Document:

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                                                                   EXHIBIT 10.14

                                    EXHIBIT A

THE SECURITIES EVIDENCED BY THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY APPLICABLE STATE LAW, AND
NO INTEREST THEREIN MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, 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, (B) THE COMPANY RECEIVES AN OPINION OF
LEGAL COUNSEL FOR THE HOLDER OF THESE SECURITIES (CONCURRED IN BY LEGAL COUNSEL
FOR THE COMPANY) STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION OR
(C) THE COMPANY OTHERWISE SATISFIES ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM
REGISTRATION.

                          SUBORDINATED PROMISSORY NOTE

$400,000                                                        Portland, Oregon
                                                                June 30, 2000

           FOR VALUE RECEIVED, the undersigned, MICROFIELD GRAPHICS INC.
("Maker"), hereby promises to pay to the order of JMW CAPITAL PARTNERS, INC.
("Holder") in immediately available funds the principal sum of Four Hundred
Thousand Dollars ($400,000), together with interest at the Applicable Rate
(calculated on the basis of a 360-day year and actual days elapsed) as follows:
(a) interest in arrears on the last day of each quarter beginning September 30,
2000; and (b) the outstanding principal balance and all accrued and unpaid
interest on the earlier of (i) June 30, 2005 or (ii) demand by Holder made at
any time (or from time to time if demand is for less than all of the then
outstanding principal) after June 30, 2003. Each payment on account of the
obligations evidenced by this Note shall be applied first to expenses for which
Maker is liable hereunder, next to accrued interest and the balance to
outstanding principal.

           Maker shall apply all proceeds from the exercise of Warrants (as
defined in the Note Purchase Agreement) to prepay amounts due under this Note,
without payment of any Prepayment Fee. On ten days' prior written notice to
Holder, Maker may, at any time, prepay all or any portion of the amount due
under this Note, together with (a) accrued interest to the date of such
prepayment on the principal amount prepaid and (b) the applicable Prepayment
Fee, provided, however, that each partial prepayment shall be in an aggregate
principal

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amount of at least $100,000. The applicable Prepayment Fee shall also be payable
upon any mandatory prepayment due to an acceleration of amounts due under this
Note in connection with an Event of Default.

           As used herein:

           "APPLICABLE RATE" means, at any date, the lesser of (a) 10% per annum
           PLUS; during the continuation of an Event of Default, 200 basis
           points, or (b) the Highest Lawful Rate.

           "EVENT OF DEFAULT" means the occurrence of any of the following
           events:

                     (i)            Maker fails to pay when due any obligation
                     evidenced hereby;

                     (ii)           Maker fails to pay any indebtedness for
                     borrowed money when due or any event occurs or exists which
                     gives the holder of any such indebtedness the right to
                     accelerate the payment thereof;

                     (iii)          Maker shall become insolvent, or shall
                     suffer or consent to or apply for the appointment of a
                     receiver, trustee, custodian or liquidator of its property,
                     or shall generally be unable to or fail to pay its debts as
                     they become due, or shall make a general assignment for the
                     benefit of creditors;

                     (iv)           Maker shall file a voluntary petition in
                     bankruptcy, or seek to effect a plan or other arrangement
                     with creditors or any other relief under the Bankruptcy
                     Code, or under any state or other Federal law granting
                     relief to debtors, whether now or hereafter in effect; or
                     any involuntary petition or proceeding pursuant to the
                     Bankruptcy Code or any other applicable state or other
                     Federal law relating to bankruptcy, reorganization or other
                     relief for debtors is filed or commenced against Maker and
                     is not dismissed, stayed or vacated within sixty days
                     thereafter; Maker shall file an answer admitting the
                     jurisdiction of the court and the material allegations of
                     any involuntary petition; or Maker shall be adjudicated a
                     bankrupt, or an order for relief shall be entered by any
                     court of competent jurisdiction under the Bankruptcy Code
                     or any other applicable state or Federal law relating to
                     bankruptcy, reorganization or other relief for debtors;

                     (v)            Any representation or warranty made by Maker
                     (or any of its officers) under or in connection with any
                     Transaction Document (as defined in the Note Purchase
                     Agreement) shall prove to have been incorrect in any
                     material respect when made;

                     (vi)           The Company shall fail to perform or observe
                     any term, covenant or agreement contained in any
                     Transaction Document on its part to be performed

                                      -2-
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                     or observed and such failure shall remain unremedied for 15
                     days after written notice thereof shall have been given to
                     the Company by the Holder;

                     (vii)          Any judgment or order for the payment of
                     money (net of anticipated insurance proceeds, as determined
                     in good faith by Maker's Board of Directors) in excess of
                     $150,000 shall be rendered against the Company and either
                     (A) enforcement proceedings shall have been commenced by
                     any creditor upon such judgment or order or (B) there shall
                     be any period of 10 consecutive days during which a stay of
                     enforcement of such judgment or order, by reason of a
                     pending appeal or otherwise, shall not be in effect;

                     (viii)         John B. Conroy shall at any time prior to
                     June 30, 2002, for any reason, cease to be active in the
                     management of Maker;

                     (ix)           Designees of JMW Capital Partners, Inc.
                     shall represent less than 40% of all members of the Maker's
                     Board of Directors;

                     (x)            Maker shall sell or otherwise transfer or
                     dispose of all or substantially all of its assets or shall
                     effect any merger, consolidation, reorganization or other
                     transaction or series of related transactions (other than a
                     mere reincorporation merger) resulting in the exchange of
                     outstanding shares of Maker's capital stock for securities
                     or consideration issued or caused to be issued by the
                     acquiring entity or any of its affiliates and as a result
                     of which the shareholders of Maker immediately prior to
                     such transaction hold or receive, by virtue of their
                     ownership of securities of Maker, less than 50% of the
                     capital stock of the resulting entity; or

                     (xi)           Maker shall contest the enforceability of
                                    this Note, any other Transaction Document or
                                    any transaction contemplated hereby or
                                    thereby.

           "HIGHEST LAWFUL RATE" means, at the particular time in question, the
           maximum rate of interest which, under applicable law, Holder is then
           permitted to charge Maker on the obligations evidenced hereby, and if
           the maximum rate changes at any time, the Highest Lawful Rate shall
           increase or decrease, as the case may be, as of the effective time of
           each such change, without notice to Maker.

           "NOTE PURCHASE AGREEMENT" means the Note and Warrant Purchase
           Agreement dated as of June __, 2000 between Maker and JMW Capital
           Partners, Inc., as the same may be amended, supplemented or modified.

           "PREPAYMENT FEE" means, with respect to any prepayment hereunder, an
           amount equal to the principal amount prepaid multiplied by the
           appropriate percentage set forth below:

                                      -3-
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<TABLE>
<CAPTION>

                                                                                                   APPLICABLE
                      TIMING OF PAYMENT                                                            PERCENTAGE
<S>                                                                                                <C>
                      Prior to June 30, 2001                                                           3%

                      After June 30, 2001 but prior                                                    2%
                             to June 30, 2002

                      After June 30, 2002 but                                                          1%
                             prior to June 30, 2003

</TABLE>

           "SENIOR CREDITOR" means any bank, commercial finance company,
           insurance company or other institutional lender.

           "SENIOR INDEBTEDNESS" means all obligations now or hereafter owed by
           Maker to Senior Creditors for or in connection with borrowed money,
           capitalized leases, guaranties or other similar obligations, the
           aggregate principal amount of which does not exceed $1,000,000. The
           $1,000,000 limitation shall be applied first to include obligations
           owed to Maker's senior secured working capital lender, next to
           include other secured obligations and last to include unsecured
           obligations.

           Subject to the rights of holders of Senior Indebtedness set forth
herein, if an Event of Default shall occur and be continuing, the Holder may, by
notice to Maker, declare all amounts payable hereunder to be due and payable,
whereupon all such amounts shall be due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by Maker; PROVIDED, HOWEVER, that in the event of an entry of an order
for relief with respect to Maker under the Federal Bankruptcy Code or Maker's
voluntary filing under the Federal Bankruptcy Code, all such amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
Maker.

           The obligations evidenced hereby are subordinate and junior in right
of payment to Senior Indebtedness. No payment shall be made pursuant to this
Note if Maker is in default of any of its obligations with respect to Senior
Indebtedness (or if such payment would itself constitute a default) until such
default is cured to the written satisfaction of or waived by the applicable
Senior Creditor, provided that Maker's failure to make any such payment shall
nonetheless constitute a default by Maker of its obligations to Holder
hereunder. Upon any dissolution, winding up, liquidation or reorganization of
Maker, whether voluntary or involuntary, or in bankruptcy, insolvency,
receivership or other proceedings, all Senior Indebtedness shall first be paid
in full in cash, or payment thereof provided for, before any payment is made on
the obligations evidenced by this Note, and any payment received by Holder in
violation of the foregoing shall be paid to the holders of Senior Indebtedness
for application to the payment of all Senior Indebtedness remaining unpaid to
the extent

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necessary to pay all Senior Indebtedness in full in cash, after giving effect to
any concurrent payment to the holders of Senior Indebtedness. The provisions of
this paragraph are included solely for the purpose of defining the relative
rights of Holder and holders of Senior Indebtedness, and nothing herein shall
impair, as between Maker and Holder, Maker's unconditional and absolute
obligation to pay Holder all amounts owing hereunder.

           Maker shall pay all costs of collection, including reasonable
attorneys' fees (whether incurred at the trial or appellate level, in an
arbitration proceeding, in bankruptcy (including, without limitation, any
adversary proceeding, contested matter or motion) or otherwise). No delay or
failure on the part of Holder to exercise any of its rights hereunder shall be
deemed a waiver of such rights or any other right of Holder nor shall any delay,
omission or waiver on any one occasion be deemed a bar to or waiver of such
rights or any other right on any future occasion. Maker and every surety,
indorser and guarantor of this Note waive presentment, demand, protest, notice
of intention to accelerate, notice of acceleration, notice of nonpayment and all
other notices of every kind, and agree that their liability under this Note
shall not be affected by any renewal, postponement or extension in the time of
payment hereof, by any indulgence granted by any holder hereof with respect
hereto, or by any release or change in any security for the payment of this
Note, and they hereby consent to any and all renewals, extensions, indulgences,
releases or changes, regardless of the number of such renewals, extensions,
indulgences, releases or changes.

           Time is of the essence in the performance of all obligations of Maker
under this Note. This Note shall be governed by and construed in accordance with
the laws of the State of Oregon.

           This Note shall be binding upon and inure to the benefit of Maker and
Holder and their respective successors, heirs, legal representatives and
permitted assigns. Maker may not assign its rights or obligations under this
Note without the prior written consent of Holder. Holder may not assign its
rights or obligations under this Note without the prior written consent of
Maker, which shall not be unreasonably withheld; provided, however, that no
consent of Maker shall be required for any transfer by Holder to any person or
entity that controls, is controlled by or is under common control with Holder.

           UNDER OREGON LAW, MOST AGREEMENTS, PROMISES, AND COMMITMENTS MADE BY
HOLDER AFTER OCTOBER 3, 1989 CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH
ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE
MAKER'S RESIDENCE, MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY
HOLDER TO BE ENFORCEABLE.

                                                   MICROFIELD GRAPHICS, INC.

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                                                   By:_________________________
                                                   Title:_______________________

                                      -6-<PAGE>

                                                                   EXHIBIT 10.15

THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE STATE SECURITIES LAWS.
NEITHER THIS WARRANT NOR THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF MAY BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE APPLICABLE SECURITIES UNDER SUCH ACT OR LAWS OR
AN OPINION OF COUNSEL FOR THE HOLDER REASONABLY SATISFACTORY TO THE ISSUER
STATING THAT SUCH REGISTRATION IS NOT REQUIRED.

No. 2000-W-1                                       WARRANT TO PURCHASE 1,033,000
                                                          SHARES OF COMMON STOCK

                             STOCK PURCHASE WARRANT
                       TO PURCHASE SHARES OF COMMON STOCK
                          OF MICROFIELD GRAPHICS, INC.

         For value received, Microfield Graphics, Inc., an Oregon corporation
(the "Company"), grants to JMW Capital Partners, Inc. (the "Holder") the right,
subject to the terms of this Warrant, to purchase at any time during the period
commencing on the "Initial Exercise Date" (as defined below), and ending on the
"Expiration Date" (as defined below), 1,033,000 fully paid and nonassessable
shares of Common Stock of the Company at the "Exercise Price" (as defined
below). This Warrant may be exercised in whole or in part, but not less than
500,000 shares in a single exercise (or such lesser amount then issuable upon
the entire exercise of this Warrant. The number of shares that may be purchased
are subject to adjustment under the terms of this Warrant.

Section 1.  DEFINITIONS.  As used in this Warrant, unless the context
otherwise requires:

         "EXERCISE AMOUNT" means 1,033,000 shares (adjusted as necessary in
accordance with Section 7).

         "EXERCISE PRICE" means $0.50 per share (adjusted as necessary in
accordance with Section 7).

         "COMMON STOCK" means the Common Stock of the Company.

         "COMPANY" has the meaning specified in the introductory paragraph.

         "EXERCISE DATE" means any date when this Warrant is exercised in the
manner indicated in Sections 2.1 and 2.2.

         "EXPIRATION DATE" means 12:00 midnight (Portland time) on June 30,
2005.

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         "HOLDER" has the meaning specified in the introductory paragraph.

         "INITIAL EXERCISE DATE" means June 30, 2000.

         "PERSON" means an individual, corporation, partnership, trust, joint
venture or other form of business entity.

         "SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time, and all rules and regulations promulgated thereunder, or any act, rules
or regulations which replace the Securities Act or any such rules and
regulations.

         "WARRANT SHARES" means the shares of Common Stock issued or issuable
upon exercise of this Warrant, adjusted as necessary in accordance with Section
7.

Section 2.  DURATION AND EXERCISE OF WARRANT.

         2.1 EXERCISE PERIOD. Subject to the provisions hereof, this Warrant may
be exercised at any time during the period commencing on the Initial Exercise
Date and ending on the Expiration date for the Exercise Amount. After the
Expiration Date, this Warrant shall become void and all rights to purchase
Warrant Shares hereunder shall thereupon cease.

         2.2 METHODS OF EXERCISE. This Warrant may be exercised by the Holder,
in whole or in part, by (i) surrendering this Warrant to the Secretary of the
Company, (ii) payment of any applicable consideration, and (iii) executing and
delivering to the Secretary of the Company the attached Exercise Form, which
must select one of the following exercise methods, to be at the Holder's option:

                  2.2.1 EXERCISE FOR CASH. If the Holder elects to exercise the
Warrant for cash, the Holder shall tender to the Company payment in full by
cash, check, or wire transfer of the Exercise Price for the Warrant Shares.

                  2.2.2 SAME DAY SALE EXERCISE. In lieu of exercising this
Warrant by payment of cash, when permitted by law and applicable regulations
(including Nasdaq and NASD rules), the Holder may pay the Exercise Price through
a "same day sale" commitment from the Holder and a broker-dealer that is a
member of the National Association of Securities Dealers (an "NASD Dealer")
whereby the Holder irrevocably elects to exercise the Warrant and to sell a
portion of the Warrant Shares so purchased to pay for the Exercise Price and
whereby the NASD Dealer irrevocably commits upon receipt of such Warrant Shares
to forward the Exercise Price directly to the Company.

         2.3 CERTIFICATES. As soon as practicable after exercise of this Warrant
(but in no event later than five business days), (a) certificates for Warrant
Shares shall be delivered, at the Company's expense, to the Holder or the
transferee thereof set forth in the attached Exercise Form and (b) a new Warrant
of like tenor to purchase up to that number, if any, not previously purchased by
the Holder (if this Warrant has not expired) shall be delivered, at the
Company's expense, to the Holder.

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         2.4 EFFECTIVE DATE OF EXERCISE. This Warrant shall be deemed to have
been exercised immediately prior to the close of business on the date of its
surrender for exercise as provided above. The person entitled to receive the
Warrant Shares shall be treated for all purposes as the holder of record of such
shares as of the close of business on the date the Holder is deemed to have
exercised this Warrant.

         2.5 SECURITIES ACT COMPLIANCE. Unless the Warrant Shares are no longer
subject to Rule 144 under the Securities Act, the Company may place
conspicuously upon each certificate representing the Warrant Shares a legend
substantially in the following form, the terms of which are agreed to by the
Holder:

         THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
         APPLICABLE STATE LAW, AND NO INTEREST THEREIN MAY BE SOLD, DISTRIBUTED,
         ASSIGNED, OFFERED, 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) STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION OR
         (C) THE COMPANY OTHERWISE SATISFIES ITSELF THAT SUCH TRANSACTION IS
         EXEMPT FROM REGISTRATION.

         2.6 TAXES. The Company shall pay any tax and other governmental charges
which may be payable in respect of the issuance of the Warrant Shares, provided,
however, that in no case will the Company pay any taxes relating to income to
the Holder resulting from the issuance or exercise of this Warrant.

Section 3.  WARRANT SHARES.

         3.1 VALIDITY AND RESERVATION. The Company covenants that all Warrant
Shares issued upon exercise of this Warrant will be validly issued, fully paid,
nonassessable, free and clear of all liens, security interests, charges and
other encumbrances or restrictions on sale (except encumbrances or restrictions
arising under federal or state securities laws), and not subject to preemptive
rights. The Company agrees that, as long as this Warrant may be exercised, the
Company will have duly authorized and reserved for issuance upon exercise of
this Warrant a sufficient number of shares of Common Stock or other shares of
capital stock of the Company as are from time to time issuable upon exercise of
this Warrant and from time to time will take all steps necessary to amend its
Articles of Incorporation to provide sufficient reserves of Common Stock
issuable upon exercise of this Warrant. Issuance of this Warrant shall
constitute full authority to the Company's officers who are charged with the
duty of executing stock certificates to execute and issue the necessary
certificates for Common Stock upon the exercise of this Warrant.

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         3.2 LISTING OF WARRANT SHARES. The Company shall take all steps
necessary to cause the Warrant Shares issuable upon exercise of this Warrant to
be approved for listing on all securities exchanges or markets and all trading
or quotation facilities on which the Common Stock is listed as soon as possible
after the Initial Exercise Date and shall use commercially reasonable efforts to
maintain such listings until the earlier of the Expiration Date or the date this
Warrant is exercised in full.

Section 4.  FRACTIONAL SHARES.

         No fractional Warrant Shares shall be issued upon the exercise of this
Warrant, and the number of Warrant Shares to be issued shall be rounded to the
nearest whole number.

Section 5.  LIMITED RIGHTS OF WARRANT HOLDER.

         The Holder shall not, solely by virtue of being the Holder of this
Warrant, have any of the rights of a shareholder of the Company, either at law
or equity, until this Warrant shall have been exercised.

Section 6.  LOSS OF WARRANT.

         Upon receipt by the Company of satisfactory evidence of the loss,
theft, destruction or mutilation of this Warrant and either (in the case of
loss, theft or destruction) reasonable indemnification and a bond reasonably
satisfactory to the Company if requested by the Company or (in the case of
mutilation) the surrender of this Warrant for cancellation, the Company will
execute and deliver to the Holder, without charge, a new warrant of like
denomination.

Section 7.  CERTAIN ADJUSTMENTS.

         7.1 ADJUSTMENT OF WARRANT SHARES. The number, class and Exercise Price
per share of securities for which this Warrant may be exercised are subject to
adjustment from time to time upon the happening of certain events as hereinafter
provided:

                  (a) RECAPITALIZATION. If the outstanding shares of the
Company's Common Stock are divided into a greater number of shares or if the
Company shall effect a stock dividend, the number of shares of Common Stock
purchasable upon the exercise of this Warrant shall be proportionately increased
and the Exercise Price per share shall be proportionately reduced. Conversely,
if the outstanding shares of Common Stock are combined into a smaller number of
shares of Common Stock, the number of shares of Common Stock purchasable upon
the exercise of this Warrant shall be proportionately reduced and the Exercise
Price per share shall be proportionately increased. The increases and reductions
provided for in this Section 7.1(a) shall be made with the intent and, as nearly
as practicable, the effect that neither the percentage of the total equity of
the Company obtainable on exercise of this Warrant nor the aggregate price
payable for such percentage shall be affected by any event described in this
Section 7.1(a).

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                  (b) MERGER OR REORGANIZATION, ETC. In the event of any change
in the Common Stock through merger, consolidation, reclassification,
reorganization, partial or complete liquidation or other change in the capital
structure of the Company (not including the issuance of additional shares of
capital stock other than by stock dividend or stock split), then, the Holder of
this Warrant will have the right thereafter to receive upon the exercise of this
Warrant the kind and amount of shares of stock or other securities or property
to which it would have been entitled if, immediately before the merger,
consolidation, reclassification, reorganization, recapitalization or other
change in the capital structure, it had held the number of shares of Common
Stock obtainable upon the exercise of this Warrant. In any such case,
appropriate adjustment shall be made in the application of the provisions of
this Section 7 with respect to the rights of the Holder after the merger,
consolidation, reclassification, reorganization, recapitalization or other
change to the end that the provisions of this Section 7 (including adjustment of
the Exercise Price then in effect and the number of shares issuable upon
exercise of this Warrant) shall be applicable after that event as nearly
equivalent as may be practicable.

                  (c) ADJUSTMENT FOR DIVIDENDS OR DISTRIBUTIONS OF STOCK OR
OTHER SECURITIES OR PROPERTY. In case the Company shall make or issue, or shall
fix a record date for the determination of eligible holders entitled to receive,
a dividend or other distribution with respect to the Warrant Shares (or any
shares of stock or other securities at the time issuable upon exercise of the
Warrant) payable in (i) securities of the Company (other than as provided for in
Section 7.1(a) or (b) above) or any other entity or (ii) assets (excluding cash
dividends paid or payable solely out of retained earnings), then, in each such
case, upon exercise of this Warrant at any time after the consummation,
effective date or record date of such dividend or other distribution, the Holder
shall receive, in addition to the Warrant Shares (or such other stock or
securities) issuable on such exercise prior to such date, and without the
payment of additional consideration therefor, the securities or such other
assets of the Company to which such Holder would have been entitled upon such
date if such Holder had exercised this Warrant on the Initial Exercise Date and
had thereafter, during the period from the Initial Exercise Date to and
including the date of such exercise, retained such shares and/or all other
additional stock or securities available by it as aforesaid during such period
giving effect to all adjustments called for by this Section 7.

                  (d)      SALE OF SHARES BELOW EXERCISE PRICE.

                  (i) If the Company shall issue any Additional Stock (as
         defined below) without consideration or for a consideration per share
         less than $0.50 (adjusted appropriately for stock dividends, splits,
         combinations and similar transactions) in effect immediately prior to
         the issuance of such Additional Stock in a transaction not subject to
         Section 7.1(a), (b) or (c) above, the Exercise Price in effect
         immediately prior to issuance of such Additional Stock (except as
         otherwise provided in this Section 7.1(d)) shall be adjusted down to a
         price equal to the quotient obtained by dividing the total computed
         under clause (x) below by the total computed under clause (y) below as
         follows:

                           (x) an amount equal to the sum of (1) the result
                  obtained by multiplying the number of shares of Common Stock
                  deemed outstanding immediately prior to such issuance (which
                  shall include the actual number of

                                       5
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                  shares outstanding plus all shares issuable upon the
                  conversion or exercise of all outstanding convertible
                  securities, warrants and options other than shares excluded
                  from the definition of Additional Stock by Section 7.1(d)(vi))
                  by the Exercise Price then in effect, and (2) the aggregate
                  consideration, if any, received by the Company upon the
                  issuance of such Additional Stock;

                           (y) the number of shares of Common Stock of the
                  Company outstanding immediately after such issuance (including
                  the shares deemed outstanding as provided in clause (x)
                  above).

                  (ii) No adjustment of the Exercise Price shall be made in an
         amount less than $0.01 per share; provided, however, that any
         adjustments which are not required to be made by reason of this
         sentence shall be carried forward and shall be taken into account in
         any subsequent adjustment made to the Exercise Price. Except as
         provided in Sections 7.1(d)(v)(C) and (D) below, no adjustment of the
         Exercise Price shall have the effect of increasing the Exercise Price
         above the Exercise Price in effect immediately prior to such
         adjustment.

                  (iii) In the case of the issuance of Common Stock for cash,
         the consideration shall be deemed to be the amount of cash paid
         therefor before deducting any discounts, commissions or other expenses
         allowed, paid or incurred by the Company for any underwriting or
         otherwise in connection with the issuance and sale thereof.

                  (iv) In the case of the issuance of Common Stock for a
         consideration in whole or in part other than cash, the consideration
         other than cash shall be deemed to be the fair value thereof as
         determined in good faith by the Board of Directors irrespective of any
         accounting treatment.

                  (v) In the case of the issuance of options or warrants to
         purchase or rights to subscribe for Common Stock, securities by their
         terms convertible into or exchangeable for Common Stock, or options or
         warrants to purchase or rights to subscribe for such convertible or
         exchangeable securities (which options, warrants, rights, convertible
         or exchangeable securities are not excluded from the definition of
         Additional Stock except as provided in Section 7.1(d)(vi)(B)), the
         following provisions shall apply:

                           (A) the aggregate maximum number of shares of Common
                  Stock deliverable upon exercise of such options or warrants to
                  purchase or rights to subscribe for Common Stock shall be
                  deemed to have been issued at the time such options, warrants,
                  or rights were issued for a consideration equal to the
                  consideration (determined in the manner provided in Sections
                  7.1(d)(iii) and (iv) above), if any, received by the Company
                  upon the issuance of such options, warrants or rights plus the
                  minimum purchase price provided in such options, warrants or
                  rights for the Common Stock covered thereby, but no further
                  adjustment to the Exercise Price shall be made for the actual
                  issuance of Common Stock upon the exercise of such options,
                  warrants or rights in accordance with their terms;

                                       6
<PAGE>

                           (B) the aggregate maximum number of shares of Common
                  Stock deliverable upon conversion of or in exchange for any
                  such convertible or exchangeable securities or upon the
                  exercise of options or warrants to purchase or rights to
                  subscribe for such convertible or exchangeable securities and
                  subsequent conversion or exchange thereof shall be deemed to
                  have been issued at the time such securities were issued or
                  such options, warrants or rights were issued for a
                  consideration equal to the consideration received, if any, by
                  the Company for any such securities and any related options,
                  warrants or rights, plus the minimum additional consideration,
                  if any, to be received by the Company upon the conversion or
                  exchange of such securities or the exercise of any related
                  options, warrants or rights (the consideration in each case to
                  be determined in the manner provided in Sections 7.1(d)(iii)
                  and (iv) above), but no further adjustment to the Exercise
                  Price shall be made for the actual issuance of Common Stock
                  upon the conversion or exchange of such securities in
                  accordance with their terms;

                           (C) if such options, warrants, rights or convertible
                  or exchangeable securities by their terms provide, with the
                  passage of time or otherwise, for any change in the
                  consideration payable to the Company or in the number of
                  shares of Common Stock issuable upon the exercise, conversion
                  or exchange thereof, including, without limitation, a change
                  resulting from the antidilution provisions thereof, the
                  Exercise Price computed upon the original issue thereof, and
                  any subsequent adjustments based thereon, shall, upon such
                  change becoming effective, be recomputed to reflect such
                  change, but no further adjustment to the Exercise Price shall
                  be made for the actual issuance of Common Stock upon the
                  exercise of any such options, warrants or rights or the
                  conversion or exchange of such securities in accordance with
                  their terms; and

                           (D) upon the expiration of any such options, warrants
                  or rights, the termination of any such rights to convert or
                  exchange or the expiration of any options, warrants or rights
                  related to such convertible or exchangeable securities, the
                  Exercise Price shall forthwith be readjusted to such Exercise
                  Price as would have been obtained had the adjustment which was
                  made upon the issuance of such options, warrants, rights or
                  securities or options, warrants or rights related to such
                  securities been made upon the basis of the issuance of only
                  the number of shares of Common Stock (and convertible or
                  exchangeable securities which remain in effect) actually
                  issued upon the exercise of such options, warrants or rights,
                  upon the conversion or exchange of such securities or upon the
                  exercise of the options, warrants or rights related to such
                  securities.

                  (vi) "Additional Stock" shall mean any shares of Common Stock
         or securities convertible into or exchangeable or exercisable for
         shares of Common Stock issued (or deemed to have been issued pursuant
         to Section 7.1(d)(v) above) by the Company after the Initial Exercise
         Date other than:

                           (A) Common Stock issued in connection with a
                  transaction described in Section 7.1(a), (b) or (c);

                                       7
<PAGE>

                           (B) shares of Common Stock (and options to purchase
                  shares of Common Stock) issued or issuable to employees,
                  officers or directors of, or consultants to, the Company
                  pursuant to a stock option or restricted stock plan approved
                  by the Company's Board of Directors;

                           (C) 280,000 shares of Common Stock (adjusted
                  appropriately for stock dividends, splits, combinations and
                  similar transactions) issued or issuable upon the exercise of
                  warrants outstanding on the Initial Exercise Date;

                           (D) shares of Common Stock issued or issuable upon
                  the exercise of any warrant issued pursuant to the Note and
                  Warrant Purchase Agreement by and among the Company and JMW
                  Capital Partners, Inc. dated as of the Initial Exercise Date.

                           (E) shares of Common Stock, or securities convertible
                  into or exchangeable or exercisable for shares of Common
                  Stock, issued to financial institutions or equipment lessors
                  in connection with commercial credit arrangements, equipment
                  financings or similar transactions not primarily for equity
                  financing purposes and which have been approved by the
                  Company's Board of Directors; and

                           (F) shares of Common Stock, or securities convertible
                  into or exchangeable or exercisable for shares of Common
                  Stock, issued in connection with business combinations or
                  corporate partnering agreements approved by the Company's
                  Board of Directors.

                  (e) OTHER IMPAIRMENTS. If any event shall occur as to which
the provisions of Section 7.1(a)-(d) are not strictly applicable but are covered
by the essential intent and principles of such sections, then, in each such
case, the Company will appoint the firm of independent certified public
accountants of recognized national standing with the largest U.S. revenues for
the prior year (but not the Company's regular auditors), which shall give their
opinion upon the adjustment, if any, on a basis consistent with the essential
intent and principles established in this Section 7.1, necessary to preserve the
rights represented by this Warrant. Upon receipt of such opinion, the Company
will promptly mail a copy thereof to the holder of this Warrant and shall make
the adjustments described therein.

         7.2 NOTICE OF ADJUSTMENT. Whenever an event occurs requiring any
adjustment to be made pursuant to Section 7.1, the Company shall promptly file
with its Secretary or an assistant secretary at its principal office and with
its stock transfer agent, if any, a certificate of its President or Chief
Financial Officer specifying such adjustment, setting forth in reasonable detail
the acts requiring such adjustment, and stating such other facts as shall be
necessary to show the manner and figures used to compute such adjustment. Such
certificate shall be made available at all reasonable times for inspection by
the Holder. Promptly (but in no event more than 30 days) after each such
adjustment, the Company shall give a copy of such certificate by certified mail
to the Holder.

                                       8
<PAGE>

Section 8.  MISCELLANEOUS.

         8.1 BINDING EFFECT; ASSIGNMENT. This Warrant shall inure to the benefit
of and be binding upon the Company and the Holder and their respective
successors, heirs, legal representatives and permitted assigns. This Warrant and
the Warrant Shares (collectively, "Securities") may only be disposed of pursuant
to an effective registration statement under the Securities Act or pursuant to
an available exemption from or in a transaction not subject to the registration
requirements of the Securities Act, and in compliance with any applicable
federal and state securities laws. In connection with any transfer of Securities
other than pursuant to an effective registration statement, transfer may only be
made with the prior written consent of the Company, which shall not be
unreasonably withheld, and the Company may require the transferor to provide to
the Company an opinion of counsel selected by the transferor, the form and
substance of which opinion shall be reasonably satisfactory to the Company, to
the effect that such transfer does not require registration of such transferred
securities under the Securities Act; provided, however, that notwithstanding the
foregoing, no consent of the Company shall be required for the assignment or
transfer of rights hereunder by a Holder to such assignor's or transferor's
partners, shareholders or members or retired partners or former shareholders or
members, if any, or for any other assignment or transfer to the spouse,
ancestors, lineal descendants or siblings of such assignor or transferor,
provided the transferee(s) certify to the Company that each is an "accredited
investor" within the meaning of Rule 501(a) under the Securities Act and that it
is acquiring the Securities solely for investment purposes.

                  The Company shall register the transfer of any portion of this
Warrant, upon surrender of this Warrant with the Form of Assignment attached
hereto duly completed and signed, to the Company's transfer agent or to the
Company at the office specified in Section 8.2. Upon any such transfer, a new
warrant to purchase Common Stock, in substantially the form of this Warrant (any
such new warrant, a "New Warrant"), evidencing the portion of this Warrant so
transferred shall be issued to the transferee and a New Warrant evidencing the
remaining portion of this Warrant not so transferred, if any, shall be issued to
the transferring Holder. The acceptance of a New Warrant by the transferee shall
be deemed the acceptance of such transferee of all of the rights and obligations
of a holder of a Warrant.

                  This Warrant is exchangeable, upon the surrender hereof by the
Holder to the office of the Company specified in Section 8.2, for one or more
New Warrants evidencing in the aggregate the right to purchase the number of
Warrant Shares which may then be purchased hereunder. Any such New Warrant will
be dated the date of such exchange.

         8.2 NOTICE. All notices required or permitted under this Warrant shall
be given in writing and shall be deemed effectively given (a) upon personal
delivery to the party to be notified, (b) three days after deposit with the
United States Post Office, by registered or certified mail, postage prepaid and
addressed to the party to be notified at the address for such party, (c) one day
after deposit with a nationally recognized air courier service such as DHL or
Federal Express, or (d) on the date of facsimile transmission, with confirmed
transmission.

                  IF TO THE COMPANY:

                                       9
<PAGE>

                  Microfield Graphics, Inc.
                  16112 SW 72nd Avenue
                  Portland, OR 97224
                  Attn:  John B. Conroy, Chief Executive Officer
                  Fax:  (503) 620-4090

                  WITH A COPY TO:

                  Stoel Rives LLP
                  900 SW Fifth Avenue
                  Portland, OR  97204
                  Attn:  Annette M. Mulee
                  Fax:  (503) 220-2480

                  IF TO THE HOLDER:

                  JMW Capital Partners, Inc.
                  8201 SE 17th Avenue
                  Portland, OR 97202
                  Attn:  Robert Jesenik
                  Fax:  (503) 905-6033

                  WITH A COPY TO:

                  Perkins Coie LLP
                  Suite 1500
                  1211 SW Fifth Avenue
                  Portland, OR 97204-3715
                  Attn:  David Matheson
                  Fax:  (503) 727-2222

or such other address as such party may designate by 10 days' advance written
notice to the other party.

         8.3 GOVERNING LAW. The validity, interpretation and performance of this
Warrant shall be governed by the laws of the State of Oregon, exclusive of
choice of law rules.

         8.4 IMPAIRMENT. The Company will not, by amendment of its Articles of
Incorporation or Bylaws, or through reorganization, consolidation, merger,
dissolution, issue or sale of securities, sale of assets or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder of this Warrant against
impairment. Without limiting the generality of the foregoing, the Company (a)
will not increase the par value of any shares of stock issuable upon the
exercise of this Warrant above the amount payable therefore upon such exercise
and (b) will take all such action as may be necessary or

                                       10
<PAGE>

appropriate in order that the Company may validly and legally issue fully paid
and non-assessable Warrant Shares upon exercise of this Warrant.

         8.5  NOTICES OF RECORD DATE.  After the Initial Exercise Date, in
case:

                  8.5.1 the Company shall take a record of the holders of its
Common Stock (or other stock or securities at the time receivable upon the
exercise of this Warrant) for the purpose of entitling them to receive any
dividend or other distribution, or any right to subscribe for or purchase any
shares of stock of any class or any securities or to receive any other right; or

                  8.5.2 of any consolidation or merger of the Company with or
into another corporation, any capital reorganization of the Company, any
reclassification of the capital stock of the Company, or any conveyance of all
or substantially all of the assets of the Company; or

                  8.5.3 of any voluntary dissolution, liquidation or winding-up
of the Company; or

                  8.5.4 of any redemption or conversion of all outstanding
Common Stock;

then, and in each such case, the Company will mail or cause to be mailed to the
Holder of this Warrant a notice specifying, as the case may be, (i) the date on
which a record is to be taken for the purpose of such dividend, distribution or
right, or (ii) the date on which such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation, winding-up,
redemption or conversion is to take place, and the time, if any is to be fixed,
as of which the holders of record of Common Stock (or such stock or securities
as at the time are receivable upon the exercise of this Warrant) shall be
entitled to exchange their shares of Common Stock (or such other stock or
securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice shall be delivered at least
thirty (30) days before the consummation of the applicable event.

         8.6 NO INCONSISTENT AGREEMENTS. The Company will not on or after the
date of this Warrant enter into any agreement with respect to its securities
which is inconsistent with the rights granted to the Holder of this Warrant or
otherwise conflicts with the provisions hereof. The rights granted to the Holder
hereunder do not in any way conflict with the rights granted to holders of the
Company's securities under any other agreements, except rights that have been
waived.

         8.7 SATURDAYS, SUNDAYS AND HOLIDAYS. If the Expiration Date falls on a
Saturday, Sunday or legal holiday, the Expiration Date shall automatically be
extended until 5:00 p.m. Pacific Time the next business day.

         8.8 HEADINGS. The headings herein are for convenience only and shall
not control or affect the meaning or construction of this Warrant.

                                       11
<PAGE>

         8.9 PURCHASE AGREEMENT; REGISTRATION RIGHTS. This Warrant is one of the
Warrants referred in the Note and Warrant Purchase Agreement dated as of June
30, 2000 between the Company and JMW Capital Partners, Inc. and shall entitle
the Holder to all of the rights granted to holders of the Warrants thereunder,
including the registration rights provided in the Registration Rights Agreement
(as defined therein).

         Dated as of: June 30, 2000.

                                    MICROFIELD GRAPHICS, INC.

                                    By:_________________________________________
                                              John B. Conroy
                                              Chief Executive Officer

                                       12
<PAGE>

                                  EXERCISE FORM

                      (To Be Executed by the Warrant Holder
                            to Exercise the Warrant)

To:      MICROFIELD GRAPHICS, INC.

1.       The undersigned hereby irrevocably elects to exercise the right
         represented by Warrant No. 2000-W-__ to purchase _________ shares of
         Common Stock provided for in the Warrant as follows [check one]:

         [ ] Exercise for Cash: Pursuant to Section 2.2.1 of the Warrant, the
Holder hereby elects to exercise the Warrant for cash and tenders payment
herewith (or has made a wire transfer) to the order of Microfield Graphics, Inc.
in the amount of $____________.

         [ ] Same Day Sale Exercise: Pursuant to Section 2.2.2 of the Warrant,
the Holder hereby elects to exercise the Warrant on a cashless basis.

2.       The undersigned requests that certificates for such shares of Common
         Stock be issued and delivered as follows:

         Name:____________________________________________

         Address:_________________________________________

         Deliver to:______________________________________

         Address:_________________________________________

If the number of shares of Common Stock to be issued upon this exercise is not
all the shares that may be purchased pursuant to the Warrant, the undersigned
requests that a new warrant evidencing the right to purchase the balance of such
shares be registered in the name of, and be delivered to, the undersigned at the
foregoing address.

3.       In connection with the exercise of the Warrant, the undersigned hereby
         represents and warrants to you as follows:

         (a)      PURCHASE ENTIRELY FOR OWN ACCOUNT. The Common Stock will be
                  acquired for investment for the undersigned's own account and
                  not with a view to the resale or distribution of any part
                  thereof, and the undersigned has no intention of selling,
                  granting any participation in, or otherwise distributing the
                  same.

                                       1
<PAGE>

         (b)      RESTRICTED SECURITIES. The undersigned understands the Common
                  Stock may not be sold, transferred, or otherwise disposed of
                  without registration under the Securities Act or an exemption
                  therefrom and, in the absence of an effective registration
                  statement covering the Common Stock or an available exemption
                  from registration under the Securities Act, the Common Stock
                  must be held indefinitely.

         (c)      INVESTMENT EXPERIENCE. The undersigned is experienced in
                  evaluating and investing in companies in the development
                  stage, can bear the economic risk of an investment in the
                  Common Stock, and has enough knowledge and experience in
                  financial and business matters to evaluate the merits and
                  risks of the investment in the Common Stock.

         (d)      INVESTOR QUALIFICATIONS. The undersigned is an Accredited
                  Investor as defined in Rule 501 promulgated under the
                  Securities Act or has such knowledge and experience in
                  financial and business matters that he or it is capable of
                  evaluating the merits and risks of investing in the Common
                  Stock.

         (e)      OPPORTUNITY TO REVIEW DOCUMENTS AND ASK QUESTIONS. The Company
                  has made available to the undersigned all documents and
                  information requested by the undersigned relating to an
                  investment in the Company. In addition, the undersigned has
                  had adequate opportunity to ask questions and to receive
                  answers from the management of the Company covering the terms
                  and conditions of the offering and the Company's business,
                  management, and financial affairs.

4.       The undersigned understands, agrees, and recognizes that:

         (a)      No federal or state agency has made any finding or
                  determination as to the fairness of the investment or any
                  recommendation or endorsement of the Common Stock.

         (b)      All certificates evidencing the Common Stock shall bear a
                  legend substantially similar to the legend set forth in
                  Section 2.5 of the Warrant regarding resale restrictions.

                                       2
<PAGE>

5.       The undersigned is a resident of the state of ________________________.

         Dated:   _____________, 2000.

                                    [HOLDER]

                                    By:_________________________________________
                                    Name:_______________________________________
                                    Title:______________________________________

                                    Note: Signature must correspond with the
                                    name as written upon the face of the Warrant
                                    in every particular, without alteration or
                                    enlargement or any change whatsoever.

                                       3
<PAGE>

                               FORM OF ASSIGNMENT

         FOR VALUE RECEIVED, ______________________________________ hereby
sells, assigns and transfers to the assignee set forth below all of the rights
of the undersigned in and to the number of Warrant Shares (as defined in and
evidenced by the foregoing Warrant) set opposite the name of such assignee below
and in and to the foregoing Warrant with respect to said Warrant Shares:

<TABLE>
<CAPTION>

Name of Assignee                               Address                                       Number of Shares
----------------                               -------                                       ----------------
<S>                                       <C>                                               <C>

</TABLE>

         If the total of said Warrant Shares shall not be all such shares which
may be purchased pursuant to the foregoing Warrant, the undersigned requests
that a new Warrant evidencing the right to purchase the balance of such shares
be issued in the name of, and delivered to, the undersigned at the undersigned's
address stated below.

         Dated:____________

         Name of holder of Warrant:_____________________________________________
                                                     (please print)
                  Address:______________________________________________________
                  Signature:____________________________________________________

                                       1
<PAGE>

THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE STATE SECURITIES LAWS.
NEITHER THIS WARRANT NOR THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF MAY BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE APPLICABLE SECURITIES UNDER SUCH ACT OR LAWS OR
AN OPINION OF COUNSEL FOR THE HOLDER REASONABLY SATISFACTORY TO THE ISSUER
STATING THAT SUCH REGISTRATION IS NOT REQUIRED.

No. 2000-W-2                                       WARRANT TO PURCHASE 1,033,000
                                                          SHARES OF COMMON STOCK

                             STOCK PURCHASE WARRANT
                       TO PURCHASE SHARES OF COMMON STOCK
                          OF MICROFIELD GRAPHICS, INC.

         For value received, Microfield Graphics, Inc., an Oregon corporation
(the "Company"), grants to JMW Capital Partners, Inc. (the "Holder") the right,
subject to the terms of this Warrant, to purchase at any time during the period
commencing on the "Initial Exercise Date" (as defined below), and ending on the
"Expiration Date" (as defined below), 1,033,000 fully paid and nonassessable
shares of Common Stock of the Company at the "Exercise Price" (as defined
below). This Warrant may be exercised in whole or in part, but not less than
500,000 shares in a single exercise (or such lesser amount then issuable upon
the entire exercise of this Warrant. The number of shares that may be purchased
are subject to adjustment under the terms of this Warrant.

Section 2.  DEFINITIONS.  As used in this Warrant, unless the context
otherwise requires:

         "EXERCISE AMOUNT" means 1,033,000 shares (adjusted as necessary in
accordance with Section 7).

         "EXERCISE PRICE" means $0.38722 per share (adjusted as necessary in
accordance with Section 7).

         "COMMON STOCK" means the Common Stock of the Company.

         "COMPANY" has the meaning specified in the introductory paragraph.

         "EXERCISE DATE" means any date when this Warrant is exercised in the
manner indicated in Sections 2.1 and 2.2.

         "EXPIRATION DATE" means 12:00 midnight (Portland time) on June 30,
2005.

                                       2
<PAGE>

         "HOLDER" has the meaning specified in the introductory paragraph.

         "INITIAL EXERCISE DATE" means June 30, 2000.

         "PERSON" means an individual, corporation, partnership, trust, joint
venture or other form of business entity.

         "SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time, and all rules and regulations promulgated thereunder, or any act, rules
or regulations which replace the Securities Act or any such rules and
regulations.

         "WARRANT SHARES" means the shares of Common Stock issued or issuable
upon exercise of this Warrant, adjusted as necessary in accordance with Section
7.

Section 2.  DURATION AND EXERCISE OF WARRANT.

         2.1 EXERCISE PERIOD. Subject to the provisions hereof, this Warrant may
be exercised at any time during the period commencing on the Initial Exercise
Date and ending on the Expiration date for the Exercise Amount. After the
Expiration Date, this Warrant shall become void and all rights to purchase
Warrant Shares hereunder shall thereupon cease.

         2.2 METHODS OF EXERCISE. This Warrant may be exercised by the Holder,
in whole or in part, by (i) surrendering this Warrant to the Secretary of the
Company, (ii) payment of any applicable consideration, and (iii) executing and
delivering to the Secretary of the Company the attached Exercise Form, which
must select one of the following exercise methods, to be at the Holder's option:

                  2.2.1 EXERCISE FOR CASH. If the Holder elects to exercise the
Warrant for cash, the Holder shall tender to the Company payment in full by
cash, check, or wire transfer of the Exercise Price for the Warrant Shares.

                  2.2.2 SAME DAY SALE EXERCISE. In lieu of exercising this
Warrant by payment of cash, when permitted by law and applicable regulations
(including Nasdaq and NASD rules), the Holder may pay the Exercise Price through
a "same day sale" commitment from the Holder and a broker-dealer that is a
member of the National Association of Securities Dealers (an "NASD Dealer")
whereby the Holder irrevocably elects to exercise the Warrant and to sell a
portion of the Warrant Shares so purchased to pay for the Exercise Price and
whereby the NASD Dealer irrevocably commits upon receipt of such Warrant Shares
to forward the Exercise Price directly to the Company.

         2.3 CERTIFICATES. As soon as practicable after exercise of this Warrant
(but in no event later than five business days), (a) certificates for Warrant
Shares shall be delivered, at the Company's expense, to the Holder or the
transferee thereof set forth in the attached Exercise Form and (b) a new Warrant
of like tenor to purchase up to that number, if any, not previously purchased by
the Holder (if this Warrant has not expired) shall be delivered, at the
Company's expense, to the Holder.

                                       3
<PAGE>

         2.4 EFFECTIVE DATE OF EXERCISE. This Warrant shall be deemed to have
been exercised immediately prior to the close of business on the date of its
surrender for exercise as provided above. The person entitled to receive the
Warrant Shares shall be treated for all purposes as the holder of record of such
shares as of the close of business on the date the Holder is deemed to have
exercised this Warrant.

         2.5 SECURITIES ACT COMPLIANCE. Unless the Warrant Shares are no longer
subject to Rule 144 under the Securities Act, the Company may place
conspicuously upon each certificate representing the Warrant Shares a legend
substantially in the following form, the terms of which are agreed to by the
Holder:

         THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
         APPLICABLE STATE LAW, AND NO INTEREST THEREIN MAY BE SOLD, DISTRIBUTED,
         ASSIGNED, OFFERED, 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) STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION OR
         (C) THE COMPANY OTHERWISE SATISFIES ITSELF THAT SUCH TRANSACTION IS
         EXEMPT FROM REGISTRATION.

         2.6 TAXES. The Company shall pay any tax and other governmental charges
which may be payable in respect of the issuance of the Warrant Shares, provided,
however, that in no case will the Company pay any taxes relating to income to
the Holder resulting from the issuance or exercise of this Warrant.

Section 3.  WARRANT SHARES.

         3.1 VALIDITY AND RESERVATION. The Company covenants that all Warrant
Shares issued upon exercise of this Warrant will be validly issued, fully paid,
nonassessable, free and clear of all liens, security interests, charges and
other encumbrances or restrictions on sale (except encumbrances or restrictions
arising under federal or state securities laws), and not subject to preemptive
rights. The Company agrees that, as long as this Warrant may be exercised, the
Company will have duly authorized and reserved for issuance upon exercise of
this Warrant a sufficient number of shares of Common Stock or other shares of
capital stock of the Company as are from time to time issuable upon exercise of
this Warrant and from time to time will take all steps necessary to amend its
Articles of Incorporation to provide sufficient reserves of Common Stock
issuable upon exercise of this Warrant. Issuance of this Warrant shall
constitute full authority to the Company's officers who are charged with the
duty of executing stock certificates to execute and issue the necessary
certificates for Common Stock upon the exercise of this Warrant.

                                       4
<PAGE>

         3.2 LISTING OF WARRANT SHARES. The Company shall take all steps
necessary to cause the Warrant Shares issuable upon exercise of this Warrant to
be approved for listing on all securities exchanges or markets and all trading
or quotation facilities on which the Common Stock is listed as soon as possible
after the Initial Exercise Date and shall use commercially reasonable efforts to
maintain such listings until the earlier of the Expiration Date or the date this
Warrant is exercised in full.

Section 4.  FRACTIONAL SHARES.

         No fractional Warrant Shares shall be issued upon the exercise of this
Warrant, and the number of Warrant Shares to be issued shall be rounded to the
nearest whole number.

Section 5.  LIMITED RIGHTS OF WARRANT HOLDER.

         The Holder shall not, solely by virtue of being the Holder of this
Warrant, have any of the rights of a shareholder of the Company, either at law
or equity, until this Warrant shall have been exercised.

Section 6.  LOSS OF WARRANT.

         Upon receipt by the Company of satisfactory evidence of the loss,
theft, destruction or mutilation of this Warrant and either (in the case of
loss, theft or destruction) reasonable indemnification and a bond reasonably
satisfactory to the Company if requested by the Company or (in the case of
mutilation) the surrender of this Warrant for cancellation, the Company will
execute and deliver to the Holder, without charge, a new warrant of like
denomination.

Section 7.  CERTAIN ADJUSTMENTS.

         7.1 ADJUSTMENT OF WARRANT SHARES. The number, class and Exercise Price
per share of securities for which this Warrant may be exercised are subject to
adjustment from time to time upon the happening of certain events as hereinafter
provided:

                  (a) RECAPITALIZATION. If the outstanding shares of the
Company's Common Stock are divided into a greater number of shares or if the
Company shall effect a stock dividend, the number of shares of Common Stock
purchasable upon the exercise of this Warrant shall be proportionately increased
and the Exercise Price per share shall be proportionately reduced. Conversely,
if the outstanding shares of Common Stock are combined into a smaller number of
shares of Common Stock, the number of shares of Common Stock purchasable upon
the exercise of this Warrant shall be proportionately reduced and the Exercise
Price per share shall be proportionately increased. The increases and reductions
provided for in this Section 7.1(a) shall be made with the intent and, as nearly
as practicable, the effect that neither the percentage of the total equity of
the Company obtainable on exercise of this Warrant nor the aggregate price
payable for such percentage shall be affected by any event described in this
Section 7.1(a).

                                       5
<PAGE>

                  (b) MERGER OR REORGANIZATION, ETC. In the event of any change
in the Common Stock through merger, consolidation, reclassification,
reorganization, partial or complete liquidation or other change in the capital
structure of the Company (not including the issuance of additional shares of
capital stock other than by stock dividend or stock split), then, the Holder of
this Warrant will have the right thereafter to receive upon the exercise of this
Warrant the kind and amount of shares of stock or other securities or property
to which it would have been entitled if, immediately before the merger,
consolidation, reclassification, reorganization, recapitalization or other
change in the capital structure, it had held the number of shares of Common
Stock obtainable upon the exercise of this Warrant. In any such case,
appropriate adjustment shall be made in the application of the provisions of
this Section 7 with respect to the rights of the Holder after the merger,
consolidation, reclassification, reorganization, recapitalization or other
change to the end that the provisions of this Section 7 (including adjustment of
the Exercise Price then in effect and the number of shares issuable upon
exercise of this Warrant) shall be applicable after that event as nearly
equivalent as may be practicable.

                  (c) ADJUSTMENT FOR DIVIDENDS OR DISTRIBUTIONS OF STOCK OR
OTHER SECURITIES OR PROPERTY. In case the Company shall make or issue, or shall
fix a record date for the determination of eligible holders entitled to receive,
a dividend or other distribution with respect to the Warrant Shares (or any
shares of stock or other securities at the time issuable upon exercise of the
Warrant) payable in (i) securities of the Company (other than as provided for in
Section 7.1(a) or (b) above) or any other entity or (ii) assets (excluding cash
dividends paid or payable solely out of retained earnings), then, in each such
case, upon exercise of this Warrant at any time after the consummation,
effective date or record date of such dividend or other distribution, the Holder
shall receive, in addition to the Warrant Shares (or such other stock or
securities) issuable on such exercise prior to such date, and without the
payment of additional consideration therefor, the securities or such other
assets of the Company to which such Holder would have been entitled upon such
date if such Holder had exercised this Warrant on the Initial Exercise Date and
had thereafter, during the period from the Initial Exercise Date to and
including the date of such exercise, retained such shares and/or all other
additional stock or securities available by it as aforesaid during such period
giving effect to all adjustments called for by this Section 7.

                  (d)      SALE OF SHARES BELOW EXERCISE PRICE.

                  (i) If the Company shall issue any Additional Stock (as
         defined below) without consideration or for a consideration per share
         less than $0.38722 (adjusted appropriately for stock dividends, splits,
         combinations and similar transactions) in effect immediately prior to
         the issuance of such Additional Stock in a transaction not subject to
         Section 7.1(a), (b) or (c) above, the Exercise Price in effect
         immediately prior to issuance of such Additional Stock (except as
         otherwise provided in this Section 7.1(d)) shall be adjusted down to a
         price equal to the quotient obtained by dividing the total computed
         under clause (x) below by the total computed under clause (y) below as
         follows:

                           (x) an amount equal to the sum of (1) the result
                  obtained by multiplying the number of shares of Common Stock
                  deemed outstanding immediately prior to such issuance (which
                  shall include the actual number of

                                       6
<PAGE>

                  shares outstanding plus all shares issuable upon the
                  conversion or exercise of all outstanding convertible
                  securities, warrants and options other than shares excluded
                  from the definition of Additional Stock by Section 7.1(d)(vi))
                  by the Exercise Price then in effect, and (2) the aggregate
                  consideration, if any, received by the Company upon the
                  issuance of such Additional Stock;

                           (y) the number of shares of Common Stock of the
                  Company outstanding immediately after such issuance (including
                  the shares deemed outstanding as provided in clause (x)
                  above).

                  (ii) No adjustment of the Exercise Price shall be made in an
         amount less than $0.01 per share; provided, however, that any
         adjustments which are not required to be made by reason of this
         sentence shall be carried forward and shall be taken into account in
         any subsequent adjustment made to the Exercise Price. Except as
         provided in Sections 7.1(d)(v)(C) and (D) below, no adjustment of the
         Exercise Price shall have the effect of increasing the Exercise Price
         above the Exercise Price in effect immediately prior to such
         adjustment.

                  (iii) In the case of the issuance of Common Stock for cash,
         the consideration shall be deemed to be the amount of cash paid
         therefor before deducting any discounts, commissions or other expenses
         allowed, paid or incurred by the Company for any underwriting or
         otherwise in connection with the issuance and sale thereof.

                  (iv) In the case of the issuance of Common Stock for a
         consideration in whole or in part other than cash, the consideration
         other than cash shall be deemed to be the fair value thereof as
         determined in good faith by the Board of Directors irrespective of any
         accounting treatment.

                  (v) In the case of the issuance of options or warrants to
         purchase or rights to subscribe for Common Stock, securities by their
         terms convertible into or exchangeable for Common Stock, or options or
         warrants to purchase or rights to subscribe for such convertible or
         exchangeable securities (which options, warrants, rights, convertible
         or exchangeable securities are not excluded from the definition of
         Additional Stock except as provided in Section 7.1(d)(vi)(B)), the
         following provisions shall apply:

                           (A) the aggregate maximum number of shares of Common
                  Stock deliverable upon exercise of such options or warrants to
                  purchase or rights to subscribe for Common Stock shall be
                  deemed to have been issued at the time such options, warrants,
                  or rights were issued for a consideration equal to the
                  consideration (determined in the manner provided in Sections
                  7.1(d)(iii) and (iv) above), if any, received by the Company
                  upon the issuance of such options, warrants or rights plus the
                  minimum purchase price provided in such options, warrants or
                  rights for the Common Stock covered thereby, but no further
                  adjustment to the Exercise Price shall be made for the actual
                  issuance of Common Stock upon the exercise of such options,
                  warrants or rights in accordance with their terms;

                                       7
<PAGE>

                           (B) the aggregate maximum number of shares of Common
                  Stock deliverable upon conversion of or in exchange for any
                  such convertible or exchangeable securities or upon the
                  exercise of options or warrants to purchase or rights to
                  subscribe for such convertible or exchangeable securities and
                  subsequent conversion or exchange thereof shall be deemed to
                  have been issued at the time such securities were issued or
                  such options, warrants or rights were issued for a
                  consideration equal to the consideration received, if any, by
                  the Company for any such securities and any related options,
                  warrants or rights, plus the minimum additional consideration,
                  if any, to be received by the Company upon the conversion or
                  exchange of such securities or the exercise of any related
                  options, warrants or rights (the consideration in each case to
                  be determined in the manner provided in Sections 7.1(d)(iii)
                  and (iv) above), but no further adjustment to the Exercise
                  Price shall be made for the actual issuance of Common Stock
                  upon the conversion or exchange of such securities in
                  accordance with their terms;

                           (C) if such options, warrants, rights or convertible
                  or exchangeable securities by their terms provide, with the
                  passage of time or otherwise, for any change in the
                  consideration payable to the Company or in the number of
                  shares of Common Stock issuable upon the exercise, conversion
                  or exchange thereof, including, without limitation, a change
                  resulting from the antidilution provisions thereof, the
                  Exercise Price computed upon the original issue thereof, and
                  any subsequent adjustments based thereon, shall, upon such
                  change becoming effective, be recomputed to reflect such
                  change, but no further adjustment to the Exercise Price shall
                  be made for the actual issuance of Common Stock upon the
                  exercise of any such options, warrants or rights or the
                  conversion or exchange of such securities in accordance with
                  their terms; and

                           (D) upon the expiration of any such options, warrants
                  or rights, the termination of any such rights to convert or
                  exchange or the expiration of any options, warrants or rights
                  related to such convertible or exchangeable securities, the
                  Exercise Price shall forthwith be readjusted to such Exercise
                  Price as would have been obtained had the adjustment which was
                  made upon the issuance of such options, warrants, rights or
                  securities or options, warrants or rights related to such
                  securities been made upon the basis of the issuance of only
                  the number of shares of Common Stock (and convertible or
                  exchangeable securities which remain in effect) actually
                  issued upon the exercise of such options, warrants or rights,
                  upon the conversion or exchange of such securities or upon the
                  exercise of the options, warrants or rights related to such
                  securities.

                  (vi) "Additional Stock" shall mean any shares of Common Stock
         or securities convertible into or exchangeable or exercisable for
         shares of Common Stock issued (or deemed to have been issued pursuant
         to Section 7.1(d)(v) above) by the Company after the Initial Exercise
         Date other than:

                           (A) Common Stock issued in connection with a
                  transaction described in Section 7.1(a), (b) or (c);

                                       8
<PAGE>

                           (B) shares of Common Stock (and options to purchase
                  shares of Common Stock) issued or issuable to employees,
                  officers or directors of, or consultants to, the Company
                  pursuant to a stock option or restricted stock plan approved
                  by the Company's Board of Directors;

                           (C) 280,000 shares of Common Stock (adjusted
                  appropriately for stock dividends, splits, combinations and
                  similar transactions) issued or issuable upon the exercise of
                  warrants outstanding on the Initial Exercise Date;

                           (D) shares of Common Stock issued or issuable upon
                  the exercise of any warrant issued pursuant to the Note and
                  Warrant Purchase Agreement by and among the Company and JMW
                  Capital Partners, Inc. dated as of the Initial Exercise Date.

                           (E) shares of Common Stock, or securities convertible
                  into or exchangeable or exercisable for shares of Common
                  Stock, issued to financial institutions or equipment lessors
                  in connection with commercial credit arrangements, equipment
                  financings or similar transactions not primarily for equity
                  financing purposes and which have been approved by the
                  Company's Board of Directors; and

                           (F) shares of Common Stock, or securities convertible
                  into or exchangeable or exercisable for shares of Common
                  Stock, issued in connection with business combinations or
                  corporate partnering agreements approved by the Company's
                  Board of Directors.

                  (e) OTHER IMPAIRMENTS. If any event shall occur as to which
the provisions of Section 7.1(a)-(d) are not strictly applicable but are covered
by the essential intent and principles of such sections, then, in each such
case, the Company will appoint the firm of independent certified public
accountants of recognized national standing with the largest U.S. revenues for
the prior year (but not the Company's regular auditors), which shall give their
opinion upon the adjustment, if any, on a basis consistent with the essential
intent and principles established in this Section 7.1, necessary to preserve the
rights represented by this Warrant. Upon receipt of such opinion, the Company
will promptly mail a copy thereof to the holder of this Warrant and shall make
the adjustments described therein.

         7.2 NOTICE OF ADJUSTMENT. Whenever an event occurs requiring any
adjustment to be made pursuant to Section 7.1, the Company shall promptly file
with its Secretary or an assistant secretary at its principal office and with
its stock transfer agent, if any, a certificate of its President or Chief
Financial Officer specifying such adjustment, setting forth in reasonable detail
the acts requiring such adjustment, and stating such other facts as shall be
necessary to show the manner and figures used to compute such adjustment. Such
certificate shall be made available at all reasonable times for inspection by
the Holder. Promptly (but in no event more than 30 days) after each such
adjustment, the Company shall give a copy of such certificate by certified mail
to the Holder.

                                       9
<PAGE>

Section 8.  MISCELLANEOUS.

         8.1 BINDING EFFECT; ASSIGNMENT. This Warrant shall inure to the benefit
of and be binding upon the Company and the Holder and their respective
successors, heirs, legal representatives and permitted assigns. This Warrant and
the Warrant Shares (collectively, "Securities") may only be disposed of pursuant
to an effective registration statement under the Securities Act or pursuant to
an available exemption from or in a transaction not subject to the registration
requirements of the Securities Act, and in compliance with any applicable
federal and state securities laws. In connection with any transfer of Securities
other than pursuant to an effective registration statement, transfer may only be
made with the prior written consent of the Company, which shall not be
unreasonably withheld, and the Company may require the transferor to provide to
the Company an opinion of counsel selected by the transferor, the form and
substance of which opinion shall be reasonably satisfactory to the Company, to
the effect that such transfer does not require registration of such transferred
securities under the Securities Act; provided, however, that notwithstanding the
foregoing, no consent of the Company shall be required for the assignment or
transfer of rights hereunder by a Holder to such assignor's or transferor's
partners, shareholders or members or retired partners or former shareholders or
members, if any, or for any other assignment or transfer to the spouse,
ancestors, lineal descendants or siblings of such assignor or transferor,
provided the transferee(s) certify to the Company that each is an "accredited
investor" within the meaning of Rule 501(a) under the Securities Act and that it
is acquiring the Securities solely for investment purposes.

                  The Company shall register the transfer of any portion of this
Warrant, upon surrender of this Warrant with the Form of Assignment attached
hereto duly completed and signed, to the Company's transfer agent or to the
Company at the office specified in Section 8.2. Upon any such transfer, a new
warrant to purchase Common Stock, in substantially the form of this Warrant (any
such new warrant, a "New Warrant"), evidencing the portion of this Warrant so
transferred shall be issued to the transferee and a New Warrant evidencing the
remaining portion of this Warrant not so transferred, if any, shall be issued to
the transferring Holder. The acceptance of a New Warrant by the transferee shall
be deemed the acceptance of such transferee of all of the rights and obligations
of a holder of a Warrant.

                  This Warrant is exchangeable, upon the surrender hereof by the
Holder to the office of the Company specified in Section 8.2, for one or more
New Warrants evidencing in the aggregate the right to purchase the number of
Warrant Shares which may then be purchased hereunder. Any such New Warrant will
be dated the date of such exchange.

         8.2 NOTICE. All notices required or permitted under this Warrant shall
be given in writing and shall be deemed effectively given (a) upon personal
delivery to the party to be notified, (b) three days after deposit with the
United States Post Office, by registered or certified mail, postage prepaid and
addressed to the party to be notified at the address for such party, (c) one day
after deposit with a nationally recognized air courier service such as DHL or
Federal Express, or (d) on the date of facsimile transmission, with confirmed
transmission.

                  IF TO THE COMPANY:

                                       10
<PAGE>

                  Microfield Graphics, Inc.
                  16112 SW 72nd Avenue
                  Portland, OR 97224
                  Attn:  John B. Conroy, Chief Executive Officer
                  Fax:  (503) 620-4090

                  WITH A COPY TO:

                  Stoel Rives LLP
                  900 SW Fifth Avenue
                  Portland, OR  97204
                  Attn:  Annette M. Mulee
                  Fax:  (503) 220-2480

                  IF TO THE HOLDER:

                  JMW Capital Partners, Inc.
                  8201 SE 17th Avenue
                  Portland, OR 97202
                  Attn:  Robert Jesenik
                  Fax:  (503) 905-6033

                  WITH A COPY TO:

                  Perkins Coie LLP
                  Suite 1500
                  1211 SW Fifth Avenue
                  Portland, OR 97204-3715
                  Attn:  David Matheson
                  Fax:  (503) 727-2222

or such other address as such party may designate by 10 days' advance written
notice to the other party.

         8.3 GOVERNING LAW. The validity, interpretation and performance of this
Warrant shall be governed by the laws of the State of Oregon, exclusive of
choice of law rules.

         8.4 IMPAIRMENT. The Company will not, by amendment of its Articles of
Incorporation or Bylaws, or through reorganization, consolidation, merger,
dissolution, issue or sale of securities, sale of assets or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder of this Warrant against
impairment. Without limiting the generality of the foregoing, the Company (a)
will not increase the par value of any shares of stock issuable upon the
exercise of this Warrant above the amount payable therefore upon such exercise
and (b) will take all such action as may be necessary or

                                       11
<PAGE>

appropriate in order that the Company may validly and legally issue fully paid
and non-assessable Warrant Shares upon exercise of this Warrant.

         8.5  NOTICES OF RECORD DATE.  After the Initial Exercise Date, in
case:

                  8.5.1 the Company shall take a record of the holders of its
Common Stock (or other stock or securities at the time receivable upon the
exercise of this Warrant) for the purpose of entitling them to receive any
dividend or other distribution, or any right to subscribe for or purchase any
shares of stock of any class or any securities or to receive any other right; or

                  8.5.2 of any consolidation or merger of the Company with or
into another corporation, any capital reorganization of the Company, any
reclassification of the capital stock of the Company, or any conveyance of all
or substantially all of the assets of the Company; or

                  8.5.3 of any voluntary dissolution, liquidation or winding-up
of the Company; or

                  8.5.4 of any redemption or conversion of all outstanding
Common Stock;

then, and in each such case, the Company will mail or cause to be mailed to the
Holder of this Warrant a notice specifying, as the case may be, (i) the date on
which a record is to be taken for the purpose of such dividend, distribution or
right, or (ii) the date on which such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation, winding-up,
redemption or conversion is to take place, and the time, if any is to be fixed,
as of which the holders of record of Common Stock (or such stock or securities
as at the time are receivable upon the exercise of this Warrant) shall be
entitled to exchange their shares of Common Stock (or such other stock or
securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice shall be delivered at least
thirty (30) days before the consummation of the applicable event.

         8.6 NO INCONSISTENT AGREEMENTS. The Company will not on or after the
date of this Warrant enter into any agreement with respect to its securities
which is inconsistent with the rights granted to the Holder of this Warrant or
otherwise conflicts with the provisions hereof. The rights granted to the Holder
hereunder do not in any way conflict with the rights granted to holders of the
Company's securities under any other agreements, except rights that have been
waived.

         8.7 SATURDAYS, SUNDAYS AND HOLIDAYS. If the Expiration Date falls on a
Saturday, Sunday or legal holiday, the Expiration Date shall automatically be
extended until 5:00 p.m. Pacific Time the next business day.

         8.8 HEADINGS. The headings herein are for convenience only and shall
not control or affect the meaning or construction of this Warrant.

                                       12
<PAGE>

         8.9 PURCHASE AGREEMENT; REGISTRATION RIGHTS. This Warrant is one of the
Warrants referred in the Note and Warrant Purchase Agreement dated as of June
30, 2000 between the Company and JMW Capital Partners, Inc. and shall entitle
the Holder to all of the rights granted to holders of the Warrants thereunder,
including the registration rights provided in the Registration Rights Agreement
(as defined therein).

         Dated as of: June 30, 2000.

                                    MICROFIELD GRAPHICS, INC.

                                    By:_________________________________________
                                               John B. Conroy
                                               Chief Executive Officer

                                       13
<PAGE>

                                  EXERCISE FORM

                      (To Be Executed by the Warrant Holder
                            to Exercise the Warrant)

To:      MICROFIELD GRAPHICS, INC.

1.       The undersigned hereby irrevocably elects to exercise the right
         represented by Warrant No. 2000-W-__ to purchase _________ shares of
         Common Stock provided for in the Warrant as follows [check one]:

         [ ] Exercise for Cash: Pursuant to Section 2.2.1 of the Warrant, the
Holder hereby elects to exercise the Warrant for cash and tenders payment
herewith (or has made a wire transfer) to the order of Microfield Graphics, Inc.
in the amount of $____________.

         [ ] Same Day Sale Exercise: Pursuant to Section 2.2.2 of the Warrant,
the Holder hereby elects to exercise the Warrant on a cashless basis.

2.       The undersigned requests that certificates for such shares of Common
         Stock be issued and delivered as follows:

         Name:____________________________________________

         Address:_________________________________________

         Deliver to:______________________________________

         Address:_________________________________________

If the number of shares of Common Stock to be issued upon this exercise is not
all the shares that may be purchased pursuant to the Warrant, the undersigned
requests that a new warrant evidencing the right to purchase the balance of such
shares be registered in the name of, and be delivered to, the undersigned at the
foregoing address.

3.       In connection with the exercise of the Warrant, the undersigned hereby
         represents and warrants to you as follows:

         (a)      PURCHASE ENTIRELY FOR OWN ACCOUNT. The Common Stock will be
                  acquired for investment for the undersigned's own account and
                  not with a view to the resale or distribution of any part
                  thereof, and the undersigned has no intention of selling,
                  granting any participation in, or otherwise distributing the
                  same.

                                       1
<PAGE>

         (b)      RESTRICTED SECURITIES. The undersigned understands the Common
                  Stock may not be sold, transferred, or otherwise disposed of
                  without registration under the Securities Act or an exemption
                  therefrom and, in the absence of an effective registration
                  statement covering the Common Stock or an available exemption
                  from registration under the Securities Act, the Common Stock
                  must be held indefinitely.

         (c)      INVESTMENT EXPERIENCE. The undersigned is experienced in
                  evaluating and investing in companies in the development
                  stage, can bear the economic risk of an investment in the
                  Common Stock, and has enough knowledge and experience in
                  financial and business matters to evaluate the merits and
                  risks of the investment in the Common Stock.

         (d)      INVESTOR QUALIFICATIONS. The undersigned is an Accredited
                  Investor as defined in Rule 501 promulgated under the
                  Securities Act or has such knowledge and experience in
                  financial and business matters that he or it is capable of
                  evaluating the merits and risks of investing in the Common
                  Stock.

         (e)      OPPORTUNITY TO REVIEW DOCUMENTS AND ASK QUESTIONS. The Company
                  has made available to the undersigned all documents and
                  information requested by the undersigned relating to an
                  investment in the Company. In addition, the undersigned has
                  had adequate opportunity to ask questions and to receive
                  answers from the management of the Company covering the terms
                  and conditions of the offering and the Company's business,
                  management, and financial affairs.

4.       The undersigned understands, agrees, and recognizes that:

         (a)      No federal or state agency has made any finding or
                  determination as to the fairness of the investment or any
                  recommendation or endorsement of the Common Stock.

         (c)      All certificates evidencing the Common Stock shall bear a
                  legend substantially similar to the legend set forth in
                  Section 2.5 of the Warrant regarding resale restrictions.

                                       2
<PAGE>

5.       The undersigned is a resident of the state of ________________________.

         Dated:   _____________, 2000.

                                    [HOLDER]

                                    By:_________________________________________
                                    Name:_______________________________________
                                    Title:______________________________________

                                    Note: Signature must correspond with the
                                    name as written upon the face of the Warrant
                                    in every particular, without alteration or
                                    enlargement or any change whatsoever.

                                       3
<PAGE>

                               FORM OF ASSIGNMENT

         FOR VALUE RECEIVED, ______________________________________ hereby
sells, assigns and transfers to the assignee set forth below all of the rights
of the undersigned in and to the number of Warrant Shares (as defined in and
evidenced by the foregoing Warrant) set opposite the name of such assignee below
and in and to the foregoing Warrant with respect to said Warrant Shares:

<TABLE>
<CAPTION>

Name of Assignee                               Address                                       Number of Shares
----------------                               -------                                       ----------------
<S>                                         <C>                                            <C>

</TABLE>

         If the total of said Warrant Shares shall not be all such shares which
may be purchased pursuant to the foregoing Warrant, the undersigned requests
that a new Warrant evidencing the right to purchase the balance of such shares
be issued in the name of, and delivered to, the undersigned at the undersigned's
address stated below.

         Dated:____________

         Name of holder of Warrant:_____________________________________________
                                                       (please print)
                  Address:    __________________________________________________
                  Signature:  __________________________________________________

                                       1

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