Document:

EXHIBIT
        10.10

       

      SUBSCRIPTION
        AGREEMENT

      

      February
        20, 2007

       

      Simtrol,
        Inc. 

      Suite
        255

      2200
        Norcross Parkway

      Norcross,
        Georgia 30071

      

      Ladies
        and Gentlemen:

      

      1.
        Private
        Placement

      

      The
        undersigned (the "Investor") is writing to advise you of the following terms
        and
        conditions under which the Investor hereby offers to subscribe (the "Offer")
        for
        the securities of this private placement ("Offering") which are offered by
        Simtrol, Inc., a Delaware corporation (the "Company"), pursuant to that certain
        Confidential Private Placement Memorandum (the "Memorandum") of the Company
        dated February 20, 2007. The Company is issuing securities consisting of
        Series
        B Convertible Preferred Stock ("Preferred Stock") with warrants to acquire
        shares of Common Stock ("Warrants") (collectively, the "Securities") at $37,500
        per Security. Each Security contains 50 shares of Preferred Stock, of which
        each
        share of Preferred Stock is convertible into 2,000 shares of common stock
        of the
        Company, par value $0.001 per share (the "Common Stock") and a warrant to
        purchase 100,000 shares of Common Stock at $0.375 per share. The undersigned
        understands that the Securities are being issued pursuant to the exemption
        from
        registration requirements of the Securities Act of 1933, as amended (the
        "Act"),
        provided by Section 4(2) of the Act. As such, the Preferred Stock, the Warrants,
        and the underlying shares of Common Stock into which the Preferred Stock
        and the
        Warrants may be converted (the "Underlying Shares") are "restricted securities".
        

      

      Capitalized
        terms not otherwise defined herein shall have the meanings set forth in the
        Memorandum.

      

      2. Subscription.

      

      Subject
        to the terms and conditions hereinafter set forth in this Subscription
        Agreement, the undersigned hereby offers to purchase the Securities as set
        forth
        in the Investor Signature Page attached hereto.

      

      3. Conditions
        to Offer.

      

      The
        undersigned acknowledges that the Company may accept or reject the Offer,
        in
        whole or in part, for any reason whatsoever. Acceptance of this Offer shall
        be
        deemed given by the countersigning of this Subscription Agreement on behalf
        of
        the Company.

      

      4. Representations
        and Warranties of the Investor.

      

      The
        undersigned, in order to induce the Company to accept this Offer, hereby
        warrants and represents as follows:

      

      (A) The
        undersigned has sufficient liquid assets to sustain a loss of the undersigned's
        entire investment.

      
        
          
          

        

        
          
          

          
            

          

        

         

      

      

      (B) The
        Company has not made any other representations or warranties to the Investor
        with respect to the Company except as contained herein. The Company has not
        rendered any investment advice to the Investor with respect to the
        Company.

      

      (C) The
        Investor understands that the Securities involve a high degree of risk and
        represents that the Investor (i) has adequate means of providing for its
        current
        financial needs and possible contingencies, and has no need for liquidity
        of
        investment in the Securities; (ii) can afford (a) to hold unregistered
        securities for an indefinite period of time as required and (b) sustain a
        complete loss of the entire amount of the subscription; and (iii) has not
        made
        an overall commitment to investments which are not readily marketable which
        is
        disproportionate so as to cause such overall commitment to become
        excessive.

      

      (D) The
        undersigned has carefully reviewed the Memorandum. The undersigned has also
        been
        afforded the opportunity to ask questions of, and receive answers from, the
        officers and/or directors of the Company concerning the terms and conditions
        of
        the Offering and to obtain any additional information, to the extent that
        the
        Company possesses such information or can acquire it without unreasonable
        effort
        or expense, necessary to verify the accuracy of the information furnished;
        and
        has availed itself of such opportunity to the extent the Investor considers
        appropriate in order to permit it to
        evaluate the merits and risks of an investment in the Securities. It is
        understood that all documents, records and books pertaining to this investment
        have been made available for inspection, and that the books and records of
        the
        Company will be available upon reasonable notice for inspection by investors
        during reasonable business hours at its principal place of
        business.

      

      (E) The
        undersigned acknowledges that the Securities including Underlying Shares
        have
        not been registered under the Act in reliance on an exemption for transactions
        by an issuer not involving a public offering, and further understands that
        the
        Investor is purchasing the Securities without being furnished any prospectus
        setting forth all of the information that would be required to be furnished
        under the Act.

      

      (F) The
        undersigned further acknowledges that this Offering has not been passed upon
        or
        the merits thereof endorsed or approved by any state or federal
        authorities.

      

      (G) The
        Securities being subscribed for are being acquired solely for the account
        of the
        undersigned and not with a view to, or for resale in connection with, any
        distribution in any jurisdiction where such sale or distribution would be
        precluded. By such representation, the Investor means that no other person
        has a
        beneficial interest in the Securities (or Underlying Shares) subscribed for
        hereunder, and that no other person has furnished or will furnish directly
        or
        indirectly, any part of or guarantee the payment of any part of the
        consideration to be paid to the Company in connection therewith. The undersigned
        does not intend to dispose of all or any part of the Securities (or Warrant
        or
        Common Stock issuable upon any exercise of the Warrant) except in compliance
        with the provisions of the Act and applicable state securities laws and
        understands that the Securities are being offered pursuant to a specific
        exemption under the provisions of the Act, which exemption(s) depends, among
        other things, upon compliance with the provisions of the Act.

      

      (H) The
        undersigned further represents and agrees that the undersigned will not sell,
        transfer, pledge or otherwise dispose of or encumber the Securities (including
        the Underlying Shares) prior to registration, or the undersigned will, if
        requested, furnish the Company and its transfer agent with an opinion of
        counsel
        satisfactory to the Company in form and substance that registration under
        the
        Act or applicable state securities laws is not required.

      

      (I) The
        undersigned hereby agrees that the Company may insert the following or similar
        legend on the face of the certificates evidencing the Securities and the
        Underlying Shares, if required in compliance with federal and state securities
        laws:

      

      "These
        securities have not been registered under Act or under the securities laws
        of
        any state. They may not be sold, offered for sale, pledged or hypothecated
        in
        the absence of a registration statement in effect with respect to the securities
        under such act or an opinion of counsel reasonably satisfactory to the company
        that such registration is not required pursuant to a valid exemption under
        the
        Act." 

      
        
          
          

        

        
          
          

          
            

          

        

         

      

      

      (J) Neither
        the Company nor any person acting on its behalf has offered or sold the
        undersigned the Securities by means of any form of general solicitation or
        general advertising and the Securities were not offered or sold to the Investor
        by means of publicly disseminated advertisements or sales
        literature.

      

      The
        undersigned certifies that each of the foregoing representations and warranties
        set forth in subsection (A) through (J) inclusive of this Section 4 are true
        as
        of the date hereof and shall survive such date.

       

      5. Representations
        and Warranties of the Company.

      

      The
        Company hereby makes the following representations and warranties to the
        Investor:

      

        (A) SUBSIDIARIES.
          THE COMPANY HAS NO DIRECT OR INDIRECT SUBSIDIARIES (EACH A "SUBSIDIARY,"
          AND
          COLLECTIVELY, "SUBSIDIARIES") EXCEPT AS DESCRIBED IN SEC REPORTS AND/OR
          THE
          MEMORANDUM. ALL THE ISSUED AND OUTSTANDING SHARES OF CAPITAL STOCK OF EACH
          SUBSIDIARY ARE VALIDLY ISSUED AND ARE FULLY PAID, NON-ASSESSABLE AND FREE
          OF
          PREEMPTIVE AND SIMILAR RIGHTS, AND THE COMPANY OWNS ALL OF THE ISSUED AND
          OUTSTANDING SHARES OF CAPITAL STOCK OF EACH SUBSIDIARY, EXCEPT AS DESCRIBED
          IN
          SUCH THE SEC REPORTS AND/OR THE MEMORANDUM.

        

        (B) ORGANIZATION
          AND QUALIFICATION.
          EACH OF THE COMPANY AND THE SUBSIDIARIES IS AN ENTITY DULY INCORPORATED
          OR
          OTHERWISE ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS
          OF THE
          JURISDICTION OF ITS INCORPORATION OR ORGANIZATION (AS APPLICABLE), WITH
          THE
          REQUISITE POWER AND AUTHORITY TO OWN AND USE ITS PROPERTIES AND ASSETS
          AND TO
          CARRY ON ITS BUSINESS AS CURRENTLY CONDUCTED. NEITHER THE COMPANY NOR ANY
          SUBSIDIARY IS IN VIOLATION OF ANY OF THE PROVISIONS OF ITS RESPECTIVE
          CERTIFICATE OR ARTICLES OF INCORPORATION, BYLAWS OR OTHER ORGANIZATIONAL
          OR
          CHARTER DOCUMENTS. 

        

        (C) AUTHORIZATION;
          ENFORCEMENT.
          THE COMPANY HAS THE REQUISITE CORPORATE POWER AND AUTHORITY TO ENTER INTO
          AND TO
          CONSUMMATE THE OFFERING. THE EXECUTION AND DELIVERY OF THIS SUBSCRIPTION
          AGREEMENT BY THE COMPANY AND THE CONSUMMATION BY IT OF THE TRANSACTIONS
          CONTEMPLATED HEREBY HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY ACTION ON
          THE
          PART OF THE COMPANY AND NO FURTHER CONSENT OR ACTION IS REQUIRED BY THE
          COMPANY,
          OTHER THAN THE REQUIRED APPROVALS (AS DEFINED BELOW). THIS SUBSCRIPTION
          AGREEMENT, WHEN EXECUTED AND DELIVERED IN ACCORDANCE WITH THE TERMS HEREOF,
          WILL
          CONSTITUTE THE VALID AND BINDING OBLIGATION OF THE COMPANY ENFORCEABLE
          AGAINST
          THE COMPANY IN ACCORDANCE WITH ITS TERMS, SUBJECT TO APPLICABLE BANKRUPTCY,
          INSOLVENCY, FRAUDULENT CONVEYANCE, REORGANIZATION, MORATORIUM AND SIMILAR
          LAWS
          AFFECTING CREDITORS’ RIGHTS AND REMEDIES GENERALLY AND GENERAL PRINCIPLES OF
          EQUITY. 

        

        (D) NO
          CONFLICTS.
          THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS SUBSCRIPTION AGREEMENT
          BY THE
          COMPANY AND THE CONSUMMATION BY THE COMPANY OF THE OFFERING DO NOT AND
          WILL NOT:
          (I) CONFLICT WITH OR VIOLATE ANY PROVISION OF THE COMPANY’S OR ANY SUBSIDIARY’S
          CERTIFICATE OR ARTICLES OF INCORPORATION, BYLAWS OR OTHER ORGANIZATIONAL
          OR
          CHARTER DOCUMENTS, OR (II) SUBJECT TO OBTAINING THE REQUIRED APPROVALS,
          CONFLICT
          WITH, OR CONSTITUTE A DEFAULT (OR AN EVENT THAT WITH NOTICE OR LAPSE OF
          TIME OR
          BOTH WOULD BECOME A DEFAULT) UNDER, OR GIVE TO OTHERS ANY RIGHTS OF TERMINATION,
          AMENDMENT, ACCELERATION OR CANCELLATION (WITH OR WITHOUT NOTICE, LAPSE
          OF TIME
          OR BOTH) OF, ANY AGREEMENT, CREDIT FACILITY, DEBT OR OTHER INSTRUMENT
          (EVIDENCING A COMPANY OR SUBSIDIARY DEBT OR OTHERWISE) OR OTHER UNDERSTANDING
          TO
          WHICH THE COMPANY OR ANY SUBSIDIARY IS A PARTY OR BY WHICH ANY PROPERTY
          OR ASSET
          OF THE COMPANY OR ANY SUBSIDIARY IS BOUND OR AFFECTED, OR (III) RESULT
          IN A
          VIOLATION OF ANY LAW, RULE, REGULATION, ORDER, JUDGMENT, INJUNCTION, DECREE
          OR
          OTHER RESTRICTION OF ANY COURT OR GOVERNMENTAL AUTHORITY AS CURRENTLY IN
          EFFECT
          TO WHICH THE COMPANY OR A SUBSIDIARY IS SUBJECT (INCLUDING FEDERAL AND
          STATE
          SECURITIES LAWS AND REGULATIONS), OR BY WHICH ANY PROPERTY OR ASSET OF
          THE
          COMPANY OR A SUBSIDIARY IS BOUND OR AFFECTED; EXCEPT IN THE CASE OF EACH
          OF
          CLAUSES (II) AND (III), SUCH AS COULD NOT, INDIVIDUALLY OR IN THE AGGREGATE
          (A)
          ADVERSELY AFFECT THE LEGALITY, VALIDITY OR ENFORCEABILITY OF THE OFFERING,
          (B)
          HAVE OR RESULT IN OR BE REASONABLY LIKELY TO HAVE OR RESULT IN A MATERIAL
          ADVERSE EFFECT ON THE RESULTS OF OPERATIONS, ASSETS, PROSPECTS, BUSINESS
          OR
          CONDITION (FINANCIAL OR OTHERWISE) OF THE COMPANY AND THE SUBSIDIARIES,
          TAKEN AS
          A WHOLE, OR (C) ADVERSELY IMPAIR THE COMPANY'S ABILITY TO PERFORM FULLY
          ON A
          TIMELY BASIS ITS OBLIGATIONS UNDER THIS SUBSCRIPTION AGREEMENT (ANY OF
          (A), (B)
          OR (C), A "MATERIAL ADVERSE EFFECT").

         

      

      
        
          
          

        

        
          
          

          
            

          

        

         

      

      

         

        (E) FILINGS,
          CONSENTS AND APPROVALS.
          NEITHER THE COMPANY NOR ANY SUBSIDIARY IS REQUIRED TO OBTAIN ANY CONSENT,
          WAIVER, AUTHORIZATION OR ORDER OF, GIVE ANY NOTICE TO, OR MAKE ANY FILING
          OR
          REGISTRATION WITH, ANY COURT OR OTHER FEDERAL, STATE, LOCAL OR OTHER
          GOVERNMENTAL AUTHORITY OR OTHER PERSON IN CONNECTION WITH THE EXECUTION,
          DELIVERY AND PERFORMANCE BY THE COMPANY OF THIS SUBSCRIPTION AGREEMENT,
          OTHER
          THAN (I) THE FILING WITH THE SEC OF A FORM D PURSUANT TO SEC REGULATION
          D AND
          (II) APPLICABLE BLUE SKY FILINGS (COLLECTIVELY, THE "REQUIRED APPROVALS").
          SUCH
          "PERSON" MEANS AN INDIVIDUAL OR CORPORATION, PARTNERSHIP, TRUST, INCORPORATED
          OR
          UNINCORPORATED ASSOCIATION, JOINT VENTURE, LIMITED LIABILITY COMPANY, JOINT
          STOCK COMPANY, GOVERNMENT (OR AGENCY OR SUBDIVISION THEREOF) OR OTHER ENTITY
          OF
          ANY KIND.

        

        (F) ISSUANCE
          OF THE SECURITIES.
          THE SECURITIES ARE DULY AUTHORIZED AND, WHEN ISSUED AND PAID FOR IN ACCORDANCE
          WITH THIS SUBSCRIPTION AGREEMENT, WILL BE DULY AND VALIDLY ISSUED, FULLY
          PAID
          AND NONASSESSABLE, FREE AND CLEAR OF ALL LIENS. THE COMPANY HAS RESERVED
          FROM
          ITS DULY AUTHORIZED CAPITAL STOCK A NUMBER OF SHARES OF COMMON STOCK FOR
          ISSUANCE UPON CONVERSION OF THE PREFERRED STOCK AND FOR THE ISSUANCE OF
          THE
          SHARES OF COMMON STOCK UPON EXERCISE OF THE WARRANTS. THE SECURITIES CONFORM
          TO
          THE DESCRIPTION CONTAINED IN THE MEMORANDUM. THE ISSUANCE AND SALE OF THE
          SECURITIES HEREUNDER DOES NOT CONTRAVENE THE SEC RULES AND REGULATIONS.
          

        

        (G)
          CAPITALIZATION.
          THE NUMBER OF SHARES AND TYPE OF ALL AUTHORIZED, ISSUED AND OUTSTANDING
          CAPITAL
          STOCK OF THE COMPANY IS AS SET FORTH IN THE SEC REPORTS OR MEMORANDUM OF
          THE
          COMPANY. 

        

        (H) SEC
          REPORTS; FINANCIAL STATEMENTS.
          THE COMPANY HAS FILED ALL REPORTS REQUIRED TO BE FILED BY IT UNDER THE
          ACT AND
          THE SECURITIES EXCHANGE ACT OF 1934 (THE "EXCHANGE ACT"), INCLUDING PURSUANT
          TO
          SECTION 13(A) OF 15(D) THEREOF, FOR THE TWO YEARS PRECEDING THE DATE HEREOF
          (OR
          SUCH SHORTER PERIOD AS THE COMPANY WAS REQUIRED BY LAW TO FILE SUCH MATERIAL)
          (THE FOREGOING MATERIALS BEING COLLECTIVELY REFERRED TO HEREIN AS THE "SEC
          REPORTS"). THE SEC REPORTS, WHEN FILED, COMPLIED IN ALL MATERIAL RESPECTS
          WITH
          THE REQUIREMENTS OF THE ACT AND THE EXCHANGE ACT AND THE RULES AND REGULATIONS
          OF THE COMMISSION PROMULGATED THEREUNDER, AND NONE OF THE SEC REPORTS,
          WHEN
          FILED, CONTAINED ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMITTED TO
          STATE A
          MATERIAL FACT REQUIRED TO BE STATED THEREIN OR NECESSARY IN ORDER TO MAKE
          THE
          STATEMENTS THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE
          MADE,
          NOT MISLEADING. THE FINANCIAL STATEMENTS OF THE COMPANY THAT HAVE BEEN
          INCLUDED
          IN THE SEC REPORTS COMPLY IN ALL MATERIAL RESPECTS WITH APPLICABLE ACCOUNTING
          REQUIREMENTS AND THE RULES AND REGULATIONS OF THE SEC WITH RESPECT THERETO
          AS IN
          EFFECT AT THE TIME OF FILING. SUCH FINANCIAL STATEMENTS HAVE BEEN PREPARED
          IN
          ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES APPLIED ON A CONSISTENT
          BASIS DURING THE PERIODS INVOLVED ("GAAP"),
          EXCEPT AS MAY BE OTHERWISE SPECIFIED IN SUCH FINANCIAL STATEMENTS OR THE
          NOTES
          THERETO, AND FAIRLY PRESENT IN ALL MATERIAL RESPECTS THE FINANCIAL POSITION
          OF
          THE COMPANY AND ITS CONSOLIDATED SUBSIDIARIES AS OF AND FOR THE DATES THEREOF
          AND THE RESULTS OF OPERATIONS AND CASH FLOWS FOR THE PERIODS THEN ENDED,
          SUBJECT, IN THE CASE OF UNAUDITED STATEMENTS, TO NORMAL, IMMATERIAL, YEAR-END
          AUDIT ADJUSTMENTS. 

        

          
            
              
              

            

            
              
              

              
                

              

            

             

          

        

      

      

         

        (I) MATERIAL
          CHANGES.
          SINCE THE DATE OF THE LATEST FINANCIAL STATEMENTS INCLUDED WITHIN THE SEC
          REPORTS, EXCEPT AS SPECIFICALLY DISCLOSED IN THE MEMORANDUM: (I) THERE
          HAS BEEN
          NO EVENT, OCCURRENCE OR DEVELOPMENT THAT HAS HAD A MATERIAL ADVERSE EFFECT,
          (II)
          THE COMPANY HAS NOT INCURRED ANY LIABILITIES (CONTINGENT OR OTHERWISE)
          OTHER
          THAN (A) TRADE PAYABLES AND ACCRUED EXPENSES INCURRED IN THE ORDINARY COURSE
          OF
          BUSINESS CONSISTENT WITH PAST PRACTICE AND (B) LIABILITIES NOT REQUIRED
          TO BE
          REFLECTED IN THE COMPANY’S FINANCIAL STATEMENTS PURSUANT TO GAAP OR REQUIRED TO
          BE DISCLOSED IN FILINGS MADE WITH THE SEC, (III) THE COMPANY HAS NOT ALTERED
          ITS
          METHOD OF ACCOUNTING OR THE IDENTITY OF ITS AUDITORS, (IV) THE COMPANY
          HAS NOT
          DECLARED OR MADE ANY DIVIDEND OR DISTRIBUTION OF CASH OR OTHER PROPERTY
          TO ITS
          STOCKHOLDERS EXCEPT IN THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH
          PRIOR
          PRACTICE, OR PURCHASED, REDEEMED OR MADE ANY AGREEMENTS TO PURCHASE OR
          REDEEM
          ANY SHARES OF ITS CAPITAL STOCK EXCEPT CONSISTENT WITH PRIOR PRACTICE OR
          PURSUANT TO EXISTING COMPANY STOCK OPTION OR SIMILAR PLANS, AND (V) THE
          COMPANY
          HAS NOT ISSUED ANY EQUITY SECURITIES TO ANY OFFICER, DIRECTOR OR AFFILIATE,
          EXCEPT PURSUANT TO EXISTING COMPANY STOCK OPTION OR SIMILAR PLANS. SUCH
          "AFFILIATE" MEANS ANY PERSON THAT, DIRECTLY OR INDIRECTLY THROUGH ONE OR
          MORE
          INTERMEDIARIES, CONTROLS OR IS CONTROLLED BY OR IS UNDER COMMON CONTROL
          WITH A
          PERSON, AS SUCH TERMS ARE USED IN AND CONSTRUED UNDER RULE 144 UNDER THE
          ACT.
          WITH RESPECT TO ANY INVESTOR, ANY INVESTMENT FUND OR MANAGED ACCOUNT THAT
          IS
          MANAGED ON A DISCRETIONARY BASIS BY THE SAME INVESTMENT MANAGER AS SUCH
          INVESTOR
          WILL BE DEEMED TO BE AN AFFILIATE OF SUCH INVESTOR.

        

        (J) LITIGATION.
          EXCEPT AS SET FORTH IN THE SEC REPORTS AND THE MEMORANDUM, THERE IS NO
          ACTION,
          SUIT, INQUIRY, NOTICE OF VIOLATION, PROCEEDING OR INVESTIGATION PENDING
          OR, TO
          THE KNOWLEDGE OF THE COMPANY, THREATENED AGAINST OR AFFECTING THE COMPANY,
          ANY
          SUBSIDIARY OR ANY OF THEIR RESPECTIVE PROPERTIES BEFORE OR BY ANY COURT,
          ARBITRATOR, GOVERNMENTAL OR ADMINISTRATIVE AGENCY OR REGULATORY AUTHORITY
          (FEDERAL, STATE, COUNTY, LOCAL OR FOREIGN) (COLLECTIVELY, AN "ACTION")
          WHICH:
          (I) ADVERSELY AFFECTS OR CHALLENGES THE LEGALITY, VALIDITY OR ENFORCEABILITY
          OF
          THIS SUBSCRIPTION AGREEMENT OR THE SECURITIES OR (II) WOULD, IF THERE WERE
          AN
          UNFAVORABLE DECISION, INDIVIDUALLY OR IN THE AGGREGATE, HAVE OR REASONABLY
          BE
          EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT. NEITHER THE COMPANY NOR
          ANY
          SUBSIDIARY IS OR HAS BEEN THE SUBJECT OF ANY ACTION INVOLVING A CLAIM OF
          VIOLATION OF OR LIABILITY UNDER FEDERAL OR STATE SECURITIES LAWS. THE COMPANY
          DOES NOT HAVE PENDING BEFORE THE SEC ANY REQUEST FOR CONFIDENTIAL TREATMENT
          OF
          INFORMATION. THERE
          HAS NOT BEEN, AND TO THE KNOWLEDGE OF THE COMPANY, THERE IS NOT PENDING
          OR
          CONTEMPLATED, ANY INVESTIGATION BY THE SEC INVOLVING THE COMPANY. THE SEC
          HAS
          NOT ISSUED ANY STOP ORDER OR OTHER ORDER SUSPENDING THE EFFECTIVENESS OF
          ANY
          REGISTRATION STATEMENT FILED BY THE COMPANY OR ANY SUBSIDIARY UNDER THE
          EXCHANGE
          ACT OR THE SECURITIES ACT. 

         

      

      
        
          
          

        

        
          
          

          
            

          

        

         

      

      

        (K) COMPLIANCE.
          NEITHER THE COMPANY NOR ANY SUBSIDIARY: (I) IS IN DEFAULT UNDER OR IN VIOLATION
          OF (AND NO EVENT HAS OCCURRED THAT HAS NOT BEEN WAIVED THAT, WITH NOTICE
          OR
          LAPSE OF TIME OR BOTH, WOULD RESULT IN A DEFAULT BY THE COMPANY OR ANY
          SUBSIDIARY UNDER), NOR HAS THE COMPANY OR ANY SUBSIDIARY RECEIVED NOTICE
          OF A
          CLAIM THAT IT IS IN DEFAULT UNDER OR THAT IT IS IN VIOLATION OF, ANY MATERIAL
          INDENTURE, LOAN OR CREDIT AGREEMENT OR ANY OTHER MATERIAL AGREEMENT OR
          INSTRUMENT TO WHICH IT IS A PARTY OR BY WHICH IT OR ANY OF ITS PROPERTIES
          IS
          BOUND (WHETHER OR NOT SUCH DEFAULT OR VIOLATION HAS BEEN WAIVED), WHICH
          DEFAULT
          OR VIOLATION WOULD HAVE OR RESULT IN A MATERIAL ADVERSE EFFECT, (II) IS
          IN
          VIOLATION OF ANY ORDER OF ANY COURT, ARBITRATOR OR GOVERNMENTAL BODY, OR
          (III)
          IS IN VIOLATION OF ANY STATUTE, RULE OR REGULATION OF ANY GOVERNMENTAL
          AUTHORITY, EXCEPT IN EACH CASE AS WOULD NOT, INDIVIDUALLY OR IN THE AGGREGATE,
          HAVE OR RESULT IN A MATERIAL ADVERSE EFFECT. 

        

        (L) REGULATORY
          PERMITS.
          THE COMPANY AND THE SUBSIDIARIES POSSESS ALL CERTIFICATES, AUTHORIZATIONS
          AND
          PERMITS ISSUED BY THE APPROPRIATE FEDERAL, STATE, LOCAL OR FOREIGN REGULATORY
          AUTHORITIES NECESSARY TO CONDUCT THEIR RESPECTIVE BUSINESSES AS DESCRIBED
          IN THE
          SEC REPORTS, EXCEPT WHERE THE FAILURE TO POSSESS SUCH PERMITS WOULD NOT,
          INDIVIDUALLY OR IN THE AGGREGATE, HAVE OR REASONABLY BE EXPECTED TO RESULT
          IN A
          MATERIAL ADVERSE EFFECT ("MATERIAL PERMITS"), AND NEITHER THE COMPANY NOR
          ANY
          SUBSIDIARY HAS RECEIVED ANY NOTICE OF PROCEEDINGS RELATING TO THE REVOCATION
          OR
          MODIFICATION OF ANY MATERIAL PERMIT.

        

        (M) LISTING
          AND MAINTENANCE REQUIREMENTS.
          THE COMPANY IS CURRENTLY QUOTED ON THE OTC BULLETIN BOARD UNDER THE SYMBOL
          "SMRL". THE COMPANY IS, AND HAS NO REASON TO BELIEVE THAT IT WILL NOT IN
          THE
          FORESEEABLE FUTURE TO BE, IN COMPLIANCE WITH ALL REQUIREMENTS TO BE QUOTED
          ON
          THE OTC BULLETIN BOARD.

        

        (N) INTERNAL
          ACCOUNTING CONTROLS.
          THE COMPANY AND THE 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. THE COMPANY HAS ESTABLISHED DISCLOSURE CONTROLS AND PROCEDURES
          (AS
          DEFINED IN EXCHANGE ACT RULES 13A-14 AND 15D-14) FOR THE COMPANY AND DESIGNED
          SUCH DISCLOSURES CONTROLS AND PROCEDURES TO ENSURE THAT MATERIAL INFORMATION
          RELATING TO THE COMPANY, INCLUDING ITS SUBSIDIARIES, IS MADE KNOWN TO THE
          CERTIFYING OFFICERS BY OTHERS WITHIN THOSE ENTITIES. THE COMPANY'S CERTIFYING
          OFFICERS HAVE EVALUATED THE EFFECTIVENESS OF THE COMPANY'S DISCLOSURE CONTROLS
          AND PROCEDURES AS OF THE DATE IMMEDIATELY PRIOR TO THE FILING OF THE COMPANY’S
          MOST RECENT PERIODIC REPORT UNDER THE EXCHANGE ACT (SUCH DATE, THE "EVALUATION
          DATE"). THE COMPANY PRESENTED IN SUCH REPORT THE CONCLUSIONS OF THE CERTIFYING
          OFFICERS ABOUT THE EFFECTIVENESS OF THE DISCLOSURE CONTROLS AND PROCEDURES
          BASED
          ON THEIR EVALUATIONS AS OF THE EVALUATION DATE. SINCE THE EVALUATION DATE,
          THERE
          HAVE BEEN NO SIGNIFICANT CHANGES IN THE COMPANY'S INTERNAL CONTROLS (AS
          SUCH
          TERM IS DEFINED IN ITEM 307(B) OF REGULATION S-K UNDER THE EXCHANGE ACT).
          

         

      

      
        
          
          

        

        
          
          

          
            

          

        

         

      

       

      
        (O) DISCLOSURE.
          THE DISCLOSURE PROVIDED TO THE INVESTOR REGARDING THE COMPANY, ITS BUSINESS
          AND
          THE TRANSACTIONS CONTEMPLATED HEREBY, FURNISHED BY OR ON BEHALF OF THE
          COMPANY,
          INCLUDING ALL OF THE SEC REPORTS, DOES NOT CONTAIN ANY UNTRUE STATEMENT
          OF A
          MATERIAL FACT OR OMIT TO STATE ANY MATERIAL FACT NECESSARY IN ORDER TO
          MAKE THE
          STATEMENTS MADE THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY
          WERE
          MADE, NOT MISLEADING. THE COMPANY ACKNOWLEDGES AND AGREES THAT THE INVESTOR
          MAKES OR HAS MADE NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE
          TRANSACTIONS CONTEMPLATED HEREBY OTHER THAN THOSE SPECIFICALLY SET FORTH
          IN THIS
          SUBSCRIPTION AGREEMENT.

         

      

      6. Covenants
        of the Company.

       

      (A)
         Registration
        Rights. The
        Company grants to the Investor registration rights relating to the Common
        Stock
        and the Underlying Shares under the following terms and conditions:

      

      (1)
         The
        Company will prepare and file, at its own expense, a registration statement
        under the Act (the "Registration Statement") with the SEC sufficient to permit
        the non-underwritten public offering and resale of the Underlying Shares
        (the
        "Registrable Securities") through the facilities of all appropriate securities
        exchanges, if any, on which the Common Stock is being sold or on the
        over-the-counter market if the Common Stock is traded thereon.

       

      (2)
         The
        Company will use its reasonable best efforts to cause such Registration
        Statement to become effective within one hundred and twenty (120) days of
        the
        date of the sale of the Securities to Investor or, if earlier, within five
        (5)
        business days of Commission clearance to request acceleration of effectiveness.
        The number of shares designated in the Registration Statement to be registered
        shall include all of the Registrable Securities and shall include appropriate
        language regarding reliance upon Rule 416 to the extent permitted by the
        SEC.
        The Company will notify the Investor of the effectiveness of the Registration
        Statement within five (5) business days of such event.

       

      (3) Except
        as
        otherwise provided in Section 6(C) below, the Company will use its reasonable
        best efforts to maintain effectiveness under the Act of the Registration
        Statement or any post-effective amendment thereto filed under the terms of
        this
        Agreement until the earlier of (i) the date that all of the Registrable
        Securities have been sold pursuant to such Registration Statement, (ii) the
        date
        all Registrable Securities have been otherwise transferred to persons who
        may
        trade such shares without restriction under the Act, and the Company has
        delivered a new certificate or other evidence of ownership for such securities
        not bearing a restrictive legend, or (iii) the date all Securities may be
        sold
        at any time, without volume or manner of sale limitations pursuant to Rule
        144(k) (Rule 144 means Rule 144 promulgated by the SEC pursuant to the Act,
        herein referred to as "Rule 144") or any similar provision then in effect
        under
        the Securities Act (the "Effectiveness Period").

       

      
        
          
          

        

        
          
          

          
            

          

        

         

      

       

      (4) If,
        at
        any time during which the Registration Statement required by Section 6(A)(1)
        and
        6(A)(2) above is not effective, the Company shall determine to proceed with
        the
        preparation and filing of a separate registration statement pursuant to the
        Act
        in connection with the proposed offer and sale of any securities by it or
        any of
        its securities holders (other than a registration statement on Form S-4,
        S-8, or
        other limited purpose Form), the Company will give written notice of its
        determination to do so to the Investor. Upon receipt of a written request
        from
        Investor, within twenty (20) days after receipt of any such notice from the
        Company, the Company will cause all such Registrable Securities requested
        by the
        Investor to be included in such registration statement, all to the extent
        required to permit the sale or other disposition by the Investor of such
        shares.
        The obligation of the Company under this Section 6(A)(4) shall be unlimited
        as
        to the number of registration statements to which it applies, unless the
        Effectiveness Period has ended. Notwithstanding the foregoing, the Company
        shall
        have the right to postpone or withdraw any registration effect pursuant to
        this
        Section 6(A)(4) without obligation to the Investor. In addition, if any
        registration effected pursuant to this Section 6(A)(4) is a registered public
        offering involving an underwriting, the Company shall so advise the Investor
        as
        a part of the written notice given pursuant to this Section 6(A)(4). In such
        event, the right of the Investor to include Registrable Securities in such
        registration pursuant to this Section 6(A)(4) shall be conditioned upon
        Investor’s execution of an underwriting agreement upon customary terms with the
        underwriter or underwriters selected for the underwriting by the Company.
        If the
        managing underwriter advises the Company in writing that marketing factors
        require a limitation in the number of shares held by selling stockholders
        to be
        underwritten, the number of Registrable Securities that may be included in
        such
        Registration Statement and underwriting shall be allocated among all investors,
        including the Investor, requesting registration in proportion, as nearly
        as
        practicable, to the respective number of shares of Registrable Securities
        held
        by them on the date the Company gives the notice specified in this Section
        6(A)(4).

       

      (5) All
        fees,
        disbursements and out-of-pocket expenses and costs incurred by the Company
        in
        connection with the preparation and filing of the Registration Statement
        and in
        complying with applicable federal securities and Blue Sky laws (including,
        without limitation, all attorneys' fees of the Company) shall be borne by
        the
        Company. The Investor shall bear the cost of underwriting and/or brokerage
        discounts, fees and commissions, if any, applicable to the Registrable
        Securities being registered and the fees and expenses of its counsel. The
        Company shall use its reasonable best efforts to qualify any of the Securities
        for sale in such states as any Investor reasonably designates. However, the
        Company shall not be required to qualify in any state which will require
        an
        escrow or other restriction relating to the Company and/or the sellers, or
        which
        will require the Company to qualify to do business in such state or require
        the
        Company to file therein any general consent to service of process. If NASDR
        Rule
        2710 requires any broker-dealer to make a filing prior to executing a sale
        by a
        Purchaser of the Securities, make an issuer filing with the NASDR, Inc.
        Corporate Financing Department pursuant to NASDR Rule 2710(b)(10)(A)(i) and
        respond within five (5) Trading Days to any comments received from NASDR
        in
        connection therewith, and pay the filing fee required in connection therewith.
        The Company, at its expense, will supply the Investor with copies of the
        applicable Registration Statement and any prospectus included therein and
        other
        related documents in such quantities as may be reasonably requested by the
        Investor.

      

      (6) In
        the
        event that (i) the Registration Statement to be filed by the Company pursuant
        to
        Section 6(A)(2) is not declared effective by the SEC within the earlier of
        one
        hundred and twenty (120) days from the date of the sale of the Securities
        or
        five (5) days of clearance by the SEC to request effectiveness, (ii) such
        Registration Statement is not maintained as effective by the Company for
        the
        period set forth in Section 6(A)(2) above (each a "Registration Default")
        then
        the Company will pay Investor (pro rated on a daily basis), as partial
        compensation for such failure and not as a penalty, one and one-half percent
        (1.5%) of the purchase price of the Registrable Securities purchased from
        the
        Company and held by the Investor for each month (or portion thereof) until
        such
        Registration Statement has been filed or declared effective or lapsed
        effectiveness (in the case of clause (ii) above), one and one-half percent
        (1.5%) of the purchase price of the Registrable Securities purchased from
        the
        Company and held by the Investor each month (or portion thereof) (regardless
        of
        whether one or more such Registration Defaults are then in existence, but
        without duplication of such partial compensatory payments) until such
        Registration Statement has been declared effective. Such compensatory payments
        shall be made to the Investor in cash, within five (5) calendar days of demand,
        provided, however, that the payment of such amounts shall not relieve the
        Company from its obligations to register the Securities pursuant to this
        Section. 

      
        
          
          

        

        
          
          

          
            

          

        

         

      

      

      If
        the
        Company does not remit the payment to the Investor as set forth above, the
        Company will pay the Investor reasonable costs of collection, including
        attorneys’ fees, in addition to the liquidated damages. The registration of the
        Securities pursuant to this provision or payment of such compensatory amounts
        shall not affect or limit the Investor’s other rights or remedies as set forth
        in this Agreement or at law. 

      

      (B) The
        Company shall be entitled to suspend the availability of any Registration
        Statement, by providing notice thereof to the Investors, without incurring
        or
        accruing any obligation to pay liquidated damages pursuant to Section 6(A)(4),
        no more than one (1) time in any three month period or three (3) times in
        any
        twelve month period, and any such period during which the availability of
        the
        Registration Statement is suspended (the "Deferral Period") shall, without
        incurring any obligation to pay liquidated damages pursuant to Section 6(A)(4),
        not exceed 30 days; provided
        that the
        aggregate duration of any Deferral Periods shall not exceed 15 days in any
        three
        month period or 40 days in any twelve (12) month period; provided
        that in
        the case of a Material Event relating to an acquisition or a probable
        acquisition or financing, recapitalization, business combination or other
        similar transaction, the Company may, without incurring any obligation to
        pay
        liquidated damages pursuant to Section 6(A)(4), deliver to the Holders a
        second
        notice to the effect set forth above, which shall have the effect of extending
        the Deferral Period by up to an additional 30 days, or such shorter period
        of
        time as is specified in such second notice. As used herein, "Material Event"
        shall mean the occurrence of any event or the existence of any fact as a
        result
        of which any Registration Statement shall 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.

      

      (C) In
        the
        case of each registration effected by the Company pursuant to any section
        herein, the Company will keep each shareholder advised in writing as to the
        initiation of each registration and as to the completion thereof. At its
        expense, the Company will:

      

      (1) Keep
        such
        registration effective at least until such time as the Underlying Shares
        are
        eligible to have the restrictive legend removed pursuant to SEC Rule
        144(k);

      

      (2) Prepare
        and file with the SEC such amendments and supplements to such registration
        statement and the prospectus used in connection with such registration statement
        as may be necessary to comply with the provisions of the Securities Act with
        respect to a disposition of all securities covered by such registration
        statement;

      

      (3) Notify
        the shareholders at any time when a prospectus relating thereto is required
        to
        be delivered under the Act, of the happening of any event as a result of
        which
        the prospectus included in such registration statement, as then in effect,
        includes an untrue statement of a material fact or omits to state a material
        fact required to be stated therein or necessary to make the statements therein
        not misleading or incomplete in light of the circumstances then existing,
        and at
        the request of the shareholders, prepare and furnish to them a reasonable
        number
        of copies of a supplement to or an amendment of such prospectus as may be
        necessary so that, as thereafter delivered to the shareholders, such prospectus
        shall not include an untrue statement of a material fact or omit to state
        a
        material fact required to be stated therein or necessary to make the statements
        therein not misleading or incomplete in light of the circumstances then
        existing;

      

      (4) Use
        its
        commercially reasonable best efforts to prevent the issuance of any stop
        order
        or other suspension of effectiveness of a registration statement, and, if
        such
        an order is issued, to obtain the withdrawal of such order at the earliest
        possible moment and to notify Investor (and, in the event of an underwritten
        offering, the managing underwriter) of the issuance of such order and the
        resolution thereof;

       

      
        
          
          

        

        
          
          

          
            

          

        

         

      

      

      (5) Cause
        all
        shares which are registered in accordance with the provisions herein, to
        be
        listed or included for quotation on each exchange on which the shares of
        Common
        Stock are then listed or included for quotation;

      

      (6) Provide
        a
        transfer agent and registrar for all such shares and CUSIP number for all
        such
        shares of Common Stock in each case not later than the effective date of
        such
        registration statement; and  

      

      (7) Otherwise
        use its commercially reasonable best efforts to comply with all applicable
        rules
        and regulations of the SEC. 

      

      (D)
         To
        the
        extent Investor includes any Common Stock in a Registration Statement pursuant
        to the terms hereof, the Company will indemnify and hold harmless Investor,
        its
        directors and officers, and each person, if any, who controls Investor within
        the meaning of the Act, from and against, and will reimburse Investor, its
        directors and officers and each controlling person with respect to, any and
        all
        loss, damage, liability, cost and expense to which Investor or such controlling
        person may become subject under the Act or otherwise, insofar as such losses,
        damages, liabilities, costs or expenses are caused by any untrue statement
        or
        alleged untrue statement of any material fact contained in such registration
        statement, any prospectus contained therein or any amendment or supplement
        thereto, or arise out of or are based upon the omission or alleged omission
        to
        state therein a material fact required to be stated therein or necessary
        to make
        the statements therein, in light of the circumstances in which they were
        made,
        not misleading; provided, however, that the Company will not be liable in
        any
        such case to the extent that any such loss, damage, liability, cost or expense
        arises out of or is based upon an untrue statement or alleged untrue statement
        or omission or alleged omission so made in conformity with information furnished
        by Investor or any such controlling person in writing specifically for use
        in
        the preparation thereof.

       

      (E)
         To
        the
        extent Investor includes any Underlying Shares in a Registration Statement
        pursuant to the terms hereof, Investor will indemnify and hold harmless the
        Company, its directors and officers and any controlling person from and against,
        and will reimburse the Company, its directors and officers and any controlling
        person with respect to, any and all loss, damage, liability, cost or expense
        to
        which the Company, its directors and officers or such controlling person
        may
        become subject under the Act or otherwise, insofar as such losses, damages,
        liabilities, costs or expenses are caused by any untrue statement or alleged
        untrue statement of any material fact contained in such registration statement,
        any prospectus contained therein or any amendment or supplement thereto,
        or
        arise out of or are based upon the omission or alleged omission to state
        therein
        a material fact required to be stated therein or necessary to make the
        statements therein, in light of the circumstances in which they were made,
        not
        misleading, in each case to the extent, but only to the extent, that such
        untrue
        statement or alleged untrue statement or omission or alleged omission was
        so
        made in reliance upon and in conformity with written information furnished
        by or
        on behalf of the Investor specifically for use in the preparation thereof
        and
        provided further, that the maximum amount that may be recovered from Investor
        shall be limited to the amount of proceeds received by Investor from the
        sale of
        such shares of Common Stock.

       

      (F)
         To
        the
        extent any indemnification by an indemnifying party is prohibited or limited
        by
        law, the indemnifying party agrees to make the maximum contribution with
        respect
        to any amounts for which it would otherwise be liable hereunder to the extent
        permitted by law, provided that (i) no contribution shall be made under
        circumstances where the indemnifying party would not have been liable for
        indemnification pursuant to the provisions hereof, (ii) no seller of securities
        guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
        of
        the Act) shall be entitled to contribution from any seller of securities
        who was
        not guilty of such fraudulent misrepresentation, and (iii) the amount of
        the
        contribution together with any other payments made in respect of such loss,
        damage, liability or expense, by any seller of securities shall be limited
        to
        the net amount of proceeds received by such seller from the sale of such
        securities.

      

      (G)
         The
        Investor will cooperate with the Company in connection with this Subscription
        Agreement, including timely supplying all information reasonably requested
        by
        the Company (which shall include all information regarding the Investor and
        proposed manner of sale of securities required to be disclosed in any
        registration statement filed in accordance with this Section 6) and executing
        and returning all documents reasonably requested in connection with the
        registration and sale of any securities being registered hereunder and entering
        into and performing their obligations under any underwriting agreement, if
        the
        offering is an underwritten offering, in usual and customary form, with the
        managing underwriter or underwriters of such underwritten offering.

       

      
        
          
          

        

        
          
          

          
            

          

        

         

      

      

      (H) Transfer
        Restrictions.

      

      (1) THE
        SECURITIES MAY ONLY BE DISPOSED OF IN COMPLIANCE WITH STATE AND FEDERAL
        SECURITIES LAWS. IN CONNECTION WITH ANY TRANSFER OF SECURITIES OTHER THAN
        PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR RULE 144, TO THE COMPANY
        OR
        TO AN AFFILIATE OF AN INVESTOR OR IN CONNECTION WITH A PLEDGE AS CONTEMPLATED
        IN
        SECTION 6(H)(2), THE COMPANY MAY REQUIRE THE TRANSFEROR THEREOF TO PROVIDE
        TO
        THE COMPANY AN OPINION OF COUNSEL SELECTED BY THE TRANSFEROR AND REASONABLY
        ACCEPTABLE TO THE COMPANY, THE FORM AND SUBSTANCE OF WHICH OPINION SHALL
        BE
        REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT SUCH TRANSFER
        DOES
        NOT REQUIRE REGISTRATION OF SUCH TRANSFERRED SECURITIES UNDER THE ACT. AS
        A
        CONDITION OF TRANSFER, ANY SUCH TRANSFEREE SHALL AGREE IN WRITING TO BE BOUND
        BY
        THE TERMS OF THIS SUBSCRIPTION AGREEMENT AND SHALL HAVE THE RIGHTS OF AN
        INVESTOR UNDER THIS SUBSCRIPTION AGREEMENT. 

       

      (2) THE
        INVESTOR AGREES TO THE IMPRINTING, SO LONG AS IS REQUIRED BY THIS SECTION
        6(H)(2) OF A LEGEND ON ANY OF THE SECURITIES IN THE FOLLOWING
        FORM: 

       

      THIS
        PREFERRED STOCK AND WARRANT AND THE SHARES ISSUABLE UPON CONVERSION OR EXERCISE
        OF THIS PREFERRED STOCK OR WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
        ACT OF 1933, AS AMENDED (THE "ACT"), NOR UNDER ANY STATE SECURITIES LAW AND
        MAY
        NOT BE SOLD, ASSIGNED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNTIL (1) A
        REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND
        ANY
        APPLICABLE STATE SECURITIES LAW OR (2) THE COMPANY RECEIVES AN OPINION OF
        COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH NOTE MAY BE SOLD,
        ASSIGNED, HYPOTHECATED OR TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
        STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS.

      

        (3) CERTIFICATES
          EVIDENCING THE UNDERLYING SHARES SHALL NOT CONTAIN ANY LEGEND (INCLUDING
          THE
          LEGEND SET FORTH IN SECTION 6(H)(2) HEREOF): (I) WHILE A REGISTRATION STATEMENT
          (INCLUDING THE REGISTRATION STATEMENT) COVERING THE RESALE OF SUCH SECURITY
          IS
          EFFECTIVE UNDER THE ACT, OR (II) FOLLOWING ANY SALE OF SUCH UNDERLYING
          SHARES
          PURSUANT TO RULE 144, OR (III) IF SUCH UNDERLYING SHARES ARE ELIGIBLE FOR
          SALE
          UNDER RULE 144(K), OR (IV) IF SUCH LEGEND IS NOT REQUIRED UNDER APPLICABLE
          REQUIREMENTS OF THE ACT (INCLUDING JUDICIAL INTERPRETATIONS AND PRONOUNCEMENTS
          ISSUED BY THE STAFF OF THE SEC); PROVIDED,
          HOWEVER,
          IN CONNECTION WITH THE ISSUANCE OF THE UNDERLYING SHARES, EACH INVESTOR,
          SEVERALLY AND NOT JOINTLY WITH THE OTHER INVESTORS, HEREBY AGREES TO ADHERE
          TO
          AND ABIDE BY ALL PROSPECTUS DELIVERY REQUIREMENTS UNDER THE ACT AND RULES
          AND
          REGULATIONS OF THE SEC. THE COMPANY SHALL CAUSE ITS COUNSEL TO ISSUE A
          LEGAL
          OPINION TO THE COMPANY’S TRANSFER AGENT PROMPTLY AFTER THE EFFECTIVE DATE IF
          REQUIRED BY THE COMPANY’S TRANSFER AGENT TO EFFECT THE REMOVAL OF THE LEGEND
          HEREUNDER. IF ALL OR ANY PORTION OF PREFERRED STOCK OR WARRANT IS CONVERTED
          OR
          EXERCISED (AS APPLICABLE) AT A TIME WHEN THERE IS AN EFFECTIVE REGISTRATION
          STATEMENT TO COVER THE RESALE OF THE UNDERLYING SHARES, OR IF SUCH UNDERLYING
          SHARES MAY BE SOLD UNDER RULE 144(K) OR IF SUCH LEGEND IS NOT OTHERWISE
          REQUIRED
          UNDER APPLICABLE REQUIREMENTS OF THE ACT (INCLUDING JUDICIAL INTERPRETATIONS
          THEREOF) THEN SUCH UNDERLYING SHARES SHALL BE ISSUED FREE OF ALL LEGENDS.
          THE
          COMPANY AGREES THAT FOLLOWING THE EFFECTIVE DATE OR AT SUCH TIME AS SUCH
          LEGEND
          IS NO LONGER REQUIRED UNDER THIS SECTION 6(H)(3), IT WILL, NO LATER THAN
          THREE
          (3) DAYS FOLLOWING THE DELIVERY BY AN INVESTOR TO THE COMPANY OR THE COMPANY'S
          TRANSFER AGENT OF A CERTIFICATE REPRESENTING UNDERLYING SHARES, AS APPLICABLE,
          ISSUED WITH A RESTRICTIVE LEGEND (SUCH THIRD (3RD)
          DAY, THE "LEGEND
          REMOVAL DATE"),
          DELIVER OR CAUSE TO BE DELIVERED TO SUCH INVESTOR A CERTIFICATE REPRESENTING
          SUCH SHARES THAT IS FREE FROM ALL RESTRICTIVE AND OTHER LEGENDS. THE COMPANY
          MAY
          NOT MAKE ANY NOTATION ON ITS RECORDS OR GIVE INSTRUCTIONS TO ANY TRANSFER
          AGENT
          OF THE COMPANY THAT ENLARGE THE RESTRICTIONS ON TRANSFER SET FORTH IN THIS
          SECTION.

         

      

      
        
          
          

        

        
          
          

          
            

          

        

         

      

      

      (4) EACH
        INVESTOR, SEVERALLY AND NOT JOINTLY WITH THE OTHER INVESTORS, AGREES THAT
        THE
        REMOVAL OF THE RESTRICTIVE LEGEND FROM CERTIFICATES REPRESENTING SECURITIES
        AS
        SET FORTH IN THIS SECTION 6(H) IS PREDICATED UPON THE COMPANY’S RELIANCE THAT
        THE INVESTOR WILL SELL ANY SECURITIES PURSUANT TO EITHER THE REGISTRATION
        REQUIREMENTS OF THE ACT, INCLUDING ANY APPLICABLE PROSPECTUS DELIVERY
        REQUIREMENTS, OR AN EXEMPTION THEREFROM. 

       

      (I) Material
        Non-Public Information.
        The
        Company covenants and agrees that neither it nor any other person or entity
        acting on its behalf will provide the Investor or its agents or counsel with
        any
        information that the Company believes constitutes material non-public
        information, unless prior thereto such Investor shall have executed a written
        agreement regarding confidentiality and use of such information. The Company
        understands and confirms that the investor shall be relying on the foregoing
        representations in effecting transactions in securities of the
        Company.

      

      7. No
        Waiver.

      

      Notwithstanding
        any of the representations, warranties, acknowledgments or agreements made
        herein by the Investor, the Investor does not thereby or in any manner waive
        any
        rights granted to the Investor under federal or state securities
        laws.

      

      8. Revocation.

      

      The
        Investor agrees that he shall not cancel, terminate or revoke this Subscription
        Agreement or any agreement of the Investor made hereunder other than as set
        forth herein, and that this Subscription Agreement shall survive the death
        or
        disability of the Investor. 

      

      9. Termination
        of Subscription Agreement.

      

      If
        the
        Company elects to cancel this Subscription Agreement, provided that it returns
        to the Investor, without interest and without deduction, all sums paid by
        the
        Investor, this Offer shall be null and void and of no further force and effect,
        and no party shall have any rights against any other party
        hereunder.

       

      
        
          
          

        

        
          
          

          
            

          

        

         

      

      

      10. Miscellaneous.

      

      (A) All
        notices or other communications given or made hereunder shall be in writing
        and
        shall be mailed by registered or certified mail, return receipt requested,
        postage prepaid, or by overnight courier service to the Investor at his address
        set forth below, to the Company and the Placement Agent at the addresses
        set
        forth herein.

      

      (B) This
        Subscription Agreement constitutes the entire agreement among the parties
        hereto
        with respect to the subject matter hereof and may be amended only by a writing
        executed by all parties. 

      

      (C) The
        provisions of this Subscription Agreement shall survive the execution thereof.
        

      

      (D) The
        Subscription Agreement shall be governed by the laws of the State of Delaware
        as
        if entered into between residents of the state of Delaware.

       

      11. Certification.

      

      The
        Investor certifies that he has read this entire Subscription Agreement and
        that
        every statement on the part of the Investor made and set forth herein is
        true
        and complete.

      

      12. Investor
        Suitability Qualification.

      

      (A) The
        Investor has initialed each of the following statements that correctly describes
        the Investor:

      

      ______
        An
        organization described in Section 501(c)(3) of the Internal Revenue Code,
        corporation, Massachusetts or similar business trust, or partnership not
        formed
        for the specific purpose of acquiring the securities offered, with total
        assets
        in excess of $5,000,000;

      

      _____
        A
        natural person whose individual net worth, or joint net worth with such person’s
        spouse, exceeds $1,000,000;

      

      ______
        A
        natural person who had an individual income in excess of $200,000 in each
        of the
        two most recent years or joint income with such individual’s spouse in excess of
        $300,000 in each of those years and who has a reasonable expectation of reaching
        the same income level in the current year;

      

      ______
        A
        trust with total assets in excess of $5,000,000, not formed for the specific
        purpose of acquiring the Membership Interest, whose purchase is directed
        by a
        person who has such knowledge and experience in financial and business matters
        that he is capable of evaluating the merits and the risks of an investment
        in
        the Membership Interest; or

      

      ______
        An
        entity in which all of the equity owners are accredited investors.

      

      Note:
        If the Investor is an entity, questions (B) and (C) must be completed by
        the
individual
        making the investment decision on
        behalf of
        the Investor.

      

      (B)
         Name
        of
        Individual making investment decision:
        _______________________________

      

      (C) Please
        provide the following information:

      

      (1) Occupation
        _________________________________________________

       

      
        
          
          

        

        
          
          

          
            

          

        

         

      

      

      (2) Please
        describe your education background, including dates of attendance and degrees
        earned. 

       

        
          

        

         

      

      
        

      

       

      
        

      

      

      (3) Please
        describe briefly principal positions held and any other business involvement
        (e.g., service on boards of directors) during the last five years. Specific
        employers need
        not be
        identified. What is sought is a sufficient description to enable the Company
        to
        determine the extent of vocationally related experience in financial and
        business matters.

       

      
        
          

        

         

        
          

        

         

        
          

        

      

       

      (4) Please
        describe the number, amount and type of investments you have made in the
        past in
        private placements of any type of securities:

       

      
        
          

        

         

        
          

        

         

        
          

        

      

       

      (5) Please
        indicate in the space provided below any additional information which you
        think
        may be helpful in enabling the Company to determine that your knowledge and
        experience in financial and business matters is sufficient to enable you
        to
        evaluate the merits and risks of investing in the Securities. 

       

      
        
          

        

         

        
          

        

         

        
          

        

      

       

      THE
        SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
        OF
        1933 OR THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN
        RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND
        SUCH
        LAWS. THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE
        AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SAID ACT AND
        SUCH
        LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE
        AWARE
        THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT
        FOR AN
        INDEFINITE PERIOD OF TIME. 

      

      THE
        SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
        COMMISSION, ANY STATE SECURITIES COMMISSION, OR ANY OTHER REGULATORY AUTHORITY,
        NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS
        OF
        THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

       

      
        
          
          

        

        
          
          

          
            

          

        

         

      

      INVESTOR
        SIGNATURE PAGE FOR SIMTROL, INC. SUBSCRIPTION AGREEMENT

      Please
        print or type, Use ink only. (All
        Parties Must Sign)

      

      The
        undersigned investor hereby certifies that he (i) has received and relied
        solely
        upon the Confidential Private Placement Memorandum, this Subscription Agreement
        and their respective exhibits and schedules, (ii) agrees
        to
        all the terms and conditions of this Subscription Agreement, (iii) meets
        the
        suitability standards set forth herein and (iv) is a resident of the state
        or
        foreign jurisdiction indicated below.

      

      Dollar
        Amount of Securities Subscribed for: $_________________________ (Minimum
        of
        $37,500 with Subscription amount in increments of $750)

      

      
        	 	 	 
	  
	 	
                If
                  other than individual check one and indicate

              
	
                Name
                  of Investor (Print)

              	 	
                capacity
                  of signatory under the signature:

              
	 	 	
                o
 
                  Trust

              
	   
	 	
                o  
                  Estate

              
	
                Name
                  of Joint Investor (if any) (Print)

              	 	
                o  
Uniform
                  Gifts to
                  Minors Act, State of

              
	 	 	 
	 	 	
                o  
                  Attorney-in-fact

              
	 	 	
                o  
                  Corporation

              
	  
	 	
                o  
                  Other

              
	
                Signature
                  of Investor

              	 	 
	 	 	
                If
                  Joint Ownership, Check one:

              
	
                o Joint
                  Tenants with Right of
                  Survivorship

              	 	 
	  
	 	
                o  
Tenants
                  in
                  Common

              
	
                Signature
                  of Joint Investor (if any)

              	 	
                o  
Tenants
                  by the
                  Entirety

              
	 	 	
                o  
Community
                  by
                  Property

              
	  
	 	 
	
                Capacity
                  of Signatory (if applicable)

              	 	
                Backup
                  Withholding Statement:

              
	 	 	
                o  
Please
                  check this box
                  only if the investor is

              
	
                subject
                  to

              	 	 
	  
	 	
                backup
                  withholding

              
	
                Social
                  Security or Taxpayer Identification Number

              	 	 
	 	 	
                Foreign
                  Person:

              
	
                Investor
                  Mail Address:

              	 	
                o  
Please
                  check this box
                  only if the investor is a

              
	 	 	
                nonresident
                  alien, foreign corporation, foreign

              
	  
	 	
                partnership,
                  foreign trust or foreign estate

              
	
                Street
                  Address

              	 	 
	 	 	 
	  
	 	 
	
                City              State      Zip
                  Code

              	 	
                Share
                  and Warrant Registration Name(s) and

              
	
                Amounts:

              	 	 
	 	 	 
	
                Telephone:
                  (         )         Fax:
                  (        )

              	 	
                Name

              
	
                Amount

              	 	 
	
              	 	
                1.
                  ___________________________________

              
	 	 	 
	 	 	 
	
                Email:
                  ______________________________________

              	 	
                2.
                  _________________________________

              
	 	 	 
	 	 	 
	 	 	
                3.
                  _________________________________

              
	 	 	 
	
                Address
                  for Delivery of Shares (if different from above):

              	 	 
	 	 	
                4.
                  _________________________________

              
	 	 	 
	  
	 	 
	 	 	 
	  
	 	 
	
                
                  City              State      Zip
                    Code

                

              	 	 
	 	 	 

      

       

      The
        investor agrees to the terms of this Agreement and, as required by the
        Regulations pursuant to the Internal Revenue Code, certifies under penalty
        of
        perjury that (1) the Social Security Number or Taxpayer Identification Number
        and address provided above is correct, (2) the investor is not subject to
        backup
        withholding (unless the Backup Withholding Statement box is checked) either
        because he has not been notified that he is subject to backup withholding
        as a
        result of a failure to report all interest or dividends or because the Internal
        Revenue Service has notified him that he is no longer subject to backup
        withholding and (3) the investor (unless, the Foreign Person box above is
        checked) is not a nonresident alien, foreign partnership, foreign trust or
        foreign estate.

       

      
        
          
          

        

        
          
          

          
            

          

        

         

      

      

      THE
        SUBSCRIPTION FOR SECURITIES OF SIMTROL, INC. BY THE ABOVE NAMED INVESTOR(S)
        IS
        ACCEPTED THIS ________ DAY OF ______________________, 2007.

       

      SIMTROL,
        INC.  

       

       

      By:
        

      
        
          

        

      

      Name:
        Richard Egan

      Title:
        President and CEOUnassociated Document

    CERTIFICATE
      OF DESIGNATION

    OF
      THE RIGHTS, PREFERENCES, PRIVILEGES

    AND
      RESTRICTIONS, WHICH HAVE NOT BEEN SET

    FORTH
      IN THE CERTIFICATE OF INCORPORATION

    OR
      IN ANY AMENDMENT THERETO,

    OF
      THE

    SERIES
      A CONVERTIBLE PREFERRED STOCK

    OF

    REAL
      PAPER DISPLAYS, INC.

    

    The
      undersigned, Malcolm D. Lennie, does hereby certify that:

    

    A.    He
      is the
      duly elected and acting President of Real Paper Displays, Inc., a Nevada
      corporation (the “Company”).

    

    B.    Pursuant
      to the Unanimous Written Consent of the Board of Directors of the Company dated
      September 1, 2006, the Board of Directors duly adopted the following
      resolutions:

    

    WHEREAS,
      the Certificate of Incorporation of the Company authorizes a class of stock
      designated as Preferred Stock, with a par value of $0.001 per share (the
“Preferred Class”), comprising Ten Million (10,000,000) shares and provides that
      the Board of Directors of the Company may fix the terms, including any dividend
      rights, dividend rates, conversion rights, voting rights, rights and terms
      of
      any redemption, redemption, redemption price or prices, and liquidation
      preferences, if any, of the Preferred Class;

    

    WHEREAS,
      the Board of Directors believes it is in the best interests of the Company
      to
      create a series of preferred stock consisting of 10 shares and designated as
      the
“Series A Convertible Preferred Stock” having certain rights, preferences,
      privileges, restrictions and other matters relating to the Series A Convertible
      Preferred Stock.

    

    NOW,
      THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby fix and
      determine the rights, preferences, privileges, restrictions and other matters
      relating do the Series A Convertible Preferred Stock as follows:

    

    1.    Definitions.
      For
      purposes of this Certificate of Designation, the following definitions shall
      apply:

    

    1.1  “Available
      Funds and Assets” shall have the meaning set forth in
      Section 3.

    

    1.2  “Board”
      shall mean the Board of Directors of the Company.

    

    1.3  “Common
      Stock” shall mean the Common Stock, $0.001 par value per share, of the
      Company.

     

    
      
        
        

      

      
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    1.4  “Common
      Stock Dividend” shall mean a stock dividend declared and paid on the Common
      Stock that is payable in shares of Common Stock.

    

    1.5  “Company”
      shall mean Real
      Paper Displays, Inc.,
      a
      Nevada corporation.

    

    1.6  “Conversion
      Date” shall have the meaning set forth in Section 4(b).

    

    1.7  “Distribution”
      shall mean the transfer of cash or property by the Company to one or more of
      its
      stockholders without consideration, whether by dividend or otherwise (except
      a
      dividend in shares of Company’s stock).

    

    1.8  “License
      Agreement” shall have the meaning set forth in Section 6.1.

    

    1.9  “Original
      Issue Date” shall mean the date on which the first share of Series A Convertible
      Preferred Stock is issued by the Company.

    

    1.10  “Original
      Issue Price” shall mean $100,000 per share for the Series A Convertible
      Preferred Stock.

    

    1.11  “Series
      A
      Convertible Preferred Stock” shall mean the Series A Convertible Preferred
      Stock, $0.001 par value per share, of the Company.

    

    1.12  “Subsidiary”
      shall mean any corporation or limited liability company of which at least fifty
      percent (50%) of the outstanding voting stock or membership interests, as the
      case may be, is at the time owned directly or indirectly by the Company or
      by
      one or more of such subsidiary corporations.

    

    1.13  “University
      of Texas” shall mean The University of Texas at Austin.

    

    2.    Dividend
      Rights.

    

    2.1
       In
      each
      calendar year, the holders of the then outstanding Series A Convertible
      Preferred Stock shall be entitled to receive, when, as and if declared by the
      Board, out of any funds and assets of the Company legally available therefore,
      noncumulative dividends in an amount equal to any dividends or other
      Distribution on the Common Stock in such calendar year (other than a Common
      Stock Dividend). No dividends (other than a Common Stock Dividend) shall be
      paid, and no Distribution shall be made, with respect to the Common Stock unless
      dividends in such amount shall have been paid or declared and set apart for
      payment to the holders of the Series A Convertible Preferred Stock
      simultaneously. Dividends on the Series A Convertible Preferred Stock shall
      not
      be mandatory or cumulative, and no rights or interest shall accrue to the
      holders of the Series A Convertible Preferred Stock by reason of the fact that
      the Company shall fail to declare or pay dividends on the Series A Convertible
      Preferred Stock, except for such rights or interest that may arise as a result
      of the Company paying a dividend or making a Distribution on the Common Stock
      in
      violation of the terms of this Section 2.

     

    
      
        
        

      

      
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    2.2 Participation
      Rights. Dividends shall be declared pro rata on the Common Stock and the Series
      A Convertible Preferred Stock on a pari passu basis according to the number
      of
      shares of Common Stock held by such holders, where each holder of shares of
      Series A Preferred Stock is to be treated for this purpose as holding the number
      of shares of Common Stock to which the holders thereof would be entitled if
      they
      converted their shares of Series A Convertible Preferred Stock at the time
      of
      such dividend in accordance with Section 4 hereof.

    

    2.3 Non-Cash
      Dividends. Whenever a dividend or Distribution provided for in this Section
      2
      shall be payable in property other than cash (other than a Common Stock
      Dividend), the value of such dividend or Distribution shall be deemed to be
      the
      fair market value of such property as determined in good faith by the
      Board.

    

    3. Liquidation
      Rights.
      In the
      event of any liquidation, dissolution or winding up of the Company; whether
      voluntary or involuntary, the funds and assets of the Company that may be
      legally distributed to the Company’s shareholders (the “Available Funds and
      Assets”) shall be distributed to shareholders in the following
      manner:

    

    3.1 Series
      A
      Convertible Preferred Stock. The holders of each share of Series A Preferred
      Stock then outstanding shall be entitled to be paid, out of the Available Funds
      and Assets, and prior and in preference to any payment or distribution (or
      any
      setting apart of any payment or distribution) of any Available Funds and Assets
      on any shares of Common Stock or subsequent series of preferred stock, an amount
      per share equal to the Original Issue Price of the Series A Convertible
      Preferred Stock plus all declared but unpaid dividends on the Series A
      Convertible Preferred Stock. If upon any liquidation, dissolution or winding
      up
      of the Company, the Available Funds and Assets shall be insufficient to permit
      the payment to holders of the Series A Convertible Preferred Stock of their
      full
      preferential amount as described in this subsection, then all of the remaining
      Available Funds and Assets shall be distributed among the holders of the then
      outstanding Series A Convertible Preferred Stock pro rata, according to the
      number of outstanding shares of Series A Convertible Preferred Stock held by
      each holder thereof.

    

    3.2 Participation
      Rights. If there are any Available Funds and Assets remaining after the payment
      or distribution (or the setting aside for payment or distribution) to the
      holders of the Series A Convertible Preferred Stock of their full preferential
      amounts described above in this Section 3, then all such remaining Available
      Funds and Assets shall be distributed among the holders of the then outstanding
      Common Stock and Preferred Stock pro rata according to the number and
      preferences of the shares of Common Stock and Preferred Stock (as converted
      to
      Common Stock) held by such holders.

    

    3.3 Merger
      or
      Sale of Assets. A reorganization or any other consolidation or merger of the
      Company with or into any other corporation, or any other sale of all or
      substantially all of the assets of the Company, shall not be deemed to be a
      liquidation, dissolution or winding up of the Company within the meaning of
      this
      Section 3, and the Series A Convertible Preferred Stock shall be entitled only
      to (i) the right provided in any agreement or plan governing the reorganization
      or other consolidation, merger or sale of assets transaction, (ii) the rights
      contained in the General Corporation Law of the State of Nevada and (iii) the
      rights contained in other Sections hereof.

     

    
      
        
        

      

      
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    3.4 Non-Cash
      Consideration. If any assets of the Company distributed to shareholders in
      connection with any liquidation, dissolution or winding up of the Company are
      other than cash, then the value of such assets shall be their fair market value
      as determined by the Board, except that any securities to be distributed to
      shareholders in a liquidation, dissolution or winding up of the Company shall
      be
      valued as follows:

    

    (a)
      The
      method of valuation of securities not subject to investment letter or other
      similar restrictions on free marketability shall be as follows:

    

    
      	 	
              (i)

            	
              if
                the securities are then traded on a national securities exchange
                or the
                Nasdaq National Market (or a similar national quotation system),
                then the
                value shall be deemed to be the average of the closing prices of
                the
                securities on such exchange or system over the 30-day period ending
                three
                (3) days prior to the distribution;
                and,

            

    

    

    
      	 	
              (ii)

            	
              if
                actively traded over-the-counter, then the value shall be deemed
                to be the
                average of the closing bid prices over the 30-day period ending three
                (3)
                days prior to the distribution; and

            

    

    

    
      	 	
              (iii)

            	
              if
                there is no active public market, then the value shall be the fair
                market
                value thereof, as determined in good faith (i) the Board of Directors
                of
                the Company.

            

    

    

    (b)
       The
      method of valuation of securities subject to investment letter or other
      restrictions on free marketability shall be to make an appropriate discount
      from
      the market value determined as above in subparagraphs (a)(i), (ii) or (iii)
      of
      this subsection to reflect the approximate fair market value thereof, as
      determined in good faith by the Board.

    

    4. Conversion
      Rights.

    

    (a) Conversion
      of Preferred Stock. 

    

    
      	 	
              (i)

            	
              Optional
                Conversion. Each share of Series A Convertible Preferred Stock shall
                be
                convertible, at the option of the holder thereof, at any time after
                the
                issuance of such share, into that number of fully paid and nonassessable
                shares of Common Stock of the Company described equal to one percent
                (1%)
                of the outstanding shares of Common Stock of the Company then outstanding,
                after giving consideration to the shares issued as a result of the
                conversion, any options, warrants, or other convertible securities
                then
                outstanding, and any other securities issued simultaneously on the
                date of
                conversion.

            

    

    

    
      	 	
              (ii)

            	
              Automatic
                Conversion. Each share of Series A Convertible Preferred Stock will
                automatically convert, without any action on the part of the Holder,
                into
                that number of fully paid and nonassessable shares of Common Stock
                of the
                Company described equal to one percent (1%) of the outstanding shares
                of
                Common Stock of the Company then outstanding, after giving consideration
                to the shares issued as a result of the conversion, any options,
                warrants,
                or other convertible securities then outstanding, and any other securities
                issued simultaneously on the date of conversion, upon
                the receipt by the Company of at least $8.5 million in “Net Funding”
                financing. Any
                funds raised from grants or other sources (other than Company financing
                transactions) will be credited toward the above funding requirements
                at
                the rate of $0.50 for each $1.00 of “Net Funding.” “Net Funding” shall be
                defined for these purposes as actual cash or cash equivalents available
                for Company use.

            

    

     

    
      
        
        

      

      
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    (b) Procedures
      for Exercise of Conversion Rights. The holders of any shares of Series A
      Convertible Preferred Stock may exercise their conversion rights as to all
      such
      shares or any part thereof by delivering to the Company during regular business
      hours, at the office of any transfer agent of the Company for the Series A
      Convertible Preferred Stock, or at the principal office of the Company or at
      such other place as may be designated by the Company, the certificate or
      certificates for the shares to be converted, duly endorsed for transfer to
      the
      Company (if required by the Company), accompanied by written notice stating
      that
      the holder elects to convert such shares. Conversion shall be deemed to have
      been effected on the date when such delivery is made, and such date is referred
      to herein as the “Conversion Date” (unless the conversion is effected
      automatically, in which case the date that the financing conditions set forth
      above shall be the Conversion Date). As promptly as practicable after the
      Conversion Date, but not later than ten (10) business days thereafter, the
      Company shall issue and deliver to or upon the written order of such holder,
      at
      such office or other place designated by the Company, a certificate or
      certificates for the number of full shares of Common Stock to which such holder
      is entitled and a check for cash with respect to any fractional interest in
      a
      share of Common Stock as provided in section 4(c) below. The holder shall be
      deemed to have become a shareholder of record on the Conversion Date. Upon
      conversion of only a portion of the number of shares of Series A Convertible
      Preferred Stock represented by a certificate surrendered for conversion, the
      Company shall issue and deliver to or upon the written order of the holder
      of
      the certificate so surrendered for conversion, at the expense of the Company,
      a
      new certificate covering the number of shares of Series A Convertible Preferred
      Stock representing the unconverted portion of the certificate so
      surrendered.

    

    (c) No
      Fractional Shares. No fractional shares of Common Stock or scrip shall be issued
      upon conversion of shares of Series A Convertible Preferred Stock. If more
      than
      one share of Series A Convertible Preferred Stock shall be surrendered for
      conversion at any one time by the same holder, the number of full shares of
      Common Stock issuable upon conversion thereof shall be computed on the basis
      of
      the aggregate number of shares of Series A Convertible Preferred Stock so
      surrendered. Instead of any fractional shares of Common Stock which would
      otherwise be issuable upon conversion of any shares of Series A Convertible
      Preferred Stock, the Company shall pay a cash adjustment in respect of such
      fractional interest equal to the fair market value of such fractional interest
      as determined by the Company’s Board of Directors.

    

    
      
        
        

      

      
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    (d) Payment
      of Taxes for Conversions. The Company shall pay any and all issue and other
      taxes that may be payable in respect of any issue or delivery of shares of
      Common Stock on conversion pursuant hereto of Series A Convertible Preferred
      Stock. The Company shall not, however, be required to pay any tax which may
      be
      payable in respect of any transfer involved in the issue and delivery of shares
      of Common Stock in a name other than that in which the shares of Series A
      Convertible Preferred Stock so converted were registered, and no such issue
      or
      delivery shall be made unless and until the person requesting such issue has
      paid to the Company the amount of any such tax, or has established, to the
      satisfaction of the Company, that such tax has been paid.

    

    (e) Reservation
      of Common Stock. The Company shall at all times reserve and keep available,
      out
      of its authorized but unissued Common Stock, solely for the purpose of effecting
      the conversion of the Series A Convertible Preferred Stock, the full number
      of
      shares of Common Stock deliverable upon the conversion of all shares of all
      series of preferred stock from time to time outstanding.

    

    (f) Registration
      or Listing of Shares of Common Stock. If any shares of Common Stock to be
      reserved for the purpose of conversion of shares of Series A Convertible
      Preferred Stock require registration or listing with, or approval of, any
      governmental authority, stock exchange or other regulatory body under any
      federal or state law or regulation or otherwise, before such shares may be
      validly issued or delivered upon conversion, the Company will in good faith
      and
      as expeditiously as possible endeavor to secure such registration, listing
      or
      approval, as the case may be.

    

    (g) Status
      of
      Common Stock Issued Upon Conversion. All shares of Common Stock which may be
      issued upon conversion of the shares of Series A Convertible Preferred Stock
      will upon issuance by the Company be validly issued, fully paid and
      nonassessable and free from all taxes, liens and charges with respect to the
      issuance thereof.

    

    (h) Status
      of
      Converted Preferred Stock. In case any shares of Series A Convertible Preferred
      Stock shall be converted pursuant to this Section 4, the shares so converted
      shall be canceled and shall not be issuable by the Company.

    

    5. Adjustment
      of Conversion Price.

    

    (a) General
      Provisions. In case, at any time after the date hereof, of any capital
      reorganization, or any reclassification of the stock of the Company (other
      than
      a change in par value or as a result of a stock dividend or subdivision,
      split-up or combination of shares), or the consolidation or merger of the
      Company with or into another person (other than a consolidation or merger in
      which the Company is the continuing entity and which does not result in any
      change in the Common Stock), or of the sale or other disposition of all or
      substantially all the properties and assets of the Company as an entirety to
      any
      other person, the shares of Series A Convertible Preferred Stock shall, after
      such reorganization, reclassification, consolidation, merger, sale or other
      disposition, be convertible into the kind and number of shares of stock or
      other
      securities or property of the Company or of the entity resulting from such
      consolidation or surviving such merger or to which such properties and assets
      shall have been sold or otherwise disposed to which such holder would have
      been
      entitled if immediately prior to such reorganization, reclassification,
      consolidation, merger, sale or other disposition it had converted its shares
      of
      Series A Convertible Preferred Stock into Common Stock. The provisions of this
      section 5(a) shall similarly apply to successive reorganizations,
      reclassifications, consolidations, mergers, sales or other dispositions. The
      provisions of this section 5 shall not affect the conversion of the Class A
      Convertible Preferred Stock in the event of a forward or reverse stock
      split.

    

    
      
        
        

      

      
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    (b) No
      Impairment. The Company will not, through any reorganization, transfer of
      assets, consolidation, merger, dissolution, issue or sale of securities or
      any
      other voluntary action, including amending this Certificate of Designation,
      avoid or seek to avoid the observance or performance of any of the terms to
      be
      observed or performed hereunder by the Company, but will at all times in good
      faith assist in the carrying out of all the provisions of this section 5 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 Series A Convertible Preferred
      Stock against impairment. This provision shall not restrict the Company from
      amending its Articles of Incorporation in accordance with the General
      Corporation Law of the State of Nevada and
      the
      terms hereof.

    

    6.
       Redemption.
      

    

    6.1 Upon
      the
      termination of that certain Patent License Agreement UTA No. PM0607801, to
      be
      entered into by and between the Company and the University of Texas at Austin,
      then the Company shall have the right, but not the obligation, to redeem the
      Series A Convertible Preferred Stock for $1.00 per share (the “Redemption
      Price”).

    

    6.2 Redemption
      Procedures. 

    

    (a) Any
      permitted redemption of the Series A Convertible Preferred Stock pursuant to
      Section 6.1 above shall be deemed to be effective and consummated date of
      delivery of a notice of redemption by the Company.

    

    (b) Within
      five (5) business days of the effective date of a redemption of the Series
      A
      Convertible Preferred Stock as specified above, the Company shall deliver the
      Redemption Price to the holders of the Series A Convertible Preferred Stock.
      

    

    (c) Should
      any Series A Convertible Preferred Stock to be redeemed under the terms hereof
      not be redeemed solely by reason of limitations imposed by law, the applicable
      Series A Convertible Preferred Stock shall be redeemed on the earliest possible
      dates thereafter to the maximum extent permitted by law.

    

    (d) Any
      Notice of Conversion delivered by a holder (including delivery via facsimile)
      to
      the Company at least ten (10) days prior to the effective date of redemption
      pursuant to Section 6.1 shall be honored by the Company and the conversion
      of
      the Series A Convertible Preferred Stock shall be deemed effected on the
      Conversion Date. In addition, between the effective date of a redemption
      pursuant to Section 6.1 above and the date the Company is required to deliver
      the redemption proceeds in full to the applicable holder(s), the holder may
      deliver a Notice of Conversion to the Company. Such notice will be (x) of no
      force or effect if the Company timely pays the redemption proceeds to holder
      when due or (y) honored on or as of the date of the Notice of Conversion if
      the
      Company fails to timely pay the redemption proceeds to holder when
      due.

    

    
      
        
        

      

      
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    7. Notices.
      Any
      notices required by the provisions of this Certificate of Designation to be
      given to the holders of shares of Series A Convertible Redeemable Preferred
      Stock shall be deemed given if deposited in the United States mail, postage
      prepaid, and addressed to each holder of record at its address appearing on
      the
      books of the Company.

    

    8. Voting
      Provisions.
      Each
      share of Series A Convertible Preferred Stock shall be entitled to the number
      of
      votes to which the holders thereof would be entitled if they converted their
      shares of Series A Convertible Preferred Stock at the time of voting in
      accordance with Section 4 hereof.

    

    9. Protective
      Provisions.
      The
      Company may not take any of the following actions without the approval of a
      majority of the holders of the outstanding Series A Convertible Preferred Stock:
      (i) effect a sale of all or substantially all of the Company’s assets or which
      results in the holders of the Company’s capital stock prior to the transaction
      owning less than fifty percent (50%) of the voting power of the Company’s
      capital stock after the transaction, (ii) alter or change the rights,
      preferences, or privileges of the Series A Convertible Preferred Stock, (iii)
      increase or decrease the number of authorized shares of Series A Convertible
      Preferred Stock, or (iv) authorize the issuance of securities having a
      preference over or on par with the Series A Convertible Preferred
      Stock.

    

    IN
      WITNESS WHEREOF, the Company has caused this Certificate of Designation of
      Series A Convertible Preferred Stock to be duly executed by its President and
      attested to by its Secretary and has caused its corporate seal to be affixed
      hereto this 1st day of September, 2006.

    

    
      	By:	 	
              /s/
                Malcolm D. Lennie    

            

      	 	 	Malcolm D. Lennie,
              President
              & Secretary

    

     

    

    
      
        
        

      

      
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