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                               SEDONA CORPORATION
                              455 South Gulph Road
                            King of Prussia, PA 19406

                                February 1, 2001

FEDERAL EXPRESS

Dutchess Advisors, Ltd.
100 Mill Plain Rd., 3rd Fl.
Danbury, CT  06811

Attention: Michael A. Novielli

         Re:      Finder's Fee Arrangement

Ladies and Gentlemen:

         This letter agreement ("Agreement") will confirm the understanding
between Sedona Corporation, a Pennsylvania corporation (the "Company"), and
Dutchess Advisors, Ltd., a New York corporation ("Dutchess"), pursuant to which
the Company will retain Dutchess as its non-exclusive financial advisor
("Finder"), on the terms and subject to the conditions set forth herein, in
connection with a private placement of shares of the Company's common stock,
$0.001 par value per share ("Common Stock") and/or Class A preferred stock,
$2.00 par value per share ("Preferred Stock"). The Preferred Stock and the
Common Stock are sometimes referred to herein as the "Securities."

         The Company proposes, and the Finder agrees, that the Securities be
sold solely to investors that qualify as "accredited investors" as that term is
defined in Rule 501(a) under the Securities Act of 1933, as amended ("Act"),
pursuant to an exemption from the registration requirements of Section 5 of that
Act.

         1. Retention of Finder. The Company hereby appoints Dutchess as its
non-exclusive financial advisor in connection with the private placement of the
Securities and Dutchess hereby accepts such appointment and agrees to use its
best efforts to introduce accredited investors to the Company. In introducing
accredited investors to the Company, the Finder shall act solely as the agent
for the Company and not as principal.



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         2. Offering Materials. Only the Company may transmit materials
describing the Company, the Securities and the transactions related thereto
(together with any amendments thereof or supplements or exhibits thereto, the
"Offering Materials") to accredited investors. The Company does not authorize
the Finder to transmit any Offering Materials to accredited investors.

         3. Representation, Warranties and Covenants of the Finder. The Finder
represents, warrants and covenants to the Company that, as of the date hereof
and as of the consummation of the sale of the Securities to any accredited
investors introduced to the Company by the Finder ("Closing Date"):

                  (a)  The Finder has full power and authority and legal right
to enter into this Agreement and to engage in the transactions contemplated
hereby; and

                  (b) The Finder did not seek accredited investors by means of
any form of general solicitation, general advertising, publicly disseminated
advertisements or sales literature.

         4. Indemnification. The Company agrees to indemnify the Finder against
all losses, claims, damages, liabilities or expenses insofar as such losses,
claims, damages, liabilities or expenses arise out of or relate to actions or
failures to act by the Company or otherwise arise out of or relate to the
Finder's engagement hereunder, provided, however, that the Company shall not be
liable to the extent that such losses, claims, damages, liabilities or expenses
are determined to have resulted primarily from the gross negligence or willful
misconduct of the Finder.

         5. Compensation of Finder. At the Closing Date of a sale of the
Securities to accredited investors introduced to the Company by the Finder, the
Company will pay to the Finder in consideration of its services hereunder an
amount based on the following fee schedule:

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     Total Gross Proceeds from       Fee as a Percentage of Total Gross Proceeds
          Securities Sold
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          up to $3 million                                 7%
  over $3 million up to $7 million                         5%
  over $7million up to $10 million                         3%
          over $10 million                                 2%

 -------------------------------------------------------------------------------

         Such fee shall be due and payable on each Closing Date by wire transfer
in immediately available funds to the account designated by the Finder.

         At each Closing Date, the Company also will issue five-year warrants to
purchase 5,000 shares of Common Stock to the Finder for every $1 million dollars
of the Securities sold to

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accredited investors introduced to the Company by the Finder. The per share
exercise price of the warrants shall be equal to 120% of the highest per share
offering price at which the Securities are sold. The Company shall enter into a
registration rights agreement with the Finder at the Closing Date granting
piggyback registration rights with respect to the shares of Common Stock
issuable upon exercise of the warrants.

         6. Termination. This Agreement shall automatically terminate 180 days
from the date first written above. Notwithstanding the foregoing, the Company or
the Finder may terminate this Agreement, with or without cause, at any time upon
written notice to the other party. However, the actual termination date of this
Agreement notwithstanding, the Finder shall be entitled to receive its full and
complete remuneration pursuant to Section 5. of this Agreement, for the entire
term of the agreement executed between the Company and the accredited
investor(s).

         7. Notices. All communications hereunder shall be in writing and shall
be deemed to have been duly given if personally delivered to or mailed by
registered mail, postage prepaid, or transmitted by facsimile transmission,
telex or telegraph and confirmed by a similar mailed writing, if to the Company,
addressed to the Company at the address first stated in this Agreement,
Attention: William K. Williams, Chief Financial Officer, or to such other
address as the Company may designate in writing to the Finder and, if to the
Finder, addressed to , Dutchess Advisors, Ltd., 100 Mill Plain Rd., 3rd Floor,
Danbury, CT 06811; Attention: Michael A. Novielli, Managing Director, or such
other address as the Finder may designate in writing to the Company.

         8. Confidentiality. The Finder agrees to use all non-public information
provided to it by or on behalf of the Company hereunder solely for the purpose
of providing the services which are the subject of this Agreement and to treat
confidentially all such information, provided, however, that nothing herein
shall prevent the Finder from disclosing any such information (i) pursuant to
law, regulation or legal process, including the order of any court or
administrative agency or in any pending legal or administrative proceeding, (ii)
upon the request or demand of any regulatory authority having jurisdiction over
the Finder or any of its affiliates, (iii) to the extent that such information
becomes publicly available other than by reason of disclosure by the Finder,
(iv) to the Finder's employees, legal counsel, independent auditors and other
experts or agents who need to know such information and are informed of the
confidential nature of such information or (v) to any of its affiliates as set
forth in Section 9.


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         9. Miscellaneous.

                  (a) THIS AGREEMENT SHALL BE DEEMED MADE IN PENNSYLVANIA AND
SHALL BE GOVERNED BY THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA WITHOUT REGARD
TO ITS CONFLICT OF LAWS RULES.

                  (b) This Agreement may be executed in two or more
counterparts, each of which when so executed and delivered shall constitute one
and the same instrument. The Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and assigns, and
no other person shall have any right or obligation hereunder. This Agreement
supersedes all prior agreements and understandings of the parties hereto with
respect to the subject matter hereof and may only be amended, modified or
changed, or a provision hereof waived, by a written instrument signed by the
parties hereto. Paragraph headings herein are for convenience only and are not a
part of this Agreement. This Agreement is solely for the benefit of the Company
and the Finder and no other person shall acquire or have any rights under or by
virtue of this Agreement. This Agreement may not be assigned by either party
without the prior written consent of the other party.

                  (c) If any term, provision, covenant or restriction contained
in this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable or against public policy, the remainder of the terms,
provisions, covenants and restrictions contained herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated. The
Company and the Finder shall endeavor in good faith negotiations to replace the
invalid, void or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the invalid, void or
unenforceable provisions.

                  (d) The Company acknowledges that the Finder has been retained
on a non-exclusive basis solely by the Company, and that the Company's
engagement of the Finder is not intended to confer rights upon any persons not a
party hereto (including shareholders, employees and creditors of the Company) as
against the Finder, its affiliates or their respective directors, officers,
agents and employees.

                  (e) The Company acknowledges that the Finder or an affiliate
may be providing financial advisory or other services to parties whose interests
may conflict with those of the Company. In accordance with their long-standing
policy to hold in confidence the affairs of their customers, however, neither
the Finder nor any of its affiliates will furnish confidential information
obtained from the Company or such other parties to any of its other customers.
Furthermore, neither the Finder nor any of its affiliates will make available to
the Company or such other parties confidential information that it has obtained
or may obtain from any other customer.

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                  (f) Any payments to the Finder hereunder, whether pursuant to
Sections 4, 5 or otherwise, shall be in U.S. dollars and shall be free of all
withholding, stamp and other similar taxes and of all other governmental charges
of any nature whatsoever.

                  (g) EACH OF THE COMPANY AND THE FINDER HEREBY IRREVOCABLY
WAIVES (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON
BEHALF OF ITS STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS
OF THE FINDER IN THE NEGOTIATIONS, PERFORMANCE OR ENFORCEMENT HEREOF.

                  (h) Each of the Company and the Finder irrevocably and
unconditionally submit to the exclusive jurisdiction of any state or federal
court sitting in the City of King of Prussia over any suit, action or proceeding
arising out of or relating to this Agreement. Each of the Company and the Finder
hereby agree that service of any process, summons, notice or document by
registered mail addressed to the Company or the Finder, as the case may be,
shall be effective service of process for any suit, action or proceeding brought
in any such court. Each of the Company and the Finder irrevocably and
unconditionally waive any objection to the laying of venue of any such suit,
action or proceeding brought in any such court and any claim that any such suit,
action or proceeding has been brought in an inconvenient forum. Each of the
Company and the Finder agree that a final judgment in any such suit, action or
proceeding brought in any such court shall be conclusive and binding upon the
Company and the Finder and may be enforced in any other courts to whose
jurisdiction the Company or the Finder, as the case may be, is or may be subject
by suit upon judgment.


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         If the foregoing is in accordance with your understanding of our
agreement, please sign and return to each of the undersigned a counterpart
hereof, whereupon this Agreement shall become a binding agreement between the
Finder and the Company. This Agreement shall supercede all other prior such
agreements between the Finder and Company. Upon execution of this Agreement by
both parties, all other prior such agreements shall be considered immediately
null and void.

                                            Very truly yours,

                                            SEDONA CORPORATION


                                            By: /s/ Marco A. Emrich
                                                --------------------------------
                                                    Marco A. Emrich, President


ACCEPTED AND AGREED TO
this 1st day of February, 2001

DUTCHESS ADVISORS, LTD.


By: /s/  Michael A. Novielli
    -----------------------
         Michael A. Novielli
         Managing Director


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