Sample Business Contracts

Consulting Agreement - Datawatch Corp. and Russell Ryan

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         THIS  CONSULTING  AGREEMENT  ("Agreement"),  effective this 30th day of
June, 2000 (the "Effective  Date"), is made by and among Datawatch  Corporation,
with a business address at 900 Chelmsford Street,  Tower 3, Fifth Floor, Lowell,
MA 01851, its successors and its subsidiaries worldwide ("Company"); and Russell
Ryan,  with an address at 6 Homebush Court,  Joyner,  Australia 4500 (also doing
business as "Edge IT") ("Consultant").

         WHEREAS,  Consultant desires to provide services to Company and Company
desires to obtain the services of  Consultant,  as set forth in the Statement of
Work  attached  hereto  as  Exhibit  A  and  incorporated  herein  by  reference
("Statement of Work");

         WHEREAS, such services shall include, without limitation, modifications
and  enhancements  to  Company's  products,  Q-Flow  and  Quetzal  SC,  and  the
development  of web-based  versions of these  products,  in accordance  with the
Statement of Work;

         WHEREAS,  Consultant desires to convey to Company,  and Company desires
to obtain from Consultant, whatever right, title or interest Consultant may have
or claim to have in  Q-Flow  (resulting  from  Consultant's  role in  developing
Q-Flow  or  otherwise),  as well  as in any  other  software,  work  product  or
technology  developed by Consultant in connection with Consultant's  performance
of services for Workgroup Systems Australia Pty. Ltd., Company or any affiliated
entity (such software,  work product and/or technology hereinafter  collectively
referred to as the "Software"); and

         WHEREAS,  the parties wish to establish  the terms of their  consulting
arrangement,  and to effectuate the transfer to Company of any rights Consultant
may have or claim to have in Q-Flow and the  Software,  in the manner,  and upon
the terms and conditions, hereinafter set forth.

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
obligations specified in this Agreement, and the compensation paid to Consultant
hereunder,  the receipt and  sufficiency  of which is hereby  acknowledged,  the
parties, intending to be legally bound, hereby agree as follows:


         As used in this Agreement, the following terms in quotation marks shall
have the following meanings unless otherwise indicated:

         1.1 "Deliverables"  shall mean software (in both source and object code
form)  and other  items  provided  by  Consultant  to  Company  pursuant  to the
Statement of Work.

         1.2 "Developments" shall mean all ideas, concepts,  designs,  know-how,
inventions,   techniques,   developments,   works  of   authorship,   proposals,
algorithms, systems, processes, research, information,  methods, code, formulae,
software programs,  discoveries,  improvements, and all related notes, drawings,
reports,  specifications,  logic diagrams, flow charts,  operating instructions,
manuals,  notebooks,  data,  memoranda and other  documentation,  whether or not
patentable, made, conceived,  created, discovered,  invented or first reduced to
practice by  Consultant,  his affiliates or  subcontractors,  during the term of
this Agreement and pursuant to the performance of Services hereunder,  including
all work resulting from use of Information (as defined in Section 5.1).

         1.3 "Intellectual Property Rights" shall mean all intellectual property
rights  worldwide  arising  under  statutory  or common law or by  contract  and
whether or not perfected,  now existing or hereafter filed,  issued or acquired,
including  all Patent  Rights;  copyrights,  moral  rights and all other  rights
associated  with  works  of  authorship;  trademarks;  rights  relating  to  the
protection  of  trade  secrets  and  confidential  information;  and  any  right
analogous to those set forth herein and any other proprietary rights relating to
intangible property.


         1.4  "Patent  Rights"  shall mean any and all:  (i)  United  States and
foreign patent  applications  containing one or more claims of an  invention(s);
(ii)  continuations,  continuations-in-part  and  divisional  of  Patent  Rights
described in (i) above;  and (iii) United States and foreign  patents issuing on
Patent Rights described in (i) and (ii) above, and reissues,  reexaminations and
extensions thereof.

         1.5  "Q-Flow"  shall  mean  Company's   proprietary  Workflow  software
application which automates and monitors  standardized business processes within
an organization.

         1.6 "Quetzal SC" shall mean Company's  proprietary Help Desk Automation
software  which  provides   call-tracking,   service  level  management,   asset
management,  problem  resolution,  change  management,  data  analysis and other
capabilities to improve support center productivity.

         1.7 "Work  Product"  shall  mean  Developments,  Deliverables,  and all
versions, releases, updates, upgrades, modifications, enhancements, improvements
and derivatives of the foregoing.

         1.8  "Maintenance  Services"  shall mean all  maintenance  and  support
services,  as well as  enhancements  and  releases,  which  correct  defects and
malfunctions  in the Work Product  after its accepted  release date or which are
required to maintain  compatibility with supported 3rd-party products. The scope
of these services shall be limited to corrections to  functionality  existent in
the Work Product at the time of release or as defined in the Statement of Work.

2.       SCOPE OF WORK:

         2.1 Company hereby retains Consultant to perform, and Consultant hereby
agrees to perform for Company,  certain  software  development  work and related
consulting,  advisory and technical  services,  as described in the Statement of
Work, including, without limitation, modifications and enhancements to Company's
products,  Q-Flow and Quetzal SC, and the  development of web-based  versions of
these products (collectively, the "Services"), upon the terms and conditions set
forth in this Agreement.

         2.2 On a bi-weekly  basis, or at such other interval as the parties may
agree,  Consultant  shall submit to Company a written  status report  describing
Consultant's  progress  under  the  Statement  of  Work.  Concurrently  with the
submission of such report, Consultant shall deliver to Company a current version
of all work in process,  including  source  code,  program  documentation  and a
compiled version of the software under development. Company shall have the right
at any  time to  request  additional  information  or  materials  regarding  the
Services being rendered by Consultant hereunder.

         2.3 Company  shall engage  Consultant to provide and  Consultant  shall
also  provide  ongoing  support  and  maintenance  for the Phase 2 product  (the
"Maintenance  Services")  for a period of five (5) years  from the date of first
customer  shipment  of the Phase 2 product on a mutually  agreed  upon  delivery

         2.4 During the term of this  Agreement,  Consultant  will  devote  such
time,  effort and  resources  to the  Services  as may be  necessary  to fulfill
Consultant's  obligations hereunder in accordance with the Schedule set forth in
the Statement of Work, and will not undertake  commitments to third parties that
would  conflict  or  interfere  with his ability to perform  and  complete  such
Services in a timely manner.


         3.1 Consultant agrees to, and does hereby, irrevocably, perpetually and
unconditionally  grant,  deliver,  convey,  transfer and assign to Company,  its
successors  and  assigns,  any and  all  worldwide  right,  title  and  interest
Consultant may have in Q-Flow,  the Software,  and Intellectual  Property Rights
therein,  it being  understood that Consultant  shall retain no right,  title or
interest  of any kind  whatsoever  in or to,  and  expressly  waives any and all
claims of any nature whatsoever Consultant may have with respect to, Q-Flow, the
Software, or Intellectual Property Rights therein (the "Assignment").


         3.2  Consultant  represents  and warrants that he (a) has not assigned,
transferred,  licensed  or  conveyed  to any  third  party any  right,  title or
interest Consultant may have in Q-Flow or the Software, or Intellectual Property
Rights  therein;  and (b) is not  aware  of any  injunction,  judgment,  decree,
ruling, order, right, charge, lien or claim that would prevent full transfer and
benefit of the rights conveyed herein.

         3.3 Consultant further represents and warrants that as of the Effective
Date he has no right,  title,  interest,  lien or claim of ownership of any kind
whatsoever in or to any Company  product or technology and expressly  waives any
and all claims of any nature  whatsoever  related thereto (such  representation,
warranty and waiver herein collectively referred to as "Waiver").


         4.1 In consideration of the Assignment and Waiver,  Company shall issue
50,000 shares of Company's  Common Stock,  par value $.01 per share (the "Common
Stock") to  Consultant,  promptly after the execution of this  Agreement,  which
shares shall  constitute full and complete  compensation for such Assignment and
Waiver.  The issuance of the shares is subject to the  provisions of Section 4.7

         4.2 In  consideration  of  Consultant's  performance of the Phase 1 and
Phase 2 Tasks, as set forth in the Statement of Work,  Company shall  compensate
Consultant on a time and materials  basis,  at the rates set forth in Exhibit B;
provided,  however, that the amounts specified in Exhibit B shall constitute the
maximum amount  Company shall be required to pay  Consultant for  performance of
the  Phase 1 and  Phase 2 Tasks,  unless  otherwise  agreed  by the  parties  in
writing.  At the option of Company,  the  compensation  payable pursuant to this
Section 4.2 may be paid in cash or by the  issuance  of shares of Common  Stock.
The value of the shares of Common Stock to be so issued shall be  determined  as
the  average of the  closing  price of the Common  Stock on the NASDAQ  National
Market for the five trading days immediately preceding the date on which Company
becomes  obligated to make such payment.  The issuance of such shares is subject
to the provisions of Sections 4.7 and 4.8 hereof.

         4.3 Company  shall also pay to  Consultant a ten percent  (10%) royalty
based upon Company's Net Sales of Q-Flow;  provided,  however, that such royalty
shall  only be  payable  with  respect  to sales made prior to the date of first
customer  shipment  of the  Phase  2  product,  upon  which  date  such  royalty
obligation shall automatically terminate.

         4.4 In  consideration  of  Consultant's  performance of the Maintenance
Services as set forth in Section 2.3,  Company shall pay Consultant a royalty of
three percent (3%) based upon Company's Net Sales of the Phase 2 product.

         4.5 "Net  Sales"  shall mean  payments  collected  by Company  from its
customers on account of sales of licenses for the Phase 1 or Phase 2 product, as
the case may be ("License Payments"),  less any sales, use, excise,  value-added
or similar taxes,  shipping  charges,  import duties,  customs fees,  discounts,
allowances,  and  returns  actually  made or  allowed  as  supported  by  credit
memoranda issued to customers.  The royalties owed Consultant hereunder shall be
calculated  on a  quarterly  calendar  basis and shall be  payable no later than
thirty (30) days  following the close of Company's  fiscal  quarter during which
such License Payments are received.  Concurrently with the payment of royalties,
Consultant  shall be provided with a summary  statement of the  transactions  on
which the royalties are based.

         4.6 Consultant shall not be entitled to receive any other  compensation
or any benefits from Company. Except as otherwise required by law, Company shall
not withhold any sums from payments made to  Consultant  for Social  Security or
other federal,  state or local tax  liabilities or  contributions,  and all such
withholdings,  liabilities,  and  contributions  shall  be  solely  Consultant's

         4.7 In  connection  with the  issuance  of shares  of  Common  Stock to
Consultant  pursuant to Section 4.1 and, if any, Section 4.2,  Consultant hereby
represents and warrants to, and agrees with, Company as follows:


         (a) The Consultant has sufficient knowledge and experience in investing
in  companies  similar  to Company  so as to be able to  evaluate  the risks and
merits of the Consultant's  receipt of shares of Common Stock of Company and the
Consultant is able financially to bear the risks thereof.

         (b) The Consultant has had an opportunity to discuss Company's
business, management and financial affairs with the Company's management.

         (c) The shares of Common  Stock being  acquired by the  Consultant  are
being  acquired for the  Consultant's  own account for the purpose of investment
and not with a view to or for sale in connection with any distribution thereof.

         (d) The  Consultant  understands  that  (i) the  shares  have  not been
registered under the Securities Act by reason of their issuance in a transaction
exempt from the  registration  requirements  of the  Securities  Act of 1933, as
amended (the  "Securities  Act") pursuant to Section 4(2) thereof or Rule 505 or
506  promulgated  under  the  Securities  act,  (ii)  the  shares  must  be held
indefinitely  unless a subsequent  disposition  thereof is registered  under the
Securities  Act or is exempt  from such  registration  and (iii) the shares will
bear a legend to such effect.  With respect to the shares of Common Stock issued
pursuant to Section 4.1 hereof,  Consultant  hereby  further agrees that he will
not sell,  transfer,  pledge or  otherwise  dispose  of the  shares  (except  in
connection  with an  acquisition  of Company)  for a period of one year from the
date of issuance of the shares.

         4.8 Company agrees that promptly after a request from Consultant  after
the  issuance of shares,  if any,  pursuant to Section 4.2 hereof,  Company will
prepare and file with the  Securities  and Exchange  Commission  a  registration
statement  on Form  S-3 to  register  such  shares,  and the  Company  will  use
commercially  reasonable  efforts to have such registration  statement  declared
effective and to maintain the effectiveness of such registration statement for a
period of at least six months.


         5.1 During the term of this Agreement and in the course of Consultant's
performance  hereunder,  Consultant  may  receive  and  otherwise  be exposed to
Company confidential and proprietary  information relating to Company's business
practices,  strategies,  and technologies (the  "Information").  The Information
includes,  but is not limited  to,  Company's  marketing  and  customer  support
strategies, Company's financial information including sales, costs, profits, and
pricing methods,  Company's internal  organization,  employee lists and customer
lists,  and  Company's  technology  including  designs,  inventions,   know-how,
techniques,  developments, works of authorship,  algorithms, systems, processes,
methods,   code,  formulae,   software  programs,   discoveries,   research  and
development  efforts,  manufacturing  processes,  hardware/software  design  and
maintenance  tools,  hardware/software  product  know-how and show-how,  and all
related notes, drawings, reports,  specifications,  logic diagrams, flow charts,
operating   instructions,   manuals,   notebooks,   data,  memoranda  and  other
documentation, and all derivatives, improvements, and enhancements to any of the
above which were created or developed by Consultant under this Agreement.

         5.2 Consultant acknowledges that the Information is the sole, exclusive
and extremely  valuable property of Company.  Accordingly,  Consultant agrees to
segregate all Information  from information of other companies and agrees not to
reproduce any of the Information without Company's prior written consent, not to
use the  Information  except in the  performance of this  Agreement,  and not to
divulge  all or any  part of the  Information  in any form to any  third  party,
either  during or after the term of this  Agreement.  Upon  termination  of this
Agreement  for any reason  including  expiration of term,  Consultant  agrees to
cease  using  and to  return  to  Company  all  whole  and  partial  copies  and
derivatives  of Company's  Information,  whether in  Consultant's  possession or
under  Consultant's  direct or indirect  control,  including any computer access
nodes and/or codes.

         5.3  Consultant  shall not  disclose or  otherwise  make  available  to
Company in any manner any confidential and proprietary  information  received by
Consultant  from third  parties.  Consultant has not entered into, and agrees to
not enter into, any agreement, either written or oral, in conflict herewith.



         6.1 Consultant has  specifically  described and identified in Exhibit C
to this  Agreement any and all  technology  which  Consultant  intends to use in
performing under this Agreement ("Background Technology"). Consultant represents
and warrants  that all of the  Background  Technology  is either owned solely by
Consultant or licensed to Consultant with a right to sublicense.

         6.2 Consultant  hereby  acknowledges and agrees that Company shall own,
solely  and  exclusively,   all  right,   title  and  interest,   including  all
Intellectual  Property Rights, in and to the Work Product. In furtherance of the
foregoing,  Consultant  hereby  irrevocably  and  unconditionally  transfers and
assigns to Company all right, title and interest  Consultant may have or acquire
in or to any Work  Product,  and agrees to execute and deliver  such  documents,
certificates,  assignments and other writings,  and take such other actions,  as
may be necessary or desirable to vest in Company the ownership rights granted to
Company hereunder.

         6.3  Consultant  further  agrees  that any and all works of  authorship
created,  authored or  developed  by  Consultant  for  Company  pursuant to this
Agreement  shall be deemed to be "works made for hire" within the meaning of the
United States Copyright Law and, as such, all rights therein including copyright
shall belong solely and  exclusively to Company from the time of their creation.
To the  extent any such work of  authorship  may not be deemed to be a work made
for hire, Consultant agrees to, and does hereby, irrevocably and unconditionally
transfer and assign to Company all right, title and interest including copyright
in and to such work.

         6.4 Consultant  shall ensure that all personnel,  including  employees,
agents,  consultants  and  subcontractors  of  Consultant,  who contribute to or
participate in the creation of any Development or Deliverables  are parties to a
"work-for-hire"  agreement with Consultant in accordance with applicable federal
and state law, and have executed appropriate  instruments of assignment in favor
of Consultant as assignee that have conveyed to Consultant  full,  effective and
exclusive ownership of all tangible and intangible property thereby arising.

         6.5 Consultant agrees to grant and hereby grants to Company,  under any
and all Intellectual Property Rights in Background Technology,  a non-exclusive,
irrevocable,   royalty  free,  and  worldwide  license  to  use  the  Background
Technology,  including,  without limitation, the right to make, have made, sell,
offer for sale, rent, lease,  import,  copy,  create derivative works,  display,
perform  and  distribute  the  Background  Technology  (including  the  right to
sublicense, assign or otherwise transfer all of the foregoing rights).


         7.1 Consultant shall, during the term of this Agreement and at any time
thereafter, at the request and cost of Company, promptly sign, execute, make and
do all such deeds, documents, acts and things as Company may reasonably require:

              (a) to give effect to or evidence the Assignment set forth herein,
      and  to  protect,  prosecute,   enforce,  maintain  and  defend  Company's
      ownership rights in Q-Flow;

              (b) to apply for, obtain, register and vest in the name of Company
      alone (unless Company otherwise directs) patents,  copyrights, mask works,
      trademarks or other  analogous  protection in any country  throughout  the
      world and when so obtained or vested to renew and restore the same; and

              (c) to defend any  judicial,  opposition or other  proceedings  in
      respect  of  such  applications  and any  judicial,  opposition  or  other
      proceedings  or petitions or  applications  for revocation of such patent,
      copyright, mask work, trademark or other analogous protection.

         7.2 In the event that  Consultant  fails to take any action  reasonably
requested  by  Company  pursuant  to this  Section  7,  then  Company  may,  and
Consultant  hereby  irrevocably  designates  and  appoints


Company and its duly authorized  officers and agents as  Consultant's  agent and
attorney in fact to, act for and in  Consultant's  behalf and stead,  to execute
and file any such  applications  and to do all other lawfully  permitted acts to
further  the  prosecution  and  issuance  of  patent,  copyright,  mask work and
trademark  registrations  thereon  with the same  legal  force and  effect as if
executed and filed by Consultant.


         8.1  Consultant  agrees to take all  necessary  precautions  to prevent
injury to any  persons  (including  employees  of Company) or damage to property
(including  Company's  property)  during  the term of this  Agreement  and shall
indemnify  and hold Company and its  officers,  agents,  directors and employees
harmless against all claims,  losses,  expenses (including reasonable attorney's
fees) and injuries to person or property (including death) resulting in any way,
from  any  act,  omission  or  negligence  on  the  part  of  Consultant  in the
performance or failure to fulfill any Services under this Agreement.

         8.2  Consultant  warrants that he has or will have good and  marketable
title to all Work  Product  assigned by  Consultant  to Company  pursuant to the
provisions of this Agreement.  Consultant further warrants that the Work Product
and  Background  Technology  shall  be free  and  clear  of all  liens,  claims,
encumbrances or demands of third parties, including any claims by any such third
parties of any right,  title or interest in or to the Work Product or Background
Technology  arising out of any trade secret,  copyright,  trademark,  patent, or
other intellectual property right.  Consultant shall indemnify,  defend and hold
harmless  Company and its  customers  from any and all  liability,  loss,  cost,
damage,  judgment or expense  (including  reasonable  attorney's fees) resulting
from or arising in any way out of any such claims by any third  parties,  and/or
which  are  based  upon,  or are the  result  of any  breach  of the  warranties
contained in this Section 5. In the event of such a breach or claim,  Consultant
shall, at no additional  cost to Company,  at the Company's  option,  either (a)
replace or modify the Work Product or Background Technology, as the case may be,
with   functionally   equivalent  and  conforming  Work  Product  or  Background
Technology  or (b)  obtain  for  Company  the right to  continue  using the Work
Product or Background Technology, and in all other respects use his best efforts
to remedy the breach.  Notwithstanding  anything  else in this  Section 8 to the
contrary,  Consultant  shall  have no  liability  under  this  Section 5 for any
Deliverable created in accordance with detailed and specific design instructions
furnished to Consultant by Company.

         8.3 Should Company permit Consultant to use any of Company's equipment,
tools or facilities during the term of this Agreement,  such permission shall be
gratuitous  and  Consultant  shall  indemnify and hold harmless  Company and its
officers,  directors,  agents and employees,  from and against any claim,  loss,
expense or judgment for injury to person or property  (including  death) arising
out of the use of any such equipment,  tools or facilities,  whether or not such
claim is based upon its  condition  or on the alleged  negligence  of Company in
permitting its use.


         9.1 Consultant  hereby agrees that he will not, during the term of this
Agreement,  and for a period  of two years  following  termination  hereof,  (a)
directly or indirectly  engage in any  Competitive  Business (as defined below),
whether such  engagement  shall be as an  employer,  officer,  director,  owner,
employee, partner or in any other capacity, (b) assist others in engaging in any
Competitive  Business  or (c)  develop,  enhance,  produce,  market,  promote or
support,  or render  consulting or other  services to a third party with respect
to, a  Similar  Application  (as  defined  below).  As used in this  Section  9,
"Competitive  Business"  shall mean a business  providing  products  or services
similar to, or  competitive  with,  those provided by Company during the term of
this Agreement,  and "Similar  Application" shall mean a software program having
substantially similar functionality to Q-Flow or Quetzal SC.


         10.1 The term of this  Agreement  shall begin on the Effective Date and
shall continue through  September 30, 2001 (the "Initial Term"),  unless earlier
terminated in accordance  with the terms hereof;  provided,  however,  that this
Agreement  shall remain in effect with respect to any  Statement of Work entered
into hereunder until such Statement of Work is itself  terminated or performance
thereunder is completed.


         10.2  Either   Company  or  Consultant  may  terminate  this  Agreement
immediately  in the event of a  material  breach of the  Agreement  which is not
cured within fifteen (15) days of written notice to the other of such breach.

         10.3 Company may terminate this Agreement for convenience with ten (10)
days'  prior  written  notice.  In the  event  of  termination  by  Company  for
convenience,  unless otherwise  advised by Company,  Consultant shall cease work
immediately  after receiving  notice from Company but shall upon request perform
such work as may be  requested  to  transfer  work in process to Company or to a
party designated by Company.


         11.1 Consultant warrants that any materials supplied and work performed
under this  Agreement  comply  with or will comply  with all  applicable  United
States and foreign laws and regulations.

         11.2 Notwithstanding any other provisions of this Agreement, Consultant
agrees not to export,  directly or indirectly,  any information,  data, or other
materials to any countries  outside the United States except in compliance  with
all United States or local laws or regulations. Nothing in this section releases
Consultant  from  any  obligation  stated  elsewhere  in this  Agreement  not to
disclose such materials.


         12.1  Consultant  is an  independent  contractor,  is not an agent,  or
employee of Company  and is not  authorized  to act on behalf of Company.  While
Company is  entitled  to provide  Consultant  with  general  guidance  to assist
Consultant  in  completing   the  scope  of  work  to  Company's   satisfaction,
nevertheless  Consultant is ultimately responsible for directing and controlling
the performance of the task comprising the scope of work, in accordance with the
terms and conditions of this Agreement.


         13.1 This  Agreement  expressly  replaces and supersedes the Consulting
Agreement between WorkGroup Systems Australia dated 10 February 1997 as amended.
Upon execution hereof by the parties hereto,  the Consulting  Agreement  between
WorkGroup  Systems  Australia  dated  10  February  1997  with  amendments  will
terminate and be of no further force or effect.

14.      GENERAL:

         14.1 This Agreement may not be changed unless mutually agreed upon in
writing by both parties.

         14.2 This Agreement does not create an obligation on Company to
continue to retain Consultant beyond its term.

         14.3  Consultant  hereby  agrees that each  provision  herein  shall be
treated as a separate and independent  clause, and the  unenforceability  of any
one clause shall in no way impair the enforceability of any of the other clauses
herein.  Moreover,  if one or more of the provisions contained in this Agreement
shall for any  reason  be held to be  excessively  broad as to scope,  activity,
subject  or  otherwise  so as to be  unenforceable  at law,  such  provision  or
provisions  shall be construed by the  appropriate  judicial body by limiting or
reducing it or them so as to be  enforceable  to the maximum  extent  compatible
with the applicable law as it shall then appear.

         14.4  Company  shall  have the right to assign  this  Agreement  or any
rights  and  obligations  hereunder  to its  successors  and  assigns,  and  all
covenants  and  agreements  hereunder  shall  inure  to  the  benefit  of and be
enforceable  by said  successors  or  assigns.  Contractor  may not assign  this
Agreement  or any rights or  obligations  hereunder  without  the prior  written
consent of the Company.


         14.5 Sections 3 through 7 and 9 shall survive the  termination  of this
Agreement for any reason, including expiration of term.

         14.6 This  Agreement  and all aspects of the  relationship  between the
parties  hereto shall be construed and enforced in accordance  with and governed
by the internal laws of the Commonwealth of Massachusetts  without regard to its
conflict of laws  provisions.  Any claims or legal  actions by one party against
the other  shall be  commenced  and  maintained  in any state or  federal  court
located in the Commonwealth of Massachusetts,  and both parties hereby submit to
the jurisdiction and venue of any such court.

         14.7  All  notices  provided  for in this  Agreement  shall be given in
writing and shall be effective when either served by hand  delivery,  electronic
facsimile  transmission,  express overnight courier service, or by registered or
certified  mail,  return  receipt  requested,  addressed to the parties at their
respective  addresses set forth below,  or to such other address or addresses as
either party may later specify by written notice to the other:

         If to Company:                        If to Consultant:

             Datawatch Corporation                     Russell Ryan
             900 Chelmsford Street                     6 Homebush Court
             Tower 3, Fifth Floor                      Joyner, Australia.4500
             Lowell, MA 01851                          Tel: +617 3882 3764
             Tel: 978-441-2200                              --------------
                  ------------                         Fax: +617 3882 1490
             Fax: 978-441-1114                              --------------

         14.8 This Agreement constitutes the complete and exclusive statement of
the  agreement  between  the  parties,  and  supersedes  all  prior  agreements,
proposals,  negotiations and communications  between the parties,  both oral and
written, regarding the subject matter hereof.

         IN WITNESS  WHEREOF,  the parties hereto have executed this  Consulting
Agreement as of the date first above written.


By: /s/ Linda Lammi                      /s/  R. B. Ryan
    ----------------------------         -------------------------------
Signature (Duly Authorized)              Signature

      Linda Lammi                            Russell Ryan
--------------------------------         -------------------------------
Authorized Agent of Corporation          Name

Dated: 10/26/2000                        Dated: 31 Oct 2000
       ----------                               -----------


                                    Exhibit A
                                Statement of Work

                                  Phase 1 Tasks

To produce,  at a minimum, a functionally  equivalent web only based application
that has the same level of  functionality  as the current  version of  Q-Browser
(v1.03) and the Q-Flow Process Module (build 21). The following functionality is
also to be included in Phase 1:

     o        Ability to add/modify/view/delete call subjects to a call and to
              include call subject information, and scripting

     o        Include  a  "Universal  Field  Control  (UFC)"  object  which,  by
              manipulation    of   object    properties,    can   be   used   to
              add/modify/view/delete  data contained in any accessible  database

     o        Ability to add/modify/view/delete call reference codes

     o        Ability to  add/modify/view/delete  call  comments in a read-only,
              full edit access and append only mode (object property selectable)

     o       Ability to add/modify/view/delete dual SLTs for a call.

     o       Ability to add/modify/view/delete call priorities

     o       Ability to add/modify/view/delete Allocation and/or Assignments
             including the ability for the application to set these
             automatically based on system defaults

     o       Ability to perform the call functions of (including the
             modification of the function's timer):

             1.       Respond to Call (SLT1 and SLT2)
             2.       Fix Call (SLT1 and SLT2), including the ability to add/
                      modify/view/delete call fix codes

     o       Ability to add/modify/view/delete inventory (client/logon/config/
             item) to a call, including the ability to perform QBE functions
             from  within the call. The ability to auto-select inventory based
             on a parent/child relationship is to be preserved.

     o       Ability to add/modify/view/delete the organization structure
             (including location and cost code) to a call

     o       Ability to search for, list and browse calls based on List, List+,
             and by the general QBE function.  When listing and browsing calls,
             the full use of system indicators must be used.

System security parameters should be sourced from within the Quetzal|SC database
and from object property settings.

The expected milestones for Phase 1 tasks are:

     o       October  30,  2000- All  functionality  listed  above  ready for
             beta trials
     o       November 30, 2000- All functionality listed above ready for general
             production release.


                                  Phase 2 Tasks

To produce, at a minimum, a functionally  equivalent web only based that has the
same level of functionality as the current version of Quetzal|SC (v1.04) and the
Q-Flow Module (build 21) as a thin-client web application.

This functionality is to include:

     o      Inventory Management
     o      Q-Flow Designer and Administration Modules
     o      Quetzal|SC Administration
     o      Q-Alert Functionality and Administration
     o      Q-Mail Functionality and Administration
     o      Integration with K-Commerce (Inference)
     o      Remote call notification similar in functionality to Q-IconPlus
     o      Shell to Crystal Reports v8 (or above) via a web browser (including
            the passing of parameters)
     o      Monarch Integration
     o      Screen designer
     o      HTML Forms access
     o      Call actions
     o      Manual manipulation of SLT timers
     o      Hold / release calls
     o      Bookmark a call to the user or group of users

The following are excluded:

     o      Q-Import
     o      Data conversion utility (v4.1 to Quetzal|SC component only)
     o      Database administration utility (QSC-Utils)
     o      Q-Icon
     o      Q-View
     o      Quetzal|SC Daemon
     o      Network Management System (HP Openview ITO/NNM, BMC Patrol and the
            proprietary Datawatch Network Management System (Internal code
     o      Crystal Report Templates
     o      All Monarch Models

The current Quetzal|SC  developers/contractors (HCL America) will be undertaking
the  conversion of existing code to use all objects being  developed by Edge IT.
Edge IT will co-operate  fully with HCL in supplying the necessary  information,
skill and software to allow the conversion to occur in a timely manner.

The expected milestones for Phase 2 tasks are:

     o      September 30, 2001 - All functionality listed above ready for
            general production release.


                                    Exhibit B


Note: Amounts shown are in US dollars and do not reflect expenses for additional
services such as testing and test plan development.


                                    Exhibit C

         The following is a complete list of all Background  Technology relevant
to Consultant's Services with Company:

                                    ____X____        No Background Technology

                                    _________        See Below

Background Technology owned by Consultant:

Background Technology provided by sublicense (copies of license(s) to Consultant
is/are attached):

                                    _________        Additional sheets attached