<PAGE>
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
$50,000.00
King of Prussia, Pennsylvania
FOR VALUE RECEIVED, the undersigned, SEDONA
CORPORATION, a Pennsylvania
Corporation ("Maker"), promises to pay to
David R. Vey ("Holder"), with the
address of 11822 Justice Avenue Suite B-6
Baton Rouge, Louisiana 70816, the
principal sum of Fifty Thousand Dollars
($50,000.00), 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 upon
which the unpaid balance shall be paid
in full (the or this "Note").
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 of
the high and low sales price 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 successors
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 April 22, 2006.
(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, whichever is at the time the
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principal trading exchange or market for the Common Stock,
based
upon 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 by mutual consent of the Holder
and the Company. Holder shall have the
right to convert the principal balance of
the Note and accrued interest into
Common Stock at any time. 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 shall fail to pay any invoice or
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 l
