Document:

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                                                                   EXHIBIT 10.5

This Note supersedes and replaces that certain Promissory Note dated March 28,
2001 in the amount of $15,000,000.00 executed by the Borrower in favor of the
Bank, but does not extinguish the indebtedness evidenced thereby.

                                                                BANK HAPOALIM
PROMISSORY NOTE

U.S. $3,000,000.00
     -------------------------------------------------------------------------
as of September 28, 2001 New York, New York

1.   Obligation and Repayment: For value received, Borrower absolutely and
     unconditionally promises to pay to the order of the Bank, at the Office,
     without defense, setoff or counterclaim, the principal amount of Three
     Million and 00/100 --------------------------------------------------
     United States Dollars, together with interest and any other sum(s) due as
     specified below. The principal amount of this Note shall be due and payable
     as follows (complete one of the following as applicable):

(a)  |_| ON DEMAND.
(b)  On                         ;
       ------------------------
(c)  In consecutive installments, of which each but the last shall be
     $_____________ and the last of which shall be equal to the then unpaid
     principal balance of this Note. The first such installment shall be due
     on ______________, 20__. Each subsequent installment shall be due on the
     corresponding day of each month/ quarter/ other __________ thereafter (or
     if there is no such corresponding day, on the last day of such period).
     The remaining principal balance shall be due on ______________, 20__.

(d)  |X| In accordance with the attached Rider, but in any event no later than
         November 15, 2003.

2.  Interest:  Subject to  paragraph  A(2) of the Terms and  Conditions,
    interest  shall accrue on the  principal  amount of this Note outstanding
    from time to time at the following rate (the "Loan Rate") (complete one of
    the following as applicable):
(a) A fixed rate equal to ______% per year.
(b) A Variable Prime-Based Rate equal to the Prime Rate plus ______% per year.
(c) |X| In accordance with the attached Rider.
    Interest shall be payable monthly/ quarterly/ (other) _____________ and at
    any Payment Date and at any time that any part of the principal or any
    installment of this Note is paid.

3.  Riders: In the event of any inconsistency between this Note and any Rider(s)
    to which this Note is subject, the provisions of such Rider(s) shall
    prevail. This Note is subject to any Rider(s) referred to in paragraph 1(d)
    and/or 2(c) and to the following Rider(s), all of which are part of this
    Note:

                     Multiple-Loan Rider to Promissory Note
    --------------------------------------------------------------------------
                               (Libor-Based Rate)

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4.

Address and Identification of Borrower:

     Address:   8000 Regency Parkway
               -----------------------------------------------
                Cary, NC  27511
               -----------------------------------------------

    Telex or similar number:
                             ---------------------------------
    Answerback:
               -----------------------------------------------
    Telecopy or similar number:
                                ------------------------------
    Social Security or Taxpayer ID number:
                                          --------------------
5.  Agreement to All Terms and Condition; Authorization to Complete Blanks: This
    Note is subject to the Terms and Conditions set forth below and on the
    reverse side of this Note. Each of the undersigned agrees to all of the
    provisions of this Note, including the Terms and Conditions and any
    Rider(s). The Bank is authorized to complete any blank space in this Note.
    Such completion shall be conclusive, final and binding on Borrower in the
    absence of manifest error.

6.  No Representations or Agreements by the Bank: Each of the undersigned
    acknowledges that the Bank has made no representation, covenant, commitment
    or agreement to Borrower except pursuant to any written document executed
    by the Bank.

7.  No Representation of Nonenforcement: Each of the undersigned acknowledges
    that no representative or agent of the Bank has represented or indicated
    that the Bank will not enforce any provision of this Note, including the
    Terms and Conditions and any Rider(s), in the event of litigation or
    otherwise.

8.  Waiver of Jury Trial: Borrower waives, and understands that the Bank waives,
    the right to a jury trial with respect to any dispute arising hereunder or
    relating to any of the Liabilities; any judicial proceeding with respect to
    any such dispute shall take place without a jury.

9.  Execution of Promissory Note:

    Print name of Borrower: Level 8 Systems, Inc.
                            ----------------------------------

    (Signature) By:    /s/ John Broderick
                    ------------------------------------------
    Print name:            John Broderick
                ----------------------------------------------
    Title or capacity:     Chief Financial Officer
                       ---------------------------------------
    (if signing on behalf of Borrower)
    (Signature) By:
                    ------------------------------------------
    Print Name:
                ----------------------------------------------
    Title or capacity:
                       ---------------------------------------
    (if signing on behalf of Borrower)

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===============================================================================

                              TERMS AND CONDITIONS

Definitions are set forth in paragraph M

A.  Calculation and Accrual of Interest: (1) Generality. Interest shall be
    calculated on a daily basis on outstanding balances at the Applicable Rate,
    divided by 360, on the actual days elapsed. During any time that the
    Applicable Rate would exceed the applicable maximum lawful rate of interest,
    the Applicable Rate shall automatically be reduced to such maximum rate. Any
    interest payment made in excess of such maximum rate shall be applied as,
    and deemed to be, in the Bank's sole discretion, (a) a payment of any of the
    Liabilities, in such manner as determined by the Bank, or (b) cash
    collateral to be retained by the Bank to secure repayment of this Note. (2)
    Increased Rate. Interest shall accrue at the Increased Rate upon and after
    (a) the occurrence of any Debtor Relief Action, (b) any demand of payment of
    this Note (if payable on demand) or (c) the occurrence of any Event of
    Default (if this Note is payable other than on demand). (3) Accrual. To the
    extent permitted by Law, interest shall accrue at the Applicable Rate on all
    unpaid Liabilities under this Note, including but not limited to any unpaid
    interest and any unpaid obligation owed pursuant to paragraph B
    (Indemnification).

B.  Indemnification: To the extent permitted by Law: (1) Taxes: All payments
    under this Note shall be made free and clear of, and without deduction for,
    any Taxes. If Borrower shall be required to deduct any Taxes in respect of
    any sum payable under this Note, then (a) the sum payable shall be increased
    so that the Bank shall receive an amount equal to the sum the Bank would
    have received had no deductions been made, and (b) Borrower shall make such
    deductions and shall pay the amount deducted to the relevant Governmental
    Authority. Borrower shall pay to the Bank on demand, and shall indemnify and
    hold the Bank harmless from, any and all Taxes paid by the Bank and any and
    all liability (including penalties, interest and expenses) with respect
    thereto, whether or not such Taxes were correctly or legally asserted.
    Within 30 days after any Taxes are paid, Borrower shall furnish evidence
    thereof to the Bank. (2) Regulatory Costs. In the event that in connection
    with the transaction(s), contemplated by this Note and/or the Bank's funding
    of such transaction(s), the Bank is required to incur any Regulatory Costs
    in order to comply with any Law issued after the date of this Note, then
    Borrower shall pay to the Bank on demand, and shall indemnify and hold the
    Bank harmless from any and all such Regulatory Costs. (3) Costs and
    Expenses. Borrower shall pay the Bank on demand, and shall indemnify and
    hold the Bank harmless from, any and all costs and expenses. (4) Prepayment
    Costs. If Borrower makes any payment of Prepaid Principal (voluntarily or
    not), and if the Applicable Rate with respect to such Prepaid Principal is
    not a Variable Prime-Based Rate, then Borrower shall pay to the Bank an
    amount sufficient to compensate the Bank for its Prepayment Costs. Borrower
    acknowledges that determining the actual amount of Prepayment Costs may be
    difficult or impossible in any specific instance. Accordingly, Borrower
    agrees that Prepayment Costs shall be deemed to be the excess, if any, of
    (i) the product of (A) the Prepaid Principle, times (B) the Applicable Rate
    divided by 360, times (C) the remaining number of days from the date of the
    payment to the applicable Payment Date, over (ii) that amount of interest
    which the Bank determines that the holder of a Treasury Obligation selected
    by the Bank in the amount (or as close to such amount as feasible) of the
    Prepaid Principal and having a maturity date on (or as soon after as
    feasible) the applicable Payment Date would earn if that Treasury Obligation
    were purchased in the secondary market on the date the Prepaid Principal is
    paid to the Bank and were held to maturity. Borrower agrees that the
    determination of Prepayment Costs shall be based on amounts which a holder
    of a Treasury Obligation could receive under these circumstances, whether or
    not the Bank actually invests the Prepaid Principal in any Treasury
    Obligation. (5) Bank Certificate. The Bank's certificate as to any amounts
    owing under this paragraph shall be prima facia evidence of Borrower's
    obligation.

C.  Set Off: Every Account of Borrower with the Bank shall be subject to a lien
    and to being set off against the Liabilities. The Bank may at any time at
    its option and without notice, except as may be required by law, charge
    and/or appropriate and apply all or any part of any such Account toward the
    payment of any of the Liabilities.

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D.  Events of Default: The remainder of this paragraph D shall not apply if this
    Note is payable on demand. Each of the following shall be an Event of
    Default hereunder: (1) Nonpayment. (a) The nonpayment when due of any part
    of the Liabilities; (b) the prohibition by any Law of payment of any part of
    any of the Liabilities; (2) Bankruptcy; Adverse Proceedings. (a) The
    occurrence of any Debtor Relief Action; (b) the appointment of a receiver,
    trustee, committee, custodian, personal representative or similar official
    for any Party or for any Material part of any Party's property; (c) any
    action taken by any Party to authorize or consent to any action set forth in
    subparagraph D(2)(a) or (b); (d) the rendering against any Party of one or
    more judgments, orders, decrees and/or arbitration awards (whether for the
    payment of money or injunctive or other relief) which in the aggregate are
    Material to such Party, if they continue in effect for 30 days without being
    vacated, discharged, stayed, satisfied or performed; (e) the issuance or
    filing of any warrant, process, order of attachment, garnishment or other
    lien or levy against any Material part of any Party's property; (f) the
    commencement of any proceeding under, or the use of any of the provisions of
    any Law against any Material part of any Party's property, including but not
    limited to any Law (i) relating to the enforcement of judgments or (ii)
    providing for forfeiture to, or condemnation, appropriation, seizure or
    taking possession by, or on order of any Governmental Authority; (g) the
    forfeiture to, or the condemnation, appropriation, seizure or taking
    possession by, or on the order of, any Governmental Authority, of any
    Material part of any Party's property; (h) any Party being charged with a
    crime by indictment, information or the like. (3) Noncompliance. (a) Any
    Default with respect to any Agreement with or to the Bank, (b) the giving to
    the Bank by or on behalf of any Party at any time of any materially
    incorrect or incomplete representation, warranty, statement or information;
    (c) the failure of any Party to furnish to the Bank, copies of its financial
    statements and such other information respecting its business, properties,
    condition or operations, financial or otherwise, promptly when, and in such
    form as, reasonably required or requested by the Bank; (d) any Party's
    failure or refusal, upon reasonable notice from the Bank, to permit the
    Bank's representative(s) to visit such Party's premises during normal
    business hours and to examine and make photographs, copies and extracts of
    such Party's property and of its books and records; (e) any Party's
    concealing, removing or permitting to be concealed or removed, any part of
    its property with the intent to hinder or defraud any of its creditors; (f)
    any Party's making or suffering any Transfer of any of its property, which
    Transfer is deemed fraudulent under the law of any applicable jurisdiction;
    (g) the revocation or early termination of any Party's obligations under any
    Agreement with or to the Bank (including, but not limited to any of the
    Liabilities) or the validity, binding effect or enforceability of any such
    obligations being challenged or questioned, whether or not by the
    institution of proceedings. (4) Adverse Changes. (a) the occurrence of a
    Material adverse change in any Party's financial condition; (b) the death or
    incompetence (if a person) or the dissolution or liquidation (if a
    corporation, partnership or other entity) of any Party or such Party's
    failure to be and remain in good standing and qualified to do business in
    each jurisdiction Material to such Party; (c) any Material Default with
    respect to any Material Agreement other than with or to the Bank; (d) any
    Default pursuant to which any Person shall have the power to effect an
    Acceleration of any Material Debt; (e) any Acceleration or demand of payment
    with respect to any Material Debt; (f) any Party's becoming insolvent, as
    defined in the Uniform Commercial Code; (g) the Bank's believing in good
    faith that the prospect of payment of any of the Liabilities or of
    performance of any other obligation of any Party to the Bank is impaired;
    (h) the Material suspension of any Party's business; (i) any Party's
    Material failure to pay any tax when due; (j) the expulsion of any Party
    from any exchange or self-regulatory organization or any loss, suspension,
    nonrenewal or invalidity of any Party's Material license, permit, franchise,
    patent, copyright, trademark or the like; (k) the occurrence of any event
    which gives any Person the right to assert a lien, levy or right of
    forfeiture against any Material part of any Party's property; (l) Borrower's
    failure to give the Bank notice, within 10 Business Days after Borrower had
    notice or knowledge, of the occurrence of any event which, with the giving
    of notice and/or lapse of time, would constitute an Event of Default. (5)
    Business Changes. (a) any change in Control of any Party; (b) any merger or
    consolidation involving any Party; (c) any Party's sale or other Transfer or
    substantially all of its property; (d) any bulk sale by any Party; (e) any
    Material change in the nature or structure of any Party's business. (6)
    Exchange Controls. (a) Any Party's failure to obtain any Exchange Control
    Permit deemed by the Bank to be necessary or appropriate; (b) the failure to
    obtain the renewal of any such Exchange Control Permit at least 30 days
    prior to its expiration.

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E.  Remedies: (1) Acceleration at Bank's Option. Upon any failure to pay this
    Note in full on demand (if payable on demand) or (if this Note is payable
    other than on demand) upon the occurrence of any Event of Default other than
    any Debtor Relief Action, then any and all Liabilities, not then due, shall,
    at the Bank's option, become immediately due and payable without notice,
    which Borrower waives. (2) Automatic Acceleration. Upon the occurrence of
    any Debtor Relief Action, then, whether or not any of the Liabilities are
    payable upon demand and notwithstanding paragraph F, any and all
    Liabilities, not then due, shall automatically become immediately due and
    payable without notice or demand, which Borrower waives. (3) Additional
    Remedies. The Bank shall have all rights and remedies available to it under
    any applicable Agreement or Law.

F.  Waiver of Protest, Etc.: Notice, presentment, protest, notice of dishonor
    and (except for such of the Liabilities as are payable on demand, but
    subject to subparagraph E(2)) demand for payment are hereby waived as to all
    of the Liabilities.

G.  Payment: (1) Manner. Any payment by other than immediately available funds
    shall be subject to collection. Interest shall continue to accrue until the
    funds by which payment is made are available to the Bank. If and to the
    extent any payment of any of the Liabilities is not made when due, the Bank
    is authorized in its discretion to effect payment by charging any amount so
    due against any Account of Borrower with the Bank without notice, except as
    may be required by law, whether or not such charge creates an overdraft. (2)
    Application. Any payment received by the Bank (including a deemed payment
    under paragraph A, a set-off under paragraph C or a charge against an
    Account under this paragraph G) shall be applied to pay any obligation of
    indemnification (including but not limited to under paragraph B) and to pay
    any other Liabilities (including interest thereon and the principal thereof)
    in such order as the Bank shall elect in its discretion. Borrower will
    continue to be liable for any deficiency. (3) Prepayment. Borrower shall be
    entitled to pay any outstanding principal amount or installment under this
    Note on any Business Day prior to the applicable Payment Date without the
    prior consent of the Bank provided that (a) any such payment shall be
    together with payment of all Liabilities then due and all interest accrued
    on the Prepaid Principal to the date of such payment, and (b) if the
    Applicable Rate with respect to such Prepaid Principal is not a Variable
    Prime-Based Rate, any such payment shall be on not less than 5 Business
    Day's notice to the Bank and shall be accompanied by any amount required
    pursuant to subparagraph B(4). Any such payment shall, unless otherwise
    consented to by the Bank, be applied pro rata to the last outstanding
    principal amount(s) to become due under this Note in inverse order of
    maturity. (4) Non-Business Days. If any payment of any of the Liabilities is
    due on any day that is not a Business Day, it shall be payable on the next
    Business Day. The additional day(s) shall be included in the compilation of
    interest. (5) Extension at Bank's Option. The Bank shall have the option,
    which may be exercise one or more times by notice(s) to Borrower, to extend
    the date on which any amount is payable hereunder to one or more subsequent
    date(s) set forth in such notice(s).

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H.  Parties; No Transfer by Borrower: If Borrower is more than one Person, all
    of them shall be jointly and severally liable under the Note. The
    obligations under this Note shall continue in force and shall apply
    notwithstanding any change in the membership of any partnership executing
    this Note, whether arising from the death or retirement of one or more
    partners or the accession of one or more new partners. Without the Bank's
    written consent, Borrower shall have no right to make any Transfer of any of
    the Liabilities, any such purported Transfer shall be void. Subject to the
    foregoing, the provisions of this Note shall be binding on Borrower's
    executors, administrators, successors and assigns.

I.  Bank Transfers: (1) Transferability. Without limiting the Bank's rights
    hereunder, the Bank may make a Transfer of all or any part of (a) any
    obligation of Borrower to the Bank (including but not limited to any of the
    Liabilities); (b) any obligation of any other Party in connection with any
    of the Liabilities; (c) any Agreement of any Party in connection with any of
    the Liabilities; (d) any collateral, mortgage, lien or security interest,
    however denominated, securing any of the Liabilities; and/or (e) the Bank's
    rights and, if any, obligations with respect to any of the foregoing. (2)
    Extent of Transfer. In the event the Bank shall make any Transfer of any of
    the foregoing items ("Transferred Items"), then - to the extent provided by
    the Bank with respect to such Transfer, the Transferee shall have the
    rights, powers, privileges and remedies of the Bank. The Bank shall
    thereafter, to the extent of such Transfer, be forever relieved and fully
    discharged from all liability or responsibility, if any, that it may have to
    any Person with respect thereto, except for claims, if any, arising prior to
    or upon such Transfer. The Bank shall retain all its rights and powers with
    respect to any Transferred items to the extent that it has not made a
    Transfer thereof. Without limiting the foregoing, to the extent of any such
    Transfer, paragraph B (indemnification) shall apply to any Taxes, Regulatory
    Costs, Costs and Expenses and Prepayment Costs of, or incurred by, any
    Transferee, and paragraphs C (Set-Off) and G(1) (Payment-Manner) shall apply
    to any Account of Borrower with any Transferee. (3) Disclosures. The Bank is
    authorized to disclose to any prospective or actual Transferee any
    information that the Bank may have or acquire about Borrower and any
    information about any other Person submitted to the Bank by or on behalf of
    Borrower. (4) Negotiability Defenses Waived. If this Note is not a
    negotiable instrument, Borrower waives all defenses (except such defenses as
    may be asserted against a holder in due course of a negotiable instrument)
    which Borrower may have or acquire against any Transferee who takes this
    Note, or any complete or partial interest in it, for value, in good faith
    and without notice that it is overdue or has been dishonored or of any
    defense against or claim to it on the part of any Person.

J.  No Oral Changes; No Waiver by the Bank; Partial Unenforceability. This Note
    may not be changed orally. Neither a waiver by the Bank of any of its
    options, powers or rights in one or more instances, nor any delay on the
    part of the Bank in exercising any of them, nor any partial or single
    exercise thereof, shall constitute a waiver thereof in any other instance.
    Any provision of this Note which is prohibited, unenforceable or not
    authorized in any jurisdiction shall, as to such jurisdiction, be
    ineffective to the extent of such prohibition, unenforceability or
    non-authorization, without invalidating the remaining provisions of the Note
    in that or any other jurisdiction and without affecting the validity,
    enforceability or legality of such provision in any other jurisdiction.

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K.  Disputes and Litigation: (1) Governing Law. This Note and the rights and
    obligations of the Bank and Borrower hereunder shall be governed by the
    internal laws of the State of New York without giving effect to conflict of
    laws principles. (2) Jurisdiction, Venues and Service of Process. Borrower
    submits to the nonexclusive jurisdiction of the federal and state courts in
    the State of New York in New York County with respect to any dispute that
    may be made on Borrower by personal deliver at, or by mail addressed to, any
    address to which the Bank is authorized to address notices to Borrower. (3)
    Waiver of Defenses, Setoffs, Counterclaims and Certain Damages. Borrower
    waives the right to assert any defense, setoff or counterclaim in any
    proceeding relating in any way to this Note or any transaction contemplated
    hereby. The Bank shall not have any liability for negligence, except solely
    to the extent required by law and not disclaimable, and except for its own
    gross negligence or willful misconduct. In any event, the Bank shall not
    have any liability for any special, consequential or punitive damages. (4)
    Sovereign Immunity. Borrower irrevocably waives, with respect to itself and
    its property, any sovereign immunity that it may have or hereafter acquire,
    including but not limited to immunity from the jurisdiction of any court,
    from any legal process, from attachment prior to judgment, from attachment
    in aid of execution, from execution or otherwise.

<PAGE>

L.  Notice. Any notice in connection with any of the Liabilities shall be in
    writing and may be delivered personally or by cable, telex, telecopy or
    other electronic means of communication, or by certified mail, return
    receipt requested, addressed (a) to Borrower as set forth herein or to any
    other address that the Bank believes to be Borrower's address, and (b) to
    the Bank at Bank Hapaolim B.M., 1177 Avenue of the Americas, New York, New
    York 10036, Attention Legal Department. Any such notices shall be addressed
    to such other address(es) as may be designated in writing hereafter. All
    such notices shall be deemed given when delivered personally or
    electronically or when mailed, except notice of change of address, which
    shall be deemed to have been given when received.

M.  Definitions. The following definitions apply in this Note: (1) Acceleration.
    Any acceleration of payment of requirement of prepayment of any Debt, or any
    Debt's becoming due and payable prior to stated maturity. (2) Account: (a)
    the balance of any account of Borrower with any Person, (b) any claim of
    Borrower against any Person and/or (c) any property in the possession or
    custody of, or in transit to, any Person, whether for safekeeping,
    collection, pledge or otherwise, as to which Borrower has any right, power
    or interest, in each case whether existing now or hereafter, in any
    jurisdiction worldwide, and whether or not disconnected in the same currency
    as any of the Liabilities. (3) Agreement. Any agreement or instrument
    (including but not limited to this Note), no matter when made, under which
    any Party is obligated to any Person. (4) Applicable Rate. Whichever of the
    Loan Rate or Increased Rate is the applicable interest rate at any time. (5)
    Bank: Bank Hapoalim B.M. (6) Borrower. The Person(s) executing this Note at
    paragraph 9 or any one or more of them. "Borrower" may refer to one or more
    Persons. (7) Business Day. Any day on which both (a) banks are regularly
    open for business in New York City and (b) the Office is open for ordinary
    business in the Bank's discretion, the Office may be closed on any Saturday,
    Sunday, legal holiday or other day on which it is lawfully permitted to
    close. (8) Control. The power, alone or in conjunction with others, directly
    or indirectly, through voting securities, by contract or otherwise, to
    direct or cause the direction of a Person's management and policies. (9)
    Costs and Expenses. Any and all reasonable costs and expenses (including but
    not limited to attorneys' fees and disbursements) incurred in connection
    with the Borrower and/or the Liabilities, including but not limited to those
    for (a) any action taken, whether or not by litigation, to collect, or to
    protect rights or interests with respect to, or to preserve any collateral
    securing, any of the Liabilities; (b) compliance with any legal process or
    any order or directive of any Governmental Authority with respect to any
    party; (c) any litigation or administrative proceeding relating to any Party
    and/or (d) any amendment, modification, extension or waiver with respect to
    any of the Liabilities. (10) Debt. Any Party's obligation of any sort (in
    whole or in part for the payment of money to any Person, whether (a)
    absolute or contingent, (b) secured or unsecured, (c) joint, several or
    independent, (d) nor or hereafter existing, or (e) due or to become due.
    (11) Debtor Relief Action. The commencement by any Party or (unless
    dismissed or terminated within 30 days) against any Party of any proceeding
    under any law of any jurisdiction (domestic or foreign) relating to
    bankruptcy, reorganization, insolvency, arrangement, composition,
    receivership, liquidation, dissolution, moratorium or other relief of
    financially distressed debtors, or the making by any Party of any assignment
    for the benefit of creditors. (12) Default. Any breach, default or event of
    default under, or any failure to comply with, any provision of any
    Agreement. (13) Event of Default. Any event set forth in paragraph D. (14)
    Exchange Control Permit. Any permit or license issued by a Governmental
    Authority outside the United States under which any Party is permitted (a)
    to incur and pay any of the Liabilities in the United States in any
    currency(ies) in which denominated or (b) to enter into, incur and, or
    perform any other obligation or Agreement. (15) Governmental Authority. Any
    domestic or foreign, national or local (a) government, (b) governmental,
    quasi-governmental or regulatory agency or authority, (c) court or (d)
    central bank or other monetary authority. (16) Increased Rate. (a) If the
    Loan Rate is a Variable Prime-Based Rate, the Increased Rate with respect to
    the entire outstanding principal balance shall be the Loan Rate plus 2% per
    year; (b) if the Loan Rate is not a Variable Prime-Based Rate, the Increased
    Rate with respect to any amount of principal or installment shall be (i) the
    Loan Rate plus 2% per year prior to the applicable Payment Date and (ii) the
    Prime Rate plus 4% per year on or subsequent to the applicable Payment Date.
    (17) Law. Any treaty, law, regulation, rule, Judgment, order, decree,
    guideline, interpretation or request (whether or not having the force of
    law) issued by any Governmental Authority. (18) Liabilities. (a) any and all
    of the Debt evidenced by this Note, and any and all other Debt of Borrower
    to, or held or to be held by, the Bank in any jurisdiction worldwide for its
    own account or as agent for another or others, whether created directly or
    acquired by Transfer or otherwise, and (b) any and all obligations of any
    other Party with respect to any of such Debt. (19) Loan Rate. The interest
    rate determined under paragraph 2. (20) Material. Material to the business
    or financial condition of any Party on a consolidated or consolidating
    basis. (21) Office. The Bank's office at 1177 Avenue of the Americas, New
    York, New York 10036, or such other place as the Bank may specify by notice.
    (22) Party. (a) borrower; (b) any maker co-maker or endorser or any
    Agreement evidencing or any guarantor surety, accommodation party or
    indemnitor with respect to, or any Person that provides any collateral as
    security for, or any Person that issues a subordination, comfort letter,
    standby letter of credit, repurchase agreement, put agreement, option, other
    Agreement or other credit support with respect to any of the Liabilities;
    (c) if any Party is a partnership or joint venture, any general partner or
    joint venturer in such Party, and (d) any Person (i) that is under the
    Control of any Party and (ii) whose business or financial condition is
    Material to such Party. (23) Payment Date. Any Business Day on which any
    part of the principal or any installment of this Note becomes due and
    payable under paragraph 1 (and not on account of an Acceleration). (24)
    Person. Any person, partnership, joint venture, company, corporation,
    uncorporated organization or association, trust, estate, Governmental
    Authority, or any other entity. (25) Prepaid Principal. Any amount of
    principal or any installment of this Note which Borrower pays prior to the
    applicable Payment Date for such amount. (26) Prepayment Costs. All losses,
    costs and expenses incurred as a result of receiving Prepaid Principal and
    of reinvesting it at rate(s) which may be less than the Applicable Rate for
    such Prepaid Principal. (27) Prime Rate. The Bank's New York Branch's stated
    Prime Rate as reflected in the books and records as such Prime Rate may
    change from time to time. The Bank's determination of its Prime Rate shall
    be conclusive and final. The Prime Rate is a reference rate and not
    necessarily the lowest interest rate charged by the Bank. (28) Regulatory
    Costs. Any and all costs and expenses of complying with any Law, including
    but not limited to with respect to (a) any reserves or special deposits
    maintained for or with, or pledges to, any Governmental Authority, or (b)
    any capital, capital equivalency ledger account, ratio of assets to
    liabilities, risk-based capital assessment or any other capital substitute,
    risk-based or otherwise. (29) Taxes. Any and all present and future taxes,
    levies, imposts, deductions, charges and withholdings in any jurisdiction
    worldwide, and all liabilities with respect thereto, which are imposed with
    respect to this Note or to any amount payable under this Note, excluding
    taxes determined on the basis of the net income of a Person or of any of its
    offices. (30) Transfer. Any negotiation, assignment, participation,
    conveyance, grant of a security interest, lease, delegation, or any other
    direct or indirect transfer of a complete or partial, legal, beneficial,
    economic or other interest or obligation. (31) Transferee. Any Person to
    whom a Transfer is made. (32) Transferred Items. Items defined in paragraph
    I. (33) Treasury Obligation. A note, bill or bond issued by the United
    States Treasury Department as a full faith and credit general obligation of
    the United States. (34) Variable Prime-Based Rate. Any Applicable Rate which
    is determined based on the Prime Rate. Any such rate shall change
    automatically when and as the Prime Rate changes.<PAGE>

                                                                   EXHIBIT 10.10

                              EMPLOYMENT AGREEMENT
                              --------------------

This Employment Agreement (the "Agreement") is made effective this 1st day of
January, 2002, by and between LEVEL 8 SYSTEMS, INC., a Delaware corporation (the
"Company"), and Anthony Pizi, a resident of the State of New Jersey (the
"Employee").

In consideration of the mutual covenants, promises and conditions set forth in
this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

1.       Employment.  The Company hereby employs  Employee and Employee  hereby
         ----------
         accepts such  employment  upon the terms and conditions set forth in
         this Agreement.

2.       Duties of Employee.  Employee's  title will be Chief Executive  Officer
         ------------------
         and Chief Technology Officer. Employee will be based in New Jersey.
         Employee agrees to perform and discharge such other duties as may be
         assigned to Employee from time to time by the Company to the reasonable
         satisfaction of the Company, and such duties will be consistent with
         those duties regularly and customarily assigned by the Company to the
         position of Chief Executive Officer and Chief Technology Officer. In
         addition, Employee shall serve as Chairman of the Board of Directors so
         long as he is elected to such post by the Board of Directors according
         to the By-Laws of the Company. Employee also agrees to comply with all
         of the Company's policies, standards and regulations and to follow the
         instructions and directives as promulgated by the Board of Directors of
         the Company. Employee will devote Employee's full professional and
         business-related time, skills and best efforts to such duties and will
         not, during the term of this Agreement, be engaged (whether or not
         during normal business hours) in any other business or professional
         activity, whether or not such activity is pursued for gain, profit or
         other pecuniary advantage, without the prior written consent of the
         Board of Directors of the Company. This Section will not be construed
         to prevent Employee from (a) investing personal assets in businesses
         which do not compete with the Company in such form or manner that will
         not require any services on the part of Employee in the operation or
         the affairs of the companies in which such investments are made and in
         which Employee's participation is solely that of an investor; (b)
         purchasing securities in any corporation whose securities are listed on
         a national securities exchange or regularly traded in the
         over-the-counter market, provided that Employee at no time owns,
         directly or indirectly, in excess of one percent (1%) of the
         outstanding stock of any class of any such corporation engaged in a
         business competitive with that of the Company; or (c) participating in
         conferences, preparing and publishing papers or books, teaching or
         joining or participating in any professional associations or trade
         group.

3.       Term. The term of this Agreement  will be at-will,  and can be
         ----
         terminated by either party at any time,  with or without cause,
         subject to the provisions of Section 4 of this Agreement.

<PAGE>
4.       Termination.
         -----------

         (a)      Termination by Company for Cause. The Company may terminate
                  --------------------------------
                  this Agreement and all of its obligations hereunder
                  immediately, including the obligation to pay Employee
                  severance, vacation pay or any further benefits or
                  remuneration, if any of the following events occur:

                  (i)      Employee materially breaches any of the terms or
                           conditions set forth in this Agreement and fails to
                           cure such breach within ten (10) days after
                           Employee's receipt from the Company of written notice
                           of such breach (notwithstanding the foregoing, no
                           cure period shall be applicable to breaches by
                           Employee of Sections 6, 7 or 8 of this Agreement);

                  (ii)     Employee commits any other act materially detrimental
                           to the business or reputation of the Company;

                  (iii)    Employee engages in dishonest or illegal activities
                           or commits or is convicted of any crime involving
                           fraud, deceit or moral turpitude; or

                  (iv)     Employee dies or becomes mentally or physically
                           incapacitated or disabled so as to be unable to
                           perform Employee's duties under this Agreement even
                           with a reasonable accommodation. Without limiting the
                           generality of the foregoing, Employee's inability
                           adequately to perform services under this Agreement
                           for a period of sixty (60) consecutive days will be
                           conclusive evidence of such mental or physical
                           incapacity or disability, unless such inability
                           adequately to perform services under this Agreement
                           is pursuant to a mental or physical incapacity or
                           disability covered by the Family Medical Leave Act,
                           in which case such sixty (60) day period shall be
                           extended to a one hundred and twenty (120) day
                           period.

         (b)      Termination by Company Without Cause.  The Company may
                  ------------------------------------
                  terminate  Employee's  employment  pursuant to this Agreement
                  for reasons other than those stated in Section 4(a) upon at
                  least thirty (30) days' prior written notice to Employee. In
                  the event Employee's employment with the Company is terminated
                  by the Company without cause, the Company shall be obligated
                  to pay Employee a lump sum severance payment equal to one (1)
                  year of Employee's then base salary payable within thirty (30)
                  days of the date of termination. In addition, all Employee's
                  then outstanding but unvested stock options shall vest one
                  hundred percent (100%). Other than the severance payment and
                  vesting of outstanding options set forth in this Section 4(b),
                  Employee will be entitled to receive no further remuneration
                  and will not be entitled to participate in any Company benefit
                  programs following his termination by the Company, whether
                  such termination is with or without cause. Furthermore, should
                  Employee's employment with the Company be terminated without
                  cause, Employee shall be entitled to an award of 200,000
                  shares of the Company's Common Stock. Employee shall not be
                  entitled

                                       2

<PAGE>

                  to any further remuneration of any kind whatsoever for his
                  termination without cause.

         (c)      Termination by Employee for Cause.  In the event there occurs
                  ---------------------------------
                  a substantial change in the Employee's job duties, there is a
                  decrease in or a failure to provide the compensation or vested
                  benefits under this Agreement or there is a Change in Control
                  (as defined below) of the Company, Employee shall have the
                  right to resign his employment and will be entitled to receive
                  a severance payment equal to an award of 200,000 shares of the
                  Company's common stock. For avoidance of doubt, this award
                  shall be in lieu of the 200,000 common stock shares awarded
                  Employee under Section 4(b) above. In addition, all Employee's
                  then outstanding but unvested stock options shall vest one
                  hundred percent (100%). Employee shall have thirty (30) days
                  from the date written notice is given to Employee about either
                  (a) a change in his duties or (b) the announcement and closing
                  of a transaction resulting in a Change in Control of the
                  Company to resign or this Section 4(c) shall not apply. In the
                  event Employee resigns from the Company for any other reason,
                  Employee will not be entitled to receive or accrue any further
                  Company benefits or other remuneration under this Agreement,
                  and Employee specifically agrees that he will not be entitled
                  to receive any severance pay.

                  For purposes of this Section 4, a Change in Control shall be
                  deemed to have occurred if any of the following occur:

                  (i)      the merger of consolidation of the Company with or
                           into another unaffiliated entity, or the merger of
                           another unaffiliated entity into the Company or
                           another subsidiary thereof with the effect that
                           immediately after such transaction the stockholders
                           of the Company immediately prior to such transaction
                           hold less than fifty percent (50%) of the total
                           voting power of all securities generally entitled to
                           vote in the election of directors, managers or
                           trustees of the entity surviving such merger or
                           consolidation;

                  (ii)     the sale or transfer of more than fifty-one percent
                           (51%) of the Company's then outstanding voting stock
                           (other than a restructuring event which results in
                           the continuation of the Company's business by an
                           affiliated entity) to unaffiliated person or group
                           (as such term is used in Section 13(d)(3) of the
                           Securities Exchange Act of 1934, as amended); or

                  (iii)    the adoption by the  stockholders of the Company of a
                           plan relating to the liquidation or dissolution of
                           the Company.

5.       Compensation and Benefits.
         -------------------------

                                       3

<PAGE>

         (a)      Annual Salary. During the term of this Agreement and for all
                  -------------
                  services rendered by Employee under this Agreement, the
                  Company will pay Employee a base salary of Three Hundred
                  Thousand Dollars ($300,000.00) per annum in equal bi-monthly
                  installments. Such annual salary will be subject to
                  adjustments by any increases given in the normal course of
                  business.

         (b)      Incentive Compensation. Employee shall be eligible to receive
                  ----------------------
                  incentive compensation in the form of a cash bonus equal to
                  One Hundred Fifty Thousand Dollars ($150,000.00) upon the
                  Company reaching sales goals for the calendar year as set
                  forth in the operating plan for the Company which was approved
                  by the Board of Directors. Said bonus will be pro-rated and
                  payable quarterly.

         (c)      Stock Options.  On the 1st day of January, 2002, the
                  -------------
                  Company will issue to Employee, incentive stock options to
                  purchase three hundred thousand (300,000) shares of Level 8
                  Systems, Inc. common stock pursuant to the terms and
                  conditions of the Level 8 Systems, Inc. Stock Option Plan
                  ("Stock Option Plan"), as amended. Such options will vest at
                  the rate of thirty-three and one-third percent (33.33%) per
                  year for a three-year period beginning on the first day after
                  the common stock of the Company reaches three dollars and
                  50/100 ($3.50) as quoted on the Nasdaq market, or such other
                  public securities market as the company may be a member of at
                  the time. Employee shall be considered for additional grants
                  of options to purchase shares of Level 8 Systems, Inc. common
                  stock in a manner which is consistent with other senior
                  officers of the Company. However, nothing in this Agreement
                  shall give rise to a contractual right to Employee to receive
                  grants of additional stock options. Further, the Company has
                  no obligation to Employee to create parity with any other
                  Company executives with respect to any options granted to such
                  other executives.

6.       Vacation.  Employee shall be eligible for four (4) weeks of paid
         ---------
         vacation  annually,  provided that such vacation is scheduled at such
         times that do not interfere with the Company's legitimate business
         needs.

7.       Other Benefits. Employee will be entitled to such fringe benefits as
         --------------
         may be provided from time-to-time by the Company to its employees,
         including, but not limited to, group health insurance, life and
         disability insurance, and any other fringe benefits now or hereafter
         provided by the Company to its employees, if and when Employee meets
         the eligibility requirements for any such benefit. The Company reserves
         the right to change or discontinue any employee benefit plans or
         programs now being offered to its employees; provided, however, that
         all benefits provided for employees of the same position and status as
         Employee will be provided to Employee on an equal basis.

8.       Business Expenses.  Employee will be reimbursed for all reasonable
         -----------------
         expenses incurred in the discharge of Employee's duties under this
         Agreement pursuant to the Company's standard reimbursement policies.

                                       4

<PAGE>

9.       Withholding.  The Company will deduct and withhold from the
         -----------
         payments made to Employee under this Agreement, state and federal
         income taxes, FICA and other amounts normally withheld from
         compensation due employees.

10.      Non-Disclosure of Proprietary Information.  Employee recognizes and
         -----------------------------------------
         acknowledges that the Trade Secrets (as defined below)and Confidential
         Information (as defined below) of the Company and its affiliates and
         all physical embodiments thereof (as they may exist from time-to-time,
         collectively, the "Proprietary Information") are valuable, special and
         unique assets of the Company's and its affiliates' businesses. Employee
         further acknowledges that access to such Proprietary Information is
         essential to the performance of Employee's duties under this Agreement.
         Therefore, in order to obtain access to such Proprietary Information,
         Employee agrees that, except with respect to those duties assigned to
         him by the Company, Employee shall hold in confidence all Proprietary
         Information and will not reproduce, use, distribute, disclose, publish
         or otherwise disseminate any Proprietary Information, in whole or in
         part, and will take no action causing, or fail to take any action
         necessary to prevent causing, any Proprietary Information to lose its
         character as Proprietary Information, nor will Employee make use of any
         such information for Employee's own purposes or for the benefit of any
         person, firm, corporation, association or other entity (except the
         Company) under any circumstances.

         For purposes of this Agreement, the term "Trade Secrets" means
         information, including, but not limited to, any technical or
         nontechnical data, formula, pattern, compilation, program, device,
         method, technique, drawing, process, financial data, financial plan,
         product plan, list of actual or potential customers or suppliers, or
         other information similar to any of the foregoing, which derives
         economic value, actual or potential, from not being generally known to,
         and not being readily ascertainable by proper means by, other persons
         who can derive economic value from its disclosure or use. For purposes
         of this Agreement, the term "Trade Secrets" does not include
         information that Employee can show by competent proof (i) was known to
         Employee and reduced to writing prior to disclosure by the Company (but
         only if Employee promptly notifies the Company of Employee's prior
         knowledge); (ii) was generally known to the public at the time the
         Company disclosed the information to Employee; (iii) became generally
         known to the public after disclosure by the Company through no act or
         omission of Employee; or (iv) was disclosed to Employee by a third
         party having a bona fide right both to possess the information and to
         disclose the information to Employee. The term "Confidential
         Information" means any data or information of the Company, other than
         trade secrets, which is valuable to the Company and not generally known
         to competitors of the Company. The provisions of this Section 6 will
         apply to Trade Secrets for so long as such information remains a trade
         secret and to Confidential Information during Employee's employment
         with the Company and for a period of two (2) years following any
         termination of Employee's employment with the Company for whatever
         reason.

11.      Non-Solicitation Covenants. Employee agrees that during Employee's
         ---------------------------
         employment by the Company and for a period of one (1) year following
         the termination of Employee's

                                       5

<PAGE>

         employment for whatever reason, Employee will not, directly or
         indirectly, on Employee's own behalf or in the service of or on behalf
         of any other individual or entity, divert, solicit or attempt to divert
         or solicit any individual or entity (i) who is a client of the Company
         at any time during the six (6)-month period prior to Employee's
         termination of employment with the Company ("Client"), or was actively
         sought by the Company as a prospective client, and (ii) with whom
         Employee had material contact while employed by the Company to provide
         similar services or products as such provided by Employee for the
         Company to such Clients or prospects. Employee further agrees and
         represents that during Employee's employment by the Company and for a
         period of one (1) year following any termination of Employee's
         employment for whatever reason, Employee will not, directly or
         indirectly, on Employee's own behalf or in the service of, or on behalf
         of any other individual or entity, divert, solicit or hire away, or
         attempt to divert, solicit or hire away, to or for any individual or
         entity which is engaged in providing similar services or products to
         that provided by the Company, any person employed by the Company for
         whom Employee had supervisory responsibility or with whom Employee had
         material contact while employed by the Company, whether or not such
         employee is a full-time employee or temporary employee of the Company,
         whether or not such employee is employed pursuant to written agreement
         and whether or not such employee is employed for a determined period or
         at-will. For purposes of this Agreement, "material contact" exists
         between Employee and a Client or potential Client when (1) Employee
         established and/or nurtured the Client or potential Client; (2) the
         Client or potential Client and Employee interacted to further a
         business relationship or contract with the Company; (3) Employee had
         access to confidential information and/or marketing strategies or
         programs regarding the Client or potential Client; and/or (4) Employee
         learned of the Client or potential Client through the efforts of the
         Company providing Employee with confidential Client information,
         including but not limited to the Client's identify, for purposes of
         furthering a business relationship.

12.      Existing Restrictive Covenants. Except as provided in Exhibit B,
         ------------------------------
         Employee has not entered into any agreement with any employer or former
         employer (a) to keep in confidence any confidential information or (b)
         to not compete with any former employer. Employee represents and
         warrants that Employee's employment with the Company does not and will
         not breach any agreement which Employee has with any former employer to
         keep in confidence confidential information or not to compete with any
         such former employer. Employee will not disclose to the Company or use
         on its behalf any confidential information of any other party required
         to be kept confidential by Employee.

13.      Return of Proprietary Information. Employee acknowledges that as a
         ---------------------------------
         result of Employee's employment with the Company, Employee may come
         into the possession and control of Proprietary Information, such as
         proprietary documents, drawings, specifications, manuals, notes,
         computer programs, or other proprietary material. Employee
         acknowledges, warrants and agrees that Employee will return to the
         Company all such items and any copies or excerpts thereof, and any
         other properties, files or documents obtained as a result of Employee's
         employment with the Company, immediately upon the termination of
         Employee's employment with the Company.

                                       6

<PAGE>

14.      Proprietary  Rights.  During the course of Employee's employment with
         -------------------
         the Company, Employee may make, develop or conceive of useful
         processes, machines, compositions of matter, computer software,
         algorithms, works of authorship expressing such algorithm, or any other
         discovery, idea, concept, document or improvement which relates to or
         is useful to the Company's Business (the "Inventions"), whether or not
         subject to copyright or patent protection, and which may or may not be
         considered Proprietary Information. Employee acknowledges that all such
         Inventions will be "works made for hire" under United States copyright
         law and will remain the sole and exclusive property of the Company.
         Employee also hereby assigns and agrees to assign to the Company, in
         perpetuity, all right, title and interest Employee may have in and to
         such Inventions, including without limitation, all copyrights, and the
         right to apply for any form of patent, utility model, industrial design
         or similar proprietary right recognized by any state, country or
         jurisdiction. Employee further agrees, at the Company's request and
         expense, to do all things and sign all documents or instruments
         necessary, in the opinion of the Company, to eliminate any ambiguity as
         to the ownership of, and rights of the Company to, such Inventions,
         including filing copyright and patent registrations and defending and
         enforcing in litigation or otherwise all such rights.

         Employee will not be obligated to assign to the Company any Invention
         made by Employee while in the Company's employ which does not relate to
         any business or activity in which the Company is or may reasonably be
         expected to become engaged, except that Employee is so obligated if the
         same relates to or is based on Proprietary Information to which
         Employee will have had access during and by virtue of Employee's
         employment or which arises out of work assigned to Employee by the
         Company. Employee will not be obligated to assign any Invention which
         may be wholly conceived by Employee after Employee leaves the employ of
         the Company, except that Employee is so obligated if such Invention
         involves the utilization of Proprietary Information obtained while in
         the employ of the Company. Employee is not obligated to assign any
         Invention that relates to or would be useful in any business or
         activities in which the Company is engaged if such Invention was
         conceived and reduced to practice by Employee prior to Employee's
         employment with the Company. Employee agrees that any such Invention is
         set forth on Exhibit "A" to this Agreement.

15.      Remedies. Employee agrees and acknowledges that the violation of any of
         --------
         the covenants or agreements contained in Sections 6, 7, and 10 of this
         Agreement would cause irreparable injury to the Company, that the
         remedy at law for any such violation or threatened violation thereof
         would be inadequate, and that the Company will be entitled, in addition
         to any other remedy, to temporary and permanent injunctive or other
         equitable relief without the necessity of proving actual damages or
         posting a bond.

16.      Severability.  In case one or more of the provisions contained in
         ------------
         this Agreement is for any reason held to be invalid, illegal or
         unenforceable in any respect, the parties agree that it is their intent
         that the same will not affect any other provision in this Agreement,
         and this Agreement will be construed as if such invalid or illegal or
         unenforceable provision had

                                       7

<PAGE>

         never been contained herein. It is the intent of the parties that this
         Agreement be enforced to the maximum extent permitted by law.

17.      Entire Agreement. This Agreement embodies the entire agreement of the
         ----------------
         parties relating to the subject matter of this Agreement and supersedes
         all prior agreements, oral or written, regarding the subject matter
         hereof. No amendment or modification of this Agreement will be valid or
         binding upon the parties unless made in writing and signed by the
         parties.

18.      Governing Law. This Agreement is entered into and will be interpreted
         -------------
         and enforced pursuant to the laws of the State of New Jersey. The
         parties hereto hereby agree that the appropriate forum and venue for
         any disputes between any of the parties hereto arising out of this
         Agreement shall be any federal court in the state where the Employee
         has his principal place of residence and each of the parties hereto
         hereby submits to the personal jurisdiction of any such court. The
         foregoing shall not limit the rights of any party to obtain execution
         of judgment in any other jurisdiction. The parties further agree, to
         the extent permitted by law, that a final and unappealable judgment
         against either of them in any action or proceeding contemplated above
         shall be conclusive and may be enforced in any other jurisdiction
         within or outside the United States by suit on the judgment, a
         certified exemplified copy of which shall be conclusive evidence of the
         fact and amount of such judgment.

19.      Surviving Terms.  Sections 4, 6, 7, 10, 11 and 14 of this Agreement
         ---------------
         shall survive termination of this Agreement.

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

COMPANY:                                             EMPLOYEE:

LEVEL 8 SYSTEMS, INC.

By:
    ---------------------------------     --------------------------------------
Name:                                     Anthony Pizi
     --------------------------------
Title:
      -------------------------------

                                       8

<PAGE>

                                    EXHIBIT A

                                   INVENTIONS
                                   ----------

         Employee represents that there are no Inventions.

                                                       ------------------------
                                                       Employee Initials

                                       9

<PAGE>

                                    EXHIBIT B

                         EXISTING RESTRICTIVE COVENANTS
                         ------------------------------

                                       10

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