Exhibit 4.1

Intrusion Preferred

[FACE OF CERTIFICATE]

NUMBER

P

INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE

SEE REVERSE SIDE FOR RESTRICTIONS

INTRUSION INC.

SHARES

PREFERRED STOCK

SEE REVERSE FOR CERTAIN DEFINITIONS AND RESTRICTIONS ON TRANSFER

THIS CERTIFIES THAT

is the OWNER of

FULLY PAID AND NON-ASSESSABLE SHARES OF PREFERRED STOCK, $.01 PAR VALUE PER SHARE, OF INTRUSION INC. (herein called the "Corporation") transferable on the books of the Corporation by the holder hereof, in person or by duly authorized attorney, upon surrender of this Certificate properly endorsed or accompanied by a proper assignment. This Certificate and the shares represented hereby are issued under and shall be held subject to all of the provisions of the Certificate of Incorporation and the By-laws of the Corporation, and all amendments thereto, copies of which are on file at the principal offices of the Corporation, to all of which the holder of this Certificate, by acceptance hereof, assents. IN WITNESS WHEREOF, the Corporation has caused the facsimile signatures of its duly authorized officers and its facsimile seal to be hereunto affixed.

[SIGNATURE]

PRESIDENT AND CHIEF EXECUTIVE OFFICER

[SIGNATURE]

SECRETARY

[CORPORATE SEAL]

DATED:

[REVERSE OF CERTIFICATE]

INTRUSION INC.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR INTRUSION INC. SHALL HAVE RECEIVED AN OPINION OF COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED, WHICH OPINION AND COUNSEL SHALL BE REASONABLY SATISFACTORY TO INTRUSION INC. INTRUSION INC. WILL FURNISH TO EACH HOLDER OF ITS 5% CONVERTIBLE PREFERRED STOCK WHO SO REQUESTS WITHOUT CHARGE A COPY OF THE CERTIFICATE OF DESIGNATIONS SETTING FORTH THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF SUCH STOCK AND ANY OTHER CLASS OR SERIES THEREOF AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS.

The Certificate of Incorporation of the Corporation on file in the Office of the Secretary of State of Delaware sets forth a full statement of (i) all of the designations, preferences, limitations and relative rights of the shares of each class of capital stock authorized to be issued, (ii) the authority of the Board of Directors to fix and determine the relative rights and preferences of the shares of preferred stock which the Corporation is authorized to issue in series and, if and to the extent fixed and determined, the relative rights and preferences of any such series, (iii) the denial to stockholders of preemptive rights to acquire unissued or treasury shares or other securities of the Corporation and (iv) the denial to stockholders of the right to cumulate votes in any election of directors of the Corporation. The Corporation will furnish a copy of such statement to the record holder of this Certificate without charge on written request to the Corporation at its principal place of business or to the Transfer Agent and Registrar.

The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:

TEN COM - as tenants in common

TEN ENT - as tenants by the entireties

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JT TEN - as joint tenants with right of survivorship and not as tenants in common

UNIF GIFT MIN ACT - .........................................................................(Cust) Custodian

..................................................................(Minor) under Uniform Gifts to Minors Act

.............................................................. .............................................................. (State)

Additional abbreviations may also be used though not in the above list.

For Value Received,

hereby sell(s), assign(s) and transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE

Shares of the Preferred Stock represented by the within Certificate and do(es) hereby irrevocably constitute and appoint

Attorney to transfer the said stock on the books of the within-named Corporation with full power of substitution in the premises.

Dated

NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

X (SIGNATURE)

X (SIGNATURE)

THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.

SIGNATURE(S) GUARANTEED BY:

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Exhibit 4.2

CERTIFICATE OF DESIGNATIONS

OF

PREFERRED STOCK

OF

INTRUSION INC.

To Be Designated

5% Convertible Preferred Stock

Pursuant to Section 151(g) of the

General Corporation Law of the State of Delaware

The undersigned DOES HEREBY CERTIFY that the following resolution was duly adopted by the Board of Directors of Intrusion Inc., a Delaware corporation (the “Corporation”), at a meeting duly convened and held, at which a quorum was present and acting throughout:

“RESOLVED, that pursuant to the authority conferred on the Board of Directors of the Corporation (the “Board of Directors”) by the Corporation’s Certificate of Incorporation, the issuance of a series of preferred stock, par value $0.01 per share, of the Corporation which shall consist of 1,000,000 shares of preferred stock be, and the same hereby is, authorized; and the Chief Executive Officer and Secretary or Assistant Secretary of the Corporation be, and they hereby are, authorized and directed to execute and file with the Secretary of State of the State of Delaware a Certificate of Designations of Preferred Stock of the Corporation fixing the designations, powers, preferences and rights of the shares of such series, and the qualifications, limitations or restrictions thereof (in addition to the designations, powers, preferences and rights, and the qualifications, limitations or restrictions thereof, set forth in the Certificate of Incorporation which may be applicable to the Corporation’s preferred stock), as follows:

1.                                        Number of Shares; Designation . A total of 1,000,000 shares of preferred stock, par value $0.01 per share, of the Corporation are hereby designated as 5% Convertible Preferred Stock (the “Series”). Shares of the Series are being sold for a purchase price of $5.00 per share (the “Purchase Price”) pursuant to the Securities Purchase Agreement dated March 25, 2004, among the Corporation and the Purchasers party thereto.

2.                                        Rank . The Series shall, with respect to payment of dividends, redemption payments and rights upon liquidation, dissolution or winding-up of the affairs of the Corporation, rank:

(i)                                      senior and prior to the Common Stock, par value $0.01 per share, of the Corporation (the “Common Stock”), and any additional series of preferred

stock which may in the future be issued by the Corporation and are designated in the amendment to the Certificate of Incorporation or the certificate of designations establishing such additional preferred stock as ranking junior to the shares of the Series. Any shares of the Corporation’s capital stock which are junior to the shares of the Series with respect to the payment of dividends are hereinafter referred to as “Junior Dividend Shares” and any shares which are junior to the shares of the Series with respect to redemption, payment and rights upon liquidation, dissolution or winding-up of the affairs of the Corporation are hereinafter referred to as “Junior Liquidation Shares”.

(ii)                                   Parri passu with any additional series of preferred stock which may in the future be issued by the Corporation and are designated in the amendment to the Certificate of Incorporation or the certificate of designations establishing such additional preferred stock as ranking equal to the shares of the Series or which do not state they are Junior Dividend Shares or Senior Dividend Shares (as defined below). Any shares of the Corporation’s capital stock which are equal to the shares of the Series with respect to the payment of dividends are hereinafter referred to as “Parity Dividend Shares” and any shares which are equal to the shares of the Series with respect to redemption, payment and rights upon liquidation, dissolution or winding-up of the affairs of the Corporation are hereinafter referred to as “Parity Liquidation Shares”.

(iii)                                Junior to any additional series of preferred stock which may in the future be issued by the Corporation and are designated in the amendment to the Certificate of Incorporation or the certificate of designations establishing such additional preferred stock as ranking senior to the shares of the Series. Any shares of the Corporation’s capital stock which are senior to the shares of the Series with respect to the payment of dividends are hereinafter referred to as “Senior Dividend Shares” and any shares which are senior to the shares of the Series with respect to redemption, payment and rights upon liquidation, dissolution or winding-up of the affairs of the Corporation are hereinafter referred to as “Senior Liquidation Shares”.

The Corporation may not issue additional shares of preferred stock which are not (a) Junior Stock (as defined in paragraph 3(c) below) or (b) both Parity Liquidation Shares and Parity Dividend Shares without the consent of the holders of a majority of the outstanding shares of the Series.

3.                                        Dividends .  (a)  The dividend rate on shares of the Series shall be 5.0% of the Purchase Price per share per annum (as adjusted for any stock dividends, combinations or splits, recapitalizations or the like with respect to such shares). Dividends on shares of the Series shall be fully cumulative, accruing, without interest, from the date of original issuance of the Series through the date of redemption or conversion thereof, and shall be payable in arrears, when, as and if declared by the Board of Directors out of funds legally available for the payment of dividends, on September 30 and March 31 of each year, commencing September 30, 2004, except that if such date is not a business day then the dividend shall be payable on the first immediately succeeding business day (as used

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herein, the term “business day” shall mean any day except a Saturday, Sunday or day on which banking institutions are legally authorized to close in Dallas, Texas) (each such period being hereinafter referred to as a “Dividend Period”). Dividends shall be payable in cash. Each dividend shall be paid to the holders of record of shares of the Series as they appear on the stock register of the Corporation on the record date, not less than 10 nor more than 60 days preceding the payment date thereof, as shall be fixed by the Board of Directors. Dividends payable for each Dividend Period shall be computed on the basis of a 360-day year of twelve 30-day months and rounded to the nearest cent. Dividends on account of arrearages for any past Dividend Period may be declared and paid at any time, without reference to any regular dividend payment date, to holders of record on such date, not exceeding 45 days preceding the payment date thereof, as may be fixed by the Board of Directors. Dividends shall accrue regardless of whether the Corporation has earnings, whether there are funds legally available therefor and/or whether declared. No interest shall be payable with respect to any dividend payment that may be in arrears. Holders of shares of the Series called for redemption between the close of business on a dividend payment record date and the close of business on the corresponding dividend payment date shall, in lieu of receiving such dividend on the dividend payment date fixed therefor, receive such dividend payment on the date fixed for redemption together with all other accrued and unpaid dividends to the date fixed for redemption. The holders of shares of the Series shall not be entitled to any dividends other than the cash dividends provided for in this paragraph 3.

(b)                                  No cash dividends, except as described in the next succeeding sentence, shall be declared or paid or set apart for payment on any Parity Dividend Shares for any period unless full cumulative dividends have been or contemporaneously are declared and paid or declared and set aside for payment for all accrued dividends with respect to the Series through the most recent Dividend Period ending on or prior to the date of payment.  Unless dividends accrued and payable but unpaid on shares of the Series and any Parity Dividend Shares at the time outstanding have been paid in full, all cash dividends declared by the Corporation upon shares of the Series or Parity Dividend Shares shall be declared pro rata with respect to all such shares, so that the amounts of any such dividends declared on shares of the Series and the Parity Dividend Shares shall in all cases bear to each other the same ratio that, at the time of the declaration, all accrued but unpaid cash dividends on shares of the Series and the other Parity Dividend Shares, respectively, bear to each other.

(c)                                   If at any time the Corporation has failed to (x) pay or set apart for payment all accrued dividends on any shares of the Series through the then most recent Dividend Period and (y) set apart for payment an amount in cash equal to the scheduled dividend payments for each of the next two Dividend Periods, the Corporation shall not, and shall not permit any corporation or other entity directly or indirectly controlled by the Corporation to:

(i)                                      declare or pay or set aside for payment any dividend or other distribution on or with respect to the Junior Dividend Shares, whether in cash, securities, obligations or otherwise (other than dividends or distributions paid in shares of capital stock of the Corporation ranking junior to shares of the Series both

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as to the payment of dividends and as to rights in liquidation, dissolution or winding-up of the affairs of the Corporation (“Junior Stock”), or options, warrants or rights to subscribe for or purchase shares of Junior Stock); or

(ii)                                   redeem, purchase or otherwise acquire, or pay into, set apart money or make available for a sinking or other analogous fund for the redemption, purchase or other acquisition of, any shares of the Series (unless all of the shares of the Series are concurrently redeemed), Parity Dividend Shares, Parity Liquidation Shares or shares of Junior Stock for any consideration (except by conversion into or exchange for Junior Stock), other than repurchases of shares of Common Stock from employees, officers, directors, consultants or other persons performing services for the Corporation or any subsidiary pursuant to agreements under which the Corporation has the option to repurchase such shares at cost or at cost plus interest at a rate not to exceed nine percent (9%) per annum upon the occurrence of certain events, such as the termination of employment; and provided further , that the total amount applied to the repurchase of shares of Common Stock shall not exceed $100,000 during any twelve month period ,

unless, in each such case, all dividends accrued on shares of the Series through the most recent Dividend Period and on any Parity Dividend Shares have been or contemporaneously are declared and paid in full.

(d)                                  Any reference to “distribution” contained in this paragraph 3 shall not be deemed to include any distribution made in connection with any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary.

4.                                        Liquidation .  (a)  The liquidation value per share of shares of the Series, in case of the voluntary or involuntary liquidation, dissolution or winding-up of the affairs of the Corporation, shall be an amount equal to the Purchase Price, plus an amount equal to the cash value of dividends accrued and unpaid thereon, whether or not declared, to the payment date.

(b)                                  In the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Corporation, the holders of shares of the Series (i) shall not be entitled to receive the liquidation value of the shares held by them until the liquidation value of all Senior Liquidation Shares shall have been paid in full, and (ii) shall be entitled to receive the liquidation value of such shares held by them in preference to and in priority over any distributions upon the Junior Liquidation Shares. Upon payment in full of the liquidation value to which the holders of shares of the Series are entitled, the holders of shares of the Series will not be entitled to any further participation in any distribution of assets by the Corporation. If the assets of the Corporation are not sufficient to pay in full the liquidation value payable to the holders of shares of the Series and the liquidation value payable to the holders of any Parity Liquidation Shares, the holders of all such shares shall share ratably in such distribution of assets in accordance with the amounts that would be payable on the distribution if the amounts to which the holders of shares of the Series and the holders of Parity Liquidation Shares are entitled were paid in full.

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(c)                                   For purposes of this paragraph 4, (i) any acquisition of the Corporation by means of merger or other form of corporate reorganization in which outstanding capital stock of the Corporation are exchanged for securities or other consideration issued, or caused to be issued, by the acquiring entity or its subsidiary (other than a mere reincorporation transaction), or (ii) a sale of all or substantially all of the assets of the Corporation, shall be treated as a liquidation, dissolution or winding-up of the Corporation, unless otherwise approved by holders of at least two-thirds of the then outstanding shares of the Series, and shall entitle the holders of the Series to receive at the closing in cash, securities or other property (valued as provided in paragraph 4(e) below) amounts as specified in paragraph 4(a) and (b) above.

(d)                                  Written notice of any liquidation, dissolution or winding-up of the Corporation, stating the payment date or dates when and the place or places where the amounts distributable in such circumstances shall be payable, shall be given by first class mail, postage prepaid, not less than 30 days prior to any payment date stated therein, to the holders of record of shares of the Series at their respective addresses as the same shall appear on the books of the transfer agent with respect to the Series.

(e)                                   Whenever the distribution provided for in this paragraph 4 shall be payable in securities or property other than cash, the value of such distribution shall be the fair market value of such securities or other property as determined in good faith by the Board of Directors.

5.                                        Optional Redemption . (a) Shares of the Series will be redeemable at the option of the Corporation, in whole or in part, from and after the time that (x) the six-month anniversary of the issuance of shares of the Series occurs, and (y) the Current Market Price for the Common Stock for a period of any 20 out of 30 consecutive trading days equals or exceeds 200% of the Conversion Price (as defined below) then in effect, and (z) the Common Stock underlying the Shares can be sold by the holder thereof without restriction on resale; provided, however , that prior to the last date (the “Final Registration Date”) on which a registration statement is required to remain effective and available for use pursuant to that certain Registration Rights Agreement, dated March 25, 2004 (the “Registration Rights Agreement”), such registration statement is effective and available for use at all times during the period beginning thirty (30) days prior to the date of the redemption notice and ending on the earlier of the redemption date or the Final Registration Date, and is expected to remain effective and available for use until the earlier of thirty (30) days following the redemption date or the Final Registration Date.  The redemption price will be payable in cash and equal to the Purchase Price, together with an amount equal to the dividends accrued and unpaid thereon, whether or not declared, to the redemption date. The aggregate payment to each holder of shares of the Series to be redeemed will be rounded to the nearest cent. Notwithstanding the foregoing, if the date fixed for redemption occurs after a record date for a dividend and prior to the corresponding payment date, such dividend shall be paid on the payment date and the amount payable with respect to each share of the Series redeemed shall not include the amount of the dividend to be so paid.

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(b)                                  Not less than 60 nor more than 90 days prior to the date fixed for any redemption of shares of the Series pursuant to this paragraph 5, a notice of redemption shall be mailed by first class mail, postage prepaid, to each holder of shares of the Series to be redeemed at such holder’s last address as it appears on the books of the transfer agent for the Series. Such notice shall state (i) that the Corporation has elected to redeem all or a portion of the shares of the Series, as specified in such notice, (ii) the redemption price, (iii) the redemption date, (iv) that, unless the Corporation defaults in the payment of the redemption price, all shares of the Series called for redemption shall cease to accrue dividends after the redemption date and shall cease to be outstanding after such date, and (v) any other information required by applicable law to be included therein and any other procedures that a holder of shares of the Series must follow to receive payment for its redeemed shares. Neither failure to mail such notice, nor any defect therein or in the mailing thereof, to any particular holder shall affect the sufficiency of the notice or the validity of the proceedings for redemption with respect to any other holder. Any notice mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the holder receives the notice. On or after the redemption date, each holder of shares of the Series to be redeemed shall present and surrender such holder’s certificate or certificates for such shares to the Corporation at the place designated in the redemption notice and thereupon the redemption price of the shares shall be promptly paid to or on the order of the person whose name appears on such certificate or certificates as the owner thereof, and each surrendered certificate shall be canceled. In case less than all the shares represented by any such certificate are redeemed, a new certificate shall be issued to the holder representing the unredeemed shares of the Series.

(c)                                   If a notice of redemption has been given pursuant to this paragraph 5 and if, on or before the date fixed for redemption, the funds necessary for such redemption shall have been set aside by the Corporation, separate and apart from its other funds, in trust for the pro rata benefit of the holders of the shares of the Series so called for redemption, then, notwithstanding that any certificates for such shares have not been surrendered for cancellation, on the redemption date dividends shall cease to accrue on the shares of the Series to be redeemed, and at the close of business on the redemption date the holders of such shares shall cease to be stockholders with respect to those shares, shall have no interest in or claims against the Corporation by virtue thereof and shall have no voting or other rights with respect thereto, except the right to receive the moneys payable upon such redemption, without interest thereon, upon surrender (and endorsement, if required by the Corporation) of their certificates, and the shares evidenced thereby shall no longer be outstanding. Subject to applicable escheat laws, any moneys so set aside by the Corporation and unclaimed at the end of two years from the redemption date shall revert to the Corporation, after which reversion the holders of such shares so called for redemption shall look only to the Corporation for the payment of the redemption price.  No holder shall be entitled to receive any interest accrued on funds so deposited from time to time which shall be for the sole benefit of the Corporation.

(d)                                  If a notice of redemption has been given pursuant to this paragraph 5, and any holder of shares of the Series shall, prior to the close of business on the date fixed for redemption, give written notice to the Corporation pursuant to paragraph 6 below of the

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conversion of any or all of the shares to be redeemed held by the holder, then such redemption shall not become effective as to such shares to be converted and such conversion shall become effective as provided in paragraph 6 below, whereupon any funds deposited by the Corporation, or on its behalf, with a payment agent or segregated and held in trust by the Corporation for the redemption of such shares shall (subject to any right of the holder of such shares to receive the dividend payable thereon as provided in paragraph 6 below) immediately upon such conversion be returned to the Corporation or, if then held in trust by the Corporation, shall be discharged from the trust.

(e)                                   In every case of redemption of less than all of the outstanding shares of the Series pursuant to this paragraph 5, the shares to be redeemed shall be selected pro rata or by lot or in such other manner as the Board of Directors may determine, as may be prescribed by resolution of the Board of Directors, provided that only whole shares shall be selected for redemption.

6.                                        Conversion . (a) Holders of shares of the Series will have the right, exercisable at any time after (x) the issuance by the Corporation of shares of the Series, and (y) prior to redemption of such shares (as described in paragraph 5), to convert, in whole or in part, shares of the Series into shares of Common Stock (calculated as to each conversion to the nearest 1/100th of a share) at the conversion price in an amount equal to $0.786, subject to adjustment as described below (the “Conversion Price”). The number of shares of Common Stock into which each share of the Series shall be convertible shall be determined by dividing $5.00, subject to proportional adjustment to reflect any split or consolidation of the Common Stock or any dividend payable on the Common Stock in additional shares of Common Stock (the “Conversion Amount”), by the Conversion Price then in effect. In the case of shares of the Series called for redemption, conversion rights will expire at the close of business on the business day immediately preceding the redemption date. Upon conversion of shares of the Series, the Corporation will pay to the holder of the converted shares an amount equal to the dividends accrued but unpaid thereon through the date the notice of conversion is delivered to the Corporation. Such payment shall be made in cash. Notwithstanding the foregoing, holders of record of shares of the Series on a record date fixed for the payment of a dividend on such shares shall be entitled to receive the dividend notwithstanding the conversion of the shares prior to the dividend payment date. A share of the Series may not be converted in part.

(b)                                  In order to exercise the conversion right, the holder of each share of the Series to be converted shall surrender the certificate representing such share, duly endorsed or assigned to the Corporation or in blank, at the office of the Corporation in Richardson, Texas (or such other address as the Corporation may designate) and shall give written notice to the Corporation in the form set forth on the reverse of the stock certificates for the shares of the Series that such holder elects to convert the shares represented by such certificate or a portion thereof. Such notice shall also state the name or names (with address) in which the certificate or certificates for the shares of Common Stock which shall be issuable upon such conversion shall be issued, and shall be accompanied by funds in an amount sufficient to pay any transfer or similar tax required by the provisions of paragraph 6(e) below. Each share surrendered for conversion shall, unless the shares issuable on conversion are to be issued in the same name as the name in which such share

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of the Series is registered, be duly endorsed by, or be accompanied by instruments of transfer (in each case, in form reasonably satisfactory to the Corporation), duly executed by the holder or such holder’s duly authorized attorney-in-fact, with such signature guaranteed by a member of the STAMP medallion program.

(c)                                   As promptly as practicable after the surrender of certificates for shares of the Series for conversion and the receipt of such notice and funds, if any, as aforesaid, the Corporation shall issue and shall deliver to such holder, or on such holder’s written order, a certificate or certificates for the number of shares of Common Stock issuable upon the conversion of such shares of the Series in accordance with the provisions of this paragraph 6, and a check or cash in respect of any fractional interest in respect of a share of Common Stock arising upon such conversion, as provided in paragraph 6(d) below.  Each conversion with respect to any shares of the Series shall be deemed to have been effected immediately prior to the close of business on the date on which the certificates for shares of the Series shall have been surrendered (accompanied by the funds, if any, required by paragraph 6(e) below) and such notice and assignment, if any, shall have been received by the Corporation as aforesaid, and the person or persons entitled to receive the Common Stock issuable upon such conversion shall be deemed for all purposes to be the record holder or holders of such Common Stock upon that date.

(d)                                  No fractional shares of Common Stock or scrip representing fractional shares shall be issued upon conversion of shares of the Series. If more than one share of the Series shall be surrendered for conversion at one time by the same holder, the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of the Series so surrendered. Instead of any fractional share of Common Stock otherwise issuable upon conversion of any shares of the Series, the Corporation shall pay a cash adjustment in respect to such fraction in an amount equal to the same fraction of the Current Market Price of the Common Stock at the close of business on the day of conversion.

(e)                                   If a holder converts shares of the Series, the Corporation shall pay any and all documentary, stamp or similar issue or transfer tax payable in respect of the issue or delivery of the shares of the Series (or any other securities issued on account thereof pursuant hereto) or Common Stock upon the conversion; provided, however, the Corporation shall not be required to pay any such tax that may be payable because any such shares are issued in a name other than the name of the holder.

(f)                                     The Corporation shall reserve out of its authorized but unissued Common Stock or its Common Stock held in treasury sufficient shares of Common Stock to permit the conversion of all of the outstanding shares of the Series. The Corporation shall from time to time, in accordance with the General Corporation Law of the State of Delaware, increase the authorized amount of its Common Stock if at any time the authorized amount of its Common Stock remaining unissued shall not be sufficient to permit the conversion of all shares of the Series at the time outstanding. If any shares of Common Stock required to be reserved for issuance upon conversion of shares of the Series hereunder require registration with or approval of any governmental authority under any federal or state law before the shares may be issued upon conversion, the Corporation shall in good

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faith and as expeditiously as possible endeavor to cause the shares to be so registered or approved. All shares of Common Stock delivered upon conversion of the shares of the Series will, upon delivery, be duly authorized and validly issued, fully paid and nonassessable, free from all taxes, liens and charges with respect to the issue thereof.

(g)                                  The Conversion Price shall be subject to adjustment from time to time as follows:

(i)                                      In the event that the Corporation shall (A) pay a dividend or make a distribution, in shares of Common Stock, on any class of Capital Stock of the Corporation or any subsidiary which is not directly or indirectly wholly owned by the Corporation, (B) split or subdivide its outstanding Common Stock into a greater number of shares, or (C) combine its outstanding Common Stock into a smaller number of shares, then in each such case the Conversion Price in effect immediately prior thereto shall be adjusted so that the holder of each share of the Series thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock that such holder would have owned or have been entitled to receive after the occurrence of any of the events described above had such share of the Series been converted immediately prior to the occurrence of such event. An adjustment made pursuant to this paragraph 6(g)(i) shall become effective immediately after the close of business on the record date in the case of a dividend or distribution (except as provided in paragraph 6(k) below) and shall become effective immediately after the close of business on the effective date in the case of such subdivision, split or combination, as the case may be.

(ii)                                   No adjustment in the Conversion Price shall be required unless the adjustment would require an increase or decrease of at least 1% in the Conversion Price then in effect; provided, however, that any adjustments that by reason of this paragraph 6(g)(ii) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this paragraph 6(g) shall be made to the nearest cent or nearest 1/100th of a share.

(iii)                                In the event that, at any time as a result of an adjustment made pursuant to paragraph 6(g)(i) or 6(g)(ii) above, the holder of any share of the Series thereafter surrendered for conversion shall become entitled to receive any shares of the Corporation other than shares of the Common Stock, thereafter the number of such other shares so receivable upon conversion of any share of the Series 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 Common Stock contained in paragraphs 6(g)(i) and 6(g)(ii) above, and the other provisions of this paragraph 6(g)(iii) with respect to the Common Stock shall apply on like terms to any such other shares.

(h)                                  In case of any reclassification of the Common Stock (other than in a transaction to which paragraph 6(g)(i) applies), any consolidation of the Corporation with, or merger of the Corporation into, any other entity, any merger of another entity

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into the Corporation (other than a merger that does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of Common Stock of the Corporation), any sale or transfer of all or substantially all of the assets of the Corporation or any compulsory share exchange which does not result in a liquidation under paragraph 4 above, pursuant to which share exchange the Common Stock is converted into other securities, cash or other property, then lawful provision shall be made as part of the terms of such transaction whereby the holder of each share of the Series then outstanding shall have the right thereafter, during the period such share shall be convertible, to convert such share only into the kind and amount of securities, cash and other property receivable upon the reclassification, consolidation, merger, sale, transfer or share exchange by a holder of the number of shares of Common Stock of the Corporation into which a share of the Series might have been converted immediately prior to the reclassification, consolidation, merger, sale, transfer or share exchange assuming that such holder of Common Stock failed to exercise rights of election, if any, as to the kind or amount of securities, cash or other property receivable upon consummation of such transaction, subject to adjustment as provided in paragraph 6(g) above following the date of consummation of such transaction. As a condition to any such transaction, the Corporation or the person formed by the consolidation or resulting from the merger or which acquires such assets or which acquires the Corporation’s shares, as the case may be, shall make provisions in its certificate or articles of incorporation or other constituent document to establish such right. The certificate or articles of incorporation or other constituent document shall provide for adjustments which, for events subsequent to the effective date of the certificate or articles of incorporation or other constituent document, shall be as nearly equivalent as may be practicable to the adjustments provided for in this paragraph 6. The provisions of this paragraph 6(h) shall similarly apply to successive reclassifications, consolidations, mergers, sales, transfers or share exchanges.

(i)                                                              If:

(i)                                      the Corporation shall take any action which would require an adjustment in the Conversion Price pursuant to Section 7(g); or

(ii)                                   the Corporation shall authorize the granting to the holders of its Common Stock generally of rights, warrants or options to subscribe for or purchase any shares of any class or any other rights, warrants or options; or

(iii)                                there shall be any reclassification or change of the Common Stock (other than a subdivision or combination of its outstanding Common Stock or a change in par value) or any consolidation, merger or statutory share exchange to which the Corporation is a party and for which approval of any stockholders of the Corporation is required, or the sale or transfer of all or substantially all of the assets of the Corporation; or

(iv)                               there shall be a voluntary or involuntary dissolution, liquidation or winding-up of the Corporation;

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then, the Corporation shall cause to be filed with the transfer agent for the Series and shall cause to be mailed to the holders of shares of the Series at their addresses as shown on the books of the transfer agent for the Series, as promptly as possible, but at least 30 days prior to the applicable date hereinafter specified, a notice stating (A) the date on which a record is to be taken for the purpose of such dividend, distribution or granting of rights, warrants or options or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution or rights, warrants or options are to be determined, or (B) the date on which such reclassification, change, consolidation, merger, statutory share exchange, sale, transfer, dissolution, liquidation or winding-up is expected to become effective or occur, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reclassification, change, consolidation, merger, statutory share exchange, sale, transfer, dissolution, liquidation or winding-up. Failure to give such notice or any defect therein shall not affect the legality or validity of the proceedings described in this paragraph 6(i).

(j)                                      Whenever the Conversion Price is adjusted as herein provided, the Corporation shall promptly file with the transfer agent for the Series a certificate of an officer of the Corporation setting forth the Conversion Price after the adjustment and setting forth a brief statement of the facts requiring such adjustment and a computation thereof. The Corporation shall promptly cause a notice of the adjusted Conversion Price to be mailed to each registered holder of shares of the Series.

(k)                                   In any case in which paragraph 6(g) provides that an adjustment shall become effective immediately after a record date for an event and the date fixed for such adjustment pursuant to paragraph 6(g) occurs after such record date but before the occurrence of such event, the Corporation may defer until the actual occurrence of such event (i) issuing to the holder of any shares of the Series converted after such record date and before the occurrence of such event the additional shares of Common Stock issuable upon such conversion by reason of the adjustment required by such event over and above the Common Stock issuable upon such conversion before giving effect to such adjustment, and (ii) paying to such holder any amount in cash in lieu of any fraction pursuant to paragraph 6(d).

(l)                                      In case the Corporation shall take any action affecting the Common Stock, other than actions described in this paragraph 6, which in the opinion of the Board of Directors would materially adversely affect the conversion right of the holders of the shares of the Series, the Conversion Price may be adjusted, to the extent permitted by law, in such manner, if any, and at such time, as the Board of Directors may determine to be equitable in the circumstances; provided, however, that in no event shall the Board of Directors be required to take any such action.

(m)                                The Corporation shall list the shares of Common Stock required to be delivered upon conversion of shares of the Series, prior to delivery, upon each national securities exchange or any similar system of automated dissemination of securities prices, if any, upon which the Common Stock is listed at the time of delivery.

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(n)                                  The Corporation shall not effect any conversion of the Series by any holder, and no person who is a holder of shares of the Series shall have the right to convert its shares into Common Stock, to the extent that after giving effect to such conversion, such person (together with such person’s Affiliates) would beneficially own in excess of 9.99% of the shares of the Common Stock outstanding immediately after giving effect to such conversion. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by such person and its Affiliates shall include, without limitation, the number of shares of Common Stock issuable upon conversion of the shares of the Series with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would be issuable upon (i) conversion of the remaining, unconverted shares of the Series beneficially owned by such person and its Affiliates, and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Corporation beneficially owned by such person and its Affiliates (including, without limitation, any debentures, convertible notes or convertible preferred stock or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended. For purposes of this paragraph 6(n), in determining the number of outstanding shares of Common Stock, a holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Corporation’s most recent Form 10-Q, Form 10-K or other public filing with the Securities and Exchange Commission, as the case may be, (B) a more recent public announcement by the Corporation, or (C) any other notice by the Corporation or its transfer agent setting forth the number of shares of Common Stock outstanding. For any reason at any time, upon the written or oral request of any holder of the Series, the Corporation shall within two business days confirm orally and in writing to such 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 Corporation by such holder and its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. In effecting the conversion of shares of the Series, the Corporation shall be entitled to rely on a representation by the holder of such shares of the Series as to the number of shares that it beneficially owns for purposes of the above 9.99% limitation calculation.

8.                                        Status of Shares . All shares of the Series that are at any time redeemed or converted pursuant to paragraph 5 or 6 above, and all shares of the Series that are otherwise reacquired by the Corporation and subsequently canceled by the Board of Directors, shall have the status of authorized but unissued shares of preferred stock, without designation as to series, subject to reissuance by the Board of Directors as shares of any one or more other series.

9.                                        Voting Rights . Each holder of shares of the Series shall be entitled to the number of votes equal to the number of shares of Common Stock into which such shares of the Series could be converted and shall have voting rights and powers equal to the voting rights and powers of the Common Stock (except as otherwise expressly provided herein or as required by law), voting together with the Common Stock as a single class

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and shall be entitled to notice of any stockholders’ meeting in accordance with the Bylaws of the Corporation. Fractional votes shall not, however, be permitted and any fractional voting rights resulting from the above formula (after aggregating all shares into which shares of the Series held by each holder could be converted) shall be rounded to the nearest whole number (with one-half being rounded upward).

10.                                  Restrictions and Limitations . So long as any shares of the Series remain outstanding, the Corporation, shall not, without the vote or written consent by the holders of at least a majority of the then outstanding shares of the Series, voting together as a single class:

(i)                                      Redeem, purchase or otherwise acquire for value (or pay into or set aside for a sinking fund for such purpose) any share or shares of preferred stock otherwise than by redemption in accordance with paragraph 5 hereof or by conversion in accordance with paragraph 6 hereof;

(ii)                                   Redeem, purchase or otherwise acquire (or pay into or set aside for a sinking fund for such purpose), any of the Common Stock; provided, however , that this restriction shall not apply to the repurchase of shares of Common Stock from employees, officers, directors, consultants or other persons performing services for the Corporation or any subsidiary pursuant to agreements under which the Corporation has the option to repurchase such shares at cost or at cost plus interest at a rate not to exceed nine percent (9%) per annum upon the occurrence of certain events, such as the termination of employment; and provided further , that the total amount applied to the repurchase of shares of Common Stock shall not exceed $100,000 during any twelve month period; or

(iii)                                Authorize or issue, or obligate itself to issue, any debt security, or otherwise incur indebtedness for borrowed money (other than (A) to a strategic investor in connection with a strategic commercial agreement or transaction as determined by the Board of Directors, (B) pursuant to a commercial borrowing, secured lending or lease financing transaction approved by the Board of Directors, or (c) pursuant to the acquisition of another corporation or entity by the Corporation by consolidation, merger, purchase of all or substantially all of the assets, or other reorganization).

11.                                  Certain Definitions . As used in this Certificate, the following terms shall have the following respective meanings:

“ Affiliate ” of any specified person means any other person directly or indirectly controlling or controlled by or under common control with such specified person. For purposes of this definition, “control” when used with respect to any person means the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities or otherwise; and the term “controlling” and “controlled” having meanings correlative to the foregoing.

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“ Associate ” of a person means (A) any corporation or organization, other than the Corporation or any subsidiary of the Corporation, of which the person is an officer or partner or is, directly or indirectly, the beneficial owner of 10% or more of any class of its equity securities; (B) any trust or estate in which the person has a substantial beneficial interest or as to which the person serves as trustee or in a similar fiduciary capacity; and (C) any relative or spouse of the person, or any relative of the spouse, who has the same home as the person or who is a director or officer of the person or any of its parents or subsidiaries.

“ Capital Stock ” of any person or entity means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in the common stock or preferred stock of such person or entity, including, without limitation, partnership and membership interests.

“ Current Market Price ” means, when used with respect to any security as of any date, the volume weighted average price of such security on the ten (10) consecutive trading days immediately preceding such date as reported for consolidated transactions with respect to securities listed on the principal national securities exchange on which such security is listed or admitted to trading or, if such security is not listed or admitted to trading on any national securities exchange, the volume weighted average price of such security on the ten (10) consecutive trading days immediately preceding such date in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotations System or such other system then in use or, if such security is not quoted by any such organization, the volume weighted average price of such security as of the ten (10) consecutive trading days immediately preceding such date furnished by a New York Stock Exchange member firm selected by the Corporation, or if such security is not quoted by any such organization and no such New York Stock Exchange member firm is able to provide such prices, such price as is determined by the Board of Directors in good faith.

“ Related Person ”  means an individual related to an officer, director or employee of the Corporation or any of its Affiliates which relation is by blood, marriage or adoption and not more remote than first cousin.

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IN WITNESS WHEREOF, the Corporation has caused this Certificate to be duly executed on its behalf by its undersigned Chief Executive Officer this 25 ^th day of March, 2004.

[Signature Page to Certificate of Designations]

Exhibit 4.3

THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED EXCEPT UPON DELIVERY TO THE CORPORATION OF AN OPINION OF COUNSEL SATISFACTORY IN FORM AND SUBSTANCE TO IT THAT SUCH TRANSFER WILL NOT VIOLATE THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS

THE TRANSFER OF THIS WARRANT IS RESTRICTED AS DESCRIBED HEREIN.

Intrusion Inc.

Warrant for the Purchase of Shares of Common Stock,

par value $0.01 per Share

Issuance Date:  March 25, 2004

THIS CERTIFIES that, for value received,                                                     , whose address is                                   ,           ,                 (the “Holder”), is entitled to subscribe for and purchase from Intrusion Inc., a Delaware corporation (the “Company”), upon the terms and conditions set forth herein,               shares of the Company’s Common Stock, par value $0.01 per share (“Common Stock”), at a price of $0.786 per share (the “Exercise Price”). As used herein the term “this Warrant” shall mean and include this Warrant and any Common Stock or Warrants hereafter issued as a consequence of the exercise or transfer of this Warrant in whole or in part.

The number of shares of Common Stock issuable upon exercise of the Warrants (the “Warrant Shares”) may be adjusted from time to time as hereinafter set forth. The Warrant Shares are entitled to the benefits, and subject to the obligations, set forth in the Registration Rights Agreement between the Company and the Holder dated concurrently herewith.

1.                                        Exercise Period . This Warrant may be exercised at any time or from time to time during the period commencing on the Issuance Date and ending at 5:00 P.M. Central time on March 25, 2009 (the “Exercise Period”).

2.                                        Procedure for Exercise; Effect of Exercise .

(a)                                   Cash Exercise . This Warrant may be exercised, in whole or in part, by the Holder during normal business hours on any business day during the Exercise Period by (i) the presentation and surrender of this Warrant to the Company at its principal office along with a

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duly executed Notice of Exercise (in the form attached to this Agreement) specifying the number of Warrant Shares to be purchased, and (ii) delivery of payment to the Company of the Exercise Price for the number of Warrant Shares specified in the Notice of Exercise by cash, wire transfer of immediately available funds to a bank account specified by the Company, or by certified or bank cashier’s check.

(b)                                  Cashless Exercise . This Warrant may also be exercised by the Holder through a cashless exercise, as described in this Section 2(b) ; provided, that if so required by an acquiror in connection with a transaction resulting in a liquidation of the Company’s 5% Convertible Preferred Stock pursuant to paragraph 4 of the Company’s Certificate of Designations for such stock, this Warrant shall be deemed exercised pursuant to this Section 2(b), or, if the Exercise Price is greater than the consideration paid per share of Common Stock in such transaction, shall be deemed cancelled, immediately prior to the consummation thereof . This Warrant may be exercised, in whole or in part, by the Holder during normal business hours on any business day during the Exercise Period by the presentation and surrender of this Warrant to the Company at its principal office along with a duly executed Notice of Exercise specifying the number of Warrant Shares to be applied to such exercise. The number of Warrant Shares to be delivered upon exercise of this Warrant pursuant to this Section 2(b) shall equal the value of this Warrant (or the portion thereof being canceled) computed as of the date of delivery of this Warrant to the Company using the following formula:

Where:

For purposes of this Section 2(b) and Section 6, the “ Current Market Price ” per share of Common Stock on any date shall mean the volume weighted average price of such security on the ten (10) consecutive trading days immediately preceding such date as reported for consolidated transactions with respect to securities listed on the principal national securities exchange on which such security is listed or admitted to trading or, if such security is not listed or admitted to trading on any national securities exchange, the volume weighted average price of such security on the ten (10) consecutive trading days immediately preceding such date in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotations System or such other system then in use or, if such security is not quoted by any such

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organization, the volume weighted average price of such security as of the ten (10) consecutive trading days immediately preceding such date furnished by a New York Stock Exchange member firm selected by the Company, or if such security is not quoted by any such organization and no such New York Stock Exchange member firm is able to provide such prices, such price as is determined by the Board of Directors in good faith.

The Company acknowledges and agrees that this Warrant was issued on the Issuance Date. Consequently, the Company acknowledges and agrees that, if the Holder conducts a cashless exercise pursuant to this Section 2(b), the period during which the Holder held this Warrant may, for purposes of Rule 144 promulgated under the Securities Act of 1933, as amended (the “ Securities Act ”), be “tacked” to the period during which the Holder holds the Warrant Shares received upon such cashless exercise.

Notwithstanding the foregoing, except in connection with a transaction described in the proviso in the first sentence of this Section 2(b), the Holder may conduct a cashless exercise pursuant to this Section 2(b) only after the first anniversary of the Issuance Date, and then only in the event that a registration statement covering the resale of the Warrant Shares is not then effective and available for use by the Holder at the time that the Holder wishes to conduct such cashless exercise.

(c)                                   Effect of Exercise . Upon receipt by the Company of this Warrant and a Notice of Exercise, together with proper payment of the Exercise Price, as provided in this Section 2, the Company agrees that such Warrant Shares shall be deemed to be issued to the Holder as the record holder of such Warrant Shares as of the close of business on the date on which this Warrant has been surrendered and payment has been made for such Warrant Shares in accordance with this Agreement and the Holder shall be deemed to be the holder of record of the Warrant Shares, notwithstanding that the stock transfer books of the Company shall then be closed or that certificates representing such Warrant Shares shall not then be actually delivered to the Holder. A stock certificate or certificates for the Warrant Shares specified in the Notice of Exercise shall be delivered to the Holder as promptly as practicable, and in any event within seven (7) business days, thereafter. The stock certificate(s) so delivered shall be in any such denominations as may be reasonably specified by the Holder in the Notice of Exercise. If this Warrant should be exercised in part only, the Company shall, upon surrender of this Warrant for cancellation, execute and deliver a new Warrant evidencing the right of the Holder to purchase the balance of the Warrant Shares subject to purchase hereunder.

3.                                        Registration of Warrants; Transfer of Warrants . Any Warrants issued upon the transfer or exercise in part of this Warrant shall be numbered and shall be registered in a Warrant Register as they are issued. The Company shall be entitled to treat the registered holder of any Warrant on the Warrant Register as the owner in fact thereof for all pur­poses and shall not be bound to recognize any equitable or other claim to or inter­est in such Warrant on the part of any other person, and shall not be liable for any registration or transfer of Warrants which are registered or to be registered in the name of a fiduciary or the nominee of a fiduciary unless made with the actual knowledge that a fiduciary or nominee is committing a breach of trust in requesting such registration or transfer, or with the knowledge of such facts that its participation therein amounts to bad faith. This Warrant shall be transferable only on the books of the Company upon delivery thereof duly endorsed by the Holder or by its duly authorized attorney

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or representative, or accompanied by proper evidence of succession, assignment, or authority to transfer.  In all cases of transfer by an attorney, executor, administrator, guardian, or other legal representative, duly authenticated evidence of his or its author­ity shall be produced. Upon any registration of transfer, the Company shall deliver a new Warrant or Warrants to the person entitled thereto. This Warrant may be exchanged, at the option of the Holder thereof, for another Warrant, or other Warrants of different denominations, of like tenor and representing in the aggregate the right to purchase a like number of Warrant Shares, upon surrender to the Company or its duly authorized agent.

4.                                        Restrictions on Transfer . (a) The Holder, as of the date of issuance hereof, represents to the Company that such Holder is acquiring the Warrants for its own account for investment purposes and not with a view to the distribution thereof or of the Warrant Shares.  Notwithstanding any provisions contained in this Warrant to the contrary, this Warrant and the related Warrant Shares shall not be transferable except pursuant to the proviso contained in the following sentence or upon the conditions specified in this Section 4, which conditions are intended, among other things, to insure compliance with the provisions of the Securities Act and applicable state law in respect of the transfer of this Warrant or such Warrant Shares. The Holder by acceptance of this Warrant agrees that the Holder will not transfer this Warrant or the related Warrant Shares prior to delivery to the Company of an opinion of the Holder’s counsel (as such opinion and such counsel are described in Section 4(b) hereof) or until registration of such Warrant Shares under the Securities Act has become effective or after a sale of such Warrant or Warrant Shares has been consummated pursuant to Rule 144 or Rule 144A under the Securities Act; provided, however , that the Holder may freely transfer this Warrant or such Warrant Shares (without delivery to the Company of an opinion of Counsel) (i) to one of its nominees, affiliates or a nominee thereof, (ii) to a pension or profit-sharing fund established and maintained for its employees or for the employees of any affiliate, (iii) from a nominee to any of the aforementioned persons as beneficial owner of this Warrant or such Warrant Shares, or (iv) to a qualified institutional buyer, so long as such transfer is effected in compliance with Rule 144A under the Securities Act; provided, in each case, that such transferee agrees to be bound by the transfer restrictions set forth herein.

(b)                                  The Holder, by its acceptance hereof, agrees that prior to any transfer of this Warrant or of the related Warrant Shares (other than as permitted by Section 4(a) hereof or pursuant to a registration under the Securities Act), the Holder will give written notice to the Company of its intention to effect such transfer, together with an opinion of such counsel for the Holder as shall be reasonably acceptable to the Company, to the effect that the proposed transfer of this Warrant and/or such Warrant Shares may be effected without registration under the Securities Act, which opinion shall be reasonably satisfactory in form and substance to the Company . Upon delivery of such notice and opinion to the Company, the Holder shall be entitled to transfer this Warrant and/or such Warrant Shares in accordance with the intended method of disposition specified in the notice to the Company.

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(c)                                   Each stock certificate representing Warrant Shares issued upon exercise or exchange of this Warrant shall bear the following legend unless the opinion of counsel referred to in Section 4(b) states such legend is not required:

“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED EXCEPT UPON DELIVERY TO THE CORPORATION OF AN OPINION OF COUNSEL SATISFACTORY IN FORM AND SUBSTANCE TO IT THAT SUCH TRANSFER WILL NOT VIOLATE THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS.”

The Holder understands that the Company may place, and may instruct any transfer agent or depository for the Warrant Shares to place, a stop transfer notation in the securities records in respect of the Warrant Shares.

5.                                        Reservation of Shares . The Company shall at all times during the Exercise Period reserve and keep available out of its authorized and unissued Common Stock, solely for the purpose of providing for the exercise of the rights to purchase all Warrant Shares granted pursuant to the Warrants, such number of shares of Common Stock as shall, from time to time, be sufficient therefor. The Company covenants that all shares of Common Stock issuable upon exercise of this Warrant, upon receipt by the Company of the full Exercise Price therefor, and all shares of Common Stock issuable upon conversion of this Warrant, shall be validly issued, fully paid, non-assessable, and free of preemptive rights.

6.                                        Adjustments . The number of shares of Common Stock issuable upon exercise of the Warrants shall be adjusted from time to time as follows:

(a)                                   (i)                                      In the event that the Company shall (A) pay a dividend or make a distribution, in shares of Common Stock, on any class of capital stock of the Company or any subsidiary which is not directly or indirectly wholly owned by the Company, (B) split or subdivide its outstanding Common Stock into a greater number of shares, or (C) combine its outstanding Common Stock into a smaller number of shares, then in each such case the number of shares issuable upon exercise of this Warrant shall be adjusted so that the Holder of a Warrant thereafter surrendered for exercise shall be entitled to receive the number of shares of Common Stock that such Holder would have owned or have been entitled to receive after the occurrence of any of the events described above had such Warrant been exercised immediately prior to the occurrence of such event.  An adjustment made pursuant to this Section 6(a)(i) shall become effective immediately after the close of business on the record date in the case of a dividend or distribution (except as provided in Section 6(e) below) and shall become effective immediately after the close of business on the effective date in the case of such subdivision, split or combination, as the case may be.

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(ii)                                   No adjustment in the Exercise Price shall be required unless the adjustment would require an increase or decrease of at least 1% in the Exercise Price then in effect; provided, however, that any adjustments that by reason of this Section 6(a) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 6(a) shall be made to the nearest cent or nearest 1/100th of a share.

(iii)                                In the event that, at any time as a result of an adjustment made pursuant to Sections 6(a)(i) and 6(a)(ii) above, the Holder of any Warrant thereafter surrendered for exercise shall become entitled to receive any shares of the Company other than shares of the Common Stock, thereafter the number of such other shares so receivable upon exercise of any such 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 Common Stock contained in Sections 6(a)(i) and 6(a)(ii) above, and the other provisions of this Section 6(a) with respect to the Common Stock shall apply on like terms to any such other shares.

(b)                                  In case of any reclassification of the Common Stock (other than in a transaction to which Section 6(a)(i) applies), any consolidation of the Company with, or merger of the Company into, any other entity, any merger of another entity into the Company (other than a merger that does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of Common Stock of the Company), any sale or transfer of all or substantially all of the assets of the Company or any compulsory share exchange which does not result in the cashless exercise or cancellation of this Warrant pursuant to Section 2(b), pursuant to which share exchange the Common Stock is converted into other securities, cash or other property, then lawful provision shall be made as part of the terms of such transaction whereby the Holder of a Warrant then outstanding shall have the right thereafter, during the period such Warrant shall be exercisable, to exercise such Warrant only for the kind and amount of securities, cash and other property receivable upon the reclassification, consolidation, merger, sale, transfer or share exchange by a holder of the number of shares of Common Stock of the Company into which a Warrant might have been able to exercise for immediately prior to the reclassification, consolidation, merger, sale, transfer or share exchange assuming that such holder of Common Stock failed to exercise rights of election, if any, as to the kind or amount of securities, cash or other property receivable upon consummation of such transaction subject to adjustment as provided in Section 6(a) above following the date of consummation of such transaction. The Company shall not effect any such reclassification, consolidation, merger, sale, transfer, share exchange or other disposition unless prior to or simultaneously with the consummation thereof the successor corporation (if other than the Company) resulting from such consolidation or merger, or the corporation purchasing or otherwise acquiring such assets or other appropriate corporation or entity shall assume, by written instrument executed and delivered to the Holder, the obligation to deliver to the Holder upon its exercise of the Warrant such shares of stock, securities or assets as, in accordance with the foregoing provisions, the Holder may be entitled to purchase and the other obligations under this Warrant. The provisions of this Section 6(b) shall similarly apply to successive reclassifications, consolidations, mergers, sales, transfers or share exchanges.

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(c)                                   If:

(i)                                      the Company shall take any action which would require an adjustment pursuant to Section 6(a); or

(ii)                                   the Company shall authorize the granting to the holders of its Common Stock generally of rights, warrants or options to subscribe for or purchase any shares of any class or any other rights, warrants or options; or

(iii)                                there shall be any reclassification or change of the Common Stock (other than a subdivision or combination of its outstanding Common Stock or a change in par value) or any consolidation, merger or statutory share exchange to which the Company is a party and for which approval of any stockholders of the Company is required, or the sale or transfer of all or substantially all of the assets of the Company; or

(iv)                               there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company;

then, the Company shall cause to be filed with the transfer agent for the Warrants and shall cause to be mailed to each Holder at such Holder’s address as shown on the books of the transfer agent for the Warrants, as promptly as possible, but at least 30 days prior to the applicable date hereinafter specified, a notice stating (A) the date on which a record is to be taken for the purpose of such dividend, distribution or granting of rights, warrants or options, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution or rights, warrants or options are to be determined, or (B) the date on which such reclassification, change, consolidation, merger, statutory share exchange, sale, transfer, dissolution, liquidation or winding-up is expected to become effective or occur, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reclassification, change, consolidation, merger, statutory share exchange, sale, transfer, dissolution, liquidation or winding up. Failure to give such notice or any defect therein shall not affect the legality or validity of the proceedings described in this Section 6(c).

(d)                                  Whenever an adjustment is made as herein provided, the Company shall promptly file with the transfer agent for the Warrants a certificate of an officer of the Company setting forth the adjustment and setting forth a brief statement of the facts requiring such adjustment and a computation thereof. The Company shall promptly cause a notice of such adjustment to be mailed to each Holder.

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(e)                                   In any case in which Section 6(a) provides that an adjustment shall become effective immediately after a record date for an event and the date fixed for such adjustment pursuant to Section 6(a) occurs after such record date but before the occurrence of such event, the Company may defer until the actual occurrence of such event (i) issuing to the Holder of any Warrants exercised after such record date and before the occurrence of such event the additional shares of Common Stock issuable upon such conversion by reason of the adjustment required by such event over and above the Common Stock issuable upon such exercise before giving effect to such adjustment, and (ii) paying to such holder any amount in cash in lieu of any fraction pursuant to Section 6(g).

(f)                                     Upon each adjustment of the Exercise Price, this Warrant shall thereafter evidence the right to purchase, at the adjusted Exercise Price, that number of shares (calculated to the nearest thousandth) obtained by dividing (i) the product obtained by multiplying the number of shares purchasable upon exercise of this Warrant prior to adjustment of the number of shares by the Exercise Price in effect prior to adjustment of the Exercise Price, by (ii) the Exercise Price in effect after such adjustment of the Exercise Price.

(g)                                  The Company shall not be required to issue fractions of shares of Common Stock or other capital stock of the Company upon the exercise of this Warrant. If any fraction of a share would be issuable on the exercise of this Warrant (or specified portions thereof), the Company shall purchase such fraction for an amount in cash equal to the same fraction of the Current Market Price of such share of Common Stock on the date of exercise of this Warrant.

(h)                                  In case the Company shall take any action affecting the Common Stock, other than actions described in this Section 6, which in the opinion of the Board of Directors would materially adversely affect the exercise right of the Holder, the Exercise Price may be adjusted, to the extent permitted by law, in such manner, if any, and at such time, as the Board of Directors may determine to be equitable in the circumstances; provided, however, that in no event shall the Board of Directors be required to take any such action.

7.                                        Transfer Taxes . The issuance of any shares or other securities upon the exercise of this Warrant, and the delivery of certificates or other instruments representing such shares or other securities, shall be made without charge to the Holder for any tax or other charge in respect of such issuance. The Company shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of any certificate in a name other than that of the Holder and the Company shall not be required to issue or deliver any such certificate unless and until the person or persons requesting the issue thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid.

8.                                        Loss or Mutilation of Warrant . Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction, or mutilation of any Warrant (and upon surrender of any Warrant if mutilated), and upon reimbursement of the Company’s reasonable incidental

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expenses, the Company shall execute and deliver to the Holder thereof a new Warrant of like date, tenor, and denomination.

9.                                        No Rights as a Stockholder . The Holder of any Warrant shall not have, solely on account of such status, any rights of a stockholder of the Company, either at law or in equity, or to any notice of meetings of stockholders or of any other proceedings of the Company, except as provided in this Warrant.

10.                                  Governing Law . This Warrant shall be con­strued in accordance with the laws of the State of Delaware applicable to contracts made and performed within such State, without regard to principles of conflicts of law.

11.                                  Beneficial Ownership . The Company shall not effect the exercise of this Warrant by any Holder, and no person who is a holder of this Warrant shall have the right to exercise this Warrant, to the extent that after giving effect to such exercise, such person (together with such person’s affiliates) would beneficially own in excess of 9.99% of the shares of the Common Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by such person and its affiliates shall include, without limitation, 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 shares of Common Stock which would be issuable upon (a) exercise of the remaining, unexercised portion of this Warrant beneficially owned by such person and its affiliates, and (b) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company beneficially owned by such person and its affiliates (including, without limitation, any debentures, convertible notes or convertible preferred stock or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein. Except as set forth in the preceding sentence, for purposes of this Section 11, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended. For purposes of this Warrant, in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (i) the Company’s most recent Form 10-Q, Form 10-K or other public filing with the Securities and Exchange Commission, as the case may be, (ii) a more recent public announcement by the Company, or (iii) any other notice by the Company or its transfer agent setting forth the number of shares of Common Stock outstanding.  For any reason at any time, upon the written or oral request of the Holder of this Warrant, the Company shall within two business days confirm orally and in writing to the Holder of this Warrant 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 by the Holder of this Warrant and its affiliates since the date as of which such number of outstanding shares of Common Stock was reported. In effecting the exercise of this Warrant, the Company shall be entitled to rely on a representation by the Holder of this Warrant as to the number of shares that it beneficially owns for purposes of the above 9.99% limitation calculation.

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[Remainder of page intentionally left blank

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Dated:              March 25, 2004

[Signature Page to Warrant]

FORM OF ASSIGNMENT

(To be executed by the registered holder if such holder desires to transfer the attached Warrant.)

FOR VALUE RECEIVED,                                                                                          hereby sells, assigns, and transfers unto                                  a Warrant to purchase                        shares of Common Stock, par value $0.01 per share, of Intrusion Inc. (the “Company”), together with all right, title, and interest therein, and does hereby irrevocably constitute and appoint                                                                                             attorney to transfer such Warrant on the books of the Company, with full power of substitution.

The signature on the foregoing Assignment must correspond to the name as written upon the face of this Warrant in every particular, without alteration or enlarge­ment or any change whatsoever.

To:                               Intrusion Inc.

1101 East Arapaho Road

Richardson, Texas  75081

Attention:  Chief Executive Officer

NOTICE OF EXERCISE

The undersigned hereby exercises his or its rights to purchase                 Warrant Shares covered by the within Warrant and tenders payment herewith in the amount of $                 by [ tendering cash 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 attached Warrant, which shares have a Current Market Price equal to such payment] in accordance with the terms thereof, and requests that certificates for such securities be issued in the name of, and delivered to:

(Print Name, Address and Social Security

or Tax Identification Number)

and, if such number of Warrant Shares shall not be all the Warrant Shares covered by the within Warrant, that a new Warrant for the balance of the Warrant Shares covered by the within Warrant be registered in the name of, and delivered to, the under­signed at the address stated below.

Address:

Exhibit 4.4

NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN FILED UNDER NEW HAMPSHIRE REVISED STATUTES ANNOTATED (“RSA”) CHAPTER 421-B WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING.  NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY, OR TRANSACTION.  IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER, OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.

THIS WARRANT HAS NOT BEEN REGISTERED UNDER EITHER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ ACT ”), OR APPLICABLE STATE SECURITIES LAWS, AND IS SUBJECT TO CERTAIN INVESTMENT REPRESENTATIONS.  THIS WARRANT MAY NOT BE SOLD, ASSIGNED, PLEDGED, OFFERED FOR SALE OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION UNDER THE ACT AND SUCH APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

(WC-10)

THIS CERTIFIES THAT, for value received, the Holder is entitled to purchase the above number of warrant shares of the Stock of the Company at a price per share equal to the initial exercise price set forth above, subject to the provisions and upon the terms and conditions set forth in this Warrant to Purchase Shares of Common Stock (this “ Warrant ”).

1.                                        Definitions .   As used in this Warrant, the following terms shall have the following meanings:

“ Board ” means the Board of Directors of the Company.

“ Common Stock ” means shares of the presently authorized common stock of the Company, $0.01 par value, and any stock into which such common stock may hereafter be exchanged.

“ Expiration Date ” means the date so specified above, or such earlier date as may be determined pursuant to Section 5.

“ Holder ” means the person or entity so identified above, or any subsequent person or entity who shall at the time be the holder of this Warrant.

“ Purchase Price ” means the Warrant Price in effect at the time of exercise of this Warrant, multiplied by the number of Warrant Shares then being purchased.

“ Subscription ” means the form of subscription attached hereto as Appendix A .

“ Warrant Price ” means the Initial Exercise Price at which this Warrant may be exercised, as adjusted pursuant to Section 4.

“ Warrant Shares ” means the number of shares of Common Stock so specified above, as adjusted pursuant to Section 4.

Other capitalized terms shall have the definitions given to such terms elsewhere in this Warrant.

2.                                        Term .   The purchase right represented by this Warrant is exercisable at any time on or before the Expiration Date.

3.                                        Method of Exercise; Payment; Issuance of New Warrant .

3.1.                               Exercise .   This Warrant may be exercised by the Holder, in whole or in part, by delivering to the Company, at its then principal office or such other location as the Company may designate, on or before the Expiration Date:

(a)                                   a duly executed Subscription specifying the number of whole Warrant Shares being purchased (the “ Purchased Shares ”);

(b)                                  the original of this Warrant; and

(c)                                   payment of the Purchase Price for the Purchased Shares in accordance with the provisions of Section 3.2 (or, if applicable, on a “net issuance” basis pursuant to Section 3.3).

3.2                                  Payment .   Except as otherwise provided in Section 3.3, the Purchase Price for the Purchased Shares shall be paid by the Holder either in cash, by check made payable to the Company drawn on a United States bank and for United States funds, or by such other method of payment as may be acceptable to the Company.

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3.3                                  Net Issuance .

(a)                                   In lieu of payment for the Purchased Shares pursuant to Section 3.2, the Holder may elect (the “ Net Issuance Election ”) to exercise this Warrant, in whole or in part, by receiving a number of Warrant Shares equal to the net issuance value (as determined below) of this Warrant, or any part hereof.  In order to make a Net Issuance Election, the Holder shall designate such election in the completed Subscription delivered to the Company.  In such event, the Company shall issue to the Holder a number of Purchased Shares computed using the following formula:

X = Y (A-B)

A

where:                                      X =              the number of Purchased Shares to be issued to the Holder

Y =               the number of whole Warrant Shares as to which this Warrant is to be exercised

A =             the fair value of a share of Common Stock (the “ Fair Value ”) on the date on which the Net Issuance Election is made, as determined in good faith by the Board

B =               the Warrant Price in effect on the date on which the Net Issuance Election is made

(b)                                  No fractional shares shall be issuable upon exercise of the Net Issuance Election, and, if the number of Purchased Shares to be issued determined in accordance with the provisions of subsection (a) above is other than a whole number, (i) the number of Purchased Shares shall be rounded down to the nearest whole number, and (ii) the Company shall pay to the Holder an amount in cash equal to the Fair Value of the fractional share so rounded-down.

3.4.                               Issuance of Certificates and New Warrant .   In the event of the exercise of this Warrant, a stock certificate for the Purchased Shares shall be delivered to the Holder within thirty (30) days following the Company’s receipt of a duly executed Subscription and payment of the applicable Purchase Price for the Purchased Shares.  If this Warrant is exercised in part, the Holder is entitled to receive a new Warrant covering the remaining number of Warrant Shares in respect of which this Warrant has not been exercised.

4.                                        Adjustments to Warrant Price and Warrant Shares .

4.1                                  Reclassification, Reorganization, Consolidation, or Merger .   In the event of any reclassification of the Common Stock, or any reorganization, consolidation, or merger of the Company with or into another corporation (other than a merger or reorganization with respect to which the Company is the continuing corporation and which does not result in any reclassification of the Common Stock) where the Company has not accelerated the Expiration Date pursuant to Section 5, the Company, or such successor corporation, as the case may be, shall execute a new warrant, providing that the Holder shall have the right to exercise such new warrant and upon such exercise to receive, in lieu of each share of Common Stock theretofore issuable upon exercise of this Warrant, the number and kind of securities receivable upon such reclassification, reorganization, consolidation, or merger by a holder of shares of Common Stock for each share of Common Stock.  The aggregate warrant price of the new warrant shall be the aggregate Warrant Price in effect immediately prior to the reclassification, reorganization, consolidation, or merger.  Such new warrant shall provide for adjustments which shall be as

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nearly equivalent as may be practicable to the adjustments provided for in this Section 4 (including, without limitation, adjustments to the Warrant Price and to the number of Warrant Shares).  The provisions of this Section 4.1 shall similarly apply to successive reclassifications, reorganizations, consolidations, or mergers.

4.2                                  Split, Subdivision, Reverse Stock Split, or Combination of Common Stock .   If, at any time while this Warrant remains outstanding and unexpired, there shall be a split or subdivision of the Common Stock or a reverse stock split or combination of the Common Stock, then:

(a)                                   in the case of a split or subdivision, the Warrant Price shall be proportionately decreased (to the nearest tenth of a cent), and the number of Warrant Shares shall be proportionately increased pursuant to Section 4.4; or

(b)                                  in the case of a reverse stock split or combination, the Warrant Price shall be proportionately increased (to the nearest tenth of a cent), and the number of Warrant Shares shall be proportionately decreased pursuant to Section 4.4.

Any adjustment under this Section 4.2 shall become effective when the split, subdivision, reverse stock split, or combination becomes effective.

4.3                                  Stock Dividends .   If, at any time while this Warrant remains outstanding and unexpired, the Company shall pay a dividend with respect to the Common Stock that is payable in shares of Common Stock, then the Warrant Price shall be adjusted (to the nearest tenth of a cent), from and after the date of determination of the shareholders entitled to receive such dividend, to that price determined by multiplying:

(a)                                   the Warrant Price in effect immediately prior to such date of determination, times

(b)                                  a fraction, (i) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such dividend, and (ii) the denominator of which shall be the total number of shares of Common Stock outstanding immediately after such dividend.

In such event, the number of Warrant Shares shall be proportionately adjusted pursuant to Section 4.4.  Any adjustment under this Section 4.3 shall become effective on the record date for such dividend.

4.4                                  Adjustment of Number of Warrant Shares .   Upon each adjustment in the Warrant Price pursuant to Sections 4.2 or 4.3, the number of Warrant Shares shall be adjusted to the product obtained by multiplying:

(a)                                   the number of Warrant Shares issuable immediately prior to such adjustment in the Warrant Price, times

(b)                                  a fraction, (i) the numerator of which shall be the Warrant Price in effect immediately prior to such adjustment, and (ii) the denominator of which shall be the Warrant Price in effect immediately after such adjustment.

4.5                                  No Other Adjustments .   Except as expressly provided in this Section 4, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of shares of Common Stock issuable upon exercise of this Warrant or the Warrant

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Price.  Furthermore, no adjustments shall be made for dividends paid on the Common Stock in cash or in property other than shares of Common Stock.

5.                                        Acceleration of Expiration Date in Event of Change of Control .

(a)                                   In anticipation of the occurrence of:

(i)                                      the sale to a non-affiliated third party of all or substantially all of Company’s assets (an “ Asset Sale ”); or

(ii)                                   the issuance, sale, or exchange of stock, or a merger, consolidation, recapitalization, reorganization, or other transaction involving the Company, after which a majority of the voting power of the Company (or, if applicable, the surviving corporation or entity) will be held by one or more parties that do not control a majority of the voting power of the Company immediately before such transaction (an “ Extraordinary Stock Transaction ”),

the Company shall have the right to accelerate the Expiration Date in the manner set forth in this Section with respect to any then-unexercised Warrant Shares.  As used herein, a “ Change of Control ” shall mean either an Asset Sale or an Extraordinary Stock Transaction.

(b)                                  If the Company elects to accelerate the Expiration Date in anticipation of a Change of Control, written notice of the anticipated Change of Control, including the date on which the Change of Control is expected to close (the “ Expected Closing Date ”) and the accelerated Expiration Date designated by the Company (the “ Accelerated Expiration Date ”), shall be mailed (or, at the Company’s option, hand-delivered) by the Company to the Holder not less than five calendar (5) days prior to the Accelerated Expiration Date.

(c)                                   The Holder shall be entitled to condition exercise of the Warrant on the closing of the anticipated Change of Control by providing the Company with a written notice thereof (the “ Conditional Exercise Notice ”) contemporaneously with the delivery of the Holder’s Subscription.  In such event, the Holder’s Subscription and payment for the Purchased Shares hereunder, and the Purchased Shares issued by the Company thereby, shall be held in escrow by Company’s attorney or other third party designated by the Company until either:

(i)                                      the closing on the Change of Control occurs, in which event the Holder’s purchase of the escrowed Purchased Shares shall be deemed to have occurred immediately prior to such closing; or

(ii)                                   the Company notifies the escrow agent that such closing will not occur, in which event this Warrant will be deemed not to have been exercised with respect to the escrowed Purchased Shares, the Purchased Shares shall be deemed not to have been issued, and the escrow agent shall return to the Holder the Subscription, the Conditional Exercise Notice, and any payment for the escrowed Purchased Shares.

(d)                                  Unless otherwise specified in writing by the Company to the Holder, upon the closing of a Change of Control this Warrant shall automatically terminate and, thereafter, the Holder shall have no further rights of purchase with respect to any remaining unpurchased Warrant Shares.

6.                                        Replacement of Warrant .   Upon receipt by the Company of (a) evidence reasonably satisfactory to it of the loss, theft, destruction, or mutilation of this Warrant (and, in such case, of an indemnity or security reasonably satisfactory to the Company), and (b) reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender

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and cancellation of this Warrant, if mutilated, the Company will make and deliver a new Warrant of like tenor to the Holder in lieu of this Warrant.

7.                                        No Stockholder Rights with Respect to Unexercised Warrant Shares .   The Holder shall not be entitled to any rights of a stockholder of the Company (including, without limitation, the right to vote, receive dividends or other distributions, or receive notice of any proceedings of the Company) with respect to any unexercised Warrant Shares.

8.                                        Compliance With Act; Transferability of Warrant .

8.1.                               Legends .   This Warrant and any information statement or stock certificate for the Warrant Shares issued upon exercise thereof shall be imprinted with a legend in substantially the following form:

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER EITHER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE SECURITIES LAWS, AND ARE SUBJECT TO CERTAIN INVESTMENT REPRESENTATIONS.  THESE SECURITIES MAY NOT BE SOLD, ASSIGNED, PLEDGED, OFFERED FOR SALE OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION UNDER THE ACT AND SUCH APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.”

8.2.                               Transferability and Non-Negotiability of Warrant .   This Warrant may not be transferred or assigned, in whole or in part, without (a) the written consent of the Company, which may be withheld or given in the Company’s sole and absolute discretion, and (b) compliance with applicable federal and state securities laws by the transferor and the transferee (including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, if reasonably requested by the Company).

9.                                        Miscellaneous .   The terms and provisions of this Warrant shall be for the benefit of and binding upon the Company and the Holder and their respective successors and permitted assigns.  This Warrant shall be governed by and construed under the laws of the State of Delaware, without regard to its conflict of law provisions.  The titles of the sections and subsections of this Warrant are for convenience only and are not to be considered in construing this Warrant.  All pronouns used in this Warrant shall be deemed to include masculine, feminine, and neuter forms.

[Signature Page Follows]

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[Signature Page to Black Point Partners Warrant]

APPENDIX A

TO

WARRANT TO PURCHASE SHARES OF COMMON STOCK

SUBSCRIPTION

To:                               Intrusion Inc.

1.                                        The undersigned, pursuant to the provisions set forth in the attached Warrant hereby irrevocably elects to purchase certain shares of the Common Stock covered by such Warrant, as follows ( please check/complete as appropriate ):

o             The undersigned hereby elects to purchase                  Warrant Shares (the “ Purchased Shares ”) for a purchase price (the “ Purchase Price ”) equal to $                 (i.e., the product obtained by multiplying the number of Purchased Shares by the current Warrant Price of $            per share).  The Purchase Price for the Purchased Shares is being made in cash or by check made payable to the Company drawn on a United States bank and for United States funds.

o             The undersigned hereby makes a Net Issuance Election to purchase the number of Warrant Shares (the “ Purchased Shares ”) determined in accordance with the following formula (and, for purposes hereof, the number of Warrant Shares specified as “Y” below is equal to                 ):

X = Y (A-B)

A

where:                                      X =              the number of Purchased Shares to be issued to the undersigned

Y =               the number of whole Warrant Shares as to which this Warrant is to be exercised

A =             the fair value of a share of Common Stock (the “ Fair Value ”) on the date on which this Net Issuance Election is made, as determined in good faith by the Board

B =               the Warrant Price in effect on the date on which this Net Issuance Election is made

2.                                        The undersigned is aware that the Purchased Shares have not been registered under the Securities Act of 1933, as amended (the “ Act ”), or any state securities laws.  The undersigned understands that the reliance by the Company on exemptions under the Act is predicated in part upon the truth and accuracy of the statements of the undersigned in this Subscription.

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3.                                        The undersigned represents and warrants that the undersigned has:

(a)                                   been furnished with all information which the undersigned deems necessary to evaluate the merits and risks of the purchase of the Purchased Shares;

(b)                                  had the opportunity to ask questions concerning the Purchased Shares and the Company and all questions posed have been answered to the undersigned’s satisfaction;

(c)                                   been given the opportunity to obtain any additional information it deems necessary to verify the accuracy of any information obtained concerning the Purchased Shares and the Company; and

(d)                                  such knowledge and experience in financial and business matters that the undersigned is able to evaluate the merits and risks of purchasing the Purchased Shares and to make an informed investment decision relating thereto.

4.                                        The undersigned hereby represents and warrants that the undersigned is purchasing the Purchased Shares for the undersigned’s own account and not with a view to the sale or distribution of all or any part of the Purchased Shares.

5.                                        The undersigned understands that (a) because the Purchased Shares have not been registered under the Act, the undersigned must continue to bear the economic risk of the investment for an indefinite time, and (b) the Purchased Shares cannot be sold unless they are subsequently registered under applicable federal and state securities laws or an exemption from such registration is available.

6.                                        The undersigned agrees that the undersigned will in no event sell or distribute or otherwise dispose of all or any part of the Purchased Shares unless (a) there is an effective registration statement under the Act and applicable state securities laws covering any such transaction involving the Purchased Shares, or (b) the Company receives an opinion of legal counsel to the undersigned (concurred in by legal counsel for the Company) stating that such transaction is exempt from registration or the Company otherwise satisfies itself that such transaction is exempt from registration.

7.                                        The undersigned consents to the placing of a legend on the stock certificate for the Purchased Shares stating that the Purchased Shares have not been registered and setting forth the restriction on transfer contemplated hereby and to the placing of a stop transfer order on the books of the Company and with any transfer agents against the Purchased Shares until the Purchased Shares may be legally resold or distributed without restriction.

8.                                        The undersigned has considered the Federal and state income tax implications of the exercise of the Warrant and the purchase and subsequent sale of the Purchased Shares.

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Exhibit 4.5

LOCK-UP AGREEMENT

Lock-Up Agreement (this “ Agreement ”) is entered into as of February       , 2004, by and between Intrusion Inc., a Delaware corporation (the “ Company ”), and the stockholder of the Company named on the signature page hereof (the “ Stockholder ”).

RECITALS :

A.                                    The Company and certain purchasers (the “ Purchasers ”) have entered into a Securities Purchase Agreement dated as of February       , 2004 (the “Purchase Agreement”), pursuant to which the Purchasers have agreed to purchase, and the Company has agreed to sell, shares of the Company’s 5% Convertible Preferred Stock, par value $0.01 per share, and common stock, par value $0.01 per share (the “ Common Stock ”).

B.                                      Stockholder is a stockholder of the Company and owns and/or controls shares of Common Stock (the “ Common Shares ”).

C.                                      As a condition to the Purchasers entering into the Purchaser Agreement, Stockholder has agreed to the lock-up set forth in Section 1 hereof.

D.                                     Capitalized terms used in this Agreement but not otherwise defined herein shall have the meanings ascribed to such terms in the Purchase Agreement.

AGREEMENTS :

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.                                        Lock-Up . Stockholder hereby agrees that, except as set forth in Section 2 below, from the date hereof until the date that the Registration Statement is first declared effective by the Commission (the “ Lock-up Period ”), without the prior written consent of the Company and Purchasers owning more than 50% of the Shares, he will not offer, pledge, sell, contract to sell, grant any options for the sale of or otherwise transfer, distribute or dispose of, directly or indirectly (collectively “ Dispose of ”), any Common Shares (the “ Lock-up ”). On and after the day immediately following the last day of the Lock-up Period, no Common Shares shall be subject to the Lock-up.

2.                                        Permitted Dispositions . The following dispositions of Common Shares shall not be subject to the Lock-up set forth in Section 1:

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(a)                                   Stockholder may Dispose of Common Shares to his spouse, siblings, parents or any natural or adopted children or other descendants or to any personal trust in which any such family member or Stockholder retains the entire beneficial interest;

(b)                                  Stockholder may Dispose of Common Shares on his death to Stockholder’s estate, executor, administrator or personal representative or to Stockholder’s beneficiaries pursuant to a devise or bequest or by laws of descent and distribution;

(c)                                   Stockholder may Dispose of Common Shares as a gift or other transfer without consideration; and

(d)                                  Stockholder may make a bona fide pledge of Common Shares to a lender;

provided, however , that in the case of any transfer of Common Shares pursuant to clauses (a), (c), and (d), the transferor shall, at the request of the Company, provide evidence (which may include, without limitation, an opinion of counsel satisfactory in form, scope and substance to the Company in its sole discretion as the issuer thereof) satisfactory to the Company that the transfer is exempt from the registration requirements of the Securities Act.

In the event Stockholder Disposes of Common Shares described in this Section 2, such Common Shares shall remain subject to this Agreement and, as a condition of the validity of such disposition, the transferee shall be required to execute and deliver a counterpart of this Agreement. Thereafter, such transferee shall be deemed to be the Stockholder for purposes of this Agreement.

3.                                        Miscellaneous .

(a)                                   Amendments and Waivers . The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given other than as initially agreed upon in writing by the Company, Stockholder and Purchasers owning more than 50% of the Shares.

(b)                                  Successors and Assigns . Stockholder shall not assign any rights or benefits under this Agreement without the prior written consent of the Company and Purchasers owning more than 50% of the Shares.

(c)                                   Counterparts . This Agreement may be executed in a number of identical counterparts and it shall not be necessary for the Company and Stockholder to execute each of such counterparts, but when each has executed and delivered one or more of such counterparts, the several parts, when taken together, shall be deemed to constitute one and the same instrument, enforceable against each in accordance with its terms. In making proof of this Agreement, it shall not be necessary to produce or account for more than one such counterpart executed by the party against whom enforcement of this Agreement is sought.

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(d)                                  Headings . The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

(e)                                   Governing Law; Venue . THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELWARE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OR CHOICE OF LAW. The Company and Stockholder (i) hereby irrevocably submit to the exclusive jurisdiction of the United States District Court sitting in the Northern District of Texas and the courts of the State of Texas located in Dallas County for the purposes of any suit, action or proceeding arising out of or relating to this Agreement, and (ii) hereby waive, and agree not to assert in any such suit, action or proceeding, any claim that he or it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or proceeding is improper.

(f)                                     Severability . If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term of this Agreement, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part of this Agreement; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of each such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable.

(g)                                  Entire Agreement . This Agreement is intended by the Company and the Stockholder as a final expression of their agreement and is intended to be a complete and exclusive statement of their agreement and understanding in respect of the subject matter contained herein. This Agreement supersedes all prior agreements and understandings between the Company and the Stockholder with respect to such subject matter.

(h)                                  Third Party Beneficiaries . This Agreement is intended for the benefit of the Company, Stockholder and the Purchasers and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person or entity. The Company and Stockholder each specifically acknowledge and agree that each Purchaser is a third party beneficiary of this Agreement.

3

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

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Exhibit 4.6

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “ Agreement ”) is made and entered into as of March 25, 2004, by and among Intrusion Inc., a Delaware corporation (the “ Company ”), and the Persons listed on Exhibit A hereto (each a “ Purchaser ” and collectively, the “ Purchasers ”).

WHEREAS, upon the terms and subject to the conditions of the Securities Purchase Agreement, dated as of the date hereof (the “ Purchase Agreement ”), the Company has agreed to issue and sell shares of its Preferred Stock and Warrants to purchase shares of its Common Stock to certain of the Purchasers; and

WHEREAS, to induce such Purchasers to execute and deliver the Purchase Agreement and to purchase the Shares and the Warrants, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended (the “ Securities Act ”), with respect to the Conversion Shares and the Warrant Shares (each as respectively defined in the Purchase Agreement).

NOW, THEREFORE, in consideration of the representations, warranties and agreements contained herein and other good and valuable consideration, the receipt and legal adequacy of which are hereby acknowledged by the parties, the Company and the Purchasers hereby agree as follows:

1.                                        Definitions .

Capitalized terms used but not otherwise defined herein shall have the meanings given such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:

“ Affiliate ” means, with respect to any Person, any other Person that directly or indirectly controls or is controlled by or under common control with such Person. For the purposes of this definition, “ control ,” when used with respect to any Person, means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise; and the terms “ affiliated ,” “ controlling ” and “ controlled ” have meanings correlative to the foregoing.

“ Blackout Period ” shall have the meaning set forth in Section 3(m).

“ Board ” shall have the meaning set forth in Section 3(m).

“ Business Day ” means any day except Saturday, Sunday and any day which is a legal holiday or a day on which banking institutions in the State of Texas generally are authorized or required by law or other government actions to close.

“ Commission ” means the Securities and Exchange Commission.

“ Common Shares ” shall have the meaning set forth in the definition of “Registrable Securities.”

“ Common Stock ” means the Company’s Common Stock, $0.01 par value.

“ Effectiveness Date ” means with respect to the Registration Statement the earlier of (i) the 120 ^th day following the Closing Date, before which the Company will use its commercially reasonable efforts to cause the Registration Statement to become effective, and (ii) the date which is within five (5) Business Days of the date on which the Commission informs the Company that the Commission (a) will not review the Registration Statement or (b) that the Company may request the acceleration of the effectiveness of the Registration Statement.

“ Effectiveness Period ” shall have the meaning set forth in Section 2.

“ Event ” shall have the meaning set forth in Section 8(d).

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ Filing Date ” means the date that the Registration Statement is required to be filed, which date shall be within thirty (30) days after the Closing Date.

“ Holder ” means, collectively, each holder from time to time of Registrable Securities including, without limitation, each Purchaser and its assignees. To the extent this Agreement refers to an election, consent, waiver, request or approval of or by the Holders, such reference shall mean an election, consent, waiver, request or approval by the holders of a majority in interest of the then-outstanding Registrable Securities (on an as converted basis).

“ Indemnified Party ” shall have the meaning set forth in Section 6(c).

“ Indemnifying Party ” shall have the meaning set forth in Section 6(c).

“ Liquidated Damages ” shall have the meaning set forth in Section 8(d).

“ Losses ” shall have the meaning set forth in Section 6(a).

“ Person ” means an individual or a corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or political subdivision thereof) or other entity of any kind.

“ Preferred Shares ” means the shares of Preferred Stock issued or issuable pursuant to the Purchase Agreement, and upon any stock split, stock dividend, recapitalization or similar event with respect to such shares of Preferred Stock and any other securities issued in exchange of or replacement of such shares of Preferred Stock.

“ Preferred Stock ” means the Company’s 5% Convertible Preferred Stock, $0.01 par value.

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“ Proceeding ” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

“ Prospectus ” means the prospectus included in the Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by the Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference in such Prospectus.

“ Registrable Securities ” means (i) the shares of Common Stock issued and issuable pursuant to the conversion of the Preferred Stock and the exercise of the Warrants, as the case may be, (ii) up to 1,349,352 shares of Common Stock owned by Gryphon Master Fund, L.P., (iii) up to 500,000 shares of Common Stock owned by James F. and Catherine A. Gero, Tenants in Common, (iv) the shares of Common Stock issued and issuable upon the exercise of that certain Warrant to Purchase Common Stock dated March 25, 2004, issued by the Company to Black Point Partners, Inc., and (v) any Common Stock issued upon any stock split, stock dividend, recapitalization or similar event with respect to such shares of Common Stock and any other securities issued in exchange of or replacement of the shares of Common Stock referenced in clauses (i) through (iv) above (collectively, the “ Common Shares ”); until in the case of any of the Common Shares (a) a Registration Statement covering such Common Share has been declared effective by the Commission and continues to be effective during the Effectiveness Period, or (b) such Common Share is sold in compliance with Rule 144 or may be sold pursuant to Rule 144(k), after which time such Common Share shall not be a Registrable Security.

“ Registration Statement ” means the registration statement, including the Prospectus, amendments and supplements to such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference in such registration statement, for the Conversion Shares and the Warrant Shares required to be filed by the Company with the Commission pursuant to this Agreement.

“ Rule 144 ” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

“ Rule 158 ” means Rule 158 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

“ Rule 415 ” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

“ Securities Act ” means the Securities Act of 1933, as amended.

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“ Special Counsel ” means any special counsel to Gryphon Master Fund, L.P.

2.                                        Registration . On or prior to the Filing Date, the Company shall prepare and file with the Commission a Registration Statement covering the resale of the Registrable Securities for an offering to be made on a continuous basis pursuant to Rule 415. The Registration Statement shall be on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate form in accordance with the Securities Act and the rules promulgated thereunder) and shall contain (except if otherwise directed by the Holders or required by the Commission) the “ Plan of Distribution ” attached hereto as Exhibit B . The Company shall (i) not permit any securities other than the Registrable Securities to be included in the Registration Statement, (ii) use its commercially reasonable efforts to cause the Registration Statement to be declared effective under the Securities Act (including filing with the Commission a request for acceleration of effectiveness in accordance with Rule 12dl-2 promulgated under the Exchange Act within five (5) Business Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the Commission that a Registration Statement will not be “reviewed,” or not be subject to further review) as soon as possible after the filing thereof, but in any event prior to the Effectiveness Date, and (iii) keep such Registration Statement continuously effective under the Securities Act for a period ending on the earliest of (A) two years from the Closing Date, (B) such time as all Registrable Securities covered by such Registration Statement have been sold, and (C) the termination of this Agreement (the “ Effectiveness Period ”).

3.                                        Registration Procedures; Company’s Obligations .

In connection with the registration of the Registrable Securities, the Company shall:

(a)                                   Prepare and file with the Commission on or prior to the Filing Date, a Registration Statement on Form S-3 (or if the Company is not then eligible to register for resale the Registrable Securities on Form S-3 such registration shall be on another appropriate form in accordance with the Securities Act and the Rules promulgated thereunder) in accordance with Section 2, and use its commercially reasonable efforts to cause the Registration Statement to become effective and remain effective as provided herein; provided , however , that not less than three (3) Business Days prior to the filing of the Registration Statement or any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated therein by reference), the Company shall (i) furnish to the Holders and any Special Counsel, copies of all such documents proposed to be filed, which documents (other than those incorporated by reference) will be subject to the timely review of and comment by such Special Counsel, and (ii) at the request of any Holder cause its officers and directors, counsel and independent certified public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of such Special Counsel, to conduct a reasonable investigation within the meaning of the Securities Act. The Company shall not file the Registration Statement or any such Prospectus or any amendments or supplements thereto to which any Holder or any Special Counsel shall reasonably object in writing within three (3) Business Days of their receipt thereof.

(b)                                  (i) Prepare and file with the Commission such amendments, including post-effective amendments, to the Registration Statement as may be necessary to keep the

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Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period in order to register for resale under the Securities Act of all the Registrable Securities; (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424 (or any similar provisions then in force) promulgated under the Securities Act; (iii) respond promptly to any comments received from the Commission with respect to the Registration Statement or any amendment thereto and promptly provide the Holders true and complete copies of all correspondence from and to the Commission relating to the Registration Statement; and (iv) comply in all material respects with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by the Registration Statement during the applicable period in accordance with the intended methods of disposition by the Holders set forth in the Registration Statement as so amended or in such Prospectus as so supplemented.

(c)                                   Notify the Holders of Registrable Securities to be sold and any Special Counsel promptly (and, in the case of (i)(A) below, not less than three (3) Business Days prior to such filing and, in the case of (i)(B) or (i)(C) below, no later than the first Business Day following the date on which the Registration Statement becomes effective) and (if requested by any such Person) confirm such notice in writing no later than three (3) Business Days following the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to the Registration Statement is proposed to be filed, (B) when the Commission notifies the Company whether there will be a “review” of such Registration Statement and whenever the Commission comments in writing on such Registration Statement, and (C) with respect to the Registration Statement or any post-effective amendment, when the same has become effective; (ii) of any request by the Commission or any other Federal or state governmental authority for amendments or supplements to the Registration Statement or Prospectus or for additional information; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; and (v) of the occurrence of any event that makes any statement made in the Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to the Registration Statement, Prospectus or other documents so that, in the case of the Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

The Company shall promptly furnish to the Special Counsel, without charge, (i) any correspondence from the Commission or the Commission’s staff to the Company or its representatives relating to any Registration Statement, and (ii) promptly after the same is prepared and filed with the Commission, a copy of any written response to the correspondence received from the Commission.

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(d)                                  Use its commercially reasonable efforts to avoid the issuance of, or, if issued, obtain the withdrawal of, (i) any order suspending the effectiveness of the Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any U.S. jurisdiction, at the earliest practicable moment.

(e)                                   If requested by the Holders, (i) promptly incorporate in a Prospectus supplement or post-effective amendment to the Registration Statement such information as the Company reasonably agrees should be included therein, and (ii) make all required filings of such Prospectus supplement or such post-effective amendment as soon as practicable after the Company has received notification of the matters to be incorporated in such Prospectus supplement or post-effective amendment.

(f)                                     Furnish to each Holder and any Special Counsel, without charge, at least one conformed copy of each Registration Statement and each amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference, and all exhibits to the extent requested by such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the Commission.

(g)                                  Promptly deliver to the Holders and any Special Counsel, without charge, as many copies of the Registration Statement, Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such Persons may reasonably request; and the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by any selling Holder in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto until such time that the Company provides such selling Holder with the notice contemplated by Section 3(c)(ii), (iii), (iv) or (v).

(h)                                  Prior to any public offering of Registrable Securities, use its commercially reasonable efforts to register or qualify or cooperate with the selling Holders and any Special Counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any Holder reasonably requests in writing, to keep each such registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by a Registration Statement; provided , however , that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject or subject the Company to any tax in any such jurisdiction where it is not then so subject.

(i)                                      Cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold pursuant to a Registration Statement and to enable such Registrable Securities to be in such denominations and registered in such names as the Holders may request at least two (2) Business Days prior to any sale of Registrable Securities.

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(j)                                      Upon the occurrence of any event contemplated by Section 3(c)(v), promptly prepare a supplement or amendment, including a post-effective amendment, to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither the Registration Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(k)                                   Use its commercially reasonable efforts to cause all Registrable Securities relating to such Registration Statement to be listed on any securities exchange, quotation system, market or over-the-counter bulletin board, if any, on which the same securities issued by the Company are then listed as and when required pursuant to the Purchase Agreement.

(l)                                      Comply in all material respects with all applicable rules and regulations of the Commission and make generally available to its security holders earning statements satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 not later than forty-five (45) days after the end of any twelve (12) month period (or ninety (90) days after the end of any twelve (12) month period if such period is a fiscal year) commencing on the first day of the first fiscal quarter of the Company after the effective date of the Registration Statement, which statement shall conform to the requirements of Rule 158.

(m)                                If (i) there is material non-public information regarding the Company which the Company’s Board of Directors (the “ Board ”) reasonably determines not to be in the Company’s best interest to disclose and which the Company is not otherwise required to disclose, or (ii) there is a significant business opportunity (including, but not limited to, the acquisition or disposition of assets (other than in the ordinary course of business) or any merger, consolidation, tender offer or other similar transaction) available to the Company which the Board reasonably determines not to be in the Company’s best interest to disclose and which the Company would be required to disclose under the Registration Statement, then the Company may suspend effectiveness of a Registration Statement and suspend the sale of Registrable Securities under a Registration Statement one (1) time every three (3) months or three (3) times in any twelve month period, provided that the Company may not suspend its obligation for more than thirty (30) days in the aggregate in any twelve month period if suspension is for any of the reasons listed above or sixty (60) days in the aggregate in any twelve month period for any other reason (each, a “ Blackout Period ”); provided , however , that no such suspension shall be permitted for more than thirty (30) consecutive days, arising out of the same set of facts, circumstances or transactions.

(n)                                  Within two (2) Business Days after the Registration Statement which includes the Registrable Securities is ordered effective by the Commission, the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities (with copies to each Holder whose Registrable Securities are included in such Registration Statement) confirmation that the Registration Statement has been declared effective by the Commission in the form attached hereto as Exhibit C .

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(o)                                  Use its commercially reasonable efforts to prevent all executive officers and directors of the Company from selling or otherwise disposing of any Common Stock prior to the Effectiveness Date.

4.                                        Registration Procedures; Holders’ Obligations

In connection with the registration of the Registrable Securities, each Holder shall:

(a)                                   If the Registration Statement refers to the Holder by name or otherwise as the holder of any securities of the Company, have the right to require (if such reference to the Holder by name or otherwise is not required by the Securities Act or any similar federal statute then in force) the deletion of the reference to the Holder in any amendment or supplement to the Registration Statement filed or prepared subsequent to the time that such reference ceases to be required.

(b)                                  (i) not sell any Registrable Securities under the Registration Statement until it has received copies of the Prospectus as then amended or supplemented as contemplated in Section 3(g) and notice from the Company that such Registration Statement and any post-effective amendments thereto have become effective as contemplated by Section 3(c), (ii) comply with the prospectus delivery requirements of the Securities Act as applicable to it in connection with sales of Registrable Securities pursuant to the Registration Statement, and (iii) furnish to the Company information regarding such Holder and the distribution of such Registrable Securities as is required by law to be disclosed in the Registration Statement, and the Company may exclude from such registration the Registrable Securities of the Holder if it fails to furnish such information within a reasonable time prior to the filing of each Registration Statement, supplemented Prospectus and/or amended Registration Statement.

(c)                                   upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or 3(m), forthwith discontinue disposition of such Registrable Securities under the Registration Statement until the Holder’s receipt of the copies of the supplemented Prospectus and/or amended Registration Statement contemplated by Section 3(j), or until it is advised in writing by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement.

5.                                        Registration Expenses

All reasonable fees and expenses of the Company incident to the performance of or compliance with this Agreement by the Company shall be borne by the Company whether or not the Registration Statement is filed or becomes effective and whether or not any Registrable Securities are sold pursuant to the Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, the following: (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with each securities exchange or market on which Registrable Securities are required hereunder to be listed, (B) with respect to filings required to be made with the Commission, and

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(C) in compliance with state securities or Blue Sky laws); (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of printing prospectuses if the printing of prospectuses is requested by the holders of a majority of the Registrable Securities included in the Registration Statement); (iii) messenger, telephone and delivery expenses; (iv) fees and disbursements of counsel for the Company; and (v) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement, including, without limitation, the Company’s independent public accountants (including the expenses of any comfort letters or costs associated with the delivery by independent public accountants of a comfort letter or comfort letters). In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit, and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder. All fees and expenses of the Holders (including the attorneys’ fees of the Special Counsel) shall be borne pro rata by each Holder based on the number of Registrable Securities owned by such Holder.

6.                                        Indemnification

(a)                                   Indemnification by the Company . The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, its permitted assignees, officers, directors, agents, brokers (including brokers who offer and sell Registrable Securities as principal as a result of a pledge or any failure to perform under a margin call of Common Stock), investment advisors and employees, each Person who controls any Holder or permitted assignee (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, agents and employees of each such controlling Person, and the respective successors, assigns, estate and personal representatives of each of the foregoing, to the fullest extent permitted by applicable law, from and against any and all claims, losses, damages, liabilities, penalties, judgments, costs (including, without limitation, costs of investigation) and expenses (including, without limitation, reasonable attorneys’ fees and expenses) (collectively, “ Losses ”), as incurred, arising out of or relating to any untrue or alleged untrue statement of a material fact contained in the Registration Statement, any Prospectus, as supplemented or amended, if applicable, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, except (i) to the extent, but only to the extent, that such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, which information was reviewed and expressly approved by such Holder or Special Counsel expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto, or (ii) as a result of the failure of such Holder to deliver a Prospectus, as amended or supplemented, to the purchaser in connection with an offer or sale. The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding of which the Company is aware in connection with the transactions contemplated by this Agreement. Such indemnity shall remain in full force and effect regardless

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of any investigation made by or on behalf of an Indemnified Party (as defined in Section 6(c) hereof) and shall survive the transfer of the Registrable Securities by the Holders.

(b)                                  Indemnification by the Purchasers . Each Holder, severally but not jointly, shall indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, and the respective successors, assigns, estate and personal representatives of each of the foregoing, to the fullest extent permitted by applicable law, from and against any and all Losses, as incurred, arising out of or relating to any untrue or alleged untrue statement of a material fact contained in the Registration Statement, any Prospectus, as supplemented or amended, if applicable, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, to the extent, but only to the extent, that (i) such untrue statement or omission is contained in or omitted from any information so furnished in writing by such Holder to the Company specifically for inclusion in the Registration Statement or such Prospectus, and (ii) such information was reasonably relied upon by the Company for use in the Registration Statement, such Prospectus or such form of prospectus or, to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities, was reviewed and expressly approved in writing by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus Supplement.  Notwithstanding anything to the contrary contained herein, no Holder shall be liable under this Section 6(b) for any amount that exceeds the net proceeds to such Holder as a result of the sale of Registrable Securities pursuant to such Registration Statement.

(c)                                   Conduct of Indemnification Proceedings . If any Proceeding shall be brought or asserted against any Person entitled to indemnity pursuant to Section 6(a) or 6(b) hereunder (an “ Indemnified Party ”), such Indemnified Party promptly shall notify the Person from whom indemnity is sought (the “ Indemnifying Party ) in writing, and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided , that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have materially and adversely prejudiced the Indemnifying Party.

An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (i) the Indemnifying Party has agreed in writing to pay such fees and expenses; or (ii) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (iii) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party

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and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and such counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld, conditioned or delayed. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, which consent shall not unreasonably be withheld, conditioned or delayed, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

All reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten (10) Business Days of written notice thereof to the Indemnifying Party (regardless of whether it is ultimately determined that an Indemnified Party is not entitled to indemnification hereunder; provided , that the Indemnifying Party may require such Indemnified Party to undertake to reimburse all such fees and expenses to the extent it is finally judicially determined that such Indemnified Party is not entitled to indemnification hereunder or pursuant to applicable law).

(d)                                  Contribution . If a claim for indemnification under Section 6(a) or 6(b) is unavailable to an Indemnified Party because of a failure or refusal of a governmental authority to enforce such indemnification in accordance with its terms (by reason of public policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in Section 6(c), any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for under Section 6(a) or 6(b) was available to such party in accordance with its terms. Notwithstanding anything to the contrary contained herein, no Holder shall be liable or required to contribute under this Section 6(d) for any amount that exceeds the net proceeds to such Holder as a result of the sale of Registrable Securities pursuant to the Registration Statement.

The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 6(d) were determined by pro rata allocation or by any other method of

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allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

The indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties.

7.                                        Rule 144 .

As long as any Holder owns Registrable Securities, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to Section 13(a) or 15(d) of the Exchange Act and to promptly furnish the Holders with true and complete copies of all such filings. As long as any Holder owns Registrable Securities, if the Company is not required to file reports pursuant to Section 13(a) or 15(d) of the Exchange Act, it will prepare and furnish to the Holders and make publicly available in accordance with Rule 144(c) promulgated under the Securities Act annual and quarterly financial statements, together with a discussion and analysis of such financial statements in form and substance substantially similar to those that would otherwise be required to be included in reports required by Section 13(a) or 15(d) of the Exchange Act, as well as any other information required thereby, in the time period that such filings would have been required to have been made under the Exchange Act. The Company further covenants that it will take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to sell Common Shares without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act, including providing any legal opinions of counsel to the Company referred to in the Purchase Agreement. Upon the request of any Holder, the Company shall deliver to such Holder a written certification of a duly authorized officer as to whether it has complied with such requirements.

8.                                        Miscellaneous .

(a)                                   Remedies . The remedies provided in this Agreement and the Purchase Agreement are cumulative and not exclusive of any remedies provided by law. In the event of a breach by the Company or by any Holder of any of their obligations under this Agreement, the Holders or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate.

(b)                                  No Inconsistent Agreements . Neither the Company nor any of its Affiliates has as of the date hereof entered into, nor shall the Company or any of its Affiliates, on or after the date of this Agreement, enter into, any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with

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the provisions hereof. Without limiting the generality of the foregoing, without the written consent of the Holders, the Company shall not grant to any Person the right to request the Company to register any securities of the Company under the Securities Act if the rights so granted are inconsistent with the rights granted to the Holders set forth herein, or otherwise prevent the Company with complying with all of its obligations hereunder.

(c)                                   No Piggyback on Registrations . Neither the Company nor any of its security holders (other than the Holders) may include securities of the Company in the Registration Statement.

(d)                                  Failure to File Registration Statement and Other Events . The Company and the Holders agree that the Holders will suffer damages if the Registration Statement is not filed on or prior to the Filing Date or is not declared effective by the Commission on or prior to the Effectiveness Date and maintained in the manner contemplated herein during the Effectiveness Period or if certain other events occur. The Company and the Holders further agree that it would not be feasible to ascertain the extent of such damages with precision. Accordingly, if (i) the Registration Statement is not filed on or prior to the Filing Date, or is not declared effective by the Commission on or prior to the Effectiveness Date, except where such failure results from a Holder’s or the Special Counsel’s failure to return at least one (1) Business Day prior to filing any comments to the Registration Statement or any related Prospectus delivered thereto pursuant to Section 3(a) or otherwise to deliver information regarding a Holder required to be included therein or to comply with its obligations thereunder, or (ii) the Company fails to file with the Commission a request for acceleration in accordance with Rule 12dl-2 promulgated under the Exchange Act within five (5) Business Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the Commission that a Registration Statement will not be “reviewed,” or not subject to further review, or (iii) the Registration Statement is filed with and declared effective by the Commission but thereafter ceases to be effective or available as to all Registrable Securities at any time during the Effectiveness Period other than in connection with a Blackout Period permitted by Section 3(m), without being succeeded within a reasonable period by a subsequent Registration Statement filed with and declared effective by the Commission, or (iv) other than in connection with a Blackout Period permitted by Section 3(m), the Company suspends the use of the Prospectus forming a part of such Registration Statement for more than thirty (30) days in any period of 365 consecutive days if the Company suspends in reliance on its ability to do so due to the existence of a development that, in the good faith discretion of the Board, makes it appropriate to so suspend or which renders the Company unable to comply with the Commission requirements, or the Company suspends the use of the Prospectus forming a part of such Registration Statement for more than sixty (60) days in any period of 365 consecutive days for any other reason (any such failure or breach being referred to as an “ Event ”), the Company shall pay as liquidated damages for such failure or breach and not as a penalty (the “ Liquidated Damages ”) to each Holder an amount equal to two percent (2%) of the purchase price of the Preferred Stock and Warrants paid by such Holder pursuant to the Purchase Agreement for each thirty (30) day period, pro rated for any period less than thirty (30) days, following the Event until the applicable Event has been cured. Payments to be made pursuant to this Section 8(d) shall be due and payable immediately upon demand in cash. The parties agree that the Liquidated Damages represent a reasonable estimate on the part of the parties, as of the date of this Agreement, of the amount of damages that may be incurred by the Holders if the Registration Statement is not filed on or prior to the Filing Date or has not been

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declared effective by the Commission on or prior to the Effectiveness Date and maintained in the manner contemplated herein during the Effectiveness Period or if any other Event as described herein has occurred.

(e)                                   Consent to Jurisdiction . The Company and each Holder (i) hereby irrevocably submit to the jurisdiction of the United States District Court for the Northern District of Texas and the courts of the State of Texas located in Dallas County for the purposes of any suit, action or proceeding arising out of or relating to this Agreement or the Purchase Agreement, and (ii) hereby waive, and agree not to assert in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or proceeding is improper. The Company and each Holder consent to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing in this Section 8(e) shall affect or limit any right to serve process in any other manner permitted by law.

(f)                                     Amendments and Waivers . The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and the Holders.

(g)                                  Notices . Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earlier of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice prior to 5:00 p.m., Central Time, on a Business Day, (ii) the first Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified for notice later than 5:00 p.m., Central Time, on any date and earlier than 11:59 p.m., Central Time, on such date, (iii) the Business Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) actual receipt by the party to whom such notice is required to be given.

(x)                                    if to the Company:

Intrusion Inc.

1101 East Arapaho Road

Richardson, Texas  75081

Attention:  G. Ward Paxton, Chairman, CEO and President

Telecopier:  (972) 234-1467

Telephone:  (972) 301-3633

with a copy to:

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Patton Boggs LLP

2001 Ross Avenue

Suite 3000

Dallas, Texas  75201

Attention: Thomas R. Nelson, Esq.

Telecopier:  (214) 758-1550

Telephone:  (214) 758-1500

(y)                                  if to any Purchaser:

At the address of such Purchaser set forth on Exhibit A to this Agreement.

or to such other address or addresses or facsimile number or numbers as any such party may most recently have designated in writing to the other parties hereto by such notice.

(h)                                  Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns and shall inure to the benefit of the Holders and their respective successors and assigns. The Company may not assign this Agreement or any of its respective rights or obligations hereunder without the prior written consent of the Holders. Each Purchaser may assign its rights hereunder in the manner and to the Persons as permitted under the Purchase Agreement.

(i)                                      Assignment of Registration Rights . The rights of the Holders hereunder, including the right to have the Company register for resale Registrable Securities in accordance with the terms of this Agreement, shall be assignable by each Holder to any transferee of such Holder of all or a portion of the shares of Registrable Securities if:  (i) such Holder agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment; (ii) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (A) the name and address of such transferee or assignee, and (B) the securities with respect to which such registration rights are being transferred or assigned; (iii) following such transfer or assignment the further disposition of such securities by the transferee or assignees is restricted under the Securities Act and applicable state securities laws; (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this Section, the transferee or assignee agrees in writing with the Company to be bound by all of the provisions of this Agreement; and (v) such transfer shall have been made in accordance with the applicable requirements of the Purchase Agreement and shall be for no less than 50% of the Registrable Securities held by such Holder. In addition, each Holder shall have the right to assign its rights hereunder to any other Person with the prior written consent of the Company. The rights to assignment shall apply to each Holder and to its subsequent successors and assigns. In the event of an assignment pursuant to this Section 8(i), the assigning Holder shall pay all incremental costs and expenses incurred by the Company in connection with filing a Registration Statement (or an amendment to the Registration Statement) to register the shares of Registrable Securities assigned to any assignee or transferee of such Holder.

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(j)                                      Counterparts . This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original, and all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof.

(k)                                   Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflicts of law thereof. This Agreement shall not be interpreted or construed with any presumption against the party causing this Agreement to be drafted.

(l)                                      Cumulative Remedies . The remedies provided herein are cumulative and not exclusive of any remedies provided by law.

(m)                                Termination . This Agreement shall terminate on the date on which all remaining Registrable Securities may be sold without restriction pursuant to Rule 144(k) of the Securities Act.

(n)                                  Severability . If any term, provision, covenant or restriction of this Agreement is held to be invalid, illegal, void or unenforceable in any respect, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction.  It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

(o)                                  Headings . The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

[Signature Pages Follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights Agreement to be duly executed by their respective authorized persons as of the date first indicated above.

[Signatures of Purchasers to follow on next pages.]

[Signature page to Registration Rights Agreement dated March 25, 2004,

by and among Intrusion Inc. and the Purchasers named therein]

[Signature page to Registration Rights Agreement dated March 25, 2004,

by and among Intrusion Inc. and the Purchasers named therein]

[Signature page to Registration Rights Agreement dated March 25, 2004,

by and among Intrusion Inc. and the Purchasers named therein]

[Signature page to Registration Rights Agreement dated March 25, 2004,

by and among Intrusion Inc. and the Purchasers named therein]

[Signature page to Registration Rights Agreement dated March 25, 2004,

by and among Intrusion Inc. and the Purchasers named therein]

[Signature page to Registration Rights Agreement dated March 25, 2004,

by and among Intrusion Inc. and the Purchasers named therein]

[Signature page to Registration Rights Agreement dated March 25, 2004,

by and among Intrusion Inc. and the Purchasers named therein]

[Signature page to Registration Rights Agreement dated March 25, 2004,

by and among Intrusion Inc. and the Purchasers named therein]

EXHIBIT A

THE PURCHASERS

Black Point Partners, Inc.

100 Cummings Center, Suite 335A

Beverly, MA  01915

Attention:  Charles Manuel

Crestview Capital Master, L.L.C

95 Revere Drive, Suite F

Northbrook, IL  60062

Attention: Robert M. Hoyt

Telecopier:  (847) 559-5807

Telephone:  ( 847)-559-0060

Enable Growth Partners L.P.

c/o Enable Capital Management

One Sansome Street, Suite 2900

San Francisco, CA  94104

Telecopier:  (415) 835-3843

Telephone:  ( 415) 835-3839

James F. and Catherine A. Gero

11900 N. Anna Cade Road

Rockwall, TX  75087

Gryphon Master Fund, L.P.

100 Crescent Court, Suite 490

Dallas, TX  75201

Attention:  Ryan R. Wolters

Telecopier: (214) 871-6711

Telephone: (214) 871-6783

with a copy to:

Warren W. Garden, P.C.

100 Crescent Court, Suite 400

Dallas, TX  75201

Attention:  Warren W. Garden, Esq.

Telecopier: (214) 871-6711

Telephone: (214) 871-6710

G. Ward Paxton

c/o Intrusion Inc.

1101 E. Arapaho Road

Richardson, TX  75081

Telecopier: (972) 301-3892

Marshall B. Payne

500 Crescent Court, Suite 250

Dallas, TX  75201

Telecopier:  (214) 880-4491

Telephone:  (214) 871-6807

A-1

Renaissance Capital Growth & Income Fund III, Inc.

Renaissance US Growth Investment Trust PLC

BFS US Special Opportunities Trust PLC

c/o Renaissance Capital Group, Inc.

8080 N. Central Expressway,  Suite 210-LB -59

Dallas, TX  75206

Telecopier:  ( 214) 891-8291

Telephone:  ( 214) 891-8294

A-2

EXHIBIT B

PLAN OF DISTRIBUTION

We are registering the shares of common stock on behalf of the selling stockholders.  The shares of common stock may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market prices, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected at various times in one or more of the following transactions, or in other kinds of transactions:

•                   transactions on any national securities exchange or U.S. inter-dealer system of a registered national securities association on which the common stock may be listed or quoted at the time of sale;

•                   in the over-the-counter market;

•                   in private transactions and transactions otherwise than on these exchanges or systems or in the over-the-counter market;

•                   in connection with short sales of the shares;

•                   by pledge to secure or in payment of debt and other obligations;

•                   through the writing of options, whether the options are listed on an options exchange or otherwise;

•                   in connection with the writing of non-traded and exchange-traded call options, in hedge transactions and in settlement of other transactions in standardized or over-the-counter options; or

through a combination of any of the above transactions.

The selling stockholders and their successors, including their transferees, pledgees or donees or their successors, may sell the common stock directly to the purchaser or through underwriters, broker-dealers or agents, who may receive compensation in the form of discounts, concessions or commissions from the selling stockholders or the purchasers. These discounts, concessions or commissions as to any particular underwriter, broker-dealer or agent may be in excess of those customary in the types of transactions involved.

In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule 144 of the Securities Act may be sold under Rule 144 rather than pursuant to this prospectus.

We entered into a registration rights agreement for the benefit of the selling stockholders to register the common stock under applicable federal and state securities laws. The registration rights agreement provides for cross-indemnification of the selling stockholders and us and our respective directors, officers and controlling persons against specific liabilities in connection

B-1

with the offer and sale of the common stock, including liabilities under the Securities Act. We will pay substantially all of the expenses incurred by the selling stockholders incident to the offering and sale of the common stock.

B-2

EXHIBIT C

FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT

[Name and address of Transfer Agent]

Re:                                Intrusion Inc.

Ladies and Gentlemen:

We are counsel to Intrusion Inc., a Delaware corporation (the “ Company ”), and have represented the Company in connection with that certain Securities Purchase Agreement (the “ Purchase Agreement ”), dated as of March 25, 2004, by and between the Company and the Purchasers (the “ Purchasers ”) named therein pursuant to which the Company issued to the Purchasers shares of its 5% Convertible Preferred Stock, $0.01 par value, and warrants to purchase shares of its common stock, $0.01 par value. Pursuant to the Purchase Agreement, the Company has also entered into a Registration Rights Agreement with the Purchasers (the “ Registration Rights Agreement ”), dated as of March 25, 2004, pursuant to which the Company agreed, among other things, to register the Registrable Securities (as defined in the Registration Rights Agreement) under the Securities Act of 1933, as amended (the “ 1933 Act ”). In connection with the Company’s obligations under the Registration Rights Agreement, on                    , 2004, the Company filed a Registration Statement on Form S-3 (File No. 333-                ) (the “ Registration Statement ”) with the Securities and Exchange Commission (the “ SEC ”) relating to the resale of the Registrable Securities which names the Purchasers as selling stockholders thereunder.

In connection with the foregoing, we advise you that a member of the SEC’s staff has advised us by telephone that the SEC has entered an order declaring the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after telephonic inquiry of a member of the SEC’s staff, that any stop order suspending its effectiveness has been issued or that any proceedings for that purpose are pending before, or threatened by, the SEC, and, accordingly, the Registrable Securities are available for resale under the 1933 Act in the manner specified in, and pursuant to the terms of, the Registration Statement.

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