Document:

Exhibit 10.34

          MADE2MANGAGE SYSTEMS, INC. EXECUTIVE SALARY CONTINUATION PLAN

     The Made2Magage  Systems,  Inc. Executive Salary Continuation Plan ("Plan")
has been adopted by Made2Manage Systems, Inc., effective May 1, 2001.

                                   BACKGROUND

     A. The Board of Directors of the Company has  determined  that it is in the
best  interests of the Company and its  shareholders  to assure that the Company
will have the continued undivided time,  attention,  loyalty,  and dedication of
key executive employees,  notwithstanding the possibility, threat, or occurrence
of a Change in Control.

     B. The Board  believes  that it is  imperative  to diminish the  inevitable
distraction of such executives by the personal  uncertainties  and risks created
by a pending or threatened  Change in Control and to encourage such  executives'
full undivided time, attention, loyalty, and dedication to the Company currently
and in the event of any threatened or pending Change in Control.

     C. By the adoption of this Plan,  the Board  intends to assure  that,  if a
covered  executive's  employment  terminates  in  connection  with a  Change  in
Control,  the executive will be provided with compensation and benefits that are
competitive with those of other corporations similarly situated to the Company.

                                   PLAN TERMS

     1.  Definitions.  When used  herein,  the  following  terms  shall have the
meanings set out below, when the first letter of the term is capitalized:

     (a)  "Affiliated Employer" means a parent or subsidiary of the Company.

     (b)  "Board"  or  "Board  of  Directors"   means  the  Company's  Board  of
          Directors.

     (c)  "Change in Control" means any of the following occurrences:

          (1)  the  Company   becomes  a  party  to  an   agreement  of  merger,
               consolidation,  or other  reorganization  pursuant  to which  the
               Company will be a  constituent  corporation  and the Company will
               not be the  surviving  or  resulting  corporation,  or which will
               result in less than 50% of the outstanding  voting  securities of
               the  surviving  or  resulting  entity  being  owned by the former
               shareholders of the Company;

          (2)  the Company  becomes a party to an  agreement  providing  for the
               sale or other  disposition by the Company of all or substantially
               all of the assets of the Company to any individual,  partnership,
               joint venture,  association,  trust, corporation, or other entity
               that is not an Affiliated Employer; or

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          (3)  the acquisition by any individual,  entity,  or group (within the
               meaning  of  Section  13(d)(3)  or  14(d)(2)  of  the  Securities
               Exchange  Act of  1934,  as  amended  from  time to  time)  of an
               aggregate  of more than 20% of the  combined  voting power of the
               then outstanding common stock of the Company.

     (d) "Committee" means the Compensation Committee of the Board, to which the
Board has delegated authority to administer and interpret the Plan.

     (e) "Company" means Made2Manage Systems, Inc.

     (f) "Disability" means a disability as determined for purposes of any group
disability  insurance  policy of the  Company in effect for the  Executive  that
qualifies  the  Executive  for  permanent   disability   insurance  payments  in
accordance with such policy.

     (g)  "Executive"  means an  employee  of the  Company  whom the  Board  has
designated as a participant  pursuant to Section 2 and whose  participation  has
not ended pursuant to that Section.

     (h) "Good Cause" means (i) conduct  resulting in conviction for a felony or
conviction for any crime or offense lesser than a felony  involving the property
of the Company or an Affiliated Employer,  whether such conviction occurs before
or after  termination  of  employment;  (ii) engaging in conduct that has caused
demonstrable  and  material  injury to the  Company or an  Affiliated  Employer,
monetary  or  otherwise;  (iii)  gross  dereliction  of  duties  or other  gross
misconduct and the failure to cure such situation  within thirty (30) days after
receipt of notice  thereof  from the  Committee;  or (iv) a  material  breach of
Section 5. The  determination  as to whether  Good Cause exists shall be made by
the Committee in good faith. Notwithstanding anything herein to the contrary, no
act or failure to act of the  Executive  shall be  considered to be "Good Cause"
unless it shall be done,  or omitted to be done,  by the  Executive  not in good
faith and without  reasonable belief that his action or omission was in the best
interest of the Company.

     (i) "Good Reason" means, without the Executive's written consent:

          (1)  a substantial  change in the  Executive's  status,  position,  or
               responsibilities  that does not  represent a  promotion  from the
               Executive's  status,  position,  or responsibilities as in effect
               immediately before the Change in Control;

          (2)  a reduction by the Company in Executive's  annual base salary, as
               in  effect  at  the  time  the  Executive  became  a  participant
               hereunder,  or as the same  may be  increased  from  time to time
               during the Executive's participation in the Plan;

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          (3)  the  Company's  requiring  the Executive to be based at any place
               more than forty (40) miles  distance  from the  location at which
               the Executive performed his principal duties immediately before a
               Change in Control,  except for required  travel on the  Company's
               business  to  an  extent   substantially   consistent   with  the
               Executive's  business travel  obligations at the time of a Change
               in Control;

          (4)  the failure by the  Company to continue to provide the  Executive
               with  benefits  (including  any  variable  compensation  program)
               substantially  similar to, or of substantially the same aggregate
               value to the Executive,  as those enjoyed by all other  corporate
               officers of the Company from time to time either  before or after
               a Change in Control;

          (6)  the failure of the Company to obtain an agreement satisfactory to
               the  Executive  (which   satisfaction  may  not  be  unreasonably
               withheld)  from any  successor or assign of the Company to assume
               and agree to perform the Company's obligations hereunder; or

          (7)  any purported  termination of the Executive's  employment that is
               not a termination for Good Cause.

Notwithstanding  anything in this  subsection to the contrary,  the  Executive's
right to terminate his  employment for Good Reason  pursuant to this  Subsection
shall not be affected by the  Executive's  incapacity  due to physical or mental
illness.

     (j) "Notice of  Participation"  means a written  notice by the Committee to
the  Executive  stating that the  Executive  has been  designated a  Participant
hereunder and specifying the Executive's Salary Continuation Period.

     (k)  "Salary  Continuation  Period"  means  the  period  during  which  the
Executive's base salary is continued pursuant to Section 4, as designated in the
Notice of Participation.

     (l) "Terminates Employment" or "Termination of Employment" means a complete
termination  of the  employment  relationship  between  the  Executive  and  all
Affiliated Employers.

     2.  Participation.  The Committee  shall  designate those employees who are
covered  by the  Plan  and the  Salary  Continuation  Period  for  each  covered
Executive. The Committee shall provide a Notice of Participation to each covered
Executive stating the Executive's Salary Continuation  Period. The Committee may
terminate an Executive's  coverage under the Plan by providing written notice to
the Executive, but any such termination shall be subject to the same limitations
as specified in Section 11 for amendments to the Plan.

                                     - 3 -
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     3. Company's Payment Obligations. Subject to the conditions and limitations
expressly  stated herein,  the Company agrees to pay or provide to the Executive
the termination  benefits specified in Section 4 if: (a) within one year after a
Change in  Control,  either (i) the Company  Terminates  the  Employment  of the
Executive for any reason other than Good Cause,  death,  or Disability,  or (ii)
the Executive voluntarily  Terminates his Employment for Good Reason, or (b) the
Company  Terminates the Executive's  Employment within one year before an actual
or anticipated Change in Control, and the Executive reasonably demonstrates that
such termination  occurred in connection with, or in anticipation of a Change in
Control  (whether or not the Change in Control actually  occurs).  The Company's
payment  obligations  hereunder  are  expressly  contingent  on the  Executive's
compliance with Section 6.

     4.  Termination  Benefits.  If the Executive  becomes  entitled to benefits
pursuant to Section 3, the Company shall pay or provide the following:

     (a) The Company shall continue to pay the Executive's  base salary pursuant
to its normal payroll practices for a period after his Termination of Employment
equal to the Salary Continuation Period.

     (b) During the Salary Continuation  Period, the Executive shall be entitled
to continue,  at the  Company's  cost,  the  Executive's  (and his  dependents')
coverage under the Company's  group  insurance,  health and accident,  life, and
disability  benefit  plans in which the  Executive  was entitled to  participate
immediately before the Change in Control,  provided that continued participation
is possible under the general terms and provisions of such plans,  programs, and
arrangements;   provided,   however,   such  continuation   coverage  shall  run
concurrently with any COBRA  continuation  coverage  otherwise  available to the
Executive under the terms of such plans. If the Executive's (or his dependents')
participation in any such plan,  program,  or arrangement is barred, or any such
plan,  program,  or arrangement is discontinued  or the benefits  thereunder are
materially reduced,  the Company shall arrange to provide the Executive (and his
dependents)  with continued  benefits  substantially  similar to those described
above at the Company's cost throughout the Severance Period.

     5.  Limitation  on  Payments.  Before  any  payment  pursuant  hereto,  the
Company's  independent  auditors ("Auditor") shall determine whether any payment
by the Company to or for the benefit of the  Executive,  whether  paid  pursuant
hereto or otherwise,  would be an "excess parachute  payment" within the meaning
of Section 280G of the Code.  If the Auditor  determines  that any payment would
constitute an excess  parachute  payment,  the Company shall promptly notify the
Executive of that fact,  and the Executive may elect to reduce  amounts  payable
him or for his benefit to the extent necessary to eliminate the excess parachute
payment.

     6.  Nonsolicitation.  While covered by the Plan and for one year  following
his  Termination  of  Employment,  the  Executive  shall  not  (i)  directly  or
indirectly divert or influence or attempt to divert or influence any business of
the Company from the Company to a competitor  of the Company or (ii) directly or
indirectly seek to induce, bring about,  influence, or encourage any employee of
the Company to leave the Company's employment.

                                     - 4 -
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     7.  Enforcement  of Company's  Obligation.  It is the intent of the Company
that an  Executive  not be required to incur the  expenses  associated  with the
enforcement  of his rights  hereunder by litigation  or other legal action,  nor
that an Executive be bound to negotiate any settlement of his rights  hereunder,
because  the  cost  and  expense  of  such  legal  action  or  settlement  would
substantially  detract  from  the  benefits  intended  to  be  extended  to  the
Executive. Accordingly, if following a Change in Control it should appear to the
Executive  that the  Company  has failed to comply  with any of its  obligations
hereunder  or in the event that the Company or any other person  (including  the
Internal Revenue Service) takes any action to declare the Company's  obligations
hereunder  void or  unenforceable,  or institutes  any litigation or other legal
action designed to deny, diminish,  or to recover from Executive the benefits to
which he is entitled  hereunder,  and the Executive has complied with all of his
obligations  hereunder,  the Company  irrevocably  authorizes the Executive from
time to time to retain counsel of the Executive's  choice, at the expense of the
Company, to represent the Executive in connection with the initiation or defense
of any  litigation or other legal  action,  whether such action is by or against
the Company or any director,  officer,  shareholder,  or other person affiliated
with the  Company,  in any  jurisdiction.  The  reasonable  fees and expenses of
counsel  selected  from time to time by the  Executive as herein above  provided
shall be paid or  reimbursed  to the  Executive  by the  Company  on a  regular,
periodic basis upon  presentation  by the Executive of a statement or statements
prepared by such counsel in accordance with its customary practices.

     8. No Duty to Mitigate  Severance Pay. The amounts payable to the Executive
hereunder shall be treated as severance  compensation and not damages. No amount
payable  hereunder  shall be  affected  by amounts  earned by the  Executive  in
subsequent  employment  or by any claim that the  Company  may have  against the
Executive or any other person.

     9.  Assignment.  The  Executive  shall have no right to assign his benefits
under the Plan  (other  than by will or the laws of  descent  and  distribution)
without the prior written consent of the Company.  This Agreement shall inure to
the benefit of and be enforceable by the Executive's legal representatives. This
Agreement  shall inure to the benefit of and be binding upon the Company and its
successors  and  assigns.  The  Company  shall  assign  this  Agreement  to  any
corporation  or other business  entity  succeeding to  substantially  all of the
business and assets of the Company by merger, consolidation,  sale of assets, or
otherwise and shall obtain the assumption of this Agreement by such successor.

     10.  Termination.  The Board shall have the right to terminate the Plan for
any reason prior to a Change in Control, provided that it has furnished at least
12 months'  prior notice to each  affected  Executive.  Termination  of the Plan
shall not affect the benefits payable to an Executive who Terminated  Employment
before the effective date of the termination.

     11.  Amendment.  The Board  shall  have the right to amend the Plan for any
reason prior to a Change in Control,  provided  that it has provided at least 12
months prior written  notice to each  Executive who could be adversely  affected
thereby.  Amendment of the Plan shall not adversely  affect the benefits payable
with respect to an Executive who Terminated Employment before the effective date
of the amendment.

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     12.  Governing Law. This Agreement  shall be governed by and subject to the
laws of the State of Indiana.

     13.  Severability.  The  invalidity or  unenforceability  of any particular
provision  of this  Agreement  shall not affect the other  provisions,  and this
Agreement shall be construed in all respects as if such invalid or unenforceable
provision had not been contained herein.

     14.  Source of  Payment.  Amounts  payable by the  Company  pursuant  to an
Agreement shall be paid from the general assets of the Company or its successor.

     15. Waivers. The Executive's or the Company's failure to insist upon strict
compliance  with any  provision  of the Plan or the  failure to assert any right
that the  Executive or the Company may have under the Plan,  including,  without
limitation,  the right of the  Executive to terminate  his  employment  for Good
Reason,  shall not be deemed to be a waiver of such provision or right or of any
other provision or right under the Plan.

     16.  Non-Exclusivity of Right.  Nothing in this Plan shall prevent or limit
Executive's  continuing or future participation in any plan, program,  policy or
practice  provided by the  Company or any of its  Affiliated  Employers  and for
which Executive may qualify, nor shall anything herein limit or otherwise affect
such rights as the Executive  may have under any contract or agreement  with the
Company or any Affiliated Employer.

     To signify the  Company's  adoption  of the  Made2Manage  Executive  Salary
Continuation  Plan, the  undersigned  have signed this Plan document on the 27th
day of July, 2001.

                                MADE2MANAGE SYSTEMS, INC.

                                /s/ David B. Wortmam
                                ------------------------------------------------
                                Chairman of the Board

                                     - 6 -<PAGE>

Exhibit 4.1

THIS NOTE, AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE  "ACT"), OR
THE SECURITIES LAWS OF ANY STATE.  THIS NOTE AND ANY OF SUCH SECURITIES MAY NOT
BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT RELATING TO SUCH
TRANSACTION UNDER THE ACT AND ALL OTHER APPLICABLE SECURITIES LAWS, OR PURSUANT
TO AN EXEMPTION FROM THE REGISTRATION PROVISIONS OF THE ACT AND OTHER APPLICABLE
SECURITIES LAWS.

<PAGE>

                         CONVERTIBLE SUBORDINATED NOTE

$__________                                                September ___ , 2001

    FOR VALUE RECEIVED, INFORMATION ANALYSIS INCORPORATED (the "Company"), a
Virginia corporation, hereby promises to pay to the order of  _________________
(the "Holder") the sum of _______________dollars ($                 ).  All
payments to be made by the Company in repayment of principal and interest
hereunder shall be made in currency of the United States of America which at the
time of payment shall be legal tender for the payment of public or private
debts.

  1.  THE NOTE.

  1.1  Related Transactions.  This Note is one of a duly authorized series of
       --------------------
Notes in the aggregate principal amount of up to $500,000 due on September 30,
2004 (the "Notes").  For purposes of this Note, the Noteholder Majority shall
mean those holders of the Notes representing more than fifty percent (50%) of
the outstanding balances then due under the Notes.

  1.2  Place of Payment.  Principal on this Note shall be payable at the offices
       ----------------
of the Company at 11240 Waples Mill Road, Fairfax, Virginia 22030 or at such
other place as the Holder may from time to time designate in writing to the
Company.

  2.  PAYMENTS OF PRINCIPAL AND INTEREST.

  2.1  Rate of Interest.  For the period from the date hereof until all sums due
       ----------------
hereunder, whether principal, interest, charges, fees or other sums, have been
paid in full, interest shall accrue on the unpaid principal balance of this Note
at the simple rate of twelve percent (12.0%) per annum.  Interest on the
outstanding principal balance of the Note will be computed on the basis of a
360-day year comprised of twelve 30 day months.

  2.2  Mandatory Principal and Interest Payment. Commencing on March 31, 2002,
       ----------------------------------------
interest hereunder shall be paid semi-annually on March 31 and September 30 of
each calendar year. Unless converted into shares of the Company's common stock,
par value $.01 per share (the "Common Stock"), in accordance with Section 4
hereof, the total amount of principal due under this Note and all accrued and
unpaid interest thereon shall be paid in a single lump sum on September 30, 2004
(herein referred to as the "Repayment Date").

  3.  CONVERSION OF NOTE.

  3.1  Conversion Privilege.  Subject to and upon compliance with the provisions
       --------------------
hereof, at the option of the Holder, any or all of the principal amount and/or
accrued and unpaid interest owing under this Note may be converted, in whole or
in any part, into fully paid and non-assessable shares of Common Stock (the
"Shares") at the Conversion Price (as defined in Section 4.2 below).

  3.2  Conversion Price.  The price at which shares of Common Stock shall be
       ----------------
issuable upon conversion of this Note (the "Conversion Price") shall be $.25 per
share.

  3.3  Manner of Exercise of Conversion Privilege.  In order to exercise the
       ------------------------------------------
conversion privilege under Section 3.1 above, the Holder of this Note shall give
written notice to the Company (in the form of the Conversion Notice attached
hereto) that the Holder elects to convert all or a portion of this Note which
notice shall also specify the amount of principal to which such conversion
relates.  Any such notice of conversion shall supersede the actual payment of
the amount against which the conversion is to occur if such notice is received
by the Company prior to

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the actual receipt by the Holder of the payment. The conversion shall become
effective on the date the notice of conversion is received by the Company, and
the person or persons in whose name or names any certificate for the Shares
shall be issuable upon such conversion shall be deemed to have become on said
date the holder or holders of record of the Shares represented by that
certificate and the Note shall be deemed cancelled as of that date.

  3.4  Reorganization, Reclassification, Consolidation, Merger or Sale.  If any
       ---------------------------------------------------------------
capital reorganization or reclassification of the capital stock of the Company,
or any consolidation or merger of the Company with another corporation, or the
sale of all or substantially all of the assets of the Company to another
corporation, or any exchange of capital stock of the Company for cash or any
other securities or assets, shall be effected in such a way that holders of
Shares shall be entitled to receive stock, securities, cash or assets with
respect to or in exchange for Shares, then, as a condition of such
reorganization, reclassification, consolidation, merger, sale or exchange,
lawful and adequate provisions shall be made whereby the Holder hereof shall
thereafter have the right to purchase and receive, upon the basis and upon the
terms and conditions specified in this Note and in lieu of the Shares
immediately theretofore purchasable and receivable upon the exercise of the
rights represented hereby, such shares of stock, securities, cash or assets as
may be issued or payable with respect to or in exchange for a number of
outstanding Shares equal to the number of Shares immediately theretofore
purchasable and receivable upon the exercise of the rights represented hereby
had such reorganization, reclassification, consolidation, merger, sale or
exchange not taken place.  In any such case, appropriate provision shall be made
with respect to the rights and interests of the Holder of this Note to the end
that the provisions hereof (including, without limitation, provisions for
adjustments of the Conversion Price) shall thereafter be applicable, as nearly
as may be practicable, in relation to any shares of stock, securities, cash or
assets thereafter deliverable upon the exercise hereof.

  3.5  Subdivision or Combination of Stock.  In case the Company shall at any
       ------------------------------------
time subdivide its outstanding shares of Common Stock into a greater number of
shares, the Conversion Price in effect immediately prior to such subdivision
shall be proportionately reduced, and conversely, in case the outstanding shares
of Common Stock of the Company shall be combined into a smaller number of
shares, the Conversion Price in effect immediately prior to such combination
shall be proportionately increased.

  3.6  Other Notices.  In case at any time after the issuance of this Note:
       -------------

       (a) the Company shall declare any dividend upon its Shares payable in
shares of capital stock or make any special dividend or other distribution
(other than regular cash dividends) to the holders of its Shares;

       (b) the Company shall offer for subscription pro rata to the holders of
its Shares any additional shares of stock of any class or other rights;

       (c) there shall be any capital reorganization or reclassification of the
capital stock of the Company, or any consolidation or merger of the Company
with, or sale of all or substantially all of its assets or the sale of the
patent to, another corporation; or

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

then, the Company shall give, by first-class mail, postage prepaid, addressed to
the Holder of this Note at the address of such Holder as shown on the books of
the Company, (i) at least ten (10) days prior written notice of the date on
which the books of the Company shall close or a record shall be taken for
determining the holders of Shares entitled to receive a dividend, distribution
or subscription right or the right to vote in respect of any such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up, and (ii) as to (c) and (d), above, at least ten (10)
days prior written notice of the date when any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up shall take place.  Such notice in accordance with the foregoing
clause (ii) shall specify the date on which the holders of Shares shall be
entitled to exchange their shares for
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securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up, as the case may be.

  3.7  Company to Provide Stock.  The Company shall at all times reserve and
       ------------------------
keep available out of the aggregate of its authorized but unissued capital stock
or its issued capital stock held in its treasury, or both, for the purpose of
effecting the conversion of this Note, such number of shares of Common Stock or
as shall then be issuable upon the conversion of this Note under Section 3.1,
3.3 and 3.4 hereof.  The Company covenants that all shares of Common Stock
issued on conversion of this Note shall be duly and validly issued and fully
paid and nonassessable and free from all taxes, liens and charges with respect
to the issue thereof.

  3.8  Fractional Shares.  No fractional Shares shall be issued upon conversion
       -----------------
of this Note.  Instead of any fractional share which would otherwise be issuable
upon conversion of this Note, the Company shall pay a cash adjustment in respect
of such fractional interest in an amount equal to the portion of the then
applicable Conversion Price for each share.

  4.  SUBORDINATION.

     4.1  Subordination.  The Company, for itself and its successors and
          -------------
assigns, covenants and agrees, and the Holder by its acceptance hereof likewise
covenants and agrees, that notwithstanding any other provision of this Note, the
indebtedness evidenced by this Note and the payment of the principal and
interest on this Note shall be subordinated in right of payment, to the extent
and in the matter hereinafter set forth, to the prior payment in full of all
Senior Indebtedness (as hereinafter defined) at any time outstanding.  The
provisions of this Section 5 shall constitute a continuing obligation in favor
of all persons who become the holders of or continue to hold Senior Indebtedness
and such provisions are made for the benefit of the holders of Senior
Indebtedness and such holders of Senior Indebtedness are hereby made obligees
hereunder the same as if their names were written hereinafter as such and they
or any of them may proceed to enforce such provisions against the Company and
the Holder.

     4.2  Definition of Senior Indebtedness.  The term "Senior Indebtedness"
          ---------------------------------
shall mean all (i) indebtedness of the Company for money borrowed from a bank or
other commercial lender, (ii) obligations of the Company as lessee under leases
of real or personal property and, in each case with respect to indebtedness
under (i) or (ii), whether outstanding on the date hereof or hereafter created,
or to any entity which refinances, restructures or acquires, in whole or in
part, any such indebtedness of the Company, including, without limitation, all
obligations of the Company for principal, interest (including post-petition
interest, whether or not allowable), fees, penalties, indemnities, reimbursement
obligations and expenses (including reasonable attorneys' fees) and any other
amounts owing in respect of such indebtedness, for the payment of which the
Company is responsible or liable as an obligor, guarantor, indemnitor, or
otherwise (including, without limitation, all amounts committed or permitted to
be advanced pursuant to agreements in respect of such indebtedness under which
the Company is responsible or liable) and all deferrals, renewals, extensions,
amendments, modifications and refundings thereof and (iii) any other
indebtedness of the Company which the Company and the Noteholder Majority may
hereafter agree in writing shall constitute Senior Indebtedness.
Notwithstanding the foregoing, "Senior Indebtedness" shall not include
indebtedness of the Company evidenced by any other notes which shall rank
equally and ratably with this Note.

     4.3  Payment of Senior Indebtedness.  In the event of any insolvency or
          ------------------------------
bankruptcy proceedings under federal or state bankruptcy statutes or any
receivership, liquidation, reorganization, or other similar proceedings in
connection therewith, relative to the Company, or, in the event of any
proceedings for voluntary liquidation, dissolution, or other winding up of the
Company or distribution or marshaling of its assets or any composition with or
assignment for the benefit of all or substantially all of the creditors of the
Company, then and in any such event all Senior Indebtedness shall be paid in
full before any payment or distribution of any character, whether in cash,
securities, or other property, shall be made on account of this Note and any
such payment or distribution, except for payment by means of the transfer of
securities which are subordinate and junior in right of payment to the payment
of all Senior Indebtedness then outstanding on terms of substantially the same
tenor as this Section 5, which would, but for the provisions hereof, be payable
or deliverable in respect of this Note, shall be paid or delivered directly to
the

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<PAGE>

holders of Senior Indebtedness (or their duly authorized representatives),
in the proportions in which they hold the same, until all Senior Indebtedness
shall have been paid in full and the Holder, by becoming a Holder, shall have
designated and appointed the holder or holders of Senior Indebtedness (and their
duly appointed representatives) as its agent and attorney-in-fact to file any
necessary proof of claim not otherwise filed.  The original and each successor
Holder of this Note, by its acceptance hereof, agrees to execute, at the request
of the Company, a separate agreement with any holder of Senior Indebtedness on
the terms set forth in this Section 5.

     4.4  No Payment on Note under Certain Circumstances.  In the event that:
          ----------------------------------------------

     i.    Any default occurs in the payment of the principal of or interest on
any Senior Indebtedness and during the continuance of such default until such
payment has been made or such default has been cured or waived in writing by
such holder of Senior Indebtedness;

     ii.   Any other default occurs with respect to any Senior Indebtedness and
during the continuance of such default for a period of up to one hundred and
twenty (120) days thereafter and thereafter if the maturity of such Senior
Indebtedness has been accelerated by the holder thereof, until such acceleration
has been rescinded or such default has been cured or waived; or

     iii.  The maturity of any Senior Indebtedness is accelerated by any holder
thereof because of a default with respect thereto and until such acceleration
has been rescinded or said Senior Indebtedness has been paid;

then, during the continuance of any of such events, the Company shall not,
directly or indirectly, make any payment on account of, or transfer any
collateral for, any part of the Note, and the Holder shall not demand or
accept from the Company or any other person any such payment or collateral or
cancel, set off or otherwise discharge any part of the Note, and neither the
Company nor the Holder shall otherwise take or permit any action in violation of
the terms of this subordination.  Notwithstanding anything to the contrary
herein, nothing herein shall be deemed at any time to delay or prohibit (a) the
tender to the Company of all or a portion of the principal amount plus accrued
interest of the Note to purchase equity securities of the Company, or (b) the
Company from converting the principal plus accrued interest on the Note any time
into equity securities of the Company.

     4.5  Payments Held in Trust.  In case any payment or distribution shall be
          ----------------------
paid or delivered to any Holder in violation or contravention of the terms of
this subordination, such payment or distribution shall, upon such Holder's
receipt of notice of such violation or contravention, be held in trust for and
paid and delivered ratably to the holders of Senior Indebtedness.

     4.6  Subrogation.  Subject to the payment in full of all Senior
          -----------
Indebtedness and until this Note shall be paid in full, the Holder shall be
subrogated to the rights of the holders of Senior Indebtedness (to the extent of
payments or distributions previously made to such holders of Senior Indebtedness
pursuant to the provisions of Subsections (b) and (d) of this Section 4) to
receive payments or distributions of assets of the Borrower applicable to the
Senior Indebtedness.  No such payments or distributions applicable to the Senior
Indebtedness shall, as between the Company and its creditors (other than the
holders of Senior Indebtedness and the Holder), be deemed to be a payment by the
Company to or on account of this Note and, for purposes of such subrogation, no
payments or distributions to the holders of Senior Indebtedness to which the
holder of this Note would be entitled except for the provisions of this Section
4 shall, as between the Company and its creditors (other than the holders of
Senior

                                       5
<PAGE>

Indebtedness and the holder of this Note), be deemed to be a payment by
the Company to or on account of the Senior Indebtedness.

     4.7  Scope of Section.  The provisions of this Section 4 are intended
          ----------------
solely for the purpose of defining the relative rights of the Holder, on the one
hand, and holders of the Senior Indebtedness, on the other hand.  Nothing
contained in this Section 4 or elsewhere in this Note is intended to, or shall
impair, as between the Company and its creditors (other than the holders of
Senior Indebtedness and the Holder), the obligation of the Company, which is
unconditional and absolute, to deliver to the Holder the principal and accrued
and unpaid interest on this Note as and when the same shall become due and
payable in accordance with the terms hereof, or to affect the relative rights of
the Holder of this Note and creditors of the Company other than the holders of
the Senior Indebtedness, nor shall anything herein prevent, as between the
Company and its creditors (other than the holders of Senior Indebtedness and the
Holder), the Holder from accepting any payment with respect to this Note or
exercising all remedies otherwise permitted by applicable law upon default under
this Note.

     4.8  Survival of Rights.  The right of any present or future holder of
          ------------------
Senior Indebtedness to enforce subordination of this Note pursuant to the
provisions of this Section 5 shall not at any time be prejudiced or impaired by
any act or failure to act on the part of the Company or any such holder,
including, without limitation, any forbearance, waiver, consent, compromise,
amendment, extension, renewal, or taking or release of security of or in respect
of any Senior Indebtedness or noncompliance by the Company with the terms of
such subordination regardless of any knowledge thereof such holder may have or
otherwise be charged with.

     4.9  Amendment or Waiver.  The provisions of this Section 4 shall not be
          -------------------
amended or waived in any manner without the consent of the Company and of the
holders of all Senior Indebtedness.

  4.10  Company to Make Payment of Principal and Accrued and Unpaid Interest.
        --------------------------------------------------------------------
Except as provided in this Section 4, the Company shall make payment of
principal and accrued and unpaid interest on this Note in accordance with its
tenor.  Upon any payment or distribution of assets of the Company referred to in
Section 5(b), the Holder shall be entitled to rely upon a certificate of the
receiver, trustee in bankruptcy, liquidating trustee. agent, or other person
making any such payment or distribution for the purpose of ascertaining the
person entitled to participate in such distribution, the holders of Senior
Indebtedness and other indebtedness or the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon, and all
other facts pertinent thereto or to this Section 5.

  5.   EVENTS OF DEFAULT.

  5.1  Events of Default Defined.  The principal and interest due and owing on
       -------------------------
this Note will become immediately due and payable, at the option of the Holder,
if the Company shall (i) fail to make any payment of principal or interest due
under this Note within forty-five (45) days when due; (ii) admit in writing its
inability to pay its debts generally as they become due, (iii) file a petition
in bankruptcy or petition to take advantage of any insolvency act, (iv) make an
assignment for the benefit of its creditors, (v) consent to the appointment of a
receiver of itself or of the whole of any substantial part of its property, (vi)
on a petition in bankruptcy filed against it, be adjudicated as a bankrupt,
(vii) file a petition or answer seeking reorganization or arrangement under the
federal bankruptcy laws or any other applicable law or statute of the United
States of America or any state thereof, or (viii) distribute any of its assets
upon any dissolution, winding up, liquidation or reorganization of the Company.
For purposes hereof, each of the above events is hereafter referred to as a
"Event of Default".

  5.2  Notification.  If an Event of Default as defined above shall occur
       ------------
without the Holder's knowledge, the Company will notify the Holder promptly in
writing by mail of the Event of Default describing it in reasonable detail,
including a statement of the nature and length of existence thereof, and what
action the Company proposes to take with respect thereto.

                                       6
<PAGE>

  6.  SUITS FOR ENFORCEMENT UPON DEFAULT.

  If an Event of Default shall have occurred, then and in any such event the
Holder may, at any time at its option, declare the principal of and the accrued
interest due under this Note to be due and payable, whereupon the same shall
forthwith mature and become due and payable without demand, protest, notice of
protest and notice of default, presentment for payment and diligence in
collection, all of which are hereby expressly waived by the Company.  In case
any Event of Default shall occur, the Holder may proceed to protect and enforce
its rights hereunder by a suit in equity, action at law or other appropriate
proceeding.  The Company covenants that if default be made in any payment of any
principal or interest on this Note, it will pay to the Holder, to the extent
permitted under applicable law, such further reasonable amount as shall be
sufficient to cover the cost and expenses of collection, including reasonable
compensation to the attorneys of the Holder hereof and any court costs incurred
for all services rendered in that connection.  In addition, until all amounts
are paid in respect of a Note, interest will accrue, to the extent permitted
under applicable law, on any such unpaid amounts at the rate specified herein as
the rate of interest on the Note.  No course of dealing and no delay on the part
of the Holder in exercising any rights shall operate as a waiver thereof or
otherwise prejudice its rights and no consent or waiver shall extend beyond the
particular case involved.  During any period of default, the conversion price
set forth in Section 3.2 shall be reduced to $.10 per share.

  7.  NOTICES.

  Any request, demand, authorization, direction, notice, consent, waiver or
other document permitted by this Note to be made upon, given or furnished to, or
filed with the Company or the Holder shall be sufficient for every purpose
hereunder if in writing and mailed to the Company, addressed to it at 11240
Waples Mill Road, Suite 400, Fairfax, Virginia 22030 (or such subsequent address
as the Company shall advise the Holder hereof in writing) and if to the Holder
at the address for the Holder reflected in the Company's records (or at such
further address as the Holder hereof shall advise the Company in writing).  All
notices required hereunder shall be deemed to have been given or made when
actually delivered to or received by the  party to which the notice is addressed
at its respective address.

  8.  MUTILATION, DESTRUCTION, LOSS, OR REISSUANCE.

  8.1 Mutilation.  This Note, if mutilated, may be surrendered and thereupon the
      ----------
Company shall execute and deliver in exchange therefor a new Note of like tenor
and principal amount.

  8.2 Destruction, Loss, Etc.  If there is delivered to the Company (i) evidence
      ----------------------
of the destruction, loss, or theft of this Note and (ii) such security or
indemnity as may be required by it to save it harmless, then, in the absence of
notice to the Company that this Note has been acquired by a bona fide purchaser,
the Company shall execute and deliver in lieu of such destroyed, lost or stolen
Note, a new Note of like tenor and principal amount.

  9.  SUCCESSORS.

  All of the covenants, stipulations, promises and agreements in this Note
contained by or on behalf of the Company shall bind and inure to the benefit of
its successors  whether so expressed or not and also to the benefit of the
Holder and its successors.

                                       7
<PAGE>

  10.  AMENDMENT.

  The Noteholder Majority shall have the right to amend the provisions of all
the Notes; provided, however, no such amendment shall be binding on the Holder
if such amendment adversely changes the terms of payment to the Holder or
reduces the rate of interest hereunder.

  11.  LAWS OF VIRGINIA TO GOVERN.

  This Note shall be deemed to be a contract made under the laws of the
Commonwealth of Virginia and for all purposes shall be construed in accordance
with the laws of such State.

  12.  TRANSFERABILITY OF NOTE.

  This Note and the Shares issuable upon conversion hereof are not transferable
except pursuant to an effective registration statement under the Securities Act
of 1933, as amended, or unless an exemption from the registration provisions of
such Act is applicable.

  13.   HOLDER REPRESENTATION.

  The Holder named in this Note hereby represents and warrants to the Company
that (i) such Holder is an "accredited investor" within the meaning of
Regulation D under the Securities Act of 1933, as amended, (ii) no other person
has a direct or indirect beneficial interest in this Note and (iii) this Note
and any shares issued upon conversion hereof is being and will be acquired for
investment only and not with a view to or for sale in connection with a
distribution thereof and not with a view to resale.

    IN WITNESS WHEREOF, the Company has caused this Note to be executed in its
corporate name by its duly authorized officers and to be dated as of the day and
year first above written.

ATTEST:                            INFORMATION ANALSYIS INCORPORATED

__________________________         By:____________________________________
Secretary                             President

                                       8
<PAGE>

                               CONVERSION NOTICE
                               -----------------
                                                      Dated: ____________

  Pursuant to that certain Convertible Subordinated Note, dated ___________,
2001 in the principal amount of $__________________, the undersigned hereby
irrevocably elects to exercise its right to purchase ______________ shares of
the $.01 par value Common Stock of Information Analysis Incorporated, such right
being and as issued to the undersigned by Information Analysis Incorporated, by
converting $_____________ principal and/or interest amount under the Convertible
Subordinated Note in payment for same in accordance with the Conversion Price
specified in Section 3.2 of said Convertible Subordinated Note.

INSTRUCTIONS FOR REGISTRATION OF STOCK

Name

____________________________________________

Address

____________________________________________

____________________________________________

                 (Please typewrite or print in block letters)

                                        ________________________________________
                                        Signature

                                       9

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