Document:

EXHIBIT 10.27
                                                                   -------------

                    INTELLECTUAL PROPERTY SECURITY AGREEMENT

         This Intellectual Property Security Agreement (this "IP Agreement") is
made as of the 30th day of October, 2001 by and between DATAWATCH CORPORATION, a
Delaware corporation with its principal place of business at 175 Cabot Street,
Suite 503, Lowell, Massachusetts 01854-3633 ("Grantor"), and SILICON VALLEY
BANK, a California-chartered bank, with its principal place of business at 3003
Tasman Drive, Santa Clara, California 95054 and with a loan production office
located at One Newton Executive Park, Suite 200, 2221 Washington Street, Newton,
Massachusetts 02462, doing business under the name "Silicon Valley East"
("Lender").

                                    RECITALS

         A. Lender has agreed to make advances of money and to extend certain
financial accommodations to Grantor (the "Loan"), pursuant to a certain Loan and
Security Agreement of even date herewith between Grantor and Lender, as amended
from time to time (as amended, the "Loan Agreement"). The Loan is secured
pursuant to the terms of the Loan Agreement. Lender is willing to enter into
certain financial accommodations with Grantor, but only upon the condition,
among others, that Grantor shall grant to Lender a security interest in certain
Copyrights, Trademarks, Patents, and Mask Works, and other assets, to secure the
obligations of Grantor under the Loan Agreement. Defined terms used but not
defined herein shall have the same meanings as in the Loan Agreement.

         B. Pursuant to the terms of the Loan Agreement, Grantor has granted to
Lender a security interest in all of Grantor's right title and interest, whether
presently existing or hereafter acquired in, to and under all of the Collateral
(as defined therein).

         NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged and intending to be legally bound, as collateral security
for the prompt and complete payment when due of Grantor's Indebtedness (as
defined below), Grantor hereby represents, warrants, covenants and agrees as
follows:

         1.   Grant of Security Interest. As collateral security for the prompt
and complete payment and performance of all of Grantor's present or future
indebtedness, obligations and liabilities to Lender (hereinafter, the
"Indebtedness"), including, without limitation, under the Loan Agreement,
Grantor hereby grants a security interest in all of Grantor's right, title and
interest in, to and under its registered and unregistered intellectual property
collateral (all of which shall collectively be called the "Intellectual Property
Collateral"), including, without limitation, the following:

              (a)   Any and all copyright rights, copyright applications,
         copyright registrations and like protections in each work or authorship
         and derivative work thereof, whether published or unpublished and
         whether or not the same also constitutes a trade secret, now or
         hereafter existing, created, acquired or held, including without
         limitation those set forth on EXHIBIT A attached hereto (collectively,
         the "Copyrights");

              (b)   Any and all trade secrets, and any and all intellectual
         property rights in computer software and computer software products now
         or hereafter existing, created, acquired or held;

              (c)   Any and all design rights which may be available to Grantor
         now or hereafter existing, created, acquired or held;

              (d)   All patents, patent applications and like protections
         including, without limitation, improvements, divisions, continuations,
         renewals, reissues, extensions and continuations-in-part of the same,
         including without limitation the patents and patent applications set
         forth on EXHIBIT B attached hereto (collectively, the "Patents");
<PAGE>

              (e)   Any trademark and service mark rights, slogans, trade dress,
         and tradenames, whether registered or not, applications to register and
         registrations of the same and like protections, and the entire goodwill
         of the business of Grantor connected with and symbolized by such
         trademarks, including without limitation those set forth on EXHIBIT C
         attached hereto (collectively, the "Trademarks");

              (f)   All mask works or similar rights available for the
         protection of semiconductor chips, now owned or hereafter acquired,
         including, without limitation those set forth on EXHIBIT D attached
         hereto (collectively, the "Mask Works");

              (g)   Any and all claims for damages by way of past, present and
         future infringements of any of the rights included above, with the
         right, but not the obligation, to sue for and collect such damages for
         said use or infringement of the intellectual property rights identified
         above;

              (h)   All licenses or other rights to use any of the Copyrights,
         Patents, Trademarks, or Mask Works and all license fees and royalties
         arising from such use to the extent permitted by such license or
         rights;

              (i)   All amendments, extensions, renewals and extensions of any
         of the Copyrights, Trademarks, Patents, or Mask Works; and

              (j)   All proceeds and products of the foregoing, including
         without limitation all payments under insurance or any indemnity or
         warranty payable in respect of any of the foregoing.

         2.   Authorization and Request. Grantor authorizes and requests that
the Register of Copyrights and the Commissioner of Patents and Trademarks record
this IP Agreement.

         3.   Covenants and Warranties. Grantor represents, warrants, covenants
and agrees as follows:

              (a)   Grantor is now the sole owner of the Intellectual Property
         Collateral, except for non-exclusive licenses granted by Grantor to its
         customers in the ordinary course of business or exclusive licenses
         granted to distributors in the ordinary course of business to market
         certain Intellectual Property Collateral.

              (b)   Performance of this IP Agreement does not conflict with or
         result in a breach of any material agreement to which Grantor is bound.

              (c)   During the term of this IP Agreement, Grantor will not
         transfer or otherwise encumber any interest in the Intellectual
         Property Collateral, except for non-exclusive licenses granted by
         Grantor in the ordinary course of business, exclusive licenses granted
         to distributors in the ordinary course of business to market certain
         Intellectual Property Collateral, or as set forth in this IP Agreement;

              (d)   To its knowledge, each of the Patents is valid and
         enforceable, and no part of the Intellectual Property Collateral has
         been judged invalid or unenforceable, in whole or in part, and no claim
         has been made that any part of the Intellectual Property Collateral
         violates the rights of any third party;

              (e)   Grantor shall promptly advise Lender of any material adverse
         change in the composition of the Collateral, including but not limited
         to any subsequent ownership right of the Grantor in or to any
         Trademark, Patent, Copyright, or Mask Work specified in this IP
         Agreement;

              (f)   Grantor shall (i) protect, defend and maintain the validity
         and enforceability of the Trademarks, Patents, Copyrights, and Mask
         Works, (ii) use its best efforts to detect infringements of the
         Trademarks, Patents, Copyrights, and Mask Works and promptly advise
         Lender in writing of material infringements detected and (iii) not
         allow any Trademarks, Patents, Copyrights, or Mask Works to be

                                       -2-
<PAGE>
         abandoned, forfeited or dedicated to the public without the written
         consent of Lender, which shall not be unreasonably withheld, unless
         Grantor determines that reasonable business practices suggest that
         abandonment is appropriate.

              (g)   Grantor shall, in its reasonable business discretion,
         register the most recent version of any of Grantor's Copyrights, if not
         so already registered, and shall, from time to time, execute and file
         such other instruments, and take such further actions as Lender may
         reasonably request from time to time to perfect or continue the
         perfection of Lender's interest in the Intellectual Property
         Collateral;

              (h)   This IP Agreement creates, and in the case of after acquired
         Intellectual Property Collateral, this IP Agreement will create at the
         time Grantor first has rights in such after acquired Intellectual
         Property Collateral, in favor of Lender a valid and perfected first
         priority security interest and collateral assignment in the
         Intellectual Property Collateral in the United States securing the
         payment and performance of the obligations evidenced by the Loan
         Agreement upon making the filings referred to in clause (i) below;

              (i)   To its knowledge, except for, and upon, the filing of UCC
         financing statements in the appropriate filing office and with the
         United States Patent and Trademark office with respect to the Patents
         and Trademarks and the Register of Copyrights with respect to the
         Copyrights and Mask Works necessary to perfect the security interests
         created hereunder and except as has been already made or obtained, no
         authorization, approval or other action by, and no notice to or filing
         with, any U.S. governmental authority or U.S. regulatory body is
         required either (i) for the grant by Grantor of the security interest
         granted hereby, or for the execution, delivery or performance of this
         IP Agreement by Grantor in the U.S. or (ii) for the perfection in the
         United States or the exercise by Lender of its rights and remedies
         thereunder;

              (j)   All information heretofore, herein or hereafter supplied to
         Lender by or on behalf of Grantor with respect to the Intellectual
         Property Collateral is accurate and complete in all material respects.

              (k)   Grantor shall not enter into any agreement that would
         materially impair or conflict with Grantor's obligations hereunder
         without Lender's prior written consent, which consent shall not be
         unreasonably withheld. Grantor shall not permit the inclusion in any
         material contract to which it becomes a party of any provisions that
         could or might in any way prevent the creation of a security interest
         in Grantor's rights and interest in any property included within the
         definition of the Intellectual property Collateral acquired under such
         contracts.

              (l)   Upon any executive officer of Grantor obtaining actual
         knowledge thereof, Grantor will promptly notify Lender in writing of
         any event that materially adversely affects the value of any material
         Intellectual Property Collateral, the ability of Grantor to dispose of
         any material Intellectual Property Collateral of the rights and
         remedies of Lender in relation thereto, including the levy of any legal
         process against any of the Intellectual Property Collateral.

         4.   Lender's Rights. Lender shall have the right, but not the
obligation, to take, at Grantor's sole expense, any actions that Grantor is
required under this IP Agreement to take but which Grantor fails to take, after
fifteen (15) days' notice to Grantor. Grantor shall reimburse and indemnify
Lender for all reasonable costs and reasonable expenses incurred in the
reasonable exercise of its rights under this section 4.

         5.   Inspection Rights. Grantor hereby grants to Lender and its
employees, representatives and agents the right to visit, during reasonable
hours upon prior reasonable written notice to Grantor, any of Grantor's plants
and facilities that manufacture, install or store products (or that have done so
during the prior six-month period) that are sold utilizing any of the
Intellectual Property Collateral, and to inspect the products and quality
control records relating thereto upon reasonable written notice to Grantor and
as often as may be reasonably requested, but not more than once in every six (6)
months; provided, however, nothing herein shall entitle Lender access to
Grantor's trade secrets and other proprietary information.

                                       -3-
<PAGE>

         6.   Further Assurances; Attorney in Fact.

              (a)   On a continuing basis, Grantor will, subject to any prior
         licenses, encumbrances and restrictions and prospective licenses, make,
         execute, acknowledge and deliver, and file and record in the proper
         filing and recording places in the United States, all such instruments,
         including appropriate financing and continuation statements and
         collateral agreements and filings with the United States Patent and
         Trademarks Office and the Register of Copyrights, and take all such
         action as may reasonably be deemed necessary or advisable, or as
         requested by Lender, to perfect Lender's security interest in all
         Copyrights, Patents, Trademarks, and Mask Works and otherwise to carry
         out the intent and purposes of this IP Agreement, or for assuring and
         confirming to Lender the grant or perfection of a security interest in
         all Intellectual Property Collateral.

              (b)   Grantor hereby irrevocably appoints Lender as Grantor's
         attorney-in-fact, with full authority in the place and stead of Grantor
         and in the name of Grantor, Lender or otherwise, from time to time in
         Lender's discretion, upon Grantor's failure or inability to do so, to
         take any action and to execute any instrument which Lender may deem
         necessary or advisable to accomplish the purposes of this IP Agreement,
         including:

                    (i)   To modify, in its sole discretion, this IP Agreement
              without first obtaining Grantor's approval of or signature to such
              modification by amending Exhibit A, Exhibit B, Exhibit C, and
              Exhibit D hereof, as appropriate, to include reference to any
              right, title or interest in any Copyrights, Patents, Trademarks or
              Mask Works acquired by Grantor after the execution hereof or to
              delete any reference to any right, title or interest in any
              Copyrights, Patents, Trademarks, or Mask Works in which Grantor no
              longer has or claims any right, title or interest; provided, that
              written notice of any such modifications is promptly provided to
              Grantor; and

                    (ii)  To file, in its sole discretion, one or more financing
              or continuation statements and amendments thereto, relative to any
              of the Intellectual Property Collateral without the signature of
              Grantor where permitted by law.

                    (iii) Grantor hereby authorizes Lender to file financing
              statements without notice to Grantor with all appropriate
              jurisdictions, as Lender deems appropriate, in order to further
              perfect or protect Lender's interest in the Intellectual Property
              Collateral.

         7.   Events of Default. The occurrence of any of the following shall
constitute an Event of Default under this IP Agreement:

              (a)   An Event of Default occurs under the Loan Agreement; or any
         document from Grantor to Lender; or

              (b)   Grantor breaches any warranty or agreement made by Grantor
         in this IP Agreement.

         8.   Remedies. Upon the occurrence and continuance of an Event of
Default, Lender shall have the right to exercise all the remedies of a secured
party under the Massachusetts Uniform Commercial Code, including without
limitation the right to require Grantor to assemble the Intellectual Property
Collateral and any tangible property in which Lender has a security interest and
to make it available to Lender at a place designated by Lender. Lender shall
have a nonexclusive, royalty free license to use the Copyrights, Patents,
Trademarks, and Mask Works to the extent reasonably necessary to permit Lender
to exercise its rights and remedies upon the occurrence of an Event of Default.
Grantor will pay any expenses (including reasonable attorney's fees) incurred by
Lender in connection with the exercise of any of Lender's rights hereunder,
including without limitation any expense incurred in disposing of the
Intellectual Property Collateral. All of Lender's rights and remedies with
respect to the Intellectual Property Collateral shall be cumulative.

         9.   Indemnity. Grantor agrees to defend, indemnify and hold harmless
Lender and its officers, employees, and agents against: (a) all obligations,
demands, claims, and liabilities claimed or asserted by any other party in
connection with the transactions contemplated by this IP Agreement, and (b) all
<PAGE>
losses or expenses in any way suffered, incurred, or paid by Lender as a result
of or in any way arising out of, following or consequential to transactions
between Lender and Grantor, whether under this IP Agreement or otherwise
(including without limitation, reasonable attorneys fees and reasonable
expenses), except for losses arising from or out of Lender's gross negligence or
willful misconduct.

         10.  Reassignment. At such time as Grantor shall completely satisfy all
of the obligations secured hereunder, Lender shall execute and deliver to
Grantor all deeds, assignments, and other instruments as may be necessary or
proper to reinvest in Grantor full title to the property assigned hereunder,
subject to any disposition thereof which may have been made by Lender pursuant
hereto.

         11.  Course of Dealing. No course of dealing, nor any failure to
exercise, nor any delay in exercising any right, power or privilege hereunder
shall operate as a waiver thereof.

         12.  Amendments. This IP Agreement may be amended only by a written
instrument signed by both parties hereto.

         13.  Counterparts. This IP Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute the same instrument.

         14.  Law and Jurisdiction. This IP Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts.
GRANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE COMMONWEALTH OF MASSACHUSETTS IN ANY ACTION, SUIT,
OR PROCEEDING OF ANY KIND, AGAINST IT WHICH ARISES OUT OF OR BY REASON OF THIS
AGREEMENT; PROVIDED, HOWEVER, THAT IF FOR ANY REASON LENDER CANNOT AVAIL ITSELF
OF THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS, GRANTOR ACCEPTS JURISDICTION
OF THE COURTS AND VENUE IN SANTA CLARA COUNTY, CALIFORNIA. NOTWITHSTANDING THE
FOREGOING, THE LENDER SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING
AGAINST THE GRANTOR OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION
WHICH THE LENDER DEEMS NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE
COLLATERAL OR TO OTHERWISE ENFORCE THE LENDER'S RIGHTS AGAINST THE GRANTOR OR
ITS PROPERTY.

         GRANTOR AND LENDER EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE
LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER
CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH
PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

         15.  Confidentiality. In handling any confidential information, Lender
shall exercise the same degree of care that it exercises for its own proprietary
information, but disclosure of information may be made: (i) to Lender's
subsidiaries or affiliates in connection with their present or prospective
business relations with Grantor; (ii) to prospective transferees or purchasers
of any interest in the Loans; (iii) as required by law, regulation, subpoena, or
other order, (iv) as required in connection with Lender's examination or audit;
and (v) as Lender considers appropriate in exercising remedies under this
Agreement. Confidential information does not include information that either:
(a) is in the public domain or in Lender's possession when disclosed to Lender,
or becomes part of the public domain after disclosure to Lender (through no act
or omission of Lender); or (b) is disclosed to Lender by a third party, which
third party is not under any non-disclosure obligation.

                                       -5-
<PAGE>

         EXECUTED as a sealed instrument under the laws of the Commonwealth of
Massachusetts on the day and year first written above.

ADDRESS OF GRANTOR:                   GRANTOR:

175 Cabot Street, Suite 503           DATAWATCH CORPORATION
Lowell, Massachusetts 01854-3633

                                      By: /s/ Robert Hagger
                                          --------------------------------------

                                      Name: Robert Hagger
                                            ------------------------------------

                                      Title: President & Chief Executive Officer
                                             -----------------------------------

                                      SILICON VALLEY BANK

                                      By: /s/ David Rodriquez
                                          --------------------------------------

                                      Name: David Rodriquez
                                            ------------------------------------

                                      Title: Vice President
                                             -----------------------------------

                                       -6-
<PAGE>

         Exhibit "A" attached to that certain Intellectual Property Security
Agreement dated October 30, 2001.

                                   EXHIBIT "A"

                                   COPYRIGHTS

                         SCHEDULE A - ISSUED COPYRIGHTS
                         ------------------------------

COPYRIGHT                         REGISTRATION                        DATE OF
DESCRIPTION                          NUMBER                           ISSUANCE
-----------                         ---------                         --------

                   SCHEDULE B - PENDING COPYRIGHT APPLICATIONS
                   -------------------------------------------
                                                                    FIRST DATE
COPYRIGHT         APPLICATION        DATE OF         DATE OF        OF PUBLIC
DESCRIPTION          NUMBER          FILING          CREATION       DISTRIBUTION
-----------       -----------        -------         --------       ------------

SCHEDULE C - UNREGISTERED COPYRIGHTS (Where No Copyright Application is Pending)
--------------------------------------------------------------------------------

                                             DATE AND
                                             RECORDATION
                                             NUMBER OF IP
                                             AGREEMENT WITH
                                             OWNER OR ORIGINAL
                                             GRANTOR IF          ORIGINAL AUTHOR
                                             AUTHOR OR OWNER     OR OWNER OF
                             FIRST DATE      OF COPYRIGHT        COPYRIGHT
COPYRIGHT      DATE OF           OF          IS DIFFERENT        IS DIFFERENT
DESCRIPTION    CREATION     DISTRIBUTION     FROM GRANTOR        FROM GRANTOR
-----------    --------     ------------     ------------        ------------

                                       -7-
<PAGE>

Exhibit "B" attached to that certain Intellectual Property Security Agreement
dated October 30, 2001.

                                   EXHIBIT "B"

                                     PATENTS

PATENT
DESCRIPTION     DOCKET NO.     COUNTRY     SERIAL NO.     FILING DATE     STATUS
-----------     ----------     -------     ----------     -----------     ------

                                       -8-
<PAGE>

Exhibit "C" attached to that certain Intellectual Property Security Agreement
dated October 30, 2001.

                                   EXHIBIT "C"

                                   TRADEMARKS

TRADEMARK
DESCRIPTION       COUNTRY          SERIAL NO.        REG. NO           STATUS
-----------       -------          ----------        -------           ------

DESCRIPTION          COUNTRY              APPLICATION NO.  REG. NO    STATUS
-----------          -------              ---------------  -------    ------
Datawatch            Canada               1,013,488                   Pending
Datawatch            European Community   210,476          210,476    Registered
Datawatch            USA                  74/553,269       1,963,783  Registered
Q-Browser            Australia            752,268          752,268    Registered
Q-Browser            European Community   547,323          547,323    Registered
Q-Browser            USA                  75/315,418       2,255,961  Registered
Q-Flow               Australia            744,567          744,567    Registered
Q-Flow               Canada               873,647          528,267    Registered
Q-Flow               European Community   633,834          633,834    Registered
Q-Flow               USA                  75/364,269       2,256,046  Registered
Q-Support            European Community   210,682          210,682    Registered
Quetzal              Australia            634,675          A634,675   Registered
Quetzal              European Community   210,831          210,831    Registered
Quetzal/SC           Australia            821,537                     Published
Quetzal/SC           Canada               1,045,423                   Pending
Quetzal/SC           USA                  75/580,763       2,471,994  Registered
VorteXML and Design  Australia            873,785                     Pending
VorteXML and Design  Canada               1,100,922                   Pending
VorteXML and Design  European Community   2,192,961                   Pending
VorteXML and Design  USA                  76/209,512                  Pending

                                       -9-
<PAGE>

Exhibit "D" attached to that certain Intellectual Property Security Agreement
dated October 30, 2001.

                                   EXHIBIT "D"

                                   MASK WORKS

MASK WORK
DESCRIPTION       COUNTRY          SERIAL NO.        REG. NO           STATUS
-----------       -------          ----------        -------           ------

                                      -10-EXHIBIT 10.28
                                                                   -------------

                              AMENDED AND RESTATED
                 EXPORT-IMPORT BANK LOAN AND SECURITY AGREEMENT

            THIS AMENDED AND RESTATED EXPORT-IMPORT BANK LOAN AND SECURITY
AGREEMENT (this "Exim Agreement") dated as of December 19, 2001, between SILICON
VALLEY BANK, a California chartered bank, with its principal place of business
at 3003 Tasman Drive, Santa Clara, California 95054 and with a loan production
office located at One Newton Executive Park, Suite 200, 2221 Washington Street,
Newton, Massachusetts 02462, doing business under the name "Silicon Valley East"
("Bank") and DATAWATCH CORPORATION, a Delaware corporation with its chief
executive office located at 175 Cabot Street, Suite 503, Lowell, Massachusetts
01854 ("Datawatch US"), DATAWATCH INTERNATIONAL LIMITED, a company registered
under the laws of England and Wales with its principal place of business at
Novartis House, Station Road, Kings Langley, Hertfordshire, England WD4 8LJ
("Datawatch International"), DATAWATCH EUROPE LIMITED, a company registered
under the laws of England and Wales with its principal place of business at The
Software Centre East Way, Lee Mill Industrial Estate, Ivybridge, Plymouth,
England PL21 9PE ("Datawatch Europe") (hereinafter Datawatch US, Datawatch
International, and Datawatch Europe are referred to herein jointly and severally
as the "Borrower"), provides the terms on which Bank shall lend to Borrower and
Borrower shall repay Bank. The parties agree as follows:

1        RECITALS.

         A. Borrower and Bank are parties to that certain Amended and Restated
Loan and Security Agreement dated October 30, 2001, as may be amended from time
to time (as may be amended, the "Domestic Agreement"), together with related
documents executed in conjunction therewith.

         B. Borrower and Bank desire in this Exim Agreement to set forth their
agreement with respect to a working capital facility to be guaranteed by the
Export-Import Bank of the United States (the "Exim Bank").

         SECTION 2. LOAN AND TERMS OF PAYMENT

         2.1 Promise to Pay. Borrower hereby unconditionally promises to pay
Bank the unpaid principal amount of all Advances and interest on the unpaid
principal amount of the Advances as and when due in accordance with this Exim
Agreement.

         2.2 Revolving Advances. Subject to the terms and conditions of this
Exim Agreement, Bank agrees to make Advances to Borrower in an amount not to
exceed (i) the Exim Committed Line or the Borrowing Base, whichever is less,
minus (iii) the aggregate outstanding Advances hereunder, as determined by the
Borrowing Base Certificate to be delivered to the Bank.

         To evidence the Advances, Borrower shall execute and deliver to Bank on
the date hereof a promissory note (the "Note") in substantially the form
attached hereto as EXHIBIT B.

         Whenever Borrower desires an Advance, Borrower will notify Bank by
facsimile transmission or telephone no later than 3:00 p.m. Eastern time, on the
Business Day that the Advance is to be made together with any additional
documentation required under the Borrower Agreement, including without
limitation, as set forth in Section 2.03 of the Borrower Agreement. In addition
to the procedure set forth in the preceding sentence, Bank is authorized to make
Advances under this Exim Agreement, based upon instructions received from a
Responsible Officer or without instructions if in Bank's discretion such
Advances are necessary to meet Obligations which have become due and remain
unpaid. Bank shall be entitled to rely on any telephonic notice given by a
person who Bank reasonably believes to be a Responsible Officer or a designee
(as designated in writing by a Responsible Officer) thereof, and Borrower shall
indemnify and hold Bank harmless for any damages or loss suffered by Bank as a
result of such reliance. Bank will credit the amount of Advances made under this
Section to Borrower's deposit account. Amounts borrowed pursuant to this Section
may be repaid at any time and re-borrowed at any time during the term of this
Exim Agreement so long as no Event of Default has occurred and is continuing.
<PAGE>

         Only Datawatch US may request Advances hereunder. Notwithstanding the
foregoing, each Borrower hereunder shall be obligated to repay all Advances made
hereunder, regardless of which Borrower actually receives said Advance, as if
each Borrower hereunder directly received all Advances. Each Borrower
acknowledges and agrees that, to the extent the other Borrower has or may have
certain rights of subrogation or reimbursement against the other for claims
arising out of this Exim Agreement, that those rights are hereby waived.

         2.3 Overadvances. If, at any time or for any reason, the amount of
Obligations under this Exim Agreement owed by Borrower to Bank is greater than
the lesser of (i) the Borrowing Base or (ii) the Exim Committed Line, the
Borrower shall immediately pay to Bank, in cash, the amount of such excess.

         2.4 Interest Rate; Payments.

                     (i) Interest Rate. Advances accrue interest on the
             outstanding principal balance at a per annum rate equal to the
             aggregate of the Bank's Prime Rate, and two percent (2.0%). After
             an Event of Default, Obligations shall bear interest at four
             percent (4.0%) above the rate effective immediately before the
             Event of Default. The interest rate shall increase or decrease when
             the Prime Rate changes. Interest is computed on the basis of a 360
             day year for the actual number of days elapsed.

                     (ii) Payments. Interest is payable on the Payment Date of
             each month. Bank may debit any of Borrower's deposit accounts
             including Account Number __________ for principal and interest
             payments or any amounts Borrower owes Bank, including, without
             limitation, Bank Expenses. Bank shall promptly notify Borrower when
             it debits Borrower's accounts. These debits are not a set-off.
             Payments received after 12:00 noon Eastern time are considered
             received at the opening of business on the next Business Day. When
             a payment is due on a day that is not a Business Day, the payment
             is due the next Business Day and additional fees or interest, as
             applicable, shall continue to accrue.

         2.5 Fees. Borrower shall pay to Bank:

                     (i) Exim Fee. A fully earned, non-refundable facility fee
             of $7,500.00 due on the Closing Date; and

                     (ii) Unused Line Fee. In the event, in any calendar month
             (or portion thereof at the beginning and end of the term hereof),
             the average daily principal balance of the Advances outstanding
             during the month is less than the amount of the Exim Committed
             Line, Borrower shall pay Bank an unused line fee in an amount equal
             to 0.50% per annum on the difference between the amount of the Exim
             Committed Line and the average daily principal balance of the
             Advances outstanding during the month, which unused line fee shall
             be computed and paid monthly, in arrears, on the first day of the
             following month.

                     (iii) Bank Expenses. All Bank Expenses (including
             reasonable attorneys' fees and expenses incurred through and after
             the Closing Date) when due.

         2.6 Use of Proceeds. Borrower will use the proceeds of Advances only
for the purposes specified in the Borrower Agreement. Borrower shall not use the
proceeds of the Advances for any purpose prohibited herein or by the Borrower
Agreement.

         SECTION 3. CONDITIONS OF LOANS

         3.1 Conditions Precedent to all Advances. The obligation of Bank to
make each Advance, including the initial Advance, is subject to the following
conditions:

                                       2
<PAGE>

                  (a) timely receipt by Bank of the Payment/Advance Form as
         provided in Section 2.2;

                  (b) timely receipt by Bank of a Borrowing Base Certificate as
         defined in the Borrower Agreement;

                  (c) the Exim Guarantee shall be in full force and effect; and

                  (d) except as otherwise disclosed to the Bank, the
         representations and warranties contained in Section 5 hereof shall be
         true and accurate in all material respects on and as of the date of
         such Payment/Advance Form and on the effective date of each Advance as
         though made at and as of each such date (except to the extent they
         relate specifically to an earlier date, in which case such
         representations and warranties shall continue to have been true and
         accurate as of such date), and no potential Event of Default or Event
         of Default shall have occurred and be continuing, or would result from
         such Advance.

         The making of each Advance shall be deemed to be a representation and
warranty by Borrower on the date of such Advance as to the accuracy of the facts
referred to in this Section 3.1.

         SECTION 4. CREATION OF SECURITY INTEREST

         4.1 Grant of Security Interest. Borrower hereby grants Bank, to secure
the payment and performance in full of all of the Obligations and the
performance of each of Borrower's duties under the Loan Documents, a continuing
security interest in, and pledges and assigns to the Bank, the Collateral,
wherever located, whether now owned or hereafter acquired or arising, and all
proceeds and products thereof. Borrower warrants and represents that the
security interest granted herein shall be a first priority security interest in
the Collateral. Bank may place a "hold" on any deposit account pledged as
Collateral. Notwithstanding the foregoing, it is expressly acknowledged and
agreed that the security interest created in this Exim Agreement in all of the
Collateral (with the exception of Exim Eligible Foreign Accounts, but only to
the extent any Advances are actually made by the Bank to the Borrower based upon
such Exim Eligible Foreign Accounts), is subject to and subordinate to the
security interest granted to the Bank in the Domestic Agreement with respect to
the Collateral. Borrower agrees that any disposition of the Collateral in
violation of this Exim Agreement, by either the Borrower or any other Person,
shall be deemed to violate the rights of the Bank under the Code. If this Exim
Agreement is terminated, Bank's lien and security interest in the Collateral
shall continue until Borrower fully satisfies its Obligations.

         SECTION 5. REPRESENTATIONS AND WARRANTIES

         Borrower represents, warrants and covenants as follows:

         5.1 Domestic Loan Documents. The representations and warranties
contained in the Domestic Loan Documents, which are incorporated by reference
into this Exim Agreement, are true and correct.

         SECTION 6. AFFIRMATIVE COVENANTS

         Borrower covenants and agrees that, until payment in full of all
Obligations, it shall do all of the following:

         6.1 Domestic Loan Documents. Borrower shall comply in all respects with
the terms and provisions of the Domestic Loan Documents, which terms and
provisions are incorporated into this Exim Agreement and shall survive the
termination of Domestic Agreement, which shall include, without limitation,
compliance with the financial reporting requirements set forth in Section 5.3 of
the Domestic Agreement and the financial covenants set forth in Section 5.1 of
the Domestic Agreement. In addition to the foregoing, each of Datawatch
International and Datawatch Europe shall remit weekly to the United States all
proceeds of collected Accounts; provided, however, that no event of default
occurs and is continuing hereunder, Datawatch International and Datawatch Europe
shall remit weekly to the United States all proceeds of collected Accounts net
of reasonable and customary operating expenses of each of each of Datawatch
International and Datawatch Europe. Notwithstanding the foregoing, the

                                       3
<PAGE>

proceeds of Advances hereunder may not be transferred to any of each of
Datawatch International and Datawatch Europe.

         6.2 Terms of Sale. Borrower shall cause all sales of products upon
which Advances are based to be on open account to creditworthy buyers that have
been preapproved in writing by Bank and Exim Bank.

         6.3 Borrower Agreement. Borrower shall comply with all of the terms of
the Borrower Agreement, including without limitation, the delivery of any and
all notices required pursuant to Sections 2.11 and/or 2.18 of the Borrower
Agreement. Unless otherwise specifically indicated in this Exim Agreement that
the provisions of this Exim Agreement control, in the event of any conflict or
inconsistency between any provision contained in the Borrower Agreement with any
provision contained in this Exim Agreement, the more strict provision, with
respect to Borrower, shall control.

         6.4 Notice in Event of Filing of Action for Debtor's Relief. Borrower
shall notify Bank in writing within five (5) days of the occurrence of any of
the following: (1) Borrower begins or consents in any manner to any proceeding
or arrangement for its liquidation in whole or in part or to any other
proceeding or arrangement whereby any of its assets are subject generally to the
payment of its liabilities or whereby any receiver, trustee, liquidator or the
like is appointed for it or any substantial part of its assets (including
without limitation the filing by Borrower of a petition for appointment as
debtor-in-possession under Title 11 of the U.S. Code); (2) Borrower fails to
obtain the dismissal or stay on appeal within thirty (30) calendar days of the
commencement of any proceeding arrangement referred to in (1) above; (3)
Borrower begins any other procedure for the relief of financially distressed or
insolvent debtors, or such procedure has been commenced against it, whether
voluntarily or involuntarily, and such procedure has not been effectively
terminated, dismissed or stayed within thirty (30) calendar days after the
commencement thereof, or (4) Borrower begins any procedure for its dissolution,
or a procedure therefor has been commenced against it.

         6.5 Payment in Dollars. Borrower shall require payment in United States
Dollars or an Acceptable Foreing Currency subject to the terms of this Exim
Agreement for the products, unless the Exim Bank otherwise agrees in writing
hereafter.

         6.6 Further Assurances. At any time and from time to time Borrower
shall (i) execute and deliver such further instruments, (ii) take such further
action as may reasonably be requested by Bank, and (iii) deliver such additional
information, reports, contracts, invoices and other data concerning the
Collateral as may reasonably be requested by Bank, all of the foregoing in
furtherance of the purposes of this Exim Agreement.

         SECTION 7. NEGATIVE COVENANTS

         Prior to the (i) payment in full of outstanding Obligations, and (ii)
termination of Bank's commitment to make any Advance, Borrower shall not do any
of the following without the Bank's written consent:

         7.1 Domestic Loan Documents. Violate or otherwise fail to comply with
any provisions of the Domestic Loan Documents, which provisions are incorporated
into this Exim Agreement.

         7.2 Borrower Agreement. Violate or otherwise fail to comply with any
provision of the Borrower Agreement, including without limitation the negative
covenants set forth in Section 2.15.

         7.3 Exim Guarantee. Take any action, or permit any action to be taken,
that causes or, with the passage of time, could reasonably be expected to cause,
the Exim Guarantee to cease to be in full force and effect.

         SECTION 8. EVENTS OF DEFAULT

         Any one of the following is an Event of Default:

                                       4
<PAGE>

         8.1 Payment Default. If Borrower fails to pay when due any of the
Obligations.

         8.2 Covenant Default; Cross Default. If Borrower fails or neglects to
perform, keep, or observe any material term, provision, condition, covenant, or
agreement contained in this Exim Agreement, in any of the Domestic Loan
Documents which terms and provisions are incorporated into this Exim Agreement
and shall survive the termination of Domestic Agreement, the Borrower Agreement,
or the Exim Loan Documents, or an Event of Default occurs under any of the
Domestic Loan Documents or the Borrower Agreement; or

         8.3 Exim Guarantee. If the Exim Guarantee ceases for any reason to be
in full force and effect, or if the Exim Bank declares the Exim Guarantee void
or revokes or purports to revoke any obligations under the Exim Guarantee.

         SECTION 9. BANK'S RIGHTS AND REMEDIES

         9.1 Rights and Remedies. When an Event of Default occurs and continues
Bank may, without notice or demand, do any or all of the following:

                  (a) Declare all Obligations immediately due and payable (but
         if an Event of Default described in Section 8.5 of the Domestic
         Agreement occurs all Obligations are immediately due and payable
         without any action by Bank);

                  (b) Stop advancing money or extending credit for Borrower's
         benefit under this Exim Agreement or under any other agreement between
         Borrower and Bank;

                  (c) Settle or adjust disputes and claims directly with account
         debtors for amounts, on terms and in any order that Bank considers
         advisable;

                  (d) Make any payments and do any acts it considers necessary
         or reasonable to protect its security interest in the Collateral.
         Borrower shall assemble the Collateral if Bank requests and make it
         available as Bank designates. Bank may enter premises where the
         Collateral is located, take and maintain possession of any part of the
         Collateral, and pay, purchase, contest, or compromise any Lien which
         appears to be prior or superior to its security interest and pay all
         expenses incurred. Borrower grants Bank a license to enter and occupy
         any of its premises, without charge, to exercise any of Bank's rights
         or remedies;

                  (e) Apply to the Obligations any (i) balances and deposits of
         Borrower it holds, or (ii) any amount held by Bank owing to or for the
         credit or the account of Borrower;

                  (f) Ship, reclaim, recover, store, finish, maintain, repair,
         prepare for sale, advertise for sale, and sell the Collateral; and

                  (g) Dispose of the Collateral according to the Code.

         9.2 Exim Direction. Upon the occurrence of an Event of Default, Exim
Bank shall have a right to: (i) direct Bank to exercise the remedies specified
in Section 9.1 and (ii) request that Bank accelerate the maturity of any other
loans to Borrower as to which Bank has a right to accelerate.

         9.3 Exim Notification. Bank shall have the right to immediately notify
Exim Bank in writing if it has knowledge of the occurrence of any of the
following events: (1) any failure to pay any amount due under this Exim
Agreement or the Note; (2) the Borrowing Base is less than the sum of
outstanding Advances hereunder; (3) any failure to pay when due any amount
payable to Bank by the Borrower under any loan(s) extended by Bank to Borrower;
(4) the filing of an action for debtor's relief by, against, or on behalf of
Borrower; or (5) any threatened or pending material litigation against Borrower,
or any material dispute involving Borrower.

                                       5
<PAGE>

         In the event that it sends such a notification to Exim Bank, Bank shall
have the right to thereafter send Exim Bank a written report on the status of
the events covered by said notification on each Business Day which occurs every
thirty (30) calendar days after the date of said notification, until such time
as Bank files a claim with Exim Bank or said default or other events have been
cured. Bank shall not have any obligation to make any Advances following said
notification to Exim Bank, unless Exim Bank gives its written approval thereto.
If directed to do so by Exim Bank, Bank shall have a right promptly to exercise
any rights it may have against Borrower to demand the immediate repayment of all
amounts outstanding under the Exim Loan Documents.

         9.4 Remedies Cumulative. Bank's rights and remedies under this Exim
Agreement, the Exim Loan Documents, the Domestic Loan Documents and all other
agreements shall be cumulative. Bank shall have all other rights and remedies
not inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by Bank of one right or remedy shall be deemed an election, and no
waiver by Bank of any Event of Default on Borrower's part shall be deemed a
continuing waiver. No delay by Bank shall constitute a waiver, election, or
acquiescence by it. No waiver by Bank shall be effective unless made in a
written document signed on behalf of Bank and then shall be effective only in
the specific instance and for the specific purpose for which it was given.

         9.5 Power of Attorney. Borrower hereby irrevocably appoints Bank as its
lawful attorney-in-fact, to be effective upon the occurrence and during the
continuance of an Event of Default, to: (i) endorse Borrower's name on any
checks or other forms of payment or security; (ii) sign Borrower's name on any
invoice or bill of lading for any Account or drafts against account debtors;
(iii) settle and adjust disputes and claims about the Accounts directly with
account debtors, for amounts and on terms Bank determines reasonable; (iv) make,
settle, and adjust all claims under Borrower's insurance policies; and (v)
transfer the Collateral into the name of Bank or a third party as the Code
permits. Borrower hereby appoints Bank its power of attorney to sign Borrower's
name on any documents necessary to perfect or continue the perfection of any
security interest regardless of whether an Event of Default has occurred until
all Obligations have been satisfied in full and Bank is under no further
obligation to make Advances hereunder. Bank's foregoing appointment as
Borrower's attorney in fact, and all of Bank's rights and powers, coupled with
an interest, are irrevocable until all Obligations have been fully repaid and
performed and Bank's obligation to provide Advances terminates.

         9.6 Accounts Collection. In the event that an Event of Default occurs
and is continuing, Bank may notify any Person owing Borrower money of Bank's
security interest in the funds and verify and/or collect the amount of the
Account. Any amounts received by Borrower shall be held in trust by Borrower for
Bank, and, if requested by Bank, Borrower shall immediately deliver such
receipts to Bank in the form received from the account debtor, with proper
endorsements for deposit.

         9.7 Bank Expenses. Any amounts paid by Bank as provided herein are Bank
Expenses and are immediately due and payable, and shall bear interest at the
then applicable rate and be secured by the Collateral. No payments by Bank shall
be deemed an agreement to make similar payments in the future or Bank's waiver
of any Event of Default.

         9.8 Bank's Liability for Collateral. So long as the Bank complies with
reasonable banking practices regarding the safekeeping of collateral, the Bank
shall not be liable or responsible for: (a) the safekeeping of the Collateral;
(b) any loss or damage to the Collateral; (c) any diminution in the value of the
Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or
other person. Borrower bears all risk of loss, damage or destruction of the
Collateral.

         9.9 Demand Waiver. Borrower waives demand, notice of default or
dishonor, notice of payment and nonpayment, notice of any default, nonpayment at
maturity, release, compromise, settlement, extension, or renewal of accounts,
documents, instruments, chattel paper, and guarantees held by Bank on which
Borrower is liable.

                                       6
<PAGE>

SECTION 10. NOTICES

         Unless otherwise provided in this Exim Agreement, all notices or
demands by any party relating to this Exim Agreement or any other agreement
entered into in connection herewith shall be in writing and (except for
financial statements and other informational documents which may be sent by
first-class mail, postage prepaid) shall be personally delivered or sent by a
recognized overnight delivery service, by certified mail, postage prepaid,
return receipt requested, or by telefacsimile to Borrower or to Bank, as the
case may be, at the address set forth in the Domestic Loan Documents. The
parties hereto may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other.

         SECTION 11. CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER

         Massachusetts law governs the Loan Documents without regard to
principles of conflicts of law. Borrower and Bank each submit to the exclusive
jurisdiction of the State and Federal courts in Massachusetts; provided,
however, that if for any reason Bank cannot avail itself of such courts in the
Commonwealth of Massachusetts, Borrower accepts jurisdiction of the courts and
venue in Santa Clara County, California. NOTWITHSTANDING THE FOREGOING, THE BANK
SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR
ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION WHICH THE BANK DEEMS
NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR TO OTHERWISE
ENFORCE THE BANK'S RIGHTS AGAINST THE BORROWER OR ITS PROPERTY.

BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION ARISING OUT OF OR BASED UPON THIS EXIM AGREEMENT, THE LOAN DOCUMENTS
OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND
ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER
INTO THIS EXIM AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

         SECTION 12. GENERAL PROVISIONS

         12.1 Successors and Assigns. This Exim Agreement binds and is for the
benefit of the successors and permitted assigns of each party. Borrower may not
assign this Exim Agreement or any rights or Obligations under it without Bank's
prior written consent which may be granted or withheld in Bank's discretion.
Bank has the right, without the consent of or notice to Borrower, to sell,
transfer, negotiate, or grant participation in all or any part of, or any
interest in, Bank's obligations, rights and benefits under this Exim Agreement,
the Loan Documents or any related agreement.

         12.2 Indemnification. Borrower hereby indemnifies, defends and holds
the Bank and its officers, employees and agents harmless against: (a) all
obligations, demands, claims, and liabilities asserted by any other party in
connection with the transactions contemplated by the Loan Documents; and (b) all
losses or Bank Expenses incurred, or paid by Bank from, following, or
consequential to transactions between Bank and Borrower (including reasonable
attorneys' fees and expenses), except for losses caused by Bank's gross
negligence or willful misconduct.

         12.3 Right of Set-Off. Borrower and any guarantor hereby grant to Bank,
a lien, security interest and right of setoff as security for all Obligations to
Bank, whether now existing or hereafter arising upon and against all deposits,
credits, collateral and property, now or hereafter in the possession, custody,
safekeeping or control of Bank or any entity under the control of the Bank or in
transit to any of them. At any time after the occurrence and during the
continuance of an Event of Default, without demand or notice, Bank may set off
the same or any part thereof and apply the same to any liability or obligation
of Borrower and any guarantor even though unmatured and regardless of the
adequacy of any other collateral securing the loan. ANY AND ALL RIGHTS TO
REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER
COLLATERAL WHICH SECURES THE LOAN, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH
RESPECT TO SUCH

                                       7
<PAGE>

DEPOSITS, CREDITS OR OTHER PROPERTY OF THE BORROWER OR ANY GUARANTOR, ARE HEREBY
KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

         12.4 Time of Essence. Time is of the essence for the performance of all
Obligations in this Exim Agreement.

         12.5 Severability of Provision. Each provision of this Exim Agreement
is severable from every other provision in determining the enforceability of any
provision.

         12.6 Amended and Restated Agreement. This Agreement shall amend and
restate in its entirety a certain Export-Import Bank Loan and Security Agreement
dated as of December 27, 1999 between Borrower and Bank, as amended by a certain
First Loan Modification Agreement (EXIM Line) dated as of January 17, 2001, as
further amended by a certain Second Loan Modification Agreement (EXIM Line)
dated as of September 13, 2001.

         12.7 Amendments in Writing; Integration. All amendments to this Exim
Agreement must be in writing signed by both Bank and Borrower. This Exim
Agreement and the Loan Documents represent the entire agreement about this
subject matter, and supersede prior negotiations or agreements. Without the
prior written consent of Exim Bank, no material amendment of or deviation from
the terms of this Exim Agreement or the Note shall be made that would adversely
affect the interests of Exim Bank under the Exim Guarantee, including without
limitation the rescheduling of any payment terms provided for in this Exim
Agreement. All prior agreements, understandings, representations, warranties,
and negotiations between the parties about the subject matter of this Exim
Agreement and the Loan Documents merge into this Exim Agreement and the Loan
Documents.

         12.8 Counterparts. This Exim Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, are an original, and all taken together, constitute
one agreement.

         12.9 Survival. All covenants, representations and warranties made in
this Exim Agreement continue in full force while any Obligations remain
outstanding. The obligation of Borrower in Section 12.2 to indemnify Bank shall
survive until the statute of limitations with respect to such claim or cause of
action shall have run.

         SECTION 13. DEFINITIONS

         13.1 Definitions. Except as otherwise defined, terms that are
capitalized in this Exim Agreement shall have the meanings assigned in the
Domestic Loan Documents. As used in this Exim Agreement, the following terms
shall have the following definitions:

                  "ACCEPTABLE FOREIGN CURRENCY" means any one of British Pounds
         Sterling, the Euro, Swedish Krona, Irish Pounds, Deutsche Marks,
         Italian Lire and Dutch Guilders.

                  "ACCOUNTS" means all presently existing and hereafter arising
         accounts, contract rights, and all other forms of obligations owing to
         Borrower arising out of the sale or lease of goods (including, without
         limitation, the licensing of software and other technology) or the
         rendering of services by Borrower, whether or not earned by
         performance, and any and all credit insurance, guaranties, and other
         security therefor, as well as all merchandise returned to or reclaimed
         by Borrower and Borrower's books relating to any of the foregoing.

                  "ADVANCES" means any loans or other extensions of credit
         hereunder.

                  "BANK EXPENSES" means all: reasonable costs or expenses
         (including reasonable attorneys' fees and expenses) incurred in
         connection with the preparation, negotiation, and administration of the
         Exim Loan Documents, including any costs incurred in relation to
         opposing or seeking to obtain relief from any stay or restructuring
         order prohibiting Bank from exercising its rights as a secured
         creditor, foreclosing

                                       8
<PAGE>

         upon or disposing of Collateral, or such related matters; and Bank's
         reasonable attorneys' fees and expenses incurred in enforcing or
         defending the Exim Loan Documents, whether or not suit is brought,
         unless a final court of competent jurisdiction finds the Bank acted
         with gross negligence or willful misconduct.

                  "BORROWER AGREEMENT" means the Export-Import Bank of the
         United States Working Capital Guarantee Program Borrower Agreement
         between Borrower and Bank.

                  "BORROWING BASE" means an amount equal to (i) eighty percent
         (80%) of Exim Eligible Foreign Accounts which Exim Eligible Foreign
         Accounts (A) are billed and collected by each of the entities
         comprising the Borrower in the United States or United Kingdom and (B)
         if payable in an Acceptable Foreign Currency (other than British Pounds
         Sterling), Borrower has made arrangements satisfactory to the Bank in
         its sole discretion with respect to a hedge on such Exim Eligible
         Foreign Accounts; or (ii) eighty (80%) percent with respect to Exim
         Eligible Foreign Accounts which (A) are billed and collected by the
         Borrower in the United States or United Kingdom (B) are billed in
         British Pounds Sterling and (C) Borrower has not made arrangements
         satisfactory to the Bank in its sole discretion with respect to a hedge
         on such Exim Eligible Foreign Accounts; and (iii) seventy (70%) percent
         with respect to Exim Eligible Foreign Accounts which (A) are billed and
         collected by the Borrower in the United States or United Kingdom, (B)
         are billed in any Acceptable Foreign Currency other than British Pounds
         Sterling and (C) Borrower has not made arrangements satisfactory to the
         Bank in its sole discretion with respect to a hedge on such Exim
         Eligible Foreign Accounts.

                  "CLOSING DATE" is the date of this Agreement

                  "COLLATERAL" is the property described on Exhibit A.

                  "DOMESTIC AGREEMENT" has the meaning set forth in recital
         paragraph A.

                  "DOMESTIC LOAN DOCUMENTS" means the Domestic Agreement and all
         instruments, documents, and agreements executed in connection with the
         Domestic Agreement.

                  "EXIM BANK" means Export-Import Bank of the United States.

                  "EXIM COMMITTED LINE" means Five Hundred Thousand Dollars
         ($500,000.00).

                  "EXIM ELIGIBLE FOREIGN ACCOUNTS" means those Accounts payable
         in United States Dollars or an Acceptable Foreign Currency that arise
         in the ordinary course of Borrower's business and are derived from
         exports originating in the United States, and (i) with respect to which
         the account debtor is not a resident of the United States; (ii) that
         have been validly assigned or pledged to Bank in a manner satisfactory
         to the Bank giving the Bank a first priority perfected security
         interest, or its equivalent, in such Accounts, (iii) comply with all of
         Borrower's representations and warranties to Bank, and (iv) that either
         (A) the Bank approves on a case by case basis (which shall be required
         with respect to foreign Accounts on open account terms), or (B) are
         supported by letter(s) of credit acceptable to Bank. Standards of
         eligibility may be fixed revised from time to time by Bank in Bank's
         reasonable judgment and upon notification thereof to the Borrower in
         accordance with the provisions hereof. Exim Eligible Foreign Accounts
         shall not include the following:

                  (a) Accounts with a term in excess of ninety (90) days;

                  (b) Accounts that the account debtor has failed to pay within
         sixty (60) calendar days of the original due date of the invoice unless
         such accounts are insured through Exim Bank export credit insurance for
         comprehensive commercial and political risk, or through Exim Bank
         approved private insurers for comparable coverage, in which case sixty
         (60) calendar days shall apply;

                                       9
<PAGE>

                  (c) Accounts with respect to an account debtor, fifty percent
         (50%) or more of whose Accounts the account debtor has failed to pay
         within ninety (90) days of the original date of invoice;

                  (d) Accounts evidenced by a letter of credit until the date of
         shipment of the items covered by the subject letter of credit;

                  (e) Accounts with respect to which an invoice has not been
         sent;

                  (f) Accounts with respect to which the account debtor is an
         Affiliate, officer or director of Borrower;

                  (g) Accounts with respect to which the account debtor is
         located in a country in which Exim Bank is legally prohibited from
         doing business as designated in the Country Limitation Schedule (as
         such term is defined in the Borrower Agreement);

                  (h) Accounts with respect to which the account debtor is
         located in a country in which Exim Bank coverage is not available for
         commercial reasons;

                  (i) Accounts with respect to which Borrower is liable to the
         account debtor for goods sold or services rendered by the account
         debtor to Borrower, but only to the extent of Borrower's liability to
         such account debtor, or if the account debtor is subject to an
         Insolvency Proceeding or is otherwise insolvent.

                  (j) Accounts which arise for the sales of items not in the
         ordinary course of Borrower's business, unless pre-approved in writing
         by Bank;

                  (k) Accounts not owned by Borrower or which are subject to any
         rights, claim or interest of another Person or than the lien in favor
         of Bank;

                  (l) Accounts with respect to which the account debtor has
         disputed liability or makes any claim with respect thereto (but only to
         the extent of the amount subject to such dispute or claim), or is
         subject to any Insolvency Proceeding, or becomes insolvent, or goes out
         of business;

                  (m) Accounts with respect to an account debtor, including
         Subsidiaries and Affiliates, whose total obligations to Borrower exceed
         twenty-five percent (25%) of the aggregate dollar amount of all
         Accounts, only to the extent such obligations exceed such percentage,
         except as approved in writing by Bank;

                  (n) Accounts generated by the sale of products purchased for
         military purposes or that are due and payable from a military Buyer;

                  (o) Accounts, if any, generated by sales of Inventory which
         constitutes defense articles or defense services;

                  (p) Accounts payable in currency other than Dollars or an
         Acceptable Foreign Currency, except as may be approved in writing by
         the Bank and the Exim Bank;

                  (q) Accounts which are due and owing and the collection of
         which must be made outside the United States or the United Kingdom;

                  (r) Accounts the collection of which Bank or Exim Bank
         determines in its reasonable judgment to be doubtful; and

                                       10
<PAGE>

                  (s) Accounts which are not "Eligible Export-Related Accounts
         Receivable", as such term is defined in the Borrower Agreement.

                  Notwithstanding the terms of the Borrower Agreement to the
         contrary, and subject to the terms and conditions of this Exim
         Agreement, Exim Eligible Foreign Accounts may include Accounts that are
         billed in the United States or the United Kingdom and also may include
         Accounts that are billed in United States Dollars or an Acceptable
         Foreign Currency.

                  "EXIM GUARANTEE" means that certain Master Guarantee Agreement
         or other agreement, as amended from time to time, the terms of which
         are incorporated by reference into this Exim Agreement, pursuant to
         which Exim Bank guarantees Borrower's obligations under this Exim
         Agreement.

                  "EXIM LOAN DOCUMENTS" means, collectively, this Exim
         Agreement, the Domestic Loan Documents, any note or notes executed by
         Borrower, and any other agreement entered into between Borrower and
         Bank in connection with this Exim Agreement, all as amended or extended
         from time to time.

                  "EXIM MATURITY DATE" is October 1, 2002.

                  "NOTE" is defined in Section 2.2.

                  "OBLIGATIONS" shall mean all debts, principal, interest, Bank
         Expenses arising under the Exim Loan Documents, the Borrower Agreement,
         the Domestic Loan Documents and other amounts Borrower owes Bank now or
         later, and including interest accruing after Insolvency Proceedings
         begin and debts, liabilities, or obligations of Borrower assigned to
         Bank.

                  "PAYMENT DATE" means the last calendar day of each month
         commencing on the first such date after the Closing Date and ending on
         the Exim Maturity Date.

                  "RESPONSIBLE OFFICER" means each of the Chief Executive
         Officer and Chief Financial Officer of the Borrower.

                                       11
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as a sealed instrument under the laws of the Commonwealth of
Massachusetts as of the date first above written.

BORROWER:

DATAWATCH CORPORATION                        SILICON VALLEY BANK, doing business
                                             as SILICON VALLEY EAST

By: /s/ Robert W. Hagger                     By: /s/ David Rodriquez
    ---------------------------------------      -------------------------------

Name: Robert W. Hagger                       Name: David Rodriquez
      -------------------------------------        -----------------------------

Title: President & Chief Executive Officer   Title: Vice President
       ------------------------------------         ----------------------------

DATAWATCH INTERNATIONAL LIMITED

By: /s/ Robert W. Hagger
    ---------------------------------------

Name: Robert W. Hagger
      -------------------------------------

Title: Director
       ------------------------------------

DATAWATCH EUROPE LIMITED

By: /s/ Alan R. MacDougall
    ---------------------------------------

Name: Alan R. MacDougall
      -------------------------------------

Title: Director and Secretary
       ------------------------------------

                                       12
<PAGE>

                                    EXHIBIT A
                                    ---------

            The Collateral consists of all of Borrower's right, title and
interest in and to the following:

            All goods, equipment, inventory, contract rights or rights to
payment of money, leases, license agreements, franchise agreements, general
intangibles (including payment intangibles), accounts (including health-care
receivables), documents, instruments (including any promissory notes), chattel
paper (whether tangible or electronic), cash, deposit accounts, fixtures,
letters of credit rights (whether or not the letter of credit is evidenced by a
writing), commercial tort claims, securities, and all other investment property,
supporting obligations, and financial assets, whether now owned or hereafter
acquired, wherever located; and

            Any copyright rights, copyright applications, copyright
registrations and like protections in each work of authorship and derivative
work, whether published or unpublished, now owned or later acquired; any
patents, trademarks, service marks and applications therefor; trade styles,
trade names, any trade secret rights, including any rights to unpatented
inventions, know-how, operating manuals, license rights and agreements and
confidential information, now owned or hereafter acquired; or any claims for
damages by way of any past, present and future infringement of any of the
foregoing; and

            All Borrower's Books relating to the foregoing and any and all
claims, rights and interests in any of the above and all substitutions for,
additions, attachments, accessories, accessions and improvements to and
replacements, products, proceeds and insurance proceeds of any or all of the
foregoing.

                                       13
<PAGE>

                                    EXHIBIT B
                                    ---------

$500,000.00                                                  _____________, 2001

            FOR VALUE RECEIVED, the undersigned (the "Borrower"), promises to
pay to the order of Silicon Valley Bank ("Bank"), at such place as the holder
hereof may designate, in lawful money of the United States of America, the
aggregate unpaid principal amount of all advances ("Advances") made by Bank to
Borrower, up to a maximum principal amount of Five Hundred Thousand Dollars
($500,000.00), plus interest on the aggregate unpaid principal amount of such
Advances, at the rates and in accordance with the terms of the Export-Import
Bank Loan and Security Agreement between Borrower and Bank of even date
herewith, as amended from time to time (the "Loan Agreement") on the first
calendar day of each month after an Advance has been made. The entire principal
amount and all accrued interest shall be due and payable on October 1, 2002, or
on such earlier date, as provided for in the Loan Agreement.

            Borrower irrevocably waives the right to direct the application of
any and all payments at any time hereafter received by Bank from or on behalf of
Borrower, and Borrower irrevocably agrees that Bank shall have the continuing
exclusive right to apply any and all such payments against the then due and
owing obligations of Borrower as Bank may deem advisable. In the absence of a
specific determination by Bank with respect thereto, all payments shall be
applied in the following order: (a) then due and payable fees and expenses; (b)
then due and payable interest payments and mandatory prepayments; and (c) then
due and payable principal payments and optional prepayments.

            Bank is hereby authorized by Borrower to endorse on Bank's books and
records each Advance made by Bank under this Note and the amount of each payment
or prepayment of principal of each such Advance received by Bank; it being
understood, however, that failure to make any such endorsement (or any errors in
notation) shall not affect the obligations of Borrower with respect to Advances
made hereunder, and payments of principal by Borrower shall be credited to
Borrower notwithstanding the failure to make a notation (or any errors in
notation) thereof on such books and records.

            Borrower promises to pay Bank all reasonable costs and reasonable
expenses including all reasonable attorneys' fees, incurred in such collection
or in any suit or action to collect this Note or in any appeal thereof, unless a
final court of competent jurisdiction finds that the Bank acted with gross
negligence or willful misconduct. Borrower waives presentment, demand, protest,
notice of protest, notice of dishonor, notice of nonpayment, and any and all
other notices and demands in connection with the delivery, acceptance,
performance, default or enforcement of this Note, as well as any applicable
statute of limitations. No delay by Bank in exercising any power or right
hereunder shall operate as a waiver of any power or right. Time is of the
essence as to all obligations hereunder.

            This Note is issued pursuant to the Loan Agreement, which shall
govern the rights and obligations of Borrower with respect to all obligations
hereunder.

            The law of the Commonwealth of Massachusetts shall apply to this
Agreement. BORROWER ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE COMMONWEALTH OF MASSACHUSETTS IN ANY ACTION, SUIT,
OR PROCEEDING OF ANY KIND, AGAINST IT WHICH ARISES OUT OF OR BY REASON OF THIS
NOTE OR THE LOAN AGREEMENT; PROVIDED, HOWEVER, THAT IF FOR ANY REASON BANK
CANNOT AVAIL ITSELF OF THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS, BORROWER
ACCEPTS JURISDICTION OF THE COURTS AND VENUE IN SANTA CLARA COUNTY, CALIFORNIA.

            BORROWER WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF ANY OF THE EXIM LOAN DOCUMENTS OR ANY OF THE

                                       14
<PAGE>

TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. BORROWER
RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL
INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. BORROWER REPRESENTS AND WARRANTS
THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY
AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL.

DATAWATCH CORPORATION

By:_____________________________________

Name:___________________________________

Title:__________________________________

DATAWATCH INTERNATIONAL LIMITED

By:_____________________________________

Name:___________________________________

Title:__________________________________

DATAWATCH EUROPE LIMITED

By:_____________________________________

Name:___________________________________

Title:__________________________________

                                       15

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