Document:

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                                                                    EXHIBIT 10.2

                          PCA SHELL LICENSE AGREEMENT

                          dated as of August 23, 2000

                                 by and between

                             LEVEL 8 SYSTEMS, INC.,

                                       and

               MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

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                          PCA SHELL LICENSE AGREEMENT

                  This agreement ("Agreement"), dated as of August 23, 2000
("Effective Date"), is by and between Merrill, Lynch, Pierce, Fenner & Smith
Incorporated, a Delaware corporation having an office at Merrill Lynch World
Headquarters North Tower, World Financial Center, 250 Vesey Street, New York,
New York 10281 ("Merrill Lynch"), and Level 8 Systems, Inc., a Delaware
corporation having an office at 8000 Regency Parkway, Cary, North Carolina 27511
("Level 8").

                                   WITNESSETH

                  WHEREAS, Merrill Lynch has developed and owns a software
product comprising a Seamless Application Interface Manager ("PCA Shell");

                  WHEREAS, Level 8 desires to license from Merrill Lynch and
Merrill Lynch desires to license to Level 8 upon the terms set out herein, the
PCA Shell; and

                  WHEREAS, Merrill Lynch and Level 8 are entering into a
Purchase Agreement of the same Effective Date as this Agreement relating to
their overall relationship;

                  NOW, THEREFORE, in consideration of the premises and mutual
covenants, agreements, representations and warranties contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, it is agreed as follows:

                             ARTICLE 1 - DEFINITIONS

                  When used in this Agreement, the capitalized terms listed in
this Article 1 shall have the following meanings:

         1.1      "Affiliates" means, with respect to Merrill Lynch, (i) each
company that controls, is controlled by or is under common control with Merrill
Lynch or any Affiliate of Merrill Lynch, (ii) each company that Merrill Lynch,
directly or indirectly, owns or controls, whether beneficially, or as a trustee,
guardian or other fiduciary, 30% or more of the equity having ordinary voting
power either in the election of directors of such company or otherwise in the
selection of the management of such company, or (iii) any trust or beneficiary
of a trust of which Merrill Lynch is the sole trustee. For the purpose of this
definition, "control" of a company shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of its management or
policies, whether through the ownership of voting securities, by contract or
otherwise.

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         1.2      "DOCUMENTATION" means logic diagrams, flow charts, working
papers, installation, instruction and operating manuals, and other written
materials relating to the PCA Shell and any component thereof, to the extent
reasonably required by each party to enable that party to perform its
obligations hereunder.

         1.3      "INTELLECTUAL PROPERTY" means any rights available with
respect to the Technology under patent, copyright or trade secret law or any
other statutory provision or common law doctrine.

         1.4      "PCA SHELL" means the so-called "PCA Shell" user
interface/infrastructure software developed by Merrill Lynch which incorporates
the inventions claimed in the Patent (as such term is hereafter defined in
Section 2.3(b)).

         1.5      "SOFTWARE" means any computer software, including, but not
limited to, source code, object code, screens, user interfaces, report formats,
templates, menus, buttons and icons, and all user materials and manuals related
thereto.

         1.6      "TECHNOLOGY" means, collectively, designs, formulas,
processes, algorithms, methods, techniques, ideas, know-how, research, Software,
programs, subroutines, tools, inventions, trade secrets, creations,
improvements, works of authorship and other similar materials, and all
recordings, graphs, drawings, reports, and other writings in any form whether or
not specifically listed herein, and all related technology, that are used in,
incorporated in, embodied in, or relate to the PCA Shell.

                       ARTICLE 2 - OWNERSHIP AND LICENSE

         2.1      DELIVERY. Promptly after the Effective Date, Merrill Lynch
shall deliver to Level 8 the PCA Shell Software and Documentation.

         2.2      OWNERSHIP.

                  (a)      Merrill Lynch shall own all right, title and interest
in and to the Technology and Intellectual Property relating to the PCA Shell in
the form delivered to Level 8, and any improvements, enhancements or
modifications to the foregoing developed by Merrill Lynch. Merrill Lynch shall
also own all right, title and interest in and to the Technology and Intellectual
Property relating to the so-called "Distributed Computing Substrate"
architecture currently under development by Merrill Lynch as described in that
certain document referred to as the "Distributed Computing Substrate"
("Distributed Computing Substrate").

                  (b)      Level 8 shall immediately and fully disclose to
Merrill Lynch any and all Technology discovered or developed by it solely, or
jointly with Merrill Lynch, and any modifications or enhancements made by Level
8 to the PCA Shell. Subject to Merrill

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Lynch's ownership rights set out in Section 2.2(a), Level 8 shall own all right,
title and interest in and to the Technology and Intellectual Property relating
to the PCA Shell discovered or developed by it solely, and any modifications or
enhancements made by Level 8 to the PCA Shell. Subject to Merrill Lynch's
ownership rights set out in Section 2.2(a), Merrill Lynch and Level 8 shall each
own an undivided one-half interest in and to the Technology and Intellectual
Property relating to the Technology discovered or developed jointly by Level 8
and Merrill Lynch, except that any patent rights relating to the Technology that
are jointly developed by Merrill Lynch and Level 8 shall be solely owned by
Merrill Lynch and Level 8 shall execute any assignments needed to give effect to
such ownership by Merrill Lynch.

         2.3      MERRILL LYNCH LICENSES TO LEVEL 8. Merrill Lynch hereby grants
to Level 8, and Level 8 hereby accepts, the following royalty-free, fully paid,
nontransferable, worldwide, licenses, with the right to sublicense:

                  (a)      a license to copy, display, use, modify and reproduce
the PCA Shell, including any improvements, enhancements or modifications thereto
developed during the term of this Agreement that Merrill Lynch, in its sole
discretion, provides to Level 8, and to distribute the PCA Shell to the public
pursuant to license agreements containing terms which are adequate to protect
the rights of Merrill Lynch in the PCA Shell; and

                  (b)      a license to make, use, sell and offer to sell
products incorporating inventions claimed in U.S. Patent No. 5,878,258, entitled
"Seamless Application Interface Manager" (the "Patent"); and

                  (c)      a nonexclusive license to copy, display, use, modify
and reproduce the Distributed Computing Substrate, including any improvements,
enhancements or modifications thereto developed during the term of this
Agreement that Merrill Lynch, in its sole discretion, provides to Level 8, and
to distribute the Distributed Computing Substrate to the public pursuant to
license agreements containing terms which are adequate to protect the rights of
Merrill Lynch in the Distributed Computing Substrate.

         2.4      LEVEL 8 LICENSE TO MERRILL LYNCH. Level 8 hereby grants to
Merrill Lynch, and Merrill Lynch hereby accepts, a royalty-free, perpetual,
worldwide license to copy, display, use, modify and reproduce any Technology
developed by Level 8 and any modifications or enhancements made by Level 8 to
the PCA Shell, including any improvements, enhancements or modifications thereto
developed during or after the term of this Agreement, for any and all business
uses of Merrill Lynch and its Affiliates and subsidiaries.

         2.5      EXCLUSIVITY PERIOD. The foregoing licenses with respect to the
PCA Shell, and the Patent granted by Merrill Lynch shall be exclusive, subject
to Section 2.7, for two years from the Effective Date (the "Exclusivity
Period"), after which such licenses shall be non-exclusive unless the average,
split-adjusted closing price of the common stock of Level 8 over a period of 60
consecutive trading days during the Exclusivity Period is greater than or equal
to $120 per share (the "Target Price").

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Notwithstanding the aforementioned provision, if during the Exclusivity Period
(i) the Target Price is not achieved for the requisite time period but (ii) the
average closing price of the Dow Jones Industrial Average over a period of 60
consecutive trading days during the Exclusivity Period is less than 5,000, then
the Exclusivity Period shall be extended for one additional year, for a maximum
total Exclusivity Period of three years subject to further extensions as may be
agreed upon in writing by the parties. If Level 8 common stock achieves the
above mentioned Target Price, the PCA Shell and Patent licenses shall become
exclusive in perpetuity. For avoidance of doubt, the lapse of exclusivity shall
apply only to the PCA Shell as delivered pursuant to Section 2.1.
Notwithstanding the foregoing, Merrill Lynch shall have the rights: (i) to
continue development of the PCA Shell Software independently of Level 8's
development efforts after the Effective Date; (ii) to copy, display, use, modify
and reproduce the modifications and improvements that Merrill Lynch
independently develops; and (iii) subject to the exclusivity with respect to the
PCA Shell and the Patent granted pursuant to this Section 2.5, to distribute
such modifications and improvements to the public.

         2.6      ENFORCEMENT DURING THE EXCLUSIVITY PERIOD. During the
Exclusivity Period, Merrill Lynch shall have the initial right, but not the
obligation, for a period of 60 days commencing upon the discovery of an alleged
infringer of the Patent to enforce the Patent against the alleged infringer. The
discovery of an alleged infringer of the Patent shall mean the receipt of a
written legal opinion from counsel of Merrill Lynch's choice, in its sole
discretion, that the Patent has been infringed. If Merrill Lynch decides, in its
sole discretion, not to enforce the Patent against such alleged infringer, the
right to enforce the patent against the alleged infringer shall be transferred
to Level 8, except to the extent that the activities of the alleged infringer
are on behalf of Merrill Lynch in support of its business activities relating to
the PCA Shell.

         2.7      RESERVATION OF RIGHTS. Notwithstanding any provision to the
contrary, Merrill Lynch hereby reserves the right (i) to copy, display, use,
modify and reproduce the PCA Shell, and (ii) to make, have made and use products
incorporating inventions claimed in the Patent, for its own business uses and
the business uses of its Affiliates and subsidiaries.

         2.8      MARKING. Level 8 shall mark any product containing the PCA
Shell or any inventions covered by the Patent with a notice containing
reasonable text which shall be provided by Merrill Lynch.

                      ARTICLE 3 - PROPRIETARY INFORMATION

         3.1      DURATION. The provisions of this Article 3 shall survive the
termination of this Agreement for a period of five years thereafter.

         3.2      APPLICATION OF MUTUAL NON-DISCLOSURE AGREEMENT. Except where
expressly and specifically stated to the contrary in this Agreement or in the
Master

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License Agreement between Merrill Lynch and Seer Technologies, Inc.,
predecessor in interest to Level 8, dated October 24, 1996, the terms and
conditions set forth in paragraphs 1, 2, 3, 4 (first paragraph only), 5 and 7 of
the Mutual Non-Disclosure Agreement dated July 1, 1999 between Merrill Lynch and
Level 8 shall apply to any and all information disclosed pursuant to the terms
of this Agreement.

                   ARTICLE 4 - REPRESENTATIONS AND WARRANTIES

         4.1      REPRESENTATIONS AND WARRANTIES. Each party hereby represents,
warrants and covenants to the other party that it has full corporate power and
authority to enter into this Agreement, and the execution by it of this
Agreement and the consummation by it of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate actions; the
execution and delivery of this Agreement, and the consummation of the
transactions contemplated by this Agreement, do not conflict with or violate:
(i) its charter documents or by-laws; (ii) any contract or agreement to which it
is a party, by which it or any of its affiliates is bound, or to which any of
its assets are subject; or (iii) any applicable law or the order of any court or
governmental authority. Merrill Lynch hereby represents and warrants that it has
sufficient rights in the PCA Shell Software to grant the rights described herein
and has not previously and will not grant any rights in the PCA Shell Software
to any third party that are inconsistent with the rights granted to Level 8
herein. Merrill Lynch further represents and warrants that to its knowledge the
PCA Shell Software does not infringe any patents, copyrights, trade secret
rights, trademarks or other proprietary rights held by any third party.

         4.2      LIMITATIONS; DISCLAIMER OF WARRANTIES. EXCEPT AS SET FORTH IN
THE MASTER LICENSE AGREEMENT, THE FOLLOWING LIMITATIONS AND DISCLAIMERS SHALL
APPLY:

(a)      IN NO EVENT SHALL MERRILL LYNCH OR ITS AFFILIATES OR SUPPLIERS BE
         LIABLE FOR PROSPECTIVE PROFITS, OR ANY SPECIAL, INCIDENTAL OR
         CONSEQUENTIAL DAMAGES ARISING OUT OF (i) THE USE OR DISTRIBUTION OF ANY
         PCA SHELL SOFTWARE, THE DISTRIBUTED COMPUTING SUBSTRATE OR
         DOCUMENTATION PROVIDED BY MERRILL LYNCH, IN WHOLE OR IN PART, OR ANY
         EXECUTABLE SOFTWARE OR LEVEL 8 SOFTWARE, BY LEVEL 8 OR ANY THIRD PARTY,
         (ii) THE MANUFACTURING OF PRODUCTS BY LEVEL 8 WHICH INCLUDE THE PCA
         SHELL SOFTWARE AND/OR THE DISTRIBUTED COMPUTING SUBSTRATE, IN WHOLE OR
         IN PART, OR ANY OF THE INTELLECTUAL PROPERTY RIGHTS LICENSED UNDER THIS
         AGREEMENT, OR (iii) THE USE OF SUCH PRODUCTS BY LEVEL 8 OR ANY END
         USER, WHETHER UNDER THEORY OF CONTRACT, TORT (INCLUDING NEGLIGENCE),
         INDEMNITY, PRODUCT LIABILITY OR OTHERWISE. IN NO EVENT SHALL MERRILL
         LYNCH'S LIABILITY

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         ARISING UNDER THIS AGREEMENT, INCLUDING WITHOUT LIMITATION ANY
         LIABILITY FOR DIRECT DAMAGES, EXCEED THE FAIR MARKET VALUE ON THE
         EFFECTIVE DATE, OF THE SECURITIES RECEIVED BY MERRILL LYNCH PURSUANT TO
         SUCH PURCHASE AGREEMENT.

(b)      NEITHER MERRILL LYNCH, NOR ANY AFFILIATE, NOR ANY OF THEIR RESPECTIVE
         DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS, SHALL BEAR ANY RISK, OR HAVE
         ANY RESPONSIBILITY OR LIABILITY, OF ANY KIND TO LEVEL 8 OR TO ANY THIRD
         PARTIES WITH RESPECT TO (i) THE QUALITY AND/OR PERFORMANCE OF ANY
         PORTION OF THE PCA SHELL SOFTWARE, THE DISTRIBUTED COMPUTING SUBSTRATE
         AND DOCUMENTATION, (ii) THE INTELLECTUAL PROPERTIES RIGHTS LICENSED BY
         MERRILL LYNCH HEREUNDER, OR (iii) ANY PRODUCTS INCORPORATING ANY OF THE
         FOREGOING, IN WHOLE OR IN PART, INCLUDING, WITHOUT LIMITATION, THE
         OPERATION OR PERFORMANCE OF ANY OF SUCH PRODUCTS.

(c)      NEITHER DOES MERRILL LYNCH NOR ITS AFFILIATES AND SUPPLIERS MAKE, NOR
         DOES LEVEL 8 RECEIVE, ANY WARRANTIES OR CONDITIONS, EXPRESS, IMPLIED OR
         STATUTORY REGARDING THE PCA SHELL SOFTWARE, THE DISTRIBUTED COMPUTING
         SUBSTRATE AND/OR THE INTELLECTUAL PROPERTY RIGHTS LICENSED BY MERRILL
         LYNCH HEREUNDER EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT.
         WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MERRILL LYNCH AND ITS
         AFFILIATES AND SUPPLIERS EXPRESSLY DISCLAIM THE IMPLIED WARRANTIES OF
         MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND THEIR
         EQUIVALENTS UNDER THE LAWS OF ANY JURISDICTION, REGARDING THE PCA SHELL
         SOFTWARE, THE DISTRIBUTED COMPUTING SUBSTRATE AND DOCUMENTATION. ANY
         WARRANTY AGAINST INFRINGEMENT THAT MAY BE PROVIDED IN SECTION 2-312(3)
         OF THE UNIFORM COMMERCIAL CODE AND/OR IN ANY OTHER COMPARABLE STATE
         STATUTE IS EXPRESSLY DISCLAIMED.

                            ARTICLE 5 - TERMINATION

         5.1      TERMINATION BY EITHER PARTY. Either party may terminate this
Agreement, effective immediately upon receipt of notice of termination by the
other party, in the event that the other party defaults on the performance or
observance of any of the material terms or material conditions of this Agreement
(including without limitation, a breach of warranty or of an obligation with
respect to the maintenance of

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confidentiality), which default is not remedied within thirty (30) days after
written notice specifying the nature of the default is received.

                       ARTICLE 6 - EFFECTS OF TERMINATION

         6.1      LICENSES. Upon the termination of this Agreement, (i) all
licenses granted by one party to the other (and permitted sublicenses granted to
third parties) shall survive, but neither party shall have any further rights to
grant sublicenses under the other party's Technology or Intellectual Property to
third parties or to distribute the other party's Software to any third party,
and (ii) notwithstanding any provision of this Agreement to the contrary, any
exclusive licenses granted to Level 8 under this Agreement by Merrill Lynch
shall immediately become non-exclusive.

         6.2      SURVIVAL PROVISIONS OF AGREEMENT. In the event of any
termination of this Agreement, the provisions of Articles 2 (OWNERSHIP AND
LICENSE), 3 (PROPRIETARY INFORMATION AND RIGHTS), 4 (REPRESENTATIONS AND
WARRANTIES), 6 (EFFECTS OF TERMINATION), 8 (INDEMNIFICATION BY MERRILL LYNCH)
AND 9 (DISPUTE RESOLUTION) shall survive and continue in effect as set forth
therein and shall inure to the benefit of and be binding upon the parties and
their legal representatives, heirs, successors, and permitted assigns.

                           ARTICLE 7 - FORCE MAJEURE

         7.1      LIMITATION ON LIABILITY. Neither party shall be liable to the
other party for any failure or delay in performance under this Agreement, and
such failure or delay shall not constitute a default under or breach of this
Agreement, for any period and to the extent that the failure or delay is due in
whole or in part to any cause beyond its reasonable control, including but not
limited to, action or inaction of governmental, civil or military authority,
changes in federal, state or local statutes, rules or regulations, delays in
transportation, sources of supply, material shortages, third party labor
difficulties, accidents, acts of God, fire, flood, war, riot, earthquake or any
other force majeure.

                  ARTICLE 8 - INDEMNIFICATION BY MERRILL LYNCH

         8.1      INDEMNIFICATION BY MERRILL LYNCH. Subject to Section 8.3,
Merrill Lynch (the "Indemnifying Party") shall indemnify Level 8 (the
"Indemnified Party") and its affiliates against, and hold them harmless from,
any and all claims, losses, deficiencies, damages, liabilities, costs, and
expenses (including without limitation reasonable attorneys' fees and all
related costs and expenses) ("Losses") incurred by the

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Indemnified Party as a result of any third party claim, judgment or adjudication
against them arising from a breach by Merrill Lynch of its representations and
warranties contained herein.

         8.2      LIMITATION. The indemnities in Sections 8.1 shall not apply:
(a) if the Indemnified Party fails to give the Indemnifying Party prompt notice
of any claim it receives and such failure materially prejudices the Indemnifying
Party, (b) if the Indemnified Party fails to provide reasonable information and
cooperation to the Indemnifying Party in connection with the litigation or
settlement of a third party claim; or (c) unless the Indemnifying Party is given
the opportunity to approve any settlement, which approval shall not be
unreasonably withheld; provided, however, that if the Indemnifying Party
unreasonably withholds such approval, it shall, at the option of the Indemnified
Party, be required to assume the defense of such claim at its own expense.

         8.3      LIMITATION ON DAMAGES. MERRILL LYNCH SHALL HAVE NO
INDEMNIFICATION OBLIGATIONS RELATING TO THIS AGREEMENT OTHER THAN THOSE SET
FORTH IN SECTION 8.1, AND IN NO EVENT SHALL MERRILL LYNCH BE LIABLE UNDER THIS
AGREEMENT FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING
OUT OF OR IN CONNECTION WITH THIS AGREEMENT.

                         ARTICLE 9 - DISPUTE RESOLUTION

         9.1      The parties shall attempt to resolve in good faith any claim,
controversy or other dispute arising out of or relating to this Agreement. Any
such dispute which cannot be resolved informally shall be submitted in writing
to the Merrill Lynch Project Manger (as of the Effective Date, Elizabeth Lerner)
and the Level 8 Project Manager (as of the Effective Date, Ted Venema), who
shall attempt to resolve the dispute within seven calendar days of such
submission. Neither party may take any other action to resolve the dispute
during such seven calendar days.

                           ARTICLE 10 - MISCELLANEOUS

         10.1     NOTICES. Whenever it is provided herein that any notice,
demand, request, consent, approval, declaration or other communication shall or
may be given to or served upon any of the parties by another, or whenever any of
the parties desires to give or serve upon another any such communication with
respect to this Agreement, each such notice, demand, request, consent, approval,
declaration or other communication shall be in writing and either shall be
delivered in person with receipt acknowledged or by registered or certified
mail, return receipt requested, postage prepaid, or by telecopy and confirmed by
telecopy answerback addressed as follows:

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                  If to Level 8:

                  Level 8 Systems, Inc.
                  8000 Regency Parkway
                  Cary, North Carolina 27511
                  Attn:  Dennis McKinnie
                  Telecopy Number: (919) 380-5005

                  with a copy to:

                  Scott Smith
                  Powell Goldstein Frazer & Murphy
                  191 Peachtree Street, 16th Floor
                  Atlanta, Georgia 30303
                  Telecopy Number: (404) 572-6875

                  If to Merrill Lynch:

                  Merrill Lynch, Pierce, Fenner & Smith Incorporated
                  222 Broadway
                  17th Floor
                  New York, New York  10038
                  Attn: Patrick Romain
                  Telecopy Number: (212) 670-4517

                  with copies to:

                  Weil, Gotshal & Manges LLP
                  767 Fifth Avenue
                  New York, New York  10153
                  Attn:  Howard Chatzinoff, Esq.
                         S. Wade Angus, Esq.
                  Telecopy Number: (212) 310-8007

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 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 with the United
States mail.

         10.2     Binding Effect; Benefits. Except as otherwise provided herein,
this Agreement shall be binding upon and inure to the benefit of the parties to
this Agreement and their respective successors and permitted assigns. Nothing in
this Agreement,

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express or implied, is intended or shall be construed to give any person other
than the parties to this Agreement or their respective successors or assigns any
legal or equitable right, remedy or claim under or in respect of any agreement
or any provision contained herein.

         10.3     Complete Agreement; Amendment. This Agreement constitutes the
complete agreement and understanding of the parties with respect to the subject
matter hereof and thereof and supersedes any previous agreement or understanding
between them relating thereto. No amendment or waiver of any provision of this
Agreement nor consent to any departure by a party therefrom, shall in any event
be effective unless the same shall be in writing and signed by a party hereto,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. No action taken pursuant to this
Agreement, including, without limitation, any investigation by or on behalf of
any party, shall be deemed to constitute a waiver by the party taking such
action, of compliance with any representations, warranties, covenants or
agreements contained herein. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
preceding or succeeding breach and no failure by either party to exercise any
right or privilege hereunder shall be deemed a waiver of such party's rights or
privileges hereunder or shall be deemed a waiver of such party's rights to
exercise the same at any subsequent time or times hereunder.

         10.4     Assignability. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by Level 8 without Merrill Lynch's prior written approval.

         10.5     Section and Other Headings.  The section and other headings
contained in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.

         10.6     Written Approval. All approvals and/or consents required by a
party to this Agreement must be requested by such party in writing to the other
party, and all approvals or consents shall not be effective unless in writing.

         10.7     Severability. In the event that any one or more of the
provisions contained in this Agreement shall be determined to be invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision or provisions in every other respect
and the remaining provisions of this Agreement shall not be in any way impaired.

         10.8     Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.

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         10.9     Publicity. Neither party shall issue any press release or make
any public disclosure regarding the transactions contemplated hereby unless such
press release or public disclosure is approved by the other party in advance.

         10.10    Governing Law; Waiver of Jury Trial. This Agreement shall be
governed by, construed and enforced in accordance with, the laws of the State of
New York without regard to the principles thereof relating to conflict of laws.
Each of the parties hereby submits to personal jurisdiction and waives any
objection as to venue in the federal or state courts located in the County of
New York, State of New York. Service of process on the parties in any action
arising out of or relating to this Agreement shall be effective if mailed to the
parties in accordance with Section 10.1 hereof. The parties hereto waive all
right to trial by jury in any action or proceeding to enforce or defend any
rights under this Agreement.

         10.11    No Partnership or Joint Venture. The relationship between
Merrill Lynch and Level 8 is that of licensor and licensee. Level 8 is an
independent contractor and is not the legal representative, agent, joint
venturer, partner or employee of Merrill Lynch for any purpose whatsoever.
Neither party has any right or authority to assume or create any obligations of
any kind or to make any representation or warranty on behalf of the other party,
whether express or implied, or to bind the other party in any respect
whatsoever.

         10.12    Construction. This Agreement shall be fairly interpreted in
accordance with its terms and without any strict construction in favor of or
against either of the parties.

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IN WITNESS WHEREOF, Merrill Lynch and Level 8 have executed this Agreement as of
the day and year first above written.

                                 LEVEL 8 SYSTEMS, INC.

                                 By: /s/ Dennis McKinnie
                                    ------------------------------------------
                                    Name:  Dennis McKinnie

                                    Title: Senior Vice President, Chief Legal
                                           and Administrative Officer and
                                           Corporate Secretary

                                 MERRILL LYNCH, PIERCE, FENNER & SMITH
                                 INCORPORATED

                                 By: /s/ E. Stanley O'Neal
                                    ------------------------------------------
                                    Name:  E. Stanley O'Neal

                                    Title: Executive Vice President

                                       12<PAGE>   1
                                                                    EXHIBIT 10.3

                             STOCKHOLDERS AGREEMENT

                  STOCKHOLDERS AGREEMENT, dated as of August 23, 2000 (this
"Agreement"), by and among Level 8 Systems, Inc., a Delaware corporation having
an office at 8000 Regency Parkway, Cary, North Carolina 27511 ("Company"), and
those stockholders of Company set forth on Annex I hereto (individually, a
"Stockholder" and collectively, the "Stockholders"). W I T N E S S E T H :

                  WHEREAS, Company and Merrill Lynch, Pierce Fenner & Smith
Incorporated, a Delaware Corporation ("Purchaser"), have entered into that
certain Purchase Agreement, dated as of July 31, 2000 (the "Purchase
Agreement"), pursuant to which Company has agreed to sell, and Purchaser has
agreed to purchase, on the terms and subject to the conditions set forth
therein, 1,000,000 shares (the "Purchased Shares") of common stock of Company,
$0.001 par value per share ("Common Stock");

                  WHEREAS, each of the Stockholders party hereto (other than
Purchaser) are on the date hereof holders of the number of shares of Common
Stock as is set forth on Annex I hereto (such Stockholders, other than Purchaser
and its respective successors and assigns, the "Existing Stockholders"); and

                  WHEREAS, certain capitalized terms used in this Agreement and
not otherwise defined herein are used as such terms are defined in the Purchase
Agreement;

                  NOW, THEREFORE, in consideration of the agreements, premises
and mutual covenants contained herein, the parties hereto, intending to be
legally bound, hereby agree as follows:

                  1.       Board of Directors.

                  (a)      On the date hereof, and at each annual meeting of
stockholders or any special meeting called for the purpose of electing members
to the board of directors of Company (the "Board") (or by consent of
stockholders in lieu of any such meeting) or at such other time or times as the
stockholders pursuant to Company's certificate of incorporation and by-laws may
agree, so long as Purchaser owns shares of Common Stock equal to at least twenty
percent (20%) of the Purchased Shares, the Purchaser shall have the right to
nominate one (1) director (such nominee is hereinafter referred to as the
"Purchaser Designee") to the Board. Each of the Existing Stockholders shall vote
any and all of its shares of Common Stock entitled to vote in favor of the
election of the Purchaser Designee.

                  (b)      No Existing Stockholder shall vote any shares of
Common Stock in favor of the removal of a director nominated by Purchaser
hereunder unless (i) the right of Purchaser so to nominate such director shall
no longer exist pursuant to Section 1(a) or

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(ii) Purchaser has terminated this Agreement in accordance with Section 5
hereof; provided, however, that upon the request of Purchaser to remove a
director previously designated for nomination by Purchaser, the Existing
Stockholders shall vote all of their shares of Common Stock in favor of (A) the
removal of such director and (B) the election of any replacement director as may
be designated by Purchaser, subject to the provisions of Section 1(a); and,
provided, further, that any such director may be removed by the Existing
Stockholders for cause in accordance with applicable law, provided that the
Purchaser shall be entitled to designate a successor to such director and the
Existing Stockholders shall vote all of their shares of Common Stock in favor of
the election of such replacement director, subject to the provisions of Section
1(a).

                  (c)      So long as (i) Purchaser has the right to nominate a
director pursuant to Section 1(a) and (ii) Purchaser has not terminated this
Agreement in accordance with Section 5 hereof, each of the Stockholders agrees
to take such action in accordance with the terms of this Agreement, including
the voting of shares of Common Stock owned or controlled by such Stockholder, as
may be necessary to cause Company to have a Board consisting of eight (8)
directors. In no event shall there be more than eleven (11) directors
constituting the Board.

                  (d)      If any vacancy occurs on the Board because of death,
incapacity, resignation, retirement or removal of the Purchaser Designee in
accordance with this Agreement, the Purchaser shall designate a successor to
such Purchaser Designee, and each Existing Stockholder shall vote its shares of
Common Stock in favor of the election of such successor to the Board, subject to
the provisions of Section 1(a).

                  (e)      Neither Company nor any Existing Stockholder shall
give any proxy or power of attorney to any Person that permits the holder
thereof to vote in his discretion on any matter that may be submitted to
Company's stockholders for their consideration and approval, unless such proxy
or power of attorney is made subject to and is exercised in conformity with the
provisions of this Agreement.

                  (f)      In the event Purchaser determines not to exercise its
rights under Section 1(a) to designate a member of the Board, Purchaser may
designate one individual (the "Observer") to attend any and all meetings of the
Board (and any committees thereof) in a non-voting observer capacity. The
Observer shall be entitled to receive all reports, presentations and materials
as if the Observer were a director on the Board.

                  (g)      Company shall reimburse the Purchaser Designee or the
Observer, as the case may be, for any reasonable out-of-pocket expenses incurred
in connection with Purchaser Designee's or Observer's service on the Board and
committees thereof, which shall include travel expenses for attending Board
meetings and other travel expenses related to Company or the activities of the
Board.

                  (h)      Company shall furnish to Purchaser Designee or the
Observer, as the case may be, the same information (in form and substance) that
it furnishes from time to time to the directors comprising its existing Board as
of the date hereof, including, but

                                       2
<PAGE>   3

not limited to: (i) all management letters of accountants relating to Company or
any of its subsidiaries; (ii) budget information; and (iii) any notices relating
to:

                  (1)      the occurrence of any default or breach under any
material agreement to which Company or any of its subsidiaries is a party;

                  (2)      the commencement of any material legal or regulatory
proceeding, action or investigation to which Company or any of its subsidiaries
is a party; and

                  (3)      copies of any material regulatory requests,
documentation relating to governmental investigations, and governmental or
regulatory orders, decisions and rulings and any filings with the SEC.

         2.       Stockholders' Representations and Warranties. Each Stockholder
represents and warrants to each of the other Stockholders that there are no
agreements to which such Stockholder is a party with respect to the voting or
transfer of the capital stock of Company or with respect to any other aspect of
Company's affairs, other than (i) this Agreement and (ii) the agreements set
forth on Annex II attached hereto.

         3.       Stop Order; Transfer Agent Instructions. Except for any shares
of Common Stock (i) sold to the public as part of a registered public offering
in accordance with the requirements of the Securities Act of 1933, as amended
(the "Securities Act"), including any applicable rules and regulations
promulgated thereunder, (ii) sold to the public in accordance with the
applicable provisions of Rule 144 promulgated under the Securities Act, or (iii)
distributed by any of Welsh, Carson, Anderson & Stowe VI, L.P., WCAS Information
Partners, L.P. and WCAS Capital Partners II, L.P. (each, a "Welsh Carson Party")
to any of such Welsh Carson Party's limited partners or any general partner
thereof not involved in the management of such Welsh Carson Party (such limited
or general partners, "Passive Investors") as part of an in-kind distribution of
the shares of Common Stock to all of such Welsh Carson Party's Passive
Investors, the Stockholders agree that their shares of Common Stock shall not be
transferable during the term of this Agreement until such time as any transferee
thereof executes and delivers to Company a counterpart signature page agreeing
to be bound by the terms of this Agreement. Company shall provide its transfer
agent with stop transfer orders in the form attached hereto as Exhibit A.

         4.       Equitable Relief. It is hereby acknowledged that irreparable
harm would occur in the event that any of the provisions of this Agreement were
not performed fully by the parties hereto in accordance with the terms specified
herein, and that monetary damages are an inadequate remedy for breach of this
Agreement because of the difficulty of ascertaining and quantifying the amount
of damage that will be suffered by the parties relying hereon in the event that
the undertakings and provisions contained in this Agreement were breached or
violated. Accordingly, each party hereto hereby agrees that each other party
hereto shall be entitled to an injunction or injunctions to restrain, enjoin and
prevent breaches of the undertakings and provisions hereof and to enforce

                                       3
<PAGE>   4

specifically the undertakings and provisions hereof in any court of the United
States or any state having jurisdiction over the matter; it being understood
that such remedies shall be in addition to, and not in lieu of, any other rights
and remedies available at law or in equity.

         5.       Termination by Purchaser. Purchaser may, in its sole
discretion, terminate this Agreement at any time by delivery of written notice
to Company (which termination shall be effective as of the date specified in
such written notice), whereupon all rights and obligations of Purchaser, the
Existing Stockholders and any other party that may become a Stockholder under
this Agreement shall terminate and be of no further force and effect.

         6.       Miscellaneous.

         (a)      Notices. Whenever it is provided herein that any notice,
demand, request, consent, approval, declaration or other communication shall or
may be given to or served upon any of the parties by another, or whenever any of
the parties desires to give or serve upon another any such communication with
respect to this Agreement, each such notice, demand, request, consent, approval,
declaration or other communication shall be in writing and either shall be
delivered in person with receipt acknowledged or by registered or certified
mail, return receipt requested, postage prepaid, or by telecopy and confirmed by
telecopy answerback addressed as follows:

                  If to Company:

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

                  with a copy to:

                  Powell, Goldstein, Frazer & Murphy LLP
                  191 Peachtree Street N.E., 16th Floor
                  Atlanta, Georgia  30303
                  Attn:  Scott D. Smith, Esq.
                  Telecopy Number: (404) 572-6999

                  If to Purchaser:

                  Merrill Lynch, Pierce, Fenner & Smith Incorporated
                  4 World Financial Center
                  New York, New York  10080
                  Attn: John A. McKinley
                  Telecopy Number: (212) 449-8687

                                       4
<PAGE>   5

                  with copies to:

                  Weil, Gotshal & Manges LLP
                  767 Fifth Avenue
                  New York, New York  10153
                  Attn:  Howard Chatzinoff, Esq.
                         S. Wade Angus, Esq.
                  Telecopy Number: (212) 310-8007

                  If to any Existing Stockholder

                  To the address of such party appearing
                  under its or his name on Annex I hereto

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 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 with the United
States mail.

         (b)      Complete Agreement; Amendment. This Agreement constitutes the
complete understanding of the parties with respect to its subject matter and
supersedes any other agreement or understanding relating thereto. No amendment,
change or modification of this Agreement shall be valid, binding or enforceable,
unless the same shall be in writing and signed by Purchaser and the Company and
the Existing Stockholders to the extent their rights and obligations under this
Agreement would be affected thereby.

         (c)      Waiver. No failure or delay on the part of the Stockholders or
Company or any of them in exercising any right, power or privilege hereunder,
and no course of dealing between the Stockholders or Company, shall operate as a
waiver thereof nor shall any single or partial exercise of any right, power or
privilege hereunder preclude the simultaneous or later exercise of any other
right, power or privilege. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights and remedies which the Stockholders
or Company would otherwise have.

         (d)      Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which together shall
constitute but one and the same instrument.

         (e)      Governing Law; Jurisdiction; Waivers. This Agreement shall be
governed by, construed and enforced in accordance with the laws of the State of
Delaware without giving effect to the conflict of laws provisions thereof. Each
of the parties hereby submits to personal jurisdiction and waives any objection
as to venue in

                                       5
<PAGE>   6

the County of New York, State of New York. Service of process on the parties in
any action arising out of or relating to this Agreement shall be effective if
mailed to the parties in accordance with Section 6(a) hereof. The parties hereto
waive all right to trial by jury in any action or proceeding to enforce or
defend any rights hereunder.

         (f)      Benefit and Binding Effect. All of the terms and provisions of
this Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns, including any permitted
transferee of their Common Stock (other than as part of (i) a registered
offering under the Securities Act, (ii) a sale to the public pursuant to Rule
144 promulgated under the Securities Act, or (iii) in the case of any Welsh
Carson Party, a distribution by such Welsh Carson Party to any of its Passive
Investors as an in-kind distribution of the shares of Common Stock to all of
such Welsh Carson Party's Passive Investors). References herein to Purchaser
shall include Purchaser and any of its successors and assigns.

         (g)      Severability. Whenever 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 is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.

         (h)      After-Acquired Shares. All of the provisions of this Agreement
shall apply to all of the shares of capital stock of Company now owned or which
may be issued to or acquired by a Stockholder in consequence of any additional
issuance (including, without limitation, by exercise of an option or any
warrant), purchase, exchange, conversion or reclassification of stock, corporate
reorganization, or any other form of recapitalization, consolidation, merger,
stock split or stock dividend, or which are acquired by a Stockholder in any
other manner.

         (i)      Approvals and Consents. The Stockholders hereby agree, for
themselves, their successors, heirs and legal representatives, to vote at
stockholders' and directors' meetings of Company, to prepare, execute and
deliver or cause to be prepared, executed and delivered such further instruments
and documents, to take such other actions and to adopt such by-laws and
provisions of the certificate of incorporation as may be reasonably required to
more effectively carry out the intent and purposes of this Agreement and the
transactions contemplated hereby. They further agree to cause Company to do the
same.

                                       6
<PAGE>   7

                     [STOCKHOLDERS AGREEMENT SIGNATURE PAGE]

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

                         COMPANY:

                         LEVEL 8 SYSTEMS, INC.

                         By: /s/ Dennis McKinnie
                            ----------------------------------------
                            Name:  Dennis McKinnie
                            Title: Senior Vice President, Chief Legal and
                                   Administrative Officer and Corporate
                                   Secretary

                         PURCHASER:

                         MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

                         By: /s/ E. Stanley O'Neal
                            ----------------------------------------
                            Name:  E. Stanley O'Neal
                            Title: Executive Vice President

                         EXISTING STOCKHOLDERS:

                         LIRAZ SYSTEMS LTD.

                         By: /s/ Arie Kilman
                            ----------------------------------------
                            Name:
                            Title:

                         LIRAZ EXPORT (1990) LTD.

                         By: /s/ Arie Kilman
                            ----------------------------------------
                            Name:
                            Title:

<PAGE>   8
                    [STOCKHOLDERS AGREEMENT SIGNATURE PAGE]

                         ADVANCED SYSTEMS EUROPE B.V.

                         By: /s/ Arie Kilman
                            ----------------------------------------
                            Name:
                            Title:

                         WELSH, CARSON, ANDERSON
                         & STOWE VI, L.P.

                         By: WCAS VI PARTNERS, L.P., General Partner

                         By: /s/ Robert A. Minicucci
                            ----------------------------------------
                            Name:  Robert A. Minicucci
                            Title: General Partner

                         WCAS INFORMATION PARTNERS, L.P.

                         By: WCAS INFO Partners, General Partner

                         By: /s/ Thomas E. McInerney
                            ----------------------------------------
                            Name:  Thomas E. McInerney
                            Title: General Partner

                         WCAS CAPITAL PARTNERS II, L.P.

                         By: /s/ Robert A. Minicucci
                            ----------------------------------------
                            Name:  Robert A. Minicucci
                            Title: General Partner

<PAGE>   9

                                     ANNEX I
<TABLE>
<CAPTION>
Stockholders/Purchasers                        Class of Securities                   of Shares
-----------------------                        -------------------                   ---------
<S>                                            <C>                                   <C>
Merrill Lynch, Pierce, Fenner & Smith          Common Stock                          1,000,000
Incorporated
Merrill Lynch World Headquarters North Tower
World Financial Center
250 Vesey Street
New York, New York 10281

Liraz Systems Ltd.                             Common Stock                          2,921,863
5 Hatzoref Street
Holon, 58856
Israel
Telecopy No. 972 3 559 9073

Liraz Export (1990) Ltd.                       Common Stock                            821,257
5 Hatzoref Street
Holon, 58856
Israel
Telecopy No. 972 3 559 9073

Advanced Systems Europe B.V.                   Common Stock                          1,000,000
5 Hatzoref Street
Holon, 58856                                   Preferred Stock                          10,000
Israel
Telecopy No. 972 3 559 9073

WCAS PARTIES:

Welsh, Carson, Anderson & Stowe                Common Stock                            944,844
VI, L.P.
c/o Welsh, Carson, Anderson & Stowe
320 Park Avenue
New York, New York 10022
Telecopy No. 212-893-9536

WCAS Information Partners, L.P.                Common Stock                             11,290
c/o Welsh, Carson, Anderson & Stowe
320 Park Avenue
New York, New York 10022
Telecopy No. 212-893-9536

WCAS Capital Partners II, L.P.                 Common Stock                           ________
c/o Welsh, Carson, Anderson & Stowe
320 Park Avenue
New York, New York 10022
Telecopy No. 212-893-9536
</TABLE>

<PAGE>   10

                                    ANNEX II

         AGREEMENT WITH WELSH, CARSON, ANDERSON & STOWE RELATED TO THE PURCHASE
         OF SEER

         Level 8 purchased a majority interest in Seer Technologies, Inc.
         pursuant to an "Agreement" dated November 23, 1998. The Agreement is
         filed as 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"). The agreement obligates
         the WCAS Parties to grant proxies to Level 8 for all votes prior to
         January 1, 2001. (Agreement Section 9.3.1).

         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 as Exhibit 10.42 to Level 8's Annual Report
         on Form 10-K, filed March 31, 1998.

         Section 5.14 of the Momentum Purchase Agreement provides that the Board
         of Directors of Level 8 will take all actions necessary to maintain
         Robert Brill on the Board until December 1, 2000.

         The Momentum Purchase Agreement also provides for a voting agreement in
         favor of Liraz. The form of that agreement shows that the Momentum
         Liquidating Trust (the "Trust") was to enter into a Voting and Rights
         Agreement with Liraz Systems, Ltd. as of March 26, 1998. The form
         requires the Trust to vote all of its shares in accordance with Liraz'
         instructions "to the extent necessary, pursuant to generally accepted
         accounting principles in Israel, to permit Liraz to file consolidated
         financial statements with Level 8."

         LIRAZ - SOMECH VOTING COORDINATION AGREEMENT

         In June of 1997 Liraz Systems, Inc. and Samuel Somech entered into a
         Voting Coordination Agreement which provided for voting to elect Mr.
         Somech and the candidates designated by Liraz to the Board, and
         otherwise provided for

<PAGE>   11

         coordinated voting to prevent any change in the structure of the
         Company without the consent of both parties.

         AGREEMENT RELATED TO INVESTMENT BY CANDLE CORPORATION

         The Investment Agreement dated July 26, 1996, among Across Data
         Systems, Inc. (predecessor to Level 8), Liraz Systems Ltd., and Candle
         Corporation, filed as Exhibit 10.41 to the Company's Registration
         Statement on Form S-1 filed November 4, 1996, allows Candle to
         designate to Liraz and Level 8 an individual nominee to the Board of
         Directors of Level 8 until the later of July 26, 1999 (three years from
         the date of the agreement), or the date on which, in the good faith
         judgment of Level 8's board, Candle and Level 8 cease to have
         substantial, ongoing business relationships, including but not limited
         to, the renewal or extension of:

                  1.       The agency agreement for certain Candle products;

                  2.       Candle's distribution rights and license of the
                           Falcon External Gateway; or

                  3.       Candle's license to incorporate Level 8's DOT/XM.

         Level 8 and Liraz are obligated to use all reasonable efforts to cause
         the Candle designee to be elected to the Board. Despite the three year
         minimum on Candle's right to designate a director nominee, the
         agreement also provides that "[a]ny director so designated may be
         removed from the board of directors with or without cause at any time
         after the second anniversary of this agreement."

<PAGE>   12

                                                                       EXHIBIT A

                             _____________ __, 2000

VIA FACSIMILE AND CERTIFIED MAIL

American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, New York  10005

Attention:  Isaac Kagen or Rosie Rosenbloom

         Re:      Level 8 Systems, Inc.
                  Transfer Restriction Related to Voting Agreement

Ladies and Gentlemen:

         I am Senior Vice President, Chief Legal and Administrative Officer and
Corporate Secretary of Level 8 Systems, Inc. (the "Company"). I am writing to
you in such capacity to advise you that each of the stockholders listed on
Schedule A attached hereto have entered into a stockholders agreement, dated as
of __________ ___, 2000, with the Company (the "Stockholders Agreement"). The
Stockholders Agreement applies to all of the shares of Level 8 Common Stock
owned by each of the listed stockholders, whether the shares are currently owned
or hereafter acquired, in accordance with the terms and conditions of the
Stockholders Agreement.

         You are hereby authorized and directed to stop the transfer of any
shares of the Company's Common Stock held by any of the listed stockholders
unless and until the Company confirms to you in writing that it has received
from any transferee with respect to such shares a signed counterpart signature
page to the Stockholders Agreement.

                                  Very truly yours,

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

Enclosures
PGF&M 388088

<PAGE>   13

                                   SCHEDULE A

         Merrill Lynch, Pierce, Fenner & Smith
            Incorporated

         Liraz Systems Ltd.

         Liraz Export (1990) Ltd.

         Advanced Systems Europe B.V.

         Welsh, Carson, Anderson & Stowe VI, L.P.

         WCAS Information Partners, L.P.

         WCAS Capital Partners II, L.P.

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