MICROFIELD GROUP, INC.
an Oregon corporation
SUBSCRIPTION AGREEMENT
Xxxxxx X. Xxxxxx, President & CEO
Microfield Group, Inc.
0000 XX Xxxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Dear Sir:
You have provided me with certain information regarding Microfield
Group, Inc., an Oregon corporation (the "Company"), including information
relating to the financial status, management, and products of the Company. This
information includes without limitation the Velagio Solutions, Inc. Consolidated
and Projected Income Statements and Balance Sheet for September to December,
2003 and Quarterly Statements for 2004, Company's 2002 10-KSB and its first and
second quarter 10-QSB, recent Company press releases, Company product
literature, and the 2003 investor presentation materials. You have also provided
me with the opportunity to ask questions and to request information regarding
the Company.
In light of that information, I agree with the Company as follows:
1. PURCHASE. Subject to the terms and conditions of this
Subscription Agreement and for valuable consideration, I irrevocably tender this
Subscription Agreement for purchase of 225,535 shares of the Company's Series 2
Preferred Shares (the "Shares"), for the total purchase price of $94,725.
2. CONDITION TO PURCHASE. The Purchase described in Section 1 is
contingent upon the Company completing the merger of wholly owned subsidiaries
of the Company with Velagio, Inc., and Xxxxxxxxxxx Technology Services, Inc. The
Purchase Price will be due within 10 days' notice from the Company to me of the
closing of the merger transactions.
3. REPRESENTATION BY SUBSCRIBER. I represent and warrant:
a. I understand that the Shares have not been registered
under the Securities Act of 1933 and that I have no right to require
registration;
b. I have adequate means of providing for my current
needs and possible personal contingencies without having to resort to the funds
contemplated to be used for the purchase of Shares;
c. I have made an independent investment decision
relating to the Shares based upon the information you provided to me;
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d. I am an accredited investor
and as an individual (check one):
___ have a net worth in excess of $1,000,000;
___ have individual income in excess of $200,000
in each of the two most recent years and have reasonable expectation of reaching
the same income level in the current year;
___ have joint (with spouse) income in excess of
$300,000 in each of the two most recent years and have reasonable expectation of
reaching the same income level in the current year; or
___ am a director, officer, or general partner
of the issuer of the securities being offered or sold or a director, executive
officer, or general partner of a general partner of the issuer.
e. I have a net worth sufficient to bear the risk of
losing my entire investment and I have sufficient knowledge and experience in
financial matters so as to be able to evaluate the relative risks and merits of
an investment in the Company when it is offered;
f. The Shares which are the subject of this Agreement
will be acquired solely for my account as an investment and will not be
purchased with a view toward distribution, resale, subdivision or
fractionalization;
g. I realize that the Shares cannot be readily sold,
that there will be no public market, that I may not be able to sell or to
dispose of my interest in the Company and that I therefore must not purchase
Shares unless I have liquid assets sufficient to assure that the purchase will
cause me no undue financial difficulties;
h. I understand that my right to transfer the Shares
will be restricted unless the transfer will not be in violation of the
Securities Act of 1933 or applicable state securities laws (including investor
suitability standards) and that the Company will not consent to transfer of
Shares unless the transferee represents that the transferee meets certain
financial suitability standards;
i. I have carefully reviewed the information relating to
the financial status, management, and products of the Company. The Company has
made available to me and, if I so requested, to my attorney and accountant, all
documents that were reviewed or requested prior to an offer of shares of the
Company, and has provided answers to all questions asked of the Company
concerning the offering and an investment in the Company. In evaluating the
suitability of an investment in the Company, I have not relied upon any
representations or other information (whether oral or written) except documents
or answers furnished by the Company;
j. The information which I provided to the Company is
true and correct as of the date of this Subscription Agreement, and I have
sufficient knowledge and experience in financial matters that I am capable of
evaluating the merits and risks of an investment in the
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PDX/112816/141153/DLH/1395743.1
Company, and I am able to bear the economic risk of the complete loss of my
investment in the Company;
k. I acknowledge that the information provided to me
regarding the Company is confidential and non-public. I agree that all of the
information will be kept in confidence by me and will be neither used to my
personal benefit (other than in connection with my subscription for Shares) nor
disclosed to any third party, but this obligation does not apply to any such
information which (i) is part of public knowledge or is readily accessible as
literature at the date of this Subscription Agreement, (ii) becomes part of
public knowledge or literature and, thus, becomes readily accessible by
publication (except as a result of a breach of this provision), or (iii) is
received from third parties (except third parties who disclose it in violation
of any confidentiality agreement they may have with the Company;
l. I understand that the books and records of the
Company will be available upon reasonable notice for inspection by investors
during reasonable business hours at its principal place of business;
m. I agree and acknowledge that no representations or
warranties have been made to me by the Company in connection with my acquisition
of Shares;
n. I recognize that investment in the Company involves
certain risks, and I acknowledge that I have taken full cognizance of the
special risks relating to a development stage company and the Shares being
offered;
o. I understand that the stock certificates for the
Shares will include the following legend:
"The securities evidenced by this certificate have
not been registered under the Securities Act of 1933
(the "Act") or any applicable state law, and no
interest therein may be sold, distributed, assigned,
pledged or otherwise transferred unless (a) there is
an effective registration statement under such Act
and applicable state securities laws covering any
such transaction involving these securities or (b)
the Company receives an opinion of legal counsel for
the holder of these securities (concurred in by legal
counsel for the Company) to the effect that such
transaction is exempt from registration or the
Company otherwise satisfies itself that such
transaction is exempt from registration."
and
p. I have discussed with my professional legal, tax, and
financial advisers the suitability of an investment in the Company. All
information that I have provided to the Company concerning my financial position
and me is correct and complete as of the date set of this Subscription
Agreement.
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IN WITNESS WHEREOF, I have executed this Subscription Agreement this
3rd day of October, 2003.
/s/ Xxxxxx Xxxxxxx, CEO of JMW Capital Partners
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Subscriber's Signature
JMW Group, LLC
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Print or Type Subscriber's Name
0000 XX Xxxxxxx Xxxxxx, Xxxxx 000
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Street Address
Xxxxxxxx, XX 00000
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City State Zip
00-0000000
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Subscriber's Social Security or
Taxpayer Identification Number
(000) 000-0000
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Telephone Number
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