REGISTRATION RIGHTS AGREEMENT

                  THIS REGISTRATION  RIGHTS AGREEMENT,  dated as of February 25,
2000, between the investor or investors signatory hereto (each an "Investor" and
together the "Investors"),  and Sedona Corporation,  a Pennsylvania  corporation
(the "Company").

                  WHEREAS,  simultaneously  with the  execution  and delivery of
this  Agreement,  the Investor is  purchasing  from the  Company,  pursuant to a
Convertible  Preferred  Stock and  Warrants  Purchase  Agreement  dated the date
hereof  (the  "Purchase  Agreement"),  $3,000,000  Stated  Value of  Convertible
Preferred Stock and 100,000  Warrants to purchase shares of the Company's Common
Stock (terms not defined herein shall have the meanings  ascribed to them in the
Purchase Agreement); and

                  WHEREAS,  the Company  desires to grant to the  Investors  the
registration  rights set forth herein with respect to the  Conversion  Shares of
Common  Stock  issuable  upon  conversion  of the  Convertible  Preferred  Stock
purchased pursuant to the Purchase Agreement and shares of Common Stock issuable
upon  exercise  of the  Warrants  (hereinafter  referred  to as the  "Stock"  or
"Securities" of the Company).

                  NOW, THEREFORE, the parties hereto mutually agree as follows:

                  Section 1.  Registrable  Securities.  As used  herein the term
"Registrable Security" means the Securities until (i) the Registration Statement
has been declared  effective by the  Commission,  and all  Securities  have been
disposed of pursuant to the  Registration  Statement,  (ii) all Securities  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 Securities  have been otherwise  transferred to
holders who may trade such Securities  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 Securities 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.  The term  "Registrable
Securities" means any and/or all of the securities  falling within the foregoing
definition   of  a   "Registrable   Security."  In  the  event  of  any  merger,
reorganization,  consolidation,  recapitalization  or other  change in corporate
structure affecting the Common Stock, such adjustment shall be deemed to be made
in the  definition  of  "Registrable  Security"  as is  appropriate  in order to
prevent  any  dilution or  enlargement  of the rights  granted  pursuant to this
Agreement.

                  Section   2.   Restrictions   on   Transfer.   Each   Investor
acknowledges and understands that prior to the registration of the Securities as
provided herein,  the Securities are "restricted  securities" as defined in Rule
144  promulgated  under the Securities  Act. Each Investor  understands  that no
disposition or transfer of the Securities may be made by Investor in the absence
of (i) an opinion of counsel to the Investor,  in form and substance  reasonably
satisfactory to the Company, that such transfer may be made without registration
under the Securities Act or (ii) such registration.

                           With a view to making available to the  Investors the
benefits  of  Rule  144 under  the  Securities  Act or any other similar rule or
regulation of the  Commission that may at any time permit the  Investors to sell
securities  of the Company to the public  without registration ("Rule 144"), the
Company agrees to:

                           (a) comply with the provisions of paragraph (c)(1) of
Rule 144; and

                           (b) file with the  Commission  in a timely manner all
reports and other documents required to be filed with  the  Commission  pursuant
to Section 13 or 15(d) under the  Exchange Act  by companies  subject  to either
of such  sections,  irrespective of  whether the Company is then subject to such
reporting requirements.

                  Section 3. Registration Rights With Respect to the Securities.

                           (a)      The  Company agrees that it will prepare and
file with the Securities and Exchange  Commission ("Commission"),  no later than
April 10, 2000  a  registration  statement  (on Form S-3,  or  other appropriate
registration  statement  form)  under  the  Securities  Act  (the  "Registration
Statement"),  at the sole expense of the Company (except as provided in  Section
3(c) hereof), in respect of the Investors, so as to permit a public offering and
resale of the Securities  under the Act by the Investors as selling stockholders
and not as underwriters.

                           The Company shall use its best  efforts to cause such
Registration Statement to become effective within one hundred  twenty (120) days
from the filing  date,  or, if earlier, within five (5) days of SEC clearance to
request  acceleration of effectiveness.  The number of shares  designated in the
Registration Statement to be registered shall include all the Warrant Shares, at
least two hundred percent (200%) of the shares  issuable upon the  conversion of
Series G  Convertible  Preferred  Stock  based  upon  the   Conversion  Price in
effect on  the date prior  to the filing  date issuable  upon conversion  of the
Convertible  Preferred  Stock, and shall include  appropriate language regarding
reliance upon Rule 416 to the extent permitted by the Commission.   The  Company
will notify the  Investors and its  transfer agent of  the  effectiveness of the
Registration  Statement within one Trading Day of such event.  In the event that
the number of shares so  registered  shall prove to be  insufficient to register
the  resale  of all of the  Securities,   then the Company shall be obligated to
to  file,  within thirty  (30)  days of  notice  from  any  Investor,  a further
Registration Statement registering such remaining shares and shall use  diligent
best  efforts   to  prosecute   such   additional   Registration   Statement  to
effectiveness within ninety (90) days of the date of such notice.

                           (b)  The  Company  will  maintain  the   Registration
Statement or post-effective amendment filed under this Section 3 effective under
the Securities Act until the earlier of (i) the date that none of the Securities
covered by such Registration Statement are or may become issued and outstanding,
(ii)  the date  that  all  of  the  Securities  have  been sold pursuant to such
Registration  Statement,   (iii)  the date the Investors receive  an  opinion of
counsel to the Company,   which counsel shall be  reasonably  acceptable  to the
Investors,  that the Securities may  be  sold  under  the provisions of Rule 144
without  limitation  as  to volume,  (iv)  all  Securities  have been  otherwise
transferred  to  persons  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  restrictrive
legend,  (v)  all  Securities  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 in the opinion of counsel to the Company,  which
counsel  shall be  reasonably  acceptable  to the Investor  (the  "Effectiveness
Period"), or (vi) four (4) years from the Effective Date.

                           (c)      All fees,  disbursements  and  out-of-pocket
expenses  and costs  incurred by the Company in connection  with the preparation
and  filing  of  the  Registration  Statement  under  subparagraph  3(a)  and in
complying  with  applicable  securities  and  Blue  Sky laws (including, without
limitation,  all attorneys'  fees of the Company) shall be borne by the Company.
The Investors shall bear the cost of  underwriting  and/or  brokerage discounts,
fees and commissions, if any, applicable to the Securities being  registered and
the fees and expenses of their counsel.  The Investors and their  counsel  shall
have a reasonable  period,  not to exceed five  (5)  Trading Days, to review the
proposed  Registration  Statement or any amendment  thereto, including a copy of
the Company's proposed response to any staff comments, prior  to filing with the
Commission,   and  the Company  shall provide  each Investor  with copies of any
comment  letters  received  from  the  Commission  with  respect  thereto within
two  (2)  Trading  Days  of receipt  thereof  and  shall  communicate  any  oral
advice from the Commission as to whether or not the Registration  Statement will
be reviewed,  and if so, how  extensively.  The Company shall qualify any of the
securities  for sale in such states as any Investor  reasonably  designates  and
shall  furnish  indemnification  in the  manner  provided  in  Section 6 hereof.
However,  the  Company  shall not be required to qualify in any state which will
require  an escrow or other  restriction  relating  to the  Company  and/or  the
sellers,  or which will  require  the  Company to qualify to do business in such
state or require the Company to file  therein any general  consent to service of
process. The Company at its expense will supply the Investors with copies of the
applicable  Registration Statement and the prospectus included therein and other
related  documents  in such  quantities  as may be  reasonably  requested by the
Investors.

                           (d)      The  Company  shall  not be required by this
Section 3 to include an  Investor's  Securities  in any  Registration  Statement
which is to be filed if, in the opinion of counsel for both the Investor and the
Company  (or,  should  they  not  agree,  in  the  opinion  of  another  counsel
experienced in securities law matters acceptable to counsel for the Investor and
the  Company)   the  proposed  offering  or  other  transfer  as  to  which such
registration  is  requested  is  exempt   from   applicable  federal  and  state
securities  laws and would result in all  purchasers  or  transferees  obtaining
securities which are not "restricted  securities",  as defined in Rule 144 under
the Securities Act.

                           (e)      In  the  event  that  (i)  the  Registration
Statement  to be filed by the  Company  pursuant  to Section 3 (a)  above is not
filed with the Commission by April 10, 2000, (ii) such Registration Statement is
not declared effective by the Commission within 120 (5) days of clearance by the
Commission  to request effectiveness,  (iii) such Registration  Statement is not
maintained as effective  by the Company for the period set forth in Section 3(b)
above  or (iv) the additional Registration Statement referred to in Section 3(a)
is not filed within thirty (30) days or declared  effective  within  ninety (90)
days as set  forth therein (each a "Registration Default") then the Company will
pay Investor (pro  rated  on  a  daily  basis),  as liquidated  damages for such
failure and not as a penalty two percent (2%) of the  aggregate market  value of
shares  of  Common Stock  purchased  from  the Company (including the Conversion
Shares which would be issuable  upon  conversion  of the  Convertible  Preferred
Stock  on  any  date  of  determination,  and  whether  or  not the  Convertible
Preferred Shares are then Convertible  pursuant to their  terms) and held by the
Investor   for each  month thereafter until such Registration Statement has been
filed,  and in the event of  late  effectiveness  (in case of clause (ii) above)
or lapsed  effectiveness (in  the case of clause (iii) above),  two percent (2%)
of  the  aggregate  market value of shares of Common  Stock  purchased  from the
Company and held by the Investor  (including  the Conversion  Shares which would
be  issuable  upon  conversion of the Convertible Preferred Stock on any date of
determination,  and  whether  or  not  the Convertible  Preferred Stock are then
convertible  pursuant to their terms) for  each   month  thereafter  (regardless
of  whether  one  or  more  such  Registration Defaults  are then in  existence)
until such  Registration  Statement  has been declared effective.   Such payment
of  the liquidated  damages  shall be made to the Investors in cash, within five
(5)  calendar  days  of  demand,  provided,  however, that  the  payment of such
liquidated  damages  shall  not  relieve  the  Company from  its  obligations to
register  the Securities  pursuant  to  this  Section.   The market value of the
Common Stock for this purpose  shall be the closing  price (or last trade, if so
reported)  on the  Principal  Market  for  each  day  during  such  Registration
Default. Notwithstanding anything to the contrary contained herein, a failure to
maintain the  effectiveness of an filed  Registration  Statement or the  ability
of an Investor to use  an otherwise effective  Registration  Statement to effect
resales of  Securities  during the period after 45 days and within 90  days from
the end of the Company's fiscal  year resulting  solely  from the need to update
the Company's financial  statements contained or  incorporated  by  reference in
such Registration  Statement  shall not constitute a  Registration  Default  and
shall not trigger the accrual of liquidated damages hereunder.

                           If  the  Company  does  not  remit the payment to the
Investors  as set forth above,   the Company will pay  the Investors  reasonable
costs of collection,  including  attorneys'  fees, in addition to the liquidated
damages.  The registration of the Securities pursuant  to this  provision  shall
not  affect  or limit the  Investors'  other  rights or remedies as set forth in
this Agreement.

                           (f) No provision  contained herein shall preclude the
Company  from  selling securities pursuant to any  Registration  Statement  in
which it is  required  to  include  Securities pursuant to this Section 3.

                           (g) If at any  time or from  time to time  after  the
effective date of any Registration Statement, the Company notifies the Investors
in writing of the existence of a Potential Material Event (as defined in Section
3(h) below), the Investors shall not offer or sell any  Securities or engage  in
any other transaction  involving or relating to Securities, from the time of the
giving of notice with respect to a Potential  Material Event until the Investors
receive  written  notice from the Company that  such  Potential  Material  Event
either has been  disclosed  to  the public or no longer  constitutes a Potential
Material  Event;  provided,  however,  that  the  Company may not so suspend the
right to such  holders  of  Securities  for  more  than  twenty (20) days in the
aggregate  during any twelve month  period,  during the period the  Registration
Statement  is  required  to be in effect,  and if such period is exceeded,  such
event  shall  be a Registration  Default.  If a Potential  Material  Event shall
occur  prior to the  date  a  Registration  Statement  is  required to be filed,
then the Company's   obligation  to  file such  Registration Statement  shall be
delayed  without  penalty for not more than twenty (20) days, and such  delay or
delays  shall not  constitute  a  Registration  Default.  The  Company  must, if
lawful,  give the Investors  notice in writing at least two (2) Trading Days
prior to the first day of the blackout period.

                           (h) "Potential  Material  Event"  means  any  of  the
following:  (i) the possession by the Company of material  information  not ripe
for disclosure in a  registration  statement,  if determined  in good  faith  by
the  Chief  Executive  Officer  or  the  Board  of Directors of the Company;  or
(ii) any  material  engagement  or activity by the Company  which would,  in the
good faith  determination  of  the  Chief  Executive  Officer  or  the  Board of
Directors   of  the  Company,   be  adversely  affected   by   disclosure  in  a
registration  statement at such time, which  determination shall  be accompanied
by a good faith  determination by the Chief  Executive  Officer or the  Board of
Directors of the Company that  the applicable  Registration  Statement  would be
materially misleading absent the inclusion of such information.

                  Section  4.  Cooperation  with  Company.  The  Investors  will
cooperate  with the Company in all respects in connection  with this  Agreement,
including timely supplying all information  reasonably  requested by the Company
(which shall include all information regarding the Investors and proposed manner
of  sale  of  the  Registrable  Securities  required  to  be  disclosed  in  any
Registration  Statement)  and executing  and returning all documents  reasonably
requested  in  connection  with the  registration  and  sale of the  Registrable
Securities  and  entering  into  and  performing  their  obligations  under  any
underwriting  agreement,  if the offering is an underwritten  offering, in usual
and  customary  form,  with the managing  underwriter  or  underwriters  of such
underwritten offering.  Nothing in this Agreement shall obligate any Investor to
consent  to be  named  as an  underwriter  in any  Registration  Statement.  The
obligation  of the  Company to  register  the  Registrable  Securities  shall be
absolute and  unconditional  as to those  Securities  which the Commission  will
permit to be registered without naming the Investors as underwriters.  Any delay
or delays caused by the Investors by failure to cooperate as required  hereunder
shall not constitute a Registration Default.

                  Section  5.  Registration  Procedures.  If  and  whenever  the
Company is required by any of the  provisions  of this  Agreement  to effect the
registration  of any of the  Registrable  Securities  under the Act, the Company
shall (except as otherwise  provided in this  Agreement),  as  expeditiously  as
possible,  subject to the Investors'  assistance  and  cooperation as reasonably
required with respect to each Registration Statement:

                           (a)(i)  prepare  and  file with the  Commission  such
amendments and  supplements to  the  Registration  Statement  and the prospectus
used in connection therewith as  may  be  necessary  to keep  such  Registration
Statement effective and to comply with the provisions of the Act with respect to
the sale or other disposition of all securities  covered  by  such  registration
statement  whenever the Investors shall desire  to  sell or otherwise dispose of
the  same (including   prospectus  supplements  with  respect  to  the sales  of
securities  from  time  to  time  in  connection  with a  registration statement
pursuant  to  Rule  415  promulgated  under  the Act)  and  (ii) take all lawful
action such that each of  (A)  the  Registration  Statement  and  any  amendment
thereto does not, when it becomes  effective,  contain an untrue  statement of a
material fact or omit to state a material fact required to be stated  therein or
necessary to make the statements  therein,  in light of the circumstances  under
which they were made, not misleading and (B) the prospectus  forming part of the
Registration Statement, and any amendment or supplement thereto, does not at any
time during the  Registration  Period include an untrue  statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements  therein,  in light of the circumstances under which they
were made, not misleading;

                           (b) (i) prior to the filing  with the  Commission  of
any  Registration Statement (including any amendments   thereto)  and (including
the  distribution  or  delivery  of  any  prospectus any  supplements  thereto),
provide  draft  copies  thereof  to  the Investors  as required by Section  3(c)
and reflect in such  documents  all such comments as  the  Investors (and  their
counsel)  reasonably may propose respecting the Selling Shareholders and Plan of
Distribution  sections (or equivalents) and  (ii)  furnish to each Investor such
numbers  of copies  of  a  prospectus including a preliminary  prospectus or any
amendment or  supplement  to  any  prospectus,   as  applicable,  in  conformity
with the  requirements  of the Act,  and such other documents,  as such Investor
may  reasonably  request  in  order  to  facilitate  the  public  sale  or other
disposition of the securities owned by such Investor;

                           (c)      register   and   qualify   the   Registrable
Securities covered by the Registration  Statement under such other securities or
blue sky laws of such  jurisdictions  as the Investors shall  reasonably request
subject to the limitations set forth in Section 3(c) above),  and do any and all
other  acts and  things  which may be  necessary  or advisable  to  enable  each
Investor  to   consummate   the   public  sale  or  other  disposition  in  such
jurisdiction of the securities owned by such Investor;

                           (d) list such Registrable Securities on the Principal
Market, if the listing of such  Registrable Securities  is  then permitted under
the rules of such Principal Market;

                           (e)  notify   each   Investor  at  any  time  when  a
prospectus relating thereto covered by the Registration  Statement  is  required
to be  delivered  under  the Act,  of the happening  of any  event  of  which it
has knowledge  as a result of  which the prospectus included in the Registration
Statement,  as  then  in  effect, includes an  untrue  statement  of a  material
fact  or  omits to  state  a  material  fact  required  to be stated  therein or
necessary to make the  statements  therein  not misleading  in  the light of the
circumstances  then  existing,   and  the  Company  shall  prepare  and  file  a
curative  amendment  under  Section 5(a) as quickly as commercially possible;

                           (f) as promptly as  practicable  after becoming aware
of such event, notify each Investor who holds  Registrable Securities being sold
(or, in the event of an  underwritten offering,  the managing  underwriters)  of
the issuance by the Commission of any stop  order  or  other  suspension  of the
effectiveness  of  the  Registration Statement at the earliest possible time and
take  all  lawful action  to effect the withdrawal, recession or removal of such
stop order or other suspension;

                           (g)      cooperate  with  the Investors to facilitate
the  timely   preparation  and  delivery  of certificates  for  the  Registrable
Securities  to be  offered  pursuant  to the Registration  Statement  and enable
such  certificates  for  the  Registrable Securities to be in such denominations
or amounts,  as the case may be,  as the  Investors  reasonably  may request and
registered in such names as the Investors may request;   and,  within  three (3)
Trading   Days   after  a  Registration  Statement  which  includes  Registrable
Securities  is  declared effective  by the Commission, deliver  and cause  legal
counsel  selected  by  the  Company  to  deliver  to  the transfer agent for the
Registrable  Securities   (with  copies  to  the  Investors)   an    appropriate
instruction  and,  to the  extent  necessary,  an  opinion  of such counsel;

                           (h) take all such  other  lawful  actions  reasonably
necessary to expedite and facilitate the disposition  by  the Investors of their
Registrable Securities in accordance with the intended methods therefor provided
in  the  prospectus  which  are  customary  for  issuers  to  perform  under the
circumstances;

                           (i)      in  the event of an  underwritten  offering,
promptly  include or incorporate in a prospectus  supplement  or  post-effective
amendment  to  the  Registration  Statement  such  information  as  the managers
reasonably  agree  should  be included therein and to which the Company does not
reasonably  object and make all required  filings of such prospectus  supplement
or  post-effective  amendment as soon as practicable after it is notified of the
matters to be  included  or  incorporated in such Prospectus supplement or post-
effective amendment; and

                           (j) maintain a transfer  agent and  registrar for its
Common Stock.

                  Section 6.  Indemnification.

                           (a)      To  the  maximum  extent  permitted  by law,
the  Company  agrees  to indemnify  and  hold  harmless the  Investors  and each
person,   if  any,   who  controls   an  Investor  within  the  meaning  of  the
Securities  Act (each  a   "Distributing  Investor") against any losses, claims,
damages  or  liabilities,   joint  or  several  (which  shall,  for all purposes
of this Agreement,  include,  but  not be limited to,  all reasonable  costs  of
defense  and  investigation  and  all reasonable  attorneys' fees and expenses),
to which the Distributing Investor may become subject,  under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in  respect  thereof)  arise out of or are based upon any  untrue  statement  or
alleged  untrue  statement of any material  fact  contained in any  Registration
Statement,  or any related final prospectus or amendment or supplement  thereto,
or arise out of or are based  upon the  omission  or alleged  omission  to state
therein a material fact  required to be stated  therein or necessary to make the
statements therein not misleading;  provided, however, that the Company will not
be liable in any such case to the extent, and only to the extent,  that any such
loss,  claim,  damage  or  liability  arises  out of or is based  upon an untrue
statement or alleged  untrue  statement or omission or alleged  omission made in
such  Registration  Statement,   preliminary  prospectus,  final  prospectus  or
amendment  or  supplement  thereto in reliance  upon,  and in  conformity  with,
written information furnished to the Company by the Distributing  Investor,  its
counsel, affiliates or any underwriter,  specifically for use in the preparation
thereof. This indemnity agreement will be in addition to any liability which the
Company may otherwise have.

                           (b) To the  maximum  extent  permitted  by law,  each
Distributing  Investor  agrees  that  it  will  indemnify  and hold harmless the
Company,  and  each officer  and  director  of  the  Company or person,  if any,
who  controls the Company  within the meaning of the Securities Act, against any
losses, claims, damages or liabilities (which shall, for all  purposes  of  this
Agreement,  include,  but  not be  limited  to,  all reasonable costs of defense
and investigation  and all reasonable attorneys' fees and expenses) to which the
Company  or any such officer,  director or controlling person may become subject
under the Securities Act or otherwise, insofar  as  such losses, claims, damages
or  liabilities  (or actions in respect thereof)  arise out of or are based upon
any untrue  statement or alleged untrue statement of any material fact contained
in any  Registration  Statement, or any related final prospectus or amendment or
supplement  thereto,  or arise out  of  or are based  upon the omission  or  the
alleged  omission  to  state  therein  a  material  fact  required  to be stated
therein or necessary to make the statements therein not misleading,  but in each
case  only  to  the  extent  that  such   untrue  statement  or  alleged  untrue
statement  or  omission  or  alleged  omission  was  made in  such  Registration
Statement, final prospectus or amendment or supplement thereto in reliance upon,
and in conformity  with,  written  information  furnished to the Company by such
Distributing Investor, its counsel, affiliates or any underwriter,  specifically
for use in the  preparation  thereof.  Notwithstanding  anything to the contrary
contained herein,  the Distributing  Investor shall be liable under this Section
6(b)  only  for  that  amount  as  does  not  exceed  the net  proceeds  to such
Distributing Investor as a result of the sale of Registrable Securities pursuant
to the Registration Statement.

                           (c) Promptly  after receipt by an  indemnified  party
under this Section 6 of notice of the commencement  of any  action  against such
indemnified  party,  such  indemnified party will, if a claim in respect thereof
is to be made against the indemnifying party  under this  Section 6,  notify the
indemnifying party in writing of the commencement  thereof; but the omission  so
to notify the indemnifying party will not relieve  the  indemnifying  party from
any liability which it may have to any
indemnified  party except to the extent the failure of the indemnified  party to
provide  such  written  notification  actually  prejudices  the  ability  of the
indemnifying  party to defend  such  action.  In case any such action is brought
against any indemnified  party,  and it notifies the  indemnifying  party of the
commencement thereof, the indemnifying party will be entitled to participate in,
and, to the extent that it may wish,  jointly with any other  indemnifying party
similarly notified, assume the defense thereof, subject to the provisions herein
stated and after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof,  the indemnifying  party will not
be liable to such indemnified  party under this Section 6 for any legal or other
expenses  subsequently incurred by such indemnified party in connection with the
defense  thereof  other  than  reasonable  costs of  investigation,  unless  the
indemnifying  party  shall not pursue the  action to its final  conclusion.  The
indemnified  parties  as a group  shall  have the right to employ  one  separate
counsel in any such action and to  participate in the defense  thereof,  but the
fees  and  expenses  of  such  counsel  shall  not  be at  the  expense  of  the
indemnifying  party if the  indemnifying  party has  assumed  the defense of the
action with counsel reasonably  satisfactory to the indemnified party unless (i)
the  employment of such counsel has been  specifically  authorized in writing by
the indemnifying  party, or (ii) the named parties to any such action (including
any impleaded  parties) include both the indemnified  party and the indemnifying
party and the  indemnified  party shall have been  advised by its  counsel  that
there may be one or more legal  defenses  available  to the  indemnifying  party
different  from or in conflict with any legal defenses which may be available to
the  indemnified  party  or any  other  indemnified  party  (in  which  case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such  indemnified  party, it being  understood,  however,  that the
indemnifying party shall, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable only for the reasonable
fees and expenses of one separate firm of attorneys for the  indemnified  party,
which  firm  shall be  designated  in  writing  by the  indemnified  party).  No
settlement of any action against an indemnified  party shall be made without the
prior  written  consent of the  indemnified  party,  which  consent shall not be
unreasonably  withheld  so long as such  settlement  includes a full  release of
claims against the indemnified  party.  All fees and expenses of the indemnified
party  (including  reasonable  fees  and  expenses  to the  extent  incurred  in
connection with investigating or preparing to defend such proceeding in a manner
not  inconsistent  with this Section) shall be paid to the indemnified  party as
incurred,  within  ten  (10)  Trading  Days of  written  notice  thereof  to the
indemnifying  party  (regardless of whether it is ultimately  determined that an
indemnified party is not entitled to  indemnification  hereunder;  provided that
the  indemnifying  party may require  such  indemnified  party to  undertake  to
reimburse  all such fees and  expenses  to the extent it is  finally  judicially
determined  that  such  indemnified  party is not  entitled  to  indemnification
hereunder).

                  Section  7.  Contribution.  In order to  provide  for just and
equitable  contribution  under the  Securities  Act in any case in which (i) the
indemnified party makes a claim for indemnification pursuant to Section 6 hereof
but is judicially  determined  (by the entry of a final  judgment or decree by a
court of  competent  jurisdiction  and the  expiration  of time to appeal or the
denial  of the last  right  of  appeal)  that  such  indemnification  may not be
enforced in such case  notwithstanding  the fact that the express  provisions of
Section 6 hereof provide for  indemnification in such case, or (ii) contribution
under the Securities Act may be required on the part of any  indemnified  party,
then the Company and the applicable  Distributing  Investor shall  contribute to
the  aggregate  losses,  claims,  damages  or  liabilities  to which they may be
subject (which shall,  for all purposes of this Agreement,  include,  but not be
limited to, all reasonable costs of defense and investigation and all reasonable
attorneys'  fees and  expenses),  in either such case (after  contribution  from
others) on the basis of relative fault as well as any other  relevant  equitable
considerations.  The relative  fault shall be  determined by reference to, among
other things,  whether the untrue or alleged untrue statement of a material fact
or the  omission  or  alleged  omission  to state a  material  fact  relates  to
information  supplied  by  the  Company  on  the  one  hand  or  the  applicable
Distributing  Investor  on the other hand,  and the  parties'  relative  intent,
knowledge,  access to  information  and  opportunity  to correct or prevent such
statement or omission.  The Company and the Distributing  Investor agree that it
would not be just and equitable if contribution  pursuant to this Section 7 were
determined by pro rata  allocation  or by any other method of  allocation  which
does  not take  account  of the  equitable  considerations  referred  to in this
Section 7. The amount paid or payable by an indemnified party as a result of the
losses,  claims, damages or liabilities (or actions in respect thereof) referred
to above in this  Section  7 shall  be  deemed  to  include  any  legal or other
expenses  reasonably  incurred  by such  indemnified  party in  connection  with
investigating  or  defending  any such  action  or claim.  No  person  guilty of
fraudulent  misrepresentation  (within  the  meaning  of  Section  11(f)  of the
Securities  Act) shall be entitled to  contribution  from any person who was not
guilty of such fraudulent misrepresentation.

Notwithstanding any other provision of this Section 7, in no event shall any (i)
Investor be required to  undertake  liability to any person under this Section 7
for any amounts in excess of the dollar amount of the proceeds  received by such
Investor  from  the  sale  of  such  Investor's  Registrable  Securities  (after
deducting any fees,  discounts and commissions  applicable  thereto) pursuant to
any  Registration   Statement  under  which  such  Registrable   Securities  are
registered  under  the  Securities  Act and  (ii)  underwriter  be  required  to
undertake  liability  to any person  hereunder  for any amounts in excess of the
aggregate discount, commission or other compensation payable to such underwriter
with respect to the  Registrable  Securities  underwritten by it and distributed
pursuant to such Registration Statement.

                  Section 8. 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 delivered as provided
in the Purchase Agreement.

                  Section 9.  Assignment.  This  Agreement  is binding  upon and
inures  to the  benefit  of the  parties  hereto  and  their  respective  heirs,
successors and permitted  assigns.  The rights granted the Investors  under this
Agreement may be assigned as permitted by the Purchase Agreement.

                  Section 10. Additional  Covenants of the Company.  The Company
agrees that at such time as it otherwise meets the  requirements  for the use of
Securities Act Registration Statement on Form S-3 for the purpose of registering
the Registrable  Securities,  it shall file all reports and information required
to be filed by it with the Commission in a timely manner and take all such other
action so as to maintain such eligibility for the use of such form.

                  Section  11.  Counterparts/Facsimile.  This  Agreement  may be
executed  in two or  more  counterparts,  each  of  which  shall  constitute  an
original,  but all of which, when together shall constitute but one and the same
instrument,  and shall become effective when one or more  counterparts have been
signed by each party hereto and delivered to the other  parties.  In lieu of the
original, a facsimile transmission or copy of the original shall be as effective
and enforceable as the original.

                  Section 12. Remedies.  The remedies provided in this Agreement
are cumulative  and not exclusive of any remedies  provided by law. If any term,
provision,  covenant  or  restriction  of this  Agreement  is held by a court of
competent  jurisdiction  to be  invalid,  illegal,  void or  unenforceable,  the
remainder of the terms, provisions,  covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected,  impaired
or invalidated,  and the parties hereto shall use their best efforts to find and
employ an alternative means to achieve the same or substantially the same result
as that contemplated by such term, provision, covenant or restriction.

                  Section 13.  Conflicting  Agreements.  The  Company  shall not
enter into any agreement  with respect to its  securities  that is  inconsistent
with the  rights  granted  to the  holders  of  Registrable  Securities  in this
Agreement or  otherwise  prevents  the Company  from  complying  with all of its
obligations hereunder.

                  Section 14.  Headings.   The  headings in this  Agreement  are
for   reference  purposes  only  and  shall not affect in any way the meaning or
interpretation of this Agreement.

                  Section 15. Governing Law,  Arbitration.  This Agreement shall
be governed by and  construed  in  accordance  with the laws of the State of New
York  applicable to contracts made in New York by persons  domiciled in New York
City and without  regard to its  principles  of conflicts  of laws.  Any dispute
under this  Agreement  shall be  submitted  to  arbitration  under the  American
Arbitration  Association  (the "AAA") in New York City,  New York,  and shall be
finally and  conclusively  determined by the decision of a board of  arbitration
consisting  of three  (3)  members  (hereinafter  referred  to as the  "Board of
Arbitration") selected as according to the rules governing the AAA. The Board of
Arbitration shall meet on consecutive  business days in New York City, New York,
and shall reach and render a decision in writing  (concurred in by a majority of
the members of the Board of  Arbitration)  with  respect to the amount,  if any,
which the losing  party is  required  to pay to the other  party in respect of a
claim  filed.  In  connection  with  rendering  its  decisions,   the  Board  of
Arbitration  shall  adopt and follow  the laws of the State of New York.  To the
extent  practical,  decisions of the Board of  Arbitration  shall be rendered no
more than thirty (30) calendar days following  commencement of proceedings  with
respect thereto. The Board of Arbitration shall cause its written decision to be
delivered to all parties involved in the dispute. Any decision made by the Board
of  Arbitration  (either  prior to or after the  expiration  of such thirty (30)
calendar day period)  shall be final,  binding and  conclusive on the parties to
the dispute,  and entitled to be enforced to the fullest extent permitted by law
and entered in any court of  competent  jurisdiction.  The Board of  Arbitration
shall be authorized and is hereby directed to enter a default  judgment  against
any party failing to  participate in any  proceeding  hereunder  within the time
periods set forth in the AAA rules. The non-prevailing  party to any arbitration
(as  determined  by the  Board of  Arbitration)  shall pay the  expenses  of the
prevailing party,  including reasonable attorneys' fees, in connection with such
arbitration.  Any party  shall be entitled  to obtain  injunctive  relief from a
court in any case where such relief is available,  and the non-prevailing  party
in any such  injunctive  proceeding  shall pay the  expenses  of the  prevailing
party,  including reasonable attorneys' fees, in connection with such injunctive
proceeding.



<PAGE>


                  IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Registration  Rights  Agreement to be duly  executed,  on the day and year first
above written.

                               SEDONA CORPORATION


                               By:________________________________________
                                  Marco A. Emrich, President and CEO




                               AMRO International, S.A.


                               By:________________________________________
                                  H. U. Bachofen, Director



                               Markham Holdings Limited


                               By:________________________________________
                                  H. U. Bachofen, Director



                               Aspen International Limited


                               By:________________________________________
                                  Authorized Signatory



                               The Cuttyhunk Fund Limited


                               By:________________________________________
                                  Authorized Signatory


                              The George S.Sarlo 1995 Charitable Remainder Trust


                              By:________________________________________
                                 Authorized Signatory