Document:

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                            AMENDMENT NO. 1 TO
                       REGISTRATION RIGHTS AGREEMENT

         Tektronix, Inc. ("Tektronix") and Merix Corporation (the "Company")
are parties to a Registration Rights Agreement dated June 1, 1995 (the
"Registration Rights Agreement"). In connection with the proposed sale of up
to 1,150,000 shares of Common Stock of the Company by Tektronix, Inc. and up
to 2,300,000 shares of Common Stock by the Company pursuant to a registered
underwritten offering and in consideration of the agreements to be made by
Tektronix and the Company in the Underwriting Agreement among Tektronix, the
Company, Thomas Weisel Partners LLC and other underwriters (the "Underwriting
Agreement"), Tektronix and the Company amend the Registration Rights
Agreement, effective as of April 13, 2000, as set forth in this Amendment.
All terms used in this Amendment without definition shall have the respective
meaning given to them in the Registration Rights Agreement.

         1.       APPLICATION OF AMENDMENT

         This Amendment shall apply only to an underwritten offering of
Common Stock of the Company pursuant to the Underwriting Agreement (the
"Offering"), and in no event shall it apply to any offering that (a) is made
pursuant to a registration statement that becomes effective with the
Commission after May 15, 2000 or (b) occurs when Tektronix holds less than
25% of the outstanding Common Stock of the Company. Tektronix and the Company
agree that the provisions set forth in this Amendment shall be in addition to
the provisions in the Registration Rights Agreement and the provisions in the
Registration Rights Agreement shall remain in full force and effect on and
after the date of this Amendment.

         2.       INDEMNIFICATION BY THE COMPANY

         Subject to Section 4, the Company will, and hereby does, indemnify
and hold harmless, to the fullest extent permitted by law, Tektronix, its
directors and officers, and each other Person, if any, who controls Tektronix
within the meaning of the Securities Act, against any and all Losses to which
they or any of them may become subject; provided, however, that the
indemnification agreement contained herein shall not apply to such losses,
claims, damages, liabilities, expenses or actions arising out of, or based
upon, any such untrue statement or alleged untrue statement, or any such
omission or alleged omission, if such statement or omission was made in
reliance upon and in conformity with written information furnished to the
Company by Tektronix specifically stating that it is for use in connection
with preparation of the Registration Statement, any preliminary prospectus or
final prospectus contained in the Registration Statement, any such amendment
or supplement thereto or any Blue Sky Filing.

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         3.       INDEMNIFICATION BY TEKTRONIX

         Subject to Sections 4 and 5, Tektronix will, and hereby does,
indemnify and hold harmless, to the fullest extent permitted by law, the
Company, its directors and officers, and each other Person, if any, who
controls the Company within the meaning of the Securities Act, against any
and all Losses to which they or any of them may become subject.

         4.       APPLICATION OF INDEMNITY PROVISIONS

         The indemnity provisions of Sections 2 and 3 shall apply so that
Total Losses and costs and other expenses are borne by the Company and
Tektronix with the following effect:

                  a.   The Company shall bear its own costs and expenses in
connection with its investigation of any claims or defending any actions
relating to the Offering, and the Company shall indemnify and reimburse
Tektronix for Tektronix= costs and expenses as provided in Section 2.7(b) of
the Registration Rights Agreement.

                  b.   Total Losses shall first be borne by the Company to
the extent of the amount of Company Proceeds, and the Company shall indemnify
Tektronix with respect to any and all Losses of Tektronix so that this result
is achieved.

                  c.   If Total Losses exceed the amount of Company Proceeds
and the Company has paid the entire amount of the Company Proceeds in
connection with such Total Losses, Tektronix shall bear Total Losses in
excess of Company Proceeds, and Tektronix shall indemnify the Company with
respect to such excess Losses of the Company so that this result is achieved,
provided that Tektronix= indemnity obligations under this Amendment are
subject to the limitations in Section 5.

                  d.   The Company shall bear any Total Losses in excess of
the sum of Company Proceeds and Tektronix Proceeds, and the Company shall
indemnify Tektronix with respect to such excess Losses of Tektronix so that
this result is achieved.

         5.       LIMITATIONS ON TEKTRONIX INDEMNITY

         Notwithstanding any provision in this Amendment to the contrary,
Tektronix shall have no obligation to indemnify the Company in excess of the
Tektronix Proceeds less amounts that Tektronix pays or may be required to pay
under the Underwriting Agreement or to other persons for any Losses in
connection with the Offering.

         6.       DEFINITIONS

         "Company Proceeds" means proceeds from the sale of securities by the
Company in the Offering (less underwriters' discounts and commissions).

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         "Losses" means any and all losses, claims, damages, liabilities and
expenses, joint or several, (or actions or proceedings, whether commenced or
threatened, in respect thereof) to which such person or any of them may
become subject under the Securities Act, any other statute or common law or
Section 8 of the Underwriting Agreement in connection with the Offering,
including any amount paid in settlement of any litigation, commenced or
threatened, insofar as any such losses, claims, damages, liabilities,
expenses or actions arise out of or are based upon (i) any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement or any post-effective amendment thereto or in any filing made in
connection with the qualification of the offering under Blue Sky or other
securities laws of jurisdictions in which the Registrable Securities are
offered ("Blue Sky Filing"), or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which
they were made, not misleading or (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus, if used
prior to the effective date of the Registration Statement, or contained in
the final prospectus (as amended or supplemented if the Company shall have
filed with the Commission any amendment thereof or supplement thereto) if
used within the period during which the Company is required to keep the
Registration Statement to which such prospectus relates current, or the
omission or alleged omission to state therein (if so used) a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. ALosses@ does not
include legal or other expenses of the Company or Tektronix incurred by
either of them in connection with investigating such claims and defending
such actions.

         "Registration Statement" means the registration statement relating
to the Offering.

         "Tektronix Proceeds" means proceeds from the sale of securities by
Tektronix in the Offering (less underwriters' discounts and commissions).

         "Total Losses" shall mean Losses of the Company and Losses of
Tektronix.

         DATED:  April 13, 2000

                                           MERIX CORPORATION

                                           By:
                                              ---------------------------------

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

                                           TEKTRONIX, INC.

                                           By:
                                              ---------------------------------

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

                                       3<PAGE>

                                                                     Exhibit 4.2

               CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS

                                       OF

                            SERIES A PREFERRED STOCK

                                       OF

                        VISTA INFORMATION SOLUTIONS, INC.

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

         The undersigned, officer of Vista Information Solutions, Inc.
(hereinafter called the "Company"), a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware, in
accordance with the provisions of Section 9 thereof, does hereby certify as
follows:

         Pursuant to the authority conferred upon the Board of Directors of the
Company by the Certificate of Incorporation of the Company filed with the
Secretary of State of the State of Delaware on March 2, 1998, the Board of
Directors of the Company on July 19, 1999, adopted the following resolution
creating a series of Preferred Stock designated as Series A Convertible
Preferred Stock on the terms set forth in EXHIBIT A attached hereto:

RESOLVED:         That a series of Preferred Stock of the Company be and it
                  hereby is created, and that the designation, powers,
                  preferences and rights of the shares of such series, and the
                  qualification, limitations or restrictions thereof are as set
                  forth in the Certificate of Designation, Preferences and
                  Rights attached as EXHIBIT A hereto.

         IN WITNESS WHEREOF, the Company has caused this Certificate of
Designation to be signed on its behalf, this 1st day of September, 1999.

                                              VISTA INFORMATION SOLUTIONS, INC.

                                              By:
                                                 ------------------------------
                                                   Name:
                                                   Title:

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                                                                       EXHIBIT A

                         DESCRIPTION AND DESIGNATION OF

                      SERIES A CONVERTIBLE PREFERRED STOCK

         1. DESIGNATION; NUMBER. One Hundred Ten Thousand (110,000) shares of
the authorized and undesignated Preferred Stock of the Company, $0.001 par
value, are hereby designated as the "Series A Convertible Preferred Stock" (the
"Series A Preferred Stock") with the powers, preferences and rights, and the
qualifications, limitations and restrictions set forth below.

         2. DIVIDENDS.

            (a) GENERAL. If a dividend or distribution is declared or otherwise
is to be made (whether in liquidation or otherwise) on or in respect of the
Common Stock of the Company, the holders of shares of the Series A Preferred
Stock shall be paid dividends or distributions in an amount equal to the amount
that would have been paid on or in respect of the number of whole shares of
Common Stock into which such shares of the Series A Preferred Stock are then
convertible as if all such Common Stock had been issued upon conversion. The
holders of the shares of Series A Preferred Stock shall be entitled to be paid
in full the dividends and distributions provided in this Section 2(a) prior to
the payment of any dividends or distributions on or in respect of Common Stock
of the Company.

            (b) OTHER DIVIDENDS. In addition to dividends and distributions
referred to in Section 2(a) hereof, the holders of the shares of Series A
Preferred Stock shall be paid such other dividends or distributions on the
shares of Series A Preferred Stock when and as declared by the Board of
Directors of the Company, acting in its sole discretion, out of assets of the
Company legally available therefor, provided that any dividends payable pursuant
hereto shall be paid on a pro rata basis to each holder of Series A Preferred
Stock based on the number of shares of Series A Preferred Stock held.

            (c) EFFECT OF ISSUANCE OF SUBSEQUENT EQUITY. In the event that the
Company issues any Common Stock Equivalents (as defined in Section 5(c)(iii))
having rights, preferences or privileges senior to or more favorable to the
holders thereof than the Series A Preferred Stock on or before December 31, 1999
(the "Subsequent Equity"), then, to the extent that the dividend rights of the
Subsequent Equity are superior (whether as to priority, amount or otherwise) to
those granted herein, the dividend rights of the Series A Preferred Stock shall
thereupon, without the need for any further action on the part of the Company or
the holders of the Series A Preferred Stock, automatically be amended to be
equal to those of the Subsequent Equity.

         3. LIQUIDATION RIGHTS.

            (a) SERIES A PREFERRED STOCK PREFERENCE. In the event of any
liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary (a "Liquidation"), the holders of the shares of Series A Preferred
Stock shall thereupon be entitled to receive out of legally available assets of
the Company, before the payment, distribution or setting apart for

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payment or distribution of any amount in respect of the Common Stock or in
respect of any shares of Preferred Stock not issued and outstanding on the date
of this Certificate of Designation, Preferences and Rights and pari passu (pro
rata according to the number of shares held) with any shares of Series C, D and
F Preferred Stock, a preferential amount (the "Liquidation Amount") per share of
Series A Preferred Stock, payable in cash equal to the GREATER of:

                  (i) the Original Purchase Price (as defined in Section 9
hereof) plus (x) all declared but unpaid dividends or distributions (if any),
and (y) an amount equal to 9% per annum of the Original Purchase Price
compounded from the date of each respective holder's original purchase of the
Series A Preferred Stock; or

                  (ii) such amount per share of Series A Preferred Stock as
would have been payable upon such Liquidation had each such share of Series A
Preferred Stock been converted into Common Stock immediately prior to such
Liquidation, plus all declared but unpaid dividends or distributions (if any).

         After payment of the full Liquidation Amount to the holders of the
Series A Preferred Stock and the liquidation preferences of any other series of
Preferred Stock, all remaining assets of the Company shall be distributed to the
holders of Common Stock. If the assets of Company available for distribution to
holders of shares of Series A Preferred Stock are insufficient to pay the full
preferential amount payable to such holders, then all assets legally available
for distribution shall be distributed among the holders of the Series A
Preferred Stock pro rata in proportion to the respective liquidation preference
amounts which would otherwise be payable upon liquidation if all amounts payable
on or with respect to such shares were paid in full.

            (b) TREATMENT OF MERGERS, CONSOLIDATIONS OR SALES OF ASSETS. Unless
the holders of a majority of the outstanding shares of Series A Preferred Stock
elect to have the provisions of Section 5(c)(ix) apply, for purposes of Section
3(a) above, a sale of all or substantially all of the assets of the Company or a
merger or consolidation of the Company with or into another corporation,
following which the holders of the Company's outstanding capital stock
immediately prior to such merger, consolidation or sale of assets do not own a
majority of the outstanding voting securities of the surviving entity (a "Sale
Event"), shall be treated as a Liquidation, entitling the holders of the Series
A Preferred Stock to receive their Liquidation Amount upon consummation of such
Sale Event; PROVIDED HOWEVER, that a Sale Event shall not be treated as a
Liquidation if either:

                  (i) (A) payment of the Liquidation Amounts would prevent the
Sale Event from being accounted for as a "pooling of interests" transaction, (B)
such treatment is a necessary condition to accomplishing the Sale Event, and (C)
the holders of the Series A Preferred Stock receive securities or other property
upon consummation of the Sale Event valued at an amount per share equal to the
Original Purchase Price plus a return of 20% of the Original Purchase Price per
annum compounded from the date of each respective holder's original purchase of
the Series A Preferred Stock, or

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                  (ii) under Section 5(c)(ix), the holders of Series A Preferred
Stock would receive freely tradable securities upon consummation of such Sale
Event valued at the time of receipt at no less than the Liquidation Amount.

            (c) EFFECT OF ISSUANCE OF SUBSEQUENT EQUITY. In the event that the
Company issues the Subsequent Equity, then, to the extent that the liquidation
preferences of the Subsequent Equity are superior (whether as to priority,
amount or otherwise) to those granted herein, the liquidation preferences of the
Series A Preferred Stock shall thereupon, without the need for any further
action on the part of the Company or the holders of the Series A Preferred
Stock, automatically be amended to be equal to those of the Subsequent Equity.

         4. VOTING RIGHTS.

            (a) GENERAL. Except as expressly required by law or as otherwise
provided herein, including without limitation Sections 4(b) and 4(c) hereof, the
holders of shares of Series A Preferred Stock shall vote together with the
holders of shares of Common Stock as a single class on all matters as to which
the holders of shares of the Company may be entitled to vote. The holders of
shares of Series A Preferred Stock shall be entitled to the number of votes
equal to the number of shares of Common Stock into which their respective shares
of Series A Preferred Stock are convertible on the record date for such vote.
The voting rights conferred upon the holders of shares of Series A Preferred
Stock herein shall be in addition to those provided by law, and neither any
provision in the Certificate of Incorporation of the Company or Bylaws nor any
action taken by the Company shall decrease or otherwise affect said voting
rights provided by law.

            (b) PROTECTIVE PROVISIONS. Except as expressly required by law or as
otherwise provided herein,

                  (i) so long as any shares of Series A Preferred Stock are
outstanding, the Company shall not, without first obtaining the written consent
or the affirmative vote of the holders of a majority of the then outstanding
shares of Series A Preferred Stock, voting separately as a class, take or permit
any of the following actions:

                          (A) any amendment to the Certificate of Incorporation
or the Bylaws of the Company that would increase the authorized number of shares
of Series A Preferred Stock or;

                          (B) any authorization or issuance of any shares of
capital stock of the Company, or any securities or other instruments convertible
into, exchangeable or exercisable for shares of capital stock of the Company,
having rights to dividends or amounts payable upon liquidation or redemption
ranking senior to or pari passu with the Series A Preferred Stock;

                          (C) any amendment of the terms of any existing shares
of capital stock of the Company, or any securities or other instruments
convertible into, exchangeable or exercisable for shares of capital stock of the
Company, to provide for rights to dividends or upon liquidation or redemption
ranking senior to or pari passu with the Series A Preferred Stock;

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                  (ii) so long as a majority of the aggregate number of shares
of Series A Preferred Stock and, if applicable, any Subsequent Equity originally
issued are outstanding, the Company shall not, without first obtaining the
written consent or the affirmative vote of the holders of seventy-five percent
(75%) of the then outstanding shares of Series A Preferred Stock and any such
Subsequent Equity, voting together as a single class, take or permit any of the
following actions:

                          (A) any amendment to the Certificate of Incorporation
or the Bylaws of the Company or any other action that would adversely affect any
of the rights, powers, preferences or privileges of the shares of Series A
Preferred Stock (in common with those of the Subsequent Equity, if issued);

                          (B) any recapitalization of a type described in
Section 5(c)(viii);

                          (C) any declaration or payment of a dividend on any
shares of capital stock of the Company other than the Series F Preferred Stock;
or

                          (D) any direct or indirect redemption, repurchase or
other acquisition by the Company of any of its capital stock other than the
Series F Preferred Shares;

                  (ii) so long as a majority of the aggregate number of shares
of Series A Preferred Stock and, if applicable, any Subsequent Equity originally
issued are outstanding, the Company shall not, without first obtaining the
written consent or the affirmative vote of the holders of sixty-five percent
(65%) of the then outstanding shares of Series A Preferred Stock and any such
Subsequent Equity, voting together as a single class, take or permit any of the
following actions:

                          (A) any authorization or issuance of any shares of
capital stock of the Company, or any securities or other instruments convertible
into, exchangeable or exercisable for shares of capital stock of the Company,
having rights to dividends or amounts payable upon liquidation or redemption
ranking senior to or pari passu with the common rights of the Series A Preferred
Stock and any such Subsequent Equity;

                          (B) any amendment of the terms of any existing shares
of capital stock of the Company, or any securities or other instruments
convertible into, exchangeable or exercisable for shares of capital stock of the
Company, to provide for rights to dividends or upon liquidation or redemption
ranking senior to or pari passu with the common rights of the Series A Preferred
Stock and any such Subsequent Equity;

                          (C) any direct or indirect redemption, repurchase or
other acquisition by the Company of any series of Preferred Stock other than the
Series F Preferred Stock, the Series A Preferred Stock or the Subsequent Equity
before the seventh anniversary of the issuance of the Series A Preferred Stock;
or

                          (D) any Fundamental Change (as defined in Section
5(c)(ix)).

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            (c) RIGHT TO ELECT DIRECTORS.

                  (i) INITIAL DIRECTOR. Each time the shareholders of the
Company are entitled to vote on the election of directors, whether at a meeting
or by written consent, the holders of the Series A Preferred Stock and of any
Subsequent Equity, voting together as a single class, shall have the right to
elect one (1) member of the Board of Directors. Such director initially shall be
Richard J. Freeman, who shall serve until the next annual meeting of the
Company's shareholders after the date of the original issuance of the Series A
Preferred Stock and until his successor is duly elected and has qualified, or
until his earlier death, resignation or removal.

                  (ii) DEFINITION OF EVENT OF DEFAULT. An Event of Default will
be deemed to have occurred if the Company fails to comply with or breaches any
material provision hereof, of the Investor Rights Agreement or any Stock
Purchase Agreement, and such breach or failure is not cured by the Company
within 30 days after written notice thereof is furnished to the Company.

                  (iii) CONSEQUENCES OF EVENTS OF DEFAULT.

                          (A) If any Event of Default occurs, the holders of the
Series A Preferred Stock and of any Subsequent Equity, voting together as a
single class, shall thereupon be entitled to elect two members to the Company's
Board of Directors. Such right to elect two members the Board of Directors will
continue until such time as the condition constituting the Event of Default
ceases to exist, at which time such right will terminate subject to revesting
upon the reoccurrence and continuation of any Event of Default. Any director
elected by the holders of the Series A Preferred Stock upon an Event of Default
will continue to serve as a director until three months following the date on
which there is no longer any Event of Default.

                          (B) If any Event of Default occurs, each holder of
Preferred Stock will also have any other rights which such holder may have been
afforded under any contract or agreement at any time and any other rights which
such holder may have pursuant to applicable law.

                  (iv) REMOVAL; REPLACEMENT. Any director elected by the holders
of the Series A Preferred Stock and any Subsequent Equity pursuant to this
Section 4(c) may be removed and replaced, with or without cause by the vote of
the holders of a majority of the shares of Series A Preferred Stock and any
Subsequent Equity. If any vacancy shall exist for any reason in any directorship
that the holders of such shares are entitled to appoint or elect, such vacancy
may be filled only by such holders, by delivery to the Company of a written
instruction by the affirmative vote of the holders of the Series A Preferred
Stock and any Subsequent Equity or in any other manner that is in accordance
with the Certificate of Incorporation and the Bylaws of the Corporation or
otherwise authorized by law.

            (d) EFFECT OF ISSUANCE OF SUBSEQUENT EQUITY. In the event that the
Company issues the Subsequent Equity, then, to the extent that the voting rights
of the Subsequent Equity are superior to those granted herein, the voting rights
of the Series A Preferred Stock shall thereupon, without the need for any
further action on the part of the Company or the holders of

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the Series A Preferred Stock, automatically be amended to be equal to those of
the Subsequent Equity; provided, however, that the instruments governing the
voting rights of the Subsequent Equity shall provide that the holders of the
Series A Preferred Stock shall vote together as a single class with the
Subsequent Equity except with respect to matters (such as those described in
subsection 4(b)(i)) affecting solely the rights of the Series A Preferred Stock
or the Subsequent Equity, as the case may be.

5.       CONVERSION.

            (a) OPTIONAL CONVERSION. Each share of Series A Preferred Stock
shall be convertible at any time at the option of the holder thereof into such
number of fully paid and non-assessable shares of Common Stock as is determined
by dividing the Original Purchase Price by the Conversion Price then in effect
(the "Conversion Ratio"). The Conversion Price shall initially equal 10% of the
Original Purchase Price, and may thereafter be adjusted from time to time in
accordance with Section 5(c) hereof.

            (b) AUTOMATIC CONVERSION.

                  (i) MANDATORY CONVERSION OF SERIES A PREFERRED STOCK. Subject
to the provisions of Section 5(d), each share of Series A Preferred Stock then
outstanding shall be automatically converted into shares of Common Stock at the
then effective Conversion Ratio:

                          (A) upon the closing of an underwritten public
offering on a firm commitment basis pursuant to an effective registration
statement under the Securities Act of 1933, as amended, covering the offer and
sale of Common Stock for the account of the Company in which the aggregate gross
proceeds to the Company are at least $50,000,000 and in which the price per
share of Common Stock equals or exceeds 150% of the Original Purchase Price;

                          (B) upon written notice from the Company to the
holders thereof at any time within 10 days after the end of any period of 20
consecutive Trading Days in which the Market Price of the Common Stock has
exceeded twenty percent (20%) of the Liquidation Amount (determined as of the
close of business on the last Trading Day before the beginning of such 20-day
period); PROVIDED THAT the shares of Common Stock issued upon conversion of the
Series A Preferred Stock are then freely tradable in the public markets without
any restriction on the holder thereof (other than a restriction resulting from
participation on the Board of Directors of the Company by any holder of the
Series A Preferred Stock); or

                          (C) at such time as less than 20% of the shares of
Series A Preferred Stock issued pursuant to the Stock Purchase Agreement remain
outstanding.

            (c) ADJUSTMENT TO APPLICABLE CONVERSION PRICE. In order to prevent
dilution of the conversion rights granted under this Section 5, the Conversion
Price shall be subject to adjustment from time to time as provided in this
Section 5(c).

                  (i) UPON SALE OF SUBSEQUENT EQUITY. If, at the time of
issuance of the Subsequent Equity, the Net Consideration Per Share (as defined
in Section 5(c)(iii)) of the Subsequent Equity is less than the Conversion Price
then in effect, then the Conversion Price

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shall automatically be lowered so as to be equal to the lowest Net Consideration
Per Share received for such Common Stock Equivalents.

                  (ii) UPON OTHER SALES OF COMMON STOCK. If at any time while
any shares of the Series A Preferred Stock are outstanding, the Company issues
or sells, or in accordance with Section 5(c)(iii) is deemed to have issued or
sold, any shares of Common Stock or Common Stock Equivalents (as defined below)
without consideration or at a price per share less than the Conversion Price of
the Series A Preferred Stock in effect immediately prior to such time, then
immediately upon such issue or sale, the Conversion Price shall be adjusted to
equal the product obtained by multiplying the Conversion Price in effect
immediately prior to such adjustment by a fraction:

                          (A) the numerator of which shall be (i) the number of
shares of Common Stock Deemed Outstanding (as defined in Section 9 hereof)
immediately prior to such issue or sale plus (ii) the number of shares of Common
Stock or Common Stock Equivalents which the aggregate purchase price of the
total number of additional shares so issued or sold would purchase at the then
effective Conversion Price, and

                          (B) the denominator of which shall be (i) the number
of shares of Common Stock Deemed Outstanding on the date immediately prior to
such issue or sale plus (ii) the number of additional shares of Common Stock or
Common Stock Equivalents so issued or sold.

Notwithstanding the foregoing, this Section 5(c)(ii) shall not apply with
respect to the issuance of: (i) Common Stock upon the conversion of any shares
of Series A Preferred Stock; (ii) the securities issuable upon the exercise or
conversion of any right, warrant, option or other convertible security
outstanding at the time of the issuance of the Series A Preferred Stock; (iii)
the Subsequent Equity; and (iv) up to 500,000 shares of Common Stock or options
to purchase such shares of Common Stock issued or issuable at prices lower than
the then current Conversion Price pursuant to any employee benefit plans
approved by the Board of Directors of the Company or the Compensation Committee
thereof.

                  (iii) UPON ISSUANCES OF WARRANTS, OPTIONS AND RIGHTS TO
PURCHASE COMMON STOCK OR OTHER CONVERTIBLE Securities.

                          (A) COMMON STOCK EQUIVALENTS. If the Company in any
manner issues or sells any options, warrants or rights to subscribe for or to
purchase Common Stock or any stock or other securities convertible into or
exercisable or exchangeable for Common Stock (collectively, "Common Stock
Equivalents") and the price per share for which Common Stock is issuable upon
the exercise, conversion or exchange of such Common Stock Equivalents is LESS
THAN the Conversion Price of the Series A Preferred Stock in effect immediately
prior to the time of such issuance or sale, then, for purposes of this Section
5(c), the total maximum number of shares of Common Stock issuable upon the
exercise, conversion or exchange of such Common Stock Equivalents shall be
deemed to be outstanding and to have been issued and sold by the Company for the
"Net Consideration Per Share". For purposes of this paragraph, the "Net
Consideration Per Share" is determined by dividing (A) the total amount, if any,
received or receivable by the Company as consideration for the issuance or sale

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of such Common Stock Equivalents, plus the minimum aggregate amount of
additional consideration payable to the Company upon the exercise, conversion or
exchange thereof, by (B) the total maximum number of shares of Common Stock
issuable upon exercise, conversion or exchange of all such Common Stock
Equivalents. No adjustment of the Conversion Price for the Series A Preferred
Stock shall be made under Section 5(c)(ii) upon the issuance of any shares of
Common Stock pursuant to the exercise, conversion or exchange of any Common
Stock Equivalents if any such adjustment shall previously have been made upon
the original issuance of any such Common Stock Equivalents as provided above.

                          (B) DECREASES IN NET CONSIDERATION PER SHARE. Should
the Net Consideration Per Share of any such Common Stock Equivalents be
decreased from time to time, then, upon the effectiveness of each such change,
the Conversion Price of the Series A Preferred Stock will be adjusted to that
which would have been obtained had (1) the adjustments made upon the issuance of
such Common Stock Equivalents been made upon the basis of the decreased Net
Consideration Per Share of such securities, and (2) all other adjustments made
to the Conversion Price of the Series A Preferred Stock since the date of
issuance of such Common Stock Equivalents been made to such Conversion Price as
adjusted pursuant to (1) above. Any adjustment of the Conversion Price pursuant
to this paragraph which relates to Common Stock Equivalents shall be
disregarded, in whole or in part, as applicable, if, as, and when all, or such
portion, of such Common Stock Equivalents expire or are cancelled without being
exercised, so that the Conversion Price of the Series A Preferred Stock
effective immediately upon such cancellation or expiration shall be equal to the
Conversion Price of the Series A Preferred Stock in effect at the time of the
issuance of the expired or cancelled Common Stock Equivalents, with such
additional adjustments as would have been made to the Conversion Price had the
expired or cancelled Common Stock Equivalents not been issued.

                  (iv) CONSIDERATION OTHER THAN CASH. If any Common Stock or
Common Stock Equivalents are issued or sold or deemed to have been issued or
sold for cash, the consideration received therefor shall be deemed to be the
gross amount received by the Company. If any Common Stock or Common Stock
Equivalents are issued or sold for a consideration other than cash, the amount
of the consideration other than cash received by the Company shall be (A) the
Market Price, in the case of securities or (B) the fair value thereof, in the
case of any other consideration. The fair value of any consideration other than
cash or securities shall be determined jointly by the Company and the holders of
a majority of the Series A Preferred Stock. If such parties are unable to reach
agreement within thirty (30) days, such fair value shall be determined by an
Appraisal.

                  (v) INTEGRATED TRANSACTIONS. In case any Common Stock
Equivalents are issued in connection with the issue or sale of other securities
of the Company, together comprising one integrated transaction in which no
specific consideration is allocated to such Common Stock Equivalents by the
parties thereto, the Common Stock Equivalents shall be deemed to have been
issued without consideration.

                  (vi) REACQUIRED SHARES. The disposition of any shares owned or
held by or for the account of the Company or any subsidiary of the Company shall
be considered an issue or sale of Common Stock.

                                       8
<PAGE>

                  (vii) RECORD DATE. If the Company determines a record date of
the holders of Common Stock for the purpose of entitling them (A) to receive a
dividend or other distribution payable in Common Stock or Common Stock
Equivalents or (B) to subscribe for or purchase Common Stock or Common Stock
Equivalents, then, for purposes of this Section 5(c), such record date shall be
deemed to be the date of the issue or sale of the shares of Common Stock deemed
to have been issued or sold upon the declaration of such dividend or the making
of such other distribution or the date of the granting of such right of
subscription or purchase, as the case may be.

                  (viii) STOCK SPLITS, STOCK DIVIDENDS AND RECAPITALIZATIONS. If
the Company, at any time while any shares of Series A Preferred Stock are
outstanding, shall (A) pay a stock dividend or otherwise make a distribution or
distributions on shares of its Common Stock payable in shares of its capital
stock (whether Common Stock or capital stock of any class), (B) subdivide its
outstanding shares of Common Stock into a larger number of shares, (C) combine
its outstanding shares of Common Stock into a smaller number of shares, or (D)
issue by reclassification of shares of Common Stock any shares of capital stock
of the Company, the Conversion Price designated in Section 5(a) shall be
multiplied by a fraction of which the numerator shall be the number of shares of
Common Stock of the Company outstanding immediately before such event and of
which the denominator shall be the number of shares of Common Stock outstanding
immediately after such event. Any adjustment made pursuant to this Section
5(c)(viii) shall become effective immediately after the record date in the case
of a dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or reclassification.

                  (ix) CAPITAL REORGANIZATION, MERGER OR SALE OF ASSETS. Any
recapitalization, reorganization, or reclassification (other than as described
in Section 5(c)(viii)), or any consolidation, merger, sale of all or
substantially all of the assets of the Company to another person or entity or
other transaction which is effected in such a way that holders of Common Stock
are entitled to receive (either directly or upon subsequent liquidation) stock,
securities or assets with respect to or in exchange for Common Stock is referred
to herein as "Fundamental Change." Subject to the provisions of Section 3(b),
prior to the consummation of any Fundamental Change, the Company shall make
appropriate provision (in form and substance satisfactory to the holders of a
majority of the Series A Preferred Stock) to ensure that all holders of shares
of Series A Preferred Stock shall thereafter have the right to acquire and
receive in lieu of or in addition to (as the case may be) the shares of Common
Stock immediately theretofore issuable upon conversion thereof, such shares of
stock, securities or assets as may be issued or payable with respect to or in
exchange for the number of shares of Common Stock issuable upon conversion
thereof immediately before Fundamental Change. In any such case, the Company
shall make appropriate provision (in form and substance satisfactory to the
holders of a majority of the Series A Preferred Stock) with respect to the
rights and interests of all holders of shares of Series A Preferred Stock to
ensure that the provisions of this Section 5 shall thereafter be applicable to
the Series A Preferred Stock including, in the case of any such consolidation,
merger or sale in which the successor entity or purchasing entity is other than
the Company, an immediate adjustment of the Conversion Ratio taking into account
the value of the Common Stock reflected by the terms of such consolidation,
merger or sale, if the value per share so reflected is less than the Market
Price of the Common Stock in effect immediately prior to such consolidation,
merger or sale. The Company shall not effect any such consolidation, merger or

                                       9
<PAGE>

sale unless prior to the consummation thereof, the successor entity (if other
than the Company) resulting from such consolidation or merger or the entity
purchasing such assets assumes by written instrument (in form and substance
satisfactory to the holders of a majority of the Series A Preferred Stock), the
obligation to deliver to holders of shares of Series A Preferred Stock such
shares of stock, securities or assets as, in accordance with the foregoing
provisions, such holders may be entitled to acquire.

                  (x) OTHER DILUTIVE ISSUANCES. If any event occurs of the type
contemplated by the provisions of this Section 5(c) but not expressly provided
for by such provisions, including, without limitation, the granting of stock
appreciation rights, phantom stock rights or other rights with equity features,
then the Board of Directors shall make an appropriate adjustment in the
Conversion Price so as to protect the rights of the holders of shares of Series
A Preferred Stock, respectively.

            (d) SURRENDER OF CERTIFICATES; PARTIAL CONVERSION. Upon a conversion
pursuant to Section 5(a) hereof, the holder of any shares of Series A Preferred
Stock to be converted shall surrender the certificates representing the shares
of Series A Preferred Stock, duly endorsed, at the office of the Company or of
its transfer agent and give written notice to the Company that such holder
elects to convert such shares of Series A Preferred Stock or specified portion
thereof into shares of Common Stock as set forth in such notice (the "Conversion
Notice"). Each Conversion Notice shall be given by facsimile or by mail, postage
prepaid, addressed to the attention of the Chief Financial Officer of the
Company at the facsimile, telephone number or address of the principal place of
business of the Company. Any conversion of shares of Series A Preferred Stock
into Common Stock shall be effective as of the date of the Company's receipt of
such notice (the "Conversion Date"). Upon an automatic conversion pursuant to
Section 5(b), the outstanding shares of Series A Preferred Stock shall thereupon
be converted automatically without any further action by the Company or the
holders of such shares. At such time as the certificate or certificates
representing shares of Series A Preferred Stock which have been converted are
surrendered to the Company, a certificate or certificates representing the
number of shares of Common Stock issuable upon conversion thereof shall be
issued and delivered. In case of conversion of only part of the shares of Series
A Preferred Stock represented by a certificate or certificates surrendered to
the Company, the Company also shall forthwith issue and deliver a new
certificate for the number of shares of Series A Preferred Stock, which had not
been converted. Until such time as the certificate or certificates representing
shares of Series A Preferred Stock which are being converted are surrendered to
the Company and a certificate or certificates representing the shares of Common
Stock into which such shares of Series A Preferred Stock have been converted
have been issued and delivered, the certificate or certificates representing the
shares of Series A Preferred Stock which had been converted shall represent the
shares of Common Stock into which such shares of Series A Preferred Stock have
been converted.

            (e) RESERVATION OF COMMON STOCK. The Company shall at all times
reserve from its authorized Common Stock a sufficient number of shares to
provide for conversion of all shares of Series A Preferred Stock from time to
time outstanding. As a condition precedent to the taking of any action which
would cause an adjustment increasing the number of shares into which the
outstanding shares of Series A Preferred Stock may be converted, the Company
shall take such corporate action as maybe necessary in order that it may validly
and legally issue to the

                                       10
<PAGE>

holders of shares of Series A Preferred Stock upon conversion fully paid and
non-assessable shares of Common Stock as may be required by this Section 5. If
the Common Stock issuable upon conversion of the shares of Series A Preferred
Stock is listed on any national securities exchange, the Company shall cause all
shares reserved for such conversion to be listed on such exchange, subject to
official notice of issuance upon such conversion.

            (f) FRACTIONAL SHARES. In lieu of any fractional shares to which the
holder of the Series A Preferred Stock otherwise would be entitled, the Company
shall pay cash equal to such fraction multiplied by the Market Price of the
Company's Common Stock on the applicable Conversion Date.

            (g) NO REISSUANCE OF SERIES A PREFERRED STOCK. No shares of Series A
Preferred Stock acquired by the Company by reason of conversion or otherwise
shall be reissued, and all such shares shall be canceled, retired and eliminated
from the shares that the Company is authorized to issue.

         6. REDEMPTION. The shares of Series A Preferred Stock do not have
redemption rights. However, in the event that the Company issues the Subsequent
Equity, then, to the extent that the Subsequent Equity has any redemption
rights, upon the issuance of the Subsequent Equity, the redemption rights of the
shares of Series A Preferred Stock shall thereupon, without the need for any
further action on the part of the Company or the holders of the Series A
Preferred Stock, automatically be amended to be equal to those of the Subsequent
Equity.

         7. LIMITATION OF LIABILITY.

            (a) To the maximum extent permitted by law, the Company does hereby
exonerate the holders of shares of Series A Preferred Stock and their designees
serving on the Board of Directors from time to time, or any person or entity
being represented by or acting on behalf of any of the foregoing, directly and
indirectly, and their respective successors and assigns (collectively,
"Indemnitees") and waives and releases any suit, claim, demand or cause of
action of any kind arising from any action taken or failure to take any action
by an Indemnitee, unless such action or failure to take action constitutes
self-dealing or willful misconduct, and to the maximum extent permitted by law,
no Indemnitee shall be personally liable for monetary damages as such for any
action or failure to take action.

            (b) The Company shall indemnify and hold harmless each Indemnitee
made or threatened to be made a party to, or having to appear as a witness in
connection with, a Proceeding (as hereinafter defined), to the fullest extent
permitted by law and against all expense, liability and loss, including without
limitation judgments, penalties, fines (including without limitation excise
taxes with respect to employee benefit plans, settlements and reasonable
expenses), and attorneys' fees and disbursements incurred or suffered by the
Indemnitee in connection with any Proceeding (as hereinafter defined), except to
the extent that the act or failure to act giving rise to the claim for
indemnification is determined by a court of competent jurisdiction without right
of appeal to have constituted bad faith or, in the case of a criminal
proceeding, unlawful conduct that the Indemnitee had reasonable cause to believe
was unlawful. The right to indemnification provided in this Section 7 shall
include the right, upon written request to the Company, to have the expenses
incurred by the Indemnitee in connection

                                       11
<PAGE>

with any Proceeding (including without limitation attorney's fees and
disbursements) paid or reimbursed by the Company in advance of the final
disposition of the Proceeding to the fullest extent permitted by law; provided
that, if law so requires, the payment of such expenses incurred by the
Indemnitee in advance of the final disposition of a Proceeding shall be made
upon delivery to the Company of a written affirmation by the Indemnitee of a
good faith belief that the criteria for indemnification have been satisfied and
a written undertaking, by or on behalf of the Indemnitee, to repay all amounts
so advanced without interest if it shall ultimately be determined that the
Indemnitee was not entitled to be indemnified under this Section 7 or otherwise.
The written undertaking required by the preceding sentence is an unlimited
general obligation of the Indemnitee, but need not be secured and shall be
accepted without reference to financial ability to make repayment.
Indemnification pursuant to this Section 7 shall continue as to an Indemnitee
who has ceased to be a holder of shares of Series A Preferred Stock, a Director
or an officer or ceased to have any relationship with the Company and shall
inure to the benefit of the Indemnitee's heirs, executors and administrators.
For purpose of this Section 7, "Proceeding" shall mean any threatened, pending
or completed action, suit or proceeding (including without limitation any
action, suit or proceeding by or in the right of the Company), whether civil,
criminal, administrative or investigative, against any one or more Indemnitees
arising from or in connection with any action or failure to take action pursuant
hereto or any right, power or privilege granted hereunder or in connection with
any duty of such Indemnitee to the Company. The rights to indemnification and to
the advancement of expenses provided in this Section 7 shall not be exclusive of
any other rights that any person or entity may have or hereafter acquire under
any statute, provision of the Company's Certificate of In Company or Bylaws,
agreement, vote of Shareholders or Directors, or otherwise.

            (c) The provisions of this Section 7 relating to the limitation of
Indemnitees' liability, to indemnification and to the advancement of expenses
shall constitute a contract between the Company and each of the Indemnitees
which may be modified as to any Indemnitee only with that person's or entity's
consent or as specifically provided in this Section 7. Notwithstanding any
provision in the Certificate of Incorporation of the Company relating to
amendment of the Certificate of Incorporation of the Company generally, no
repeal or amendment of this Section 7 can be effective without the prior written
consent of the holders of a majority of the Series A Preferred Stock, and any
such amendment or repeal which is adverse to any Indemnitee shall apply to such
Indemnitee only on a prospective basis and shall not reduce any limitation on
the personal liability of an Indemnitee or limit the rights of an Indemnitee to
indemnification or to the advancement of expenses with respect to any action or
failure to act occurring prior to the time of such repeal or amendment.

            (d) In the case of any change in law which expands the liability of
an Indemnitee or limits the indemnification rights or the rights to advancement
of expenses which the Company may provide, the right to limited liability, to
indemnification and to the advancement of expenses provided in this Section 7
shall continue as theretofore to the extent permitted by law. Conversely, if any
change in law permits the Company to limit further the liability of an
Indemnitee or to provide broader indemnification rights or rights to the
advancement of expenses than the Company was permitted to provide prior to such
change, then liability thereupon shall be so limited and the rights to
indemnification and the advancement of expenses shall be so broadened to the
extent permitted by law.

                                       12
<PAGE>

         8. NOTICES OF RECORD DATE. In the event of

            (a) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, or

            (b) any capital reorganization of the Company, any reclassification
or recapitalization of the capital stock of the Company, any merger or
consolidation of the Company, or any transfer of all or substantially all of the
assets of the Company to any other corporation, or any other entity or person,
or

            (c) any voluntary or involuntary dissolution, liquidation or winding
up of the Company,

then and in each such event the Company shall mail or cause to be mailed to each
holder of Series A Preferred Stock a notice specifying (i) the date on which any
such record is to be taken for the purpose of such dividend, distribution or
right and a description of such dividend, distribution or right, (ii) the date
on which any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding up is expected to
become effective and (iii) the time, if any, that is to be fixed, as to when the
holders of record of Common Stock (or other securities) shall be entitled to
exchange their shares of Common Stock (or other securities) for securities or
other property deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding up. Such notice shall be mailed at least thirty (30) days prior to the
date specified in such notice on which such action is to be taken.

         9. DEFINED TERMS.

                For purposes hereof:

            (a) "APPRAISAL" means the determination of fair value by an
appraiser selected by the Company and by the holders of a majority of the Series
A Preferred Stock. In the event that the Company and the holders of a majority
of the Series A Preferred Stock are unable to agree upon an appraiser within
five days, then the Company and the holders of a majority of the Series A
Preferred Stock shall each choose an appraiser within five days thereafter who
shall each complete their appraisals and provide a written report of the results
thereof to the Company and the holders of the Series A Preferred Stock within
thirty (30) days thereafter. If the appraisals made by such appraisers do not
differ by more than ten (10%) percent of the amount of the higher appraiser, the
two appraisals shall be averaged to determine the fair value. It the appraisals
differ by more than ten (10%) percent of the amount of the higher appraiser,
then a third appraiser shall be chosen by the first two appraisers within five
days after the report of the two appraisers has been submitted. If such
appraisers are unable to agree upon the third appraiser within such time, such
third appraiser shall be designated by the American Arbitration Association in
San Diego, California ("AAA") upon application of the Company or the holders of
a majority of the Series A Preferred Stock and such third appraiser shall
complete its appraisal and provide a written report of the results to the
Company and the holders of the Series A

                                       13
<PAGE>

Preferred Stock within thirty (30) days after such third appraiser is selected.
If the appraisal of such third appraiser falls between the two prior appraisals,
then the third appraisal shall determine the fair value. If the third appraisal
is higher or lower than both of the prior appraisals, then the third appraisal
and the prior appraisal which is most similar in amount to the third appraisal
shall be averaged to determine the fair value: The determination of such
appraisers shall be final and binding on the Company and all holders of shares
of Series A Preferred Stock, and the fees and expenses of such appraisers shall
be paid by the Company.

            (b) "COMMON STOCK DEEMED OUTSTANDING" means, at any given time, the
number of shares of Common Stock actually outstanding at such time (excluding
any shares held by or for the account of the Company or any subsidiary of the
Company), plus the number of shares of Common Stock deemed to be outstanding
upon the conversion of the Series A Preferred Stock and upon the exercise,
exchange or conversion of all Common Stock Equivalents outstanding immediately
prior to an issuance or sale of Common Stock pursuant to Section 5(c) hereof.

            (c) "ORIGINAL PURCHASE PRICE" of the Series A Preferred Stock means
the price per share at which the shares of Series A Preferred Stock were sold by
the Company (as adjusted for stock dividends, stock splits, combinations,
reclassifications or other similar events involving the Series A Preferred
Stock).

            (d) "INVESTOR RIGHTS AGREEMENT" means that certain Investor Rights
Agreement entered into by and among the Company and the original purchasers of
the Series A Preferred Stock on or about the date(s) of the issuance of the
Series A Preferred Stock, as amended from time to time.

            (e) "MARKET PRICE" with respect to the Company's Common Stock means
on any particular date (i) the last sale price per share of the Common Stock on
such date on the NASDAQ National Market System or other stock exchange on which
the Common Stock has been listed or if there is no such price on such date, then
the last price on such exchange on the last Trading Date preceding such date, or
(ii) if the Common Stock is not listed on the NASDAQ National Market or any
stock exchange, the average of the bid and asked price for a share of Common
Stock in the over-the-counter market, as reported by the NASDAQ SmallCap Market
at the close of business on such date, or (iii) if the Common Stock is not
quoted on the NASDAQ SmallCap Market, the average of the bid and asked price for
a share of Common stock in the over-the-counter market as reported by the
National Quotation Bureau Incorporated (or similar organization or agency
succeeding to its functions of reporting prices) or (iv) if the Common Stock is
not listed on any domestic securities exchange or quoted in the NASDAQ system or
the domestic over-the-counter market, the "Market Price" shall be the fair value
thereof determined jointly by the Company and the holders of a majority of the
Series A Preferred Stock; provided that if such parties are unable to reach
agreement within thirty (30) days, such fair value shall be determined by an
Appraisal.

            (f) "STOCK PURCHASE AGREEMENT" means each agreement for the purchase
and sale of Series A Preferred Stock entered into by and among the Company and
the original purchasers of the Series A Preferred Stock, as amended from time to
time.

                                       14
<PAGE>

            (g) "TRADING DAY" means (i) a day on which the Common Stock is
traded on the NASDAQ National Market system or principal stock exchange on which
the Common Stock has been listed, or (ii) if the Common Stock is not listed on
the NASDAQ National Market or any stock exchange, a day on which the Common
Stock is traded in the over-the-counter market, as reported by the NASDAQ
SmallCap Market, or (c) if the Common Stock is not quoted on the NASDAQ SmallCap
Market, a day on which the Common Stock is quoted in the over-the-counter market
as reported by the National Quotation Bureau Incorporated (or any similar
organization or agency succeeding its functions of reporting prices).

                                       15

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