<PAGE>

                                  EXHIBIT 10.2

                              AMENDED AND RESTATED
                              EMPLOYMENT AGREEMENT

        AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement") entered into as
of August 11, 2004, between RAMDAS RAO ("Employee") and AMBIENT CORPORATION, a
Delaware corporation (collectively, the "Company").

        WHEREAS, Employee and the Company entered into an employment agreement
dated as of September 27, 2000, as amended as of November 3, 2002, pursuant to
which Employee serves as the Company's Chief Network Architect (the "Original
Agreement");

        WHEREAS, the Company and Employee desire to amend and restate the
Original Agreement in its entirety, all on the terms and conditions set forth
herein;

        NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements set forth herein, and other valuable consideration, the parties
hereto, intending to be legally bound, hereby agree as follows:

        1.      EMPLOYMENT

        The Company agrees to employ Employee, and Employee hereby agrees to
such employment, subject to the terms and conditions set forth in this
Agreement.

        2.      TERM

        The employment under this Agreement shall become effective as of August
1, 2004 (the "Effective Date") and continue through December 31, 2006, unless
Employee's employment is otherwise terminated earlier by the Company or Employee
in accordance with Section 5 hereof (the "Initial Term"). If not otherwise
terminated this Agreement shall automatically renew for successive one year
terms at the end of the Initial Term, unless either Party gives notice of its
intent not to renew at least 60 days prior to termination of term

        3.      POSITIONS AND DUTIES

        (a)     Upon the commencement of the Initial Term, Employee shall
continue to occupy the position and perform the duties of Chief Network
Architect of the Company on a full-time basis. In his capacity as Chief Network
Architect, Employee shall report directly to, and be responsible to, the Chief
Executive Officer of the Company, or such other Company officer as shall be
designated by the Chief Executive Officer. Employee shall perform duties and
responsibilities as are consistent with the position described above which
relate to the business of Company, or of any affiliates or subsidiaries of the
Company, or any business ventures in which Company, its affiliates or
subsidiaries may participate and as are assigned to him from time to time by the
Chief Executive Officer.

        (b)     Employee shall devote 100% of his working time, attention and
energies to the business of the Company and shall assume and perform such
further reasonable and lawful responsibilities and duties as may be assigned or
directed by the Board.

        (c)     Employee agrees that he will at all times devote his reasonable
best efforts, skill and ability to promote the Company's interests and work with
the Chief Executive Officer and the other executives of the Company.

        (d)     Employee acknowledges and agrees that he is required to observe
all the lawful rules and policies of the Company generally applicable to senior
executives to the extent they are not inconsistent with the terms of this
Agreement.

        4.      COMPENSATION AND BENEFITS

<PAGE>

        For the full and faithful performance of the services to be rendered by
Employee, in consideration of Employee's obligations under this Agreement,
provided Employee is not in material breach of this Agreement and that Employee
is employed by the Company as of each relevant payment date, and it being
understood and agreed by Employee and the Company that Employee would not be
entitled to the full compensation package and benefits without his absolute
commitment to comply with his undertakings set forth in this Agreement, the
Company shall pay to Employee and Employee shall be entitled to receive:

        (a)     BASE SALARY. Company will pay to Employee during the term of his
employment under this Agreement, a base salary at the annual rate of One hundred
seventy-one thousand Dollars ($171,000) per annum less required deductions for
state and federal withholding tax, social security and other employee taxes
(said amounts hereinafter referred to as the "Base Salary"). Any Base Salary
payable hereunder shall be paid in regular intervals in accordance with the
Company's payroll practices, but no less frequently than once each month.
Subject to review at January 1st of each year, commencing on January 1, 2005,
Employee's Base Salary may, at the discretion of the Chief Executive Officer, be
increased for the succeeding calendar year, for each such subsequent year of
employment during the Initial Term.

        (b)     INCENTIVE COMPENSATION.

        (i)     In addition to his Base Salary, Employee shall be eligible for
an annual incentive cash compensation as determined by the Compensation
Committee of the Board of directors ("Compensation Committee").

        (ii)    COMPANY PLANS. Employee shall be eligible to participate, on
terms no less favorable than those afforded to other executives of the Company,
in any incentive compensation plan that may hereafter be adopted by the Company
for its executives and management employees from time to time. Such
participation shall be subject to the terms of the applicable plans, generally
applicable policies of the Company, applicable law and the discretion of the
Board of Directors. Nothing contained in this Agreement shall be construed to
create any obligation on the part of the Company to establish any such plan or
to maintain the effectiveness of any such plan which may be in effect from time
to time.

        (c)     STOCK OPTION GRANTS. Upon execution of this agreement Employer
shall grant to Employee under the Company's 2000 Equity Incentive Plan (the
"Plan"), in addition to the options previously granted to the Employee,
additional options as follows: 750,000 options vesting in equal monthly
installments over 24 months. 375,000 options shall have an exercise price equal
to the fair market value as of the date of this Agreement and 375,000 options
shall have an exercise price of $0.50 per share. In each month one half of the
vesting options shall be those exercisable at market price and the other one
half at $0.50. The Options shall be evidenced by a written stock option
agreement, in form satisfactory to the Employer, executed by the Employer and
the Employee. The shares underlying the Options shall be fully paid and
non-assessable. The Company shall recommend to the Compensation Committee of the
Company to effect such grant under the Plan. The Options, once vested, may be
exercised during the period that this agreement remains in effect and for a
period of twelve (12) months thereafter.

        (d)     BENEFITS: Employee shall be entitled to participate in any
employee benefit plans, medical insurance plans, life insurance plans,
disability insurance plans, retirement plans, 401(k) and other benefit plans
which are available to any other executives of the Company. Such participation
shall be subject to the terms of the applicable plan documents, generally
applicable policies of the Company, and applicable law.

        (e)     EXPENSE REIMBURSEMENT. The Company shall promptly pay the
reasonable, business-related expenses incurred by Employee in the performance of
his duties hereunder, including, without limitation, those incurred in
connection with business related travel, telecommunications and entertainment,
or, if such expenses are paid directly by Employee, shall promptly reimburse the
Employee for such payment, provided that Employee has properly accounted
therefore in accordance with Company policy.

        (f)     VACATION. Employee shall be entitled to four (4) weeks paid
vacation in accordance with the Company's vacation policies for its executives,
as in effect from time to time, but in no event less


                                       2
<PAGE>

than four (4) weeks per year. The timing and duration of any vacation shall be
taken at such time so as not to interfere with Employee's responsibilities and
commitment to the company as determined by the Chief Executive Officer. Employee
shall also be entitled to all paid holidays given by the Company to its
employees.

        5.      TERMINATION.

        Employee's services shall terminate upon the first to occur of the
following events:

        (a)     The expiration of the Initial Term or any renewal term, if
applicable;

        (b)     Upon Employee's date of death or the date Employee is given
written notice that he has been determined to be disabled by the Company. For
purposes of this Agreement, Employee shall be deemed to be disabled if Employee,
as a result of illness or incapacity, shall be unable to perform substantially
his required duties for a period of sixty (60) consecutive days or an aggregate
of ninety (90) days in any twelve (12) month period ("Incapacity"). Termination
of Employee's employment by the Company due to Incapacity shall be communicated
to Employee by written notice to Employee and shall be effective on the tenth
(10) day after receipt of such notice by Employee, unless Employee returns to
full-time performance of his required duties before such tenth (10th) day;

        (c)     On the date Employee is terminated by the Company for "Cause."
For purposes of this Agreement, Cause shall be defined as: (i) Employee's
conviction of, or plea of nolo contendere, to any felony or to a crime involving
moral depravity or fraud; (ii) Employee's commission of an act of dishonesty or
fraud or breach of fiduciary duty or act that has a adverse effect on the name
or public image of the Company (iii) Employee's commission of an act of willful
misconduct or gross negligence, as determined by the Board, provided the
Employee shall have the opportunity to state his case before the Board prior to
the Board taking such decision to so terminate the Employee; (iv) the failure of
Employee to substantially perform his duties under this Agreement; (v) the
material breach of any of Employee's material obligations under this Agreement;
(vi) the failure of Employee to follow a lawful directive of the Chief Executive
Officer or the Board Of Directors or (vii) excessive absenteeism, chronic
alcoholism or any other form of addiction that prevents Employee from performing
the essential functions of his position with or without a reasonable
accommodation; provided, however, that the Company may terminate Employee's
employment for Cause, as to ( (iv) or (v) above, only after failure by Employee
to correct or cure, or to commence or to continue to pursue the correction or
curing of, such conduct or omission within ten (10) days after receipt by
Employee of written notice by the Company of each specific claim of any such
misconduct or failure.

        (d)     On the date Employee terminates his employment with the Company
for Good Reason (as defined below) by giving the Chief Executive Officer of the
Company thirty (30) calendar days written notice of intent to terminate,
("Notice Period") which notice sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for such Good Reason termination. For
the purposes of this Agreement, "Good Reason" shall mean, without Employee's
express written consent, the occurrence of any one or more of the following: (i)
the assignment of Employee to duties materially and substantially inconsistent
with Employee's authorities, duties and responsibilities, (ii) the breach by the
Company of any of its material obligations under this Agreement or (iii) the
failure of the Company to obtain a satisfactory agreement from any successor to
the Company to assume and agree to perform this Agreement.

        (e)     On the date Employee terminates his employment without Good
Reason, provided that Employee shall give the Company thirty (30) days written
notice prior to such date of his intention to terminate his employment ("Notice
Period"); or

        (f)     On the date the Company terminates Employee's employment for any
reason, other than a reason set forth in Sections 6(b) or 6(c), provided that
the Company shall give Employee thirty (30) days written notice prior to such
date of its intention to terminate Employee's employment ("Notice Period").
During such Notice Period, Employee will continue to perform his duties and
responsibilities unless the Company advises Employee otherwise. Notwithstanding
anything to the contrary contained herein, in the event that the Company
requests that Employee vacate the premises immediately upon the furnishing of
the Notice Period, then the amounts payable under this Section 6(f) shall be
subsumed under the payments payable under Section 7(c) such that Employee will
not be entitled to the amount otherwise payable in respect of the Notice Period.


                                       3
<PAGE>

        6.      RIGHTS UPON TERMINATION.

        (a)     Upon termination of Employee's employment by either party for
any reason, or by virtue of the expiration of the Initial Term or any renewal
term, if applicable, all rights Employee has to payment under this Agreement
shall cease as of the effective date of the termination, and except as expressly
provided herein or as may be provided under any employee benefit plan or as
required by law, Employee shall not be entitled to any additional compensation,
commission, bonus, perquisites, or benefits with the exception of this Section 6
which shall survive termination of this agreement as outlined herein.

        (b)     Upon termination of Employee's employment (i) by the Company for
Cause, (ii) by the Company for reason of Employee's death or Incapacity or (iii)
by Employee without Good Reason, the Company shall pay to Employee or Employee's
estate or representatives, as the case may be, his Base Salary and any benefits
and outstanding reimbursable expenses accrued and payable to him through the
last day of his actual employment by the Company.

        (c)     If at anytime during the Initial Term Employee's employment is
terminated by Employee pursuant to Section 5(d) or by the Company pursuant to
Section 5(f) hereof, then, Employee's Base Salary and benefits shall continue
(in the customary manner in which Company has paid the base salary and benefits)
for the remainder of the term, provided, that, if the amount otherwise payable
through the remainder of the Initial Term is less than twelve (12) months, then,
notwithstanding anything to the contrary contained herein, Employee shall be
paid Base Salary and benefits as herein provided for such lesser period. In
addition, subject to the provisions of this Agreement, the Company shall
reimburse Employee for all outstanding reimbursable expenses.

        In order to be eligible for the severance benefits as set forth in this
Section 6(c), Employee must (i) execute and deliver to the Company a general
release, in a form satisfactory to the Company, and (ii) be and remain in full
compliance with his obligations under this Agreement. In the event Employee
breaches any obligation under this Agreement or the NDA any and all payments or
benefits provided for in this Section 6(c) shall cease immediately.

        (d)     Notwithstanding the foregoing, in the event that this Agreement
shall have been terminated by Employee pursuant to Section 5(d) or Section 5(e)
or by the Company pursuant to Section 5(f) hereof, upon the request of the
Company the Employee shall vacate his position and the Company's premises (if
applicable) on a date specified by the Company which is earlier than the end of
the Notice Period specified above upon payment to Employee, in one lump sum on
the effective date of termination, the base salary and benefits payable until
the end of the Notice Period, from the effective date of termination until the
end of such Notice Period, less required deductions for state and federal
withholding tax, social security and other employee taxes.

        (e)     This agreement automatically shall terminate upon the death of
Employee, except that Employee's estate shall be entitled to receive any amount
accrued under Section 4(a) and any other amount to which Employee was entitled
of the time of his death Upon the Employee's death, all stock options, warrants
and stock appreciation rights granted by the employer to employee under any plan
or otherwise prior to the date of Employee's death, shall become vested,
accelerate and become immediately exercisable by the Employee's Estate for a
period of six (6) months from the date of Employee's death. In the event the
Employee owned or was entitled to receive any unregistered securities of
Employer, then Employer must use its reasonable best efforts to effect the
registration of all such securities as soon as practical, and the estate of the
Employee shall then have six (6) months after the effective date of the
registration statement to exercise said options for the previously unregistered
securities.

        7.      CONFIDENTIALITY AND NON COMPETITION AGREEMENT

Employee shall execute the Employee Confidentiality and Non-Competition
Agreement annexed hereto as EXHIBIT A ("NDA"), which shall be incorporated by
reference into this Agreement and made a part hereof. All references herein to
this Agreement shall be construed to include EXHIBIT A.


                                       4
<PAGE>

Employee understands that entering into and complying with the NDA is a
condition to Employee 's continued employment with the Company and that failure
to comply with the terms and conditions of these provisions may result in
termination "for cause" under this Agreement and in other damages to the
Company.

        8.      COOPERATION FOLLOWING TERMINATION

Employee agrees that, following notice of termination of his employment until
the date of his termination, he shall in good faith cooperate with the Company
in all matters relating to the completion of his pending work on behalf of the
Company and the orderly transition of such work to such other employees as the
Company may designate. Employee further agrees that during and following the
termination of his employment he shall in good faith cooperate with the Company
as to any and all claims, controversies, disputes or complaints over which he
has any knowledge or that may relate to his employment relationship with the
Company; provided, however, that (a) Employee will be reimbursed by the Company
for any out of pocket expenses incurred pursuant to his duties under this
Section 8 and reasonably compensated for his time, and (b) Employee's obligation
to cooperate under this Section 8 shall in no way preclude Employee from seeking
to enforce his rights under this Agreement. Such cooperation includes, but is
not limited to, providing the Company with all information known to him related
to such claims, controversies, disputes or complaints and appearing and giving
testimony in any forum.

        9.      GOVERNING LAW

Except as otherwise explicitly noted, this Agreement shall be governed by and
construed in accordance with the laws of the State of New York (without giving
effect to the conflict of law rules of New York).

        10.     INTEGRATION

This Agreement constitutes the entire understanding between the parties hereto
relating to the subject matter hereof, superseding all negotiations, prior
discussions, preliminary agreements and agreements related to the subject matter
hereof made prior to the date hereof.

        11.     MODIFICATIONS AND AMENDMENTS

        This Agreement may be modified or amended only by an instrument in
writing executed by the parties hereto and approved in writing by the Board of
Directors. Such modification or amendment will not become effective until such
approval has been given.

        12.     SEVERABILITY

        If any of the terms or conditions of this Agreement shall be declared
void or unenforceable by any court or administrative body of competent
jurisdiction, such term or condition shall be deemed severable from the
remainder of this Agreement, and the other terms and conditions of this
Agreement shall continue to be valid and enforceable.

        13.     NOTICE

        For the purpose of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given as of the date if delivered in person or by telecopy, on the
next business day, if sent by a nationally recognized overnight courier service,
and on the second business day if mailed by registered mail, return receipt
requested, postage prepaid, in each case addressed as follows:

IF TO THE EMPLOYEE:

Ramdas Rao
c/o Ambient Corporation
79 Chapel Street
Newton, MA 02458


                                       5
<PAGE>

IF TO THE COMPANY:

Ambient Corporation
79 Chapel Street
Newton, MA 02458

with a copy to:
David Aboudi
Aboudi and Brounstein
3 Gavish St., Ind. Zone Kfar Saba, Israel

or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of changes of address shall be
effective upon receipt.

        14.     WAIVER

        The observation or performance of any condition or obligation imposed
upon Employee hereunder may be waived only upon the written consent of the Board
of Directors. Such waiver shall be limited to the terms thereof and shall not
constitute a waiver of any other condition or obligation of the Employee under
this Agreement.

        15.     ASSIGNMENT

        The rights and obligations of the Company in this Agreement shall inure
to its benefit and be binding upon its successors-in-interest (whether by
merger, consolidation, reorganization, sale of stock or assets or otherwise),
and the Company may assign this Agreement to any affiliate. This Agreement,
being for the personal services of Employee, shall not be assignable by
Employee.

        16.     HEADINGS

The headings have been inserted for convenience only and are not to be
considered when construing the provisions of this Agreement.

        17.     COUNTERPARTS

        This Agreement may be executed in one or more counterparts, each of
which counterparts, when taken together, shall constitute but one and the same
agreement.

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

                              AMBIENT CORPORATION.




        BY:
            ----------------------------
            NAME: JOHN J. JOYCE
            TITLE: CHIEF EXECUTIVE OFFICER
            DATE: AUGUST  11, 2004

                                    EMPLOYEE




        --------------------------------
        RAMDAS RAO


                                       6
<PAGE>

                                    EXHIBIT A

                               AMBIENT CORPORATION

             EMPLOYEE CONFIDENTIALITY AND NON-COMPETITION AGREEMENT


        THIS EMPLOYEE CONFIDENTIALITY AND NON-COMPETITION AGREEMENT (this
"Agreement") entered into as of the 11 day of August 2004, by and between
AMBIENT CORPORATION, a Delaware corporation with its principal place of business
at 79 Chapel Street, Newton, MA 02458 (hereinafter called the "COMPANY") and
Ramdas Rao (hereinafter called "EMPLOYEE").

                              W I T N E S S E T H:

        WHEREAS, in pursuing its power line telecommunications business, Company
has developed and acquired valuable proprietary information, technology,
intellectual property, inventions, trade secrets, production and marketing
plans, equipment, business methods and strategic plans; and

        WHEREAS, the secrecy of Company's proprietary information, trade secrets
and inventions, and the protection of its patents, are essential, because
Company is engaged in a highly competitive industry which requires a substantial
continuing commitment to research, development and innovation to remain
competitive; and

        WHEREAS, it has been and will continue to be necessary for Company to
impart to Employee knowledge of its proprietary information, inventions and
trade secrets and to involve Employee in various aspects of research,
development, business methods and business plans, during which involvement, of
necessity, Employee will gain additional knowledge of Company's inventions,
trade secrets and other confidential information, all for the purpose of
equipping and enabling Employee to discharge his duties effectively to the
mutual advantage of himself and Company; and

        WHEREAS, Employee recognizes that Company must, for its protection,
place reasonable limitations on Employee's ability to use and disclose Company's
proprietary information, inventions and trade secrets and, further, that
Company, in order that such limitations shall be effective, must have the right
to enforce such limitations by way of injunctive relief, both temporary and
permanent;

        NOW THEREFORE, in consideration for the employment of Employee by the
Company and in consideration of the mutual covenants and agreements hereinafter
contained, the parties hereto agree as follows:

        Section 1. INVENTIONS.

        1.1     Any and all inventions, ideas, improvements, processes, formula
and discoveries, whether or not patentable, conceived, devised, made, acquired
or reduced to practice by Employee, either alone or in conjunction with others,
during the period of Employee's employment by Company (including, without
limitation, prior employment by Company and/or its subsidiaries) which relate or
reasonably appertain to the business engaged in by Company or its subsidiaries,
or to any products now manufactured, advertised or sold by Company or its
subsidiaries, or to any products in the process of development by Company or its
subsidiaries, or to any similar or competitive products, or to the method or
process of making or using any such products, or which result from duties or
tasks assigned to Employee by Company, whether so devised, made, acquired or
reduced to practice during working hours or otherwise, with the materials and
tools of Company or its subsidiaries or otherwise, and (except as provided in
Section 1.2) whether done before or after the execution of this Agreement, shall
be the sole and exclusive property of Company; and Employee shall, without
further compensation or consideration, but at the expense of Company:

                (a)     fully and promptly disclose to Company all information
with respect to such inventions, ideas, improvements, processes, formulae and
discoveries;


                                       7
<PAGE>

                (b)     whenever requested by Company, promptly execute and
cooperate in the filing and prosecution of any and all applications, assignments
and other instruments which Company shall deem necessary in order to apply for
and obtain Letters Patent of the United States and of foreign countries for such
inventions, ideas, improvements, processes, formulae and discoveries, and in
order to assign and convey to Company, or to Company's nominee, the sole and
exclusive right, title and interest in and to such inventions, ideas,
improvements, processes, formula and discoveries or any applications or patents
thereon; and

                (c)     whenever requested by Company, promptly deliver to
Company evidence with respect to such inventions, ideas, improvements,
processes, formulae and discoveries for the purpose of any legal proceedings and
testify with respect thereto in any legal proceedings.

        1.2     Employee has, on Attachment A hereof, listed and provided a
complete description of all inventions, ideas, improvements, processes, formulae
and discoveries, both patented and unpatented, which Employee has conceived,
devised, made, acquired or reduced to practice prior to entering the employ of
Company and in which Employee claims a proprietary interest. Employee represents
that said list is complete and agrees that only those items listed and fully
described and identified on Attachment A are to be excluded from this Agreement.

        Section 2. CONFIDENTIAL INFORMATION.

        2.1     Employee shall exercise utmost diligence to protect and guard
the secret and confidential proprietary information, technology, intellectual
property, inventions, trade secrets, production and marketing plans, equipment,
business methods and strategic plans of Company and its subsidiaries, relating
to the business engaged in by Company and its subsidiaries (hereinafter
collectively referred to as "Confidential Information"). Confidential
Information shall not include any information that: (a) was in Employee's
possession prior to Employee's employment with Company; (b) is or becomes a
matter of public knowledge through no fault of Employee or Company; (c) is
rightfully received by Employee from a third party that is not under any duty of
confidentiality with respect to such information; or (d) is generally made
available to third parties by Company without any restrictions on disclosure. In
each case the burden of proof shall be on Employee to show by tangible evidence.

        2.2     Neither during Employee's employment by Company nor thereafter
shall Employee, directly or indirectly, use for himself or another, or disclose
to another, any Confidential Information which has in any manner come into the
Employee's knowledge, except as such disclosure or use may be reasonably
required in connection with his employment by Company or may be consented to in
advance in writing by Company.

        2.3     Each of the foregoing obligations of Employee regarding
Confidential Information shall also apply with respect to Confidential
Information of customers, suppliers, contractors, joint venturers, affiliates
and others with whom Company or any of its subsidiaries has a business
relationship.

        Section 3. NON-COMPETITION.

        3.1     During the Non-Compete Period (as defined below), Employee shall
not, without the prior unanimous written approval of the President of Company,
perform any of the following acts:

                        (A)     accept employment with any business wherever
located which engages in any business in the Territory (as hereinafter defined)
in the design, development, production, sale or distribution of any product or
component that directly or indirectly competes with a product or component (i)
being designed, produced, sold or distributed by the Company or any of its
affiliates (ii) or to which the Company or any of its affiliates shall then have
proprietary rights; or

                        (B)     directly or indirectly, for himself or an behalf
of others, as an individual on his own account or as an employee, agent or
representative for any person, partnership, firm or corporation, engage in, aid
in the operation of, contribute his knowledge to, or own, manage, operate or
participate in the ownership, management or control of any business wherever
located which engages in the Territory in the design, development, production,
sale or distribution of any product or


                                       8
<PAGE>

component that directly or indirectly competes with a product or component (i)
being designed, produced, sold or distributed by the Company or any of its
affiliates (ii) or to which the Company or any of its affiliates shall then have
proprietary rights. Nothing contained in this Section 3 shall be construed to
prohibit Employee from owning, either of record or beneficially, not more than
five percent (5%) of the shares or other equity interest of any publicly traded
entity, even if that entity is in the business engaged in by Company or any of
its subsidiaries.

        3.2     Employee and Company agree that, in view of the character of
Employee's work and of the business engaged in by Company and its subsidiaries,
in view of the nature of the market in which Company and its subsidiaries
compete, it is reasonable and necessary for the protection of Company and its
subsidiaries that the "Territory" referred to in Section 3.1 include the United
States of America.

        3.3     The provisions of this Section 3 shall not in any way or to any
extent limit the obligations of Employee under any other Section of this
Agreement.

        3.4     For purposes of this Agreement. The Non-Compete Period shall be
one (1) year after the effective date of the termination of Employee's
employment by Company or any of its subsidiaries (the "Termination Date").

        Section 4. EMPLOYEE, CUSTOMER OR SUPPLIER INTERFERENCE. During the term
of his employment with the Company and for two (2) years after the Termination
Date, Employee shall not, directly or indirectly, for himself or on behalf of
others, (a) induce or attempt to induce any other employee to quit Company's
employ or the employ of any Company subsidiary, interfere with or disrupt
Company's or the subsidiary's relationship with any other employee or solicit,
entice, take or employ any other employee of Company or the subsidiary; and/or
(b) call upon, solicit, divert or attempt to solicit or divert from Company or
its subsidiaries any of their customers or suppliers, or potential customers or
suppliers whose business was solicited by Company or one of its subsidiaries, or
who were identified in writing by Company or one of its subsidiaries as a
potential customer or supplier, during Employee's employment with Company;
provided, however, that nothing in this Section 4.1 shall be deemed to prohibit
Employee from calling upon or soliciting a customer or supplier if such action
relates solely to a business or matter that is not competitive with Company and
its subsidiaries.

        Section 5. MISCELLANEOUS.

        5.1     Each covenant set forth in this Agreement is separate and
distinct from every other covenant and, if any such covenant, or any part of any
such covenant, is declared to be invalid by a court of competent jurisdiction,
the remaining obligations of this Agreement shall be deemed to be independent
and divisible and shall remain in full force and effect as if the invalid
covenant or covenants never were part of this Agreement. In the event that a
court of competent jurisdiction shall determine that any provision of this
Agreement or the application thereof is unenforceable in whole or in part, the
parties hereto agree that said court in making such determination shall have the
power to reduce the duration and scope of such provision or otherwise modify
such provision to the extent necessary to make it enforceable, and that the
Agreement in its modified form shall be valid and enforceable to the full extent
permitted by law.

        5.2     Failure on Company's part to exercise any rights or privileges
granted to it by this Agreement or to insist upon the full performance of all
obligations or duties assumed by Employee shall not be construed as waiving any
such rights, privileges, obligations or duties, or as creating any custom
contrary thereto.

        5.3     If Employee shall violate any of the terms of this Agreement,
Company, in addition to any other remedies it may have, shall be entitled to an
injunction (including a temporary restraining order and/or a temporary and/or a
preliminary injunction), without the necessity of proving actual damages and
without the posting of a bond, to be issued by any court of equity of competent
jurisdiction, enjoining and restraining Employee from such wrongful acts, and
Employee shall reimburse Company for all reasonable attorneys' fees and expenses
incurred by it to enforce this Agreement.


                                       9
<PAGE>

        5.5     The provisions hereof shall survive and continue in full force
and effect after termination of Employee's employment with Company, whether such
termination is with or without cause, or is voluntary or involuntary.

        5.6     Whenever written notice is required to be given by this
Agreement, adequate notice shall be deemed to have been given if the written
notice is sent by first class mail addressed as follows:

                (a)     To Employee at either his last known residence or his
                        place of business as noted on the records of Company;

                (b)     To Company as shown below:
                        AMBIENT CORPORATION
                        79 Chapel Street
                        Newton, MA  02458
                        Attn:  Chairman of the Board

        5.7     The validity of this Agreement shall be determined under and
shall be governed in all respects by, the laws of the State of Massachusetts,
even though all or a substantial part of Employee's duties may be performed
elsewhere. The parties agree to submit to the jurisdiction of any appropriate
state court of record or federal district court in the district in which the
Company's offices are located for purposes of resolving any dispute arising
under this Agreement.

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

        5.9     This Agreement contains the entire agreement between the parties
and Employee agrees that no other promises or inducements have been made unless
contained in writing, attached hereto or incorporated herein by reference.

        IN WITNESS WHEREOF, the parties hereto have signed this Agreement in
duplicate as of the date first above written.


EMPLOYEE                            AMBIENT CORPORATION


____________________________        By __________________________
Ramdas Rao                          Name:  John J. Joyce
                                    Title: CEO / President



                                       10
<PAGE>

                                    EXHIBIT A

                                       TO

              EMPLOYEE CONFIDENTIALITY AND NONCOMPETITION AGREEMENT

Ambient Corporation
________________________
________________________
Att: President

        1.      The following is a complete list of all inventions or
improvements relevant to the subject matter of employment by COMPANY which have
been made or conceived or first reduced to practice by me alone or jointly with
others prior to the date hereof.

        __  No Inventions   __ See Below   (__  Additional sheets attached)

________________________________________________________________________________

________________________________________________________________________________

        2.      I propose to bring to my employment by COMPANY the following
material and documents of a former employer which are not personally available
to the public, which materials and documents may be used in my employment.

        __  No Inventions   __ See Below   (__  Additional sheets attached)

________________________________________________________________________________

________________________________________________________________________________

        The signature below confirms that my continued possession and use of
these materials is authorized.

                                         Very truly yours,


                                         ___________________________


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