Document:

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                                                                    EXHIBIT 10.2

                            ASSET PURCHASE AGREEMENT
                            ------------------------

                             MADE AS OF MAY 31, 2002

                                      AMONG

                             LEVEL 8 SYSTEMS, INC.,

                           LEVEL 8 TECHNOLOGIES, INC.,

                                       AND

                            STARQUEST VENTURES, INC.

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                            Asset Purchase Agreement

This Asset Purchase Agreement (this "Agreement") is entered into as of May 31,
2002, by and among Starquest Ventures, Inc., a corporation organized under the
laws of California ("the "Purchaser"), Level 8 Systems, Inc., a corporation
organized under the laws of Delaware ("Parent") and Level 8 Technologies, Inc.,
a corporation organized under the laws of Delaware ("Subsidiary" and together
with Parent, the "Sellers").

WHEREAS,  the Sellers are engaged in the business of developing, distributing,
          licensing, maintaining, and supporting its StarSQL Software (the
          "Software"); and

WHEREAS,  the Purchaser has agreed to purchase from the Sellers, and the Sellers
          have agreed to sell to the Purchaser the Assets (as defined below)
          relating to the Software.

NOW, THEREFORE, in consideration of the mutual promises, covenants, conditions,
representations and warranties set forth herein, and intending to be legally
bound hereby, the parties agree as follows:

1.    Purchase and Sale of the Assets

      1.1.    Purchase and Sale of Assets

              On the terms and subject to the conditions set forth in this
              Agreement, as of the Closing Date, the Sellers shall sell, assign,
              transfer and deliver to the Purchaser, and the Purchaser (relying
              on the representations, warranties, undertakings and indemnities
              made by the Sellers) shall purchase free and clear of any lien,
              security interest, claim, condition, restriction or encumbrance
              ("Liens") all of the assets of the Sellers relating to the
              Software listed on Schedule 1.1 (the "Assets"). At the Closing,
              the Sellers shall effect such sale, assignment, transfer and
              delivery by delivery by the Sellers to the Purchaser of the
              Instruments of Assignment duly executed as shall be necessary to
              vest in the Purchaser good and marketable title to the Assets free
              and clear of any Liens.

      1.2.    Assumed Liabilities

              Subject to the terms and conditions set forth herein, Purchaser,
              on the Closing Date shall assume and hereafter pay, perform or
              discharge when due or required to be performed, as the case may
              be, (a) the obligations and liabilities of the Sellers under the
              Assigned Contracts listed on Schedule 1.2 arising after May 31,
              2002 and (b) the obligations and liabilities of Sellers with
              respect to accrued commission payments in the amount of $34,034
              relating to the services of Ms. Barstad (collectively, the
              "Assumed Liabilities"). At the Closing, the Purchaser shall effect
              the assumption of the Assumed Liabilities by delivery by the
              Purchaser to the Sellers of the Instruments of Assignment duly
              executed as shall be necessary to evidence the assignment and
              assumption of the Assumed Liabilities by the Purchaser.

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      1.3.    Excluded Liabilities

              It is understood and agreed that except for the Assumed
              Liabilities, the Purchaser shall not assume and shall not be
              liable for or have any obligation in relation to any liability or
              other obligation of the Sellers of any kind and nature, whether
              known or unknown, contingent or non-contingent, disclosed or
              undisclosed. All such liabilities and obligations shall be
              retained by, remain the obligations of, and be paid and discharged
              when due by, Sellers.

              Without derogating from the foregoing paragraph, the Purchaser
              does not assume and shall not be liable for the following
              liabilities and obligations of the Sellers and none of the
              following shall be included in the Assumed Liabilities:

              1.3.1.    Any liability arising under or in relation to the
                        Assigned Contracts with respect to the period prior to
                        May 31, 2002;

              1.3.2.    Any liability arising under or in relation to the Assets
                        with respect to the period prior to May 31, 2002,
                        whether such liability is known prior to May 31, 2002 or
                        not; or

              1.3.3.    Any liability under or in connection with any
                        litigation, proceeding or claim of any nature related to
                        the Assets with respect to the period prior to May 31,
                        2002, whether or not such litigation, proceeding or
                        claim is pending, threatened or asserted before, on or
                        after May 31, 2002.

      1.4.    Consideration

              As consideration for the Assets purchased by the Purchaser
              hereunder, the Purchaser shall (a) pay Sellers $300,000 in
              immediately available funds by wire transfer upon Closing and (b)
              deliver a promissory note in the principal amount of $65,000 in
              substantially the form of the attached Exhibit 1.4 (collectively,
              the "Consideration").

2.    The Closing

      2.1.    Closing, Date and Location

              Upon the terms and subject to the conditions contained in this
              Agreement, the closing of the transactions contemplated by this
              Agreement (the "Closing") shall take place upon the execution and
              delivery of this Agreement or such other date, time and place as
              will be agreed between the parties (the "Closing Date"), provided,
              however that all the conditions set forth in Section 6 hereof are
              satisfied or waived.

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      2.2.    Deliveries at the Closing

              2.2.1.    At the Closing, the Sellers shall deliver or cause to be
                        delivered to the Purchaser against the actual payment of
                        the Consideration in accordance with the provision of
                        Section 1.4:

                        2.2.1.1.   One or more executed bills of sale and deeds
                                   of assignment and assumption substantially in
                                   the form of Exhibit 2.2.1.1 hereto
                                   transferring and assigning the Assets and the
                                   Assumed Liabilities to the Purchaser, and any
                                   such other good and sufficient instruments as
                                   shall be reasonably requested by Purchaser to
                                   vest in the Purchaser good and marketable
                                   title in and to all the Assets free and clear
                                   of any Liens (collectively, the "Instruments
                                   of Assignment"); and

                        2.2.1.2.   The duly executed certificate of the
                                   authorized officer of Sellers in the form of
                                   Exhibit 2.2.1.2 certifying the fulfillment of
                                   the conditions set forth in Section 6.2
                                   below.

                        2.2.1.3.   A copy of the fairness opinion delivered to
                                   the Board of Directors of Parent in
                                   connection with the transactions contemplated
                                   herein.

              2.2.2.    At the Closing, the Purchaser shall deliver or cause to
                        be delivered to Sellers:

                        2.2.2.1.   the Consideration in accordance with the
                                   provision of Section 1.4;

                        2.2.2.2.   The duly executed certificate of the duly
                                   authorized officer of Purchaser in the form
                                   of Exhibit 2.2.2.2 certifying the fulfillment
                                   of the conditions set forth in Section 6.3
                                   below;

                        2.2.2.3.   A counterpart or counterparts of the
                                   Instruments of Assignments; and

              2.2.3.    The parties hereto acknowledge and agree that all source
                        code within the Assets is located in Cary, North
                        Carolina, and will be delivered to Purchaser at the
                        Closing by electronic transmission from Sellers in Cary,
                        North Carolina to Purchaser in California, as Purchaser
                        shall direct.

              2.2.4.    All transactions occurring at the Closing shall be
                        deemed to take place simultaneously and no transaction
                        shall be deemed to have been completed and no document
                        or certificate shall be deemed to have been delivered
                        until all transactions are completed and all documents

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                        delivered. Unless otherwise indicated, all documents and
                        certificates shall be dated on or as of the Closing
                        Date.

3.    Representations and Warranties of the Sellers

      Except as set forth in the disclosure schedule attached hereto (the
      "Disclosure Schedule") (which Disclosure Schedule shall contain
      appropriate references to applicable Sections and subsections of the
      Agreement to which such Section and subsection references relate), the
      Sellers, jointly and severally, represent, warrant and agree that the
      following statements are true and correct in all respects (all references
      in this Section 3 to a "Schedule" shall be to the indicated subsection of
      the Disclosure Schedule):

      3.1.    Organization and Authority

              Parent is a corporation duly organized, validly existing and in
              good standing under the laws of the State of Delaware. Parent has
              all requisite corporate power and authority necessary to conduct
              its business as presently conducted. Parent is duly qualified or
              licensed and in good standing to do business in each jurisdiction
              in which the property owned, leased or operated by it or the
              nature of the business conducted by it makes such qualification
              necessary, except where the failure to be so qualified would not
              have a material adverse affect on the business, financial
              condition or results of operation of Parent. Parent has made
              available to the Purchaser complete and correct copies of the
              certificate of incorporation and bylaws of Parent, as currently in
              effect. Parent owns all of the Subsidiary Stock. The Subsidiary is
              a corporation duly organized, validly existing and in good
              standing under the laws of the State of Delaware. The Subsidiary
              has all requisite corporate power and authority necessary to
              conduct its business as presently conducted. The Subsidiary is
              duly qualified or licensed and in good standing to do business in
              each jurisdiction in which the property owned, leased or operated
              by it or the nature of the business conducted by it makes such
              qualification necessary, except where the failure to be so
              qualified would not have a material adverse affect on the
              business, financial condition or results of operation of the
              Subsidiary. The Subsidiary has made available to the Purchaser
              complete and correct copies of the certificate of incorporation
              and bylaws of the Subsidiary, as currently in effect.

              Each Seller has all requisite corporate power and authority and
              has taken all corporate action necessary, to execute and deliver
              this Agreement and has full legal capacity to execute, deliver and
              perform this Agreement and to consummate the transactions
              contemplated hereby and to perform its obligations hereunder. The
              execution, delivery and performance by the Sellers of this
              Agreement and each agreement, certificate or other document that
              is to be executed and delivered by the Sellers in connection with
              the transactions contemplated by this Agreement have been duly and
              validly authorized by each Seller's Board of Directors and no
              other corporate proceedings on the part of the Sellers or their
              stockholders are necessary to authorize this Agreement and the

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              transactions contemplated hereby. This Agreement has been duly and
              validly executed and delivered by each Seller and constitutes, and
              each agreement, certificate or other document that is to be
              executed and delivered by each Seller in connection with the
              transactions contemplated by this Agreement when executed and
              delivered by such Seller will constitute, a valid and binding
              agreement of such Seller, enforceable against such Seller in
              accordance with its terms, subject to applicable bankruptcy,
              insolvency and other similar laws affecting the enforceability of
              creditors' rights generally, general equitable principles and the
              discretion of courts in granting equitable remedies.

      3.2.    Consents and Approvals; No Violations

              Except as set forth in Schedule 3.2, no filing with, and no
              permit, authorization, consent, approval of, or notice to, any
              governmental body or any other third party is necessary for the
              lawful consummation by the Sellers of the transactions
              contemplated by this Agreement. The execution, delivery and
              performance of this Agreement by the Sellers and the consummation
              by the Sellers of the transactions contemplated hereby, do not and
              will not (a) conflict with or result in any violation or breach of
              any provision of the respective certificates of incorporation and
              bylaws of Parent and the Subsidiary, (b) violate or conflict with
              or constitute a default (or an event which, with notice or lapse
              of time, or both would constitute a default) or give rise to any
              right of termination, cancellation or acceleration, under any of
              the terms, conditions, or provisions of any contract or agreement
              including, without limitation, the Assigned Contracts, or result
              in the creation or imposition of any Lien on the Assets, (c) to
              the Sellers' knowledge, violate or conflict with any order, writ,
              injunction, decree, statute, rule or regulation of any
              governmental body or any other restriction of any kind or
              character applicable to the Sellers or any of the Assets, or (d)
              to Sellers' knowledge, cause Purchaser to be subject to any
              federal or state tax liability. To Sellers' knowledge, there is no
              lawsuit, proceeding or investigation pending or threatened against
              any Seller that seeks to prevent the consummation of the
              transactions contemplated hereby.

      3.3.    Title to Assets; Encumbrances; Condition of Assets

              Each Seller has good and marketable title to all of the Assets to
              be sold or transferred by it hereunder and at the Closing,
              Purchaser will take all of the Assets to be purchased by it or
              transferred hereunder, in each case, free and clear of any Liens
              other than those by, through or under Purchaser. The tangible
              assets included in the Assets are in good operating condition and
              repair, ordinary wear and tear excepted, and are adequate and
              suitable in accordance with general industry practices for the
              purposes for which they are currently used and intended to be
              used. Except as listed on Schedule 3.3(a), neither Parent nor
              Subsidiary is obliged or under any liability whatsoever to make
              any payments by way of royalties, fees or otherwise with respect
              to the Assets or to any owner or licensee of, or other claimant
              to, any patent, trademark, service mark, trade name,

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              copyright or other intangible asset, with respect to the use
              thereof or in its activities concerning and relating to the
              Assets. Except as listed on Schedule 3.3(b), neither Parent nor
              Subsidiary has granted any license or other rights with respect to
              any of the Assets.

      3.4.    Contracts

              All Assigned Contracts and all amendments and modifications
              thereof are listed on Schedule 1.2 hereto. As of the date hereof,
              neither Parent nor Subsidiary is in breach of any of the Assigned
              Contracts, has performed all of its respective obligations under
              the Assigned Contracts, and none of the Sellers is aware of any
              event which would constitute a default on the part of Parent or
              Subsidiary, except for such defaults, events of default or other
              events as to which requisite waivers or consents have been
              obtained or which could not reasonably be expected to have,
              individually or in the aggregate, a material adverse effect on the
              Assets or on the use thereof by the Purchaser in a manner
              consistent with the use thereof by the Sellers prior to the
              Closing. Schedule 3.4 specifies those Assigned Contracts the
              assignment of which requires the consent of a third party. Each of
              the Assigned Contracts is valid, binding and enforceable by the
              Sellers in accordance with its terms and is in full force and
              effect. None of the Assigned Contracts is subject to rescission
              and to the Sellers' knowledge there are no circumstances which
              would modify their terms, prevent their assignment or create a
              Lien thereon. The execution of this Agreement by the Sellers and
              the consummation of the transactions contemplated hereby do not
              constitute a default of the part of Parent or the Subsidiary under
              any of the Assigned Contracts, except for such defaults which
              could not reasonably be expected to have, individually or in the
              aggregate, a material adverse effect on the Assets or on the use
              thereof by the Purchaser in a manner consistent with the use
              thereof by the Sellers prior to the Closing. Neither Parent nor
              the Subsidiary has given any power of attorney (revocable or
              irrevocable) to any person, firm or corporation concerning or in
              relation to the Assets.

      3.5.    Litigation and Compliance with Laws

              There is no suit, action, charge, claim, inquiry, investigation or
              proceeding pending by or against, or to the Sellers' knowledge,
              threatened against, the Assets or the transactions contemplated
              hereby. Further, there is no action, suit, proceeding or
              investigation that the Sellers intend to initiate in connection
              with the Assets or the transactions contemplated hereby. The
              Sellers have complied with all laws, regulations, orders or
              decrees applicable to the Assets and have not received any
              complaint or notice from any governmental authority alleging that
              any Seller has violated any such law, regulation, order or decree,
              except for non-compliance or violations which could not reasonably
              be expected to have, individually or in the aggregate, a material
              adverse effect on the Assets or on the use thereof by the
              Purchaser in a manner consistent with the use thereof by the
              Sellers prior to the Closing.

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      3.6.    Brokers and Finders

              Neither Seller has become obligated to pay any fee or commission
              to any broker, finder or intermediary for or on account of the
              transactions provided for in this Agreement.

      3.7.    Disclosure

              All Schedules and Exhibits hereto are complete and accurate.
              Originals, or true and complete copies, of all documents requested
              by the Purchaser or other written materials underlying items
              listed on the Schedules and Exhibits that have been requested in
              writing by the Purchaser have been or will be promptly delivered
              to the Purchaser, and such documents have not been modified and
              will not be modified prior to the Closing Date without the
              Purchaser's prior written consent. No representation or warranty
              by the Sellers in this Agreement and no statement contained in any
              document (including the documents furnished by the Sellers during
              the Purchaser's investigation of the Sellers in connection with
              the transactions contemplated hereby) contains any untrue
              statement of a material fact or omits to state any material fact
              necessary in light of the circumstances under which it was made,
              in order to make the statements herein or therein misleading.
              There is no material fact or information relating to the Assets
              that has not been disclosed to the Purchaser in writing.

      3.8.    Receivables

              Schedule 1.1 includes a true, correct and complete list of all
              billed and unbilled accounts receivable arising in connection
              with, or related to, the Assets, including the name of the account
              debtor, and the face amount and aging thereof (the "Receivables").
              To the knowledge of Sellers, no account debtor disputes the amount
              of any Receivable.

4.    Representations and Warranties of the Purchaser

      The Purchaser represents, warrants to, and agrees with the Sellers that
      the following statements are true and correct in all respects:

      4.1.    Organization and Authority

              The Purchaser is a corporation duly organized, validly existing
              and in good standing under the laws of its jurisdiction of
              incorporation and has all requisite corporate power and authority,
              and has taken all corporate action necessary, to execute and
              deliver this Agreement and has full legal capacity to execute,
              deliver and perform this Agreement and to consummate the
              transactions contemplated hereby and to perform its obligations
              hereunder. The execution, delivery and performance by the
              Purchaser of this Agreement and each agreement, certificate or
              other document that is to be executed and delivered by Purchaser
              in connection with the transactions contemplated by this Agreement
              have been duly

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              and validly authorized by Purchaser and no other corporate
              proceedings on the part of the Purchaser or its stockholders are
              necessary to authorize this Agreement and the transactions
              contemplated hereby. This Agreement has been duly and validly
              executed and delivered by the Purchaser and constitutes, and each
              agreement, certificate or other document that is to be executed
              and delivered by the Purchaser in connection with the transactions
              contemplated by this Agreement when executed and delivered by
              Purchaser will constitute, a valid and binding agreement of
              Purchaser, enforceable against Purchaser in accordance with its
              terms, subject to applicable bankruptcy, insolvency and other
              similar laws affecting the enforceability of creditors' rights
              generally, general equitable principles and the discretion of
              courts in granting equitable remedies.

      4.2.    Consents and Approvals; No Violations

              No filing with, and no permit, authorization, consent, approval
              of, or notice to, any governmental, administrative or judicial
              authority is necessary for the lawful consummation by the
              Purchaser of the transactions contemplated by this Agreement. The
              execution, delivery and performance of this Agreement by the
              Purchaser and the consummation by the Purchaser of the
              transactions contemplated hereby, do not and will not (a) conflict
              with or result in any violation or breach of any provision of the
              articles of association, certificate of incorporation, bylaws or
              any other similar documents of Purchaser or (b) violate or
              conflict with any order, writ, injunction, decree, statute, rule
              or regulation of any court, public body or authority or any other
              restriction of any kind or character applicable to Purchaser.
              There is no lawsuit, proceeding or investigation pending or
              threatened against Purchaser that seeks to prevent the
              consummation of the transactions contemplated hereby.

      4.3.    Brokers and Finders

              Purchaserhas not become obligated to pay any fee or commission to
              any broker, finder or intermediary for or on account of the
              transactions provided for in this Agreement.

5.    Covenants of the Parties

      5.1.    Covenants of the Sellers. Sellers hereby, jointly and severally,
              covenant and agree with Purchaser as follows:

              5.1.1.    To the extent that any Asset to be transferred to
                        Purchaser is not capable of being validly and fully
                        assigned and transferred to Purchaser without a consent
                        or approval, or a consent or approval is necessary to
                        consummate any of the transactions contemplated hereby,
                        and such consents or approvals have not been obtained by
                        Sellers prior to the Closing or do not remain in full
                        force and effect at the Closing, Sellers shall use their
                        reasonable best efforts to, as soon as practicable:

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                        (a) obtain such consents or approvals; and (b) provide
                        to Purchaser the benefits of any Asset as to which such
                        consent or approval has not been so obtained or does not
                        remain in full force and effect.

              5.1.2.    Sellers will provide the transition services listed on
                        Schedule 5.1.2 at no cost or expense to the Purchaser.

              5.1.3.    Sellers agree to use their commercially reasonable
                        efforts to maintain as confidential any confidential
                        information, trade secret or intellectual property
                        information relating to the Assets and to permit
                        Purchaser to enforce in the name of Sellers any rights
                        of Sellers under agreements or contracts that require
                        other persons to hold such information confidential.
                        Enforcement of agreements with other persons shall be
                        for the benefit of, and at the sole expense of,
                        Purchaser.

              5.1.4.    Parent shall, within 90 days of Closing, cause its
                        wholly-owned subsidiary, StarQuest Software, Inc., a
                        California corporation, to change its name to a name
                        which does not use the word Starquest or any derivative
                        thereof and which is not the same as or similar to the
                        name StarQuest Software, Inc.

              5.1.5.    If, on or after May 31, 2002, Sellers receive any
                        payment on account of any Receivable or any sales of
                        products or services associated with the Assets (under
                        any Assumed Contract or otherwise), Sellers shall
                        promptly turn over fifty-percent (50%) of such payment
                        to Purchaser. The additional fifty-percent (50%) of such
                        payment shall be applied by Sellers as a payment with
                        respect to the principal of and interest on the
                        promissory note according to the terms of the promissory
                        note. After the promissory note is paid in full, Sellers
                        shall promptly turn over all payments received on
                        account of any Receivable or any sales of products or
                        services associated with the Assets (under any Assumed
                        Contract or otherwise) to the Purchaser. In the event
                        Sellers fail to turn over such amounts within three (3)
                        days of Sellers' receipt of such amounts, the portion of
                        such payment owed to Purchaser shall accrue interest at
                        ten percent (10%) per annum until such payment is made
                        by Sellers.

              5.1.6.    Sellers shall, for 120 days following the Closing, use
                        its commercially reasonable efforts to provide Purchaser
                        daily reports on the status of the Receivables.

      5.2.    Mutual Covenants.

              Purchaser covenants and agrees with Sellers, and Sellers jointly
              and severally covenant and agree with Purchaser, that from time to
              time after the Closing and without further consideration, the
              parties will execute and deliver, or arrange for

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              the execution and delivery of such other instruments of conveyance
              and transfer or other instruments or documents and take or arrange
              for such other actions as may reasonably be requested to complete
              more effectively any of the transactions provided for in this
              Agreement.

6.    Closing Conditions

      6.1.    Conditions to Each Party's Obligations

              The respective obligations of each party to consummate the
              transactions contemplated hereby shall be subject to the
              fulfillment at or prior to the Closing Date of the following
              conditions, any of which may be waived, in whole or in part, by
              mutual agreement of the Sellers and the Purchaser:

              6.1.1.    The absence of any effective injunction, writ, or
                        preliminary restraining order of a court of competent
                        jurisdiction directing that the transactions provided
                        for herein not be consummated.

              6.1.2.    No action, suit, proceeding or investigation by or
                        before any court, administrative agency or other
                        governmental body shall have been instituted (i) to
                        restrain, prohibit or invalidate the transactions
                        contemplated by this Agreement; (ii) which seeks
                        material or substantial damages by reason of completion
                        of such transaction; or (iii) which may materially
                        affect the right of the Purchaser to own, operate or
                        control the Assets after the Closing Date.

              6.1.3.    A Separation and Release Agreement shall have been duly
                        executed by Parent and Paul Rampel providing for the
                        termination of Mr. Rampel's employment with Parent.

      6.2.    Conditions to the Obligations of the Purchaser

              The obligations of the Purchaser to consummate the transactions
              contemplated hereby shall be further subject to the fulfillment at
              or prior to the Closing Date of the following conditions, any one
              or more of which may be waived, in whole or in part, by the
              Purchaser:

              6.2.1.    The representations and warranties made by the Sellers
                        in this Agreement, the Services Agreement and the
                        statements contained in the Disclosure Schedule and in
                        any statement, deed, certificate or other document
                        delivered by Seller pursuant to this Agreement shall be
                        true and correct as of the Closing Date (except as
                        otherwise contemplated by this Agreement).

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              6.2.2.    Each Seller shall have performed and complied with the
                        agreements contained in this Agreement required to be
                        performed and complied with by it at or prior to the
                        Closing Date.

              6.2.3.    Each Seller shall have delivered to the Purchaser a
                        certificate, dated the Closing Date and executed by a
                        duly authorized signatory of Sellers certifying the
                        fulfillment of all conditions set forth in this Section
                        6.2.

              6.2.4.    Each Seller shall have delivered to Purchaser the
                        Instruments of Assignment and other documents and
                        instruments required to be delivered pursuant to Section
                        2.2 of this Agreement, in each case, as appropriate,
                        duly executed and in form and substance satisfactory to
                        counsel to the Purchaser.

              6.2.5.    There shall not have been a material adverse change in
                        the Assets or any development which is reasonably likely
                        to result in a material adverse change in the Assets.

              6.2.6.    No Seller shall have commenced any proceedings to be
                        adjudicated as bankrupt or insolvent or made any filing
                        pursuant to any bankruptcy or insolvency law.

      6.3.    Conditions to the Obligations of the Sellers

              The obligations of the Sellers to consummate the transactions
              contemplated hereby shall be further subject to the fulfillment at
              or prior to the Closing Date of the following conditions, any one
              or more of which may be waived, in whole or in part, by the
              Sellers:

              6.3.1.    The representations and warranties made by the Purchaser
                        in this Agreement and the Services Agreement, and in any
                        statement, deed, certificate or other document delivered
                        by the Purchaser pursuant to this Agreement shall be
                        true and correct as of the Closing Date (except as
                        otherwise contemplated by this Agreement).

              6.3.2.    The Purchaser shall have performed and complied with the
                        agreements contained in this Agreement required to be
                        performed and complied with by it at or prior to the
                        Closing Date.

              6.3.3.    Purchaser shall have delivered to the Sellers a
                        certificate, dated the Closing Date and executed by an
                        authorized executive officer of Purchaser certifying the
                        fulfillment of all conditions set forth in this Section
                        6.3.

              6.3.4.    Purchaser shall have delivered to Sellers the
                        Instruments of Assignment and other documents required
                        to be delivered pursuant to

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                        Section 2.2 of this Agreement, in each case, as
                        appropriate, duly executed and in form and substance
                        satisfactory to counsel to the Sellers.

              6.3.5.    Each of Merrill Lynch, Pierce, Fenner & Smith
                        Incorporated, Cisco Systems, Inc. and Liraz Systems Ltd.
                        shall have consented to the transactions contemplated by
                        this Agreement.

              6.3.6.    The Board of Directors of Parent shall have received an
                        opinion from its financial advisor to the effect that
                        the transactions contemplated by this Agreement are fair
                        to the Parent and its stockholders from a financial
                        point of view and such fairness opinion shall not have
                        been withdrawn or materially modified.

7.    Indemnification; Survival Of Representations, Warranties And Agreements

      7.1.    Survival of Representations

              All representations, warranties, covenants, and obligations in
              this Agreement, the Disclosure Schedule and any other certificate
              or document delivered pursuant to this Agreement will survive the
              Closing for a period of one year. The right to indemnification,
              payment of Damages (as defined in Section 7.2 below) or other
              remedy based on such representations, warranties, covenants, and
              obligations will not be affected by any investigation conducted
              with respect to, or any knowledge acquired (or capable of being
              acquired) at any time, whether before or after the Closing Date,
              with respect to the accuracy or inaccuracy of or compliance with,
              any such representation, warranty, covenant, or obligation. The
              waiver of any condition based on the accuracy of any
              representation or warranty, or on the performance of or compliance
              with any covenant or obligation, will not affect the right to
              indemnification, payment of Damages, or other remedy based on such
              representations, warranties, covenants, and obligations.

      7.2.    Indemnification of the Purchaser

              The Sellers will jointly and severally indemnify and hold harmless
              the Purchaser and its respective representatives, stockholders,
              employees, officers, directors, controlling persons, and
              affiliates (collectively, the "Purchaser Indemnified Persons")
              for, and will pay and reimburse to the Purchaser Indemnified
              Persons the amount of, any loss, liability, claim, damage, expense
              (including costs of investigation and defense and reasonable
              attorneys' expenses and fees) or diminution of value, whether or
              not involving a third-party claim (collectively, "Damages"),
              arising, directly or indirectly, from or in connection with: (a)
              any breach of any representation or warranty made by the Sellers
              in this Agreement, the Schedules, any supplements to the
              Schedules, or any other certificate or document delivered by the
              Sellers pursuant to this Agreement; (b) any breach by the Sellers
              of any covenant or obligation of the Sellers in this Agreement,
              the

                                       12

<PAGE>

              Schedules, any supplements to the Schedules, or any other
              certificate or document delivered by the Sellers pursuant to this
              Agreement; (c) the claims of any broker, finder, or similar person
              engaged by the Sellers in connection with any of the transactions
              contemplated hereby; or (d) without in any manner limiting the
              foregoing, Damages which arise from the operation of the
              Subsidiary's business, or from the ownership or condition of the
              Assets by Parent or the Subsidiary during any period or periods on
              or prior to the Closing Date or which arise otherwise out of or in
              relation to the Assets on or prior to the Closing Date, including,
              without limitation, product liability or warranty.

              Notwithstanding anything to the contrary herein, the Sellers,
              jointly and severally, will indemnify and hold harmless the
              Purchaser Indemnified Persons from and against any Damages
              arising, directly or indirectly, from or in connection with the
              failure of the Sellers to make any tax filing in any jurisdiction
              or the failure of the Sellers to pay any employment tax or
              transfer tax, including any sales, use and other taxes, mandatory
              payments and charges (if such failure to file or pay relates to
              any period on or prior to May 31, 2002, or is attributable to the
              failure of Sellers to pay the taxes provided for in Section 8.11).
              Such indemnification obligation shall not be limited in time.

              The remedies provided in this Section 7.2 will not be exclusive of
              or limit any other remedies that may be available to the Purchaser
              or the other Purchaser Indemnified Persons.

      7.3.    Indemnification of the Sellers

              The Purchaser will indemnify and hold harmless the Sellers and
              their respective representatives, shareholders, employees,
              officers, directors, controlling persons, and affiliates
              (collectively, the "Seller Indemnified Persons"), for, and will
              pay to the Seller Indemnified Persons the amount of any Damages
              arising, directly or indirectly, from or in connection with: (a)
              any breach of any representation or warranty made by the Purchaser
              in this Agreement or in any certificate or document delivered by
              the Purchaser pursuant to this Agreement; (b) any breach by the
              Purchaser of any covenant or obligation of the Purchaser in this
              Agreement; (c) the claims of any broker, finder, or similar person
              engaged by the Purchaser in connection with any of the
              transactions contemplated hereby; and (d) any liabilities or
              obligations of, or claims or causes of action against the Sellers
              which arise from the use of the Assets by the Purchaser during any
              period or periods after the Closing Date.

              The remedies provided in this Section 7.3 will not be exclusive of
              or limit any other remedies that may be available to the Sellers
              or the other Seller Indemnified Persons.

                                       13

<PAGE>

      7.4.    Limitations

              7.4.1.    Notwithstanding the foregoing, neither the Sellers and
                        the Seller Indemnified Persons on the one hand, nor the
                        Purchaser and the Purchaser Indemnified Persons on the
                        other, shall be entitled to indemnification for Damages
                        arising out of matters referred to in Sections 7.2 or
                        7.3, as applicable unless it shall have given written
                        notice to the other party, setting forth its claim for
                        indemnification in reasonable detail, within one year
                        after the Closing Date; provided, however, that the
                        foregoing limitation shall not apply with respect to
                        claims by the Sellers for payment of the Consideration.

      7.5.    Procedure

              If the matter with respect to which a party seeks indemnification
              (the "Indemnitee") involves a claim asserted against the
              Indemnitee by a third party, promptly after receipt by the
              Indemnitee of notice of the commencement of any action, it will
              notify the party from whom it is entitled to indemnification (the
              "Indemnitor") in writing of the commencement thereof, but the
              omission so to notify the Indemnitor will not relieve the
              Indemnitor from any liability which it may have to the Indemnitee
              unless the Indemnitor is prejudiced by such omission. In case any
              such action shall be brought against the Indemnitee and it shall
              notify the Indemnitor of the commencement thereof, the Indemnitor
              shall be entitled to participate in, and, to the extent that it
              may wish to assume the defense thereof, with counsel satisfactory
              to the Indemnitee, and after notice from the Indemnitor to the
              Indemnitee of its election to assume the defense thereof, the
              Indemnitor shall not be liable to the Indemnitee for any legal or
              other expenses subsequently incurred by the Indemnitee in
              connection with the defense thereof unless (a) the Indemnitee
              shall have employed separate counsel in connection with the
              assertion of legal defenses in accordance with the proviso to this
              sentence, (b) the Indemnitor shall not have employed counsel
              satisfactory to the Indemnitee to represent the Indemnitee within
              a reasonable time, (c) the Indemnitor and its counsel do not
              actively and vigorously pursue the defense of such action, or (d)
              the Indemnitor has authorized the employment of counsel for the
              Indemnitee at the expense of the Indemnitor; provided, however,
              that the Indemnitee shall have the right to employ counsel to
              represent it if, in its reasonable judgment, it is advisable for
              it to be represented by separate counsel because separate defenses
              are available, or because a conflict of interest exists between
              the Indemnitee and the Indemnitor in respect to such claim, and in
              such event the fees and expenses of such separate counsel shall be
              paid by the Indemnitor. In such circumstance, the Indemnitee shall
              designate the counsel. The Indemnitor will not be liable to the
              Indemnitee for any settlement of any action or claim without the
              consent of the Indemnitor and the Indemnitor may not unreasonably
              withhold its consent to any settlement. The Indemnitor will not
              consent to entry of any judgment or enter into any settlement or
              compromise any claim which does not include as an unconditional
              term thereof the giving by the

                                       14

<PAGE>

              claimant or plaintiff to the Indemnitee of a full release from all
              liability with respect to such claim or litigation.

8.    Miscellaneous Provisions

      8.1.    Amendment and Modification

              Subject to applicable law, this Agreement may be amended, modified
              or supplemented only by written agreement of both of the parties
              hereto.

      8.2.    Waiver of Compliance; Consents

              Except as otherwise provided in this Agreement, any failure of any
              of the parties to comply with any obligation, covenant, agreement
              or condition herein may be waived by the party or parties entitled
              to the benefits thereof only by a written instrument signed by the
              party granting such waiver, but such waiver or failure to insist
              upon strict compliance with such obligation, covenant, agreement
              or condition shall not operate as a waiver of, or stopped with
              respect to, any subsequent or other failure. Whenever this
              Agreement requires or permits, consent by or on behalf of any
              party hereto, such consent shall be given in writing in a manner
              consistent with the requirements for a waiver of compliance as set
              forth in this Section 8.2.

      8.3.    Notices

              All notices or other communications in connection with this
              Agreement shall be in writing and shall be considered given when
              personally delivered or when mailed by registered or certified
              mail, postage prepaid, return receipt requested, or when sent via
              commercial courier or facsimile, directed to the parties at the
              following addresses (or at such other address for a party as shall
              be specified by written notice; provided that notices of a change
              of address shall be effective only upon deemed receipt thereof):

              (a)         if to the Purchaser, to

                          StarQuest Ventures, Inc.
                          PO Box 146
                          Inverness, CA 94937
                          Attention: Paul Rampel
                          Tel: (415) 669-9619
                          Fax: (415) 669-9629

                          with a copy to:

                          Greene, Radovsky, Maloney & Share, LLP
                          4 Embarcadero Center, Suite 4000
                          San Francisco, CA 94111

                                       15

<PAGE>

                          Tel: (415) 981-1400
                          Fax: (415) 777-4961
                          Attention: Joseph Radovsky

           (b)            if to any of the Sellers, to

                          Level 8 Systems, Inc.
                          8000 Regency Parkway
                          Cary, North Carolina 27511
                          Tel: (919) 380-5000
                          Fax: (919) 380-5090
                          Attention: John P. Broderick

                          with a copy to:

                          Powell, Goldstein, Frazer & Murphy LLP
                          191 Peachtree St.; 16th Floor
                          Atlanta, Georgia 30303
                          Tel: 404-572-6875
                          Fax: 404-572-6999
                          Attention: Scott D. Smith

      8.4.    Severability

              If any provision of this Agreement is held by a court of competent
              jurisdiction to be unenforceable under applicable law, then such
              provision shall be excluded from this Agreement and the remainder
              of this Agreement shall be interpreted as if such provision were
              so excluded and shall be enforceable in accordance with its terms;
              provided, however, that in such event this Agreement shall be
              interpreted so as to give effect, to the greatest extent
              consistent with, and permitted by, applicable law.

      8.5.    Assignment

              This Agreement and all of the provisions hereof shall be binding
              upon and inure to the benefit of the parties hereto and their
              respective successors and permitted assigns, but neither this
              Agreement nor any of the rights, interests or obligations
              hereunder shall be assigned by any of the parties hereto without
              the prior written consent of the other parties, nor is this
              Agreement intended to confer upon any other person except the
              parties hereto any rights or remedies hereunder.

      8.6.    Governing Law; Dispute Resolution

              This Agreement shall be governed by and construed in accordance
              with the laws of the State of Delaware. In the event of a dispute
              that cannot be resolved

                                       16

<PAGE>

              amicably between the parties, the dispute shall be resolved
              through binding arbitration, conducted in Berkeley, California by
              a sole arbitrator in accordance with the rules of the American
              Arbitration Association. The sole arbitrator shall be appointed by
              agreement of the parties. In the event the parties fail to agree
              upon the appointment of the sole arbitrator within thirty (30)
              days after a notice of arbitration is given by either party to the
              other, then the arbitrator shall be selected and appointed by the
              American Arbitration Association. The arbitration award and/or
              determination shall be final and binding and judgment may be
              entered thereon in any court of competent jurisdiction.

      8.7.    Bulk Sales

              The parties hereby waive compliance with any applicable Bulk Sales
              Laws in any jurisdiction.

      8.8.    Counterparts

              This Agreement may be executed in two or more counterparts, each
              of which shall be deemed an original, but all of which together
              shall constitute one and the same instrument.

      8.9.    Interpretation

              The article and section headings in this Agreement are solely for
              the purpose of reference, are not part of the agreement of the
              parties and shall not in any way affect the meaning or
              interpretation of this Agreement. As used in this Agreement, the
              term "person" shall mean and include an individual, a partnership,
              a joint venture, a corporation, a trust, an unincorporated
              organization and a government or any department or agency thereof.

      8.10.   Entire Agreement

              This Agreement, including the exhibits attached hereto and the
              documents, schedules, certificates and instruments referred to
              herein, embody the entire agreement and understanding of the
              parties hereto in respect of the transactions contemplated by this
              Agreement. There are no restrictions, promises, representations,
              warranties, covenants or undertakings, other than those expressly
              set forth or referred to herein. Other than as provided for
              herein, this Agreement supersedes all prior agreements and
              understandings between the parties with respect to such
              transactions.

      8.11.   Expenses

              Sellers, on the one hand, and Purchaser, on the other hand, shall
              pay their own expenses (including the fees and expenses of their
              accountants, advisors and counsel) in connection with negotiating,
              preparing, closing and carrying out this Agreement and the
              transactions contemplated hereby and thereby. Sellers shall

                                       17

<PAGE>

              pay timely all transfer taxes, including, without limitation,
              sales, use and other taxes, mandatory payments and charges
              applicable to Sellers resulting from the sale and transfer to
              Purchaser of the Assets.

                                       18

<PAGE>

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

                                 PURCHASER

                                      STARQUEST VENTURES, INC.

                                      By:  ______________________________
                                      Name:______________________________
                                      Its: ______________________________

                                 SELLERS

                                      LEVEL 8 SYSTEMS, INC.

                                      By:  ______________________________
                                           John P. Broderick
                                           Chief Financial Officer and Secretary

                                      LEVEL 8 TECHNOLOGIES, INC.

                                      By:  ______________________________
                                           John P. Broderick
                                           Chief Financial Officer and Secretary

                                       19Prepared by R.R. Donnelley Financial -- Third Supplemental Indenture

 EXHIBIT 4.2 
  
 
 
 UNUMPROVIDENT CORPORATION 
  
 AND 
  
 JPMORGAN CHASE BANK 
  
 as Trustee 
  
 
 
 THIRD SUPPLEMENTAL INDENTURE 
  
 June 25, 2002 
  
 
 
 Supplement to Indenture dated as of March 9, 2001 
 (Senior Debt Securities) 
  

 THIRD SUPPLEMENTAL INDENTURE 
  
 THIRD SUPPLEMENTAL INDENTURE, dated as of June 25, 2002, by and between UNUMPROVIDENT CORPORATION, a Delaware corporation (hereinafter called the “Company”), having its principal office at 1
Fountain Square, Chattanooga, Tennessee 37402 and JPMORGAN CHASE BANK (formerly known as The Chase Manhattan Bank), a New York banking corporation (hereafter called the “Trustee”), having a Corporate Trust Office at 450 West 33rd Street,
15th Floor, New York, New York 10001, as Trustee under the Indenture (as hereinafter defined). 
  
 RECITALS

  
 WHEREAS, the Company and the Trustee have as of March 9, 2001 entered into an Indenture (hereinafter called
the “Indenture”, all capitalized terms used and not otherwise defined herein shall have the meanings set forth in the Indenture) providing for the issuance by the Company from time to time of its subordinated debt securities; 

 
 WHEREAS, the Company issued a series of 7.625% senior notes due 2011 under the Indenture and First Supplemental Indenture dated
as of March 9, 2001; 
  
 WHEREAS, the Company issued a series of 7.375% senior debentures due 2032 under a Second
Supplemental Indenture dated as of June 18, 2002; 
  
 WHEREAS, the Company desires to issue a third series of senior
debt securities under the Indenture, and has duly authorized the creation and issuance of such debt securities and the execution and delivery of this Third Supplemental Indenture to modify the Indenture and provide certain additional provisions as
hereinafter described; 
  
 WHEREAS, the Company and the Trustee deem it advisable to enter into this Third
Supplemental Indenture for the purposes of establishing the terms of such debt securities and providing for the rights, obligations and duties of the Trustee with respect to such debt securities; 
  

WHEREAS, the execution and delivery of this Third Supplemental Indenture has been authorized by a resolution of the Pricing Committee of the Board of Directors of the
Company; 
  
 WHEREAS, concurrent with the execution hereof, the Company has delivered an Officers’ Certificate
and has caused its counsel to deliver to the Trustee an Opinion of Counsel; and 
  
 WHEREAS, all conditions and
requirements of the Indenture necessary to make this Third Supplemental Indenture a valid, binding and legal instrument in accordance with its terms have been performed and fulfilled by the parties hereto and the execution and delivery thereof have
been in all respects duly authorized by the parties hereto. 
 

 1 

  
 NOW, THEREFORE, THIS THIRD SUPPLEMENTAL INDENTURE WITNESSETH:

  
 For and in consideration of the mutual premises and agreements herein contained, the Company and the Trustee
covenant and agree, for the equal and proportionate benefit of all Holders of the Notes (as defined below), as follows: 
  
 ARTICLE ONE 
  
 CREATION OF THE NOTES 
  
 Section 1.1.    Designation of Series.    Pursuant to the terms hereof and Sections 201 and 301 of the Indenture, the Company
hereby creates a series of its debt securities designated as the “7.250% Public Income Notes (PINES®) due 2032” (the “Notes”), which Notes shall be deemed “Securities” for all purposes under the Indenture. 
  
 Section 1.2.    Form of Notes.    The definitive form of the Notes shall be substantially in the form set forth in Exhibit
A attached hereto, which is incorporated herein and made part hereof. The Notes shall bear interest, be payable and have such other terms as are stated in the form of definitive Note and in the Indenture, as supplemented by this Third
Supplemental Indenture. The Stated Maturity of the Notes shall be June 15, 2032. 
  
 Section
1.3.    Limit on Amount of Series.    The Notes initially shall not exceed U.S. $150,000,000 in aggregate principal amount, and may, upon the execution and delivery of this Third Supplemental Indenture or
from time to time thereafter, be executed by the Company and delivered to the Trustee for authentication, and the Trustee shall thereupon authenticate and deliver said Notes upon the delivery of a Company Order; provided, however, that,
pursuant to Section 1.9 hereof and the penultimate paragraph of Section 301 of the Indenture, the Company may elect at any time and from time to time to issue Additional Notes (as defined in Section 1.9 below) after the date hereof in such aggregate
principal amount or amounts as it shall elect. 
  
 Section 1.4.    Nature of Notes/Minimum
Denomination.    The Notes shall constitute senior unsecured obligations of the Company and shall be pari passu with all other unsecured and unsubordinated indebtedness of the Company from time to time outstanding.
Pursuant to Section 301(8) of the Indenture, the Notes shall be issued in minimum denominations of U.S. $25.00 and integral multiples thereof. 
  
 Section 1.5.    No Sinking Fund.    No sinking fund will be provided with respect to the Notes. 
  
 Section 1.6.    Notes Not Convertible or Exchangeable.    The Notes will not be convertible or exchangeable for other
securities or property. 
  
 Section 1.7.    Issuance of Notes; Selection of
Depository.    The Notes shall be issued as Registered Securities in permanent global form, without coupons. The initial Depository for the Notes shall be DTC. 
 

 2 

  
 Section 1.8.    No Additional
Amounts.    No Additional Amounts shall be payable with respect to the Notes. 
  
 Section
1.9.    Issuance of Additional Notes.    From time to time subsequent to the date hereof, without the consent of the Holders of the Notes, the Company may create and issue additional Notes (the
“Additional Notes”) under the terms of the Indenture and this Third Supplemental Indenture (and without the need to execute any additional supplemental indenture). The Additional Notes shall be issued as part of the existing series of
Notes issued pursuant to this Third Supplemental Indenture and shall have terms identical in all material respects (except for the initial interest accrual date and the first Interest Payment Date) to any Outstanding Notes and shall be treated
together with any Outstanding Notes as a single issue of Notes. Any Additional Notes issued hereunder shall rank equally and ratably with the Notes originally issued pursuant to this Third Supplemental Indenture, shall have the same CUSIP number and
shall trade interchangeably with such Notes and shall otherwise constitute Notes for all other purposes hereof. Any Additional Notes may be issued pursuant to authorization provided by one or more Board Resolutions. 
  
 ARTICLE TWO 
  
 APPOINTMENT OF THE TRUSTEE FOR THE NOTES 
  
 Section
2.1.    Appointment of Trustee.    Pursuant and subject to the Indenture, the Company and the Trustee hereby constitute the Trustee as trustee to act on behalf of the Holders of the Notes, and as the
principal Paying Agent and Security Registrar for the Notes, effective upon execution and delivery of this Third Supplemental Indenture. By execution, acknowledgment and delivery of this Third Supplemental Indenture, the Trustee hereby accepts
appointment as trustee, Paying Agent and Security Registrar with respect to the Notes, and agrees to perform such trusts upon the terms and conditions set forth in the Indenture and in this Third Supplemental Indenture. 
  
 Section 2.2.    Rights, Powers, Duties and Obligations of the Trustee.    Any rights,
powers, duties and obligations by any provisions of the Indenture conferred or imposed upon the Trustee shall, insofar as permitted by law, be conferred or imposed upon and exercised or performed by the Trustee with respect to the Notes.

  
 ARTICLE THREE 
  
 DEFEASANCE 
  
 Section
3.1.    Defeasance Applicable to Notes.    Pursuant to Section 301(19) and Section 1401 of the Indenture, the Company will have (i) the option of defeasance of the Notes under Section 1402 of the Indenture
and (ii) the option of covenant defeasance under Section 1403, in each case, upon the terms and conditions contained in Article Fourteen of the Indenture. 
 

 3 

  
 ARTICLE FOUR 
  
 REDEMPTION OF NOTES 
  
 Pursuant to
Section 301(6) and Section 1101 of the Indenture, so long as any of the Notes are Outstanding, the following provisions shall be applicable to the Notes: 
  
  Section 4.1.    Optional Redemption by the Company. 
  
 (a)    Each of the Notes may be redeemed at the option of the Company at any time on or after June 25, 2007, in whole or in part, upon notice as set forth in Section 1104 of the Indenture, at a Redemption
Price equal to 100% of the principal amount of such Notes to be redeemed plus accrued and unpaid interest on the principal amount of such Notes to the Redemption Date. 
  
 (b)    If less than all of the Notes are redeemed, Notes shall be selected for redemption pursuant to the provisions of Section 1103 of the Indenture.

  
 (c)    The provisions of Sections 1105, 1106 and 1107 of the Indenture shall apply to a
redemption of the Notes. 
  
 (d)    The Notes shall not be subject to any mandatory redemption
provisions. 
  
 Section 4.2.    Applicability of
Article.    Redemption of the Notes at the election of the Company or otherwise, as permitted or required by any provision of the Notes or this Third Supplemental Indenture, shall be made in accordance with such provision,
Article Eleven of the Indenture and this Article Four. 
  
 ARTICLE FIVE 
  
 MISCELLANEOUS 
  
 Section 5.1.    Application of Third Supplemental Indenture.    Each and every term and condition contained in the Third Supplemental Indenture that modifies, amends or supplements the
terms and conditions of the Indenture shall apply only to the Notes created hereby, including any Additional Notes, and not to any future series of Securities established under the Indenture. 
  

Section 5.2.    Benefits of Third Supplemental Indenture.    Nothing contained in this Third Supplemental Indenture
shall or shall be construed to confer upon any person other than a Holder of the Notes, the Company and the Trustee any right or interest to avail itself or 
 

 4 

 himself, as the case may be, of any benefit under any provision of the Indenture or this Third Supplemental Indenture. 
  
 Section 5.3.    Effective Date.    This Third Supplemental Indenture shall be effective as
of the date first above written and upon the execution and delivery hereof by each of the parties hereto. 
  
 Section 5.4.    Governing Law.    This Third Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the State of New York. 
  
 Section 5.5.    Counterparts.    This Third Supplemental Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. 
  
 Section 5.6.    Satisfaction and Discharge.    The Company shall be deemed to have satisfied all of its obligations under
this Third Supplemental Indenture upon compliance with the provisions of Section 1402 of the Indenture relating to defeasance of the Notes, to the extent set forth in Section 1401. 
 

 5 

  
 IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental
Indenture to be duly executed by their respective officers hereunto duly authorized, all as of the day and year first above written. 
  
 UNUMPROVIDENT CORPORATION 
  
 Dated:    June 25, 2002 
 By:     /s/     Robert C. Greving 
 Name:    Robert C. Greving 
 Title:      Senior Vice President and 
                Chief Financial Officer 
  
 [Corporate Seal] 
  
 Attest:    /s/    Susan N. Roth 
 Name:    Susan N. Roth 
 Title:      Vice President, Corporate Secretary

                 and Assistant General Counsel 
  
 JPMORGAN CHASE BANK 
 not in its individual capacity, but solely as Trustee 
  
 Dated: June 25, 2002 
 By:    /s/    Gregory P. Shea 
 Name:    Gregory P. Shea 
 Title:      Assistant Vice President 
  
 [Corporate Seal] 
  
 Attest:    /s/    Virginia Dominguez 
 Name:    Virginia Dominguez 
 Title:      Trust Officer 
 

 6 

 EXHIBIT A TO THIRD SUPPLEMENTAL INDENTURE 
  
 FORM OF NOTE 
  
 [THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH GLOBAL
SECURITY: 
  
 THIS NOTE IS A SECURITY IN GLOBAL FORM (“GLOBAL SECURITY”) WITHIN THE MEANING OF SECTION 203
OF THE BASE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE OF THE DEPOSITARY, WHICH MAY BE TREATED BY THE COMPANY, THE TRUSTEE AND ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS NOTE FOR ALL PURPOSES
INCLUDING THE PAYMENT OF PRINCIPAL AND INTEREST. 
  
 UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 
  
 UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE REGISTERED FORM IN THE LIMITED CIRCUMSTANCES REFERRED TO IN THE INDENTURE, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY
TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.] 

 A-1 

  
 UNUMPROVIDENT CORPORATION 
  
 7.250% PUBLIC INCOME NOTES (PINES®) DUE 2032 
  
 No.
                                 
 U.S.$                             
  
 CUSIP NO. 91529Y 30 4 
  
 UNUMPROVIDENT CORPORATION, a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company”, which term includes any successor Person under the Indenture referred to on the
reverse hereof), for value received, hereby promises to pay to                             , the principal
sum of                      United States Dollars (U.S.$             ) (which principal
amount may from time to time be increased or decreased to such other principal amounts by adjustments made on the records of the Trustee hereinafter referred to in accordance with the Indenture) on June 15, 2032 and to pay interest thereon, from
June 25, 2002, or from the most recent Interest Payment Date (as defined below) to which interest has been paid or duly provided for, quarterly in arrears on March 15, June 15, September 15 and December 15 in each year (each, an “Interest
Payment Date”), commencing September 15, 2002, at the rate of 7.250% per annum, until the principal hereof is due, and at the rate of 7.250% per annum on any overdue principal and, to the extent permitted by law, on any overdue interest. The
interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, which shall be, so long as the Notes are represented by Global Securities, the Business Day prior to the relevant Interest Payment Date, and in case the Notes are no longer represented by Global
Securities, the 15th calendar day (whether or not a Business Day) prior to the relevant Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice of
which shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date and shall otherwise be payable, all as more fully provided in the Indenture. Payments of principal shall be made upon the surrender
of this Note at the Corporate Trust Office of the Trustee, or at such other office or agency of the Company as may be designated by the Company for such purpose in the Borough of Manhattan, The City of New York or in the City of Chattanooga,
Tennessee, in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, by Dollar check drawn on, or transfer to, a Dollar account. Payments of interest on this
Note may be made by Dollar check, drawn on a Dollar account, mailed to the address of the Person entitled thereto as such address shall appear in the Security Register, or, upon written application by the Holder to the Security Registrar setting
forth wire instructions not later than the relevant Record Date, by wire transfer to a Dollar account. The amount of interest payable for any period shall be computed on the basis of twelve 
 

 A-2 

 30-day months and a 360-day year. The amount of interest payable for any period shorter than a full quarterly interest period will be computed
on the basis of the number of days elapsed in a 90-day quarter of three 30-day months. 
  
 Reference is hereby made
to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. 
  
 Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof or an Authenticating Agent by the manual signature of one
of their respective authorized signatories, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. 
  
 IN WITNESS WHEREOF, the Company has caused this Note to be duly executed and delivered under its corporate seal. 
  
 UNUMPROVIDENT CORPORATION 
  
 [Corporate
Seal] 
  
 By:                                     
                                        
                   
 Name: 

Title: 
  
 Attest: 

 
                                      
                                        
                                        
                                        
                                        

Name: 
 Title: 
  
 (Trustee’s Certificate of Authentication) 
  
 This is one of the Securities of the
series designated therein referred to in the within-mentioned Indenture. 
  
 Dated:                             
 JPMORGAN CHASE BANK, not in its individual 
 capacity, but solely as Trustee 
  
 By:                                     
                                        
                   
             Authorized Officer 
 

 A-3 

  
 [FORM OF REVERSE] 
  
 This Note is one of a duly authorized issue of securities of the Company designated as its “7.250% Public Income Notes (PINES®) due 2032” (herein called the “Notes”), initially limited in aggregate principal amount to U.S. $150,000,000, issued and
to be issued under an Indenture, dated as of March 9, 2001 (herein called the “Base Indenture”), between the Company and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as Trustee (herein called the “Trustee”,
which term includes any successor trustee under the Base Indenture), and a Third Supplemental Indenture, dated as of June 25, 2002, between the Company and the Trustee (the “Third Supplemental Indenture”; the Base Indenture, as
supplemented by the Third Supplemental Indenture, the “Indenture”), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. As provided in the Indenture and subject to certain limitations therein set forth, Notes are
exchangeable for a like aggregate principal amount of Notes of any authorized denominations as requested by the Holder surrendering the same upon surrender of the Note or Notes to be exchanged, at the Corporate Trust Office of the Trustee. The
Trustee upon such surrender by the Holder will issue the new Notes in the requested denominations. Each Note shall be in a minimum denomination of U.S. $25.00 or an integral multiple thereof. 
  

No sinking fund is provided for the Notes. 
  
 Each of the Notes may be redeemed at the option of the Company at any time on or after June 25, 2007, in whole or in part, upon notice as set forth in Section 1104 of the Indenture, at a Redemption Price of 100% of the principal
amount thereof; provided, however, that interest installments on Notes whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Notes, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture. 
  
 In the
event of a redemption of the Notes, the Company will not be required (a) to register the transfer or exchange of Notes for a period of 15 days immediately preceding the selection of Notes for redemption or (b) to register the transfer or exchange of
any Note, or portion thereof, called for redemption. 
  
 In any case where the due date for the payment of the
principal of, premium, if any, or interest on any Note at any Place of Payment as the case may be, is not a Business Day, then payment of principal, premium, if any, or interest of such Note need not be made on or by such date at such place but may
be made on or by the next succeeding Business Day, with the same force and effect as if made on the date for such payment or the date fixed for redemption, and, provided that so long as such payment is made on or by the next succeeding Business Day,
no interest shall accrue on the amount so payable for the period after such date. 
  
 [The following paragraph shall
appear in each Global Security: 
 

 A-4 

  
 In the event of a deposit or withdrawal of an interest in this Note, including an
exchange, redemption or transfer of this Note in part only, the Trustee, as custodian of the Depositary, shall make an adjustment on its records to reflect such deposit or withdrawal in accordance with the rules and procedures of The Depository
Trust Company applicable to, and as in effect at the time of, such transaction.] 
  
 [The following paragraph shall
appear in each Note that is not a Global Security: 
  
 In the event of redemption of this Note in part only, a new
Note or Notes for the unredeemed portion hereof will be issued in the name of the Holder hereof.] 
  
 If an Event of Default shall occur and be continuing, the principal of all the Notes, together with accrued interest to the date of declaration, may be declared due and payable in the manner and with the effect provided in the
Indenture. 
  
 The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the written consent of the Holders of not
less than a majority in principal amount of the Securities at the time Outstanding and affected thereby. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Notes at the time Outstanding,
on behalf of the Holders of all the Notes, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall
be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Note or such other Note.

  
 As provided in and subject to the provisions of the Indenture, the Holder of this Note shall not have the right
to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default,
the Holders of not less than 25% in principal amount of the Notes that are Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee indemnity
satisfactory to it and the Trustee shall not have received from the Holders of a majority in principal amount of the Notes that are Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for
60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by any Holder of this Note for the enforcement of any payment of principal hereof, or any premium of interest hereon on or
after the respective due dates expressed herein. 
  
 No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, premium, if any, and interest on this Note at the times, places and rate, and in the coin or currency, herein
prescribed. 
 

 A-5 

  
 As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Note is registrable on the Security Register upon surrender of this Note for registration of transfer at the Corporate Trust Office of the Trustee or at such other office or agency of the Company as may be designated by
it for such purpose in the Borough of Manhattan, The City of New York or the City of Chattanooga, Tennessee (which shall initially be an office or agency of the Trustee), or at such other offices or agencies as the Company may designate, duly
endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Security Registrar duly executed by, the Holder thereof or his attorney duly authorized in writing, and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees by the Security Registrar. No service charge shall be made for any such registration of transfer or exchange, but the Company may
require payment of a sum sufficient to recover any tax or other governmental charge payable in connection therewith. 
  
 Prior to due presentation of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered, as the owner thereof for all
purposes, whether or not such Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. 
  
 No recourse for the payment of the principal (and premium, if any) or interest on this Note and no recourse under or upon any obligation, covenant or agreement of the Company in the Indenture or any
indenture supplemental thereto or in any Note, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, employee, agent, officer or director or subsidiary, as such, past, present or
future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the acceptance hereof and as part of consideration for the issue hereof, expressly waived and released. 
  
 THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA. 
  
 All capitalized terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture. 
 

 A-6 

  
 ABBREVIATIONS 
  
 The following abbreviations, when used in the inscription of the face of this Note, shall be construed as though they were written out in full according to applicable laws
or regulations: 
  
 
	 TEN COM
 	  	 -
 	  	 as tenants in common
 
	 TEN ENT
 	  	 -
 	  	 as tenants by the entireties (Cust)
 
	 JT TEN
 	  	 -
 	  	 as joint tenants with right of survivorship and not as tenants in common
 
	 UNIF GIFT MIN ACT
 	  	 -
 	  	 _________________ Custodian _____________
                                       
                          (Minor)
 
	  	  	  	  	 under Uniform Gifts to Minors Act ___________
                                       
                              (State)
 

 
  
 Additional abbreviations may also be used though not in the above
list. 
 

 A-7 

 FORM OF ASSIGNMENT 
  
 For value received                          hereby sell(s), assign(s) and
transfer(s) unto                          (Please insert social security or other identifying number of assignee) the within
Note, and hereby irrevocably constitutes and appoints                          as attorney to transfer the said Note on the books
of the Company, with full power of substitution in the premises. 
  
 Dated:                             
                                      
                                        
                      
  
                                      
                                        
                      
  
 Signature(s) 
  
 Signature(s) must be guaranteed by an Eligible Guarantor Institution with
membership in an approved signature guarantee program pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934. 
 

 A-8

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