Exhibit
      4.1

    
 

    LCA-VISION
      INC.

     

    AND

     

    COMPUTERSHARE
      TRUST COMPANY, N.A. 

     

    Rights
      Agent

     

    Rights
      Agreement

     

    Dated
      as of November 24, 2008

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
      OF CONTENTS

    
 

    
      
        	
                Section

              	
                1.
                  Certain Definitions

              	
                1

              
	
                Section

              	
                2.
                  Appointment of Rights Agent

              	
                5

              
	
                Section

              	
                3.
                  Issuance of Rights Certificates

              	
                6

              
	
                Section

              	
                4.
                  Form of Rights Certificates

              	
                7

              
	
                Section

              	
                5.
                  Countersignature and Registration

              	
                8

              
	
                Section

              	
                6.
                  Transfer, Split-Up, Combination and Exchange of Rights Certificates;
                  Mutilated,

              	 
	
                Destroyed,
                  Lost or Stolen Rights Certificates

              	
                8

              
	
                Section

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

              	
                9

              
	
                Section

              	
                8.
                  Cancellation and Destruction of Rights Certificates

              	
                10

              
	
                Section

              	
                9.
                  Reservation and Availability of Capital Stock

              	
                11

              
	
                Section

              	
                10. Preferred
                  Stock Record Date

              	
                12

              
	
                Section

              	
                11. Adjustment
                  of Purchase Price, Number and Kind of Shares or Number of
                  Rights

              	
                12

              
	
                Section

              	
                12. Certificate
                  of Adjusted Purchase Price or Number of Shares

              	
                19

              
	
                Section

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

              	
                19

              
	
                Section

              	
                14.
                  Fractional Rights and Fractional Shares

              	
                21

              
	
                Section

              	
                15. Rights
                  of Action

              	
                22

              
	
                Section

              	
                16. Agreement
                  of Rights Holders

              	
                22

              
	
                Section

              	
                17. Rights
                  Certificate Holder Not Deemed a Stockholder

              	
                23

              
	
                Section

              	
                18. Concerning
                  the Rights Agent

              	
                23

              
	
                Section

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

              	
                23

              
	
                Section

              	
                20.
                  Duties of Rights Agent

              	
                24

              
	
                Section

              	
                21. Change
                  of Rights Agent

              	
                25

              
	
                Section

              	
                22. Issuance
                  of New Rights Certificates

              	
                26

              
	
                Section

              	
                23. Redemption
                  and Termination

              	
                26

              
	
                Section

              	
                24. Exchange

              	
                27

              
	
                Section

              	
                25. Notice
                  of Certain Events

              	
                28

              
	
                Section

              	
                26. Notices

              	
                29

              
	
                Section

              	
                27. Supplements
                  and Amendments

              	
                29

              
	
                Section

              	
                28. Successors

              	
                30

              
	
                Section

              	
                29. Determinations
                  and Actions by the Board of Directors, etc

              	
                30

              
	
                Section

              	
                30. Benefits
                  of this Agreement

              	
                30

              
	
                Section

              	
                31. Severability

              	
                30

              
	
                Section

              	
                32. Governing
                  Law

              	
                30

              
	
                Section

              	
                33. Counterparts

              	
                30

              
	
                Section

              	
                34. Descriptive
                  Headings

              	
                31

              
	
                Section

              	
                35. Force
                  Majeure

              	
                31

              


      

    

     

    
      
        	
                Exhibit
                  A

              	
                 Form
                  of Rights Certificate

              
	
                Exhibit
                  B

              	
                 Summary
                  of Rights to Purchase Preferred
                  Stock

              


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    RIGHTS
      AGREEMENT

     

    This
      RIGHTS AGREEMENT, dated as of November 24, 2008 (the “Agreement”), is entered
      into between LCA-Vision Inc., a Delaware corporation (the “Company”), and
      Computershare Trust Company, N.A., a federally chartered trust company (the
      “Rights Agent”).

     

    WHEREAS,
      on November 11, 2008 (the “Rights Dividend Declaration Date”), the Board of
      Directors of the Company authorized and declared a dividend distribution of
      one
      Right (as hereinafter defined) for each share of common stock, par value $.001
      per share, of the Company (the “Common Stock”) outstanding at the Close of
      Business on November 24, 2008 (the “Record Date”), and has authorized the
      issuance of one Right (as such number may hereinafter be adjusted pursuant
      to
      the provisions of Section 11(p) hereof) for each share of Common Stock of the
      Company issued between the Record Date (whether originally issued or delivered
      from the Company's treasury) and the Distribution Date (as hereinafter defined)
      each Right initially representing the right to purchase one one-hundredth
      (1/100) of a share of Series A Junior Participating Preferred Stock of the
      Company (the “Preferred Stock”) having the rights, powers and preferences set
      forth in the Certificate of Designation of Series A Junior Participating
      Preferred Stock issued pursuant to the Company's Restated Certificate of
      Incorporation, upon the terms and subject to the conditions hereinafter set
      forth (the “Rights”).

     

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

     

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

     

    (a) “Acquiring
      Person” shall mean (x) any Person who or which, together with all Affiliates and
      Associates of such Person, shall be the Beneficial Owner of twenty percent
      (20%)
      or more of the shares of Common Stock then outstanding, but shall not include
      (i) the Company, (ii) any Subsidiary of the Company, (iii) any employee benefit
      plan of the Company, or of any Subsidiary of the Company, or any Person or
      entity organized, appointed or established by the Company for or pursuant to
      the
      terms of any such plan, (iv) any Person who becomes the Beneficial Owner of
      twenty percent (20%) or more of the shares of Common Stock then outstanding
      as a
      result of a reduction in the number of shares of Common Stock outstanding due
      to
      the repurchase of shares of Common Stock by the Company or at a time when the
      rights are not redeemable, unless and until such Person, after becoming aware
      that such Person has become the Beneficial Owner of twenty percent (20%) or
      more
      of the then outstanding shares of Common Stock, acquires beneficial ownership
      of
      additional shares of Common Stock representing one percent (1%) or more of
      the
      shares of Common Stock then outstanding, (v) any such Person who has reported
      or
      is required to report such ownership (but less than twenty percent (20%)) on
      Schedule 13G under the Securities Exchange Act of 1934, as amended and in effect
      on the date of the Agreement (the “Exchange Act”) (or any comparable or
      successor report) or on Schedule 13D under the Exchange Act (or any comparable
      or successor report) which Schedule 13D does not state any intention to or
      reserve the right to control or influence the management or policies of the
      Company or engage in any of the actions specified in Item 4 of such schedule
      (other than the disposition of the Common Stock) and, within ten (10) Business
      Days of being requested by the Company to advise it regarding the same,
      certifies to the Company that such Person acquired shares of Common Stock in
      excess of nineteen and nine-tenths percent (19.9%) inadvertently or without
      knowledge of the terms of the Rights and who or which, together with all
      Affiliates and Associates, thereafter does not acquire additional shares of
      Common Stock while the Beneficial Owner of twenty percent (20%) or more of
      the
      shares of Common Stock then outstanding; provided,
      however,
      that if
      the Person requested to so certify fails to do so within ten (10) Business
      Days,
      then such Person shall become an Acquiring Person immediately after such ten
      (10)-Business-Day period, (vi) any Person who is, as of the Record Date the
      Beneficial Owner of twenty percent (20%) or more of the shares of Common Stock
      then outstanding, so long as such Person thereafter does not, while the
      Beneficial Owner of twenty percent (20%) or more of the shares of Common Stock
      then outstanding, acquire additional shares of Common Stock representing one
      percent (1%) or more of the shares of Common Stock then outstanding, unless
      any
      such acquisition of additional shares is pursuant to (A) a stock dividend or
      distribution by the Company or (B) a Qualified Offer (as defined in Section
      11(a) (ii)); provided,
      however,
      that
      such Person shall cease to be excluded from the definition of Acquiring Person
      pursuant to this clause (vi) at such time, if any, as such Person ceases to
      be
      the Beneficial Owner of twenty percent (20%) or more of the shares of Common
      Stock then outstanding, or (y) any Person who or which has entered into any
      agreement or arrangement with the Company or any Subsidiary of the Company
      providing for an Acquisition Transaction (as defined in Section 1(b)
      hereof).

     

    
      
        
        

      

      
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    Notwithstanding
      the foregoing, if a bona fide swaps dealer who would otherwise be an “Acquiring
      Person” has become so as a result of its actions in the ordinary course of its
      business that the Board of Directors of the Company determines in good faith
      were taken without the intent of evading or assisting any other Person to evade
      the purposes and intent of this Agreement, or otherwise seeking to control
      or
      influence the management or policies of the Company, then such Person shall
      not
      be deemed to be an “Acquiring Person” for any purposes of this
      Agreement.

    


    (b) “Acquisition
      Transaction” shall
      mean (x) a merger, consolidation or similar transaction involving the Company
      or
      any of its Subsidiaries as a result of which stockholders of the Company will
      no
      longer own a majority of the outstanding shares of Common Stock of the Company
      or a publicly traded entity which controls the Company or, if appropriate,
      the
      entity into which the Company may be merged, consolidated or otherwise combined
      (based solely on the shares of Common Stock received or retained by such
      stockholders, in their capacity as stockholders of the Company, pursuant to
      such
      transaction), (y) a purchase or other acquisition of all or a substantial
      portion of the assets of the Company and its Subsidiaries, or (z) a purchase
      or
      other acquisition of securities representing twenty percent (20%) or more of
      the
      shares of Common Stock then outstanding.

     

    (c) “Adjustment
      Shares” shall have the meaning set forth in Section 11(a)(ii)
      hereof.

     

    (d) “Adverse
      Person” shall mean any Person declared to be an Adverse Person by the Board of
      Directors upon a determination that the criteria set forth in Section
      11(a)(ii)(B) apply to such Person.

     

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

     

    (f) A
      Person
      shall be deemed the “Beneficial Owner” of, and shall be deemed to “beneficially
      own,” any securities:

     

    (i) which
      such Person or any of such Person's Affiliates or Associates, directly or
      indirectly, has the right to acquire (whether such right is exercisable
      immediately or only after the passage of time) pursuant to any agreement,
      arrangement or understanding (whether or not in writing) or upon the exercise
      of
      conversion rights, exchange rights, other rights, warrants or options, or
      otherwise; provided, however, that a Person shall not be deemed the “Beneficial
      Owner” of, or to “beneficially own,” (A) securities tendered pursuant to a
      tender or exchange offer made by such Person or any of such Person's Affiliates
      or Associates until such tendered securities are accepted for purchase or
      exchange, (B) securities issuable upon exercise of Rights at any time prior
      to
      the occurrence of a Triggering Event (as hereinafter defined), or (C) securities
      issuable upon exercise of Rights from and after the occurrence of a Triggering
      Event which Rights were acquired by such Person or any of such Person's
      Affiliates or Associates prior to the Distribution Date (as hereinafter defined)
      or pursuant to Section 3(a) or Section 22 hereof (the “Original Rights”) or
      pursuant to Section 11(i) hereof in connection with an adjustment made with
      respect to any Original Rights;

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (ii) which
      such Person or any of such Person's Affiliates or Associates, directly or
      indirectly, has the right to vote or dispose of or has “beneficial ownership” of
      (as determined pursuant to Rule 13d-3 of the General Rules and Regulations
      under
      the Exchange Act), including pursuant to any agreement, arrangement or
      understanding, whether or not in writing; provided, however, that a Person
      shall
      not be deemed the “Beneficial Owner” of, or to “beneficially own,” any security
      under this subparagraph (ii) as a result of an agreement, arrangement or
      understanding to vote such security if such agreement, arrangement or
      understanding: (A) arises solely from a revocable proxy given in response to
      a
      public proxy or consent solicitation made pursuant to, and in accordance with,
      the applicable provisions of the General Rules and Regulations under the
      Exchange Act, and (B) is not reportable by such Person on Schedule 13D under
      the
      Exchange Act tor any comparable or successor report); 

     

    (iii) which
      are
      beneficially owned, directly or indirectly, by any other Person (or any
      Affiliate or Associate thereof) with which such Person (or any of such Person's
      Affiliates or Associates) has any agreement, arrangement or understanding
      (whether or not in writing), for the purpose of acquiring, holding, voting
      (except pursuant to a revocable proxy as described in the proviso to
      subparagraph (ii) of this paragraph (f)) or disposing of any voting securities
      of the Company; or

     

    (iv) which
      are
      beneficially owned, directly or indirectly, by a Counterparty under any
      Derivatives Contract (without regard to any short or similar position under
      the
      same or any other Derivatives Contract) to which such Person or any of such
      Person’s Affiliates or Associates is a Receiving Party (as such terms are
      defined in the immediately following paragraph); provided however that the
      number of securities that a Person is deemed to beneficially own pursuant to
      this clause (iv) in connection with a particular Derivatives Contract shall
      not
      exceed the number of Notional Securities that are subject to such Derivatives
      Contract; provided, further, that the number of securities beneficially owned
      by
      each Counterparty (“Counterparty A”) under a Derivatives Contract shall for
      purposes of this clause (iv) be deemed to include all securities that are
      beneficially owned, directly or indirectly, by a Counterparty (“Counterparty B”)
      under any Derivatives Contract to which such Counterparty A is a Receiving
      Party, with this proviso being applied to successive Counterparties as
      appropriate.

     

    A
      “Derivatives Contract” is a contract between two parties (the “Receiving Party”
and the “Counterparty”) that is designed to produce economic benefits and risks
      to the Receiving Party that correspond substantially to the ownership by the
      Receiving Party of a number of securities (the number corresponding to such
      economic benefits and risks, the “Notional Securities”), regardless of whether
      obligations under such contract are settled through the delivery of cash,
      securities or other property, without regard to any short position under the
      same or any other Derivative Contract.

    


    Provided,
      however,
      that
      nothing in this paragraph (f) shall cause a Person engaged in business as an
      underwriter of securities to be the “Beneficial Owner” of, or to “beneficially
      own,” any securities acquired through such Person's participation in good faith
      in a firm commitment underwriting until the expiration of forty (40) days after
      the date of such acquisition, and then only if such securities continue to
      be
      owned by such Person at such expiration of forty (40) days and provided further,
      however,
      that
      any stockholder of the Company, with affiliate(s), associate(s) or other
      person(s) who may be deemed representatives of it serving as director(s) of
      the
      Company, shall not be deemed to beneficially own securities held by other
      Persons as a result of (i) persons affiliated or otherwise associated with
      such
      stockholder serving as directors or taking any action in connection therewith,
      (ii) discussing the status of its shares with the Company or other stockholders
      of the Company similarly situated or (iii) voting or acting in a manner similar
      to other stockholders similarly situated, absent a specific finding by the
      Board
      of Directors of an express agreement among such stockholders to act in concert
      with one another as stockholders so as to cause, in the good faith judgment
      of
      the Board of Directors, each such stockholder to be the Beneficial Owner of
      the
      shares held by the other stockholder(s).

     

    
      
        
        

      

      
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    (g) “Business
      Day” shall mean any day other than a Saturday, Sunday or a day on which banking
      institutions in the State of Massachusetts or Ohio are authorized or obligated
      by law or executive order to close.

     

    (h) “Close
      of
      Business” on any given date shall mean 5:00 P.M., Eastern time, on such date;
      provided, however, that if such date is not a Business Day, it shall mean 5:00
      P.M., Eastern time, on the next succeeding Business Day.

     

    (i) “Common
      Stock” shall have the meaning ascribed in the recitals, except that “Common
      Stock” when used with reference to any Person other than the Company shall mean
      the capital stock of such Person with the greatest voting power, or the equity
      securities or other equity interest having power to control or direct the
      management, of such Person.

     

    (j) “Common
      Stock Equivalents” shall have the meaning set forth in Section 11(a)(iii)
      hereof.

     

    (k) “Current
      Market Price” shall have the meaning set forth in Section 11(d)(i)
      hereof.

     

    (l) “Current
      Value” shall have the meaning set forth in Section 11(a)(iii)
      hereof.

     

    (m) “Distribution
      Date” shall have the meaning set forth in Section 3(a) hereof.

     

    (n) “Equivalent
      Preferred Stock” shall have the meaning set forth in Section 11(h)
      hereof,

     

    (o) “Exchange
      Act” shall mean the Securities Exchange Act of 1934, as amended and in effect on
      the date of the Agreement.

     

    (p) “Exchange
      Ratio” shall have the meaning set forth in Section 24 hereof.

     

    (q) “Expiration
      Date” shall have the meaning set forth in Section 7(a) hereof.

     

    (r) “Final
      Expiration Date” shall have the meaning set forth in Section 7(a)
      hereof.

     

    (s) “Person”
      shall mean any individual, firm, corporation, partnership or other
      entity.

     

    (t) “Preferred
      Stock” shall have the meaning ascribed in the recitals, and, to the extent that
      there are not a sufficient number of shares of Series A Junior Participating
      Preferred Stock authorized to permit the full exercise of the Rights, any other
      series of preferred stock of the Company designated for such purpose the terms
      of which are substantially similar to the terms of the Series A Junior
      Participating Preferred Stock.

     

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

     

    (v) “Purchase
      Price” shall have the meaning set forth in Section 4(a) hereof.

     

    (w) “Qualified
      Offer” shall have the meaning set forth in Section 11(a)(ii)
      hereof.

     

    (x) “Record
      Date” shall have the meaning set forth in the preamble of this
      Agreement.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (y) “Rights”
      shall have the meaning set forth in the preamble of this Agreement.

     

    (z) “Rights
      Agent” shall have the meaning set forth in the preamble of this
      Agreement.

     

    (aa) “Rights
      Certificate” shall have the meaning set forth in Section 3(a)
      hereof.

     

    (bb) “Rights
      Dividend Declaration Date” shall have the meaning set forth in the preamble of
      this Agreement.

     

    (cc) “Section
      11(a)(ii) Event” shall mean any event described in Section 11(a)(ii)
      hereof.

     

    (dd) “Section
      13 Event” shall mean any event described in clauses (x), (y) or (z) of Section
      13(a) hereof.

     

    (ee) “Securities
      Act” shall mean the Securities Act of 1933, as amended.

     

    (ff) “Spread”
      shall have the meaning set forth in Section 11(a)(iii) hereof.

     

    (gg) “Stock
      Acquisition Date” shall mean the earlier of (i) the first date of public
      announcement (which, for purposes of this definition, shall include, without
      limitation, a report filed or amended pursuant to Section 13(d) under the
      Exchange Act) by the Company or an Acquiring Person that an Acquiring Person
      has
      become such pursuant to clause (x) of the definition of Acquiring Person other
      than pursuant to a Qualified Offer, and (ii) the date that an Acquiring Person
      has become such pursuant to clause (y) of the definition of Acquiring
      Person.

     

    (hh) “Subsidiary”
      shall mean, with reference to any Person, any corporation of which an amount
      of
      voting securities sufficient to elect at least a majority of the directors
      of
      such corporation is beneficially owned, directly or indirectly, by such Person,
      or otherwise controlled by such Person.

     

    (ii) “Substitution
      Period” shall have the meaning set forth in Section 11(a)(iii)
      hereof.

     

    (jj) “Summary
      of Rights” shall have the meaning set forth in Section 3(b) hereof.

     

    (kk) “Trading
      Day” shall have the meaning set forth in Section 11(d)(i) hereof,

     

    (ll) “Triggering
      Event” shall mean any Section 11(a)(ii) Event or any Section 13
      Event.

     

    Section
      2. Appointment of Rights Agent.
      The
      Company hereby appoints the Rights Agent to act as agent for the Company in
      accordance with the terms and conditions hereof, and the Rights Agent hereby
      accepts such appointment. The Company may from time to time appoint such
      co-rights agents as it may deem necessary or desirable, upon ten (10) days'
      prior written notice to the Rights Agent. The Rights Agent shall have no duty
      to
      supervise, and in no event shall be liable for, the acts or omissions of any
      such co-Rights Agent.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    Section
      3. Issuance of Rights Certificates.

     

    (a) Until
      the
      earliest of (i) the Close of Business on the tenth Business Day after the Stock
      Acquisition Date (or, if the tenth Business Day after the Stock Acquisition
      Date
      occurs before the Record Date, the Close of Business on the Record Date), (ii)
      the Close of Business on the tenth Business Day (or such later date as the
      Board
      of Directors shall determine) after the date of the commencement of a tender
      or
      exchange offer by any Person (other than the Company, any Subsidiary of the
      Company, any employee benefit plan of the Company or of any Subsidiary of the
      Company, or any Person or entity organized, appointed or established by the
      Company for or pursuant to the terms of any such plan) within the meaning of
      Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act,
      or
      any successor provision thereto, if upon consummation thereof, such Person
      would
      become an Acquiring Person, or (iii) the Close of Business on the tenth Business
      Day after the Board of Directors of the Company determines, pursuant to the
      criteria set forth in Section 11(a)(ii)(B) hereof, that a Person is an Adverse
      Person, in any instance other than pursuant to a Qualified Offer (the earliest
      of (i), (ii) or (iii) being herein referred to as the “Distribution Date”), (x)
      the Rights will be evidenced (subject to the provisions of paragraphs (b) and
      (c) of this Section 3) by the certificates for the Common Stock registered
      in
      the names of the holders of the Common Stock (which certificates for Common
      Stock shall be deemed also to be certificates for Rights) and not by separate
      certificates, and (y) the Rights will be transferable only in connection with
      the transfer of the underlying shares of Common Stock (including a transfer
      to
      the Company). As soon as practicable after the Distribution Date, the Rights
      Agent will send by first-class, insured, postage-prepaid mail, to each record
      holder of the Common Stock as of the Close of Business on the Distribution
      Date,
      at the address of such holder shown on the records of the Company, one or more
      rights certificates, in substantially the form of Exhibit A hereto (the “Rights
      Certificates”), evidencing one Right for each share of Common Stock so held,
      subject to adjustment as provided herein. In the event that an adjustment in
      the
      number of Rights per share of Common Stock has been made pursuant to Section
      11(p) hereof, at the time of distribution of the Rights Certificates, the
      Company shall make the necessary and appropriate rounding adjustments (in
      accordance with Section 14(a) hereof) so that Rights Certificates representing
      only whole numbers of Rights are distributed and cash is paid in lieu of any
      fractional Rights. As of and after the Distribution Date, the Rights will be
      evidenced solely by such Rights Certificates.

     

    (b) Commencing
      as promptly as practicable following the Record Date, the Company will make
      available a copy of a Summary of Rights, in substantially the form attached
      hereto as Exhibit B (the “Summary of Rights”) to any holder of Rights who may so
      request from time to time prior to the Expiration Date. With respect to
      certificates for the Common Stock outstanding as of the Record Date, or issued
      subsequent to the Record Date but prior to the earlier of the Distribution
      Date
      or the Expiration Date, the Rights will be evidenced by such certificates for
      the Common Stock and the registered holders of the Common Stock shall also
      be
      the registered holders of the associated Rights. Until the earlier of the
      Distribution Date or the Expiration Date, the transfer of any certificates
      representing shares of Common Stock in respect of which Rights have been issued
      shall also constitute the transfer of the Rights associated with such shares
      of
      Common Stock.

     

    (c) Rights
      shall be issued in respect of all shares of Common Stock which are issued
      (whether originally issued or from the Company's treasury) after the Record
      Date
      but prior to the earlier of the Distribution Date or the Expiration Date.
      Certificates representing such shares of Common Stock shall also be deemed
      to be
      certificates for Rights, and shall bear the following legend:

     

    THIS
      CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN RIGHTS
      AS
      SET FORTH IN THE RIGHTS AGREEMENT BETWEEN LCA-VISION INC. (THE “COMPANY”) AND
      THE RIGHTS AGENT THEREUNDER (THE “RIGHTS AGREEMENT”), THE TERMS OF WHICH ARE
      HEREBY INCORPORATED HEREIN BY REFERENCE AND A COPY OF WHICH IS ON FILE AT THE
      PRINCIPAL OFFICES OF THE COMPANY. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH
      IN
      THE RIGHTS AGREEMENT, SUCH RIGHTS WILL BE EVIDENCED BY SEPARATE CERTIFICATES
      AND
      WILL NO LONGER BE EVIDENCED BY THIS CERTIFICATE, THE COMPANY WILL MAIL. TO
      THE
      HOLDER OF THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT, AS IN EFFECT ON
      THE
      DATE OF MAILING, WITHOUT CHARGE, PROMPTLY AFTER RECEIPT OF A WRITTEN REQUEST
      THEREFOR. UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
      ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON
      OR
      ANY AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
      AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY
      SUBSEQUENT HOLDER, MAY BECOME NULL AND VOID.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    With
      respect to such certificates containing the foregoing legend, until the earlier
      of (i) the Distribution Date or (ii) the Expiration Date, the Rights associated
      with the Common Stock represented by such certificates shall be evidenced by
      such certificates alone and registered holders of Common Stock shall also be
      the
      registered holders of the associated Rights, and the transfer of any of such
      certificates shall also constitute the transfer of the Rights associated with
      the Common Stock represented by such certificates.

     

    Section
      4. Form of Rights Certificates.

     

    (a) The
      Rights Certificates (and the forms of election to purchase and of assignment
      to
      be printed on the reverse thereof) shall each be substantially in the form
      set
      forth in Exhibit A hereto and may have such marks of identification or
      designation and such legends, summaries or endorsements printed thereon as
      the
      Company may deem appropriate and as are not inconsistent with the provisions
      of
      this Agreement, or as may be required to comply with any applicable law or
      with
      any rule or regulation made pursuant thereto or with any rule or regulation
      of
      any stock exchange on which the Rights may from time to time be listed, or
      to
      conform to usage. Subject to the provisions of Section 11 and Section 22 hereof,
      the Rights Certificates, whenever distributed, shall be dated as of the Record
      Date and on their face shall entitle the holders thereof to purchase such number
      of one one-hundredths (1/100) of a share of Preferred Stock as shall be set
      forth therein at the price set forth therein (such exercise price per one
      one-hundredth (1/100) of a share, the “Purchase Price”), but the amount and type
      of securities purchasable upon the exercise of each Right and the Purchase
      Price
      thereof shall be subject to adjustment as provided herein.

     

    (b) Any
      Rights Certificate issued pursuant to Section 3(a), Section 11(i), Section
      11(p)
      or Section 22 hereof that represents Rights beneficially owned by: (i) an
      Acquiring Person or an Adverse Person or any Associate or Affiliate of an
      Acquiring Person or an Adverse Person, (ii) a transferee of an Acquiring Person
      or an Adverse Person (or of any such Associate or Affiliate) who becomes a
      transferee after the Acquiring Person becomes such, or (iii) a transferee of
      an
      Acquiring Person or an Adverse Person (or of any such Associate or Affiliate)
      who becomes a transferee prior to or concurrently with the Acquiring Person
      or
      Adverse Person becoming such and receives such Rights pursuant to either (A)
      a
      transfer (whether or not for consideration) from the Acquiring Person or Adverse
      Person to holders of equity interests in such Acquiring Person or to any Person
      with whom such Acquiring Person or Adverse Person has any continuing agreement,
      arrangement or understanding regarding the transferred Rights or (B) a transfer
      which the Board of Directors has determined is part of a plan, arrangement
      or
      understanding which has as a primary purpose or effect the avoidance of Section
      7(e) hereof, and any Rights Certificate issued pursuant to Section 6 or Section
      11 hereof upon transfer, exchange, replacement or adjustment of any other Rights
      Certificate referred to in this sentence, shall contain (to the extent feasible)
      the following legend:

     

    THE
      RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED
      BY
      A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON, ADVERSE PERSON OR AN AFFILIATE
      OR ASSOCIATE OF AN ACQUIRING PERSON OR ADVERSE PERSON (AS SUCH TERMS ARE DEFINED
      IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
      REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED
      IN
      SECTION 7(E) OF THE RIGHTS AGREEMENT.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    Section
      5. Countersignature and Registration.

     

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

     

    (b) Following
      the Distribution Date, the Rights Agent will keep, or cause to be kept, at
      its
      principal office or offices designated as the appropriate place for surrender
      of
      Rights Certificates upon exercise or transfer, books for registration and
      transfer of the Rights Certificates issued hereunder. Such books shall show
      the
      names and addresses of the respective holders of the Rights Certificates, the
      number of Rights evidenced on its face by each of the Rights Certificates and
      the date of each of the Rights Certificates.

     

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

     

    (a) Subject
      to the provisions of Section 4(b), Section 7(c) and Section 14 hereof, at any
      time after the Close of Business on the Distribution Date, and at or prior
      to
      the Close of Business on the Expiration Date, any Rights Certificates may be
      transferred, split up, combined or exchanged for any other Rights Certificates,
      entitling the registered holder to purchase a like number of one one-hundredths
      (1/100) of a share of Preferred Stock (or, following a Triggering Event, Common
      Stock, other securities, cash or other assets, as the case may be) as any Rights
      Certificates surrendered then entitles such holder (or former holder in the
      case
      of a transfer) to purchase. Any registered holder desiring to transfer, split
      up, combine or exchange any Rights Certificates shall make such request in
      writing delivered to the Rights Agent, and shall surrender any Rights
      Certificates to be transferred, split up, combined or exchanged at the principal
      office or offices of the Rights Agent designated for such purpose. Neither
      the
      Rights Agent nor the Company shall be obligated to take any action whatsoever
      with respect to the transfer of any such surrendered Rights Certificate until
      the registered holder shall have completed and signed the certificate contained
      in the form of assignment on the reverse side of such Rights Certificate and
      shall have provided such additional evidence of the identity of the Beneficial
      Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the
      Company shall reasonably request. Thereupon the Rights Agent shall, subject
      to
      Section 4(b), Section 7(e), Section 14 and Section 24 hereof, countersign and
      deliver to the Person entitled thereto a Rights Certificate or Rights
      Certificates, as the case may be, as so requested. The Company may require
      payment of a sum sufficient to cover any tax or governmental charge that may
      be
      imposed in connection with any transfer, split up, combination or exchange
      of
      Rights Certificates.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    (a) Subject
      to Section 7(e) hereof, at any time after the Distribution Date the registered
      holder of any Rights Certificate may exercise the Rights evidenced thereby
      (except as otherwise provided herein including, without limitation, the
      restrictions on exercisability set forth in Section 9(c), Section 11(a)(iii)
      and
      Section 23(a) hereof) in whole or in part upon surrender of the Rights
      Certificate, with the form of election to purchase and the certificate on the
      reverse side thereof duly executed, to the Rights Agent at the principal office
      or offices of the Rights Agent designated for such purpose, together with
      payment of the aggregate Purchase Price with respect to the total number of
      one
      one-hundredths (1/100) of a share of Preferred Stock (or other securities,
      cash
      or other assets, as the case may be) as to which such surrendered Rights are
      then exercisable, at or prior to the earliest of (i) the Close of Business
      on
      November 23, 2018 or such later date as may be established by the Board of
      Directors prior to the expiration of the Rights (such date, as it may be
      extended by the Board of Directors, the “Final Expiration Date”), (ii) the time
      at which the Rights are redeemed or exchanged as provided in Section 23 and
      Section 24 hereof, or (iii) the Close of Business on the first anniversary
      of
      the date hereof, unless prior to such time adoption of this Agreement has been
      ratified by the Company’s stockholders in accordance with the approval
      requirements for stockholder action as set forth in the Company’s By-laws (the
      earliest of (i), (ii) and (iii) being herein referred to as the “Expiration
      Date”).

     

    (b) The
      Purchase Price for each one one-hundredth (1/100) of a share of Preferred Stock
      pursuant to the exercise of a Right initially shall be $100.00, subject to
      adjustment from time to time as provided in Section 11 and Section 13(a) hereof
      and shall be payable in accordance with paragraph (c) below.

     

    (c) Upon
      receipt of a Rights Certificate representing exercisable Rights, with the form
      of election to purchase and the certificate duly executed, accompanied by
      payment, with respect to each Right so exercised, of the Purchase Price per
      one
      one-hundredth (1/100) of a share of Preferred Stock (or other shares,
      securities, cash or other assets, as the case may be) to be purchased as set
      forth below and an amount equal to any applicable transfer tax, the Rights
      Agent
      shall, subject to Section 20(k) hereof, thereupon promptly (i) (A) requisition
      from any transfer agent of the shares of Preferred Stock (or make available,
      if
      the Rights Agent is the transfer agent for such shares) certificates for the
      total number of one one-hundredths (1/100) of a share of Preferred Stock to
      be
      purchased and the Company hereby irrevocably authorizes its transfer agent
      to
      comply with all such requests, or (B) if the Company shall have elected to
      deposit the total number of shares of Preferred Stock issuable upon exercise
      of
      the Rights hereunder with a depositary agent, requisition from the depositary
      agent depositary receipts representing such number of one one-hundredths (1/100)
      of a share of Preferred Stock as are to be purchased (in which case certificates
      for the shares of Preferred Stock represented by such receipts shall be
      deposited by the transfer agent with the depositary agent) and the Company
      will
      direct the depositary agent to comply with such request, (ii) requisition from
      the Company the amount of cash, if any, to be paid in lieu of fractional shares
      in accordance with Section 14 hereof (iii) after receipt of such certificates
      or
      depositary receipts, cause the same to be delivered to or, upon the order of
      the
      registered holder of such Rights Certificate, registered in such name or names
      as may be designated by such holder, and (iv) after receipt thereof, deliver
      such cash, if any, to or upon the order of the registered holder of such Rights
      Certificate. The payment of the Purchase Price (as such amount may be reduced
      pursuant to Section 11(a)(iii) hereof) shall be made in cash or by certified
      bank check or bank draft payable to the order of the Company. In the event
      that
      the Company is obligated to issue other securities (including Common Stock)
      of
      the Company, pay cash and/or distribute other property pursuant to Section
      11(a)
      hereof, the Company will make all arrangements necessary so that such other
      securities, cash and/or other property are available for distribution by the
      Rights Agent, if and when appropriate. The Company reserves the right to require
      prior to the occurrence of a Triggering Event that, upon any exercise of Rights,
      a number of Rights be exercised so that only whole shares of Preferred Stock
      would be issued.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (d) If
      the
      registered holder of any Rights Certificate shall exercise less than all the
      Rights evidenced thereby, a new Rights Certificate evidencing the Rights
      remaining unexercised shall be issued by the Rights Agent and delivered to,
      or
      upon the order of, the registered holder of such Rights Certificate, registered
      in such name or names as may be designated by such holder, subject to the
      provisions of Section 14 hereof.

     

    (e) Notwithstanding
      anything in this Agreement to the contrary, from and after the first occurrence
      of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring
      Person or Adverse Person, or an Associate or Affiliate of an Acquiring Person
      or
      Adverse Person, (ii) a transferee of an Acquiring Person or Adverse Person
      (or
      of any such Associate or Affiliate) who becomes a transferee after the Acquiring
      Person or Adverse Person becomes such, or (iii) a transferee of an Acquiring
      Person or Adverse Person (or of any such Associate or Affiliate) who becomes
      a
      transferee prior to or concurrently with the Acquiring Person or Adverse Person
      becoming such and receives such Rights pursuant to either (A) a transfer
      (whether or not for consideration) from the Acquiring Person or Adverse Person
      to holders of equity interests in such Acquiring Person or Adverse Person or
      to
      any Person with whom the Acquiring Person or Adverse Person has any continuing
      agreement, arrangement or understanding regarding the transferred Rights or
      (B)
      a transfer which the Board of Directors has determined is part of a plan,
      arrangement or understanding which has as a primary purpose or effect the
      avoidance of this Section 7(e), shall become null and void without any further
      action and no holder of such Rights shall have any rights whatsoever with
      respect to such Rights, whether under any provision of this Agreement or
      otherwise. The Company shall use all reasonable efforts to insure that the
      provisions of this Section 7(e) and Section 4(b) hereof are complied with,
      but
      shall have no liability to any holder of Rights Certificates or any other Person
      as a result of its failure to make any determinations with respect to an
      Acquiring Person or Adverse Person or any of its Affiliates, Associates or
      transferees hereunder.

     

    (f) Notwithstanding
      anything in this Agreement to the contrary, neither the Rights Agent nor the
      Company shall be obligated to undertake any action with respect to a registered
      holder upon the occurrence of any purported exercise as set forth in this
      Section 7 unless such registered holder shall have (i) completed and signed
      the
      certificate contained in the form of election to purchase set forth on the
      reverse side of the Rights Certificate surrendered for such exercise, and (ii)
      provided such additional evidence of the identity of the Beneficial Owner (or
      former Beneficial Owner) or Affiliates or Associates thereof as the Company
      shall reasonably request.

     

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

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    Section
      9. Reservation and Availability of Capital Stock.

     

    (a) The
      Company covenants and agrees that it will cause to be reserved and kept
      available out of its authorized and unissued shares of Preferred Stock (and,
      following the occurrence of a Section 11(a)(ii) Event, out of its authorized
      and
      unissued shares of Common Stock and/or other securities or out of its authorized
      and issued shares held in its treasury), the number of shares of Preferred
      Stock
      (and, following the occurrence of a Section 11(a)(ii) Event, Common Stock and/or
      other securities) that, as provided in this Agreement, including Section
      11(a)(iii) hereof, will be sufficient to permit the exercise in full of all
      outstanding Rights.

     

    (b) So
      long
      as the shares of Preferred Stock (and, following the occurrence of a Section
      11(a)(ii) Event, Common Stock and/or other securities) issuable and deliverable
      upon the exercise of the Rights may be listed on any national securities
      exchange, the Company shall use its best efforts to cause, from and after such
      time as the Rights become exercisable, all shares reserved for such issuance
      to
      be listed on such exchange upon official notice of issuance upon such
      exercise.

     

    (c) The
      Company shall use its best efforts to (i) file, as soon as practicable following
      the earliest date after the first occurrence of a Section 11(a)(ii) Event on
      which the consideration to be delivered by the Company upon exercise of the
      Rights has been determined in accordance with Section 11(a)(iii) hereof, a
      registration statement under the Securities Act, with respect to the securities
      purchasable upon exercise of the Rights on an appropriate form, (ii) cause
      such
      registration statement to become effective as soon as practicable after such
      filing, and (iii) cause such registration statement to remain effective (with
      a
      prospectus at all times meeting the requirements of the Securities Act) until
      the earlier of (A) the date as of which the Rights are no longer exercisable
      for
      such securities, and (B) the date of the expiration of the Rights. The Company
      will also take such action as may be appropriate under, or to ensure compliance
      with, the securities or “blue sky” laws of the various states in connection with
      the exercisability of the Rights. The Company may temporarily suspend, for
      a
      period of time not to exceed ninety (90) days after the date set forth in clause
      (i) of the first sentence of this Section 9(c), the exercisability of the Rights
      in order to prepare and file such registration statement and permit it to become
      effective. Upon any such suspension, the Company shall issue a public
      announcement stating that the exercisability of the Rights has been temporarily
      suspended, as well as a public announcement at such time as the suspension
      has
      been rescinded. In addition, if the Company shall determine that a registration
      statement is required following the Distribution Date, the Company may
      temporarily suspend the exercisability of the Rights until such time as a
      registration statement has been declared effective. Notwithstanding any
      provision of this Agreement to the contrary, the Rights shall not be exercisable
      in any jurisdiction if the requisite qualification in such jurisdiction shall
      not have been obtained, the exercise thereof shall not be permitted under
      applicable law, or a registration statement shall not have been declared
      effective.

     

    (d) The
      Company covenants and agrees that it will take all such action as may be
      necessary to ensure that all one one-hundredths (1/100) of a share of Preferred
      Stock (and, following the occurrence of a Section 11(a)(ii) Event, Common Stock
      and/or other securities) delivered upon exercise of Rights shall, at the time
      of
      delivery of the certificates for such shares (subject to payment of the Purchase
      Price), be duly and validly authorized and issued and fully paid and
      nonassessable.

     

    (e) The
      Company further covenants and agrees that it will pay when due and payable
      any
      and all federal and state transfer taxes and charges which may be payable in
      respect of the issuance or delivery of the Rights Certificates and of any
      certificates for a number of one one-hundredths (1/100) of a share of Preferred
      Stock (or Common Stock and/or other securities, as the case may be) upon the
      exercise of Rights. The Company shall not, however, be required to pay any
      transfer tax which may be payable in respect of any transfer or delivery of
      Rights Certificates to a Person other than, or the issuance or delivery of
      a
      number of one one-hundredths (1/100) of a share of Preferred Stock (or Common
      Stock and/or other securities, as the case may be) in respect of a name other
      than that of the registered holder of the flights Certificates evidencing Rights
      surrendered for exercise or to issue or deliver any certificates for a number
      of
      one one-hundredths (1/100) of a share of Preferred Stock (or Common Stock and/or
      other securities, as the case may be) in a name other than that of the
      registered holder upon the exercise of any Rights until such tax shall have
      been
      paid (any such tax being payable by the holder of such Rights Certificates
      at
      the time of surrender) or until it has been established to the Company's
      satisfaction that no such tax is due.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    Section
      10. Preferred Stock Record Date.
      Each
      person in whose name any certificate for a number of one one-hundredths (1/100)
      of a share of Preferred Stock (or Common Stock and/or other securities, as
      the
      case may be) is issued upon the exercise of Rights shall for all purposes be
      deemed to have become the holder of record of such fractional shares of
      Preferred Stock (or Common Stock and/or other securities, as the case may be)
      represented thereby on, and such certificate shall be dated, the date upon
      which
      the Rights Certificate evidencing such Rights was duly surrendered and payment
      of the Purchase Price (and all applicable transfer taxes) was made; provided,
      however, that if the date of such surrender and payment is a date upon which
      the
      Preferred Stock (or Common Stock and/or other securities, as the case may be)
      transfer books of the Company are closed, such Person shall be deemed to have
      become the record holder of such shares (fractional or otherwise) on, and such
      certificate shall be dated, the next succeeding Business Day on which the
      Preferred Stock (or Common Stock and/or other securities, as the case may be)
      transfer books of the Company are open. Prior to the exercise of the Rights
      evidenced thereby, the holder of a Rights Certificate shall not be entitled
      to
      any rights of a stockholder of the Company with respect to shares for which
      the
      Rights shall be exercisable, including, without limitation, the right to vote,
      to receive dividends or other distributions or to exercise any preemptive
      rights, and shall not be entitled to receive any notice of any proceedings
      of
      the Company, except as provided herein.

     

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

     

    (a)
      (i)
      If the
      Company shall at any time after the date of this Agreement (A) declare a
      dividend on the Preferred Stock payable in shares of Preferred Stock, (B)
      subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred
      Stock into a smaller number of shares, or (D) issue any shares of its capital
      stock in a reclassification of the Preferred Stock (including any such
      reclassification in connection with a consolidation or merger in which the
      Company is the continuing or surviving corporation), except as otherwise
      provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price
      in
      effect at the time of the record date for such dividend or of the effective
      date
      of such subdivision, combination or reclassification, and the number and kind
      of
      shares of Preferred Stock or capital stock, as the case may be, issuable on
      such
      date, shall be proportionately adjusted so that the holder of any Right
      exercised after such time shall be entitled to receive, upon payment of the
      Purchase Price then in effect, the aggregate number and kind of shares of
      Preferred Stock or capital stock, as the case may be, which, if such Right
      had
      been exercised immediately prior to such date and at a time when the Preferred
      Stock transfer books of the Company were open, such holder would have owned
      upon
      such exercise and been entitled to receive by virtue of such dividend,
      subdivision, combination or reclassification. If an event occurs which would
      require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
      hereof, the adjustment provided for in this Section 11(a)(i) shall be in
      addition to, and shall be made prior to, any adjustment required pursuant to
      Section 11(a)(ii) hereof.

     

    (ii) If:

     

    (A) any
      Person shall, at any time after the Rights Dividend Declaration Date, become
      an
      Acquiring Person, unless the event causing such Person to become an Acquiring
      Person is a transaction set forth in Section 13(a) hereof, or is an acquisition
      of shares of Common Stock pursuant to a tender offer or an exchange offer for
      all outstanding shares of Common Stock at a price and on terms determined by
      at
      least a majority of the members of the Board of Directors who are not officers
      of the Company and who are not representatives, nominees, Affiliates or
      Associates of an Acquiring Person, after receiving advice from one or more
      investment banking firms, to be (a) at a price which is fair to stockholders
      and
      not inadequate (taking into account all factors which such members of the Board
      of Directors deem relevant, including, without limitation, prices which could
      reasonably be achieved if the Company or its assets were sold on an orderly
      basis designed to realize maximum value) and (b) otherwise in the best interests
      of the Company and its stockholders (a “Qualified Offer”), or

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (B) the
      Board
      of Directors of the Company shall declare any Person to be an Adverse Person,
      upon a determination that such Person, alone or together with its Affiliates
      and
      Associates, has become the Beneficial Owner of an amount of Common Stock that
      the Board of Directors determines to be substantial (which amount shall in
      no
      event be less than 10% of the shares of Common Stock then outstanding) and
      a
      determination by at least a majority of the members of the Board of Directors
      who are not officers of the Company and who are not affiliated with an Adverse
      Person, after reasonable inquiry and investigation, including, consultation
      with
      such persons as the directors shall deem appropriate, that (a) such Beneficial
      Ownership by such Person is intended to cause the Company to repurchase the
      Common Stock beneficially owned by such Person or to cause pressure on the
      Company to take action or enter into a transaction or series of transactions
      intended to provide such Person with short-term financial gain under
      circumstances where the Board of Directors determines that the best long-term
      interests of the Company and its stockholders would not be served by taking
      such
      action or entering into such transactions or series of transactions at that
      time
      or (b) such Beneficial Ownership is causing or reasonably likely to cause a
      material adverse impact (including, but not limited to, impairment of
      relationships with customers or impairment of the Company's ability to maintain
      its competitive position) on the business or prospects of the Company,


     

    then,
      promptly following the occurrence of such event, proper provision shall be
      made
      so that each holder of a Right (except as provided below and in Section 7(e)
      hereof) shall thereafter have the right to receive, upon exercise thereof at
      the
      then current Purchase Price in accordance with the terms of this Agreement,
      in
      Lieu of a number of one one-hundredths (1/100) of a share of Preferred Stock,
      such number of shares of Common Stock of the Company as shall equal the result
      obtained by (x) multiplying the then current Purchase Price by the then number
      of one one-hundredths (1/100) of a share of Preferred Stock for which a Right
      was exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
      Event, and (y) dividing that product (which, following such first occurrence,
      shall thereafter be referred to as the “Purchase Price” for each Right and for
      all purposes of this Agreement) by fifty percent (50%) of the Current Market
      Price (determined pursuant to Section 11(d) hereof) per share of Common Stock
      on
      the date of such first occurrence (such number of shares, the “Adjustment
      Shares”).

     

    
      
        
        

      

      
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    (iii) If
      the
      number of shares of Common Stock which is authorized by the Company's Restated
      Certificate of Incorporation, but not outstanding or reserved for issuance
      for
      purposes other than upon exercise of the Rights, is not sufficient to permit
      the
      exercise in full of the Rights in accordance with the foregoing subparagraph
      (ii) of this Section 11(a), the Company shall (A) determine the value of the
      Adjustment Shares issuable upon the exercise of a Right (the “Current Value”),
      and (B) with respect to each Right (subject to Section 7(e) hereof), make
      adequate provision to substitute for the Adjustment Shares, upon the exercise
      of
      a Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction
      in the Purchase Price, (3) Common Stock or other equity securities of the
      Company (including, without limitation, shares, or units of shares, of preferred
      stock, such as the Preferred Stock, which the Board of Directors has deemed
      to
      have essentially the same value or economic rights as shares of Common Stock
      (such shares of preferred stock being referred to as “Common Stock
      Equivalents”)), (4) debt securities of the Company, (5) other assets, or (6) any
      combination of the foregoing, having an aggregate value equal to the Current
      Value (less the amount of any reduction in the Purchase Price), where such
      aggregate value has been determined by the Board of Directors based upon the
      advice of a nationally recognized investment banking firm selected by the Board
      of Directors; provided,
      however,
      that if
      the Company shall not have made adequate provision to deliver value pursuant
      to
      clause (B) above within thirty (30) days following the later of (x) the first
      occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's
      right of redemption pursuant to Section 23(a) expires (the later of (x) and
      (y)
      being referred to herein as the “Section 11(a)(ii) Trigger Date”), then the
      Company shall be obligated to deliver, upon the surrender for exercise of a
      Right and without requiring payment of the Purchase Price, shares of Common
      Stock (to the extent available) and then, if necessary, cash, which shares
      and/or cash have an aggregate value equal to the Spread. For purposes of the
      preceding sentence, the term “Spread” shall mean the excess of (i) the Current
      Value over (ii) the Purchase Price. If the Board of Directors determines in
      good
      faith that it is likely that sufficient additional shares of Common Stock could
      be authorized for issuance upon exercise in full of the Rights, the thirty
      (30)
      day period set forth above may be extended to the extent necessary, but not
      more
      than ninety (90) days alter the Section 11(a)(ii) Trigger Date, in order that
      the Company may seek stockholder approval for the authorization of such
      additional shares (such thirty (30) day period, as it may be extended, is herein
      called the “Substitution Period”). To the extent that the Company determines
      that action should be taken pursuant to the first and/or third sentences of
      this
      Section 11(a)(iii), the Company (1) shall provide, subject to Section 7(e)
      hereof, that such action shall apply uniformly to all outstanding Rights, and
      (2) may suspend the exercisability of the Rights until the expiration of the
      Substitution Period in order to seek such stockholder approval for such
      authorization of additional shares and/or to decide the appropriate form of
      distribution to be made pursuant to such first sentence and to determine the
      value thereof. In the event of any such suspension, the Company shall issue
      a
      public announcement stating that the exercisability of the Rights has been
      temporarily suspended, as well as a public announcement at such time as the
      suspension is no longer in effect. For purposes of this Section 11(a)(iii),
      the
      value of each Adjustment Share shall be the Current Market Price (as determined
      pursuant to Section 11(d) hereof) per share of the Common Stock on the Section
      11(a)(ii) Trigger Date and the per share or per unit value of any Common Stock
      Equivalent shall be deemed to equal the Current Market Price per share of the
      Common Stock on such date.

     

    (b) If
      the
      Company shall fix a record date for the issuance of rights, options or warrants
      to all holders of Preferred Stock entitling them to subscribe for or purchase
      (for a period expiring within forty-five (45) calendar days after such record
      date) Preferred Stock (or shares having the same rights, privileges and
      preferences as the shares of Preferred Stock (“Equivalent Preferred Stock”)) or
      securities convertible into Preferred Stock or Equivalent Preferred Stock at
      a
      price per share of Preferred Stock or per share of Equivalent Preferred Stock
      (or having a conversion price per share, if a security convertible into
      Preferred Stock or Equivalent Preferred Stock) less than the Current Market
      Price (as determined pursuant to Section 11(d) hereof) per share of Preferred
      Stock on such record date, the Purchase Price to be in effect after such record
      date shall be determined by multiplying the Purchase Price in effect immediately
      prior to such record date by a fraction, the numerator of which shall be the
      number of shares of Preferred Stock outstanding on such record date, plus the
      number of shares of Preferred Stock which the aggregate offering price of the
      total number of shares of Preferred Stock and/or Equivalent Preferred Stock
      so
      to be offered (and/or the aggregate initial conversion price of the convertible
      securities so to be offered) would purchase at such Current Market Price, and
      the denominator of which shall be the number of shares of Preferred Stock
      outstanding on such record date, plus the number of additional shares of
      Preferred Stock and/or Equivalent Preferred Stock to be offered for subscription
      or purchase (or into which the convertible securities so to be offered are
      initially convertible), in case such subscription price may be paid by delivery
      of consideration, part or all of which may be in a form other than cash, the
      value of such consideration shall be as determined in good faith by the Board
      of
      Directors, whose determination shall be described in a statement filed with
      the
      Rights Agent and shall be binding on the Rights Agent and the holders of the
      Rights. Shares of Preferred Stock owned by or held for the account of the
      Company shall not be deemed outstanding for the purpose of any such computation.
      Such adjustment shall be made successively whenever such a record date is fixed,
      and if such rights or warrants are not so issued, the Purchase Price shall
      be
      adjusted to be the Purchase Price which would then be in effect if such record
      date had not been fixed.

     

    
      
        
        

      

      
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    (c) If
      the
      Company shall fix a record date for a distribution to all holders of Preferred
      Stock (including any such distribution made in connection with a consolidation
      or merger in which the Company is the continuing corporation), cash (other
      than
      a regular quarterly cash dividend out of the earnings or retained earnings
      of
      the Company), assets (other than a dividend payable in Preferred Stock, but
      including any dividend payable in stock other than Preferred Stock) or evidences
      of indebtedness, or of subscription rights or warrants (excluding those referred
      to in Section 11(b) hereof), the Purchase Price to be in effect after such
      record date shall be determined by multiplying the Purchase Price in effect
      immediately prior to such record date by a fraction, the numerator of which
      shall be the Current Market Price (as determined pursuant to Section 11(d)
      hereof) per share of Preferred Stock on such record date, less the fair market
      value (as determined in good faith by the Board of Directors, whose
      determination shall be described in a statement filed with the Rights Agent)
      of
      the portion of the cash, assets or evidences of indebtedness so to be
      distributed or of such subscription rights or warrants applicable to a share
      of
      Preferred Stock, and the denominator of which shall be such Current Market
      Price
      (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock.
      Such adjustments shall be made successively whenever such a record date is
      fixed, and in the event that such distribution is not so made, the Purchase
      Price shall be adjusted to be the Purchase Price which would have been in effect
      if such record date had not been fixed.

     

    (d)(i)
      For the
      purpose of any computation hereunder, other than computations made pursuant
      to
      Section 11(a)(iii) hereof, the Current Market Price per share of Common Stock
      on
      any date shall be deemed to be the average of the daily closing prices per
      share
      of such Common Stock for the thirty (30) consecutive Trading Days immediately
      prior to such date, and for purposes of computations made pursuant to Section
      11(a)(iii) hereof; the Current Market Price per share of Common Stock on any
      date shall be deemed to be the average of the daily closing prices per share
      of
      such Common Stock for the ten (10) consecutive Trading Days immediately
      following such date; provided, however, that in the event that the Current
      Market Price per share of the Common Stock is determined during a period
      following the announcement by the issuer of such Common Stock of (A) a dividend
      or distribution on such Common Stock payable in shares of such Common Stock
      or
      securities convertible into shares of such Common Stock (other than the Rights),
      or (B) any subdivision, combination or reclassification of such Common Stock,
      and the ex-dividend date for such dividend or distribution, or the record date
      for such subdivision, combination or reclassification shall not have occurred
      prior to the commencement of the requisite thirty (30) Trading Day or ten (10)
      Trading Day period, as set forth above, then, and in each such case, the Current
      Market Price shall be properly adjusted to take into account ex-dividend
      trading. The closing price for each day shall be the last sale price, regular
      way, or, in case no such sale takes place on such day, the average of the
      closing bid and asked prices, regular way, in either case as reported in the
      principal consolidated transaction reporting system with respect to securities
      listed or admitted to trading on the NASDAQ Stock Market or, if the shares
      of
      Common Stock are not listed or admitted to trading on the NASDAQ Stock Market,
      as reported in the principal consolidated transaction reporting system with
      respect to securities listed on the principal national securities exchange
      on
      which the shares of Common Stock are listed or admitted to trading or, if the
      shares of Common Stock are not listed or admitted to trading on any national
      securities exchange, the last quoted price or, if not so quoted, the average
      of
      the high bid and low asked prices in the over-the-counter market, as reported
      by
      NASDAQ (“OTC Market”) or such other system then in use, or, if on any such date
      the shares of Common Stock are not quoted by any such organization, the average
      of the closing bid and asked prices as furnished by a professional market maker
      making a market in the Common Stock selected by the Board of Directors. If
      on
      any such date no market maker is making a market in the Common Stock, the fair
      value of such shares on such date as determined in good faith by the Board
      of
      Directors shall be used. The term “Trading Day” shall mean a day on which the
      principal national securities exchange on which the shares of Common Stock
      are
      listed or admitted to trading is open for the transaction of business or, if
      the
      shares of Common Stock are not listed or admitted to trading on any national
      securities exchange, a Business Day. If the Common Stock is not publicly held
      or
      not so listed or traded, Current Market Price per share shall mean the fair
      value per share as determined in good faith by the Board of Directors, whose
      determination shall be described in a statement filed with the Rights Agent
      and
      shall be conclusive for all purposes.

     

    
      
        
        

      

      
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    (ii) For
      the
      purpose of any computation hereunder, the Current Market Price per share of
      Preferred Stock shall be determined in the same manner as set forth above for
      the Common Stock in clause (i) of this Section 11(d) (other than the last
      sentence thereof). If the Current Market Price per share of Preferred Stock
      cannot be determined in the manner provided above or if the Preferred Stock
      is
      not publicly held or listed or traded in a manner described in clause (i) of
      this Section 11(d), the Current Market Price per share of Preferred Stock shall
      be conclusively deemed to be an amount equal to one hundred (100) (as such
      number may be appropriately adjusted for such events as stock splits, stock
      dividends and recapitalizations with respect to the Common Stock occurring
      after
      the date of this. Agreement) multiplied by the Current Market Price per share
      of
      the Common Stock. If neither the Common Stock nor the Preferred Stock is
      publicly held or so listed or traded, Current Market Price per share of the
      Preferred Stock shall mean the fair value per share as determined in good faith
      by the Board of Directors, whose determination shall be described in a statement
      flied with the Rights Agent and shall be conclusive for all
      purposes.

     

    (e) Anything
      herein to the contrary notwithstanding, no adjustment in the Purchase Price
      shall be required unless such adjustment would require an increase or decrease
      of at least one percent (1%) in the Purchase Price; provided, however, that
      any
      adjustments which by reason of this Section 11(e) are not required to be made
      shall be carried forward and taken into account in any subsequent adjustment.
      All calculations under this Section 11 shall be made to the nearest cent or
      to
      the nearest ten-thousandth of a share of Common Stock or other share or
      one-millionth of a share of Preferred Stock, as the case may be. Notwithstanding
      the first sentence of this Section 11(e), any adjustment required by this
      Section 11 shall be made no later than the earlier of (i) three (3) years from
      the date of the transaction which mandates such adjustment, or (ii) the
      Expiration Date.

     

    (f) If
      as a
      result of an adjustment made pursuant to Section 11(a)(ii) or Section 13(a)
      hereof, the holder of any Right thereafter exercised shall become entitled
      to
      receive ally shares of capital stock other than Preferred Stock, thereafter
      the
      number of such other shares so receivable upon exercise of any Right and the
      Purchase Price thereof shall be subject to adjustment from time to time in
      a
      manner and on terms as nearly equivalent as practicable to the provisions with
      respect to the Preferred Stock contained in Sections 11(a), (b), (c), (e),
      (g),
      (h), (i), (j), (k) and (m), and the provisions of Sections 7, 9, 10, 13 and
      14
      hereof with respect to the Preferred Stock shall apply on like terms to any
      such
      other shares.

     

    (g) All
      Rights originally issued by the Company subsequent to any adjustment made to
      the
      Purchase Price hereunder shall evidence the right to purchase, at the adjusted
      Purchase Price, the number of one one-hundredths (1/100) of a share of Preferred
      Stock purchasable from time to time hereunder upon exercise of the Rights,
      all
      subject to further adjustment as provided herein.

     

    
      
        
        

      

      
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    (h) Unless
      the Company shall have exercised its election as provided in Section 11(i),
      upon
      each adjustment of the Purchase Price as a result of the calculations made
      in
      Sections 11(b) and (c), each Right outstanding immediately prior to the making
      of such adjustment shall thereafter evidence the right to purchase, at the
      adjusted Purchase Price, that number of one one-hundredths (1/100) of a share
      of
      Preferred Stock (calculated to the nearest one-millionth) obtained by (i)
      multiplying (x) the number of one one-hundredths (1/100) of a share covered
      by a
      Right immediately prior to this adjustment, by (y) the Purchase Price in effect
      immediately prior to such adjustment of the Purchase Price, and (ii) dividing
      the product so obtained by the Purchase Price in effect immediately after such
      adjustment of the Purchase Price.

     

    (i) The
      Company may elect on or after the date of any adjustment of the Purchase Price
      to adjust the number of Rights, in lieu of any adjustment in the number of
      one
      one-hundredths (1/100) of a share of Preferred Stock purchasable upon the
      exercise of a Right. Each of the Rights outstanding after the adjustment in
      the
      number of Rights shall be exercisable for the number of one one-hundredths
      (1/100) of a share of Preferred Stock for which a Right was exercisable
      immediately prior to such adjustment. Each Right held of record prior to such
      adjustment of the number of Rights shall become that number of Rights
      (calculated to the nearest one-ten-thousandth) obtained by dividing the Purchase
      Price in effect immediately prior to adjustment of the Purchase Price by the
      Purchase Price in effect immediately after adjustment of the Purchase Price.
      The
      Company shall make a public announcement of its election to adjust the number
      of
      Rights, indicating the record date for the adjustment, and, if known at the
      time, the amount of the adjustment to be made. This record date may be the
      date
      on which the Purchase Price is adjusted or any day thereafter, but, if the
      Rights Certificates have been issued, shall be at least ten (10) days later
      than
      the date of the public announcement. If Rights Certificates have been issued,
      upon each adjustment of the number of Rights pursuant to this Section 11(i),
      the
      Company shall, as promptly as practicable, cause to be distributed to holders
      of
      record of Rights Certificates on such record date Rights Certificates
      evidencing, subject to Section 14 hereof, the additional Rights to which such
      holders shall be entitled as a result of such adjustment, or, at the option
      of
      the Company, shall cause to be distributed to such holders of record in
      substitution and replacement for the Rights Certificates held by such holders
      prior to the date of adjustment, and upon surrender thereof, if required by
      the
      Company, new Rights Certificates evidencing all the Rights to which such holders
      shall be entitled after such adjustment. Rights Certificates so to be
      distributed shall be issued, executed and countersigned in the manner provided
      for herein (and may bear, at the option of the Company, the adjusted Purchase
      Price) and shall be registered in the names of the holders of record of Rights
      Certificates on the record date specified in the public
      announcement.

     

    (j) Irrespective
      of any adjustment or change in the Purchase Price or the number of one
      one-hundredths (1/100) of a share of Preferred Stock issuable upon the exercise
      of the Rights, the Rights Certificates theretofore and thereafter issued may
      continue to express the Purchase Price per one one-hundredth (1/100) of a share
      and the number of one one-hundredths (1/100) of a share which were expressed
      in
      the initial Rights Certificates issued hereunder.

     

    (k) Before
      taking any action that would cause an adjustment reducing the Purchase Price
      below the then stated value, if any, of the number of one one-hundredths (1/100)
      of a share of Preferred Stock issuable upon exercise of the Rights, the Company
      shall take any corporate action which may, in the opinion of its counsel, be
      necessary in order that the Company may validly and legally issue fully paid
      and
      nonassessable such number of one one-hundredths (1/100) of a share of Preferred
      Stock at such adjusted Purchase Price.

     

    (l) In
      any
      case in which this Section 11 shall require that an adjustment in the Purchase
      Price be made effective as of a record date for a specified event, the Company
      may elect to defer until the occurrence of such event the issuance to the holder
      of any Right exercised after such record date the number of one one-hundredths
      (1/100) of a share of Preferred Stock and other capital stock or securities
      of
      the Company, if any, issuable upon such exercise over and above the number
      of
      one one-hundredths (1/100) of a share of Preferred Stock and other capital
      stock
      or securities of the Company, if any, issuable upon such exercise on the basis
      of the Purchase Price in effect prior to such adjustment; provided, however,
      that the Company shall deliver to such holder a due bill or other appropriate
      instrument evidencing such holder's right to receive such additional shares
      (fractional or otherwise) or securities upon the occurrence of the event
      requiring such adjustment.

     

    
      
        
        

      

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

     

    (n) The
      Company covenants and agrees that it shall not, at any time after the
      Distribution Date, (i) consolidate with any other Person (other than a
      Subsidiary of the Company in a transaction which complies with Section 11(o)
      hereof), (ii) merge with or into any other Person (other than a Subsidiary
      of
      the Company in a transaction which complies with Section 11(o) hereof), or
      (iii)
      sell or transfer (or permit any Subsidiary to sell or transfer), in one
      transaction, or a series of related transactions, assets, cash flow or earning
      power aggregating more than fifty percent (50%) of the assets or earning power
      of the Company and its Subsidiaries (taken as a whole) to any other Person
      or
      Persons (other than the Company and/or any of its Subsidiaries in one or more
      transactions each of which complies with Section 11(o) hereof), if (x) at the
      time of or immediately after such consolidation, merger or sale there are any
      rights, warrants or other instruments or securities outstanding or agreements
      in
      effect which would substantially diminish or otherwise eliminate the benefits
      intended to be afforded by the Rights or (y) prior to, simultaneously with
      or
      immediately after such consolidation, merger or sale, the stockholders of the
      Person who constitutes, or would constitute, the “Principal Party” for purposes
      of Section 13(a) hereof shall have received a distribution of Rights previously
      owned by such Person or any of its Affiliates and Associates.

     

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

     

    (p) Anything
      in this Agreement to the contrary notwithstanding, if the Company shall at
      any
      time after the Rights Dividend Declaration Date and prior to the earlier of
      the
      Distribution Date or the Expiration Date (i) declare a dividend on the
      outstanding shares of Common Stock payable in shares of Common Stock, (ii)
      subdivide the outstanding shares of Common Stock, or (iii) combine the
      outstanding shares of Common Stock into a smaller number of shares, the number
      of Rights associated with each share of Common Stock then outstanding, or issued
      or delivered thereafter but prior to the Distribution Date, shall be
      proportionately adjusted so that the number of Rights thereafter associated
      with
      each share of Common Stock following any such event shall equal the result
      obtained by multiplying the number of Rights associated with each share of
      Common Stock immediately prior to such event by a fraction the numerator which
      shall be the total number of shares of Common Stock outstanding immediately
      prior to the occurrence of the event and the denominator of which shall be
      the
      total number of shares of Common Stock outstanding immediately following the
      occurrence of such event.

     

    
      
        
        

      

      
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    (q) The
      failure by the Board of Directors of the Company to declare a Person to be
      an
      Adverse Person following such Person becoming the Beneficial Owner of 10% or
      more of the outstanding Common Stock shall not imply that such Person is not
      an
      Adverse Person or limit the Board of Directors' right at any time in the future
      to declare such Person to be an Adverse Person.

     

    Section
      12. Certificate of Adjusted Purchase Price or Number of Shares.
      Whenever an adjustment is made as provided in Section 11 and Section 13 hereof,
      the Company shall (a) promptly prepare a certificate setting forth such
      adjustment and a brief statement of the facts accounting for such adjustment,
      (b) promptly file with the Rights Agent, and with each transfer agent for the
      Preferred Stock and the Common Stock, a copy of such certificate and (c) if
      a
      Distribution Date has occurred, mail a brief summary thereof to each holder
      of a
      Rights Certificate (or, if prior to the Distribution Date, to each holder of
      a
      certificate representing shares of Common Stock) in accordance with Section
      25
      hereof. The Rights Agent shall be fully protected in relying on any such
      certificate and on any adjustment therein contained.

     

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

     

    (a) If,
      following a Stock Acquisition Date, directly or indirectly, (x) the Company
      shall consolidate with, or merge with and into, any other Person (other than
      a
      Subsidiary of, the Company in a transaction which complies with Section 11(o)
      hereof), and the Company shall not be the continuing or surviving corporation
      of
      such consolidation or merger, (y) any Person (other than a Subsidiary of the
      Company in a transaction which complies with Section 11(o) hereof) shall
      consolidate with, or merge with or into, the Company, and the Company shall
      be
      the continuing or surviving corporation of such consolidation or merger and,
      in
      connection with such consolidation or merger, all or part of the outstanding
      shares of Common Stock shall be changed into or exchanged for stock or other
      securities of any other Person or cash or any other property, or (z) the Company
      shall sell or otherwise transfer (or one or more of its Subsidiaries shall
      sell
      or otherwise transfer), in one transaction or a series of related transactions,
      assets, cash flow or earning power aggregating more than fifty percent (50%)
      of
      the assets, cash flow or earning power of the Company and its Subsidiaries
      (taken as a whole) to any Person or Persons (other than the Company or any
      Subsidiary of the Company in one or more transactions each of which complies
      with Section 11(o) hereof), then, and in each such case (except as may be
      contemplated by Section 13(d) hereof), proper provision shall be made so that:
      (1) each holder of a Right, except as provided in Section 7(e) hereof, shall
      thereafter have the right to receive, upon the exercise thereof at the then
      current Purchase Price in accordance with the terms of this Agreement, such
      number of validly authorized and issued, fully paid, non-assessable and freely
      tradable shares of Common Stock of the Principal Party (as such term is
      hereinafter defined), not subject to any liens, encumbrances, rights of first
      refusal or other adverse claims, as shall be equal to the result obtained by
      (1)
      multiplying the then current Purchase Price by the number of one-hundredths
      (1/100) of a share of Preferred Stock for which a Right is exercisable
      immediately prior to the first occurrence of a Section 13 Event (or, if a
      Section 11(a)(ii) Event has occurred prior to the first occurrence of a Section
      13 Event, multiplying the number of such one one-hundredths (1/100) of a share
      for which a Right was exercisable immediately prior to the first occurrence
      of a
      Section 11(a)(ii) Event by the Purchase Price in effect immediately prior to
      such first occurrence of a Section 11(a)(ii) Event), and (2) dividing that
      product (which, following the first occurrence of a Section 13 Event, shall
      be
      referred to as the “Purchase Price” for each Right and for all purposes of this
      Agreement) by fifty percent (50%) of the Current Market Price (determined
      pursuant to Section 11(d)(i) hereof) per share of the Common Stock of such
      Principal Party on the date of consummation of such Section 13 Event; (ii)
      such
      Principal Party shall thereafter be liable for, and shall assume, by virtue
      of
      such Section 13 Event, all the obligations and duties of the Company pursuant
      to
      this Agreement; (iii) the term “Company” shall thereafter be deemed to refer to
      such Principal Party, it being specifically intended that the provisions of
      Section 11 hereof shall apply only to such Principal Party following, the first
      occurrence of a Section 13 Event; (iv) such Principal Party shall take such
      steps (including, but not limited to, the reservation or a sufficient number
      of
      shares of its Common Stock) in connection with the consummation of any such
      transaction as may be necessary to assure that the provisions hereof shall
      thereafter be applicable, as nearly as reasonably may be, in relation to its
      shares of Common Stock thereafter deliverable upon the exercise of the Rights;
      and (v) the provisions of Section 11(a)(ii) hereof shall be of no effect
      following the first occurrence of any Section 13 Event.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    (b) “Principal
      Party” shall mean:

     

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

     

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

     

    (c) The
      Company shall not consummate any such consolidation, merger, sale or transfer
      unless the Principal Party shall have a sufficient number of authorized shares
      of its Common Stock which have not been issued or reserved for issuance to
      permit the exercise in full of the Rights in accordance with this Section 13
      and
      unless prior thereto the Company and such Principal Party shall have executed
      and delivered to the Rights Agent a supplemental agreement providing for the
      terms set forth in paragraphs (a) and (b) of this Section 13 and further
      providing that, as soon as practicable after the date of any consolidation,
      merger or sale or assets mentioned in paragraph (a) of this Section 13, the
      Principal Party will

     

    (i) prepare
      and file a registration statement under the Securities Act, with respect to
      the
      Rights and the securities purchasable upon exercise of the Rights on an
      appropriate form, and will use its best efforts to cause such registration
      statement to (A) become effective as soon as practicable after such filing
      and
      (B) remain effective (with a prospectus at all times meeting the requirements
      of
      the Securities Act) until the Expiration Date; 

     

    (ii) take
      all
      such other action as may be necessary to enable the Principal Party to issue
      the
      securities purchasable upon exercise of the Rights, including but not limited
      to
      the registration or qualification of such securities under all requisite
      securities laws of jurisdictions of the various states and the listing of such
      securities on such exchanges and trading markets as may be necessary or
      appropriate; and

     

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

     

    
      
        
        

      

      
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    The
      provisions of this Section 13 shall similarly apply to successive mergers or
      consolidations or sales or other transfers. In the event that a Section 13
      Event
      shall occur at any time after the occurrence of a Section 11(a)(ii) Event,
      the
      Rights which have not theretofore been exercised shall thereafter become
      exercisable in the manner described in Section 13(a).

     

    (d) Notwithstanding
      anything in this Agreement to the contrary, Section 13 shall not be applicable
      to a transaction described in subparagraphs (x) and (y) of Section 13(a) if
      (i)
      such transaction is consummated with a Person or Persons who acquired shares
      of
      Common Stock pursuant to a tender offer or exchange offer for all outstanding
      shares of Common Stock which is a Qualified Offer as such term is defined in
      Section 11(a)(ii) hereof (or a wholly owned subsidiary of any such Person or
      Persons), (ii) the price per share of Common Stock offered in such transaction
      is not less than the price per share of Common Stock paid to all holders of
      shares of Common Stock whose shares were purchased pursuant to such tender
      offer
      or exchange offer and (iii) the form of consideration being offered to the
      remaining holders of shares of Common Stock pursuant to such transaction is
      the
      same as the form of consideration paid pursuant to such tender offer or exchange
      offer. Upon consummation of any such transaction contemplated by this Section
      13(d), all Rights hereunder shall expire.

     

    Section
      14. Fractional Rights and Fractional Shares.

     

    (a) The
      Company shall not be required to issue fractions of Rights, except prior to
      the
      Distribution Date as provided in Section 11(i) or Section 11(p) hereof, or
      to
      distribute Rights Certificates which evidence fractional Rights, in lieu of
      such
      fractional Rights, the Company shall pay to the registered holders of the Rights
      Certificates with regard to which such fractional Rights would otherwise be
      issuable, an amount in cash equal to the same fraction of the current market
      value of a whole Right. For purposes of this Section 14(a), the current market
      value of a whole Right shall be the closing price of the Rights for the Trading
      Day immediately prior to the date on which such fractional Rights would have
      been otherwise issuable. The closing price of the Rights for any day shall
      be
      the last sale price, regular way, or, in case no such sale takes place on such
      day, the average of the closing bid and asked prices, regular way, in either
      case as reported in the principal consolidated transaction reporting system
      with
      respect to securities listed or admitted to trading on the NASDAQ Stock Market
      or, if the Rights are not listed or admitted to trading on the NASDAQ Stock
      Market, as reported in the principal consolidated transaction reporting system
      with respect to securities listed on the principal national securities exchange
      on which the Rights are listed or admitted to trading, or if the Rights are
      not
      listed or admitted to trading on any national securities exchange, the last
      quoted price or, if not so quoted, the average of the high hid and low asked
      prices in the over-the-counter market, as reported by the OTC Market or such
      other system then in use or, if on any such date the Rights are not quoted
      by
      any such organization, the average of the closing hid and asked prices as
      furnished by a professional market maker making a market in the Rights, selected
      by the Board of Directors. If on any such date no such market maker is making
      a
      market in the Rights, the fair value of the Rights on such date as determined
      in
      good faith by the Board of Directors shall be used.

     

    (b) The
      Company shall not be required to issue fractions of shares of Preferred Stock
      (other than fractions which are integral multiples of one one-hundredth (1/100)
      or a share of Preferred Stock) upon exercise of the Rights or to distribute
      certificates which evidence fractional shares of Preferred Stock (other than
      fractions which are integral multiples of one one-hundredth (1/100) of a share
      of Preferred Stock). In lieu of fractional shares of Preferred Stock that are
      not integral multiples of one one-hundredth (1/100) of a share of Preferred
      Stock, the Company may pay to the registered holders of Rights Certificates
      at
      the time such Rights are exercised as herein provided an amount in cash equal
      to
      the same fraction of the current market value of one one-hundredth (1/100)
      of a
      share of Preferred Stock. For purposes of this Section 14(b), the current market
      value of one one-hundredth (1/100) of a share of Preferred Stock shall be one
      one-hundredth (1/100) or the closing price of a share of Preferred Stock (as
      determined pursuant to Section 11(d) (ii) hereof) for the Trading Day
      immediately prior to the date of such exercise.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    (c) Following
      the occurrence of a Triggering Event, the Company shall not be required to
      issue
      fractions of shares of Common Stock upon exercise of the Rights or to distribute
      certificates which evidence fractional shares of Common Stock. In lieu of
      fractional shares of Common Stock, the Company may pay to the registered holders
      of Rights Certificates at the time such Rights are exercised as herein provided
      an amount in cash equal to the same fraction of the current market value of
      one
      (1) share of Common Stock. For purposes of this Section 14(c), the current
      market value of one share of Common Stock shall be the closing price per share
      of Common Stock (as determined pursuant to Section 11(d)(i) hereof) on the
      Trading Day immediately prior to the date of such exercise.

     

    (d) The
      holder of a Right by the acceptance of the Rights expressly waives his right
      to
      receive any fractional Rights or any fractional shares upon exercise of a Right,
      except as permitted by this Section 14.

     

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

     

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

     

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

     

    (b) after
      the
      Distribution Date, the Rights Certificates are transferable only on the registry
      books of the Rights Agent if surrendered at the principal office or offices
      of
      the Rights Agent designated for such purposes, duly endorsed or accompanied
      by a
      proper instrument of transfer and with the appropriate forms and certificates
      fully executed;

     

    (c) subject
      to Section 6(a) and Section 7(f) hereof, the Company and the Rights Agent may
      deem and treat the Person in whose name a Rights Certificate (or, prior to
      the
      Distribution Date, the associated Common Stock certificate) is registered as
      the
      absolute owner thereof and of the Rights evidenced thereby (notwithstanding
      any
      notations of ownership or writing on the Rights Certificates or the associated
      Common Stock certificate made by anyone other than the Company or the Rights
      Agent) for all purposes whatsoever, and neither the Company nor the Rights
      Agent, subject to the last sentence of Section 7(e) hereof, shall be required
      to
      be affected by any notice to the contrary; and

     

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

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    Section
      17. Rights Certificate Holder Not Deemed a Stockholder.
      No
      holder, as such, of any Rights Certificate shall be entitled to vote, receive
      dividends or be deemed for any purpose the holder of the number of one
      one-hundredths (1/100) of a share of Preferred Stock or any other securities
      of
      the Company which may at any time be issuable on the exercise of the Rights
      represented thereby, nor shall anything contained herein or in any Rights
      Certificate be construed to confer upon the holder of any Rights Certificate,
      as
      such, any of the rights of a stockholder of the Company or any right to vote
      for
      the election of directors or upon any matter submitted to stockholders at any
      meeting thereof, or to give or withhold consent to any corporate action, or
      to
      receive notice of meetings or other actions affecting stockholders (except
      as
      provided in Section 25 hereof), or to receive dividends or subscription rights,
      or otherwise, until the Right or Rights evidenced by such Rights Certificate
      shall have been exercised in accordance with the provisions hereof.

     

    Section
      18. Concerning the Rights Agent.

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    (b) Whenever
      in the performance of its duties under this Agreement the Rights Agent shall
      deem it necessary or desirable that any fact or matter (including, without
      limitation, the identity of any Acquiring Person or Adverse Person and the
      determination of Current Market Price) be proved or established by the Company
      prior to taking or suffering any action hereunder, such fact or matter (unless
      other evidence in respect thereof be herein specifically prescribed) may be
      deemed to be conclusively proved and established by a certificate signed by
      the
      Chairman of the Board, the President, any Vice President, the Treasurer, any
      Assistant Treasurer, the Secretary or any Assistant Secretary of the Company
      and
      delivered to the Rights Agent, and such certificate shall be full authorization
      to the Rights Agent for any action taken or suffered in good faith by it under
      the provisions of this Agreement in reliance upon such certificate.

     

    (c) The
      Rights Agent shall be liable hereunder only for its own gross negligence, bad
      faith or willful misconduct.

     

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

     

    (e) The
      Rights Agent shall not be under any responsibility in respect of the validity
      of
      this Agreement or the execution and delivery hereof (except the due execution
      hereof by the Rights Agent) or in respect of the validity or execution of any
      Rights Certificate (except its countersignature thereof); nor shall it be
      responsible for any breach by the Company of any covenant or condition contained
      in this Agreement or in any Rights Certificate; nor shall it be responsible
      for
      any adjustment required under the provisions of Section 11, Section 13 or
      Section 24 hereof or responsible for the manner, method or amount of any such
      adjustment or the ascertaining of the existence of facts that would require
      any
      such adjustment (except with respect to the exercise of Rights evidenced by
      Rights Certificates after actual notice of any such adjustment); nor shall
      it by
      any act hereunder be deemed to make any representation or warranty as to the
      authorization or reservation of any shares of Common Stock or Preferred Stock
      to
      be issued pursuant to this Agreement or any Rights Certificate or as to whether
      any shares of Common Stock or Preferred Stock will, when so issued, be validly
      authorized and issued, fully paid and nonassessable.

     

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

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

    Section
      21. Change of Rights Agent.
      The
      Rights Agent or any successor Rights Agent may resign and be discharged from
      its
      duties under this Agreement upon thirty (30) days' notice in writing mailed
      to
      the Company, and to each transfer agent of the Common Stock and Preferred Stock,
      by registered or certified mail, and, if such resignation occurs after the
      Distribution Date, to the registered holders of the Rights Certificates by
      first-class mail. If the transfer agency relationship in effect between the
      Company and the Rights Agent terminates, the Rights Agent will be deemed to
      have
      resigned automatically and be discharged from its duties under this Agreement
      as
      of the effective date of such termination, and the Company shall be responsible
      for sending any required notice. The Company may remove the Rights Agent or
      any
      successor Rights Agent upon thirty (30) days' notice in writing, mailed to
      the
      Rights Agent or successor Rights Agent, as the case may be, and to each transfer
      agent of the Common Stock and Preferred Stock, by registered or certified mail,
      and, if such removal occurs after the Distribution Date, to the holders of
      the
      Rights Certificates by first-class mail. If the Rights Agent shall resign or
      be
      removed or shall otherwise become incapable of acting, the Company shall appoint
      a successor to the Rights Agent. If the Company shall fail to make such
      appointment within a period of thirty (30) days after giving notice of such
      removal or after it has been notified in writing of such resignation or
      incapacity by the resigning or incapacitated Rights Agent or by the holder
      of a
      Rights Certificate (who shall, with such notice, submit his Rights Certificate
      for inspection by the Company), then any registered holder of any Rights
      Certificate may apply to any court of competent jurisdiction for the appointment
      of a new Rights Agent. Any successor Rights Agent, whether appointed by the
      Company or by such a court, shall be (a) a legal business entity organized
      and
      doing business under the laws of the United States or of the State of Ohio
      or of
      any other state of the United States, in good standing, having an office in
      the
      State of Ohio, which is authorized under such laws to exercise corporate trust,
      stock transfer or stockholder services powers and which has at the time of
      its
      appointment as Rights Agent a combined capital and surplus of at least
      $50,000.000 or (b) an affiliate of a legal business entity described in clause
      (a) of this sentence. After appointment, the successor Rights Agent shall be
      vested with the same powers, rights, duties and responsibilities as if it had
      been originally named as Rights Agent without further act or deed; but the
      predecessor Rights Agent shall deliver and transfer to the successor Rights
      Agent any property at the time held by it hereunder, and execute and deliver
      any
      further assurance, conveyance, act or deed necessary for the purpose. Not later
      than the effective date of any such appointment, the Company shall file notice
      thereof in writing with the predecessor Rights Agent and each transfer agent
      of
      the Common Stock and the Preferred Stock, and, if such appointment occurs after
      the Distribution Date, mail a notice thereof in writing to the registered
      holders of the Rights Certificates. Failure to give any notice provided for
      in
      this Section 21, however, or any defect therein, shall not affect the legality
      or validity of the resignation or removal of the Rights Agent or the appointment
      of the successor Rights Agent, as the case may be.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    Section
      22. Issuance of New Rights Certificates.
      Notwithstanding any of the provisions of this Agreement or of the Rights to
      the
      contrary, the Company may, at its option, issue new Rights Certificates
      evidencing Rights in such form as may be approved by the Board of Directors
      to
      reflect any adjustment or change in the Purchase Price and the number or kind
      or
      class of shares or other securities or property purchasable under the Rights
      Certificates made in accordance with the provisions of this Agreement. In
      addition, in connection with the issuance or sale of shares of Common Stock
      following the Distribution Date and prior to the redemption or expiration of
      the
      Rights, the Company (a) shall, with respect to shares of Common Stock so issued
      or sold pursuant to the exercise of stock options or under any employee plan
      or
      arrangement, granted or awarded as of the Distribution Date, or upon the
      exercise, conversion or exchange of securities hereinafter issued by the
      Company, and (b) may, in any other case, if deemed necessary or appropriate
      by
      the Board of Directors, issue Rights Certificates representing the appropriate
      number of Rights in connection with such issuance or sale; provided,
      however,
      that
      (i) no such Rights Certificate shall be issued if, and to the extent that,
      the
      Company shall be advised by counsel that such issuance would create a
      significant risk of material adverse tax consequences to the Company or the
      Person to whom such Rights Certificate would be issued, and (ii) no such Rights
      Certificate shall be issued if, and to the extent that, appropriate adjustment
      shall otherwise have been made in lieu of the issuance thereof.

     

    Section
      23. Redemption and Termination.

     

    (a) The
      Board
      of Directors may, at its option, at any time prior to the earliest of (i) the
      Close of Business on the tenth Business Day following a Stock Acquisition Date
      (or, if the Stock Acquisition Date shall have occurred prior to the Record
      Date,
      the Close of Business on the tenth Business Day following the Record Date),
      (ii)
      the Close of Business on the tenth Business Day after the Board of Directors
      of
      the Company determines, pursuant to the criteria set forth in Section
      11(a)(ii)(B) hereof, that a Person is an Adverse Person, or (iii) the Final
      Expiration Date, redeem all but not less than all of the then outstanding Rights
      at a redemption price of $.001 per Right, as such amount may be appropriately
      adjusted to reflect any stock split, stock dividend or similar transaction
      occurring after the date hereof (such redemption price being hereinafter
      referred to as the “Redemption Price”). Notwithstanding anything contained in
      this Agreement to the contrary, the Rights shall not be exercisable after the
      first occurrence of a Section 11(a)(ii) Event until such time as the Company's
      right of redemption hereunder has expired. The Company may, at its option,
      pay
      the Redemption Price in cash, shares of Common Stock (based on the Current
      Market Price, as defined in Section 11(d)(i) hereof, of the Common Stock at
      the
      time of redemption) or any other form of consideration deemed appropriate by
      the
      Board of Directors.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    (b) Immediately
      upon the action of the Board of Directors ordering the redemption of the Rights,
      evidence of which shall have been filed with the Rights Agent and without any
      further action and without any notice, the right to exercise the Rights will
      terminate and the only right thereafter of the holders of Rights shall be to
      receive the Redemption Price for each Right so held. Promptly after the action
      of the Board of Directors ordering the redemption of the Rights, the Company
      shall give notice of such redemption to the Rights Agent and the holders of
      the
      then outstanding Rights by mailing such notice to all such holders at each
      holder's last address as it appears upon the registry books of the Rights Agent
      or, prior to the Distribution Date, on the registry books of the transfer agent
      for the Common Stock. Any notice which is mailed in the manner herein provided
      shall be deemed given, whether or not the holder receives the notice. Each
      such
      notice of redemption will state the method by which the payment of the
      Redemption Price will be made.

     

    (c) Neither
      the Company nor any of its Affiliates or Associates may redeem, acquire or
      purchase for value any Rights at any time in any manner other than that
      specifically set forth in this Section 23 and other than in connection with
      the
      purchase or repurchase by any of them of Common Stock prior to the Distribution
      Date.

     

    Section
      24. Exchange.

     

    (a) The
      Board
      of Directors may, at its option, at any time after any Person becomes an
      Acquiring Person, exchange all or part of the then outstanding and exercisable
      Rights (which shall not include Rights that have become void pursuant to the
      provisions of Section 7(e) hereof) for Common Stock at an exchange ratio of
      one
      share of Common Stock per Right, appropriately adjusted to reflect any stock
      split, stock dividend or similar transaction occurring after the date hereof
      (such exchange ratio being hereinafter referred to as the “Exchange Ratio”).
      Notwithstanding the foregoing, the Board of Directors shall not be empowered
      to
      effect such exchange at any time after any Person (other than the Company,
      any
      Subsidiary of the Company, any employee benefit plan of the Company or any
      such
      Subsidiary, or any entity holding Common Stock for or pursuant to the terms
      of
      any such plan), together with all Affiliates and Associates of such Person,
      becomes the Beneficial Owner of fifty percent (50%) or more of the Common Stock
      then outstanding.

     

    (b) Immediately
      upon the action of the Board of Directors ordering the exchange of any Rights
      pursuant to subsection (a) of this Section 24 and without any further action
      and
      without any notice, the right to exercise such Rights shall terminate and the
      only right thereafter of a holder of such Rights shall be to receive that number
      of shares of Common Stock equal to the number of such Rights held by such holder
      multiplied by the Exchange Ratio. The Company shall promptly give public notice
      of any such exchange; provided, however, that the failure to give, or any defect
      in, such notice shall not affect the validity of such exchange. The Company
      promptly shall mail a notice of any such exchange to all of the holders of
      such
      Rights at their last addresses as they appear upon the registry books of the
      Rights Agent. Any notice which is mailed in the manner herein provided shall
      be
      deemed given, whether or not the holder receives the notice. Each such notice
      of
      exchange will state the method by which the exchange of the Common Stock for
      Rights will be effected and, in the event of any partial exchange, the number
      of
      Rights which will be exchanged. Any partial exchange shall be effected pro
      rata
      based on the number of Rights (other than Rights which have become void pursuant
      to the provisions of Section 7(e) hereof) held by each holder of
      Rights.

     

    (c) In
      any
      exchange pursuant to this Section 24, the Company, at its option, may substitute
      Preferred Stock (or Equivalent Preferred Stock, as such term is defined in
      paragraph (b) of Section 11 hereof) for Common Stock exchangeable for Rights,
      at
      the initial rate of one one-hundredth (1/100) of a share of Preferred Stock
      (or
      Equivalent Preferred Stock) for each share of Common Stock, as appropriately
      adjusted to reflect stock splits, stock dividends and other similar transactions
      after the date hereof

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    (d) In
      the
      event that there shall not be sufficient shares of Common Stock issued but
      not
      outstanding or authorized but unissued to permit any exchange of Rights as
      contemplated in accordance with this Section 24, the Company shall take all
      such
      action as may be necessary to authorize additional shares of Common Stock for
      issuance upon exchange of the Rights.

     

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

     

    Section
      25. Notice of Certain Events.

     

    (a) If
      the
      Company shall propose, at any time after the Distribution Date, (i) to pay
      any
      dividend payable in stock of any class to the holders of Preferred Stock or
      to
      make any other distribution to the holders of Preferred Stock (other than a
      regular quarterly cash dividend out of earnings or retained earnings of the
      Company), (ii) to offer to the holders of Preferred Stock rights or warrants
      to
      subscribe for or to purchase any additional shares of Preferred Stock or shares
      of stock of any class or any other securities, rights or options, (iii) to
      effect any reclassification of its Preferred Stock (other than a
      reclassification involving only the subdivision of outstanding shares of
      Preferred Stock), (iv) to effect any consolidation or merger into or with any
      other Person (other than a Subsidiary of the Company in a transaction which
      complies with Section 11(o) hereof), or to effect any sale or other transfer
      (or
      to permit one or more of its Subsidiaries to effect any sale or other transfer),
      in one transaction or a series of related transactions, of more than fifty
      percent (50%) of the assets, cash flow or earning power of the Company and
      its
      Subsidiaries (taken as a whole) to any other Person or Persons (other than
      the
      Company and/or any of its Subsidiaries in one or more transactions each of
      which
      complies with Section 11(o) hereof), or (v) to effect the liquidation,
      dissolution or winding up of the Company, then, in each such case, the Company
      shall give to each holder of a Rights Certificate, to the extent feasible and
      in
      accordance with Section 26 hereof, a notice of such proposed action, which
      shall
      specify the record date for the purposes of such stock dividend, distribution
      of
      rights or warrants, or the date on which such reclassification, consolidation,
      merger, sale, transfer, liquidation, dissolution, or winding up is to take
      place
      and the date of participation therein by the holders of the shares of Preferred
      Stock, if any such date is to be fixed, and such notice shall be so given in
      the
      case of any action covered by clause (i) or (ii) above at least twenty (20)
      days
      prior to the record date for determining holders of the shares of Preferred
      Stock for purposes of such action, and in the case of any such other action,
      at
      least twenty (20) days prior to the date of the taking of such proposed action
      or the date of participation therein by the holders of the shares of Preferred
      Stock, whichever shall be the earlier.

     

    (b) If
      a
      Section 11(a)(ii) Event shall occur, then, in any such case, (i) the Company
      shall as soon as practicable thereafter give to each holder of a Rights
      Certificate, to the extent feasible and in accordance with Section 26 hereof,
      a
      notice of the occurrence of such event, which shall specify the event and the
      consequences of the event to holders of Rights under Section 11(a)(ii) hereof,
      and (ii) all references in the preceding paragraph to Preferred Stock shall
      be
      deemed thereafter to refer to Common Stock and/or, if appropriate, other
      securities.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

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

     

    LCA-Vision
      Inc.

    7840
      Montgomery Road

    Cincinnati,
      OH 45236

    Attention:
      Corporate Secretary

    


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

     

    Computershare
      Trust Company, N.A. 

    250
      Royall Street

    Canton,
      MA 02021

    Attention:
      Client Services 

    


    Notices
      or demands authorized by this Agreement to be given or made by the Company
      or
      the Rights Agent to the holder of any Rights Certificate (or, if prior to the
      Distribution Date, to the holder of certificates representing shares of Common
      Stock) shall be sufficiently given or made if sent by first-class mail, postage
      prepaid, addressed to such holder at the address of such holder as shown on
      the
      registry books of the Company.

     

    Section
      27. Supplements and Amendments.

     

    (a) Prior
      to
      the Distribution Date, and subject to the provisions of Section 27(h) hereof,
      the Company and the Rights Agent shall, if the Company so directs, supplement
      or
      amend any provision of this Agreement without the approval of any holders of
      certificates representing shares of Common Stock. From and after the
      Distribution Date, and subject to the provisions of Section 27(b) hereof, the
      Company and the Rights Agent shall, if the Company so directs, supplement or
      amend this Agreement without the approval of any holders of Rights Certificates
      in order (i) to cure any ambiguity, (ii) to correct or supplement any provision
      contained herein which may be defective or inconsistent with any other
      provisions herein, (iii) to shorten or lengthen any time period hereunder,
      or
      (iv) to change or supplement the provisions hereunder in any manner which the
      Company may deem necessary or desirable and which shall not adversely affect
      the
      interests of the holders of Rights Certificates (other than an Acquiring Person,
      an Adverse Person or an Affiliate or Associate of an Acquiring Person or an
      Adverse Person). Upon the delivery of a certificate from an appropriate officer
      of the Company which states that the proposed supplement or amendment is in
      compliance with the terms of this Section 27, the Rights Agent shall execute
      such supplement or amendment, provided that such supplement or amendment does
      not adversely affect the rights, duties or obligations of the Rights Agent
      under
      this Agreement. Prior to the Distribution Date, the interests of the holders
      of
      Rights shall be deemed coincident with the interests of the holders of Common
      Stock.

     

    (b) Notwithstanding
      anything herein to the contrary, no supplement or amendment shall be made to
      this Agreement at a time when the Rights are not redeemable, except as
      contemplated by clause (i) or (ii) of Section 27(a) hereof.

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

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

     

    Section
      29. Determinations and Actions by the Board of Directors, etc.
      For all
      purposes of this Agreement, any calculation of the number of shares of Common
      Stock or any other class of capital stock outstanding at any particular time,
      including for purposes of determining the particular percentage of such
      outstanding shares of Common Stock of which any Person is the Beneficial Owner,
      shall be made in accordance with the last sentence of Rule 13d-3(d)(l)(i) of
      the
      General Rules and Regulations under the Exchange Act. The Board of Directors
      shall have the exclusive power and authority to administer this Agreement and
      to
      exercise all rights and powers specifically granted to the Board of Directors
      or
      to the Company, or as may be necessary or advisable in the administration of
      this Agreement, including, without limitation, the right and power to (i)
      interpret the provisions of this Agreement, and (ii) make all determinations
      deemed necessary or advisable for the administration of this Agreement
      (including a determination to redeem or not redeem the Rights, to declare than
      a
      Person is an Adverse Person or to amend the Agreement). All such actions,
      calculations, interpretations and determinations (including, for purposes of
      clause (y) below, all omissions with respect to the foregoing) which are done
      or
      made by the Board of Directors in good faith, shall (x) be final, conclusive
      and
      binding on the Company, the Rights Agent, the holders of the Rights and all
      other parties, and (y) not subject the Board of Directors, or any of the
      directors on the Board of Directors, to any liability to the holders of the
      Rights.

     

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

     

    Section
      31. Severability.
      If any
      term, provision, covenant or restriction of this Agreement is held by a court
      of
      competent jurisdiction or other authority to be invalid, void or unenforceable,
      the remainder of the terms, provisions, covenants and restrictions of this
      Agreement shall remain in full force and effect and shall in no way be affected,
      impaired or invalidated; provided, however, that notwithstanding anything in
      this Agreement to the contrary, if any such term, provision, covenant or
      restriction is held by such court or authority to be invalid, void or
      unenforceable and the Board of Directors determines in its good faith judgment
      that severing the invalid language from this Agreement would adversely affect
      the purpose or effect of this Agreement, the right of redemption set forth
      in
      Section 23 hereof shall be reinstated and shall not expire until the Close
      of
      Business on the tenth Business Day following the date of such determination
      by
      the Board of Directors. Without limiting the foregoing, if any provision
      requiring a specific group of directors to act is held to by any court of
      competent jurisdiction or other authority to be invalid, void or unenforceable,
      such determination shall then be made by the Board of Directors in accordance
      with applicable law and the Company's Restated Certificate of Incorporation
      and
      Bylaws.

     

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

     

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

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

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

     

    Section
      35. Force Majeure. Notwithstanding anything to the contrary contained herein,
      the Rights Agent shall not be liable for any delays or failures in performance
      resulting from acts beyond its reasonable control including, without limitation,
      acts of God, terrorist acts, shortage of supply, breakdowns or malfunctions,
      interruptions or malfunction of computer facilities, or loss of data due to
      power failures or mechanical difficulties with information storage or retrieval
      systems, labor difficulties, war, or civil unrest. 

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

       

    

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

     

    
      	 	 	 
	 	LCA-VISION
              INC.
	 
 	 
 	 
 
	 	By:  	/s/ Steven
              C.
              Straus
	 	Name: Steven C. Straus 
	 	Title:  
              Chief Executive Officer


    

     

    
      
        	 	 	 
	 	COMPUTERSHARE
                TRUST COMPANY, N.A.
	 
 	 
 	 
 
	 	By:  	/s/ Jeanine
                Simon
	 	Name: Jeanine Simon
	 	Title:  
                Relationship  Manager


      

       

    

    [Rights
      Agreement Signature page]

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

     Exhibit
      A

    Form
      of
      Rights Certificate

     

    
      	Certificate No. R-	
               Rights

            


    

    


    NOT
      EXERCISABLE AFTER NOVEMBER 23, 2018 OR EARLIER IF REDEEMED BY THE COMPANY OR
      IF
      THE RIGHTS AGREEMENT IS NOT RATIFIED BY THE COMPANY’S STOCKHOLDERS AS SET FORTH
      IN THE RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION
      OF
      THE COMPANY, AT $.001 PER R1GHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
      UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON
      OR
      ADVERSE PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY
      SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
      REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
      PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR ADVERSE PERSON OR AN AFFILIATE
      OR ASSOCIATE OF AN ACQUIRING PERSON OR ADVERSE PERSON (AS SUCH TERMS ARE DEFINED
      IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
      REPRESENTED HEREBY MAY BECOME NULL AND VOID IN CIRCUMSTANCES SPECIFIED IN
      SECTION 7(e) OF SUCH AGREEMENT.]1 

     

     

      
        

      

    

    1
      The
      portion of the legend in brackets shall be inserted only if applicable and
      if so
      inserted shall replace the preceding sentence.

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

    


    Rights
      Certificate

     

    LCA-VISION
      INC.

     

    This
      certifies that ____________, or registered assigns, is the registered owner
      of
      the number of Rights set forth above, each of which entities the owner thereof,
      subject to the terms, provisions and conditions of the Rights Agreement, dated
      as of ________, 2008 (the “Rights Agreement”), between LCA-Vision Inc., a
      Delaware corporation (the “Company”), and _________________, a _____________
      (the “Rights Agent”), to purchase from the Company at any time prior to 5:00
      P.M. (Eastern time) on the earlier of (i) November 23, 2018 (unless such date
      is
      extended prior thereto by the Board of Directors) and (ii) November 23, 2009
      (unless prior to such time adoption of the Rights Agreement has been ratified
      by
      the Company’s stockholders in accordance with the approval requirements for
      stockholder action as set forth in the Company’s By-laws), at the office or
      offices of the Rights Agent designated for such purpose, or its successors
      as
      Rights Agent, one one-hundredth (1/100) of a fully paid, non-assessable share
      of
      Series A Junior Participating Preferred Stock (the “Preferred Stock”) of the
      Company, at a purchase price of $100.00 per one one-hundredth (1/100) of a
      share
      (the “Purchase Price”), upon presentation and surrender of this Rights
      Certificate with the Form of Election to Purchase and related Certificate duly
      executed. The number of Rights evidenced by this Rights Certificate (and the
      number of shares which may be purchased upon exercise thereof) set forth above,
      and the Purchase Price per share set forth above, are the number and Purchase
      Price as of __________________ based on the Preferred Stock as constituted
      at
      such date. The Company reserves the right to require prior to the occurrence
      of
      a Triggering Event (as such term is defined in the Rights Agreement) that a
      number of Rights be exercised so that only whole shares of Preferred Stock
      will
      be issued.

     

    Upon
      the
      occurrence of a Section 11(a)(ii) Event (as such term is defined in the Rights
      Agreement), if the Rights evidenced by this Rights Certificate are beneficially
      owned by (i) an Acquiring Person, an Adverse Person or an Affiliate or Associate
      of any such Acquiring Person or Adverse Person (as such terms are defined in
      the
      Rights Agreement), (ii) a transferee of any such Acquiring Person, Adverse
      Person, Associate or Affiliate, or (iii) under certain circumstances specified
      in the Rights Agreement, a transferee of a person who, after such transfer,
      became an Acquiring Person, an Adverse Person, or an Affiliate or Associate
      of
      an Acquiring Person or Adverse Person, such Rights shall become null and void
      and no holder hereof shall have any right with respect to such Rights from
      and
      after the occurrence of such Section 11(a)(ii) Event.

     

    As
      provided in the Rights Agreement, the Purchase Price and the number and kind
      of
      shares of Preferred Stock or other securities, which may be purchased upon
      the
      exercise of the Rights evidenced by this Rights Certificate are subject to
      modification and adjustment upon the happening of certain events, including
      Triggering Events.

     

    This
      Rights Certificate is subject to all of the terms, provisions and conditions
      of
      the Rights Agreement, which terms, provisions and conditions are hereby
      incorporated herein by reference and made a part hereof and to which Rights
      Agreement reference is hereby made for a full description of the rights,
      limitations of rights, obligations, duties and immunities hereunder of the
      Rights Agent, the Company and the holders of the Rights Certificates, which
      limitations of rights include the temporary suspension of the exercisability
      of
      such Rights under the specific circumstances set forth in the Rights Agreement.
      Copies of the Rights Agreement are on file at the above-mentioned office of
      the
      Rights Agent and are also available upon written request to the Rights
      Agent.

     

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        

      

    

     

    This
      Rights Certificate, with or without other Rights Certificates, upon surrender
      at
      the principal office or offices of the Rights Agent designated for such purpose,
      may be exchanged for another Rights Certificate or Rights Certificates of like
      tenor and date evidencing Rights entitling the holder to purchase a like
      aggregate number of one one-hundredths (1/100) of a share of Preferred Stock
      as
      the Rights evidenced by the Rights Certificate or Rights Certificates
      surrendered shall have entitled such holder to purchase. If this Rights
      Certificate shall be exercised in part, the holder shall be entitled to receive
      upon surrender hereof another Rights Certificate or Rights Certificates for
      the
      number of whole Rights not exercised.

     

    Subject
      to the provisions of the Rights Agreement, the Rights evidenced by this
      Certificate may (unless the board of Directors shall have made a determination
      that a Person is all Adverse Person) be redeemed by the Company at its option
      at
      a redemption price of $.001 per Right at any time prior to the earlier of the
      Close of Business on (i) the tenth Business Day following the Stock Acquisition
      Date (as such time period may be extended pursuant to the Rights Agreement),
      and
      (ii) the Final Expiration Date. In addition, under certain circumstances
      following the Stock Acquisition Date, the Rights may be exchanged, in whole
      or
      in part, for shares of the Common Stock, or shares of preferred stock of the
      Company having essentially the same value or economic rights as such shares.
      Immediately upon the action of the Board of Directors authorizing any such
      exchange, and without any further action or any notice, the Rights (other than
      Rights which are not subject to such exchange) will terminate and the Rights
      will only enable holders to receive the shares issuable upon such
      exchange.

     

    No
      fractional shares of Preferred Stock will be issued upon the exercise of any
      Right or Rights evidenced hereby (other than fractions which are integral
      multiples of one one-hundredth (1/100) of a share of Preferred Stock, which
      may,
      at the election of the Company, be evidenced by depositary receipts), but in
      lieu thereof a cash payment will be made, as provided in the Rights
      Agreement.

     

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

     

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

     

    


    


    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
        A-3

        
          

        

      

      
        
        

      

       

    

    WITNESS
      the facsimile signatures of the proper officers of the Company and its corporate
      seal.

     

    Dated
      as
      of ____________________.

     

    
      	ATTEST:	 	 LCA-VISION
              INC.
	 	 	 	 	 
	 	 	 	 	 
	  	 	 By: 	 
	Secretary	 	 	Name
Title
	 	 	 	 
	
              Countersigned:

              


              [RIGHTS
                AGENT]

            	 	 	 
	 	 	 	 	 
	By: 
	 	 	 	 
	 	Authorized Signature	 	 	 


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Form
      of
      Reverse Side of Rights Certificate

     

    FORM
      OF ASSIGNMENT

     

    (To
      be
      executed by the registered holder if such

    holder
      desires to transfer the Rights Certificate.)

     

    FOR
      VALUE
      RECEIVED _______________________________________ hereby sells, assigns and
      transfers unto
      ____________________________________________________________________

     

    


     

    (Please
      print name and address of transferee)

     

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

     

    Dated:
      _______________

     

    
      	 	 
	 	 Signature


    

     

    


    Signature
      Guaranteed:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Certificate

     

    The
      undersigned hereby certifies by checking the appropriate boxes
      that:

     

    (1)
      this
      Rights Certificate [ ] is [ ] is not being sold, assigned and transferred by
      or
      on behalf of a Person who is or was an Acquiring Person or an Adverse Person,
      or
      an Affiliate or Associate of any such Acquiring Person or Adverse Person (as
      such terms are defined pursuant to the Rights Agreement);

     

    (2)
      after
      due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did
      not
      acquire the Rights evidenced by this Rights Certificate from any Person who
      is,
      was or subsequently became an Acquiring Person or Adverse or an Affiliate or
      Associate of an Acquiring Person or Adverse Person.

     

    Dated:______________

     

    
      	
            	 
	 	 Signature


    

     

     

    Signature
      Guaranteed:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    


    NOTICE

     

    The
      signature to the foregoing Assignment and Certificate must correspond to the
      name as written upon the face of this Rights Certificate in every particular,
      without alteration or enlargement or any change whatsoever.

     

    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    


    FORM
      OF ELECTION TO PURCHASE

     

    (To
      be
      executed if holder desires to exercise

    Rights
      represented by the Rights Certificate.)

     

    To:
      LCA-Vision Inc.:

    


    The
      undersigned hereby irrevocably elects to exercise ________ Rights represented
      by
      this Rights Certificate to purchase the shares of Preferred Stock issuable
      upon
      the exercise of the Rights (or such other securities of the Company or of any
      other person which may be issuable upon the exercise of the Rights) and requests
      that certificates for such shares be issued in the name of and delivered
      to:

     

    Please
      insert social security

    or
      other
      identifying number

    


    (Please
      print name and address)

     

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

     

    Please
      insert social security

    or
      other
      identifying number

     

    (Please
      print name and address)

     

    Dated:____________

     

     

    
      	
            	 
	 	 Signature


    

     

     

    Signature
      Guaranteed:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    


    Certificate

     

    The
      undersigned hereby certifies by checking the appropriate boxes
      that:

     

    (1)
      the
      Rights evidenced by this Rights Certificate [ ] are [ ] are not being exercised
      by or on behalf of a Person who is or was an Acquiring Person or an Adverse
      Person, or an Affiliate or Associate of any such Acquiring Person or Adverse
      Person (as such terms are defined pursuant to the Rights Agreement);
      and

     

    (2)
      after
      due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did
      not
      acquire the Rights evidenced by this Rights Certificate from any Person who
      is,
      was or became an Acquiring Person or Adverse Person or an Affiliate or Associate
      of an Acquiring Person or Adverse Person.

     

    Dated:_____________

    
      	
            	 
	 	 Signature


    

     

     

    Signature
      Guaranteed:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    NOTICE

     

    The
      signature to the foregoing Election to Purchase and Certificate must correspond
      to the name as written upon the face of this Rights Certificate in every
      particular, without alteration or enlargement or any change
      whatsoever.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     Exhibit
      B

    


    SUMMARY
      OF RIGHTS TO PURCHASE

    PREFERRED
      STOCK

     

    On
      November 11, 2008, the Board of Directors of LCA-Vision Inc. (the “Company”)
      declared a dividend distribution of one Right for each outstanding share of
      Company Common Stock to stockholders of record at the Close of Business on
      November 24, 2008 (the “Record Date”). Each Right entitles the registered holder
      to purchase from the Company a unit consisting of one one-hundredth (1/100)
      of a
      share (a “Unit”) of Series A Junior Participating Preferred Stock, par value
      $.001 per share (the “Series A Preferred Stock”) at a Purchase Price of $100.00
      per Unit, subject to adjustment. The description and terms of the Rights are
      set
      forth in a Rights Agreement (the “Rights Agreement”) between the Company and
      Computershare Trust Company, N.A., as Rights Agent.

     

    Initially,
      the Rights will be attached to all Common Stock certificates representing shares
      then outstanding, and no separate Rights Certificates will be distributed.
      Subject to certain exceptions specified in the Rights Agreement, the Rights
      will
      separate from the Common Stock and a Distribution Date will occur upon the
      earlier of (i) ten (10) business days following a public announcement that
      a
      person or group of affiliated or associated persons (an “Acquiring Person”) has
      acquired beneficial ownership of twenty percent (20%) or more of the outstanding
      shares of Common Stock other than as a result of repurchases of stock by the
      Company, certain inadvertent actions by institutional or certain other
      stockholders or the beneficial ownership by a person of twenty percent (20%)
      or
      more of the outstanding Common Stock as of November 24, 2008, or the date a
      Person has entered into an agreement or arrangement with the Company or any
      Subsidiary of the Company providing for an Acquisition Transaction (the “Stock
      Acquisition Date”), (ii) ten (10) business days (or such later date as the Board
      of Directors shall determine) following the commencement of a tender offer
      or
      exchange offer that would result in a person or group becoming an Acquiring
      Person, or (iii) ten (10) business days alter the Board of Directors of the
      Company determines any person, alone or together with its affiliates and
      associates, has become the Beneficial Owner of an amount of Common Stock which
      the Board of Directors determines to be substantial (which amount shall in
      no
      event be less than 10% of the shares of Common Stock outstanding) and at least
      a
      majority of the Board of Directors who are not officers of the Company, after
      reasonable inquiry and investigation, including consultation with such persons
      as such directors shall deem appropriate, shall determine that (a) such
      beneficial ownership by such person is intended to cause the Company to
      repurchase the Common Stock beneficially owned by such person or to cause
      pressure on the Company to take action or enter into a transaction or series
      of
      transactions intended to provide such person with short-term financial gain
      under circumstances where the Board of Directors determines that the best
      long-term interests of the Company and its stockholders would not be served
      by
      taking such action or entering into such transactions or series of transactions
      at that time or (b) such beneficial ownership is causing or reasonably likely
      to
      cause a material adverse impact (including, but not limited to, impairment
      of
      relationships with customers or impairment of the Company's ability to maintain
      its competitive position) on the business or prospects of the Company (any
      such
      person being referred to herein and in the Rights Agreement as an “Adverse
      Person”). An Acquisition Transaction is defined in the Rights Agreement as (x) a
      merger, consolidation or similar transaction involving the Company or any of
      its
      Subsidiaries as a result of which stockholders of the Company will no longer
      own
      a majority of the outstanding shares of Common Stock of the Company or a
      publicly traded entity which controls the Company or, if appropriate, the entity
      into which the Company may be merged, consolidated or otherwise combined (based
      solely on the shares of Common Stock received or retained by such stockholders,
      in their capacity as stockholders of the Company, pursuant to such transaction),
      (y) a purchase or other acquisition of all or a substantial portion of the
      assets of the Company and its Subsidiaries, or (z) a purchase or other
      acquisition of securities representing twenty percent (20%) or more of the
      shares of Common Stock then outstanding. Until the Distribution Date, (i) the
      Rights will be evidenced by the Common Stock certificates and will be
      transferred with and only with such Common Stock certificates, (ii) new Common
      Stock certificates issued after the Record Date will contain a notation
      incorporating the Rights Agreement by reference and (iii) the surrender for
      transfer of any certificates for Common Stock outstanding will also constitute
      the transfer of the Rights associated with the Common Stock represented by
      such
      certificate. Pursuant to the Rights Agreement, the Company reserves the right
      to
      require prior to the occurrence of a Triggering Event (as defined below) that,
      upon any exercise of Rights, a number of Rights be exercised so that only whole
      shares of Preferred Stock will be issued.

     

    
      
        
        

      

      
        B-1

        
          

        

      

      
        
        

      

    

     

    The
      Rights are not exercisable until the Distribution Date and will expire at 5:00
      P.M. (Eastern time) on the earlier of (i) November 23, 2018 (subject to
      extension by the Board of Directors) and (ii) November 23, 2009 if prior to
      such
      time adoption of the Rights Agreement has not been ratified by the Company’s
      stockholders. The Rights are subject to earlier redemption or exchange by the
      Company as described below.

     

    As
      soon
      as practicable after the Distribution Date, Rights Certificates will be mailed
      to holders of record of the Common Stock as of the Close of Business on the
      Distribution Date and, thereafter, the separate Rights Certificates alone will
      represent the Rights. Except as otherwise determined by the Board of Directors,
      only shares of Common Stock issued prior to the Distribution Date will be issued
      with Rights.

     

    If
      (i) a
      Person becomes an Acquiring Person, except pursuant to an offer for all
      outstanding shares of Common Stock which the independent directors determine
      to
      be fair and not inadequate and to otherwise be in the best interests of the
      Company and its stockholders, after receiving advice from one or more investment
      banking firms (a “Qualified Offer”), or (ii) the Board of Directors determines
      that a person is an Adverse Person, each holder of a Right will thereafter
      have
      the right to receive, upon exercise, Common Stock (or, in certain circumstances,
      cash, property or other securities of the Company) having a value equal to
      two
      times the exercise price of the Right. Notwithstanding any of the foregoing,
      following the occurrence of the event set forth in this paragraph, all Rights
      that are, or (under certain circumstances specified in the Rights Agreement)
      were, beneficially owned by any Acquiring Person or Adverse Person (or by
      certain related parties) will be null and void. However, Rights are not
      exercisable following the occurrence of the event set forth above until such
      time as the Rights are no longer redeemable by the Company as set forth
      below.

     

    For
      example, at an exercise price of $100.00 per Right, each Right not owned by
      an
      Acquiring Person or by an Adverse Person (or by certain related parties)
      following an event set forth in the preceding paragraph would entitle its holder
      to purchase $200.00 worth of Common Stock (or other consideration, as noted
      above) for $100.00. Assuming that the Common Stock had a per share value of
      $40.00 at such time, the holder of each valid Right would be entitled to
      purchase 5 shares of Common Stock for $100.00.

     

    If
      at any
      time following the Stock Acquisition Date, (i) the Company engages in a merger
      or other business combination transaction in which the Company is not the
      surviving corporation (other than with an entity which acquired the shares
      pursuant to a Qualified Offer), (ii) the Company engages in a merger or other
      business combination transaction in which the Company is the surviving
      corporation and the Common Stock of the Company is changed or exchanged, or
      (iii) fifty percent (50%) or more of the Company's assets, cash flow or earning
      power is sold or transferred, each holder of a Right (except Rights which have
      previously been voided as set forth above) shall thereafter have the right
      to
      receive, upon exercise, common stock of the acquiring company having a value
      equal to two times the exercise price of the Right. The events set forth in
      this
      paragraph and in the second preceding paragraph are referred to as the
“Triggering Events.”

     

    
      
        
        

      

      
        B-2

        
          

        

      

      
        
        

      

    

     

    At
      any
      time after a person becomes an Acquiring Person and prior to the acquisition
      by
      such person or group of fifty percent (50%) or more of the outstanding Common
      Stock, the Board of Directors may exchange the Rights (other than Rights owned
      by such person or group which have become void), in whole or in part, at an
      exchange ratio of one share of Common Stock, or one one-hundredth (1/100) of
      a
      share of Preferred Stock (or of a share of a class or series of the Company's
      preferred stock having equivalent rights, preferences and privileges), per
      Right
      (subject to adjustment).

     

    At
      any
      time until ten (10) business days following the Stock Acquisition Date, the
      Company may redeem the Rights in whole, but not in part, at a price of $.001
      per
      Right (payable in cash. Common Stock or other consideration deemed appropriate
      by the Board of Directors). Immediately upon the action of the Board of
      Directors ordering redemption of the Rights, the Rights will terminate and
      the
      only right of the holders of Rights will be to receive the $.001 redemption
      price.

     

    Until
      a
      Right is exercised, the holder thereof, as such, will have no rights as a
      stockholder of the Company, including, without limitation, the right to vote
      or
      to receive dividends. While the distribution of the Rights will not be taxable
      to stockholders or to the Company, stockholders may, depending upon the
      circumstances, recognize taxable income in the event that the Rights become
      exercisable for Common Stock (or other consideration) of the Company or for
      common stock of the acquiring company or in the event of the redemption of
      the
      Rights as set forth above.

     

    Any
      of
      the provisions of the Rights Agreement may be amended by the Board of Directors
      prior to the Distribution Date. After the Distribution Date, the provisions
      of
      the Rights Agreement may be amended by the Board of Directors in order to cure
      any ambiguity, to make changes which do not adversely affect the interests
      of
      holders of Rights (excluding the interests of an Acquiring Person, an Adverse
      Person or certain related parties), or to shorten or lengthen any time period
      under the Rights Agreement. The foregoing notwithstanding, no amendment may
      be
      made to the Rights Agreement at a time when the Rights are not redeemable,
      except to cure any ambiguity or correct or supplement any provision contained
      in
      the Rights Agreement which may be defective or inconsistent with any other
      provision therein.

     

    A
      copy of
      the Rights Agreement is being filed with the Securities and Exchange Commission
      as an Exhibit to a Registration Statement on Form 8-A/Current Report on Form
      8-K. A copy of the Rights Agreement is available free of charge from the Rights
      Agent. This summary description of the Rights does not purport to be complete
      and is qualified in its entirety by reference to the Rights Agreement, which
      is
      incorporated herein by reference.

     

    
      
        
        

      

      
        B-3