Document:

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                                                                   EXHIBIT 4.10

THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
TRANSFERRED IN VIOLATION OF SUCH ACT, THE RULES AND REGULATIONS THEREUNDER OR
THE PROVISIONS OF THIS WARRANT.

No. of Shares of Common Stock:____________           Warrant No. S-_____________

                                    WARRANT

                          To Purchase Common Stock of

                             Level 8 Systems, Inc.

          THIS IS TO CERTIFY THAT ___________ ("Holder"), or its registered
                                                ------
assigns, is entitled, at any time prior to the Expiration Date (as hereinafter
defined), to purchase from Level 8 Systems, Inc., a Delaware corporation
("Company"), _____________ shares of Common Stock (as hereinafter defined and
subject to adjustment as provided herein), in whole or in part, including
fractional parts, at a purchase price of $30.00 per share, all on the terms and
conditions and pursuant to the provisions hereinafter set forth.

1.   DEFINITIONS
     -----------

          As used in this Warrant, the following terms have the respective
meanings set forth below:

          "Additional Shares of Common Stock" shall mean all shares of Common
           ---------------------------------
Stock issued by Company after the Closing Date, other than Warrant Stock.

          "Business Day" shall mean any day that is not a Saturday or Sunday or
           ------------
a day on which banks are required or permitted to be closed in the State of New
York.

          "Closing Date" shall have the meaning set forth in the Merger
           ------------
Agreement.

          "Commission" shall mean the Securities and Exchange Commission or any
           ----------
other federal agency then administering the Securities Act and other federal
securities laws.

          "Common Stock" shall mean (except where the context otherwise
           ------------
indicates) the common stock, $0.001 par value, of Company as constituted on the
Closing Date, and any capital stock into which such Common Stock may thereafter
be changed, and shall also include (i) capital stock of Company of any other
class (regardless of how denominated) issued to the holders of shares of Common
Stock upon any reclassification thereof which is also not preferred as to
dividends or assets over any other class of stock of Company and which is not
subject to redemption and (ii) shares of common stock of any successor or
acquiring corporation (as defined in Section 4.4) received by or
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distributed to the holders of Common Stock of Company in the circumstances
contemplated by Section 4.4.

          "Convertible Securities" shall mean evidences of indebtedness, shares
           ----------------------
of stock or other securities which are convertible into or exchangeable, with or
without payment of additional consideration in cash or property, for Additional
Shares of Common Stock, either immediately or upon the occurrence of a specified
date or a specified event.

          "Current Market Price" shall mean, in respect of any share of Common
           --------------------
Stock on any date herein specified, the Appraised Value per share of Common
Stock as at such date, or so long as there shall be a public market for the
Common Stock the average of the daily market prices for thirty (30) consecutive
Business Days commencing forty-five (45) days before such date.  The daily
market price for each such Business Day shall be (i) the last sale price on such
day on the NASDAQ National Market System ("NASDAQ") or the principal stock
exchange on which such Common Stock is listed or admitted to trading, (ii) if no
sale takes place on such day on NASDAQ or any such exchange, the average of the
last reported closing bid and asked prices on such day as officially quoted on
NASDAQ or any such exchange, (iii) if the Common Stock is not then listed or
admitted to trading on NASDAQ or any stock exchange, the average of the last
reported closing bid and asked prices on such day in the over-the-counter
market, as furnished by the National Association of Securities Dealers Automatic
Quotation System or the National Quotation Bureau, Inc., (iv) if neither such
corporation at the time is engaged in the business of reporting such prices, as
furnished by any similar firm then engaged in such business, or (v) if there is
no such firm, as furnished by any member of the NASD selected mutually by the
Majority Holders and Company or, if they cannot agree upon such selection, as
selected by two such members of the NASD, one of which shall be selected by the
Majority Holders and one of which shall be selected by Company.

          "Current Warrant Price" shall mean, in respect of a share of Common
           ---------------------
Stock at any date herein specified, $30.00 per share of Common Stock as of the
date hereof, subject to adjustment as provided herein.

          "Exchange Act" shall mean the Securities Exchange Act of 1934, as
           ------------
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.

          "Exercise Period" shall mean the period during which this Warrant is
           ---------------
exercisable pursuant to Section 2.1.

          "Expiration Date" shall mean ______________, 2003.
           ---------------

          "GAAP" shall mean generally accepted accounting principles in the
           ----
United States of America as from time to time in effect.

          "Holder" shall mean the Person in whose name the Warrant set forth
           ------
herein is registered on the books of Company maintained for such purpose.

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          "Majority Holders" shall mean the holders of Warrants exercisable for
           ----------------
in excess of fifty (50%) percent of the aggregate number of shares of Common
Stock then purchasable upon exercise of all Warrants, whether or not then
exercisable.

          "Merger Agreement" shall mean the Agreement and Plan of Merger dated
           ----------------
as of October 2, 2000, by and among Company, Level 8 Technologies Acquisition
Corp. and StarQuest Software, Inc.

          "NASD" shall mean the National Association of Securities Dealers,
           ----
Inc., or any successor corporation thereto.

          "Other Property" shall have the meaning set forth in Section 4.4.
           --------------

          "Outstanding" shall mean, when used with reference to Common Stock, at
           -----------
any date as of which the number of shares thereof is to be determined, all
issued shares of Common Stock, except shares then owned or held by or for the
account of Company or any subsidiary thereof, and shall include all shares
issuable in respect of outstanding scrip or any certificates representing
fractional interests in shares of Common Stock.

          "Person" shall mean any individual, sole proprietorship, partnership,
           ------
limited liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, entity or
government (whether federal, state, county, city, municipal or otherwise,
including, without limitation, any instrumentality, division, agency, body or
department thereof).

          "Restricted Common Stock" shall mean shares of Common Stock which are,
           -----------------------
or which upon their issuance on the exercise of this Warrant would be, evidenced
by a certificate bearing the restrictive legend set forth in Section 9.1(a).

          "Securities Act" shall mean the Securities Act of 1933, as amended, or
           --------------
any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.

          "Transfer" shall mean any disposition of any Warrant or Warrant Stock
           --------
or of any interest in either thereof, which would constitute a sale thereof
within the meaning of the Securities Act.

          "Transfer Notice" shall have the meaning set forth in Section 9.2.
           ---------------

          "Warrants" shall mean this Warrant and all warrants issued upon
           --------
transfer, division or combination of, or in substitution for, any thereof.  All
Warrants shall at all times be identical as to terms and conditions and date,
except as to the number of shares of Common Stock for which they may be
exercised.

          "Warrant Price" shall mean an amount equal to (i) the number of shares
           -------------
of Common Stock being purchased upon exercise of this Warrant pursuant to
Section 2.1, multiplied by (ii) the Current Warrant Price as of the date of such
exercise.

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          "Warrant Stock" shall mean the shares of Common Stock purchased by the
           -------------
holders of the Warrants upon the exercise thereof.

2.  EXERCISE OF WARRANT
    -------------------

     2.1. Manner of Exercise.  From and after the Closing Date and until 5:00
          ------------------
P.M., New York time, on the Expiration Date, Holder may exercise this Warrant,
on any Business Day, for all or any part of the number of shares of Common Stock
purchasable hereunder.

          In order to exercise this Warrant, in whole or in part, Holder shall
deliver to Company at its principal office at 8000 Regency Parkway, Cary, North
Carolina 27511 or at the office or agency designated by Company pursuant to
Section 12, (i) a written notice of Holder's election to exercise this Warrant,
which notice shall specify the number of shares of Common Stock to be purchased,
(ii) payment of the Warrant Price and (iii) this Warrant.  Such notice shall be
substantially in the form of the subscription form appearing at the end of this
Warrant as Exhibit A, duly executed by Holder or its agent or attorney.  Upon
           ---------
receipt thereof, Company shall, as promptly as practicable, and in any event
within ten (10) Business Days thereafter, execute or cause to be executed and
deliver or cause to be delivered to Holder a certificate or certificates
representing the aggregate number of full shares of Common Stock issuable upon
such exercise, together with cash in lieu of any fraction of a share, as
hereinafter provided.  The stock certificate or certificates so delivered shall
be, to the extent possible, in such denomination or denominations as such Holder
shall request in the notice and shall be registered in the name of Holder or,
subject to Section 9, such other name as shall be designated in the notice.
This Warrant shall be deemed to have been exercised and such certificate or
certificates shall be deemed to have been issued, and Holder or any other Person
so designated to be named therein shall be deemed to have become a holder of
record of such shares for all purposes, as of the date the notice, together with
the cash or check or checks and this Warrant, is received by Company as
described above and all taxes required to be paid by Holder, if any, pursuant to
Section 2.2 prior to the issuance of such shares have been paid.  If this
Warrant shall have been exercised in part, Company shall, at the time of
delivery of the certificate or certificates representing Warrant Stock, deliver
to Holder a new Warrant evidencing the rights of Holder to purchase the
unpurchased shares of Common Stock called for by this Warrant, which new Warrant
shall in all other respects be identical with this Warrant, or, at the request
of Holder, appropriate notation may be made on this Warrant and the same
returned to Holder.  Notwithstanding any provision herein to the contrary,
Company shall not be required to register shares in the name of any Person who
acquired this Warrant (or part hereof) or any Warrant Stock otherwise than in
accordance with this Warrant.

          Payment of the Warrant Price shall be made at the option of the Holder
by (i) wire transfer to an account designated by Company, (ii) certified or
official bank check, and/or (iii) by the Holder's surrender to Company of that
number of shares of Warrant Stock (or the right to receive such number of
shares) or shares of Common Stock having an aggregate Current Market Price equal
to or greater than the Current Warrant Price for all shares then being purchased
(including those being surrendered), or (iv) any

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combination thereof, duly endorsed by or accompanied by appropriate instruments
of transfer duly executed by Holder or by Holder's attorney duly authorized in
writing.

     2.2. Payment of Taxes.  All shares of Common Stock issuable upon the
          ----------------
exercise of this Warrant pursuant to the terms hereof shall be validly issued,
fully paid and nonassessable and without any preemptive rights.  Company shall
pay all expenses in connection with, and all taxes and other governmental
charges that may be imposed with respect to, the issue or delivery thereof,
unless such tax or charge is imposed by law upon Holder, in which case such
taxes or charges shall be paid by Holder.  Holder or its transferee shall pay
any transfer tax due and payable in respect of a transfer of this Warrant or the
Warrant Stock to a party other than Holder.

     2.3. Fractional Shares.  Company shall not be required to issue a
          -----------------
fractional share of Common Stock upon exercise of any Warrant.  As to any
fraction of a share which the Holder of one or more Warrants, the rights under
which are exercised in the same transaction, would otherwise be entitled to
purchase upon such exercise, Company shall pay a cash adjustment in respect of
such final fraction in an amount equal to the same fraction of (x) the Current
Market Price per share of Common Stock on the date of exercise, so long as there
continues to be a public market for the Common Stock, or (y) in the event there
is no public market for the Common Stock, the fair market value thereof as
reasonably determined by the Board of Directors of Company.

     2.4. Continued Validity.  A holder of shares of Common Stock issued upon
          ------------------
the exercise of this Warrant, in whole or in part (other than a holder who
acquires such shares after the same have been publicly sold pursuant to a
Registration Statement under the Securities Act or sold pursuant to Rule 144
thereunder), shall continue to be entitled to all rights, and subject to all
obligations, to which it would have been entitled or obligated, as applicable,
as Holder under Sections 9, 10 and 15 of this Warrant.  Company will, at the
time of each exercise of this Warrant, in whole or in part, upon the request of
the holder of the shares of Common Stock issued upon such exercise hereof,
acknowledge in writing, in form reasonably satisfactory to such holder, its
continuing obligation to afford to such holder all such rights; provided,
                                                                --------
however, that if such holder shall fail to make any such request, such failure
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shall not affect the continuing obligation of Company to afford to such holder
all such rights.

3. TRANSFER, DIVISION AND COMBINATION
   ----------------------------------

     3.1. Transfer.  Subject to compliance with Section 9, transfer of this
          --------
Warrant and all rights hereunder, in whole or in part, shall be registered on
the books of Company to be maintained for such purpose, upon surrender of this
Warrant at the principal office of Company referred to in Section 2.1 or the
office or agency designated by Company pursuant to Section 12, together with a
written assignment of this Warrant substantially in the form of Exhibit B hereto
                                                                ---------
duly executed by Holder or its agent or attorney.  Upon such surrender, Company
shall, subject to Section 9, execute and deliver a new Warrant or Warrants in
the name of the assignee or assignees and in the denomination specified in such
instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this Warrant shall
promptly be cancelled.

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A Warrant, if properly assigned in compliance with Section 9, may be exercised
by a new Holder for the purchase of shares of Common Stock without having a new
Warrant issued.

     3.2. Division and Combination.  Subject to Section 9, this Warrant may be
          ------------------------
divided or combined with other Warrants upon presentation hereof at the
aforesaid office or agency of Company, together with a written notice specifying
the names and denominations in which new Warrants are to be issued, signed by
Holder or its agent or attorney.  Subject to compliance with Section 3.1 and
with Section 9, as to any transfer which may be involved in such division or
combination, Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.

     3.3. Expenses.  Company shall prepare, issue and deliver at its own expense
          --------
the new Warrant or Warrants to be delivered under this Section 3.

     3.4. Maintenance of Books.  Company agrees to maintain, at its aforesaid
          --------------------
office or agency, books for the registration and the registration of transfer of
the Warrants.

4. ADJUSTMENTS
   -----------

          The number of shares of Common Stock for which this Warrant is
exercisable, or the price at which such shares may be purchased upon exercise of
this Warrant, shall be subject to adjustment from time to time as set forth in
this Section 4.  Company shall give each Holder notice of any event described
below which requires an adjustment pursuant to this Section 4 at the time of
such event.

     4.1. Stock Dividends, Subdivisions and Combinations.  If at any time
          ----------------------------------------------
Company shall:

          (a)  take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend payable in, or other distribution of,
Additional Shares of Common Stock,

          (b)  subdivide its outstanding shares of Common Stock into a larger
number of shares of Common Stock, or

          (c)  combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock,

then (i) the number of shares of Common Stock for which this Warrant is
exercisable immediately after the occurrence of any such event shall be adjusted
to equal the number of shares of Common Stock which a record holder of the same
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to the occurrence of such event would own or be entitled to
receive after the happening of such event, and (ii) the Current Warrant Price
shall be adjusted to equal (A) the Current Warrant Price multiplied by the
number of shares of Common Stock for which this Warrant is

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exercisable immediately prior to the adjustment divided by (B) the number of
shares for which this Warrant is exercisable immediately after such adjustment.

     4.2. Certain Other Distributions.  If at any time the Company shall take a
          ---------------------------
record of the holders of its Common Stock for the purpose of entitling them to
receive any dividend or other distribution of:

          (a)  cash,

          (b)  any evidences of its indebtedness, any shares of its stock or any
other securities or property of any nature whatsoever (other than cash,
Convertible Securities or Additional Shares of Common Stock), or

          (c)  any warrants or other rights to subscribe for or purchase any
evidences of its indebtedness, any shares of its stock or any other securities
or property of any nature whatsoever (other than cash, Convertible Securities or
Additional Shares of Common Stock),

then (i) the number of shares of Common Stock for which this Warrant is
exercisable shall be adjusted to equal the product of the number of shares of
Common Stock for which this Warrant is exercisable immediately prior to such
adjustment by a fraction (A) the numerator of which shall be the Current Market
Price per share of Common Stock at the date of taking such record and (B) the
denominator of which shall be such Current Market Price per share of Common
Stock minus the amount allocable to one share of Common Stock of any such cash
so distributable and of the fair value (as determined in good faith by the Board
of Directors of Company) of any and all such evidences of indebtedness, shares
of stock, other securities or property or warrants or other subscription or
purchase rights so distributable, and (ii) the Current Warrant Price shall be
adjusted to equal (A) the Current Warrant Price multiplied by the number of
shares of Common Stock for which this Warrant is exercisable immediately prior
to the adjustment divided by (B) the number of shares for which this Warrant is
exercisable immediately after such adjustment.  A reclassification of the Common
Stock (other than a change in par value, or from par value to no par value or
from no par value to par value) into shares of Common Stock and shares of any
other class of stock shall be deemed a distribution by Company to the holders of
its Common Stock of such shares of such other class of stock within the meaning
of this Section 4.2 and, if the outstanding shares of Common Stock shall be
changed into a larger or smaller number of shares of Common Stock as a part of
such reclassification, such change shall be deemed a subdivision or combination,
as the case may be, of the outstanding shares of Common Stock within the meaning
of Section 4.1.

     4.3. Other Provisions Applicable to Adjustments under this Section.  The
          -------------------------------------------------------------
following provisions shall be applicable to the making of adjustments of the
number of shares of Common Stock for which this Warrant is exercisable and the
Current Warrant Price provided for in this Section 4:

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          (a)  When Adjustments to Be Made. The adjustments required by this
               ---------------------------
Section 4 shall be made whenever and as often as any specified event requiring
an adjustment shall occur, except that any adjustment of the number of shares of
Common Stock for which this Warrant is exercisable that would otherwise be
required may be postponed (except in the case of a subdivision or combination of
shares of Common Stock, as provided for in Section 4.1) up to, but not beyond
the date of exercise if such adjustment either by itself or with other
adjustments not previously made adds or subtracts less than 1% of the shares of
Common Stock for which this Warrant is exercisable immediately prior to the
making of such adjustment. Any adjustment representing a change of less than
such minimum amount (except as aforesaid) which is postponed shall be carried
forward and made as soon as such adjustment, together with other adjustments
required by this Section 4 and not previously made, would result in a minimum
adjustment or on the date of exercise. For the purpose of any adjustment, any
specified event shall be deemed to have occurred at the close of business on the
date of its occurrence.

          (b)  Fractional Interests. In computing adjustments under this Section
               --------------------
4, fractional interests in Common Stock shall be taken into account to the
nearest 1/10th of a share.

          (c)  When Adjustment Not Required. If Company shall take a record of
               ----------------------------
the holders of its Common Stock for the purpose of entitling them to receive a
dividend or distribution and shall, thereafter and before the distribution to
stockholders thereof, legally abandon its plan to pay or deliver such dividend
or distribution, then thereafter no adjustment shall be required by reason of
the taking of such record and any such adjustment previously made in respect
thereof shall be rescinded and annulled.

          (d)  Escrow of Warrant Stock. If after any property becomes
               -----------------------
distributable pursuant to this Section 4 by reason of the taking of any record
of the holders of Common Stock, but prior to the occurrence of the event for
which such record is taken, and Holder exercises this Warrant, any Additional
Shares of Common Stock issuable upon exercise by reason of such adjustment shall
be deemed the last shares of Common Stock for which this Warrant is exercised
(notwithstanding any other provision to the contrary herein) and such shares or
other property shall be held in escrow for Holder by Company to be issued to
Holder upon and to the extent that the event actually takes place, upon payment
of the then Current Warrant Price. Notwithstanding any other provision to the
contrary herein, if the event for which such record was taken fails to occur or
is rescinded, then such escrowed shares shall be cancelled by Company and
escrowed property returned.

     4.4. Reorganization, Reclassification, Merger, Consolidation or Disposition
          ----------------------------------------------------------------------
of Assets.  In case Company shall reorganize its capital, reclassify its capital
---------
stock, consolidate or merge with or into another corporation or other business
entity (where Company is not the surviving corporation or where there is a
change in or distribution with respect to the Common Stock of Company), or sell,
transfer or otherwise dispose of all or substantially all its property, assets
or business to another corporation or other business entity and, pursuant to the
terms of such reorganization, reclassification, merger, consolidation or
disposition of assets, shares of common stock of the successor or

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acquiring corporation, or any cash, shares of stock or other securities or
property of any nature whatsoever (including warrants or other subscription or
purchase rights) in addition to or in lieu of common stock of the successor or
acquiring corporation ("Other Property"), are to be received by or distributed
                        --------------
to the holders of Common Stock of Company, then each Holder shall have the right
thereafter to receive, upon exercise of such Warrant, the number of shares of
common stock of the successor or acquiring corporation or of Company, if it is
the surviving corporation, and Other Property receivable upon or as a result of
such reorganization, reclassification, merger, consolidation or disposition of
assets by a holder of the number of shares of Common Stock for which this
Warrant is exercisable immediately prior to such event. In case of any such
reorganization, reclassification, merger, consolidation or disposition of
assets, the successor or acquiring corporation (if other than Company) or other
business entity shall expressly assume the due and punctual observance and
performance of each and every covenant and condition of this Warrant to be
performed and observed by Company and all the obligations and liabilities
hereunder, subject to such modifications as may be deemed appropriate (as
determined by resolution of the Board of Directors of Company) in order to
provide for adjustments of shares of Common Stock for which this Warrant is
exercisable which shall be as nearly equivalent as practicable to the
adjustments provided for in this Section 4. For purposes of this Section 4.4,
"common stock of the successor or acquiring corporation" shall include stock of
such corporation of any class which is not preferred as to dividends or assets
over any other class of stock of such corporation and which is not subject to
redemption and shall also include any evidences of indebtedness, shares of stock
or other securities which are convertible into or exchangeable for any such
stock, either immediately or upon the arrival of a specified date or the
happening of a specified event and any warrants or other rights to subscribe for
or purchase any such stock. The foregoing provisions of this Section 4.4 shall
similarly apply to successive reorganizations, reclassifications, mergers,
consolidations or disposition of assets.

5.  NOTICES TO WARRANT HOLDERS
    --------------------------

     5.1. Notice of Adjustments.  Whenever the number of shares of Common Stock
          ---------------------
for which this Warrant is exercisable, or whenever the price at which a share of
such Common Stock may be purchased upon exercise of the Warrants, shall be
adjusted pursuant to Section 4, Company shall forthwith prepare a certificate to
be executed by the chief financial officer of Company setting forth, in
reasonable detail, the event requiring the adjustment and the method by which
such adjustment was calculated (including a description of the basis on which
the Board of Directors of Company determined the fair value of any evidences of
indebtedness, shares of stock, other securities or property or warrants or other
subscription or purchase rights referred to in Section 4.2) specifying the
number of shares of Common Stock for which this Warrant is exercisable and (if
such adjustment was made pursuant to Section 4.4) describing the number and kind
of any other shares of stock or Other Property for which this Warrant is
exercisable, and any change in the purchase price or prices thereof, after
giving effect to such adjustment or change.  Company shall promptly cause a
signed copy of such certificate to be delivered to each Holder in accordance
with Section 15.2.  Company shall keep at its office or agency designated
pursuant to Section 12 copies of all such certificates and cause the

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same to be available for inspection at said office during normal business hours
by any Holder or any prospective purchaser of a Warrant designated by a Holder
thereof.

     5.2. Notice of Corporate Action.  If at any time
          --------------------------

          (a)  Company shall take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend (other than a cash
dividend payable out of earnings or earned surplus legally available for the
payment of dividends under the laws of the jurisdiction of incorporation of
Company) or other distribution, or any right to subscribe for or purchase any
evidences of its indebtedness, any shares of stock of any class or any other
securities or property, or to receive any other right, or

          (b)  there shall be any capital reorganization of Company, any
reclassification or recapitalization of the capital stock of Company or any
consolidation or merger of Company with, or any sale, transfer or other
disposition of all or substantially all the property, assets or business of
Company to, another corporation, or

          (c)  there shall be a voluntary or involuntary dissolution,
liquidation or winding up of Company;

then, in any one or more of such cases, Company shall give to Holder (i) at
least ten (10) days' prior written notice of the date on which a record date
shall be selected for such dividend, distribution or right or for determining
rights to vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, and (ii) in the case of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, at least ten (10) days' prior written notice of the date when the same shall
take place.  Such notice in accordance with the foregoing clause also shall
specify (A) the date on which any such record is to be taken for the purpose of
such dividend, distribution or right, the date on which the holders of Common
Stock shall be entitled to any such dividend, distribution or right, and the
amount and character thereof, and (B) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up.  Each such written notice shall be sufficiently given if addressed to Holder
at the last address of Holder appearing on the books of Company and delivered in
accordance with Section 15.2.

6.  NO IMPAIRMENT
    -------------

          Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and

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in the taking of all such actions as may be necessary or appropriate to protect
the rights of Holder against impairment. Without limiting the generality of the
foregoing, Company will (a) not increase the par value of any shares of Common
Stock receivable upon the exercise of this Warrant above the amount payable
therefor upon such exercise immediately prior to such increase in par value, (b)
take all such action as may be necessary or appropriate in order that Company
may validly and legally issue fully paid and nonassessable shares of Common
Stock upon the exercise of this Warrant, and (c) use its best efforts to obtain
all such authorizations, exemptions or consents from any public regulatory body
having jurisdiction thereof as may be necessary to enable Company to perform its
obligations under this Warrant.

          Upon the reasonable request of Holder, Company will at any time during
the period this Warrant is outstanding acknowledge in writing, in form
reasonably satisfactory to Holder, the continuing validity of this Warrant and
the obligations of Company hereunder.

7.  RESERVATION AND AUTHORIZATION OF COMMON STOCK; REGISTRATION WITH OR APPROVAL
    ----------------------------------------------------------------------------
OF ANY GOVERNMENTAL AUTHORITY
-----------------------------

          From and after the Closing Date, Company shall at all times reserve
and keep available for issue upon the exercise of Warrants such number of its
authorized but unissued shares of Common Stock as will be sufficient to permit
the exercise in full of all outstanding Warrants.  All shares of Common Stock
which shall be so issuable, when issued upon exercise of any Warrant and payment
therefor in accordance with the terms of such Warrant, shall be duly and validly
issued and fully paid and nonassessable, and not subject to preemptive rights.

          Before taking any action which would cause an adjustment reducing the
Current Warrant Price below the then par value, if any, of the shares of Common
Stock issuable upon exercise of the Warrants, Company shall take any corporate
action which may be necessary in order that Company may validly and legally
issue fully paid and non-assessable shares of such Common Stock at such adjusted
Current Warrant Price.

          Before taking any action which would result in an adjustment in the
number of shares of Common Stock for which this Warrant is exercisable or in the
Current Warrant Price, Company shall obtain all such authorizations or
exemptions thereof, or consents thereto, as may be necessary from any public
regulatory body or bodies having jurisdiction thereof.

          If any shares of Common Stock required to be reserved for issuance
upon exercise of Warrants require registration or qualification with any
governmental authority or other governmental approval or filing under any
federal or state law (otherwise than as provided in Section 9) before such
shares may be so issued, Company will in good faith and as expeditiously as
possible and at its expense endeavor to cause such shares to be duly registered.

                                       11
<PAGE>

8.  TAKING OF RECORD; STOCK AND WARRANT TRANSFER BOOKS
    --------------------------------------------------

          In the case of all dividends or other distributions by Company to the
holders of its Common Stock with respect to which any provision of Section 4
refers to the taking of a record of such holders, Company will in each such case
take such a record and will take such record as of the close of business on a
Business Day.  Company will not at any time, except upon dissolution,
liquidation or winding up of Company, close its stock transfer books or Warrant
transfer books so as to result in preventing or delaying the exercise or
transfer of any Warrant.

9.  RESTRICTIONS ON TRANSFERABILITY
    -------------------------------

          The Warrants and the Warrant Stock shall not be transferred,
hypothecated or assigned before satisfaction of the conditions specified in this
Section 9, which conditions are intended to ensure compliance with the
provisions of the Securities Act with respect to the Transfer of any Warrant or
any Warrant Stock; provided, however, that any Holder may Transfer the Warrants
                   --------  -------
and/or any Warrant Stock to an "affiliate", as that term is defined for purposes
of Rule 145 of the Rules and Regulations of the Commission under the Securities
Act of 1933, as amended.  Holder, by acceptance of this Warrant, agrees to be
bound by the provisions of this Section 9.

     9.1. Restrictive Legend.  i) Except as otherwise provided in this Section
          ------------------
9, each certificate for Warrant Stock initially issued upon the exercise of this
Warrant, and each certificate for Warrant Stock issued to any subsequent
transferee of any such certificate, shall be stamped or otherwise imprinted with
a legend in substantially the following form:

                    "The shares represented by this certificate
          have not been registered under the Securities Act of
          1933, as amended, and are subject to the conditions
          specified in a certain Warrant dated ____________,
          2000, originally issued by [Level 8 Systems, Inc.]. No
          transfer of the shares represented by this certificate
          shall be valid or effective until such conditions have
          been fulfilled. A copy of the form of said Warrant is
          on file with the Secretary of [Parent]. The holder of
          this certificate, by acceptance of this certificate,
          agrees to be bound by the provisions of such Warrant."

          (a)  Except as otherwise provided in this Section 9, each Warrant
shall be stamped or otherwise imprinted with a legend in substantially the
following form:

                    "This Warrant and the securities represented
          hereby have not been registered under the Securities
          Act of 1933, as amended, and shall not be transferred
          in violation of such Act, the rules and regulations
          thereunder or the provisions of this Warrant."

                                       12
<PAGE>

     9.2. Notice of Proposed Transfers.  Prior to or promptly following any
          ----------------------------
Transfer of any Warrants or any shares of Restricted Common stock, the holder of
such Warrants or Restricted Common Stock shall give written notice (a "Transfer
                                                                       --------
Notice") to Company of such Transfer.  Each certificate, if any, evidencing such
------
shares of Restricted Common Stock issued upon such Transfer shall bear the
restrictive legend set forth in Section 9.1(a), and each Warrant issued upon
such Transfer shall bear the restrictive legend set forth in Section 9.1(b),
unless (a) such shares of Common Stock have been effectively registered under
the Securities Act or (b) in the opinion of counsel to such holder which is
reasonably acceptable to Company such legend is not required in order to ensure
compliance with the Securities Act.

     9.3. Termination of Restrictions.  Notwithstanding the foregoing provisions
          ---------------------------
of Section 9, the restrictions imposed by this Section upon the transferability
of the Warrants, the Warrant Stock and the Restricted Common Stock (or Common
Stock issuable upon the exercise of the Warrants) and the legend requirements of
Section 9.1 shall terminate as to any particular Warrant or share of Warrant
Stock or Restricted Common Stock (or Common Stock issuable upon the exercise of
the Warrants) (a) when and so long as such security shall have been effectively
registered under the Securities Act and disposed of pursuant thereto or (b) when
such shares may be sold pursuant to Rule 144 of the Securities Act or otherwise
transferred without registration thereof under the Securities Act and Company
shall have received an opinion of counsel reasonably satisfactory to it,
including an opinion of in-house counsel to the Holder, that such shares may be
transferred without registration thereof under the Securities Act.  Whenever the
restrictions imposed by Section 9 shall terminate as to this Warrant, as
hereinabove provided, the Holder hereof shall be entitled to receive from
Company, at the expense of Company, a new Warrant bearing the following legend
in place of the restrictive legend set forth hereon:

                    "THE RESTRICTIONS ON TRANSFERABILITY OF THE
          WITHIN WARRANT CONTAINED IN SECTION 9 HEREOF TERMINATED
          ON ________, 20__, AND ARE OF NO FURTHER FORCE AND
          EFFECT."

All Warrants issued upon registration of transfer, division or combination of,
or in substitution for, any Warrant or Warrants entitled to bear such legend
shall have a similar legend endorsed thereon.  Whenever the restrictions imposed
by this Section shall terminate as to any share of Restricted Common Stock, as
hereinabove provided, the holder thereof shall be entitled to receive from
Company, at Company's expense, a new certificate representing such Common Stock
not bearing the restrictive legend set forth in Section 9.1(a).

     9.4. Additional Listing.  The Company will, at its expense, list thereon,
          ------------------
maintain and, when necessary, increase such listing of, all shares of Common
Stock issued or, to the extent permissible under the applicable securities
exchange rules, issuable upon the exercise of this Warrant so long as any shares
of Common Stock shall be listed on NASDAQ or any national securities exchange
during the Exercise Period.

                                       13
<PAGE>

10.  SUPPLYING INFORMATION
     ---------------------

          Company shall cooperate with each Holder of a Warrant and each holder
of Restricted Common Stock in supplying such information as may be reasonably
necessary for such holder to complete and file any information reporting forms
presently or hereafter required by the Commission as a condition to the
availability of an exemption from the Securities Act for the sale of any Warrant
or Restricted Common Stock.

11.  LOSS OR MUTILATION
     ------------------

          Upon receipt by Company from any Holder of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of this Warrant and indemnity reasonably satisfactory to it, and in
case of mutilation upon surrender and cancellation hereof, Company will execute
and deliver in lieu hereof a new Warrant of like tenor to such Holder; provided,
                                                                       --------
in the case of mutilation, no indemnity shall be required if this Warrant in
identifiable form is surrendered to Company for cancellation.

12.  OFFICE OF COMPANY
     -----------------

          As long as any of the Warrants remain outstanding, Company shall
maintain an office or agency (which may be the principal executive offices of
Company) where the Warrants may be presented for exercise, registration of
transfer, division or combination as provided in this Warrant.

13.  FILINGS
     -------

          So long as Company has a class of equity securities registered
pursuant to Section 12 of the Exchange Act, Company will file on or before the
required date all regular or periodic reports (pursuant to the Exchange Act)
required to be filed with the Commission pursuant to the Exchange Act and will
deliver to Holder promptly upon their becoming available (unless such reports
are available through the Commission's EDGAR system) one copy of each report,
notice or proxy statement sent by Company to its stockholders generally, and of
each regular or periodic report (pursuant to the Exchange Act) and any
Registration Statement, prospectus or written communication (other than
transmittal letters) (pursuant to the Securities Act), filed by Company with (a)
the Commission or (b) any securities exchange on which shares of Common Stock
are listed.

14.  NO RIGHTS AS STOCKHOLDER; LIMITATION OF LIABILITY
     -------------------------------------------------

          Except as otherwise provided herein, this Warrant shall not entitle
the Holder to any rights as a stockholder of Company, including, without
limitation, the right to vote, to receive dividends and other distributions or
to receive notice of or attend meetings of stockholders or any other proceedings
of Company unless and to the extent exercised for shares of Common Stock in
accordance with the terms hereof.  No provision hereof, in the absence of
affirmative action by Holder to exercise its rights to purchase shares of Common
Stock hereunder, and no enumeration herein of the rights or

                                       14
<PAGE>

privileges of Holder hereof, shall give rise to any liability of such Holder for
the purchase price of any Common Stock or as a stockholder of Company, whether
such liability is asserted by Company or by creditors of Company.

15. MISCELLANEOUS
    -------------

     15.1. Nonwaiver and Expenses.  No course of dealing or any delay or failure
           ----------------------
to exercise any right hereunder on the part of Holder shall operate as a waiver
of such right or otherwise prejudice Holder's rights, powers or remedies.  If
Company fails to make, when due, any payments provided for hereunder, or fails
to comply with any other provision of this Warrant, Company shall pay to Holder
such amounts as shall be sufficient to cover any costs and expenses including,
but not limited to, reasonable attorneys' fees, including those of appellate
proceedings, incurred by Holder in collecting any amounts due pursuant hereto or
in otherwise enforcing any of its rights, powers or remedies hereunder.

     15.2. Notice Generally.  Any notice, demand, request, consent, approval,
           ----------------
declaration, delivery or other communication hereunder to be made pursuant to
the provisions of this Warrant shall be sufficiently given or made if in writing
and either delivered in person with receipt acknowledged or sent by registered
or certified mail, return receipt requested, postage prepaid, or by telecopy and
confirmed by telecopy answerback, addressed as follows:

           (a) If to any Holder or holder of Warrant Stock, at its last known
address appearing on the books of Company maintained for such purpose.

           (b) If to Company at

                    Level 8 Systems, Inc.
                    8000 Regency Parkway
                    Cary, North Carolina  27511
                    Attention: Dennis McKinnie
                    Telecopy Number: (919) 461-2690

or at such other address as may be substituted by notice given as herein
provided.  The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice.  Every notice, demand, request,
consent, approval, declaration, delivery or other communication hereunder shall
be deemed to have been duly given or served on the date on which personally
delivered, with receipt acknowledged, telecopied and confirmed by telecopy
answerback, or three (3) Business Days after the same shall have been deposited
in the United States mail.  Failure or delay in delivering copies of any notice,
demand, request, approval, declaration, delivery or other communication to the
person designated above to receive a copy shall in no way adversely affect the
effectiveness of such notice, demand, request, approval, declaration, delivery
or other communication.

     15.3. Remedies.  Each holder of Warrant and Warrant Stock, in addition to
           --------
being entitled to exercise all rights granted by law, including recovery of
damages, will

                                       15
<PAGE>

be entitled to specific performance of its rights under Section 9 of this
Warrant. Company agrees that monetary damages would not be adequate compensation
for any loss incurred by reason of a breach by it of the provisions of Section 9
of this Warrant and hereby agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.

     15.4. Successors and Assigns. Subject to the provisions of Sections 3.1 and
           ----------------------
9, this Warrant and the rights evidenced hereby shall inure to the benefit of
and be binding upon the successors of Company and the successors and assigns of
Holder. The provisions of this Warrant are intended to be for the benefit of all
Holders from time to time of this Warrant and, with respect to Section 9 hereof,
holders of Warrant Stock, and shall be enforceable by any such Holder or holder
of Warrant Stock.

     15.5. Amendment.  This Warrant and all other Warrants may be modified or
           ---------
amended or the provisions hereof waived with the written consent of Company and
the Majority Holders, provided that no such Warrant may be modified or amended
                      --------
to reduce the number of shares of Common Stock for which such Warrant is
exercisable or to increase the price at which such shares may be purchased upon
exercise of such Warrant (before giving effect to any adjustment as provided
therein) without the prior written consent of the Holder thereof.

     15.6. Severability. Wherever possible, each provision of this Warrant shall
           ------------
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Warrant.

     15.7. Headings.  The headings used in this Warrant are for the convenience
           --------
of reference only and shall not, for any purpose, be deemed a part of this
Warrant.

     15.8. Governing Law.  This Warrant shall be governed by the laws of the
           -------------
State of Delaware, without regard to the provisions thereof relating to conflict
of laws.

                                       16
<PAGE>

          IN WITNESS WHEREOF, Company has caused this Warrant to be duly
executed and its corporate seal to be impressed hereon and attested by its
Secretary or an Assistant Secretary.

Dated:  ______________ __, 2000

                                        [LEVEL 8 SYSTEMS, INC.]

                                        By:___________________________

                                            Name:
                                            Title:

                                       17
<PAGE>

                                   EXHIBIT A
                                   ---------

                               SUBSCRIPTION FORM

[To be executed only upon exercise of Warrant]

          The undersigned registered owner of this Warrant irrevocably exercises
this Warrant for the purchase of ______ Shares of Common Stock of [LEVEL 8
SYSTEMS, INC.] and herewith makes payment therefor, all at the price and on the
terms and conditions specified in this Warrant and requests that certificates
for the shares of Common Stock hereby purchased (and any securities or other
property issuable upon such exercise) be issued in the name of and delivered to
_____________ whose address is _________________ and, if such shares of Common
Stock shall not include all of the shares of Common Stock issuable as provided
in this Warrant, that a new Warrant of like tenor and date for the balance of
the shares of Common Stock issuable hereunder be delivered to the undersigned.

                                        _______________________________
                                        (Name of Registered Owner)

                                        _______________________________
                                        (Signature of Registered Owner)

                                        _______________________________
                                        (Street Address)

                                        _______________________________
                                        (City)  (State)    (Zip Code)

NOTICE:   The signature on this subscription must correspond with the name as
          written upon the face of the within Warrant in every particular,
          without alteration or enlargement or any change whatsoever.
<PAGE>

                                   EXHIBIT B
                                   ---------

                                ASSIGNMENT FORM

          FOR VALUE RECEIVED the undersigned registered owner of this Warrant
hereby sells, assigns and transfers unto the Assignee named below all of the
rights of the undersigned under this Warrant, with respect to the number of
shares of Common Stock set forth below:

Name and Address of Assignee                           No. of Shares of
----------------------------                           ----------------
                                                       Common Stock
                                                       ------------

and does hereby irrevocably constitute and appoint _____________________________
attorney-in-fact to register such transfer on the books of [LEVEL 8 SYSTEMS,
INC.] maintained for the purpose, with full power of substitution in the
premises.

Dated:__________________                     Print Name:________________________

                                             Signature:_________________________

                                             Witness:___________________________

NOTICE:   The signature on this subscription must correspond with the name as
          written upon the face of the within Warrant in every particular,
          without alteration or enlargement or any change whatsoever.<PAGE>

                                                                   EXHIBIT 4.11

                         REGISTRATION RIGHTS AGREEMENT
                         -----------------------------

          REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
                                               ---------
__________________, 2000, by and among Level 8 Systems, Inc., a Delaware
corporation ("Company"), and the parties who have executed this Agreement and
              -------
whose names appear on Schedule I hereto (each party listed on Schedule I hereto
is sometimes referred to herein as "Holder" and all such persons are sometimes
collectively referred to as the "Holders.")

                             W I T N E S S E T H:
                             - - - - - - - - - -

          WHEREAS, pursuant to the terms of that certain Agreement and Plan of
Merger dated as of October 2, 2000 (the "Merger Agreement"), by and among the
Company, Level 8 Technologies Acquisition Corp., Inc. and StarQuest Software,
Inc.  ("Target"), certain of the shares of capital stock of Target will be
converted into the right to receive shares of Common Stock of Parent, $0.001 par
value per share (the "Common Stock"), and Warrants to purchase shares of Parent
Common Stock (the "Warrants" and such shares being the "Underlying Shares,"
together with the Common Stock, being collectively the "Registrable
Securities");

          WHEREAS, the Company has agreed, as a condition precedent to Target's
obligations under the Merger Agreement, to grant to the Holders certain
registration rights;

          WHEREAS, the Company and the Holders desire to define such
registration rights on the terms and subject to the conditions herein set forth.

          NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, it is agreed as follows:

          1.   Definitions. Unless otherwise defined herein, terms defined in
               -----------
the Merger Agreement are used herein as therein defined, and the following shall
have (unless otherwise provided elsewhere in this Agreement) the following
respective meanings (such meanings being equally applicable to both the singular
and plural form of the terms defined):

          "Agreement" shall mean this Registration Rights Agreement, including
           ---------
all amendments, modifications and supplements and any exhibits or schedules to
any of the foregoing, and shall refer to the Agreement as the same may be in
effect at the time such reference becomes operative.

          "Business Day" shall mean any day that is not a Saturday, a Sunday or
           ------------
a day on which banks are required or permitted to be closed in the State of New
York.
<PAGE>

          "Commission" shall mean the Securities and Exchange Commission or any
           ----------
other federal agency then administering the Securities Act and other federal
securities laws.

          "Exchange Act" shall mean the Securities Exchange Act of 1934, as
           ------------
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.

          "NASD" shall mean the National Association of Securities Dealers,
           ----
Inc., or any successor corporation thereto.

          "Securities Act" shall mean the Securities Act of 1933, as amended, or
           --------------
any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.

          2.   Required Registration.  On or prior to the 225/th/ day from the
               ---------------------
Effective Time, the Company shall prepare and file with the Commission a
Registration Statement (the "Registration Statement") which shall cover all
Registrable Securities for an offering to be made on a continuous basis pursuant
to a "Shelf" registration statement under Rule 415.  The Registration Statement
shall be on Form S-3 or any successor form (except if the Company is not then
eligible to register for resale the Registrable Securities on Form S-3, in which
case such registration shall be on another appropriate form in accordance
herewith).  The Company shall use its best efforts to cause the Registration
Statement to be declared effective under the Securities Act as promptly as
possible after the filing thereof.

          3.   Incidental Registration.  If Company at any time after the
               -----------------------
Effective Time proposes to file on its behalf and/or on behalf of any of its
security holders (the "demanding security holders") a registration statement
                       --------------------------
under the Securities Act on any form (other than a registration statement on
Form S-4 or S-8 or any successor form for securities to be offered in a
transaction of the type referred to in Rule 145 under the Securities Act or to
employees of Company pursuant to any employee benefit plan, respectively) for
the general registration of securities (a "Registration Statement"), it will
                                           ----------------------
give written notice to all Holders at least twenty (20) Business Days prior to
the initial filing with the Commission of such Registration Statement, which
notice shall set forth the intended method of disposition of the securities
proposed to be registered by Company. The notice shall offer to include in such
filing the aggregate number of shares of Registrable Securities as such Holders
may request.

          Each Holder desiring to have Registrable Securities registered under
this Section 3 shall advise Company in writing within ten (10) Business Days
after the date of receipt of such offer from Company, setting forth the amount
of such Registrable Securities for which registration is requested.  Company
shall thereupon include in such filing the number of shares of Registrable
Securities for which registration is so requested, subject to the next sentence,
and shall use its best efforts to effect registration under the Securities Act
of such shares.  If the managing underwriter of a proposed public

                                       2
<PAGE>

offering shall advise Company in writing that, in its opinion, the distribution
of the Registrable Securities requested to be included in the registration
concurrently with the securities being registered by Company or such demanding
security holder would materially and adversely affect the distribution of such
securities by Company or such demanding security holder, then all selling
security holders (including the demanding security holder who initially
requested such registration, but not the Company) shall reduce the amount of
securities each intended to be distributed through such offering on a pro rata
basis (which reduced amount may be zero). Except as otherwise provided in
Section 5, all expenses of such registration shall be borne by Company.

          Notwithstanding the provisions of this Section 3, the Holders shall
have no right to have any Registrable Securities registered under any
Registration Statement filed by the Company in connection with the registration
of shares of the Company's Common Stock that are issued to persons who have
received such stock as a result of the conversion of indebtedness of Target held
by such persons.

          4.   Registration Procedures. If Company is required by the provisions
               -----------------------
of Section 2 or 3 to use its best efforts to effect the registration of any of
its securities under the Securities Act, Company will, as expeditiously as
possible:

                    (a) prepare and file with the Commission a Registration
Statement with respect to such securities and use its best efforts to cause such
Registration Statement to become and remain effective for a period of time
required for the disposition of such securities by the Holders thereof, but not
to exceed one hundred and eighty (180) days;

                    (b) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective and
to comply with the provisions of the Securities Act with respect to the sale or
other disposition of all securities covered by such Registration Statement until
the earlier of such time as all of such securities have been disposed of in a
public offering or the expiration of one hundred and eighty (180) days;

                    (c) furnish to such selling security Holders such number of
copies of a summary prospectus or other prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents, as such selling security Holders may reasonably request;

                    (d) use its best efforts to register or qualify the
securities covered by such Registration Statement under such other securities or
blue sky laws of such jurisdictions within the United States as each Holder of
such securities shall reasonably request to the extent such registration or
qualification is required in such jurisdictions (provided, however, that Company
                                                 --------  -------
shall not be obligated to qualify as a foreign corporation to do business under
the laws of any jurisdiction in which it is not then qualified or to file any
general consent to service or process), and do such other

                                       3
<PAGE>

reasonable acts and things as may be required of it to enable such Holder to
consummate the disposition in such jurisdiction of the securities covered by
such Registration Statement;

                    (e) furnish, at the request of any Holder requesting
registration of Registrable Securities pursuant to Section 2, on the date that
such shares of Registrable Securities are delivered to the underwriters for sale
pursuant to such registration or, if such Registrable Securities are not being
sold through underwriters, on the date that the Registration Statement with
respect to such shares of Registrable Securities becomes effective, (i) an
opinion, dated such date, of the independent counsel representing Company for
the purposes of such registration, addressed to the underwriters, if any, and if
such Registrable Securities are not being sold through underwriters, then to the
Holders making such request, in customary form and covering matters of the type
customarily covered in such legal opinions; and (ii) a comfort letter dated such
date, from the independent certified public accountants of Company, addressed to
the underwriters, if any, and if such Registrable Securities are not being sold
through underwriters, then to the Holder making such request and, if such
accountants refuse to deliver such letter to such Holder, then to Company, in a
customary form and covering matters of the type customarily covered by such
comfort letters and as the underwriters or such Holder shall reasonably request;

                    (f) enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of such
Registrable Securities;

                    (g) notify the Holders as promptly as practicable upon the
occurrence of any event as a result of which the prospectus included in a
Registration Statement, as then in effect, contains an untrue statement of
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing, and as promptly as possible, prepare, file and
furnish to each Holder a reasonable number of copies of a supplement or an
amendment to such prospectus as may be necessary so that such prospectus does
not contain an untrue statement of material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing; provided, however,
                                                            --------  -------
that the Company may delay preparing, filing and distributing any such
supplement or amendment if the Board of Directors of the Company determines in
good faith that such supplement or amendment could, in its reasonable judgment,
(i) interfere with or adversely affect the negotiation or completion of a
transaction that is being contemplated by the Company or (ii) involve initial or
continuing disclosure obligations that are not in the best interests of the
Company's stockholders at the time; provided, further, that (w) the Company will
                                    --------  -------
give notice (a "Standstill Notice") of any such delay prior to such delay, (x)
                -----------------
such delay shall not extend for a period of more than thirty (30) days without
the written consent of the Holders, (y) the Company may utilize such delay no
more than two (2) times or for an aggregate of more than sixty (60) days in any
period of two hundred and forty (240) consecutive days and (z) the period of
effectiveness of the Registration Statement provided for herein

                                       4
<PAGE>

shall be extended by the number of days from and including the date of the
giving of a Standstill Notice to and including the date when the Company shall
have delivered to the Holders copies of such supplement or amendment pursuant to
this Section 4(g);

                    (h) provide each Holder and its representatives the
opportunity to conduct reasonable inquiry of the Company's financial and other
records during normal business hours and make available its officers, directors
and employees for questions regarding information which such Holder may
reasonably request in order to conduct any due diligence;

                    (i) permit each Holder to review a Registration Statement
covering Registrable Securities and all amendments and supplements thereto a
reasonable period of time prior to the filing thereof with the Commission; and

                    (j) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security Holders, as soon as reasonably practicable, but not later than eighteen
(18) months after the effective date of the Registration Statement, an earnings
statement covering the period of at least twelve (12) months beginning with the
first full month after the effective date of such Registration Statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act.

          It shall be a condition precedent to the obligation of Company to take
any action pursuant to this Agreement in respect of the securities which are to
be registered at the request of any Holder that such Holder shall furnish to
Company such information regarding the securities held by such Holder and the
intended method of disposition thereof as Company shall reasonably request and
as shall be required in connection with the action taken by Company.

          5.   Expenses. All expenses incident to the Company's compliance with
               --------
the terms of this Agreement, including, without limitation, all registration and
filing fees (including all expenses incident to filing with the NASD), printing
expenses, fees and disbursements of counsel for Company, the reasonable fees and
expenses of one counsel for the selling security Holders (selected by those
holding a majority of the shares being registered), expenses of any special
audits incident to or required by any such registration and expenses of
complying with the securities or blue sky laws of any jurisdiction pursuant to
Section 4(d), shall be paid by Company, except that Company shall not be liable
for any fees, discounts or commissions to any underwriter or any fees or
disbursements of counsel for any underwriter in respect of the securities sold
by such Holder.

          6.   Indemnification and Contribution.
               ---------------------------------

                    (a) In the event of any registration of any Registrable
Securities under the Securities Act pursuant to this Agreement, Company shall
indemnify and hold harmless the Holder of such Registrable Securities, such
Holder's directors and officers,

                                       5
<PAGE>

and each other person (including each underwriter) who participated in the
offering of such Registrable Securities and each other person, if any, who
controls such Holder or such participating person within the meaning of the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which such Holder or any such director or officer or participating
person or controlling person may become subject under the Securities Act or any
other statute or at common law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any alleged untrue statement of any material fact contained, on the effective
date thereof, in any Registration Statement under which such securities were
registered under the Securities Act, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereto, or (ii)
any alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and shall
reimburse such Holder or such director, officer or participating person or
controlling person for any legal or any other expenses reasonably incurred by
such Holder or such director, officer or participating person or controlling
person in connection with investigating or defending any such loss, claim,
damage, liability or action. Notwithstanding anything to the contrary set forth
in this Section 6(a), Company shall not be liable to indemnify any person in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon (1) any actual or alleged untrue statement or actual or
alleged omission either (x) made in such Registration Statement, preliminary
prospectus, prospectus or amendment or supplement in reliance upon and in
conformity with written information furnished to Company by such Holder
specifically for use therein or so furnished for such purposes by any
underwriter or (y) that had been corrected in a preliminary prospectus,
prospectus supplement or amendment which had been furnished to such Holder prior
to any distribution of the document alleged to contain the untrue statement or
omission to offerees or purchasers, (2) any offer or sale of Registrable
Securities after receipt by such Holder of a Standstill Notice under Section
4(g) and prior to the delivery of the prospectus supplement or amendment
contemplated by Section 4(g), or (3) Holder's failure to comply with the
prospectus delivery requirements under the Securities Act or failure to
distribute its Registrable Securities in a manner consistent with its intended
plan of distribution as provided to Company and disclosed in the Registration
Statement. Notwithstanding the foregoing, Company shall not be required to
indemnify any person for amounts paid in settlement of any claim without the
prior written consent of Company, which consent shall not be unreasonably
withheld. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such Holder or such director, officer or
participating person or controlling person, and shall survive the transfer of
such securities by such Holder.

                    (b) Each Holder, by acceptance hereof, agrees to indemnify
and hold harmless Company, its directors and officers and each person who
participated in such offering and each other person, if any, who controls
Company within the meaning of the Securities Act against any losses, claims,
damages or liabilities, joint or several, to which Company or any such director
or officer or any such person may become subject under the Securities Act or any
other statute or at common law, insofar as such losses,

                                       6
<PAGE>

claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon (i) information in writing provided to Company by such Holder
specifically for use in the following documents and contained, on the effective
date thereof, in any Registration Statement under which securities were
registered under the Securities Act at the request of such Holder, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereto, (ii) such Holder's offer or sale of Registrable
Securities after receipt by such Holder of a Standstill Notice under Section
4(g) and prior to the delivery of the prospectus supplement or amendment
contemplated by Section 4(g), (iii) such Holder's failure to comply with the
prospectus delivery requirements under the Securities Act or failure to
distribute its Registrable Securities in a manner consistent with its intended
plan of distribution as provided to Company and disclosed in the Registration
Statement, (iv) such Holder's failure to comply with Regulation M under the
Exchange Act, or (v) such Holder's failure to comply with any rules and
regulations applicable because such Holder is, or is an Affiliate of, a
registered broker-dealer. Notwithstanding the provisions of this paragraph (b)
or paragraph (c) below, no Holder shall be required to indemnify any person
pursuant to this Section 6 or to contribute pursuant to paragraph (c) below in
an amount in excess of the amount of the aggregate net proceeds received by such
Holder in connection with any such registration under the Securities Act.

                    (c) If the indemnification provided for in this Section 6
from the indemnifying party is unavailable to an indemnified party hereunder in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified parties in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying party
and indemnified parties shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with any
investigation or proceeding.

          The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(c) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act)

                                       7
<PAGE>

shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.

          7.   Certain Limitations on Registration Rights. Notwithstanding the
               ------------------------------------------
other provisions of this Agreement:

                    (a) Company shall not be obligated to register the
Registrable Securities of any Holder if, in the opinion of counsel to Company
reasonably satisfactory to the Holder and its counsel (or, if the Holder has
engaged an investment banking firm, to such investment banking firm and its
counsel), the sale or other disposition of such Holder's Registrable Securities,
in the manner proposed by such Holder (or by such investment banking firm), may
be effected without registering such Registrable Securities under the Securities
Act;

                    (b) Company shall not be obligated to register the
Registrable Securities of any Holder pursuant to Section 2 if Company has had a
registration statement, under which such Holder had a right to have its
Registrable Securities included pursuant to Section 3, declared effective;
provided, however, that to the extent such Registrable Securities consist solely
of Underlying Shares, the Company shall be obligated to effect the registration
of such Underlying Shares pursuant to the provisions of Section 3 above; and

                    (c) Company shall have the right to delay the filing or
effectiveness of the registration statement required pursuant to Section 2
hereof during one or more periods aggregating not more than forty five (45) days
in any twelve-month period in the event that (i) Company would, in accordance
with the advice of its counsel, be required to disclose in the prospectus
information not otherwise then required by law to be publicly disclosed and (ii)
in the judgment of Company's Board of Directors, there is a reasonable
likelihood that such disclosure would materially and adversely affect any
existing or prospective material business situation, transaction or negotiation
or otherwise materially and adversely affect Company.

          8.   Holder Agreements
               -----------------

                    (a) No Holder may participate in an underwritten offering
provided for hereunder unless such Holder (i) agrees to sell such Holder's
Registrable Securities on the basis provided in the underwriting arrangements
contemplated for such offering as reasonably requested by the managing
underwriter, (ii) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents reasonably required
under the terms of such underwriting arrangements as reasonably requested by the
managing underwriter, and (iii) agrees to bear such Holder's pro rata portion of
all underwriting discounts and commissions.

                    (b) Each Holder agrees to comply with Regulation M under the
Exchange Act in connection with its offer and sale of Registrable Securities.

                                       8
<PAGE>

                    (c) Each Holder agrees that it will not sell any Registrable
Securities registered under the Securities Act pursuant to the terms of this
Agreement until a Registration Statement (and any associated post-effective
amendment) relating thereto has been declared effective and such Holder has been
provided copies of the related prospectus, as amended or supplemented to date.

                    (d) Each Holder agrees to comply with the prospectus
delivery requirements of the Securities Act as applicable in connection with the
sale of Registrable Securities registered under the Securities Act pursuant to a
Registration Statement.

                    (e) Each Holder agrees that upon receipt of a Standstill
Notice pursuant to Section 4(g), such Holder shall immediately discontinue
offers and sales of Registrable Securities registered under the Securities Act
pursuant to any Registration Statements covering such Registrable Securities
until such Holder receives copies of the supplemented or amended prospectus
contemplated by Section 4(g) or notice from the Company that no such supplement
or amendment is required.

          9.   Miscellaneous.
               -------------

                    (a) No Inconsistent Agreements. Except as set forth on
                        --------------------------
Schedule A hereto, Company has not previously entered into any agreement with
----------
respect to any of its securities granting any registration rights to any person.

                    (b) Remedies.  A Holder, in addition to being entitled to
                        --------
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. Company
agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Agreement and
hereby agrees to waive the defense in any action for specific performance that a
remedy at law would be adequate. In any action or proceeding brought to enforce
any provision of this Agreement or where any provision hereof is validly
asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys' fees in addition to any other available remedy.

                    (c) Amendments and Waivers. Except as otherwise provided
                        ----------------------
herein, the provisions of this Agreement may not be amended, modified or
supplemented, and waivers or consents to departure from the provisions hereof
may not be given unless Company has obtained the written consent from a majority
of the Holders.

                    (d) Notice Generally. Any notice, demand, request, consent,
                        ----------------
approval, declaration, delivery or other communication hereunder to be made
pursuant to the provisions of this Agreement shall be sufficiently given or made
if in writing and either delivered in person with receipt acknowledged or sent
by registered or certified mail, return receipt requested, postage prepaid, or
by telecopy and confirmed by telecopy answerback, addressed as follows:

                                       9
<PAGE>

               (i)   If to a Holder, at the last known address appearing on the
     books of Company maintained for such purpose.

               (ii)  If to Company, at

                         Level 8 Systems, Inc.
                         8000 Regency Parkway
                         Cary, North Carolina  27511
                         Attention: Dennis McKinnie
                         Telecopy Number: (919) 461-2690

or at such other address as may be substituted by notice given as herein
provided.  The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice.  Every notice, demand, request,
consent, approval, declaration, delivery or other communication hereunder shall
be deemed to have been duly given or served on the date on which personally
delivered, with receipt acknowledged, telecopied and confirmed by telecopy
answerback or three (3) Business Days after the same shall have been deposited
in the United States mail.

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

                    (i)   make and keep public information available, as those
terms are understood and defined in Rule 144;

                    (ii)  file with the Commission in a timely manner all
reports and other documents required of the Company under the Exchange Act; and

                    (iii) furnish to each Holder, so long as such Holder owns
any Registrable Securities, forthwith upon request (A) a written statement by
the Company, if true, that it has complied with the reporting requirements of
Rule 144, the Securities Act and the Exchange Act, (B) a copy of the most recent
annual or quarterly report of the Company and such other reports and documents
so filed by the Company, and (C) such other information as may be reasonably
requested in availing the Holder of any rule or regulation of the Commission
which permits the selling of any such securities without registration.

               (f)  Successors and Assigns. This Agreement shall inure to the
                    ----------------------
benefit of and be binding upon the successors and assigns of each of the parties
hereto including any person to whom Registrable Securities are transferred.

               (g)  Headings. The headings in this Agreement are for convenience
                    --------
of reference only and shall not limit or otherwise affect the meaning hereof.

                                       10
<PAGE>

          (h)  Governing Law; Jury Waiver.  This Agreement shall be governed by,
               --------------------------
construed and enforced in accordance with the laws of the State of California
without giving effect to the conflict of laws provisions thereof.  The parties
hereto waive all right to trial by jury in any action or proceeding to enforce
or defend any rights hereunder.

          (i)  Severability. Wherever possible, each provision of this Agreement
               ------------
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

          (j)  Entire Agreement. This Agreement, together with the Merger
               ----------------
Agreement and the other transaction documents, represents the complete agreement
and understanding of the parties hereto in respect of the subject matter
contained herein and therein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to the subject matter hereof.

                                       11
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

                         LEVEL 8 SYSTEMS, INC.

                         By:__________________________________
                            Dennis McKinnie
                            Senior Vice President, Chief Legal and
                            Administrative Officer, Corporate Secretary

                         HOLDERS:

                         [COUNTERPART SIGNATURE PAGES

                                    FOLLOW]

                                       12
<PAGE>

                             Level 8 Systems, Inc.

                         Registration Rights Agreement

     The undersigned hereby executes this Registration Rights Agreement, and
hereby authorizes this signature page to be attached to a counterpart of such
Agreement executed by the other party hereof.

                                    Dated: ________________________

HOLDER (Individual):                     HOLDER (Entity):

                                         ____________________________________
                                         (print/type complete name of entity)

____________________________________     By: ________________________________
          (signature)                              (signature)

Name: ______________________________     Name: ______________________________
     (please print or type full name)          (please print or type full name)

                                         Title: _____________________________

*Social Security Number: ___________     *Tax Identification Number: ________

*if applicable

                                       13
<PAGE>

                                   SCHEDULE A

Registration Rights.
-------------------

Agreement with Merrill Lynch, Pierce, Fenner & Smith Incorporated.
     In connection with the sale of 1,000,000 shares of Level 8 Common Stock to
     Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"),
     pursuant to a Purchase Agreement dated July 31, 2000 (the "Merrill Lynch
     Purchase Agreement"), Level 8 and Merrill Lynch entered into a
     "Registration Rights Agreement."  Pursuant to that registration rights
     agreement, after October 30, 2000 the holders of at least 30% of the shares
     issued pursuant to the Merrill Lynch Purchase Agreement will have the right
     to request registration of those shares, and any of the other shares issued
     pursuant to the Merrill Lynch Purchase Agreement whose holders elect to
     participate.  Those requesting the registration may specify the intended
     method or methods of disposition.  The registration rights agreement also
     provides the holders of shares issued pursuant to the Merrill Lynch
     Purchase Agreement to participate in other registration statements filed by
     Level 8.

Agreement related to issuance of Series B Preferred Stock.
     In connection with the issuance of its Series B Preferred Stock and certain
     warrants in July of 2000, Level 8 entered into a "Registration Rights
     Agreement" dated July 19, 2000 among Level 8 and certain investors,
     including Brown Simpson Strategic Growth Funds, and Seneca Capital.  This
     agreement requires the registration of the 1,197,007 shares of Common Stock
     issuable upon conversion of the Series B Preferred Stock, and the 1,047,382
     shares of Common Stock issuable upon exercise of the warrants.

     Level 8 met its obligation to file a  "shelf" registration for sale on a
     delayed or continuous basis, with the S-1 Registration Statement,
     subsequent amendment and prospectus dated September 22, 2000. The
     registration rights further provide the Series B Preferred Stock holders
     with the right, on two occasions, to have the prospectus associated with
     the shelf registration amended to provide for underwritten offerings.

Agreement related to issuance of Series A Preferred Stock.
     In connection with the issuance of its Series A Preferred Stock and certain
     warrants in June of 1999, Level 8 entered into a "Registration Rights
     Agreement" dated June 28, 1999 among Level 8 and certain investors,
     including Brown Simpson Strategic Growth Funds, Advanced Systems Europe
     B.V. and Seneca Capital.  This Registration Rights Agreement was filed with
     the SEC as Exhibit 10.3 to Level 8's Current Report on Form 8-K filed July
     23, 1999.  The agreement required the registration of the 2,100,000 shares
     of Common Stock issuable upon conversion of the Series A Preferred Stock,
     and the 2,100,000 shares of Common Stock issuable upon exercise of the
     warrants.

                                      A-1
<PAGE>

     Level 8 met the registration obligations of this agreement when the
     registration statement on Form S-3, filed on August 8, 1999, became
     effective, registering resales of the 4,200,000 shares.  As long as that
     registration statement remains effective, the requirements of this
     registration rights agreement remain satisfied.

Agreement with Welsh, Carson, Anderson & Stowe related to the purchase of Seer.
     Level 8 purchased a majority interest in Seer Technologies, Inc. with an
     "Agreement" dated November 23, 1998.  The Agreement is filed with the SEC
     as Exhibit B to Level 8's Schedule on Form SC 13-D, filed January 11, 1999,
     and is also filed Exhibit 2.1 to Seer Technologies, Inc.'s Annual Report on
     Form 10-K405, filed January 12, 1999.  The agreement was among Level 8 and
     twenty parties, all of whom were related to the Welsh, Carson, Anderson &
     Stowe investment firm (the "WCAS Parties").  Under the agreement the WCAS
     Parties received 1,000,000 shares of Level 8 stock and warrants to purchase
     up to 250,000 additional shares at $12.00 per share.  The agreement
     incorporates a voting agreement binding the WCAS Parties.

     The Agreement provides the WCAS Parties with piggyback registration rights
     in any underwritten public offering which includes shares already
     outstanding (Agreement Section 9.3.4).  The rights apply "if, at any time
     before [January 1, 2001], Level 8 determines to file a registration
     statement."  Any cutbacks at the advice of the underwriter are to be pro
     rata equally among all participating shareholders.  This would appear to
     apply even in the event of another shareholder exercising a demand
     registration, as "[t]he rights with respect to such offering by any WCAS
     Party whose shares are included shall not be less, and the obligations with
     respect to such offering by any such WCAS Party shall not be greater, than
     those of any other shareholder whose shares are included in such offering."

Agreements related to Level 8's purchase of Momentum Software Corporation.
     Level 8 purchased Momentum Software Corporation in February of 1998,
     pursuant to an Agreement and Plan of Reorganization by and Among Level 8
     Systems, Inc., Middleware Acquisition Corporation, Momentum Software
     Corporation and Robert Brill, Bruns Grayson and Hubertus Vandervoort, as
     Trustees of the Momentum Liquidating Trust, on Behalf of the
     Securityholders of Momentum Software Corporation (the "Momentum Purchase
     Agreement"), filed with the SEC as Exhibit 10.42 to Level 8's Annual Report
     on Form 10-K, filed March 31, 1998.  The Momentum Purchase Agreement
     provides for two associated Registration Rights Agreements.

     One of the two agreements relates to 36,000 shares of Level 8 Common Stock
     issued to former Momentum employees in exchange for Momentum Series E
     Preferred Shares, and 50,000 shares of Level 8 Common Stock issued as

                                   A-2
<PAGE>

     consideration for some of the employees agreeing to continue on as
     employees of Level 8 (the "Momentum Employees' Registration Agreement")

     The other agreement relates to 575,000 shares of Level 8 Common Stock,
     200,000 additional shares underlying warrants and 250,000 further
     additional shares which could be issued in exchange for a $3,000,000
     promissory note, all issued to the stockholders and management of Momentum.
     (the "Momentum Stockholders' Registration Agreement")

     The Momentum Employees' Registration Agreement states that Level 8 will
     file a registration statement for the 86,000 shares by September 15, 1998.
     Section 2(d) states that the Holders of  a majority in interest may select
     the managing underwriters, if any, for any such registration, subject to
     the approval of the Company, which shall not be unreasonably withheld.  No
     such registration was ever filed. The registration rights are not
     transferable, and extinguish if the shares are sold, pursuant to Rule 144
     or otherwise. While there is no particular termination date for the
     agreement, the Company need only keep the demand registration effective
     until "the date on which all Holders can sell all Registrable Securities
     covered by such Demand Registration Statement pursuant to Rule 144 of the
     Securities Act without restriction under Rule 144(e) thereof."  Because the
     shares have been outstanding for two years, it is likely that all or most
     are eligible for transfer without registration pursuant to Rule 144.

     The Momentum Stockholders' Registration Agreement provides for one demand
     registration, to occur not earlier than March 2000 (two years from the date
     of the agreement).  The agreement provides that the Company is to file a
     registration statement within 60 days of the demand from Holders of a
     majority in interest of the "Registrable Securities."  The Holders have the
     right to select the managing underwriters, if any, for the demand
     registration, subject to the approval of the Company, not to be
     unreasonably withheld.  All of the Registrable Securities (being 1,025,000
     shares of  Common Stock (which includes shares initially issued, underlying
     the warrant, and issuable in return for the promissory note)) are to be
     registered, unless a Holder opts out.   The Company need only keep the
     demand registration effective until "the date on which all Holders can sell
     all Registrable Securities covered by such Demand Registration Statement
     pursuant to Rule 144 of the Securities Act without restriction under Rule
     144(e) thereof."  Because the shares have been outstanding for two years,
     it is likely that all or most are eligible for transfer without
     registration pursuant to Rule 144.

     Under the Momentum Stockholders' Registration Agreement, the Holders are
     also given piggyback registration rights.  These rights are explicitly
     secondary to earlier granted registration rights, but are to be apportioned
     pro rata among all other selling security Holders. The registration rights
     are not transferable, and extinguish if the shares are sold pursuant to
     Rule 144 or otherwise.

                                      A-3
<PAGE>

Hampshire Securities Warrants
     Hampshire Securities Corporation served as the lead underwriter for the
     Company's initial public offering in June of 1995 and for a subsequent
     public offering in December of 1996.  In the underwriting agreements for
     each of the two offerings Hampshire got a warrant to purchase Level 8's
     Common Stock.  Both of the warrants included registration rights.

     The first warrant (related to the IPO) was for 140,000 shares of Common
     Stock at $7.425 per share, exerciseable from July 28, 1996 to July 27,
     2000.  A preliminary form of the warrant was filed with the SEC as Exhibit
     10.27 to the Company's Registration Statement on Form S-1, filed June 14,
     1995.  The warrant provided for two demand registrations and piggyback
     registrations during the period July 1996 to July 2001.  The Company filed
     a registration statement on Form S-3, filed March 7, 1997 and assigned File
     No. 333-22979, registering the 140,000 underlying shares.

     The second warrant (related to the December 1996 public offering) was for
     100,000 shares of Common Stock (the final version may have been for
     110,000) at $14.85 per share, exercisable from December 17, 1997 to
     December 17, 2001.  (These terms are pursuant to the form of warrant filed
     as Exhibit 10.45 to the Company's Registration Statement on Form S-1, filed
     November 4, 1996.)  The warrant grants Hampshire a single demand
     registration and piggyback registration rights, both during the period from
     December 17, 1997 to December 17, 2002.  The rights are terminated once the
     warrants or underlying shares are sold pursuant to a registration statement
     or Rule 144, but there does not appear to be a provision that Rule 144
     eligibility (as opposed to sale) terminated or mooted the registration
     rights.  The agreement provides that the Company cannot grant any
     registration rights "prior to the rights of" Hampshire.   With regard to
     piggyback rights, the agreement more particularly provides that other
     piggy-back rights are only allowable if the [Hampshire securities]
     requested to be included in such registration are included on a pro rata
     basis as to such other persons.  Thus, it appears that the Company could
     grant piggyback rights equal to Hampshire's, to be cut back on a pro rata
     basis if the underwriter advises a cut back.

     A prospectus Supplement, filed with the SEC on Form 424B3, filed December
     16, 1999, incorporated 246,473 shares into a previously filed Registration
     Statement on Form S-3.  Those shares were held by various warrant and
     Common Stock holders who had piggyback rights.  The shares included by the
     supplement are in the names of approximately 40 individuals and businesses.
     Most of these shares are shares which were underlying the warrants issued
     to Hampshire, including shares from the warrant associated with the initial
     public offering which had previously been registered.  There are only about
     400 shares underlying the warrants distributed to Hampshire which are not
     now registered.

                                      A-4
<PAGE>

Liraz Registration Rights Agreement
     The Registration Rights Agreement dated June 13, 1995 by and between Across
     Data Systems, Inc. (predecessor to Level 8) and Liraz Systems Ltd.
     ("Liraz"), filed with the SEC as Exhibit 10.24 to Level 8's Registration
     Statement on Form S-1 filed June 14, 1995, applies to all shares of Level 8
     Common Stock held by Liraz.  It grants to Liraz two demand registrations at
     any time after 18 months after the Company's initial public offering (that
     IPO being pursuant to the June 14, 1995 Registration Statement).  Liraz was
     also granted piggyback registration rights (with 30 days to respond to
     notice).  Liraz is subject to pro-rata reductions with all other
     stockholders.  The agreement contains the following stand-off provision:
     "During the duration of the period specified by the Company and an
     underwriter of Common Shares of other securities of the Company following
     the effective date of the registration statement", Liraz shall not directly
     or indirectly sell or transfer any securities of Level 8 except for any of
     its shares included in the offering.

                                      A-5

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