EXHIBIT 10.42




                                CONVERTIBLE NOTE
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BORROWER:         SEDONA CORPORATION
                  1003 WEST NINTH AVENUE
                  2ND FLOOR
                  KING OF PRUSSIA, PENNSYLVANIA 19406

LENDER:           DAVID R. VEY
                  RICHARD T. HARTLEY
                  11822 JUSTICE AVENUE
                  BATON ROUGE, LOUISIANA
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THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT")
OR ANY APPLICABLE STATE SECURITIES LAWS. IT MAY NOT BE 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.

                                CONVERTIBLE NOTE
                                ----------------

$100,000.00                                        KING OF PRUSSIA, PENNSYLVANIA

                  FOR VALUE RECEIVED, the undersigned, SEDONA CORPORATION, a
Pennsyvania Corporation ("Maker"), promises to pay DAVID R. VEY and RICHARD T.
HARTLEY ("Holder"), with an address of 11822 Justice Avenue, Suite B-6, Baton
Rouge, Louisiana 70816, the principal sum of ONE HUNDRED THOUSAND AND NO/100
DOLLARS ($100,000.00), together with interest thereon at the rate of seven
percent (7%) per annum from the date hereon until the earlier of Maturity or the
date upon which the unpaid balance shall be paid in full.

                  1. Definitions. The following definitions are applicable to
the words, phrases or terms used in this Note.

                     (a)   The term "Average Daily Price" shall mean the average
                           high and low sales prices of a share of the Maker's
                           common stock as reported by the Principal Market.

                     (b)   The term "Common Stock" shall mean the Maker's common
                           stock, par value $0.001 per share.

                     (c)   The term "Holder" shall mean and include all
                           successor and assigns of any owner or holder of this
                           Note.

                     (d)   The term "Maker" shall mean and include all makers,
                           co-makers and other parties signing on the face of
                           this Note and their successors and assigns, and the
                           use of the plural number shall include the singular
                           and vice versa.

                     (e)   The term "Maturity" shall mean the date on which this
                           Note shall be due and payable in full, which date
                           shall be January 5, 2004.

                     (f)   The term "Principal Market" shall mean the American
                           Stock Exchange, the New York Stock Exchange, the
                           NASDAQ National Market, the NASDAQ Small Cap Market
                           or the OTC Bulletin Board, which is at the time the
                           principal trading exchange or market for the Common
                           Stock, based upon the share volume.

                  2. Terms of Payment. The Note shall be paid in full, as to
principal and any unpaid interest, on or before Maturity. Such Maturity may be
extended at the option of the



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Company for three (3) successive years by the Company. Holders shall have the
right to convert the Note and accrued interest into Common Stock time. Unless
otherwise designated in writing, mailed or delivered to Maker, the place for
payment of the indebtedness evidenced by this Note shall be Holder's principal
address as noted above. Payments received on this Note shall be applied first to
the 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 shall fail to pay any invoice or
                           any other sum, which may be due and payable to
                           Holder, when due or required, according to the terms
                           thereunder unless prior written waiver has been
                           granted to Maker by Holder.

                  4. Acceleration of Maturity. Upon the happening of any Event
of Default, the unpaid principal and interest due Holder shall, at the option of
the Holder, become immediately due and payable.

                  5. 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 by applicable
law shall be applied to the reduction of the principal of this Note and not to
the payment of interest, of if such excessive interest exceeds the unpaid
balance of principal of Note such excess shall be refunded to Maker. All
interest paid or agreed to be paid to Holder shall, to the extent permitted by
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.

                  6. 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 the 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 of 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, including but not limited to reasonable attorney fees
(such fees not to exceed ten percent (10%) of the then outstanding principal
balance


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of the Note), enforceable as a contract of indemnity, plus all court
costs and other expenses incurred at or prior to the trial and in connection
with any and all appeals.

                  7. Waivers. The Maker endorses, sureties and guarantors
hereof, if any, severally (i) waive presentment, protest and demand, (ii) waive
notice of protest, demand, dishonor and non payment of this Note, and (iii)
expressly agree that this Note may be renewed in whole or in part, or any non
payment 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, form time to
time, but, in any singular event or any combination of such events, neither
Maker no endorser, surety or guarantor will be released from liability by
reasons 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.

                  8. Option to Convert Note Into Stock.

                     (a)   Holder shall have the sole right and option to
                           convert (the "Conversion Right") the unpaid balance
                           of this Note, together with all accrued and unpaid
                           interest, into shares of Maker's voting common stock
                           (the "Shares") having all rights inherent in common
                           stock under the Maker's Articles of Incorporation and
                           Bylaws in effect as of the date hereof (the
                           "Option"). The number of Shares to be paid on
                           conversion shall be Ten Million (10,000,000).

                     (b)   Maker shall file a registration statement to register
                           for resale under the Securities Act of 1933, as
                           amended (the "Securities Act") all Shares that may be
                           issued under subsections of this Note. The
                           Registration Statement for Conversion of Common Stock
                           shall be filed within sixty (60) days of Conversion.

                  9. 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 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 "Notice of Conversion"). The Maker shall,
promptly thereafter, 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.

                  10. Prepayment. The Maker may prepay any part of or the entire
balance of this Note without penalty.


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                  11. Controlling Law. This Note shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania (other
than its conflict of laws principles) and the provisions of applicable federal
law.

                  12. 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 to or receive the 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 thereof.

                  13. 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 addressed 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.


                EXECUTED AND EFFECTIVE as of this the ____ day of January, 2003.

                Maker's Address                     MAKER

                1003 West 9th Avenue                SEDONA CORPORATION
                2nd  Floor
                King of Prussia, Pennsylvania 19406

                                                    By: ____________________
                                                        Marco A. Emrich
                                                        Chief Executive Officer


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