LEVEL 8 SYSTEMS INC
SEPARATION AGREEMENT, DENNIS MCKINNIE
<DOCUMENT>
<TYPE>EX-10.28
<SEQUENCE>1
<FILENAME>r10q-ex1028.txt
<DESCRIPTION>SEPARATION AGREEMENT, DENNIS MCKINNIE
<TEXT>

                                                                   EXHIBIT 10.28


                    SEPARATION AGREEMENT AND GENERAL RELEASE


     This Separation Agreement and General Release ("this Agreement") is made by
and  between  Dennis  McKinnie  ("Employee")  and  Level  8  Systems, Inc. ("the
Company").

     The  Company  and  Employee  desire  to  effect  a  severance of Employee's
employment  with  the  Company  on  the  terms  and conditions set forth in this
Agreement.  The Company and Employee agree that it is in their best interests to
settle  any and all matters that might arise out of Employee's former employment
with  the Company.  Therefore, in consideration of the mutual promises contained
in  this  Agreement,  the  Company  and  Employee  agree  to  the  following:

     1.     SEVERANCE AND EFFECTIVE DATES. By executing this Agreement, Employee
            ------------------------------
acknowledges  that  Employee's  Last Day Worked for the Company will be July 31,
2001  and  Employee's  termination  date with the Company will be July 31, 2002,
("Termination  Date).  In  addition, Employee acknowledges Effective Date of the
Agreement  is  the eighth (8) day after Employee signs the Agreement ("Effective
Date").

     2.     SEVERANCE  ARRANGEMENT.  In  full  consideration  and  as  material
            -----------------------
inducement  for  Employee  to  execute  this Agreement, and in full and complete
settlement  of  any  and  all  claims (including any claim Employee may have for
attorneys'  fees,  expenses  and  costs),  the  Company  will:

a.     Continue  Employee's  regular salary of $4326.93 per week, less all legal
deductions,  for  the  equivalent of 52 weeks, on the first payday following the
end  of  the Consulting Period set forth above.  These monies shall be paid over
twenty six (26) weeks with the first payment equal to 27 weeks of salary and the
final  25  payments  equal  to  Employees  regular  weekly  salary.

b.     Continue Employee's medical, dental, vision, life insurance and long term
disability  benefits  at  employee  rates  and 401K participation, for 52 weeks,
beginning on the day following the Last Day Worked.  Employee contributions will
be  deducted  with  each  paycheck.

c.     Reimburse Employee in accordance with the Company's expense reimbursement
policies for all normal business expenses incurred by Employee prior to the last
day  of  the  Consulting  Period.

d.     Allow  Employee  to  retain  his  lap-top,  as  provided  by the Company.

e.     Provide Employee with a cell phone through termination date.  All expense
associated  with  the  use  of  this  phone  will  be  paid  by  the  Company.

f.     The  Company  will  pay  for executive coaching/placement services from a
firm  of  the  Employees  choosing  for  a  period of six (6) months, which must
conclude,  by  the  end  of  the  severance  period.

g.     Pay  Employee for 60 unused, accrued vacation days.  This payment will be
made  on  the  first  regular  payday  following the last day worked, along with
payment  for  any  wages  earned.

h.     Immediately  upon  execution  of  this  Agreement,  vest  all  Employees'
outstanding  but  currently  unvested  stock options held under the 1997 Level 8
Systems,  Inc.  Stock  Option  Plan.  Employee  shall have one (1) year from the
Effective  Date  of  this  Agreement  to  exercise  all  his  stock  options.

     3.     GENERAL  RELEASE.  As  a material inducement to the Company to enter
            -----------------
into  this  Agreement, Employee hereby irrevocably and unconditionally releases,
acquits  and  forever  discharges  the Company and each of the Company's owners,
stockholders,  predecessors,  successors,  assigns, agents, directors, officers,
employees,  representatives,  attorneys,  parent  companies,  divisions,
subsidiaries,  affiliates  (and  agents,  directors,  officers,  employees,
representatives  and attorneys of such parent companies, divisions, subsidiaries
and affiliates) and all persons acting by, through, under or in concert with any
of them (collectively "Releases"), from any and all charges, complaints, claims,
liabilities, obligations, promises, agreements, controversies, damages, actions,
causes  of action, suits, rights, demands, costs, losses, debts, and expenses of
any  nature  whatsoever,  known or unknown, suspected or unsuspected, including,
but  not limited to, rights arising out of alleged violations or breaches of any
contracts,  express  or  implied,  or any tort, or any legal restrictions on the
Company's  right  to  terminate  employees,  or  any  federal,  state  or  other
governmental  statute,  regulation  or ordinance, including, without limitation:
(1)  Title  VII  of the Civil Rights Act of 1964, as amended by the Civil Rights
Act  of  1991,  (race, color, religion, sex and national origin discrimination);
(2)  the  Americans  with  Disabilities  Act (disability discrimination); (3) 42
U.S.C.   1981 (discrimination); (4) the Age Discrimination in Employment Act (29
U.S.C.    621-  624); (5) 29 U.S.C.   206(d)(1) (equal pay); (6) Executive Order
11246  (race,  color,  religion,  sex  and  national origin discrimination); (7)
Executive  Order  11141  (age  discrimination);  (8)  Section  503  of  the
Rehabilitation  Act of 1973 (disability discrimination); (9) Employee Retirement
Income  Security  Act  (ERISA);  (10)  intentional  or  negligent  infliction of
emotional  distress  or  "outrage;"  (11)  defamation;  (12)  interference  with
employment  or contractual relations; (13) wrongful discharge; and (14) invasion
of  privacy,  ("Claim"  or  "Claims"),  which Employee now has, owns or holds or
claims  to have, own or hold or which Employee at any time heretofore had, owned
or held or claimed to have, owned or held against each or any of the Releases at
any time up to and including the Effective Date of this Agreement.  This release
does  not include those claims that cannot be waived under Federal or State law.

Company  hereby  irrevocably  and  unconditionally releases, acquits and forever
discharges  Employee  his  heirs,  representatives,  and  assigns  (collectively
"Employee Releases"), from any and all charges, complaints, claims, liabilities,
obligations,  promises,  agreements,  controversies, damages, actions, causes of
action, suits, rights, demands, costs, losses, debts, and expenses of any nature
whatsoever,  known  or  unknown,  suspected  or  unsuspected, including, but not
limited  to,  rights  arising  out  of  alleged  violations  or  breaches of any
contracts,  express  or  implied,  or  any  tort, or any federal, state or other
governmental  statute,  regulation  or  ordinance.

4.     INDEMNIFICATION.  As  a  further  material  inducement  to the Company to
       ----------------
enter into this Agreement, Employee hereby agrees to indemnify and hold each and
all  of  the Releases harmless from and against any and all loss, costs, damages
or  expenses including, without limitation, attorneys' fees incurred by Releases
arising  out  of  any  breach of this Agreement by Employee or the fact that any
representation  made  herein  by  Employee  was  false  when  made.

     Company  hereby  agrees  to indemnify and hold each and all of the Employee
Releases  harmless from and against any and all loss, costs, damages or expenses
including,  without  limitation,  attorneys'  fees incurred by Employee Releases
arising  out  of  any  breach  of  this  Agreement  by  Company.

     5.     LITIGATION.  Employee  represents  that  neither  Employee  nor  any
            -----------
person  or organization on Employee's behalf has filed or assigned to others the
right  to  file any complaints, charges or lawsuits against the Company with any
federal,  state  or  local  governmental  agency  or  court.

     6.     CONFIDENTIALITY AND PROFESSIONALISM.  Employee represents and agrees
            ------------------------------------
that  Employee  will  keep  the terms, amount, value and nature of consideration
paid  to  Employee  completely confidential and that Employee will not hereafter
disclose  any  information  concerning  this  Agreement  to  anyone  other  than
Employee's  immediate  family  and  professional  representatives,  who  will be
informed  of  and  bound  by  this  confidentiality  clause.  The  obligation of
confidentiality and professionalism includes, without limitation, any discussion
by  Employee about the Company or any of the Company's employees, which shall be
limited  to  respectful, non-derogatory and non-damaging references by Employee.
Further  Company  agrees that it will not make any statement concerning Employee
or  his performance with the Company other than as set forth in Section 12 below
without  Employee's  express  written  permission.

     7.     AGREEMENT NOT TO DISCLOSE TRADE SECRET AND CONFIDENTIAL INFORMATION.
            --------------------------------------------------------------------
Employee  shall  not,  at  any  time,  directly  or  indirectly,  use,  publish,
disseminate  or  otherwise  disclose  any  Confidential Information to any third
party  without  the Company's prior written consent.  "Confidential Information"
shall  mean  that  secret  or  proprietary  information  of  any  kind or nature
disclosed  to  Employee  or becoming known to Employee (whether or not invented,
discovered or developed by Employee) at any time during Employee's employment by
or  acting  as  a  consultant  to  the  Company.  Such  secret  or  proprietary
information  shall  include  (unless  such information is generally known in the
industry  through  no  action  of  Employee) information relating to the design,
manufacture,  application,  know-how,  research and development of the Company's
present,  past  or  prospective  products,  sources  of  supplies and materials,
operating  and  other cost data, lists of present customers, customer proposals,
price  lists and data relating to pricing of the Company's products or services.
Such  secret  or  proprietary  information  shall  specifically include, without
limitation,  all  information  contained  in  the  Company's manuals, memoranda,
formulae,  plans,  drawings  and design specifications, supply sources, computer
programs  and records identified by the Company as confidential information.  In
addition,  to  constitute  Confidential  Information,  the information must have
value  because  it  is  not generally known to the public, and Level 8 must have
taken  reasonable  means  to  protect  the  information.

     8.     PROPRIETARY RIGHTS OF THE COMPANY.  Employee acknowledges and agrees
            ---------------------------------
that  all Inventions (or any modifications thereof) shall be the property of the
Company  free  of  any  reserved or other rights of any kind on Employee's part.
Employee  shall,  at the Company's expense, promptly execute formal applications
for  patents  and  also  do  all other acts and things (including, among others,
executing  and  delivering  instruments  of  further assignments, registrations,
assurance  or  confirmation) deemed by the Company necessary or desirable at any
time  or  times  in  order  to  effect  the  full  assignment  to the Company of
Employee's  rights,  title and interest to such inventions and/or modifications,
without  payment therefore and without further compensation beyond that provided
for in this Agreement.  The absence of a request by the Company for information,
or  for  the making of an oath or for the execution of any document, shall in no
way  be  construed  to  constitute  a  waiver of the rights of the Company.  For
purposes  of  the  Agreement,  "inventions"  shall  mean  those  discoveries,
developments and works of authorship, whether or not patentable, relating to the
Company's  present, past or prospective activities, services and products, which
activities,  services,  and products became known to Employee at any time during
Employee's employment, including any patents, models, trade secrets, trademarks,
service  marks,  copyrightable  subject  matter  and  any  copyrights  therein,
proprietary  information,  any design of a useful article (whether the design is
ornamental or otherwise), computer programs and related documentation, and other
writings,  code,  algorithms  and  information  and  related  documentation  and
materials  which  the  Employee has made, written or conceived during Employee's
employment  by  the Company, either solely or jointly with others, and either on
or  off  the  Company's premises (i) while providing services to the Company, or
(ii)  with  the  use  of  time,  materials  or  facilities of the Company, (iii)
relating  to  any  Company  product,  service  or activity of which Employee has
knowledge,  or  (iv) suggested by or resulting from any work performed by or for
the Company.  Such term shall not be limited to the meaning of "invention" under
the  United  States  patent  laws.

     9.     NON-SOLICITATION.  Employee  shall  not,  directly or indirectly, on
            ----------------
Employee's  behalf or on behalf of others (except on behalf of or with the prior
consent  of  the Company) for a period of six (6) months following the execution
of  this  Agreement:

a.     solicit  or request any other employee of or consultant to the Company to
leave  the  employment  of  or  cease  consulting for the Company or to join the
employment  of  or  begin  consulting  for  any  Competing  Business;  or

b.     hire  any  employee  of  the  Company;  or

c.     solicit  or  request  any  Competing  Business  to employ or retain as an
employee  or  consultant  any  employee  or  consultant  of  the  Company;  or

d.     provide  individual  names  or  lists  of  names  of Company employees to
recruiters.

     For  purposes  of  this  Section 9, "Competing Business" means any business
organization  of  whatever  form  directly engaged in any business or enterprise
which  is  the  same  as or substantially the same as the business of designing,
developing,  manufacturing,  marketing, selling and supporting software products
and  providing  related services that enable customers of the Company to create,
distribute  and  manage  large-scale  mission-critical  information  processing
applications.

     Employee  stipulates and agrees that the restrictive covenants contained in
this  section  are  reasonable  in  time, scope and territory covered and do not
impose  a  greater  restraint  than necessary for the protection of the business
interests  of  the  Company.

     10.     TRANSITION  SERVICES.  Employee  acknowledges that he may have been
             --------------------
working  on matters that will need to be transitioned to another employee of the
Company.  Employee  further  acknowledges  that  these matters and their orderly
transition  are  important  to  the  Company's  continuing  business  interests.
Employee  agrees  to  be  available for reasonable consultation with the Company
concerning  the  transition of those matters for a reasonable period of time and
that Employee will assist the Company in the orderly transition of those matters
to  another  employee of the Company.  Employee covenants to use best efforts to
carry  out  responsibilities  under  this  Agreement, including these transition
services.

     11.     RETURN OF COMPANY MATERIALS AND PROPERTY.  Employee understands and
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agrees  that Employee will turn over to the Company on or before the Termination
Date  all  files,  memoranda,  records, credit cards and other documents and all
physical  or  personal  property which Employee received from the Company and/or
which  Employee used in the course of Employee's employment with the Company and
which  are  the  property  of the Company.  Employee represents and acknowledges
that  as a result of Employee's employment with the Company, Employee has had in
Employee's  custody,  possession  and  control  proprietary  documents,  data,
materials,  files and other similar items concerning confidential information of
the Company.  Employee represents and agrees that Employee has returned all such
items  and  any  copies  or  extras  thereof  and  any  other property, files or
documents  obtained  as  a  result  of  Employee's  employment with the Company.
Employee further represents that Employee has held such information in trust and
in  strict  confidence  and  will  continue  to  do.  Notwithstanding the above,
Employee  shall be allowed to retain his laptop.  Employee shall also retain his
cellular phone, and Company agrees to pay all changes associated with Employee's
cellular  phone  until  July  2002.

     12.     REFERENCES.  The  Company agrees to provide Employee with a neutral
             -----------
reference giving only dates of employment and job title should Employee seek new
employment.  Reciprocally,  Employee  agrees  that  Employee  will  communicate
nothing  negative  or  adverse  about  the  Company.

     13.     ACKNOWLEDGMENT.  Employee represents that Employee has read all the
             ---------------
terms  of  this  Agreement  and  has  had  an  opportunity  to  discuss  it with
individuals  of  Employee's  own choice who are not associated with the Company.
Employee  understands  that  this  Agreement  releases  forever the Company, its
parent,  subsidiaries  and  affiliated corporations and each of their respective
stockholders,  officers,  directors,  employees,  agents,  heirs,  legal
representatives,  predecessors,  successors,  assigns  and  transferees from any
legal  action  arising  from  Employee's  employment  relationship  with and the
termination  of  Employee's  employment  relationship  by the Company.  Employee
signs  this  Agreement  of  Employee's  own  free  will  in  exchange  for  the
consideration  to  be given to Employee pursuant to Section 2 of this Agreement,
which  Employee acknowledges is adequate and satisfactory.  Employee agrees that
neither  the  Company nor its agents, representatives or employees have made any
representations  to  Employee  concerning the terms or effects of this Agreement
other  than  those  contained  in  this  Agreement.

     14.     SEVERABILITY.  The provisions of this Agreement can be severed, and
             -------------
if  any  part  of  this Agreement is found to be unenforceable, the remainder of
this Agreement will continue to be valid and effective, and this Agreement shall
be  construed  as  if  such  unenforceable provision(s) had never been contained
herein.  It  is the intent of the parties that this Agreement be enforced to the
maximum  extent  permitted  by  law.

     15.     ENTIRE  AGREEMENT.  This Agreement embodies the entire agreement of
             ------------------
the  parties hereto relating to the subject matter hereof and supersedes any and
all  prior  agreements.  No amendment or modification of this Agreement shall be
valid  or  binding  upon  the  parties  unless made in writing and signed by the
parties  hereto.

     16.     BINDING  EFFECT.  As used in this Agreement, all references to "the
             ----------------
Company"  will  also  be construed to refer to the Company's parent corporation,
subsidiaries,  affiliates and controlling parties.  This Agreement will inure to
the  benefit  of  and  be  binding  upon the parties hereto and their respective
heirs,  representatives,  successors,  transferees  and  assigns.

<PAGE>

     17.     NON-ADMISSION  OF  LIABILITY.  This  Agreement  shall  in no way be
             -----------------------------
construed  as  an  admission  by  the  Company that it has acted wrongfully with
respect  to  Employee  or  any  other  person  or  that  Employee has any rights
whatsoever  against  the  Company.



Dennis  McKinnie:


_______________________________                    ________________________
Signature                                        Date



Level  8  Systems

By:  ____________________________                    ________________________
                                             Date
Title:  ___________________________


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