<PAGE>


                  COMMON STOCK AND WARRANTS PURCHASE AGREEMENT

                                     Between

                               Sedona Corporation

                                       and

                         the Investors Signatory Hereto


         COMMON STOCK AND WARRANTS PURCHASE AGREEMENT dated as of July 5, 2001
(the "Agreement"), between the Investors signatory hereto (each an "Investor"
and together the "Investors"), and Sedona Corporation, a corporation organized
and existing under the laws of the Commonwealth of Pennsylvania (the "Company").

         WHEREAS, each party desires that, upon the terms and subject to the
conditions contained herein, the Company shall issue and sell to each Investor,
and each Investor shall purchase the number of shares of Common Stock set forth
in the signature pages hereto at a per share price equal to $0.60; and each
Investor shall receive Warrants to purchase up to a number of shares of Common
Stock equal to one-half the number of shares of Common Stock purchased hereunder
by such Investor, one-half of such Warrants exercisable at a price equal to
$1.25 per share and one-half exercisable at a price equal to $1.50 per share.

         WHEREAS, such investments will be made in reliance upon the provisions
of Section 4(2) and/or Section 4(6) of the Securities Act of 1933, as amended,
(the "Securities Act") and/or Regulation D and the other rules and regulations
promulgated under the Securities Act, and/or upon such other exemption from the
registration requirements of the Securities Act as may be available with respect
to any or all of the investments in securities to be made hereunder.

         NOW, THEREFORE, the parties hereto agree as follows:


                                   ARTICLE I

                               Certain Definitions

Section 1.1. "Closing" shall mean the closing of the purchase and sale of the
Common Stock and Warrants pursuant to Section 2.1.

Section 1.2. "Common Stock" shall mean the Company's common stock, $.001 par
value per share, issued pursuant to the terms and conditions hereof.

Section 1.3. "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.

Section 1.4. "Person" shall mean an individual, a corporation, a partnership, a
limited liability company, an association, a trust or other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.

<PAGE>

Section 1.5. "Principal Market" shall mean the American Stock Exchange, the New
York Stock Exchange, the NASDAQ National Market, the NASDAQ SmallCap Market or
the OTC Bulletin Board, whichever is at the time the principal trading exchange
or market for the Common Stock, based upon share volume.

Section 1.6. "Purchase Price" shall equal the total number of shares of Common
Stock set forth in the signature pages hereto multiplied by $0.60.

Section 1.7. "Registrable Securities" shall mean the Common Stock and the
Warrant Shares until (i) the Registration Statement has been declared effective
by the SEC, and all Common Stock and Warrant Shares have been disposed of
pursuant to the Registration Statement, (ii) all Common Stock and Warrant Shares
have been sold under circumstances under which all of the applicable conditions
of Rule 144 (or any similar provision then in force) under the Securities Act
("Rule 144") are met, (iii) all Common Stock and Warrant Shares have been
otherwise transferred to holders who may trade such shares without restriction
under the Securities Act, and the Company has delivered a new certificate or
other evidence of ownership for such securities not bearing a restrictive legend
or (iv) such time as, in the opinion of counsel to the Company, all Common Stock
and Warrant Shares may be sold without any time, volume or manner limitations
pursuant to Rule 144(k) (or any similar provision then in effect) under the
Securities Act.

Section 1.8. "Registration Rights Agreement" shall mean the agreement regarding
the filing of the Registration Statement for the resale of the Registrable
Securities, entered into between the Company and the Investor as of the Closing
Date in the form annexed hereto as Exhibit A.

Section 1.9. "Registration Statement" shall mean a registration statement on
Form S-3 (if use of such form is then available to the Company pursuant to the
rules of the SEC and, if not, on such other form promulgated by the SEC for
which the Company then qualifies and which counsel for the Company shall deem
appropriate, and which form shall be available for the resale by the Investors
of the Registrable Securities to be registered thereunder in accordance with the
provisions of this Agreement, the Registration Rights Agreement and in
accordance with the intended method of distribution of such securities), for the
registration of the resale by the Investor of the Registrable Securities under
the Securities Act.

Section 1.10. "SEC" shall mean the Securities and Exchange Commission.

Section 1.11. "SEC Documents" shall mean the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2000 and each report, proxy
statement or registration statement filed by the Company with the SEC pursuant
to the Exchange Act or the Securities Act since the filing of such Annual Report
through the date hereof.

Section 1.12. "Trading Day" shall mean any day during which the Principal Market
shall be open for business.

Section 1.13. "Transfer" shall mean any sale, assignment, encumbrance,
hypothecation, pledge, conveyance in trust, gift, transfer by request, devise or
descent, or other transfer or disposition of any kind.

Section 1.14. "Warrants" shall mean the Warrants substantially in the form of
Exhibit B and Exhibit C to be issued to the Investors hereunder.

                                       2

<PAGE>


Section 1.15. "Warrant Shares" shall mean all shares of Common Stock or other
securities issued or issuable pursuant to exercise of the Warrants.

                                   ARTICLE II

                 Purchase and Sale of Common Stock and Warrants

Section 2.1. Investment.

         (a) Upon the terms and subject to the conditions set forth herein, the
Company agrees to sell, and the Investors agree to purchase the Common Stock
together with the Warrants at the Purchase Price on the Closing Date (as
hereinafter defined).

         (b) The Closing of the sale and purchase of the Common Stock together
with the Warrants under this Agreement shall take place at the offices of Piper
Marbury Rudnick & Wolfe LLP, 1200 Nineteenth Street, NW, Washington, DC 20036,
at 10:00 a.m. on June __, 2001, or at such other time, date and place as are
mutually agreeable to the Company and the Investors. At the Closing, the Company
will deliver to the Investors certificates for the Common Stock, registered in
the name of the appropriate Investor, and Warrants against payment to the
Company of each Investor's proportionate amount of the Purchase Price as set
forth on the signature pages hereto, by wire transfer, check or other method
acceptable to the Company. The date of the Closing is hereinafter referred to as
the "Closing Date."

         (c) The Closing is subject to the satisfaction or waiver by the party
to be benefited thereby of the following conditions:

            (i)     acceptance and execution by the Company and by the Investors
                    of this Agreement and the Registration Rights Agreement;

            (ii)    all representations and warranties of the Investors
                    contained herein shall remain true and correct as of the
                    Closing Date (as a condition to the Company's obligations);

            (iii)   the Company shall have obtained all permits and
                    qualifications required by any state for the offer and sale
                    of the Common Stock and Warrants, or shall have the
                    availability of exemptions therefrom;

            (iv)    the sale and issuance of the Common Stock and the Warrants
                    hereunder, and the proposed issuance by the Company to the
                    Investors of the Common Stock underlying the Warrants upon
                    exercise thereof shall be legally permitted by all laws and
                    regulations to which the Investors and the Company are
                    subject and there shall be no ruling, judgment or writ of
                    any court prohibiting the transactions contemplated by this
                    Agreement;



                                       3
<PAGE>


                                  ARTICLE III

                 Representations and Warranties of the Investors

         Each Investor, severally and not jointly, represents and warrants to
the Company that:

Section 3.1. Organization. If not a natural person, the Investor is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization.

Section 3.2. Intent. The Investor is entering into this Agreement for its own
account and not with a view to or for sale in connection with any distribution
of the Common Stock. The Investor has no present arrangement (whether or not
legally binding) at any time to sell the Common Stock, Warrants or Warrant
Shares to or through any Person or entity; provided, however, that by making the
representations herein, the Investor does not agree to hold such securities for
any minimum or other specific term (other than as specified in Section 4.3
herein) and reserves the right to dispose of the Common Stock and Warrant Shares
at any time in accordance with federal and state securities laws applicable to
such disposition and such Section 4.3.

Section 3.3. Sophisticated Investor. The Investor is a sophisticated investor
(as described in Rule 506(b)(2)(ii) of Regulation D) and an accredited investor
(as defined in Rule 501 of Regulation D), and the Investor has such experience
in business and financial matters that it has the capacity to protect its own
interests in connection with this transaction and is capable of evaluating the
merits and risks of an investment in the Common Stock, Warrants and Warrant
Shares. The Investor acknowledges that an investment in the Common Stock,
Warrants and Warrant Shares is speculative and involves a high degree of risk.

Section 3.4. Authority. This Agreement and each agreement attached as an Exhibit
hereto which is required to be executed by the Investor has been duly authorized
and validly executed and delivered by the Investor and is a valid and binding
agreement of the Investor enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency, or similar laws relating to, or
affecting generally the enforcement of, creditors' rights and remedies or by
other equitable principles of general application.

Section 3.5. Not an Affiliate. The Investor is not an officer, director or
"affiliate" (as that term is defined in Rule 405 of the Securities Act) of the
Company.

Section 3.6. Disclosure; Access to Information. The Investor has received all
documents, records, books and other publicly available information pertaining to
Investor's investment in the Company that have been requested by the Investor.
The Company is subject to the periodic reporting requirements of the Exchange
Act, and the Investor has reviewed copies of all SEC Documents deemed relevant
by the Investor.

Section 3.7. Manner of Sale. At no time was the Investor presented with or
solicited by or through any leaflet, public promotional meeting, television
advertisement or any other form of general solicitation or advertising.

                                       4
<PAGE>




                                   ARTICLE IV

                           Covenants of the Investors

         Each Investor, severally and not jointly, covenants with the Company
that:

Section 4.1. Compliance with Law. The Investor's trading activities with respect
to shares of the Company's Common Stock will be in compliance with all
applicable state and federal securities laws, rules and regulations and rules
and regulations of the Principal Market on which the Company's Common Stock is
listed.

Section 4.2. Limitation on Short Sales. The Investor agrees that it will make no
short sales (as defined in any applicable SEC or NASD rules) of the Company's
Common Stock while the Investor holds any of the Common Stock issued hereunder.

Section 4.3. Restrictions on Transfer of Common Stock. Notwithstanding the
filing and effectiveness of the Registration Statement, the Investor agrees to
Transfer the Common Stock (not including the Warrant Shares) only as follows:

         (a) The Investor may Transfer up to twenty-five percent (25%) of the
aggregate number of shares of Common Stock upon the earlier of (i) 180 days
after the Closing Date and (ii) the close of the fifth consecutive Trading Day
on which the closing sale price of the Common Stock on the Principal Market is
at least $2.00 per share.

         (b) The Investor may Transfer the remaining seventy-five percent (75%)
of the aggregate number of shares of Common Stock upon the earlier of (i) one
(1) year after the Closing Date and (ii) the close of the fifth consecutive
Trading Day on which the closing sale price of the Common Stock on the Principal
Market is at least $3.00 per share.

Section 4.4. Restrictions on Transfer of Warrant Shares. The Investor agrees not
to Transfer the Warrant Shares until the later of (i) the effectiveness of the
Registration Statement and (ii) 180 days after the Closing Date.

                                   ARTICLE V

                            Covenants of the Company

Section 5.1. Registration Rights. The Company shall cause the Registration
Rights Agreement to remain in full force and effect and the Company shall comply
in all material respects with the terms thereof.

Section 5.2. Reservation of Common Stock. As of the date hereof, the Company has
reserved and the Company shall continue to reserve and keep available at all
times, free of preemptive rights, shares of Common Stock for the purpose of
enabling the Company to issue the Warrant Shares pursuant to the exercise of the
Warrants. The number of shares so reserved from time to time, as theretofore
increased or reduced as hereinafter provided, may be reduced by the number of
shares actually delivered pursuant to any exercise of the Warrants and the
number of shares so reserved shall be increased or decreased to reflect
potential increases or decreases in the Common Stock that the Company may
thereafter be obligated to issue by reason of adjustments to the Warrants.

                                       5

<PAGE>

                                   ARTICLE VI

         Due Diligence Review; Non-Disclosure of Non-Public Information.

Section 6.1. Due Diligence Review. Subject to Section 6.2, the Company shall
make available for inspection and review by the Investors, advisors to and
representatives of the Investors (who may or may not be affiliated with the
Investors and who are reasonably acceptable to the Company), and any underwriter
participating in any disposition of the Registrable Securities on behalf of the
Investors pursuant to the Registration Statement, any such registration
statement or amendment or supplement thereto or any blue sky, Nasdaq or other
filing, all SEC Documents and other filings with the SEC, and all other publicly
available corporate documents and properties of the Company as may be reasonably
necessary for the purpose of such review, and cause the Company's officers,
directors and employees to supply all such publicly available information
reasonably requested by the Investors or any such representative, advisor or
underwriter in connection with such Registration Statement (including, without
limitation, in response to all questions and other inquiries reasonably made or
submitted by any of them), prior to and from time to time after the filing and
effectiveness of the Registration Statement for the sole purpose of enabling the
Investors and such representatives, advisors and underwriters and their
respective accountants and attorneys to conduct initial and ongoing due
diligence with respect to the Company and the accuracy of the Registration
Statement.

Section 6.2. Non-Disclosure of Non-Public Information. Nothing herein shall
require the Company to disclose material non-public information to the
Investors, advisors to or representatives of the Investors or any underwriter.
Other than disclosure of any comment letters received from the SEC staff with
respect to the Registration Statement, the Company may, as a condition to
disclosing any non-public information hereunder, require the Investors' advisors
and representatives to enter into a confidentiality agreement in form and
content reasonably satisfactory to the Company and the Investors.

                                  ARTICLE VII

                                     Legends

Section 7.1. Legends. Unless otherwise provided below, each certificate
representing the Common Stock, Warrants and Warrants Shares will bear the
following legend or equivalent (the "Legend"):

THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR STATE
SECURITIES LAWS AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD OR
TRANSFERRED UNTIL (i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND SUCH
APPLICABLE STATE SECURITIES SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR
(ii) IN THE OPINION OF COUNSEL, ACCEPTABLE TO THE COMPANY, REGISTRATION UNDER
THE SECURITIES ACT OR SUCH APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED IN
CONNECTION WITH SUCH PROPOSED OFFER, SALE OR TRANSFER.

                                       6

<PAGE>

                                  ARTICLE VIII

                                  Choice of Law

Section 8.1. Governing Law; Consent to Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the Commonwealth of
Pennsylvania without regard to the choice of law or conflicts of law provisions
thereof. Each of the parties hereto hereby irrevocably and unconditionally
consents to submit to the non-exclusive jurisdiction of the courts of the
Commonwealth of Pennsylvania and of the United States of America, located in the
Commonwealth of Pennsylvania, for any action, proceeding or investigation in any
court or before any governmental authority ("Litigation") arising out of or
relating to this Agreement and the transactions contemplated hereby, and further
agrees that service of any process, summons, notice or document by U.S.
registered mail to its respective address set forth in this Agreement shall be
effective service of process for any Litigation brought against it in any such
court. Each of the parties hereto hereby irrevocably and unconditionally waives
any objection to the laying of venue of any Litigation arising out of this
Agreement or the transaction contemplated hereby in the courts of the
Commonwealth of Pennsylvania or the United States of America, located in the
Commonwealth of Pennsylvania, and hereby further irrevocably and unconditionally
waives and agrees not to plead or claim in any such court that any such
Litigation brought in any such court has been brought in an inconvenient forum.


                                   ARTICLE IX

                                   Assignment

Section 9.1. Assignment. Neither this Agreement nor any rights of the Investors
or the Company hereunder may be assigned by either party to any other Person.
Notwithstanding the foregoing, the provisions of this Agreement shall inure to
the benefit of, and be enforceable by, any permitted transferee of any of the
Common Stock or Warrants purchased or acquired by any Investor hereunder with
respect to the Common Stock or Warrants held by such Person. The Investor shall
not assign its rights under this Agreement to any Person identified to the
Investor by the Company as a competitor of the Company.

                                   ARTICLE X

                                     Notices

Section 10.1 Notices. All notices, demands, requests, consents, approvals, and
other communications required or permitted hereunder shall be in writing and,
unless otherwise specified herein, shall be (i) hand delivered, (ii) deposited
in the mail, registered or certified, return receipt requested, postage prepaid,
(iii) delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by facsimile, addressed as set forth below or to such other address
as such party shall have specified most recently by written notice. Any notice
or other communication required or permitted to be given hereunder shall be
deemed effective (a) upon hand delivery or delivery by facsimile, with accurate

                                       7

<PAGE>

confirmation generated by the transmitting facsimile machine, at the address or
number designated below (if delivered on a business day during normal business
hours where such notice is to be received), or the first business day following
such delivery (if delivered other than on a business day during normal business
hours where such notice is to be received) or (b) on the first business day
following the date of sending by reputable courier service, fully prepaid,
addressed to such address, or (c) upon actual receipt of such mailing, if
mailed. The addresses for such communications shall be:

If to the Company:                   SEDONA Corporation
                                     455 South Gulph Road
                                     Suite 300
                                     King of Prussia, PA  19406
                                     Attention:  William K. Williams
                                     Facsimile:  484-679-2201

with a copy to (shall not            Piper Marbury Rudnick & Wolfe LLP
constitute notice):                  1200 Nineteenth Street, NW
                                     Washington, DC 20036
                                     Attention: Robert B. Murphy, Esq.
                                     Telephone: 202-861-3900
                                     Facsimile: 202-223-2085

if to the Investors:                 As set forth on the signature pages hereto.


Either party hereto may from time to time change its address or facsimile number
for notices under this Section 10.1 by giving written notice of such changed
address or facsimile number to the other party hereto as provided in this
Section 10.1.

                                   ARTICLE XI

                                  Miscellaneous

Section 11.1. Counterparts/Facsimile/Amendments. This Agreement may be executed
in multiple counterparts, each of which may be executed by less than all of the
parties and shall be deemed to be an original instrument which shall be
enforceable against the parties actually executing such counterparts and all of
which together shall constitute one and the same instrument. Except as otherwise
stated herein, in lieu of the original documents, a facsimile transmission or
copy of the original documents shall be as effective and enforceable as the
original. This Agreement may be amended only by a writing executed by all
parties.

Section 11.2. Entire Agreement. This Agreement, the agreements attached as
Exhibits hereto, which include the Warrants and the Registration Rights
Agreement, set forth the entire agreement and understanding of the parties
relating to the subject matter hereof and supersedes all prior and
contemporaneous agreements, negotiations and understandings between the parties,
both oral and written relating to the subject matter hereof. The terms and
conditions of all Exhibits to this Agreement are incorporated herein by this
reference and shall constitute part of this Agreement as is fully set forth
herein.

                                       8

<PAGE>


Section 11.3. Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that such severability shall be ineffective if
it materially changes the economic benefit of this Agreement to any party.

Section 11.4. Headings. The headings used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.

Section 11.5. Number and Gender. There may be one or more Investors parties to
this Agreement, which Investors may be natural persons or entities. All
references to plural Investors shall apply equally to a single Investor if there
is only one Investor, and all references to an Investor as "it" shall apply
equally to a natural person.

Section 11.6. Replacement of Certificates. Upon (i) receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of a certificate representing the Common Stock, Warrants or Warrant
Shares and (ii) in the case of any such loss, theft or destruction of such
certificate, upon delivery of an indemnity agreement or security reasonably
satisfactory in form to the Company (which shall not include the posting of any
bond) or (iii) in the case of any such mutilation, on surrender and cancellation
of such certificate, the Company at its expense will execute and deliver, in
lieu thereof, a new certificate of like tenor.

Section 11.7. Fees and Expenses. Each of the Company and the Investors agrees to
pay its own expenses incident to the performance of its obligations hereunder.

Section 11.8. Brokerage. Each of the parties hereto represents that it has had
no dealings in connection with this transaction with any finder or broker who
will demand payment of any fee or commission from the other party. The Company
on the one hand, and the Investors, on the other hand, agree to indemnify the
other against and hold the other harmless from any and all liabilities to any
Person claiming brokerage commissions or finder's fees on account of services
purported to have been rendered on behalf of the indemnifying party in
connection with this Agreement or the transactions contemplated hereby.


                                       9

<PAGE>



         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by the undersigned, thereunto duly authorized, as of the date first set
forth above.

<TABLE>
<CAPTION>

                                                     SEDONA CORPORATION



<S>                                                 <C>
                                                     By:    __________________________________
                                                            Marco A. Emrich, President and
                                                              Chief Executive Officer


  Address:                                           By:__________________________________



  Amount: $__________
  Number of shares of Common Stock: ____________



  Address:                                           By:__________________________________



  Amount: $__________
  Number of shares of Common Stock: ____________



  Address:                                           By:__________________________________



  Amount: $__________
  Number of shares of Common Stock: ____________


  Address:                                           By:__________________________________



  Amount: $__________
  Number of shares of Common Stock: ____________

</TABLE>


                                       10
<PAGE>



                                                                      Exhibit A

                          Registration Rights Agreement
























                                       11

<PAGE>



                                                                       Exhibit B

                                     Warrant
















                                       12


<PAGE>



                                                                       Exhibit C

                                     Warrant
















                                       13