EXHIBIT 10.2


INTRUSION
INC.

A DELAWARE CORPORATION


SUBSCRIPTION
AND INVESTMENT REPRESENTATION AGREEMENT


THE COMMON STOCK (“STOCK”) IN
INTRUSION INC. (“COMPANY”) REFERRED TO IN THIS SUBSCRIPTION AND INVESTMENT
REPRESENTATION AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR THE SECURITIES LAWS OF ANY OTHER JURISDICTION AND ARE BEING OFFERED AND SOLD
UNDER EXEMPTIONS PROVIDED THEREFROM INCLUDING SECTION 4(2) OF THE SECURITIES
ACT AND/OR REGULATION D THEREUNDER.


A PURCHASER OF STOCK SHOULD BE
PREPARED TO BEAR THE ECONOMIC RISK OF THE INVESTMENT FOR AN INDEFINITE PERIOD
OF TIME BECAUSE THE STOCK HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR
THE LAWS OF ANY OTHER JURISDICTION, AND, THEREFORE, CANNOT BE SOLD UNLESS IT IS
SUBSEQUENTLY REGISTERED OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.  THERE IS NO OBLIGATION OF THE ISSUER TO
REGISTER THE STOCK UNDER THE SECURITIES ACT OR THE LAWS OF ANY OTHER JURISDICTION.


On the basis of
the terms and conditions set forth in this Subscription and Investor
Representation Agreement ( “Subscription Agreement”),
the undersigned investor ( “Investor”)
proposes to make an investment in Intrusion Inc. (“Company”)
as follows:


1.                                      Subscription
for Stock.  Subject to the terms and
conditions hereof, the Investor hereby irrevocably subscribes to purchase
250,000 Shares of Common Stock at an aggregate purchase price of $0.40, or a
number of shares at a price of 110% of the average closing price of the Company’s
stock for the 20 trading days up to and including the closing day.


2.                                      The
Investor acknowledges that the stock offered hereby is speculative and involves
a high degree of risk, including, but not necessarily limited to, the risk
factors described on Exhibit A attached hereto.  The Investor further acknowledges that an
investment in the Company is not suitable for investors who cannot afford to
lose their entire investment.  The Investor
has carefully considered these risk factors before making its investment
decision.


3.                                      Representations
and Warranties of the Investor.  The Investor
hereby represents and warrants to the Company as follows:


(a)                                  Accredited
Investor.  The Investor is an “accredited
investor” within the meaning of Rule 501 promulgated under the Securities Act.


(b)                                  Investment
Intent.  The Investor is acquiring
the stock for the Investor’s own account for investment, with no intention of
distributing or selling any portion of the stock within the meaning of the
Securities Act, and will not transfer any stock in violation of the Securities
Act or the then applicable rules or regulations thereunder or any other
applicable law.  No one other than the Investor
has any interest in or any right to acquire the stock.


(c)                                  Ability
to Bear Risk.  The Investor’s
financial condition is such that the Investor is able to bear the risk of
holding the stock for an indefinite period of time and the risk of loss of the Investor’s
entire investment in the stock.


(d)                                  Experience.  The Investor has substantial experience in
evaluating and investing in private placement transactions of securities in
companies similar to the Company so that the Investor is capable of evaluating
the merits and risks of its investment in the Company and has the capacity to
protect his, her or its own interests.









 



(e)                                  Familiarity
with Offering Documents.  The Investor
has received, read, understood and is familiar with (i)  the Risk Factors attached
hereto on Exhibit A, and this Subscription Agreement.  In particular, the Investor has read the Risk
Factors attached hereto on Exhibit A and understands that the Investor’s
investment in the Company involves a high degree of risk.


(f)                                    Information.  The Company and the Company’s officers have
made available all additional information that the Investor has requested in
connection with the transactions contemplated by this Subscription Agreement,
and the Investor has had an opportunity to discuss the business, management and
financial affairs of the Company with management and has had the opportunity to
review the Company’s facilities.  No
representations or warranties have been made to the Investor by the Company or
any agent thereof other than as set forth in this Subscription Agreement.  The Investor has been afforded an opportunity
to ask questions of and receive answers from the Company and its officers
concerning the terms and conditions of the purchase of the stock and the
opportunity to obtain any additional information (to the extent the Company has
such information or could acquire it without unreasonable effort or expense)
necessary to verify the accuracy of information otherwise furnished by the Company
or its officers.  The Investor has
investigated the acquisition of the stock to the extent the Investor deemed
necessary or desirable and the Company has provided the Investor with any
assistance the Investor has requested in connection therewith.


(g)                                 Domicile.  The address set forth below is the Investor’s
true and correct domicile.


(h)                                 Exemption
from Securities Act.  The Investor
understands that the stock has not been, and will not be, registered under the
Securities Act or any state securities act or other applicable law by reason of
specific exemptions for private offerings, the availability of which depends
upon, among other things, the bona fide nature of the investment intent and the
accuracy of the Investor’s representations as expressed herein.  The stock may 
not be sold, transferred, offered for sale or otherwise disposed of
unless such transfer, sale, assignment or other disposition is pursuant to the
terms of an effective registration statement under the Securities Act and are
registered under any applicable state securities laws or pursuant to an
exemption from registration under the Securities Act and any applicable state
securities laws.


(i)                                    Restrictions
on Transferability.  The Investor is
aware that the Investor’s rights to transfer the stock or any part thereof are
restricted by the Securities Act, applicable state securities laws and laws of
other jurisdictions, and the absence of a market for the stock.  The Investor understands that there are
substantial restrictions on the transferability of the stock, including
restrictions on transfer of the stock under the Company Agreement; the stock
will not be, and investors in the stock have no rights to require that the stock
be, registered under the Securities Act; there will be no public market for any
of the subscribed stock; the Investor may not be able to avail itself of
exemptions available for resale of the stock without registration, and
accordingly, may have to hold the stock indefinitely, and it may not be
possible for the Investor to liquidate an investment in the stock.


(j)                                    Rule
144.  The Investor is aware of the
provisions of Rule 144 promulgated under the Securities Act, which permits
limited resale of securities purchased in a private placement subject to the
satisfaction of certain conditions, including, among other things, the
existence of a public market for the securities, the availability of certain
current public information about the Company, the resale occurring not less
than one year after a party has purchased and paid for the security to be sold,
the sale being effected through a “broker’s transaction” or in transactions
directly with a “market maker” and the number of securities being sold during
any three-month period not exceeding specified limitations.


(k)                                Authority;
Binding Obligation.  The Investor has
full power and authority to make the representations referred to herein, to
purchase the stock pursuant to this Subscription Agreement, and to execute and
deliver this Subscription Agreement. 
This Subscription Agreement when executed and delivered by the Investor
will constitute a valid and legally binding obligation of the Investor,
enforceable in accordance with its terms, subject to laws of general
application relating to bankruptcy, insolvency and the relief of debtors and
rules of law governing specific performance, injunctive relief or other
equitable remedies.









 



(l)                                    Broker’s
of Finder’s Fees.  The Company has not
incurred and will not incur, directly or indirectly, as a result of any action
taken by the Investor, any liability for brokerage or finders’ fees or agents’
commissions or any similar charges in connection with this Subscription
Agreement.


(m)                              No
Governmental Approval.  The Investor
understands that no United States federal or state agency or agency of any
other jurisdiction has made any finding or determination as to the fairness of
the terms of the offering and sale of the stock.


(n)                                 No
Advice.  The Investor is not relying
on the Company or any of its employees, agents or representatives for legal,
investment or tax advice, and the Investor has sought independent legal,
investment and tax advice to the extent the Investor has deemed necessary or
appropriate in connection with the Investor’s decision to subscribe for stock.  The Investor understands and agrees that he,
she or it (and not the Company) shall be responsible for his, her or its own
tax liability, if any, that may arise as a result of this investment or the
transactions contemplated by this Subscription Agreement.


(o)                                  Survival;
Duty to Update.  The foregoing
representations and warranties are true, accurate and complete as of the date
hereof and shall be true, accurate and complete as of the Company’s acceptance
of the Investor’s subscription, and shall survive such acceptance.  If in any respect such representations and
warranties shall not be true, accurate and complete prior to or at such
acceptance, the Investor shall give immediate notice of such fact to the Company,
by facsimile with written confirmation of receipt, specifying which
representations and warranties are not true, accurate and complete and the
reasons therefor.


4.                                      Indemnification.  The Investor acknowledges that the Investor understands
the meaning and legal consequences of the representations and warranties made
by the Investor herein, and that the Company is relying on such representations
and warranties in making its determination to accept or reject this
Subscription.  The Investor hereby agrees
to indemnify and hold harmless the Company, each manager, officer and employee
thereof and each person who controls the Company from and against any and all
loss, damage or liability due to or arising out of a breach  or inaccuracy of any representation or
warranty of the Investor contained in this Subscription Agreement.  All representations, warranties and covenants
and the indemnification contained in this Subscription Agreement shall survive
the acceptance of the subscription and the issuance to the Investor of the stock.


5.                                      Transferability.  The Investor agrees not to transfer or assign
this Subscription Agreement, or any interest herein, and further agrees that
the assignment and transfer of the stock acquired pursuant hereto shall be made
only in accordance with applicable law and the Company Agreement.


6.                                      No
Revocation.  The Investor agrees that
this Subscription Agreement and any agreement of the Investor made hereunder is
irrevocable, and that this Subscription Agreement shall survive the death or
disability of the Investor.


7.                                      Notices.  All notices or other communications given or
made hereunder shall be in writing and shall be delivered or mailed by
registered or certified mail, return receipt requested, postage prepaid, or delivered
by facsimile with written confirmation of receipt to the Investor at the
address set forth below and to the Company, c/o Intrusion Inc., 1101 E. Arapaho
Road, Suite 200, Richardson, Texas 75081, Telephone:  972.234.6400, Fax 972.301.3892, or at such
other place as the Company may designate by written notice to the Investor.


8.                                      Expenses.  The Investor will pay the Investor’s own
expenses relating to this Subscription Agreement and the purchase of stock
hereunder.


9.                                      Entire
Agreement; Amendments.  This
Subscription Agreement supersedes all prior agreements between the parties with
respect to its subject matter and constitutes a complete and exclusive
statement of the terms of the agreement between the parties with respect to its
subject matter.  Neither this
Subscription Agreement nor any term hereof may be changed, waived, discharged
or terminated orally, without the written consent of the Investor and the Company.


10.                               Counterparts.  This Subscription Agreement may be executed
in any number of counterparts, each of which shall be an original and all of
which taken together shall constitute one agreement.









 



11.                               Governing
Law.  This Subscription Agreement and
all amendments hereto shall be governed by and construed in accordance with the
laws of the State of Texas, without reference to provisions concerning the
conflict of laws.


12.                               Severability.  Should there exist or arise a conflict
between any provision of this Subscription Agreement and any law, statute,
ordinance, order or regulation applicable to the enforcement of this
Subscription Agreement, such provision of this Subscription Agreement shall be
reformed to the minimum extent necessary to bring it within applicable legal
requirements.  If one or more of the provisions
in this Subscription Agreement become or are found by any court to be void,
voidable, or unenforceable, in part or in whole, the remaining provisions shall
continue in full force and effect.  If
any provision is so held void, voidable or unenforceable, the Investor agrees
to replace such provision with a valid and enforceable provision that will
achieve, to the extent possible, the economic, business and other purposes of
such provision.


13.                               Headings.  The headings in this Subscription Agreement
are for convenience of reference only, and shall not have any bearing on the
meaning of this Subscription Agreement or of any part hereof.


(Signature
pages follow)









 



 


	
  Dated: December 28, 2006

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  [INVESTOR]

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
   

  	
  /s/ Michael L.
  Paxton

  	
   

  
	
   

  	
  Name: 

  	
   

  	
  Michael L.
  Paxton

  	
   

  
	
   

  	
  Title:

  	
   

  	
  Vice President and CFO

  	
   

  
	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
  

  	
  BUSINESS ADDRESS:

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
   

  	
  1101 E. Arapaho
  Road

  	 

	
   

  	
   

  	
  Richardson, TX
  75081

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  FEDERAL TAX I.D. NUMBER OF ENTITY

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
  ACCEPTED BY:

  	
   

  	 

	
  Intrusion
  Inc.

  	
   

  	 

	
  (a
  Delaware Corporation)

  	
   

  	 

	
   

  	
   

  	 

	
   

  	 

	
  By:

  	
  /s/ G. Ward Paxton

  	
   

  	 

	
   

  	
  G. Ward Paxton, Chief Executive Officer

  	
   

  	 

											



 









 



EXHIBIT A


RISK
FACTORS


INVESTOR SHOULD READ AND UNDERSTAND ALL RISK FACTORS,
AMONG OTHER ITEMS, AS DESCRIBED IN THE COMPANY’S RECENT 10QSB AND 10KSB FILINGS
WITH THE SECURITIES AND EXCHANGE COMMISSION.