Document:

Exhibit 4.3

 

NEITHER THIS SECURITY NOR
THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. 
THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN
SECURED BY SUCH SECURITIES SUBJECT TO CERTAIN CONDITIONS SET FORTH IN THE
PURCHASE AGREEMENT (AS DEFINED BELOW).

 

COMMON STOCK PURCHASE WARRANT

 

To Purchase               
Shares of Common Stock of

 

Intrusion Inc.

 

THIS COMMON STOCK
PURCHASE WARRANT (the “Warrant”) certifies that, for value received,                   
(the “Holder”), is entitled, upon the terms and subject to the
limitations on exercise and the conditions hereinafter set forth, at any time
on or after the six month anniversary of the date hereof (the “Initial
Exercise Date”) and on or prior to the close of business on the fifth anniversary
of the Initial Exercise Date (the “Termination Date”) but not
thereafter, to subscribe for and purchase from Intrusion Inc., a Delaware
corporation (the “Company”), up to               
shares (the “Warrant Shares”) of Common Stock, par value $0.01 per
share, of the Company (the “Common Stock”).  The purchase price of one share of Common
Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

 

Section 1.                                            Definitions.  Capitalized
terms used and not otherwise defined herein shall have the meanings set forth
in that certain Securities Purchase Agreement (the “Purchase Agreement”),
dated March 28, 2005, among the
Company and the purchasers signatory thereto.

 

Section 2.                                            Exercise.

 

a)                                      Exercise
of Warrant.  Exercise of the purchase
rights represented by this Warrant may be made, in whole or in part, at any
time or times on or after the Initial Exercise Date and on or before the
Termination Date by delivery to the Company of a duly executed facsimile copy
of the Notice of Exercise Form annexed hereto (or such other office or agency
of the Company as it may designate by notice in writing to the 

 

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registered Holder at the
address of such Holder appearing on the books of the Company); provided,
however, within 5 Trading Days of the date said Notice of Exercise is
delivered to the Company, the Holder shall have surrendered this Warrant to the
Company and the Company shall have received payment of the aggregate Exercise
Price of the shares thereby purchased by wire transfer or cashier’s check drawn
on a United States bank, unless the Holder has elected to exercise this Warrant
pursuant Section 2(c).

 

b)                                     Exercise Price.  The exercise price of the Common Stock under
this Warrant shall be $2.77, subject to adjustment hereunder (the “Exercise
Price”).

 

c)                                      Cashless
Exercise.  If at any time after one
year from the date of issuance of this Warrant there is no effective
Registration Statement registering, or no current prospectus available for, the
resale of the Warrant Shares by the Holder, then this Warrant may also be
exercised at such time by means of a “cashless exercise” in which the Holder
shall be entitled to receive a certificate for the number of Warrant Shares
equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

 (A) = the VWAP on the Trading Day immediately
preceding the date of such election;

 

(B) =  the Exercise Price of this Warrant, as
adjusted; and

 

(X) = the number of
Warrant Shares issuable upon exercise of this Warrant in accordance with the
terms of this Warrant by means of a cash exercise rather than a cashless
exercise.

 

Notwithstanding anything
herein to the contrary, on the Termination Date, this Warrant shall be
automatically exercised via cashless exercise pursuant to this Section 2(c),
provided, however, that if the VWAP is less than the Exercise
Price at such time this Warrant shall be deemed cancelled unless the Holder
elects to exercise this Warrant pursuant to Section 2(b) on or prior to
the Termination Date.

 

d)                                     Exercise
Limitations.

 

i.                                          Holder’s
Restrictions.  The Holder shall not
have the right to exercise any portion of this Warrant, pursuant to Section 2(c)
or otherwise, to the extent that after giving effect to such issuance after
exercise, the Holder (together with the Holder’s affiliates), as set forth on
the applicable Notice of Exercise, would beneficially own in excess of 4.99% of
the number of shares of the Common Stock outstanding immediately after giving
effect to such issuance.  For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by the Holder and its
affiliates shall include the number of shares of Common Stock issuable upon
exercise of this Warrant with respect to which the determination of such
sentence is being made, but shall exclude the number of shares of 

 

 

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Common Stock which would
be issuable upon (A) exercise of the remaining, nonexercised portion of this
Warrant beneficially owned by the Holder or any of its affiliates and (B)
exercise or conversion of the unexercised or nonconverted portion of any other
securities of the Company (including, without limitation, any other Preferred
Stock or Warrants) subject to a limitation on conversion or exercise analogous
to the limitation contained herein beneficially owned by the Holder or any of
its affiliates.  Except as set forth in the preceding sentence, for
purposes of this Section 2(d)(i), beneficial ownership shall be calculated
in accordance with Section 13(d) of the Exchange Act, it being
acknowledged by Holder that the Company is not representing to Holder that such
calculation is in compliance with Section 13(d) of the Exchange Act and
Holder is solely responsible for any schedules required to be filed in
accordance therewith.  To the extent that
the limitation contained in this Section 2(d)(i) applies, the
determination of whether this Warrant is exercisable (in relation to other
securities owned by the Holder) and of which a portion of this Warrant is
exercisable shall be in the sole discretion of such Holder, and the submission
of a Notice of Exercise shall be deemed to be such Holder’s determination of
whether this Warrant is exercisable (in relation to other securities owned by
such Holder) and of which portion of this Warrant is exercisable, in each case
subject to such aggregate percentage limitation, and the Company shall have no
obligation to verify or confirm the accuracy of such determination.  For purposes of this Section 2(d)(i), in
determining the number of outstanding shares of Common Stock, the Holder may
rely on the number of outstanding shares of Common Stock as reflected in (x)
the Company’s most recent Form 10-Q or Form 10-K, as the case may be, (y) a
more recent public announcement by the Company or (z) any other notice by the
Company or the Company’s transfer agent setting forth the number of shares of
Common Stock outstanding.  Upon the written or oral request of the Holder,
the Company shall within two Trading Days confirm orally and in writing to the
Holder the number of shares of Common Stock then outstanding.  In any
case, the number of outstanding shares of Common Stock shall be determined
after giving effect to the conversion or exercise of securities of the Company,
including this Warrant, by the Holder or its affiliates since the date as of
which such number of outstanding shares of Common Stock was reported.  The provisions of this Section 2(d)(i)
may be waived by the Holder, at the election of the Holder, upon not less than
61 days’ prior notice to the Company, and the provisions of this Section 2(d)(i)
shall continue to apply until such 61st day (or such later date, as
determined by the Holder, as may be specified in such notice of waiver).  Notwithstanding any of the foregoing, the
provisions of this Section 2(d)(i) shall not apply to any Holder who is an
officer or director of the Company as of the Closing Date or as of the date
exercise. In addition, if the Holder is an officer or director of the Company as
of the date of this Warrant, the Holder may not exercise this Warrant for
shares of Common Stock unless and until the 

 

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issuance of such shares
is approved by the Company’s stockholders, to the extent required by the rules
and regulations of the Nasdaq Stock Market.

 

ii.                                       Trading
Market Restrictions.  If the Company
has not obtained Shareholder Approval (as defined below) if required, then the
Company may not issue upon exercise of this Warrant in the aggregate, in excess
of 19.999% of the number of shares of Common Stock outstanding on the Trading
Day immediately preceding the Closing Date, less any shares of Common Stock issued upon conversion of or as
payment of dividends on the Preferred Stock or upon prior exercise of this or any other Warrant issued pursuant to
the Purchase Agreement (such number of shares, the “Issuable Maximum”).  If on any attempted exercise of this Warrant,
the issuance of Warrant Shares would exceed the Issuable Maximum and the Company
shall not have previously obtained the vote of shareholders (the “Shareholder Approval”), if any, as
may be required by the applicable rules and regulations of the Nasdaq Stock
Market (or any successor entity) to approve the issuance of shares of Common
Stock in excess of the Issuable Maximum pursuant to the terms hereof, then the
Company shall issue to the Holder requesting a Warrant exercise such number of
Warrant Shares as may be issued below the Issuable Maximum and, with respect to
the remainder of the aggregate number of Warrant Shares, this Warrant shall not
be exercisable until and unless Shareholder Approval has been obtained.

 

e)                                      Mechanics
of Exercise.

 

i.                                          Authorization
of Warrant Shares.  The Company
covenants that all Warrant Shares which may be issued upon the exercise of the
purchase rights represented by this Warrant will, upon exercise of the purchase
rights represented by this Warrant, be duly authorized, validly issued, fully
paid and nonassessable and free from all taxes, liens and charges in respect of
the issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).

 

ii.                                       Delivery
of Certificates Upon Exercise.  Certificates
for shares purchased hereunder shall be transmitted by the transfer agent of
the Company to the Holder by crediting the account of the Holder’s prime broker
with the Depository Trust Company through its Deposit Withdrawal Agent
Commission (“DWAC”) system if the Company is a participant in such
system, and otherwise by physical delivery to the address specified by the
Holder in the Notice of Exercise within 3 Trading Days from the delivery to the
Company of the Notice of Exercise Form, surrender of this Warrant and payment
of the aggregate Exercise Price as set forth above (“Warrant Share Delivery
Date”).  This Warrant shall be deemed
to have been exercised on the date the Exercise Price is received by the Company,
unless the Holder requests a later date for exercise.  The Warrant Shares shall be deemed to have
been issued, and Holder or any 

 

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other person so
designated to be named therein shall be deemed to have become a holder of
record of such shares for all purposes, as of the date the Warrant has been
exercised by payment to the Company of the Exercise Price and all taxes
required to be paid by the Holder, if any, pursuant to Section 2(e)(vii) prior
to the issuance of such shares, have been paid.

 

iii.                                    Delivery
of New Warrants Upon Exercise.  If
this Warrant shall have been exercised in part, the Company shall, at the time
of delivery of the certificate or certificates representing Warrant Shares,
deliver to Holder a new Warrant evidencing the rights of Holder to purchase the
unpurchased Warrant Shares called for by this Warrant, which new Warrant shall
in all other respects be identical with this Warrant.

 

iv.                                   Rescission
Rights.  If the Company fails to cause
its transfer agent to transmit to the Holder a certificate or certificates
representing the Warrant Shares pursuant to this Section 2(e)(iv) by the
Warrant Share Delivery Date, then the Holder will have the right to rescind
such exercise.

 

v.                                      Compensation
for Buy-In on Failure to Timely Deliver Certificates Upon Exercise.  In addition to any other rights available to
the Holder, if the Company fails to cause its transfer agent to transmit to the
Holder a certificate or certificates representing the Warrant Shares pursuant
to an exercise on or before the Warrant Share Delivery Date, and if after such
date the Holder is required by its broker to purchase (in an open market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of
a sale by the Holder of the Warrant Shares which the Holder anticipated
receiving upon such exercise (a “Buy-In”), then the Company shall (1)
pay in cash to the Holder the amount by which (x) the Holder’s total purchase
price (including brokerage commissions, if any) for the shares of Common Stock
so purchased exceeds (y) the amount obtained by multiplying (A) the number of
Warrant Shares that the Company was required to deliver to the Holder in
connection with the exercise at issue times (B) the price at which the sell
order giving rise to such purchase obligation was executed, and (2) at the
option of the Holder, either reinstate the portion of the Warrant and
equivalent number of Warrant Shares for which such exercise was not honored or
deliver to the Holder the number of shares of Common Stock that would have been
issued had the Company timely complied with its exercise and delivery
obligations hereunder.  For example, if
the Holder purchases Common Stock having a total purchase price of $11,000 to
cover a Buy-In with respect to an attempted exercise of shares of Common Stock
with an aggregate sale price giving rise to such purchase obligation of
$10,000, under clause (1) of the immediately preceding sentence the Company
shall be required to pay the Holder $1,000. The Holder shall provide the
Company written notice indicating the amounts payable to the Holder in 

 

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respect of the Buy-In,
together with applicable confirmations and other evidence reasonably requested
by the Company.  Nothing herein shall
limit a Holder’s right to pursue any other remedies available to it hereunder, at
law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company’s failure to
timely deliver certificates representing shares of Common Stock upon exercise
of the Warrant as required pursuant to the terms hereof.

 

vi.                                   No
Fractional Shares or Scrip.  No
fractional shares or scrip representing fractional shares shall be issued upon
the exercise of this Warrant.  As to any
fraction of a share which Holder would otherwise be entitled to purchase upon
such exercise, the Company shall pay cash to the Holder in respect of such
final fraction in an amount equal to such fraction multiplied by the Exercise
Price.

 

vii.                                Charges,
Taxes and Expenses.  Issuance of
certificates for Warrant Shares shall be made without charge to the Holder for
any issue or transfer tax or other incidental expense in respect of the
issuance of such certificate, all of which taxes and expenses shall be paid by
the Company, and such certificates shall be issued in the name of the Holder or
in such name or names as may be directed by the Holder; provided, however,
that in the event certificates for Warrant Shares are to be issued in a name
other than the name of the Holder, this Warrant when surrendered for exercise
shall be accompanied by the Assignment Form attached hereto duly executed by
the Holder; and the Company may require, as a condition thereto, the payment of
a sum sufficient to reimburse it for any transfer tax incidental thereto.

 

viii.                             Closing
of Books.  The Company will not close
its stockholder books or records in any manner which prevents the timely
exercise of this Warrant, pursuant to the terms hereof.

 

Section 3.                                            Certain Adjustments.

 

a)                                      Stock
Dividends and Splits. If the Company, at any time while this Warrant is
outstanding: (A) pays a stock dividend or otherwise make a distribution or
distributions on shares of its Common Stock or any other equity or equity
equivalent securities payable in shares of Common Stock (which, for avoidance
of doubt, shall not include any shares of Common Stock issued by the Company
pursuant to this Warrant or upon conversion of the Preferred Stock or any
distribution made in connection with any liquidation, dissolution or winding-up
of the Company, whether voluntary or involuntary, including any Liquidation
under Section 5 of the Certificate of Designations), (B) subdivides
outstanding shares of Common Stock into a larger number of shares, (C) combines
(including by way of reverse stock split) outstanding shares of Common Stock into
a smaller number of shares, or (D) issues by reclassification of shares of the
Common Stock any shares of capital stock of the Company, then in each case the 

 

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Exercise Price shall be
multiplied by a fraction of which the numerator shall be the number of shares
of Common Stock (excluding treasury shares, if any) outstanding immediately before
such event and of which the denominator shall be the number of shares of Common
Stock outstanding immediately after such event and the number of shares
issuable upon exercise of this Warrant shall be proportionately adjusted.  Any adjustment made pursuant to this Section 3(a)
shall become effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution and shall
become effective immediately after the effective date in the case of a
subdivision, combination or re-classification.

 

b)                                     [RESERVED]

 

c)                                      Pro
Rata Distributions.  If the Company,
at any time prior to the Termination Date, shall distribute to all holders of
Common Stock (and not to Holders of the Warrants) evidences of its indebtedness
or assets (including cash and cash dividends) or rights or warrants to
subscribe for or purchase any security, then in each such case the Exercise
Price shall be adjusted by multiplying the Exercise Price in effect immediately
prior to the record date fixed for determination of stockholders entitled to
receive such distribution by a fraction of which the denominator shall be the
VWAP determined as of the record date mentioned above, and of which the
numerator shall be such VWAP on such record date less the then per share fair
market value at such record date of the portion of such assets or evidence of
indebtedness so distributed applicable to one outstanding share of the Common
Stock as determined by the Board of Directors in good faith.  In either case the adjustments shall be
described in a statement provided to the Holder of the portion of assets or
evidences of indebtedness so distributed or such subscription rights applicable
to one share of Common Stock.  Such
adjustment shall be made whenever any such distribution is made and shall
become effective immediately after the record date mentioned above.

 

d)                                     Fundamental
Transaction. If, at any time while this Warrant is outstanding, (A) the
Company effects any merger or consolidation of the Company with or into another
Person (other than a merger or consolidation that does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock of the Company), (B) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions, (C)
any tender offer or exchange offer (whether by the Company or another Person)
is completed pursuant to which holders of Common Stock are permitted to tender
or exchange their shares for other securities, cash or property, or (D) the
Company effects any reclassification of the Common Stock or any compulsory
share exchange pursuant to which the Common Stock is effectively converted into
or exchanged for other securities, cash or property, in each case which does
not otherwise constitute a Liquidation under Section 5 of the Certificate
of Designations (in any such case, a “Fundamental Transaction”), then, upon any subsequent exercise of this
Warrant, the Holder shall have the right
to receive, for each Warrant Share that would have been issuable upon such
exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder, (a) upon exercise of this
Warrant, the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and any 

 

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additional
consideration (the “Alternate Consideration”) receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a Holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event or (b) if the Company is acquired in an all
cash transaction, cash equal to the value of this Warrant as determined in
accordance with the Black-Scholes option pricing formula.  For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted to apply to
such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental Transaction,
and the Company shall apportion the Exercise Price among the Alternate
Consideration in a reasonable manner reflecting the relative value of any
different components of the Alternate Consideration.  If holders of Common Stock are given any
choice as to the securities, cash or property to be received in a Fundamental
Transaction, then the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction.  To the extent
necessary to effectuate the foregoing provisions, any successor to the Company
or surviving entity in such Fundamental Transaction shall issue to the Holder a
new warrant consistent with the foregoing provisions and evidencing the Holder’s
right to exercise such warrant into Alternate Consideration. The terms of any
agreement pursuant to which a Fundamental Transaction is effected shall include
terms requiring any such successor or surviving entity to comply with the
provisions of this Section 3(d) and insuring that this Warrant (or any
such replacement security) will be similarly adjusted upon any subsequent
transaction analogous to a Fundamental Transaction.

 

e)                                      Calculations.
All calculations under this Section 3 shall be made to the nearest cent or
the nearest 1/100th of a share, as the case may be. For purposes of this Section 3,
the number of shares of Common Stock deemed to be issued and outstanding as of
a given date shall be the sum of the number of shares of Common Stock
(excluding treasury shares, if any) issued and outstanding.

 

f)                                        Notice
to Holders.

 

i.                                          Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to this
Section 3, the Company shall promptly mail to each Holder a notice setting
forth the Exercise Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment.

 

ii.                                       Notice
to Allow Exercise by Holder. If (A) the Company shall declare a dividend
(or any other distribution) on the Common Stock; (B) the Company shall declare
a special nonrecurring cash dividend on or a redemption of the Common Stock
(other than repurchases
of shares of Common Stock from employees, officers, directors, consultants or
other persons performing services for the Company or any subsidiary pursuant to
agreements under which the Company has the option to repurchase such shares
upon the happening of certain events, such as termination); (C) the
Company shall authorize the granting to all holders of the Common Stock rights
or warrants to subscribe for or purchase any shares of capital stock 

 

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of any class or of any
rights; (D) the approval of any stockholders of the Company shall be required
in connection with any reclassification of the Common Stock, any consolidation
or merger to which the Company is a party, any sale or transfer of all or
substantially all of the assets of the Company, of any compulsory share
exchange whereby the Common Stock is converted into other securities, cash or
property; (E) the Company shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the Company; then, in
each case, the Company shall cause to be mailed to the Holder at its last
address as it shall appear upon the Warrant Register of the Company, at least
20 calendar days prior to the applicable record or effective date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution, redemption, rights or warrants, or
if a record is not to be taken, the date as of which the holders of the Common
Stock of record to be entitled to such dividend, distributions, redemption,
rights or warrants are to be determined or (y) the date on which such
reclassification, consolidation, merger, sale, transfer or share exchange is
expected to become effective or close, and the date as of which it is expected
that holders of the Common Stock of record shall be entitled to exchange their
shares of the Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer or share
exchange; provided, that the failure to mail such notice or any defect
therein or in the mailing thereof shall not affect the validity of the
corporate action required to be specified in such notice.  The Holder is entitled to exercise this
Warrant during the 20-day period commencing on the date of such notice to the
effective date of the event triggering such notice.

 

Section 4.                                            Transfer of Warrant.

 

a)                                      Transferability.  Subject to compliance with any applicable
securities laws and the conditions set forth in Sections 5(a) and 4(d) hereof
and to the provisions of Section 4.1 of the Purchase Agreement, this
Warrant and all rights hereunder are transferable, in whole or in part, upon
surrender of this Warrant at the principal office of the Company, together with
a written assignment of this Warrant substantially in the form attached hereto
duly executed by the Holder or its agent or attorney and funds sufficient to
pay any transfer taxes payable upon the making of such transfer.  Upon such surrender and, if required, such
payment, the Company shall execute and deliver a new Warrant or Warrants in the
name of the assignee or assignees and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled.  A
Warrant, if properly assigned, may be exercised by a new holder for the
purchase of Warrant Shares without having a new Warrant issued.

 

b)                                     New
Warrants. This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new Warrants are
to be 

 

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issued, signed by the
Holder or its agent or attorney.  Subject
to compliance with Section 4(a), as to any transfer which may be involved
in such division or combination, the Company shall, upon request of the Holder,
execute and deliver a new Warrant or Warrants in exchange for the Warrant or
Warrants to be divided or combined in accordance with such notice.

 

c)                                      Warrant
Register. The Company shall register this Warrant, upon records to be
maintained by the Company for that purpose (the “Warrant Register”), in
the name of the record Holder hereof from time to time.  The Company may deem and treat the registered
Holder of this Warrant as the absolute owner hereof for the purpose of any
exercise hereof or any distribution to the Holder, and for all other purposes,
absent actual notice to the contrary.

 

d)                                     Transfer
Restrictions. If, at the time of the surrender of this Warrant in
connection with any transfer of this Warrant, the transfer of this Warrant
shall not be registered pursuant to an effective registration statement under
the Securities Act and under applicable state securities or blue sky laws, the
Company may require, as a condition of allowing such transfer (i) that the
Holder or transferee of this Warrant, as the case may be, furnish to the
Company a written opinion of counsel (which opinion shall be in form, substance
and scope customary for opinions of counsel in comparable transactions) to the
effect that such transfer may be made without registration under the Securities
Act and under applicable state securities or blue sky laws, (ii) that the
holder or transferee execute and deliver to the Company an investment letter in
form and substance acceptable to the Company and (iii) that the transferee be
an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7),
or (a)(8) promulgated under the Securities Act or a qualified institutional
buyer as defined in Rule 144A(a) under the Securities Act.

 

Section 5.                                            Miscellaneous.

 

a)                                      Title
to Warrant.  Prior to the Termination
Date and subject to compliance with applicable laws and Section 4 of this
Warrant, this Warrant and all rights hereunder are transferable, in whole or in
part, at the office or agency of the Company by the Holder in person or by duly
authorized attorney, upon surrender of this Warrant together with the
Assignment Form annexed hereto properly endorsed.  The transferee shall sign an investment
letter in form and substance reasonably satisfactory to the Company.

 

b)                                     No
Rights as Stockholder Until Exercise. 
This Warrant does not entitle the Holder to any voting rights or other
rights as a stockholder of the Company prior to the exercise hereof.  Upon the surrender of this Warrant and the
payment of the aggregate Exercise Price (or by means of a cashless exercise),
the Warrant Shares so purchased shall be and be deemed to be issued to such
Holder as the record owner of such shares as of the close of business on the
later of the date of such surrender or payment.

 

c)                                      Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that
upon receipt by the Company of evidence reasonably satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant or any stock certificate
relating to the Warrant Shares, and in case of loss, theft or destruction, of
indemnity or security 

 

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reasonably satisfactory
to it (which, in the case of the Warrant, shall not include the posting of any
bond), and upon surrender and cancellation of such Warrant or stock
certificate, if mutilated, the Company will make and deliver a new Warrant or
stock certificate of like tenor and dated as of such cancellation, in lieu of
such Warrant or stock certificate.

 

d)                                     Trading
Day.  If the last or appointed day
for the taking of any action or the expiration of any right required or granted
herein shall be a day other than a Trading Day, then such action may be taken
or such right may be exercised on the next succeeding Trading Day.

 

e)                                      Authorized
Shares.

 

The Company covenants
that during the period the Warrant is outstanding, it will reserve from its
authorized and unissued Common Stock a sufficient number of shares to provide
for the issuance of the Warrant Shares upon the exercise of any purchase rights
under this Warrant.  The Company further
covenants that its issuance of this Warrant shall constitute full authority to
its officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for the Warrant Shares upon the
exercise of the purchase rights under this Warrant.  The Company will take all such reasonable
action as may be necessary to assure that such Warrant Shares may be issued as
provided herein without violation of any applicable law or regulation, or of
any requirements of the Trading Market upon which the Common Stock may be
listed.

 

Except and to the extent
as waived or consented to by the Holder, the Company shall not by any action,
including, without limitation, amending its certificate of incorporation or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder as set forth in this Warrant
against impairment.  Without limiting the
generality of the foregoing, the Company will (a) not increase the par value of
any Warrant Shares above the amount payable therefor upon such exercise immediately
prior to such increase in par value, (b) take all such action as may be
necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable Warrant Shares upon the exercise of this
Warrant, and (c) use commercially reasonable efforts to obtain all such
authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof as may be necessary to enable the Company to perform its
obligations under this Warrant.

 

Before taking any action
which would result in an adjustment in the number of Warrant Shares for which
this Warrant is exercisable or in the Exercise Price, the Company shall obtain
all such authorizations or exemptions thereof, or 

 

11

 

consents thereto, as may
be necessary from any public regulatory body or bodies having jurisdiction
thereof.

 

f)                                        Jurisdiction.
All questions concerning the construction, validity, enforcement and
interpretation of this Warrant shall be determined in accordance with the
provisions of the Purchase Agreement.

 

g)                                     Restrictions.  The Holder acknowledges that the Warrant
Shares acquired upon the exercise of this Warrant, if not registered, will have
restrictions upon resale imposed by state and federal securities laws.

 

h)                                     Nonwaiver
and Expenses.  No course of dealing
or any delay or failure to exercise any right hereunder on the part of Holder
shall operate as a waiver of such right or otherwise prejudice Holder’s rights,
powers or remedies, notwithstanding the fact that all rights hereunder
terminate on the Termination Date.  If
the Company willfully and knowingly fails to comply with any provision of this
Warrant, which results in any material damages to the Holder, the Company shall
pay to Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys’ fees, including
those of appellate proceedings, incurred by Holder in collecting any amounts
due pursuant hereto or in otherwise enforcing any of its rights, powers or
remedies hereunder.

 

i)                                         Notices.  Any notice, request or other document
required or permitted to be given or delivered to the Holder by the Company
shall be delivered in accordance with the notice provisions of the Purchase Agreement.

 

j)                                         Limitation
of Liability.  No provision hereof,
in the absence of any affirmative action by Holder to exercise this Warrant or
purchase Warrant Shares, and no enumeration herein of the rights or privileges
of Holder, shall give rise to any liability of Holder for the purchase price of
any Common Stock or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the Company.

 

k)                                      Remedies.  Holder, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Warrant.  The Company agrees that monetary damages
would not be adequate compensation for any loss incurred by reason of a breach
by it of the provisions of this Warrant and hereby agrees to waive the defense
in any action for specific performance that a remedy at law would be adequate.

 

l)                                         Successors
and Assigns.  Subject to applicable
securities laws, this Warrant and the rights and obligations evidenced hereby
shall inure to the benefit of and be binding upon the successors of the Company
and the successors and permitted assigns of Holder.  The provisions of this Warrant are intended
to be for the benefit of all Holders from time to time of this Warrant and
shall be enforceable by any such Holder or holder of Warrant Shares.

 

m)                                   Amendment.  This Warrant may be modified or amended or
the provisions hereof waived with the written consent of the Company and the
Holder.

 

12

 

n)                                     Severability.  Wherever possible, each provision of this
Warrant shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Warrant.

 

o)                                     Headings.  The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.

 

********************

 

13

 

IN WITNESS
WHEREOF, the Company has caused this Warrant to be executed by its officer
thereunto duly authorized.

 

 

Dated:  March 28, 2005

 

 

	
   

  	
  INTRUSION INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: 

  
	
   

  	
   

  	
  Title:

  

 

14

 

NOTICE OF EXERCISE

 

TO:                            INTRUSION INC.

 

(1)                                  The
undersigned hereby elects to purchase                  
Warrant Shares of the Company pursuant to the terms of the attached Warrant
(only if exercised in full), and tenders herewith payment of the exercise price
in full, together with all applicable transfer taxes, if any.

 

(2)                                  Payment
shall take the form of (check applicable box):

 

o
in lawful money of the United States; or

 

o
the cancellation of such number of Warrant Shares as is necessary, in
accordance with the formula set forth in subsection 2(c), to exercise this
Warrant with respect to the maximum number of Warrant Shares purchasable
pursuant to the cashless exercise procedure set forth in subsection 2(c).

 

(3)                                  Please
issue a certificate or certificates representing said Warrant Shares in the
name of the undersigned or in such other name as is specified below:

 

	
   

  
	
   

  
	
  The Warrant Shares shall be delivered to the
  following:

  
	
   

  

 

 

(4)                                  Accredited
Investor.  The undersigned is an “accredited
investor” as defined in Regulation D promulgated under the Securities Act of
1933, as amended.

 

	
  [SIGNATURE OF HOLDER]

  
	
   

  
	
  Name of Investing Entity: 

  	
   

  
	
  Signature of Authorized Signatory of Investing
  Entity: 

  	
   

  
	
  Name of Authorized Signatory: 

  	
   

  
	
  Title of Authorized Signatory: 

  	
   

  
	
  Date: 

  	
   

  
						

 

 

ASSIGNMENT FORM

 

(To assign the foregoing warrant, execute

this form and supply required information. 

Do not use this form to exercise the warrant.)

 

FOR VALUE
RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby
assigned to

 

	
   

  	
   

  
	
   

  	
  whose address is

  
	
   

  
	
   

  	
  .

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  
	
   

  	
  Dated:
                          ,
                

  
	
   

  
	
   

  	
  Holder’s Signature:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Holder’s Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  
	
   

  	
   

  
	
  Signature Guaranteed: 

  	
   

  	
   

  
									

 

 

NOTE:  The signature to this
Assignment Form must correspond with the name as it appears on the face of the
Warrant, without alteration or enlargement or any change whatsoever, and must
be guaranteed by a bank or trust company. 
Officers of corporations and those acting in a fiduciary or other
representative capacity should file proper evidence of authority to assign the
foregoing Warrant.Exhibit 4.4

 

Form of Representative’s Warrant

 

[See attached]

 

A-1

 

THIS
WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY OTHER
SECURITIES LAWS, HAVE BEEN TAKEN FOR INVESTMENT, AND MAY NOT BE SOLD OR
TRANSFERRED OR OFFERED FOR SALE OR TRANSFER UNLESS A REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS WITH RESPECT TO
SUCH SECURITIES IS THEN IN EFFECT, OR IN THE OPINION OF COUNSEL (WHICH OPINION
IS REASONABLY SATISFACTORY TO THE ISSUER OF THESE SECURITIES), SUCH
REGISTRATION UNDER THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS IS
NOT REQUIRED.

 

	
  Date: March 28, 2005

  	
   

  	
  Warrant to Purchase

  
	
   

  	
   

  	
   

  	
  ***_____***

  
	
   

  	
   

  	
   

  	
  Shares

  

 

 

INTRUSION
INC.

 

(Incorporated under the
laws of the State of Delaware)

 

REPRESENTATIVE’S WARRANT
FOR THE PURCHASE OF SHARES OF

 

COMMON STOCK

 

Warrant Price:   $2.77
per share, subject to adjustment as provided below.

 

THIS
IS TO CERTIFY that, for value received, ________________ and his assigns
(collectively, the “Holder”), is entitled to purchase, subject to the terms and
conditions hereinafter set forth, up to ***_____*** shares of the common stock,
par value $0.01 per share (“Common Stock”), of Intrusion, Inc., a Delaware
corporation (the “Company”), and to receive certificate(s) for the Common Stock
so purchased.

 

1.                                       Exercise Period and Vesting. 
The exercise period is the period beginning on the date of this Warrant
(the “Issuance Date”) and ending at 5:00 p.m., Dallas, Texas time, five years
from the Issuance Date (the “Exercise Period”). 
This Warrant is vested in full as of the Issuance Date and is
immediately exercisable by Holder.  This
Warrant will terminate automatically and immediately upon the expiration of the
Exercise Period.

 

2.                                       Exercise of Warrant; Cashless Exercise.  This Warrant may be exercised, in whole or in
part, at any time and from time to time during the Exercise Period.  Such exercise shall be accomplished by tender
to the Company of the purchase price set forth above as the warrant price (the “Warrant
Price”), either (a) in cash, by wire transfer or by certified check or bank
cashier’s check, payable to the order of the Company, or (b) by surrendering
such number of shares of Common Stock received upon exercise of this Warrant
with a current market price equal to the Warrant Price (a “Cashless Exercise”),
together with presentation and surrender to the Company of

 

1

 

this Warrant with an
executed subscription in substantially the form attached hereto as Exhibit A
(the “Subscription”). Upon receipt of the foregoing, the Company will, or will
cause its transfer agent to, deliver to the Holder, as promptly as possible, a
certificate or certificates representing the shares of Common Stock so
purchased, registered in the name of the Holder or its transferee (as permitted
under Section 3 below).  With respect to
any exercise of this Warrant, the Holder will for all purposes be deemed to
have become the holder of record of the number of shares of Common Stock
purchased hereunder on the date this Warrant, a properly executed Subscription
and payment of the Warrant Price is received by the Company (the “Exercise Date”),
irrespective of the date of delivery of the certificate evidencing such shares,
except that, if the date of such receipt is a date on which the stock transfer
books of the Company are closed, such person will be deemed to have become the
holder of such shares at the close of business on the next succeeding date on
which the stock transfer books are open. 
Fractional shares of Common Stock will not be issued upon the exercise
of this Warrant.  In lieu of any
fractional shares that would have been issued but for the immediately preceding
sentence, the Holder will be entitled to receive cash equal to the current
market price of such fraction of a share of Common Stock on the trading day
immediately preceding the Exercise Date. 
In the event this Warrant is exercised in part, the Company shall issue
a new Warrant to the Holder covering the aggregate number of shares of Common
Stock as to which this Warrant remains exercisable for.

 

If the Holder
elects to conduct a Cashless Exercise, the Company shall cause to be delivered
to the Holder a certificate or certificates representing the number of shares
of Common Stock computed using the following formula:

 

	
  X = Y (A-B)

  	
   

  	
   

  
	
   

  	
  A

  	
   

  	
   

  
				

 

	
  Where:

  	
   

  	
   

  	
   

  
	
   

  	
  X

  	
  =

  	
  the number of shares of
  Common Stock to be issued to Holder;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Y

  	
  =

  	
  the portion of the
  Warrant (in number of shares of Common Stock) being exercised by Holder (at
  the date of such calculation);

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A

  	
  =

  	
  the fair market value
  of one share of Common Stock on the Exercise Date (as calculated below); and

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  B

  	
  =

  	
  Warrant Price (as
  adjusted to the date of such calculation).

  

 

For purposes of
the foregoing calculation, “fair market value of one share of Common Stock on
the Exercise Date” shall mean:  (i) if
the principal trading market for such securities is a national or regional
securities exchange, the closing price on such exchange for day immediately
prior to such Exercise Date; (ii) if sales prices for shares of Common Stock
are reported by the Nasdaq National Market System or Nasdaq Small Cap Market
(or a similar system then in use), the last reported sales price for the day
immediately prior to such Exercise Date; or (iii) if neither (i) nor (ii) above
are applicable, and if bid and ask prices for shares of Common Stock are
reported in the over-the-counter market by Nasdaq (or, if not so reported, by
the National Quotation Bureau), the average of the high bid and low ask prices
so reported for the ten (10) trading days immediately prior to such

 

2

 

Exercise Date.  Notwithstanding the foregoing, if there is no
reported closing price, last reported sales price, or bid and ask prices, as
the case may be, for the period in question, then the current market price
shall be determined as of the latest ten (10) day period prior to such day for
which such closing price, last reported sales price, or bid and ask prices, as
the case may be, are available, unless such securities have not been traded on
an exchange or in the over-the-counter market for 30 or more days immediately
prior to the day in question, in which case the current market price shall be
determined in good faith by, and reflected in a formal resolution of, the Board
of Directors of the Company.  The Company
acknowledges and agrees that this Warrant was issued on the Issuance Date.

 

3.                                       Transferability and Exchange.

 

(a)                                  This
Warrant, and the Common Stock issuable upon the exercise hereof, may not be
sold, transferred, pledged or hypothecated unless the Company shall have been
provided with an opinion of counsel, or other evidence reasonably satisfactory
to it, that such transfer is not in violation of the Securities Act, and any
applicable state securities laws. 
Subject to the satisfaction of the aforesaid condition, this Warrant and
the underlying shares of Common Stock shall be transferable from time to time
by the Holder upon written notice to the Company.  If this Warrant is transferred, in whole or
in part, the Company shall, upon surrender of this Warrant to the Company,
deliver to each transferee a Warrant evidencing the rights of such transferee
to purchase the number of shares of Common Stock that such transferee is
entitled to purchase pursuant to such transfer. 
The Company may place a legend similar to the legend at the top of this
Warrant on any replacement Warrant and on each certificate representing shares
issuable upon exercise of this Warrant or any replacement Warrants.  Only a registered Holder may enforce the
provisions of this Warrant against the Company. 
A transferee of the original registered Holder becomes a registered
Holder only upon delivery to the Company of the original Warrant and an
original Assignment, substantially in the form set forth in Exhibit B
attached hereto.

 

(b)                                 This
Warrant is exchangeable upon its surrender by the Holder to the Company for new
Warrants of like tenor and date representing in the aggregate the right to
purchase the number of shares purchasable hereunder, each of such new Warrants
to represent the right to purchase such number of shares as may be designated by
the Holder at the time of such surrender.

 

4.                                       Adjustments to Warrant Price and Number of Shares Subject to Warrant.  The Warrant Price and the number of shares of
Common Stock purchasable upon the exercise of this Warrant are subject to
adjustment from time to time upon the occurrence of any of the events specified
in this Section 4.  For the purpose of
this Section 4, “Common Stock” means shares now or hereafter authorized of any
class of common stock of the Company and any other stock of the Company, however
designated, that has the right to participate in any distribution of the assets
or earnings of the Company without limit as to per share amount (excluding, and
subject to any prior rights of, any class or series of preferred stock).

 

(a)                                  In
case the Company shall (i) pay a dividend or make a distribution in shares of
Common Stock or other securities, (ii) subdivide its outstanding shares of
Common Stock into a greater number of shares, (iii) combine its outstanding
shares of Common Stock into a smaller number of shares, or (iv) issue by
reclassification of its shares of Common Stock other securities of the Company,
then the Warrant Price in effect at the time of the record date for such
dividend or on

 

3

 

the effective date of
such subdivision, combination or reclassification, and/or the number and kind
of securities issuable on such date, shall be proportionately adjusted so that
the Holder of any Warrant thereafter exercised shall be entitled to receive the
aggregate number and kind of shares of Common Stock (or such other securities
other than Common Stock) of the Company, at the same aggregate Warrant Price,
that, if such Warrant had been exercised immediately prior to such date, the
Holder would have owned upon such exercise and been entitled to receive by
virtue of such dividend, distribution, subdivision, combination or
reclassification.  Such adjustment shall
be made successively whenever any event listed above shall occur.

 

(b)                                 Notwithstanding
any provision herein to the contrary, no adjustment in the Warrant Price shall
be required unless such adjustment would require an increase or decrease of at
least 1% in the Warrant Price; provided, however, that any adjustments which by
reason of this subsection (b) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment.  All calculations under this Section 4 shall
be made to the nearest cent or the nearest one-hundredth of a share, as the
case may be.

 

(c)                                  In
the event that at any time, as a result of an adjustment made pursuant to
subsection (a) above, the Holder of any Warrant thereafter exercised shall
become entitled to receive any shares of capital stock of the Company other
than shares of Common Stock, thereafter the number of such other shares so
receivable upon exercise of any Warrant shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to
the provisions with respect to the shares of Common Stock contained in this
Section 4, and the other provisions of this Warrant shall apply on like terms
to any such other shares.

 

(d)                                 If
the Company merges or consolidates into or with another corporation or entity,
or if another corporation or entity merges into or with the Company (excluding
such a merger in which the Company is the surviving or continuing corporation
and which does not result in any reclassification, conversion, exchange, or
cancellation of the outstanding shares of Common Stock), or if all or substantially
all of the assets or business of the Company are sold or transferred to another
corporation, entity, or person, then, as a condition to such consolidation,
merger, or sale (a “Transaction”), lawful and adequate provision shall be made
whereby the Holder shall have the right from and after the Transaction to
receive, upon exercise of this Warrant and upon the terms and conditions
specified herein and in lieu of the shares of the Common Stock that would have
been issuable if this Warrant had been exercised immediately before the
Transaction, such shares of stock, securities, or assets as the Holder would
have owned immediately after the Transaction if the Holder had exercised this
Warrant immediately before the effective date of the Transaction; provided,
however, that if so required by the acquiror in connection with any
Transaction, this Warrant shall be deemed exercised pursuant to a Cashless
Exercise, or if the Warrant Price is greater than the consideration paid per
share of Common Stock in such Transaction, shall be deemed cancelled, in each
case immediately prior to the consummation of such Transaction.

 

5.                                       Registration Rights. 
The Company hereby grants to Holder, with respect to the shares of
Common Stock underlying this Warrant, registration rights identical to those
that are granted to Purchasers in the Placement (as such terms are defined in
that certain Placement Agency Agreement, dated as of February 7, 2005, by and
between the Company and Stonegate Securities, Inc.; it being specifically
agreed and understood that the shares of Common Stock underlying this Warrant
will be included in any registration statement filed by the Company which
includes shares of Common Stock, or shares of Common

 

4

 

Stock underlying any
securities, issued to Purchasers in the Placement); provided that the investors
party thereto agree to include such shares in such registration pursuant to any
agreement governing such registration rights and the Holder agrees to become a
party to any such agreement.

 

6.                                       Reservation of Shares. 
The Company agrees at all times to reserve and hold available out of its
authorized but unissued shares of Common Stock the number of shares of Common
Stock issuable upon the full exercise of this Warrant.  The Company further covenants and agrees that
all shares of Common Stock that may be delivered upon the exercise of this
Warrant will, upon delivery, be fully paid and nonassessable and free from all taxes,
liens and charges with respect to the purchase thereof hereunder.

 

7.                                       Notices to Holder. 
Upon any adjustment of the Warrant Price (or number of shares of Common
Stock purchasable upon the exercise of this Warrant) pursuant to Section 4, the
Company shall promptly thereafter cause to be given to the Holder written
notice of such adjustment.  Such notice
shall include the Warrant Price (and/or the number of shares of Common Stock
purchasable upon the exercise of this Warrant) after such adjustment, and shall
set forth in reasonable detail the Company’s method of calculation and the
facts upon which such calculations were based. 
Where appropriate, such notice shall be given in advance and included as
a part of any notice required to be given under the other provisions of this
Section 7.

 

In the event of
(a) any fixing by the Company of a record date with respect to the holders of
any class of securities of the Company for the purpose of determining which of
such holders are entitled to dividends or other distributions, or any rights to
subscribe for, purchase or otherwise acquire any shares of capital stock of any
class or any other securities or property, or to receive any other right, (b)
any capital reorganization of the Company, or reclassification or
recapitalization of the capital stock of the Company or any transfer of all or
substantially all of the assets or business of the Company to, or consolidation
or merger of the Company with or into, any other entity or person, or (c) any
voluntary or involuntary dissolution or winding up of the Company, then and in
each such event the Company will give the Holder a written notice specifying,
as the case may be (i) the record date for the purpose of such dividend,
distribution, or right, and stating the amount and character of such dividend,
distribution, or right; or (ii) the date on which any such reorganization,
reclassification, recapitalization, transfer, consolidation, merger,
conveyance, dissolution, liquidation, or winding up is to take place and the
time, if any is to be fixed, as of which the holders of record of Common Stock
(or such capital stock or securities receivable upon the exercise of this
Warrant) shall be entitled to exchange their shares of Common Stock (or such
other stock securities) for securities or other property deliverable upon such
event.  Any such notice shall be given at
least 10 days prior to the earliest date therein specified.

 

8.                                       No Rights as a Stockholder. 
This Warrant does not entitle the Holder to any voting rights or other
rights as a stockholder of the Company, nor to any other rights whatsoever
except the rights herein set forth.

 

9.                                       Additional Covenants of the Company.  For so long as the Common Stock is listed for
trading on any regional or national securities exchange or Nasdaq (National
Market or Small Cap System), the Company shall, upon issuance of any shares for
which this Warrant is exercisable, at its expense, promptly obtain and maintain
the listing of such shares.  The Company
shall also comply

 

5

 

with the reporting
requirements of Sections 13 and 15(d) of the Exchange Act for so long as and to
the extent that such requirements apply to the Company.

 

The Company shall
not, by amendment of its Certificate of Incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities, or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms of this Warrant.  Without limiting the generality of the
foregoing, the Company (a) will not increase the par value of any shares of
capital stock receivable upon exercise of this Warrant above the amount payable
therefor upon such exercise, and (b) will take all such actions as may be
necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable stock. 

 

10.                                 Successors and Assigns.  This Agreement shall be binding upon and inure
to the benefit of the Company, the Holder and their respective successors and
permitted assigns.

 

11.                                 Notices.  The Company
agrees to maintain a ledger of the ownership of this Warrant (the “Ledger”).  Any notice hereunder shall be given by
registered or certified mail if to the Company, at its principal executive
office and, if to the Holder, to its address shown in the Ledger of the
Company; provided, however, that the Holder may at any time on three (3) days
written notice to the Company designate or substitute another address where
notice is to be given.  Notice shall be
deemed given and received after a certified or registered letter, properly
addressed with postage prepaid, is deposited in the U.S. mail.

 

12.                                 Severability.  Every
provision of this Warrant is intended to be severable. If any term or provision
hereof is illegal or invalid for any reason whatsoever, such illegality or
invalidity shall not affect the remainder of this Warrant.

 

13.                                 Governing Law.  This
Warrant shall be governed by and construed in accordance with the laws of the
State of Texas without giving effect to the principles of choice of laws
thereof.

 

14.                                 Attorneys’ Fees.  In
any action or proceeding brought to enforce any provision of this Warrant, the
prevailing party shall be entitled to recover reasonable attorneys’ fees in
addition to its costs and expenses and any other available remedy.

 

15.                                 Entire Agreement. 
This Warrant (including the Exhibits attached hereto) constitutes the
entire understanding between the Company and the Holder with respect to the
subject matter hereof, and supersedes all prior negotiations, discussions,
agreements and understandings relating to such subject matter.

 

IN WITNESS
WHEREOF, the Company has caused this Warrant to be executed by its duly
authorized officer as of the date first set forth above.

 

	
   

  	
  INTRUSION INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
  Chairman, President
  & CEO

  
				

 

6

 

Exhibit A

 

SUBSCRIPTION FORM

 

(To be Executed by the
Holder to Exercise the Rights To Purchase Common Stock Evidenced by the Within
Warrant)

 

The undersigned
hereby irrevocably subscribes for           
shares (the “Stock”) of the Common Stock of Intrusion, Inc. (the “Company”)
pursuant to and in accordance with the terms and conditions of the attached
Warrant (the “Warrant”), and hereby makes payment of $         
therefor by [tendering cash, wire transferring or delivering a certified check
or bank cashier’s check, payable to the order of the Company] [surrendering              
shares of Common Stock received upon exercise of the Warrant, which shares have
a current market price equal to such payment as required in Section 2 of the
Warrant].  The undersigned requests that
a certificate for the Stock be issued in the name of the undersigned and be
delivered to the undersigned at the address stated below.  If the Stock is not all of the shares
purchasable pursuant to the Warrant, the undersigned requests that a new
Warrant of like tenor for the balance of the remaining shares purchasable
thereunder be delivered to the undersigned at the address stated below.

 

In connection with
the issuance of the Stock, I hereby represent to the Company that I am
acquiring the Stock for my own account for investment and not with a view to,
or for resale in connection with, a distribution of the shares within the
meaning of the Securities Act of 1933, as amended (the “Securities Act”).

 

I understand that
because the Stock has not been registered under the Securities Act, I must hold
such Stock indefinitely unless the Stock is subsequently registered and
qualified under the Securities Act or is exempt from such registration and
qualification. I shall make no transfer or disposition of the Stock unless (a)
such transfer or disposition can be made without registration under the
Securities Act by reason of a specific exemption from such registration and
such qualification, or (b) a registration statement has been filed pursuant to
the Securities Act and has been declared effective with respect to such
disposition.  I agree that each
certificate representing the Stock delivered to me shall bear substantially the
same as set forth on the front page of the Warrant.

 

I agree that each
certificate representing the Stock delivered to me shall bear substantially the
same legend as set forth on the front page of the Warrant.

 

I further agree
that the Company may place stop orders on the certificates evidencing the Stock
with the transfer agent, if any, to the same effect as the above legend.  The legend and stop transfer notice referred
to above shall be removed only upon my furnishing to the Company of an opinion
of counsel (reasonably satisfactory to the Company) to the effect that such
legend may be removed.

 

	
  Date:

  	
   

  	
   

  	
  Signed: 

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  

 

A-1

 

Exhibit B

 

ASSIGNMENT

 

(To be Executed by the
Holder to Effect Transfer of the Attached Warrant)

 

For Value Received                               
hereby sells, assigns and transfers to                                 
the Warrant attached hereto and the rights represented thereby to purchase                             
shares of Common Stock in accordance with the terms and conditions hereof, and
does hereby irrevocably constitute and appoint                                                
as attorney to transfer such Warrant on the books of the Company with full
power of substitution.

 

	
  Dated:

  	
   

  	
   

  	
  Signed: 

  	
   

  

 

	
  Please print or
  typewrite

  name and address of

  assignee:

  	
   

  	
  Please insert Social
  Security

  or other Tax Identification

  Number of Assignee:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}]]