**EXHIBIT 10.25**

 

**AMENDED AND RESTATEDPROMISSORY NOTE**

**(Revolving Loan)**

** **

** **
| $700,000.00 |   | Effective February 4, 2010 |
|-------------|--------|---------------------------------|

 

 

FOR VALUE RECEIVED, on or before March 31, 2011 (“MaturityDate”), INTRUSION INC., a Delaware corporation (“Borrower”),promises to pay to the order of G. WARD PAXTON, of Richardson, TX (“Payee”),at 1101 E. Arapaho Road, Suite 200, the principal amount of SEVEN HUNDREDTHOUSAND AND NO/100 DOLLARS ($700,000.00), or such lesser amount as may havebeen advanced by Payee to Borrower pursuant to this Amended and RestatedPromissory Note (“Note”), together with interest on the unpaid principalbalance of this Note from time to time outstanding at a floating rate per annumequal to one percent (1%) above the Prime Rate (as hereinafter defined),calculated on the basis of actual days elapsed but computed as if each yearconsisted of 360 days.  This Note amends,restates and replaces in full that certain Promissory Note dated January 30,2008, in the original principal amount of $700,000.00, executed by Borrower andoriginally payable to the order of Payee on or before December 31, 2008.As used herein, the term “Prime Rate” shall mean the most recentlyannounced “prime rate” of Silicon Valley Bank, even if it is not such bank’slowest rate.  Changes to the interestrate on this Note based upon changes in the Prime Rate shall be effective onthe effective date of any changes to the Prime Rate and to the extent of anysuch change.

 

The outstanding principal balance of this Note,together with all accrued but unpaid interest, shall be due and payable in fullon the Maturity Date.

 

Subject to the terms and conditions of this Note,Payee has agreed to make advances during the period beginning on the date ofthis Note and ending on the Maturity Date in an aggregate principal amount ofup to $700,000 outstanding at any date upon three (3) Business Days priorwritten notice.  Payee is authorized toendorse on the schedule annexed hereto and made a part hereof amounts advancedto Borrower through the Maturity Date.  Borrowerand Payee have agreed that Payee shall be obligated to make such advances toBorrower only so long as of the date of each such advance, no Event of Default(as hereinafter defined) exists or would occur by reason of the making of suchadvance.  Subject to the foregoing,amounts repaid may be reborrowed by Borrower.

 

Borrower may from time to time prepay all or anyportion of the principal of this Note without premium or penalty.  Unless otherwise agreed to in writing, orotherwise required by applicable law, payments will be applied first to unpaidaccrued interest, then to principal, and any remaining amount to any unpaidcollection costs; provided, however, upon delinquency or other Event ofDefault, Payee reserves the right to apply payments among principal, interestand collection cost, at its discretion. All prepayments shall be applied to the indebtedness owing hereunder insuch order and manner as Payee may from time to time determine in its solediscretion.   All payments andprepayments of principal of or interest on this Note shall be made in lawfulmoney of the United States of America in immediately available funds, at theaddress of Payee indicated above, or such other place as the holder of thisNote shall designate in writing to Borrower. If any payment of principal of or interest on this Note shall become dueon a day which is not a Business Day (as hereinafter defined), such paymentshall be made on the next succeeding Business Day and any such extension oftime shall be included in computing interest in connection with suchpayment.  As used herein, the term “BusinessDay” shall mean any day other than a Saturday, Sunday or any other day onwhich national banking associations are authorized to be closed.

 

Borrower represents and warrants to Payee as follows:

 

(a)           This Note is the legal, valid andbinding obligation of Borrower, enforceable against it in accordance with itsterms.

 

(b)           The approval, execution, delivery andperformance of, and compliance by Borrower with the terms of this Note, willnot cause Borrower to be in violation of any applicable law or regulation, orof any order or regulation applicable to it. The approval, execution, deliveryand performance of, and compliance by Borrower with the terms of, this Notewill not conflict 

 

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with or result ina breach of any of the terms of any material agreement or instrument to whichBorrower is a party or by which it is bound, or constitute a defaultthereunder.

 

Borrower agrees that upon the occurrence of any one ormore of the following events of default (“Event of Default”):

 

(a)       failure of Borrower to pay anyinstallment of principal of or interest on this Note or on any otherindebtedness of Borrower to Payee when due; or

 

(b)      any representation or warranty made byBorrower in this Note shall be untrue in any material respect when made; or

 

(c)       the bankruptcy or insolvency of, theassignment for the benefit of creditors by, or the appointment of a receiverfor any of the property of, or the liquidation, termination, dissolution ordeath or legal incapacity of, any party liable for the payment of this Note,whether as maker, endorser, guarantor, surety or otherwise;

 

the holder of this Note may, at its option, without further notice ordemand, (i) declare the outstanding principal balance of and accrued butunpaid interest on this Note at once due and payable, (ii) refuse toadvance any additional amounts under this Note, (iii) pursue any and allother rights, remedies and recourses available to the holder hereof, includingbut not limited to any such rights, remedies or recourses at law or in equity,or (iv) pursue any combination of the foregoing.

The failure to exercise the option to accelerate thematurity of this Note or any other right, remedy or recourse available to theholder hereof upon the occurrence of an Event of Default hereunder shall notconstitute a waiver of the right of the holder of this Note to exercise thesame at that time or at any subsequent time with respect to such Event ofDefault or any other Event of Default. The rights, remedies and recourses of the holder hereof, as provided inthis Note, shall be cumulative and concurrent and may be pursued separately,successively or together as often as occasion therefore shall arise, at thesole discretion of the holder hereof. The acceptance by the holder hereof of any payment under this Note whichis less than the payment in full of all amounts due and payable at the time ofsuch payment shall not (i) constitute a waiver of or impair, reduce,release or extinguish any right, remedy or recourse of the holder hereof, ornullify any prior exercise of any such right, remedy or recourse, or (ii) impair,reduce, release or extinguish the obligations of any party liable under thisNote as originally provided herein.

 

Notwithstanding anything herein to the contrary, if atany time the interest rate set forth above, together with all fees, charges andother amounts which are treated as interest on the indebtedness evidenced bythis Note under applicable law (collectively the “Charges”), shallexceed the maximum lawful rate (the “Maximum Rate”) which may becontracted for, charged, taken, received or reserved by Payee in accordancewith applicable law, the rate of interest payable hereunder in respect of suchindebtedness, together with all Charges payable in respect thereof, shall belimited to the Maximum Rate.

 

If this Note is placed in the hands of an attorney forcollection, or is collected in whole or in part by suit or through probate,bankruptcy or other legal proceedings of any kind, Borrower agrees to pay, inaddition to all other sums payable hereunder, all costs and expenses ofcollection, including but not limited to reasonable attorneys’ fees.

 

Borrower and any and all endorsers and guarantors ofthis Note severally waive presentment for payment, notice of nonpayment,protest, demand, notice of protest, notice of intent to accelerate, notice ofacceleration and dishonor, diligence in enforcement and indulgences of everykind and without further notice hereby agree to renewals, extensions, exchangesor releases of collateral, taking of additional collateral, indulgences orpartial payments, either before or after maturity.

 

**THIS NOTE HAS BEEN EXECUTED UNDER, AND SHALL BECONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.**

 

*[Signature Page Follows]*

 

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|                          |       | **BORROWER:**       |
|-------------------------------|------------|---------------------|
|                          |       |                |
|                          |       | **INTRUSION  INC.** |
|                          |       |                |
|                          |       |                |
|                          |       | By:                 |  /s/  Michael L. Paxton |   |
|                          |       |                |
|                          |       |                |
|                          |       | Name:               |  Michael  L. Paxton |   |
|                          |       | Title:              |  Vice President and Chief Financial Officer  |   |   |
|                          |       |                |
|                          |       |                |
| **ACKNOWLEDGED  AND AGREED:** | ** ** | ** **          |
|                          |       |                |
|                          |       |                |
| /s/  G. Ward Paxton           |       |                |   |
| **G.  WARD PAXTON**           |       |                |
|                               |            |                     |  |  |  |  |  |  |  |

 

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