Document:

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                                                                   Exhibit 10(i)

                              NDCHEALTH CORPORATION
                  2002 NON-EMPLOYEE DIRECTORS COMPENSATION PLAN

         1.  Purpose. The purpose of the NDCHealth Corporation 2002 Non-Employee
Directors Compensation Plan is to attract, retain and compensate
highly-qualified individuals who are not employees of NDCHealth Corporation or
any of its subsidiaries or affiliates for service as members of the Board by
providing them with competitive compensation and an ownership interest in the
Common Stock of the Company. The Company intends that the Plan will benefit the
Company and its stockholders by allowing Non-Employee Directors to have a
personal financial stake in the Company through an ownership interest in the
Common Stock and will closely associate the interests of Non-Employee Directors
with those of the Company's stockholders. This Plan supersedes the National Data
Corporation 1995 Non-Employee Director Compensation Plan and the National Data
Corporation 1984 Non-Employee Directors Stock Option Plan.

         2.  Defined Terms. Unless the context clearly indicates otherwise, the
following terms shall have the following meanings:

         "Annual Retainer" means the annual retainer (excluding meeting fees and
expenses) payable by the Company to a Non-Employee Director pursuant to Section
6(a) hereof for service as a director of the Company, as such amount may be
changed from time to time. The Annual Retainer shall consist of the Cash
Equivalent Annual Retainer plus the Stock Equivalent Annual Retainer.

         "Board" means the Board of Directors of the Company.

         "Cash Equivalent Annual Retainer" means the 50% of Annual Retainer
that, unless deferred in accordance with Section 8 of the Plan, will be paid in
the form of cash in accordance with Section 7 hereof.

         "Company" means NDCHealth Corporation, a Delaware corporation.

         "Common Stock" means the common stock, par value $0.125 per share, of
the Company.

         "Deferred Stock Rights" means the right to receive shares of Common
Stock on a designated future date or dates, as provided in Section 8 of the
Plan. Each Deferred Stock Right represents the right to receive one share of
Common Stock in the future.

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         "Disability" means any illness or other physical or mental condition of
a Non-Employee Director that renders him or her incapable of performing as a
director of the Company, or any medically determinable illness or other physical
or mental condition resulting from a bodily injury, disease or mental disorder
which, in the judgment of the Board, is permanent and continuous in nature. The
Board may require such medical or other evidence as it deems necessary to judge
the nature and permanency of a Non-Employee Director's condition.

         "Effective Date" has the meaning set forth in Section 16 of the Plan.

         "Election Form" means a form approved by the Board pursuant to which a
Non-Employee Director elects to defer some or all of his or her Annual Retainer,
as provided in Section 8 herein.

         "Fair Market Value", on any date, means (i) if the Common Stock is
listed on a securities exchange or is traded over the Nasdaq National Market,
the closing sales price on such exchange or over such system on such date or, in
the absence of reported sales on such date, the closing sales price on the
immediately preceding date on which sales were reported, or (ii) if the Common
Stock is not listed on a securities exchange or traded over the Nasdaq National
Market, the mean between the bid and offered prices as quoted by Nasdaq for such
date, provided that if it is determined that the fair market value is not
properly reflected by such Nasdaq quotations, Fair Market Value will be
determined by such other method as the Board determines in good faith to be
reasonable.

         "Non-Employee Director" means a director of the Company who is not an
employee of the Company or of any of its subsidiaries or affiliates.

         "Option" means an option to purchase Common Stock granted under Section
9 of the Plan. Options granted under the Plan are not incentive stock options
within the meaning of Section 422 of the Internal Revenue Code.

         "Option Grant Date" means the date upon which an Option is granted to a
Non-Employee Director pursuant to Section 9 of the Plan.

         "Optionee" means a Non-Employee Director of the Company to whom an
Option has been granted under Section 9.

         "Plan" means the NDCHealth Corporation 2002 Non-Employee Directors
Compensation Plan, as amended from time to time.

         "Plan Year" means the twelve-month period ending on May 31 of each year
which, for purposes of the Plan, is the period for which Annual Retainers are
earned.

         "Retirement" means retirement as a director of the Company in
accordance with the provisions of the Company's bylaws as in effect from time to
time.

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         "Stock Equivalent Annual Retainer" means the 50% of Annual Retainer
that, unless deferred in accordance with Section 8 hereof, will be paid in the
form of Common Stock in accordance with Section 7(a) hereof.

         "Stock Grant Date" has the meaning set forth in Section 7 of the Plan.

         3.  Administration. The Plan shall be administered by the Board.
Subject to the provisions of the Plan, the Board shall be authorized to
interpret the Plan, to establish, amend and rescind any rules and regulations
relating to the Plan, and to make all other determinations necessary or
advisable for the administration of the Plan. The Board's interpretation of the
Plan, and all actions taken and determinations made by the Board pursuant to the
powers vested in it hereunder, shall be conclusive and binding upon all parties
concerned including the Company, its stockholders and persons granted awards
under the Plan. The Board may appoint a plan administrator to carry out the
ministerial functions of the Plan, but the administrator shall have no other
authority or powers of the Board.

         4.  Shares Subject to Plan. The shares of Common Stock that may be
issued pursuant to the Plan, including upon the exercise of Options or the
settlement of Deferred Stock Rights, shall not exceed in the aggregate 450,000
shares of Common Stock. Such shares may be authorized and unissued shares or
treasury shares. The Board's adoption of this Plan shall constitute the
reservation of 450,000 shares of authorized and unissued Common Stock for
issuance pursuant to this Plan. Notwithstanding the foregoing, until such time,
if any, as the stockholders of the Company shall approve this Plan, all awards
of Common Stock, Options and Deferred Stock Rights pursuant to this Plan shall
be granted under, and to the extent not inconsistent herewith shall be governed
by the terms of, the Company's 2000 Long-Term Incentive Plan or any successor
plan or plans approved by the Company's stockholders and under which such awards
may be granted to Non-Employee Directors.

         5.  Eligibility.  All active Non-Employee Directors shall automatically
be participants in the Plan.

         6.  Elements of Director Compensation.

         (a) Annual Retainer. Each Non-Employee Director shall be paid an Annual
Retainer for service as a director during each Plan Year. The amount of the
Annual Retainer shall be established from time to time by the Board. Until
changed by the Board, the Annual Retainer shall be $30,000 for each Non-Employee
Director other than the Chairman of the Board, and shall be $60,000 for the
Chairman of the Board. A pro-rata Annual Retainer will be paid to any
Non-Employee Director who joins the Board on a date other than the beginning of
a Plan Year, based on the number of full months between the date such
Non-Employee Director joined the Board and the following June 1. For example, a
Non-Employee Director joining the Board on February 3 would

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be entitled to three twelfths (3/12) of the normal Annual Retainer for such
partial Plan Year of service.

         (b) Meeting Fees. Each Non-Employee Director shall be paid a meeting
fee for each meeting of the Board or committee thereof he or she attends. The
amount of the meeting fees shall be established from time to time by the Board,
and may depend on whether the director is serving on a committee or as a
chairman of a committee of the Board. Until changed by the Board, (i) the
meeting fee for attending a meeting of the Board or any committee there of shall
be $1,000, (ii) each member of the Audit Committee and each member of the
Compensation Committee shall receive an additional $1,000 fee for attending a
meeting of such committee, and (iii) the Chairman of the Audit Committee and the
Chairman of the Compensation Committee shall receive an additional $500 fee for
attending and chairing a meeting of such committee.

         (c) Travel Expense Reimbursement. All Non-Employee Directors shall be
reimbursed for reasonable travel expenses (including spouse's expenses to attend
events to which spouses are invited) in connection with attendance at meetings
of the Board and its committees, or other Company functions at which the Chief
Executive Officer requests the Non-Employee Director to participate. If the
travel expense is related to the reimbursement of commercial airfare, such
reimbursement will not exceed full-coach rates. If the travel expense is related
to reimbursement of non-commercial air travel, such reimbursement shall not
exceed the rate for comparable travel by means of commercial airlines.

         (d) Insurance. The Company shall maintain director's and officer's
liability insurance with reputable carriers of at least $15 million.

         7.  Non-deferred Payment of Annual Retainer.

         (a) Two Components of Annual Retainer. Unless converted to Deferred
Stock Rights as provided in Section 8, the Annual Retainer shall be paid fifty
percent (50%) in Common Stock (the "Stock Equivalent Annual Retainer") and fifty
percent (50%) in cash (the "Cash Equivalent Annual Retainer"), as provided in
this Section 7.

         (b) Stock Equivalent Annual Retainer. Unless a Non-Employee Director
has elected to defer receipt of his or her Stock Equivalent Annual Retainer as
provided in Section 8 below, shares of Common Stock shall be automatically
granted on June 1 of each Plan Year (each such date is hereinafter referred to
as a "Stock Grant Date") to each eligible Non-Employee Director commencing with
the June 1, 2002 Stock Grant Date. The total number of shares of Common Stock
included in each grant under this Section 7(b) shall be determined by dividing
the Stock Equivalent Annual Retainer by the Fair Market Value per share of
Common Stock on the Stock Grant Date. Fractions will be rounded to the next
highest share.

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         (c) Cash Equivalent Annual Retainer. Unless a Non-Employee Director has
elected to defer receipt of his or her Cash Equivalent Annual Retainer as
provided in Section 8 below, the Cash Equivalent Annual Retainer shall be paid
to the director in cash on or about June 1 of each Plan Year commencing with
June 1, 2002.

         8.  Deferred Payment of Annual Retainer.

         (a) Election to Receive Deferred Stock Rights. A Non-Employee Director
may elect to defer (i) 0% or 100% of his or her Stock Equivalent Annual
Retainer, and (ii) 0% or 100% of his or her Cash Equivalent Annual Retainer by
conversion to Deferred Stock Rights in accordance with this Section 8.

         (b) Timing and Manner of Deferral Election. A Non-Employee Director who
wishes to receive Annual Retainer for a Plan Year in the form of Deferred Stock
Rights must irrevocably elect to do so by delivering a valid Election Form to
the Board or the plan administrator prior to the beginning of such Plan Year. A
Non-Employee Director's participation in Section 8 of the Plan will be effective
as of the first day of the Plan Year beginning after the Board or the plan
administrator receives the Non-Employee Director's Election Form. For example,
in order to defer the Annual Retainer payable for the Plan Year ending May 31,
2003, the Election Form must be received on or before May 31, 2002. The deferral
Election Form signed by the Non-Employee Director prior to the Plan Year will be
irrevocable for the coming Plan Year. However, prior to the commencement of the
following Plan Year, a Non-Employee Director may change his or her election for
future Plan Years by executing and delivering a new Election Form indicating a
different choice. If a Non-Employee Director fails to deliver a new Election
Form prior to the commencement of the new Plan Year, his or her Election Form in
effect during the previous Plan Year shall continue in effect during the new
Plan Year.

         (c) Crediting and Settlement of Deferred Stock Rights. The number of
Deferred Stock Rights into which deferred Annual Retainer shall be converted
shall be determined by dividing the dollar amount of the Annual Retainer elected
to be deferred by the Fair Market Value per share of the Common Stock on June 1
of the applicable Plan Year. Such Deferred Stock Rights shall be credited to a
bookkeeping account maintained by the Company on behalf of the Non-Employee
Director and shall be settled (paid) in shares of Common Stock on the earlier of
(i) a date designated by the Non-Employee Director in his or her Election Form,
which shall be at least two (2) years after the election date, or (ii) thirty
(30) days after the Non-Employee Director's termination of service as a director
of the Company (in any capacity). No shares of Common Stock will be issued until
the settlement date, at which time the Company agrees to issue shares of Common
Stock to the Non-Employee Director (at the conversion rate of one share of
Common Stock for each Deferred Stock Right). The Non-Employee Director will have
no rights as a stockholder with respect to the Deferred Stock Rights, and such
rights will be unsecured.

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         (d) Spendthrift Clause. No right or interest in the Deferred Stock
Rights shall be subject to the claims of creditors of the Non-Employee Director
or to liability for the debts, contracts or engagements of the Non-Employee
Director, or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null and
void and of no effect; provided, however, that nothing in this Section 8(d)
shall prevent transfers by will or by the applicable laws of descent and
distribution.

         9.  Annual Stock Option Awards.

         (a) Each person who is a Non-Employee Director on the day immediately
following the 2001 annual meeting of the Company's stockholders shall be granted
on that date an Option to purchase that number of shares of the Company's Common
Stock having a Fair Market Value on the date of grant equal to $125,000. Each
person who thereafter first becomes a Non-Employee Director shall be granted on
the date that he or she first becomes a Non-Employee Director an Option to
purchase that number of shares of the Company's Common Stock having a Fair
Market Value on the date of grant equal to $125,000, multiplied by a fraction,
the numerator or which is the number of full months before the next regularly
scheduled annual meeting of the Company's stockholders, and the denominator of
which is 12. In addition, as of the day following the 2002 annual meeting of the
Company's stockholders, and on the day following each subsequent annual meeting
of the Company's stockholders, each Non-Employee Director serving as such on
that date shall be granted an Option to purchase that number of shares of the
Company's Common Stock having a Fair Market Value on the date of grant equal to
$125,000. Each such day that Options are to be granted under the Plan is
referred to hereinafter as an "Option Grant Date."

         If on any Option Grant Date, shares of Common Stock are not available
to grant to Non-Employee Directors the full amount of a grant contemplated by
the immediately preceding paragraph, then each Non-Employee Director shall
receive an Option (a "Reduced Grant") to purchase shares of Common Stock in an
amount equal to the number of shares of Common Stock then available, divided by
the number of Non-Employee Directors as of the applicable Option Grant Date.
Fractional shares shall be ignored and not granted.

         If a Reduced Grant has been made and, thereafter, during the term of
this Plan, additional shares of Common Stock become available for grant (e.g.,
because of the forfeiture or lapse of an Option), then each person who was a
Non-Employee Director both on the Option Grant Date on which the Reduced Grant
was made and on the date additional shares of Common Stock become available (a
"Continuing Non-Employee Director") shall receive an additional Option to
purchase shares of Common Stock. The number of newly available shares shall be
divided equally among the Options granted to the Continuing Non-Employee
Directors; provided, however, that the aggregate number

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of shares of Common Stock subject to a Continuing Non-Employee Director's
additional Option plus any prior Reduced Grant to the Continuing Non-Employee
Director on the applicable Option Grant Date shall not exceed that number of
shares having a Fair Market Value equal to $125,000 as of the date on which the
applicable Reduced Grant was made. If more than one Reduced Grant has been made,
available Options shall be granted beginning with the earliest such Option Grant
Date.

         (b) Exercise  Price.  The exercise price for each Option granted under
             ---------------
the Plan shall be the Fair Market Value of the shares of Common Stock subject to
the Option on the date of grant of the Option.

         (c) Medium and Time of Payment. The exercise price shall be payable in
             --------------------------
full upon the exercise of an Option in cash and/or shares of Common Stock;
provided, however, that if shares of Common Stock are used to pay the exercise
price of an Option, such shares must have been held by the Optionee for at least
six months. In the event that all or part of the exercise price of an Option is
paid by the surrender to the Company of shares of Common Stock previously held
by the Optionee, such shares shall be valued at their Fair Market Value as of
the date of exercise, and the Optionee shall deliver to the Company a
certificate of certificates representing such shares duly endorsed to the
Company or accompanied by a duly-executed separate instrument of transfer
satisfactory to the Board. To the extent permitted under Regulation T of the
Federal Reserve Board, and subject to applicable securities laws, Options may be
exercised through a broker in a so-called "cashless exercise" whereby the broker
sells the Option shares and delivers cash sales proceeds to the Company in
payment of the exercise price.

         (d) Term. Each Option granted under the Plan shall, to the extent not
             ----
previously exercised, terminate and expire on the date ten (10) years after the
date of grant of the Option, unless earlier terminated as provided hereinafter
in Section 9(g).

         (e) Exercisability. Except as set forth below, each Option granted
             --------------
under this Plan shall vest (become exercisable) in accordance with the following
schedule:

               Years of Service          Percent of Option Shares Vested
               ----------------          -------------------------------
             After Date of Grant
             -------------------

                 Less than 2                            0%
                      2                                20%
                      3                                45%
                      4                                70%
                      5                               100%

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         Notwithstanding the foregoing, each Option granted under this Plan
shall vest (become exercisable) as to all of the shares covered thereby upon the
termination of the Optionee's membership on the Board by reason of death,
Disability, Retirement or failure to be re-nominated or re-elected as a
director.

         (f) Method of Exercise. All Options granted under the Plan shall be
             ------------------
exercised by an irrevocable written notice directed to the Secretary of the
Company at the Company's principal place of business or to such other person or
place as the Secretary shall direct. Such written notice shall be accompanied by
payment in full of the exercise price for the shares for which such Option is
being exercised. The Company shall make delivery of certificates representing
the shares for which an Option has been exercised within a reasonable period of
time; provided, however, that if any law, regulation or agreement requires the
Company to take any action with respect to the shares for which an Option has
been exercised before the issuance thereof, then the date of delivery of such
shares shall be extended for the period necessary to take such action.
Certificates representing shares for which Options are exercised under the Plan
may bear such restrictive legends as may be necessary or desirable in order to
comply with applicable federal and state securities laws. Nothing contained in
the Plan shall be construed to require the Company to register any shares of
Common Stock underlying Options granted under this Plan.

         (g) Effect of Termination of Directorship. Upon termination of an
             -------------------------------------
Optionee's membership on the Board for any reason (including without limitation
by reason of death, Disability, Retirement or failure to be re-nominated or
re-elected as a director), the Options held by the Optionee under the Plan, to
the extent they were exercisable on the date of termination (including any
acceleration by reason of such termination) shall remain exercisable until the
earlier of (i) the original expiration date of the Option, or (ii) the fifth
anniversary of the Optionee's termination as a director. In the event of the
death of an Optionee, the Optionee's personal representatives, heirs or legatees
may exercise the Options held by the Optionee on the date of death, upon proof
satisfactory to the Company of their authority. Such exercise otherwise shall be
subject to the terms and conditions of the Plan.

         (h) Transferability of Options. Any Option granted hereunder shall be
             --------------------------
assignable or transferable by the Optionee by will, by the laws of descent and
distribution, or pursuant to a domestic relations order that would satisfy
Section 414(p)(1)(A) of the Internal Revenue Code of 1986, as amended, if such
provision applied to an Option under the Plan. In addition, any Option granted
pursuant to the Plan shall be transferable by the Optionee to any of the
following permitted transferees, upon such reasonable terms and conditions as
the Board may establish: (i) any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, any person sharing the
Optionee's household (other than a tenant or employee), (ii) a trust in which
the foregoing persons (or the Optionee) have more than fifty percent of the
beneficial interests, (iii) a

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foundation in which these persons (or the Optionee) control the management of
assets, or (iv) any other entity in which these persons (or the Optionee) own
more than fifty percent of the voting interests.

         (i) Rights as Stockholder. Neither the Optionee nor the Optionee's
             ---------------------
personal representatives, heirs, legatees or transferees shall have rights as a
stockholder of the Company with respect to shares of Common Stock covered by the
Optionee's Option until the Optionee or such other person becomes the holder of
record of such shares.

         (j) No Options after Ten Years. No Options shall be granted except
             --------------------------
within a period of ten (10) years after the effective date of the Plan.

         (k) Option Agreements. All Options shall be evidenced by a written
             -----------------
Option Agreement between the Company and the Non-Employee Director, which shall
include such provisions, not inconsistent with the Plan, as may be specified by
the Board.

         10. Adjustments.

         (a) In the event that the Board determines that any distribution
(whether in the form of cash, Common Stock, other securities, or other
property), recapitalization, reclassification, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Common Stock or other securities of the Company,
issuance of warrants or other rights to purchase Common Stock or other
securities of the Company, or other similar corporate transaction or event, in
the Board's sole discretion, affects the Common Stock such that an adjustment is
determined by the Board to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan or with respect to an award or awards hereunder, then the Board
shall, in such manner as it may deem equitable, adjust the number and type of
shares (or other securities or property) which may be granted under the Plan
(including, but not limited to, adjustments of the maximum number and kind of
securities which may be issued).

         (b) In the event of any corporate transaction or event described in
Section 10(a) which results in shares of Common Stock being exchanged for or
converted into cash, securities or other property (including securities of
another corporation), the Board will have the right to terminate this Plan as of
the date of the transaction or event, in which case all Deferred Stock Rights
shall become the right to receive such cash, securities or other property, and
there shall be substituted on an equitable basis for each share of Common Stock
then subject to an Option granted pursuant to Section 9 the consideration
payable with respect to the outstanding shares of Common Stock in connection
with such corporate transaction or event, all without any change in the
aggregate purchase price for the shares of Common Stock then subject to the
Option.

         (c) The number of shares of Common Stock finally granted under this
Plan shall always be rounded to the next highest whole share.

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         (d) Any decision of the Board pursuant to the terms of this Section 10
shall be final, binding and conclusive upon the Non-Employee Directors, the
Company and all other interested parties.

         11. Amendment. The Board may terminate or suspend the Plan at any time,
without stockholder approval. The Board may amend the Plan at any time and for
any reason without stockholder approval; provided, however, that the Board may
condition any amendment on the approval of stockholders of the Company if such
approval is necessary or deemed advisable with respect to tax, securities or
other applicable laws, policies or regulations. Except as provided in Section
10, no termination, modification or amendment of the Plan may, without the
consent of a Non-Employee Director, adversely affect a Non-Employee Director's
rights under an award granted prior thereto.

         12. Indemnification. Each person who is or has been a member of the
Board or who otherwise participates in the administration or operation of this
Plan shall be indemnified by the Company against, and held harmless from, any
loss, cost, liability or expense that may be imposed upon or incurred by him or
her in connection with or resulting from any claim, action, suit or proceeding
in which such person may be involved by reason of any action taken or failure to
act under the Plan and shall be fully reimbursed by the Company for any and all
amounts paid by such person in satisfaction of judgment against him or her in
any such action, suit or proceeding, provided he or she will give the Company an
opportunity, by written notice to the Board, to defend the same at the Company's
own expense before he or she undertakes to defend it on his or her own behalf.
This right of indemnification shall not be exclusive of any other rights of
indemnification.

         The Board may rely upon any information furnished by the Company, its
public accountants and other experts. No individual will have personal liability
by reason of anything done or omitted to be done by the Company or the Board in
connection with the Plan.

         13. Duration of the Plan. The Plan shall remain in effect until May 31,
2011, unless terminated earlier by the Board.

         14. Expenses of the Plan. The expenses of administering the Plan shall
be borne by the Company.

         15. Status of Plan. The Plan is intended to be a nonqualified, unfunded
plan of deferred compensation under the Internal Revenue Code of 1986, as
amended. Plan benefits shall be paid from the general assets of the Company or
as otherwise directed by the Company. To the extent that any participant
acquires the right to receive payments under the Plan (from whatever source),
such right shall be no greater than that of an unsecured general creditor of the
Company. Participants and their beneficiaries shall not

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have any preference or security interest in the assets of the Company other than
as a general unsecured creditor.

         16. Effective Date. The Plan was originally adopted by the Board on
October 5, 2001, and became effective on that date (the "Effective Date").

                                              NDCHealth Corporation

                                              By: /s/ Patricia A. Wilson
                                                  -----------------------------
                                                  Patricia A. Wilson
                                                  General Counsel and Secretary

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                                    EXHIBIT A

      Election to Receive Deferred Stock Rights in Lieu of Annual Retainer
                                 pursuant to the
       NDCHealth Corporation 2002 Non-Employee Directors Compensation Plan

The following constitutes the irrevocable election of the undersigned under the
NDCHealth Corporation 2002 Non-Employee Directors Compensation Plan (the "Plan")
with respect to the undersigned's Stock Equivalent Annual Retainer and/or Cash
Equivalent Annual Retainer as a non-employee director of NDCHealth Corporation
(the "Company") to be earned by the undersigned during the Plan Year ending May
31, 2003. Capitalized terms used herein and not otherwise defined have the
meanings assigned such terms in the Plan.

Deferred Right to Receive Common Stock.  I hereby irrevocably elect to defer:

[Check only if applicable]

________  none (0%) of my Annual Retainer to be earned in the Plan Year ending
          May 31, 2003

[If the above is left blank, check one or both of the following, as applicable]

________  100% of my Stock Equivalent Annual Retainer to be earned in the Plan
          Year ending May 31, 2003

________  100% of my Cash Equivalent Annual Retainer to be earned in the Plan
          Year ending May 31, 2003

in the form of the right to receive Common Stock at a future date, as indicated
below.

I elect to receive such shares on the earlier of:

(i)   _____________, 20__ (must be at least two years after May 31, 2002), or
(ii)  thirty (30) days after my termination as a director of NDCHealth
      Corporation (in any capacity).

If no date is filled in above, I acknowledge that the shares will be delivered
to me on or about thirty (30) days after my termination as a director of
NDCHealth Corporation (in any capacity).

Executed this _____ day of ____________, 2002.

                                           ____________________________________
                                           (Name)<PAGE>

                                                                     EXHIBIT 4.1

                          REGISTRATION RIGHTS AGREEMENT

                  REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
January __, 2002, by and among Level 8 Systems, Inc., a Delaware corporation
("Company"), and MLBC, Inc., a Delaware corporation ("Purchaser").

                              W I T N E S S E T H :

                  WHEREAS, Company and Purchaser have entered into that certain
Purchase Agreement, dated as of January __, 2002 (the "Purchase Agreement"),
pursuant to which Company has agreed to issue and sell to Purchaser, and
Purchaser has agreed to purchase from Company, 250,000 shares of common stock of
the company, $0.001 par value ("Common Stock"); and

                  WHEREAS, Purchaser has acquired 1,000,000 shares of Common
Stock from Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Purchased
Stock");

                  WHEREAS, in order to induce Purchaser to (i) enter into the
Purchase Agreement and purchase such shares of Common Stock and (ii) enter into
the other agreements contemplated under the Purchase Agreement in connection
with the issuance of the shares of Common Stock, Company has agreed to enter
into this Registration Rights Agreement to provide registration rights with
respect to the shares of Common Stock issued to Purchaser pursuant to the
Purchase Agreement, or purchased by Purchaser;

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

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

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

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

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

<PAGE>

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

                  "Holder" shall mean each of Purchaser, any affiliates thereof
or other permitted assigns holding shares of Common Stock issued pursuant to the
Purchase Agreement or Purchased Stock.

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

                  "Registrable Securities" shall mean the shares of Common Stock
acquired by Purchaser pursuant to the terms of the Purchase Agreement and
Purchased Stock.

                  "Rule 415" shall mean Rule 415 under the Securities Act as in
effect on the date hereof and such rule as from time to time amended and any
successor rule or regulation under the Securities Act.

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

                  2. Required Registration. (a) After receipt of a written
request from the Holders of Registrable Securities requesting that Company
effect a registration under the Securities Act covering at least 50,000 shares
of the Registrable Securities, and specifying the intended method or methods of
disposition thereof, Company shall promptly notify all Holders in writing of the
receipt of such request and each such Holder, in lieu of exercising its rights
under Section 3 may elect (by written notice sent to Company within ten (10)
Business Days from the date of such Holder's receipt of the aforementioned
Company's notice) to have Registrable Securities included in such registration
thereof pursuant to this Section 2. Thereupon Company shall, as expeditiously as
is possible, use its best efforts to effect the registration under the
Securities Act of all shares of Registrable Securities which Company has been so
requested to register by such Holders for sale, all to the extent required to
permit the disposition (in accordance with the intended method or methods
thereof, as aforesaid) of the Registrable Securities so registered; provided,
however, that, subject to the provisions of Section 2(b) hereof, Company shall
not be required to effect more than three (3) registrations of any Registrable
Securities pursuant to this Section 2. The rights of the Holders under this
Section 2 shall not become effective until thirty (30) days after the date
hereof. Any such registration effectuated pursuant to the terms of this Section
2 shall hereinafter be referred to as a "Demand Registration."

                  (b) In the event a Demand Registration is (i) requested by the
Holders in accordance with the terms of this Section 2 and (ii) any security
holders of Company exercise any incidental registration rights to participate in
such Demand Registration, such that the number of Registrable Securities
included in such registration statement is

                                        2

<PAGE>

reduced to less than seventy-five percent (75%) of the total number of
Registrable Securities contained in the written request submitted by the Holders
pursuant to a Demand Registration (the "Minimum Level"), then the Holders shall
receive one (1) additional Demand Registration pursuant to Section 2(a),
exercisable in the same manner as the other Demand Registration rights granted
to the Holders pursuant thereto; provided, however, that the Holders shall only
be entitled to one (1) additional Demand Registration under this Section 2,
notwithstanding that the number of Registrable Securities of such Holders
included in a registration statement filed pursuant to a Demand Registration may
be reduced below the Minimum Level in a subsequent Demand Registration.

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

                  Each Holder desiring to have Registrable Securities registered
under this Section 3 shall advise Company in writing within ten (10) Business
Days after the date of receipt of such offer from Company, setting forth the
amount of such Registrable Securities for which registration is requested.
Company shall thereupon include in such filing the number of shares of
Registrable Securities for which registration is so requested, subject to the
next sentence, and shall use its best efforts to effect registration under the
Securities Act of such shares. If the managing underwriter of a proposed public
offering shall advise Company in writing that, in its opinion, the distribution
of the Registrable Securities requested to be included in the registration
concurrently with the securities being registered by Company or such demanding
security holder would materially and adversely affect the distribution of such
securities by Company or such demanding security holder, then all selling
security holders (including the demanding security holder who initially
requested such registration, but not the Company) shall reduce the amount of
securities each intended to be distributed through such offering on a pro rata
basis (which reduced amount may be zero). Except as otherwise provided in
Section 5, all expenses of such registration shall be borne by Company.

                  4. Shelf Registration. The Company shall use its best efforts
to prepare and file with the SEC and have declared effective as promptly as
practicable a registration statement (the "Shelf Registration Statement") on
Form S-3 under the Securities Act relating to the offer and sale of all of the
Registrable Securities by the Holder at any time and from time to time on a
delayed or continuous basis in accordance

                                        3

<PAGE>

with Rule 415, through such method or methods of distribution as the Holder
shall select, and the Company shall use its best efforts to keep the Shelf
Registration Statement effective under the Securities Act for so long as
permitted by Rule 415. In the event the Shelf Registration Statement cannot be
kept effective for such period, the Company shall use its best efforts to
prepare and file with the SEC and have declared effective as promptly as
practicable another registration statement on the same terms and conditions as
the initial Shelf Registration Statement and such registration statement shall
be considered the Shelf Registration Statement for purposes hereof. The Company
shall supplement and amend the Shelf Registration Statement to include therein
any securities other than the Shares that become Registrable Securities or to
reflect changes in the manner of distribution reasonably requested by the
Holder.

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

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

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

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

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

                                        4

<PAGE>

                  (e) furnish, at the request of any Holder requesting
registration of Registrable Securities pursuant to Section 2, on the date that
such shares of Registrable Securities are delivered to the underwriters for sale
pursuant to such registration or, if such Registrable Securities are not being
sold through underwriters, on the date that the Registration Statement with
respect to such shares of Registrable Securities becomes effective, (1) an
opinion, dated such date, of the independent counsel representing Company for
the purposes of such registration, addressed to the underwriters, if any, and if
such Registrable Securities are not being sold through underwriters, then to the
Holders making such request, in customary form and covering matters of the type
customarily covered in such legal opinions; and (2) a comfort letter dated such
date, from the independent certified public accountants of Company, addressed to
the underwriters, if any, and if such Registrable Securities are not being sold
through underwriters, then to the Holder making such request and, if such
accountants refuse to deliver such letter to such Holder, then to Company, in a
customary form and covering matters of the type customarily covered by such
comfort letters and as the underwriters or such Holder shall reasonably request;

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

                  (g) notify the Holders as promptly as practicable upon the
occurrence of any event as a result of which the prospectus included in a
Registration Statement, as then in effect, contains an untrue statement of
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing, and as promptly as possible, prepare, file and
furnish to each Holder a reasonable number of copies of a supplement or an
amendment to such prospectus as may be necessary so that such prospectus does
not contain an untrue statement of material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing; provided, however,
that the Company may delay preparing, filing and distributing any such
supplement or amendment if the Board of Directors of the Company determines in
good faith that such supplement or amendment could, in its reasonable judgment,
(i) interfere with or adversely affect the negotiation or completion of a
transaction that is being contemplated by the Company or (ii) involve initial or
continuing disclosure obligations that are not in the best interests of the
Company's stockholders at the time; provided, further, that (w) the Company will
give notice (a "Standstill Notice") of any such delay prior to such delay, (x)
such delay shall not extend for a period of more than thirty (30) days without
the written consent of the Holders, (y) the Company may utilize such delay no
more than two (2) times or for an aggregate of more than sixty (60) days in any
period of two hundred and seventy (270) consecutive days and (z) the period of
effectiveness of the Registration Statement provided for herein shall be
extended by the number of days from and including the date of the giving of a
Standstill Notice to and including the date when the Company shall have
delivered to the Holders copies of such supplement or amendment pursuant to this
Section 4(g).

                                        5

<PAGE>

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

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

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

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

                  6. Expenses. All expenses incident to the Company's compliance
with the terms of this Agreement, including, without limitation, all
registration and filing fees (including all expenses incident to filing with the
NASD), printing expenses, fees and disbursements of counsel for Company, the
reasonable fees and expenses of one counsel for the selling security holders
(selected by those holding a majority of the shares being registered), expenses
of any special audits incident to or required by any such registration and
expenses of complying with the securities or blue sky laws of any jurisdiction
pursuant to Section 4(d), shall be paid by Company, except that:

                  (a) all such expenses in connection with any amendment or
supplement to the Registration Statement or prospectus filed more than one
hundred and eighty (180) days after the effective date of such Registration
Statement because any Holder has not effected the disposition of the securities
requested to be registered shall be paid by such Holder; and

                  (b) Company shall not be liable for any fees, discounts or
commissions to any underwriter or any fees or disbursements of counsel for any
underwriter in respect of the securities sold by such Holder.

                  (c) any incremental expenses incurred by Company as a result
of the inclusion of a Holder's Registrable Securities in an underwritten
offering where the

                                        6

<PAGE>

Holder or any of its Affiliates is an underwriter of the Registrable Securities
which, inclusion of such Holder's Registrable Securities, requires a "qualified
independent underwriter" under the applicable rules of the National Association
of Securities Dealers, Inc. shall be paid by Holder.

                  7. Indemnification and Contribution.

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

                                        7

<PAGE>

indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such holder or such director, officer or participating
person or controlling person, and shall survive the transfer of such securities
by such holder.

                  (b) Each Holder, by acceptance hereof, agrees to indemnify and
hold harmless Company, its directors and officers and each person who
participated in such offering and each other person, if any, who controls
Company within the meaning of the Securities Act against any losses, claims,
damages or liabilities, joint or several, to which Company or any such director
or officer or any such person may become subject under the Securities Act or any
other statute or at common law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
information in writing provided to Company by such Holder specifically for use
in the following documents and contained, on the effective date thereof, in any
Registration Statement under which securities were registered under the
Securities Act at the request of such holder, any preliminary prospectus or
final prospectus contained therein, or any amendment or supplement thereto, (ii)
such Holder's offer or sale of Registrable Securities after receipt by such
Holder of a Standstill Notice under Section 4(g) and prior to the delivery of
the prospectus supplement or amendment contemplated by Section 4(g), (iii) such
Holder's failure to comply with the prospectus delivery requirements under the
Securities Act or failure to distribute its Registrable Securities in a manner
consistent with the its intended plan of distribution as provided to Company and
disclosed in the registration statement, (iv) such Holder's failure to comply
with Regulation M under the Exchange Act, or (v) such Holder's failure to comply
with any rules and regulations applicable because such Holder is, or is an
Affiliate of, a registered broker-dealer. Notwithstanding the provisions of this
paragraph (b) or paragraph (c) below, no Holder shall be required to indemnify
any person pursuant to this Section 6 or to contribute pursuant to paragraph (c)
below in an amount in excess of the amount of the aggregate net proceeds
received by such Holder in connection with any such registration under the
Securities Act.

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

                                        8

<PAGE>

damages, liabilities and expenses referred to above shall be deemed to include
any legal or other fees or expenses reasonably incurred by such party in
connection with any investigation or proceeding.

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

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

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

                  (b) Company shall not be obligated to register the Registrable
Securities of any Holder pursuant to Section 2 if Company has had a registration
statement, under which such Holder had a right to have its Registrable
Securities included pursuant to Section 2 or 3, declared effective within one
hundred and eighty (180) days prior to the date of the request pursuant to
Section 2; provided, however, that if any Holder elected to have shares of its
Registrable Securities included under such registration statement but some or
all of such shares were excluded pursuant to the penultimate sentence of Section
3, then such one hundred and eighty (180) day period shall be reduced to ninety
(90) days.

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

                  9. Selection of Managing Underwriters. The managing
underwriter or underwriters for any offering of Registrable Securities to be
registered pursuant to

                                        9

<PAGE>

Section 2 shall be selected by the Holders of a majority of the shares being so
registered and shall be reasonably acceptable to Company.

                  10. Holder Agreements

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

                  (b) Each Holder of Registrable Securities eligible for
inclusion in a Registration Statement that is notified in writing pursuant to
Section 3 hereof of a proposed registration of an underwritten public offering
shall not effect any public sale or distribution (including sales under Rule
144) of any Registrable Securities that are similar to (or exchangeable or
exercisable for or convertible into securities that are similar to) the
securities proposed to be offered in such underwritten public offering, during
the 10-day period prior to, and during the 90-day beginning on, the effective
date of the applicable registration statement, except for offers and sales
pursuant to such registration statement, and hereby agrees to execute a
"lock-up" letter covering such 90-day period in form and substance customary for
such transactions if so requested by the managing underwriter for such
underwritten offering.

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

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

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

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

                                       10

<PAGE>

                  11. Miscellaneous.

                  (a) No Inconsistent Agreements. Company will not hereafter
enter into any agreement with respect to its securities which conflicts with the
rights granted to the Holders in this Agreement. Except as set forth on Schedule
A hereto, Company has not previously entered into any agreement with respect to
any of its securities granting any registration rights to any person.

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

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

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

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

                  (ii) If to Company, at

                       Level 8 Systems, Inc.
                       8000 Regency Parkway
                       Cary, North Carolina  27511
                       Attention:  John P. Broderick
                       Telecopy Number: (919) 380-5121

or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration, delivery or other communication hereunder shall
be deemed to have been duly given or served on the date on which personally
delivered, with receipt acknowledged, telecopied

                                       11

<PAGE>

and confirmed by telecopy answerback or three (3) Business Days after the same
shall have been deposited in the United States mail.

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

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

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

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

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

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

                  (g) Governing Law; Jurisdiction. This Agreement shall be
governed by, construed and enforced in accordance with the laws of the State of
New York 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 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(d) hereof. The
parties hereto waive all right to trial by jury in any action or proceeding to
enforce or defend any rights hereunder.

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

                                       12

<PAGE>

                  (i) Entire Agreement. This Agreement, together with the
Purchase Agreement, the Original Purchase Agreement and the other Transaction
Documents, represents the complete agreement and understanding of the parties
hereto in respect of the subject matter contained herein and therein. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to the subject matter hereof.

                                       13

<PAGE>

                 [REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGE]

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

                                            LEVEL 8 SYSTEMS, INC.

                                            By:
                                                --------------------------------
                                                 Name:
                                                 Title:

                                            MLBC, INC.

                                            By:
                                                --------------------------------
                                                 Name:
                                                 Title:

                                       14

<PAGE>

                                   SCHEDULE A

                                       15

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00033-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00033-of-00352.parquet"}]]