Document:

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                                  EXHIBIT 10.9

                           SECURITY INTEREST AGREEMENT

        SECURITY INTEREST AGREEMENT ("Security Interest Agreement"), dated as of
January 18, 2006, by and among the persons set forth on Schedule 1 (each a
"Secured Party" and collectively, the "Secured Parties"), AMBIENT CORPORATION, a
Delaware corporation with headquarters located at 79 Chapel Street, Newton,
Massachusetts 02458 (the "Company" or the "Debtor"), and KRIEGER & PRAGER, LLP,
as agent for the Secured Parties (the "Agent").

                                    RECITALS

        A.      Reference is made to (i) that certain Bridge Loan Agreement of
even date herewith (the "Bridge Loan Agreement") to which the Debtor and each of
the Secured Party are parties, and (ii) the Transaction Agreements, including,
without limitation, the Notes. Capitalized terms not otherwise defined herein
shall have the meanings ascribed to them in the relevant Transaction Agreements.

        B.      Pursuant to the Notes, the Debtor has certain obligations to
each of the Secured Parties (all such obligations, the "Obligations").

        C.      In order to induce each of the Secured Parties to execute and
deliver the Transaction Agreements and to make the advances to the Debtor
contemplated thereby, and as contemplated by the Bridge Loan Agreement and the
Notes, the Debtor has agreed to grant to each of the Secured Parties a security
interest in the Collateral (as defined below) to secure the due and punctual
fulfillment of the Obligations. Each of the Secured Parties is willing to enter
into the Bridge Loan Agreement and the other Transaction Agreements only upon
receiving the Debtor's execution of this Security Interest Agreement.

        NOW, THEREFORE, in consideration of the premises, the mutual covenants
and conditions contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

        1.      GRANT OF SECURITY INTEREST.

        (a)     In order to secure the due and punctual fulfillment of the
Obligations, the Debtor hereby grants, conveys, transfers and assigns to the
Secured Parties (and to each of them based on their respective Allocable Shares,
as defined below) a continuing security interest in the Collateral.

        (b)     For purposes of this Agreement, the following terms shall have
the meanings indicated:

        "COLLATERAL" is all right, title and interest of Debtor in and to all of
        the following, whether now owned or hereafter arising or acquired and
        wherever located: All assets of the Debtor, including, but not limited
        to: all personal and fixture property of every kind and nature,
        including without limitation all goods (including inventory, equipment
        and any accessions thereto), instruments (including promissory notes),
        documents, accounts (including accounts receivable), chattel paper
        (whether tangible or electronic), deposit accounts, letter-of-credit
        rights (whether or not the letter of credit is evidenced by a writing),
        commercial tort claims, securities and all other investment property,
        supporting obligations, any other contract rights or rights to the
        payment of money, insurance claims and proceeds, and all general
        intangibles (including all payment intangibles); all Equipment; all
        Intellectual Property; and any and all claims, rights and interests in
        any of the above, and all guaranties and security for any of the above,
        and all substitutions and replacements for, additions, accessions,
        attachments, accessories, and improvements to, and proceeds (including
        proceeds of any insurance policies, proceeds of proceeds and claims
        against third parties) of, any and all of the above, and all Debtor's
        books relating to any and all of the above and includes, without
        limiting the generality of the above, the Equipment (and related IP)
        listed in Exhibit B.

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        "CODE" is the Uniform Commercial Code, in effect in the State of
        Delaware as in effect from time to time.

        "COPYRIGHTS" are all copyrights, copyright rights, applications or
        registrations and like protections in each work or authorship or
        derivative work, whether published or not (whether or not it is a trade
        secret) now or later existing, created, acquired or held.

        "EQUIPMENT" has the meaning set forth in the Code and includes all
        present and future machinery, equipment, tenant improvements, furniture,
        fixtures, vehicles, tools, parts and attachments in which Debtor has any
        interest.

        "INTELLECTUAL PROPERTY" is all present and future (a) Copyrights, (b)
        trade secret rights, including all rights to unpatented inventions and
        know-how, and confidential information; (c) mask work or similar rights
        available for the protection of semiconductor chips; (d) Patents; (e)
        Trademarks; (f) computer software and computer software products; (g)
        designs and design rights; (h) technology; (i) all claims for damages by
        way of past, present and future infringement of any of the rights
        included above; (j) all licenses or other rights to use any property or
        rights of a type described above.

        "PATENTS" are patents, patent applications and like protections,
        including improvements, divisions, continuations, renewals, reissues,
        extensions and continuations-in-part of the same.

        "TRADEMARKS" are trademarks, servicemarks, trade styles, and trade
        names, whether or not any of the foregoing are registered, and all
        applications to register and registrations of the same and like
        protections, and the entire goodwill of the business of Debtor connected
        with and symbolized by any such trademarks.

        (c)     The security interests granted pursuant to this Section (the
"Security Interests") are granted as security only and shall not subject any of
the Secured Parties to, or transfer or in any way affect or modify, any
obligation or liability of the Debtor under any of the Collateral or any
transaction which gave rise thereto.

        (d)     The term "Allocable Share" means, with respect to each Secured
Party (if there is more than one Secured Party), as of the relevant date, the
fraction equal to (i) the outstanding principal of the Notes then held by such
Secured Party, divided by (ii) the aggregate outstanding principal of the Notes
then held by all Secured Parties.

        SECTION 2. FILING; FURTHER ASSURANCES.

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        (a)     The Debtor will, at its expense, cause to be searched the public
records with respect to the Collateral and will execute, deliver, file and
record (in such manner and form as each of the Secured Parties may require), or
permit each of the Secured Parties to file and record, as its attorney in fact,
any financing statement, any carbon, photographic or other reproduction of a
financing statement or this Security Agreement (which shall be sufficient as a
financing statement hereunder), any specific assignments or other paper that may
be reasonably necessary or desirable, or that the Secured Parties may request,
in order to create, preserve, perfect or validate any Security Interest or to
enable each of the Secured Parties to exercise and enforce its rights hereunder
with respect to any of the Collateral. The Debtor hereby appoints each Secured
Party as Debtor's attorney-in-fact to execute in the name and behalf of Debtor
such additional financing statements as such Secured Party may request.

        (b)     Each Secured Party has designated an Agent as provided in the
Section titled "Agent" below. Among other things, such Agent shall be agent of
each such Secured Party for execution of and identification on any financing
statement or similar instrument referring to or describing the Collateral.

        (c)     The Agent is authorized to execute and file any and all
financing statements desired to be filed by the relevant Secured Party to
reflect the security interest in the Collateral in any and all jurisdictions.
For such purposes, the Debtor irrevocably appoints the Agent (acting by Samuel
M. Krieger and Ronald Nussbaum, or either one of them), with full power of
substitution to execute and file such financing statements naming the Debtor as
debtor thereon.

        SECTION 3. REPRESENTATIONS AND WARRANTIES OF DEBTOR. The Debtor hereby
represents and warrants to each Secured Party (a) that, except as set forth in
Exhibit A attached hereto, the Debtor is, or to the extent that certain of the
Collateral is to be acquired after the date hereof, will be, the owner of the
Collateral free from any adverse lien, security interest or encumbrance; (b)
that except for such financing statements as may be described on Exhibit A
attached hereto and made a part hereof, no financing statement covering the
Collateral is on file in any public office, other than the financing statements
filed pursuant to this Security Agreement; and (c) that all additional
information, representations and warranties contained in Exhibit B attached
hereto and made a part hereof are true, accurate and complete on the date
hereof.

        SECTION 4. COVENANTS OF DEBTOR. The Debtor hereby covenants and agrees
with each Secured Party that the Debtor (a) will, at the Debtor's sole cost and
expense, defend the Collateral against all claims and demands of all persons at
any time claiming any interest therein junior to the Secured Party's interest;
(b) will provide the Secured Party with prompt written notice of (i) any change
in the chief executive officer of the Debtor or the office where the Debtor
maintains its books and records pertaining to the Collateral; (ii) the movement
or location of all or a material part of the Collateral to or at any address
other than as set forth in said Exhibit B; and (iii) any facts which constitute
a Debtor Event of Default (as such term is defined below), or which, with the
giving of notice and/or the passage of time, could or would constitute a Debtor
Event of Default, pursuant to the Section titled "Debtor Events of Default"
below; (c) will promptly pay any and all taxes, assessments and governmental
charges upon the Collateral prior to the date penalties are attached thereto,
except to the extent that such taxes, assessments and charges shall be contested
in good faith by the Debtor; (d) will immediately notify the Secured Party of
any event causing a substantial loss or diminution in the value of all or any
material part of the Collateral and the amount or an estimate of the amount of
such loss or diminution; (e) will have and maintain adequate insurance at all
times with respect to the Collateral, for such other risks as are customary in
the Debtor's industry for the respective items included in the Collateral, such
insurance to be payable to the Secured Party and the Debtor as their respective
interests may appear, and shall provide for a minimum of ten (10) days prior
written notice of cancellation to the Secured Party, and Debtor shall furnish
the Secured Party with certificates or other evidence satisfactory to the
Secured Party of compliance with the foregoing insurance provisions; (f) will
not sell or offer to sell or otherwise assign, transfer or dispose of the
Collateral or any interest therein, without the prior written consent of the
Secured Party, except in the ordinary course of business; (g) will keep the
Collateral free from any adverse lien, security interest or encumbrance (except
for encumbrances specified in Exhibit A attached hereto) and in good order and
repair, reasonable wear

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and tear excepted, and will not waste or destroy the Collateral or any part
thereof; and (h) will not use the Collateral in material violation of any
statute or ordinance the violation of which could materially and adversely
affect the Debtor's business.

        SECTION 5. RECORDS RELATING TO COLLATERAL. The Debtor will keep its
records concerning the Collateral at its offices designated in the caption of
this Security Interest Agreement or at such other place or places of business of
which the Secured Party shall have been notified in writing no less than ten
(10) days prior thereto. The Debtor will hold and preserve such records and
chattel paper and will permit representatives of the Secured Party at any time
during normal business hours upon reasonable notice to examine and inspect the
Collateral and to make abstracts from such records and chattel paper, and will
furnish to the Secured Party such information and reports regarding the
Collateral as the Secured Party may from time to time reasonably request.

        SECTION 6. GENERAL AUTHORITY. From and during the term of any Debtor
Event of Default, the Debtor hereby appoints the Secured Party the Debtor's
lawful attorney, with full power of substitution, in the name of the Debtor, for
the sole use and benefit of the Secured Party, but at the Debtor's expense, to
exercise, all or any of the following powers with respect to all or any of the
Collateral:

        (a)     to demand, sue for, collect, receive and give acquittance for
any and all monies due or to become due;

        (b)     to receive, take, endorse, assign and deliver all checks, notes,
drafts, documents and other negotiable and non- negotiable instruments and
chattel paper taken or received by the Secured Party;

        (c)     to settle, compromise, prosecute or defend any action or
proceeding with respect thereto;

        (d)     to sell, transfer, assign or otherwise deal in or with the same
or the proceeds thereof or the related goods securing the Collateral, as fully
and effectually as if the Secured Party were the sole and absolute owner
thereof;

        (e)     to extend the time of payment of any or all thereof and to make
any allowance and other adjustments with reference thereto; and

        (f)     to discharge any taxes, liens, security interests or other
encumbrances at any time placed thereon; provided that the Secured Party or the
Agent shall give the Debtor not less than ten (10) business days prior written
notice of the time and place of any sale or other intended disposition of any of
the Collateral.

        The exercise by the Secured Party or the Agent of or failure to so
exercise any authority granted herein shall in no manner affect Debtor's
liability to the Secured Party, and provided, further, that the Secured Party
and the Agent shall be under no obligation or duty to exercise any of the powers
hereby conferred upon them and they shall be without liability for any act or
failure to act in connection with the collection of, or the preservation of, any
rights under any of the Collateral.

        SECTION 7. DEBTOR EVENTS OF DEFAULT.

        (a)     The Debtor shall be in default under this Security Agreement
upon the occurrence of an Event of Default (as defined in the Note) by the
Debtor (a "Debtor Event of Default").

        (b)     The Debtor hereby irrevocably agrees that, upon the occurrence
of a Debtor Event of Default, the Debtor shall be deemed to have consented to an
immediate conveyance and transfer to the Secured Party of the copyrights and all
other rights the Debtor may have in the software included in the Collateral,
including, but not necessarily limited to, the software identified in Schedule B
attached hereto. In furtherance of the foregoing, and not in limitation thereof,
the Debtor will, upon the occurrence of a Debtor Event of Default, deliver to
the Secured Party copies of the source code of the relevant software, with
accompanying written

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assignment of the software to the Secured Party. Without limiting the foregoing,
such source code and assignment shall be in form sufficient to enable the
Secured Party to register the software in Secured Party's name with the
Copyright Register. The Debtor hereby agrees to take all steps necessary or
appropriate, as requested by the Secured Party, to effectuate and reflect such
conveyance and transfer or assignment to Secured Party. In all events, such
conveyance, transfer or assignment shall be deemed to vest title in such
software in the Secured Party.

        (c)     In furtherance of the foregoing and not in limitation thereof,
the Debtor acknowledges and agrees that the Secured Party may, upon the
occurrence of a Debtor Event of Default, seek the immediate entry of a
preliminary injunction prohibiting the Debtor's use of such software in any
shape, way or manner, including, but not necessarily limited to, through the
sale of products that use any of such software, and the Debtor hereby
irrevocably agrees that it will not contest an application seeking entry of a
preliminary injunction and that it will accept the entry of such injunction.

        SECTION 8. REMEDIES UPON DEBTOR EVENT OF DEFAULT. If any Debtor Event of
Default shall have occurred, then in addition to the provisions of Section 7
hereof, the Secured Party may exercise all the rights and remedies of a secured
party under the Code. The Secured Party may require the Debtor to assemble all
or any part of the Collateral and make it available to the Secured Party at a
place to be designated by the Secured Party which is reasonably convenient. The
Secured Party shall give the Debtor ten (10) business days prior written notice
of the Secured Party's intention to make any public or private sale or sale at a
broker's board or on a securities exchange of the Collateral. At any such sale
the Collateral may be sold in one lot as an entirety or in separate parcels, as
the Secured Party, in its sole discretion, may determine. The Secured Party
shall not be obligated to make any such sale pursuant to any such notice. The
Secured Party may, without notice or publication, adjourn any public or private
sale or cause the same to be adjourned from time to time by announcement at the
time and place fixed for the sale, and such sale may be made at any time or
place to which the same may be adjourned. The Secured Party, instead of
exercising the power of sale herein conferred upon it, may proceed by a suit or
suits at law or in equity to foreclose the Security Interests and sell the
Collateral, or any portion thereof, under a judgment or decree of a court or
courts of competent jurisdiction.

        SECTION 9. APPLICATION OF COLLATERAL AND PROCEEDS. The proceeds of any
sale of, or other realization upon, all or any part of the Collateral shall be
applied in the following order of priorities: (a) first, to pay the reasonable
expenses of such sale or other realization, including, without limitation,
reasonable attorneys' fees, and all expenses, liabilities and advances
reasonably incurred or made by the Secured Party in connection therewith, and
any other unreimbursed expenses for which the Secured Party is to be reimbursed
pursuant to the Section titled "Expenses; Secured Party's Lien" below; (b)
second, to the payment of the Obligations in such order of priority as the
Secured Party, in its sole discretion, shall determine; and (c) finally, to pay
to the Debtor, or its successors or assigns, or as a court of competent
jurisdiction may direct, any surplus then remaining from such proceeds.

        SECTION 10. EXPENSES; SECURED PARTY'S LIEN. If any Debtor Event of
Default shall have occurred, the Debtor will forthwith upon demand pay to the
Secured Party: (a) the amount which the Secured Party may have been required to
pay to free any of the Collateral from any lien thereon; and (b) the amount of
any and all reasonable out-of-pocket expenses, including, without limitation,
the reasonable fees and disbursements of its counsel, and of any agents not
regularly in its employ, which the Secured Party may incur in connection with
the collection, sale or other disposition of any of the Collateral.

        SECTION 11. TERMINATION OF SECURITY INTERESTS; RELEASE OF COLLATERAL.
Upon the payment, performance or other satisfaction in full of all the
Obligations, the Security Interests shall terminate and all rights to the
Collateral shall revert to the Debtor. Upon any such termination of the Security
Interests or release of Collateral, the Secured Party will, at the Debtor's
expense, to the extent permitted by law, execute and deliver to the Debtor such
documents as the Debtor shall reasonably request to evidence the termination of
the Security Interests or the release of such Collateral, as the case may be.

        SECTION 12. NOTICES. All notices, demands, requests, consents,
approvals, and other communications required or permitted hereunder shall be in
writing and, unless otherwise specified herein, shall be (a) personally

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served, (b) deposited in the mail, registered or certified, return receipt
requested, postage prepaid, (c) delivered by reputable air courier service with
charges prepaid, or (d) transmitted by hand delivery, telegram, or facsimile,
addressed as set forth below or to such other address as such party shall have
specified most recently by written notice given in accordance herewith. Any
notice or other communication required or permitted to be given hereunder shall
be deemed effective (i) upon hand delivery or delivery by facsimile, with
accurate confirmation generated by the transmitting facsimile machine, at the
address or number designated below (if delivered on a business day during normal
business hours where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal
business hours where such notice is to be received) or (ii) on the second
business day following the date of mailing by express courier service or on the
fifth business day after deposited in the mail, in each case, fully prepaid,
addressed to such address, or upon actual receipt of such mailing, whichever
shall first occur. The addresses for such communications shall be for (i) the
Debtor as provided in the Bridge Loan Agreement for notices to the Company, (ii)
for each Secured Party as provided in the Bridge Loan Agreement for notices to
the Buyer and (iii) for the Agent as provided in the Bridge Loan Agreement for
notices to the Escrow Agent. Any party hereto may from time to time change its
address or facsimile number for notices under this Section in the manner
contemplated by the Bridge Loan Agreement.

        SECTION 13. AGENT.

        (a)     Anything in the other provisions of this Security Interest
Agreement to the contrary notwithstanding, the Secured Party may designate
another entity to act as agent (the "Agent") for the Secured Party with respect
to any one or more of the rights of Secured Party hereunder, including, but not
necessarily limited to, the right to hold the security interest and/or be named
as secured party (as agent for the Secured Party) in any filed financing
statement and to take action in the name and stead of the Secured Party
hereunder. Such designation may be made with or without power of substitution,
Such designation shall remain in effect until canceled by the Secured Party, as
provided herein; provided, however, that such cancellation shall not affect the
validity of any action theretofore taken by such agent pursuant to this Security
Interest Agreement. The Debtor acknowledges and agrees to honor such designation
and acknowledges that the Agent is acting as the agent of the Secured Party and
not as a principal.

        (b)     Each Secured Party hereby confirms that the Secured Party has
designated Krieger & Prager, LLP (acting by Samuel M. Krieger and Ronald
Nussbaum, or either one of them), as its initial Agent, with full right of
substitution.

        (c)     If there is more than one Secured Party, the Agent shall act as
agent for all Secured Parties. Any revocation of the authority of the Agent or
the designation of an alternate Agent shall be done only by Secured Parties who
represent a Majority in Interest of the Holders (as defined below) at that time;
provided that at all times all Secured Parties shall be represented by one and
the same Agent. The term "Majority in Interest of the Holders" means, as of the
relevant date, one or more Secured Parties whose respective outstanding
principal amounts of the Notes held by each of them, as of such date, aggregate
more than fifty percent (50%) of the aggregate outstanding principal amounts of
the outstanding Notes held by all Secured Parties on that date.

        (d)     Reference is made to the provisions of Sections 2 through 15,
inclusive, of the Joint Escrow Instructions. All such provisions are
incorporated herein by reference, as if set forth herein in full, except that,
for such purposes, the references therein to (i) the "Escrow Agent" shall be
deemed to be references to the "Agent" under this Security Interest Agreement,
(ii) the "Company" shall be deemed to be references to the Debtor under this
Security Interest Agreement, and (iii) the "Buyer" shall be deemed to be
references to the relevant Secured Party under this Security Interest Agreement.

        SECTION 14. MISCELLANEOUS.

<PAGE>

        (a)     No failure on the part of the Secured Party to exercise, and no
delay in exercising, and no course of dealing with respect to, any right, power
or remedy under this Security Interest Agreement shall operate as a waiver
thereof; nor shall any single or partial exercise by the Secured Party of any
right, power or remedy under this Security Interest Agreement preclude the
exercise, in whole or in part, of any other right, power or remedy. The remedies
in this Security Interest Agreement are cumulative and are not exclusive of any
other remedies provided by law. Neither this Security Interest Agreement nor any
provision hereof may be changed, waived, discharged or terminated orally but
only by a statement in writing signed by the party against which enforcement of
the change, waiver, discharge or termination is sought.

        (b)     The execution and delivery by Debtor of this Security Interest
Agreement and all documents delivered in connection herewith have been duly and
validly authorized by all necessary corporate action of Debtor and this
Agreement and all documents delivered in connection herewith have been duly and
validly executed and delivered by Debtor. The execution and delivery by Debtor
of this Security Interest Agreement and all documents delivered in connection
herewith will not result in a breach or default of or under the Certificate of
Incorporation, By-laws or any agreement, contract or indenture of Debtor. This
Security Interest Agreement and all documents delivered in connection therewith
are legal, valid and binding obligations of Debtor enforceable against Debtor in
accordance with their terms.

        (c)     In the event that any action is taken by Debtor or Secured Party
in connection with the this Security Interest Agreement, or any related document
or matter, the losing party in such legal action, in addition to such other
damages as he or it may be required to pay, shall pay reasonable attorneys' fees
to the prevailing party.

        SECTION 15. SEPARABILITY. If any provision hereof shall prove invalid or
unenforceable in any jurisdiction whose laws shall be deemed applicable, the
other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Secured Party.

        SECTION 16. GOVERNING LAW.

        (a)     This Security Interest Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware for contracts to
be wholly performed in such state and without giving effect to the principles
thereof regarding the conflict of laws. Each of the parties consents to the
exclusive jurisdiction of the federal courts whose districts encompass any part
of the City of Wilmington or (except with respect to issues relating to the
copyright in and to the software, as contemplated by Section 7 hereof, which
shall exclusively be in the aforesaid federal courts) or of the state courts of
the State of Delaware sitting in the City of Wilmington in connection with any
dispute arising under this Security Interest Agreement and hereby waives, to the
maximum extent permitted by law, any objection, including any objection based on
FORUM NON COVENIENS, to the bringing of any such proceeding in such
jurisdictions or to any claim that such venue of the suit, action or proceeding
is improper. To the extent determined by such court, the Debtor shall reimburse
the Secured Party for any reasonable legal fees and disbursements incurred by
the Secured Party in enforcement of or protection of any of its rights under
this Security Interest Agreement. Nothing in this Section shall affect or limit
any right to serve process in any other manner permitted by law.

        (b)     The Debtor and the Secured Party acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Security Interest Agreement were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that the parties
shall be entitled to an injunction or injunctions to prevent or cure breaches of
the provisions of this Security Interest Agreement and to enforce specifically
the terms and provisions hereof, this being in addition to any other remedy to
which any of them may be entitled by law or equity.

        SECTION 16. JURY TRIAL WAIVER. The Debtor and the Secured Party hereby
waive a trial by jury in any action, proceeding or counterclaim brought by
either of the parties hereto against the other in respect of any matter arising
out of or in connection with the Note or this Security Interest Agreement.

<PAGE>

        SECTION 17. ASSIGNMENT. Only in connection with the transfer of all of
the rights under the Transaction Agreements in accordance with their terms, a
Secured Party may assign or transfer the whole of its security interest granted
hereunder. Any transferee of the Collateral shall be vested with all of the
rights and powers of the assigning Secured Party hereunder with respect to the
Collateral.

SECTION 18.WAIVER. The Debtor waives any right that it may have to require
Secured Party to proceed against any other person, or proceed against or exhaust
any other security, or pursue any other remedy Secured Party may have.

IN WITNESS WHEREOF, the Parties have executed this Security Interest Agreement
as of the day, month and year first above written.

                                 SECURED PARTY:
                     SECURED PARTIES (named in Schedule 1):
                    By: Krieger & Prager LLP, as their agent

                              By:/S/ _____________

                                     DEBTOR:
                               AMBIENT CORPORATION

                                By: John J. Joyce

                                    President

                                     AGENT:
                              KRIEGER & PRAGER, LLP

                               By:/s/ Sam Krieger

                                   SCHEDULE 1

                            The Secured Parties are:

----------------------------------- --------------------------------------------
Name                                Address
----------------------------------- --------------------------------------------
Double U Master Fund LP             Harbour House, Waterfront Drive
                                    Road Town, Tortola, BVI
----------------------------------- --------------------------------------------Form of 2006 Stock Option Agreement

 Exhibit 10.1 
 TERMS AND CONDITIONS 
 2006 EXECUTIVE STOCK OPTION 
 NORTHERN TRUST CORPORATION 2002 STOCK PLAN 
 GRANT DATE: FEBRUARY 21, 2006 
 THIS STOCK OPTION AGREEMENT (AS DEFINED BELOW) IS AN AGREEMENT BETWEEN YOU AND NORTHERN TRUST
CORPORATION. PLEASE READ THIS AGREEMENT CAREFULLY. IF YOU AGREE TO BE BOUND BY ALL OF THE TERMS AND CONDITIONS OF THIS AGREEMENT, PLEASE CLICK THE “I ACCEPT” BUTTON AT THE END OF THIS AGREEMENT. IF YOU DO NOT AGREE TO THESE TERMS AND
CONDITIONS, PLEASE CLICK THE “I DECLINE” BUTTON AT THE END OF THIS AGREEMENT, IN WHICH CASE THIS AGREEMENT WILL BE OF NO FORCE AND EFFECT AND YOUR AWARD UNDER THIS AGREEMENT WILL BE CANCELLED. 
 1. Governing Documents. Your stock option grant is subject to the provisions of the Northern Trust Corporation 2002 Stock Plan (the “Plan”) and
the stock option notice (the “Option Notice”). The Option Notice and these Terms and Conditions constitute the “Stock Option Agreement” as defined in the Plan. If there is any conflict between the information in the Stock Option
Agreement and the Plan, the Plan will govern. These Terms and Conditions apply to non-qualified stock options and incentive stock options issued under the Plan. 
 2. Amendments. The Compensation and Benefits Committee of the Board of Directors (the “Committee”) may amend the terms of the Plan or the Stock Option Agreement at any time, except that any amendment that adversely
affects your rights in any material way requires your written consent. 
 3. Exercise Limitations. Your stock option is exercisable from and
after the vesting date(s) set forth on the Option Notice until the ten (10)-year anniversary of the date the option was granted (the “Expiration Date”), except as provided below: 
  

	 	•	 	Change in Control. Your stock option (whether vested or unvested) becomes vested and exercisable from and after the date of a “Change in Control” (as defined
in the Plan) of the Corporation. Please see “Other Termination of Employment” below for additional provisions relating to a “Change in Control.” 

  

	 	•	 	Death. If you die while employed, your stock option (whether vested or unvested) becomes vested and exercisable as of the date of your death and may be exercised by
your beneficiary at any time until the earlier of (a) five (5) years following your death and (b) the Expiration Date. If you do not name a beneficiary (or your beneficiary dies before you), your stock option will pass to the
following persons in the order indicated: 

  

	 	•	 	Your spouse; if none, then, 

	 	•	 	Your children (in equal amounts); if none, then, 

  

	 	•	 	Your parents (in equal amounts); if none, then, 

  

	 	•	 	Your brothers and sisters (in equal amounts); if none, then, 

  

	 	•	 	Your estate. 

  

	 	•	 	Retirement. If you retire, your stock option continues to vest in accordance with its terms, and, once vested, it may be exercised at any time until the earlier of
(a) five (5) years following the effective date of your retirement and (b) the Expiration Date. The terms “retire” and “retirement” mean retirement occurring by reason of your having qualified for a Normal, Early,
or Postponed Retirement Pension under The Northern Trust Company Pension Plan. You should be aware that an unexercised incentive stock option automatically converts into a non-qualified stock option three (3) months after termination of
employment due to retirement pursuant to the applicable provisions of the Internal Revenue Code of 1986, as amended (the “Code”) relating to incentive stock options. 

  

	 	•	 	Special Circumstances. If (a) on the date of grant, you are a Management Committee member, and (b) on the date of your termination of employment, you are age
55 or older and have a minimum of 10 years of employment with the Corporation or its Subsidiaries, then your stock option continues to vest in accordance with its terms, and, once vested, it may be exercised at any time until the earlier of
(i) five (5) years following the date of your termination of employment and (ii) the Expiration Date. You should be aware that an unexercised incentive stock option automatically converts into a non-qualified stock option three
(3) months after termination of employment under the described circumstances pursuant to the applicable provisions of the Code. 

  

	 	•	 	Disability. If you become disabled while employed, your stock option (whether vested or unvested) becomes vested and exercisable upon your disability and may be
exercised at any time until the earlier of (a) five (5) years following your disability, and (b) the Expiration Date. The term “disability” means a disability that continues for a period of 12 months as defined by Northern
Trust’s Managed Disability Program, at which date you are terminated from the Plan. You should be aware that an unexercised incentive stock option automatically converts into a non-qualified stock option three months after termination from the
Plan due to disability pursuant to the applicable provisions of the Code relating to incentive stock options. 

  

	 	•	 	Severance. If your employment is terminated under circumstances that entitle you to severance benefits under the Northern Trust Corporation Severance Plan (the
“Severance Plan”), and you have executed and not revoked a settlement agreement, waiver and release under the Severance Plan (a “Release”), your stock option (whether vested or unvested) becomes vested and exercisable as of the
date of your termination of employment and may be exercised at any time until the 

  

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 earlier of (a) one-hundred and eighty (180) days following your termination of employment under
the Severance Plan and (b) the Expiration Date. If you are eligible for a Normal, Early, or Postponed Pension Retirement Pension upon termination of employment under the Severance Plan, your stock option (whether vested or unvested) becomes
vested and exercisable as of the date of your termination of employment and may be exercised at any time until the earlier of (a) five (5) years following the effective date of your retirement and (b) the Expiration Date. You should
be aware that an unexercised incentive stock option automatically converts into a non-qualified stock option three (3) months after termination of employment in these circumstances pursuant to the applicable provisions of the Code relating to
incentive stock options. 
  

	 	•	 	Other Termination of Employment. Except as set forth below, if (a) your employment terminates for any reason other than death, retirement or a severance under the
Severance Plan for which you have executed and not revoked a Release, and (b) you are not terminated from the Plan due to disability pursuant to the “Disability” provisions described above, your stock option, if and to the extent
vested as of the date of your termination of employment, may be exercised at any time until the earlier of (i) three (3) months following the date of your termination of employment and (ii) the Expiration Date. Your stock option, if
and to the extent unvested as of the date of your termination of employment, expires as of the date of your termination of employment. A termination of employment shall not be deemed to occur by reason of your transfer between the Corporation and a
Subsidiary of the Corporation or between two Subsidiaries of the Corporation. The post-termination exercise provision of this sub-paragraph shall apply to you if you become a consultant to the Corporation or a Subsidiary of the Corporation upon
termination of your employment from the Corporation or a Subsidiary of the Corporation. Notwithstanding the foregoing, if, within the two-year period following a Change in Control, (A) your employment by the Corporation or a subsidiary of the
Corporation is terminated for any reason other than death, retirement or a severance under the Severance Plan for which you have executed and not revoked a Release, and (B) you are not terminated from the Plan due to disability pursuant to the
“Disability” provisions described above, then (except as may otherwise be specified in an Employment Security Agreement between you and the Corporation), your stock option, to the extent vested, may be exercised at any time until the
earlier of (I) six (6) months following the date of your termination of employment, and (II) the Expiration Date; provided, however, you should be aware that an unexercised incentive stock option automatically converts into a non-qualified
stock option three (3) months after termination of employment in connection with a Change of Control pursuant to the applicable provisions of the Code relating to incentive stock options. 

 4. Re-Employment. If, after your termination of employment, you are re-employed by the Corporation or one of its Subsidiaries, upon your return you will be
considered a new hire. Options that previously expired upon your termination of employment remain expired and are not reinstated. 
  

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 5. Exercise of Options. 
  

	 	•	 	How to Exercise. You may exercise your stock option by contacting Retirement Passport through the H.R. Service Center at (800) 807-0302. For inquiry or modeling,
you can use Your Benefits Resources online. You may access Your Benefits Resources online through the People Place on nside northern by selecting My Place followed by the Retirement and Stock Option Plans link. 

  

	 	•	 	Black-out Period. Due to federal securities law concerns, the Corporation has a “black-out” policy which restricts any exercise of your stock option around
quarterly corporate earnings announcements. Please refer to the “Statement of Confidential Information and Securities Trading” for further information about the Corporation’s black-out policy. You may access this document online
through nside northern. From the homepage click on Corporate, and then Corporate Policies. 

 6. Nontransferability. Your stock
option is not transferable other than as provided in these Terms and Conditions, except that you, with the prior approval of the Committee, may transfer a non-qualified stock option (but not an incentive stock option) under certain circumstances and
subject to the terms and conditions of the Plan and such limits as the Committee may establish, and the transferee shall remain subject to all the terms and conditions applicable to the non-qualified stock option prior to the transfer. Except as
described in the prior sentence, your stock option (whether a non-qualified stock option or an incentive stock option) is exercisable, during your lifetime, only by you or your personal representative. Additional written information regarding the
mechanics and consequences of transferring a non-qualified stock option is available from the Corporate Secretary. You should request and review this information prior to making a request to transfer a non-qualified stock option. 
 7. Delivery of Shares. Delivery of shares of Common Stock upon exercise of your stock option is subject to the withholding of all applicable taxes. At your
election, any withholding tax obligation shall be satisfied by the Corporation’s withholding of a portion of the shares otherwise distributable to you at a rate acceptable to the Corporation or by your delivery of previously acquired shares
that are “mature” (meaning that the shares have been held by you for more than six months) to the Corporation, up to the maximum federal rate. Payment of federal income taxes may be accomplished through a combination of withholding of
shares and delivery of previously acquired shares that are “mature.” If at any time the Corporation shall be advised by its counsel that the shares deliverable upon an exercise of the option must be accompanied or preceded by a prospectus
meeting the requirements of the Securities Act of 1933 or any State securities law, or that the Corporation must comply with the rules of any securities exchange on which its common stock is traded, the Corporation will use its reasonable best
efforts to deliver such prospectus and to comply with the rules of such securities exchange not later than a reasonable time following the exercise of the option, but the delivery of shares by the Corporation may be deferred until such prospectus is
available or the Corporation complies with the rules of such securities exchange. As an option holder, you have no interest in the shares covered by the option until the shares are actually issued. 
  

 -4- 

 8. Restricted Activity. Despite anything to the contrary in these Terms and Conditions, your stock options
(whether vested or unvested) shall be forfeited and the Corporation shall have no obligation to honor the exercise of the stock options by you (or your beneficiary), if you: 
  

	 	(a)	at any time after the date of these Terms and Conditions, have divulged, directly or indirectly, or used for your own or another’s benefit, any Confidential Information; or

  

	 	(b)	at any time after the date of these Terms and Conditions and through a period of twelve (12) months after you cease to be employed by the Corporation or any of its Subsidiaries
for any reason, have Solicited, or assisted in the Solicitation of, any Client or Prospective Client; or solicited, encouraged, advised, induced or caused any employee of the Corporation or any of its Subsidiaries to terminate his or her employment
with the Corporation or any of its Subsidiaries, or provided any assistance, encouragement, information, or suggestion to any person or entity regarding the solicitation or hiring of any employee of the Corporation or any of its Subsidiaries;
provided, however, that this clause (b) shall not prohibit any Solicitation of any Client or Prospective Client with whom I had a business relationship prior to the start of my employment with the Corporation or any of its Subsidiaries,
provided no Confidential Information, directly or indirectly, is used in each Solicitation. 

  

	 	(c)	If you shall have so engaged in any such activity described in clauses (a) or (b) above without the written consent of the Corporation, your stock options (whether vested
or unvested) shall be forfeited to the Corporation by notice in writing to you within a reasonable period of time after the Corporation acquires knowledge of your violation of this Section 8. Any failure by you to comply with this
Section 8 shall entitle the Corporation, as determined by the Committee in its sole discretion, to (i) cancel and terminate all of your unexercised, unexpired or unpaid stock options (whether vested or unvested) under the Plan, and
(ii) rescind any exercise, payment or delivery under any stock option occurring within twelve (12) months prior to, or at any time following, the date of your termination of employment for any reason (including but not limited to
termination of employment due to retirement or disability). Upon any such rescission, (1) you shall immediately pay to the Corporation the amount of any gain realized or payment received, and (2) you shall immediately forfeit to the
Corporation any shares of the Corporation’s Common Stock received, in each case as a result of the rescinded exercise, payment or delivery under any stock options, in such manner and on such terms and conditions as the Committee shall require,
and the Corporation shall be entitled, as permitted by applicable law, to deduct from any amounts the Corporation owes you from time to time the amount of any such gain realized or payment received. “Gain realized” shall be the excess of
the fair market value of the Corporation’s common stock on the date of exercise over the option exercise price, multiplied by the number of shares purchased. 

  

 -5- 

 9. No Contract of Employment. The option grant shall not be deemed to obligate the Corporation or any of
its Subsidiaries to continue your employment for any particular period, nor is employment guaranteed for the length of the vesting schedule set forth in the Option Notice. 
 10. Taxes. Please refer to the “Summary Description of the Northern Trust Corporation 2002 Stock Plan” for a description of the U.S. federal income tax consequences affecting non-qualified
stock options and incentive stock options. 
 11. Applicable Law. All questions pertaining to the validity, construction and administration of
the Plan and the stock option grants to which the Option Notice and these Terms and Conditions apply shall be determined in conformity with the laws of the State of Illinois, without regard to the conflict of law provisions of any state. 

12. Definitions. Capitalized terms not defined in the Stock Option Agreement shall have the meanings assigned to them in the Plan. For purposes of the
Stock Option Agreement: 
  

	 	(a)	“Client” means any person or entity with which the Corporation, or any of its Subsidiaries, did business and with which you had contact, or about which you had access to
Confidential Information, during the last twelve (12) months of your employment. 

  

	 	(b)	“Competitive Service or Product” means any service or product: (i) that is substantially similar to or competitive with any service or product that you created or
provided, or of which you assisted in the creation or provision, during your employment by the Corporation or any of its Subsidiaries; or (ii) about which you had access to Confidential Information during your employment by the Corporation or
any of its Subsidiaries. 

  

	 	(c)	“Confidential Information” means any trade secrets or other information, including, but not limited to, any client information (for example, client lists, information
about client accounts, borrowings, and current or proposed transactions), any internal analysis of clients, marketing strategies, financial reports or projections, business or other plans, data, procedures, methods, computer data or system program
or design, devices, lists, tools, or compilation, which relate to the present or planned business of the Corporation or any of its Subsidiaries and which has not been made generally known to the public by authorized representatives of the
Corporation. 

  

	 	(d)	“Prospective Client” means any person or entity to which the Corporation, or any of its Subsidiaries or affiliates, provided, or from which the Corporation, or any of its
Subsidiaries received, a proposal, bid, or written inquiry (general advertising or promotional materials and mass mailings excepted) and with which you had contact, or about which you had access to Confidential Information, during the last twelve
(12) months of your employment. 

  

	 	(e)	“Solicit” and “Solicitation” (with respect to Clients or Prospective Clients) mean directly or indirectly, and without the Corporation’s written
authorization, to invite, encourage, request, or induce (or to assist another to invite, encourage, 

  

 -6- 

 request or induce) any Client or Prospective Client of the Corporation, or any of its Subsidiaries, to:
(i) surrender, redeem or terminate a product, service or relationship with the Corporation, or any of its Subsidiaries; (ii) obtain any Competitive Service or Product from you or any third party; or (iii) transfer a product, service
or relationship from the Corporation, or any of its Subsidiaries, to you or any third party. 
  

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