Document:

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                                                                Exhibit 10.2

IBM Credit Corporation

                      AGREEMENT FOR WHOLESALE FINANCING
                            (SECURITY AGREEMENT)

     This Agreement for Wholesale Financing - Security Agreement (as amended,
supplemented or otherwise modified from time to time, this "Agreement") dated
November 27, 2000 is by and between IBM CREDIT CORPORATION, a Delaware
corporation, with a place of business at 1500 RiverEdge Parkway, Atlanta, GA
30358 ("IBM Credit"), and INFORMATION TECHNOLOGY SERVICES, INC., a New York
corporation, ("Customer"). This Agreement replaces that Inventory and Working
Capital Financing Agreement between IBM Credit Customer (as amended, modified
or supplemented from time to time) dated September 24, 1996.

     In the course of Customer's business, Customer acquires products and
wants IBM Credit to finance Customer's purchase of such products under the
following terms and conditions:

1.   IBM Credit may in its sole discretion from time to time decide the amount
of credit IBM Credit extends to Customer, notwithstanding any prior course of
conduct between IBM Credit and Customer. IBM Credit may combine all of its
advances to make one debt owed by Customer.

2.   IBM Credit may in its sole discretion decide the amount of funds, if any,
IBM Credit will advance on any products Customer may seek to acquire. Customer
agrees that any decision to finance products will not be binding on IBM Credit
until such time as the funds are actually advanced by IBM Credit.

3.   In the course of Customer's operations, Customer intends to purchase from
persons approved in writing by IBM Credit for the purposes of this Agreement
(the "Authorized Suppliers") computer hardware and software products
manufactured or distributed by or bearing any trademark or trade name of such
Authorized Suppliers (the "Authorized Inventory"). When IBM Credit advances
funds, IBM Credit may send Customer a Statement of Transaction or other
statement. If IBM Credit does, Customer will have acknowledged the debt to be
an account stated and Customer will have agreed to the terms set forth on such
statement unless Customer notifies IBM Credit in writing of any question or
objection within seven (7) days after such statement is mailed to Customer.

4.   To secure payment of all Customer's current and future obligations to IBM
Credit whether under this Agreement, any guaranty that Customer now or
hereafter executes, or any other agreement between Customer and IBM Credit,
whether direct or contingent, Customer grants IBM Credit a security interest
in all of Customer's inventory, equipment, fixtures, account, contract rights,
chattel paper, instruments, reserves, documents of title, deposit accounts and
general intangibles, whether now owned or hereafter acquired, and all
attachments, accessories, accessions, substitutions and/or replacements
thereto and all proceeds thereof. All of the above assets are defined pursuant
to the provisions of Article 9 of the Uniform Commercial Code and are
hereinafter collectively referred to as the "Collateral." This security
interest is also granted to secure Customer's obligations to all IBM Credit's
affiliates. Customer will hold all of the Collateral financed by IBM Credit,
and the proceeds thereof, in trust for IBM Credit and Customer will
immediately account for and remit directly to IBM Credit all such proceeds
when payment is required under the terms set forth in the billing statement or
as otherwise provided in this Agreement. IBM Credit may directly collect any
amount owed Customer from Authorized Suppliers with respect to the Collateral
and credit Customer with all such sums received by IBM Credit from Authorized
Suppliers. IBM Credit's title, lien or security interest will not be
impaired by any payments Customer makes to the seller or anyone else or by
Customer's failure or refusal to account to IBM Credit for proceeds.

5.   Customer's principal place of business is located at:

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 20 Precision Drive, Shirley, NY 11967
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(Number and Street)                            (City, County, State, Zip Code)

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and Customer represents that its business is conducted as a      SOLE
                                                            ----
PROPRIETORSHIP.     PARTNERSHIP, XXX CORPORATION.  X   LIMITED LIABILITY
               ----                               ----
COMPANY
(check applicable term). Customer will notify IBM Credit, in writing, prior to
any change in Customer's identity, name, form of ownership, management, and of
any changes in Customer's principal place of business, or any additions or
discontinuances of other business locations. The Collateral will be kept at
Customer's principal place of business. Customer will notify IBM Credit, in
writing, thirty (30) days prior to moving any of the Collateral to any other
address. Customer and Customer's predecessors have done business during the
last six (6) months only under the following names:

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 Information Technology Services, Inc.
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This paragraph is not in any manner intended to limit the extent of IBM
Credit's security interest in the Collateral.

6.   Customer represents and covenants that the Collateral is and will remain
free from all claims and liens superior to IBM Credit's unless otherwise
agreed to by IBM Credit in writing, and that Customer will defend the
Collateral against all other claims and demands. Customer will not sell, rent,
lease, lend, demonstrate, pledge transfer or secrete any of the Collateral or
use any of the Collateral for any purpose other than exhibition and sale to
buyers in the ordinary course of business, without IBM Credit's prior written
consent. Customer will execute all documents IBM Credit may request to confirm
or perfect IBM Credit's security interest in the Collateral. Customer warrants
and represents that Customer is not in default in the payment of any
principal, interest or other charges relating to any indebtedness owed to any
third party, and no event has occurred, as of the effective date of this
Agreement or as of the date of any request by Customer to IBM Credit for
financing in the future, under the terms of any agreement, document,
promissary note or other instrument, which with or without the passage of time
and/or the giving of notice constitutes or would constitute an event of
default thereunder. Customer will promptly provide its year-end financial
statement, in form and detail satisfactory to IBM Credit, to IBM Credit within
ninety (90) days after Customer's fiscal year ends and, if requested by IBM
Credit, Customer will also promptly provide Customer's financial Statement to
IBM Credit after each fiscal quarter within forty five (45) days. Customer
represents and covenants that each financial statement that Customer submits
to IBM Credit will be prepared according to generally accepted accounting
principles in effect in the United States from time to time, and is and will
be correct and will accurately represent Customer's financial condition.
Customer further acknowledges IBM Credit's reliance on the truthfulness and
accuracy of each financial statement that Customer submits to IBM Credit in
IBM Credit's extension of various financial accommodations to Customer.

7.   Customer will pay all taxes, license fees, assessments and charges on the
Collateral when due. Customer will immediately notify IBM Credit of any loss,
theft, or destruction of or damage to any of the Collateral. Customer will be
responsible for any loss, theft, or destruction or damage of Collateral.
Customer will keep the Collateral insured for its full insurable value against
loss or damage under an "all risk" insurance policy. Customer will obtain
insurance under such terms and in such amounts acceptable to IBM Credit, from
time to time, with companies acceptable to IBM Credit, with a lender loss-
payee or mortgagee clause payable to IBM Credit to the extent of any loss to
the Collateral and containing a waiver of all defenses against Customer that
is acceptable to IBM Credit. Customer agrees to provide IBM Credit with
written evidence of the required insurance coverage and lender loss-payee or
mortgagee clause. Customer assigns to IBM Credit all amounts owed to Customer
under any insurance policy, and Customer directs any insurance company to
make payment directly to IBM Credit to be applied to the unpaid obligations
owed IBM Credit. Customer further grants IBM Credit an irrevocable power of
attorney to endorse any checks or drafts and sign and file any of the papers,
forms and documents required to initiate and settle any insurance claims with
respect to the Collateral. If Customer fails to pay any of the above-referenced
costs, charges, or insurance premiums, or if Customer fails to insure the
Collateral, IBM Credit may, but will not be obligated to, pay such costs,
charges and insurance premiums, and the amounts paid will be considered an
additional obligation owed by Customer to IBM Credit.

8.   IBM Credit has the right to enter upon Customer's premises from time to
time, as IBM Credit in its sole discretion may determine for IBM Credit's sole
benefit, and all without any advance notice to Customer, to: examine the
Collateral; appraise it as security; verify its condition and non-use; verify
that

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all Collateral have been properly accounted for; verify that Customer has
complied with all the terms and provisions of this Agreement; and assess,
examine, and make copies of Customer's books and record. Any collection by
IBM Credit of any amounts Customer owes at or during IBM Credit's examination
of the Collateral does not relieve Customer of its continuing obligation to
pay Customer's obligations owed to IBM Credit in accordance with such terms.

9.   Customer agrees to immediately pay IBM Credit the full amount of the
principal balance owed IBM Credit on each item of Approved Inventory financed
by IBM Credit at the time such Approved Inventory is sold, lost, stolen,
destroyed, or damaged, whichever occurs first, unless IBM Credit has agreed in
writing to provide financing to Customer on other terms. Customer also agrees
to provide IBM Credit, upon IBM Credit's request, an inventory report which
describes all the Approved Inventory in Customer's possession (excluding any
Approved Inventory financed by IBM Credit under the Demonstration and Training
Equipment Financing Option). Regardless of the repayment terms set forth in
any billing statement, if IBM Credit determines, after conducting an
inspection of all of Customer's inventory, that the current outstanding
obligations owed by Customer to IBM Credit exceeds the aggregate wholesale
invoice price, net of all applicable price reduction credits, of the Approved
Inventory in Customer's possession that is new and in manufacturer sealed
boxes and in which IBM Credit has a perfected first priority security
interest, Customer agrees to immediately pay to IBM Credit an amount equal to
the difference between such outstanding obligations and the aggregate
wholesale invoice price, net of all applicable price reduction credits, of
such Approved Inventory. Customer will make all payments to IBM Credit
according to the remit instructions in the billing statement. Any checks or
other instruments delivered to IBM Credit to be applied against Customer's
outstanding obligations will constitute conditional payment until the funds
represented by such instruments are actually received by IBM Credit. IBM
Credit may apply payments to reduce finance charges first and then principal,
irrespective of Customer's instructions. Further, IBM Credit may apply
principal payments to the oldest (earliest) invoice for the Approved
Inventory financed by IBM Credit, or to such Approved Inventory which is
sold, lost, stolen, destroyed, damaged, or otherwise disposed of. If Customer
signs any instrument for any outstanding obligations, it will be evidence of
Customer's obligation to pay and will not be payment. Any discount, rebate,
bonus, or credit for Approved Inventory granted to Customer by any Authorized
Supplier will not, in any way, reduce the obligations Customer owes IBM
Credit, until IBM Credit has received payment in good funds.

10.  Customer will pay IBM Credit finance charges on the total amount of
credit extended to Customer in the amount agreed to between Customer and IBM
Credit from time to time. The period of any financing will begin on the
invoice date of the Approved Inventory whether or not IBM Credit advances
payment on such date. This period will be included in the calculation of the
annual percentage rate of the finance charges. Such finance charges may be
applied by IBM Credit to cover any amounts expended for IBM Credit's:
appraisal and examination of the Collateral; maintenance of facilities for
payment; assistance in support of Customer's retail sales; IBM Credit's
commitments to Authorized Suppliers to finance shipments of Approved Inventory
to Customer; recording and filing fees; expenses incurred in obtaining
additional collateral or security; and any costs and expenses incurred by IBM
Credit arising out of the financing IBM Credit extends to Customer. Customer
also agrees to pay IBM Credit additional charges which include: late payment
fees at a per annum rate equal to the Prime Rate plus 6.5%; flat charges:
charges for receiving NSF checks from Customer; renewal charges; and any other
charges agreed to by Customer and IBM Credit from time to time. For purposes
of this Agreement, "Prime Rate" will mean the average of the rates of interest
announced by banks which IBM Credit uses in its normal course of business of
determining prime rate. Unless Customer hereafter otherwise agrees in writing,
the finance charges and additional charges agreed upon will be IBM Credit's
applicable finance charges and additional charges for the class of Approved
Inventory involved prevailing from time to time at IBM Credit's principal
place of business, but in no event greater than the highest rate from time to
time permitted by applicable law. If it is determined that amounts received
from Customer were in excess of such highest rate, then the amount
representing such excess will be considered reductions to the outstanding
principal of IBM Credit's advances to Customer. IBM Credit will send Customer,
at monthly or other intervals, a statement of all charges due on Customer's
account with IBM Credit. Customer will have acknowledged the charges due, as
indicated on the statement, to be an account stated, unless Customer objects
in writing to IBM Credit within seven (7) days after such statement is mailed
to

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Customer. This statement may be adjusted by IBM Credit at any time to conform
to applicable law and this Agreement. IBM Credit shall calculate any free
financing period utilizing a methodology that is consistent with the
methodologies used for similarly situated customers of IBM Credit. The
Customer understands that IBM Credit may not offer, may change or may cease
to offer a free financing period for the Customer's purchases of Approved
Inventory. If any Authorized Supplier fails to provide payment of a finance
charge for Customer, as agreed, Customer will be responsible for and pay to
IBM Credit all finance charges billed to Customer's account.

11.  Any of the following events will constitute an event of default by
Customer under this Agreement: Customer breaches any of the terms, warranties
or representations contained in this Agreement or in any other agreements
between Customer and IBM Credit or between Customer and any of IBM Credit's
affiliates; any guarantor of Customer's obligations to IBM Credit under this
Agreement or any other agreements, breaches of any terms, warranties or
representations contained in such guaranty or other agreements between such
guarantor and IBM Credit: any representation, statement, report or certificate
made or delivered by Customer or any of Customer's owners, representatives,
employees or agents or by any guarantor to IBM Credit is not true and correct;
Customer fails to pay any of the liabilities or obligations owed to IBM Credit
or any of IBM Credit's affiliates when due and payable under this Agreement or
under any other agreements between Customer and IBM Credit or between Customer
and any of IBM Credit's affiliates; IBM Credit determines that IBM Credit is
insecure with respect to any of the Collateral or the payment of Customer's
obligations owed to IBM Credit; Customer abandons the Collateral or any part
thereof; Customer or any guarantor becomes in default in the payment of any
indebtedness owed to any third party; a judgment issues on any money demand
against Customer or any guarantor; an attachment, sale or seizure is issued
against Customer or any of the Collateral; any part of the Collateral is
seized or taken in execution; the death of the undersigned if the business is
operated as a sole proprietorship, or the death of a partner if the business
is operated as a partnership, or the death of any guarantor; Customer ceases
or suspends Customer's business; Customer or any guarantor makes a general
assignment for the benefit of creditors; Customer or any guarantor becomes
insolvent or voluntarily or involuntarily becomes subject to the Federal
Bankruptcy Code, state insolvency laws or any act for the benefit of creditors;
any receiver is appointed for any of Customer's or any guarantor's assets,
or any guaranty pertaining to Customer's obligations to IBM Credit is
terminated for any reason whatsoever; any guarantor disclaims any obligations
under any guaranty; Customer loses any franchise, permission license or right
to sell or deal in any Approved Inventory; Customer or any guarantor
misrepresents its respective financial condition or organizational structure;
or IBM Credit determines, in its sole discretion, that the Collateral, any
other collateral given to IBM Credit to secure Customer's obligations to IBM
Credit, any guarantor's guaranty, or Customer's or any guarantor's net worth
has decreased in value, and Customer has been unable, within the time period
prescribed by IBM Credit, to either provide IBM Credit with additional
collateral in a form and substance satisfactory to IBM Credit or reduce
Customer's total obligations by an amount sufficient to satisfy IBM Credit.
Following an event of a default:

     (a)    IBM Credit may, at any time at IBM Credit's election, without
notice or demand to Customer do any one or more of the following: declare all
or part of the obligations Customer owes IBM Credit immediately due and
payable, together will all court costs and all costs and expenses of IBM
Credit's repossession and collection activity, including, but not limited to,
all attorney's fees: exercise any or all rights of a secured party under
applicable law; cease making any further financial accommodations or extending
any additional credit to Customer, and/or exercise any or all rights available
at law or in equity. All of IBM Credit's rights and remedies are cumulative.

     (b)    Customer will segregate, hold and keep the Collateral in trust, in
good order and repair, only for IBM Credit's benefit, and Customer will not
exhibit, transfer, sell, further encumber, otherwise dispose of or use for any
other purpose whatsoever any of the Collateral.

     (c)    Upon IBM Credit's oral or written demand, Customer will
immediately deliver the Collateral to IBM Credit, in good order and repair, at
a place specified by IBM Credit, together with all related documents: or IBM
Credit may, in its sole discretion and without notice or demand to Customer,
take immediate possession of the Collateral, together with all related
documents.

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     (d)    Customer waives and releases: any claims and causes of action
which Customer may now or ever have against IBM Credit as a direct or indirect
result of any possession, repossession, collection or sale by IBM Credit of
any of the Collateral and the benefit of all valuation, appraisal and
exemption laws. If IBM Credit seeks to take possession of any of the
Collateral by court process, Customer irrevocably waives any notice, bonds,
surety and security relating thereto required by any statute, court rule or
otherwise.

     (e)    Customer appoints IBM Credit or any person IBM Credit may delegate
as Customer's duly authorized Attorney-In-Fact to do, in IBM Credit's sole
discretion, any of the following in the event of a default: endorse Customer's
name on any notes, checks, drafts or other forms of exchange constituting
Collateral, or received as payment on any Collateral for deposit in IBM
Credit's account; sell, assign, transfer, negotiate, demand, collect, receive,
settle, extend or renew any amounts due on any of the Collateral; and exercise
any rights Customer has in the Collateral.

If Customer brings any action or asserts any claim against IBM Credit which
arises out of this Agreement, any other agreement or any of the business
dealings between IBM Credit and Customer, in which Customer does not prevail,
Customer agrees to pay IBM Credit all costs and expenses of IBM Credit's
defense of such action or claim including, but not limited to, all attorney's
fees. If IBM Credit fails to exercise any of IBM Credit's rights or remedies
under this Agreement, such failure will in no way or manner waive any of IBM
Credit's rights or remedies as to any past, current or future default.

12.  Customer agrees that if IBM Credit conducts private sale of any
Collateral by soliciting bids from ten (10) or more other dealers or
distributors in the type of Collateral repossessed by or returned to IBM
Credit hereunder, any sale by IBM Credit of such property will be deemed to be
a commercially reasonable disposition under the Uniform Commercial Code. IBM
Credit agrees that commercially reasonable notice of any public or private
sale will be deemed given to Customer if IBM Credit sends Customer a notice of
sale at least seven (7) days prior to the date of any public sale or the
time after which a private sale will be made. If IBM Credit disposes of any
such Collateral other than as herein contemplated, the commercial
reasonableness of such sale will be determined in accordance with the
provisions of the Uniform Commercial Code as adopted by the state whose laws
govern this Agreement.

Customer agrees that IBM Credit does not warrant the Approved Inventory.
Customer will pay IBM Credit in full even if the Approved Inventory is
defective or fails to conform to any warranties extended by any third party.
Customer's obligations to IBM Credit will not be affected by any dispute
Customer may have with any third party. Customer will not assert against IBM
Credit any claim or defense against any claim or defense Customer may have
against any third party. Customer will indemnify and hold IBM Credit harmless
against any claims or defenses asserted by any buyer of the Approved Inventory
by reason of: the condition of any Approved Inventory; any representations
made about the Approved Inventory; or for any and all other reasons
whatsoever.

13.  Customer grants to IBM Credit a power of attorney authorizing any of IBM
Credit's representatives to: execute or endorse on Customer's behalf any
documents, financing statements and instruments evidencing Customer's
obligations to IBM Credit; supply any omitted information and correct errors
in any documents or other instruments executed by or for the Customer; do any
and every act which Customer is obligated to perform under this Agreement; and
do any other things necessary to preserve and protect Collateral and IBM
Credit's security interest in the Collateral. Customer further authorizes IBM
Credit to provide to any third party any credit, financial or other
information about Customer that is in IBM Credit's possession.

14.  Each party may electronically transmit to or receive from the other party
certain documents specified in the E-Business Schedule A attached hereto ("E-
Documents") via the Internet or electronic data interchange ("EDI"). Any
transmission of data which is not an E-Document shall have no force or effect
between the parties. EDI transmissions may be transmitted directly or through
any third party service provider ("Provider") with which either party may
contract. Each party will be liable for the acts or omissions of its Provider
while handling E-Documents for such party, provided, that if both parties use

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the same Provider, the originating party will be liable for the acts or
omissions of such Provider as to such E-Document. Some information to be made
available to Customer will be specific to the Customer and will require
Customer to register with IBM Credit before access is provided. After IBM
Credit has approved the registration submitted by Customer, IBM Credit will
provide an ID and password(s) to an individual designated by Customer
("Customer Recipient"). Customer accepts responsibility for the designated
individual's distribution of the ID and password(s) within its organization
and Customer will take reasonable measures to ensure that passwords are not
shared or disclosed to unauthorized individuals. Customer will conduct an
annual review of all IDs and passwords to ensure that they are accurate and
properly authorized. IBM CREDIT MAY CHANGE OR DISCONTINUE USE OF AN ID OR
PASSWORD AT ITS DISCRETION AT ANY TIME.  E-Documents will not be deemed to
have been properly received, and no E-Document will give rise to any
obligation, until accessible to the receiving party at such party's receipt
computer at the address specified therein. Upon proper receipt of an E-
Document, the receiving party will promptly transmit a functional
acknowledgment in return. A functional acknowledgment will constitute
conclusive evidence that an E-Document has been properly received. If any
transmitted E-Document is received in an unintelligible or garbled form, the
receiving party will promptly notify the originating part in a reasonable
manner. In the absence of such a notice, the originating party's records of
the contents of the E-Document will control.

Each party will use those security procedures which are reasonable sufficient
to ensure that all transmissions of E-Documents are authorized and to protect
its business records and data from improper access. Any E-Document received
pursuant to this paragraph 14 will have the same effect as if the contents of
the E-Document had been sent in paper rather than electronic form. The conduct
of the parties pursuant to this paragraph 14 will, for all legal purposes,
evidence a course of dealing and a course of performance accepted by the
parties. The parties agree not to contest the validity or enforceability of E-
Documents under the provisions of any applicable law relating to whether
certain agreements are to be in writing or signed by the party to be bound
thereby. The parties agree as to any E-Document accompanied by Customer's ID,
that IBM Credit can reasonably rely on the fact that such E-Document is
properly authorized by Customer. E-Documents, if introduced as evidence on
paper in any judicial, arbitration, mediation or administrative proceedings,
will be admissible as between the parties to the same extent and under the
same conditions as other business records originated and maintained in
documentary form. Neither party will contest the admissibility of copies of E-
Documents under either the business records exception to the hearsay rule or
the best evidence rule on the basis that the E-Documents were not originated
or maintained in documentary form.

Neither party will be liable to the other for any special, incidental,
exemplary or consequential damages arising from or as a result of any delay,
omission or error in the electronic transmission or receipt of any E-Document
pursuant to this paragraph 14, even if neither party has been advised of the
possibility of such damages. In the event Customer requests IBM Credit to
effect withdrawal or debit of funds from an account of Customer, then in no
event will IBM Credit be liable for any amount in excess of any amount
incorrectly debited, except in the event of IBM Credit's gross negligence or
willful misconduct. No party will be liable for any failure to perform its
obligations pursuant to this paragraph 14 in connection with any E-Document,
where such failure results from any act of God or other cause beyond such
party's reasonable control (including, without limitation, any mechanical,
electronic or communications failure) which prevents such party from
transmitting or receiving E-Documents.

CUSTOMER RECIPIENT for Internet transmissions:

(PLEASE PRINT)
NAME OF CUSTOMER'S DESIGNATED CENTRAL CONTACT AUTHORIZED TO RECEIVE IDS AND
PASSWORDS:

Mary Driscoll
-------------------------------------------------------
E-MAIL ADDRESS: mary.driscoll@infotechusa.com
                ---------------------------------------
PHONE NUMBER:   631-205-1000 ext. 115
              ---------------------------------------

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15.  Time is of the essence in this Agreement. This Agreement will be
effective from the date of its acceptance at IBM Credit's office. Customer
acknowledges receipt of a true copy and waives notice of IBM Credit's
acceptance of it. If IBM Credit advances funds under this Agreement, IBM
Credit will have accepted it. This Agreement will remain in force until one of
the parties gives notice to the other that it is terminated. If Customer
terminates this Agreement, IBM Credit may declare all or any part of the
obligations Customer owes IBM Credit due and payable immediately. If this
Agreement is terminated, Customer will not be relieved from any obligations to
IBM Credit arising out of IBM Credit's advances or commitments made before the
effective date of termination. IBM Credit's rights under this Agreement and
IBM Credit's security interest in present and future Collateral will remain
valid and enforceable until all Customer's obligations to IBM Credit are paid
in full. This Agreement shall be binding and inure to the benefit of IBM
Credit and the Customer and their respective successors and assigns; provided,
that the Customer shall have no right to assign this Agreement without
the prior written consent of IBM Credit. This Agreement will protect and bind
IBM Credit's and Customer's respective heirs, representatives, successors and
assigns. It can be varied only by a document signed by IBM Credit's and
Customer's authorized representatives. If any provision of this Agreement or
its application is invalid or unenforceable, the remainder of this Agreement
will not be impaired or affected and will remain binding and enforceable. This
Agreement is executed with the authority of Customer's Board of Directors, and
with shareholder approval, if required by the law, if Customer is a
corporation or if Customer is a limited liability company, with the authority of
authorized members. All notices IBM Credit sends to Customer will be
sufficiently given if mailed or delivered to Customer as its address shown in
paragraph 5.

16.  The laws of the State of New York will govern this Agreement. Customer
agrees that venue for any lawsuit will be in the State of Federal Court within
the county, parish, or district where IBM Credit's office, which provides the
financial accommodations, is located. Customer hereby waives any right to
change the venue of any action.

17.  If Customer has previously executed any security agreements relating to
the Collateral with IBM Credit, Customer agrees that this Agreement is
intended only to amend and supplement such written agreements, and will not be
deemed to be a novation or termination of such written agreements. In the
event the terms of this Agreement conflict with the terms of any prior
security agreement that Customer previously executed with IBM Credit, the
terms of this Agreement will control in determining the agreement between
Customer and IBM Credit.

18.  CUSTOMER WAIVES ALL EXEMPTIONS AND HOMESTEAD LAWS TO THE MAXIMUM EXTENT
PERMITTED BY LAW. CUSTOMER WAIVES ANY STATUTORY RIGHT TO NOTICE OR HEARING
PRIOR TO IBM CREDIT'S ATTACHMENT, REPOSSESSION OR SEIZURE OF THE COLLATERAL.
CUSTOMER FURTHER WAIVES ANY AND ALL RIGHTS OF SETOFF CUSTOMER MAY HAVE AGAINST
IBM CREDIT. CUSTOMER AGREES THAT ANY PROCEEDING IN WHICH CUSTOMER, OR IBM
CREDIT OR ANY OF IBM CREDIT'S AFFILIATES, OR CUSTOMER'S OR IBM CREDIT'S
ASSIGNS ARE PARTIES, AS TO ALL MATTERS AND THINGS ARISING DIRECTLY OR
INDIRECTLY OUT OF THIS AGREEMENT, OR THE RELATIONS AMONG THE PARTIES LISTED IN
THIS PARAGRAPH WILL BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE
WITHOUT A JURY. EACH PARTY TO THIS AGREEMENT HEREBY WAIVES ANY RIGHT TO A JURY
TRIAL IN ANY SUCH PROCEEDING.

ATTEST:
/s/ John H. Spielberger
-----------------------------------    INFORMATION TECHNOLOGY SERVICES, INC.
              Secretary                               Customer

                                 By: /s/ Mary Driscoll
                                    ---------------------------------
Print Name:
 John H. Spielberger
---------------------------
                                 Print Name: Mary Driscoll
                                            -------------------------
                                 Title: Controller
                                       ------------------------------
    (CORPORATE SEAL)

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             E-BUSINESS SCHEDULE A ("SCHEDULE A")

CUSTOMER NAME: INFORMATION TECHNOLOGY SERVICES, INC.

EFFECTIVE DATE OF THIS SCHEDULE A: December 1, 2000
                                  ------------------------

E-DOCUMENTS AVAILABLE TO SUPPLIERS:

Invoices

Payment Report/Remittance Advisor

E-DOCUMENTS AVAILABLE TO CUSTOMER:

Invoices

Remittance Advisor

Transaction Approval

Billing Statement

Payment Planner

Auto Cash

Statements of Transaction

Common Dispute Form

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                   SECRETARY'S CERTIFICATE OF RESOLUTION

     I certify that I am the Secretary and the official custodian of certain
records, including the certificate of incorporation, charter, by-laws and
minutes of the meeting of the Board of Directors of the corporation named
below, and that the following is a true, accurate and compared extract from
the minutes of the Board of Directors of the corporation adopted at a special
meeting thereof held on due notice, at which meeting there was present a
quorum authorized to transact the business described below, and that the
proceedings of the meeting were in accordance with the certificate of
incorporation, charter and by-laws of the corporation, and that they have
not been revoked, annulled or amended in any manner whatsoever.

     Upon motion duly made and seconded, the following resolution was
unanimously adopted after full discussion: "RESOLVED, That the several
officers, directors and agents of this corporation, or any one or more of
them, are hereby authorized and empowered on behalf of this corporation: to
obtain financing from IBM Credit Corporation ("IBM Credit") in such amounts
and on such terms as such officers, directors or agents deem proper; to enter
into security and other agreements with IBM Credit relating to the terms upon
which financing may be obtained and security to be furnished by this
corporation therefor; from time to time to supplement or amend any such
agreements; and from time to time to pledge, assign, guaranty, mortgage, grant
security interest in and, otherwise transfer to IBM Credit as collateral
security for any obligations of this corporation to IBM Credit and its
affiliated companies, whenever and however arising, any assets of this
corporation, whether now owned or hereafter acquired; hereby ratifying,
approving and confirming all that any of said officers, directors or agents
have done or may do in the premises."

     IN WITNESS WHEREOF, I have executed and affixed the seal of the
corporation on the date stated below.

Dated: November 27        , 2000                  /s/ John H. Spielberger
      --------------------  ------           ---------------------------------
                                                         Secretary

                                                SysComm International Corp.
                                            ---------------------------------
                                                     Corporate Name

                          Page 9 of 9EXHIBIT 10.6
                                                                    ------------

                          COMMERCIAL SECURITY AGREEMENT

BORROWER:        DATAWATCH CORPORATION
                 234 BALLARDVALE STREET
                 WILMINGTON, MA 01887

LENDER:          SILICON VALLEY BANK A CALIFORNIA-CHARTERED BANK
                 DOING BUSINESS AS SILICON VALLEY EAST
                 45 WILLIAM STREET
                 WELLESLEY, MA 02181

THIS COMMERCIAL SECURITY AGREEMENT IS ENTERED INTO BETWEEN DATAWATCH CORPORATION
(REFERRED TO BELOW AS "GRANTOR"); AND SILICON VALLEY BANK (REFERRED TO BELOW AS
"LENDER"). FOR VALUABLE CONSIDERATION, GRANTOR GRANTS TO LENDER A SECURITY
INTEREST IN THE COLLATERAL TO SECURE THE INDEBTEDNESS AND AGREES THAT LENDER
SHALL HAVE THE RIGHTS STATED IN THIS AGREEMENT WITH RESPECT TO THE COLLATERAL,
IN ADDITION TO ALL OTHER RIGHTS WHICH LENDER MAY HAVE BY LAW.

DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. All references
to dollar amounts shall mean amounts in lawful money of the United States of
America.

          AGREEMENT. The word "Agreement" means this Commercial Security
          Agreement together with all exhibits and schedules attached to this
          Commercial Security Agreement from time to time, if any, as amended
          from time to time.

          COLLATERAL. The word "Collateral" means the following described
          property of Grantor, whether now owned or hereafter acquired, whether
          now existing or hereafter arising, and wherever located:

                   INVENTORY, CHATTEL PAPER, ACCOUNTS, CONTRACT RIGHTS, DEPOSIT
                   ACCOUNTS, DOCUMENTS, INSTRUMENTS, EQUIPMENT, GENERAL
                   INTANGIBLES AND FIXTURES

          In addition, the word "Collateral" includes all the following, whether
          now owned or hereafter acquired, whether now existing or hereafter
          arising, and wherever located:

          (a) All attachments, accessions, accessories, tools, parts, supplies,
          increases, and additions to and all replacements of and substitutions
          for any property described above.

          (b) All products and produce of any of the property described in this
          Collateral section.

          (c) All accounts, contract rights, general intangibles, instruments,
          rents, monies, payments, and all other rights, arising out of a sale,
          lease, or other disposition of any of the property described in this
          Collateral section.

          (d) All proceeds (including insurance proceeds) from the sale,
          destruction, loss, or other disposition of any of the property
          described in this Collateral section.

          (e) All records and data relating to any of the property described in
          this Collateral section, whether in the form of a writing, photograph,
          microfilm, microfiche, or electronic media, together with all

                                        1
<PAGE>

          of Grantor's right, title, and interest in and to all computer
          software to utilize, create, maintain, and process any such records or
          data on electronic media.

          EVENT OF DEFAULT. The words "Event of Default" mean and include
          without limitation any of the Events of Default set forth below in the
          section titled "Events of Default."

          GRANTOR. The word "Grantor" means PERSONICS CORPORATION, its
          successors and assigns.

          GUARANTOR. The word "Guarantor" means and includes without limitation
          each and all of the guarantors, sureties, and accommodation parties in
          connection with the Indebtedness.

          INDEBTEDNESS. The word "Indebtedness" means the indebtedness evidenced
          by the Note, including all principal and interest, together with all
          other indebtedness and costs and expenses for which Grantor is
          responsible under this Agreement or under any of the Related
          Documents.

          LENDER. The word "Lender" means Silicon Valley Bank, its successors
          and assigns.

          NOTE. The word "Note" means the notes, letters of credits or credit
          agreements in any principal amount from Borrower to Lender, together
          with all renewals of, extensions of, modifications of, refinancings
          of, consolidations of and substitutions for the notes, letters of
          credit or credit agreements.

          RELATED DOCUMENTS. The words "Related Documents" mean and include
          without limitation all promissory notes, credit agreements, loan
          agreements, environmental agreements, guaranties, security agreements,
          mortgages, deeds of trust, and all other instruments, agreements and
          documents, whether now or hereafter existing, executed in connection
          with the Indebtedness.

OBLIGATIONS OF GRANTOR.  Grantor warrants and covenants to Lender as follows:

          PERFECTION OF SECURITY INTEREST. Grantor agrees to execute such
          financing statements and to take whatever other actions are requested
          by Lender to perfect and continue Lender's security interest in the
          Collateral. Upon request of Lender, Grantor will deliver to Lender any
          and all of the documents evidencing or constituting the Collateral,
          and Grantor will note Lender's interest upon any and all chattel paper
          if not delivered to Lender for possession by Lender. Grantor hereby
          appoints Lender as its irrevocable attorney-in-fact for the purpose of
          executing any documents necessary to perfect or to continue the
          security interest granted in this Agreement. Lender may at any time,
          and without further authorization from Grantor, file a carbon,
          photographic or other reproduction of any financing statement or of
          this Agreement for use as a financing statement. Grantor will
          reimburse Lender for all expenses for the perfection and the
          continuation of the perfection of Lenders security interest in the
          Collateral. Grantor promptly will notify Lender before any change in
          Grantors name including any change to the assumed business names of
          Grantor. THIS IS A CONTINUING SECURITY AGREEMENT AND WILL CONTINUE IN
          EFFECT EVEN THOUGH ALL OR ANY PART OF THE INDEBTEDNESS IS PAID IN FULL
          AND EVEN THOUGH FOR A PERIOD OF TIME GRANTOR MAY NOT BE INDEBTED TO
          LENDER.

          NO VIOLATION. The execution and delivery of this Agreement will not
          violate any law or agreement governing Grantor or to which Grantor is
          a party, and its certificate or articles of incorporation and bylaws
          do not prohibit any term or condition of this Agreement.

          ENFORCEABILITY OF COLLATERAL. To the extent the Collateral consists of
          accounts, contract rights, chattel paper, or general intangibles, the
          Collateral is enforceable in accordance with its terms,

                                        2
<PAGE>

                          COMMERCIAL SECURITY AGREEMENT
                                    CONTINUED

          is genuine, and complies with applicable laws concerning form, content
          and manner of preparation and execution, and all persons appearing to
          be obligated on the Collateral have authority and capacity to contract
          and are in fact obligated as they appear to be on the Collateral.

          LOCATION OF THE COLLATERAL. Grantor, upon request of Lender, will
          deliver to Lender in form satisfactory to Lender a schedule of real
          properties and Collateral locations relating to Grantor's operations,
          including without limitation the following: (a) all real property
          owned or being purchased by Grantor; (b) all real property being
          rented or leased by Grantor; (c) all storage facilities owned, rented,
          leased, or being used by Grantor; and (d) all other properties where
          Collateral is or may be located. Except in the ordinary course of its
          business, Grantor shall not remove the Collateral from its existing
          locations without the prior written consent of Lender.

          REMOVAL OF COLLATERAL. Grantor shall keep the Collateral (or to the
          extent the Collateral consists of intangible property such as
          accounts, the records concerning the Collateral) at Grantor's address
          shown above, or at such other locations as are acceptable to Lender.
          Except in the ordinary course of its business, including the sales of
          inventory, Grantor shall not remove the Collateral from its existing
          locations without the prior written consent of Lender. To the extent
          that the Collateral consists of vehicles, or other titled property,
          Grantor shall not take or permit any action which would require
          application for certificates of title for the vehicles outside the
          Commonwealth of Massachusetts, without the prior written consent of
          Lender.

          TRANSACTIONS INVOLVING COLLATERAL. Except for inventory sold or
          accounts collected in the ordinary course of Grantor's business,
          Grantor shall not sell, offer to sell, or otherwise transfer or
          dispose of the Collateral. While Grantor is not in default under this
          Agreement, Grantor may sell inventory, but only in the ordinary course
          of its business and only to buyers who qualify as a buyer in the
          ordinary course of business. A sale in the ordinary course of
          Grantor's business does not include a transfer in partial or total
          satisfaction of a debt or any bulk sale. Grantor shall not pledge,
          mortgage, encumber or otherwise permit the Collateral to be subject to
          any lien, security interest, encumbrance, or charge, other than the
          security interest provided for in this Agreement, without the prior
          written consent of Lender. This includes security interests even if
          junior in right to the security interests granted under this
          Agreement. Unless waived by Lender, all proceeds from any disposition
          of the Collateral (for whatever reason) shall be held in trust for
          Lender and shall not be commingled with any other funds; provided
          however, this requirement shall not constitute consent by Lender to
          any sale or other disposition. Upon receipt, Grantor shall immediately
          deliver any such proceeds to Lender.

          TITLE. Grantor represents and warrants to Lender that it holds good
          and marketable title to the Collateral, free and clear of all liens
          and encumbrances except for the lien of this Agreement. No financing
          statement covering any of the Collateral is on file in any public
          office other than those which reflect the security interest created by
          this Agreement or to which Lender has specifically consented. Grantor
          shall defend Lender's rights in the Collateral against the claims and
          demands of all other persons.

          COLLATERAL SCHEDULES AND LOCATIONS. Insofar as the Collateral consists
          of inventory, Grantor shall deliver to Lender, as often as Lender
          shall require, such lists, descriptions, and designations of such
          Collateral as Lender may require to identify the nature, extent, and
          location of such

                                        3
<PAGE>

                          COMMERCIAL SECURITY AGREEMENT
                                    CONTINUED

          Collateral. Such information shall be submitted for Grantor and each
          of its subsidiaries or related companies.

          MAINTENANCE AND INSPECTION OF COLLATERAL. Grantor shall maintain all
          tangible Collateral in good condition and repair. Grantor will not
          commit or permit damage to or destruction of the Collateral or any
          part of the Collateral. Lender and its designated representatives and
          agents shall have the right at all reasonable times to examine,
          inspect, and audit the Collateral wherever located. Grantor shall
          immediately notify Lender of all cases involving the return,
          rejection, repossession, loss or damage of or to any Collateral; of
          any request for credit or adjustment or of any other dispute arising
          with respect to the Collateral; and generally of all happenings and
          events affecting the Collateral or the value or the amount of the
          Collateral.

          TAXES, ASSESSMENTS AND LIENS. Grantor will pay when due all taxes,
          assessments and liens upon the Collateral, its use or operation, upon
          this Agreement, upon any promissory note or notes evidencing the
          Indebtedness, or upon any of the other Related Documents. Grantor may
          withhold any such payment or may elect to contest any lien if Grantor
          is in good faith conducting an appropriate proceeding to contest the
          obligation to pay and so long as Lender's interest in the Collateral
          is not jeopardized in Lender's sole opinion. If the Collateral is
          subjected to a lien which is not discharged within fifteen (15) days,
          Grantor shall deposit with Lender cash, a sufficient corporate surety
          bond or other security satisfactory to Lender in an amount adequate to
          provide for the discharge of the lien plus any interest, costs,
          attorneys' fees or other charges that could accrue as a result of
          foreclosure or sale of the Collateral. In any contest Grantor shall
          defend itself and Lender and shall satisfy any final adverse judgment
          before enforcement against the Collateral. Grantor shall name Lender
          as an additional obliges under any surety bond furnished in the
          contest proceedings.

          COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Grantor shall comply
          promptly with all laws, ordinances, rules and regulations of all
          governmental authorities, now or hereafter in effect, applicable to
          the ownership, production, disposition, or use of the Collateral.
          Grantor may contest in good faith any such law, ordinance or
          regulation and withhold compliance during any proceeding, including
          appropriate appeals, so long as Lender's interest in the Collateral,
          in Lender's opinion, is not jeopardized.

          HAZARDOUS SUBSTANCES. Grantor represents and warrants that the
          Collateral never has been, and never will be so long as this Agreement
          remains a lien on the Collateral, used for the generation,
          manufacture, storage, transportation, treatment, disposal, release or
          threatened release of any hazardous waste or substance, as those terms
          are defined in the Comprehensive Environmental Response, Compensation,
          and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et
          seq., ("CERCLA"), the Superfund Amendments and Reauthorization Act of
          1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials
          Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource
          Conservation and Recovery Act, 49 U.S.C. Section 6901, et seq., or
          other applicable state or Federal laws, rules, or regulations adopted
          pursuant to any of the foregoing. The terms "hazardous waste" and
          "hazardous substance" shall also include, without limitation,
          petroleum and petroleum by-products or any fraction thereof and
          asbestos. The representations and warranties contained herein are
          based on Grantors due diligence in investigating the Collateral for
          hazardous wastes and substances. Grantor hereby (a) releases and
          waives any future claims against Lender for indemnity or contribution
          in the event Grantor becomes liable for cleanup or other costs

                                        4
<PAGE>

                          COMMERCIAL SECURITY AGREEMENT
                                    CONTINUED

          under any such laws, and (b) agrees to indemnify and hold harmless
          Lender against any and all claims and losses resuming from a breach of
          this provision of this Agreement. This obligation to indemnify shall
          survive the payment of the Indebtedness and the satisfaction of this
          Agreement.

          MAINTENANCE OF CASUALTY INSURANCE. Grantor shall procure and maintain
          all risks insurance, including without limitation fire, theft and
          liability coverage together with such other insurance as Lender may
          require with respect to the Collateral, in form, amounts, coverages
          and basis reasonably acceptable to Lender and issued by a company or
          companies reasonably acceptable to Lender. Grantor, upon request of
          Lender, will deliver to Lender from time to time the policies or
          certificates of insurance in form satisfactory to Lender, including
          stipulations that coverages will not be cancelled or diminished
          without at least ten (10) days' prior written notice to Lender and not
          including any disclaimer of the insurer's liability for failure to
          give such a notice. Each insurance policy also shall include an
          endorsement providing that coverage in favor of Lender will not be
          impaired in any way by any act, omission or default of Grantor or any
          other person. In connection with all policies covering assets in which
          Lender holds or is offered a security interest, Grantor will provide
          Lender with such loss payable or other endorsements as Lender may
          require. If Grantor at any time fails to obtain or maintain any
          insurance as required under this Agreement, Lender may (but shall not
          be obligated to) obtain such insurance as Lender deems appropriate,
          including if it so chooses "single interest insurance," which will
          cover only Lender's interest in the Collateral.

          APPLICATION OF INSURANCE PROCEEDS. Grantor shall promptly notify
          Lender of any loss or damage to the Collateral. Lender may make proof
          of loss if Grantor fails to do so within fifteen (15) days of the
          casualty. All proceeds of any insurance on the Collateral, including
          accrued proceeds thereon, shall be held by Lender as part of the
          Collateral. If Lender consents to repair or replacement of the damaged
          or destroyed Collateral, Lender shall, upon satisfactory proof of
          expenditure, pay or reimburse Grantor from the proceeds for the
          reasonable cost of repair or restoration. If Lender does not consent
          to repair or replacement of the Collateral, Lender shall retain a
          sufficient amount of the proceeds to pay all of the Indebtedness, and
          shall pay the balance to Grantor. Any proceeds which have not been
          disbursed within six (6) months after their receipt and which Grantor
          has not committed to the repair or restoration of the Collateral shall
          be used to prepay the Indebtedness.

          INSURANCE RESERVES. Lender may require Grantor to maintain with Lender
          reserves for payment of insurance premiums, which reserves shall be
          created by monthly payments from Grantor of a sum estimated by Lender
          to be sufficient to produce, at least fifteen (15) days before the
          premium due date, amounts at least equal to the insurance premiums to
          be paid. If fifteen (15) days before payment is due, the reserve funds
          are insufficient, Grantor shall upon demand pay any deficiency to
          Lender. The reserve funds shall be held by Lender as a general deposit
          and shall constitute a non-interest-bearing account which Lender may
          satisfy by payment of the insurance premiums required to be paid by
          Grantor as they become due. Lender does not hold the reserve funds in
          trust for Grantor, and Lender is not the agent of Grantor for payment
          of the insurance premiums required to be paid by Grantor. The
          responsibility for the payment of premiums shall remain Grantor's sole
          responsibility.

          INSURANCE REPORTS. Grantor, upon request of Lender, shall furnish to
          Lender reports on each existing policy of insurance showing such
          information as Lender may reasonably request including

                                        5
<PAGE>

                          COMMERCIAL SECURITY AGREEMENT
                                    CONTINUED

          the following: (a) the name of the insurer; (b) the risks insured; (c)
          the amount of the policy; (d) the property insured; (e) the then
          current value on the basis of which insurance has been obtained and
          the manner of determining that value; and (f) the expiration date of
          the policy. In addition, Grantor shall upon request by Lender (however
          not more often than annually) have an independent appraiser
          satisfactory to Lender determine, as applicable, the cash value or
          replacement cost of the Collateral.

GRANTOR'S RIGHT TO POSSESSION. Until default, Grantor may have possession of the
tangible personal property and beneficial use of all the Collateral and may use
it in any lawful manner not inconsistent with this Agreement or the Related
Documents, provided that Grantor's right to possession and beneficial use shall
not apply to any Collateral where possession of the Collateral by Lender is
required by law to perfect Lender's security interest in such Collateral. If
Lender at any time has possession of any Collateral, whether before or after an
Event of Default, Lender shall be deemed to have exercised reasonable care in
the custody and preservation of the Collateral if Lender takes such action for
that purpose as Grantor shall request or as Lender, in Lender's sole discretion,
shall deem appropriate under the circumstances, but failure to honor any request
by Grantor shall not of itself be deemed to be a failure to exercise reasonable
care. Lender shall not be required to take any steps necessary to preserve any
rights in the Collateral against prior parties, nor to protect, preserve or
maintain any security interest given to secure the Indebtedness.

EXPENDITURES BY LENDER. If not discharged or paid when due, Lender may (but
shall not be obligated to) discharge or pay any amounts required to be
discharged or paid by Grantor under this Agreement, including without limitation
all taxes, liens, security interests, encumbrances, and other claims, at any
time levied or placed on the Collateral. Lender also may (but shall not be
obligated to) pay all costs for insuring, maintaining and preserving the
Collateral. All such expenditures incurred or paid by Lender for such purposes
will then bear interest at the rate charged under the Note from the date
incurred or paid by Lender to the date of repayment by Grantor. All such
expenses shall become a part of the Indebtedness and, at Lenders option, will
(a) be payable on demand, (b) be added to the balance of the Note and be
apportioned among and be payable with any installment payments to become due
during either (i) the term of any applicable insurance policy or (ii) the
remaining term of the Note, or (c) be treated as a balloon payment which will be
due and payable at the Note's maturity. This Agreement also will secure payment
of these amounts. Such right shall be in addition to all other rights and
remedies to which Lender may be entitled upon the occurrence of an Event of
Default.

EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:

          DEFAULT ON INDEBTEDNESS. Failure of Grantor to make any payment when
          due on the Indebtedness.

          OTHER DEFAULTS. Failure of Grantor to comply with or to perform any
          other term, obligation, covenant or condition contained in this
          Agreement or in any of the Related Documents or in any other agreement
          between Lender and Grantor.

          INSOLVENCY. The dissolution or termination of Grantors existence as a
          going business, the insolvency of Grantor, the appointment of a
          receiver for any part of Grantor's property, any assignment for the
          benefit of creditors, any type of creditor workout, or the
          commencement of any proceeding under any bankruptcy or insolvency laws
          by or against Grantor.

                                        6
<PAGE>

                          COMMERCIAL SECURITY AGREEMENT
                                    CONTINUED

          CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
          forfeiture proceedings, whether by judicial proceeding, self-help,
          repossession or any other method, by any creditor of Grantor or by any
          governmental agency against the Collateral or any other collateral
          securing the Indebtedness. This includes a garnishment of any of
          Grantor's depose accounts with Lender.

          EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with
          respect to any Guarantor of any of the Indebtedness or such Guarantor
          dies or becomes incompetent.

RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a secured
party under the Massachusetts Uniform Commercial Code. In addition and without
limitation, Lender may exercise any one or more of the following rights and
remedies:

          ACCELERATE INDEBTEDNESS. Lender may declare the entire Indebtedness,
          including any prepayment penalty which Grantor would be required to
          pay, immediately due and payable, without notice.

          ASSEMBLE COLLATERAL. Lender may require Grantor to deliver to Lender
          all or any portion of the Collateral and any and all certificates of
          title and other documents relating to the Collateral. Lender may
          require Grantor to assemble the Collateral and make it available to
          Lender at a place to be designated by Lender. Lender also shall have
          full power to enter upon the property of Grantor to take possession of
          and remove the Collateral. If the Collateral contains other goods not
          covered by this Agreement at the time of repossession, Grantor agrees
          Lender may take such other goods, provided that Lender makes
          reasonable efforts to return them to Grantor after repossession.

          SELL THE COLLATERAL. Lender shall have full power to sell, lease,
          transfer, or otherwise deal with the Collateral or proceeds thereof in
          as own name or that of Grantor. Lender may sell the Collateral at
          public auction or private sale. Unless the Collateral threatens to
          decline speedily in value or is of a type customarily sold on a
          recognized market, Lender will give Grantor reasonable notice of the
          time after which any private sale or any other intended disposition of
          the Collateral is to be made. The requirements of reasonable notice
          shall be met if such notice is given at least ten (10) days before the
          time of the sale or disposition. All expenses relating to the
          disposition of the Collateral, including without limitation the
          expenses of retaking, holding, insuring, preparing for sale and
          selling the Collateral, shall become a part of the Indebtedness
          secured by this Agreement and shall be payable on demand, with
          interest at the Note rate from date of expenditure until repaid.

          APPOINT RECEIVER. To the extent permitted by applicable law, Lender
          shall have the following rights and remedies regarding the appointment
          of a receiver: (a) Lender may have a receiver appointed as a matter of
          right, (b) the receiver may be an employee of Lender and may serve
          without bond, and (c) all fees of the receiver and his or her attorney
          shall become part of the Indebtedness secured by this Agreement and
          shall be payable on demand, with interest at the Note rate from date
          of expenditure until repaid.

          COLLECT REVENUES, APPLY ACCOUNTS. Lender, either Itself or through a
          receiver, may collect the payments, rents, income, and revenues from
          the Collateral. Lender may at any time in its

                                        7
<PAGE>

                          COMMERCIAL SECURITY AGREEMENT
                                    CONTINUED

          discretion transfer any Collateral into its own name or that of its
          nominee and receive the payments, rents, income, and revenues
          therefrom and hold the same as security for the Indebtedness or apply
          it to payment of the Indebtedness in such order of preference as
          Lender may determine. Insofar as the Collateral consists of accounts,
          general intangibles, insurance policies, instruments, chattel paper,
          choses in action, or similar property, Lender may demand, collect,
          receipt for, settle, compromise, adjust, sue for, foreclose, or
          realize on the Collateral as Lender may determine, whether or not
          Indebtedness or Collateral is then due. For these purposes, Lender
          may, on behalf of and in the name of Grantor, receive, open and
          dispose of mail addressed to Grantor; change any address to which mail
          and payments are to be sent; and endorse notes, checks, drafts, money
          orders, documents of title, instruments and items pertaining to
          payment, shipment, or storage of any Collateral. To facilitate
          collection, Lender may notify account debtors and obligors on any
          Collateral to make payments directly to Lender.

          OBTAIN DEFICIENCY. If Lender chooses to sell any or all of the
          Collateral, Lender may obtain a judgment against Grantor for any
          deficiency remaining on the Indebtedness due to Lender after
          application of all amounts received from the exercise of the rights
          provided in this Agreement. Grantor shall be liable for a deficiency
          even if the transaction described in this subsection is a sale of
          accounts or chattel paper.

          OTHER RIGHTS AND REMEDIES. Lender shall have all the rights and
          remedies of a secured creditor under the provisions of the Uniform
          Commercial Code, as may be amended from time to time. In addition,
          Lender shall have and may exercise any or all other rights and
          remedies it may have available at law, in equity, or otherwise.

          CUMULATIVE REMEDIES. All of Lender's rights and remedies, whether
          evidenced by this Agreement or the Related Documents or by any other
          writing, shall be cumulative and may be exercised singularly or
          concurrently. Election by Lender to pursue any remedy shall not
          exclude pursue of any other remedy, and an election to make
          expenditures or to take action to perform an obligation of Grantor
          under this Agreement, after Grantor's failure to perform, shall not
          affect Lender's right to declare a default and to exercise its
          remedies.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:

          AMENDMENTS. This Agreement, together with any Related Documents,
          constitutes the entire understanding and agreement of the parties as
          to the matters set forth in this Agreement. No alteration of or
          amendment to this Agreement shall be effective unless given in writing
          and signed by the party or parties sought to be charged or bound by
          the alteration or amendment.

          APPLICABLE LAW. This Agreement has been delivered to Lender and
          accepted by Lender in the Commonwealth of Massachusetts. If there is a
          lawsuit, Grantor agrees upon Lender's request to submit to the
          jurisdiction of the courts of the Commonwealth of Massachusetts.
          (Initial Here________) Lender and Grantor hereby waive the right to
          any jury trial in any action, proceeding, or counterclaim brought by
          either Lender or Grantor against the other. This Agreement shall be
          governed by and construed in accordance with the laws of the
          Commonwealth of Massachusetts.

          ATTORNEYS' FEES; EXPENSES. Grantor agrees to pay upon demand all of
          Lender's reasonable

                                        8
<PAGE>

                          COMMERCIAL SECURITY AGREEMENT
                                    CONTINUED

          costs and expenses, including reasonable attorneys' fees and Lender's
          legal expenses, incurred in connection with the enforcement of this
          Agreement. Lender may pay someone else to help enforce this Agreement,
          and Grantor shall pay the costs and expenses of such enforcement.
          Costs and expenses include Lender's attorneys' fees and legal expenses
          whether or not there is a lawsuit, including attorneys' fees and legal
          expenses for bankruptcy proceedings (and including efforts to modify
          or vacate any automatic stay or injunction), appeals, and any
          anticipated post-judgment collection services. Grantor also shall pay
          all court costs and such additional fees as may be directed by the
          court.

          CAPTION HEADINGS. Caption headings in this Agreement are for
          convenience purposes only and are not to be used to interpret or
          define the provisions of this Agreement.

          MULTIPLE PARTIES; CORPORATE AUTHORITY. All obligations of Grantor
          under this Agreement shall be joint and several, and all references to
          Grantor shall mean each and every Grantor. This means that each of the
          persons signing below is responsible for all obligations in this
          Agreement.

          NOTICES. All notices required to be given under this Agreement shall
          be given in writing and shall be effective when actually delivered or
          when deposited with a nationally recognized overnight courier or
          deposited in the United States mail, first class, postage prepaid,
          addressed to the party to whom the notice is to be given at the
          address shown above. Any party may change its address for notices
          under this Agreement by giving formal written notice to the other
          parties, specifying that the purpose of the notice is to change the
          party's address. To the extent permitted by applicable law, if there
          is more than one Grantor, notice to any Grantor will constitute notice
          to all Grantors. For notice purposes, Grantor agrees to keep Lender
          informed at all times of Grantor's current address(es).

          POWER OF ATTORNEY. Grantor hereby appoints Lender as its true and
          lawful attorney-in-fact, irrevocably, with full power of substitution
          to do the following, after the occurrence and continuation of an Event
          of Default: (a) to demand, collect, receive, receipt for, sue and
          recover all sums of money or other property which may now or hereafter
          become due, owing or payable from the Collateral; (b) to execute, sign
          and endorse any and all claims, instruments, receipts, checks, drafts
          or warrants issued in payment for the Collateral; (c) to settle or
          compromise any and all claims arising under the Collateral, and, in
          the place and stead of Grantor, to execute and deliver its release and
          settlement for the claim; and (d) to file any claim or claims or to
          take any action or institute or take part in any proceedings, either
          in its own name or in the name of Grantor, or otherwise, which in the
          discretion of Lender may seem to be necessary or advisable. This power
          is given as security for the Indebtedness, and the authority hereby
          conferred is and shall be irrevocable and shall remain in full force
          and effect until renounced by Lender.

          SEVERABILITY. If a court of competent jurisdiction finds any provision
          of this Agreement to be invalid or unenforceable as to any person or
          circumstance, such finding shall not render that provision invalid or
          unenforceable as to any other persons or circumstances. If feasible,
          any such offending provision shall be deemed to be modified to be
          within the limes of enforceability or validity; however, if the
          offending provision cannot be so modified, it shall be stricken and
          all other provisions of this Agreement in all other respects shall
          remain valid and enforceable.

          SUCCESSOR INTERESTS. Subject to the limitations set forth above on
          transfer of the Collateral, this

                                        9
<PAGE>

                          COMMERCIAL SECURITY AGREEMENT
                                    CONTINUED

          Agreement shall be binding upon and inure to the benefit of the
          parties, their successors and assigns.

          WAIVER. Lender shall not be deemed to have waived any rights under
          this Agreement unless such waiver is given in writing and signed by
          Lender. No delay or omission on the part of Lender in exercising any
          right shall operate as a waiver of such right or any other right. A
          waiver by Lender of a provision of this Agreement shall not prejudice
          or constitute a waiver of Lender's right otherwise to demand strict
          compliance with that provision or any other provision of this
          Agreement. No prior waiver by Lender, nor any course of dealing
          between Lender and Grantor, shall constitute a waiver of any of
          Lender's rights or of any of Grantors obligations as to any future
          transactions. Whenever the consent of Lender is required under this
          Agreement, the granting of such consent by Lender in any instance
          shall not constitute continuing consent to subsequent instances where
          such consent is required and in all cases such consent may be granted
          or withheld in the sole discretion of Lender.

GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY
AGREEMENT, AND GRANTOR AGREES TO ITS TERMS. THIS AGREEMENT IS DATED NOVEMBER 1,
1994. THIS COMMERCIAL SECURITY AGREEMENT IS EXECUTED UNDER SEAL.

GRANTOR:

DATAWATCH CORPORATION

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

                                       10

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