8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest reported) September 8, 2004

Microfield Group, Inc.

(Exact name of registrant as specified in its charter)

Oregon	000-26226	93-0935149
(State or other jurisdiction of incorporation)	Commission file number	(IRS Employer Identification No.)

1631 NW Thurman, Suite 200, Portland, OR	97209
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (503) 419-3580

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	ITEM 5.03. Amendment to Articles of Incorporation
	ITEM 9.1. Exhibits
SIGNATURES
EXHIBIT 3.(I)

ITEM 5.03. Amendment to Articles of Incorporation

A special meeting of the shareholders of Microfield was held on September 1, 2004. A quorum being present, the shareholders voted to authorize the amendment of its articles of incorporation to increase the number of authorized common shares from 25,000,000 to 125,000,000.

Microfield filed the Eighth Amended and Restated Articles of Incorporation with the Oregon Secretary of State’s office on September 8, 2004.

ITEM 9.1. Exhibits

     (3)(i) Eighth Amended & Restated Articles of Incorporation.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: September 9, 2004.	Microfield Group, Inc.
	/s/ William C. McCormick
	William C. McCormick, President

EX-3.(I)

                                                                    EXHIBIT 3(i)

                   EIGHTH RESTATED ARTICLES OF INCORPORATION

                                       OF

                             MICROFIELD GROUP, INC.

      These Eighth Restated Articles of Incorporation shall supersede the
previously existing Seventh Restated Articles of Incorporation and all
amendments thereto:

                                   ARTICLE I

      The name of the corporation is Microfield Group, Inc. (the "Corporation").

                                   ARTICLE II

      A. The aggregate number of shares which the Corporation shall have
authority to issue is 125,000,000 shares of common stock ("Common Stock") and
10,000,000 shares of preferred stock ("Preferred Stock").

      B. Holders of Common Stock are entitled to one vote per share on any
matter submitted to the shareholders. On dissolution of the Corporation, after
any preferential amount with respect to Preferred Stock has been paid or set
aside, the holders of Common Stock and the holders of any series of Preferred
Stock entitled to participate in the distribution of assets are entitled to
receive the net assets of the Corporation.

      C. The Board of Directors is authorized, subject to limitations prescribed
by the Oregon Business Corporation Act as amended from time to time (the "Act")
and the provisions of this Article II, to provide for the issuance of the shares
of Preferred Stock in series, and by filing articles of amendment effective
without shareholder approval pursuant to the Act, to establish from time to time
the number of shares to be included in each series, and to determine the
designation, relative rights, preferences and limitations of the shares of each
series. The authority of the Board of Directors with respect to each series
shall include determination of the following:

            (1) The number of shares in and the distinguishing designation of
that series;

            (2) Whether shares of that series shall have full, special,
conditional, limited or no voting rights, except to the extent otherwise
provided by the Act;

            (3) Whether shares of that series shall be convertible and the terms
and conditions of the conversion, including provision for adjustment of the
conversion rate under circumstances determined by the Board of Directors;

            (4) Whether shares of that series shall be redeemable and the terms
and conditions of redemption, including the date or dates upon or after which
they shall be

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redeemable and the amount per share payable in case of redemption, which amount
may vary under different conditions or at different redemption dates;

            (5) The dividend rate, if any, on shares of that series, the manner
of calculating any dividends and the preferences of any dividends;

            (6) The rights of shares of that series in the event of voluntary or
involuntary dissolution of the Corporation and the rights of priority of that
series relative to the Common Stock and any other series of Preferred Stock on
the distribution of assets on dissolution; and

            (7) Any other relative rights, preferences and limitations of that
series that are permitted by law to vary.

      D. The series of Preferred Stock designated as Series 1 Preferred Stock in
the Fifth Restated Articles was never issued and is hereby canceled.

      E. There shall be a series of Preferred Stock designated as Series 2
Preferred Stock ("Series 2 Preferred"), consisting of 8,000,000 shares, with the
following preferences, limitations and relative rights:

            Section 1. Definitions. For purposes of Section 2 through Section 5
of this Article II.E., the following terms shall have the respective meanings
indicated below or as set forth in the indicated section:

            Additional Proceeds - Section 3(a).

            Conversion Rights - Section 4.

            Corporation - Microfield Group, Inc.

            Junior Stock - Common Stock and shares of any other class or series
of capital stock ranking junior to the Series 2 Preferred with respect to both
the payment of dividends and the distribution of assets upon the liquidation,
dissolution or winding up of the Corporation.

            Issue Price - $0.42 per share.

            Subsidiary - Any corporation at least 50 percent of the outstanding
voting stock of which is owned directly or indirectly by the Corporation.

            Section 2. Dividends.

            (a) Junior Stock. Dividends and distributions (other than those
payable solely in Junior Stock) may be paid, or declared and set aside for
payment, upon shares of Junior Stock in any calendar year only if dividends
shall have been paid, or declared and set apart for payment, on account of all
shares of Series 2 Preferred as provided in Section 2(b) of this Article II.E.
below.

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            (b) Series 2 Preferred. Series 2 Preferred shares issued and
outstanding shall be entitled to receive a cash dividend in the amount of 6.5%
of the Issue Price per annum. The Series 2 Preferred dividends shall be
cumulative and payable in cash on a quarterly basis, subject to the declaration
of the dividend by the board of directors upon a determination that any such
dividend is permitted under ORS 60.181. Any declared but unpaid dividend will
not bear interest and will be payable out of legally available funds. If such
funds are not sufficient to pay this dividend, either in whole or in part, then
no dividend or distribution will be paid with respect to the Junior Stock (other
than a dividend payable in Junior Stock) until full cumulative dividends on the
Series 2 Preferred Stock for all past quarters have been declared and paid or
the Corporation has set aside a sum sufficient to pay such dividends.

            Section 3. Liquidation Preference

            (a) Subject to Section G, of this Article II, in the event of any
liquidation, dissolution or winding up of the Corporation, either voluntary or
involuntary, the holders of each share of Series 2 Preferred shall be entitled
to be paid out of the assets of the Corporation available for distribution to
its shareholders, before any declaration and payment or setting apart for
payment of any amount shall be made in respect of Junior Stock, an amount equal
to the Issue Price and all accrued but unpaid dividends.

            (b) After the payment or distributions described in Section 3(a)
above have been made, the remaining assets of the Corporation available for
distribution to its shareholders shall be distributed among the holders of
Junior Stock.

            Section 4. Conversion. The holders of the Series 2 Preferred shall
have the following conversion rights (the "Conversion Rights"):

            (a) Right to Convert

                  (i) Each holder of shares of Series 2 Preferred may, at the
holder's option, convert all or any part of such share(s) from time to time into
shares of Common Stock at any time after the date of issuance. Each such share
of Series 2 Preferred shall be converted into one share of fully paid and
nonassessable shares of Common Stock.

                  (ii) Upon conversion of the Series 2 Preferred, the Common
Stock so issued shall be duly and validly issued, fully paid and nonassessable
shares of the Corporation.

                  (iii) Each Share of Series 2 Preferred shall automatically be
converted into Shares of Common Stock on a one-for-one basis on the third
anniversary of the date of issuance of the Series 2 Preferred.

                  (iv) Upon the occurrence of the event specified in clause
(iii) of this Section 4(a), the outstanding shares of the Series 2 Preferred to
be converted shall be converted automatically without any further action by the
holders of such shares and whether or not the certificates representing such
shares are surrendered to the Corporation or its transfer agent;

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provided, however, that the Corporation shall not be obligated to issue
certificates evidencing the shares of Common Stock issuable upon such conversion
unless certificates evidencing such shares of the Series 2 Preferred being
converted are either delivered to the Corporation or any transfer agent, as
hereinafter provided, or the holder notifies the Corporation or any transfer
agent, as hereinafter provided, that such certificates have been lost, stolen,
or destroyed and executes an agreement satisfactory to the Corporation to
indemnify the Corporation from any loss incurred by it in connection therewith.
Upon the automatic conversion of the Series 2 Preferred, the holders of such
Series 2 Preferred shall surrender the certificates representing such shares at
the office of the Corporation or of any transfer agent for the Common Stock.
Thereupon, there shall be issued and delivered to such holder, promptly at such
office and in the holder's name as shown on such surrendered certificate or
certificates, a certificate or certificates for the number of shares of Common
Stock into which the shares of the Series 2 Preferred surrendered were
convertible on the date on which such automatic conversion occurred.

            (b) Mechanics of Conversion. Before any holder of Series 2 Preferred
shall be entitled to convert the same into shares of Common Stock, the holder
shall surrender the certificate or certificates therefor, duly endorsed, at the
office of the Corporation or of any transfer agent for the Series 2 Preferred,
and shall give written notice by mail, postage prepaid, to the Corporation at
its principal corporate office, of the election to convert the same and shall
state therein the name or names in which the certificate or certificates for
shares of Common Stock are to be issued. The Corporation shall, as soon as
practicable thereafter, issue and deliver at such office to such holder of
Series 2 Preferred, or to the nominee or nominees of such holder, a certificate
or certificates for the number of shares of Common Stock to which such holder
shall be entitled as aforesaid. Such conversion shall be deemed to have been
made immediately prior to the close of business on the date of such surrender of
the shares of Series 2 Preferred to be converted, and the person or persons
entitled to receive the shares of Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders of such shares
of Common Stock as of such date. If the conversion is in connection with an
underwritten offer of securities registered pursuant to the Securities Act of
1933, the conversion may, at the option of any holder tendering Series 2
Preferred for conversion, be conditioned upon the closing with the underwriter
of the sale of securities pursuant to such offering, in which event the
person(s) entitled to receive the Common Stock issuable upon such conversion of
the Series 2 Preferred shall not be deemed to have converted such Series 2
Preferred until immediately prior to the closing of such sale of securities.

            (c) Other Distributions. In the event the Corporation shall declare
a distribution payable in securities of other persons, evidences of indebtedness
issued by the Corporation or other persons or assets (excluding cash dividends),
then, in each such case for the purpose of this Section 4(c), the holders of the
Series 2 Preferred shall be entitled to a proportionate share of any such
distribution as though they were the holders of the number of shares of Common
Stock of the Corporation into which their shares of Series 2 Preferred are
convertible as of the record date fixed for the determination of the holders of
Junior Stock of the Corporation entitled to receive such distribution.

            (d) Recapitalizations. If at any time or from time to time there
shall be a recapitalization of the Common Stock (other than a subdivision,
combination or merger or sale

4 - EIGHTH RESTATED ARTICLES OF INCORPORATION

of assets transaction provided for elsewhere in this Section 4) provision shall
be made so that the holders of the Series 2 Preferred shall thereafter be
entitled to receive upon conversion of the Series 2 Preferred the number of
shares of stock or other securities or property of the Company or otherwise, to
which a holder of Common Stock deliverable upon conversion would have been
entitled on such recapitalization. In any such case, appropriate adjustment
shall be made in the application of the provisions of this Section 4 with
respect to the rights of the holders of the Series 2 Preferred after the
recapitalization to the end that the provisions of this Section 4 (including
adjustment of the Conversion Price then in effect and the number of shares
purchasable upon conversion of the Series 2 Preferred) shall be applicable after
that event as nearly equivalent as may be practicable.

            (e) No Impairment. The Corporation will not, by amendment of its
Articles of Incorporation or through any reorganization, recapitalization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the
Corporation, but will at all times in good faith assist in the carrying out of
all the provisions of this Section 4 and in the taking of all such action as may
be necessary or appropriate in order to protect the Conversion Rights of the
holders of the Series 2 Preferred against impairment.

            (f) No Fractional Shares and Certificate as to Adjustments

                  (i) No fractional shares shall be issued upon conversion of
the Series 2 Preferred, and the number of shares of Common Stock to be issued
shall be rounded to the nearest whole share. Whether fractional shares would
otherwise be issuable upon conversion shall be determined on the basis of the
total number of shares of Series 2 Preferred the holder is at the time
converting into Common Stock and the number of shares of Common Stock issuable
upon such aggregate conversion.

                  (ii) Upon the occurrence of each adjustment or readjustment of
the Conversion Price pursuant to this Section 4, the Corporation, at its
expense, shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and prepare and furnish to each holder of Series 2
Preferred, by first class mail, postage prepaid, a certificate setting forth
such adjustment or readjustment is based, including a statement setting forth
(A) the consideration received or to be received by the Corporation for any
Additional Stock, (B) the Conversion Price then in effect, and (C) the number of
shares of Common Stock and the amount, if any, of other property which at the
time would be received upon the conversion of a share of Series 2 Preferred.

            (g) Notices of Record Date. In the event of any taking by the
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, the Corporation
shall mail to each holder of Series 2 Preferred, at least 20 days prior to the
date specified therein, a notice specifying the date

5 - EIGHTH RESTATED ARTICLES OF INCORPORATION

on which any such record is to be taken for the purpose of such dividend,
distribution or right, and the amount and character of such dividend,
distribution or right.

            (h) Reservation of Stock Issuable upon Conversion. The Corporation
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the shares of Series 2 Preferred, such number of its shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all
outstanding shares of Series 2 Preferred; and if at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to effect
the conversion of all then outstanding shares of the Series 2 Preferred, in
addition to such other remedies as shall be available to the holder of such
Series 2 Preferred, the Corporation will take such corporate action as may, in
the opinion of its counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such
purposes.

            (i) Notices. Any notice required by the provisions of this Section 4
to be given to the holder of shares of Series 2 Preferred shall be deemed given
when personally delivered to such holder or two business days after the same has
been deposited in the United States mail, certified or registered mail, return
receipt requested, postage prepaid, and addressed to each holder of record at
the holder's address appearing on the books of the Corporation.

            Section 5. Voting Rights. Each holder of Series 2 Preferred shall
have the right to one vote for each share of Common Stock into which such Series
2 Preferred could then be converted (with any fractional share determined on an
aggregate conversion basis being rounded to the nearest whole share), and with
respect to such vote, such holder shall have full voting rights and powers equal
to the voting rights and powers of a holder of Common Stock, and shall be
entitled, notwithstanding any provision hereof, to notice of any shareholders'
meeting in accordance with the bylaws of the Corporation, and shall be entitled
to vote, together with holders of Common Stock, with respect to any question
upon which holders of Common Stock have the right to vote.

            Section 6. Amendment. Upon the automatic conversion of every
outstanding share of Series 2 Preferred Stock into Shares of Common Stock
pursuant to Section 4(a)(iii) of this Article II.E., these Eighth Restated
Articles of Incorporation shall automatically be amended to delete Article II.E.
hereof in its entirety and Article II.E. shall have no further force and effect.
Upon such automatic amendment, the officers of the Company are authorized and
directed to do such acts and things as may be necessary or appropriate to effect
said amendment, including filing restated articles that include such amendment
and making any other required filings with any authorities of the state of
Oregon.

      F. There shall be a series of Preferred Stock designated as Series 3
Preferred Stock ("Series 3 Preferred"), consisting of 10,000 shares, with the
following preferences, limitations and relative rights:

            Section 1. Definitions. For purposes of Section 2 through Section 5
of this Article II.F., the following terms shall have the respective meanings
indicated below or as set forth in the indicated section:

6 - EIGHTH RESTATED ARTICLES OF INCORPORATION

            Additional Proceeds - Section 3(a).

            Conversion Rights - Section 4.

            Corporation - Microfield Group, Inc.

            Junior Stock - Common Stock and shares of any other class or series
of capital stock ranking junior to the Series 2 Preferred and Series 3 Preferred
with respect to both the payment of dividends and the distribution of assets
upon the liquidation, dissolution or winding up of the Corporation.

            Issue Price - $420.00 per share.

            Subsidiary - Any corporation at least 50 percent of the outstanding
voting stock of which is owned directly or indirectly by the Corporation.

            Section 2. Dividends.

            (a) Junior Stock. Dividends and distributions (other than those
payable solely in Junior Stock) may be paid, or declared and set aside for
payment, upon shares of Junior Stock in any calendar year only if dividends
shall have been paid, or declared and set apart for payment, on account of all
shares of Series 3 Preferred as provided in Section 2(b) of this Article II.F.
below.

            (b) Series 3 Preferred. Series 3 Preferred shares issued and
outstanding shall be entitled to receive a cash dividend in the amount of 6.5%
of the Issue Price per annum. The Series 3 Preferred dividends shall be
cumulative and payable in cash on a quarterly basis, subject to the declaration
of the dividend by the board of directors upon a determination that any such
dividend is permitted under ORS 60.181. Any declared but unpaid dividend will
not bear interest and will be payable out of legally available funds. If such
funds are not sufficient to pay this dividend, either in whole or in part, then
no dividend or distribution will be paid with respect to the Junior Stock (other
than a dividend payable in Junior Stock) until full cumulative dividends on the
Series 2 Preferred Stock and Series 3 Preferred Stock for all past quarters have
been declared and paid or the Corporation has set aside a sum sufficient to pay
such dividends.

            Section 3. Liquidation Preference

            (a) Subject to Section G, of this Article II, in the event of any
liquidation, dissolution or winding up of the Corporation, either voluntary or
involuntary, the holders of each share of Series 3 Preferred shall be entitled
to be paid out of the assets of the Corporation available for distribution to
its shareholders, before any declaration and payment or setting apart for
payment of any amount shall be made in respect of Junior Stock, an amount equal
to the Issue Price and all accrued but unpaid dividends.

7 - EIGHTH RESTATED ARTICLES OF INCORPORATION

            (b) After the payment or distributions described in Section 3(a)
above have been made, the remaining assets of the Corporation available for
distribution to its shareholders shall be distributed among the holders of
Junior Stock.

            Section 4. Conversion. The holders of the Series 2 Preferred shall
have the following conversion rights (the "Conversion Rights"):

            (a) Right to Convert

                  (i) Each holder of shares of Series 2 Preferred may, at the
holder's option after March 31, 2005, convert all or any part of such share(s)
from time to time into shares of Common Stock at any time after the date of
issuance. Each such share of Series 3 Preferred shall be converted into one
thousand shares of fully paid and nonassessable shares of Common Stock.

                  (ii) Upon conversion of the Series 3 Preferred, the Common
Stock so issued shall be duly and validly issued, fully paid and nonassessable
shares of the Corporation.

                  (iii) Each Share of Series 3 Preferred shall automatically be
converted into Shares of Common Stock on a one-for-one thousand basis on the
third anniversary of the date of issuance of the Series 2 Preferred.

                  (iv) Upon the occurrence of the event specified in clause
(iii) of this Section 4(a), the outstanding shares of the Series 3 Preferred to
be converted shall be converted automatically without any further action by the
holders of such shares and whether or not the certificates representing such
shares are surrendered to the Corporation or its transfer agent; provided,
however, that the Corporation shall not be obligated to issue certificates
evidencing the shares of Common Stock issuable upon such conversion unless
certificates evidencing such shares of the Series 3 Preferred being converted
are either delivered to the Corporation or any transfer agent, as hereinafter
provided, or the holder notifies the Corporation or any transfer agent, as
hereinafter provided, that such certificates have been lost, stolen, or
destroyed and executes an agreement satisfactory to the Corporation to indemnify
the Corporation from any loss incurred by it in connection therewith. Upon the
automatic conversion of the Series 3 Preferred, the holders of such Series 3
Preferred shall surrender the certificates representing such shares at the
office of the Corporation or of any transfer agent for the Common Stock.
Thereupon, there shall be issued and delivered to such holder, promptly at such
office and in the holder's name as shown on such surrendered certificate or
certificates, a certificate or certificates for the number of shares of Common
Stock into which the shares of the Series 3 Preferred surrendered were
convertible on the date on which such automatic conversion occurred.

            (b) Mechanics of Conversion. Before any holder of Series 3 Preferred
shall be entitled to convert the same into shares of Common Stock, the holder
shall surrender the certificate or certificates therefor, duly endorsed, at the
office of the Corporation or of any transfer agent for the Series 3 Preferred,
and shall give written notice by mail, postage prepaid, to the Corporation at
its principal corporate office, of the election to convert the same and shall
state therein the name or names in which the certificate or certificates for
shares of Common

8 - EIGHTH RESTATED ARTICLES OF INCORPORATION

Stock are to be issued. The Corporation shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of Series 3
Preferred, or to the nominee or nominees of such holder, a certificate or
certificates for the number of shares of Common Stock to which such holder shall
be entitled as aforesaid. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender of the
shares of Series 3 Preferred to be converted, and the person or persons entitled
to receive the shares of Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder or holders of such shares of
Common Stock as of such date. If the conversion is in connection with an
underwritten offer of securities registered pursuant to the Securities Act of
1933, the conversion may, at the option of any holder tendering Series 3
Preferred for conversion, be conditioned upon the closing with the underwriter
of the sale of securities pursuant to such offering, in which event the
person(s) entitled to receive the Common Stock issuable upon such conversion of
the Series 3 Preferred shall not be deemed to have converted such Series 3
Preferred until immediately prior to the closing of such sale of securities.

            (c) Other Distributions. In the event the Corporation shall declare
a distribution payable in securities of other persons, evidences of indebtedness
issued by the Corporation or other persons or assets (excluding cash dividends),
then, in each such case for the purpose of this Section 4(c), the holders of the
Series 3 Preferred shall be entitled to a proportionate share of any such
distribution as though they were the holders of the number of shares of Common
Stock of the Corporation into which their shares of Series 3 Preferred are
convertible as of the record date fixed for the determination of the holders of
Junior Stock of the Corporation entitled to receive such distribution.

            (d) Recapitalizations. If at any time or from time to time there
shall be a recapitalization of the Common Stock (other than a subdivision,
combination or merger or sale of assets transaction provided for elsewhere in
this Section 4) provision shall be made so that the holders of the Series 3
Preferred shall thereafter be entitled to receive upon conversion of the Series
3 Preferred the number of shares of stock or other securities or property of the
Company or otherwise, to which a holder of Common Stock deliverable upon
conversion would have been entitled on such recapitalization. In any such case,
appropriate adjustment shall be made in the application of the provisions of
this Section 4 with respect to the rights of the holders of the Series 3
Preferred after the recapitalization to the end that the provisions of this
Section 4 (including adjustment of the Conversion Price then in effect and the
number of shares purchasable upon conversion of the Series 3 Preferred) shall be
applicable after that event as nearly equivalent as may be practicable.

            (e) No Impairment. The Corporation will not, by amendment of its
Articles of Incorporation or through any reorganization, recapitalization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the
Corporation, but will at all times in good faith assist in the carrying out of
all the provisions of this Section 4 and in the taking of all such action as may
be necessary or appropriate in order to protect the Conversion Rights of the
holders of the Series 3 Preferred against impairment.

9 - EIGHTH RESTATED ARTICLES OF INCORPORATION

            (f) No Fractional Shares and Certificate as to Adjustments

                  (i) No fractional shares shall be issued upon conversion of
the Series 3 Preferred, and the number of shares of Common Stock to be issued
shall be rounded to the nearest whole share. Whether fractional shares would
otherwise be issuable upon conversion shall be determined on the basis of the
total number of shares of Series 3 Preferred the holder is at the time
converting into Common Stock and the number of shares of Common Stock issuable
upon such aggregate conversion.

                  (ii) Upon the occurrence of each adjustment or readjustment of
the Conversion Price pursuant to this Section 4, the Corporation, at its
expense, shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and prepare and furnish to each holder of Series 3
Preferred, by first class mail, postage prepaid, a certificate setting forth
such adjustment or readjustment is based, including a statement setting forth
(A) the consideration received or to be received by the Corporation for any
Additional Stock, (B) the Conversion Price then in effect, and (C) the number of
shares of Common Stock and the amount, if any, of other property which at the
time would be received upon the conversion of a share of Series 3 Preferred.

            (g) Notices of Record Date. In the event of any taking by the
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, the Corporation
shall mail to each holder of Series 3 Preferred, at least 20 days prior to the
date specified therein, a notice specifying the date on which any such record is
to be taken for the purpose of such dividend, distribution or right, and the
amount and character of such dividend, distribution or right.

            (h) Reservation of Stock Issuable upon Conversion. The Corporation
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the shares of Series 3 Preferred, such number of its shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all
outstanding shares of Series 3 Preferred; and if at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to effect
the conversion of all then outstanding shares of the Series 3 Preferred, in
addition to such other remedies as shall be available to the holder of such
Series 3 Preferred, the Corporation will take such corporate action as may, in
the opinion of its counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such
purposes.

            (i) Notices. Any notice required by the provisions of this Section 4
to be given to the holder of shares of Series 3 Preferred shall be deemed given
when personally delivered to such holder or two business days after the same has
been deposited in the United States mail, certified or registered mail, return
receipt requested, postage prepaid, and addressed to each holder of record at
the holder's address appearing on the books of the Corporation.

10 - EIGHTH RESTATED ARTICLES OF INCORPORATION

            Section 5. Voting Rights. Each holder of Series 3 Preferred shall
have the right to one vote for each share of Common Stock into which such Series
3 Preferred could then be converted (with any fractional share determined on an
aggregate conversion basis being rounded to the nearest whole share), and with
respect to such vote, such holder shall have full voting rights and powers equal
to the voting rights and powers of a holder of Common Stock, and shall be
entitled, notwithstanding any provision hereof, to notice of any shareholders'
meeting in accordance with the bylaws of the Corporation, and shall be entitled
to vote, together with holders of Common Stock, with respect to any question
upon which holders of Common Stock have the right to vote.

            Section 6. Amendment. Upon the automatic conversion of every
outstanding share of Series 3 Preferred Stock into Shares of Common Stock
pursuant to Section 4(a)(iii) of this Article II.F., these Eighth Restated
Articles of Incorporation shall automatically be amended to delete Article II.F.
hereof in its entirety and Article II.F. shall have no further force and effect.
Upon such automatic amendment, the officers of the Company are authorized and
directed to do such acts and things as may be necessary or appropriate to effect
said amendment, including filing restated articles that include such amendment
and making any other required filings with any authorities of the state of
Oregon.

      G. Liquidation Preferences Series 2 Preferred and Series 3 Preferred. The
holder of each share of Series 2 Preferred and the holder of each share of the
Series 3 Preferred Stock shall be entitled pari passu to be paid out of the
assets of the Company an amount per share equal to the Original Series 2 Issue
Price or the Original Series 3 Issue Price, as applicable, plus all declared and
unpaid dividends (as adjusted for any stock dividends, combinations, splits or
recapitalizations) for each share. If, upon any such liquidation, distribution,
or winding up, the assets of the Company shall be insufficient to make payment
in full to all holders of Series 2 Preferred and Series 3 Preferred of the
liquidation preferences set forth in this Section G, then such assets shall be
distributed among the holders of Series 2 Preferred and Series 3 Preferred Stock
at the time outstanding, ratably in proportion to the full amounts to which they
would otherwise be respectively entitled.

                                  ARTICLE III

      No director of the Corporation shall be personally liable to the
Corporation or its shareholders for monetary damages for conduct as a director;
provided that this Article III shall not eliminate the liability of a director
for any act or omission for which such elimination of liability is not permitted
under the Act. No amendment to the Act that further limits the acts or omissions
for which elimination of liability is permitted shall affect the liability of a
director for any act or omission which occurs prior to the effective date of
such amendment.

                                   ARTICLE IV

      The Corporation elects to waive preemptive rights.

11 - EIGHTH RESTATED ARTICLES OF INCORPORATION

                                   ARTICLE V

      In determining whether the Corporation has sufficient assets to repurchase
shares of Common Stock from its employees or consultants to the extent permitted
by any applicable stock restriction or vesting agreements such determination
shall be made and any distribution to such shareholders may be made regardless
of whether the Corporation's net assets, after giving effect to the
distribution, would be sufficient, if the Corporation were to be dissolved as of
the date of the distribution, to satisfy the preferential rights of the holders
of Preferred Stock.

                                   ARTICLE VI

      The Corporation shall indemnify to the fullest extent permitted by law any
director or officer of the Corporation who is made, or threatened to be made, a
party to an action, suit or proceeding, whether civil, criminal, administrative,
investigative or otherwise (including an action, suit or proceeding by or in the
right of the Corporation) by reason of the fact that the person is or was a
director, officer, employee or agent of the Corporation, or a fiduciary within
the meaning of the Employee Retirement Income Security Act of 1974 with respect
to any employee benefit plans of the Corporation or serves or served at the
request of the Corporation as a director, officer, employee or agent or as a
fiduciary of an employee benefit plan, of another corporation, partnership,
joint venture, trust or other enterprise. The Corporation shall pay for or
reimburse the reasonable expenses incurred by any such director or officer in
any such proceeding in advance of the final disposition of the proceeding if the
director or officer sets forth in writing (i) his or her good faith belief that
he or she is entitled to indemnification under this Article VI and (ii) his or
her agreement to repay all advances if it is ultimately determined that he or
she is not entitled to indemnification under this Article VI. No amendment to
this Article VI that limits the Corporation's obligation to indemnify any person
shall have any effect on such obligation for any act or omission that occurs
prior to the later of the effective date of the amendment or the date notice of
the amendment is given to the director or officer. This Article shall not be
deemed exclusive of any other provisions for indemnification of directors,
officers, employees, agents and fiduciaries that may be included in any statute,
bylaw, agreement, general or specific action of the Board of Directors, vote of
shareholders or other document or arrangement.


12 - EIGHTH RESTATED ARTICLES OF INCORPORATION