Exchange Agreement between Sedona Corporation and Oak Harbor Investment Properties, L.L.C. (August 17, 2006)

Summary

Sedona Corporation and Oak Harbor Investment Properties, L.L.C. entered into an agreement to refinance Sedona's existing debt to Oak Harbor. Under this agreement, multiple old promissory notes totaling $1,000,000 plus accrued interest are exchanged for a single new promissory note of $1,040,402.22, secured by certain company assets. Both parties confirm their authority to enter the agreement, and the exchange is subject to compliance with securities laws and the absence of legal challenges. The agreement is binding on successors and governed by Louisiana law.

EX-10.79 4 b415608_ex10-79.txt EXHIBIT 10.79 EXHIBIT 10.79 EXCHANGE AGREEMENT EXCHANGE AGREEMENT, dated as of August 17, 2006, among SEDONA CORPORATION, a Pennsylvania corporation (THE "COMPANY"), and OAK HARBOR INVESTMENT PROPERTIES, L.L.C., (HEREINAFTER REFERRED TO AS "OAK HARBOR"). WHEREAS, an Independent Committee of the Board of Directors of Sedona met and reviewed the terms of a proposed refinancing of certain of the Company's obligations to Oak Harbor (the "Refinancing") and has deemed it to be in the best interests of the Company; and WHEREAS, the Board of Directors has reviewed the findings of the Independent Committee and has also deemed that the Refinancing is in the best interests of the Company; and WHEREAS, in connection with and in furtherance of the Refinancing, the existing obligations of the Company to Oak Harbor, evidenced by various promissory notes, will be exchanged for a single promissory note in the principal amount of $1,040,402.22 (the "New Oak Harbor Note"); and WHEREAS, the obligations of the New Oak Harbor Note will be secured by a first priority security interest in certain assets of the Company; NOW THEREFORE, in consideration of the mutual agreements contained herein and other good and valuable consideration, receipt of which is acknowledged, the parties hereto agree as follows: ARTICLE I EXCHANGE OF THE NOTES 1.1. EXCHANGE OF NOTES. The Company and Oak Harbor hereby agree to exchange the notes listed on Exhibit A (the "Old Oak Harbor Notes") in the aggregate principal amount of the One Million ($1,000,000) Dollars for the New Oak Harbor Note, substantially in the form attached hereto as Exhibit B (the "Exchange"). The New Oak Harbor Note includes in the aggregate principal amount all of the accrued interest in the Old Oak Harbor Notes in the amount of Forty Thousand Four Hundred Two 22/100 Dollars ($40,402.22). 1.2. CLOSING OF EXCHANGE. Upon the signature of this Agreement, Oak Harbor shall surrender the Old Oak Harbor Notes to the Company for cancellation, and the Company shall issue the New Oak Harbor Note to Oak Harbor. ARTICLE II CONDITIONS TO EXCHANGE 2. CONDITIONS TO EXCHANGE. Oak Harbor's obligation to surrender the Old Oak Harbor Notes and the Company's obligation to issue the New Oak Harbor Note are subject to the fulfillment by the Company and Oak Harbor of the following conditions: 2.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties of the Company and Oak Harbor contained in Article 3 shall have been correct when made and shall be correct at the time of the Exchange. 2.2 COMPLIANCE WITH SECURITY LAWS. The New Oak Harbor Note shall have complied with all applicable requirements of federal and state securities laws. 2.3 NO ACTIONS PENDING. There shall be no suit, action, investigation, inquiry or other proceeding by any governmental body or any other person or any other legal or administrative proceeding pending or threatened which seeks to enjoin or otherwise prevent the consummation of, or to recover any damages or obtain relief as a result of the Exchange, any transaction contemplated by this Agreement or is otherwise related to this Agreement. ARTICLE III REPRESENTATIONS AND WARRANTIES 3.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and warrants as follows: 3.1.1. ORGANIZATION. The Company (a) has been duly incorporated and is validly existing under the laws of the State of Pennsylvania, and (b) has all requisite corporate power and authority to carry on its business as now conducted and as proposed to be conducted. 3.1.2. AUTHORIZATION. The Company has the corporate power and authority and the full legal right to make, deliver and perform its obligations under this Agreement, to issue and exchange the notes and otherwise carry out the transactions contemplated hereby and has taken all necessary corporate action to authorize the transactions contemplated hereby. This Agreement has been duly authorized, executed and delivered by the Company; and is the legal, valid and binding obligation of the Company, enforceable against it in accordance with its terms. 3.1.3. GOVERNMENTAL CONSENTS, ETC. Except for filings with the Securities and Exchange Commission in the ordinary course of business, no consent, approval or authorization of, or declaration or filing with any governmental authority is required in connection with the execution, and delivery of this Agreement, the performance of this Agreement, or the issuance, exchange and delivery of the New Oak Harbor Note. 3.1.4. COMPLIANCE WITH SECURITIES LAWS. Neither the Company nor anyone acting on its behalf has taken, or will take any action which would subject the issuance and exchange of the New Oak Harbor Note to the registration and prospectus delivery provisions of the Securities Act of 1933, as amended. 3.2. REPRESENTATIONS AND WARRANTIES OF OAK HARBOR. Oak Harbor represents and warrants as follows: 3.2.1 ORGANIZATION. Oak Harbor (a) has been duly incorporated and is validly existing under the laws its state of incorporation, and (b) has all requisite corporate power and authority to carry on its business as now conducted and as proposed to be conducted. 2 3.2.2 AUTHORIZATION. Oak Harbor has the corporate power and authority and the full legal right to make, deliver and perform its obligations under this Agreement, to surrender and exchange the notes and otherwise carry out the transactions contemplated hereby and has taken all necessary corporate action to authorize the transactions contemplated hereby. This Agreement has been duly authorized, executed and delivered by Oak Harbor; and is the legal, valid and binding obligation of Oak Harbor, enforceable against it in accordance with its terms. 3.2.3 OWNERSHIP OF OLD OAK HARBOR NOTES. Oak Harbor owns all of the Old Oak Harbor Notes set forth on Exhibit A free and clear of any liens and encumbrances. Without limiting the foregoing, except for Oak Harbor's obligations under this Agreement, Oak Harbor has sole power of disposition with respect to the Old Oak Harbor Notes, with no restrictions on its rights of disposition pertaining thereto and no person or entity other than Oak Harbor has any right to direct or approve the disposition of the Old Oak Harbor Notes. 3.2.4 INVESTMENT INTENT. Oak Harbor represents that it is acquiring the New Oak Harbor Note for its own account for investment and not with a view to or for sale in connection with any distribution thereof, except for such distributions and dispositions which are effected in compliance with the Securities Act and all applicable state securities and "blue sky" laws. Oak Harbor acknowledges that the New Oak Harbor Note has not been registered under the Securities Act and may be resold (which resale is not now contemplated) only if registered pursuant to the provisions of such Act or if an exemption from registration is available, except under circumstances where neither such registration nor such exemption is required by law. ARTICLE IV MISCELLANEOUS 4.1 MISCELLANEOUS. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto, whether so expressed or not, and, in particular, shall inure to the benefit of and be enforceable by any holder or holders of the New Oak Harbor Note at that time. This Agreement, embodies the entire agreement and understandings relating to the subject matter hereof. This Agreement and the New Oak Harbor Note shall be construed and enforced in accordance with and governed by the law of the State of Louisiana. The headings in this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning hereof. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. 3 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective representatives thereunto duly authorized as of the day and year first written above. SEDONA CORPORATION By: ------------------------------------ Name: Marco A. Emrich Title: President and CEO OAK HARBOR INVESTMENT PROPERTIES, L.L.C. By: ------------------------------------ 4 EXHIBIT A NOTES TO BE SURRENDERED 1. PROMISSORY NOTE DATED MARCH 13, 2003 IN THE PRINCIPAL AMOUNT OF $400,000.00 FROM SEDONA TO OAK HARBOR. 2. PROMISSORY NOTE DATED JANUARY 13, 2003 IN THE PRINCIPAL AMOUNT OF $600,000.00 FROM SEDONA TO OAK HARBOR. 5 EXHIBIT B FORM OF NOTE 6