Exhibit 14.1


              LEVEL 8 SYSTEMS CODE OF ETHICS AND BUSINESS CONDUCT

SECTION 1. INTRODUCTION

This Code of Ethics and  Business  Conduct  helps insure  compliance  with legal
requirements  and our  standards of business  conduct.  All employees of Level 8
Systems,  Inc. (the  "Company") are expected to read and understand this Code of
Ethics and Business  Conduct,  uphold these  standards in day to day activities,
comply with all applicable  policies and procedures,  and ensure that all agents
and contractors are aware of, understand and adhere to these standards.

This  Code of Ethics  and  Business  Conduct  seeks to deter  wrongdoing  and to
promote:

      o     Honest and ethical conduct, including the ethical handling of actual
            or apparent  conflicts of interest between personal and professional
            relationships;

      o     Avoidance  of  conflicts of  interest,  including  disclosure  to an
            appropriate  person or persons identified in this Code of Ethics and
            Business  Conduct of any material  transaction or relationship  that
            reasonably could be expected to give rise to such conflict;

      o     Full,  fair,  accurate,  timely  and  understandable  disclosure  in
            reports and  documents  that the Company  files with, or submits to,
            the  Securities  and  Exchange  Commission  (the "SEC") and in other
            public communications made by the Company;

      o     Compliance with applicable governmental laws, rules and regulations;

      o     The prompt  internal  reporting of violations of this Code of Ethics
            and Business Conduct to an appropriate  person or persons identified
            in this Code of Ethics and Business Conduct; and

      o     Accountability  for  adherence  to this Code of Ethics and  Business
            Conduct.

Because the principles described in this Code of Ethics and Business Conduct are
general in nature,  you should also review all applicable  Company  policies and
procedures  for more  specific  instruction  which  can be found on the  Level 8
Systems Knowledge Center intranet,  under Network and Systems  Policies.  If you
have any questions you can contact the Human  Resources  Department or Corporate
Secretary.

Nothing in this Code of Ethics and Business Conduct, in any company policies and
procedures,  or in other related  communications  (verbal or written) creates or
implies an employment contract or term of employment.

We are  committed  to  continuously  reviewing  and  updating  our  policies and
procedure.  This Code of Ethics and Business Conduct,  therefore,  is subject to
modification. This Code of Ethics and Business Conduct supersedes all other such
codes, policies, procedures, instructions, practices, rules or written or verbal
representations to the extent they are inconsistent.

SECTION 2. COMPLIANCE IS EVERYONES BUSINESS

Ethical  business  conduct is critical to our  business.  As an  employee,  your
responsibility  is to  respect  and  adhere  to these  practices.  Many of these
practices reflect legal or regulatory requirements. Violations of these laws and
regulations  can  create  significant   liability  for  you,  the  Company,  its
directors, officers, and other employees.

Part of your job and  ethical  responsibility  is to help  enforce  this Code of
Ethics and Business Conduct.  You should be alert to possible  violations of the
law,  this Code of Ethics and Business  Conduct,  or other  company  policies or
procedures.  You should  report any such  possible  violations  to the Corporate
Secretary.  You must  cooperate  in any internal or external  investigations  of
possible violations.  Reprisal, threats,  retribution or retaliation against any
person who has in good faith  reported a violation  or a suspected  violation of
law, this Code of Ethics and Business  Conduct,  or other Company  policies,  or
against any person who is assisting any investigation or process with respect to
such a violation, is prohibited.


                                      E-63
<PAGE>

                                                                    Exhibit 14.1

Violations  of law,  this Code of Ethics and Business  Conduct or other  Company
policies or procedures by Company  employees can lead to disciplinary  action up
to and including termination.

In  trying  to  determine  whether  any given  action  is  appropriate,  use the
following  test.  Imagine  that the words you are  using or the  action  you are
taking  is  going to be  fully  disclosed  in the  media  with all the  details,
including your photo. If you are uncomfortable with the idea of this information
being made  public,  perhaps  you should  think  again  about your words or your
course of action.

In all cases, if you are unsure about the appropriateness of an event or action,
please seek  assistance in interpreting  the  requirements of these practices by
contacting the Corporate Secretary.

SECTION 3. YOUR RESPONSIBILITIES TO THE COMPANY AND ITS STOCKHOLDERS

                          GENERAL STANDARDS OF CONDUCT

The Company  expects all  employees,  agents and  contractors  to exercise  good
judgment to ensure the safety and welfare of employees,  agents and  contractors
and to maintain a cooperative,  efficient,  positive,  harmonious and productive
work environment and business organization.  These standards apply while working
on our premises, at offsite locations where our business is being conducted,  at
Company  sponsored  business and social events,  or at any other place where you
are a representative of the Company. Employees, agents or contractors who engage
in  misconduct  or  whose  performance  is  unsatisfactory  may  be  subject  to
corrective action, up to and including termination.

                                APPLICABLE LAWS

All Company  employees,  agents and contractors  must comply with all applicable
laws,  regulations,  rules and  regulatory  orders.  Company  employees  located
outside of the United  States  must  comply  with laws,  regulations,  rules and
regulatory orders of the United States,  including the Foreign Corrupt Practices
Act and the U.S. Export Control Act, in addition to applicable  local laws. Each
employee,  agent  and  contractor  must  acquire  appropriate  knowledge  of the
requirements  relating to his or her duties  sufficient  to enable him or her to
recognize  potential  dangers and to know when to seek advice from legal counsel
on specific  Company policies and procedures.  Violations of laws,  regulations,
rules and orders may subject the  employee,  agent or  contractor  to individual
criminal or civil  liability,  as well as to  discipline  by the  Company.  Such
individual  violations  also may  subject  the  Company  to  civil  or  criminal
liability or the loss of business.

                             CONFLICTS OF INTEREST

Each of us has a responsibility to the Company, our stockholders and each other.
Although  this duty does not prevent us from  engaging in personal  transactions
and  investments,  it does demand that we avoid  situations  where a conflict of
interest might occur or appear to occur. The Company is subject to scrutiny from
many different  individuals and organizations.  We always should strive to avoid
even the appearance of impropriety.

What constitutes  conflict of interest?  A conflict of interest exists where the
interests  or benefits  of one person or entity  conflict  with the  interest or
benefits of the Company. Examples include:

      o     Employment/Outside  Employment.  In consideration of your employment
            with the Company,  you are expected to devote your full attention to
            the  business  interests  of the Company.  You are  prohibited  from
            engaging in any activity that  interferes  with your  performance or
            responsibilities  to the Company or is otherwise in conflict with or
            prejudicial to the Company.  Our policies prohibit any employee from
            accepting simultaneous employment with a Company supplier, customer,
            developer or  competitor,  or from taking part in any activity  that
            enhances or supports a competitor's position. Additionally, you must
            disclose to the Company any interest that you have that may conflict
            with the business of the Company.  If you have any questions on this
            requirement,  you  should  contact  your  supervisor  or  the  Human
            Resources Department.

      o     Outside  Directorships.  It is a conflict  of interest to serve as a
            director of any company that competes with the Company. Although you
            may serve as a director of a Company supplier, customer,  developer,
            or other business partner, our policy requires that you first obtain
            approval from the Company's  Corporate  Secretary before accepting a


                                      E-64
<PAGE>

                                                                    Exhibit 14.1

            directorship. Any compensation you receive should be commensurate to
            your  responsibilities.  Such approval may be  conditioned  upon the
            completion of specified actions.

      o     Business  Interests.  If you are considering  investing in a Company
            customer,  supplier,  developer or  competitor,  you must first take
            great care to ensure that these  investments do not compromise  your
            responsibilities  to the Company.  Many factors should be considered
            in  determining  whether a conflict  exists,  including the size and
            nature of the  investment;  your ability to influence  the Company's
            decisions; your access to confidential information of the Company or
            of the other company; and the nature of the relationship between the
            Company and the other company.

      o     Inventions.  Company employees must receive written  permission from
            the Corporate  Secretary before  developing  outside of the Company,
            any products,  software or  intellectual  property that is or may be
            related to the Company's current or potential business.

      o     Related  Parties.  As a general  rule,  you should avoid  conducting
            Company  business with a relative or  significant  other,  or with a
            business in which a relative or  significant  other is associated in
            any significant  role.  Relatives include spouse,  sister,  brother,
            daughter, son, mother, father, grandparents,  aunts, uncles, nieces,
            nephews,  cousins,  step  relationships,  and  in-laws.  Significant
            others include  persons living in a spousal  (including same sex) or
            familial fashion with an employee.

            If such a related party  transaction is unavoidable,  you must fully
            disclose  the  nature  of  the  related  party  transaction  to  the
            Company's  Human  Resource  Department and Corporate  Secretary.  If
            determined  to be  material  to the  Company  by the Human  Resource
            Department,  the  Company's  Audit  Committee  must  review  and, in
            advance, approve in writing the related party transaction.  The most
            significant related party transactions, particularly those involving
            the Company's directors or executive officers, must be reviewed and,
            in advance, approved in writing by the Company's Board of Directors.
            The Company must report all such material related party transactions
            under  applicable  accounting  rules,  Federal  securities laws, SEC
            rules and  regulations,  and securities  market rules.  Any dealings
            with a  related  party  must  be  conducted  in  such a way  that no
            preferential treatment is given to this business.

            The Company  discourages the employment of relatives and significant
            others in positions or  assignments  within the same  department and
            prohibits the employment of such  individuals in positions that have
            a financial  dependence or influence  (e.g.,  an auditing or control
            relationship or a supervisor/subordinate  relationship). The purpose
            of this  policy is to  prevent  the  organizational  impairment  and
            conflicts  that are likely outcome of the employment of relatives or
            significant   others,   especially   in   a   supervisor/subordinate
            relationship.  If a question  arises about whether a relationship is
            covered by this policy, the Human Resources  Department shall advise
            all affected  applicants  and  transferees  of this policy.  Willful
            withholding     of     information     regarding    a     prohibited
            relationship/reporting  arrangement  may be  subject  to  corrective
            action,   up  to  and   including   termination.   If  a  prohibited
            relationship exists or develops between two employees,  the employee
            in the senior  position must bring the situation to the attention of
            his/her supervisor.  The Company retains the prerogative to separate
            the   individuals  at  the  earliest   possible   time,   either  by
            reassignment or by termination, if necessary.

      o     Other Situations.  Because other conflicts of interest may arise, it
            would be impractical to attempt to list all possible situations.  If
            a proposed  transaction or situation  raises any questions or doubts
            in your mind, you should consult the Corporate Secretary.

Corporate Opportunities

      Employees,  officers and  directors may not exploit for their own personal
      gain  opportunities  that  are  discovered  through  the use of  corporate
      property,  information  or position  unless the  opportunity  is disclosed
      fully in  writing to the  Company's  Board of  Directors  and the Board of
      Directors declines to pursue such opportunity.

Protecting the Company's Confidential Information

      Employees,  officers and  directors may not exploit for their own personal
      gain  opportunities  that  are  discovered  through  the use of  corporate
      property,  information  or position  unless the  opportunity  is disclosed
      fully in  writing to the  Company's  Board of  Directors  and the Board of
      Directors declines to pursue such opportunity.


                                      E-65
<PAGE>

                                                                    Exhibit 14.1

Protecting the Company's Confidential Information

      The Company's confidential  information is a valuable asset. The Company's
      confidential  information  includes:  (1) source and object code,  prices,
      trade secrets,  mask works,  databases,  hardware,  software,  designs and
      techniques,  programs, engine protocols, models, displays and manuals, and
      the  selection,  coordination,  and  arrangement  of the  contents of such
      materials,  (2) any unpublished information concerning research activities
      and plans, customers, marketing or sales plans, sales forecasts or results
      of marketing efforts,  pricing or pricing strategies,  costs,  operational
      techniques, strategic plans, customer information, including name, address
      and email address,  (3) marketing  data, and (4) any other  identification
      data,  and  unpublished  financial   information,   including  information
      concerning revenues,  profits and profit margins.  This information is the
      property  of the  Company  and  may be  protected  by  patent,  trademark,
      copyright and trade secret laws. All confidential information must be used
      for Company business  purposes only. Every employee,  agent and contractor
      must safeguard it. THIS RESPONSIBILITY INCLUDES NOT DISCLOSING THE COMPANY
      CONFIDENTIAL  INFORMATION,  SUCH AS  INFORMATION  REGARDING  THE COMPANY'S
      PRODUCTS OR  BUSINESS  OVER THE  INTERNET.  You are also  responsible  for
      properly labeling any and all documentation  shared with or correspondence
      sent to the Company's  Corporate  Secretary or outside counsel as "Level 8
      Systems  Confidential".  This  responsibility  includes the  safeguarding,
      securing and proper  disposal of  confidential  information  in accordance
      with the Company's  policy on Maintaining  and Managing  Records set forth
      later in this  Section 3 of this  document.  This  obligation  extends  to
      confidential  information of third parties,  which the Company  rightfully
      has received under Non  Disclosure  Agreements.  See the Company's  policy
      dealing  with  Handling  Confidential  Information  of Others set forth in
      Section 4 of this Code of Ethics and Business Conduct.

      o     Confidentiality  Guidelines. When you joined the Company, you signed
            guidelines   to  protect  and  use   appropriately   the   Company's
            confidential  information.  These guidelines remain in effect for as
            long as you work for the  Company  and after you leave the  Company.
            Under  these   guidelines   you  may  not  disclose  the   Company's
            confidential information to anyone or use it to benefit anyone other
            than the Company  without the prior written consent of an authorized
            Company officer.

      o     Disclosure  of Company  Confidential  Information.  To  further  the
            Company's business,  from time to time our confidential  information
            may be disclosed to potential  business  partners.  Such  disclosure
            however,  should never be done  without  carefully  considering  its
            potential benefits and risks. If you determine, in consultation with
            your  manager  and  other  appropriate  Company   management,   that
            disclosure of confidential  information is necessary,  you then must
            contact  the  Corporate  Secretary  to  ensure  that an  appropriate
            written  nondisclosure  agreement is signed prior to the disclosure.
            The Company has standard nondisclosure  agreements suitable for most
            disclosures.  You  must  not  sign  a  third  party's  nondisclosure
            agreement or accept changes to the Company's standard  nondisclosure
            agreements  without  review and approval by the Company's  Corporate
            Secretary.  In addition,  all Company materials that contain Company
            confidential information,  including presentations, must be reviewed
            and  approved  by  the  Company's   Corporate   Secretary  prior  to
            publication  or  use.  Furthermore,   any  employee  publication  or
            publicly  made  statement  that might be  perceived  or construed as
            attributable  to the  Company,  made outside the scope of his or her
            employment  with the  Company,  must be  reviewed  and  approved  in
            writing  in  advance  and  must  include  the   Company's   standard
            disclaimer that the publication or statement represents the views of
            the specific author and not of the Company.

      o     Requests by Regulatory  Authorities.  The Company and its employees,
            agents and contractors  must cooperate with  appropriate  government
            inquiries  and  investigations.  In  this  context,  however,  it is
            important to protect the legal rights of the Company with respect to
            its   confidential   information.   All   government   requests  for
            information,  documents or investigative interviews must be referred
            to the Company's Corporate Secretary.  No financial  information may
            be  disclosed  without  the prior  approval  of the Chief  Financial
            Officer.

      o     Company  Spokespeople.   Specific  policies  have  been  established
            regarding  who may  communicate  information  to the  press  and the
            financial analyst  community.  All inquiries or calls from the press
            and  financial  analysts  should be referred to the Chief  Financial
            Officer or Investor Relations Department. The Company has designated
            its Chief Executive  Officer,  Chief Financial  Officer and Investor
            Relations  Department as official Company spokespeople for financial
            matters.  The Company has designated its Public Relations Department
            as official Company spokespeople for marketing,  technical and other
            such  information.  These  designees  are the  only  people  who may
            communicate with the press on behalf of the Company.


                                      E-66
<PAGE>

                                                                    Exhibit 14.1

              OBLIGATIONS UNDER SECURITIES LAWS "INSIDER" TRADING

Obligations  under the U.S.  securities  laws apply to  everyone.  In the normal
course of business,  officers,  directors,  employees,  agents,  contractors and
consultants of the Company may come into  possession of  significant,  sensitive
information.  This  information  is the  property of the Company - you have been
entrusted  with it. You may not profit  from it by buying or selling  securities
yourself or from passing on the  information  to others to enable them to profit
or for them to profit on your  behalf.  The  purpose  of this  policy is both to
inform  you of your  legal  responsibilities  and to make  clear to you that the
misuse  of  sensitive  information  is  contrary  to  Company  policy  and  U.S.
securities laws.

Insider trading is a crime,  penalized by fines up to $5,000,000 and 20 years in
jail for  individuals.  In addition,  the SEC may seek the imposition of a civil
penalty of up to 3 times the profits  made or losses  avoided  from the trading.
Insider  trades  must expel any  profits  made,  and are often  subjected  to an
injunction against future violations.  Finally, insider traders may be subjected
to civil liability in private lawsuits.

Employers and other controlling persons (including  supervisory  personnel) also
are at risk under U.S.  securities  laws.  Controlling  persons may, among other
things,  face penalties of the greater of $5,000,000 or 3 times the profits made
or losses avoided by the trader if they recklessly fail to take preventive steps
to control insider trading.

Thus,  it is  important  both to you  and to the  Company  that  insider-trading
violations  do not occur.  You should be aware  that stock  market  surveillance
techniques are becoming  increasingly  more  sophisticated,  and the chance that
U.S.  federal or other  regulatory  authorities  will detect and prosecute  even
small level trading is significant. Insider trading rules are strictly enforced,
even in instances when the financial transactions seem small. You should contact
the Chief Financial  Officer if you are unsure as to whether or not you are free
to trade.

The  Company has  imposed a trading  blackout  period on members of the Board of
Directors,  executive  officers and all employees.  These  directors,  executive
officers and employers  generally may not trade in Company securities during the
blackout period.

Trading Windows and Blackout Periods

1.    Trading  Window  for  Section  16  Individuals  and Key  Employees.  After
      obtaining  trading approval from the Chief Financial  Officer,  Section 16
      Individuals and Key Employees may trade in Company  securities only during
      the period beginning at the open of trading on the second full trading day
      following the Company's widespread public release of quarterly or year-end
      earnings,  and ending at the close of trading on the  fifteenth day of the
      third month of the fiscal quarter in which the earnings are released.

2.    Trading Windows for All Other Covered Insiders. All other Covered Insiders
      who are not Section 16  Individuals  or Key Employees may trade in Company
      securities only during the period  beginning at the open of trading on the
      second full trading day following the Company's  widespread public release
      of  quarterly  or year-end  earnings and ending at the close of trading on
      the  fifteenth  day of the third month of the fiscal  quarter in which the
      earnings are released.

3.    No Trading  During  Trading  Windows  While in the  Possession of Material
      Nonpublic  Information.  No Covered Insiders possessing material nonpublic
      information  concerning the Company may trade in Company  securities  even
      during applicable trading windows. Persons possessing such information may
      trade during a trading window only after the open of trading on the second
      full trading day following the Company's  widespread public release of the
      information.

4.    No Trading  During  Blackout  Periods.  No Covered  Insiders  may trade in
      Company securities outside of the applicable trading windows or during any
      special  blackout  periods that the Compliance  Officer may designate.  No
      Covered  Insiders may  disclose to any outside  third party that a special
      blackout period has been designated.

5.    Exceptions  for  Hardship  Cases.  The Chief  Financial  Officer may, on a
      case-by-case basis, authorize trading in Company securities outside of the
      applicable  trading windows (but not during special blackout  periods) due
      to financial hardship or other hardships.


                                      E-67
<PAGE>

                                                                    Exhibit 14.1

               PROHIBITION AGAINST SHORT SELLING OF COMPANY STOCK

No  Company  director,  officer  or other  employee,  agent or  contractor  may,
directly or indirectly, sell any equity security,  including derivatives, of the
Company  if he or she (1) does not own the  security  sold,  or (2) if he or she
owns the security,  does not deliver it against such sale (a "short sale against
the box") within twenty days thereafter, or does not within five days after such
sale  deposit it in the mails or other  usual  channels  of  transportation.  No
Company director,  officer or other employee,  agent or contractor may engage in
such short sales. A short sale, as defined in this policy, means any transaction
whereby one may  benefit  from a decline in the  Company's  stock  price.  While
employees who are not executive  officers or directors are not prohibited by law
from engaging in short sales of Company's securities, the Company has adopted as
policy that employees may not do so.

                            USE OF COMPANY'S ASSETS

1.    General. Protecting the Company's assets is a key fiduciary responsibility
      of every employee,  agent and  contractor.  Care should be taken to ensure
      that assets are not misappropriated, loaned to others, or sold or donated,
      without  appropriate  authorization.  All  Company  employees,  agents and
      contractors are responsible for the proper use of Company assets, and must
      safeguard such assets against loss,  damage,  misuse or theft.  Employees,
      agents  or  contractors  who  violate  any  aspect  of this  policy or who
      demonstrates  poor  judgment  in the manner in which they use any  Company
      asset  may  be  subject  to  disciplinary  action,  up  to  and  including
      termination of employment or business relationship,  at the Company's sole
      discretion.  Company  equipment  and  assets  are to be used  for  Company
      business  purposes only.  Employees,  agents and  contractors  may not use
      Company  assets for personnel  use, nor may they allow any other person to
      use Company assets. Employees who have any questions regarding this policy
      should  bring  them to the  attention  of the  Company's  Human  Resources
      representative.

2.    Company Funds.  Every Company  employee is personally  responsible for all
      Company funds over which he or she exercises  control.  Company agents and
      contractors  should not be allowed to exercise control over Company funds.
      Company  funds must solely be used for Company  business  purposes.  Every
      Company  employee,  agent and  contractor  must take  reasonable  steps to
      ensure that the Company  receives  good value for Company  funds spent and
      must maintain  accurate and timely records of each and every  expenditure.
      Expense reports must be accurate and submitted in a timely manner. Company
      employees,  agents  and  contractors  must not use  Company  funds for any
      personal use.

3.    Computers and Other  Equipment.  The Company strives to furnish  employees
      with the equipment  necessary to efficiently and effectively perform their
      jobs. You must care for that equipment and  responsibly use it for Company
      business  purposes,  only.  If you use Company  equipment  at your home or
      off-site,  take precautions to protect it from theft or damage, just as if
      it were your own. If you are no longer  employed by the Company,  you must
      immediately  return  all  Company  equipment.  While  computers  and other
      electronic  devices are made  accessible  to  employees  to assist them to
      perform their jobs and to promote Company's interests, all such equipment,
      whether used wholly or partially on the  Company's  premises,  must remain
      fully  accessible to the Company and, to the maximum  extent  permitted by
      law, will remain the sole and exclusive property of the Company.

      Employees,  agents and contractors  should not maintain any expectation of
      privacy  with respect to  information  transmitted  over,  received by, or
      stored in any electronic  communications device owned, leased, or operated
      in  whole  or in  part  by or on  behalf  of the  Company.  To the  extent
      permitted by applicable  law, the Company retains the right to gain access
      to any  information  received  by,  transmitted  by, or stored in any such
      electronic  communications  device, by and through its employees,  agents,
      contractors,  or  representatives,  at any time, either with or without an
      employee's or third party's knowledge, consent or approval.

4.    Software.  All software used by employees to conduct Company business must
      be  appropriately  licensed.  Never make or use  illegal  or  unauthorized
      copies of any  software,  whether in the office,  at home, or on the road,
      since doing so may constitute  copyright  infringement  and may expose you
      and the Company to potential  civil and criminal  liability.  In addition,
      use of illegal or unauthorized copies of software may subject the employee
      to disciplinary  action,  up to and including  termination.  The Company's
      Information  Technology  Department   periodically  will  inspect  Company
      computers  to verify that only  approved  and  licensed  software has been
      installed. Any non-licensed/supported software will be removed.


                                      E-68
<PAGE>

                                                                    Exhibit 14.1

5.    Electronic  Usage.  The  purpose of this  policy is to make  certain  that
      employees utilize electronic  communication  devices in a legal,  ethical,
      and   appropriate    manner.   This   policy   addresses   the   Company's
      responsibilities  and  concerns  regarding  the fair and proper use of all
      electronic  communications  devices  within  the  organization,  including
      computers,  email, connections to the Internet,  intranet and extranet and
      any other  public or private  networks,  voice mail,  video  conferencing,
      facsimiles,  and telephones.  Posting or discussing information concerning
      the  Company's  products  or business  on the  Internet  without the prior
      written consent of the company's  Chief  Financial  Officer is prohibited.
      Any other form of electronic  communication used by employees currently or
      in the future also is intended to be encompassed  under this policy. It is
      not possible to identify every standard and rule  applicable to the use of
      electronic communications devices. Employees, therefore, are encouraged to
      use sound  judgment  whenever  using  any  feature  of our  communications
      systems.

                        MAINTAINING AND MANAGING RECORDS

The purpose of this policy is to set forth and convey the Company's business and
legal  requirements  in managing  records,  including  all recorded  information
regardless of medium or characteristics.  Records include paper documents, CD's,
computer  hard disks,  email,  floppy disks,  microfilm or all other media.  The
Company is required by local, state, federal, foreign and other applicable laws,
rules  and  regulations  to  retain  certain  records  and  to  follow  specific
guidelines in managing its records.  Civil and criminal penalties for failure to
comply with such guidelines can be severe for employees, agents, contractors and
the  Company,  and  failure  to comply  with such  guidelines  may  subject  the
employee,  agent or  contractor  to  disciplinary  action,  up to and  including
termination  of  employment  or  business  relationship  at the  Company's  sole
discretion.

                             RECORDS ON LEGAL HOLD

A legal hold suspends all document  destruction  procedures in order to preserve
appropriate  records  under  special   circumstances,   such  as  litigation  or
government  investigations.  The Company's  Corporate  Secretary  determines and
identifies  what types of Company records or documents are required to be placed
under a legal hold.  Every Company  employee,  agent and contractor  must comply
with this policy.  Failure to comply with this policy may subject the  employee,
agent or contractor to disciplinary  action, up to and including  termination of
employment or business relationship at the Company's sole discretion.

The Company's  Corporate  Secretary will notify you if a legal hold is placed on
records for which you are  responsible.  You then must  preserve and protect the
necessary records in accordance with  instructions from the Company's  Corporate
Secretary.  RECORDS OR SUPPORTING  DOCUMENTS THAT HAVE BEEN PLACED UNDER A LEGAL
HOLD MUST NOT BE DESTROYED, ALTERED OR MODIFIED UNDER ANY CIRCUMSTANCES. A legal
hold  remains  effective  until it  officially  is  released  in  writing by the
Company's  Corporate  Secretary.  If you are unsure  whether a document has been
placed under a legal hold,  you should  preserve and protect that document while
you check with the Company's Corporate Secretary.

If you have any questions  about this policy,  you should  contact the Company's
Corporate Secretary.

                               PAYMENT PRACTICES

      o     Accounting   Practices.   The  Company's   responsibilities  to  its
            stockholders  and the investing public require that all transactions
            fully and accurately be recorded in the Company's  books and records
            in compliance with all applicable laws. False or misleading entries,
            unrecorded  funds  or  assets,   or  payments  without   appropriate
            supporting  documentation  and approval  strictly are prohibited and
            violate Company policy and the law. Additionally,  all documentation
            supporting a transaction  fully and accurately  should  describe the
            nature of the transaction and be processed in a timely fashion.

      o     Political   Contributions.   The  Company   reserves  the  right  to
            communicate   its   position   on   important   issues  to   elected
            representatives and other government officials.  It is the Company's
            policy fully to comply with all local, state,  federal,  foreign and
            other  applicable laws,  rules and regulations  regarding  political
            contributions.  Under no  circumstances  may the Company's  funds or
            assets be used for, or be  contributed  to,  political  campaigns or
            political  practices  without  the  prior  written  approval  of the
            Company's  Chief  Financial  Officer and, if required,  the Board of
            Directors.


                                      E-69
<PAGE>

                                                                    Exhibit 14.1

      o     Prohibition of Inducements.  Under no  circumstances  may employees,
            agents or  contractors  make an offer to pay, make  payment,  make a
            promise to pay, or issue an authorization to pay any money, gift, or
            anything of value to customers,  vendors,  consultants,  etc., which
            would be perceived to intend, directly or indirectly,  to improperly
            influence  any  business  decision,  any act or failure to act,  any
            commitment of fraud, or any opportunity for the commission of fraud.
            Inexpensive gifts, infrequent business meals, celebratory events and
            entertainment,  provided  that they are not  excessive  or create an
            appearance  of  impropriety,  do not violate this policy.  Questions
            regarding whether a particular  payment or gift violates this policy
            should be directed to Human Resources or the Corporate Secretary.

                         FOREIGN CORRUPT PRACTICES ACT

The Company  requires full  compliance  with the Foreign  Corrupt  Practices Act
(FCPA) by all of its employees, agents, and contractors.

The  anti-bribery  and corrupt  payment  provisions of the FCPA make illegal any
corrupt offer, payment, promise to pay, or authorization to pay any money, gift,
or anything of value to any foreign  official,  or any foreign  political party,
candidate or  official,  for the purpose of:  influencing  any act or failure to
act, in the official capacity of that foreign official or party; or inducing the
foreign  official  or party to use  influence  to affect a decision of a foreign
government  or agency,  in order to obtain or retain  business  for  anyone,  or
direct business to anyone.

All Company  employees,  agents and  contractors,  whether located in the United
States or abroad,  are  responsible  for FCPA  compliance  and the procedures to
ensure FCPA compliance.  All managers and supervisory  personnel are expected to
monitor continued compliance with the FCPA to ensure compliance with the highest
moral,  ethical and  professional  standards  of the  Company.  FCPA  compliance
includes the Company's  policy on Maintaining and Managing  Records in Section 3
of this Code of Business Conduct and Ethics.

Laws in most  countries  outside of the United  States also prohibit or restrict
government   officials  or  employees  of  government  agencies  from  receiving
payments,  entertainment,  or  gifts  for the  purpose  of  winning  or  keeping
business.  No contract  or  agreement  may be made with any  business in which a
government official or employee holds a significant interest,  without the prior
approval of the Company's Corporate Secretary.

                                EXPORT CONTROLS

A number of countries maintain controls on the destinations of exported products
or software.  Some of the strictest export controls are maintained by the United
States against  countries that the U.S.  government  considers  unfriendly or as
supporting  international  terrorism. The U.S. regulations are complex and apply
both to exports  from the United  States and to exports of  products  from other
countries,  when those products  contain U.S.  origin  components or technology.
Software  created in the United States is subject to these  regulations  even if
duplicated and packaged  abroad.  In some  circumstances,  an oral  presentation
containing  technical  data made to foreign  nationals in the United  States may
constitute a controlled  export.  The  Corporate  Secretary can provide you with
guidance on which countries are prohibited  destinations for Company products or
whether a proposed  technical  presentation  to foreign  nationals may require a
U.S. Government license.

                        PUBLIC DISCLOSURE OF INFORMATION

The federal securities laws require the Company to disclose certain  information
in various  reports  that the  Company  must file with or submit to the SEC.  In
addition, from time to time the Company makes other public communications,  such
as issuing  press  releases.  In order to ensure that  material  information  is
presented to the public on a timely basis,  the Company has designated its Chief
Executive Officer,  Chief Financial Officer,  and General Counsel as responsible
for  considering  the  materiality of information  and determining the Company's
disclosure obligations.

The Company expects its Chief Executive Officer,  Chief Financial  Officer,  the
Audit  Committee,  and all employees who are involved in the  preparation of SEC
reports or other public  documents to ensure that the  information  disclosed in
those documents is full, fair, accurate, timely and understandable.

Moreover,  if any employee  becomes aware of any material  information  that you
believe  should be disclosed to the public in the  Company's  reports filed with
the SEC, it is your responsibility to bring such information to the attention of
the Chief Financial Officer or to the Company's  General Counsel.  To the extent
that you reasonably believe that questionable  accounting or auditing conduct or


                                      E-70
<PAGE>

                                                                    Exhibit 14.1

practices  have occurred or are  occurring,  you should report those concerns to
the Company's General Counsel.

SECTION 4. RESPONSIBLITIES TO OUR CUSTOMERS AND OUR SUPPLIERS

                             CUSTOMER RELATIONSHIPS

If your  job  puts  you in  contact  with any  Company  customers  or  potential
customers,  it is critical for you to remember that you represent the Company to
the people with whom you are dealing. Act in a manner that creates value for our
customers and helps to build a  relationship  based upon trust.  The Company and
its employees have provided  products and services for a period of time and have
built up significant  goodwill over that time.  This goodwill is one of our most
important assets and the Company  employees,  agents and contractors must act to
preserve and enhance our reputation.

                         PAYMENTS OR GIFTS FROM OTHERS

Under no circumstances  may employees,  agents or contractors  accept any offer,
payment, promise to pay, or authorization to pay any money, gift, or anything of
value from customers,  vendors, consultants, etc. that is perceived as intended,
directly or indirectly,  to influence any business decision,  any act or failure
to act, any commitment of fraud, or any opportunity for the commission of fraud.
Inexpensive   gifts,   infrequent   business  meals,   celebratory   events  and
entertainment,  provided  that they are not excessive or create an appearance of
impropriety, do no violate this policy. Questions regarding whether a particular
payment or gift violates  this policy  should be directed to Human  Resources or
the Corporate Secretary.

Gifts given by the Company to suppliers or customers or received from  suppliers
or customers always should be appropriate to the  circumstances and never should
be of a kind that could create an appearance of impropriety. The nature and cost
must always accurately be recorded in the Company's books and records.

                             PUBLICATIONS OF OTHERS

The Company  subscribes to many  publications that help employees better perform
their jobs. These  publications  include  newsletters,  reference works,  online
reference  services,  magazines,  books,  and other  digital and printed  works.
Copyright law generally protects these works, and their unauthorized copying and
distribution  constitute  copyright  infringement.  You first  must  obtain  the
consent  of the  publisher  of a  publication  before  copying  publications  or
significant  parts  of  them.  When  in  doubt  about  whether  you  may  copy a
publication, consult the Corporate Secretary.

                HANDLING THE CONFIDENTIAL INFORMATION OF OTHERS

The Company has many kinds of business  relationships  with many  companies  and
individuals. Sometimes, they will volunteer confidential information about their
products  or  business  plans to induce  the  Company  to enter  into a business
relationship.  At  other  times,  we  may  request  a  third  party  to  provide
confidential  information to permit the Company to evaluate a potential business
relationship with that party. Whatever the situation,  we must take special care
to  responsibly  handle the  confidential  information  in  accordance  with our
agreements with such third parties. See also the Company's policy on Maintaining
and Managing Records in Section 3 of this Code of Ethics and Business Conduct.

      o     Appropriate Nondisclosure  Agreements.  Confidential information may
            take many forms.  An oral  presentation  about a  company's  product
            development plans may contain protected trade secrets.  A demo of an
            alpha  version of a company's  new software may contain  information
            protected by trade secret and copyright laws.

            You should never accept information offered by a third party that is
            represented as  confidential,  unless an  appropriate  nondisclosure
            agreement has been signed with the party  offering the  information.
            THE CORPORATE SECRETARY CAN PROVIDE NONDISCLOSURE  AGREEMENTS TO FIT
            ANY PARTICULAR SITUATION,  AND WILL COORDINATE APPROPRIATE EXECUTION
            OF  SUCH  AGREEMENTS  ON  BEHALF  OF  THE  COMPANY.   Even  after  a
            nondisclosure  agreement  is in place,  you only  should  accept the
            information  necessary to  accomplish  the purpose of receiving  it,
            such as a decision  on whether to proceed to  negotiate  a deal.  If
            more detailed or extensive  confidential  information is offered but
            is not necessary for your immediate purposes, it should be refused.


                                      E-71
<PAGE>

                                                                    Exhibit 14.1

      o     Need-to-Know. Once a third party's confidential information has been
            disclosed  to the  Company,  we have an  obligation  to abide by the
            terms of the relevant  nondisclosure  agreement and limit its use to
            the specific  purpose for which it was disclosed and to  disseminate
            it  only  to  other  Company  employees  with a  need  to  know  the
            information.  Every  employee,  agent and  contractor  involved in a
            potential  business  relationship with a third party must understand
            and  strictly  observe the  restrictions  on the use and handling of
            confidential  information.  When in  doubt,  consult  the  Corporate
            Secretary.

      o     Notes and Reports. When reviewing the confidential  information of a
            third party under a nondisclosure  agreement,  it is natural to take
            notes to prepare reports  summarizing the results of the review and,
            based partly on those notes or reports,  to draw  conclusions  about
            the  suitability  of a  business  relationship.  Notes  or  reports,
            however, can include confidential information disclosed by the other
            party and so only  should be retained  long  enough to complete  the
            evaluation of the  potential  business  relationship.  Subsequently,
            they either  should be  destroyed  or turned  over to the  Corporate
            Secretary for safekeeping or destruction.  These materials should be
            treated  as any other  disclosure  of  confidential  information  is
            treated:  marked  as  confidential  and  distributed  only to  those
            Company employees with a need to know.

      o     Competitive  Information.  You  should  never  attempt  to  obtain a
            competitor's  confidential  information by improper  means,  and you
            especially  should  never  contact  a  competitor   regarding  their
            confidential  information.  While the Company may, and does,  employ
            former  employees  of  competitors,  we  recognize  and  respect the
            obligations   of  those   employees  not  to  use  or  disclose  the
            confidential information of their former employers.

                              SELECTING SUPPLIERS

The Company's suppliers make significant contributions to our success. To create
an  environment  where our suppliers have an incentive to work with the Company,
they must be  confident  that they will be  treated  lawfully  and in an ethical
manner.  The Company's  policy is to purchase  supplies based on need,  quality,
service,  price and terms and  conditions..  Under no  circumstances  should any
Company  employee,  agent or contractor  attempt to coerce suppliers in any way.
The confidential information of a supplier is entitled to the same protection as
that of any other  third party and must not be  received  before an  appropriate
nondisclosure  agreement has been signed. A supplier's  performance never should
be  discussed  with  anyone  outside  the  Company.  A supplier  to the  Company
generally is free to sell its products or services to any other party, including
competitors of the Company.  In some cases,  where the products or services have
been designed,  fabricated,  or developed to our  specifications,  the agreement
between the parties may contain restrictions on sales.

                             GOVERNMENT REGULATIONS

It is the  Company's  policy  to  fully  comply  with  all  applicable  laws and
regulations  governing contact and dealings with government employees and public
officials and to adhere to high ethical,  moral and legal  standards of business
conduct.  This policy includes strict compliance with all local, state, federal,
foreign  and  other  applicable  laws,  rules and  regulations.  If you have any
questions  concerning  government  relations  you should  contact the  Company's
Corporate Secretary.

                                    LOBBYING

Employees, agents or contractors whose work requires lobbying communication with
any member or employee of a legislative body or with any government  official or
employee in the formulation of legislation  must have prior written  approval of
such activity from the Company's Corporate  Secretary.  Activity covered by this
policy  includes  meetings with  legislators  or members of their staffs or with
senior executive branch officials.  Preparation,  research, and other background
activities that are done in support of lobbying  communication  also are covered
by this policy even if the communication ultimately is not made.

                              GOVERNMENT CONTRACTS

It is the  Company's  policy  to  fully  comply  with  all  applicable  laws and
regulations  that  apply to  government  contracting.  It also is  necessary  to
strictly  adhere to all terms and conditions of any contract with local,  state,
federal,  foreign  or other  applicable  governments.  The  Company's  Corporate
Secretary must review and approve all contracts with any government entity.


                                      E-72
<PAGE>

                                                                    Exhibit 14.1

                           FREE AND FAIR COMPETITION

Most  countries  have  well-developed  bodies of law designed to  encourage  and
protect free and fair competition.  The Company is committed to obeying both the
letter and spirit of these laws. The  consequences of not doing so can be severe
for all of us.

These laws often  regulate the Company's  relationships  with its  distributors,
resellers,  dealers,  and  customers,.  Competition  laws generally  address the
following   areas:   pricing   practices   (including   price   discrimination),
discounting,  terms of  sales,  credit  terms,  promotional  allowances,  secret
rebates,   exclusive   dealerships  or   distributorships,   product   bundling,
restrictions  on  carrying  competing  products,  termination,  and  many  other
practices.

Competition laws also govern, usually quite strictly,  relationships between the
Company and its competitors. As a general rule, contacts with competitors should
be limited and always  should avoid  subjects  such as prices or other terms and
conditions of sale, customers, and suppliers.  Employees,  agents or contractors
of the Company may not knowingly make false or misleading  statements  regarding
its  competitors,  customers or suppliers.  Participating  with competitors in a
trade  association  or in a  standards  creation  body is  acceptable  when  the
association has been properly  established,  has a legitimate  purpose,  and has
limited its activities to that purpose.

No employee,  agent or contractor  shall at any time or under any  circumstances
enter into an agreement or understanding,  written or oral,  express or implied,
with any competitor concerning prices,  discounts,  other terms or conditions of
sale,  profits or profit  margin,  costs,  allocation  of product or  geographic
markets,  allocation  of  customers,  limitations  on  production,  boycotts  of
customers or suppliers, or bids or the intent to bid or even discuss or exchange
information on these  subjects.  In some cases,  legitimate  joint ventures with
competitors  may permit  exceptions to these rules,  as may bona fide  purchases
from or sales to  competitors  on non  competitive  products,  but the Company's
Corporate  Secretary  must review all such proposed  ventures in advance.  These
prohibitions  are absolute and strict  observance is required.  Collusion  among
competitors is illegal and the consequences of a violation are severe.

Although  the spirit of these  laws,  known as  "antitrust,"  "competition,"  or
"consumer  protection" or unfair  competition  laws, is  straightforward,  their
application to particular  situations  can be quite complex.  To ensure that the
Company complies fully with these laws, each of us should have a basic knowledge
of them and should involve our Corporate  Secretary  early on when  questionable
situations arise.

                              INDUSTRIAL ESPIONAGE

It is  the  Company's  policy  to  lawfully  compete  in the  marketplace.  This
commitment to fairness  includes  respecting the rights of our  competitors  and
abiding by all applicable  laws in the course of competing.  The purpose of this
policy is to maintain the  Company's  reputation as a lawful  competitor  and to
help ensure the integrity of the  competitive  marketplace.  The Company expects
its competitors to respect our rights to lawfully compete in the marketplace and
we must equally respect their rights to do the same. Company  employees,  agents
and  contractors  may not steal or  unlawfully  use the  information,  material,
products,  intellectual property, or proprietary or confidential  information of
anyone including suppliers, customers, business partners or competitors.

SECTION 5. WAIVERS

Any waiver of any  provision of this Code of Ethics and  Business  Conduct for a
member of the  Company's  Board of  Directors  or an  executive  officer must be
approved in writing by the Company's Board of Directors and promptly  disclosed.
Any waiver of any  provision  of this Code of Ethics and  Business  Conduct with
respect to any other  employee,  agent or contractor must be approved in writing
by the Company's Corporate Secretary.

SECTION 6. DISCIPLINARY ACTIONS

The  matters  covered in this Code of  Conduct  and  Business  Ethics are of the
utmost  importance to the Company,  its stockholders and its business  partners,
and are essential to the Company's ability to conduct its business in accordance
with its stated values. We expect all of our employees,  agents, contractors and
consultants  to adhere to these  rules in  carrying  out  their  duties  for the
Company.


                                      E-73
<PAGE>

                                                                    Exhibit 14.1

The Company will take appropriate action against any employee, agent, contractor
or consultant  whose  actions are found to violate  these  policies or any other
policies of the Company.  Disciplinary actions may include immediate termination
of employment or business  relationship at the Company's sole discretion.  Where
the  Company  has  suffered  a loss,  it may  pursue its  remedies  against  the
individuals or entities responsible.  Where laws have been violated, the Company
will fully  cooperate with the  appropriate  authorities.  You should review the
Company's  policies and procedures on Level 8 Systems Knowledge Center intranet,
under Network and Systems Policies for more detailed information.


                                      E-74
<PAGE>

                                                                    Exhibit 14.1

                            CONFIRMATION OF RECEIPT
                                     OF THE
                      CODE OF ETHICS AND BUSINESS CONDUCT
                                      FOR
                             LEVEL 8 SYSTEMS, INC.

By signing below, I attest that I have received a copy of the Code of Ethics and
Business  Conduct for Level 8 Systems,  Inc. and agree to abide by the terms and
conditions  set  forth  therein.  Failure  to abide by the  Code of  Ethics  and
Business Conduct of Level 8 Systems,  Inc. may result in disciplinary  action or
possible termination of employment.

                                                DATE:
----------------------------------------------        ---------------------
      EMPLOYEE SIGNATURE



WITNESS:
         -------------------------------------


                                      E-75