SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): ~~March~~August 1119, 2009

SEDONA CORPORATION

(Exact name of registrant as specified in its charter)


Pennsylvania	0-15864	95-4091769
(State or other jurisdiction of	(Commission File No.)	(IRS Employer Identification
incorporation)		No.)

1003 West Ninth Avenue		19406
King of Prussia, Pennsylvania		~~19406~~(Zip Code)
(Address of principal executive offices)		~~(Zip Code)~~

Registrant’s telephone number, including area code: (610) 337-8400

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions.

o Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

~~o Soliciting material pursuant to Rule~~Section ~~14a-12~~8 ~~under~~— ~~the~~Other ~~Exchange Act (17 CFR 240.14a-12)~~Events

~~o Pre-commencement communications pursuant to Rule~~Item ~~14d-2(b)~~8.01 ~~under~~Other ~~the Exchange Act (17 CFR 240~~Events.~~14d-2(b))~~

~~o Pre-commencement~~In ~~communications~~a ~~pursuant~~press torelease ~~Rule~~filed August ~~13e~~21, 2009, SEDONA Corporation announces recent ruling in case 3:07-4CV-00171-TPS issuing a declaratory judgment regarding a breach of contract action filed by SEDONA Corporation against Open Solutions, Inc., in the United States District Court District of Connecticut. On June 28, 2006, SEDONA filed a civil action lawsuit against Open Solutions Inc. (cOSI), in Montgomery County Court in Pennsylvania for breach of a software license agreement entered into between the parties in May 2002. In the lawsuit, the Company alleges that since September 2004, OSI failed to pay royalty payments required under the ~~Exchange~~parties’ ~~Act~~master ~~(17~~software license ~~CFR~~and ~~240~~services agreement for licensed products and services sold by OSI to its customers.~~13e-4(c))~~ OSI removed the case to federal court and successfully moved for a change in venue from the United States District Court for the District of Pennsylvania to the United States District Court for the District of Connecticut. SEDONA filed an amended complaint after the case was transferred to the District of Connecticut. In its amended complaint, SEDONA seeks a declaration and damages relating to OSI’s failure to pay royalties under the agreement for its sales of the cView product operating on the .NET platform and for breach of the agreement’s confidentiality provision. OSI served an amended answer with counterclaims asserted against SEDONA for declaratory relief and breach of contract.

~~SECTION~~In 1a —ruling ~~REGISTRANT~~filed August 19, 2009, the court denied SEDONA’Ss ~~BUSINESS~~motion ~~AND~~for ~~OPERATIONS~~summary judgment on claims that OSI was required to pay royalties on the sale of the cView product and that failure to pay such royalties and disclosure of confidential information to the offshore development company constituted a breach of contract. Further, the court denied OSI’s motion for summary judgment on claims that SEDONA was in breach of contract for demanding royalty payments, while accepting OSI’s claim that cView was a license enhancement not subject to royalties.

~~ITEM~~Anita 1Primo, Vice President and CFO of SEDONA, said: “While SEDONA Corporation respects the Court, we disagree with its decision and are disappointed with the ruling.01 ~~ENTRY~~However, ~~INTO~~SEDONA Awill ~~MATERIAL~~continue to ~~DEFINITIVE~~explore ~~AGREEMENT~~legal alternatives including filing an appeal on this decision. We remain confident in our assessment that the validity of our claims is substantiated from well-documented evidence gathered during the discovery process. The Company will continue to vigorously defend any misappropriation of its intellectual capital and pursue all legal recourse to obtain remuneration that is rightfully owed for the embedding or licensing of our technology.”

I.		Revision to Terms of Funding:
		On December 31, 2008, Sedona Corporation (“Sedona”) entered into agreements relating to the consolidation and refinancing of certain indebtedness and the borrowing of additional funds. As part of the refinancing, Sedona entered into a loan agreement and other related documents (“Agreement”) to receive new funding in an aggregate maximum amount of $2,250,000.
		The funding schedule has been amended at the request of the lender and approved by the Company and the Board of Directors on March 11, 2008 as follows:

David Vey, Chairman and CEO of SEDONA Corporation, added that “the early version of our CRM product used by OSI was replaced several years ago. Therefore, despite the court’s ruling, I remain confident in the Company’s growth potential. Along with the recent announcement of our new product architecture, we have developed an unprecedented capability to provide best practices for expanding market penetration, increasing customer loyalty, and improving profitability within leading financial institutions throughout the world.”

(i) the first installment on or before December 31, 2008; (ii) the second installment on or before January 15, 2009, in the amount of $300,000.00; (iii) the third installment on or before March 18, 2009, in the amount of $600,000.00; (iv) the fourth installment on or before May 1, 2009, in the amount of $750,000.00; (v) the fifth installment on or before September 30, 2009, in the amount of $500,000.00

		Payment of the fifth installment is subject to the Company achieving a certain profitability level, referred to as “EBITDA Break Even”, at the end of the 3rd quarter of Fiscal Year 2009, (i.e. September 30, 2009).
		The parties are currently drafting an amendment to the loan agreement to reflect the revised funding schedule.
II.		Amendment of Surety Agreement dated November 2, 2006:
		On March 11, 2009, Sedona Corporation (“Sedona”) and David Vey, the Chairman and a shareholder of Sedona, agreed to an amendment and restatement of the Surety Agreement between Sedona and David Vey, originally dated November 2, 2006 (the “Agreement”). The Agreement extends the coverage period in the Agreement from October 28, 2008 until October 28, 2009. In addition, the amended Agreement includes a provision for automatic renewal of the Agreement for yearly periods unless Sedona receives written notice of cancellation from the Vey at least 60 days prior to the expiration date. The Agreement is attached as an exhibit to this Form 8-K filing.
III.		Extension to Oak Harbor Note due May 15, 2009:
		On March 11, 2009, Sedona Corporation (“Sedona”) and Oak Harbor Investment Properties, LLC (“Oak Harbor”) agreed to extend the maturity date of a promissory note (the “Note”), originally dated August 17, 2006, in the principal amount of $1,040,402 made by Sedona in favor of Oak Harbor. Oak Harbor is a limited liability corporation in which David Vey and Richard T. Hartley are managing members. The Note originally had a maturity date of May 1, 2009, at which time all outstanding principal and interest were due. Upon amendment, the note will be payable as follows:

	(i)		$400,000 of principal shall be due on November 15, 2009;
	(ii)		$640,402 of principal plus accrued interest will be due on May 15, 2010.

The parties are currently drafting an amended and restated note to reflect such terms.

ITEM 9.01 EXHIBITS

99.1 Second Amended and Restated Surety Agreement, dated as of March 11, 2009.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: ~~March~~August 1321, 2009

SEDONA CORPORATION By: /s/ ~~SCOTT~~David CR. ~~EDELMAN~~Vey ~~Scott~~David CR. ~~Edelman~~Vey ~~President and~~ Chief Executive Officer

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