EXHIBIT 10.114
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 .
     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. 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.
     3. 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.
     4. 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.

 

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          (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.
     5. 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.
     6. 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”).
     7. 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.
     8. 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.
     9. Waivers. The Maker (i) waives presentment, protest and demand,
(ii) waives notice

 

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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.
     10. 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.
     11. 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,

 

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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.
     (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.
     12. Mechanics of Conversion. Before the Holder shall be entitled to convert
this Note

 

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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.
     13. 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.
     14. 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.
     15.  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.
     16. 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.
     17. 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.

 

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     18. 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.
     19. 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.
     20. 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.
     21. 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.
     22. 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.
     23. Time of Essence. Subject to the provisions hereof, time is of the
essence of each and every provision of this Note.
     24. 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.
     25. 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.

 

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     26. 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.
     27. 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.
     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.

 

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