exv10w116






EXHIBIT 10.116




SECURITY AGREEMENT




          SECURITY AGREEMENT, dated as of December 31, 2008, between SEDONA CORPORATION, a Pennsylvania
corporation, with an office at 1003 West Ninth Avenue, 2nd Floor, King of Prussia,
Pennsylvania, 19406 (the “Debtor”), and Vey Associates Incorporated, a Louisiana Corporation with
an office at 11822 Justice Avenue, Suite B-6, Baton Rouge, Louisiana 70816, (the “Secured Party”).



          WHEREAS, the Secured Party has made a loan to the Debtor and the Debtor has agreed and is
obligated to make certain payments to the Secured Party under the terms of the promissory note of
even date herewith in the principal sum of up to $2,250,000 (the “Note”); and



          WHEREAS, in order to induce the Secured Party to lend to the Debtor the sums set forth in the
Note, the Debtor has agreed to grant to the Secured Party an interest in certain property of Debtor
as security for the Obligations (as defined herein); and



          NOW, THEREFORE, in consideration for the promises contained herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, agree as follows:



ARTICLE I

DEFINITIONS




          All capitalized terms used herein without definitions shall have the respective meanings
provided therefor in the Note. The term “State”, as used herein, means the State of Louisiana.
All references herein to the Uniform Commercial Code shall mean the Uniform Commercial Code in the
State. All terms defined in the Uniform Commercial Code and used herein shall have the definitions
as specified therein. However, if a term is defined in Article 9 of the Uniform Commercial Code
differently than in another Article of the Uniform Commercial Code, the term has the meaning
specified in Article 9. The term “Obligations”, as used herein, means all of the indebtedness,
obligations and liabilities of the Debtor to the Secured Party, whether direct or indirect, joint
or several, absolute or contingent, due or to become due, now existing or hereafter arising,
including but not limited to those arising under or in respect of the Note or other instruments or
agreements executed and delivered pursuant thereto or in connection therewith or this Agreement,
and the term “Event of Default”, as used herein, means the failure of the Debtor to pay or perform
any of the Obligations as and when due to be paid or performed and any default or event of default
under the terms of the Note. An Event of Default shall also exist in the event that Debtor
defaults in payment of any indebtness due and owing to either Oak Harbor Investment Properties, LLC
or David R. Vey.




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ARTICLE II

GRANT OF SECURITY INTEREST AND SUBORDINATION




          The Debtor hereby grants to the Secured Party, to secure the payment and performance in full
of all of the Obligations, a lien and security interest in and so pledges and assigns to the
Secured Party the following properties, assets and rights of the Debtor, wherever located, whether
now owned or hereafter acquired or arising, and all proceeds and products thereof (all of the same
being hereinafter called the “Collateral”): all contracts, assets, software and intellectual
property, personal and fixture property of every kind and nature, (including inventory and
equipment), instruments (including promissory notes), documents, accounts, accounts receivable,
chattel paper (whether tangible or electronic), deposit accounts, commercial tort claims,
securities and all other investment property, supporting obligations, any other contract rights or
rights to the payment of money, insurance claims and proceeds, tort claims, and all general
intangibles (including all payment intangibles). The security interest of the Secured Party shall
be subordinate and be junior only to the security interest of Oak Harbor Investment Properties,
LLC and shall be senior to all other liens and interests in the Collateral, including the interest
of David R. Vey. The Secured Party acknowledges that the attachment of its security interest in any
commercial tort claim as original collateral is subject to the Debtor’s compliance with Article IV,
Section 7.



ARTICLE III

AUTHORIZATION TO FILE FINANCING STATEMENTS




          The Debtor hereby irrevocably authorizes the Secured Party, at any time and from time to time,
to file in any Uniform Commercial Code jurisdiction (in addition to the State if appropriate any
initial financing statements and amendments thereto that (a) indicate the Collateral: (i) as all
assets of the Debtor securing the Obligations or words of similar effect, regardless of whether any
particular asset comprised in the Collateral falls within the scope of Article 9 of the Uniform
Commercial Code or such jurisdiction, or (ii) as being of an equal or lesser scope or with greater
detail, and (b) contain any other information required by part 5 of Article 9 of the Uniform
Commercial Code for the sufficiency or filing office acceptance of any financing statement or
amendment, including whether the Debtor is an organization, the type of organization and any
organization identification number issued to the Debtor. The Debtor agrees to furnish any such
information to the Secured Party promptly upon request. The Debtor also ratifies its authorization
for the Secured Party to have filed in any Uniform Commercial Code jurisdiction any initial
financing statements or amendments thereto if filed prior to the date hereof.



ARTICLE IV

OTHER ACTIONS




          Further to insure (i) the attachment, perfection and priority of the Secured Party’s security
interest in the Collateral, subject to the security interests, liens or encumbrances set forth on
Appendix A, and (ii) the ability of the Secured Party to enforce its security interest in the
Collateral, the Debtor agrees, in each case at the Debtor’s own expense, to take the following
actions with



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respect to the following Collateral:



     1. Promissory Notes and Tangible Chattel Paper. If the Debtor shall, at any time, hold or
acquire any promissory notes or tangible chattel paper, the Debtor shall forthwith endorse, assign
and deliver the same to the Secured Party, accompanied by such instruments of transfer or
assignment duly executed in blank as the Secured Party may from time to time specify.



     2. Deposit Accounts. For each deposit account that the Debtor at any time opens or maintains,
the Debtor shall, at the Secured Party’s request and option, pursuant to an agreement in form and
substance satisfactory to the Secured Party and the Debtor, either (a) cause the bank to agree to
comply at any time with instructions from the Secured Party to such bank directing the disposition
of funds from time to time credited to such deposit account, without further consent of the Debtor,
or (b) arrange for the Secured Party to become the customer of the bank with respect to the
deposit account, with the Debtor being permitted, only with the consent of the Secured Party, to
exercise rights to withdraw funds from such deposit account. The Secured Party agrees with the
Debtor that the Secured Party shall not give any such instructions or withhold any withdrawal
rights from the Debtor unless an Event of Default has occurred and is continuing for a period of
sixty (60) calendar days, or, after giving effect to any withdrawal not otherwise permitted by the
Note, would occur. The provisions of this paragraph shall not apply to (i) any deposit account for
which the Debtor, the bank and the Secured Party have entered into a cash collateral agreement
specially negotiated among the Debtor, the bank and the Secured Party for the specific purpose set
forth therein, (ii) deposit accounts for which the Secured Party is the Depository and (iii)
deposit accounts specially and exclusively used for payroll, payroll taxes and other employee wage
and benefit payments to or for the benefit of the Debtor’s salaried employees.



     3. Investment Property. If the Debtor shall, at any time, hold or acquire any certificated
securities (other than securities of the Debtor), the Debtor shall forthwith endorse, assign and
deliver the same to the Secured Party, accompanied by such instruments of transfer or assignment
duly executed in blank as the Secured Party may from time to time specify. If any securities now
or hereafter acquired by the Debtor are uncertificated and are issued to the Debtor or its nominee
directly by the issuer thereof, the Debtor shall promptly notify the Secured Party thereof and,
at the Secured Party’s request and option, pursuant to an agreement in form and substance
satisfactory to the Secured Party, either (a) cause the issuer to agree to comply with instructions
from the Secured Party as to such securities, without further consent of the Debtor or such
nominee, or (b) arrange for the Secured Party to become the registered owner of the securities. If
any securities, whether certificated or uncertificated, or other investment property now or
hereafter acquired by the Debtor are held by the Debtor or its nominee through a securities
intermediary or commodity intermediary, the Debtor shall promptly notify the Secured Party thereof
and, at the Secured Party’s request and option, pursuant to an agreement in form and substance
satisfactory to the Secured Party, either (i) cause such securities intermediary or (as the case
may be) commodity intermediary to agree to comply with entitlement orders or other instructions
from the Secured Party to such securities intermediary as to such securities or other investment
property, or (as the case may be) to apply any value distributed on account of any commodity
contract as directed by the Secured Party to such commodity intermediary, in each case without
further consent of the



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Debtor or such nominee, or (ii) in the case of
financial assets or other investment property held through a securities intermediary, arrange
for the Secured Party to become the entitlement holder with respect to such investment property,
with the Debtor being permitted, only with the consent of the Secured Party, to exercise rights to
withdraw or otherwise deal with such investment property. The provisions of this paragraph shall
not apply to any financial assets credited to a securities account for which the Secured Party is
the securities intermediary.



     4. Collateral in the Possession of a Bailee. If any Collateral is at any time in the
possession of a bailee, the Debtor shall promptly notify the Secured Party thereof and, if
requested by the Secured Party, shall promptly seek an acknowledgment from the bailee, in form and
substance satisfactory to the Secured Party, that the bailee holds such Collateral for the benefit
of the Secured Party and that if an Event of Default has occurred and is continuing for a period of
sixty (60) calendar days the bailee shall act upon the instructions of the Secured Party, without
the further consent of the Debtor.



     5. Electronic Chattel Paper and Transferable Records. If the Debtor at any time holds or
acquires an interest in any electronic chattel paper or any “transferable record,” as that term is
defined in Section 201 of the federal Electronic Signatures in Global and National Commerce Act,
(“ESIGN”) or in Section 16 of the Uniform Electronic Transactions Act (“UETA”) as in effect in any
relevant jurisdiction, the Debtor shall promptly notify the Secured Party thereof and, at the
request of the Secured Party, shall take such action as the Secured Party may reasonably request to
vest in the Secured Party control, under Section 9-105 of the Uniform Commercial Code, of such
electronic chattel paper or control under Section 201 of ESIGN or, as the case may be, Section 16
of UETA, as so in effect in such jurisdiction, of such transferable record.



     6. Letter-of-Credit Rights. If the Debtor is at any time a beneficiary under a letter of
credit now or hereafter issued in favor of the Debtor, the Debtor shall promptly notify the Secured
Party thereof and, at the request and option of the Secured Party, the Debtor shall, pursuant to an
agreement in form and substance satisfactory to the Secured Party, either (i) arrange for the
issuer and any confirmer of such letter of credit to consent to an assignment to the Secured Party
of the proceeds of any drawing under the letter of credit, or (ii) arrange for the Secured Party to
become the transferee beneficiary of the letter of credit, with the Secured Party agreeing, in each
case, that the proceeds of any drawing under the letter to credit are to be applied as set forth in
the Note.



     7. Commercial Tort Claims. If the Debtor shall at any time hold or acquire a commercial or
other tort claim, the Debtor shall immediately notify the Secured Party in a writing signed by the
Debtor of the brief details thereof and grant to the Secured Party in such writing a security
interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such
writing to be in form and substance satisfactory to the Secured Party.



     8. Other Actions as to any and all Collateral. The Debtor further agrees to take any other
action reasonably requested by the Secured Party to insure the attachment, perfection and priority
of, and the ability of the Secured Party to enforce, the Secured Party’s security interest in any
and all of the Collateral, including, without limitation, (a) executing, delivering and, where



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appropriate, filing financing statements and amendments relating thereto under the Uniform
Commercial Code, to the extent, if any, that the Debtor’s signature thereon is required therefor,
(b) causing the Secured Party’s name to be noted as secured party on any certificate of title for a
titled good if such notation is a condition to attachment, perfection or priority of, or ability of
the Secured Party to enforce, the Secured Party’s security interest in such Collateral, (c)
complying with any provision of any statute, regulation or treaty of the United States as to any
Collateral if compliance with such provision is a condition to attachment, perfection or priority
of, or ability of the Secured Party to enforce, the Secured Party’s security interest in such
Collateral, (d) obtaining governmental and other third party consents and approvals, including,
without limitation, any consent of any licensor, lessor or other person obligated on the
Collateral, (e) obtaining waivers from mortgagees and landlords in form and substance satisfactory
to the Secured Party, and (f) taking all actions required by any earlier versions of the Uniform
Commercial Code or by other law, as applicable in any relevant Uniform Commercial Code
jurisdiction, or by other law as applicable in any foreign jurisdiction.



ARTICLE V

REPRESENTATIONS AND WARRANTIES CONCERNING DEBTOR’S LEGAL STATUS




          The Debtor represents and warrants to the Secured Party as follows: (a) the Debtor’s exact
legal name is that indicated on the signature page hereof, (b) the Debtor is a Corporation
organized under the laws of the Commonwealth of Pennsylvania, (c) the Debtor’s tax identification
number is 95-4091769, and (d) the address listed on the cover page hereof is Debtor’s chief
executive office.



ARTICLE VI

COVENANTS CONCERNING DEBTOR’S LEGAL STATUS




          The Debtor covenants with the Secured Party as follows: (a) without providing at least thirty
(30) days prior written notice to the Secured Party, the Debtor will not change its name, its place
of business or, if more than one, its chief executive office, or its mailing address or tax
identification number, if it has one, (b) if the Debtor does not have an tax identification number
and later obtains one, the Debtor shall forthwith notify the Secured Party of such tax
identification number, and (c) the Debtor will not change its type of organization, jurisdiction of
organization or other legal structure without prior consent of the Secured Party.



ARTICLE VII

REPRESENTATIONS AND WARRANTIES CONCERNING COLLATERAL, ETC.




          The Debtor further represents and warrants to the Secured Party as follows: (a) the Debtor is
the owner of or has other rights in or power to transfer the Collateral, free from any adverse
lien, security interest or other encumbrance, except for the security interests, liens or
encumbrances set forth on Appendix A , the security interest created by this Agreement, other liens
permitted by the
Note, and other liens or encumbrances incurred by the Debtor in the ordinary



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course of
business in an aggregate amount less than $175,000 (all the foregoing collectively as “Permitted
Liens”), except as the Secured Party may otherwise permit, (b) none of the Collateral constitutes,
or is the proceeds of, “farm products” as defined in Section 9-102(a)(34) of the Uniform Commercial
Code, (c) none of the account debtors or other persons obligated on any of the Collateral is a
governmental authority subject to the Federal Assignment of Claims Act or like federal, state or
local statute or rule in respect of such Collateral, and (d) the Debtor has at all times materially
operated its business in compliance with all applicable provisions of the federal Fair Labor
Standards Act, as amended, and with all applicable provisions of federal, state and local statutes
and ordinances dealing with the control, shipment, storage or disposal of hazardous materials or
substances.



ARTICLE VIII

COVENANTS CONCERNING COLLATERAL, ETC.




          The Debtor further covenants with the Secured Party as follows: (a) the Collateral, to the
extent not delivered to the Secured Party pursuant to Article IV, will be kept at those locations
listed on the address listed on the cover page hereof and the Debtor will not remove the Collateral
from such locations, without providing at least thirty (30) days prior written notice to the
Secured Party; (b) except for Permitted Liens, the Debtor shall be the owner of or have other
rights in the Collateral free from any lien, security interest or other encumbrance, and the Debtor
shall defend the same against all claims and demands of all persons at any time claiming the same
or any interests therein adverse to the Secured Party; (c) except for Permitted Liens, the Debtor
shall not pledge, mortgage or create, or suffer to exist a security interest in the Collateral in
favor of any person other than the Secured Party, Vey, and Oak Harbor; (d) the Debtor will keep the
Collateral in good order and repair reasonable wear and tear excepted and will not use the same in
violation of law or any policy of insurance thereon; (e) the Debtor will permit the Secured Party,
or its designee, to inspect the Collateral at any reasonable time, wherever located, during regular
business hours of the Debtor, and upon reasonable prior written notice to the Debtor; (f) the
Debtor will pay promptly when due all taxes, assessments, governmental charges and levies upon the
Collateral or incurred in connection with the use or operation of such Collateral or incurred in
connection with this Agreement; (g) the Debtor will continue to operate its business in material
compliance with all applicable provisions of the federal Fair Labor Standards Act, as amended, and
with all applicable provisions of federal, state and local statutes and ordinances dealing with the
control, shipment, storage or disposal of hazardous materials or substances; and (h) the Debtor
will not sell or otherwise dispose of, or offer to sell or otherwise dispose of, the Collateral or
any interest therein except for (i) sales and leases of inventory and licenses of general
intangibles in the ordinary course of business, and (ii) so long as no Event of Default has
occurred and is continuing for a period of sixty (60) calendar days, sales or other dispositions of
obsolescent Collateral in the ordinary course of business consistent with past practices
dispositions permitted by the Note.



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ARTICLE IX

INSURANCE




          The following provisions regarding insurance are made part of this Agreement.



     1. Maintenance of Insurance. The Debtor will maintain with financially sound and reputable
insurers insurance with respect to its properties and business against such casualties and
contingencies as shall be in accordance with general practices of businesses engaged in similar
activities in similar geographic areas. Such insurance shall be in such minimum amounts that the
Debtor will not be deemed a co-insurer under applicable insurance laws, regulations and policies
and otherwise shall be in such amounts, contain such terms, be in such forms and be for such
periods as may be reasonably satisfactory to the Secured Party. In addition, all such insurance
shall be payable to the Secured Party as loss payee under a “standard” or “New York” loss payee
clause. Without limiting the foregoing, the Debtor will (i) keep all of the Collateral constituting
physical property insured with casualty or physical hazard insurance on an “all risks” basis, with
broad form flood and earthquake coverages and electronic data processing coverage, with a full
replacement cost endorsement and an “agreed amount” clause in an amount equal to 100% of the full
replacement cost of such property, (ii) maintain all such workers’ compensation or similar
insurance as may be required by law, and (iii) maintain, in amounts and with deductibles equal to
those generally maintained by businesses engaged in similar activities in similar geographic areas,
general public liability insurance against claims of bodily injury, death or property damage
occurring, on, in or about the properties of the Debtor; business interruption insurance; and
product liability insurance.



     2. Insurance Proceeds The proceeds of any casualty insurance in respect of any casualty loss
of any of the Collateral shall, subject to the rights, if any, of other parties with a prior
interest in the property covered thereby, (i) so long as no Default or Event of Default has
occurred and is continuing for a period of sixty (60) days, be disbursed to the Debtor for direct
application by the Debtor solely to the repair or replacement of the Debtor’s property so damaged
or destroyed, and (ii) in all other circumstances, be held by the Secured Party as cash collateral
for the Obligations. The Secured Party may, at its sole option, disburse from time to time all or
any part of such proceeds so held as cash collateral, upon such terms and conditions as the Secured
Party may reasonably prescribe, for direct application by the Debtor solely to the repair or
replacement of the Debtor’s property so damaged or destroyed, or the Secured Party may apply all or
any part of such proceeds to the Obligations.



     3. Notice of Cancellation, etc. All policies of insurance shall provide for at least thirty
(30) days prior written cancellation notice to the Secured Party. In the event of failure by the
Debtor to provide and maintain insurance as herein provided, the Secured Party may, at its option,
provide such insurance and charge the amount thereof to the Debtor. The Debtor shall furnish the
Secured Party with certificates of insurance and policies evidencing compliance with the foregoing
insurance provision.



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ARTICLE X

COLLATERAL PROTECTION EXPENSES; PRESERVATION OF COLLATERAL




          The following provisions regarding the Collateral are made part of this Agreement.



     1. Expenses Incurred by Secured Party. In its discretion, the Secured Party may discharge
taxes and other encumbrances at any time levied or placed on any of the Collateral, make repairs
thereto and pay any necessary filing fees or, if the Debtor fails to do so, insurance premiums. The
Debtor agrees to reimburse the Secured Party on demand for any and all expenditures so made. The
Secured Party shall have no obligation to the Debtor to make any such expenditures, nor shall the
making thereof relieve the Debtor of any default or Event of Default.



     2. Secured Party’s Obligations and Duties. Anything herein to the contrary notwithstanding,
the Debtor shall remain liable under each contract or agreement included in the Collateral to be
observed or performed by the Debtor thereunder. The Secured Party shall not have any obligation or
liability under any such contract or agreement by reason of or arising out of this Agreement or the
receipt by the Secured Party of any payment relating to any of the Collateral, nor shall the
Secured Party be obligated in any manner to perform any of the obligations of the Debtor under or
pursuant to any such contract or agreement, to make inquiry as to the nature or sufficiency of any
payment received by the Secured Party in respect of the Collateral or as to the sufficiency of any
performance by any party under any such contract or agreement, to present or file any claim, to
take any action to enforce any performance or to collect the payment of any amounts which may have
been assigned to the Secured Party or to which the Secured Party may be entitled at any time or
times. The Secured Party’s sole duty with respect to the custody, safe-keeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the Uniform Commercial
Code or otherwise, shall be to deal with such Collateral in the same manner as the Secured Party
deals with similar property for its own account.



ARTICLE XI

SECURITIES AND DEPOSITS




          The Secured Party, may if an Event of Default exists and is continuing for a period of sixty
(60) calendar days, at its option, transfer to itself or any nominee any securities constituting
Collateral, receive any income thereon and hold such income as additional Collateral, or apply it
to the Obligations. Whether or not any Obligations are due, the Secured Party may demand, sue for,
collect, or make any settlement or compromise which it deems desirable with respect to the
Collateral. Regardless of the adequacy of Collateral or any other security for the Obligations,
any deposits or other sums at any time credited by or due from the Secured Party to the Debtor may,
at any time, be applied to or set off against any of the Obligations.



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ARTICLE XII

NOTIFICATION TO ACCOUNT DEBTORS AND

OTHER PERSONS OBLIGATED ON COLLATERAL




          The Debtor shall, at the request of the Secured Party, and only if an Event of Default has
occurred, notify account debtors and other persons obligated on any of the Collateral of the
security interest of the Secured Party in any account, chattel paper, general intangible,
instrument or other Collateral and that payment thereof is to be made directly to the Secured Party
or to any financial institution designated by the Secured Party as the Secured Party’s agent
therefor, and the Secured Party may itself, without notice to or demand upon the Debtor, so notify
account debtors and other persons obligated on Collateral. After the making of such a request or
the giving of any such notification, the Debtor shall hold any proceeds of collection of accounts,
chattel paper, general intangibles, instruments and other Collateral received by the Debtor as
trustee for the Secured Party without commingling the same with other funds of the Debtor and shall
turn the same over to the Secured Party in the identical form received, together with any necessary
endorsements or assignments. The Secured Party shall apply the proceeds of collection of accounts,
chattel paper, general intangibles, instruments and other Collateral received by the Secured Party
to the Obligations, such proceeds to be immediately entered after final payment in cash or other
immediately available funds of the items giving rise to them.



ARTICLE XIII

POWER OF ATTORNEY




          The following provisions regarding power of attorney are made part of this Agreement.



     1. Appointment and Powers of Secured Party. The Debtor hereby irrevocably constitutes and
appoints the Secured Party and any officer or agent thereof, with full power of substitution, as
its true and lawful attorneys-in-fact with full irrevocable power and authority in the place and
stead of the Debtor or in the Secured Party’s own name, for the purpose of carrying out the terms
of this Agreement, to take any and all appropriate action and to execute any and all documents and
instruments that may be necessary or desirable to accomplish the purposes of this Agreement and,
without limiting the generality of the foregoing, hereby gives said attorneys the power and right,
on behalf of the Debtor, without notice to or assent by the Debtor, to do the following:



          (A). Upon the occurrence and during the continuance of an Event of Default, which remains
uncured for sixty (60) calendar days, generally to sell, transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral in such manner as is consistent with the
Uniform Commercial Code and as fully and completely as though the Secured Party were the absolute
owner thereof for all purposes, and to do at the Debtor’s expense, at any time, or from time to
time, all acts and things which the Secured Party deems necessary to protect, preserve or realize
upon the Collateral and the Secured Party’s security interest therein, in order to effect the
intent of this Agreement, all as fully and effectively as the Debtor might do, including, without
limitation, (i) the filing and prosecuting of registration and transfer applications with the
appropriate federal or



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local agencies or authorities with respect to trademarks, copyrights and patentable inventions and
processes, (ii) upon written notice to the Debtor, the exercise of voting rights with respect to
voting securities, which rights may be exercised, if the Secured Party so elects, with a view to
causing the liquidation in a commercially reasonable manner of assets of the issuer of any such
securities, and (iii) the execution, delivery and recording, in connection with any sale or other
disposition of any Collateral, of the endorsements, assignments or other instruments of conveyance
or transfer with respect to such Collateral; and



          (B). To the extent that the Debtor’s authorization given in Article III is not sufficient, to
file such financing statements with respect hereto, with or without the Debtor’s signature, or a
photocopy of this Agreement in substitution for a financing statement, as the Secured Party may
deem appropriate and to execute in the Debtor’s name such financing statements and amendments
thereto and continuation statements which may require the Debtor’s signature.



          (C) Notwithstanding the foregoing, the rights of the Secured Party under this section may be
limited by the terms of an Intercreditor Agreement, dated of event date herewith, by and between
the Secured Party, Oak Harbor Investment Properties, L.L.C., David R. Vey and Debtor.



     2. Ratification by Debtor. To the extent permitted by law, the Debtor hereby ratifies all
that said attorneys shall lawfully do or cause to be done by virtue hereof. This power of attorney
is a power coupled with an interest and shall be irrevocable.



     3. No Duty on Secured Party. The powers conferred on the Secured Party hereunder are solely
to protect its interests in the Collateral and shall not impose any duty upon it to exercise any
such powers. The Secured Party shall be accountable only for the amounts that it actually receives
as a result of the exercise of such powers and neither it nor any of its officers, directors,
employees or agents shall be responsible to the Debtor for any act or failure to act, except for
the gross negligence or willful misconduct of the Secured Party or any of its officers, directors,
or employees.



ARTICLE XIV

REMEDIES




          If an Event of Default occurs under this Agreement and remains uncured for a period of sixty
(60) calendar days, at any time thereafter, the Secured Party shall have all of the rights of a
secured party under applicable law, and more specifically under the Uniform Commercial Code and
shall have all of the rights and remedies set forth in the Note. In addition and without
limitation, the Secured Party may exercise any one or more of the following rights and remedies:



     1. General Remedies. The Secured Party may, without notice to or demand upon the Debtor,
declare this Agreement to be in default, and the Secured Party shall thereafter have in any
jurisdiction in which enforcement hereof is sought, in addition to all other rights and remedies,
the rights and remedies of a secured party under the Uniform Commercial Code or of any
jurisdiction in which Collateral is located, including, without limitation, the right to take
possession of the Collateral, and for that purpose the Secured Party may, so far as the Debtor can
give authority therefor, enter
upon any premises on which the Collateral may be situated and remove the same therefrom. The
Secured Party may in its discretion require the Debtor to assemble all or any part of the



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Collateral at such location or locations within the jurisdiction(s) of the Debtor’s principal
office(s) or at such other locations as the Secured Party may reasonably designate. Unless the
Collateral is perishable or threatens to decline speedily in value, or is of a type customarily
sold on a recognized market, the Secured Party shall give to the Debtor at least five (5) business
days prior written notice of the time and place of any public sale of Collateral or of the time
after which any private sale or any other intended disposition is to be made. The Debtor hereby
acknowledges that five (5) business days prior written notice of such sale or sales shall be
reasonable notice. In addition, the Debtor waives any and all rights that it may have to a
judicial hearing in advance of the enforcement of any of the Secured Party’s rights hereunder,
including, without limitation, its right following an Event of Default to take immediate possession
of the Collateral and to exercise its rights with respect thereto.



     2. Keeper. Should any or all of the Collateral be seized as an incident to an action for the
recognition or enforcement of this Agreement, by executory process, sequestration, attachment, writ
of fieri facias or otherwise, the Debtor hereby agrees that the court issuing any such order shall,
if requested by the Secured Party, appoint the Secured Party, or any agent designated by the
Secured Party, or any person or entity named by the Secured Party at the time such seizure is
requested, or any time thereafter, as Keeper of the Collateral. Such a Keeper shall be entitled to
reasonable compensation. The Debtor agrees to pay the reasonable fees of such Keeper.



     3. Other Rights and Remedies. In addition, the Secured Party shall have and may exercise any
or all other rights and remedies it may have available at law, in equity, or otherwise.



     4. Cumulative Remedies. All of the Secured Party’s rights and remedies, whether evidenced by
this Agreement or the Note or by any amendments, shall be cumulative and may be exercised
singularly or concurrently. Election by the Secured Party to pursue any remedy shall not exclude
pursuit of any other remedy, and an election to make expenditures or to take action to perform an
obligation of the Debtor under this Agreement, after the Debtor’s failure to perform, shall not
affect the Secured Party’s right to declare a default and to exercise its remedies.



     5. Fees. If an Event of Default has occurred under the Note or this Agreement and the Note is
referred to an attorney at law for collection, Debtor agrees to pay all costs incurred by the
Secured Party incident to collection up to a limit of 10% of the unpaid principal balance,
including but not limited to reasonable attorney fees, enforceable as a contract of indemnity, plus
all court costs.



ARTICLE XV

STANDARDS FOR EXERCISING REMEDIES




          To the extent that applicable law imposes duties on the Secured Party to exercise



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remedies in
a commercially reasonable manner, the Debtor acknowledges and agrees that it is not commercially
unreasonable for the Secured Party (a) to fail to incur expenses reasonably deemed significant by
the Secured Party to prepare Collateral for disposition or otherwise to complete raw
material or work in process into finished goods or other finished products for disposition,
(b) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain
or, if not required by other law, to fail to obtain governmental or third party consents for the
collection or disposition of Collateral to be collected or disposed of, (c) to fail to exercise
collection remedies against account debtors or other persons obligated on Collateral or to remove
liens or encumbrances on or any adverse claims against Collateral, (d) to exercise collection
remedies against account debtors and other persons obligated on Collateral directly or through the
use of collection agencies and other collection specialists, (e) to advertise dispositions of
Collateral through publications or media of general circulation, whether or not the Collateral is
of a specialized nature, (f) to contact other persons, whether or not in the same business as the
Debtor, for expressions of interest in acquiring all or any portion of the Collateral, (g) to hire
one or more professional auctioneers to assist in the disposition of Collateral, at commercially
reasonable rates, whether or not the Collateral is of a specialized nature, (h) to dispose of
Collateral by utilizing Internet sites that provide for the auction of assets of the types included
in the Collateral or that have the reasonable capability of doing so, or that match buyers and
sellers of assets at commercially reasonable rates, (i) to dispose of assets in wholesale rather
than retail markets, (j) to disclaim disposition warranties, (k) to purchase reasonable insurance
or credit enhancements to insure the Secured Party against risks of loss, collection or disposition
of Collateral or to provide to the Secured Party a guaranteed return from the collection or
disposition of Collateral, or (l) to the extent deemed appropriate by the Secured Party, to obtain
the services of other brokers, investment bankers, consultants and other professionals to assist
the Secured Party in the collection or disposition of any of the Collateral. The Debtor
acknowledges that the purpose of this Article XV is to provide non-exhaustive indications of what
actions or omissions by the Secured Party would not be commercially unreasonable in the Secured
Party’s exercise of remedies against the Collateral and that other actions or omissions by the
Secured Party shall not be deemed commercially unreasonable solely on account of not being
indicated in this Article XV. Without limitation upon the foregoing, nothing contained in this
Article XV shall be construed to grant any rights to the Debtor or to impose any duties on the
Secured Party that would not have been granted or imposed by this Agreement or by applicable law in
the absence of this Article XV.



ARTICLE XVI

NO WAIVER BY SECURED PARTY, ETC.




          The Secured Party shall not be deemed to have waived any of its rights upon or under the
Obligations or the Collateral unless such waiver shall be in writing and signed by the Secured
Party. No delay or omission on the part of the Secured Party in exercising any right shall operate
as a waiver of such right or any other right. A waiver on any one occasion shall not be construed
as a bar to or waiver of any right on any future occasion. All rights and remedies of the Secured
Party with respect to the Obligations or the Collateral, whether evidenced hereby or by any other
instrument or papers, shall be cumulative and may be exercised singularly, alternatively,
successively or concurrently at such time or at such times as the Secured Party deems expedient.



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ARTICLE XVII

SURETYSHIP WAIVERS BY DEBTOR




          The Debtor waives demand, notice, protest, notice of acceptance of this Agreement, notice of
loans made, credit extended, Collateral received or delivered or other action taken in reliance
hereon and all other demands and notices of any description. With respect to both the Obligations
and the Collateral, the Debtor assents to any extension or postponement of the time of payment or
any other indulgence, to any substitution, exchange or release of or failure to perfect any
security interest in any Collateral, to the addition or release of any party or person primarily or
secondarily liable, to the acceptance of partial payment thereon and the settlement, compromising
or adjusting of any thereof, all in such manner and at such time or times as the Secured Party may
deem advisable. The Secured Party shall have no duty as to the collection or protection of the
Collateral or any income thereon, nor as to the preservation of rights against prior parties, nor
as to the preservation of any rights pertaining thereto beyond the safe custody thereof as set
forth in Article X, Section 2. The Debtor further waives any and all other suretyship defenses.



ARTICLE XVIII

MARSHALLING




          The Secured Party shall not be required to marshal any present or future collateral security
(including, but not limited to, this Agreement and the Collateral) for, or other assurances of
payment of, the Obligations or any of them or to resort to such collateral security or other
assurances of payment in any particular order, and all of its rights hereunder and in respect of
such collateral security and other assurances of payment shall be cumulative and, in addition to
all other rights, however existing or arising. To the extent that it lawfully may, the Debtor
hereby agrees that it will not invoke any law relating to the marshalling of collateral which might
cause delay in or impede the enforcement of the Secured Party’s rights under this Agreement or
under any other instrument creating or evidencing any of the Obligations or under which any of the
Obligations is outstanding or by which any of the Obligations is secured or payment thereof is
otherwise assured, and, to the extent that it lawfully may, the Debtor hereby irrevocably waives
the benefits of all such laws.



ARTICLE XIX

PROCEEDS OF DISPOSITIONS; EXPENSES




          The Debtor shall pay to the Secured Party, on demand, any and all expenses, including
reasonable attorneys’ fees and disbursements, incurred by the Secured Party in protecting,
preserving or enforcing the Secured Party’s rights under or in respect of any of the Obligations or
any of the Collateral. After deducting all of said expenses, the residue of any proceeds of
collection or sale of the Obligations or Collateral shall, to the extent actually received in cash,
be applied to the payment of the Obligations in such order or preference as the Secured Party may
determine or in such order or preference as is provided in the Note, proper allowance and provision
being made for any Obligations not then due. Upon the final payment and satisfaction in full of
all of the Obligations and, after making any payments required by Sections 9-608(a)(1)(C) or
9-615(a)(3) of



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the Uniform Commercial Code, any excess shall be returned to the Debtor, and the
Debtor shall remain liable for any deficiency in the payment of the Obligations.



ARTICLE XX

OVERDUE AMOUNTS




          Until paid, all amounts due and payable by the Debtor hereunder shall be a debt secured by the
Collateral and shall bear, whether before or after judgment, interest at the applicable rate as set
forth in the Note.



ARTICLE XXI

GOVERNING LAW; CONSENT TO JURISDICTION




          THIS AGREEMENT IS INTENDED TO TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF LOUISIANA. The Debtor agrees that any suit
for the enforcement of this Agreement may be brought in either the courts of the state or any
jurisdiction in which the Collateral is located, or any federal court sitting in any of the
foregoing and consents to the non-exclusive jurisdiction of such courts and to service of process
in any such suit being made upon the Debtor by mail at the address set forth on the cover page
hereof. The Debtor hereby waives any objection that it may now or hereafter have to the venue of
any such suit or any such court or that such suit is brought in an inconvenient court.



ARTICLE XXII

WAIVER OF JURY TRIAL




          THE DEBTOR WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF
ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE
PERFORMANCE OF ANY SUCH RIGHTS OR OBLIGATIONS. Except as prohibited by law, the Debtor waives any
right which it may have to claim or recover in any litigation referred to in the preceding sentence
any special, exemplary, punitive or consequential damages or any damages other than, or in addition
to, actual damages. The Debtor (i) certifies that neither the Secured Party nor any
representative, agent or attorney of the Secured Party has represented, expressly or otherwise,
that the Secured Party would not, in the event of litigation, seek to enforce the foregoing waivers
and (ii) acknowledges that, in entering into the Note, the Secured Party is relying upon, among
other things, the waivers and certifications contained in this Article XXII.



ARTICLE XXIII

MISCELLANEOUS




          This Agreement constitutes the entire agreement of the parties with respect to the subject
matter hereof. No change, modification or addition to this Agreement shall be enforceable unless in
writing and signed by the party against whom enforcement is sought. The headings of each



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section
of this Agreement are for convenience only and shall not define or limit the provisions thereof.
This Agreement and all rights and obligations hereunder shall be binding upon the Debtor and its
respective successors and assigns, and shall inure to the benefit of the Secured Party and its
successors and assigns. If any term of this Agreement shall be held to be invalid, illegal or
unenforceable, the validity of all other terms hereof shall in no way be affected thereby, and
this Agreement shall be construed and be enforceable as if such invalid, illegal or unenforceable
term had not been included herein. The Debtor acknowledges receipt of a copy of this Agreement.



          IN WITNESS WHEREOF, intending to be legally bound, the Debtor has caused this Agreement to be
duly executed as of the date first above written.



	 	 	 	 	 
	 	SECURED PARTY:`





VEY ASSOCIATES INCORPORATED

 	 
	 	By:  	/s/ David Vey
 	 
	 	 	Name:  	David Vey 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	DEBTOR:





SEDONA CORPORATION

 	 
	 	By:  	/s/ Scott Edelman
 	 
	 	 	Name:  	Scott Edelman 	 
	 	 	Title:  	President and CEO 	 
	 



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APPENDIX A

to

SECURITY AGREEMENT between SEDONA CORPORATION and

VEY ASSOCIATES




Oak Harbor Investment Properties, LLC

Jurisdiction: Commonwealth of Pennsylvania (Oak Harbor Investment Properties, LLC)

File Date: 3/18/2003

File No: 20030256799




Extended: February 26, 2008

Extended File No: 2008022700539





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