modifying the provisions of this Indenture relating
to the right of holders of the Notes to cause the Company to repurchase the
Notes following a Fundamental Change, including without limitation the
applicable provisions of this Section 3.5 and the definitions of Common Stock
and Fundamental Change, as appropriate, as determined in good faith by the
Company (which determination shall be conclusive and binding), to make such
provisions apply to such other Person if different from the Company and the
common stock issued by such Person (in lieu of the Company and the Common Stock
of the Company). Nothing contained in this Section 3.5(e) shall be deemed to
define the parameters used to determine whether a Fundamental Change has
occurred.

(f) The Company will comply with the provisions of Rule 13e-4
and any other tender offer rules under the Exchange Act to the extent then
applicable in connection with the redemption rights of the holders of Notes in
the event of a Fundamental Change.

ARTICLE FOUR

SUBORDINATION OF NOTES

Section 4.1. Agreement of Subordination. The Company covenants and
agrees, and each holder of Notes issued hereunder by its acceptance thereof
likewise covenants and agrees, that all Notes shall be issued subject to the
provisions of this Article Four, and each Person holding any Note, whether upon
original issue or upon registration of transfer, assignment or exchange thereof,
accepts and agrees to be bound by such provisions.

The payment of the principal of, premium, if any, and interest
(including Liquidated Damages, if any) on all Notes (including, but not limited
to, the redemption price with respect to the Notes called for redemption in
accordance with Section 3.2 or submitted for redemption in accordance with
Section 3.5, as the case may be, as provided in this Indenture) issued hereunder
shall, to the extent and in the manner hereinafter set forth, be subordinated
and subject in right of payment to the prior payment in full of all Senior
Indebtedness, whether outstanding at the date of this Indenture or thereafter
incurred.

No provision of this Article Four shall prevent the occurrence of any
default or Event of Default hereunder.

Section 4.2 Payments to Noteholders. No payment shall be made with
respect to the principal of, premium, if any, or interest (including Liquidated
Damages, if any) on the Notes (including, but not limited to, the redemption
price with respect to the Notes to be called for redemption in accordance with
Section 3.2 or submitted for redemption in accordance with Section 3.5, as the
case may be, as provided in this Indenture), except payments and distributions
made by the Trustee as permitted by the first or second paragraph of Section
4.5, if:

(i) a default in the payment of principal, premium, if any,
interest, rent or other obligations in respect of Senior Indebtedness
occurs and is continuing (or, in the case of Senior Indebtedness for
which there is a period of grace, in the event of such a default that
continues beyond the period of grace, if any, specified in the
instrument or lease evidencing such Senior 

24

Indebtedness) (a "Payment Default"), unless and until such Payment
Default shall have been cured or waived or shall have ceased to exist;
or

(ii) a default, other than a Payment Default, on any
Designated Senior Indebtedness occurs and is continuing that then
permits holders of such Designated Senior Indebtedness to accelerate
its maturity (or in the case of any lease, a default occurs and is
continuing that permits the lessor to either terminate the lease or
require the Company to make an irrevocable offer to terminate the lease
following an event of default thereunder) and the Trustee receives a
notice of the default (a "Payment Blockage Notice") from a holder of
Designated Senior Indebtedness, a Representative of Designated Senior
Indebtedness or the Company (a "Non-Payment Default").

If the Trustee receives any Payment Blockage Notice pursuant to clause
(ii) above, no subsequent Payment Blockage Notice shall be effective for
purposes of this Section 4.2 unless and until at least 365 days shall have
elapsed since the initial effectiveness of the immediately prior Payment
Blockage Notice. No Non-Payment Default that existed or was continuing on the
date of delivery of any Payment Blockage Notice to the Trustee shall be, or be
made, the basis for a subsequent Payment Blockage Notice.

The Company may and shall resume payments on and distributions in
respect of the Notes upon the earlier of:

(1) the date upon which any such Payment Default is cured or
waived or ceases to exist, or

(2) in the case of a Non-Payment Default, the earlier of (a)
the date upon which such default is cured or waived or ceases to exist
or (b) 179 days after the applicable Payment Blockage Notice is
received by the Trustee if the maturity of such Designated Senior
Indebtedness has not been accelerated (or in the case of any lease, 179
days after notice is received if the Company has not received notice
that the lessor under such lease has exercised its right to terminate
the lease or require the Company to make an irrevocable offer to
terminate the lease following an event of default thereunder),

unless this Article Four otherwise prohibits the payment or
distribution at the time of such payment or distribution.

Upon any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding up or liquidation or reorganization of
the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become due upon all
Senior Indebtedness shall first be paid in full in cash or other payment
satisfactory to the holders of such Senior Indebtedness (and satisfactory to the
holders of Senior Indebtedness in the case such Senior Indebtedness includes
Designated Senior Indebtedness), or payment thereof in accordance with its terms
provided for in cash or other payment satisfactory to the holders of such Senior
Indebtedness (and satisfactory to the holders of Senior Indebtedness in the case
such Senior Indebtedness includes Designated Senior Indebtedness) before any
payment is made on account of the principal of, premium, if any, or interest
(including Liquidated Damages, if any) on the Notes (except payments made
pursuant to Article Thirteen from monies deposited with the Trustee pursuant
thereto prior to commencement of proceedings for such dissolution, winding up,
liquidation or reorganization), and upon any such dissolution or winding up or
liquidation or reorganization of the Company or bankruptcy, insolvency,
receivership or other similar proceeding, any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, to which the holders of the Notes or the Trustee would
be entitled, except for the provisions of this Article Four, shall (except as
aforesaid) be paid by the 

25

Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other Person making such payment or distribution, or by the holders of the Notes
or by the Trustee under this Indenture if received by them or it, directly to
the holders of Senior Indebtedness (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders, or as otherwise
required by law or a court order) or their Representative or Representatives, as
their respective interests may appear, to the extent necessary to pay all Senior
Indebtedness in full, in cash or other payment satisfactory to the holders of
such Senior Indebtedness (and satisfactory to the holders of Senior Indebtedness
in the case such Senior Indebtedness includes Designated Senior Indebtedness),
after giving effect to any concurrent payment or distribution to or for the
holders of Senior Indebtedness, before any payment or distribution is made to
the holders of the Notes or to the Trustee.

For purposes of this Article Four, the words, "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article Four with
respect to the Notes to the payment of all Senior Indebtedness which may at the
time be outstanding provided that (i) the Senior Indebtedness is assumed by the
new corporation, if any, resulting from any reorganization or readjustment, and
(ii) the rights of the holders of Senior Indebtedness (other than leases which
are not assumed by the Company or the new corporation, as the case may be) are
not, without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another Person upon the terms and conditions
provided for in Article Twelve shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 4.2 if such other
Person shall, as a part of such consolidation, merger, conveyance or transfer,
comply with the conditions stated in Article Twelve.

In the event of the acceleration of the Notes because of an Event of
Default, no payment or distribution shall be made to the Trustee or any holder
of Notes in respect of the principal of, premium, if any, or interest (including
Liquidated Damages, if any) on the Notes (including, but not limited to, the
redemption price with respect to the Notes called for redemption in accordance
with Section 3.2 or submitted for redemption in accordance with Section 3.5, as
the case may be, as provided in this Indenture), except payments and
distributions made by the Trustee as permitted by the first or second paragraph
of Section 4.5, until all Senior Indebtedness has been paid in full in cash or
other payment satisfactory to the holders of Senior Indebtedness (and
satisfactory to the holders of Designated Senior Indebtedness in the case such
Senior Indebtedness includes Designated Senior Indebtedness) or such
acceleration is rescinded in accordance with the terms of this Indenture. If
payment of the Notes is accelerated because of an Event of Default, the Company
or the Trustee shall promptly notify holders of Senior Indebtedness of the
acceleration.

In the event that, notwithstanding the foregoing provisions, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (including, without limitation, by way
of setoff or otherwise), prohibited by the foregoing provisions in this Section
4.2, shall be received by the Trustee or the holders of the Notes before all
Senior Indebtedness is paid in full in cash or other payment satisfactory to the
holders of such Senior Indebtedness (and satisfactory to the holders of Senior
Indebtedness in the case such Senior Indebtedness includes Designated Senior
Indebtedness), or provision is made for such payment thereof in accordance with
its terms in cash or other payment satisfactory to the holders of such Senior
Indebtedness (and satisfactory to the holders of Senior Indebtedness in the case
such Senior Indebtedness includes Designated Senior Indebtedness), such payment
or distribution shall be held in trust for the benefit of and shall be paid over
or delivered to the holders of Senior Indebtedness or their Representative or
Representatives, as their respective interests may appear, as calculated by the
Company, for application to the payment of any Senior Indebtedness 

26

remaining unpaid to the extent necessary to pay all Senior Indebtedness in full
in cash or other payment satisfactory to the holders of such Senior Indebtedness
(and satisfactory to the holders of Senior Indebtedness in the case such Senior
Indebtedness includes Designated Senior Indebtedness), after giving effect to
any concurrent payment or distribution to or for the holders of such Senior
Indebtedness.

Nothing in this Section 4.2 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 8.6. This Section 4.2 shall be subject
to the further provisions of Section 4.5.

Section 4.3. Subrogation of Notes. Subject to the payment in full of
all Senior Indebtedness, the rights of the holders of the Notes shall be
subrogated to the extent of the payments or distributions made to the holders of
such Senior Indebtedness pursuant to the provisions of this Article Four
(equally and ratably with the holders of all indebtedness of the Company which
by its express terms is subordinated to other indebtedness of the Company to
substantially the same extent as the Notes are subordinated and is entitled to
like rights of subrogation) to the rights of the holders of Senior Indebtedness
to receive payments or distributions of cash, property or securities of the
Company applicable to the Senior Indebtedness until the principal, premium, if
any, and interest (including Liquidated Damages, if any) on the Notes shall be
paid in full, and, for the purposes of such subrogation, no payments or
distributions to the holders of the Senior Indebtedness of any cash, property or
securities to which the holders of the Notes or the Trustee would be entitled
except for the provisions of this Article Four, and no payment pursuant to the
provisions of this Article Four, to or for the benefit of the holders of Senior
Indebtedness by holders of the Notes or the Trustee, shall, as among the
Company, its creditors other than holders of Senior Indebtedness, and the
holders of the Notes, be deemed to be a payment by the Company to or on account
of the Senior Indebtedness, and no payments or distributions of cash, property
or securities to or for the benefit of the holders of the Notes pursuant to the
subrogation provisions of this Article Four, which would otherwise have been
paid to the holders of Senior Indebtedness, shall be deemed to be a payment by
the Company to or for the account of the Notes. It is understood that the
provisions of this Article Four are intended solely for the purposes of defining
the relative rights of the holders of the Notes, on the one hand, and the
holders of the Senior Indebtedness, on the other hand.

Nothing contained in this Article Four or elsewhere in this Indenture
or in the Notes is intended to or shall impair, as among the Company, its
creditors other than the holders of Senior Indebtedness, and the holders of the
Notes, the obligation of the Company, which is absolute and unconditional, to
pay to the holders of the Notes the principal of, premium, if any, and interest
(including Liquidated Damages, if any) on the Notes as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the holders of the Notes and creditors of
the Company other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Trustee or the holder of any Note from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article Four of the
holders of Senior Indebtedness in respect of cash, property or securities of the
Company received upon the exercise of any such remedy.

Section 4.4 Authorization to Effect Subordination. Each holder of a
Note by the holder's acceptance thereof authorizes and directs the Trustee on
the holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article Four and appoints the
Trustee to act as the holder's attorney-in-fact for any and all such purposes.
If the Trustee does not file a proper proof of claim or proof of debt in the
form required in any proceeding referred to in the third paragraph of Section
7.2 hereof at least thirty (30) days before the expiration of the time to file
such claim, the holders of any Senior Indebtedness or their Representatives are
hereby authorized to file an appropriate claim for and on behalf of the holders
of the Notes.

27

Section 4.5. Notice to Trustee. The Company shall give prompt written
notice in the form of an Officers' Certificate to a Responsible Officer of the
Trustee and to any paying agent of any fact known to the Company that would
prohibit the making of any payment of monies to or by the Trustee or any paying
agent in respect of the Notes pursuant to the provisions of this Article Four.
Notwithstanding the provisions of this Article Four or any other provision of
this Indenture, the Trustee shall not be charged with knowledge of the existence
of any facts that would prohibit the making of any payment of monies to or by
the Trustee in respect of the Notes pursuant to the provisions of this Article
Four, unless and until a Responsible Officer of the Trustee shall have received
written notice thereof at the Corporate Trust Office from the Company (in the
form of an Officers' Certificate) or a Representative or a holder or holders of
Senior Indebtedness, and before the receipt of any such written notice, the
Trustee, subject to the provisions of Section 8.1, shall be entitled in all
respects to assume that no such facts exist; provided, however, that if on a
date not less than one Business Day prior to the date upon which by the terms
hereof any such monies may become payable for any purpose (including, without
limitation, the payment of the principal of, or premium, if any, or interest
(including Liquidated Damages, if any) on any Note) the Trustee shall not have
received, with respect to such monies, the notice provided for in this Section
4.5, then, anything herein contained to the contrary notwithstanding, the
Trustee shall have full power and authority to apply monies received to the
purpose for which they were received, and shall not be affected by any notice to
the contrary that may be received by it on or after such prior date.

The Trustee, subject to the provisions of Section 8.1, shall be
entitled to rely on the delivery to it of a written notice by a Representative
or a person representing himself to be a holder of Senior Indebtedness (or a
trustee on behalf of such holder) to establish that such notice has been given
by a Representative or a holder of Senior Indebtedness or a trustee on behalf of
any such holder or holders. The Trustee shall not be required to make any
payment or distribution to or on behalf of a holder of Senior Indebtedness
pursuant to this Article Four unless it has received satisfactory evidence as to
the amount of Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article Four.

Notwithstanding anything in this Article Four to the contrary, nothing
shall prevent any payment by the Trustee to the Noteholders of monies deposited
with it pursuant to Section 13.1, if a Responsible Officer of the Trustee shall
not have received written notice at the Corporate Trust Office on or before one
Business Day prior to the date such payment is due that such payment is not
permitted under Section 4.1 or 4.2.

Section 4.6. Trustee's Relation to Senior Indebtedness. The Trustee, in
its individual capacity, shall be entitled to all the rights set forth in this
Article Four in respect of any Senior Indebtedness at any time held by it, to
the same extent as any other holder of Senior Indebtedness, and nothing in
Section 8.13 or elsewhere in this Indenture shall deprive the Trustee of any of
its rights as such holder.

With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article Four, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Section 8.1, the Trustee shall not be liable to any holder of
Senior Indebtedness (i) for any failure to make any payments or distributions to
such holder or (ii) if it shall pay over or deliver to holders of Notes, the
Company or any other Person money in compliance with this Article Four.

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Section 4.7. No Impairment of Subordination. No right of any present or
future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof which any such holder may have or otherwise be charged with. Senior
Indebtedness may be created, renewed or extended and holders of Senior
Indebtedness may exercise any rights under any instrument creating or evidencing
such Senior Indebtedness, including, without limitation, any waiver of default
thereunder, without any notice to or consent from the holders of the Notes or
the Trustee. No compromise, alteration, amendment, modification, extension,
renewal or other change of, or waiver, consent or other action in respect of,
any liability or obligation under or in respect of the Senior Indebtedness or
any terms or conditions of any instrument creating or evidencing such Senior
Indebtedness shall in any way alter or affect any of the provisions of this
Article Four or the subordination of the Notes provided thereby.

Section 4.8 Certain Conversions Not Deemed Payment For the purposes of
this Article Four only, (1) the issuance and delivery of junior securities upon
conversion of Notes in accordance with Article Fifteen shall not be deemed to
constitute a payment or distribution on account of the principal of, premium, if
any, or interest (including Liquidated Damages, if any) on Notes or on account
of the purchase or other acquisition of Notes, and (2) the payment, issuance or
delivery of cash (except in satisfaction of fractional shares pursuant to
Section 15.3), property or securities (other than junior securities) upon
conversion of a Note shall be deemed to constitute payment on account of the
principal of, premium, if any, or interest (including Liquidated Damages, if
any) on such Note. For the purposes of this Section 4.8, the term "junior
securities" means (a) shares of any stock of any class of the Company or (b)
securities of the Company that are subordinated in right of payment to all
Senior Indebtedness that may be outstanding at the time of issuance or delivery
of such securities to substantially the same extent as, or to a greater extent
than, the Notes are so subordinated as provided in this Article Four. Nothing
contained in this Article Four or elsewhere in this Indenture or in the Notes is
intended to or shall impair, as among the Company, its creditors (other than
holders of Senior Indebtedness) and the Noteholders, the right, which is
absolute and unconditional, of the Holder of any Note to convert such Note in
accordance with Article Fifteen.

Section 4.9. Article Applicable to Paying Agents. If at any time any
paying agent other than the Trustee shall have been appointed by the Company and
be then acting hereunder, the term "Trustee" as used in this Article Four shall
(unless the context otherwise requires) be construed as extending to and
including such paying agent within its meaning as fully for all intents and
purposes as if such paying agent were named in this Article Four in addition to
or in place of the Trustee; provided, however, that the first paragraph of
Section 4.5 shall not apply to the Company or any Affiliate of the Company if it
or such Affiliate acts as paying agent.

The Trustee shall not be responsible for the actions or inactions of
any other paying agents (including the Company if acting as its own paying
agent) and shall have no control of any funds held by such other paying agents.

Section 4.10 Senior Indebtedness Entitled to Rely. The holders of
Senior Indebtedness (including, without limitation, Designated Senior
Indebtedness) shall have the right to rely upon this Article Four, and no
amendment or modification of the provisions contained herein shall diminish the
rights of such holders unless such holders shall have agreed in writing thereto.

Section 4.11 Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to in
this Article Four, the Trustee, subject to the provisions of Section 8.1, and
the Noteholders shall be entitled to rely upon any order or decree 

29

entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, liquidating trustee, custodian, receiver, assignee for the benefit
of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Noteholders, for the purpose of ascertaining
the Persons entitled to participate in such payment or distribution, the holders
of Senior Indebtedness and other indebtedness of the Company, the amount thereof
or payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article Four.

ARTICLE FIVE

PARTICULAR COVENANTS OF THE COMPANY

Section 5.1. Payment of Principal, Premium and Interest. The Company
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of and premium, if any (including the redemption price upon
redemption pursuant to Article Three), and interest (including Liquidated
Damages, if any), on each of the Notes at the places, at the respective times
and in the manner provided herein and in the Notes.

Section 5.2. Maintenance of Office or Agency. Solely for purposes of
this Indenture, the Company will maintain an office or agency in the Borough of
Manhattan, the City of New York, where the Notes may be surrendered for
registration of transfer or exchange or for presentation for payment or for
conversion or redemption and where notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served. The Company will give
prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency not designated or appointed by the Trustee.
If at any time the Company shall fail to maintain any such required office or
agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office or the office of agency of the Trustee in the Borough of
Manhattan, the City of New York (which shall initially be located at Wilmington
Trust FSB, 520 Madison Avenue, 33rd Floor, New York, NY 10022, Attention:
Corporate Trust Division (Enzon, Inc., 4 1/2% Convertible Subordinated Notes due
2008).

The Company may also from time to time designate co-registrars and one
or more offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations.
The Company will give prompt written notice of any such designation or
rescission and of any change in the location of any such other office or agency.

The Company hereby initially designates the Trustee as paying agent,
Note registrar, Custodian and conversion agent and each of the Corporate Trust
Office and the office of agency of the Trustee in the Borough of Manhattan, the
City of New York (which shall initially be located at Wilmington Trust FSB, 520
Madison Avenue, 33rd Floor, New York, NY 10022, Attention: Corporate Trust
Division (Enzon, Inc., 4 1/2% Convertible Subordinated Notes due 2008)), shall
be considered as one such office or agency of the Company for all purposes of
this Indenture.

So long as the Trustee is the Note registrar, the Trustee agrees to
mail, or cause to be mailed, the notices set forth in Section 8.10(a) and the
third paragraph of Section 8.11. If co-registrars have been appointed in
accordance with this Section , the Trustee shall mail such notices only to the
Company and the holders of Notes it can identify from its records.

30

Section 5.3. Appointments to Fill Vacancies in Trustee's Office. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 8.10, a Trustee, so that there
shall at all times be a Trustee hereunder.

Section 5.4       Provisions as to Paying Agent.

(a) If the Company shall appoint a paying agent other than the
Trustee, or if the Trustee shall appoint such a paying agent, the Company will
cause such paying agent to execute and deliver to the Trustee an instrument in
which such agent shall agree with the Trustee, subject to the provisions of this
Section 5.4:

(1) that it will hold all sums held by it as such
agent for the payment of the principal of and premium, if any,
or interest (including Liquidated Damages, if any) on the
Notes (whether such sums have been paid to it by the Company
or by any other obligor on the Notes) in trust for the benefit
of the holders of the Notes;

(2) that it will give the Trustee notice of any
failure by the Company (or by any other obligor on the Notes)
to make any payment of the principal of and premium, if any,
or interest on the Notes when the same shall be due and
payable; and

(3) that at any time during the continuance of an
Event of Default, upon request of the Trustee, it will
forthwith pay to the Trustee all sums so held in trust.

The Company shall, on or before the Business Day next preceding each
due date of the principal of, premium, if any, or interest on the Notes, deposit
with the paying agent a sum (in funds which are immediately available on the due
date for such payment) sufficient to pay such principal, premium, if any, or
interest, and (unless such paying agent is the Trustee) the Company will
promptly notify the Trustee of any failure to take such action.

(b) If the Company shall act as its own paying agent, it will,
on or before each due date of the principal of, premium, if any, or interest
(including Liquidated Damages, if any) on the Notes, set aside, segregate and
hold in trust for the benefit of the holders of the Notes a sum sufficient to
pay such principal, premium, if any, or interest (including Liquidated Damages,
if any) so becoming due and will promptly notify the Trustee of any failure to
take such action and of any failure by the Company (or any other obligor under
the Notes) to make any payment of the principal of, premium, if any, or interest
(including Liquidated Damages, if any) on the Notes when the same shall become
due and payable.

(c) Anything in this Section 5.4 to the contrary
notwithstanding, the Company may, at any time, for the purpose of obtaining a
satisfaction and discharge of this Indenture, or for any other reason, pay or
cause to be paid to the Trustee all sums held in trust by the Company or any
paying agent hereunder as required by this Section 5.4, such sums to be held by
the Trustee upon the trusts herein contained and upon such payment by the
Company or any paying agent to the Trustee, the Company or such paying agent
shall be released from all further liability with respect to such sums.

(d) Anything in this Section 5.4 to the contrary
notwithstanding, the agreement to hold sums in trust as provided in this Section
5.4 is subject to Sections 13.3 and 13.4.

The Trustee shall not be responsible for the actions of any other
paying agents (including the Company if acting as its own paying agent) and
shall have no control of any funds held by such other paying agents.

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Section 5.5. Existence. Subject to Article Twelve, the Company will do
or cause to be done all things necessary to preserve and keep in full force and
effect its existence and rights (charter and statutory); provided, however, that
the Company shall not be required to preserve any such right if the Company
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Noteholders.

Section 5.6. Maintenance of Properties. The Company will cause all
properties used or useful in the conduct of its business or the business of any
Significant Subsidiary to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that nothing in this Section shall
prevent the Company from discontinuing the operation or maintenance of any of
such properties if such discontinuance is, in the judgment of the Company,
desirable in the conduct of its business or the business of any subsidiary and
not disadvantageous in any material respect to the Noteholders.

Section 5.7. Payment of Taxes and Other Claims. The Company will pay or
discharge, or cause to be paid or discharged, before the same may become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Significant Subsidiary or upon the income,
profits or property of the Company or any Significant Subsidiary, (ii) all
claims for labor, materials and supplies which, if unpaid, might by law become a
lien or charge upon the property of the Company or any Significant Subsidiary
and (iii) all stamps and other duties, if any, which may be imposed by the
United States or any political subdivision thereof or therein in connection with
the issuance, transfer, exchange or conversion of any Notes or with respect to
this Indenture; provided, however, that, in the case of clauses (i) and (ii),
the Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim (A) if the failure to do so
will not, in the aggregate, have a material adverse impact on the Company, or
(B) if the amount, applicability or validity is being contested in good faith by
appropriate proceedings.

Section 5.8. Rule 144A Information Requirement. Within the period prior
to the expiration of the holding period applicable to sales thereof under Rule
144(k) under the Securities Act (or any successor provision), the Company
covenants and agrees that it shall, during any period in which it is not subject
to Section 13 or 15(d) under the Exchange Act, make available to any holder or
beneficial holder of Notes or any Common Stock issued upon conversion thereof
which continue to be Restricted Securities in connection with any sale thereof
and any prospective purchaser of Notes or such Common Stock designated by such
holder or beneficial holder, the information required pursuant to Rule
144A(d)(4) under the Securities Act upon the request of any holder or beneficial
holder of the Notes or such Common Stock and it will take such further action as
any holder or beneficial holder of such Notes or such Common Stock may
reasonably request, all to the extent required from time to time to enable such
holder or beneficial holder to sell its Notes or Common Stock without
registration under the Securities Act within the limitation of the exemption
provided by Rule 144A, as such Rule may be amended from time to time. Upon the
request of any holder or any beneficial holder of the Notes or such Common
Stock, the Company will deliver to such holder a written statement as to whether
it has complied with such requirements.

Section 5.9. Stay, Extension and Usury Laws. The Company covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law or other law which would prohibit or
forgive the Company from paying all or any portion of the principal of, premium,
if any, or interest (including Liquidated Damages, if any) on the Notes as
contemplated herein, wherever enacted, now or at 

32

any time hereafter in force, or which may affect the covenants or the
performance of this Indenture and the Company (to the extent it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not, by resort to any such law, hinder, delay or impede
the execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been enacted.

Section 5.10. Compliance Certificate. The Company shall deliver to the
Trustee, within one hundred twenty (120) days after the end of each fiscal year
of the Company, a certificate signed by either the principal executive officer,
principal financial officer or principal accounting officer of the Company,
stating whether or not to the best knowledge of the signer thereof the Company
is in default in the performance and observance of any of the terms, provisions
and conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company shall be in
default, specifying all such defaults and the nature and the status thereof of
which the signer may have knowledge.

The Company will deliver to the Trustee, forthwith upon becoming aware
of (i) any default in the performance or observance of any covenant, agreement
or condition contained in this Indenture, or (ii) any Event of Default, an
Officers' Certificate specifying with particularity such default or Event of
Default and further stating what action the Company has taken, is taking or
proposes to take with respect thereto.

Any notice required to be given under this Section 5.10 or Section 4.5
shall be delivered to a Responsible Officer of the Trustee at its Corporate
Trust Office. In the event that the payment of the Notes is accelerated because
of an Event of Default, the Company shall promptly provide written notice to the
Trustee specifying the names and addresses of the holders of Senior Indebtedness
if the Trustee (and not the Company) is to provide holders of Senior
Indebtedness notice of such acceleration under Section 4.5 of the Indenture.

Section 5.11. Liquidated Damages Notice. In the event that the Company
is required to pay Liquidated Damages to holders of Notes pursuant to the
Registration Rights Agreement, the Company will provide written notice
("Liquidated Damages Notice") to the Trustee of its obligation to pay Liquidated
Damages no later than fifteen days prior to the proposed payment date for the
Liquidated Damages, and the Liquidated Damages Notice shall set forth the amount
of Liquidated Damages to be paid by the Company on such payment date and the
manner in which such Liquidated Damages are to be paid (which shall not be
inconsistent with the provisions of this Indenture). The Trustee shall not at
any time be under any duty or responsibility to any holder of Notes to determine
the Liquidated Damages, or with respect to the nature, extent or calculation of
the amount of Liquidated Damages when made, or with respect to the method
employed in such calculation of the Liquidated Damages.

ARTICLE SIX

NOTEHOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE

Section 6.1. Noteholders' Lists. The Company covenants and agrees that
it will furnish or cause to be furnished to the Trustee, semiannually, not more
than fifteen (15) days after each June 15 and December 15 in each year beginning
with December 15, 2001, and at such other times as the Trustee may request in
writing, within thirty (30) days after receipt by the Company of any such
request (or such lesser time as the Trustee may reasonably request in order to
enable it to timely provide any notice to be provided by it hereunder), a list
in such form as the Trustee may reasonably require of the names and addresses of
the holders of Notes as of a date not more than fifteen (15) days (or such other
date as the 

33

Trustee may reasonably request in order to so provide any such notices) prior to
the time such information is furnished, except that no such list need be
furnished by the Company to the Trustee so long as the Trustee is acting as the
sole Note registrar.

Section 6.2.      Preservation and Disclosure of Lists.

(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
holders of Notes contained in the most recent list furnished to it as provided
in Section 6.1 or maintained by the Trustee in its capacity as Note registrar or
co-registrar in respect of the Notes, if so acting. The Trustee may destroy any
list furnished to it as provided in Section 6.1 upon receipt of a new list so
furnished.

(b) The rights of Noteholders to communicate with other
holders of Notes with respect to their rights under this Indenture or under the
Notes, and the corresponding rights and duties of the Trustee, shall be as
provided by the Trust Indenture Act.

(c) Every Noteholder, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of holders of Notes made
pursuant to the Trust Indenture Act.

Section 6.3.      Reports by Trustee.

(a) Within sixty (60) days after February 1 of each year
commencing with the year 2002, the Trustee shall transmit to holders of Notes
such reports dated as of February 1 of the year in which such reports are made
concerning the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant thereto.

(b) A copy of such report shall, at the time of such
transmission to holders of Notes, be filed by the Trustee with each stock
exchange and automated quotation system upon which the Notes are listed and with
the Company. The Company will promptly notify the Trustee in writing when the
Notes are listed on any stock exchange or automated quotation system or delisted
therefrom.

Section 6.4. Reports by Company. The Company shall file with the
Trustee (and the Commission if at any time after the Indenture becomes qualified
under the Trust Indenture Act), and transmit to holders of Notes, such
information, documents and other reports and such summaries thereof, as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant to such Act, whether or not the Notes are governed by such
Act; provided, however, that any such information, documents or reports required
to be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange
Act shall be filed with the Trustee within fifteen (15) days after the same is
so required to be filed with the Commission. Delivery of such reports,
information and documents to the Trustee is for informational purposes only and
the Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).

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ARTICLE SEVEN

REMEDIES OF THE TRUSTEE AND
NOTEHOLDERS ON AN EVENT OF DEFAULT

Section 7.1. Events of Default. In case one or more of the following
Events of Default (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body) shall have occurred and be
continuing:

(a) default in the payment of any installment of interest
(including Liquidated Damages, if any) upon any of the Notes as and when the
same shall become due and payable, and continuance of such default for a period
of thirty (30) days, whether or not such payment is permitted under Article Four
hereof; or

(b) default in the payment of the principal of or premium, if
any, on any of the Notes as and when the same shall become due and payable
either at maturity or in connection with any redemption pursuant to Article
Three, by acceleration or otherwise, whether or not such payment is permitted
under Article Four hereof; or

(c) failure on the part of the Company duly to observe or
perform any other of the covenants or agreements on the part of the Company in
the Notes or in this Indenture (other than a covenant or agreement a default in
whose performance or whose breach is elsewhere in this Section 7.1 specifically
dealt with), which failure shall continue for a period of sixty (60) days after
the date on which written notice of such failure, requiring the Company to
remedy the same, shall have been given to the Company by the Trustee, or the
Company and a Responsible Officer of the Trustee by the holders of at least
twenty-five percent (25%) in aggregate principal amount of the Notes at the time
outstanding determined in accordance with Section 9.4; or

(d) the Company shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
the Company or its debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of the Company or any
substantial part of the property of the Company, or shall consent to any such
relief or to the appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against the Company, or shall
make a general assignment for the benefit of creditors, or shall fail generally
to pay its debts as they become due; or

(e) an involuntary case or other proceeding shall be commenced
against the Company seeking liquidation, reorganization or other relief with
respect to the Company or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of the Company or any
substantial part of the property of the Company, and such involuntary case or
other proceeding shall remain undismissed and unstayed for a period of ninety
(90) consecutive days;

then, and in each and every such case (other than an Event of Default specified
in Section 7.1(d) or (e)), unless the principal of all of the Notes shall have
already become due and payable, either the Trustee or the holders of not less
than twenty-five percent (25%) in aggregate principal amount of the Notes then
outstanding hereunder determined in accordance with Section 9.4, by notice in
writing to the Company (and to the Trustee if given by Noteholders), may declare
the principal of and premium, if any, on all the Notes and the interest accrued
thereon (including Liquidated Damages, if any) to be due and payable

35

immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, anything in this Indenture or in the Notes
contained to the contrary notwithstanding. If an Event of Default specified in
Section 7.1(d) or (e) occurs, the principal of all the Notes and the interest
accrued thereon shall (including Liquidated Damages, if any) be immediately and
automatically due and payable without necessity of further action. This
provision, however, is subject to the conditions that if, at any time after the
principal of the Notes shall have been so declared due and payable, and before
any judgment or decree for the payment of the monies due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest upon (including Liquidated Damages, if any) all Notes and the principal
of and premium, if any, on any and all Notes which shall have become due
otherwise than by acceleration (with interest on overdue installments of
interest (including Liquidated Damages, if any) (to the extent that payment of
such interest is enforceable under applicable law) and on such principal and
premium, if any, at the rate borne by the Notes, to the date of such payment or
deposit) and amounts due to the Trustee pursuant to Section 8.6, and if any and
all defaults under this Indenture, other than the nonpayment of principal of and
premium, if any, and accrued interest on (including Liquidated Damages, if any)
Notes which shall have become due by acceleration, shall have been cured or
waived pursuant to Section 7.7, then and in every such case the holders of a
majority in aggregate principal amount of the Notes then outstanding, by written
notice to the Company and to the Trustee, may waive all defaults or Events of
Default and rescind and annul such declaration and its consequences; but no such
waiver or rescission and annulment shall extend to or shall affect any
subsequent default or Event of Default, or shall impair any right consequent
thereon. The Company shall notify a Responsible Officer of the Trustee, promptly
upon becoming aware thereof, of any Event of Default.

In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such waiver or rescission and annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such case
the Company, the holders of Notes, and the Trustee shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the holders of Notes, and the Trustee shall
continue as though no such proceeding had been taken.

Section 7.2. Payments of Notes on Default; Suit Therefor. The Company
covenants that (a) in case default shall be made in the payment of any
installment of interest upon (including Liquidated Damages, if any) any of the
Notes as and when the same shall become due and payable, and such default shall
have continued for a period of thirty (30) days, or (b) in case default shall be
made in the payment of the principal of or premium, if any, on any of the Notes
as and when the same shall have become due and payable, whether at maturity of
the Notes or in connection with any redemption, by or under this Indenture
declaration or otherwise, then, upon demand of the Trustee, the Company will pay
to the Trustee, for the benefit of the holders of the Notes, the whole amount
that then shall have become due and payable on all such Notes for principal and
premium, if any, or interest (including Liquidated Damages, if any), as the case
may be, with interest upon the overdue principal and premium, if any, and (to
the extent that payment of such interest is enforceable under applicable law)
upon the overdue installments of interest (including Liquidated Damages, if any)
at the rate borne by the Notes, and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
all other amounts due the Trustee under Section 8.6. Until such demand by the
Trustee, the Company may pay the principal of and premium, if any, and interest
on (including Liquidated Damages, if any) the Notes to the registered holders,
whether or not the Notes are overdue.

In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any

36

such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the Notes
and collect in the manner provided by law out of the property of the Company or
any other obligor on the Notes wherever situated the monies adjudged or decreed
to be payable.

In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Notes under Title
11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative to
the Company or such other obligor upon the Notes, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 7.2, shall
be entitled and empowered, by intervention in such proceedings or otherwise, to
file and prove a claim or claims for the whole amount of principal, premium, if
any, and interest (including Liquidated Damages, if any) owing and unpaid in
respect of the Notes, and, in case of any judicial proceedings, to file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee and of the Noteholders allowed in
such judicial proceedings relative to the Company or any other obligor on the
Notes, its or their creditors, or its or their property, and to collect and
receive any monies or other property payable or deliverable on any such claims,
and to distribute the same after the deduction of any amounts due the Trustee
under Section 8.6, and any receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, custodian or similar official is hereby authorized
by each of the Noteholders to make such payments to the Trustee, and, in the
event that the Trustee shall consent to the making of such payments directly to
the Noteholders, to pay to the Trustee any amount due it for reasonable
compensation, expenses, advances and disbursements, including reasonable counsel
fees incurred by it up to the date of such distribution. To the extent that such
payment of reasonable compensation, expenses, advances and disbursements out of
the estate in any such proceedings shall be denied for any reason, payment of
the same shall be secured by a lien on, and shall be paid out of, any and all
distributions, dividends, monies, securities and other property which the
holders of the Notes may be entitled to receive in such proceedings, whether in
liquidation or under any plan of reorganization or arrangement or otherwise.

All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Trustee without the possession of
any of the Notes, or the production thereof at any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent and
counsel, be for the ratable benefit of the holders of the Notes.

In any proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the Notes, and it shall not be necessary to make any holders of the Notes
parties to any such proceedings.

Section 7.3. Application of Monies Collected by Trustee. Any monies
collected by the Trustee pursuant to this Article Seven shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such monies, upon presentation of the several Notes, and stamping thereon the
payment, if only partially paid, and upon surrender thereof, if fully paid:

FIRST: To the payment of all amounts due the Trustee under 
Section 8.6;

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SECOND: Subject to the provisions of Article Four, in case the
principal of the outstanding Notes shall not have become due and be
unpaid, to the payment of interest on (including Liquidated Damages, if
any) the Notes in default in the order of the maturity of the
installments of such interest, with interest (to the extent that such
interest has been collected by the Trustee) upon the overdue
installments of interest (including Liquidated Damages, if any) at the
rate borne by the Notes, such payments to be made ratably to the
Persons entitled thereto;

THIRD: Subject to the provisions of Article Four, in case the
principal of the outstanding Notes shall have become due, by
declaration or otherwise, and be unpaid to the payment of the whole
amount then owing and unpaid upon the Notes for principal and premium,
if any, and interest (including Liquidated Damages, if any), with
interest on the overdue principal and premium, if any, and (to the
extent that such interest has been collected by the Trustee) upon
overdue installments of interest (including Liquidated Damages, if any)
at the rate borne by the Notes, and in case such monies shall be
insufficient to pay in full the whole amounts so due and unpaid upon
the Notes, then to the payment of such principal and premium, if any,
and interest (including Liquidated Damages, if any) without preference
or priority of principal and premium, if any, over interest (including
Liquidated Damages, if any), or of interest (including Liquidated
Damages, if any) over principal and premium, if any, or of any
installment of interest over any other installment of interest, or of
any Note over any other Note, ratably to the aggregate of such
principal and premium, if any, and accrued and unpaid interest; and

FOURTH: Subject to the provisions of Article Four, to the
payment of the remainder, if any, to the Company or any other Person
lawfully entitled thereto.

Section 7.4. Proceedings by Noteholder. No holder of any Note shall
have any right by virtue of or by reference to any provision of this Indenture
to institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture, or for the appointment of a receiver, trustee,
liquidator, custodian or other similar official, or for any other remedy
hereunder, unless such holder previously shall have given to the Trustee written
notice of an Event of Default and of the continuance thereof, as hereinbefore
provided, and unless also the holders of not less than twenty-five percent (25%)
in aggregate principal amount of the Notes then outstanding shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for sixty (60)
days after its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or proceeding and
no direction inconsistent with such written request shall have been given to the
Trustee pursuant to Section 7.7; it being understood and intended, and being
expressly covenanted by the taker and holder of every Note with every other
taker and holder and the Trustee, that no one or more holders of Notes shall
have any right in any manner whatever by virtue of or by reference to any
provision of this Indenture to affect, disturb or prejudice the rights of any
other holder of Notes, or to obtain or seek to obtain priority over or
preference to any other such holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all holders of Notes (except as otherwise provided herein).
For the protection and enforcement of this Section 7.4, each and every
Noteholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.

Notwithstanding any other provision of this Indenture and any provision
of any Note, the right of any holder of any Note to receive payment of the
principal of and premium, if any (including the redemption price upon redemption
pursuant to Article Three), and accrued interest on (including Liquidated
Damages, if any) such Note, on or after the respective due dates expressed in
such Note or in the event of redemption, or to institute suit for the
enforcement of any such payment on or after such 

38

respective dates against the Company shall not be impaired or affected without 
the consent of such holder.

Anything in this Indenture or the Notes to the contrary
notwithstanding, the holder of any Note, without the consent of either the
Trustee or the holder of any other Note, in its own behalf and for its own
benefit, may enforce, and may institute and maintain any proceeding suitable to
enforce, its rights of conversion as provided herein.

Section 7.5. Proceedings by Trustee. In case of an Event of Default
known to a Responsible Officer of the Trustee, the Trustee may, in its
discretion, proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as are necessary to protect
and enforce any of such rights, either by suit in equity or by action at law or
by proceeding in bankruptcy or otherwise, whether for the specific enforcement
of any covenant or agreement contained in this Indenture or in aid of the
exercise of any power granted in this Indenture, or to enforce any other legal
or equitable right vested in the Trustee by this Indenture or by law.

Section 7.6. Remedies Cumulative and Continuing. Except as provided in
Section 2.6, all powers and remedies given by this Article Seven to the Trustee
or to the Noteholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any thereof or of any other powers and remedies
available to the Trustee or the holders of the Notes, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture, and no delay or omission of the Trustee
or of any holder of any of the Notes to exercise any right or power accruing
upon any default or Event of Default occurring and continuing as aforesaid shall
impair any such right or power, or shall be construed to be a waiver of any such
default or any acquiescence therein, and, subject to the provisions of Section
7.4, every power and remedy given by this Article Seven or by law to the Trustee
or to the Noteholders may be exercised from time to time, and as often as shall
be deemed expedient, by the Trustee or by the Noteholders.

Section 7.7. Direction of Proceedings and Waiver of Defaults by
Majority of Noteholders. The holders of a majority in aggregate principal amount
of the Notes at the time outstanding determined in accordance with Section 9.4
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee; provided, however, that (a) such direction shall
not be in conflict with any rule of law or with this Indenture, (b) the Trustee
may take any other action which is not inconsistent with such direction and (c)
the Trustee may decline to take any action that would benefit some Noteholder to
the detriment of other Noteholders. The holders of a majority in aggregate
principal amount of the Notes at the time outstanding determined in accordance
with Section 9.4 may, on behalf of the holders of all of the Notes, waive any
past default or Event of Default hereunder and its consequences except (i) a
default in the payment of interest (including Liquidated Damages, if any) or
premium, if any, on, or the principal of, the Notes, (ii) a failure by the
Company to convert any Notes into Common Stock, (iii) a default in the payment
of redemption price pursuant to Article Three or (iv) a default in respect of a
covenant or provisions hereof which under Article Eleven cannot be modified or
amended without the consent of the holders of each or all Notes then outstanding
or affected thereby. Upon any such waiver, the Company, the Trustee and the
holders of the Notes shall be restored to their former positions and rights
hereunder; but no such waiver shall extend to any subsequent or other default or
Event of Default or impair any right consequent thereon. Whenever any default or
Event of Default hereunder shall have been waived as permitted by this Section
7.7, said default or Event of Default shall for all purposes of the Notes and
this Indenture be deemed to have been cured and to be not continuing; but no
such waiver shall extend to any subsequent or other default or Event of Default
or impair any right consequent thereon.

39

Section 7.8. Notice of Defaults. The Trustee shall, within ninety (90)
days after a Responsible Officer of the Trustee has knowledge of the occurrence
of a default, mail to all Noteholders, as the names and addresses of such
holders appear upon the Note register, notice of all defaults known to a
Responsible Officer, unless such defaults shall have been cured or waived before
the giving of such notice; provided, however, that except in the case of default
in the payment of the principal of, or premium, if any, or interest (including
Liquidated Damages, if any) on any of the Notes, the Trustee shall be protected
in withholding such notice if and so long as a trust committee of directors
and/or Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the Noteholders.

Section 7.9. Undertaking to Pay Costs. All parties to this Indenture
agree, and each holder of any Note by his acceptance thereof shall be deemed to
have agreed, that any court may, in its discretion, require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant; provided, however, that the provisions of this
Section 7.9 (to the extent permitted by law) shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Noteholder, or group of
Noteholders, holding in the aggregate more than ten percent in principal amount
of the Notes at the time outstanding determined in accordance with Section 9.4,
or to any suit instituted by any Noteholder for the enforcement of the payment
of the principal of or premium, if any, or interest on any Note on or after the
due date expressed in such Note or to any suit for the enforcement of the right
to convert any Note in accordance with the provisions of Article Fifteen.

ARTICLE EIGHT

THE TRUSTEE

Section 8.1. Duties and Responsibilities of Trustee. The Trustee, prior
to the occurrence of an Event of Default and after the curing of all Events of
Default which may have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture. In case an Event of
Default has occurred (which has not been cured or waived), the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his own affairs.

No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own grossly negligent action, its own grossly
negligent failure to act or its own willful misconduct, except that:

(a)   prior to the occurrence of an Event of Default and 
after the curing or waiving of all Events of Default which may have occurred:

(1) the duties and obligations of the Trustee shall
be determined solely by the express provisions of this
Indenture and the Trust Indenture Act, and the Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this Indenture
and the Trust Indenture Act and no implied covenants or
obligations shall be read into this Indenture and the Trust
Indenture Act against the Trustee; and

40

(2) in the absence of bad faith and willful
misconduct on the part of the Trustee, the Trustee may
conclusively rely as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but, in the
case of any such certificates or opinions which by any
provisions hereof are specifically required to be furnished to
the Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not they conform to the
requirements of this Indenture;

(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Officers of the Trustee, unless
the Trustee was grossly negligent in ascertaining the pertinent facts;

(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the written
direction of the holders of not less than a majority in principal amount of the
Notes at the time outstanding determined as provided in Section 9.4 relating to
the time, method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture and the Trustee shall not be liable for any action taken or
omitted to be taken by it in accordance with the written direction of the
Company;

(d) whether or not therein provided, every provision of this
Indenture relating to the conduct or affecting the liability of, or affording
protection to, the Trustee, acting in any capacity hereunder, shall be subject
to the provisions of this Section;

(e) the Trustee shall not be liable in respect of any payment
(as to the correctness of amount, entitlement to receive or any other matters
relating to payment) or notice effected by the Company or any paying agent or
any records maintained by any co-registrar with respect to the Notes; and

(f) if any party fails to deliver a notice relating to an
event the fact of which, pursuant to this Indenture, requires notice to be sent
to the Trustee, the Trustee may conclusively rely on its failure to receive such
notice as reason to act as if no such event occurred.

None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.

Section 8.2.   Reliance on Documents, Opinions, Etc.  Except as 
otherwise provided in Section 8.1:

(a) the Trustee may conclusively rely and shall be protected
in acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, bond, debenture, note, coupon or other
paper or document (whether in its original or facsimile form) believed by it in
good faith to be genuine and to have been signed or presented by the proper
party or parties;

(b) any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by an Officers' Certificate
(unless other evidence in respect thereof be herein specifically prescribed);
and any resolution of the Board of Directors may be evidenced to the Trustee by
a copy thereof certified by the Secretary or an Assistant Secretary of the
Company;

41

(c) the Trustee may consult with counsel of its own selection
and any advice or Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or omitted by it hereunder in good
faith and in accordance with such advice or Opinion of Counsel;

(d) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request, order or
direction of any of the Noteholders pursuant to the provisions of this
Indenture, unless such Noteholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby;

(e) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney; and

(f) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for (i) any
misconduct or negligence on the part of any agent or attorney or (ii) the
supervision of such agent or attorney, appointed by it with due care hereunder.

Section 8.3. No Responsibility for Recitals, Etc. The recitals
contained herein and in the Notes (except in the Trustee's certificate of
authentication) shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Notes. The Trustee shall not be accountable for the use or application by the
Company of any Notes or the proceeds of any Notes authenticated and delivered by
the Trustee in conformity with the provisions of this Indenture.

Section 8.4. Trustee, Paying Agents, Conversion Agents or Registrar May
Own Notes. The Trustee, any paying agent, any conversion agent or Note
registrar, in its individual or any other capacity, may become the owner or
pledgee of Notes with the same rights it would have if it were not Trustee,
paying agent, conversion agent or Note registrar.

Section 8.5. Monies to be Held in Trust. Subject to the provisions of
Section 13.4 and Section 4.2, all monies received by the Trustee shall, until
used or applied as herein provided, be held in trust for the purposes for which
they were received. Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as may be agreed in writing from time to time by the Company and the
Trustee.

Section 8.6. Compensation and Expenses of Trustee. The Company
covenants and agrees to pay to the Trustee from time to time, and the Trustee
shall be entitled to, reasonable compensation for all services rendered by it
hereunder in any capacity (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) as mutually agreed
to from time to time in writing between the Company and the Trustee, and the
Company will pay or reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances reasonably incurred or made by the Trustee
in accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all Persons not regularly in its employ), except any such expense, disbursement
or advance as may arise from its gross negligence, willful misconduct,
recklessness or bad faith. The Company also covenants to indemnify the Trustee
(or any officer, director or employee of the Trustee), in any capacity under
this Indenture and its agents and any authenticating 

42

agent for, and to hold them harmless against, any and all loss, liability, claim
or expense incurred without gross negligence, willful misconduct, recklessness
or bad faith on the part of the Trustee or such officers, directors, employees
and agent or authenticating agent, as the case may be, and arising out of or in
connection with the acceptance or administration of this trust or in any other
capacity hereunder, including the costs and expenses of defending themselves
against any claim of liability in the premises. The obligations of the Company
under this Section 8.6 to compensate or indemnify the Trustee and to pay or
reimburse the Trustee for expenses, disbursements and advances shall be secured
by a lien prior to that of the Notes upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the benefit of
the holders of particular Notes. The obligation of the Company under this
Section shall survive the satisfaction and discharge of this Indenture.

When the Trustee and its agents and any authenticating agent incur
expenses or render services after an Event of Default specified in Section
7.1(d) or (e) with respect to the Company occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any bankruptcy, insolvency or similar laws.

Section 8.7. Officers' Certificate as Evidence. Except as otherwise
provided in Section 8.1, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of gross negligence or willful misconduct on the
part of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered to the Trustee.

Section 8.8. Conflicting Interests of Trustee. If the Trustee has or
shall acquire a conflicting interest within the meaning of the Trust Indenture
Act, the Trustee shall either eliminate such interest or resign, to the extent
and in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Indenture.

Section 8.9. Eligibility of Trustee. There shall at all times be a
Trustee hereunder which shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000 (or if such Person is a member of a bank holding company system, its
bank holding company shall have a combined capital and surplus of at least
$50,000,000). If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of any supervising or examining
authority, then for the purposes of this Section the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section 8.9, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.

Section 8.10.     Resignation or Removal of Trustee.

(a) The Trustee may at any time resign by giving written
notice of such resignation to the Company and to the holders of Notes. Upon
receiving such notice of resignation, the Company shall promptly appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
resigning Trustee and one copy to the successor trustee. If no successor trustee
shall have been so appointed and have accepted appointment sixty (60) days after
the mailing of such notice of resignation to the Noteholders, the resigning
Trustee may, upon ten (10) business days' notice to the Company and the
Noteholders, appoint a successor identified in such notice or may petition, at
the expense of the Company, any court of competent jurisdiction for the
appointment of a successor trustee, or, any Noteholder who has been a bona fide
holder of a Note or Notes for at least six (6) months may, subject to the
provisions of Section 7.9, on 

43

behalf of himself and all others similarly situated, petition any such court for
the appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.

(b)      In case at any time any of the following shall occur:

(1) the Trustee shall fail to comply with Section 8.8
after written request therefor by the Company or by any
Noteholder who has been a bona fide holder of a Note or Notes
for at least six (6) months; or

(2) the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.9 and shall fail
to resign after written request therefor by the Company or by
any such Noteholder; or

(3) the Trustee shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver of
the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation,
conservation or liquidation;

then, in any such case, the Company shall, or may (if not required by
the Trust Indenture Act), remove the Trustee and appoint a successor trustee by
written instrument, in duplicate, executed by order of the Board of Directors,
one copy of which instrument shall be delivered to the Trustee so removed and
one copy to the successor trustee, or, subject to the provisions of Section 7.9,
any Noteholder who has been a bona fide holder of a Note or Notes for at least
six (6) months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor trustee; provided, however, that if no successor
Trustee shall have been appointed and have accepted appointment sixty (60) days
after either the Company or the Noteholders has removed the Trustee, the Trustee
so removed may petition any court of competent jurisdiction for an appointment
of a successor trustee. Such court may thereupon, after such notice, if any, as
it may deem proper and prescribe, remove the Trustee and appoint a successor
trustee.

(c) The holders of a majority in aggregate principal amount of
the Notes at the time outstanding may at any time remove the Trustee and
nominate a successor trustee which shall be deemed appointed as successor
trustee unless, within ten (10) days after notice to the Company of such
nomination, the Company objects thereto, in which case the Trustee so removed or
any Noteholder, or if such Trustee so removed or any Noteholder fails to act,
the Company, upon the terms and conditions and otherwise as in Section 8.10(a)
provided, may petition any court of competent jurisdiction for an appointment of
a successor trustee.

(d) Any resignation or removal of the Trustee and appointment
of a successor trustee pursuant to any of the provisions of this Section 8.10
shall become effective upon acceptance of appointment by the successor trustee
as provided in Section 8.11.

Section 8.11. Acceptance by Successor Trustee. Any successor trustee
appointed as provided in Section 8.10 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Company or of the successor trustee, the trustee ceasing to act shall,
upon payment of any amount then due it pursuant to the provisions of Section
8.6, execute and deliver an instrument 

44

transferring to such successor trustee all the rights and powers of the trustee
so ceasing to act. Upon request of any such successor trustee, the Company shall
execute any and all instruments in writing for more fully and certainly vesting
in and confirming to such successor trustee all such rights and powers. Any
trustee ceasing to act shall, nevertheless, retain a lien upon all property and
funds held or collected by such trustee as such, except for funds held in trust
for the benefit of holders of particular Notes, to secure any amounts then due
it pursuant to the provisions of Section 8.6.

No successor trustee shall accept appointment as provided in this
Section 8.11 unless, at the time of such acceptance, such successor trustee
shall be qualified under the provisions of Section 8.8 and be eligible under the
provisions of Section 8.9.

Upon acceptance of appointment by a successor trustee as provided in
this Section 8.11, the Company (or the former trustee, at the written direction
of the Company) shall mail or cause to be mailed notice of the succession of
such trustee hereunder to the holders of Notes at their addresses as they shall
appear on the Note register. If the Company fails to mail such notice within ten
(10) days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Company.

Section 8.12. Succession by Merger, Etc. Any corporation into which the
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding, whether by equity or
asset purchase or exchange, to all or substantially all of the corporate trust
business of the Trustee (including any trust created by this Indenture), shall
be the successor to the Trustee hereunder without the execution or filing of any
paper or any further act on the part of any of the parties hereto, provided that
in the case of any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, such corporation shall be qualified
under the provisions of Section 8.8 and eligible under the provisions of Section
8.9.

In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Notes shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee or authenticating agent appointed
by such predecessor trustee, and deliver such Notes so authenticated; and in
case at that time any of the Notes shall not have been authenticated, any
successor to the Trustee or any authenticating agent appointed by such successor
trustee may authenticate such Notes in the name of the successor trustee; and in
all such cases such certificates shall have the full force that is provided in
the Notes or in this Indenture; provided, however, that the right to adopt the
certificate of authentication of any predecessor Trustee or authenticate Notes
in the name of any predecessor Trustee shall apply only to its successor or
successors by merger, conversion or consolidation.

Section 8.13. Preferential Collection of Claims. If and when the
Trustee shall be or become a creditor of the Company (or any other obligor upon
the Notes), the Trustee shall be subject to the provisions of the Trust
Indenture Act regarding the collection of the claims against the Company (or any
such other obligor).

Section 8.14. Trustee's Application for Instructions from the Company.
Any application by the Trustee for written instructions from the Company (other
than with regard to any action proposed to be taken or omitted to be taken by
the Trustee that affects the rights of the holders of the Notes or holders of
Senior Indebtedness under this Indenture, including, without limitation, under
Article Four hereof) may, at the option of the Trustee, set forth in writing any
action proposed to be taken or omitted by the Trustee under this Indenture and
the date on and/or after which such action shall be taken or such omission shall
be effective. The Trustee shall not be liable for any action taken by, or
omission of, the 

45

Trustee in accordance with a proposal included in such application on or after
the date specified in such application (which date shall not be less than five
(5) Business Days after the date any officer of the Company actually receives
such application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
in response to such application specifying the action to be taken or omitted.

ARTICLE NINE

THE NOTEHOLDERS

Section 9.1. Action by Noteholders. Whenever in this Indenture it is
provided that the holders of a specified percentage in aggregate principal
amount of the Notes may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or the taking of any other
action), the fact that at the time of taking any such action, the holders of
such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by Noteholders
in person or by agent or proxy appointed in writing, or (b) by the record of the
holders of Notes voting in favor thereof at any meeting of Noteholders duly
called and held in accordance with the provisions of Article Ten, or (c) by a
combination of such instrument or instruments and any such record of such a
meeting of Noteholders. Whenever the Company or the Trustee solicits the taking
of any action by the holders of the Notes, the Company or the Trustee may fix in
advance of such solicitation, a date as the record date for determining holders
entitled to take such action. The record date shall be not more than fifteen
(15) days prior to the date of commencement of solicitation of such action.

Section 9.2. Proof of Execution by Noteholders. Subject to the
provisions of Sections 8.1, 8.2 and 10.5, proof of the execution of any
instrument by a Noteholder or its agent or proxy shall be sufficient if made in
accordance with such reasonable rules and regulations as may be prescribed by
the Trustee or in such manner as shall be satisfactory to the Trustee. The
holding of Notes shall be proved by the registry of such Notes or by a
certificate of the Note registrar.

The record of any Noteholders' meeting shall be proved in the manner
provided in Section 10.6.

Section 9.3. Who Are Deemed Absolute Owners. The Company, the Trustee,
any paying agent, any conversion agent and any Note registrar may deem the
Person in whose name such Note shall be registered upon the Note register to be,
and may treat it as, the absolute owner of such Note (whether or not such Note
shall be overdue and notwithstanding any notation of ownership or other writing
thereon made by any Person other than the Company or any Note registrar) for the
purpose of receiving payment of or on account of the principal of, premium, if
any, and interest on such Note, for conversion of such Note and for all other
purposes; and neither the Company nor the Trustee nor any paying agent nor any
conversion agent nor any Note registrar shall be affected by any notice to the
contrary. All such payments so made to any holder for the time being, or upon
his order, shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for monies payable upon any
such Note.

Section 9.4. Company-Owned Notes Disregarded. In determining whether
the holders of the requisite aggregate principal amount of Notes have concurred
in any direction, consent, waiver or other action under this Indenture, Notes
which are owned by the Company or any other obligor on the Notes or any
Affiliate of the Company or any other obligor on the Notes shall be disregarded
and deemed not to be outstanding for the purpose of any such determination;
provided, however, that, for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, consent, waiver or other
action, only Notes which a Responsible Officer knows are so owned shall be so
disregarded. Notes 

46

so owned which have been pledged in good faith may be regarded as outstanding
for the purposes of this Section 9.4 if the pledgee shall establish to the
satisfaction of the Trustee the pledgee's right to vote such Notes and that the
pledgee is not the Company, any other obligor on the Notes or any Affiliate of
the Company or any such other obligor. In the case of a dispute as to such
right, any decision by the Trustee taken upon the advice of counsel shall be
full protection to the Trustee. Upon request of the Trustee, the Company shall
furnish to the Trustee promptly an Officers' Certificate listing and identifying
all Notes, if any, known by the Company to be owned or held by or for the
account of any of the above described Persons, and, subject to Section 8.1, the
Trustee shall be entitled to accept such Officers' Certificate as conclusive
evidence of the facts therein set forth and of the fact that all Notes not
listed therein are outstanding for the purpose of any such determination.

Section 9.5. Revocation of Consents; Future Holders Bound. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
9.1, of the taking of any action by the holders of the percentage in aggregate
principal amount of the Notes specified in this Indenture in connection with
such action, any holder of a Note which is shown by the evidence to be included
in the Notes the holders of which have consented to such action may, by filing
written notice with the Trustee at its Corporate Trust Office and upon proof of
holding as provided in Section 9.2, revoke such action so far as concerns such
Note. Except as aforesaid, any such action taken by the holder of any Note shall
be conclusive and binding upon such holder and upon all future holders and
owners of such Note and of any Notes issued in exchange or substitution
therefor, irrespective of whether any notation in regard thereto is made upon
such Note or any Note issued in exchange or substitution therefor.

ARTICLE TEN

MEETINGS OF NOTEHOLDERS

Section 10.1.    Purpose of Meetings. A meeting of Noteholders may be
called at any time and from time to time pursuant to the provisions of this
Article Ten for any of the following purposes:

(1) to give any notice to the Company or to the Trustee or to
give any directions to the Trustee permitted under this Indenture, or
to consent to the waiving of any default or Event of Default hereunder
and its consequences, or to take any other action authorized to be
taken by Noteholders pursuant to any of the provisions of Article
Seven;

(2) to remove the Trustee and nominate a successor trustee
pursuant to the provisions of Article Eight;

(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.2; or

(4) to take any other action authorized to be taken by or on
behalf of the holders of any specified aggregate principal amount of
the Notes under any other provision of this Indenture or under
applicable law.

Section 10.2. Call of Meetings by Trustee. The Trustee may at any time
call a meeting of Noteholders to take any action specified in Section 10.1, to
be held at such time and at such place as the Trustee shall determine. Notice of
every meeting of the Noteholders, setting forth the time and the place of such
meeting and in general terms the action proposed to be taken at such meeting and
the establishment of any record date pursuant to Section 9.1, shall be mailed to
holders of Notes at their addresses as they shall appear on the Note register.
Such notice shall also be mailed to the Company. 

47

Such notices shall be mailed not less than twenty (20) nor more than ninety (90)
days prior to the date fixed for the meeting.

Any meeting of Noteholders shall be valid without notice if the holders
of all Notes then outstanding are present in person or by proxy or if notice is
waived before or after the meeting by the holders of all Notes outstanding, and
if the Company and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.

Section 10.3. Call of Meetings by Company or Noteholders. In case at
any time the Company, pursuant to a resolution of its Board of Directors, or the
holders of at least ten percent (10%) in aggregate principal amount of the Notes
then outstanding, shall have requested the Trustee to call a meeting of
Noteholders, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have mailed the
notice of such meeting within twenty (20) days after receipt of such request,
then the Company or such Noteholders may determine the time and the place for
such meeting and may call such meeting to take any action authorized in Section
10.1, by mailing notice thereof as provided in Section 10.2.

Section 10.4. Qualifications for Voting. To be entitled to vote at any
meeting of Noteholders a person shall (a) be a holder of one or more Notes on
the record date pertaining to such meeting or (b) be a person appointed by an
instrument in writing as proxy by a holder of one or more Notes on the record
date pertaining to such meeting. The only persons who shall be entitled to be
present or to speak at any meeting of Noteholders shall be the persons entitled
to vote at such meeting and their counsel and any representatives of the Trustee
and its counsel and any representatives of the Company and its counsel.

Section 10.5. Regulations. Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Noteholders, in regard to proof of the holding of
Notes and of the appointment of proxies, and in regard to the appointment and
duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall think fit.

The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Noteholders as provided in Section 10.3, in which case the Company
or the Noteholders calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary of
the meeting shall be elected by vote of the holders of a majority in principal
amount of the Notes represented at the meeting and entitled to vote at the
meeting.

Subject to the provisions of Section 9.4, at any meeting each
Noteholder or proxyholder shall be entitled to one vote for each $1,000
principal amount of Notes held or represented by him; provided, however, that no
vote shall be cast or counted at any meeting in respect of any Note challenged
as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Notes held by him or instruments in writing as aforesaid duly
designating him as the proxy to vote on behalf of other Noteholders. Any meeting
of Noteholders duly called pursuant to the provisions of Section 10.2 or 10.3
may be adjourned from time to time by the holders of a majority of the aggregate
principal amount of Notes represented at the meeting, whether or not
constituting a quorum, and the meeting may be held as so adjourned without
further notice. Holders entitled to vote a majority of the aggregate principal
amount of Notes outstanding shall constitute a quorum.

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Section 10.6. Voting. The vote upon any resolution submitted to any
meeting of Noteholders shall be by written ballot on which shall be subscribed
the signatures of the holders of Notes or of their representatives by proxy and
the outstanding principal amount of the Notes held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record in duplicate of
the proceedings of each meeting of Noteholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice was mailed as
provided in Section 10.2. The record shall show the principal amount of the
Notes voting in favor of or against any resolution. The record shall be signed
and verified by the affidavits of the permanent chairman and secretary of the
meeting and one of the duplicates shall be delivered to the Company and the
other to the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting.

Any record so signed and verified shall be conclusive evidence of the
matters therein stated.

Section 10.7. No Delay of Rights by Meeting. Nothing contained in this
Article Ten shall be deemed or construed to authorize or permit, solely by
reason of any call of a meeting of Noteholders or any rights expressly or
impliedly conferred hereunder to make such call, any hindrance or delay in the
exercise of any right or rights conferred upon or reserved to the Trustee or to
the Noteholders under any of the provisions of this Indenture or of the Notes.

ARTICLE ELEVEN

SUPPLEMENTAL INDENTURES

Section 11.1. Supplemental Indentures Without Consent of Noteholders.
The Company, when authorized by the resolutions of the Board of Directors, and
the Trustee may, from time to time, and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:

(a) make provision with respect to the conversion rights of
the holders of Notes pursuant to the requirements of Section 15.6 and the
redemption obligations of the Company pursuant to the requirements of Section
3.5(e);

(b) subject to Article Four, to convey, transfer, assign, 
mortgage or pledge to the Trustee as security for the Notes, any property or 
assets;

(c) to evidence the succession of another Person to the
Company, or successive successions, and the assumption by the successor Person
of the covenants, agreements and obligations of the Company pursuant to Article
Twelve;

(d) to add to the covenants of the Company such further
covenants, restrictions or conditions as the Board of Directors and the Trustee
shall consider to be for the benefit of the holders of Notes, and to make the
occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions or conditions a default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided, however, that in
respect of any such additional covenant, restriction or condition, such
supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that 

49

allowed in the case of other defaults) or may provide for an immediate
enforcement upon such default or may limit the remedies available to the Trustee
upon such default;

(e) to provide for the issuance under this Indenture of Notes
in coupon form (including Notes registrable as to principal only) and to provide
for exchangeability of such Notes with the Notes issued hereunder in fully
registered form and to make all appropriate changes for such purpose;

(f) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture that may be
defective or inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions in regard to matters or
questions arising under this Indenture that shall not materially adversely
affect the interests of the holders of the Notes; provided, however,
notwithstanding Section 11.5 or 16.5, the Trustee shall not be entitled to an
opinion of counsel with respect to whether the supplemental indenture would have
a material adverse affect on the holders of the Notes;

(g) to evidence and provide for the acceptance of appointment 
hereunder by a successor Trustee with respect to the Notes;

(h) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualifications of
this Indenture under the Trust Indenture Act, or under any similar federal
statute hereafter enacted; or

(i) to provide for or facilitate the transfer of Notes to a 
Non-U.S. Person in accordance with Regulation S in a manner consistent with the
Indenture.

Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any supplemental indenture, the Trustee
is hereby authorized to join with the Company in the execution of any such
supplemental indenture, to make any further appropriate agreements and
stipulations that may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any supplemental indenture
that affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.

Any supplemental indenture authorized by the provisions of this Section
11.1 may be executed by the Company and the Trustee without the consent of the
holders of any of the Notes at the time outstanding, notwithstanding any of the
provisions of Section 11.2.

Notwithstanding any other provision of the Indenture or the Notes, the
Registration Rights Agreement and the obligation to pay Liquidated Damages
thereunder may be amended, modified or waived in accordance with the provisions
of the Registration Rights Agreement.

Section 11.2. Supplemental Indenture with Consent of Noteholders. With
the consent (evidenced as provided in Article Nine) of the holders of not less
than a majority in aggregate principal amount of the Notes at the time
outstanding, the Company, when authorized by the resolutions of the Board of
Directors, and the Trustee may, from time to time and at any time, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or any supplemental indenture or of modifying in any manner the
rights of the holders of the Notes; provided, however, that no such supplemental
indenture shall (i) extend the fixed maturity of any Note, or reduce the rate or
extend the time of payment of interest thereon, or reduce the principal amount
thereof or premium, if any, thereon, or reduce any amount payable on redemption
thereof, or impair the right of any Noteholder to institute suit for the payment

50

thereof, or make the principal thereof or interest or premium, if any, thereon
payable in any coin or currency other than that provided in the Notes, or modify
the provisions of this Indenture with respect to the subordination of the Notes
in a manner adverse to the Noteholders in any material respect, or change the
obligation of the Company to redeem any Note upon the happening of a Fundamental
Change in a manner adverse to the holder of Notes, or impair the right to
convert the Notes into Common Stock subject to the terms set forth herein,
including Section 15.6, in each case, without the consent of the holder of each
Note so affected, or (ii) reduce the aforesaid percentage of Notes, the holders
of which are required to consent to any such supplemental indenture, without the
consent of the holders of all Notes then outstanding.

Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Noteholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.

It shall not be necessary for the consent of the Noteholders under this
Section 11.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.

Section 11.3. Effect of Supplemental Indenture. Any supplemental
indenture executed pursuant to the provisions of this Article Eleven shall
comply with the Trust Indenture Act, as then in effect, provided that this
Section 11.3 shall not require such supplemental indenture or the Trustee to be
qualified under the Trust Indenture Act prior to the time such qualification is
in fact required under the terms of the Trust Indenture Act or the Indenture has
been qualified under the Trust Indenture Act, nor shall it constitute any
admission or acknowledgment by any party to such supplemental indenture that any
such qualification is required prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act. Upon the execution of any supplemental
indenture pursuant to the provisions of this Article Eleven, this Indenture
shall be and be deemed to be modified and amended in accordance therewith and
the respective rights, limitation of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Company and the holders of Notes shall
thereafter be determined, exercised and enforced hereunder, subject in all
respects to such modifications and amendments and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.

Section 11.4. Notation on Notes. Notes authenticated and delivered
after the execution of any supplemental indenture pursuant to the provisions of
this Article Eleven may bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Company or the
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Trustee and the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may, at the Company's expense, be
prepared and executed by the Company, authenticated by the Trustee (or an
authenticating agent duly appointed by the Trustee pursuant to Section 16.11)
and delivered in exchange for the Notes then outstanding, upon surrender of such
Notes then outstanding.

Section 11.5. Evidence of Compliance of Supplemental Indenture to be
Furnished to Trustee. Prior to entering into any supplemental indenture, the
Trustee may request an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant hereto is
authorized or permitted under this Article Eleven.

51

ARTICLE TWELVE

CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

Section 12.1. Company May Consolidate, Etc on Certain Terms. Subject to
the provisions of Section 12.2, nothing contained in this Indenture or in any of
the Notes shall prevent any consolidation or merger of the Company with or into
any other Person or Persons (whether or not affiliated with the Company), or
successive consolidations or mergers in which the Company or its successor or
successors shall be a party or parties, or shall prevent any sale, conveyance or
lease (or successive sales, conveyances or leases) of all or substantially all
of the property of the Company, to any other Person (whether or not affiliated
with the Company), authorized to acquire and operate the same and that shall be
organized under the laws of the United States of America, any state thereof or
the District of Columbia; provided, however, that upon any such consolidation,
merger, sale, conveyance or lease, the due and punctual payment of the principal
of and premium, if any, and interest (including Liquidated Damages, if any) on
all of the Notes, according to their tenor and the due and punctual performance
and observance of all of the covenants and conditions of this Indenture to be
performed by the Company, shall be expressly assumed, by supplemental indenture
satisfactory in form to the Trustee, executed and delivered to the Trustee by
the Person (if other than the Company) formed by such consolidation, or into
which the Company shall have been merged, or by the Person that shall have
acquired or leased such property, and such supplemental indenture shall provide
for the applicable conversion rights set forth in Section 15.6.

Section 12.2. Successor Corporation to be Substituted. In case of any
such consolidation, merger, sale, conveyance or lease and upon the assumption by
the successor Person, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the due and punctual payment
of the principal of and premium, if any, and interest on all of the Notes and
the due and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Company, such successor Person shall succeed to
and be substituted for the Company, with the same effect as if it had been named
herein as the party of this first part. Such successor Person thereupon may
cause to be signed, and may issue either in its own name or in the name of
Enzon, Inc. any or all of the Notes, issuable hereunder that theretofore shall
not have been signed by the Company and delivered to the Trustee; and, upon the
order of such successor Person instead of the Company and subject to all the
terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver, or cause to be authenticated and
delivered, any Notes that previously shall have been signed and delivered by the
officers of the Company to the Trustee for authentication, and any Notes that
such successor Person thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All the Notes so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Notes theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Notes had been issued at the date of the execution hereof. In the event
of any such consolidation, merger, sale, conveyance or lease, the Person named
as the "Company" in the first paragraph of this Indenture or any successor that
shall thereafter have become such in the manner prescribed in this Article
Twelve may be dissolved, wound up and liquidated at any time thereafter and such
Person shall be released from its liabilities as obligor and maker of the Notes
and from its obligations under this Indenture.

In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form (but not in substance) may be made in the
Notes thereafter to be issued as may be appropriate.

Section 12.3. Opinion of Counsel to be Given Trustee. The Trustee shall
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance or lease and any
such assumption complies with the provisions of this Article Twelve.

52

ARTICLE THIRTEEN

SATISFACTION AND DISCHARGE OF INDENTURE

Section 13.1. Discharge of Indenture. When (a) the Company shall
deliver to the Trustee for cancellation all Notes theretofore authenticated
(other than any Notes that have been destroyed, lost or stolen and in lieu of or
in substitution for which other Notes shall have been authenticated and
delivered) and not theretofore canceled, or (b) all the Notes not theretofore
canceled or delivered to the Trustee for cancellation shall have become due and
payable, or are by their terms to become due and payable within one year or are
to be called for redemption within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption, and the Company shall
deposit with the Trustee, in trust, funds sufficient to pay at maturity or upon
redemption of all of the Notes (other than any Notes that shall have been
mutilated, destroyed, lost or stolen and in lieu of or in substitution for which
other Notes shall have been authenticated and delivered) not theretofore
canceled or delivered to the Trustee for cancellation, including principal and
premium, if any, and interest due or to become due to such date of maturity or
redemption date, as the case may be, accompanied by a verification report, as to
the sufficiency of the deposited amount, from an independent certified
accountant or other financial professional satisfactory to the Trustee, and if
the Company shall also pay or cause to be paid all other sums payable hereunder
by the Company, then this Indenture shall cease to be of further effect (except
as to (i) remaining rights of registration of transfer, substitution and
exchange and conversion of Notes, (ii) rights hereunder of Noteholders to
receive payments of principal of and premium, if any, and interest on, the Notes
and the other rights, duties and obligations of Noteholders, as beneficiaries
hereof with respect to the amounts, if any, so deposited with the Trustee and
(iii) the rights, obligations and immunities of the Trustee hereunder), and the
Trustee, on written demand of the Company accompanied by an Officers'
Certificate and an Opinion of Counsel as required by Section 16.5 and at the
cost and expense of the Company, shall execute proper instruments acknowledging
satisfaction of and discharging this Indenture; the Company, however, hereby
agrees to reimburse the Trustee for any costs or expenses thereafter reasonably
and properly incurred by the Trustee and to compensate the Trustee for any
services thereafter reasonably and properly rendered by the Trustee in
connection with this Indenture or the Notes.

Section 13.2. Deposited Monies to be Held in Trust by Trustee. Subject
to Section 13.4, all monies deposited with the Trustee pursuant to Section 13.1,
provided such deposit was not in violation of Article Four, shall be held in
trust for the sole benefit of the Noteholders and not to be subject to the
subordination provisions of Article Four, and such monies shall be applied by
the Trustee to the payment, either directly or through any paying agent
(including the Company if acting as its own paying agent), to the holders of the
particular Notes for the payment or redemption of which such monies have been
deposited with the Trustee, of all sums due and to become due thereon for
principal and interest and premium, if any.

Section 13.3. Paying Agent to Repay Monies Held. Upon the satisfaction
and discharge of this Indenture, all monies then held by any paying agent of the
Notes (other than the Trustee) shall, upon written request of the Company, be
repaid to it or paid to the Trustee, and thereupon such paying agent shall be
released from all further liability with respect to such monies.

Section 13.4. Return of Unclaimed Monies. Subject to the requirements
of applicable law, any monies deposited with or paid to the Trustee for payment
of the principal of, premium, if any, or interest on Notes and not applied but
remaining unclaimed by the holders of Notes for two years after the date upon
which the principal of, premium, if any, or interest on such Notes, as the case
may be, shall have become due and payable, shall be repaid to the Company by the
Trustee on demand and all liability of the Trustee shall thereupon cease with
respect to such monies; and the holder of any of the Notes shall 

53

thereafter look only to the Company for any payment that such holder may be
entitled to collect unless an applicable abandoned property law designates
another Person.

Section 13.5. Reinstatement. If the Trustee or the paying agent is
unable to apply any money in accordance with Section 13.2 by reason of any order
or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 13.1 until such time as the Trustee or the paying
agent is permitted to apply all such money in accordance with Section 13.2;
provided, however, that if the Company makes any payment of interest on or
principal of any Note following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the holders of such Notes to
receive such payment from the money held by the Trustee or paying agent.

ARTICLE FOURTEEN

IMMUNITY OF INCORPORATORS,
STOCKHOLDERS, OFFICERS AND DIRECTORS

Section 14.1. Indenture and Notes Solely Corporate Obligations. No
recourse for the payment of the principal of or premium, if any, or interest on
any Note, or for any claim based thereon or otherwise in respect thereof, and no
recourse under or upon any obligation, covenant or agreement of the Company in
this Indenture or in any supplemental indenture or in any Note, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, employee, agent, officer, director or subsidiary, as
such, past, present or future, of the Company or of any successor corporation,
either directly or through the Company or any successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that all such
liability is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of the Notes.

ARTICLE FIFTEEN

CONVERSION OF NOTES

Section 15.1. Right to Convert. Subject to and upon compliance with the
provisions of this Indenture, including, without limitation, Article Four, the
holder of any Note shall have the right, at its option, at any time after the
original issuance of the Notes hereunder through the close of business on the
final maturity date of the Notes (except that, with respect to any Note or
portion of a Note that shall be called for redemption, such right shall
terminate, except as provided in Section 15.2, Section 3.2 or Section 3.4, at
the close of business on the Business Day next preceding the date fixed for
redemption of such Note or portion of a Note unless the Company shall default in
payment due upon redemption thereof) to convert the principal amount of any such
Note, or any portion of such principal amount which is $1,000 or an integral
multiple thereof, into that number of fully paid and non-assessable shares of
Common Stock (as such shares shall then be constituted) obtained by dividing the
principal amount of the Note or portion thereof surrendered for conversion by
the Conversion Price in effect at such time by surrender of the Note so to be
converted in whole or in part in the manner provided, together with any required
funds, in Section 15.2. A Note in respect of which a holder is exercising its
option to require redemption upon a Fundamental Change pursuant to Section 3.5
may be converted only if such holder withdraws its election to exercise in
accordance with Section 3.5. A holder of Notes is not entitled to any rights of
a holder of Common Stock until such holder has converted his Notes to Common
Stock, and only to the extent such Notes are deemed to have been converted to
Common Stock under this Article Fifteen.

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Section 15.2. Exercise of Conversion Privilege; Issuance of Common
Stock on Conversion; No Adjustment for Interest or Dividends. In order to
convert any Note in certificated form, the holder of any such Note to be
converted in whole or in part shall surrender such Note, duly endorsed, at an
office or agency maintained by the Company pursuant to Section 5.2, accompanied
by the funds, if any, required by the penultimate paragraph of this Section
15.2, and shall give written notice of conversion in the form provided on the
Notes (or such other notice which is acceptable to the Company) to the office or
agency that the holder elects to convert such Note or the portion thereof
specified in said notice. Such notice shall also state the name or names (with
address or addresses) in which the certificate or certificates for shares of
Common Stock which shall be issuable on such conversion shall be issued, and
shall be accompanied by transfer taxes, if required pursuant to Section 15.7.
Each such Note surrendered for conversion shall, unless the shares issuable on
conversion are to be issued in the same name as the registration of such Note,
be duly endorsed by, or be accompanied by instruments of transfer in form
satisfactory to the Company duly executed by, the holder or his duly authorized
attorney.

In order to convert any interest in a Global Note, the beneficial
holder must complete, or cause to be completed, the appropriate instruction form
for conversion pursuant to the Depository's book-entry conversion program,
deliver, or cause to be delivered, by book-entry delivery an interest in such
Global Note, furnish appropriate endorsements and transfer documents if required
by the Company or the Trustee or conversion agent, and pay the funds, if any,
required by this Section 15.2 and any transfer taxes if required pursuant to
Section 15.7.

As promptly as practicable after satisfaction of the requirements for
conversion set forth above, subject to compliance with any restrictions on
transfer if shares issuable on conversion are to be issued in a name other than
that of the Noteholder (as if such transfer were a transfer of the Note or Notes
(or portion thereof) so converted), the Company shall issue and shall deliver to
such Noteholder at the office or agency maintained by the Company for such
purpose pursuant to Section 5.2, a certificate or certificates for the number of
full shares of Common Stock issuable upon the conversion of such Note or portion
thereof as determined by the Company in accordance with the provisions of this
Article Fifteen and a check or cash in respect of any fractional interest in
respect of a share of Common Stock arising upon such conversion, calculated by
the Company as provided in Section 15.3. In case any Note in certificated form
of a denomination greater than $1,000 shall be surrendered for partial
conversion, and subject to Section 2.3, the Company shall execute and the
Trustee shall authenticate and deliver to the holder of the Note so surrendered,
without charge to him, a new Note or Notes in authorized denominations in an
aggregate principal amount equal to the unconverted portion of the surrendered
Note.

Each conversion shall be deemed to have been effected as to any such
Note (or portion thereof) on the date on which the requirements set forth above
in this Section 15.2 have been satisfied as to such Note (or portion thereof),
and the Person in whose name any certificate or certificates for shares of
Common Stock shall be issuable upon such conversion shall be deemed to have
become on said date the holder of record of the shares represented thereby;
provided, however, that any such surrender on any date when the stock transfer
books of the Company shall be closed shall constitute the Person in whose name
the certificates are to be issued as the record holder thereof for all purposes
on the next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date upon which
such Note shall be surrendered.

No adjustment in respect of interest on any Note converted or dividends
on any shares issued upon conversion of such Note will be made upon any
conversion except as set forth in the next sentence. If this Note (or portion
hereof) is surrendered for conversion during the period from the close of
business on any record date for the payment of interest to the close of business
on the Business Day preceding the following interest payment date and either (x)
has not been called for redemption on a redemption date that occurs during such
period or (y) is not to be redeemed in connection with a Fundamental Change on a

55

Repurchase Date that occurs during such period, this Note (or portion hereof
being converted) when surrendered for conversion, must be accompanied by an
amount, in New York Clearing House funds or other funds acceptable to the
Company, equal to the interest payable on such interest payment date on the
principal amount being converted; provided, however, that no such payment shall
be required if there shall exist at the time of conversion a default in the
payment of interest on the Notes.

Upon the conversion of an interest in a Global Note, the Trustee (or
other conversion agent appointed by the Company), or the Custodian at the
direction of the Trustee (or other conversion agent appointed by the Company),
shall make a notation on such Global Note as to the reduction in the principal
amount represented thereby. The Company shall notify the Trustee in writing of
any conversions of Notes effected through any conversion agent other than the
Trustee.

Section 15.3. Cash Payments in Lieu of Fractional Shares. No fractional
shares of Common Stock or scrip representing fractional shares shall be issued
upon conversion of Notes. If more than one Note shall be surrendered for
conversion at one time by the same holder, the number of full shares that shall
be issuable upon conversion shall be computed on the basis of the aggregate
principal amount of the Notes (or specified portions thereof to the extent
permitted hereby) so surrendered. If any fractional share of stock would be
issuable upon the conversion of any Note or Notes, the Company shall make an
adjustment and payment therefor in cash based upon the current market price
thereof to the holder of Notes. The current market price of a share of Common
Stock shall be the Closing Price on the last Business Day immediately preceding
the day on which the Notes (or specified portions thereof) are deemed to have
been converted.

Section 15.4. Conversion Price. The conversion price shall be as
specified in the form of Note (herein called the "Conversion Price") attached as
Exhibit A hereto, subject to adjustment as provided in this Article Fifteen.

Section 15.5. Adjustment of Conversion Price. The Conversion Price
shall be adjusted from time to time by the Company as follows:

(a) In case the Company shall hereafter pay a dividend or make
a distribution to all holders of the outstanding Common Stock in shares of
Common Stock, the Conversion Price shall be reduced so that the same shall equal
the price determined by multiplying the Conversion Price in effect at the
opening of business on the date following the date fixed for the determination
of stockholders entitled to receive such dividend or other distribution by a
fraction, the numerator of which shall be the number of shares of the Common
Stock outstanding at the close of business on the date fixed for such
determination, and the denominator of which shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution, such reduction to become effective immediately after the opening
of business on the day following the date fixed for such determination. For the
purpose of this paragraph (a), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company. The
Company will not pay any dividend or make any distribution on shares of Common
Stock held in the treasury of the Company. If any dividend or distribution of
the type described in this Section 15.5(a) is declared but not so paid or made,
the Conversion Price shall again be adjusted to the Conversion Price that would
then be in effect if such dividend or distribution had not been declared.

(b) In case the Company shall issue rights or warrants to all
holders of its outstanding shares of Common Stock entitling them (for a period
expiring within forty-five (45) days after the date fixed for determination of
stockholders entitled to receive such rights or warrants) to subscribe for or
purchase shares of Common Stock at a price per share less than the Current
Market Price (as defined below) on the date fixed for determination of
stockholders entitled to receive such rights or 

56

warrants, the Conversion Price shall be adjusted so that the same shall equal
the price determined by multiplying the Conversion Price in effect immediately
prior to the date fixed for determination of stockholders entitled to receive
such rights or warrants by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding at the close of business on the
date fixed for determination of stockholders entitled to receive such rights or
warrants plus the number of shares that the aggregate offering price of the
total number of shares so offered would purchase at such Current Market Price,
and the denominator of which shall be the number of shares of Common Stock
outstanding on the date fixed for determination of stockholders entitled to
receive such rights or warrants plus the total number of additional shares of
Common Stock offered for subscription or purchase. Such adjustment shall be
successively made whenever any such rights or warrants are issued, and shall
become effective immediately after the opening of business on the day following
the date fixed for determination of stockholders entitled to receive such rights
or warrants. To the extent that shares of Common Stock are not delivered after
the expiration of such rights or warrants, the Conversion Price shall be
readjusted to the Conversion Price that would then be in effect had the
adjustments made upon the issuance of such rights or warrants been made on the
basis of delivery of only the number of shares of Common Stock actually
delivered. In the event that such rights or warrants are not so issued, the
Conversion Price shall again be adjusted to be the Conversion Price that would
then be in effect if such date fixed for the determination of stockholders
entitled to receive such rights or warrants had not been fixed. In determining
whether any rights or warrants entitle the holders to subscribe for or purchase
shares of Common Stock at less than such Current Market Price, and in
determining the aggregate offering price of such shares of Common Stock, there
shall be taken into account any consideration received by the Company for such
rights or warrants and any amount payable on exercise or conversion thereof, the
value of such consideration, if other than cash, to be determined by the Board
of Directors.

(c) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the Conversion Price
in effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately reduced, and
conversely, in case outstanding shares of Common Stock shall be combined into a
smaller number of shares of Common Stock, the Conversion Price in effect at the
opening of business on the day following the day upon which such combination
becomes effective shall be proportionately increased, such reduction or
increase, as the case may be, to become effective immediately after the opening
of business on the day following the day upon which such subdivision or
combination becomes effective.

(d) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock shares of any class of capital
stock of the Company (other than any dividends or distributions to which Section
15.5(a) applies) or evidences of its indebtedness or assets (including
securities, but excluding any rights or warrants referred to in Section 15.5(b),
and excluding any dividend or distribution (x) paid exclusively in cash or (y)
referred to in Section 15.5(a)) (any of the foregoing hereinafter in this
Section 15.5(d) called the "Securities"), then, in each such case (unless the
Company elects to reserve such Securities for distribution to the Noteholders
upon the conversion of the Notes so that any such holder converting Notes will
receive upon such conversion, in addition to the shares of Common Stock to which
such holder is entitled, the amount and kind of such Securities which such
holder would have received if such holder had converted its Notes into Common
Stock immediately prior to the Record Date (as defined in Section 15.5(h)(4))
for such distribution of the Securities), the Conversion Price shall be reduced
so that the same shall be equal to the price determined by multiplying the
Conversion Price in effect on the Record Date with respect to such distribution
by a fraction, the numerator of which shall be the Current Market Price per
share of the Common Stock on such Record Date less the fair market value (as
determined by the Board of Directors, whose determination shall be conclusive,
and described in a resolution of the Board of Directors) on the Record Date of
the portion of the Securities so distributed applicable to one share of Common
Stock and the denominator of which shall be the Current Market Price per share
of the Common Stock, such reduction to become effective 

57

immediately prior to the opening of business on the day following such Record
Date; provided, however, that in the event the then fair market value (as so
determined) of the portion of the Securities so distributed applicable to one
share of Common Stock is equal to or greater than the Current Market Price of
the Common Stock on the Record Date, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Noteholder shall have the right to
receive upon conversion the amount of Securities such holder would have received
had such holder converted each Note on such Record Date. In the event that such
dividend or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price that would then be in effect if
such dividend or distribution had not been declared. If the Board of Directors
determines the fair market value of any distribution for purposes of this
Section 15.5(d) by reference to the actual or when issued trading market for any
securities, it must in doing so consider the prices in such market over the same
period used in computing the Current Market Price of the Common Stock.

In the event that the Company shall enter into any agreements entitling
any shareholder to purchase common stock at less than the Closing Price at that
time (a "Rights Plan"), upon conversion of the Notes into Common Stock, to the
extent that the Rights Plan is still in effect upon such conversion, the holders
of Notes will receive, in addition to the Common Stock, the rights described
therein subject to the limitations set forth in the Rights Plan.

Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("Trigger Event"): (i) are deemed to be transferred with such shares of Common
Stock; (ii) are not exercisable; and (iii) are also issued in respect of future
issuances of Common Stock, shall be deemed not to have been distributed for
purposes of this Section 15.5 (and no adjustment to the Conversion Price under
this Section 15.5 will be required) until the occurrence of the earliest Trigger
Event, whereupon such rights and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the Conversion
Price shall be made under this Section 15.5(d). If any such right or warrant,
including any such existing rights or warrants distributed prior to the date of
this Indenture, are subject to events, upon the occurrence of which such rights
or warrants become exercisable to purchase different securities, evidences of
indebtedness or other assets, then the date of the occurrence of any and each
such event shall be deemed to be the date of distribution and record date with
respect to new rights or warrants with such rights (and a termination or
expiration of the existing rights or warrants without exercise by any of the
holders thereof). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event (of the
type described in the preceding sentence) with respect thereto that was counted
for purposes of calculating a distribution amount for which an adjustment to the
Conversion Price under this Section 15.5 was made, (1) in the case of any such
rights or warrants that shall all have been redeemed or repurchased without
exercise by any holders thereof, the Conversion Price shall be readjusted upon
such final redemption or repurchase to give effect to such distribution or
Trigger Event, as the case may be, as though it were a cash distribution, equal
to the per share redemption or repurchase price received by a holder or holders
of Common Stock with respect to such rights or warrants (assuming such holder
had retained such rights or warrants), made to all holders of Common Stock as of
the date of such redemption or repurchase, and (2) in the case of such rights or
warrants that shall have expired or been terminated without exercise by any
holders thereof, the Conversion Price shall be readjusted as if such rights and
warrants had not been issued.

No adjustment of the Conversion Price shall be made pursuant to this
Section 15.5(d) in respect of rights or warrants distributed or deemed
distributed on any Trigger Event to the extent that such rights or warrants are
actually distributed, or reserved by the Company for distribution to holders of
Notes upon conversion by such holders of Notes to Common Stock.

58

For purposes of this Section 15.5(d) and Sections 15.5(a) and (b), any
dividend or distribution to which this Section 15.5(d) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock (or both), shall be deemed instead to be (1) a
dividend or distribution of the evidences of indebtedness, assets or shares of
capital stock other than such shares of Common Stock or rights or warrants (and
any Conversion Price reduction required by this Section 15.5(d) with respect to
such dividend or distribution shall then be made) immediately followed by (2) a
dividend or distribution of such shares of Common Stock or such rights or
warrants (and any further Conversion Price reduction required by Sections
15.5(a) and (b) with respect to such dividend or distribution shall then be
made), except (A) the Record Date of such dividend or distribution shall be
substituted as "the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution", "the date fixed for the
determination of stockholders entitled to receive such rights or warrants" and
"the date fixed for such determination" within the meaning of Sections 15.5(a)
and (b), and (B) any shares of Common Stock included in such dividend or
distribution shall not be deemed "outstanding at the close of business on the
date fixed for such determination" within the meaning of Section 15.5(a).

(e) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock exclusively in cash (excluding (x)
any quarterly cash dividend on the Common Stock to the extent the aggregate cash
dividend per share of Common Stock in any fiscal quarter does not exceed the
greater of (A) the amount per share of Common Stock of the next preceding
quarterly cash dividend on the Common Stock to the extent that such preceding
quarterly dividend did not require any adjustment of the Conversion Price
pursuant to this Section 15.5(e) (as adjusted to reflect subdivisions, or
combinations of the Common Stock), and (B) 3.75% of the arithmetic average of
the Closing Price (determined as set forth in Section 15.5(h)) during the ten
Trading Days (as defined in Section 15.5(h)) immediately prior to the date of
declaration of such dividend, and (y) any dividend or distribution in connection
with the liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary), then, in such case, the Conversion Price shall be
reduced so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the close of business on the
Record Date of such distribution by a fraction, the numerator of which shall be
the Current Market Price of the Common Stock on such Record Date less the amount
of cash so distributed (and not excluded as provided above) applicable to one
share of Common Stock, and the denominator of which shall be such Current Market
Price of the Common Stock, such reduction to be effective immediately prior to
the opening of business on the day following such Record Date; provided,
however, that in the event the portion of the cash so distributed applicable to
one share of Common Stock is equal to or greater than the Current Market Price
of the Common Stock on such Record Date, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Noteholder shall have the right to
receive upon conversion the amount of cash such holder would have received had
such holder converted each Note on such Record Date. In the event that such
dividend or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price that would then be in effect if
such dividend or distribution had not been declared. If any adjustment is
required to be made as set forth in this Section 15.5(e) as a result of a
distribution that is a quarterly dividend, such adjustment shall be based upon
the amount by which such distribution exceeds the amount of the quarterly cash
dividend permitted to be excluded pursuant hereto. If an adjustment is required
to be made as set forth in this Section 15.5(e) above as a result of a
distribution that is not a quarterly dividend, such adjustment shall be based
upon the full amount of the distribution.

(f) In case a tender or exchange offer made by the Company or
any Subsidiary for all or any portion of the Common Stock shall expire and such
tender or exchange offer (as amended upon the expiration thereof) shall require
the payment to stockholders of consideration per share of Common Stock having a
fair market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the Board of Directors)
that as of the last time (the "Expiration 

59

Time") tenders or exchanges may be made pursuant to such tender or exchange
offer (as it may be amended) exceeds the Current Market Price of the Common
Stock on the Trading Day next succeeding the Expiration Time, the Conversion
Price shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the Expiration
Time by a fraction the numerator of which shall be the number of shares of
Common Stock outstanding (including any tendered or exchanged shares) at the
Expiration Time multiplied by the Current Market Price of the Common Stock on
the Trading Day next succeeding the Expiration Time and the denominator of which
shall be the sum of (x) the fair market value (determined as aforesaid) of the
aggregate consideration payable to stockholders based on the acceptance (up to
any maximum specified in the terms of the tender or exchange offer) of all
shares validly tendered or exchanged and not withdrawn as of the Expiration Time
(the shares deemed so accepted, up to any such maximum, being referred to as the
"Purchased Shares") and (y) the product of the number of shares of Common Stock
outstanding (less any Purchased Shares) at the Expiration Time and the Current
Market Price of the Common Stock on the Trading Day next succeeding the
Expiration Time, such reduction to become effective immediately prior to the
opening of business on the Trading Day following the Expiration Time. In the
event that the Company is obligated to purchase shares pursuant to any such
tender or exchange offer, but the Company is permanently prevented by applicable
law from effecting any such purchases or all such purchases are rescinded, the
Conversion Price shall again be adjusted to be the Conversion Price that would
then be in effect if such tender or exchange offer had not been made.

(g) In case of a tender or exchange offer made by a Person
other than the Company or any Subsidiary for an amount that increases the
offeror's ownership of Common Stock to more than twenty-five percent (25%) of
the Common Stock outstanding and shall involve the payment by such Person of
consideration per share of Common Stock having a fair market value (as
determined by the Board of Directors, whose determination shall be conclusive,
and described in a resolution of the Board of Directors) that as of the last
time (the "Offer Expiration Time") tenders or exchanges may be made pursuant to
such tender or exchange offer (as it shall have been amended) that exceeds the
Current Market Price of the Common Stock on the Trading Day next succeeding the
Offer Expiration Time, and in which, as of the Offer Expiration Time the Board
of Directors is not recommending rejection of the offer, the Conversion Price
shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the Offer
Expiration Time by a fraction the numerator of which shall be the number of
shares of Common Stock outstanding (including any tendered or exchanged shares)
at the Offer Expiration Time multiplied by the Current Market Price of the
Common Stock on the Trading Day next succeeding the Offer Expiration Time and
the denominator of which shall be the sum of (x) the fair market value
(determined as aforesaid) of the aggregate consideration payable to stockholders
based on the acceptance (up to any maximum specified in the terms of the tender
or exchange offer) of all shares validly tendered or exchanged and not withdrawn
as of the Offer Expiration Time (the shares deemed so accepted, up to any such
maximum, being referred to as the "Accepted Purchased Shares") and (y) the
product of the number of shares of Common Stock outstanding (less any Accepted
Purchased Shares) at the Offer Expiration Time and the Current Market Price of
the Common Stock on the Trading Day next succeeding the Offer Expiration Time,
such reduction to become effective immediately prior to the opening of business
on the Trading Day following the Offer Expiration Time. In the event that such
Person is obligated to purchase shares pursuant to any such tender or exchange
offer, but such Person is permanently prevented by applicable law from effecting
any such purchases or all such purchases are rescinded, the Conversion Price
shall again be adjusted to be the Conversion Price that would then be in effect
if such tender or exchange offer had not been made. Notwithstanding the
foregoing, the adjustment described in this Section 15.5(g) shall not be made
if, as of the Offer Expiration Time, the offering documents with respect to such
offer disclose a plan or intention to cause the Company to engage in any
transaction described in Section 12.1.

60

(h)  For purposes of this Section 15.5, the following terms 
shall have the meaning indicated:

(1) "Closing Price" with respect to any security on
any day shall mean the closing sale price, regular way, on
such day or, in case no such sale takes place on such day, the
average of the reported closing bid and asked prices, regular
way, in each case, as quoted on the Nasdaq National Market or,
if such security is not quoted or listed or admitted to
trading on such Nasdaq National Market, on the principal
national securities exchange or quotation system on which such
security is quoted or listed or admitted to trading or, if not
quoted or listed or admitted to trading on any national
securities exchange or quotation system, the average of the
closing bid and asked prices of such security on the
over-the-counter market on the day in question as reported by
the National Quotation Bureau Incorporated, or a similar
generally accepted reporting service, or if not so available,
in such manner as furnished by any New York Stock Exchange
member firm selected from time to time by the Board of
Directors for that purpose, or a price determined in good
faith by the Board of Directors or, to the extent permitted by
applicable law, a duly authorized committee thereof, whose
determination shall be conclusive.

(2) "Current Market Price" shall mean the average of
the daily Closing Prices per share of Common Stock for the ten
consecutive Trading Days immediately prior to the date in
question except as hereinafter provided for purposes of any
computation under Section 15.5(f) or (g); provided, however,
that (1) if the "ex" date (as hereinafter defined) for any
event (other than the issuance or distribution requiring such
computation and other than the tender or exchange offer
requiring such computation under Section 15.5(f) or (g)) that
requires an adjustment to the Conversion Price pursuant to
Section 15.5(a), (b), (c), (d), (e), (f) or (g) occurs during
such ten consecutive Trading Days, the Closing Price for each
Trading Day prior to the "ex" date for such other event shall
be adjusted by multiplying such Closing Price by the same
fraction by which the Conversion Price is so required to be
adjusted as a result of such other event, (2) if the "ex" date
for any event (other than the issuance or distribution
requiring such computation and other than the tender or
exchange offer requiring such computation under Section
15.5(f) or (g)) that requires an adjustment to the Conversion
Price pursuant to Section 15.5(a), (b), (c), (d), (e), (f) or
(g) occurs on or after the "ex" date for the issuance or
distribution requiring such computation and prior to the day
in question, the Closing Price for each Trading Day on and
after the "ex" date for such other event shall be adjusted by
multiplying such Closing Price by the reciprocal of the
fraction by which the Conversion Price is so required to be
adjusted as a result of such other event, and (3) if the "ex"
date for the issuance or distribution requiring such
computation is prior to the day in question, after taking into
account any adjustment required pursuant to clause (1) or (2)
of this proviso, the Closing Price for each Trading Day on or
after such "ex" date shall be adjusted by adding thereto the
amount of any cash and the fair market value (as determined by
the Board of Directors or, to the extent permitted by
applicable law, a duly authorized committee thereof in a
manner consistent with any determination of such value for
purposes of Section 15.5(d), (f) or (g), whose determination
shall be conclusive and described in a resolution of the Board
of Directors or such duly authorized committee thereof, as the
case may be) of the evidences of indebtedness, shares of
capital stock or assets being distributed applicable to one
share of Common Stock as of the close of business on the day
before such "ex" date. For purposes of any computation under
Section 15.5(f) or (g), the "Current Market Price" of the
Common Stock on any date shall be deemed to be the average of
the daily Closing Prices per share of Common Stock for 

61

such day and the next two succeeding Trading Days; provided,
however, that if the "ex" date for any event (other than the
tender or exchange offer requiring such computation under
Section 15.5(f) or (g)) that requires an adjustment to the
Conversion Price pursuant to Section 15.5(a), (b), (c), (d),
(e), (f) or (g) occurs on or after the Expiration Time or
Offer Expiration Time, as the case may be, for the tender or
exchange offer requiring such computation and prior to the day
in question, the Closing Price for each Trading Day on and
after the "ex" date for such other event shall be adjusted as
provided in clauses (1), (2) and (3) of the proviso contained
in the first sentence of this Section 15.5(h)(2). For purpose
of this paragraph, the term "ex" date, (1) when used with
respect to any issuance or distribution, means the first date
on which the Common Stock trades, regular way, on the relevant
exchange or in the relevant market from which the Closing
Price was obtained without the right to receive such issuance
or distribution, (2) when used with respect to any subdivision
or combination of shares of Common Stock, means the first date
on which the Common Stock trades, regular way, on such
exchange or in such market after the time at which such
subdivision or combination becomes effective, and (3) when
used with respect to any tender or exchange offer means the
first date on which the Common Stock trades, regular way, on
such exchange or in such market after the Expiration Time or
the Offer Expiration Time of such offer.

(3) "fair market value" shall mean the amount which a
willing buyer would pay a willing seller in an arm's-length
transaction.

(4) "Record Date" shall mean, with respect to any
dividend, distribution or other transaction or event in which
the holders of Common Stock have the right to receive any
cash, securities or other property or in which the Common
Stock (or other applicable security) is exchanged for or
converted into any combination of cash, securities or other
property, the date fixed for determination of stockholders
entitled to receive such cash, securities or other property
(whether such date is fixed by the Board of Directors or by
statute, contract or otherwise).

(5) "Trading Day" shall mean (x) if the applicable
security is quoted on the Nasdaq National Market, a day on
which trades may be made thereon or (y) if the applicable
security is listed or admitted for trading on the New York
Stock Exchange or such other national securities exchange, a
day on which the New York Stock Exchange or another national
securities exchange is open for business or (z) if the
applicable security is not so listed, admitted for trading or
quoted, any day other than a Saturday or 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.

(i) The Company may make such reductions in the Conversion
Price, in addition to those required by Sections 15.5(a), (b), (c), (d), (e),
(f) or (g) as the Board of Directors considers to be advisable to avoid or
diminish any income tax to holders of Common Stock or rights to purchase Common
Stock resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes.

To the extent permitted by applicable law, the Company from
time to time may reduce the Conversion Price by any amount for any period of
time if the period is at least twenty (20) days, the reduction is irrevocable
during the period and the Board of Directors shall have made a determination
that such reduction would be in the best interests of the Company, which
determination shall be conclusive. Whenever the Conversion Price is reduced
pursuant to the preceding sentence, the Company shall mail to holders of record
of the Notes a notice of the reduction at least fifteen (15) days prior to the
date the 

62

reduced Conversion Price takes effect, and such notice shall state the reduced 
Conversion Price and the period during which it will be in effect.

(j) No adjustment in the Conversion Price shall be required
unless such adjustment would require an increase or decrease of at least one
percent (1%) in such price; provided, however, that any adjustments that by
reason of this Section 15.5(j) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Article Fifteen shall be made by the Company and shall be made to the
nearest cent or to the nearest one-hundredth (1/100) of a share, as the case may
be. No adjustment need be made for rights to purchase Common Stock pursuant to a
Company plan for reinvestment of dividends or interest. To the extent the Notes
become convertible into cash, assets, property or securities (other than capital
stock of the Company), no adjustment need be made thereafter as to the cash,
assets, property or such securities. Interest will not accrue on such cash.

(k) Whenever the Conversion Price is adjusted as herein
provided, the Company shall promptly file with the Trustee and any conversion
agent other than the Trustee an Officers' Certificate setting forth the
Conversion Price after such adjustment and setting forth a brief statement of
the facts requiring such adjustment. Unless and until a Responsible Officer of
the Trustee shall have received such Officers' Certificate, the Trustee shall
not be deemed to have knowledge of any adjustment of the Conversion Price and
may assume that the last Conversion Price of which it has knowledge is still in
effect. Promptly after delivery of such certificate, the Company shall prepare a
notice of such adjustment of the Conversion Price setting forth the adjusted
Conversion Price and the date on which each adjustment becomes effective and
shall mail such notice of such adjustment of the Conversion Price to the holder
of each Note at his last address appearing on the Note register provided for in
Section 2.5 of this Indenture, within twenty (20) days after execution thereof.
Failure to deliver such notice shall not affect the legality or validity of any
such adjustment.

(l) In any case in which this Section 15.5 provides that an
adjustment shall become effective immediately after (1) a record date or Record
Date for an event, (2) the date fixed for the determination of stockholders
entitled to receive a dividend or distribution pursuant to Section 15.5(a), (3)
a date fixed for the determination of stockholders entitled to receive rights or
warrants pursuant to Section 15.5(b), (4) the Expiration Time for any tender or
exchange offer pursuant to Section 15.5(f), or (5) the Offer Expiration Time for
a tender or exchange offer pursuant to Section 15.5(g) (each a "Determination
Date"), the Company may elect to defer until the occurrence of the relevant
Adjustment Event (as hereinafter defined) (x) issuing to the holder of any Note
converted after such Determination Date and before the occurrence of such
Adjustment Event, the additional shares of Common Stock or other securities
issuable upon such conversion by reason of the adjustment required by such
Adjustment Event over and above the Common Stock issuable upon such conversion
before giving effect to such adjustment and (y) paying to such holder any amount
in cash in lieu of any fraction pursuant to Section 15.3. For purposes of this
Section 15.5(l), the term "Adjustment Event" shall mean:

(a) in any case referred to in clause (1) hereof, the
occurrence of such event,

(b) in any case referred to in clause (2) hereof, the
date any such dividend or distribution is paid or made,

(c) in any case referred to in clause (3) hereof, the
date of expiration of such rights or warrants, and

(d) in any case referred to in clause (4) or clause
(5) hereof, the date a sale or exchange of Common Stock
pursuant to such tender or exchange offer is consummated and
becomes irrevocable.

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(m) For purposes of this Section 15.5, the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The Company
will not pay any dividend or make any distribution on shares of Common Stock
held in the treasury of the Company.

Section 15.6. Effect of Reclassification, Consolidation, Merger or
Sale. If any of the following events occur, namely (i) any reclassification or
change of the outstanding shares of Common Stock (other than a subdivision or
combination to which Section 15.5(c) applies), (ii) any consolidation, merger or
combination of the Company with another Person as a result of which holders of
Common Stock shall be entitled to receive stock, other securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, or (iii) any sale or conveyance of all or substantially all of the
properties and assets of the Company to any other Person as a result of which
holders of Common Stock shall be entitled to receive stock, other securities or
other property or assets (including cash) with respect to or in exchange for
such Common Stock, then the Company or the successor or purchasing Person, as
the case may be, shall execute with the Trustee a supplemental indenture (which
shall comply with the Trust Indenture Act as in force at the date of execution
of such supplemental indenture) providing that such Note shall be convertible
into the kind and amount of shares of stock, other securities or other property
or assets (including cash) receivable upon such reclassification, change,
consolidation, merger, combination, sale or conveyance by a holder of a number
of shares of Common Stock issuable upon conversion of such Notes (assuming, for
such purposes, a sufficient number of authorized shares of Common Stock are
available to convert all such Notes) immediately prior to such reclassification,
change, consolidation, merger, combination, sale or conveyance assuming such
holder of Common Stock did not exercise his rights of election, if any, as to
the kind or amount of stock, other securities or other property or assets
(including cash) receivable upon such reclassification, change, consolidation,
merger, combination, sale or conveyance (provided that, if the kind or amount of
stock, other securities or other property or assets (including cash) receivable
upon such reclassification, change, consolidation, merger, combination, sale or
conveyance is not the same for each share of Common Stock in respect of which
such rights of election shall not have been exercised ("non-electing share"),
then for the purposes of this Section 15.6 the kind and amount of stock, other
securities or other property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, sale or conveyance
for each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares). Such
supplemental indenture shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
Fifteen.

The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Notes, at its address appearing on the
Note register provided for in Section 2.5 of this Indenture, within twenty (20)
days after execution thereof. Failure to deliver such notice shall not affect
the legality or validity of such supplemental indenture.

The above provisions of this Section shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.

If this Section 15.6 applies to any event or occurrence, Section 15.5
shall not apply.

Section 15.7. Taxes on Shares Issued. The issue of stock certificates
on conversions of Notes shall be made without charge to the converting
Noteholder for any tax in respect of the issue thereof. The Company shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of stock in any name other than that
of the holder of any Note converted, and the Company shall not be required to
issue or deliver any such stock certificate unless and 

64

until the Person or Persons requesting the issue thereof shall have paid to the
Company the amount of such tax or shall have established to the satisfaction of
the Company that such tax has been paid.

Section 15.8. Reservation of Shares; Shares to be Fully Paid;
Compliance with Governmental Requirements; Listing of Common Stock. The Company
shall provide, free from preemptive rights, out of its authorized but unissued
shares or shares held in treasury, sufficient shares of Common Stock to provide
for the conversion of the Notes from time to time as such Notes are presented
for conversion.

Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Notes, the Company will take all corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue shares of such Common Stock at such
adjusted Conversion Price.

The Company covenants that all shares of Common Stock which may be
issued upon conversion of Notes will upon issue be fully paid and non-assessable
by the Company and free from all taxes, liens (other than those created by the
holder of such Notes) and charges with respect to the issue thereof.

The Company covenants that, if any shares of Common Stock to be
provided for the purpose of conversion of Notes hereunder require registration
with or approval of any governmental authority under any federal or state law
before such shares may be validly issued upon conversion, the Company will in
good faith and as expeditiously as possible, to the extent then permitted by the
rules and interpretations of the Securities and Exchange Commission (or any
successor thereto), endeavor to secure such registration or approval, as the
case may be.

The Company further covenants that, if at any time the Common Stock
shall be listed on the Nasdaq National Market or any other national securities
exchange or automated quotation system, the Company will, if permitted by the
rules of such exchange or automated quotation system, list and keep listed, so
long as the Common Stock shall be so listed on such exchange or automated
quotation system, all Common Stock issuable upon conversion of the Note;
provided, however, that, if the rules of such exchange or automated quotation
system permit the Company to defer the listing of such Common Stock until the
first conversion of the Notes into Common Stock in accordance with the
provisions of this Indenture, the Company covenants to list such Common Stock
issuable upon conversion of the Notes in accordance with the requirements of
such exchange or automated quotation system at such time.

Section 15.9. Responsibility of Trustee. The Trustee and any other
conversion agent shall not at any time be under any duty or responsibility to
any holder of Notes to determine the Conversion Price or whether any facts exist
which may require any adjustment of the Conversion Price, or with respect to the
nature or extent or calculation of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. The Trustee and any other
conversion agent shall not be accountable with respect to the validity or value
(or the kind or amount) of any shares of Common Stock, or of any securities or
property, which may at any time be issued or delivered upon the conversion of
any Note; and the Trustee and any other conversion agent make no representations
with respect thereto. Neither the Trustee nor any conversion agent shall be
responsible for any failure of the Company to issue, transfer or deliver any
shares of Common Stock or stock certificates or other securities or property or
cash upon the surrender of any Note for the purpose of conversion or to comply
with any of the duties, responsibilities or covenants of the Company contained
in this Article Fifteen. Without limiting the generality of the foregoing,
neither the Trustee nor any conversion agent shall be under any responsibility
to determine the correctness of any provisions contained in any supplemental
indenture entered into pursuant to Section 15.6 relating either to the kind or
amount of shares of stock or securities or property (including cash) receivable
by Noteholders upon the 

65

conversion of their Notes after any event referred to in such Section 15.6 or to
any adjustment to be made with respect thereto, but, subject to the provisions
of Section 8.1, may accept as conclusive evidence of the correctness of any such
provisions, and shall be protected in relying upon, the Officers' Certificate
(which the Company shall be obligated to file with the Trustee prior to the
execution of any such supplemental indenture) with respect thereto.

Section 15.10.  Notice to Holders Prior to Certain Actions.  In case:

(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock that would require an adjustment in the
Conversion Price pursuant to Section 15.5; or

(b) the Company shall authorize the granting to the holders of
all or substantially all of its Common Stock of rights or warrants to subscribe
for or purchase any share of any class or any other rights or warrants; or

(c) of any reclassification or reorganization of the Common
Stock of the Company (other than a subdivision or combination of its outstanding
Common Stock, or a change in par value, or from par value to no par value, or
from no par value to par value), or of any consolidation or merger to which the
Company is a party and for which approval of any stockholders of the Company is
required, or of the sale or transfer of all or substantially all of the assets
of the Company or any Significant Subsidiary; or

(d) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company or any Significant Subsidiary;

the Company shall cause to be filed with the Trustee and to be
mailed to each holder of Notes at his address appearing on the Note register
provided for in Section 2.5 of this Indenture, as promptly as possible but in
any event at least ten (10) days prior to the applicable date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution or rights or warrants, or, if a
record is not to be taken, the date as of which the holders of Common Stock of
record to be entitled to such dividend, distribution or rights are to be
determined, or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up is expected to
become effective or occur, and the date as of which it is expected that holders
of Common Stock of record shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up.
Failure to give such notice, or any defect therein, shall not affect the
legality or validity of such dividend, distribution, reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up.

ARTICLE SIXTEEN

MISCELLANEOUS PROVISIONS

Section 16.1. Provisions Binding on Company's Successors. All the
covenants, stipulations, promises and agreements by the Company contained in
this Indenture shall bind its successors and assigns whether so expressed or
not.

Section 16.2. Official Acts by Successor Corporation. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any Person that shall at the time be the lawful sole successor of the
Company.

66

Section 16.3. Addresses for Notices, Etc. Any notice or demand which by
any provision of this Indenture is required or permitted to be given or served
by the Trustee or by the holders of Notes on the Company shall be deemed to have
been sufficiently given or made, for all purposes, if given or served by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed (until another address is filed by the Company with the
Trustee) to Enzon, Inc., 20 Kingsbridge Road, Piscataway, New Jersey, Attention:
Treasurer. Any notice, direction, request or demand hereunder to or upon the
Trustee shall be deemed to have been sufficiently given or made, for all
purposes, if given or served by being deposited, postage prepaid, by registered
or certified mail in a post office letter box addressed to the Corporate Trust
Office, which office is, at the date as of which this Indenture is dated,
located at Rodney Square North, 1100 North Market Street, Wilmington, Delaware
19890, Attention: Corporate Trust Division (Enzon, Inc., 4 1/2% Convertible
Subordinated Notes due 2008).

The Trustee, by notice to the Company, may designate additional or
different addresses for subsequent notices or communications.

Any notice or communication mailed to a Noteholder shall be mailed to
him by first class mail, postage prepaid, at his address as it appears on the
Note register and shall be sufficiently given to him if so mailed within the
time prescribed.

Failure to mail a notice or communication to a Noteholder or any defect
in it shall not affect its sufficiency with respect to other Noteholders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.

Section 16.4. Governing Law. This Indenture and each Note shall be
deemed to be a contract made under the laws of the State of New York, and for
all purposes shall be construed in accordance with the laws of the State of New
York, without regard to the conflict of laws provisions thereof.

Section 16.5. Evidence of Compliance with Conditions Precedent;
Certificates to Trustee. Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish, at the request of the Trustee, to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with,
and an Opinion of Counsel stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.

Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include: (1) a statement that the person
making such certificate or opinion has read such covenant or condition; (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statement or opinion contained in such certificate or opinion is
based; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.

Section 16.6. Legal Holidays. In any case in which the date of maturity
of interest on or principal of the Notes or the date fixed for redemption of any
Note will not be a Business Day, then payment of such interest on or principal
of the Notes need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date of
maturity or the date fixed for redemption, and no interest shall accrue for the
period from and after such date.

67

Section 16.7. Trust Indenture Act. This Indenture is hereby made
subject to, and shall be governed by, the provisions of the Trust Indenture Act
required to be part of and to govern indentures qualified under the Trust
Indenture Act; provided, however, that this Section 16.7 shall not require this
Indenture or the Trustee to be qualified under the Trust Indenture Act prior to
the time such qualification is in fact required under the terms of the Trust
Indenture Act, nor shall it constitute any admission or acknowledgment by any
party to the Indenture that any such qualification is required prior to the time
such qualification is in fact required under the terms of the Trust Indenture
Act. If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in an indenture qualified
under the Trust Indenture Act, such required provision shall control.

Section 16.8. No Security Interest Created. Nothing in this Indenture
or in the Notes, expressed or implied, shall be construed to constitute a
security interest under the Uniform Commercial Code or similar legislation, as
now or hereafter enacted and in effect, in any jurisdiction in which property of
the Company or its subsidiaries is located.

Section 16.9. Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto, any paying agent, any authenticating agent, any Note registrar and their
successors hereunder, the holders of Notes and the holders of Senior
Indebtedness, any benefit or any legal or equitable right, remedy or claim under
this Indenture.

Section 16.10. Table of Contents, Headings, Etc. The table of contents
and the titles and headings of the articles and Sections of this Indenture have
been inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.

Section 16.11. Authenticating Agent. The Trustee may appoint an
authenticating agent that shall be authorized to act on its behalf, and subject
to its direction, in the authentication and delivery of Notes in connection with
the original issuance thereof and transfers and exchanges of Notes hereunder,
including under Sections 2.4, 2.5, 2.6, 2.7, 3.3 and 3.5, as fully to all
intents and purposes as though the authenticating agent had been expressly
authorized by this Indenture and those Sections to authenticate and deliver
Notes. For all purposes of this Indenture, the authentication and delivery of
Notes by the authenticating agent shall be deemed to be authentication and
delivery of such Notes "by the Trustee" and a certificate of authentication
executed on behalf of the Trustee by an authenticating agent shall be deemed to
satisfy any requirement hereunder or in the Notes for the Trustee's certificate
of authentication. Such authenticating agent shall at all times be a Person
eligible to serve as trustee hereunder pursuant to Section 8.9.

Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate trust business
of any authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor corporation is otherwise eligible under this
Section 16.11, without the execution or filing of any paper or any further act
on the part of the parties hereto or the authenticating agent or such successor
corporation.

Any authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time terminate the agency of any authenticating agent by giving written notice
of termination to such authenticating agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
any authenticating agent shall cease to be eligible under this Section , the
Trustee shall either promptly appoint a successor authenticating agent or itself
assume the duties and obligations of the former 

68

authenticating agent under this Indenture and, upon such appointment of a
successor authenticating agent, if made, shall give written notice of such
appointment of a successor authenticating agent to the Company and shall mail
notice of such appointment of a successor authenticating agent to all holders of
Notes as the names and addresses of such holders appear on the Note register.

The Company agrees to pay to the authenticating agent from time to time
such reasonable compensation for its services as shall be agreed upon in writing
between the Company and the authenticating agent.

The provisions of Sections 8.2, 8.3, 8.4, 9.3 and this Section 16.11
shall be applicable to any authenticating agent.

Section 16.12. Execution in Counterparts. This Indenture may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.

Section 16.13. Severability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, then (to the extent
permitted by law) the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

69

Wilmington Trust Company hereby accepts the trusts in this Indenture
declared and provided, upon the terms and conditions herein above set forth.

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed.

ENZON, INC.

By:  /s/ Kenneth J. Zuerblis
--------------------------------------
Name: Kenneth J. Zuerblis
Title: VP, Finance, CFO and Secretary

WILMINGTON TRUST COMPANY
as Trustee

By:  /s/ James D. Nesci
--------------------------------------
Name: James D. Nesci
Title: Authorized Signer

70

EXHIBIT A

For Global Note only: UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW
YORK, NEW YORK) (THE "DEPOSITARY", WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY
FOR THE CERTIFICATES) TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY (AND ANY PAYMENT HEREIN IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT)
("INSTITUTIONAL ACCREDITED INVESTOR"); (2) AGREES THAT IT WILL NOT, PRIOR TO
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE NOTE EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION),
RESELL OR OTHERWISE TRANSFER THIS NOTE OR THE COMMON STOCK ISSUABLE UPON
CONVERSION OF THIS NOTE EXCEPT (A) TO ENZON, INC. OR ANY SUBSIDIARY THEREOF, (B)
INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO
WILMINGTON TRUST COMPANY AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE NOTES (THE FORM OF WHICH LETTER CAN BE OBTAINED
FROM SUCH TRUSTEE OR A SUCCESSOR TRUSTEE, AS APPLICABLE), (D) OUTSIDE THE UNITED
STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
APPLICABLE) OR (F) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE
TIME OF SUCH TRANSFER); (3) AGREES THAT, PRIOR TO SUCH TRANSFER (OTHER THAN A
TRANSFER PURSUANT TO CLAUSE (2)(F) ABOVE), IT WILL FURNISH TO WILMINGTON TRUST
COMPANY, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE TRUSTEE MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT; AND (4) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE PRIOR TO THE
EXPIRATION OF THE HOLDING PERIOD 

APPLICABLE TO SALES OF THIS NOTE UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR
ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON
THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO WILMINGTON TRUST COMPANY, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE). IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR
OR IS A PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO WILMINGTON TRUST COMPANY, AS TRUSTEE (OR A SUCCESSOR
TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS SUCH TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED
UPON THE EARLIER OF THE TRANSFER OF THIS NOTE PURSUANT TO CLAUSE (2)(F) ABOVE OR
UPON ANY TRANSFER OF THIS NOTE UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR
ANY SUCCESSOR PROVISION). AS USED HEREIN, THE TERMS "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.

A-2

ENZON, INC.

4 1/2% CONVERTIBLE SUBORDINATED NOTE DUE 2008

CUSIP: ______________________

$_________________
No. _______________

Enzon, Inc., a corporation duly organized and validly existing under
the laws of the State of Delaware (herein called the "Company", which term
includes any successor corporation under the Indenture referred to on the
reverse hereof), for value received hereby promises to pay to ___________ or its
registered assigns, the principal sum of _____________ Dollars ($_____________)
on July 1, 2008, at the office or agency of the Company maintained for that
purpose in accordance with the terms of the Indenture, in such coin or currency
of the United States of America as at the time of payment shall be legal tender
for the payment of public and private debts, and to pay interest, semi-annually
on January 1 and July 1 of each year, commencing January 1, 2002, on said
principal sum at said office or agency, in like coin or currency, at the rate
per annum of 4 1/2%, from January 1 or July 1, as the case may be, next
preceding the date of this Note to which interest has been paid or duly provided
for, unless the date hereof is a date to which interest has been paid or duly
provided for, in which case from the date of this Note, or unless no interest
has been paid or duly provided for on the Notes, in which case from June 26,
2001, until payment of said principal sum has been made or duly provided for.
Notwithstanding the foregoing, if the date hereof is after any December 15 or
June 15 (on or after December 15, 2001), as the case may be, and before the
following January 1 or July 1, this Note shall bear interest from such January 1
or July 1; provided, however, that if the Company shall default in the payment
of interest due on such January 1 or July 1, then this Note shall bear interest
from the next preceding January 1 or July 1 to which interest has been paid or
duly provided for or, if no interest has been paid or duly provided for on such
Note, from June 26, 2001. Except as otherwise provided in the Indenture, the
interest payable on the Note pursuant to the Indenture on any January 1 or July
1 will be paid to the Person entitled thereto as it appears in the Note register
at the close of business on the record date, which shall be December 15 or June
15 (whether or not a Business Day) next preceding such January 1 or July 1, as
provided in the Indenture; provided, however, that any such interest not
punctually paid or duly provided for shall be payable as provided in the
Indenture. Interest may, at the option of the Company, be paid either (i) by
check mailed to the registered address of such Person (provided that the holder
of Notes with an aggregate principal amount in excess of $2,000,000 shall, at
the written election of such holder, be paid by wire transfer of immediately
available funds) or (ii) by transfer to an account maintained by such Person
located in the United States; provided, however, that payments to the Depositary
will be made by wire transfer of immediately available funds to the account of
the Depositary or its nominee.

Reference is made to the further provisions of this Note set forth on
the reverse hereof, including, without limitation, provisions subordinating the
payment of principal of and premium, if any, and interest on the Notes to the
prior payment in full of all Senior Indebtedness, as defined in the Indenture,
and provisions giving the holder of this Note the right to convert this Note
into Common Stock of the Company on the terms and subject to the limitations
referred to on the reverse hereof and as more fully specified in the Indenture.
Such further provisions shall for all purposes have the same effect as though
fully set forth at this place.

This Note shall be deemed to be a contract made under the laws of the
State of New York, and for all purposes shall be construed in accordance with
and governed by the laws of the State of New York, without regard to principles
of conflicts of laws.

A-3

This Note shall not be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been manually signed by the
Trustee or a duly authorized authenticating agent under the Indenture.

IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed.

ENZON, INC.

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

Attest:
-----------------------------
Name:
-----------------------------
Title: 
-----------------------------

Dated: 
-----------------------------

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Notes described in the within-named Indenture.

Wilmington Trust Company, as Trustee

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

A-4

FORM OF REVERSE OF NOTE

ENZON, INC.

4 1/2% CONVERTIBLE SUBORDINATED NOTE DUE 2008

This Note is one of a duly authorized issue of Notes of the Company,
designated as its 4 1/2 % Convertible Subordinated Notes due 2008 (herein called
the "Notes"), limited to the aggregate principal amount of $400,000,000 (or
$460,000,000 if the option set forth in Section 2 of the Purchase Agreement (as
defined in the Indenture) is exercised in full by the Initial Purchasers (as
defined in the Indenture)) all issued or to be issued under and pursuant to an
Indenture dated as of June 26, 2001 (herein called the "Indenture"), between the
Company and Wilmington Trust Company, as trustee (herein called the "Trustee"),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the rights, limitations of rights, obligations, duties
and immunities thereunder of the Trustee, the Company and the holders of the
Notes.

In case an Event of Default (as defined in the Indenture) shall have
occurred and be continuing, the principal of, premium, if any, and accrued
interest (including Liquidated Damages (as defined in the Registration Rights
Agreement), if any) on all Notes may be declared by either the Trustee or the
holders of not less than 25% in aggregate principal amount of the Notes then
outstanding, and upon said declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.

The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Notes at the time outstanding, to execute
supplemental indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or modifying in any manner the rights of the holders of the Notes;
provided, however, that no such supplemental indenture shall (i) extend the
fixed maturity of any Note, or reduce the rate or extend the time of payment of
interest thereon, or reduce the principal amount thereof or premium, if any,
thereon, or reduce any amount payable upon redemption thereof, or impair the
right of any Noteholder to institute suit for the payment thereof, or make the
principal thereof or interest or premium, if any, thereon payable in any coin or
currency other than that provided in the Notes, or modify the provisions of the
Indenture with respect to the subordination of the Notes in a manner adverse to
the Noteholders in any material respect, or change the obligation of the Company
to redeem any Note upon the happening of a Fundamental Change (as defined in the
Indenture) in a manner adverse to the holder of the Notes, or impair the right
to convert the Notes into Common Stock subject to the terms set forth in the
Indenture, including Section 15.6 thereof, without the consent of the holder of
each Note so affected or (ii) reduce the aforesaid percentage of Notes, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of all Notes then outstanding. Subject to the
provisions of the Indenture, the holders of a majority in aggregate principal
amount of the Notes at the time outstanding may on behalf of the holders of all
of the Notes waive any past default or Event of Default under the Indenture and
its consequences except a default in the payment of interest (including
Liquidated Damages, if any) or any premium on, or the principal of, any of the
Notes, or a failure by the Company to convert any Notes into Common Stock of the
Company, or a default in the payment of the redemption price pursuant to Article
Three of the Indenture, or a default in respect of a covenant or provisions of
the Indenture which under Article Eleven of the Indenture cannot be modified
without the consent of the holders of each or all Notes then outstanding or
affected thereby. Any such consent or waiver by the holder of this Note (unless
revoked as provided in the Indenture) shall be conclusive and binding upon such
holder and upon all future holders 

A-5

and owners of this Note and any Notes which may be issued in exchange or
substitution hereof, irrespective of whether or not any notation thereof is made
upon this Note or such other Notes.

The indebtedness evidenced by the Notes is, to the extent and in the
manner provided in the Indenture, expressly subordinated and subject in right of
payment to the prior payment in full of all Senior Indebtedness of the Company,
whether outstanding at the date of the Indenture or thereafter incurred, and
this Note is issued subject to the provisions of the Indenture with respect to
such subordination. Each holder of this Note, by accepting the same, agrees to
and shall be bound by such provisions and authorizes the Trustee on its behalf
to take such action as may be necessary or appropriate to effectuate the
subordination so provided and appoints the Trustee his attorney-in-fact for such
purpose.

No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
(including Liquidated Damages, if any) on this Note at the place, at the
respective times, at the rate and in the coin or currency herein prescribed.

Interest on the Notes shall be computed on the basis of a 360-day year
of twelve 30-day months.

The Notes are issuable in fully registered form, without coupons, in
denominations of $1,000 principal amount and any integral multiple of $1,000. At
the office or agency of the Company referred to on the face hereof, and in the
manner and subject to the limitations provided in the Indenture, without payment
of any service charge but with payment of a sum sufficient to cover any tax,
assessment or other governmental charge that may be imposed in connection with
any registration or exchange of Notes, Notes may be exchanged for a like
aggregate principal amount of Notes of any other authorized denominations.

The Notes will not be redeemable at the option of the Company prior to
July 7, 2004. At any time on or after July 7, 2004, and prior to maturity, the
Notes may be redeemed at the option of the Company, in whole or in part, upon
mailing a notice of such redemption not less than 30 days but not more than 60
days before the date fixed for redemption to the holders of Notes at their last
registered addresses, all as provided in the Indenture, at the following
optional redemption prices (expressed as percentages of the principal amount),
together in each case with accrued and unpaid interest (including Liquidated
Damages, if any) to, but excluding, the date fixed for redemption:

Period                                                                              Redemption Price
------                                                                              ----------------

Beginning on July 7, 2004 and ending on June 30, 2005..........................        102.571%
Beginning on July 1, 2005 and ending on June 30, 2006..........................        101.929%
Beginning on July 1, 2006 and ending on June 30, 2007..........................        101.286%
Beginning on July 1, 2007 and ending on June 30, 2008..........................        100.643%

and 100% on July 1, 2008; provided, however, that if the date fixed for
redemption is on a January 1 or July 1, then the interest payable on such date
shall be paid to the holder of record on the preceding December 15 or June 15,
respectively.

The Company may not give notice of any redemption of the Notes if a
default in the payment of interest or premium, if any, on the Notes has occurred
and is continuing.

The Notes are not subject to redemption through the operation of any
sinking fund.

If a Fundamental Change occurs at any time prior to maturity of the
Notes, the Notes will be redeemable on the 30th day after notice thereof (the
"Repurchase Date") at the option of the holder of the 

A-6

Notes at a redemption price equal to 100% of the principal amount thereof,
together with accrued interest to (but excluding) the date of redemption;
provided, however, that, if such Repurchase Date is a January 1 or July 1, the
interest payable on such date shall be paid to the holder of record of the Notes
on the preceding December 15 or June 15, respectively. The Notes will be
redeemable in multiples of $1,000 principal amount. The Company shall mail to
all holders of record of the Notes a notice of the occurrence of a Fundamental
Change and of the redemption right arising as a result thereof on or before the
10th day after the occurrence of such Fundamental Change. For a Note to be so
redeemed at the option of the holder, the Company must receive at the office or
agency of the Company maintained for that purpose in accordance with the terms
of the Indenture, such Note with the form entitled "Option to Elect Repayment
Upon a Fundamental Change" on the reverse thereof duly completed, together with
such Note, duly endorsed for transfer, on or before the 30th day after the date
of such notice of a Fundamental Change (or if such 30th day is not a Business
Day, the immediately succeeding Business Day).

Subject to the provisions of the Indenture, the holder hereof has the
right, at its option, at any time after the original issuance of any Notes
through the close of business on the final maturity date of the Notes, or, as to
all or any portion hereof called for redemption, prior to the close of business
on the Business Day immediately preceding the date fixed for redemption (unless
the Company shall default in payment due upon redemption thereof), to convert
the principal hereof or any portion of such principal which is $1,000 or an
integral multiple thereof into that number of shares of the Company's Common
Stock (as such shares shall be constituted at the date of conversion) obtained
by dividing the principal amount of this Note or portion thereof to be converted
by the Conversion Price of $70.98 as may adjusted from time to time as provided
in the Indenture, upon surrender of this Note, together with a conversion notice
as provided in the Indenture (the form entitled "Conversion Notice" on the
reverse hereof), to the Company at the office or agency of the Company
maintained for that purpose in accordance with the terms of the Indenture, or at
the option of such holder, the Corporate Trust Office, and, unless the shares
issuable on conversion are to be issued in the same name as this Note, duly
endorsed by, or accompanied by instruments of transfer in form satisfactory to
the Company duly executed by, the holder or by his duly authorized attorney. No
adjustment in respect of interest on any Note converted or dividends on any
shares issued upon conversion of such Note will be made upon any conversion
except as set forth in the next sentence. If this Note (or portion hereof) is
surrendered for conversion during the period from the close of business on any
record date for the payment of interest to the close of business on the Business
Day preceding the following interest payment date and either (x) has not been
called for redemption on a redemption date that occurs during such period or (y)
is not to be redeemed in connection with a Fundamental Change on a Repurchase
Date that occurs during such period, this Note (or portion hereof being
converted) must be accompanied by an amount, in New York Clearing House funds or
other funds acceptable to the Company, equal to the interest payable on such
interest payment date on the principal amount being converted; provided,
however, that no such payment shall be required if there shall exist at the time
of conversion a default in the payment of interest on the Notes. No fractional
shares will be issued upon any conversion, but an adjustment and payment in cash
will be made, as provided in the Indenture, in respect of any fraction of a
share which would otherwise be issuable upon the surrender of any Note or Notes
for conversion. A Note in respect of which a holder is exercising its right to
require redemption upon a Fundamental Change may be converted only if such
holder withdraws its election to exercise such right in accordance with the
terms of the Indenture. Any Notes called for redemption, unless surrendered for
conversion by the holders thereof on or before the close of business on the
Business Day preceding the date fixed for redemption, may be deemed to be
redeemed from the holders of such Notes for an amount equal to the applicable
redemption price, together with accrued but unpaid interest (including
Liquidated Damages, if any) to (but excluding) the date fixed for redemption, by
one or more investment banks or other purchasers who may agree with the Company
(i) to purchase such Notes from the holders thereof and convert them into shares
of the Company's Common Stock and (ii) to make payment for such Notes as
aforesaid to the Trustee in trust for the holders.

A-7

Upon due presentment for registration of transfer of this Note at the
office or agency of the Company maintained for that purpose in accordance with
the terms of the Indenture, a new Note or Notes of authorized denominations for
an equal aggregate principal amount will be issued to the transferee in exchange
thereof; subject to the limitations provided in the Indenture, without charge
except for any tax, assessment or other governmental charge imposed in
connection therewith.

The Company, the Trustee, any authenticating agent, any paying agent,
any conversion agent and any Note registrar may deem and treat the registered
holder hereof as the absolute owner of this Note (whether or not this Note shall
be overdue and notwithstanding any notation of ownership or other writing hereon
made by anyone other than the Company or any Note registrar) for the purpose of
receiving payment hereof, or on account hereof, for the conversion hereof and
for all other purposes, and neither the Company nor the Trustee nor any other
authenticating agent nor any paying agent nor other conversion agent nor any
Note registrar shall be affected by any notice to the contrary. All payments
made to or upon the order of such registered holder shall, to the extent of the
sum or sums paid, satisfy and discharge liability for monies payable on this
Note.

No recourse for the payment of the principal of or any premium or
interest on this Note, or for any claim based hereon or otherwise in respect
hereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in the Indenture or any supplemental indenture or in any Note, or
because of the creation of any indebtedness represented thereby, shall be had
against any incorporator, stockholder, employee, agent, officer or director or
subsidiary, as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law or by
the enforcement of any assessment or penalty or otherwise, all such liability
being, by acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.

This Note shall be deemed to be a contract made under the laws of New
York, and for all purposes shall be construed in accordance with the laws of New
York, without regard to principles of conflicts of laws.

Terms used in this Note and defined in the Indenture are used herein as
therein defined.

A-8

ABBREVIATIONS

The following abbreviations, when used in the inscription of the face
of this Note, shall be construed as though they were written out in full
according to applicable laws or regulations.

TEN COM -   as tenants in common               UNIF GIFT MIN ACT - _______ Custodian ______
TEN ENT -   as tenant by the entireties        (Cust)              (Minor)
JT TEN -    as joint tenants with right
of survivorship and not as         under Uniform Gifts to Minors Act
tenants in common                  ____________________________________________
(State)

Additional abbreviations may also be used though not in the above list.

A-9

CONVERSION NOTICE

TO:      ENZON, INC.
WILMINGTON TRUST COMPANY

The undersigned registered owner of this Note hereby irrevocably
exercises the option to convert this Note, or the portion thereof (which is
$1,000 or an integral multiple thereof) below designated, into shares of Common
Stock of Enzon, Inc. in accordance with the terms of the Indenture referred to
in this Note, and directs that the shares issuable and deliverable upon such
conversion, together with any check in payment for fractional shares and any
Notes representing any unconverted principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below. If shares or any portion of this Note not converted are to be
issued in the name of a person other than the undersigned, the undersigned will
provide the appropriate information below and pay all transfer taxes payable
with respect thereto. Any amount required to be paid by the undersigned on
account of interest accompanies this Note.

Dated: ___________________

________________________________________

________________________________________
Signature(s)

Signature(s) must be guaranteed by an
"eligible guarantor institution" meeting
the requirements of the Note registrar,
which requirements include membership or
participation in the Security Transfer
Agent Medallion Program ("STAMP") or
such other "signature guarantee program"
as may be determined by the Note
registrar in addition to, or in
substitution for, STAMP, all in
accordance with the Securities Exchange
Act of 1934, as amended.

________________________________________
Signature Guarantee

Fill in the registration of shares of Common Stock if to be issued, and
Notes if to be delivered, other than to and in the name of the registered
holder:

-----------------------------------
(Name)

-----------------------------------
(Street Address)

-----------------------------------
(City, State and Zip Code)

-----------------------------------
Please print name and address

A-10

Principal amount to be converted 
(if less than all):

$__________________________________

Social Security or Other Taxpayer
Identification Number:

___________________________________

A-11

OPTION TO ELECT REPAYMENT

UPON A FUNDAMENTAL CHANGE

TO:      ENZON, INC.
WILMINGTON TRUST COMPANY

The undersigned registered owner of this Note hereby irrevocably
acknowledges receipt of a notice from Enzon, Inc. (the "Company") as to the
occurrence of a Fundamental Change with respect to the Company and requests and
instructs the Company to repay the entire principal amount of this Note, or the
portion thereof (which is $1,000 or an integral multiple thereof) below
designated, in accordance with the terms of the Indenture referred to in this
Note at the price of 100% of such entire principal amount or portion thereof,
together with accrued interest to, but excluding, such repayment date, to the
registered holder hereof.

Dated: ___________________

_______________________________________

_______________________________________
Signature(s)

NOTICE: The above signatures of the
holder(s) hereof must correspond with
the name as written upon the face of the
Note in every particular without
alteration or enlargement or any change
whatever.

Principal amount to be repaid (if less 
than all):

$______________________________________

_______________________________________

Social Security or Other
Taxpayer Identification Number

A-12

ASSIGNMENT

For value received __________________________________________ hereby
sell(s) assign(s) and transfer(s) unto
____________________________________________ (Please insert social security or
other Taxpayer Identification Number of assignee) the within Note, and hereby
irrevocably constitutes and appoints ____________________________________
attorney to transfer said Note on the books of the Company, with full power of
substitution in the premises.

In connection with any transfer of the Note prior to the expiration of
the holding period applicable to sales thereof under Rule 144(k) under the
Securities Act (or any successor provision), the undersigned confirms that such
Note is being transferred:

|_|      To Enzon, Inc.  or a subsidiary thereof; or

|_|      Inside the United States pursuant to and in compliance with
Rule 144A under the Securities Act of 1933, as amended; or

|_|      Inside the United States to an Institutional Accredited
Investor pursuant to and in compliance with the Securities Act
of 1933, as amended; or

|_|      Outside the Unites States in compliance with Rule 904 under 
the Securities Act; or

|_|      Pursuant to and in compliance with Rule 144 under the 
Securities Act of 1933, as amended;

or

|_|      Pursuant to a registration statement which has been declared
effective under the Securities Act of 1933, as amended (and
continues to be effective on the date hereof).

and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate").

|_|      The transferee is an Affiliate of the Company.

Dated: ___________________

________________________________________

________________________________________
Signature(s)
Signature(s) must be guaranteed by an
"eligible guarantor institution" meeting
the requirements of the Note registrar,
which requirements include membership or
participation in the Security Transfer
Agent Medallion Program ("STAMP") or
such other "signature guarantee program"
as may be determined by the Note
registrar in addition to, or in
substitution for, 

A-13

STAMP, all in accordance with the 
Securities Exchange Act of 1934, as 
amended.

________________________________________
Signature Guarantee

NOTICE: The signature of the conversion notice, the option to elect repayment
upon a Fundamental Change or the assignment must correspond with the name as
written upon the face of the Note in every particular without alteration or
enlargement or any change whatever.

A-14

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

The following increases or decreases in this Global Security have been made:

-------------------------- ----------------------- ----------------------- ----------------------- ------------------------
Date of Exchange           Amount of decreases     Amount of increases     Principal Amount of     Signature of
in Principal Amount     in Principal Amount     this Global Security    authorized officer of
of this Global          of this Global          following such          Trustee or Custodian
Security                Security                decrease or increase
-------------------------- ----------------------- ----------------------- ----------------------- ------------------------

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

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

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

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

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

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

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

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

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

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

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

A-15

EXHIBIT B

Enzon, Inc.
20 Kingsbridge Road
Piscataway, New Jersey  08854

Wilmington Trust Company, as Trustee
520 Madison Avenue
33rd Floor
New York, New York  10022

Attention:  Corporate Trust Administration

Ladies and Gentlemen:

In connection with our proposed purchase of 4 1/2 % Convertible
Subordinated Notes due 2008 (the "Notes") of Enzon, Inc., a Delaware corporation
(the "Company") we confirm that:

(i)  we are an "accredited investor" within the meaning 
of Rule 501(a)(1), (2) or (3) under the Securities Act of 1933, as amended (the
"Securities Act"), or an entity in which all of the equity owners are accredited
investors within the meaning of Rule 501(a)(1), (2) or (3) under the Securities
Act (an "Institutional Accredited Investor") and we are able to bear the
economic risk of an investment in the Notes;

(ii) (A) any purchase of Notes by us will be for our own 
account or for the account of one or more other Institutional Accredited
Investors for each of which we exercise sole investment discretion (and have the
authority to make, and do make, the statements in this letter) or as fiduciary
for the account of one or more trusts, each of which is an "accredited investor"
within the meaning of Rule 501(a)(7) under the Securities Act and for each of
which we exercise sole investment discretion or (B) we are a "bank," within the
meaning of Section 3(a)(2) of the Securities Act, or a "savings and loan
association" or other institution described in Section 3(a)(5)(A) of the
Securities Act that is acquiring Notes as fiduciary for the account of one or
more institutions for which we exercise sole investment discretion;

(iii) in the event that we purchase any Notes, unless we 
have otherwise notified the Company and the Company has consented in writing, we
will acquire Notes having a minimum purchase price of not less than $100,000 for
our own account or for any separate account for which we are acting;

(iv) we have such knowledge and experience in financial 
and business matters that we are capable of evaluating the merits and risks of 
purchasing Notes; and

(v)  we are not acquiring Notes with a view to 
distribution thereof or with any present intention of offering or selling Notes
or the Common Stock of the Company issuable upon conversion thereof, except as
permitted below; provided that the disposition of our property and property of
any accounts for which we are acting as fiduciary shall remain at all times
within our control.

We understand that the Notes have been offered in a transaction not
involving any public offering within the United States within the meaning of the
Securities Act and that the Notes and the Common Stock of the Company issuable
upon conversion thereof have not been registered under the Securities Act, and
we agree, on our own behalf and on behalf of each account for which we acquire
any Notes, that if in the future we decide to resell or otherwise transfer such
Notes or the Common Stock of 

the Company issuable upon conversion thereof, such Notes or Common Stock of the
Company may be resold or otherwise transferred only (i) to the Company or any
subsidiary thereof, (ii) inside the United States to a person who is a
"qualified institutional buyer" (as defined in Rule 144A under the Securities
Act) in a transaction meeting the requirements of Rule 144A, (iii) inside the
United States to an Institutional Accredited Investor that, prior to such
transfer, furnishes to the Trustee for the Notes (or in the case of Common Stock
of the Company, the transfer agent therefor) a signed letter containing certain
representations and agreements relating to the restrictions on transfer of such
securities (the form of which letter can be obtained from the Trustee or the
transfer agent, as the case may be), (iv) outside the United States in a
transaction meeting the requirements of Rule 904 under the Securities Act,
(v)pursuant to the exemption from registration provided by Rule 144 under the
Securities Act (if applicable), or (vi) pursuant to a registration statement
that has been declared effective under the Securities Act (and which continues
to be effective at the time of such transfer), and in each case, in accordance
with any applicable securities law of any state of the United States and in
accordance with the legends set forth on the Notes or the Common Stock of the
Company issuable upon conversion thereof, as the case may be. We further agree
to provide any person purchasing any of the Notes or the Common Stock of the
Company issuable upon conversion thereof (other than pursuant to clause (v) or
(vi) above) from us a notice advising such purchaser that resales of such
securities are restricted as stated herein. We understand that the Trustee and
transfer agent for the Notes and the Common Stock of the Company will not be
required to accept for registration of transfer any Notes or any Common Stock of
the Company issued upon conversion of the Notes, except upon presentation of
evidence satisfactory to the Company that the foregoing restrictions on transfer
have been complied with. We further understand that any Notes and any Common
Stock of the Company issued upon conversion of the Notes will be in the form of
definitive physical certificates and that such certificates will bear a legend
reflecting the substance of this paragraph other than certificates transferred
pursuant to (v) or (vi) above.

The Company and the Trustee and their respective counsel are entitled
to rely upon this letter and are irrevocably authorized to produce this letter
or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby.

THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK.

(Name of Purchaser)

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

Address:                                            
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B-2

Exhibit 4.2

REGISTRATION RIGHTS AGREEMENT

by and among

ENZON, INC.

as Issuer,

and

MORGAN STANLEY & CO. INCORPORATED
CIBC WORLD MARKETS CORP.
SG COWEN SECURITIES CORPORATION
and
LEGG MASON WOOD WALKER INCORPORATED

as Initial Purchasers

Dated as of June 26, 2001

THIS REGISTRATION RIGHTS AGREEMENT is made and entered into as of June
26, 2001, by and among Enzon, Inc., a Delaware corporation (the "Company"), and
Morgan Stanley & Co. Incorporated, CIBC World Markets Corp., SG Cowen Securities
Corporation and Legg Mason Wood Walker Incorporated (together, the "Initial
Purchasers") pursuant to the Purchase Agreement, dated June 20, 2001 (the
"Purchase Agreement") among the Company and the Initial Purchasers. In order to
induce the Initial Purchasers to enter into the Purchase Agreement, the Company
has agreed to provide the registration rights set forth in this Agreement. The
execution of this Agreement is a condition to the closing under the Purchase
Agreement.

The Company agrees with the Initial Purchasers, (i) for their benefit
as Initial Purchasers and (ii) for the benefit of the beneficial owners
(including the Initial Purchasers) from time to time of the Notes (as defined
herein) and the beneficial owners from time to time of the Underlying Common
Stock (as defined herein) issued upon conversion of the Notes (each of the
foregoing a "Holder" and together the "Holders"), as follows:

Section 1. Definitions. Capitalized terms used herein without
definition shall have their respective meanings set forth in the Purchase
Agreement. As used in this Agreement, the following terms shall have the
following meanings:

"Affiliate" means with respect to any specified person, an "affiliate,"
as defined in Rule 144, of such person.

"Amendment Effectiveness Deadline Date" has the meaning set forth in
Section 2(d) hereof.

"Applicable Conversion Price" as of any date of determination means the
Conversion Price in effect as of such date of determination or, if no Notes are
then outstanding, the Conversion Price that would be in effect were Notes then
outstanding.

"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The City of New York
are authorized or obligated by law or executive order to close.

"Common Stock" means the shares of common stock, par value $.01 per
share, of the Company and any other shares of common stock as may constitute
"Common Stock" for purposes of the Indenture, including the Underlying Common
Stock.

"Conversion Price" has the meaning assigned such term in the Indenture.

"Damages Accrual Period" has the meaning set forth in Section 2(e)
hereof.

"Damages Payment Date" means each interest payment date under the
Indenture in the case of Notes, and each January 1 and July 1 in the case of the
Underlying Common Stock.

"Deferral Notice" has the meaning set forth in Section 3(i) hereof.

"Deferral Period" has the meaning set forth in Section 3(i) hereof.

"Effectiveness Deadline Date" has the meaning set forth in Section 2(a)
hereof.

"Effectiveness Period" means the period commencing on the date hereof
and ending on the date that all Registrable Securities have ceased to be
Registrable Securities.

"Event" has the meaning set forth in Section 2(e) hereof.

"Event Date" has the meaning set forth in Section 2(e) hereof.

"Event Termination Date" has the meaning set forth in Section 2(e)
hereof.

1

"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.

"Filing Deadline Date" has the meaning set forth in Section 2(a)
hereof.

"Holder" has the meaning set forth in the second paragraph of this
Agreement.

"Indenture" means the Indenture, dated as of June 26, 2001, between the
Company and Wilmington Trust Company, as trustee, pursuant to which the Notes
are being issued.

"Initial Purchasers" means Morgan Stanley & Co. Incorporated, CIBC
World Markets Corp., SG Cowen Securities Corporation and Legg Mason Wood Walker
Incorporated.

"Initial Shelf Registration Statement" has the meaning set forth in
Section 2(a) hereof.

"Issue Date" means the first date of original issuance of the Notes.

"Liquidated Damages Amount" has the meaning set forth in Section 2(e)
hereof.

"Losses" has the meaning set forth in Section 6 hereof.

"Material Event" has the meaning set forth in Section 3(i) hereof.

"Notes" means the 4 1/2% Convertible Subordinated Notes due 2008 of the
Company to be purchased pursuant to the Purchase Agreement.

"Notice and Questionnaire" means a written notice delivered to the
Company containing substantially the information called for by the Selling
Securityholder Notice and Questionnaire attached as Annex A to the Offering
Memorandum of the Company issued June 20, 2001 relating to the Notes.

"Notice Holder" means, on any date, any Holder that has delivered a
properly completed Notice and Questionnaire to the Company on or prior to such
date.

"Purchase Agreement" has the meaning set forth in the preamble hereof.

"Prospectus" means the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any amendment or prospectus
supplement, including post-effective amendments, and all materials incorporated
by reference or explicitly deemed to be incorporated by reference in such
Prospectus.

"Record Holder" means (i) with respect to any Damages Payment Date
relating to any Notes as to which any such Liquidated Damages Amount has
accrued, the holder of record of such Note on the record date with respect to
the interest payment date under the Indenture on which such Damages Payment Date
shall occur and (ii) with respect to any Damages Payment Date relating to the
Underlying Common Stock as to which any such Liquidated Damages Amount has
accrued, the registered holder of such Underlying Common Stock fifteen (15) days
prior to such Damages Payment Date.

"Registrable Securities" means the Notes until such Notes have been
converted into or exchanged for the Underlying Common Stock and, at all times
subsequent to any such conversion or exchange, the Underlying Common Stock and
any securities into or for which such Underlying Common Stock has been converted
or exchanged, and any security issued with respect thereto upon any stock
dividend, split or similar event until, in the case of any such security, (A)
the earliest of (i) its effective registration under the Securities Act and
resale in accordance with the Registration Statement covering it, (ii)
expiration of the holding period that would be applicable thereto under Rule
144(k) or (iii) its sale to the public pursuant to Rule 144 (or any similar
provision then in force, 

2

but not Rule 144A) under the Securities Act, and (B) as a result of the event or
circumstance described in any of the foregoing clauses (i) through (iii), the
legend with respect to transfer restrictions required under the Indenture are
removed or removable in accordance with the terms of the Indenture or such
legend, as the case may be.

"Registration Expenses" has the meaning set forth in Section 5 hereof.

"Registration Statement" means any registration statement of the
Company that covers any of the Registrable Securities pursuant to the provisions
of this Agreement including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all materials incorporated by reference or explicitly deemed to be incorporated
by reference in such registration statement.

"Restricted Securities" means "Restricted Securities" as defined in
Rule 144.

"Rule 144" means Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.

"Rule 144A" means Rule 144A under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.

"SEC" means the Securities and Exchange Commission.

"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.

"Shelf Registration Statement" has the meaning set forth in Section
2(a) hereof.

"Special Counsel" means Ropes & Gray or such other successor counsel as
shall be specified by the Holders of a majority of the Registrable Securities,
but which may, with the written consent of the Initial Purchasers (which shall
not be unreasonably withheld), be another nationally recognized law firm
experienced in securities law matters designated by the Company, the reasonable
fees and expenses of which will be paid by the Company pursuant to Section 5
hereof.

"Subsequent Shelf Registration Statement" has the meaning set forth in
Section 2(b) hereof.

"TIA" means the Trust Indenture Act of 1939, as amended.

"Trustee" means Wilmington Trust Company, the Trustee under the 
Indenture.

"Underlying Common Stock" means the Common Stock into which the Notes
are convertible or issued upon any such conversion.

Section 2. Shelf Registration

(a) The Company shall use its reasonable efforts to prepare and file or
cause to be prepared and filed with the SEC, as soon as practicable but in any
event by the date (the "Filing Deadline Date") ninety (90) days after the Issue
Date (or if such date is not a Business Day, the next succeeding Business Day),
a Registration Statement for an offering to be made on a delayed or continuous
basis pursuant to Rule 415 of the Securities Act (a "Shelf Registration
Statement") registering the resale from time to time by Holders thereof of all
of the Registrable Securities (the "Initial Shelf Registration Statement"). The
Initial Shelf Registration Statement shall be on Form S-3 or another appropriate
form permitting registration of such Registrable Securities for resale by such
Holders in accordance with the methods of distribution elected by the Holders
and set forth in the Initial Shelf Registration Statement. The Company shall use
its reasonable efforts to cause the Initial Shelf Registration Statement to be
declared effective under the Securities Act as promptly as is practicable but in
any event by the date (the "Effectiveness Deadline Date") that is one hundred
eighty (180) (or if such date is not a Business Day, the next succeeding
Business Day) days after the Issue Date, and to keep the Initial Shelf
Registration Statement (or any 

3

Subsequent Shelf Registration Statement, as defined below) continuously
effective under the Securities Act until the expiration of the Effectiveness
Period. At the time the Initial Shelf Registration Statement is declared
effective, each Holder that became a Notice Holder on or prior to the date ten
(10) Business Days prior to such time of effectiveness shall be named as a
selling securityholder in the Initial Shelf Registration Statement and the
related Prospectus in such a manner as to permit such Holder to deliver such
Prospectus to purchasers of Registrable Securities in accordance with applicable
law. The Company shall not permit any of its security holders (other than the
Holders of Registrable Securities) to include any of the Company's securities in
the Shelf Registration Statement.

(b) If the Initial Shelf Registration Statement or any Subsequent Shelf
Registration Statement ceases to be effective for any reason at any time during
the Effectiveness Period (other than because all Registrable Securities
registered thereunder shall have been resold pursuant thereto or shall have
otherwise ceased to be Registrable Securities), the Company shall use its
reasonable efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof, and in any event shall within thirty (30) days of such
cessation of effectiveness amend the Shelf Registration Statement in a manner
reasonably expected to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional Shelf Registration Statement
covering all of the securities that as of the date of such filing are
Registrable Securities (a "Subsequent Shelf Registration Statement"). If a
Subsequent Shelf Registration Statement is filed, the Company shall use its
reasonable efforts to cause the Subsequent Shelf Registration Statement to
become effective as promptly as is practicable after such filing and to keep
such Registration Statement (or subsequent Shelf Registration Statement)
continuously effective until the end of the Effectiveness Period.

(c) The Company shall supplement and amend the Shelf Registration
Statement if required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Shelf Registration Statement,
if required by the Securities Act or as reasonably requested by the Initial
Purchasers or by the Trustee on behalf of the Holders of the Registrable
Securities covered by such Shelf Registration Statement.

(d) Each Holder of Registrable Securities agrees that if such Holder
wishes to sell Registrable Securities pursuant to a Shelf Registration Statement
and related Prospectus, it will do so only in accordance with this Section 2(d)
and Section 3(i). Each Holder of Registrable Securities wishing to sell
Registrable Securities pursuant to a Shelf Registration Statement and related
Prospectus agrees to deliver a Notice and Questionnaire to the Company prior to
any intended distribution of Registrable Securities under the Shelf Registration
Statement. From and after the date the Initial Shelf Registration Statement is
declared effective, the Company shall, as promptly as practicable after the date
a Notice and Questionnaire is delivered, and in any event upon the later of (x)
fifteen (15) Business Days after such date or (y) fifteen (15) Business Days
after the expiration of any Deferral Period in effect when the Notice and
Questionnaire is delivered, (i) if required by applicable law, file with the SEC
a post-effective amendment to the Shelf Registration Statement or prepare and,
if required by applicable law, file a supplement to the related Prospectus or a
supplement or amendment to any document incorporated therein by reference or
file any other required document so that the Holder delivering such Notice and
Questionnaire is named as a selling securityholder in the Shelf Registration
Statement and the related Prospectus in such a manner as to permit such Holder
to deliver such Prospectus to purchasers of the Registrable Securities in
accordance with applicable law and, if the Company shall file a post-effective
amendment to the Shelf Registration Statement, use its reasonable efforts to
cause such post-effective amendment to be declared effective under the
Securities Act as promptly as is practicable, but in any event by the date (the
"Amendment Effectiveness Deadline Date") that is forty-five (45) days (or if
such date is not a Business Day, the next succeeding Business Day) after the
date such post-effective amendment is required by this clause to be filed; (ii)
provide such Holder copies of any documents filed pursuant to Section 2(d)(i);
and (iii) notify such Holder as promptly as practicable after the effectiveness
under the Securities Act of any post-effective amendment filed pursuant to
Section 2(d)(i); provided, that if such Notice and Questionnaire is delivered
during a Deferral Period, the Company shall so inform the Holder delivering such
Notice and Questionnaire and shall take the actions set forth in clauses (i),
(ii) and (iii) above upon expiration of the Deferral Period in accordance with
Section 3(i). Notwithstanding anything contained herein to the contrary, (i) the
Company shall be under no obligation to name any Holder that is not a Notice
Holder as a selling securityholder in any Registration Statement or related
Prospectus and (ii) the Amendment Effectiveness Deadline Date shall be extended
by up to ten (10) Business Days from the expiration of a Deferral Period (and
the Company shall incur no obligation to pay Liquidated Damages during such
extension) if such Deferral Period shall be in effect on the Amendment
Effectiveness Deadline Date.

4

(e) The parties hereto agree that the Holders of Registrable Securities
will suffer damages, and that it would not be feasible to ascertain the extent
of such damages with precision, if (i) the Initial Shelf Registration Statement
has not been filed on or prior to the Filing Deadline Date, (ii) the Initial
Shelf Registration Statement has not been declared effective under the
Securities Act on or prior to the Effectiveness Deadline Date, (iii) the Company
has failed to perform its obligations set forth in Section 2(d) within the time
period required therein, (iv) the aggregate duration of Deferral Periods in any
period exceeds the number of days permitted in respect of such period pursuant
to Section 3(i) hereof or (v) the number of Deferral Periods in any period
exceeds the number permitted in respect of such period pursuant to Section 3(i)
hereof (each of the events of a type described in any of the foregoing clauses
(i) through (v) are individually referred to herein as an "Event," and the
Filing Deadline Date in the case of clause (i), the Effectiveness Deadline Date
in the case of clause (ii), the date by which the Company is required to perform
its obligations set forth in Section 2(d) in the case of clause (iii) (including
the filing of any post-effective amendment prior to the Amendment Effectiveness
Deadline Date), the date on which the aggregate duration of Deferral Periods in
any period exceeds the number of days permitted by Section 3(i) hereof in the
case of clause (iv), and the date of the commencement of a Deferral Period that
causes the limit on the number of Deferral Periods in any period under Section
3(i) hereof to be exceeded in the case of clause (v), being referred to herein
as an "Event Date"). Events shall be deemed to continue until the "Event
Termination Date," which shall be the following dates with respect to the
respective types of Events: the date the Initial Shelf Registration Statement is
filed in the case of an Event of the type described in clause (i), the date the
Initial Shelf Registration Statement is declared effective under the Securities
Act in the case of an Event of the type described in clause (ii), the date the
Company performs its obligations set forth in Section 2(d) in the case of an
Event of the type described in clause (iii) (including, without limitation, the
date the relevant post-effective amendment to the Shelf Registration Statement
is declared effective under the Securities Act), termination of the Deferral
Period that caused the limit on the aggregate duration of Deferral Periods in a
period set forth in Section 3(i) to be exceeded in the case of the commencement
of an Event of the type described in clause (iv), and termination of the
Deferral Period the commencement of which caused the number of Deferral Periods
in a period permitted by Section 3(i) to be exceeded in the case of an Event of
the type described in clause (v).

Accordingly, commencing on (and including) any Event Date and ending on
(but excluding) the next date on which there are no Events that have occurred
and are continuing (a "Damages Accrual Period"), the Company agrees to pay, as
liquidated damages and not as a penalty, an amount (the "Liquidated Damages
Amount"), payable on the Damages Payment Dates to Record Holders of Registrable
Securities accruing, for each portion of such Damages Accrual Period beginning
on and including a Damages Payment Date (or, in respect of the first time that
the Liquidated Damages Amount is to be paid to Holders on a Damages Payment Date
as a result of the occurrence of any particular Event, from the Event Date) and
ending on but excluding the first to occur of (A) the date of the end of the
Damages Accrual Period or (B) the next Damages Payment Date, at a rate per annum
equal to one-half of one percent (0.5 %) of, in the case of Registrable
Securities that are Notes and issued and outstanding on such Damages Payment
Date, the aggregate principal amount of such Notes or, in the case of
Registrable Securities that are Underlying Common Stock and issued and
outstanding on such Damages Payment Date, for each such share, the Applicable
Conversion Price of such shares of Underlying Common Stock, as the case may be,
in each case determined as of the Business Day immediately preceding the next
Damages Payment Date; provided, that in the case of a Damages Accrual Period
that is in effect solely as a result of an Event of the type described in clause
(iii) of the immediately preceding paragraph, such Liquidated Damages Amount
shall be paid only to the Holders that have delivered Notice and Questionnaires
that caused the Company to incur the obligations set forth in Section 2(d) the
non-performance of which is the basis of such Event, provided further, that any
Liquidated Damages Amount accrued with respect to any Note or portion thereof
called for redemption on a redemption date or converted into Underlying Common
Stock on a conversion date prior to the Damages Payment Date, shall, in any such
event, be paid instead to the Holder who submitted such Note or portion thereof
for redemption or conversion on the applicable redemption date or conversion
date, as the case may be, on such date (or promptly following the conversion
date, in the case of conversion). Notwithstanding the foregoing, no Liquidated
Damages Amounts shall accrue as to any Registrable Security from and after the
earlier of (x) the date such security is no longer a Registrable Security and
(y) expiration of the Effectiveness Period. The rate of accrual of the
Liquidated Damages Amount with respect to any period shall not exceed the rate
provided for in this paragraph notwithstanding the occurrence of multiple
concurrent Events. Following the cure of all Events requiring the payment by the
Company of Liquidated Damages Amounts to the Holders of Registrable Securities
pursuant to this Section, the accrual of Liquidated Damages Amounts will cease
(without in any way limiting the effect of any subsequent Event requiring the
payment of Liquidated Damages Amount by the Company).

5

The Trustee shall be entitled, on behalf of Holders of Notes or
Underlying Common Stock, to seek any available remedy for the enforcement of
this Agreement, including for the payment of any Liquidated Damages Amount.
Notwithstanding the foregoing, the parties agree that the sole damages payable
for a violation of the terms of this Agreement with respect to which liquidated
damages are expressly provided shall be such liquidated damages. Nothing shall
preclude a Notice Holder or Holder of Registrable Securities from pursuing or
obtaining specific performance or other equitable relief with respect to this
Agreement.

All of the Company's obligations to pay liquidated damages as set forth
in this Section 2(e) that are accrued and outstanding with respect to any
Registrable Security up to the time such security ceases to be a Registrable
Security shall survive until such time as all such obligations with respect to
such security have been satisfied in full (notwithstanding termination of this
Agreement pursuant to Section 8(k)).

The parties hereto agree that the liquidated damages provided for in
this Section 2(e) constitute a reasonable estimate of the damages that may be
incurred by Holders of Registrable Securities by reason of the failure of the
Shelf Registration Statement to be filed or declared effective or available for
effecting resales of Registrable Securities in accordance with the provisions
hereof.

Section 3. Registration Procedures. In connection with the registration
obligations of the Company under Section 2 hereof, the Company shall:

(a) Prepare and file with the SEC a Registration Statement or
Registration Statements on any appropriate form under the Securities Act
available for the sale of the Registrable Securities by the Holders thereof in
accordance with the intended method or methods of distribution thereof, and use
its reasonable efforts to cause each such Registration Statement to become
effective and remain effective as provided herein; provided, that before filing
any Registration Statement or Prospectus or any amendments or supplements
thereto with the SEC, furnish to the Initial Purchasers and the Special Counsel
copies of all such documents proposed to be filed and use its best efforts to
reflect in each such document when so filed with the SEC such comments as the
Special Counsel reasonably shall propose within five (5) Business Days of the
delivery of such copies to the Initial Purchasers and the Special Counsel.

(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement continuously effective for the applicable period
specified in Section 2(a); cause the related Prospectus to be supplemented by
any required Prospectus supplement, and as so supplemented to be filed pursuant
to Rule 424 (or any similar provisions then in force) under the Securities Act;
and use its best efforts to comply with the provisions of the Securities Act
applicable to it with respect to the disposition of all Registrable Securities
covered by such Registration Statement during the Effectiveness Period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such Registration Statement as so amended or such Prospectus as so
supplemented.

(c) As promptly as practicable give notice to the Notice Holders named
therein, the Initial Purchasers and the Special Counsel (i) when any Prospectus,
Prospectus supplement, Registration Statement or post-effective amendment to a
Registration Statement has been filed with the SEC and, with respect to a
Registration Statement or any post-effective amendment, when the same has been
declared effective, (ii) of any request, following the effectiveness of the
Initial Shelf Registration Statement under the Securities Act, by the SEC or any
other federal or state governmental authority for amendments or supplements to
any Registration Statement or related Prospectus or for additional information,
(iii) of the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of any Registration
Statement or the initiation or threatening of any proceedings for that purpose,
(iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, (v) of the occurrence of (but
not the nature of or details concerning) a Material Event and (vi) of the
determination by the Company that a post-effective amendment to a Registration
Statement will be filed with the SEC, which notice may, at the discretion of the
Company (or as required pursuant to Section 3 (i)), state that it constitutes a
Deferral Notice, in which event the provisions of Section 3(i) shall apply.

6

(d) Use reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement or the lifting of any
suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction in which they have been
qualified for sale, in either case at the earliest possible moment, and provide
prompt notice to each Notice Holder and the Initial Purchasers of the withdrawal
of any such order.

(e) If reasonably requested by the Initial Purchasers or any Notice
Holder, as promptly as practicable incorporate in a Prospectus supplement or
post-effective amendment to a Registration Statement such information as the
Initial Purchasers, the Special Counsel or such Notice Holder shall, on the
basis of a written opinion of nationally-recognized counsel experienced in such
matters, determine to be required to be included therein by applicable law and
make any required filings of such Prospectus supplement or such post-effective
amendment.

(f) As promptly as practicable furnish to each Notice Holder, the
Special Counsel and the Initial Purchasers, without charge, at least one (1)
conformed copy of the Registration Statement and any amendment thereto,
including financial statements but excluding schedules, all documents
incorporated or deemed to be incorporated therein by reference and all exhibits
(unless requested in writing to the Company by such Notice Holder, Special
Counsel, counsel or Initial Purchasers).

(g) During the Effectiveness Period, deliver to each Notice Holder, the
Special Counsel and the Initial Purchasers, in connection with any sale of
Registrable Securities pursuant to a Registration Statement, without charge, as
many copies of the Prospectus or Prospectuses relating to such Registrable
Securities (including each preliminary prospectus) and any amendment or
supplement thereto as such Notice Holder may reasonably request; and the Company
hereby consents (except during such periods that a Deferral Notice is
outstanding and has not been revoked) to the use of such Prospectus or each
amendment or supplement thereto by each Notice Holder, in connection with any
offering and sale of the Registrable Securities covered by such Prospectus or
any amendment or supplement thereto in the manner set forth therein.

(h) Prior to any public offering of the Registrable Securities pursuant
to the Shelf Registration Statement, register or qualify or cooperate with the
Notice Holders in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any Notice Holder reasonably requests
in writing (which request may be included in the Notice and Questionnaire);
prior to any public offering of the Registrable Securities pursuant to the Shelf
Registration Statement, keep each such registration or qualification (or
exemption therefrom) effective during the Effectiveness Period in connection
with such Notice Holder's offer and sale of Registrable Securities pursuant to
such registration or qualification (or exemption therefrom) and do any and all
other acts or things reasonably necessary or advisable to enable the disposition
in such jurisdictions of such Registrable Securities in the manner set forth in
the relevant Registration Statement and the related Prospectus; provided, that
the Company will not be required to (i) qualify as a foreign corporation or as a
dealer in securities in any jurisdiction where it would not otherwise be
required to qualify but for this Agreement or (ii) take any action that would
subject it to general service of process in suits or to taxation in any such
jurisdiction where it is not then so subject.

(i) Upon (A) the issuance by the SEC of a stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation of
proceedings with respect to the Shelf Registration Statement under Section 8(d)
or 8(e) of the Securities Act, (B) the occurrence of any event or the existence
of any fact, event or circumstance (a "Material Event") as a result of which any
Registration Statement, as of its date, shall contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, or any Prospectus
shall contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or (C) the occurrence or existence of any pending corporate
development that, in the reasonable discretion of the Company, makes it
appropriate to suspend the availability of the Shelf Registration Statement and
the related Prospectus, (i) in the case of clause (B) above, subject to the next
sentence, as promptly as practicable prepare and file, if necessary pursuant to
applicable law, a post-effective amendment to such Registration Statement or a
supplement to the related Prospectus or any document incorporated therein by
reference or file any other required document that would be incorporated by
reference into such Registration Statement and Prospectus so that such
Registration Statement, as of its date, does not contain any

7

untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading,
and such Prospectus does not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, as thereafter delivered to the purchasers of the
Registrable Securities being sold thereunder, and, in the case of a
post-effective amendment to a Registration Statement, subject to the next
sentence, use its reasonable efforts to cause it to be declared effective as
promptly as is practicable, and (ii) give notice to the Notice Holders and the
Special Counsel that the availability of the Shelf Registration Statement is
suspended (a "Deferral Notice") and, upon receipt of any Deferral Notice, each
Notice Holder agrees not to sell any Registrable Securities pursuant to the
Registration Statement until such Notice Holder's receipt of copies of the
supplemented or amended Prospectus provided for in clause (i) above, or until it
is advised in writing by the Company that the Prospectus may be used, and has
received copies of any additional or supplemental filings that are incorporated
or deemed incorporated by reference in such Prospectus. The Company will use all
reasonable efforts to ensure that the use of the Prospectus may be resumed (x)
in the case of clause (A) above, as promptly as is practicable, (y) in the case
of clause (B) above, as soon as, in the sole judgment of the Company, public
disclosure of such Material Event would not be prejudicial to or contrary to the
interests of the Company or, if necessary to avoid unreasonable burden or
expense, as soon as practicable thereafter and (z) in the case of clause (C)
above, as soon as, in the discretion of the Company, such suspension is no
longer appropriate. Notwithstanding the foregoing, the Company shall be entitled
to exercise its right under this Section 3(i) to suspend the availability of the
Shelf Registration Statement or any Prospectus, without incurring or accruing
any obligation to pay liquidated damages pursuant to Section 2(e), no more than
one (1) time in any three month period or three (3) times in any twelve month
period, and any such period during which the availability of the Registration
Statement and any Prospectus is suspended (the "Deferral Period") shall not
exceed 30 days; provided, that in the case of a Material Event relating to an
acquisition or a probable acquisition or financing, recapitalization, business
combination or other similar transaction, the Company may, without incurring any
obligation to pay liquidated damages pursuant to Section 2(e), deliver to Notice
Holders a second notice to the effect set forth above, which shall have the
effect of extending the Deferral Period by up to an additional 30 days, or such
shorter period of time as is specified in such second notice, provided, that the
aggregate duration of any Deferral Periods shall not, without incurring any
obligation to pay liquidated damages pursuant to Section 2(e), exceed 30 days in
any three month period (or 60 days in any three month period in the event of a
Material Event pursuant to which the Company has delivered a second notice as
required above) or 90 days in any twelve (12) month period.

(j) If requested in writing in connection with a disposition of
Registrable Securities pursuant to a Registration Statement, make reasonably
available for inspection, upon at least 2 Business Days notice, during normal
business hours by a representative for the Notice Holders of such Registrable
Securities, and any managing underwriter, broker-dealers, attorneys and
accountants retained by such Notice Holders, all relevant financial and other
records and pertinent corporate documents and properties of the Company and its
subsidiaries, and cause the appropriate officers, directors and employees of the
Company and its subsidiaries to make reasonably available for inspection during
normal business hours on reasonable notice all relevant information reasonably
requested by such representative for the Notice Holders, or any such managing
underwriter, broker-dealers, attorneys or accountants in connection with such
disposition, in each case as is customary for similar "due diligence"
examinations; provided, however, that such persons shall first agree in writing
with the Company that any information that is reasonably and in good faith
designated by the Company in writing as confidential at the time of delivery of
such information shall be kept confidential by such persons and shall be used
solely for the purposes of exercising rights under this Agreement, unless (i)
disclosure of such information is required by court or administrative order or
is necessary to respond to inquiries of regulatory authorities and prior notice
has been given to the Company of such order or inquiry, (ii) disclosure of such
information is required by law (including any disclosure requirements pursuant
to federal securities laws in connection with the filing of any Registration
Statement or the use of any Prospectus referred to in this Agreement), provided
that such Notice Holder shall, if practicable, give the Company advance notice
prior to any such disclosure in order to permit the Company to contest such
disclosure, (iii) such information becomes generally available to the public
other than as a result of a disclosure or failure to safeguard by any such
person or (iv) such information becomes available to any such person from a
source other than the Company and such source is not bound by a confidentiality
agreement, and provided, that the foregoing inspection and information gathering
shall, to the greatest extent possible, be coordinated on behalf of all the
Notice Holders and the other parties entitled thereto by the counsel referred to
in Section 5 and provided further, that the Company shall not be required to
disclose any information subject to the attorney-client or attorney work product
privilege if and to the extent such disclosure would constitute a waiver of such
privilege. Notwithstanding the foregoing, if the basis of 

8

such disclosure by a Notice Holder pursuant to clause (ii) above is such Notice
Holder's belief that disclosure of any such information is required by the
disclosure requirements of federal securities laws in connection with the filing
of any Registration Statement or use of any Prospectus, such holder shall, at
least five (5) Business Days prior to any such disclosure, notify the Company in
writing that it believes disclosure of such information is so required and the
Company shall have five (5) Business Days from the date of such notice to either
(a) disclose such information, or (b) exercise its right under Section 3(i)
hereof to enter into a Deferral Period whereby such information shall be kept
confidential for the duration of such Deferral Period, or (c) notify such holder
in writing that after consultation with and based upon written advice from
independent legal counsel (which advice the holders shall be entitled to rely
upon), the Company believes that without the disclosure of such information such
Registration Statement does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein not
misleading and such Prospectus does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. If the Company fails to comply with clauses (a), (b) or (c) above,
such Notice Holder shall be permitted to disclose such information following the
five (5) Business Day period.

(k) Use all reasonable efforts to comply with all applicable rules and
regulations of the SEC and make generally available to its securityholders
earning statements (which need not be audited) satisfying the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule
promulgated under the Securities Act).

(l) Cooperate with each Notice Holder to facilitate the timely
preparation and delivery of certificates representing Registrable Securities
sold or to be sold pursuant to a Registration Statement, which certificates
shall not bear any restrictive legends, and cause such Registrable Securities to
be in such denominations as are permitted by the Indenture and registered in
such names as such Notice Holder may request in writing at least two (2)
Business Days prior to any sale of such Registrable Securities.

(m) Provide a CUSIP number for all Registrable Securities covered by
each Registration Statement not later than the effective date of such
Registration Statement and provide the Trustee and the transfer agent for the
Common Stock with printed certificates for the Registrable Securities that are
in a form eligible for deposit with The Depository Trust Company.

(n) Cooperate and assist in any filings required to be made with the
National Association of Securities Dealers, Inc.

(o) Upon (i) the filing of the Initial Registration Statement and (ii)
the effectiveness of the Initial Registration Statement, announce the same, in
each case by release to Reuters Economic Services and Bloomberg Business News.

Section 4. Holder's Obligations. Each Holder agrees, by acquisition of
the Registrable Securities, that no Holder of Registrable Securities shall be
entitled to sell any of such Registrable Securities pursuant to a Registration
Statement or to receive a Prospectus relating thereto, unless such Holder has
furnished the Company with a Notice and Questionnaire as required pursuant to
Section 2(d) hereof (including the information required to be included in such
Notice and Questionnaire) and the information set forth in the next sentence.
Each Notice Holder agrees promptly to furnish to the Company all information
required to be disclosed in order to make the information previously furnished
to the Company by such Notice Holder not misleading and any other information
regarding such Notice Holder and the distribution of such Registrable Securities
as the Company may from time to time reasonably request. Any sale of any
Registrable Securities by any Holder shall constitute a representation and
warranty by such Holder that the information relating to such Holder and its
plan of distribution is as set forth in the Prospectus delivered by such Holder
in connection with such disposition, that such Prospectus does not as of the
time of such sale contain any untrue statement of a material fact relating to or
provided by such Holder or its plan of distribution and that such Prospectus
does not as of the time of such sale omit to state any material fact relating to
or provided by such Holder or its plan of distribution necessary to make the
statements in such Prospectus, in the light of the circumstances under which
they were made, not misleading.

Section 5. Registration Expenses. The Company shall bear all fees and
expenses incurred in connection with the performance by the Company of its
obligations under Sections 2 and 3 of this Agreement whether or not 

9

any of the Registration Statements are declared effective. Such fees and
expenses shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (x) with respect to filings
required to be made with the National Association of Securities Dealers, Inc.
and (y) of compliance with federal and state securities or Blue Sky laws
(including, without limitation, reasonable fees and disbursements of the Special
Counsel in connection with Blue Sky qualifications of the Registrable Securities
under the laws of such jurisdictions as the Notice Holders of a majority of the
Registrable Securities being sold pursuant to a Registration Statement may
designate), (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities in a form eligible for deposit
with The Depository Trust Company, (iii) duplication expenses relating to copies
of any Registration Statement or Prospectus delivered to any Holders hereunder,
(iv) reasonable fees and disbursements of counsel for the Company and the
Special Counsel in connection with the Shelf Registration Statement (provided
that the Company shall not be liable for the fees and expenses of more than one
separate firm for all parties participating in any transaction hereunder) and
(v) reasonable fees and disbursements of the Trustee and its counsel and of the
registrar and transfer agent for the Common Stock. In addition, the Company
shall pay the internal expenses of the Company (including, without limitation,
all salaries and expenses of officers and employees performing legal or
accounting duties), the expense of any annual audit, the fees and expenses
incurred in connection with the listing by the Company of the Registrable
Securities on any securities exchange on which similar securities of the Company
are then listed and the fees and expenses of any person, including special
experts, retained by the Company. Notwithstanding the provisions of this Section
5, each seller of Registrable Securities shall pay selling expenses and all
registration expenses to the extent required by applicable law.

Section 6. Indemnification.

(a) Indemnification by the Company. The Company shall indemnify and
hold harmless each Notice Holder and each person, if any, who controls any
Notice Holder (within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act) from and against any losses, liabilities,
claims, damages and expenses (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) (collectively, "Losses"), arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or based upon any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, provided,
however, that the Company shall not be liable in any such case to the extent
that any such Losses arise out of or are based upon an untrue statement or
alleged untrue statement contained in or omission or alleged omission from any
of such documents in reliance upon and conformity with any of the information
relating to the Holders furnished to the Company in writing by a Holder
expressly for use therein; provided further, that the indemnification contained
in this paragraph shall not inure to the benefit of any Holder of Registrable
Securities (or to the benefit of any person controlling such Holder) on account
of any such Losses arising out of or based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any preliminary
prospectus provided in each case the Company has performed its obligations under
Section 3(a) hereof if either (A) (i) such Holder failed to send or deliver a
copy of the Prospectus with or prior to the delivery of written confirmation of
the sale by such Holder to the person asserting the claim from which such Losses
arise and (ii) the Prospectus would have corrected such untrue statement or
alleged untrue statement or such omission or alleged omission, or (B) (x) such
untrue statement or alleged untrue statement, omission or alleged omission is
corrected in an amendment or supplement to the Prospectus and (y) having
previously been furnished by or on behalf of the Company with copies of the
Prospectus as so amended or supplemented, such Holder thereafter fails to
deliver such Prospectus as so amended or supplemented, with or prior to the
delivery of written confirmation of the sale of a Registrable Security to the
person asserting the claim from which such Losses arise.

(b) Indemnification by Holders of Registrable Securities. Each Holder
agrees severally and not jointly to indemnify and hold harmless the Company and
its respective directors and officers, and each person, if any, who controls the
Company (within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act) or any other Holder, from and against all Losses
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in any Registration Statement or Prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or based upon any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with information furnished to the 

10

Company by such Holder expressly for use in such Registration Statement or
Prospectus or amendment or supplement thereto. In no event shall the liability
of any selling Holder of Registrable Securities hereunder be greater in amount
than the dollar amount of the proceeds received by such Holder upon the sale of
the Registrable Securities pursuant to the Registration Statement giving rise to
such indemnification obligation.

(c) Conduct of Indemnification Proceedings. In case any proceeding
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to either of the two
preceding paragraphs, such person (the "indemnified party") shall promptly
notify the person against whom such indemnity may be sought (the "indemnifying
party") in writing and the indemnifying party, upon request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the reasonable fees and disbursements
of such counsel related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying party
and the indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. It is understood that the indemnifying party shall not, in respect of the
legal expenses of any indemnified party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all indemnified parties, and that all such fees and expenses shall be reimbursed
as they are incurred. Such separate firm shall be designated in writing by, in
the case of parties indemnified pursuant to Section 6(a), the Holders of a
majority (with Holders of Notes deemed to be the Holders, for purposes of
determining such majority, of the number of shares of Underlying Common Stock
into which such Notes are or would be convertible or exchangeable as of the date
on which such designation is made) of the Registrable Securities covered by the
Registration Statement held by Holders that are indemnified parties pursuant to
Section 6(a) and, in the case of parties indemnified pursuant to Section 6(b),
the Company. The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.

(d) Contribution. To the extent that the indemnification provided for
in this Section 6 is unavailable to an indemnified party under Section 6(a) or
6(b) hereof in respect of any Losses or is insufficient to hold such indemnified
party harmless, then each applicable indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Losses (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
or parties on the one hand and the indemnified party or parties on the other
hand or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the indemnifying party or parties on the one hand and of the indemnified party
or parties on the other hand in connection with the statements or omissions that
resulted in such Losses, as well as any other relevant equitable considerations.
Benefits received by the Company shall be deemed to be equal to the total net
proceeds from the initial placement pursuant to the Purchase Agreement (before
deducting expenses) of the Registrable Securities to which such Losses relate.
Benefits received by any Holder shall be deemed to be equal to the value of
receiving Registrable Securities that are registered under the Securities Act.
The relative fault of the Holders on the one hand and the Company on the other
hand shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Holders
or by the Company, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Holders' respective obligations to contribute pursuant to this paragraph are
several in proportion to the respective number of Registrable Securities they
have sold pursuant to a Registration Statement, and not joint.

11

The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method or allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the Losses
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding this Section 6(d), an
indemnifying party that is a selling Holder of Registrable Securities shall not
be required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities sold by such indemnifying party and
distributed to the public were offered to the public exceeds the amount of any
damages that such indemnifying party has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.

(e) The indemnity, contribution and expense reimbursement obligations
of the parties hereunder shall be in addition to any liability any indemnified
party may otherwise have hereunder, under the Purchase Agreement or otherwise.

(f) The indemnity and contribution provisions contained in this Section
6 shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Holder or any person controlling any Holder, or the Company, or the
Company's officers or directors or any person controlling the Company and (iii)
the sale of any Registrable Securities by any Holder.

Section 7. Information Requirements.

(a) The Company covenants that, if at any time before the end of the
Effectiveness Period the Company is not subject to the reporting requirements of
the Exchange Act, it will cooperate with any Holder of Registrable Securities
and take such further reasonable action as any Holder of Registrable Securities
may reasonably request in writing (including, without limitation, making such
reasonable representations as any such Holder may reasonably request), all to
the extent required from time to time to enable such Holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 and Rule 144A under the Securities Act
and customarily taken in connection with sales pursuant to such exemptions. Upon
the written request of any Holder of Registrable Securities, the Company shall
deliver to such Holder a written statement as to whether it has complied with
such filing requirements, unless such a statement has been included in the
Company's most recent report filed pursuant to Section 13 or Section 15(d) of
Exchange Act. Notwithstanding the foregoing, nothing in this Section 7 shall be
deemed to require the Company to register any of its securities (other than the
Common Stock) under any section of the Exchange Act.

(b) The Company shall file the reports required to be filed by it under
the Exchange Act and shall comply with all other requirements set forth in the
instructions to Form S-3 in order to allow the Company to be eligible to file
registration statements on Form S-3.

Section 8. Miscellaneous.

(a) No Conflicting Agreements. Except for (i) such registration rights
existing as of the date hereof as have been expressly waived and (ii) piggyback
registration rights applicable to an aggregate of 17,500 shares of Common Stock
(as set forth in the Final Memorandum) which shares the Company, if requested by
the holders of such rights to be included in the Initial Shelf Registration or
any Subsequent Shelf Registration, intends to register under a separate shelf
registration:

(i)      the Company is not, as of the date hereof, a party
to, nor shall it, on or after the date of this
Agreement, enter into, any agreement with respect to
its securities that conflicts with the rights granted
to the Holders of Registrable Securities in this
Agreement; and

12

(ii)     the Company represents and warrants that the rights
granted to the Holders of Registrable Securities
hereunder do not in any way conflict with the rights
granted to the holders of the Company's securities
under any other agreements.

(b) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the Company has obtained the written consent of Holders of a
majority of the then outstanding Underlying Common Stock constituting
Registrable Securities (with Holders of Notes deemed to be the Holders, for
purposes of this Section, of the number of outstanding shares of Underlying
Common Stock into which such Notes are or would be convertible or exchangeable
as of the date on which such consent is requested). Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter that relates exclusively to the rights of Holders of Registrable
Securities whose securities are being sold pursuant to a Registration Statement
and that does not directly or indirectly affect the rights of other Holders of
Registrable Securities may be given by Holders of at least a majority of the
Registrable Securities being sold by such Holders pursuant to such Registration
Statement; provided, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence. Each Holder of Registrable Securities
outstanding at the time of any such amendment, modification, supplement, waiver
or consent or thereafter shall be bound by any such amendment, modification,
supplement, waiver or consent effected pursuant to this Section 8(b), whether or
not any notice, writing or marking indicating such amendment, modification,
supplement, waiver or consent appears on the Registrable Securities or is
delivered to such Holder.

(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, by telecopier, by
courier guaranteeing overnight delivery or by first class mail, return receipt
requested, and shall be deemed given (i) when made, if made by hand delivery,
(ii) upon confirmation, if made by telecopier, (iii) one (1) Business Day after
being deposited with such courier, if made by overnight courier or (iv) on the
date indicated on the notice of receipt, if made by first class mail, to the
parties as follows:

(w) if to a Holder of Registrable Securities, at the
most current address given by such Holder to the Company in a
Notice and Questionnaire or any amendment thereto;

(x) if to the Company, to:

Enzon, Inc.
20 Kingsbridge Road
Piscataway, NJ  08854
Attention:  General Counsel
Telecopy No.:  (732) 980-9606

and

Dorsey & Whitney LLP
250 Park Avenue
New York, NY 10177
Attention:  Kevin T. Collins, Esq.
Telecopy No.:  (212) 953-7201

(y)      if to the Initial Purchasers, to:

Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York
Attention:  Equity Capital Markets

Telecopy No.: (212) 761-0538

13

and

Ropes & Gray
One International Place
Boston, MA  02110
Attention:  Patrick O'Brien, Esq.
Telecopy No.:  (617) 951-7050

or to such other address as such person may have furnished to the other persons
identified in this Section 8(c) in writing in accordance herewith.

(d) Approval of Holders. Whenever the consent or approval of Holders of
a specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by the Company or its affiliates (as such term is
defined in Rule 405 under the Securities Act) (other than the Initial Purchasers
or subsequent Holders of Registrable Securities if such subsequent Holders are
deemed to be such affiliates solely by reason of their holdings of such
Registrable Securities) shall not be counted in determining whether such consent
or approval was given by the Holders of such required percentage.

(e) Successors and Assigns. Any person who purchases any Registrable
Securities from the Initial Purchasers shall be deemed, for purposes of this
Agreement, to be an assignee of the Initial Purchasers. This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties and shall inure to the benefit of and be binding upon each Holder
of any Registrable Securities.

(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be original and all of which taken together
shall constitute one and the same agreement.

(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES THEREOF.

(i) Severability. If any term provision, covenant or restriction of
this Agreement is held to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated thereby, and the parties hereto shall use their best efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction, it being intended that all of the rights and privileges of the
parties shall be enforceable to the fullest extent permitted by law.

(j) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and the registration rights
granted by the Company with respect to the Registrable Securities. Except as
provided in the Purchase Agreement, there are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein,
with respect to the registration rights granted by the Company with respect to
the Registrable Securities. This Agreement supersedes all prior agreements and
undertakings among the parties with respect to such registration rights. No
party hereto shall have any rights, duties or obligations other than those
specifically set forth in this Agreement. In no event will such methods of
distribution take the form of an underwritten offering of the Registrable
Securities without the prior agreement of the Company.

(k) Termination. This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Effectiveness Period, except for
any liabilities or obligations under Section 4, 5 or 6 hereof and the
obligations to make payments of and provide for liquidated damages under Section
2(e) hereof to the extent such 

14

damages accrue prior to the end of the Effectiveness Period, each of which 
shall remain in effect in accordance with its terms.

[The remainder of this page is intentionally left blank.]

15

IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

ENZON, INC.

By: /s/ Kenneth J. Zuerblis      
----------------------------------
Name: Kenneth J. Zuerblis
Title: VP, Finance, CFO and Secretary

Confirmed and accepted as of
the date first above written:

MORGAN STANLEY & CO. INCORPORATED
CIBC WORLD MARKETS CORP.
SG COWEN SECURITIES CORPORATION
LEGG MASON WOOD WALKER INCORPORATED

By: Morgan Stanley & Co. Incorporated

By: /s/ Michael J. Caputo         
--------------------------------
Name: Michael J. Caputo
Title: Vice President

16

Exhibit 5.1

[Dorsey & Whitney Letterhead]

August 13, 2001

Enzon, Inc.
20 Kingsbridge Road
Piscataway, New Jersey 08854

Ladies and Gentlemen:

We have acted as counsel to Enzon, Inc., a Delaware corporation (the
"Company"), in connection with the preparation of the Company's Registration
Statement on Form S-3 (the "Registration Statement"), filed with the Securities
and Exchange Commission under the Securities Act of 1933, as amended (the
"Securities Act"), relating to the registration of (i) $400,000,000 principal
amount at maturity of 4 1/2% Convertible Subordinated Notes due 2008 (the
"Notes"), and (ii) shares (the "Shares") of common stock, par value $0.01 per
share, of the Company issuable upon conversion of the Notes.

We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments as we have deemed necessary for the
purposes of rendering this opinion.

In such examination, we have assumed the genuineness of all signatures
and the authenticity of all documents submitted to us as originals and the
conformity to original documents of all documents submitted to us as certified
or photostatic copies. As to all questions of fact material to this opinion, we
have relied, without independent verification, upon statements and
representations of officers and other representatives of the Company and
certificates of public officials.

Based upon the foregoing, we are of the opinion that:

1. The Notes have been duly authorized by the Company and constitute
valid and binding obligations of the Company, enforceable in accordance with
their terms, and are entitled to the benefits of the Indenture, dated as of June
26, 2001 (the "Indenture"), between the Company and Wilmington Trust Company, as
trustee.

2. The Shares have been duly authorized and reserved and, when issued
and delivered upon conversion of the Notes in accordance with the terms of the
Notes and the Indenture, will be validly issued, fully paid and non-assessable.

The opinions set forth above are subject to the following
qualifications and exceptions:

(a) Our opinions are subject to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or other similar law of
general application affecting creditors' or secured creditors' rights, including
(without limitation) applicable fraudulent transfer laws.

(b) Our opinions are subject to the effect of general principles of
equity including (without limitation) concepts of materiality, reasonableness,
good faith and fair dealing, and other similar doctrines affecting the
enforceability of agreements generally (regardless of whether considered in a
proceeding in equity or at law). Without limiting the generality of the
foregoing, the availability of specific performance, injunctive relief and other
equitable remedies is subject to the discretion of the tribunal before which any
request for such remedies may be brought.

(c) Our opinions are subject to possible judicial action giving effect
to governmental actions or foreign laws affecting creditors' rights.

1

(d) We express no opinion as to the enforceability of choice of law or
forum selection provisions under the laws of any jurisdiction other than the
State of New York, or the waiver by the Company under Section 5.9 of the
Indenture or any waiver by the Company of any constitutional rights or remedies.

We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York, the federal laws of the
United States of America and the General Corporation Law of the State of
Delaware.

We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the caption "Legal
Matters" in the prospectus contained in this Registration Statement. In giving
such consent, we do not thereby admit that we are in the category of persons
whose consent is required under Section 7 of the Securities Act.

Very truly yours,

/s/ Dorsey and Whitney LLP

2

Exhibit 12.1

Enzon, Inc.
Ratio of Earnings to Fixed Charges
(dollars in thousands)

Year ended                                Nine months
---------------------------------------------------------------------        ended
2000           1999           1998           1997          1996        3/31/2001
---------------------------------------------------------------------     -----------

Net Income(Loss)                            $(6,306)       $(4,919)       $(3,617)       $(4,557)       $(5,175)       $ 8,217
Add:
Fixed Charges                                352            468            597            546            498            249
Less:
Capitalized interest                        --             --             --             --             --             --
----------------------------------------------------------------------------------
Net Income (Loss) as adjusted               $(5,954)       $(4,451)       $(3,020)       $(4,011)       $(4,677)       $ 8,466
==================================================================================

Fixed charges:
Interest (gross)                         $     4        $     8        $    14        $    15        $    13        $  --
Portion of rent representative of the
interest factor                       348            460            583            531            485            249
----------------------------------------------------------------------------------
Fixed charges                               $   352        $   468        $   597        $   546        $   498        $   249
----------------------------------------------------------------------------------

----------------------------------------------------------------------------------
Deficiency of earnings available to         $(6,306)       $(4,919)       $(3,617)       $(4,557)       $(5,175)           N/A
cover fixed charges                 ==================================================================================

Ratio of earnings to fixed charges              N/A            N/A            N/A            N/A            N/A           34:1

1

Exhibit 23.1

The Board of Directors
Enzon, Inc.:

We consent to the use of our report incorporated herein by reference
and to the reference to our firm under the heading "Experts" in the prospectus.

/s/ KPMG LLP

Short Hills, New Jersey
August 13, 2001

Exhibit 25.1

Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM T-1

STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE

CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)    X 
-------

WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)

Delaware                                      51-0055023
(State of incorporation)                   (I.R.S. employer identification no.)

Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)

Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)

ENZON, INC.
(Exact name of obligor as specified in its charter)

Delaware                             22-2372868
(State of incorporation)           (I.R.S. employer identification no.)

20 Kingsbridge Road                                     08854
Piscataway, New Jersey                                 (Zip Code)
(Address of principal executive offices)

4 1/2% Convertible Subordinated Notes due 2008
(Title of the indenture securities)

ITEM 1.  GENERAL INFORMATION.

Furnish the following information as to the trustee:

(a) Name and address of each examining or supervising 
authority to which it is subject.

Federal Deposit Insurance Co.                 State Bank Commissioner
Five Penn Center                              Dover, Delaware
Suite #2901
Philadelphia, PA

(b) Whether it is authorized to exercise corporate trust powers.

The trustee is authorized to exercise corporate trust
powers.

ITEM 2.  AFFILIATIONS WITH THE OBLIGOR.

If the obligor is an affiliate of the trustee,
describe each affiliation:

Based upon an examination of the books and records of
the trustee and upon information furnished by the obligor, the
obligor is not an affiliate of the trustee.

ITEM 16. LIST OF EXHIBITS.

List below all exhibits filed as part of this Statement of
Eligibility and Qualification.

A. Copy of the Charter of Wilmington Trust Company,
which includes the certificate of authority of
Wilmington Trust Company to commence business and the
authorization of Wilmington Trust Company to exercise
corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b) of 
Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust Company.

Pursuant to the requirements of the Trust Indenture Act of
1939, as amended, the trustee, Wilmington Trust Company, a corporation organized
and existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 23rd day
of July, 2001.

WILMINGTON TRUST COMPANY
[SEAL]
Attest:  \s\  Patricia A. Evans            By:   \s\  Donald G. McKelcan
------------------------------         -----------------------------
Assistant Secretary               Name:  Donald G. McKelcan
Title:  Vice President

EXHIBIT A

AMENDED CHARTER

Wilmington Trust Company

Wilmington, Delaware

As existing on May 9, 1987

Amended Charter
or
Act of Incorporation
of
Wilmington Trust Company

Wilmington Trust Company, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate the
Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the name
of which company was changed to "Wilmington Trust Company" by an amendment filed
in the Office of the Secretary of State on March 18, A.D. 1903, and the Charter
or Act of Incorporation of which company has been from time to time amended and
changed by merger agreements pursuant to the corporation law for state banks and
trust companies of the State of Delaware, does hereby alter and amend its
Charter or Act of Incorporation so that the same as so altered and amended shall
in its entirety read as follows:

First: - The name of this corporation is Wilmington Trust Company.

Second: - The location of its principal office in the State of Delaware
is at Rodney Square North, in the City of Wilmington, County of New
Castle; the name of its resident agent is Wilmington Trust Company
whose address is Rodney Square North, in said City. In addition to such
principal office, the said corporation maintains and operates branch
offices in the City of Newark, New Castle County, Delaware, the Town of
Newport, New Castle County, Delaware, at Claymont, New Castle County,
Delaware, at Greenville, New Castle County Delaware, and at Milford
Cross Roads, New Castle County, Delaware, and shall be empowered to
open, maintain and operate branch offices at Ninth and Shipley Streets,
418 Delaware Avenue, 2120 Market Street, and 3605 Market Street, all in
the City of Wilmington, New Castle County, Delaware, and such other
branch offices or places of business as may be authorized from time to
time by the agency or agencies of the government of the State of
Delaware empowered to confer such authority.

Third: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this Corporation
are to do any or all of the things herein mentioned as fully and to the
same extent as natural persons might or could do and in any part of the
world, viz.:

(1) To sue and be sued, complain and defend in any Court of
law or equity and to make and use a common seal, and alter the
seal at pleasure, to hold, purchase, convey, mortgage or
otherwise deal in real and personal estate and property, and
to appoint such officers and agents as the business of the
Corporation shall require, to make by-laws not inconsistent
with the Constitution or laws of the United States or of this
State, to discount bills, notes or other evidences of debt, to
receive deposits of money, or securities for money, to buy
gold and silver bullion and foreign coins, to buy and sell
bills of exchange, and generally to use, exercise and enjoy
all the powers, rights, privileges and franchises incident to
a corporation which are proper or necessary for the
transaction of the business of the Corporation hereby created.

(2) To insure titles to real and personal property, or any
estate or interests therein, and to guarantee the holder of
such property, real or personal, against any claim or claims,
adverse to his interest therein, and to prepare and give
certificates of title for any lands or premises in the State
of Delaware, or elsewhere.

1

(3) To act as factor, agent, broker or attorney in the
receipt, collection, custody, investment and management of
funds, and the purchase, sale, management and disposal of
property of all descriptions, and to prepare and execute all
papers which may be necessary or proper in such business.

(4) To prepare and draw agreements, contracts, deeds, leases,
conveyances, mortgages, bonds and legal papers of every
description, and to carry on the business of conveyancing in
all its branches.

(5) To receive upon deposit for safekeeping money, jewelry,
plate, deeds, bonds and any and all other personal property of
every sort and kind, from executors, administrators,
guardians, public officers, courts, receivers, assignees,
trustees, and from all fiduciaries, and from all other persons
and individuals, and from all corporations whether state,
municipal, corporate or private, and to rent boxes, safes,
vaults and other receptacles for such property.

(6) To act as agent or otherwise for the purpose of
registering, issuing, certificating, countersigning,
transferring or underwriting the stock, bonds or other
obligations of any corporation, association, state or
municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the two
parties, and in like manner may act as Treasurer of any
corporation or municipality.

(7) To act as Trustee under any deed of trust, mortgage, bond
or other instrument issued by any state, municipality, body
politic, corporation, association or person, either alone or
in conjunction with any other person or persons, corporation
or corporations.

(8) To guarantee the validity, performance or effect of any
contract or agreement, and the fidelity of persons holding
places of responsibility or trust; to become surety for any
person, or persons, for the faithful performance of any trust,
office, duty, contract or agreement, either by itself or in
conjunction with any other person, or persons, corporation, or
corporations, or in like manner become surety upon any bond,
recognizance, obligation, judgment, suit, order, or decree to
be entered in any court of record within the State of Delaware
or elsewhere, or which may now or hereafter be required by any
law, judge, officer or court in the State of Delaware or
elsewhere.

(9) To act by any and every method of appointment as trustee,
trustee in bankruptcy, receiver, assignee, assignee in
bankruptcy, executor, administrator, guardian, bailee, or in
any other trust capacity in the receiving, holding, managing,
and disposing of any and all estates and property, real,
personal or mixed, and to be appointed as such trustee,
trustee in bankruptcy, receiver, assignee, assignee in
bankruptcy, executor, administrator, guardian or bailee by any
persons, corporations, court, officer, or authority, in the
State of Delaware or elsewhere; and whenever this Corporation
is so appointed by any person, corporation, court, officer or
authority such trustee, trustee in bankruptcy, receiver,
assignee, assignee in bankruptcy, executor, administrator,
guardian, bailee, or in any other trust capacity, it shall not
be required to give bond with surety, but its capital stock
shall be taken and held as security for the performance of the
duties devolving upon it by such appointment.

(10) And for its care, management and trouble, and the
exercise of any of its powers hereby given, or for the
performance of any of the duties which it may undertake or be

2

called upon to perform, or for the assumption of any
responsibility the said Corporation may be entitled to receive
a proper compensation.

(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other securities,
obligations, contracts and evidences of indebtedness, of any
private, public or municipal corporation within and without
the State of Delaware, or of the Government of the United
States, or of any state, territory, colony, or possession
thereof, or of any foreign government or country; to receive,
collect, receipt for, and dispose of interest, dividends and
income upon and from any of the bonds, mortgages, debentures,
notes, shares of capital stock, securities, obligations,
contracts, evidences of indebtedness and other property held
and owned by it, and to exercise in respect of all such bonds,
mortgages, debentures, notes, shares of capital stock,
securities, obligations, contracts, evidences of indebtedness
and other property, any and all the rights, powers and
privileges of individual owners thereof, including the right
to vote thereon; to invest and deal in and with any of the
moneys of the Corporation upon such securities and in such
manner as it may think fit and proper, and from time to time
to vary or realize such investments; to issue bonds and secure
the same by pledges or deeds of trust or mortgages of or upon
the whole or any part of the property held or owned by the
Corporation, and to sell and pledge such bonds, as and when
the Board of Directors shall determine, and in the promotion
of its said corporate business of investment and to the extent
authorized by law, to lease, purchase, hold, sell, assign,
transfer, pledge, mortgage and convey real and personal
property of any name and nature and any estate or interest
therein.

(b) In furtherance of, and not in limitation, of the powers conferred
by the laws of the State of Delaware, it is hereby expressly provided
that the said Corporation shall also have the following powers:

(1) To do any or all of the things herein set forth, to the
same extent as natural persons might or could do, and in any
part of the world.

(2) To acquire the good will, rights, property and franchises
and to undertake the whole or any part of the assets and
liabilities of any person, firm, association or corporation,
and to pay for the same in cash, stock of this Corporation,
bonds or otherwise; to hold or in any manner to dispose of the
whole or any part of the property so purchased; to conduct in
any lawful manner the whole or any part of any business so
acquired, and to exercise all the powers necessary or
convenient in and about the conduct and management of such
business.

(3) To take, hold, own, deal in, mortgage or otherwise lien,
and to lease, sell, exchange, transfer, or in any manner
whatever dispose of property, real, personal or mixed,
wherever situated.

(4) To enter into, make, perform and carry out contracts of
every kind with any person, firm, association or corporation,
and, without limit as to amount, to draw, make, accept,
endorse, discount, execute and issue promissory notes, drafts,
bills of exchange, warrants, bonds, debentures, and other
negotiable or transferable instruments.

(5) To have one or more offices, to carry on all or any of its
operations and businesses, without restriction to the same
extent as natural persons might or could do, to purchase or
otherwise acquire, to hold, own, to mortgage, sell, convey or
otherwise dispose of, real 

3

and personal property, of every class and description, in any
State, District, Territory or Colony of the United States, and
in any foreign country or place.

(6) It is the intention that the objects, purposes and powers
specified and clauses contained in this paragraph shall
(except where otherwise expressed in said paragraph) be nowise
limited or restricted by reference to or inference from the
terms of any other clause of this or any other paragraph in
this charter, but that the objects, purposes and powers
specified in each of the clauses of this paragraph shall be
regarded as independent objects, purposes and powers.

Fourth: - (a) The total number of shares of all classes of stock which
the Corporation shall have authority to issue is forty-one million
(41,000,000) shares, consisting of:

(1) One million (1,000,000) shares of Preferred stock, par
value $10.00 per share (hereinafter referred to as "Preferred
Stock"); and

(2) Forty million (40,000,000) shares of Common Stock, par
value $1.00 per share (hereinafter referred to as "Common
Stock").

(b) Shares of Preferred Stock may be issued from time to time in one or
more series as may from time to time be determined by the Board of
Directors each of said series to be distinctly designated. All shares
of any one series of Preferred Stock shall be alike in every
particular, except that there may be different dates from which
dividends, if any, thereon shall be cumulative, if made cumulative. The
voting powers and the preferences and relative, participating, optional
and other special rights of each such series, and the qualifications,
limitations or restrictions thereof, if any, may differ from those of
any and all other series at any time outstanding; and, subject to the
provisions of subparagraph 1 of Paragraph (c) of this Article Fourth,
the Board of Directors of the Corporation is hereby expressly granted
authority to fix by resolution or resolutions adopted prior to the
issuance of any shares of a particular series of Preferred Stock, the
voting powers and the designations, preferences and relative, optional
and other special rights, and the qualifications, limitations and
restrictions of such series, including, but without limiting the
generality of the foregoing, the following:

(1) The distinctive designation of, and the number of shares
of Preferred Stock which shall constitute such series, which
number may be increased (except where otherwise provided by
the Board of Directors) or decreased (but not below the number
of shares thereof then outstanding) from time to time by like
action of the Board of Directors;

(2) The rate and times at which, and the terms and conditions
on which, dividends, if any, on Preferred Stock of such series
shall be paid, the extent of the preference or relation, if
any, of such dividends to the dividends payable on any other
class or classes, or series of the same or other class of
stock and whether such dividends shall be cumulative or
non-cumulative;

(3) The right, if any, of the holders of Preferred Stock of
such series to convert the same into or exchange the same for,
shares of any other class or classes or of any series of the
same or any other class or classes of stock of the Corporation
and the terms and conditions of such conversion or exchange;

4

(4) Whether or not Preferred Stock of such series shall be
subject to redemption, and the redemption price or prices and
the time or times at which, and the terms and conditions on
which, Preferred Stock of such series may be redeemed.

(5) The rights, if any, of the holders of Preferred Stock of
such series upon the voluntary or involuntary liquidation,
merger, consolidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation.

(6) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for the Preferred Stock of
such series; and

(7) The voting powers, if any, of the holders of such series
of Preferred Stock which may, without limiting the generality
of the foregoing include the right, voting as a series or by
itself or together with other series of Preferred Stock or all
series of Preferred Stock as a class, to elect one or more
directors of the Corporation if there shall have been a
default in the payment of dividends on any one or more series
of Preferred Stock or under such circumstances and on such
conditions as the Board of Directors may determine.

(c) (1) After the requirements with respect to preferential dividends
on the Preferred Stock (fixed in accordance with the provisions of
section (b) of this Article Fourth), if any, shall have been met and
after the Corporation shall have complied with all the requirements, if
any, with respect to the setting aside of sums as sinking funds or
redemption or purchase accounts (fixed in accordance with the
provisions of section (b) of this Article Fourth), and subject further
to any conditions which may be fixed in accordance with the provisions
of section (b) of this Article Fourth, then and not otherwise the
holders of Common Stock shall be entitled to receive such dividends as
may be declared from time to time by the Board of Directors.

(2) After distribution in full of the preferential amount, if
any, (fixed in accordance with the provisions of section (b)
of this Article Fourth), to be distributed to the holders of
Preferred Stock in the event of voluntary or involuntary
liquidation, distribution or sale of assets, dissolution or
winding-up, of the Corporation, the holders of the Common
Stock shall be entitled to receive all of the remaining assets
of the Corporation, tangible and intangible, of whatever kind
available for distribution to stockholders ratably in
proportion to the number of shares of Common Stock held by
them respectively. 

(3) Except as may otherwise be required by law or by the
provisions of such resolution or resolutions as may be adopted
by the Board of Directors pursuant to section (b) of this
Article Fourth, each holder of Common Stock shall have one
vote in respect of each share of Common Stock held on all
matters voted upon by the stockholders.

(d) No holder of any of the shares of any class or series of stock or
of options, warrants or other rights to purchase shares of any class or
series of stock or of other securities of the Corporation shall have
any preemptive right to purchase or subscribe for any unissued stock of
any class or series or any additional shares of any class or series to
be issued by reason of any increase of the authorized capital stock of
the Corporation of any class or series, or bonds, certificates of
indebtedness, debentures or other securities convertible into or
exchangeable for stock of the Corporation of any class or series, or
carrying any right to purchase stock of any class or series, but any
such unissued stock, additional authorized issue of shares of any class
or series of stock or securities convertible into or exchangeable for
stock, or carrying any right to purchase stock, may be issued and
disposed of pursuant to resolution of the Board of Directors to such
persons,

5

firms, corporations or associations, whether such holders or others,
and upon such terms as may be deemed advisable by the Board of
Directors in the exercise of its sole discretion.

(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and
rights of each other series of Preferred Stock shall, in each case, be
as fixed from time to time by the Board of Directors in the resolution
or resolutions adopted pursuant to authority granted in section (b) of
this Article Fourth and the consent, by class or series vote or
otherwise, of the holders of such of the series of Preferred Stock as
are from time to time outstanding shall not be required for the
issuance by the Board of Directors of any other series of Preferred
Stock whether or not the powers, preferences and rights of such other
series shall be fixed by the Board of Directors as senior to, or on a
parity with, the powers, preferences and rights of such outstanding
series, or any of them; provided, however, that the Board of Directors
may provide in the resolution or resolutions as to any series of
Preferred Stock adopted pursuant to section (b) of this Article Fourth
that the consent of the holders of a majority (or such greater
proportion as shall be therein fixed) of the outstanding shares of such
series voting thereon shall be required for the issuance of any or all
other series of Preferred Stock.

(f) Subject to the provisions of section (e), shares of any series of
Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and for
such consideration as shall be fixed by the Board of Directors.

(g) Shares of Common Stock may be issued from time to time as the Board
of Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the Board of Directors.

(h) The authorized amount of shares of Common Stock and of Preferred
Stock may, without a class or series vote, be increased or decreased
from time to time by the affirmative vote of the holders of a majority
of the stock of the Corporation entitled to vote thereon.

Fifth: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of directors
constituting the entire Board shall be not less than five nor more than
twenty-five as fixed from time to time by vote of a majority of the
whole Board, provided, however, that the number of directors shall not
be reduced so as to shorten the term of any director at the time in
office, and provided further, that the number of directors constituting
the whole Board shall be twenty-four until otherwise fixed by a
majority of the whole Board.

(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of one
class expiring each year. At the annual meeting of stockholders in
1982, directors of the first class shall be elected to hold office for
a term expiring at the next succeeding annual meeting, directors of the
second class shall be elected to hold office for a term expiring at the
second succeeding annual meeting and directors of the third class shall
be elected to hold office for a term expiring at the third succeeding
annual meeting. Any vacancies in the Board of Directors for any reason,
and any newly created directorships resulting from any increase in the
directors, may be filled by the Board of Directors, acting by a
majority of the directors then in office, although less than a quorum,
and any directors so chosen shall hold office until the next annual
election of directors. At such election, the stockholders shall elect a
successor to such director to hold office until the next election of
the class for which such director shall have been chosen and until his
successor shall be elected and qualified. No decrease in the number of
directors shall shorten the term of any incumbent director.

6

(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding
the fact that some lesser percentage may be specified by law, this
Charter or Act of Incorporation or the By-Laws of the Corporation), any
director or the entire Board of Directors of the Corporation may be
removed at any time without cause, but only by the affirmative vote of
the holders of two-thirds or more of the outstanding shares of capital
stock of the Corporation entitled to vote generally in the election of
directors (considered for this purpose as one class) cast at a meeting
of the stockholders called for that purpose.

(d) Nominations for the election of directors may be made by the Board
of Directors or by any stockholder entitled to vote for the election of
directors. Such nominations shall be made by notice in writing,
delivered or mailed by first class United States mail, postage prepaid,
to the Secretary of the Corporation not less than 14 days nor more than
50 days prior to any meeting of the stockholders called for the
election of directors; provided, however, that if less than 21 days'
notice of the meeting is given to stockholders, such written notice
shall be delivered or mailed, as prescribed, to the Secretary of the
Corporation not later than the close of the seventh day following the
day on which notice of the meeting was mailed to stockholders. Notice
of nominations which are proposed by the Board of Directors shall be
given by the Chairman on behalf of the Board.

(e) Each notice under subsection (d) shall set forth (i) the name, age,
business address and, if known, residence address of each nominee
proposed in such notice, (ii) the principal occupation or employment of
such nominee and (iii) the number of shares of stock of the Corporation
which are beneficially owned by each such nominee.

(f) The Chairman of the meeting may, if the facts warrant, determine
and declare to the meeting that a nomination was not made in accordance
with the foregoing procedure, and if he should so determine, he shall
so declare to the meeting and the defective nomination shall be
disregarded.

(g) No action required to be taken or which may be taken at any annual
or special meeting of stockholders of the Corporation may be taken
without a meeting, and the power of stockholders to consent in writing,
without a meeting, to the taking of any action is specifically denied.

Sixth: - The Directors shall choose such officers, agents and servants
as may be provided in the By-Laws as they may from time to time find
necessary or proper.

Seventh: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon corporations
organized under the Act entitled "An Act Providing a General
Corporation Law", approved March 10, 1899, as from time to time
amended.

Eighth: - This Act shall be deemed and taken to be a private Act.

Ninth: - This Corporation is to have perpetual existence.

Tenth: - The Board of Directors, by resolution passed by a majority of
the whole Board, may designate any of their number to constitute an
Executive Committee, which Committee, to the extent provided in said
resolution, or in the By-Laws of the Company, shall have and may
exercise all of the powers of the Board of Directors in the management
of the business and affairs of the Corporation, and shall have power to
authorize the seal of the Corporation to be affixed to all papers which
may require it.

7

Eleventh: - The private property of the stockholders shall not be
liable for the payment of corporate debts to any extent whatever.

Twelfth: - The Corporation may transact business in any part of the
world.

Thirteenth: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation by a
vote of the majority of the entire Board. The stockholders may make,
alter or repeal any By-Law whether or not adopted by them, provided
however, that any such additional By-Laws, alterations or repeal may be
adopted only by the affirmative vote of the holders of two-thirds or
more of the outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors (considered for
this purpose as one class).

Fourteenth: - Meetings of the Directors may be held outside of the
State of Delaware at such places as may be from time to time designated
by the Board, and the Directors may keep the books of the Company
outside of the State of Delaware at such places as may be from time to
time designated by them.

Fifteenth: - (a) (1) In addition to any affirmative vote required by
law, and except as otherwise expressly provided in sections (b) and (c)
of this Article Fifteenth:

(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any
Interested Stockholder (as hereinafter defined) or (ii) any
other corporation (whether or not itself an Interested
Stockholder), which, after such merger or consolidation, would
be an Affiliate (as hereinafter defined) of an Interested
Stockholder, or

(B) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of related
transactions) to or with any Interested Stockholder or any
Affiliate of any Interested Stockholder of any assets of the
Corporation or any Subsidiary having an aggregate fair market
value of $1,000,000 or more, or

(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or any
Subsidiary to any Interested Stockholder or any Affiliate of
any Interested Stockholder in exchange for cash, securities or
other property (or a combination thereof) having an aggregate
fair market value of $1,000,000 or more, or

(D) the adoption of any plan or proposal for the liquidation
or dissolution of the Corporation, or

(E) any reclassification of securities (including any reverse
stock split), or recapitalization of the Corporation, or any
merger or consolidation of the Corporation with any of its
Subsidiaries or any similar transaction (whether or not with
or into or otherwise involving an Interested Stockholder)
which has the effect, directly or indirectly, of increasing
the proportionate share of the outstanding shares of any class
of equity or convertible securities of the Corporation or any
Subsidiary which is directly or indirectly owned by any
Interested Stockholder, or any Affiliate of any Interested
Stockholder,

8

shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article Fifteenth as one class ("Voting Shares"). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.

(a) The term "business combination" as used in this Article
Fifteenth shall mean any transaction which is referred to in
any one or more of clauses (A) through (E) of paragraph 1 of
the section (a).

(b) The provisions of section (a) of this Article Fifteenth
shall not be applicable to any particular business combination
and such business combination shall require only such
affirmative vote as is required by law and any other
provisions of the Charter or Act of Incorporation or By-Laws
if such business combination has been approved by a majority
of the whole Board.

(c)  For the purposes of this Article Fifteenth:

(1) A "person" shall mean any individual, firm, corporation or other
entity.

(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any Subsidiary)
who or which as of the record date for the determination of
stockholders entitled to notice of and to vote on such business
combination, or immediately prior to the consummation of any such
transaction:

(A) is the beneficial owner, directly or indirectly, of more
than 10% of the Voting Shares, or

(B) is an Affiliate of the Corporation and at any time within
two years prior thereto was the beneficial owner, directly or
indirectly, of not less than 10% of the then outstanding
voting Shares, or

(C) is an assignee of or has otherwise succeeded in any share
of capital stock of the Corporation which were at any time
within two years prior thereto beneficially owned by any
Interested Stockholder, and such assignment or succession
shall have occurred in the course of a transaction or series
of transactions not involving a public offering within the
meaning of the Securities Act of 1933.

(3) A person shall be the "beneficial owner" of any Voting Shares:

(A) which such person or any of its Affiliates and Associates
(as hereafter defined) beneficially own, directly or
indirectly, or

(B) which such person or any of its Affiliates or Associates
has (i) the right to acquire (whether such right is
exercisable immediately or only after the passage of time),
pursuant to any agreement, arrangement or understanding or
upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (ii) the right to vote
pursuant to any agreement, arrangement or understanding, or

(C) which are beneficially owned, directly or indirectly, by
any other person with which such first mentioned person or any
of its Affiliates or Associates has any agreement, 

9

arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of capital stock of
the Corporation.

(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any
other Voting Shares which may be issuable pursuant to any agreement, or
upon exercise of conversion rights, warrants or options or otherwise.

(5) "Affiliate" and "Associate" shall have the respective meanings
given those terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as in effect on December 31,
1981.

(6) "Subsidiary" shall mean any corporation of which a majority of any
class of equity security (as defined in Rule 3a11-1 of the General
Rules and Regulations under the Securities Exchange Act of 1934, as in
effect on December 31, 1981) is owned, directly or indirectly, by the
Corporation; provided, however, that for the purposes of the definition
of Investment Stockholder set forth in paragraph (2) of this section
(c), the term "Subsidiary" shall mean only a corporation of which a
majority of each class of equity security is owned, directly or
indirectly, by the Corporation.

(d) majority of the directors shall have the power and duty to
determine for the purposes of this Article Fifteenth on the
basis of information known to them, (1) the number of Voting
Shares beneficially owned by any person (2) whether a person
is an Affiliate or Associate of another, (3) whether a person
has an agreement, arrangement or understanding with another as
to the matters referred to in paragraph (3) of section (c), or
(4) whether the assets subject to any business combination or
the consideration received for the issuance or transfer of
securities by the Corporation, or any Subsidiary has an
aggregate fair market value of $1,000,000 or more.

(e) Nothing contained in this Article 0 shall be construed to
relieve any Interested Stockholder from any fiduciary
obligation imposed by law.

Sixteenth: Notwithstanding any other provision of this Charter or Act
of Incorporation or the By-Laws of the Corporation (and in addition to
any other vote that may be required by law, this Charter or Act of
Incorporation by the By-Laws), the affirmative vote of the holders of
at least two-thirds of the outstanding shares of the capital stock of
the Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) shall be required to amend,
alter or repeal any provision of Articles Fifth, Thirteenth, Fifteenth
or Sixteenth of this Charter or Act of Incorporation.

Seventeenth: (a) a Director of this Corporation shall not be liable to
the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except to the extent such exemption from
liability or limitation thereof is not permitted under the Delaware
General Corporation Laws as the same exists or may hereafter be
amended.

(b) Any repeal or modification of the foregoing paragraph
shall not adversely affect any right or protection of a
Director of the Corporation existing hereunder with respect to
any act or omission occurring prior to the time of such repeal
or modification."

10

EXHIBIT B

BY-LAWS

WILMINGTON TRUST COMPANY

WILMINGTON, DELAWARE

As existing on February 20, 2000

BY-LAWS OF WILMINGTON TRUST COMPANY

ARTICLE I
Stockholders' Meetings

Section 1. The Annual Meeting of Stockholders shall be held on the
third Thursday in April each year at the principal office at the Company or at
such other date, time, or place as may be designated by resolution by the Board
of Directors.

Section 2. Special meetings of all stockholders may be called at any
time by the Board of Directors, the Chairman of the Board or the President.

Section 3. Notice of all meetings of the stockholders shall be given by
mailing to each stockholder at least ten (10) days before said meeting, at his
last known address, a written or printed notice fixing the time and place of
such meeting.

Section 4. A majority in the amount of the capital stock of the Company
issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each share of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.

ARTICLE II
Directors

Section 1. The authorized number of directors that shall constitute the
Board of Directors shall be fixed from time to time by or pursuant to a
resolution passed by a majority of the Board within the parameters set by the
Charter of the Bank. No more than two directors may also be employees of the
Company or any affiliate thereof.

Section 2. Except as provided in these Bylaws or as otherwise required
by law, there shall be no qualifications for election or service as directors of
the Company. In addition to any other provisions of these Bylaws, to be
qualified for nomination for Election or appointment to the Board of Directors
each person must have not attained the age of sixty nine years at the time of
such election or appointment, provided however, the Nominating and Corporate
Governance Committee may waive such qualification as to a particular candidate
otherwise qualified to serve as a director upon a good faith determination by
such committee that such a waiver is in the best interests of the Company and
its stockholders. The Chairman of the Board of Directors shall not be qualified
to continue to serve as a director upon the termination of his or her service in
that office for any reason.

Section 3. The class of Directors so elected shall hold office for
three years or until their successors are elected and qualified.

Section 4. The affairs and business of the Company shall be managed and
conducted by the Board of Directors.

Section 5. The Board of Directors shall meet at the principal office of
the Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Board of
Directors or the President.

Section 6. Special meetings of the Board of Directors may be called at
any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.

Section 7. A majority of the directors elected and qualified shall be
necessary to constitute a quorum for the transaction of business at any meeting
of the Board of Directors.

Section 8. Written notice shall be sent by mail to each director of any
special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.

Section 9. In the event of the death, resignation, removal, inability
to act, or disqualification of any director, the Board of Directors, although
less than a quorum, shall have the right to elect the successor who shall hold
office for the remainder of the full term of the class of directors in which the
vacancy occurred, and until such director's successor shall have been duly
elected and qualified.

Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect from
its own members a Chairman of the Board of Directors and a President who may be
the same person. The Board of Directors shall also elect at such meeting a
Secretary and a Treasurer, who may be the same person, may appoint at any time
such other committees and elect or appoint such other officers as it may deem
advisable. The Board of Directors may also elect at such meeting one or more
Associate Directors.

Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.

Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or divisions of the Company as it may deem
advisable.

ARTICLE III
Committees

Section 1.  Executive Committee

(A) The Executive Committee shall be composed of not more than
nine members who shall be selected by the Board of Directors from its own
members and who shall hold office during the pleasure of the Board.

(B) The Executive Committee shall have all the powers of the
Board of Directors when it is not in session to transact all business for and in
behalf of the Company that may be brought before it.

(C) The Executive Committee shall meet at the principal office
of the Company or elsewhere in its discretion at such times to be determined by
a majority of its members, or at the call of the Chairman of the Executive
Committee or at the call of the Chairman of the Board of Directors. The 

2

majority of its members shall be necessary to constitute a quorum for the
transaction of business. Special meetings of the Executive Committee may be held
at any time when a quorum is present.

(D) Minutes of each meeting of the Executive Committee shall
be kept and submitted to the Board of Directors at its next meeting.

(E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.

(F) In the event of a state of disaster of sufficient severity
to prevent the conduct and management of the affairs and business of the Company
by its directors and officers as contemplated by these By-Laws any two available
members of the Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Company in accordance with the
provisions of Article III of these By-Laws; and if less than three members of
the Trust Committee is constituted immediately prior to such disaster shall be
available for the transaction of its business, such Executive Committee shall
also be empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at such
time, of a minimum of two members of such Executive Committee, any three
available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the foregoing provisions of this Section. This By-Law shall be subject to
implementation by Resolutions of the Board of Directors presently existing or
hereafter passed from time to time for that purpose, and any provisions of these
By-Laws (other than this Section) and any resolutions which are contrary to the
provisions of this Section or to the provisions of any such implementary
Resolutions shall be suspended during such a disaster period until it shall be
determined by any interim Executive Committee acting under this section that it
shall be to the advantage of the Company to resume the conduct and management of
its affairs and business under all of the other provisions of these By-Laws.

Section 2.  Audit Committee

(A) The Audit Committee shall be composed of five members who
shall be selected by the Board of Directors from its own members, none of whom
shall be an officer of the Company, and shall hold office at the pleasure of the
Board.

(B) The Audit Committee shall have general supervision over
the Audit Division in all matters however subject to the approval of the Board
of Directors; it shall consider all matters brought to its attention by the
officer in charge of the Audit Division, review all reports of examination of
the Company made by any governmental agency or such independent auditor employed
for that purpose, and make such recommendations to the Board of Directors with
respect thereto or with respect to any other matters pertaining to auditing the
Company as it shall deem desirable.

(C) The Audit Committee shall meet whenever and wherever the
majority of its members shall deem it to be proper for the transaction of its
business, and a majority of its Committee shall constitute a quorum.

Section 3.  Compensation Committee

(A) The Compensation Committee shall be composed of not more
than five (5) members who shall be selected by the Board of Directors from its
own members who are not officers of the Company and who shall hold office during
the pleasure of the Board.

3

(B) The Compensation Committee shall in general advise upon
all matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.

(C) Meetings of the Compensation Committee may be called at
any time by the Chairman of the Compensation Committee, the Chairman of the
Board of Directors, or the President of the Company.

Section 4.  Associate Directors

(A) Any person who has served as a director may be elected by
the Board of Directors as an associate director, to serve during the pleasure of
the Board.

(B) An associate director shall be entitled to attend all
directors meetings and participate in the discussion of all matters brought to
the Board, with the exception that he would have no right to vote. An associate
director will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.

Section 5.  Absence or Disqualification of Any Member of a Committee

(A) In the absence or disqualification of any member of any
Committee created under Article III of the By-Laws of this Company, the member
or members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the place of any such
absent or disqualified member.

ARTICLE IV
Officers

Section 1. The Chairman of the Board of Directors shall preside at all
meetings of the Board and shall have such further authority and powers and shall
perform such duties as the Board of Directors may from time to time confer and
direct. He shall also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of the Company.

Section 2. The Vice Chairman of the Board. The Vice Chairman of the
Board of Directors shall preside at all meetings of the Board of Directors at
which the Chairman of the Board shall not be present and shall have such further
authority and powers and shall perform such duties as the Board of Directors or
the Chairman of the Board may from time to time confer and direct.

Section 3. The President shall have the powers and duties pertaining to
the office of the President conferred or imposed upon him by statute or assigned
to him by the Board of Directors. In the absence of the Chairman of the Board
the President shall have the powers and duties of the Chairman of the Board.

Section 4. The Chairman of the Board of Directors or the President as
designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.

4

Section 5. There may be one or more Vice Presidents, however
denominated by the Board of Directors, who may at any time perform all the
duties of the Chairman of the Board of Directors and/or the President and such
other powers and duties as may from time to time be assigned to them by the
Board of Directors, the Executive Committee, the Chairman of the Board or the
President and by the officer in charge of the department or division to which
they are assigned.

Section 6. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings and
to recording the same in the minute books of the Company. In addition to the
other notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.

Section 7. The Treasurer shall have general supervision over all assets
and liabilities of the Company. He shall be custodian of and responsible for all
monies, funds and valuables of the Company and for the keeping of proper records
of the evidence of property or indebtedness and of all the transactions of the
Company. He shall have general supervision of the expenditures of the Company
and shall report to the Board of Directors at each regular meeting of the
condition of the Company, and perform such other duties as may be assigned to
him from time to time by the Board of Directors of the Executive Committee.

Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.

There may be one or more subordinate accounting or controller officers
however denominated, who may perform the duties of the Controller and such
duties as may be prescribed by the Controller.

Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.

There shall be an Auditor and there may be one or more Audit Officers,
however denominated, who may perform all the duties of the Auditor and such
duties as may be prescribed by the officer in charge of the Audit Division.

Section 10. There may be one or more officers, subordinate in rank to
all Vice Presidents with such functional titles as shall be determined from time
to time by the Board of Directors, who shall ex officio hold the office
Assistant Secretary of this Company and who may perform such duties as may be
prescribed by the officer in charge of the department or division to whom they
are assigned.

Section 11. The powers and duties of all other officers of the Company
shall be those usually pertaining to their respective offices, subject to the
direction of the Board of Directors, the Executive Committee, Chairman of the
Board of Directors or the President and the officer in charge of the department
or division to which they are assigned.

5

ARTICLE V
Stock and Stock Certificates

Section 1. Shares of stock shall be transferrable on the books of the
Company and a transfer book shall be kept in which all transfers of stock shall
be recorded.

Section 2. Certificates of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of Directors
and countersigned by the Secretary or Treasurer or an Assistant Secretary, and
the seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of stock
shall be issued only upon giving such security as may be satisfactory to the
Board of Directors or the Executive Committee.

Section 3. The Board of Directors of the Company is authorized to fix
in advance a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining such consent.

ARTICLE VI
Seal

Section 1. The corporate seal of the Company shall be in the following
form:

Between two concentric circles the words "Wilmington
Trust Company" within the inner circle the words
"Wilmington, Delaware."

ARTICLE VII
Fiscal Year

Section 1. The fiscal year of the Company shall be the calendar year.

ARTICLE VIII
Execution of Instruments of the Company

Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver and
the Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, 

6

and any and all such instruments shall have the same force and validity as
though expressly authorized by the Board of Directors and/or the Executive
Committee.

ARTICLE IX
Compensation of Directors and Members of Committees

Section 1. Directors and associate directors of the Company, other than
salaried officers of the Company, shall be paid such reasonable honoraria or
fees for attending meetings of the Board of Directors as the Board of Directors
may from time to time determine. Directors and associate directors who serve as
members of committees, other than salaried employees of the Company, shall be
paid such reasonable honoraria or fees for services as members of committees as
the Board of Directors shall from time to time determine and directors and
associate directors may be employed by the Company for such special services as
the Board of Directors may from time to time determine and shall be paid for
such special services so performed reasonable compensation as may be determined
by the Board of Directors.

ARTICLE X
Indemnification

Section 1. (A) The Corporation shall indemnify and hold harmless, to
the fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.

(B) The Corporation shall pay the expenses incurred in
defending any proceeding in advance of its final disposition, provided, however,
that the payment of expenses incurred by a Director or officer in his capacity
as a Director or officer in advance of the final disposition of the proceeding
shall be made only upon receipt of an undertaking by the Director or officer to
repay all amounts advanced if it should be ultimately determined that the
Director or officer is not entitled to be indemnified under this Article or
otherwise.

(C) If a claim for indemnification or payment of expenses,
under this Article X is not paid in full within ninety days after a written
claim therefor has been received by the Corporation the claimant may file suit
to recover the unpaid amount of such claim and, if successful in whole or in
part, shall be entitled to be paid the expense of prosecuting such claim. In any
such action the Corporation shall have the burden of proving that the claimant
was not entitled to the requested indemnification of payment of expenses under
applicable law.

(D) The rights conferred on any person by this Article X shall
not be exclusive of any other rights which such person may have or hereafter
acquire under any statute, provision of the Charter or Act of Incorporation,
these By-Laws, agreement, vote of stockholders or disinterested Directors or
otherwise.

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(E) Any repeal or modification of the foregoing provisions of
this Article X shall not adversely affect any right or protection hereunder of
any person in respect of any act or omission occurring prior to the time of such
repeal or modification.

ARTICLE XI
Amendments to the By-Laws

Section 1. These By-Laws may be altered, amended or repealed, in whole
or in part, and any new By-Law or By-Laws adopted at any regular or special
meeting of the Board of Directors by a vote of the majority of all the members
of the Board of Directors then in office.

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EXHIBIT C

Section 321(b) Consent

Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of examinations
by Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.

WILMINGTON TRUST COMPANY

Dated:  July 23, 2001         By:      \s\  Donald G. MacKelcan
--------------------------------
Name:  Donald G. MacKelcan
Title: Vice President

EXHIBIT D

NOTICE

This form is intended to assist state nonmember banks and
savings banks with state publication requirements. It has not
been approved by any state banking authorities. Refer to your
appropriate state banking authorities for your state
publication requirements.

R E P O R T   O F   C O N D I T I O N

Consolidating domestic subsidiaries of the

WILMINGTON TRUST COMPANY           of       WILMINGTON        
--------------------------------------------   ------------------------
Name of Bank                                  City

in the State of   DELAWARE  , at the close of business on March 31, 2001.

ASSETS

Thousands of dollars

Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins..........                 195,465
Interest-bearing balances ...................................                       0
Held-to-maturity securities ..........................................                  17,881
Available-for-sale securities ........................................               1,294,541
Federal funds sold and securities purchased under agreements to resell                 505,993
Loans and lease financing receivables:
Loans and leases, net of unearned income ....................   4,687,583
LESS:  Allowance for loan and lease losses ..................      70,510
LESS:  Allocated transfer risk reserve ......................           0
Loans and leases, net of unearned income, allowance, and reserve .....                4,617,073
Assets held in trading accounts ......................................                        0
Premises and fixed assets (including capitalized leases) .............                  127,356
Other real estate owned ..............................................                      523
Investments in unconsolidated subsidiaries and associated companies ..                    1,748
Customers' liability to this bank on acceptances outstanding .........                        0
Intangible assets:                                                                    
a.  Goodwill ................................................                      249
b.  Other intangible assets .................................                    4,883
Other assets .........................................................                  161,175
Total assets .........................................................                6,926,887

CONTINUED ON NEXT PAGE

LIABILITIES

Deposits:
In domestic offices ..................................................                5,420,816
Noninterest-bearing .........................................   1,004,202
Interest-bearing, ...........................................     416,614
Federal funds purchased and Securities sold under
agreements to repurchase ...........................................                  247,037
Trading liabilities (from Schedule RC-D) .............................                        0
Other borrowed money (includes mortgage indebtedness                                 
and obligations under capitalized leases: ..........................                  631,250
Bank's liability on acceptances executed and outstanding .............                        0
Subordinated notes and debentures ....................................                        0
Other liabilities (from Schedule RC-G) ...............................                  117,530
Total liabilities ....................................................                6,416,633

EQUITY CAPITAL                                                                       

Perpetual preferred stock and related surplus ........................                        0
Common Stock .........................................................                      500
Surplus (exclude all surplus related to preferred stock) .............                   62,118
a.  Retained earnings ................................................                  440,962
b.  Accumulated other comprehensive income ...........................                    6,674
Total equity capital .................................................                  510,254
Total liabilities, limited-life preferred stock, and equity capital ..                6,926,887

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