Exhibit 10.2

____________________

Virtra Systems, Inc.

____________________

This offering consists of up to $750,000 of the Company’s 3 Year Convertible

Debentures convertible into the

Company’s Common Stock.

____________________

SUBSCRIPTION AGREEMENT

___________________

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SUBSCRIPTION PROCEDURES

            Convertible Debentures of Virtra Sytems, Inc. (the “Company”) are
being offered (the “Debentures”). This offering is being made in accordance with
the exemptions from registration provided for under Section 4(2) of the
Securities Act of 1933, as amended (the “1933 Act”) and Rule 506 of Regulation D
promulgated under the 1933 Act.

            In order to purchase Debentures, each subscriber must complete and
execute a questionnaire (the “Questionnaire”) and a subscription agreement (the
“Subscription Agreement”). In addition, the subscriber must make a payment
pursuant to the Funds Authorization Distribution Agreement, for the amount being
purchased or directly to the Holder.  All subscriptions are subject to
acceptance by the Company, which shall not occur until the Company has returned
the signed Company Signature Page.

                        The Questionnaire is designed to enable the Holder to
demonstrate the minimum legal requirements under federal and state securities
laws to purchase the Debentures.  The Signature Page for the Questionnaire and
the Subscription Agreement contain representations relating to the subscription
and should be reviewed carefully by each subscriber.

            If you are a foreign person or foreign entity, you may be subject to
a withholding tax equal to thirty percent (30%) of any dividends paid by the
Company.  In order to eliminate or reduce such withholding tax you must submit a
properly executed I.R.S. Form 4224 (Exemption from Withholding of Tax on Income
Effectively Connected with the Conduct of a Trade or Business in the United
States) or I.R.S. Form 1001 (Ownership Exemption or Reduced Trade Certificate),
claiming exemption from withholding or eligibility for treaty benefits in the
form of a lower rate of withholding tax on interest or dividends.

            Payment must be made by wire transfer to Dutchess Private Equities
Fund, II, LP (the “Holder”) per the wire instructions that will be established.
 In the event of a termination of the offering or the rejection of a
subscription, subscription funds will be returned by the Company without
interest or charges.  

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THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND ARE BEING OFFERED AND SOLD
IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SUCH LAWS.  THE
SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT
BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SUCH LAWS PURSUANT TO
REGISTRATION OR AN EXEMPTION THEREFROM.  THE SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY OTHER REGULATORY
AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE
MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE OFFERING MATERIALS.
 ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

SUBSCRIPTION AGREEMENT

To:       Virtra Systems, Inc.

            This Subscription Agreement is made between Virtra Systems, Inc.., a
Texas corporation, (the “Company”), and the undersigned prospective Holder
(“Holder”) who is subscribing hereby for the Company’s convertible debentures
(the “Debentures”). This subscription is submitted to you in accordance with and
subject to the terms and conditions described in this Subscription Agreement,
together with any Exhibits thereto, relating to an offering (the “Offering”) of
up to $750,000 of Debentures. The Offering is limited to accredited Investors
and is made in accordance with the exemptions from registration provided for
under Section 4(2) of the 1933 Act and Rule 506 of Regulation D promulgated
under the 1933 Act (“Regulation D”).

1.         SUBSCRIPTION.

            (a)        The closing shall be deemed to have occurred on the date
the funds (less attorney fees and those amounts payable pursuant to the terms
sheet) are received by the Company (the “Closing Date” or a “Closing”).  The
Company shall pay eight percent (8%) annual coupon on the unpaid principal
amount of this Debenture (the “Debenture”) at such times and in such amounts as
outlined in the Debenture Agreement.

            (b)        Upon receipt by the Company of the requisite payment for
the Debentures being purchased, the Debentures so purchased will be forwarded by
the Company to the Holder or its broker, as listed on the signature page, and
the name of such Holder will be registered on the Debenture transfer books of
the Company as the record owner of such Debentures.

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            (c)        As long as the Holder owns the Debenture, the Holder
shall have the right to change the terms for the balance of the Debenture it
then holds, to match the terms of any other offering of securities made by the
Company.

            

            (d)  The Holders shall fund five hundred thousand dollars ($500,000)
upon the initial closing and an additional two hundred and fifty thousand
dollars ($250,000) on a pro-rata basis not later than three (3) business days
following the date the registration statement covering this Offering is filed
with the United States Securities and Exchange Commission ("SEC"),.

            

2.         REPRESENTATIONS AND WARRANTIES.

            The Holder hereby represents and warrants to, and agrees with, the
Company as follows:

            (a)        The Holder has been furnished with, and has carefully
read the applicable form of Registration Rights Agreement, and the Debenture and
is familiar with and understands the terms of the Offering. With respect to tax
and other economic considerations involved in his investment, the Holder is not
relying on the Company. The Holder has carefully considered and has, to the
extent the Holder believes such discussion necessary, discussed with the Holder
's professional legal, tax, accounting and financial advisors the suitability of
an investment in the Company, by purchasing the Debentures, for the Holder 's
particular tax and financial situation and has determined that the investment
being made by the Holder is a suitable investment for the Holder.

            (b)        The Holder acknowledges that all documents, records, and
books pertaining to this investment which the Holder has requested have been
made available for inspection or the Holder has had access thereto.

            (c)        The Holder has had a reasonable opportunity to ask
questions of and receive answers from a person or persons acting on behalf of
the Company concerning the Offering and if such opportunity was taken then all
such questions have been answered to the full satisfaction of the Holder.

            (d)        The Holder will not sell, or otherwise dispose of the
Debentures or the Common Stock issued upon conversion of the Debentures without
registration under the 1933 Act or applicable state securities laws or
compliance with an exemption therefrom including but not limited to: Rule 144A,
144 (k) (herein after referred to as an "Exemption").  The Debentures have not
been registered under the 1933 Act or under the securities laws of any state.
Resales of the Common Stock underlying the Debentures or issued in payment of
accrued interest on the Debentures are to be registered by the Company pursuant
to the

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terms of the Registration Rights Agreement incorporated herein and made a part
hereof.  

            (e)        The Holder recognizes that an investment in the
Debentures involves substantial risks, including loss of the entire amount of
such investment. Further, the Holder has carefully read and considered the
schedule entitled Litigation matters attached hereto as Schedule 3(h).

            (f)        The Holder acknowledges that each certificate
representing the Debentures (and the shares of Common Stock issued upon
conversion of the Debentures, unless registered or with an Exemption) or in
payment of dividends on the Debentures shall be stamped or otherwise imprinted
with a legend substantially in the following form:

THE SECURITIES EVIDENCED BY THIS CERTIFICATE MAY NOT BE OFFERED OR SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT (i) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, (ii) TO THE EXTENT APPLICABLE, PURSUANT TO RULE 144 UNDER THE ACT (OR
ANY SIMILAR RULE UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES), OR
(iii) PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER SUCH ACT.

If Holder sends a Notice of Conversion (See Exhibit A attached hereto), and
provided a registration statement under the Securities Act of 1933 that is in
effect as to the sale, then in such event the Company shall have its transfer
agent send Holder the appropriate number of shares of Common Stock without
restrictive legends and the Company is not subject to stop transfer
instructions.  

            (g)        If this Subscription Agreement is executed and delivered
on behalf of a corporation:  (i) such corporation has the full legal right and
power and all authority and approval required (a) to execute and deliver, or
authorize execution and delivery of this Subscription Agreement and all other
instruments (including, without limitation, the Registration Rights Agreement
and Debenture Agreements) executed and delivered by or on behalf of such
corporation in connection with the purchase of the Debentures and (b) to
purchase and hold the Debentures; and (ii) the signature of the party signing on
behalf of such corporation is binding upon such corporation.

            (h)        The Holder is not subscribing for the Debentures as a
result of, or pursuant to, any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or broadcast
over television or radio or presented at any seminar or meeting.

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 (i)        The Holder is purchasing the Debentures for its own account for
investment, and not with a view toward the resale or distribution thereof,
except pursuant to sales registered or exempted from registration under the 1933
Act. The Holder has not offered or sold any portion of the Debentures being
acquired nor does the Holder have any present intention of dividing the
Debentures with others or of selling, distributing or otherwise disposing of any
portion of the Debentures either currently or after the passage of a fixed or
determinable period of time or upon the occurrence or non-occurrence of any
predetermined event or circumstance in violation of the 1933 Act provided,
however, that by making the representations herein, Holder does not agree to
hold any of the Debentures for any minimum or other specific term and reserves
the right to dispose of the Debentures at any time in accordance with or
pursuant to a registration statement or an exemption under the 1933 Act.  Holder
is neither an underwriter of, nor a dealer in, the Debentures or the Common
Stock issuable upon conversion thereof or upon the payment of dividends thereon
and is not participating in the distribution or resale of the Debentures or the
Common Stock issuable upon conversion or exercise thereof.

            (j)         The Holder or the Holder's representatives, as the case
may be, has such knowledge and experience in financial, tax and business matters
so as to enable the Holder to utilize the information made available to the
Holder in connection with the Offering to evaluate the merits and risks of an
investment in the Debentures and to make an informed investment decision with
respect thereto.  

3.         REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

            Except as set forth in the Schedules attached hereto, the Company
represents and warrants to the Holder that:

            a.          Organization and Qualification.  The Company and its
“SUBSIDIARIES” (which for purposes of this Subscription Agreement means any
entity in which the Company, directly or indirectly, owns capital stock or holds
an equity or similar interest) (a complete list of which is set forth in
Schedule 3(a)) are corporations duly organized and validly existing in good
standing under the laws of the respective jurisdictions of their incorporation,
and have the requisite corporate power and authorization to own their properties
and to carry on their business as now being conducted. Both the Company and its
Subsidiaries are duly qualified to do business and are in good standing in every
jurisdiction in which their ownership of property or the nature of the business
conducted by them makes such qualification necessary, except to the extent that
the failure to be so qualified or be in good standing would not have a Material
Adverse Effect. As used in this Subscription Agreement, “MATERIAL ADVERSE
EFFECT” means any material adverse effect on the business, properties, assets,
operations, results of operations, financial condition or prospects of the
Company and its Subsidiaries, if any, taken as a whole, or on the transactions
contemplated hereby or by the agreements and instruments to be entered into in
connection herewith, or on the authority or ability of the Company to

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perform its obligations under the Transaction Documents (as defined in Section
3(b)below).

            b.         Authorization; Enforcement; Compliance with Other
Instruments.  (i) The Company has the requisite corporate power and authority to
enter into and perform this Subscription Agreement, the Registration Rights
Agreement, Warrant Agreement and the Debenture Agreement, and each of the other
agreements entered into by the parties hereto in connection with the
transactions contemplated by this Subscription Agreement (collectively, the
“TRANSACTION DOCUMENTS”), and to issue the Debentures in accordance with the
terms hereof and thereof, (ii) the execution and delivery of the Transaction
Documents by the Company and the consummation by it of the transactions
contemplated hereby and thereby, including without limitation the reservation
for issuance and the issuance of the Debentures pursuant to this Subscription
Agreement, have been duly and validly authorized by the Company's Board of
Directors and no further consent or authorization is required by the Company,
its Board of Directors, or its shareholders, (iii) the Transaction Documents
have been duly and validly executed and delivered by the Company, and (iv) the
Transaction Documents constitute the valid and binding obligations of the
Company enforceable against the Company in accordance with their terms, except
as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of creditors'
rights and remedies.

            c.          Capitalization.  As of the date hereof, the authorized
capital stock of the Company consists of 100,000,000 shares of Common Stock
authorized, of which as of the date hereof, approximately 58,684,064 shares are
issued and outstanding,  All of such outstanding shares have been, or upon
issuance will be, validly issued and are fully paid and nonassessable.  Except
as disclosed in Schedule 3(c) which is attached hereto and made a part hereof,
(i) no shares of the Company's capital stock are subject to preemptive rights or
any other similar rights or any liens or encumbrances suffered or permitted by
the Company, (ii) there are no outstanding debt securities, (iii) there are no
outstanding shares of capital stock, options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company or any of its Subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to issue additional shares of capital stock of the Company or any of its
Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
Subsidiaries, (iv) there are no agreements or arrangements under which the
Company or any of its Subsidiaries is obligated to register the sale of any of
their securities under the 1933 Act (except the Registration Rights Agreement),
(v) there are no outstanding securities of the Company or any of its
Subsidiaries which contain any redemption or similar provisions, and there are
no contracts, commitments, understandings or arrangements by which the Company
or any of its Subsidiaries is or may become bound to redeem a security of the
Company or any of its Subsidiaries, (vi) there are no securities or instruments
containing anti-dilution or similar provisions that will be triggered by the
issuance of the Securities

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as described in this Subscription Agreement, (vii) the Company does not have any
stock appreciation rights or "phantom stock" plans or agreements or any similar
plan or agreement and (viii) there is no dispute as to the class of any shares
of the Company's capital stock. The Company has furnished to the Holder, or the
Holder has had access through EDGAR to, true and correct copies of the Company's
Articles of Incorporation, as in effect on the date hereof (the “ARTICLES OF
INCORPORATION”), and the Company's By-laws, as in effect on the date hereof (the
“BY-LAWS ‘), and the terms of all securities convertible into or exercisable for
Common Stock and the material rights of the Holder thereof in respect thereto.

            d.         Issuance of Debentures.          A sufficient number of
Debentures issuable pursuant to this Subscription Agreement, but not more than
4.99% of the shares of Common Stock outstanding as of the date hereof (if the
Company becomes listed on Nasdaq or the American Stock Exchange), has been duly
authorized and reserved for issuance pursuant to this Subscription Agreement.
 Upon issuance in accordance with this Subscription Agreement, the Debentures
will be validly issued, fully paid and nonassessable and free from all taxes,
liens and charges with respect to the issue thereof. In the event the Company
cannot register a sufficient number of shares of Common Stock, due to the
remaining number of authorized shares of Common Stock being insufficient, the
Company will use its best efforts to register the maximum number of shares it
can based on the remaining balance of authorized shares and will use its best
efforts to increase the number of its authorized shares as soon as reasonably
practicable.

            e.          No Conflicts.  The execution, delivery and performance
of the Transaction Documents by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby will not (i) result in a
violation of the Articles of Incorporation, any Certificate of Designations,
Preferences and Rights of any outstanding series of preferred stock of the
Company or the By-laws or (ii) conflict with, or constitute a material default
(or an event which with notice or lapse of time or both would become a material
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any material agreement, contract, indenture
mortgage, indebtedness or instrument to which the Company or any of its
Subsidiaries is a party, or result in a violation of any law, rule, regulation,
order, judgment or decree, including United States federal and state securities
laws and regulations and the rules and regulations of the principal securities
exchange or trading market on which the Common Stock is traded or listed (the
“Principal Market”), applicable to the Company or any of its Subsidiaries or by
which any property or asset of the Company or any of its Subsidiaries is bound
or affected. Except as disclosed in Schedule 3(e), neither the Company nor its
Subsidiaries is in violation of any term of, or in default under, the Articles
of Incorporation, any Certificate of Designations, Preferences and Rights of any
outstanding series of preferred stock of the Company or the By-laws or their
organizational charter or by-laws, respectively, or any contract, agreement,
mortgage, indebtedness, indenture, instrument, judgment, decree or order or any
statute, rule or regulation applicable to the Company or its Subsidiaries,
except for possible conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations that would not individually or in
the aggregate have a Material Adverse Effect. The business of the Company and
its

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Subsidiaries is not being conducted, and shall not be conducted, in violation of
any law, statute, ordinance, rule, order or regulation of any governmental
authority or agency, regulatory or self-regulatory agency, or court, except for
possible violations the sanctions for which either individually or in the
aggregate would not have a Material Adverse Effect.  Except as specifically
contemplated by this Subscription Agreement and as required under the 1933 Act,
the Company is not required to obtain any consent, authorization, permit or
order of, or make any filing or registration (except the filing of a
registration statement)  with, any court, governmental authority or agency,
regulatory or self-regulatory agency or other third party in order for it to
execute, deliver or perform any of its obligations under, or contemplated by,
the Transaction Documents in accordance with the terms hereof or thereof. All
consents, authorizations, permits, orders, filings and registrations which the
Company is required to obtain pursuant to the preceding sentence have been
obtained or effected on or prior to the date hereof and are in full force and
effect as of the date hereof. Except as disclosed in Schedule 3(e), the Company
and its Subsidiaries are unaware of any facts or circumstances which might give
rise to any of the foregoing. The Company is not, and will not be, in violation
of the listing requirements of the Principal Market as in effect on the date
hereof and on each of the Closing Dates and is not aware of any facts which
would reasonably lead to delisting of the Common Stock by the Principal Market
in the foreseeable future.

            f.          SEC Documents; Financial Statements.  Since February 14,
2005, the Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it with the Securities and Exchange Commission
(“SEC”) pursuant to the reporting requirements of the  Securities and Exchange
Act of 1934 (“1934 Act”) (all of the foregoing filed prior to the date hereof
and all exhibits included therein and financial statements and schedules thereto
and documents incorporated by reference therein being hereinafter referred to as
the "SEC DOCUMENTS"). The Company has delivered to the Holder or its
representatives, or they have had access through EDGAR, to true and complete
copies of the SEC Documents. As of their respective dates, the SEC Documents
complied in all material respects with the requirements of the 1934 Act and the
rules and regulations of the SEC promulgated thereunder applicable to the SEC
Documents, and none of the SEC Documents, at the time they were filed with the
SEC, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. As of their respective dates, the financial statements of the
Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial statements have been
prepared in accordance with generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments). No other written information provided by or on behalf of the
Company to the Holder which

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is not included in the SEC Documents, including, without limitation, information
referred to in Section 3(d) of this Subscription Agreement, contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstance under which they
are or were made, not misleading.

            g.         Absence of Certain Changes.  Except as disclosed in
Schedule 3(g) or the SEC Documents filed at least five (5) days prior to the
date hereof, since February 14, 2005, there has been no change or development in
the business, properties, assets, operations, financial condition, results of
operations or prospects of the Company or its Subsidiaries which has had or
reasonably could have a Material Adverse Effect. The Company has not taken any
steps, and does not currently expect to take any steps, to seek protection
pursuant to any bankruptcy law nor does the Company or its Subsidiaries have any
knowledge or reason to believe that its creditors intend to initiate involuntary
bankruptcy proceedings.

            h.         Absence of Litigation.  Except as set forth in the
Company’s SEC filings, there is no action, suit, proceeding, inquiry or
investigation before or by any court, public board, government agency,
self-regulatory organization or body pending or, to the knowledge of the
executive officers of Company or any of its Subsidiaries, threatened against or
affecting the Company, the Common Stock or any of the Company's Subsidiaries or
any of the Company's or the Company's Subsidiaries' officers or directors in
their capacities as such, in which an adverse decision could have a Material
Adverse Effect.

            i.          Acknowledgment Regarding the Purchase of Debentures.
 The Company acknowledges and agrees that the Holder is acting solely in the
capacity of an arm's length investor with respect to the Transaction Documents
and the transactions contemplated hereby and thereby. The Company further
acknowledges that the Holder is not acting as a financial advisor or fiduciary
of the Company (or in any similar capacity) with respect to the Transaction
Documents and the transactions contemplated hereby and thereby and any advice
given by the Holder or any of its respective representatives or agents in
connection with the Transaction Documents and the transactions contemplated
hereby and thereby is merely incidental to the Holder's purchase of the
Debentures. The Company further represents to the Holder that the Company's
decision to enter into the Transaction Documents has been based solely on the
independent evaluation by the Company and its representatives.

            j.          Intentionally omitted.

            k.         Employee Relations.  Neither the Company nor any of its
Subsidiaries is involved in any union labor dispute nor, to the knowledge of the
Company or any of its Subsidiaries, is any such dispute threatened. Neither the
Company nor any of its Subsidiaries is a party to a collective bargaining
agreement, and the Company and its Subsidiaries believe that relations with
their employees are good. No executive officer (as defined in Rule 501(f) of the
1933 Act) has notified the Company that such officer

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intends to leave the Company's employ or otherwise terminate such officer's
employment with the Company.

            l.          Intellectual Property Rights.  All patents, patent
applications, trademark registrations and applications for trademark
registration held by the Company are owned free and clear of all mortgages,
liens, charges or encumbrances whatsoever.  No licenses have been granted with
respect to these items and the Company and its Subsidiaries do not have any
knowledge of any infringement by the Company or its Subsidiaries of trademark,
trade name rights, patents, patent rights, copyrights, inventions, licenses,
service names, service marks, service mark registrations, trade secret or other
similar rights of others, and, except as set forth on Schedule 3(l), there is no
claim, action or proceeding being made or brought against, or to the Company's
knowledge, being threatened against, the Company or its Subsidiaries regarding
trademark, trade name, patents, patent rights, invention, copyright, license,
service names, service marks, service mark registrations, trade secret or other
infringement; and the Company and its Subsidiaries are unaware of any facts or
circumstances which might give rise to any of the foregoing. The Company and its
Subsidiaries have taken reasonable security measures to protect the secrecy,
confidentiality and value of all of their intellectual properties.

            m.        Environmental Laws.  The Company and its Subsidiaries (i)
are in compliance with any and all applicable foreign, federal, state and local
laws and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval where, in each of the three
foregoing cases, the failure to so comply would have, individually or in the
aggregate, a Material Adverse Effect.

            n.         Title.  The Company and its Subsidiaries have good and
marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them which is material to the business
of the Company and its Subsidiaries, in each case free and clear of all liens,
encumbrances and defects except such as are described in Schedule 3(n) or such
as do not materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company or any of
its Subsidiaries. Any real property and facilities held under lease by the
Company or any of its Subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company and its Subsidiaries.

            o.         Insurance.  The Company and each of its Subsidiaries are
insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as management of the Company believes to be
prudent and customary in the businesses in which the Company and its
Subsidiaries are engaged. Neither the Company

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nor any such Subsidiary has been refused any insurance coverage sought or
applied for and neither the Company nor any such Subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not have a
Material Adverse Effect.

            p.         Regulatory Permits.  The Company and its Subsidiaries
have in full force and effect all certificates, approvals, authorizations and
permits from the appropriate federal, state, local or foreign regulatory
authorities and comparable foreign regulatory agencies, necessary to own, lease
or operate their respective properties and assets and conduct their respective
businesses, and neither the Company nor any such Subsidiary has received any
notice of proceedings relating to the revocation or modification of any such
certificate, approval, authorization or permit, except for such certificates,
approvals, authorizations or permits which if not obtained, or such revocations
or modifications which, would not have a Material Adverse Effect.

            q.         Internal Accounting Controls.  The Company and each of
its Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with
management's general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.

            r.          No Materially Adverse Contracts, Etc.  Neither the
Company nor any of its Subsidiaries is subject to any charter, corporate or
other legal restriction, or any judgment, decree, order, rule or regulation
which in the judgment of the Company's officers has or is expected in the future
to have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries is a party to any contract or agreement which in the judgment of
the Company's officers has or is expected to have a Material Adverse Effect.

            s.          Tax Status. The Company’s consolidated 2003 federal
income tax return, the Company and each of its Subsidiaries has made or filed
all United States federal and state income and all other tax returns, reports
and declarations required by any jurisdiction to which it is subject (unless and
only to the extent that the Company and each of its Subsidiaries has set aside
on its books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and has set aside on its books provision reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply. Except for $512,265 in unpaid federal withholding from
the Ferris Production era, there are no unpaid taxes in any material amount
claimed to be due by the taxing

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authority of any jurisdiction, and the officers of the Company know of no basis
for any such claim.

            t.          Certain Transactions.  Except as set forth in the SEC
Documents filed at least ten days prior to the date hereof and except for arm's
length transactions pursuant to which the Company makes payments in the ordinary
course of business upon terms no less favorable than the Company could obtain
from third parties and other than the grant of stock options disclosed on
Schedule 3(c), none of the officers, directors, or employees of the Company is
presently a party to any transaction with the Company or any of its Subsidiaries
(other than for services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any officer, director or such
employee or, to the knowledge of the Company, any corporation, partnership,
trust or other entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner.

            u.         Dilutive Effect.  The Company understands and
acknowledges that the number of shares of Common Stock issuable upon purchases
pursuant to this Subscription Agreement will increase in certain circumstances
including, but not necessarily limited to, the circumstance wherein the trading
price of the Common Stock declines following the effective date of the
registration statement covering the Common Stock underlying the Debentures (the
“Effective Date”).  The Company’s executive officers and directors have studied
and fully understand the nature of the transactions contemplated by this
Subscription Agreement and recognize that they have a potential dilutive effect.
 The board of directors of the Company has concluded, in its good faith business
judgment that such issuance is in the best interests of the Company.  The
Company specifically acknowledges that, subject to such limitations as are
expressly set forth in the Transaction Documents, its obligation to issue shares
of Common Stock upon purchases pursuant to this Subscription Agreement is
absolute and unconditional regardless of the dilutive effect that such issuance
may have on the ownership interests of other shareholders of the Company.

v.   Additional Financings. The Company shall not, directly nor indirectly,
without the prior written consent of Holder, offer, sell, grant any option to
purchase, or otherwise dispose of (or announce any offer, sale, grant or any
option to purchase or other disposition) any of its Common Stock or securities
convertible into Common Stock, or file any registration statement, including
those on Form S-8,  for any securities (a "SUBSEQUENT FINANCING") for a period
of 120 (one hundred twenty) days after the Closing Date. ("Lock Up Period")

During the twelve month period following Closing, or if there is any outstanding
balance on the Debentures, the Holder shall retain a first right of refusal for
any additional financings.  The Company must submit to the Holder a duly
authorized term sheet of the financing and the Holder may elect, in writing
within five (5) days, to exercise its right to finance the Company upon the same
terms and conditions.  In the

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event the Holder chooses not to complete such financing, the Company may proceed
with the proposed third-party financing on the same terms and conditions as
contained in the notice to Holder.  The Company will file within three (3)
business days any necessary documentation required by the SEC to reflect the
Holder's new position.

4.         COVENANTS OF THE COMPANY

            a.          Best Efforts.  The Company shall use its best efforts
timely to satisfy each of the conditions to be satisfied by it as provided in
this Subscription Agreement.

            

b.         Blue Sky.  The Company shall, at its sole cost and expense, make all
filings and reports relating to the offer and sale of the Debentures and the
Common Stock underlying the Debentures as required under the applicable
securities or “Blue Sky” laws of such states of the United States as specified
by the Holder.

            c.          Reporting Status.  Until the earlier of (i) the date
that the Holder may sell all of the Common Stock underlying the shares acquired
pursuant to this Subscription Agreement without restriction pursuant to Rule
144(k) promulgated under the 1933 Act (or successor thereto), or (ii) the date
on which the Holder shall have sold all the Common Stock underlying the
Debentures, the Company shall file all reports required to be filed with the SEC
pursuant to the 1934 Act, and the Company shall not terminate its status as a
reporting company under the 1934 Act.

            d.         Use of Proceeds.         The Company shall use the entire
proceeds from this Debenture exclusively to further the growth and interest of
the Company.  Any other use of the funds contemplated herein, shall be
considered a breach of contract and an event of Default.

            e.          Conditions to Closing,  The Company shall sign the
Investment Agreement for the Equity Line of Credit with Dutchess Private
Equities Fund, II, L.P.

            f.          Financial Information.  The Company agrees to make
available to the Holder via EDGAR or other electronic means the following: (i)
within five (5) business days after the filing thereof with the SEC, a copy of
its Annual Reports on Form 10-KSB, its Quarterly Reports on Form 10-QSB, any
Current Reports on Form 8-K and any Registration Statements or amendments filed
pursuant to the 1933 Act; (ii) on the same day as the release thereof, facsimile
copies of all press releases issued by the Company or any of its Subsidiaries,
(iii) copies of any notices and other information made available or given to the
shareholders of the Company generally, contemporaneously with the making
available or giving thereof to the shareholders and (iv) within two (2) calendar
days of filing or delivery thereof, copies of all documents filed with, and all
correspondence sent to, the Principal Market, any securities exchange or market,
or the National Association of Securities Dealers, Inc.

            g.         Reservation of Common Stock.  Subject to the following
sentence, the Company shall take all action necessary to at all times have
authorized, and reserved for

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the purpose of issuance, a sufficient number of shares of Common Stock to
provide for the issuance of the Common Stock underlying the Debentures. In the
event that the Company determines that it does not have a sufficient number of
authorized shares of Common Stock to reserve and keep available for issuance,
the Company shall use its best efforts to increase the number of authorized
shares of Common Stock by seeking shareholder approval for the authorization of
such additional shares. The Holder shall have the right to determine the amount
of shares to be re-registered to satisfy the terms of the Agreement. Such amount
must be usual or customary.

            h.         Listing.  The Company shall promptly secure the listing
of all of the Common Stock underlying the Debentures upon the Principal Market
and each other national securities exchange and automated quotation system, if
any, upon which shares of Common Stock are then listed (subject to official
notice of issuance) and shall maintain, such listing. The Company shall maintain
the Common Stock's authorization for quotation on the Principal Market, unless
the Holder and the Company agree otherwise.  Neither the Company nor any of its
Subsidiaries shall take any action which would be reasonably expected to result
in the delisting or suspension of the Common Stock on the Principal Market
(excluding suspensions of not more than one trading day resulting from business
announcements by the Company). The Company shall promptly provide to the Holder
copies of any notices it receives from the Principal Market regarding the
continued eligibility of the Common Stock for listing on such automated
quotation system or securities exchange. The Company shall pay all fees and
expenses in connection with satisfying its obligations under this Section.

            

i.          Transactions With Affiliates.  The Company shall not, and shall
cause each of its Subsidiaries not to, enter into, amend, modify or supplement,
or permit any Subsidiary to enter into, amend, modify or supplement, any
agreement, transaction, commitment or arrangement with any of its or any
Subsidiary's officers, directors, persons who were officers or directors at any
time during the previous two years, shareholders who beneficially own five
percent (5%) or more of the Common Stock, or affiliates or with any individual
related by blood, marriage or adoption to any such individual or with any entity
in which any such entity or individual owns a five percent (5%) or more
beneficial interest (each a “RELATED PARTY”) during the Lock Up Period; except
for (i) customary employment arrangements and benefit programs on reasonable
terms (including changes currently under discussion with the Company's Board of
Directors concerning the compensation, to be payable in stock, of the Chairman
of the Board), (ii) any agreement, transaction, commitment or arrangement on an
arms-length basis on terms no less favorable than terms which would have been
obtainable from a person other than such Related Party, or (iii) any agreement,
transaction, commitment or arrangement which is approved by a majority of the
disinterested directors of the Company. For purposes hereof, any director who is
also an officer of the Company or any Subsidiary of the Company shall not be a
disinterested director with respect to any such agreement, transaction,
commitment or arrangement. “AFFILIATE” for purposes hereof means, with respect
to any person or entity, another person or entity that, directly or indirectly,
(i) has a five percent (5%) or more equity interest in that

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person or entity, (ii) has five percent (5%) or more common ownership with that
person or entity, (iii) Controls that person or entity, or (iv) shares common
control with that person or entity.  “CONTROL” or "CONTROLS" for purposes hereof
means that a person or entity has the power, direct or indirect, to conduct or
govern the policies of another person or entity.

            j.          Corporate Existence.  The Company shall use its
commercially reasonable best efforts to preserve and continue the corporate
existence of the Company.

            k.         Notice of Certain Events Affecting Registration.  The
Company shall promptly notify Holder upon the occurrence of any of the following
events in respect of a registration statement or related prospectus covering the
Common Stock underlying the Debentures: (i) receipt of any request for
additional information by the SEC or any other federal or state governmental
authority during the period of effectiveness of the registration statement for
amendments or supplements to the registration statement or related prospectus;
(ii) the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of any registration
statement or the initiation of any proceedings for that purpose; (iii) receipt
of any notification with respect to the suspension of the qualification or
exemption from qualification of any of the Common Stock underlying the
Debentures for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; (iv) the happening of any event that makes any
statement made in such registration statement or related prospectus or any
document incorporated or deemed to be incorporated therein by reference untrue
in any material respect or that requires the making of any changes in the
registration statement, related prospectus or documents so that, in the case of
a registration statement, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and that in the case of
the related prospectus, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and (v) the Company's reasonable
determination that a post-effective amendment to the registration statement
would be appropriate, and the Company shall promptly make available to Holder
any such supplement or amendment to the related prospectus.

            l.  Indemnification.  In consideration of the Holder’s execution and
delivery of the this Agreement and the Registration Rights Agreement and
acquiring the Debentures hereunder and in addition to all of the Company's other
obligations under the Transaction Documents, the Company shall defend, protect,
indemnify and hold harmless the Holder and all of their shareholders, officers,
directors, employees and direct or indirect investors and any of the foregoing
person's agents or other representatives (including, without limitation, those
retained in connection with the transactions contemplated by this Agreement)
(collectively, the "Indemnitees") from and against any and all actions, causes
of action, suits, claims, losses, costs, penalties, fees, liabilities and
damages, and expenses in connection therewith (irrespective of whether any such
Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable

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attorneys' fees and disbursements (the “Indemnified Liabilities”), incurred by
any Indemnitee as a result of, or arising out of, or relating to (i) any
misrepresentation or breach of any representation or warranty made by the
Company in the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, (ii) any breach of any covenant,
agreement or obligation of the Company contained in the Transaction Documents or
any other certificate, instrument or document  contemplated hereby or thereby,
(iii) any cause of action, suit or claim brought or made against such Indemnitee
by a third party and arising out of or resulting from the execution, delivery,
performance or enforcement of the Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby, (iv) any
transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of the issuance of the Debentures or (v) the
status of the Holder as an investor in the Company, except insofar as any such
untrue statement, alleged untrue statement, omission or alleged omission is made
in reliance upon and in conformity with written information furnished to the
Company by the Holder which is specifically intended by the Holder for use in
the preparation of any such Registration Statement, preliminary prospectus or
prospectus. To the extent that the foregoing undertaking by the Company may be
unenforceable for any reason, the Company shall make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. The indemnity provisions contained herein
shall be in addition to any cause of action or similar rights the Holder may
have, and any liabilities to which the Holder may be subject.

            m.        Reimbursement. If (i) Holder, other than by reason of its
gross negligence or willful misconduct, becomes involved in any capacity in any
action, proceeding or investigation brought by any shareholder of the Company,
in connection with or as a result of the consummation of the transactions
contemplated by the Transaction Documents, or if Holder is impleaded in any such
action, proceeding or investigation by any person, or (ii) Holder, other than by
reason of its gross negligence or willful misconduct or by reason of its trading
of the Common Stock in a manner that is illegal under the federal securities
laws, becomes involved in any capacity in any action, proceeding or
investigation brought by the SEC against or involving the Company or in
connection with or as a result of the consummation of the transactions
contemplated by the Transaction Documents, or if Holder is impleaded in any such
action, proceeding or investigation by any person, then in any such case, the
Company will reimburse Holder for its reasonable legal and other expenses
(including the cost of any investigation and preparation) incurred in connection
therewith, as such expenses are incurred. In addition, other than with respect
to any matter in which Holder is a named party, the Company will pay to Holder
the charges, as reasonably determined by Holder, for the time of any officers or
employees of Holder devoted to appearing and preparing to appear as witnesses,
assisting in preparation for hearings, trials or pretrial matters, or otherwise
with respect to inquiries, hearing, trials, and other proceedings relating to
the subject matter of this Subscription Agreement. The reimbursement obligations
of the Company under this section shall be in addition to any liability which
the Company may otherwise have, shall extend upon the same terms and conditions
to any affiliates of Holder that are actually named in such action, proceeding
or investigation, and partners, directors,

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agents, employees, attorneys, accountants, auditors and controlling persons (if
any), as the case may be, of Holder and any such affiliate, and shall be binding
upon and inure to the benefit of any successors of the Company, Holder and any
such affiliate and any such person.

5.         OPINION LETTER/BOARD RESOLUTION

            Prior to or on the Closing Date the Company shall deliver to the
Holder an opinion letter signed by counsel for the Company in the form attached
hereto as Exhibit D. If the Company’s counsel fails to provide a Rule 144
opinion letter in a timely manner, then the Company shall: (a) pay the
Investor’s counsel to write said Rule 144 opinion letter; and (b) instruct the
designated transfer agent to accept same Rule 144 Opinion letter.  Also, prior
to or on the Closing Date the Company shall deliver to the Holder a signed Board
Resolution authorizing this Offering, which shall be attached hereto as Exhibit
E.

6.         DELIVERY INSTRUCTIONS; FEES             

            The Debentures being purchased hereunder shall be delivered to
Dutchess Private Equities Fund, L.P., II, on the Closing Date at which time
funds (less fees and those amount payable pursuant to the Funds Authorization
Distribution Agreement) will be wired to the Company and the Debentures will be
delivered to the Holder, per the Holder’s instructions.

            

7.         UNDERSTANDINGS.

            The undersigned understands, acknowledges and agrees with the
Company as follows:

FOR ALL SUBSCRIBERS:

            a.          This Subscription may be rejected, in whole or in part,
by the Company in its sole and absolute discretion at any time before the date
set for closing unless the Company has given notice of acceptance of the
undersigned’s subscription by signing this Subscription Agreement and delivering
it to Holder.

            b.         No U.S. federal or state agency or any agency of any
other jurisdiction has made any finding or determination as to the fairness of
the terms of the Offering for investment nor any recommendation or endorsement
of the Debentures or the Company.

            c.          The representations, warranties and agreements of the
undersigned and the Company contained herein shall be true and correct in all
material respects on and as of the date of the sale of the Debentures as if made
on and as of such date and shall survive the execution and delivery of this
Subscription Agreement and the purchase of the Debentures.

            d.         In making an investment decision, Holders must rely on
their own examination of the company and the terms of the offering, including
the merits and risks

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involved.  The shares have not been recommended by any federal or state
securities commission or regulatory authority.  Furthermore, the foregoing
authorities have not confirmed the accuracy or determined the adequacy of this
document.  Any representation to the contrary is a criminal offense.

            e.          The Offering is intended to be exempt from registration
by virtue of Section 4(2) of the 1933 Act and the provisions of Regulation D
thereunder, which is in part dependent upon the truth, completeness and accuracy
of the statements made by the undersigned herein and in the Questionnaire.

            f.          It is understood that in order not to jeopardize the
Offering’s exempt status under Section 4(2) of the 1933 Act and Regulation D,
any Holder may, at a minimum, be required to fulfill the investor suitability
requirements thereunder.

            g.         The shares may not be resold except as permitted under
the securities act and applicable state securities laws, pursuant to
registration or exemption therefrom.  Holders should be aware that they will be
required to bear the financial risks of this investment for an indefinite period
of time.

8.         DISPUTES SUBJECT TO ARBITRATION GOVERNED BY MASSACHUSETTS LAW

            a.          All disputes arising under this agreement shall be
governed by and interpreted in accordance with the laws of the Commonwealth of
Massachusetts, without regard to principles of conflict of laws.  The parties to
this agreement will submit all disputes arising under this agreement to
arbitration in Boston, Massachusetts before a single arbitrator of the American
Arbitration Association (“AAA”).  The arbitrator shall be selected by
application of the rules of the AAA, or by mutual agreement of the parties,
except that such arbitrator shall be an attorney admitted to practice law in the
Commonwealth of Massachusetts.  No party to this agreement will challenge the
jurisdiction or venue provisions as provided in this section.  

9.         MISCELLANEOUS.

            a.          Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Subscription Agreement
must be in writing and will be deemed to have been delivered (i) upon receipt,
when delivered personally; (ii) upon receipt, when sent by facsimile (provided a
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one (1) day after deposit with a
nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same.  The addresses and facsimile numbers
for such communications shall be:

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If to the Company:

            

Kelly Jones

Virtra Systems

440 North Center

Arlington, TX  76011

Telephone: (817) 261-4269
Facsimile:  (817) 265-1440

If to the Holder:

            At the address listed in the Questionnaire.

            Each party shall provide five (5) business days prior notice to the
other party of any change in address, phone number or facsimile number.

            b.         All pronouns and any variations thereof used herein shall
be deemed to refer to the masculine, feminine, impersonal, singular or plural,
as the identity of the person or persons may require.

            c.          Neither this Subscription Agreement nor any provision
hereof shall be waived, modified, changed, discharged, terminated, revoked or
canceled, except by an instrument in writing signed by the party effecting the
same against whom any change, discharge or termination is sought.

            d.         Notices required or permitted to be given hereunder shall
be in writing and shall be deemed to be sufficiently given when personally
delivered or sent by facsimile transmission:  (i) if to the Company, at it’s
executive offices or (ii) if to the Holder, at the address for correspondence
set forth in the Questionnaire, or at such other address as may have been
specified by written notice given in accordance with this paragraph.

            e.          This Subscription Agreement shall be enforced, governed
and construed in all respects in accordance with the laws of the Commonwealth of
Massachusetts, as such laws are applied by Massachusetts courts to agreements
entered into, and to be performed in, Massachusetts by and between residents of
Massachusetts, and shall be binding upon the undersigned, the undersigned's
heirs, estate and legal representatives and shall inure to the benefit of the
Company and its successors.  If any provision of this Subscription Agreement is
invalid or unenforceable under any applicable statue or rule of law, then such
provisions shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law.  Any provision hereof that may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision hereof.

            f.          This Agreement shall not be assignable.

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            g.         This Subscription Agreement, together with Exhibits A, B,
C, D and E attached hereto and made a part hereof, constitute the entire
agreement between the parties hereto with respect to the subject matter hereof
and may be amended only by a writing executed by both parties hereto.

h.         This Subscription Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one instrument.
 Execution and delivery of this Subscription Agreement by exchange of facsimile
copies bearing the facsimile signature of a party shall constitute a valid and
binding execution and delivery of this Subscription Agreement by such party.
 Such facsimile copies shall constitute enforceable original documents.

                        

                        [BALANCE OF PAGE INTENTIONALLY LEFT BLANK)

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Virtra Systems, Inc

QUESTIONNAIRE

            The information contained in this Questionnaire is being furnished
in order to determine whether the undersigned’s subscription to purchase the
Debentures described in the Subscription Agreement may be accepted.

            ALL INFORMATION CONTAINED IN THIS QUESTIONNAIRE WILL BE TREATED
CONFIDENTIALLY.  The undersigned understands, however, that the Company may
present this Questionnaire to such parties as it deems appropriate if called
upon to establish that the proposed offer and sale of the Securities is exempt
from registration under the 1933 Act, as amended.  Further, the undersigned
understands that the offering is required to be reported to the Securities and
Exchange Commission, NASDAQ and to various state securities and “blue sky”
regulators.

            IN ADDITION TO SIGNING THE SIGNATURE PAGE, IF REQUESTED BY THE
COMPANY, THE UNDERSIGNED MUST COMPLETE FORM W-9.

I.          PLEASE CHECK EACH OF THE STATEMENTS BELOW THAT APPLIES.

                                    1.         The undersigned: (a) has total
assets in excess of $5,000,000; (b) was not formed for the specific purpose of
acquiring the securities and (c) has its principal place of business in
___________.

            

                        2.         The undersigned is a natural person whose
individual net worth* or joint net worth with his or her spouse exceeds
$1,000,000.

                        3.         The undersigned is a natural person who had
an individual income* in excess of $200,000 in each of the two most recent years
and who reasonably expects an individual income in excess of $200,000 in the
current year.  Such income is solely that of the undersigned and excludes the
income of the undersigned’s spouse.

                        4.         The undersigned is a natural person who,
together with his or her spouse, has had a joint income* in excess of $300,000
in each of of the two most recent years and who reasonably expects a joint
income in excess of $300,000 in the current year.

*          For purposes of this Questionnaire, the term “net worth” means the
excess of total assets over total liabilities.  In determining “income”, an
investor should add to his or her adjusted gross income any amounts attributable
to tax-exempt income received, losses claimed as a limited partner in any
limited partnership, deductions claimed for depletion, contributions to IRA or
Keogh retirement plan, alimony payments and any amount by which income from
long-term capital gains has been reduced in arriving at adjusted gross income.

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                        5.         The undersigned is:

                                    (a)        a bank as defined in Section
3(a)(2) of the 1933 Act; or

                                    (b)        a savings and loan association or
other institution as defined in Section 3(a)(5)(A) of the 1933 Act whether
acting in its individual or fiduciary capacity; or

                                    (c)        a broker or dealer registered
pursuant to Section 15 of the 1934 Act;  or

                                    (d)        an insurance company as defined
in Section 2(13) of the 1933 Act; or

X                                  (e)       An investment company registered
under the Investment Company Act of 1940 or a business development company as
defined in Section 2(a)(48) of the Investment Company Act of 1940; or

                                    (f)        a small business investment
company licensed by the U.S. Small Business Administration under Section 301 (c)
or (d) of the Small Business Investment Act of 1958; or

                        6.         The undersigned is an entity in which all of
the equity owners are accredited investors.

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II.                     HOLDER INFORMATION.

(a)        IF THE UNDERSIGNED IS AN INDIVIDUAL:

                        Name _________________________________________

                        

                        Street Address __________________________________

                        City, State, Zip Code _____________________________

                        Phone ____________________ Fax _________________

                        Social Security Number  ___________________________

                        Send Correspondence to:

            _______________________________________________

                        _______________________________________________

                        _______________________________________________

                        

(b)        IF THE UNDERSIGNED IS NOT AN INDIVIDUAL:

                        Name of Entity ____Dutchess Private Equities Fund, L.P_&

                                                Dutchess Private Equities Fund,
II, L.P._

Person’s Name Douglas Leighton Title:_Managing Member

                        State of Organization ____Delaware___________________

                        Principal Business Address ___312 Stuart St, Third
Floor__  

                        City, State, Zip Code ______Boston, MA 02116__________

                        Taxpayer Identification Number _____________________

-                       Phone __617-960-3570________ Fax ___617-960-3772___

                        Send Correspondence to:

            _______________________________________________

                        _______________________________________________

                        _______________________________________________

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Virtra Systems, Inc.

SIGNATURE PAGE

            Your signature on this Signature Page evidences your agreement to be
bound by the Questionnaire, Subscription Agreement and Registration Rights
Agreement.

            1.         The undersigned hereby represents that (a) the
information contained in the Questionnaire is complete and accurate and (b) the
undersigned will notify Company immediately if any material change in any of the
information occurs prior to the acceptance of the undersigned’s subscription and
will promptly send Company written confirmation of such change.

            2.         The undersigned signatory hereby certifies that he/she
has read and understands the Subscription Agreement and Questionnaire, and the
representations made by the undersigned in the Subscription Agreement and
Questionnaire are true and accurate.

            

           $750,000
                                                         February 25, 2005

______________________________                        ________________________

Amount of Debentures being purchased
                                            Date

                                                                                                                                                

By: _________________________________

                                                                                                (Signature)

Name:  Douglas Leighton

----------------------------------------------

                                                                        (Please
Type or Print)

Title: Managing Member,

Dutchess Capital Management, LLC;

General Partner to:

Dutchess Private Equities Fund, LP   and Dutchess Private Equities Fund  II, LP

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COMPANY ACCEPTANCE PAGE

This Subscription Agreement accepted and agreed

to this 25th day of February, 2005.

Virtra Systems, Inc.

 

By__________________________________

            L. Kelly Jones, CEO

     

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LIST OF EXHIBITS

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EXHIBIT A                             Notice of Conversion

EXHIBIT B                             Registration Rights Agreement

EXHIBIT C                             Debenture

EXHIBIT D                             Opinion of Company's Counsel

EXHIBIT E                             Board Resolution

                                                

LIST OF SCHEDULES

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Schedule 3(a)                          Subsidiaries

Schedule 3(c)                          Capitalization

Schedule 3(e)                          Conflicts

Schedule 3(g)                          Material Changes

Schedule 3(h)                          Litigation

Schedule 3(l)                           Intellectual Property

Schedule 3(n)                          Liens

Schedule 3(t)                           Certain Transactions

[Exhibits and Schedules Omitted]

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