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                              EMPLOYMENT AGREEMENT

This Agreement made as of this 1st day of January, 2000, is between SEDONA
Corporation, a Corporation of the Commonwealth of Pennsylvania (the "Company"),
and William K. Williams (the "Employee").

                             W I T N E S S E T H :

     1. Employment: The Company hereby agrees to employ Employee and Employee
hereby accepts employment by the Company for the period and the terms and
conditions hereinafter set forth.

     2. Capacity and Duties:

          a) Employee shall be employed by the Company in the capacity of Vice
President and Chief Financial Officer and Employee shall have such authority and
shall perform such key executive duties and responsibilities as may from
time-to-time reasonably be specified by the Chief Executive Officer and
President of the Company with respect to the Company and its affiliates. It is
the present expectation of the parties that Employee will be re-elected during
the entire term of this Agreement to serve as Vice President and as Chief
Financial Officer and Employee agrees to serve in such capacities without any
compensation in addition to that herein provided. Employee acknowledges that
neither the Company nor its Board of Directors is legally obligated to elect or
re-elect Employee as Vice President and Chief Financial Officer.

          b) During the term of the Agreement, Employee shall devote his time in
exercising his best efforts to perform his duties hereunder.

          c) Notwithstanding the foregoing, Employee shall be entitled to have
investments in other enterprises provided, however, that he shall not have any
investments or financial interest in any business enterprise which conducts
business activities competitive with any business activities conducted or
planned by the Company now or at any time during the term of the Employee's
employment hereunder (other than an investment of no more than 5% of any class
of equity securities of a company the securities of which are traded on a
national securities exchange). However, if the Company enters a new field in
which the Employee has previously invested, the Employee agrees to disclose his
investment to the Company President if said investment exceeds 5% of equity of a
"Competitor". If the Employee is requested by the Board of Directors of the
Company, the Employee shall divest himself of the said investment within one
year after said request.

     3. Compensation: Employee's compensation set forth in Exhibit 1.

     4. Expenses: Employee is authorized to incur reasonable expenses for
promoting the business of the Company and in carrying out his duties hereunder,
including without limitation, reasonable expenses for automobile, travel and
similar items. The Company shall reimburse Employee for all such ordinary and
necessary expenses upon the presentation by Employee from time-to-time of an
itemized account of such expenditures and required documentation. Employee shall
present an itemized account of expenditures not more frequently than weekly and
not less frequently than monthly.

     5. Term of Agreement; Separation:

          a) The term of the Employment Agreement shall be two (2) years
commencing on the date hereof, and thereafter shall continue from year-to-year
based on the approval of both parties with said approval occurring at least
three (3) months prior to the end of the original, or the then current renewal
term.

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          b) The Company may terminate this Employment Agreement for cause,
defined as follows:

               1) Deliberate disclosure of Company secrets for consideration; or

               2) Conviction of Employee of a felony involving moral turpitude,
or of any other law which may reasonably be deemed to cause a detrimental effect
upon the Company as a result of mutual association. If the Company separates the
Employee for cause, the Company will have not further liability or obligation
except to pay the Employee earned and unpaid compensation.

          c) The Company may separate the Employee; a) without cause, or b)
should the Employee die or become disabled such that the Employee has been
unable to perform any of his essential duties for ninety (90) days during any
year of the Employment Agreement or for any period of sixty (60) consecutive
days. In the event of such separation, the severance package described in
Exhibit 1, Section 4 applies.

          d) In the event, at any time during the initial term of this
Employment Agreement, or any extension thereof, Employee shall be involuntarily
removed as Vice President and as Chief Financial Officer the Employee may
terminate the Employment Agreement and receive severance in accordance with
Exhibit 1, Section 4.

          e) In the event of change of control of the Company, Employee may
elect to terminate his employment in which event he shall receive the severance
package described in Exhibit 1, Section 4. For these purposes, change of control
includes the following: Sale of a majority of the outstanding shares or assets
of the Company, or Change in composition of more than 50% of the Board of
Directors as presently constituted.

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     6. Restrictions on Competition: Employee covenants and agrees that: (a)
during the initial term and any renewal terms of his employment, and, (b) if,
but only if, this Employment Agreement is terminated by the Employee (as
hereinafter defined) during the initial term, or any renewal term hereof, for a
period of one (a) year after termination of his employment hereunder, he shall
not, directly or indirectly, engage in any business activities within the limits
of the fifty United States and Puerto Rico, the same as, or in competition with,
business activities carried on by the Company during the period of the
Employee's employment by the Company, or in the definitive planning stages at
the time of termination of Employee's employment.

     The term "engage in" shall include, without being limited to, activities as
proprietor, partner, stockholder, principal, agent, employee or consultant.
However, nothing contained in this Paragraph shall prevent Employee from having
investments of the types permitted in Subparagraph 2 c) hereof.

     These restrictions shall not apply if separation is by the Company under
Section 5c and 5d or if separation is by Employee under Section 5e of this
Employment Agreement.

     7. Trade Secrets: During the term of employment under this Employment
Agreement, the Employee will have access to, and become familiar with, various
trade secrets, consisting of formulas, patterns, devices, secret inventions,
processes, compilation of information, records and specifications, which are
owned by the Company and which are regularly used in the operation of the
business of the Company.

     The Employee shall not disclose any of the aforesaid trade secrets,
directly or indirectly, nor use them in any way, either during the term of this
Agreement or at any time thereafter, except as required in the course of this
employment by the Company.

     All files, data, records, documents, drawings, specifications, equipment,
and similar relating items to the business of the Company, whether prepared by
the Employee or otherwise coming into his possession, shall remain the exclusive
property of the Company and be returned to the Company by request of the
Company, provided the same information is not lawfully and without restriction
available to the general public.

     8. Miscellaneous Provisions:

          a) Any notice pursuant to this Agreement shall be validly given or
served if in writing and delivered personally or sent by registered or certified
mail, postage prepaid, to the following addresses:

         If to the Company:         SEDONA Corporation
                                    455 South Gulph Road, Suite 300
                                    King of Prussia, PA  19406
                                    Attention:  President

         If to the Employee:        William K. Williams
                                    1946 Welsh Road
                                    Philadelphia, PA  19115

     Or to such other addresses as either party may hereafter designate to the
other in writing.

          b) Notices delivered personally shall be deemed communicated as of the
actual receipt; notices mailed shall be deemed communicated as of five (5) days
after mailing.

          c) If any provision of this Agreement shall be or become illegal or
unenforceable in whole or in part for any reason whatsoever, the remaining
provisions shall nevertheless be deemed valid, binding and subsisting.

          d) The waiver by either party of a breach or violation of any
provision of this Employment Agreement shall not operate or be construed as a
waiver of any subsequent breach or violation thereof.

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          e) This writing including Exhibit I represents the entire Employment
Agreement and understanding of the parties with respect to the subject matter
hereof; it may not be altered or amended except by agreement in writing.

          f) The Employment Agreement has been made in and its validity,
performance and effect shall be determined in accordance with the laws of the
Commonwealth of Pennsylvania.

          g) The headings of paragraphs in this Employment Agreement are for
convenience only; they form no part of this Agreement and shall not affect its
interpretation.

          h) This Employment Agreement supersedes any earlier Employment
agreement and as such is the only Employment Agreement in force.

     IN WITNESS WHEREOF, and intending to be legally bound, the parties have
executed this Employment Agreement under seal on the day and year first above
written.


SEDONA CORPORATION                       Employee:

/s/ Marco A. Emrich                      /s/ William K. Williams
--------------------------------         -----------------------------------
Marco A. Emrich, President & CEO         William K. Williams


ATTEST: /s/ Victoria R. Franchetti
        --------------------------
            Victoria R. Franchetti
            Assistant Secretary


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SEDONA Corporation                                                     Exhibit 1

                           COMPENSATION AND BENEFITS

COMPENSATION PLAN FOR:             William K. Williams

POSITION:                          Vice President and Chief Financial Officer

1)       BASE SALARY: $130,000 per year

2)       INCENTIVE COMPENSATION: In addition to the Base Salary, as set forth
         above, an incentive bonus of $40,000 annualized is provided. 50% will
         be based on SEDONA's achieving its financial objectives for the year
         and 50% will be based on specific objectives mutually agreed to by
         Employee and management.

3)       EQUITY - OPTIONS: 100,000 Options as previously granted and approved by
         SEDONA's Board of Directors.

4)       SEPARATION: In the event of separation, under Section 5c, 5d, or 5e, or
         should the Company decide not to renew the contract, the Company will
         provide a separation package as follows:

                  o Six (6) months base salary, plus benefits (until another
                    position is found) and;

                  o All earned and unpaid bonuses and incentives, will be due
                    and paid and;

                  o Vested Options, up to the 100,000 noted above, will be
                    retained by the Holder, for the original life of the Option
                    as noted in Section 3 above.

5)       BENEFITS: As a "Full Time" Employee, Employee will be compensated
         bi-weekly, and the Employee will be included in the Company's general
         employee benefit programs.

Employee:                      SEDONA Corporation


/s/ William K. Williams        /s/ Marco A. Emrich
-----------------------            --------------------------------
William K. Williams                Marco A. Emrich, President & CEO

Date:    5/24/00                   Date:    5/24/00
     ------------------                 ---------------------------

ATTEST:

/s/ Victoria R. Franchetti
--------------------------------------------
Victoria R. Franchetti, Assistant Secretary