EXHIBIT 10.113
LOAN AND REFINANCING AGREEMENT
     THIS LOAN AND REFINANCING AGREEMENT dated as of December 31, 2008 (the
“Agreement”), is entered into by and between Vey Associates, Incorporated, a
Louisiana Corporation (“Investor”), David R. Vey, an individual, (“Vey”) and
Sedona Corporation, a corporation organized and existing under the laws of the
Commonwealth of Pennsylvania (the “Company”).
     WHEREAS, the Company desires to refinance sums payable to Vey pursuant to
the terms of certain promissory notes issued by the Company in favor of Vey; and
     WHEREAS, the terms of the Existing Notes (as defined herein) will be
amended and consolidated into a single note issued by the Company in favor of
Vey; and
     WHEREAS, in connection with such refinancing, Vey desires to convert
certain principal and interest under the Existing Notes into shares of common
stock of the Company; and
     WHEREAS, the Company desires to obtain additional working capital for its
operations up to a principal amount of $2,250.000.00 from Investor in exchange
for a note that can be converted by Investor to shares of the Company’s Common
Stock;
     NOW, THEREFORE, the Company, Vey, Investor, and each of them, agree as
follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1. “Common Stock” shall mean the Company’s common stock, $.001 par
value per share.
Section 1.2. “Converted Shares” shall mean that number of shares of Common Stock
issued in reduction of the principal and/or interest due on the Existing Note,
Consolidated Note (as defined herein), or New Note (as defined herein) which the
Investor or Vey elects to convert to Common Stock.
Section 1.3. “Person” shall mean an individual, a corporation, a partnership, a
limited liability company, association, trust or other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
Section 1.4. “SEC Documents” shall mean the Company’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2007 and each report, proxy statement or
registration statement filed by the Company with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934 or the Securities Act
since the filing of such Annual Report through the date hereof.

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Section 1.6. “Securities Act” shall mean the Securities Act of 1933, as amended.
Section 1.7. “Warrants” shall mean the Warrants that the Investor and Vey shall
receive pursuant to the terms set forth in Section 4.2.
Section 1.8. “Warrant Shares” shall mean all shares of Common Stock issuable
pursuant to exercise of the Warrants.
ARTICLE II
THE LOAN
Section 2.1. Funding of Loan.
     The Investor will provide working capital to the Company in amounts up to
Two Million Two Hundred Fifty Thousand ($2,250,000) Dollars (the “Loan”). The
Investor will fund the Loan in six (6) Tranches (the “Tranches”) as set forth
below.
     (a) The first Tranche will be paid to Company on the date hereof in the
amount of One Hundred Thousand ($100,000.00) Dollars;
     (b) The second Tranche will be paid to Company on or before January 10,
2009, in the amount of Three Hundred Fifty Thousand ($350,000.00) Dollars;
     (c) The third Tranche will be paid to Company on or before February 15,
2009, in the amount of Five Hundred Fifty Thousand ($550,000.00) Dollars;
     (d) The fourth Tranche will be paid to the Company on or before April 15,
2009 in the amount of Seven Hundred Fifty Thousand ($750,000.00) Dollars;
     (e) The fifth Tranche will be paid to the Company on or before
September 30, 2009 in the amount of Five Hundred Thousand ($500,000.00) Dollars
provided that the Company the Company has met the condition set forth in
Section 2.3; and
Section 2.2. Convertible Note.
     In exchange for the funding of the Loan by the Investor, the Company will
issue a convertible note in the form as that set forth in Exhibit A hereto which
shall provide for interest at the rate of Eight (8%) Percent per annum and,
shall have a maturity date of January 4, 2010 (the “New Note”) unless otherwise
converted pursuant to Section 4.1.
Section 2.3. Condition of Fifth Tranche.
     In order for Investor to fund the fifth Tranche, the Company must achieve
“EBITDA Breakeven” for the third quarter of Fiscal year 2009.

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ARTICLE III
REFINANCING
Section 3.1. Existing Notes.
     The Company and Vey desire to refinance the Existing Notes by extending the
maturity date thereof and by creating or adjusting certain conversion rights
thereunder. The Existing Notes consist of:
     (a) a Convertible Promissory Note (the “Old Convertible Note”) in the
principal amount of Two Million Six Hundred Ninety One Thousand Two Hundred
Sixty Three 36/100 Dollars ($2,691,263.36) from the Company in favor of Vey,
dated October 23, 2006, as amended from time to time, with accrued interest in
the amount of Four Hundred Seventy Eight Thousand Four Hundred Forty Six and
82/100 Dollars ($478,446.82);
     (b) a Revolving Promissory Note (the “Revolving Note”) in the principal
amount of Six Hundred Ninety Thousand Dollars ($690,000.00) from the Company in
favor of Vey, dated September 27, 2006, as amended from time to time, with
accrued interest in the amount of Seventy Three Thousand Two Hundred Sixty Two
and 22/100 Dollars ($73,262.22); and
     (c) a Promissory Note (the “Bridge Note”) in the principal amount of One
Million Two Hundred Thirteen Thousand Nine Hundred Fifty Two 81/100 Dollars
($1,213,952.81) from the Company in favor of Vey, dated October 23, 2006, as
amended from time to time, with accrued interest in the amount of Two Hundred
Fifteen Thousand Eight Hundred Thirteen and 83/100 dollars ($215,813.83).
Section 3.2 Partial Conversion of the Existing Notes.
     The Company and Vey agree that by execution of this Agreement Vey is
converting Four Hundred Ninety Five Thousand Two Hundred Sixteen 17/100 Dollars
($495,216.17) of principal and Seven Hundred Sixty Seven Thousand Five Hundred
Twenty Two and 81/100 Dollars ($767,522.87) of interest of the Existing Notes.
The conversion price for principal and interest shall be $0.05 per Converted
Share for a total of 25,254,781 shares.

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Section 3.3 Refinancing and Consolidation of Existing Notes.
     After such conversion, the Existing Notes shall be amended and consolidated
into a single note (the “Consolidated Note”) in the principal amount of Four
Million One Hundred Thousand Dollars ($4,100,000) in substantial form as that
set forth in Exhibit B hereto which (i) shall provide for interest at the rate
of Eight (8%) Percent per annum and, (ii) shall have a maturity date of
January 4, 2010 unless otherwise converted pursuant to Section 4.1, (iii) shall
have a conversion price of $0.05 per Converted Share, and (iv) shall have such
other terms as are set forth in Exhibit B. The Consolidated Note and the New
Note shall be collectively referred to as the “Convertible Notes.”
ARTICLE IV
CONVERSION RIGHTS
Section 4.1. Conversion of Principal/Interest.
     Investor or Vey may elect in writing to convert all or a designated part of
the outstanding principal or interest due pursuant to the Convertible Notes to
Converted Shares of the Company at any time. The conversion price for principal
and interest shall be $0.05 per Converted Share. Notwithstanding the foregoing,
Investor and the Company agree that Investor shall not be permitted to convert
any portion of the New Note until such time as Investor has provided funding to
the Company which equals One Million Seven Hundred Fifty Thousand Dollars
($1,750,000).
Section 4.2. Warrants.
     Vey is hereby granted one (1) Warrant to purchase 12,627,390 shares of the
Company’s common stock at an exercise price of $0.07 per share, which shall
expire four (4) years from the date of issuance.
ARTICLE V
COVENANTS OF THE INVESTOR
Section 5.1 Covenants
     The Investor covenants to the Company that he will not sell, assign,
hypothecate, pledge, convey, or otherwise transfer a Convertible Note, Converted
Share, Warrant, or Warrant Share, except to a company controlled by the
Investor, without registering such transaction under the Securities Act and
applicable state securities laws or pursuant to exemptions from registration
thereunder. Investor acknowledges that such instruments will bear a legend
evidencing such restriction upon transfer.
ARTICLE VI
COVENANTS OF THE COMPANY

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Section 6.1. Reservation of Common Stock.
     The Company does not currently have shares sufficient to issue the
Converted Shares and Warrant Shares based upon its current Articles of
Incorporation. The Company will use its best efforts to amend the Articles of
Incorporation to provide for additional shares sufficient to permit issuance of
the Converted Shares and the Warrants Shares. Thereafter, the Company shall
reserve and keep available at all times, free of preemptive rights, shares of
Common Stock for the purpose of enabling the Company to issue the Converted
Shares pursuant to the Convertible Note and upon issuance of the Warrants, the
Warrant Shares. The number of shares so reserved from time to time, as
theretofore increased or reduced as hereinafter provided, may be reduced by the
number of shares actually delivered pursuant to any exercise of the Warrants and
the number of shares so reserved shall be increased or decreased to reflect
potential increases or decreases in the Common Stock that the Company may
thereafter be obligated to issue by reason of adjustments to the Warrants.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Governing Law; Consent to Jurisdiction.
     This Agreement shall be governed by and construed in accordance with the
laws of the State of Louisiana without regard to the choice of law or conflicts
of law provisions thereof. Each of the parties hereto hereby irrevocably and
unconditionally consents to submit to the non-exclusive jurisdiction of the
courts of the State of Louisiana and of the United States of America, located in
the State of Louisiana, for any action, proceeding or investigation in any court
or before any governmental authority (“Litigation”) arising out of or relating
to this Agreement and the transactions contemplated hereby, and further agrees
that service of any process, summons, notice or document by U.S. registered mail
to its respective address set forth in this Agreement shall be effective service
of process for any Litigation brought against it in any such court. Each of the
parties hereto hereby irrevocably and unconditionally waives any objection to
the laying of venue of any Litigation arising out of this Agreement or the
transaction contemplated hereby in the courts of the State of Louisiana or the
United States of America, located in the State of Louisiana, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such Litigation brought in any such court has been brought
in an inconvenient forum.
Section 7.2 Notices.
     All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless
otherwise specified herein, shall be (i) hand delivered, (ii) deposited in the
mail, registered or certified, return receipt requested, postage prepaid,
(iii) delivered by reputable air courier service with charges prepaid, or
(iv) transmitted by facsimile, addressed as set forth below or to such other
address as such party shall have specified most recently by written notice. Any
notice or other communication required or permitted to be given hereunder shall
be deemed effective (a) upon hand delivery or delivery by facsimile, with
accurate confirmation generated by the transmitting facsimile machine, at the

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address or number designated below (if delivered on a business day during normal
business hours where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal
business hours where such notice is to be received) or (b) on the first business
day following the date of sending by reputable courier service, fully prepaid,
addressed to such address, or (c) upon actual receipt of such mailing, if
mailed. The addresses for such communications shall be:

     
If to the Company:
   Sedona Corporation
 
   1003 W. Ninth Avenue
 
   Second Floor
 
   King of Prussia, PA 19406
 
   Attention: Chief Financial Officer
 
   Facsimile: 610-337-8490
 
   
with a copy to (shall not constitute notice):
   White and Williams LLP
 One Penn Plaza, Suite 4110
 
   New York, New York 10119
 
   Attention: Carl Seldin Koerner, Esq.
 
   Telephone: 212-631-4403
 
   Facsimile: 212-868-4843
 
   
if to the Investor:
   As set forth on the signature pages hereto.
 
   
if to Vey:
   As set forth on the signature pages hereto.

     Any of the parties hereto may from time to time change its address or
facsimile number for notices under this Section 7.2 by giving written notice of
such changed address or facsimile number to the other party hereto as provided
in this Section 7.2.
Section 7.3 Counterparts/Facsimile/Amendments.
     This Agreement may be executed in multiple counterparts, each of which may
be executed by less than all of the parties and shall be deemed to be an
original instrument which shall be enforceable against the parties actually
executing such counterparts and all of which together shall constitute one and
the same instrument. Except as otherwise stated herein, in lieu of the original
documents, a facsimile transmission or copy of the original documents shall be
as effective and enforceable as the original. This Agreement may be amended only
by a writing executed by all parties.
Section 7.4. Entire Agreement.
     This Agreement, the forms of agreements attached as Exhibits hereto, set
forth the entire agreement and understanding of the parties relating to the
subject matter hereof and supersedes all prior and contemporaneous agreements
negotiations and understandings between the parties, both oral and written
relating to the subject matter hereof. The terms and conditions of all

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Exhibits to this Agreement are incorporated herein by this reference and shall
constitute part of this Agreement as is fully set forth herein.
Section 7.5. Severability.
     In the event that any provision of this Agreement becomes or is declared by
a court of competent jurisdiction to be illegal, unenforceable or void, this
Agreement shall continue in full force and effect without said provision;
provided that such severability shall be ineffective if it materially changes
the economic benefit of this Agreement to any party.
Section. 7.6. Headings.
     The headings used in this Agreement are used for convenience only and are
not to be considered in construing or interpreting this Agreement.
Section 7.7 Fees and Expenses.
     Each of the Company and the Investor agrees to pay its own expenses
incident to the performance of its obligations hereunder.
Section 7.8 No Brokerage.
     Each of the parties hereto represents that it has had no dealings in
connection with this transaction with any finder or broker who will demand
payment of any fee or commission from the other party. The Company on the one
hand, and the Investor, on the other hand, agree to indemnify the other against
and hold the other harmless from any and all liabilities to any Person claiming
brokerage commissions or finder’s fees on account of services purported to have
been rendered on behalf of the indemnifying party in connection with this
Agreement or the transactions contemplated hereby.

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by the undersigned, thereunto duly authorized, as of the date first set
forth above.

                  SEDONA CORPORATION    
 
           
 
  By:   /s/ Scott Edelman
 
Scott Edelman, President and Chief Executive Officer    
 
           
 
      /s/ David Vey
 
David Vey    
 
           
 
     
 
Address    
 
           
 
     
 
   
 
                VEY ASSOCIATES INCORPORATED    
 
           
 
  By:   /s/ David Vey
 
   
 
           
 
     
 
Address    
 
           
 
     
 
   

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Exhibit A
Form of Convertible Note
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”)
OR ANY APPLICABLE STATE SECURITIES LAWS. IT MAY NOT BE CONVERTED, SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN
EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
SECURED CONVERTIBLE NOTE

      $2,250,000   King of Prussia, Pennsylvania

FOR VALUE RECEIVED, the undersigned, SEDONA CORPORATION, a Pennsylvania
corporation, promises to pay to the order of Vey Associates Incorporated, with
the address of 11822 Justice Avenue Suite B-6, Baton Rouge, Louisiana 70816, the
principal sum of up to TWO MILLION TWO HUNDRED FIFTY THOUSAND dollars
($2,250,000.00), or so much thereof as shall have been advanced by the Holder to
the Maker and then be outstanding pursuant to the terms of a certain Loan and
Refinancing Agreement between Maker and Holder of even date herewith, together
with interest thereon at the rate of eight percent (8%) per annum from the date
hereof until the earlier of Maturity or the date the outstanding balance (as
defined herein) shall be paid in full; provided that Holder shall be entitled,
at any time that sums due pursuant to this Note are outstanding, to convert the
then Outstanding Balance (as defined herein), or part thereof, into shares of
Common Stock at a price of $0.05 per share .
     1. Definitions. The following definitions are applicable to the words,
phrases or terms used in this Note.
          (a) The term “Common Stock” shall mean the Maker’s common stock, par
value $0.001 per share.
          (b) The term “Conversion Price” shall mean $0.05 per share of Common
Stock.
          (c) The term “Effective Date” shall refer to December 31, 2008.
          (d) The term “Holder” shall mean and include such owner or holder and
all heirs, successors and assigns of any owner or holder of this Note.
          (e) The term “Maker” shall mean and include all makers, co-makers and
other parties signing of this Note and their successors and assigns, and the use
of the plural number shall include the singular, and vice versa, and the use of
any gender shall include all genders.

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          (f) The term “Maturity” shall mean the date on which this Note shall
be due and payable in full, which date shall be January 4, 2010, unless
theretofore converted.
          (g) The term “Note” shall refer to this instrument.
          (h) The term “Notice of Exercise” shall mean the Notice of Exercise
substantially in the form of Exhibit A attached hereto.
          (i) The term “Oak Harbor” shall mean Oak Harbor Investment Properties.
LLC.
          (j) The term “Shares” shall mean all shares of Common Stock or other
securities issued or issuable pursuant to the Notice of Exercise.
          (k) The term “Vey” shall mean David R. Vey.
     2. Payment Terms. The Maker shall be obligated to make one payment of all
outstanding principal and unpaid interest due thereon at Maturity, unless
converted. Unless otherwise designated in writing, mailed or delivered to Maker,
the place for payment of the indebtedness evidenced by this Note shall be the
Holder’s principal address as noted above. Payments received on this Note shall
be applied first to accrued interest, and the balance to principal.
     3. Events of Default. The following shall constitute an Event of Default:
          (a) In the event Maker shall fail (i) to pay any sums due hereunder
when due, or (ii) to observe or perform any term, condition, covenant,
representation or warranty set forth herein, when due or required, or within any
period of time permitted thereunder for cure of any such default or
non-performance.
          (b) In the event Maker fails to pay any invoice or other sum which may
be due and payable to Holder, Vey, or Oak Harbor under certain promissory notes
issued in their favor by the Maker, when due or required, according to the terms
thereunder, unless prior written waiver has been granted to Maker by Holder,
Vey, or Oak Harbor.
          (c) In the event Maker has received notice of default on any financial
obligation of Maker in excess of One Hundred Thousand Dollars ($100,000.00)
which remains uncured for a ten (10) day period.
     4. Acceleration of Maturity. Upon the happening of any Event of Default,
the Outstanding Balance (as defined herein) shall, at the option of the Holder,
become immediately due and payable.
     5. Security. The obligation of the Maker pursuant to this Note is secured
by a lien and security interest in the collateral of the Maker as specifically
set forth in a Security Agreement of even date herewith (the “Security
Agreement”).

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     6. Limitation on Interest. In no contingency, whether by reason of
acceleration of the Maturity of this Note or otherwise, shall the interest
contracted for, charged or received by Holder exceed the maximum amount
permissible under applicable law. If, from any circumstance whatsoever, interest
would otherwise be payable to Holder in excess of the maximum lawful amount, the
interest payable to Holder shall be reduced to the maximum amount permitted
under applicable law; and, if from any circumstance the Holder shall ever
receive anything of value deemed interest by applicable law in excess of the
maximum lawful amount, an amount equal to any excessive interest shall be
applied to the reduction of the principal of this Note and not to the payment of
interest, or if such excessive interest exceeds the unpaid balance of principal
of the Note such excess shall be refunded to Maker. All interest paid or agreed
to be paid to Holder shall, to the extent permitted by applicable law, be
amortized, prorated, allocated, and spread throughout the full period until
payment in full of the principal of the Note (including the period of any
renewal or extension thereof) so that interest thereon for such full period
shall not exceed the maximum amount permitted by applicable law.
     7. Remedies; Nonwaiver. Failure of Holder to exercise any right or remedy
available to Holder upon the occurrence of an Event of Default hereunder shall
not constitute a waiver on the part of Holder of the right to exercise any such
right or remedy for that Event of Default or any subsequent Event of Default.
The exercise of any remedy by Holder shall not constitute an election of any
such remedy to the exclusion of any other remedies afforded Holder at law or in
equity, all such remedies being nonexclusive and cumulative. If an Event of
Default occurs under this Note and this Note is referred to an attorney at law
for collection, Maker agrees to pay all costs incurred by Holder incident to
collection up to a limit of 10% of the unpaid principal balance, including but
not limited to reasonable attorney fees, enforceable as a contract of indemnity,
plus all court costs.
     8. Waivers. The Maker (i) waives presentment, protest and demand,
(ii) waives notice of protest, demand, dishonor and nonpayment of this Note, and
(iii) expressly agrees that this Note may be renewed in whole or in part, or any
nonpayment hereunder may be extended, or a new note of different form may be
substituted for this Note or changes may be made in consideration of the
extension of the Maturity date hereof, or any combination thereof, from time to
time, but, in any singular event or any combination of such events, Maker will
not be released from liability by reason of the occurrence of any such event,
nor shall Holder hereof be deemed by the occurrence of any such event to have
waived or surrendered, either in whole or in part, any right it otherwise might
have.
     9. Option to Convert Note into Stock.
          (a) Holder shall have the right and option (the “Conversion Right”) to
convert the unpaid principal balance of this Note or any part thereof, together
with all accrued and unpaid interest (the “Outstanding Balance”), into shares of
Common Stock The number of Shares to be delivered on conversion shall be equal
to the amount of the then Outstanding Balance divided by the Conversion Price,
as adjusted, in compliance with the terms contained in Section 10 hereof.
          (b) Maker shall use its best efforts to effectuate a registration
statement for all Shares that may be issued under this Note within 120 days of
the Effective Date.

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     10. Anti-Dilution.
     (a) The Conversion Price shall be protected by the anti-dilution provisions
set forth in this Section 10, provided that such anti-dilution shall not apply
with respect to: (a) Maker’s grant of restricted stock to employees or directors
(whether granted prior to or after the Effective Date) pursuant to the terms and
conditions of the Maker’s 2000 Incentive Stock Option Plan; (b) Maker’s grant of
stock options to employees or directors or the exercise of stock options
(whether granted prior to or after the Effective Date) by current, future, or
past employee’s or directors of the Maker; (c) the issuance of shares for a
consideration greater than the Conversion Price in effect on the date of, and
immediately prior to, such issuance, or (d) an issuance of shares for which the
Holder gives a written waiver of such adjustment.
     (b) Except as otherwise provided in this Section, in the event that the
Maker shall, at any time after the Effective Date, issue or sell any shares of
Common Stock, including shares held in the Maker’s treasury and shares issued
upon the exercise of any options, rights or warrants to subscribe for shares of
Common Stock and Common Stock issued upon the direct or indirect conversion or
exchange of securities for Shares, (i) for consideration per share less than the
Conversion Price in effect immediately prior to such issuance or sale, or
(ii) without consideration, then forthwith upon such issuance or sale, the
Conversion Price (until another such issuance or sale) shall be reduced (the
“Adjusted Conversion Price”) to the price (calculated to the nearest full cent)
determined by multiplying the Conversion Price in effect immediately prior to
such issuance or sale by a fraction, the numerator of which shall be the sum of
(1) the number of shares of Common Stock outstanding immediately prior to such
issuance or sale multiplied by the Conversion Price immediately prior to such
issuance or sale, plus (2) the consideration received by the Maker upon such
issuance or sale, and the denominator of which shall be the product of (x) the
total number of shares of Common Stock outstanding immediately after such
issuance or sale, multiplied by (y) the Conversion Price, immediately prior to
such issuance or sale; provided, however, that in no event shall the Adjusted
Conversion Price exceed the Conversion Price in effect immediately prior to such
computation, except in the case of a combination of outstanding shares of Common
Stock, as provided by Section 10(e) hereof. In no event shall the Conversion
Price be increased.
     (c) For the purposes of any computation to be made in accordance with this
Section, 10 the following shall be applicable:
          (i) In the case of issuance or sale of shares of Common Stock for a
consideration part or all of which shall be cash, the amount of the cash
consideration therefore shall be deemed to be the amount of cash received by the
Maker for such shares (or, if shares of Common Stock are offered by the Maker
for subscription, the subscription price, or, if such securities shall be sold
to underwriters or dealers for public offering without subscription offering,
the public offering price) before deducting therefrom any compensation paid or
discount allowed in the sale, underwriting or purchase thereof by underwriters
or dealers or others performing similar services, or any expenses incurred in
connection therewith.
          (ii) In the case of the issuance or sale (otherwise than as a dividend
or other distribution on any stock of the Maker) of shares of Common Stock for a
consideration part or all of which shall be other than cash, the amount of the
consideration therefor other than cash shall

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be deemed to be the fair market value of such consideration as determined in
good faith by the Board of Directors of the Maker.
          (iii) Shares of Common Stock issuable by way of dividend or other
distribution on any stock of the Maker shall be deemed to have been issued
immediately after the opening of business on the day following the record date
for the determination of shareholders entitled to receive such dividend or other
distribution and shall be deemed to have been issued without consideration.
          (iv) The reclassification of securities of the Maker other than shares
of Common Stock into securities including shares of Common Stock shall be deemed
to involve the issuance of such shares of Common Stock for a consideration other
than cash immediately prior to the close of business on the date fixed for the
determination of security holders entitled to receive such shares, and the value
of the consideration allocable to such shares of Common Stock shall be
determined as provided in subsection (ii) above.
          (v) The number of shares of Common Stock at any one time outstanding
shall include the aggregate number of shares issued or issuable upon the
exercise of options, warrants or rights and upon the conversion or exchange of
convertible or exchangeable securities.
     (d) In case the Maker shall, at any time after the Effective Date,
subdivide Common Stock, the Conversion Price shall forthwith be proportionately
decreased.
     (e) The Maker will, at all times, reserve and keep available out of its
authorized Common Stock or its treasury shares, solely for the purpose of issue
upon the conversion of this Note as herein provided, such number of shares of
Common Stock as shall then be issuable upon the conversion of this Note.
     11. Mechanics of Conversion. Before the Holder shall be entitled to convert
this Note into Shares, the Holder shall surrender this Note, duly endorsed, at
the office of the Maker, and shall give written Notice of Exercise (the “Notice
of Conversion”) to the Maker at its principal corporate office of the election
to convert the same and shall state therein the name or names in which the
certificate or certificates for the Shares are to be issued. The form of Notice
of Conversion is attached hereto as Exhibit A. The Maker shall, promptly after
receipt of the Notice of Conversion, issue and deliver to such persons at the
address specified by the Holder, a certificate or certificates for the Shares to
which the Holder is entitled. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of surrender of this
Note, and the persons entitled to receive the Shares issuable upon such
conversion shall be treated for all purposes as the record holder or holders of
such Shares as of such date. No fractional shares shall be issued upon
conversion of this Note and the number of Shares to be issued shall be rounded
down to the nearest whole share. In the event that Holder elects to convert only
a portion of the Outstanding Balance into Shares, Holder shall deliver to Maker
a written acknowledgement of partial payment.
     12. Prepayment. The Maker may, upon thirty (30) days prior written notice
to Holder, prepay any part of or the entire balance of this Note without
penalty.

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     13. Mandatory Prepayment. In the event that:
          (a) The net proceeds actually received by Maker from (i) sales of
Maker’s securities (other than to Holder or its affiliates) and (ii) litigation
awards, exceeds $1,000,000 during the term of this Note; or
          (b) Maker has current cash on hand in excess of $2,000,000.00 for a
period exceeding 30 days, then an amount equal to fifty percent of such proceeds
or cash shall be paid by the Maker to the Holder as a mandatory prepayment.
     14.  Controlling Law. This Note shall be governed by and construed in
accordance with the laws of the State of Louisiana (other than its conflict of
laws principles) and the provisions of applicable federal law.
     15. Shareholder Status. Nothing contained in this Note shall be construed
as conferring upon the Holder the right to vote, or to receive dividends, or to
consent or to receive notice as a shareholder in respect of any meeting of
shareholders for the election of directors of the Maker or of any other matter,
or any rights whatsoever as a shareholder of the Maker prior to conversion
hereof.
     16. Notices. Any notice required or permitted under this Note shall be in
writing and shall be deemed to have been given on the date of delivery, if
personally delivered or delivered by courier, overnight express or other method
of verified delivery, to the party to whom notice is to be given, and addressed
to the addressee at the address of the addressee set forth herein, or the most
recent address, specified by written notice, given to the sender pursuant to
this paragraph.
     17. Captions. The captions of the sections of this Note are for the purpose
of convenience only and are not intended to be a part of this Note and shall not
be deemed to modify, explain, enlarge or restrict any of the provisions hereof.
     18. Remedies Not Exclusive. The remedies provided in this Note and the
Security Agreement or otherwise available to Holder for enforcing the payment of
the principal sum together with interest and the performance of the covenants,
conditions and agreements herein and therein contained are cumulative and
concurrent and may be pursued singly or successively or together at the sole
discretion of Holder, and may be exercised from time to time as often as
occasion therefore shall occur until Holder has been paid all sums due in full.
     19. Severability. The terms and provisions of this Note are severable. In
the event of the unenforceability or invalidity of any one or more of the terms,
covenants, conditions or provisions of this Note under federal, state or other
applicable law, such unenforceability or invalidity shall not render any other
term, covenant, condition or provision hereunder unenforceable or invalid. In
the event any waiver by Maker hereunder is prohibited by law, such waiver shall
be and be deemed to be deleted herefrom.
     20. Integration. This Note, together with the Loan and Refinancing
Agreement between

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Maker and Holder, dated as of even date herewith, the Security Agreement, and
the Amended and Restated Intercreditor Agreement between Maker, Holder, Oak
Harbor and Vey dated as of even date herewith (collectively, the “Loan
Documents”) express the entire agreement between the Maker and Holder concerning
the subject matter hereof and no modification of the Loan Documents shall be
effective unless expressed in a mutually signed writing. None of Holder’s
rights, powers, privileges or immunities under this Note can be waived unless
(and then only to the extent that) such waiver is expressed in a writing signed
by Holder.
     21. Successors and Assigns. This Note shall be binding upon the Maker, its
successors and assigns, and shall inure to the benefit of Holder, his heirs and
assigns.
     22. Time of Essence. Subject to the provisions hereof, time is of the
essence of each and every provision of this Note.
     23. Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
making of any payment, the taking of any action or the expiration of any right
required or granted herein shall be a Saturday, Sunday or a legal holiday, then
such payment may be made, such action may be taken or such right may be
exercised on the next succeeding day not a Saturday, Sunday or legal holiday.
     24. Loss, Theft, Destruction or Mutilation of Note. Maker covenants that
upon receipt by the Maker of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of this Note, and in case of loss, theft or
destruction, of indemnity reasonably satisfactory to it (which shall not include
the posting of any bond), and upon surrender and cancellation of such Note if
mutilated, the Maker will make and deliver a new Note in the same form and dated
as of the date hereof, in lieu of such Note.
     25. WAIVER OF JURY TRIAL.
MAKER AND HOLDER ACKNOWLEDGE AND AGREE THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS NOTE OR WITH RESPECT TO THE TRANSACTION CONTEMPLATED HEREBY WOULD BE
BASED UPON DIFFICULT AND COMPLEX ISSUES AND, THEREFORE, THE PARTIES AGREE THAT
ANY LAWSUIT ARISING OUT OF ANY SUCH CONTROVERSY SHALL BE TRIED IN A COURT OF
COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY. ACCORDINGLY, MAKER AND
HOLDER IRREVOCABLY WAIVE, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT
EITHER PARTY MAY NOW OR HEREAFTER HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR IN CONNECTION WITH THIS NOTE
OR ANY OF THE LOAN DOCUMENTS.
     26. JURISDICTION AND VENUE.
MAKER HEREBY AGREES THAT ALL ACTIONS OR PROCEEDINGS INITIATED BY MAKER AND
ARISING DIRECTLY OR INDIRECTLY OUT OF THE LOAN DOCUMENTS SHALL BE LITIGATED IN
THE COURTS OF THE STATE OF LOUISIANA, OR THE

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UNITED STATES DISTRICT COURT IN LOUISIANA, OR IN ANY OTHER COURT IN WHICH HOLDER
SHALL INITIATE SUCH ACTION, TO THE EXTENT SUCH COURT HAS JURISDICTION. MAKER
HEREBY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY
ACTION OR PROCEEDING COMMENCED BY HOLDER IN ANY OF SUCH COURTS AND HEREBY WAIVES
PERSONAL SERVICE OF THE SUMMONS AND COMPLAINT, OR OTHER PROCESS OR PAPERS ISSUED
THEREIN, AND AGREES THAT SERVICE OF SUCH SUMMONS AND COMPLAINT OR OTHER PROCESS
OR PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE MAKER AT
THE ADDRESS TO WHICH NOTICES ARE TO BE SENT PURSUANT TO THIS NOTE. MAKER WAIVES
ANY CLAIM THAT LOUISIANA IS AN INCONVENIENT FORUM OR AN IMPROPER FORUM BASED ON
LACK OF VENUE. SHOULD MAKER, AFTER BEING SO SERVED, FAIL TO APPEAR OR ANSWER TO
ANY SUMMONS, COMPLAINT, PROCESS OR PAPERS SO SERVED WITHIN THE NUMBER OF DAYS
PRESCRIBED BY LAW AFTER THE MAILING THEREOF, MAKER SHALL BE DEEMED IN DEFAULT
AND AN ORDER AND/OR JUDGMENT MAY BE ENTERED BY HOLDER AGAINST MAKER AS DEMANDED
OR PRAYED.
     IN WITNESS WHEREOF and intending to be legally bound hereby, Maker has duly
executed this Note as of this the 31st day of December, 2008.

              Maker’s Address:   Maker:     1003 West Ninth Avenue, 2nd floor  
SEDONA CORPORATION    
King of Prussia, PA 19406
           
 
                     
 
  By:   Scott Edelman    
 
      Chief Executive Officer    

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EXHIBIT A
NOTICE OF EXERCISE
TO: SEDONA CORPORATION
     (1) The undersigned hereby elects to purchase                      shares
of Common Stock (the “Common Stock”), of SEDONA CORPORATION pursuant to the
terms of the attached Secured Convertible Note dated December ___, 2008 between
Sedona Corporation, as Maker, and Vey Associates, Inc., as Holder (the “Note”)
and tenders herewith [the original Note] [an acknowledgement of partial payment
of the Note] together with all applicable transfer taxes.
     Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:

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Exhibit B
Consolidated Note
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”)
OR ANY APPLICABLE STATE SECURITIES LAWS. IT MAY NOT BE CONVERTED, SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN
EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
SECURED RESTATED AND CONSOLIDATED AND CONVERTIBLE NOTE

      $4,100,000   King of Prussia, Pennsylvania

This Consolidated and Restated Convertible Note is executed and delivered under
and pursuant to the terms of that certain Loan and Financing Agreement dated as
of the date hereof by and among SEDONA CORPORATION, a Pennsylvania corporation,
and DAVID R. VEY, with the address of 11822 Justice Avenue Suite B-6, Baton
Rouge, Louisiana 70816.
FOR VALUE RECEIVED, the undersigned, Maker promises to pay to the order of
Holder the principal sum of FOUR MILLION ONE HUNDRED THOUSAND Dollars
($4,100,000.00), pursuant to the terms of a certain Loan and Refinancing
Agreement between Maker and Holder dated as of the date hereof, together with
interest thereon at the rate of eight percent (8%) per annum from the date
hereof until the earlier of Maturity or the date the Outstanding Balance (as
defined herein) shall be paid in full; provided that Holder shall be entitled,
at any time that sums due pursuant to this Note are outstanding, to convert the
then Outstanding Balance (as defined herein) or part thereof into shares of
Common Stock at a price of $0.05 per share .
     27. Definitions. The following definitions are applicable to the words,
phrases or terms used in this Note.
          (l) The term “Common Stock” shall mean the Maker’s common stock, par
value $0.001 per share.
          (m) The term “Conversion Price” shall mean $0.05 per share of Common
Stock.
          (n) The term “Effective Date” shall refer to December 31, 2008.
          (o) The term “Holder” shall mean and include such owner or holder and
all heirs, successors and assigns of any owner or holder of this Note.
          (p) The term “Maker” shall mean and include all makers, co-makers and
other parties signing of this Note and their successors and assigns, and the use
of the plural

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number shall include the singular, and vice versa, and the use of any gender
shall include all genders.
          (q) The term “Maturity” shall mean the date on which this Note shall
be due and payable in full, which date shall be January 4, 2010, unless
theretofore converted.
          (r) The term “Note” shall refer to this instrument.
          (s) The term “Notice of Exercise” shall mean the Notice of Exercise
substantially in the form of Exhibit A attached hereto.
          (t) The term “Oak Harbor” shall mean Oak Harbor Investment Properties.
LLC.
          (u) The term “Shares” shall mean all shares of Common Stock or other
securities issued or issuable pursuant to the Notice of Exercise.
          (v) The term “Vey” shall mean David R. Vey.
     28. Consolidation. This Note is a consolidation and restatement of the
existing indebtedness of the Maker to the Holder in the aggregate principal sum
of Four Million One Hundred Thousand and 00/100 ($4,100,000.00) Dollars,
comprising the total principal due under the certain notes (the “Existing
Notes”), after certain amounts of principal and interest have been converted
into shares of common stock of Maker and then consolidated as more fully set
forth and described in the Loan and Refinancing Agreement. This Note further
evidences the Maker’s agreement to pay the consolidated principal sum hereof in
the amount of Four Million One Hundred Thousand and 00/100 ($4,100,000.00)
Dollars and interest thereon; and this Note evidences a valid, consolidated
indebtedness of Four Million One Hundred Thousand and 00/100 ($4,100,000.00)
Dollars owing by the Maker to the Holder; and the Maker hereby acknowledges and
confirms that there are no defenses or offsets to the Existing Notes or to the
same as consolidated, modified and extended by the Amended and Restated Loan
Agreement or to the indebtedness secured thereby and evidenced this Note. It is
further agreed by the Maker that the terms and conditions and provisions of the
consolidated indebtedness evidenced hereby shall control and supersede the
terms, conditions and provisions set forth in the Existing Notes. This Note is
given by the Maker as further evidence of the consolidated principal debt but
not in payment, satisfaction or cancellation of the outstanding principal
indebtedness evidenced by the prior notes, which indebtedness is now evidenced
by this Note.
     29. Payment Terms. The Maker shall be obligated to make one payment of all
outstanding principal and unpaid interest due thereon at Maturity, unless
converted. Unless otherwise designated in writing, mailed or delivered to Maker,
the place for payment of the indebtedness evidenced by this Note shall be the
Holder’s principal address as noted above. Payments received on this Note shall
be applied first to accrued interest, and the balance to principal.
     30. Events of Default. The following shall constitute an Event of Default:
          (d) In the event Maker shall fail (i) to pay any sums due hereunder
when due,

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or (ii) to observe or perform any term, condition, covenant, representation or
warranty set forth herein, when due or required, or within any period of time
permitted thereunder for cure of any such default or non-performance.
          (e) In the event Maker fails to pay any invoice or other sum which may
be due and payable to Holder, Vey, or Oak Harbor under certain promissory notes
issued in their favor by the Maker, when due or required, according to the terms
thereunder, unless prior written waiver has been granted to Maker by Holder,
Vey, or Oak Harbor.
          (f) In the event Maker has received notice of default on any financial
obligation of Maker in excess of One Hundred Thousand Dollars ($100,000.00)
which remains uncured for a ten (10) day period.
     31. Acceleration of Maturity. Upon the happening of any Event of Default,
the Outstanding Balance (as defined herein) shall, at the option of the Holder,
become immediately due and payable.
     32. Security. The obligation of the Maker pursuant to this Note is secured
by a lien and security interest in the collateral of the Maker as specifically
set forth in a Security Agreement of even date herewith (the “Security
Agreement”).
     33. Limitation on Interest. In no contingency, whether by reason of
acceleration of the Maturity of this Note or otherwise, shall the interest
contracted for, charged or received by Holder exceed the maximum amount
permissible under applicable law. If, from any circumstance whatsoever, interest
would otherwise be payable to Holder in excess of the maximum lawful amount, the
interest payable to Holder shall be reduced to the maximum amount permitted
under applicable law; and, if from any circumstance the Holder shall ever
receive anything of value deemed interest by applicable law in excess of the
maximum lawful amount, an amount equal to any excessive interest shall be
applied to the reduction of the principal of this Note and not to the payment of
interest, or if such excessive interest exceeds the unpaid balance of principal
of the Note such excess shall be refunded to Maker. All interest paid or agreed
to be paid to Holder shall, to the extent permitted by applicable law, be
amortized, prorated, allocated, and spread throughout the full period until
payment in full of the principal of the Note (including the period of any
renewal or extension thereof) so that interest thereon for such full period
shall not exceed the maximum amount permitted by applicable law.
     34. Remedies; Nonwaiver. Failure of Holder to exercise any right or remedy
available to Holder upon the occurrence of an Event of Default hereunder shall
not constitute a waiver on the part of Holder of the right to exercise any such
right or remedy for that Event of Default or any subsequent Event of Default.
The exercise of any remedy by Holder shall not constitute an election of any
such remedy to the exclusion of any other remedies afforded Holder at law or in
equity, all such remedies being nonexclusive and cumulative. If an Event of
Default occurs under this Note and this Note is referred to an attorney at law
for collection, Maker agrees to pay all costs incurred by Holder incident to
collection up to a limit of 10% of the unpaid principal balance, including but
not limited to reasonable attorney fees, enforceable as a contract of indemnity,
plus all court costs.

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     35. Waivers. The Maker (i) waives presentment, protest and demand,
(ii) waives notice of protest, demand, dishonor and nonpayment of this Note, and
(iii) expressly agrees that this Note may be renewed in whole or in part, or any
nonpayment hereunder may be extended, or a new note of different form may be
substituted for this Note or changes may be made in consideration of the
extension of the Maturity date hereof, or any combination thereof, from time to
time, but, in any singular event or any combination of such events, Maker will
not be released from liability by reason of the occurrence of any such event,
nor shall Holder hereof be deemed by the occurrence of any such event to have
waived or surrendered, either in whole or in part, any right it otherwise might
have.
     36. Option to Convert Note into Stock.
          (c) Holder shall have the right and option (the “Conversion Right”) to
convert the unpaid principal balance of this Note or any part thereof, together
with all accrued and unpaid interest (the “Outstanding Balance”), into shares of
Common Stock The number of Shares to be delivered on conversion shall be equal
to the amount of the then Outstanding Balance divided by the Conversion Price,
as adjusted, in compliance with the terms contained in Section 10 hereof.
          (d) Maker shall use its best efforts to effectuate a registration
statement for all Shares that may be issued under this Note within 120 days of
the Effective Date.
     37. Anti-Dilution.
     (a) The Conversion Price shall be protected by the anti-dilution provisions
set forth in this Section 10, provided that such anti-dilution shall not apply
with respect to: (a) Maker’s grant of restricted stock to employees or directors
(whether granted prior to or after the Effective Date) pursuant to the terms and
conditions of the Maker’s 2000 Incentive Stock Option Plan; (b) Maker’s grant of
stock options to employees or directors or the exercise of stock options
(whether granted prior to or after the Effective Date) by current, future, or
past employee’s or directors of the Maker; (c) the issuance of shares for a
consideration greater than the Conversion Price in effect on the date of, and
immediately prior to, such issuance, or (d) an issuance of shares for which the
Holder gives a written waiver of such adjustment.
     (b) Except as otherwise provided in this Section, in the event that the
Maker shall, at any time after the Effective Date, issue or sell any shares of
Common Stock, including shares held in the Maker’s treasury and shares issued
upon the exercise of any options, rights or warrants to subscribe for shares of
Common Stock and Common Stock issued upon the direct or indirect conversion or
exchange of securities for Shares, (i) for consideration per share less than the
Conversion Price in effect immediately prior to such issuance or sale, or
(ii) without consideration, then forthwith upon such issuance or sale, the
Conversion Price (until another such issuance or sale) shall be reduced (the
“Adjusted Conversion Price”) to the price (calculated to the nearest full cent)
determined by multiplying the Conversion Price in effect immediately prior to
such issuance or sale by a fraction, the numerator of which shall be the sum of
(1) the number of shares of Common Stock outstanding immediately prior to such
issuance or sale

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multiplied by the Conversion Price immediately prior to such issuance or sale,
plus (2) the consideration received by the Maker upon such issuance or sale, and
the denominator of which shall be the product of (x) the total number of shares
of Common Stock outstanding immediately after such issuance or sale, multiplied
by (y) the Conversion Price, immediately prior to such issuance or sale;
provided, however, that in no event shall the Adjusted Conversion Price exceed
the Conversion Price in effect immediately prior to such computation, except in
the case of a combination of outstanding shares of Common Stock, as provided by
Section 10(e) hereof. In no event shall the Conversion Price be increased.
     (c) For the purposes of any computation to be made in accordance with this
Section, 10 the following shall be applicable:
          (i) In the case of issuance or sale of shares of Common Stock for a
consideration part or all of which shall be cash, the amount of the cash
consideration therefore shall be deemed to be the amount of cash received by the
Maker for such shares (or, if shares of Common Stock are offered by the Maker
for subscription, the subscription price, or, if such securities shall be sold
to underwriters or dealers for public offering without subscription offering,
the public offering price) before deducting therefrom any compensation paid or
discount allowed in the sale, underwriting or purchase thereof by underwriters
or dealers or others performing similar services, or any expenses incurred in
connection therewith.
          (ii) In the case of the issuance or sale (otherwise than as a dividend
or other distribution on any stock of the Maker) of shares of Common Stock for a
consideration part or all of which shall be other than cash, the amount of the
consideration therefor other than cash shall be deemed to be the fair market
value of such consideration as determined in good faith by the Board of
Directors of the Maker.
          (iii) Shares of Common Stock issuable by way of dividend or other
distribution on any stock of the Maker shall be deemed to have been issued
immediately after the opening of business on the day following the record date
for the determination of shareholders entitled to receive such dividend or other
distribution and shall be deemed to have been issued without consideration.
          (iv) The reclassification of securities of the Maker other than shares
of Common Stock into securities including shares of Common Stock shall be deemed
to involve the issuance of such shares of Common Stock for a consideration other
than cash immediately prior to the close of business on the date fixed for the
determination of security holders entitled to receive such shares, and the value
of the consideration allocable to such shares of Common Stock shall be
determined as provided in subsection (ii) above.
          (v) The number of shares of Common Stock at any one time outstanding
shall include the aggregate number of shares issued or issuable upon the
exercise of options, warrants or rights and upon the conversion or exchange of
convertible or exchangeable securities.
     (d) In case the Maker shall, at any time after the Effective Date,
subdivide Common Stock, the Conversion Price shall forthwith be proportionately
decreased.

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     (e) The Maker will, at all times, reserve and keep available out of its
authorized Common Stock or its treasury shares, solely for the purpose of issue
upon the conversion of this Note as herein provided, such number of shares of
Common Stock as shall then be issuable upon the conversion of this Note.
     38. Mechanics of Conversion. Before the Holder shall be entitled to convert
this Note into Shares, the Holder shall surrender this Note, duly endorsed, at
the office of the Maker, and shall give written Notice of Exercise (the “Notice
of Conversion”) to the Maker at its principal corporate office of the election
to convert the same and shall state therein the name or names in which the
certificate or certificates for the Shares are to be issued. The form of Notice
of Conversion is attached hereto as Exhibit A. The Maker shall, promptly after
receipt of the Notice of Conversion, issue and deliver to such persons at the
address specified by the Holder, a certificate or certificates for the Shares to
which the Holder is entitled. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of surrender of this
Note, and the persons entitled to receive the Shares issuable upon such
conversion shall be treated for all purposes as the record holder or holders of
such Shares as of such date. No fractional shares shall be issued upon
conversion of this Note and the number of Shares to be issued shall be rounded
down to the nearest whole share. In the event that Holder elects to convert only
a portion of the Outstanding Balance into Shares, Holder shall deliver to Maker
a written acknowledgement of partial payment.
     39. Prepayment. The Maker may, upon thirty (30) days prior written notice
to Holder, prepay any part of or the entire balance of this Note without
penalty.
     40. Mandatory Prepayment. In the event that:
          (c) The net proceeds actually received by Maker from (i) sales of
Maker’s securities (other than to Holder or its affiliates) and (ii) litigation
awards, exceeds $1,000,000 during the term of this Note; or
          (d) Maker has current cash on hand in excess of $2,000,000.00 for a
period exceeding 30 days,
then an amount equal to fifty percent of such proceeds or cash shall be paid by
the Maker to the Holder as a mandatory prepayment.
     41.  Controlling Law. This Note shall be governed by and construed in
accordance with the laws of the State of Louisiana (other than its conflict of
laws principles) and the provisions of applicable federal law.
     42. Shareholder Status. Nothing contained in this Note shall be construed
as conferring upon the Holder the right to vote, or to receive dividends, or to
consent or to receive notice as a shareholder in respect of any meeting of
shareholders for the election of directors of the Maker or of any other matter,
or any rights whatsoever as a shareholder of the Maker prior to conversion
hereof.
     43. Notices. Any notice required or permitted under this Note shall be in
writing and

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shall be deemed to have been given on the date of delivery, if personally
delivered or delivered by courier, overnight express or other method of verified
delivery, to the party to whom notice is to be given, and addressed to the
addressee at the address of the addressee set forth herein, or the most recent
address, specified by written notice, given to the sender pursuant to this
paragraph.
     44. Captions. The captions of the sections of this Note are for the purpose
of convenience only and are not intended to be a part of this Note and shall not
be deemed to modify, explain, enlarge or restrict any of the provisions hereof.
     45. Remedies Not Exclusive. The remedies provided in this Note and the
Security Agreement or otherwise available to Holder for enforcing the payment of
the principal sum together with interest and the performance of the covenants,
conditions and agreements herein and therein contained are cumulative and
concurrent and may be pursued singly or successively or together at the sole
discretion of Holder, and may be exercised from time to time as often as
occasion therefore shall occur until Holder has been paid all sums due in full.
     46. Severability. The terms and provisions of this Note are severable. In
the event of the unenforceability or invalidity of any one or more of the terms,
covenants, conditions or provisions of this Note under federal, state or other
applicable law, such unenforceability or invalidity shall not render any other
term, covenant, condition or provision hereunder unenforceable or invalid. In
the event any waiver by Maker hereunder is prohibited by law, such waiver shall
be and be deemed to be deleted herefrom.
     47. Integration. This Note, together with the Loan and Refinancing
Agreement between Maker and Holder, dated as of even date herewith, the Security
Agreement, and the Amended and Restated Intercreditor Agreement between Maker,
Holder, Oak Harbor and Vey Associates Incorporated dated as of even date
herewith (collectively, the “Loan Documents”) express the entire agreement
between the Maker and Holder concerning the subject matter hereof and no
modification of the Loan Documents shall be effective unless expressed in a
mutually signed writing. None of Holder’s rights, powers, privileges or
immunities under this Note can be waived unless (and then only to the extent
that) such waiver is expressed in a writing signed by Holder.
     48. Successors and Assigns. This Note shall be binding upon the Maker, its
successors and assigns, and shall inure to the benefit of Holder, his heirs and
assigns.
     49. Time of Essence. Subject to the provisions hereof, time is of the
essence of each and every provision of this Note.
     50. Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
making of any payment, the taking of any action or the expiration of any right
required or granted herein shall be a Saturday, Sunday or a legal holiday, then
such payment may be made, such action may be taken or such right may be
exercised on the next succeeding day not a Saturday, Sunday or legal holiday.
     51. Loss, Theft, Destruction or Mutilation of Note. Maker covenants that
upon receipt by the Maker of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation

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of this Note, and in case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (which shall not include the posting of any bond), and upon
surrender and cancellation of such Note if mutilated, the Maker will make and
deliver a new Note in the same form and dated as of the date hereof, in lieu of
such Note.
     52. WAIVER OF JURY TRIAL.
MAKER AND HOLDER ACKNOWLEDGE AND AGREE THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS NOTE OR WITH RESPECT TO THE TRANSACTION CONTEMPLATED HEREBY WOULD BE
BASED UPON DIFFICULT AND COMPLEX ISSUES AND, THEREFORE, THE PARTIES AGREE THAT
ANY LAWSUIT ARISING OUT OF ANY SUCH CONTROVERSY SHALL BE TRIED IN A COURT OF
COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY. ACCORDINGLY, MAKER AND
HOLDER IRREVOCABLY WAIVE, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT
EITHER PARTY MAY NOW OR HEREAFTER HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR IN CONNECTION WITH THIS NOTE
OR ANY OF THE LOAN DOCUMENTS.
     53. JURISDICTION AND VENUE.
MAKER HEREBY AGREES THAT ALL ACTIONS OR PROCEEDINGS INITIATED BY MAKER AND
ARISING DIRECTLY OR INDIRECTLY OUT OF THE LOAN DOCUMENTS SHALL BE LITIGATED IN
THE COURTS OF THE STATE OF LOUISIANA, OR THE UNITED STATES DISTRICT COURT IN
LOUISIANA, OR IN ANY OTHER COURT IN WHICH HOLDER SHALL INITIATE SUCH ACTION, TO
THE EXTENT SUCH COURT HAS JURISDICTION. MAKER HEREBY EXPRESSLY SUBMITS AND
CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED
BY HOLDER IN ANY OF SUCH COURTS AND HEREBY WAIVES PERSONAL SERVICE OF THE
SUMMONS AND COMPLAINT, OR OTHER PROCESS OR PAPERS ISSUED THEREIN, AND AGREES
THAT SERVICE OF SUCH SUMMONS AND COMPLAINT OR OTHER PROCESS OR PAPERS MAY BE
MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE MAKER AT THE ADDRESS TO
WHICH NOTICES ARE TO BE SENT PURSUANT TO THIS NOTE. MAKER WAIVES ANY CLAIM THAT
LOUISIANA IS AN INCONVENIENT FORUM OR AN IMPROPER FORUM BASED ON LACK OF VENUE.
SHOULD MAKER, AFTER BEING SO SERVED, FAIL TO APPEAR OR ANSWER TO ANY SUMMONS,
COMPLAINT, PROCESS OR PAPERS SO SERVED WITHIN THE NUMBER OF DAYS PRESCRIBED BY
LAW AFTER THE MAILING THEREOF, MAKER SHALL BE DEEMED IN DEFAULT AND AN ORDER
AND/OR JUDGMENT MAY BE ENTERED BY HOLDER AGAINST MAKER AS DEMANDED OR PRAYED.

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     IN WITNESS WHEREOF and intending to be legally bound hereby, Maker has duly
executed this Note as of this the ___th day of December, 2008.

         
Maker’s Address:
  Maker:    
1003 West Ninth Avenue, 2nd floor
  SEDONA CORPORATION    
King of Prussia, PA 19406
       
 
       
 
       
 
  By: Scott Edelman    
 
          Chief Executive Officer    

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EXHIBIT A
NOTICE OF EXERCISE
TO: SEDONA CORPORATION
     (1) The undersigned hereby elects to purchase                      shares
of Common Stock (the “Common Stock”), of SEDONA CORPORATION pursuant to the
terms of the attached Secured Convertible Note dated December ___, 2008 between
Sedona Corporation, as Maker, and David R. Vey, as Holder (the “Note”) and
tenders herewith [the original Note] [an acknowledgement of partial payment of
the Note] together with all applicable transfer taxes.
     Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:

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