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                               SEDONA CORPORATION
                       CODE OF BUSINESS CONDUCT AND ETHICS

INTRODUCTION

        This Code of Business Conduct and Ethics (the "Code") covers a wide
range of business practices and procedures. It does not cover every issue that
may arise, but it sets out basic principles to guide directors, officers and
employees of Sedona Corporation (the "Company"). All of our directors, officers
and employees must conduct themselves accordingly and seek to avoid even the
appearance of improper behavior.

        If a law conflicts with a policy in this Code, you must comply with the
law; however, if a local custom or policy conflicts with this Code, you must
comply with the Code. If you have any questions about these conflicts, you
should ask your supervisor how to handle the situation.

        This Code will be strictly enforced. All managers and supervisors are
required to enforce this policy and are not permitted to sanction or condone
violations. There will be serious adverse consequences for non-adherence to the
Code, which may include removal from a position as director or officer, and
dismissal as an employee of the Company. If you are in a situation which you
believe may violate or lead to a violation of this Code, you should follow the
procedures described in Sections 16-18 of this Code.

I.      1. COMPLIANCE WITH LAWS

                Obeying the law, both in letter and in spirit, is the foundation
on which this Company's ethical standards are built. All directors, officers and
employees must obey the laws of the cities, states and countries in which we
operate. Although not all employees are expected to know the details of these
laws, it is important to know enough to determine when to seek advice from
supervisors, managers or other appropriate personnel.

II.     2. ETHICAL CONDUCT

                Beyond compliance with laws, the Company requires that all its
directors, officers and employees act in a manner which meets the highest
standards of ethical behavior. This includes the obligation to avoid any actual
or apparent conflicts of interest in personal and professional relationships.
The honesty and integrity of the Company's business conduct must not be
compromised. The Company will not condone ethical violations for the sake of
personal gain, personal advantage, expediency or perceived business advantage.

III.    3. ACCOUNTING, AUDITING MATTERS AND PUBLIC DISCLOSURE OBLIGATIONS

                The Company's requirement that directors, officers and employees
follow the highest ethical standards applies directly to all actions which
involve business accounting, financial reporting, internal accounting controls,
auditing matters and public disclosure obligations. Full, fair, accurate, timely
and understandable disclosure is required in all reports and documents that the
Company files with, or submits to, the Securities Exchange Commission (the
"SEC") and in any other public communications.

                The Audit Committee of the Company has adopted special
procedures for the receipt, retention and treatment of complaints regarding
accounting, internal accounting controls or auditing matters. These procedures
are set out in Sections 17 and 18 of this Code.

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IV.     4. CONFLICTS OF INTEREST

                Any direct or indirect conflict of interest between the Company
and any director, officer or employee is prohibited unless otherwise consented
to by the Company. The Company believes that it is in its best interests and is
consistent with the obligations of directors, officers and employees to the
Company to establish a policy that all business decisions will reflect
independent judgment and discretion, uninfluenced by any considerations other
than those honestly believed to be in the best interests of the Company and its
shareholders. Any decision will be deemed to be in conflict with the interests
of the Company if, in the course of affiliation with the Company, the judgment
and discretion of a director, officer or employee is or may be influenced by
considerations of personal gain or benefit, or gain or benefit to a third party,
whether or not affiliated with the director, officer or employee. The divided
loyalty that is present when a director, officer or employee has a conflict of
interest could potentially lead to serious problems for the Company and could be
grounds for disciplinary action or termination by the Company.

                It is not possible to describe every situation or occurrence
that could lead to a conflict of interest between a director, officer or
employee and the Company. The following events are intended to describe, by way
of example, situations that could occur that could lead to a conflict of
interest with the Company:

     Relationships with Customer or Competitors: Stock ownership and other
financial interests or participation in any customer, supplier or competitor of
the Company will need to be reported to the General Counsel.

     Indirect Interests and Relationships: A conflict of interest can arise
because of the business activities of an affiliate of a director, officer or
employee. The term affiliate includes close family members and family members
who live in the same household as a director, officer or employee. A director,
officer or employee has a potential conflict of interest whenever his or her
affiliate has a significant interest in a transaction or a significant
relationship with any customer, supplier or competitor of the Company. The
director, officer or employee should not make or influence any decision which
could directly or indirectly benefit his or her affiliate and, in order to
protect the director, officer or employee and the Company from the appearance of
a conflict of interest, all relationships of this nature will need to be
reported to the General Counsel.

     Gifts, Loans and Entertainment: A director, officer or employee will not
accept gifts from competitors or from anyone having or seeking business with the
Company, other than non-cash gifts of nominal value generally used for
promotional purposes by the giver or accept loans from any person having or
seeking business with the Company (other than loans from banks or financial
institutions at prevailing market rates and terms).

     Participation in business-related functions is permitted, including the
acceptance of lunches or other meals. However, each director, officer or
employee should exercise care to ensure that such functions are necessary and
related to the conduct of business on behalf of the Company. If in doubt, the
General Counsel of the Company should be consulted.

     Outside Business Activities: As a general rule, the Company does not allow
its employees to participate or engage in business activities outside of their
employment with the Company. As a general rule, participation on a part-time or
other basis in any outside business or employment will be a conflict of interest
if the director, officer or employee's participation in that business could
interfere with his or her ability to devote proper time and attention to his or
her employment with the Company. Any questions regarding the policy should be
directed to the President/CEO.

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     Non-business Activities: Participation in the activities of a trade
association, professional society, charitable institution or governmental
institution, on a non-compensated basis, or holding a part-time public office
(with or without compensation) will not generally create a conflict of interest
in violation of this Code. However, if any director, officer or employee is
unsure of his or her particular situation, the General Counsel of the Company
should be consulted.

     Personal Use of Company Property and Company Information: It is against
Company policy for any director, officer or employee to use or divert any
Company property, including services of other employees, for his or her own
advantage or benefit, or to use Company letterhead when writing personal
correspondence.

     Related Party Business Dealing. If there is any business relationship or
proposed business transaction that the Company might have with any company in
which a director, officer or employee, or a related party of any such person,
has a direct or indirect interest, and from which such person might derive a
benefit, or at which a related party is employed, and if such a relationship or
transaction might give rise to the appearance of a conflict of interest, then
the General Counsel of the Company should be consulted.

V.      5. INSIDER TRADING; SHORT SALES

                Directors, officers and employees who have access to material
confidential information are not permitted to use or share that information for
securities trading purposes or for any other purpose except the conduct of the
Company's business and in strict conformity with all applicable laws and SEC
regulations. All non-public information about the Company should be considered
confidential information. To use non-public information for personal financial
benefit or to "tip" others who might make an investment decision on the basis of
this information is not only unethical but also illegal. Trading in the
securities of other companies with which the Company has a relationship is also
prohibited. Directors, officers and employees who have access to material inside
information may not engage in "short sales" of the Company's securities or
derivative securities. If you have any questions, please consult the Company's
General Counsel.

VI.     6. CORPORATE OPPORTUNITIES

                All directors are prohibited from taking for themselves
opportunities that are discovered through the use of corporate property,
information or position without the consent of the Board of Directors. No
director, officer or employee may use corporate property, information or
position for improper personal gain or compete with the Company either directly
or indirectly. Directors, officers and employees owe a duty to the Company to
advance the Company's legitimate interests when the opportunity to do so arises.

VII.    7. COMPETITION AND FAIR DEALING

                The Company seeks to outperform its competition fairly and
honestly. The Company seeks competitive advantages through superior performance,
never through unethical or illegal business practices. Stealing proprietary
information, possessing trade secret information that was obtained without the
owner's consent or inducing such disclosures by past or present employees of
other companies is prohibited. Each employee should endeavor to respect the
rights of and to deal fairly with the Company's customers, suppliers,
competitors and employees. No employee should take unfair advantage of anyone
through manipulation, concealment, abuse of privileged information,
misrepresentation of material facts or any other intentional act or practice.

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                The purpose of business entertainment and gifts in a commercial
setting is to create goodwill and sound working relationships, not to gain
unfair advantage with customers or suppliers. Employees should discuss with
their supervisor or manager any gifts or proposed gifts of which they are not
certain are appropriate.

VIII.   8. DISCRIMINATION, HARASSMENT AND RETALIATION

                The diversity of the Company's employees is a tremendous asset.
We are firmly committed to providing equal opportunity in all aspects of
employment and will not tolerate discrimination, harassment or retaliation. The
Company's policy against discrimination applies to any legally protected status,
including race, color, gender, religion, national origin, disability, veteran
status and age. This policy also prohibits discrimination against any person who
provides information to a federal regulatory or law enforcement agency, a member
of Congress or any committee of Congress or to a supervisor concerning conduct
which the employee reasonably believes constitutes a violation of securities
laws or any provision of federal law relating to fraud against shareholders. The
Company also prohibits discriminatory harassment of any employee covered by the
policy against discrimination.

                No director, officer or employee may retaliate against an
individual for bringing a complaint of discrimination or for participating in an
investigation or proceeding involving a complaint of discrimination.

                No one may take any action harmful to any person for providing
to a law enforcement officer any truthful information relating to the commission
or possible commission of any federal offense.

IX.     9. HEALTH AND SAFETY

                The Company strives to provide each employee with a safe and
healthy work environment. Each employee has responsibility for maintaining a
safe and healthy workplace for all employees by following safety and health
rules and practices and reporting accidents, injuries and unsafe conditions.

                Violence and threatening behavior are not permitted. Employees
should report to work in condition to perform their duties, free from the
influence of illegal drugs or alcohol. The use of illegal drugs in the workplace
will not be tolerated.

X.      10. RECORD-KEEPING

                The Company requires honest and accurate recording and reporting
of information in order to make responsible business decisions. For example,
only the true and actual number of hours worked should be reported.

                Many employees regularly use business expense accounts, which
must be documented and recorded accurately. If you are not sure whether a
certain expense is legitimate, ask your supervisor or your controller.

                All of the Company's books, records, accounts and financial
statements must be maintained in reasonable detail, must appropriately reflect
the Company's transactions and must conform to applicable legal requirements,
generally accepted accounting principles and the Company's system of internal
controls. Further, it is prohibited under federal law and Company policy to
fraudulently influence, coerce, manipulate or mislead the Company's independent
public accountants for the purpose of rendering the Company's financial
statements materially misleading. Full, fair, accurate, timely and
understandable disclosure is

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required in all reports and documents that the Company files with, or submits
to, the SEC and in any other public communications.

                Business records and communications often become public and
directors, officers and employees should avoid exaggeration, derogatory remarks,
guesswork or inappropriate characterizations of people and companies that can be
misunderstood. This applies equally to e-mail, internal memos and formal
reports. Records should always be retained or destroyed according to the
Company's record retention policies. In accordance with those policies, in the
event of litigation or governmental investigation, please consult the Company's
General Counsel.

XI.     11. CONFIDENTIALITY

                Employees must maintain the confidentiality of the information
entrusted to them by the Company or its customers, except when disclosure is
authorized by the Chief Executive Officer, the Company's General Counsel, or
required by law. Confidential information includes all non-public information
that might be of use to competitors or harmful to the Company or its customers,
if disclosed. It also includes information that suppliers and customers have
entrusted to us and even the identities of our trading partners. The obligation
to preserve confidential information continues even after employment ends.

XII.    12. PROTECTION AND PROPER USE OF COMPANY ASSETS

                All employees should endeavor to protect the Company's assets
and ensure their efficient use. Theft, carelessness and waste have a direct
impact on the Company's profitability. Any suspected incident of fraud or theft
should be immediately reported for investigation.

                The obligation of employees to protect the Company's assets
includes the Company's proprietary information. Proprietary information includes
intellectual property such as trade secrets, patents, trademarks and copyrights,
as well as business, marketing, product development and service plans, records,
salary information and any unpublished financial data and reports. Unauthorized
use or distribution of this information would violate Company policy. It could
also be illegal and result in civil or even criminal penalties.

XIII.   13. PAYMENTS TO GOVERNMENT PERSONNEL

                The U.S. Foreign Corrupt Practices Act prohibits giving anything
of value, directly or indirectly, to officials of foreign governments or foreign
political candidates in order to obtain or retain business. It is strictly
prohibited to make illegal payments to government officials of any country. In
addition, the U.S. government has a number of laws and regulations regarding
business gratuities which may be accepted by U.S. government personnel. The
promise, offer or delivery to an official or employee of the U.S. government of
a gift, favor or other gratuity in violation of these rules would not only
violate Company policy but could also be a criminal offense. State and local
governments, as well as foreign governments, may have similar rules. The
Company's General Counsel can provide guidance to you in this area.

XIV.    14. POLITICAL CONTRIBUTIONS

                A corporation is prohibited from making a political contribution
to any candidate for federal office. In addition, virtually every state either
limits or prohibits the making of political contributions by a corporation to a
state or local candidate or political party. If any of the Company's customers
request that the Company make a political contribution, it is

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essential that prior approval is given by the General Counsel before any
contribution is made. Under no circumstances shall the Company make a political
contribution to any federal candidates.

XV.     15. WAIVERS OF THE CODE OF BUSINESS CONDUCT AND ETHICS

                Any waiver of this Code for executive officers or directors may
be made only by the Board of Directors and will be promptly disclosed as
required by law or NASDAQ rules.

XVI.    16. PERSONAL RESPONSIBILITY

                It is essential that the Company ensures prompt and consistent
action against violations of this Code. However, in some situations it is
difficult to know right from wrong. Since directors, officers and employees
cannot anticipate every situation that will arise, it is important to have
guidelines on how to approach a new question or problem. These are the steps to
keep in mind:

     Make sure you have all the facts. In order to reach the right solutions, we
must be as fully informed as possible.

     Ask yourself: What specifically am I being asked to do? Does it seem
unethical or improper? This will enable you to focus on the specific question
you are faced with and the alternatives you have. Use your judgment and common
sense; if something seems unethical or improper, it probably is.

     Clarify your responsibility and role. In most situations, there is shared
responsibility. Are your colleagues informed? It may help to get others involved
and discuss the problem.

     Discuss the problem with your supervisor. This is the basic guidance for
all situations. In many cases, your supervisor will be more knowledgeable about
the question and will appreciate being brought into the decision-making process.
Remember that it is your supervisor's responsibility to help solve problems.

     Seek help from Company resources. If you believe that it is not appropriate
to discuss an issue with your supervisor, or you do not feel comfortable
approaching your supervisor with your question, discuss it with one of the Vice
Presidents. If that also is not appropriate, call our General Counsel.

     You may report ethical violations in confidence and without fear of
retaliation. If your situation requires that your identity be kept secret, your
anonymity will be protected. The Company does not permit retaliation of any kind
against employees for good faith reports of ethical violations.

     Always ask first, act later: If you are unsure of what to do in any
situation, seek guidance before you act.

XVII.   17. REPORTING/INVESTIGATION PROCEDURES

                Any employee who reasonably believes that there has been a
material violation of this Code should report it immediately to the Company's
Chief Executive or Chief Financial Officer. If the violation is caused by
questionable accounting or auditing matters, the employee may submit an
anonymous complaint as discussed in Section 18. Upon receipt of a complaint, the
Chief Executive Officer, Chief Financial Officer, General Counsel or other
designee shall promptly investigate the matter. The matter will be treated as
confidential to the fullest extent

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possible consistent with the need to investigate. Absolute confidentiality of
the complaint, however, cannot be guaranteed because the very fact of conducting
an investigation may lead employees or other persons to reach conclusions of
their own. Anyone involved in an investigation under these procedures, whether
as witnesses, participants in the performance of the investigation or otherwise,
will be informed of their obligation to maintain confidentiality and will be
asked to sign an acknowledgment of this obligation. There shall be no
discrimination or retaliation against any employee for bringing a complaint
under these procedures or against any person for participating in the
investigation. If the investigation leads to a conclusion that a material
violation of the Code has occurred, the Company will take appropriate corrective
action, which may include removal from a position as director or officer and
dismissal as an employee of the Company.

                The Company recognizes the potentially serious impact of a false
accusation. Employees are expected as part of the ethical standards required by
this Code to act responsibly in making complaints. Making a complaint without a
good faith basis is itself an ethical violation. Any employee who makes a
complaint in bad faith will be subject to appropriate corrective action,
including dismissal.

XVIII.  18. PROCEDURES FOR SUBMITTING CONFIDENTIAL, ANONYMOUS COMPLAINTS
REGARDING ACCOUNTING AND AUDITING MATTERS

                As an alternative to the procedures described in Section 17, any
employee who reasonably believes that there has been a material violation of
this Code caused by questionable accounting or auditing matters may submit
confidential, anonymous complaints in writing to the General Counsel or the
Audit Committee Chairperson. Complaints must provide sufficient information so
that a reasonable investigation can be conducted and may be made in writing
directly to either (a) [GC], the General Counsel of the Company at the office
([Office Address]; email: [Office E-mail]), or at his personal residence ([Home
Address]; email: [Home E-mail]); or (b) James C. Sargent, the Chairman of the
Audit Committee of the Board of Directors of the Company (the "Audit Committee
Chairman") at his personal residence ([Address]; email: [AC email]).

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