EXHIBIT 4.1
                                                                     -----------


THIS WARRANT AND THE SHARES ISSUABLE  HEREUNDER HAVE NOT BEEN  REGISTERED  UNDER
THE  SECURITIES  ACT OF  1933,  AS  AMENDED,  AND MAY NOT BE SOLD,  PLEDGED,  OR
OTHERWISE  TRANSFERRED WITHOUT AN EFFECTIVE  REGISTRATION THEREOF UNDER SUCH ACT
OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY  SATISFACTORY TO THE
CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.


                            WARRANT TO PURCHASE STOCK

Issuer:           Datawatch Corporation, a Delaware corporation
Number of Shares:          70,000, subject to adjustment
Class of Stock:   Common Stock
Exercise Price:   $ 0.50 per share, subject to adjustment
Issue Date:                January 17, 2001
Expiration Date:           January 17, 2011

         THIS WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for
other good and valuable consideration,  this Warrant is issued to SILICON VALLEY
BANK  ("Holder")  by  DATAWATCH   CORPORATION,   a  Delaware   corporation  (the
"Company").

         Subject to the terms and conditions  hereinafter set forth,  the Holder
is entitled upon  surrender of this Warrant and the duly  executed  subscription
form  annexed  hereto as  Appendix  1, at the office of the  Company,  175 Cabot
Street, Suite 503, Lowell, Massachusetts 01851-3633, or such other office as the
Company  shall  notify the Holder of in writing,  to  purchase  from the Company
Seventy Thousand (70,000) fully paid and non-assessable shares (the "Shares") of
the  Company's  Common  Stock,  $.01 par  value per share  (the  "Class"),  at a
purchase  price per Share of Fifty Cents ($0.50) (the "Exercise  Price").  Until
such time as this Warrant is exercised  in full or expires,  the Exercise  Price
and the  number  of  Shares  are  subject  to  adjustment  from  time to time as
hereinafter  provided.  This Warrant may be exercised in whole or in part at any
time and from time to time until 5:00 PM,  Eastern  time  January  17, 2011 (the
"Expiration Date").

ARTICLE 1. EXERCISE.
           --------

                 1.1 Method of  Exercise.  Holder may  exercise  this Warrant by
delivering a duly executed Notice of Exercise in substantially the form attached
as  Appendix  1 to  the  principal  office  of the  Company.  Unless  Holder  is
exercising  the  conversion  right set forth in Section  1.2,  Holder shall also
deliver to the Company a check for the aggregate  Exercise  Price for the Shares
being purchased.

                 1.2  Conversion  Right.  In lieu of exercising  this Warrant as
specified in Section 1.1, Holder may from time to time convert this Warrant,  in
whole or in  part,  into a number  of  Shares  determined  by  dividing  (a) the
aggregate fair market value of the Shares or other securities otherwise issuable
upon exercise of this Warrant minus the aggregate  Exercise Price of such Shares
by (b) the fair market  value of one Share.  The fair market value of the Shares
shall be determined pursuant to Section 1.4.

                 1.3       Intentionally Omitted.

                 1.4       Fair Market Value.


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                  1.4.1 If shares of the Class (or shares of the Company's stock
into which shares of the Class are convertible or exchangeable)  are traded on a
nationally  recognized  securities exchange or over the counter market, the fair
market  value of a Share shall be the closing  price of a share of the Class (or
the  closing  price of a share of the  Company's  stock for which  shares of the
Class are convertible or exchangeable) reported for the business day immediately
before Holder delivers its Notice of Exercise to the Company.

                  1.4.2 If shares of the Class (or shares of the Company's stock
into which shares of the Class are convertible or  exchangeable)  are not traded
on a nationally  recognized  securities exchange or over the counter market, the
Board of  Directors  of the Company  shall  determine  fair market  value in its
reasonable good faith judgment. The foregoing notwithstanding, if Holder advises
the Board of Directors in writing that Holder disagrees with such determination,
then the Company and Holder  shall  promptly  agree upon a reputable  investment
banking firm to undertake such  valuation.  If the valuation of such  investment
banking firm is greater than that determined by the Board of Directors, then all
fees and expenses of such investment  banking firm shall be paid by the Company.
In all other circumstances,  such fees and expenses shall be paid by Holder. The
valuation  determined by such investment banking firm shall be conclusive in any
event.

                  1.5 Delivery of  Certificate  and New Warrant.  Promptly after
Holder  exercises or converts this Warrant,  the Company shall deliver to Holder
certificates  for the Shares  acquired  and, if this  Warrant has not been fully
exercised  or  converted  and has not expired,  a new Warrant  representing  the
Shares not so acquired.

                  1.6 Replacement of Warrants. On receipt of evidence reasonably
satisfactory  to the Company of the loss,  theft,  destruction  or mutilation of
this Warrant and, in the case of loss,  theft or destruction,  on delivery of an
indemnity  agreement  reasonably  satisfactory in form and amount to the Company
or, in the case of mutilation,  on surrender and  cancellation  of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor.

                  1.7 Assumption Upon Sale, Merger, or Consolidation of the
                      Company.

                  1.7.1.  "Acquisition".   For  the  purpose  of  this  Warrant,
"Acquisition" means any sale, transfer,  exclusive license, or other disposition
of all or  substantially  all of the assets of the Company,  or any acquisition,
reorganization, consolidation, or merger of the Company where the holders of the
Company's  outstanding  voting  equity  securities   immediately  prior  to  the
transaction  beneficially  own less than 50.1% of the outstanding  voting equity
securities  of the  surviving  or successor  entity  immediately  following  the
transaction.

                  1.7.2.   Assumption  of  Warrant.  Upon  the  closing  of  any
Acquisition  the successor or surviving  entity shall assume the  obligations of
this Warrant,  and this Warrant shall be exercisable for the same securities and
property  as would be  payable  for the Shares  issuable  upon  exercise  of the
unexercised  portion of this Warrant as if such Shares were  outstanding  on the
record date for the Acquisition and subsequent closing. The Exercise Price shall
be adjusted  accordingly,  and the Exercise Price and number and class of Shares
shall continue to be subject to adjustment  from time to time in accordance with
the provisions hereof.


ARTICLE 2. ADJUSTMENTS TO THE SHARES.
           -------------------------

                  2.1 Stock Dividends,  Splits,  Etc. If the Company declares or
pays a dividend on the outstanding shares of the Class,  payable in Common Stock
or other securities, or subdivides the outstanding

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Common Stock into a greater amount of Common Stock of the outstanding  shares of
the Class into a greater number of shares of the Class, or subdivides the shares
of the Class in a  transaction  that  increases  the amount of Common Stock into
which such shares are convertible,  then upon exercise of this Warrant, for each
Share acquired,  Holder shall receive,  without cost to Holder, the total number
and kind of securities to which Holder would have been entitled had Holder owned
the Shares of record as of the date the dividend or subdivision occurred.

                  2.2  Reclassification,  Exchange  or  Substitution.  Upon  any
reclassification,  exchange,  substitution,  reorganization  or other event that
results in a change of the number and/or class of the  securities  issuable upon
exercise or  conversion  of this  Warrant,  Holder shall be entitled to receive,
upon exercise or  conversion of this Warrant,  the number and kind of securities
and property  that Holder would have received for the Shares if this Warrant had
been exercised immediately before such reclassification, exchange, substitution,
reorganization or other event. The Company or its successor shall promptly issue
to Holder a new  Warrant  for such new  securities  or other  property.  The new
Warrant shall provide for adjustments which shall be as nearly equivalent as may
be  practicable  to the  adjustments  provided  for in this Article 2 including,
without  limitation,  adjustments  to the  Exercise  Price and to the  number of
securities or property issuable upon exercise of the new Warrant. The provisions
of this  Section  2.2 shall  similarly  apply to  successive  reclassifications,
exchanges, substitutions, reorganizations or other events.

                  2.3  Adjustments  for  Combinations,  Etc. If the  outstanding
shares  of the  Class are  combined  or  consolidated,  by  reclassification  or
otherwise,  into a  lesser  number  of  shares,  the  Exercise  Price  shall  be
proportionately  increased  and the number of Shares  for which this  Warrant is
exercisable shall be proportionately decreased.

                  2.4 No Impairment.  The Company shall not, by amendment of the
Certificate  or its  by-laws or through a  reorganization,  transfer  of assets,
consolidation,  merger,  dissolution,  issue, or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed  under this  Warrant by the  Company,  but
shall at all times in good faith assist in carrying out all of the provisions of
this Article 2 and in taking all such action as may be necessary or  appropriate
to protect Holder's rights under this Article against impairment.

                  2.5 Fractional  Shares. No fractional Shares shall be issuable
upon exercise or conversion of the Warrant and the number of Shares to be issued
shall be rounded up to the nearest whole Share.

                  2.6 Certificate as to Adjustments. Upon each adjustment of the
Exercise Price, number of class of Shares or number of shares of Common Stock or
other  securities  for which the Shares are  convertible  or  exchangeable,  the
Company at its expense  shall  promptly  compute  such  adjustment,  and furnish
Holder with a  certificate  of its Chief  Financial  Officer  setting forth such
adjustment and the facts upon which such adjustment is based. The Company shall,
upon written  request,  furnish Holder a certificate  setting forth the Exercise
Price,  number and class of Shares and conversion  ratio in effect upon the date
thereof and the series of adjustments leading to such Exercise Price, number and
class of Shares and conversion ratio.

ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
           --------------------------------------------

                  3.1  Representations   and  Warranties.   The  Company  hereby
represents  and  warrants to the Holder as follows:

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<PAGE>

(a) All Shares  which may be issued upon the due exercise of this  Warrant,  and
all Common Stock or other  securities,  if any,  issuable upon due conversion of
the Shares, shall, upon issuance, be duly authorized, validly issued, fully paid
and  non-assessable,   and  free  of  any  liens  and  encumbrances  except  for
restrictions  on transfer  provided for herein or under  applicable  federal and
state securities laws.

                           (b) The execution and delivery by the Company of this
Warrant  and  the  performance  of all  obligations  of the  Company  hereunder,
including  the issuance to Holder of the right to acquire the Shares,  have been
duly  authorized by all necessary  corporate  action on the part of the Company,
and this Warrant Agreement is not inconsistent  with the Certificate  and/or the
Company's by-laws,  does not contravene any law or governmental rule, regulation
or order applicable to it, does not and will not contravene any provision of, or
constitute a default under, any material indenture,  mortgage, contract or other
instrument  to which it is a party or by which it is bound,  and  constitutes  a
legal,  valid and binding  agreement of the Company,  enforceable  in accordance
with its terms.

                           (c)  The  authorized  capital  stock  of the  Company
consists of 21,000,000 shares,  consisting of 20,000,000 shares of Common Stock,
$.01 par value per share and 1,000,000  shares of Preferred Stock, .01 par value
per share.

                           (d) The Company  covenants that it shall at all times
cause to be reserved  and kept  available  out of its  authorized  and  unissued
shares such number of shares of its Common Stock and other securities as will be
sufficient to permit the exercise in full of this Warrant.


                  3.2 Notice of Certain Events.  If the Company  proposes at any
time (a) to declare any dividend or distribution  upon any of its capital stock,
whether in cash,  property,  stock,  or other  securities  and  whether or not a
regular cash dividend;  (b) to offer for subscription pro rata to the holders of
any class or series of its stock any additional  shares of stock of any class or
series or other rights; (c) to effect any  reclassification  or recapitalization
of any of its securities;  or (d) to merge or consolidate with or into any other
corporation,  or sell, lease, license, or convey all or substantially all of its
assets, or to liquidate, dissolve or wind up, then, in connection with each such
event,  the Company shall give Holder (1) at least 20 days prior written  notice
of the date on which a record will be taken for such dividend,  distribution, or
subscription  rights (and specifying the date on which the holders of securities
of the Company  shall be  entitled to receive  such  dividend,  distribution  or
rights) or for  determining  rights to vote,  if any,  in respect of the matters
referred to in (c) and (d) above; and (2) in the case of the matters referred to
in (c) and (d) above at least 20 days prior written  notice of the date when the
same will take place (and specifying the date on which the holders of securities
of the Company will be entitled to exchange their  securities of the Company for
securities or other property deliverable upon the occurrence of such event).

                  3.3  Information  Rights.  So long as the  Holder  holds  this
Warrant  and/or any of the Shares,  the Company  shall deliver to the Holder (a)
promptly after mailing, copies of all notices or other written communications to
the  shareholders  of the Company,  and (b) within  one-hundred and twenty (120)
days  after the end of each  fiscal  year of the  Company,  the  annual  audited
financial  statements of the Company certified by independent public accountants
of recognized standing.

                                       4
<PAGE>

ARTICLE 4. MISCELLANEOUS.
           -------------

                  4.1 Automatic  Conversion upon Expiration.  In the event that,
upon the Expiration  Date, the fair market value of one Share (or other security
issuable upon the exercise  hereof) as determined in accordance with Section 1.4
above is  greater  than the  Exercise  Price in effect on such  date,  then this
Warrant  shall  automatically  be deemed on and as of such date to be  converted
pursuant  to Section 1.2 above as to all Shares (or such other  securities)  for
which it shall not previously have been exercised or converted,  and the Company
shall  promptly  deliver a  certificate  representing  the Shares (or such other
securities) issued upon such conversion to the Holder.

                  4.2 Legends.  This Warrant and the Shares (and the  securities
issuable,  directly or indirectly,  upon conversion of the Shares, if any) shall
be imprinted with a legend in substantially the following form:

         THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
         AS  AMENDED,  AND MAY NOT BE SOLD,  PLEDGED  OR  OTHERWISE  TRANSFERRED
         WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO
         RULE  144 OR AN  OPINION  OF  COUNSEL  REASONABLY  SATISFACTORY  TO THE
         CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.

                  4.3 Compliance with Securities Laws on Transfer.  This Warrant
and the Shares  (and the  securities  issuable,  directly  or  indirectly,  upon
conversion of the Shares, if any) may not be transferred or assigned in whole or
in part without  compliance with applicable federal and state securities laws by
the transferor and the transferee (including,  without limitation,  the delivery
of investment  representation letters and legal opinions reasonably satisfactory
to the Company, as reasonably  requested by the Company).  The Company shall not
require  Holder to  provide an  opinion  of  counsel  if the  transfer  is to an
affiliate  of  Holder  or  if  (a)  there  is no  material  question  as to  the
availability  of current  information  as referenced in Rule 144(c),  (b) Holder
represents  that it has complied with Rule 144(d) and (e) in reasonable  detail,
(c) the selling broker represents that it has complied with Rule 144(f), and (d)
the Company is provided with a copy of Holder's notice of proposed sale.

                  4.4 Transfer  Procedure.  Subject to the provisions of Section
4.2,  Holder may transfer all or part of this Warrant and/or the Shares issuable
upon  exercise  of  this  Warrant  (or  the  securities  issuable,  directly  or
indirectly, upon conversion of the Shares, if any) at any time to Silicon Valley
Bancshares or The Silicon Valley Bank Foundation, or, to any other transferee by
giving the  Company  notice of the  portion  of the  Warrant  being  transferred
setting  forth the  name,  address  and  taxpayer  identification  number of the
transferee  and  surrendering  this Warrant to the Company for reissuance to the
transferee(s) (and Holder if applicable).

                  4.5  Notices.  All notices and other  communications  from the
Company to the Holder,  or vice versa,  shall be deemed  delivered and effective
when given  personally or sent by  electronic  facsimile  transmission,  express
overnight  courier  service,  or mailed by  first-class  registered or certified
mail, postage prepaid, at such address as may have been furnished to the Company
or the Holder, as the case may be, in writing by the Company or such holder from
time to time,  but in all cases,  unless  instructed in writing  otherwise,  the
Company  shall  deliver a copy of all notices to Holder to Silicon  Valley Bank,
Treasury Department, 3003 Tasman Drive, HA-200, Santa Clara, California 95054.

                                       5
<PAGE>

                  4.6 Waiver.  This  Warrant and any term hereof may be changed,
waived,  discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought.

                  4.7 Attorneys  Fees.  In the event of any dispute  between the
parties  concerning  the  terms  and  provisions  of  this  Warrant,  the  party
prevailing in such dispute shall be entitled to collect from the other party all
costs incurred in such dispute, including reasonable attorneys' fees.

                  4.8  Governing  Law.  This  Warrant  shall be  governed by and
construed in  accordance  with the laws of the  Commonwealth  of  Massachusetts,
without giving effect to its principles regarding conflicts of law.

                                    "COMPANY"

ATTEST:                             DATAWATCH CORPORATION


By:                                     By:   /s/  Bruce R. Gardner
   --------------------------------        -----------------------------
Name:                                   Name:   Bruce R. Gardner
     ------------------------------          ---------------------------
Title:                                  Title:   President
      -----------------------------           --------------------------




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                                   APPENDIX 1
                                   ----------

                               NOTICE OF EXERCISE
                               ------------------

         1. The undersigned hereby elects to purchase shares of the ____________
stock of __________________ pursuant to Section 1.1 of the attached Warrant, and
tenders herewith payment of the Exercise Price of such shares in full.

         1. The undersigned  hereby elects to convert the attached  Warrant into
Shares in the manner  specified  in Section 1.2 of the  attached  Warrant.  This
conversion  is  exercised  with  respect  to   ____________  of  shares  of  the
________________________ Stock of ___________________.

         [Strike paragraph that does not apply.]

         2. Please issue a certificate or certificates  representing said shares
in the name of the undersigned or in such other name as is specified below:


                           -------------------------------------------
                                    (Name)


                           -------------------------------------------

                           -------------------------------------------
                                    (Address)

         3. The undersigned represents it is acquiring the shares solely for its
own  account and not as a nominee for any other party and not with a view toward
the  resale  or  distribution  thereof  except  in  compliance  with  applicable
securities laws.

                                            ------------------------------------
                                                     (Signature)

--------------------
      (Date)