Document:

EXHIBIT 10.19

                          SECURITIES PURCHASE AGREEMENT

            THIS SECURITIES PURCHASE AGREEMENT, dated as of the date of
acceptance set forth below, is entered into by and between AMBIENT CORPORATION,
a Delaware corporation, with headquarters located at 270 Madison Avenue, New
York, NY 10016 (the "Company"), and each entity named on a signature page hereto
(each, a "Buyer") (each agreement with a Buyer being deemed a separate and
independent agreement between the Company and such Buyer, except that each Buyer
acknowledges and consents to the rights granted to each other Buyer under such
agreement and the Transaction Agreements, as defined below, referred to
therein).

                              W I T N E S S E T H:

            WHEREAS, the Company and the Buyer are executing and delivering this
Agreement in accordance with and in reliance upon the exemption from securities
registration afforded, inter alia, by Rule 506 under Regulation D ("Regulation
D") as promulgated by the United States Securities and Exchange Commission (the
"SEC") under the Securities Act of 1933, as amended (the "1933 Act"), and/or
Section 4(2) of the 1933 Act; and

            WHEREAS, the Buyer wishes to purchase, upon the terms and subject to
the conditions of this Agreement, 10% Convertible Debentures of the Company (the
"Convertible Debentures") which which will be convertible into shares of Common
Stock, $.001 par value per share, of the Company (the "Common Stock"), upon the
terms and subject to the conditions of such Convertible Debentures, together
with the Warrants (as defined below) exercisable for the purchase of shares of
Common Stock, and subject to acceptance of this Agreement by the Company;

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

            1. AGREEMENT TO PURCHASE; PURCHASE PRICE.

            a. Purchase.

            (i) The undersigned hereby agrees to purchase from the Company
Convertible Debentures in the principal amount set forth on the signature page
of this Agreement (the "Debentures," which term includes the Initial Debentures
and the Additional Debentures defined below), out of a total offering of
$2,000,000 of such Convertible Debentures, and having the terms and conditions
and being in the form attached hereto as Annex I.

            (ii) Subject to the terms and conditions of this Agreement and the
other Transaction Agreements, the Buyer will purchase (x) fifty percent (50%) of
the Debentures (the

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"Initial Debentures") on the Initial Closing Date (as defined below) and (y) the
balance of the Debentures (the "Additional Debentures") on the Additional
Closing Date (as defined below).

            (iii) The purchase price to be paid by the Purchaser shall be equal
to the face amount of the Initial Debentures or the Additional Debentures, as
the case may be, and shall be payable in United States Dollars.

            b. Certain Definitions. As used herein, each of the following terms
has the meaning set forth below, unless the context otherwise requires:

            (i) "Securities" means the Debentures, the Warrants and the Common
Stock issuable upon conversion of the Debentures or the exercise of the
Warrants.

            (ii) "Purchase Price" means the purchase price for the Initial
Debentures or the Additional Debentures, as the case may be.

            (iii) "Initial Closing Date" means the date of the closing of the
purchase and sale of the Initial Debentures, as provided herein.

            (iv) "Additional Closing Date" means the date of the closing of the
purchase and sale of the relevant Additional Debentures, as provided herein.

            (v) "Closing Date" means the Initial Closing Date or the Additional
Closing Date, as the case may be.

            (vi) "Buyer's Allocable Share" means the fraction of which the
numerator is the Buyer's Debentures and the denominator is $2,000,000.

            (vii) "Effective Date" means the effective date of the Registration
Statement covering the Registrable Securities (as those terms are defined in the
Registration Rights Agreement defined below).

            (viii) "Converted Shares" means the shares of Common Stock issuable
upon conversion of the Debentures.

            (ix) "Warrant Shares" means the shares of Common Stock issuable upon
exercise of the Warrants.

            (x) "Shares" means the shares of Common Stock representing any or
all of the Converted Shares and the Warrant Shares.

            (xi) "Strategic Partner" means a third party unaffiliated with the
Company as of the date hereof which party (i) is engaged in a business which is
the business in which the Company is engaged or a similar or related business,
and (ii) subsequently purchases equity

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securities of the Company (or securities convertible into equity securities of
the Company), where such purchase is accompanied or followed by any one or more
of the following: the licensing by the Company of all or any portion of its
technology to such third party, the licensing by such third party of all or any
portion of its technology to the Company, or any other coordination of all or a
portion of their respective business activities or operations by the Company and
such third party. By way of illustration and not in limitation of the foregoing,
if a third party entity engaged in smartcard interface technology (exclusively
or as one of multiple fields of endeavor) purchases an equity interest in the
Company where the Company and such third party intend that such investment is to
be accompanied by any one or more of a licensing agreement by one or the other
of the other party's technology or by a cross-licensing agreement, by an OEM
agreement, by a joint development agreement or by other coordination of design,
production or marketing activities, such third party would be a Strategic
Partner.

            c. Form of Payment; Delivery of Certificates.

            (i) The Buyer shall pay the Purchase Price for the relevant
Debentures by delivering immediately available good funds in United States
Dollars to the escrow agent (the "Escrow Agent") identified in the Joint Escrow
Instructions attached hereto as Annex II (the "Joint Escrow Instructions") on
the date prior to the relevant Closing Date.

            (ii) No later than the relevant Closing Date, but in any event
promptly following payment by the Buyer to the Escrow Agent of the relevant
Purchase Price, the Company shall deliver the relevant Debentures and the
Warrants, each duly executed on behalf of the Company and issued in the name of
the Buyer (collectively, the "Certificates") to the Escrow Agent.

            (iii) By signing this Agreement, each of the Buyer and the Company,
subject to acceptance by the Escrow Agent, agrees to all of the terms and
conditions of, and becomes a party to, the Joint Escrow Instructions, all of the
provisions of which are incorporated herein by this reference as if set forth in
full.

            d. Method of Payment. Payment into escrow of the Purchase Price
shall be made by wire transfer of funds to:

                  Bank of New York
                  350 Fifth Avenue
                  New York, New York 10001

                  ABA# 021000018
                  For credit to the account of Krieger & Prager LLP, Esqs.
                  Account No.: [To be provided to the Buyer by Krieger
                               & Prager LLP]
                  Re: Ambient Transaction
Not later than 5:00 p.m., New York time, on the date which is seven (7) New York
Stock Exchange trading days after the Company shall have accepted this Agreement
and returned a

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signed counterpart of this Agreement to the Escrow Agent by facsimile, the Buyer
shall deposit with the Escrow Agent the Purchase Price for the Initial
Debentures in currently available funds. Time is of the essence with respect to
such payment, and failure by the Buyer to make such payment, shall allow the
Company to cancel this Agreement.

            e. Escrow Property. The Purchase Price and the Certificates
delivered to the Escrow Agent as contemplated by Sections 1(c) and (d) hereof
are referred to as the "Escrow Property."

            2. BUYER REPRESENTATIONS, WARRANTIES, ETC.; ACCESS TO INFORMATION;
INDEPENDENT INVESTIGATION.

            The Buyer represents and warrants to, and covenants and agrees with,
the Company as follows:

            a. Without limiting Buyer's right to sell the Common Stock pursuant
to the Registration Statement, the Buyer is purchasing the Debentures and the
Warrants and will be acquiring the Shares for its own account for investment
only and not with a view towards the public sale or distribution thereof and not
with a view to or for sale in connection with any distribution thereof.

            b. The Buyer is (i) an "accredited investor" as that term is defined
in Rule 501 of the General Rules and Regulations under the 1933 Act by reason of
Rule 501(a)(3), (ii) experienced in making investments of the kind described in
this Agreement and the related documents, (iii) able, by reason of the business
and financial experience of its officers (if an entity) and professional
advisors (who are not affiliated with or compensated in any way by the Company
or any of its affiliates or selling agents), to protect its own interests in
connection with the transactions described in this Agreement, and the related
documents, and (iv) able to afford the entire loss of its investment in the
Securities.

            c. All subsequent offers and sales of the Debentures and the Shares
by the Buyer shall be made pursuant to registration of the Shares under the 1933
Act or pursuant to an exemption from registration.

            d. The Buyer understands that the Debentures are being offered and
sold to it in reliance on specific exemptions from the registration requirements
of United States federal and state securities laws and that the Company is
relying upon the truth and accuracy of, and the Buyer's compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
the Buyer set forth herein in order to determine the availability of such
exemptions and the eligibility of the Buyer to acquire the Debentures.

            e. The Buyer and its advisors, if any, have been furnished with all
materials relating to the business, finances and operations of the Company and
materials relating to the offer and sale of the Debentures and the offer of the
Shares which have been requested by

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the Buyer, including Annex V hereto. The Buyer and its advisors, if any, have
been afforded the opportunity to ask questions of the Company and have received
complete and satisfactory answers to any such inquiries. Without limiting the
generality of the foregoing, the Buyer has also had the opportunity to obtain
and to review the Company's (1) Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1998, and (2) Quarterly Reports on Form 10-QSB for the fiscal
quarters ended March 31, June 30, and September 30, 1999, respectively (the
"Company's SEC Documents").

            f. The Buyer understands that its investment in the Securities
involves a high degree of risk.

            g. The Buyer understands that no United States federal or state
agency or any other government or governmental agency has passed on or made any
recommendation or endorsement of the Securities.

            h. This Agreement has been duly and validly authorized, executed and
delivered on behalf of the Buyer and is a valid and binding agreement of the
Buyer enforceable in accordance with its terms, subject as to enforceability to
general principles of equity and to bankruptcy, insolvency, moratorium and other
similar laws affecting the enforcement of creditors' rights generally.

            i. The Buyer represents that, for the five (5) trading days prior to
the date hereof, the Buyer has not engaged in any puts, calls, futures
contracts, short sales and hedging and arbitrage transactions with respect to
the Common Stock.

            3. COMPANY REPRESENTATIONS, ETC. The Company represents and warrants
to the Buyer as of the date hereof and as of each Closing Date that, except as
otherwise provided in the relevant Section or paragraph reference in Annex V
hereto (corresponding to the Section or paragraph references below):

            a. Concerning the Debentures and the Shares. There are no preemptive
rights of any stockholder of the Company, as such, to acquire the Debentures,
the Warrants or the Shares. No party has a currently exercisable right of first
refusal which would be applicable to any or all of the transactions contemplated
by the Transaction Agreements.

            b. Reporting Company Status. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the requisite corporate power to own its properties and to
carry on its business as now being conducted. The Company is duly qualified as a
foreign corporation to do business and is in good standing in each jurisdiction
where the nature of the business conducted or property owned by it makes such
qualification necessary, other than those jurisdictions in which the failure to
so qualify would not have a material adverse effect on the business, operations
or financial condition or results of operation of the Company and its
subsidiaries taken as a whole.. The Company has registered its Common Stock
pursuant to Section 12 of the 1934 Act, and the

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<PAGE>

Common Stock is listed and traded on The NASDAQ/Bulletin Board Market. The
Company has received no notice, either oral or written, with respect to the
continued eligibility of the Common Stock for such listing, and the Company has
maintained all requirements for the continuation of such listing.

            c. Authorized Shares. The authorized capital stock of the Company
consists of (i) 20,000,000 shares of Common Stock, $.001 par value per share, of
which approximately 8,326,611 shares had been issued as of the date hereof and
(ii) 5,000,000 shares of Preferred Stock, par value $.001 per share, none of
which have been issued as of the date hereof. All issued and outstanding shares
of Common Stock have been duly authorized and validly issued and are fully paid
and nonassessable. The Company has sufficient authorized and unissued shares of
Common Stock as may be necessary to effect the issuance of the Shares. The
Shares have been duly authorized and, when issued upon conversion of, or as
interest on, the Debentures or upon exercise of the Warrants, each in accordance
with its respective terms, will be duly and validly issued, fully paid and
non-assessable and will not subject the holder thereof to personal liability by
reason of being such holder.

            d. Securities Purchase Agreement; Registration Rights Agreement and
Stock. This Agreement and the Registration Rights Agreement, the form of which
is attached hereto as Annex IV (the "Registration Rights Agreement"), and the
transactions contemplated thereby, have been duly and validly authorized by the
Company, this Agreement has been duly executed and delivered by the Company and
this Agreement is, and the Debentures, the Warrants and the Registration Rights
Agreement, when executed and delivered by the Company, will be, valid and
binding agreements of the Company enforceable in accordance with their
respective terms, subject as to enforceability to general principles of equity
and to bankruptcy, insolvency, moratorium, and other similar laws affecting the
enforcement of creditors' rights generally.

            e. Non-contravention. The execution and delivery of this Agreement
and the Registration Rights Agreement by the Company, the issuance of the
Securities, and the consummation by the Company of the other transactions
contemplated by this Agreement, the Registration Rights Agreement, and the
Debentures do not and will not conflict with or result in a breach by the
Company of any of the terms or provisions of, or constitute a default under (i)
the articles of incorporation or by-laws of the Company, each as currently in
effect, (ii) any indenture, mortgage, deed of trust, or other material agreement
or instrument to which the Company is a party or by which it or any of its
properties or assets are bound, including any listing agreement for the Common
Stock except as herein set forth, (iii) to its knowledge, any existing
applicable law, rule, or regulation or any applicable decree, judgment, or order
of any court, United States federal or state regulatory body, administrative
agency, or other governmental body having jurisdiction over the Company or any
of its properties or assets, or (iv) the Company's listing agreement for its
Common Stock, except such conflict, breach or default which would not have a
material adverse effect on the business, operations or financial condition or
results of operations of the Company and its subsidiaries, taken as a whole, or
on the transactions contemplated herein.

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<PAGE>

            f. Approvals. No authorization, approval or consent of any court,
governmental body, regulatory agency, self-regulatory organization, or stock
exchange or market or the stockholders of the Company is required to be obtained
by the Company for the issuance and sale of the Securities to the Buyer as
contemplated by this Agreement, except such authorizations, approvals and
consents that have been obtained.

            g. SEC Filings. None of the Company's SEC Documents contained, at
the time they were filed, any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to make the
statements made therein in light of the circumstances under which they were
made, not misleading. The Company has since January 1, 1999 timely filed all
requisite forms, reports and exhibits thereto with the SEC.

            h. Absence of Certain Changes. Since December 31, 1998, there has
been no material adverse change and no material adverse development in the
business, properties, operations, financial condition, or results of operations
of the Company, except as disclosed in the Company's SEC Documents. Since
December 31, 1998, except as provided in the Company's SEC Documents, the
Company has not (i) incurred or become subject to any material liabilities
(absolute or contingent) except liabilities incurred in the ordinary course of
business consistent with past practices; (ii) discharged or satisfied any
material lien or encumbrance or paid any material obligation or liability
(absolute or contingent), other than current liabilities paid in the ordinary
course of business consistent with past practices; (iii) declared or made any
payment or distribution of cash or other property to stockholders with respect
to its capital stock, or purchased or redeemed, or made any agreements to
purchase or redeem, any shares of its capital stock; (iv) sold, assigned or
transferred any other tangible assets, or canceled any debts or claims, except
in the ordinary course of business consistent with past practices; (v) suffered
any substantial losses or waived any rights of material value, whether or not in
the ordinary course of business, or suffered the loss of any material amount of
existing business; (vi) made any changes in employee compensation, except in the
ordinary course of business consistent with past practices; or (vii) experienced
any material problems with labor or management in connection with the terms and
conditions of their employment.

            i. Full Disclosure. There is no fact known to the Company (other
than general economic conditions known to the public generally or as disclosed
in the Company's SEC Documents) that has not been disclosed in writing to the
Buyer that (i) would reasonably be expected to have a material adverse effect on
the business, operations or financial condition of the Company or results of
operations of the Company and its subsidiaries, taken as a whole , (ii) would
reasonably be expected to materially and adversely affect the ability of the
Company to perform its obligations pursuant to this Agreement or any of the
agreements contemplated hereby (collectively, including this Agreement, the
"Transaction Agreements"), or (iii) would reasonably be expected to materially
and adversely affect the value of the rights granted to the Buyer in the
Transaction Agreements.

            j. Absence of Litigation. Except as set forth in the Company's SEC
Documents, there is no action, suit, proceeding, inquiry or investigation before
or by any court,

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public board or body pending or, to the knowledge of the Company, threatened
against or affecting the Company, wherein an unfavorable decision, ruling or
finding would have a material adverse effect on the properties, business,
operations or financial condition, or results of operation of the Company and
its subsidiaries taken as a whole or the transactions contemplated by any of the
Transaction Agreements or which would adversely affect the validity or
enforceability of, or the authority or ability of the Company to perform its
obligations under, any of the Transaction Agreements.

            k. Absence of Events of Default. Except as set forth in Section 3(e)
hereof, no Event of Default (or its equivalent term), as defined in the
respective agreement to which the Company is a party, and no event which, with
the giving of notice or the passage of time or both, would become an Event of
Default (or its equivalent term) (as so defined in such agreement), has occurred
and is continuing, which would have a material adverse effect on the business,
operations or the financial condition or results of operations of the Company
and its subsidiaries, taken as a whole.

            l. Prior Issues. During the twelve (12) months preceding the date
hereof, the Company has not issued any convertible securities. The presently
outstanding unconverted principal amount of each such issuance as at February ,
2000 are set forth in Annex V.

            m. No Undisclosed Liabilities or Events. The Company has no
liabilities or obligations other than those disclosed in the Company's SEC
Documents or those incurred in the ordinary course of the Company's business
since December 31, 1998, and which individually or in the aggregate, do not or
would not have a material adverse effect on the properties, business,
operations, financial condition or results of operations of the Company and its
subsidiaries, taken as a whole. No event or circumstances has occurred or exists
with respect to the Company or its properties, business, operations, financial
condition, or results of operations, which, under applicable law, rule or
regulation, requires public disclosure or announcement prior to the date hereof
by the Company but which has not been so publicly announced or disclosed. There
are no proposals currently under consideration or currently anticipated to be
under consideration by the Board of Directors or the executive officers of the
Company which proposal would (x) change the certificate of incorporation or
other charter document or by-laws of the Company, each as currently in effect,
with or without shareholder approval, which change would reduce or otherwise
adversely affect the rights and powers of the shareholders of the Common Stock
or (y) materially or substantially change the business, assets or capital of the
Company, including its interests in subsidiaries.

            n. No Default. The Company is not in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any material indenture, mortgage, deed of trust or other material
instrument or agreement to which it is a party or by which it or its property is
bound.

            o. No Integrated Offering. Neither the Company nor any of its
affiliates nor any person acting on its or their behalf has, directly or
indirectly, at any time since December

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1, 1998, made any offer or sales of any security or solicited any offers to buy
any security under circumstances that would eliminate the availability of the
exemption from registration under Rule 506 of Regulation D in connection with
the offer and sale of the Securities as contemplated hereby.

            p. Dilution. The number of Shares issuable upon conversion of the
Debentures and the exercise of the Warrants may increase substantially in
certain circumstances, including, but not necessarily limited to, the
circumstance wherein the trading price of the Common Stock declines prior to the
conversion of the Debentures. The Company's executive officers and directors
have studied and fully understand the nature of the Securities being sold hereby
and recognize that they have a potential dilutive effect. The board of directors
of the Company has concluded, in its good faith business judgment, that such
issuance is in the best interests of the Company. The Company specifically
acknowledges that its obligation to issue the Shares upon conversion of the
Debentures and upon exercise of the Warrants is binding upon the Company and
enforceable regardless of the dilution such issuance may have on the ownership
interests of other shareholders of the Company.

            r. Brokers, Finders. Except for payment of fees to Burstein &
Lindsay Securities Corp. (the "Placement Agent"), payment of which is the sole
responsibility of the Company, the Company has taken no action which would give
rise to any claim by any person for brokerage commission, finder's fees or
similar payments by Buyer relating to this Agreement or the transactions
contemplated hereby. Buyer shall have no obligation with respect to such fees or
with respect to any claims made by or on behalf of other Persons for fees of a
type contemplated in this Section 3(r) that may be due in connection with the
transactions contemplated hereby. The Company shall indemnify and hold harmless
each of Buyer, its employees, officers, directors, agents, and partners, and
their respective affiliates, from and against all claims, losses, damages, costs
(including the costs of preparation and attorney's fees) and expenses suffered
in respect of any such claimed or existing fees, as and when incurred.

            4. CERTAIN COVENANTS AND ACKNOWLEDGMENTS.

            a. Transfer Restrictions. The Buyer acknowledges that (1) the
Debentures have not been and are not being registered under the provisions of
the 1933 Act and, except as provided in the Registration Rights Agreement, the
Shares have not been and are not being registered under the 1933 Act, and may
not be transferred unless (A) subsequently registered thereunder or (B) the
Buyer shall have delivered to the Company an opinion of counsel, reasonably
satisfactory in form, scope and substance to the Company, to the effect that the
Securities to be sold or transferred may be sold or transferred pursuant to an
exemption from such registration; (2) any sale of the Securities made in
reliance on Rule 144 promulgated under the 1933 Act may be made only in
accordance with the terms of said Rule and further, if said Rule is not
applicable, any resale of such Securities under circumstances in which the
seller, or the person through whom the sale is made, may be deemed to be an
underwriter, as that term is used in the 1933 Act, may require compliance with
some other exemption under the 1933 Act or the rules and regulations of the SEC
thereunder; and (3) neither the Company nor any other

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person is under any obligation to register the Securities (other than pursuant
to the Registration Rights Agreement) under the 1933 Act or to comply with the
terms and conditions of any exemption thereunder.

            b. Restrictive Legend. The Buyer acknowledges and agrees that the
Debentures and the Warrants, and, until such time as the Common Stock has been
registered under the 1933 Act as contemplated by the Registration Rights
Agreement and sold in accordance with an effective Registration Statement,
certificates and other instruments representing any of the Securities shall bear
a restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of any such Securities):

            THESE SECURITIES (THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER
            THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
            THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR
            SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
            SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO
            THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.

            c. Registration Rights Agreement. The parties hereto agree to enter
into the Registration Rights Agreement on or before the Closing Date.

            d. Filings. The Company undertakes and agrees to make all necessary
filings in connection with the sale of the Securities to the Buyer under any
United States laws and regulations applicable to the Company, or by any domestic
securities exchange or trading market, and to provide a copy thereof to the
Buyer promptly after such filing.

            e. Reporting Status. So long as the Buyer beneficially owns any of
the Securities, the Company shall file all reports required to be filed with the
SEC pursuant to Section 13 or 15(d) of the 1934 Act, and the Company shall not
terminate its status as an issuer required to file reports under the 1934 Act
even if the 1934 Act or the rules and regulations thereunder would permit such
termination. The Company will take all reasonable action under its control to
obtain and to continue the listing and trading of its Common Stock (including,
without limitation, all Registrable Securities) on The NASDAQ/Bulletin Board
Market and will comply in all material respects with the Company's reporting,
filing and other obligations under the by-laws or rules of the National
Association of Securities Dealers, Inc. ("NASD") or The NASDAQ/Bulletin Board
Market.

            f. Use of Proceeds. The Company will use the proceeds from the sale
of the Debentures (excluding amounts paid by the Company for legal fees,
finder's fees and escrow fees in connection with the sale of the Debentures) for
internal working capital purposes, and, unless specifically consented to in
advance in each instance by the Buyer, the Company shall not, directly or
indirectly, use such proceeds for any loan to or investment in any other

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corporation, partnership enterprise or other person or for the repayment of any
outstanding loan by the Company to any other party.

            g. Certain Agreements. (i) Except to the extent specifically
provided below, but in each such event subject to compliance with all of the
other provisions of this Agreement, the Company covenants and agrees that it
will not, without the prior written consent of the Buyer, enter into any
subsequent or further offer or sale of Common Stock or securities convertible
into Common Stock (collectively, "New Common Stock") with any third party
pursuant to a transaction which in any manner permits the sale of the New Common
Stock on any date which is earlier than one hundred eighty (180) days after the
Effective Date.

            (ii) The provisions of subparagraph (g)(i) will not apply to (x) the
issuance of securities (other than for cash) in connection with an acquisition,
merger, consolidation, or a sale or disposition of assets, or (y) the exchange
of the capital stock for assets, stock or other joint venture interests;
provided, however, that any action contemplated under this subparagraph (g)(ii)
is subject to the condition that registration rights, if any, in connection with
such action shall not require the filing of a Registration Statement in respect
of such stock prior to one hundred eighty (180) days after the Effective Date.

            (iii) The provisions of subparagraph (g)(i) will also not apply to
(x) the issuance of securities to a Strategic Partner (except that the
provisions of subparagraph g(iv) shall apply with respect to the issuance of
such securities to the Strategic Partner) and (y) the issuance of securities to
employees of the Company under the Company's ESOP in existence on the date
hereof.

            (iv) Within ten (10) business days after the Initial Closing Date,
the Company shall obtain the agreement (each, a "Principal's Agreement") of each
of its Principals (as defined below) that, without the prior written consent of
the Buyer in each instance, such Principal will not sell or otherwise transfer
or offer to sell or otherwise transfer (except in a private transaction in which
the transferee agrees in writing for the benefit of Buyer and enforceable by
Buyer, a copy of which written agreement is provided to Buyer, to be bound by
the provisions of the Principal's Agreement as if such transferee were a
Principal) any shares of Common Stock directly or indirectly held by such
Principal prior to one hundred eighty (180) days after the Effective Date. Each
such Principal's Agreement shall (w) specify that it is entered into as an
inducement to the Buyer's execution, delivery and performance of this Agreement,
(x) name the Buyer as a third party beneficiary thereof, (y) acknowledge that
the Company's transfer agent will be provided with instructions that transfers
by a Principal require the consent of the Company and the Buyer, and (z)
contemplate that, in addition to any other damages or remedies that may be
appropriate, the Principal's Agreement shall be enforceable by injunction sought
by the Company and the Buyer or any one or more of them. A "Principal" is a
person who meets any one or more of the following criteria: (A) a person who is
a director or principal officer of the Company (each, a "Company Principal") and
who, directly or indirectly, holds any shares of Common Stock of the Company;
(B) a spouse of a Company Principal (a "Principal's Spouse") who, directly or
indirectly, holds any shares of Common Stock of the Company, (C) a parent,

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sibling or child of a Company Principal who resides in the household of a
Company Principal or of a Principal's Spouse (each, a "Principal's Relative")
and who, directly or indirectly, holds any shares of Common Stock, (D) any other
person or entity, including, without limitation, for profit or non-profit
corporations, partnerships and trusts, whose voting rights regarding Common
Stock of the Company is subject to the direction, control or other influence of
any Company Principal, Principal's Spouse, or Principal's Relative, or (E) a
Strategic Partner and any person or entity controlled by or in control of such
Strategic Partner. If the Company enters into an agreement with a Strategic
Partner after the date hereof, the Company shall obtain the Principal's
Agreement from the parties contemplated by clause (E) of the immediately
preceding sentence simultaneously with the closing of such agreement. Anything
in the preceding provisions of this subparagraph (iv) to the contrary
notwithstanding, Buyer agrees that each of Aryeh Weinberg and Michael Braunold
may exclude 25,000 shares of the Company's Common Stock currently held by him
from his Principal's Agreement.

            (v) In the event the Company breaches the provisions of this Section
4(g), the Conversion Rate (as defined in the Debentures) shall be amended to be
equal to (x) 90% of (y) the amount determined in accordance with the provisions
of the Debenture without regard to this provision, and the Purchaser may require
the Company to immediately redeem all outstanding Debentures in accordance with
Section 4(j)(y) hereof.

            h. Available Shares. The Company shall have at all times authorized
and reserved for issuance, free from preemptive rights, shares of Common Stock
sufficient to yield two hundred percent (200%) of the number of shares of Common
Stock issuable (i) at conversion as may be required to satisfy the conversion
rights of the Buyer pursuant to the terms and conditions of the Debentures and
(ii) upon exercise as may be required to satisfy the exercise rights of the
Buyer pursuant to the terms and conditions of the Warrants.

            i. Warrants. The Company agrees to issue to the Buyer on each
Closing Date transferable, divisible warrants (the "Warrants") for the purchase
of six thousand two hundred fifty (6,250) shares of Common Stock for ten
thousand dollars ($10,000) of Purchase Price for the Debentures issued on that
date. The Warrants attributable to each such conversion shall bear an exercise
price One Dollar ($1.00) per share (subject to adjustment as provided in the
Warrant). The Warrants will expire on the last day of the calendar month in
which the third anniversary of the relevant Closing Date occurs. The Warrants
shall be in the form annexed hereto as Annex VI, together with (x) registration
rights as provided in the Registration Rights Agreement and (y) piggy-back
registration rights after the effectiveness of the Registration Statement
expires, as contemplated by the Registration Rights Agreement.

            j. Limitation on Issuance of Shares. The Company may be limited in
the number of shares of Common Stock it may issue by virtue of (i) the number of
authorized shares or (ii) the applicable rules and regulations of the principal
securities market on which the Common Stock is listed or traded, including, but
not necessarily limited to, NASDAQ Rule 4310(c)(25)(H)(i)(d)(2) (collectively,
the "Cap Regulations"). Without limiting the other provisions thereof, the
Debentures shall provide that (i) the Company will take all steps

                                       12
<PAGE>

reasonably necessary to be in a position to issue shares of Common Stock on
conversion of the Debentures without violating the Cap Regulations and (ii) if,
despite taking such steps, the Company still can not issue such shares of Common
Stock without violating the Cap Regulations, the holder of a Debenture which can
not be converted as result of the Cap Regulations (each such Debenture, an
"Unconverted Debenture") shall have the option, exercisable in such holder's
sole and absolute discretion, to elect either of the following remedies:

            (x) if permitted by the Cap Regulations, require the Company to
      issue shares of Common Stock in accordance with such holder's notice of
      conversion at a conversion purchase price equal to the average of the
      closing price per share of Common Stock for any five (5) consecutive
      trading days (subject to certain equitable adjustments for certain events
      occurring during such period) during the sixty (60) trading days
      immediately preceding the date of notice of conversion; or

            (y) require the Company to redeem each Unconverted Debenture for an
      amount (the "Redemption Amount"), payable in cash, equal to:

                          V                      x           M
                  -----------------
                         CP

      where:

            "V" means the principal of an Unconverted Debenture plus any accrued
      but unpaid interest thereon;

            "CP" means the conversion price in effect on the date of redemption
      (the "Redemption Date") specified in the notice from the holder of the
      Unconverted Debentures electing this remedy; and

            "M" means the highest closing price per share of the Common Stock
      during the period beginning on the Redemption Date and ending on the date
      of payment of the Redemption Amount.

A holder of an Unconverted Debenture may elect one of the above remedies with
respect to a portion of such Unconverted Debenture and the other remedy with
respect to other portions of the Unconverted Debenture. The Debentures shall
contain provisions substantially consistent with the above terms, with such
additional provisions as may be consented to by the Buyer. The provisions of
this paragraph are not intended to limit the scope of the provisions otherwise
included in the Debentures.

            k. Hedging Transactions. (i) The Company understands that the Buyer
may be a so-called "hedge" fund, and the Company hereby expressly agrees that,
except as provided in subparagraph (ii) of this paragraph (k), the Buyer shall
not in any way be prohibited

<PAGE>

or restricted from any purchases or sales of any securities or other instruments
of, or related to, the Company or any of its securities, including, but not
necessarily limited to, puts, calls, futures contracts, short sales and hedging
and arbitrage transactions. The Buyer acknowledges that such purchases, sales
and other transactions may be subject to various federal and state securities
laws and agrees to comply with all such applicable securities laws.

            (ii) The Buyer agrees that, prior to the Effective Date, the Buyer
will not engage in any puts, calls, futures contracts, short sales and hedging
and arbitrage transactions with respect to the Common Stock.

            l. Right of First Refusal. (i) The Company covenants and agrees that
if during the period from the date hereof through and including the date which
is two hundred seventy (270) days after the Effective Date, the Company offers
to enter into any transaction other than with a Strategic Partner (a "New
Transaction") for the sale of New Common Stock, the Company shall notify the
Buyer in writing of all of the terms of such offer (a "New Transaction Offer").
The Buyer shall have the right (the "Right of First Refusal"), exercisable by
written notice given to the Company by the close of business on the fifth
business day after the Buyer's receipt of the New Transaction Offer (the "Right
of First Refusal Expiration Date"), to participate in all or any part of the New
Transaction Offer on the terms so specified.

            (ii) If, and only if, the Buyer does not exercise the Right of First
Refusal in full, the Company may consummate the remaining portion of the New
Transaction with any New Investor on the terms specified in the New Transaction
Offer within thirty (30) days of the Right of First Refusal Expiration Date.

            (iii) If the terms of the New Transaction to be consummated with
such other party differ from the terms specified in the New Transaction Offer so
that the terms are more beneficial in any respect to the New Investor, the
Company shall give the Buyer a New Transaction Offer relating to the terms of
the New Transaction, as so changed, and the Buyer's Right of First Refusal and
the preceding terms of this paragraph (l) shall apply with respect to such
changed terms.

            (iv) If there is more than one Buyer signatory to this Agreement,
the preceding provisions of this paragraph (l) shall apply pro rata among them
(based on their relative Buyer's Allocable Shares), except that, to the extent
any such Buyer does not exercise its Right of First Refusal in full (a
"Declining Buyer"), the remaining Buyer or Buyers who or which have exercised
their own Right of First Refusal in full, shall have the right (pro rata among
them based on their relative Buyer's Allocable Shares, if more than one) to
exercise all or a portion of such Declining Buyer's unexercised Right of
Refusal. Nothing in this paragraph (l) shall be deemed to permit a transaction
not otherwise permitted by subparagraph (g)(i), as modified by the provisions of
subparagraph (g)(ii).

            (v) In the event the New Transaction is consummated with such other
third party at any time prior to the expiration of ninety (90) days after the
Effective Date on terms providing

<PAGE>

for (x) either a sale price equal to or computed based on, or a determination of
a conversion price based on, a lower percentage of the then current market price
(howsoever defined or computed) than provided in the Debentures for determining,
the Conversion Rate (howsoever defined or computed) and/or (y) the issuance of
warrants at an exercise price lower than that provided in the Warrants, the
terms of any unissued or unconverted Debentures or any unissued or unexercised
Warrants shall be modified to reduce the relevant Conversion Rate or Warrant
exercise price to be equal to that provided in the New Transaction as so
consummated.

            m. Certain Transfers Require Consent of Company. Anything in the
other provisions of this Agreement or any of the other Transaction Agreements to
the contrary notwithstanding, in no event shall any one or more of the Buyers
individually or collectively transfer any of the Debentures, Shares, Warrants or
Warrant Shares to any party except (i) in an ordinary bona fide arm's-length
over-the-counter or other established market transaction, (ii) provided the
transferee in such transaction agrees in writing in favor of the Company and
enforceable by the Company, a copy of which writing shall be provided to the
Company, to be bound by the provisions of this paragraph, to a relative or
affiliate of the Buyer or (iii) with the prior written consent of the Company,
which consent the Company agrees not to unreasonably withhold or delay. The
provisions of this paragraph shall not be read in any way to limit any other
rights the Buyer may have under the Transaction Agreements , including but not
limited to the right to convert the Debentures as contemplated therein and in
this Agreement.

            5. TRANSFER AGENT INSTRUCTIONS.

            a. Promptly following the delivery by the Buyer of the Purchase
Price for the Initial Debentures in accordance with Section 1(c) hereof, the
Company will irrevocably instruct its transfer agent to issue Common Stock from
time to time upon conversion of the Debentures in such amounts as specified from
time to time by the Company to the transfer agent, bearing the restrictive
legend specified in Section 4(b) of this Agreement prior to registration of the
Shares under the 1933 Act, registered in the name of the Buyer or its nominee
and in such denominations to be specified by the Buyer in connection with each
conversion of the Debentures. The Company warrants that no instruction
inconsistent with the instructions referred to in this Section 5 and the stop
transfer instructions to give effect to Section 4(a) hereof prior to
registration and sale of the Shares under the 1933 Act will be given by the
Company to the transfer agent with respect to the Shares and that the Shares
shall otherwise be freely transferable on the books and records of the Company
as and to the extent provided in this Agreement, the Registration Rights
Agreement, and applicable law. Nothing in this Section shall affect in any way
the Buyer's obligations and agreement to comply with all applicable securities
laws upon resale of the Securities. If the Buyer provides the Company with an
opinion of counsel reasonably satisfactory to the Company that registration of a
resale by the Buyer of any of the Securities in accordance with clause (1)(B) of
Section 4(a) of this Agreement is not required under the 1933 Act, the Company
shall (except as provided in clause (2) of Section 4(a) of this Agreement)
permit the transfer of the Securities and, in the case of the Converted Shares
or the Warrant Shares, as the case may be, promptly instruct the Company's
transfer agent to issue one or more certificates for Common Stock without legend
in such name and in such

<PAGE>

denominations as specified by the Buyer.

            b. (i) The Company will permit the Buyer to exercise its right to
convert the Debentures by telecopying or delivering an executed and completed
Notice of Conversion to the Company and delivering, within five (5) business
days thereafter, the original Debentures being converted to the Company by
express courier, with a copy to the transfer agent.

               (ii) The term "Conversion Date" means, with respect to any
conversion elected by the holder of the Debentures, the date specified in the
Notice of Conversion, provided the copy of the Notice of Conversion is
telecopied to or otherwise delivered to the Company in accordance with the
provisions hereof so that it is received by the Company on or before such
specified date.

               (iii) The Company will transmit the certificates representing the
Converted Shares issuable upon conversion of any Debentures (together, unless
otherwise instructed by the Buyer, with Debentures not being so converted) to
the Buyer at the address specified in the Notice of Conversion (which may be the
Buyer's address for notices as contemplated by Section 11 hereof or a different
address) via recognized express or overnight courier, by electronic transfer or
otherwise, within three (3) business days if the address for delivery is in the
United States and within eight (8) business days if the address for delivery is
outside the United States (such third business day or eighth business day, as
the case may be, the "Delivery Date") after (A) the business day on which the
Company has received both of the Notice of Conversion (by facsimile or other
delivery) and the original Debentures being converted (and if the same are not
delivered to the Company on the same date, the date of delivery of the second of
such items) or (B) the date an interest payment on the Debenture, which the
Company has elected to pay by the issuance of Common Stock, as contemplated by
the Debentures, was due.

            c. The Company understands that a delay in the issuance of the
Shares of Common Stock beyond the Delivery Date could result in economic loss to
the Buyer. As compensation to the Buyer for such loss, the Company agrees to pay
late payments to the Buyer for late issuance of Shares upon Conversion in
accordance with the following schedule (where "No. Business Days Late" is
defined as the number of business days beyond two (2) business days from the
Delivery Date):

                                              Late Payment For Each $10,000
                                              of Debenture Principal or Interest
                  No. Business Days Late      Amount Being Converted
                  --------------------------------------------------------------
                        1                             $100
                        2                             $200
                        3                             $300
                        4                             $400
                        5                             $500

<PAGE>

                        6                             $600
                        7                             $700
                        8                             $800
                        9                             $900
                        10                            $1,000
                        >10                           $1,000 +$200 for each
                                                      Business Day Late beyond
                                                      10 days

The Company shall pay any payments incurred under this Section in immediately
available funds upon demand. Nothing herein shall limit the Buyer's right to
pursue actual damages for the Company's failure to issue and deliver the Common
Stock to the Buyer. Furthermore, in addition to any other remedies which may be
available to the Buyer, in the event that the Company fails for any reason to
effect delivery of such shares of Common Stock within two (2) business days
after the Delivery Date, the Buyer will be entitled to revoke the relevant
Notice of Conversion by delivering a notice to such effect to the Company
whereupon the Company and the Buyer shall each be restored to their respective
positions immediately prior to delivery of such Notice of Conversion.

            d. If, by the relevant Delivery Date, the Company fails for any
reason to deliver the Shares to be issued upon conversion of a Debenture and
after such Delivery Date, the holder of the Debentures being converted (a
"Converting Holder") purchases, in an arm's-length open market transaction or
otherwise, shares of Common Stock (the "Covering Shares") in order to make
delivery in satisfaction of a sale of Common Stock by the Converting Holder (the
"Sold Shares"), which delivery such Converting Holder anticipated to make using
the Shares to be issued upon such conversion (a "Buy-In"), the Company shall pay
to the Converting Holder, in addition to all other amounts contemplated in other
provisions of the Transaction Agreements, and not in lieu thereof, the Buy-In
Adjustment Amount (as defined below). The "Buy-In Adjustment Amount" is the
amount equal to the excess, if any, of (x) the Converting Holder's total
purchase price (including brokerage commissions, if any) for the Covering Shares
over (y) the net proceeds (after brokerage commissions, if any) received by the
Converting Holder from the sale of the Sold Shares. The Company shall pay the
Buy-In Adjustment Amount to the Company in immediately available funds
immediately upon demand by the Converting Holder. By way of illustration and not
in limitation of the foregoing, if the Converting Holder purchases shares of
Common Stock having a total purchase price (including brokerage commissions) of
$11,000 to cover a Buy-In with respect to shares of Common Stock it sold for net
proceeds of $10,000, the Buy-In Adjustment Amount which Company will be required
to pay to the Converting Holder will be $1,000.

            e. In lieu of delivering physical certificates representing the
Common Stock issuable upon conversion, provided the Company's transfer agent is
participating in the Depository Trust Company ("DTC") Fast Automated Securities
Transfer program, upon request of the Buyer and its compliance with the
provisions contained in this paragraph, so long as the certificates therefor do
not bear a legend and the Buyer thereof is not obligated to return such

<PAGE>

certificate for the placement of a legend thereon, the Company shall use its
best efforts to cause its transfer agent to electronically transmit the Common
Stock issuable upon conversion to the Buyer by crediting the account of Buyer's
Prime Broker with DTC through its Deposit Withdrawal Agent Commission system.

            f. The Company will authorize its transfer agent to give information
relating to the Company directly to the Buyer or the Buyer's representatives
designated by the Buyer in writing to the Company upon the request of the Buyer
or any such representative. The Company will provide the Buyer with a copy of
the authorization so given to the transfer agent.

            6. CLOSING DATES.

            a. The Initial Closing Date shall occur on the date which is the
first NYSE trading day after each of the conditions contemplated by Sections 7
and 8 hereof shall have either been satisfied or been waived by the party in
whose favor such conditions run.

            b. (i) The Additional Closing Date shall be earlier of the date
specified in the Filing Additional Closing Date Notice or the date contemplated
by the Effectiveness Additional Closing Date Notice (as those terms are defined
below; each an "Additional Closing Date Notice").
Each Additional Closing Date Notice shall be a written notice given by the
Company to the Buyer and to the Escrow Agent by fax transmission or hand
delivery. Additional provisions regarding the giving of any Additional Closing
Date Notice are provided in the following provisions of this Section 6(b).

               (ii) The term "Filing Additional Closing Date Notice" means a
notice given within thirty (30) days after the date (the "Statement Filing
Date") on which the Registration Statement has been filed by the Company with
the SEC (on the SEC's EDGAR system) in which the Company specifies as the
Additional Closing Date a business day which is at least forty-five (45) days
after the Statement Filing Date.

               (iii) Subject to the other provisions of this Section 6(b), the
term "Effectiveness Additional Closing Date Notice" means a notice given no
later than one (1) business day after the Company submits the Effectiveness
Request (as defined below; a copy of the Effectiveness Request shall be attached
to the Effectiveness Additional Closing Date Notice) in which the Company
specifies the the number of business days after the actual Effective Date, which
number shall be at least two (2) and not more than five (5), on which the
Additional Closing Date is to occur. If an Effectiveness Closing Date Notice is
given, the Company shall also notify the Buyer and the Escrow Agent both (x) by
fax transmission or hand delivery and (y) by telephone communication of the
actual Effective Date declared by the SEC no later than noon on the business day
after such Effective Date.

               (iv) The term "Effectiveness Request" means the Company's written
request to the SEC that the SEC declare the Registration Statement effective on
a specified date

<PAGE>

which is more than (5) business days prior to the Additional Closing Date
specified in the Filing Additional Closing Date Notice; provided, however, that
the Effectiveness Request shall be given only after the SEC has advised the
Company informally, in writing or otherwise that it will respond favorably to
such request.

               (v) The closing for the Additional Debentures shall be conducted
upon the same terms and conditions as those applicable to the Initial
Debentures.

               (vi) The Buyer agrees that, anything in Section 10 hereof to the
contrary notwithstanding, an Additional Closing Date Notice and any other
communication contemplated to be given to the Buyer under this Section 6(b)
shall be deemed properly given to the Buyer if such notice is given in the
manner contemplated by this Section 6(b) to Advisor Associates, Inc., 1575 45th
Street, Brooklyn, NY 11219, Attn: Nourit Bassiri, telephone no. (718) 972-6400,
fax no. (718) 972-8141 on behalf of Buyer.

            c. Each closing of the purchase and issuance of Debentures shall
occur on the relevant Closing Date at the offices of the Escrow Agent and shall
take place no later than 3:00 P.M., New York time, on such day or such other
time as is mutually agreed upon by the Company and the Buyer.

            d. Notwithstanding anything to the contrary contained herein, the
Escrow Agent will be authorized to release the Escrow Funds to the Company and
to others and to release the other Escrow Property on the relevant Closing Date
upon satisfaction of the conditions set forth in Sections 7 and 8 hereof and as
provided in the Joint Escrow Instructions.

            7. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.

            The Buyer understands that the Company's obligation to sell the
relevant Debentures to the Buyer pursuant to this Agreement on the relevant
Closing Date is conditioned upon:

            a. The execution and delivery of this Agreement by the Buyer;

            b. Delivery by the Buyer to the Escrow Agent of good funds as
payment in full of an amount equal to the Purchase Price for the relevant
Debentures in accordance with this Agreement;

            c. The accuracy on such Closing Date of the representations and
warranties of the Buyer contained in this Agreement, each as if made on such
date, and the performance by the Buyer on or before such date of all covenants
and agreements of the Buyer required to be performed on or before such date; and

            d. There shall not be in effect any law, rule or regulation
prohibiting or restricting the transactions contemplated hereby, or requiring
any consent or approval which shall not have been obtained.

<PAGE>

            8. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.

            The Company understands that the Buyer's obligation to purchase the
Debentures on the relevant Closing Date is conditioned upon:

            a. The execution and delivery of this Agreement and the Registration
Rights Agreement by the Company;

            b. Delivery by the Company to the Escrow Agent of the relevant
Certificates in accordance with this Agreement;

            c. The accuracy in all material respects on such Closing Date of the
representations and warranties of the Company contained in this Agreement. each
as if made on such date, and the performance by the Company on or before such
date of all covenants and agreements of the Company required to be performed on
or before such date;

            d. On such Closing Date, the Registration Rights Agreement shall be
in full force and effect and the Company shall not be in default thereunder;

            e. On such Closing Date, the Buyer shall have received an opinion of
counsel for the Company, dated such Closing Date, in form, scope and substance
reasonably satisfactory to the Buyer, substantially to the effect set forth in
Annex III attached hereto;

            f. There shall not be in effect any law, rule or regulation
prohibiting or restricting the transactions contemplated hereby, or requiring
any consent or approval which shall not have been obtained;

            g. From and after the date hereof to and including such Closing
Date, the trading of the Common Stock shall not have been suspended by the SEC
or the NASD and trading in securities generally on the New York Stock Exchange
or The NASDAQ/Bulletin Board Market shall not have been suspended or limited,
nor shall minimum prices been established for securities traded on The
NASDAQ/Bulletin Board Market, nor shall there be any outbreak or escalation of
hostilities involving the United States or any material adverse change in any
financial market that in either case in the reasonable judgment of the Buyer
makes it impracticable or inadvisable to purchase the Debentures; and

            h. With respect to the Additional Closing Date,

            (i) an appropriate Additional Closing Date Notice shall have been
duly given;

            (ii) if the Additional Closing Date is the date contemplated by the
Effectiveness Additional Closing Date Notice, the Registration Statement shall
have been declared effective by the SEC to cover all Registrable Securities for
all the Debentures (and all the related Warrants), as contemplated by the
Registration Rights Agreement, prior to such Additional Closing Date;

<PAGE>

            (iii) the representations and warranties of the Company contained in
Section 3 hereof shall be true and correct in all material respects (and the
Company's issuance of the relevant Additional Debentures shall constitute the
Company's making each such representation and warranty as of such date) and
there shall have been no material adverse changes (financial or otherwise) in
the business or conditions of the Company from the Initial Closing Date through
and including the Additional Closing Date (and the Company's issuance of the
relevant Additional Debentures shall constitute the Company's making such
representation and warranty as of such date), (iv) the Company shall have timely
issued all shares issuable upon conversion of the Debentures prior to the date
of such Additional Closing Date; and

            (iv) the Company shall have available and shall reserve for issuance
to Buyer at least one hundred percent (100%) of the number of Shares which would
be issued on conversion of all unconverted Initial Debentures and all Additional
Debentures and exercise of all unexercised Warrants and all Warrants which would
be issued in connection with the conversion of any unconverted Debentures
(including all Additional Debentures).

            9. GOVERNING LAW: MISCELLANEOUS.

            a. This Agreement shall be governed by and interpreted 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 jurisdiction of the
federal courts whose districts encompass any part of the City of Wilmington or
the state courts of the State of Delaware sitting in the City of Wilmington in
connection with any dispute arising under this Agreement and hereby waives, to
the maximum extent permitted by law, any objection, including any objection
based on forum non conveniens, to the bringing of any such proceeding in such
jurisdictions. To the extent determined by such court, the Company shall
reimburse the Buyer for any reasonable legal fees and disbursements incurred by
the Buyer in enforcement of or protection of any of its rights under any of the
Transaction Agreements.

            b. Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

            c. This Agreement shall inure to the benefit of and be binding upon
the successors and assigns of each of the parties hereto.

            d. All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.

            e. A facsimile transmission of this signed Agreement shall be legal
and binding on all parties hereto.

<PAGE>

            f. This Agreement may be signed in one or more counterparts, each of
which shall be deemed an original.

            g. The headings of this Agreement are for convenience of reference
and shall not form part of, or affect the interpretation of, this Agreement.

            h. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement or the
validity or enforceability of this Agreement in any other jurisdiction.

            i. This Agreement may be amended only by an instrument in writing
signed by the party to be charged with enforcement thereof.

            j. This Agreement supersedes all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof.

            10. NOTICES. Any notice required or permitted hereunder shall be
given in writing (unless otherwise specified herein) and shall be deemed
effectively given on the earliest of

            (a) the date delivered, if delivered by personal delivery as against
            written receipt therefor or by confirmed facsimile transmission,

            (b) the seventh business day after deposit, postage prepaid, in the
            United States Postal Service by registered or certified mail, or

            (c) the third business day after mailing by international express
            courier, with delivery costs and fees prepaid,

in each case, addressed to each of the other parties thereunto entitled at the
following addresses (or at such other addresses as such party may designate by
ten (10) days' advance written notice similarly given to each of the other
parties hereto):

COMPANY:          Ambient Corporation
                  270 Madison Avenue
                  New York, NY 10016
                  Attn:
                  Telephone No.: (888) 861-0205
                  Telecopier No.:(212)    -

                  with a copy to:

                  Baer Marks & Upham

<PAGE>

                  New York, NY
                  Attn: Samuel Ottensosser, Esq.
                  Telephone No.: (212) 702-5700
                  Telecopier No. (212)    -

                  and with a copy to:

                  Aboudi & Brounstein
                  3 Gavish St.
                  P.O.B.  2432
                  Kfar Saba Industrial Zone, Israel 44641
                  Attn: David Aboudi, Esq.
                  Telephone No.: (011 972 9) 764-4833
                  Telecopier No.:(011 972 9) 764-4834

<PAGE>

BUYER:            At the address set forth on the signature page of this
                  Agreement.

                  with a copy to:

                  Krieger & Prager LLP, Esqs.
                  39 Broadway
                  Suite 1440
                  New York, NY 10006
                  Attn: Samuel Krieger, Esq.
                  New York, New York 10016
                  Telephone No.: (212) 363-2900
                  Telecopier No. (212) 363-2999

ESCROW AGENT:     Krieger & Prager LLP, Esqs.
                  39 Broadway
                  Suite 1440
                  New York, NY 10006
                  Attn: Samuel Krieger, Esq.
                  New York, New York 10016
                  Telephone No.: (212) 363-2900
                  Telecopier No. (212) 363-2999

            11 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The Company's and the
Buyer's representations and warranties herein shall survive the execution and
delivery of this Agreement and the delivery of the Certificates and the Warrants
and the payment of the Purchase Price, and shall inure to the benefit of the
Buyer and the Company and their respective successors and assigns.

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK.]

<PAGE>

            IN WITNESS WHEREOF, this Agreement has been duly executed by the
Buyer by one of its officers thereunto duly authorized as of the date set forth
below.

AMOUNT AND PURCHASE PRICE OF DEBENTURES:        $

                             SIGNATURES FOR ENTITIES

      IN WITNESS WHEREOF, the undersigned represents that the foregoing
statements are true and correct and that it has caused this Securities Purchase
Agreement to be duly executed on its behalf this       day of            , 2000.
                                                ------       -----------

--------------------------------
Address                             Printed Name of Subscriber

--------------------------------
                                    By:

Telecopier No.                     (Signature of Authorized Person)
              ------------------
                                    -------------------------------------
                                    Printed Name and Title

-----------------------------
Jurisdiction of Incorporation
or Organization

 As of the date set forth below, the undersigned hereby accepts this Agreement
and represents that the foregoing statements are true and correct and that it
has caused this Securities Purchase Agreement to be duly executed on its behalf.

AMBIENT CORPORATION

By:

Title:
Date:                                                ,2000
                  ----------------------------------------

<PAGE>

      ANNEX I           FORM OF DEBENTURE

      ANNEX II          JOINT ESCROW INSTRUCTIONS

      ANNEX III         OPINION OF COUNSEL

      ANNEX IV          REGISTRATION RIGHTS AGREEMENT

      ANNEX V           COMPANY DISCLOSURE MATERIALS

      ANNEX VI          FORM OF WARRANTREGISTRATION RIGHTS AGREEMENT

            THIS REGISTRATION RIGHTS AGREEMENT, dated as of February 17, 2000
(this "Agreement"), is made by and between AMBIENT CORPORATION, a Delaware
corporation, with headquarters located at 270 Madison Avenue, New York, NY 10016
(the "Company"), and each entity named on a signature page hereto (each, an
"Initial Investor") (each agreement with an Initial Investor being deemed a
separate and independent agreement between the Company and such Initial
Investor, except that each Initial Investor acknowledges and consents to the
rights granted to each other Initial Investor under such agreement).

                              W I T N E S S E T H:

            WHEREAS, upon the terms and subject to the conditions of the
Securities Purchase Agreement, dated as of February 15, 2000, between the
Initial Investor and the Company (the "Securities Purchase Agreement"; terms not
otherwise defined herein shall have the meanings ascribed to them in the
Securities Purchase Agreement), the Company has agreed to issue and sell to the
Initial Investor one or more 10% Convertible Debentures of the Company, in an
aggregate principal amount not exceeding $2,000,000 (the "Debentures"); and

            WHEREAS,  the  Company  has  agreed to issue the  Warrants  to the
Initial Investor in connection with the issuance of the Debentures; and

            WHEREAS, the Debentures are convertible into shares of Common Stock
(the "Conversion Shares"; which term, for purposes of this Agreement, shall
include shares of Common Stock of the Company issuable in lieu of accrued
interest on conversion as contemplated by the Debentures) upon the terms and
subject to the conditions contained in the Debentures and the Warrants may be
exercised for the purchase of shares of Common Stock (the "Warrant Shares") upon
the terms and conditions of the Warrants; and

            WHEREAS, to induce the Initial Investor to execute and deliver the
Securities Purchase Agreement, the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended, and the rules
and regulations thereunder, or any similar successor statute (collectively, the
"Securities Act"), with respect to the Conversion Shares and the Warrant Shares;

            NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Initial Investor hereby agree as follows:

1.                Definitions.      As used in this  Agreement,  the following
terms shall have the following meanings:
2.

<PAGE>

3. (a) "Investor" means the Initial Investor and any permitted transferee or
assignee who agrees to become bound by the provisions of this Agreement in
accordance with Section 9 hereof and who holds Debentures, Warrants or
Registrable Securities.
4.
5. (b) "Potential Material Event" means any of the following: (i) the possession
by the Company of material information not ripe for disclosure in a registration
statement, which shall be evidenced by determinations in good faith by the Board
of Directors of the Company that disclosure of such information in the
registration statement would be detrimental to the business and affairs of the
Company; or (ii) any material engagement or activity by the Company which would,
in the good faith determination of the Board of Directors of the Company, be
adversely affected by disclosure in a registration statement at such time, which
determination shall be accompanied by a good faith determination by the Board of
Directors of the Company that the registration statement would be materially
misleading absent the inclusion of such information.
6.
7. (c) "Register," "Registered," and "Registration" refer to a registration
effected by preparing and filing a Registration Statement or Statements in
compliance with the Securities Act and pursuant to Rule 415 under the Securities
Act or any successor rule providing for offering securities on a continuous
basis ("Rule 415"), and the declaration or ordering of effectiveness of such
Registration Statement by the United States Securities and Exchange Commission
(the "SEC").
8.
9. (d) "Registrable Securities" means the Conversion Shares and the Warrant
Shares.
10.
11. (e) "Registration Statement" means a registration statement of the Company
under the Securities Act.
12.
13. (f) "Required Effective Date" means the relevant Initial Required Effective
Date or Increased Required Effective Date (as those terms are defined below).
14.
15. Registration.
16.
(One) Mandatory Registration.
(Two)
(Three) (i) The Company shall prepare and file with the SEC, as soon as possible
after the Initial Closing Date but no later than a date (the "Required Filing
Date") which is forty-five (45) days after the Initial Closing Date, either a
Registration Statement on Form SB-2 or an amendment to an existing Registration
Statement, in either event registering for resale by the Investor a sufficient
number of shares of Common Stock for the Initial Investors to sell the
Registrable Securities (or such lesser number as may be required by the SEC, but
in no event less than two hundred percent (200%) of the aggregate number of
shares (A) into which the Initial Debentures and the Additional Debentures and
all interest thereon through their respective

                                       2
<PAGE>

Maturity Dates would be convertible at the time of filing of such Registration
Statement (assuming for such purposes that the Additional Debentures had been
issued at such date and that all Debentures had been eligible to be converted,
and had been converted, into Conversion Shares in accordance with their terms,
whether or not such issuance, accrual of interest, eligibility or conversion had
in fact occurred as of such date) and (B) which would be issued upon exercise of
all of the Warrants at the time of filing of the Registration Statement
(assuming for such purposes that the Warrants issued in connection with the
purchase and sale of all Debentures had been issued and that all Warrants had
been eligible to be exercised for the maximum number of shares contemplated
thereby and had been exercised in accordance with their terms, whether or not
such issuance, eligibility or exercise had in fact occurred as of such date).
The Registration Statement (W) shall include only the Registrable Securities and
the shares specifically listed on Exhibit 1 annexed hereto; and (X) shall also
state that, in accordance with Rule 416 and 457 under the Securities Act, it
also covers such indeterminate number of additional shares of Common Stock as
may become issuable upon conversion of the Debentures and the exercise of the
Warrants to prevent dilution resulting from stock splits, or stock dividends.
The Company will use its reasonable best efforts to cause such Registration
Statement to be declared effective on a date (the "Initial Required Effective
Date") which no later than is the earlier of (Y) five (5) days after notice by
the SEC that it may be declared effective or (Z) ninety (90) days after the
Initial Closing Date.
(Four)
(Five) (ii) If at any time (an "Increased Registered Shares Date"), the number
of shares of Common Stock represented by the Registrable Shares, issued or to be
issued as contemplated by the Transaction Agreements, exceeds the aggregate
number of shares of Common Stock then registered, the Company shall, within ten
(10) business days after receipt of a written notice from any Investor, either
(X) amend the Registration Statement filed by the Company pursuant to the
preceding provisions of this Section 2, if such Registration Statement has not
been declared effective by the SEC at that time, to register two hundred percent
(200%) of such Registrable Shares, computed as contemplated by the immediately
preceding subparagraph (i), or (Y) if such Registration Statement has been
declared effective by the SEC at that time, file with the SEC an additional
Registration Statement on Form SB-2 or other appropriate registration statement
form (an "Additional Registration Statement") to register two hundred percent
(200%) of the shares of Common Stock represented by the Registrable Shares,
computed as contemplated by the immediately preceding subparagraph (i), that
exceed the aggregate number of shares of Common Stock already registered. The
Company will use its reasonable best efforts to cause such Registration
Statement to be declared effective on a date (each, an "Increased Required
Effective Date") which is no later than (Q) with respect to a Registration
Statement under clause (X) of this subparagraph (ii), the Initial Required
Effective Date and (R) with respect to an Additional Registration Statement, the
earlier of (I) five (5) days after notice by the SEC that it may be declared
effective or (II) thirty (30) days after the Increased Registered Shares Date.
(Six)
(Seven) (iii) Except with respect to the party identified as the "Consultant" on
Exhibit 1 annexed hereto, it shall be a condition to the inclusion in the
Registration Statement of the shares specifically listed on Exhibit 1 annexed
hereto that the holder of such shares (each

                                       3
<PAGE>

such holder, an "Included Holder") agree in writing (an "Included Holder's
Agreement"), which writing shall be in favor of Buyer and enforceable against
such holder by Buyer (a copy of which Included Holder's Agreement shall be
provided to Buyer no later than the date the Registration Statement is first
filed with the SEC), that such Included Holder and any of such Included Holder's
transferees other than a Permitted Transferee (as defined below) (x) will not
sell or otherwise transfer, individually or on a combined basis, any shares
until thirty (30) days after the Effective Date, but thereafter may sell or
otherwise transfer an aggregate of the lesser of the number of shares specified
for such Included Holder on Exhibit 1 or 20,000 shares, and (y) after the
thirtieth day after the Effective Date, will not sell or otherwise transfer,
individually or on a combined basis, more than twenty percent (20%) of such
Included Holder's shares, if any, in excess of 20,000 shares listed in the
Registration Statement for such Included Holder (or transferee), during any
consecutive thirty (30) day period (the shares permitted to be transferred in
each such period are referred to as "Permitted Shares"). In addition to, and not
in lieu of the foregoing provisions of this subparagraph (iii), the Included
Holder's Agreement of any Included Holder who, as of the date of this Agreement,
holds a warrant to purchase Common Stock of the Company shall also provide that
such Included Holder agrees not to sell or otherwise transfer any of such
Included Holder's shares issued on exercise of such warrants prior to the date
which is thirty (30) days after the Effective Date, and that any sales and
transfers made thereafter will be made in compliance with the other terms and
conditions set forth in the Included Holder's Agreement. A "Permitted
Transferee" is a party acquiring all or a portion of the Permitted Shares in a
transaction made pursuant to the prospectus included in the Registration
Statement. The Buyer may require the Company to institute reasonable procedures
(such as, but not necessarily limited to, the establishment of an escrow
arrangement for the shares of each Included Holder) to assure compliance with
this provision.
(Eight)
(Nine) Payments by the Company.
(Ten)
(Eleven) (i) If the Registration Statement covering the Registrable Securities
is not filed in proper form with the SEC by the Required Filing Date, the
Company will make payment to the Initial Investor in such amounts and at such
times as shall be determined pursuant to this Section 2(b).
(Twelve)
(Thirteen) (ii) If the Registration Statement covering the Registrable
Securities is not effective by the relevant Required Effective Date or if the
Investor is restricted from making sales of Registrable Securities covered by a
previously effective Registration Statement at any time (the date such
restriction commences, a "Restricted Sale Date") after the Effective Date other
than during a Permitted Suspension Period (as defined below), then the Company
will make payments to the Initial Investor in such amounts and at such times as
shall be determined pursuant to this Section 2(b).
(Fourteen)
(Fifteen) (iii) The amount (the "Periodic Amount") to be paid by the Company to
the Initial Investor shall be determined as of each Computation Date (as defined
below) and such amount shall be equal to the Periodic Amount Percentage (as
defined below) of the Purchase Price for all Debentures for the period from the
date following the relevant

                                       4
<PAGE>

Required Filing Date, Required Effective Date or Restricted Sale Date, as the
case may be, to the first relevant Computation Date, and thereafter to each
subsequent Computation Date. The "Periodic Amount Percentage" means (A) two
percent (2%) of the Purchase Price for all the Debentures for the period from
the date following the relevant Required Filing Date, Required Effective Date or
Restricted Sale Date, as the case may be, to the first relevant Computation
Date, and (B) three percent (3%) of the Purchase Price of all Debentures to each
Computation Date thereafter. Anything in the preceding provisions of this
paragraph (iii) to the contrary notwithstanding, after the Effective Date the
Purchase Price shall be deemed to refer to the sum of (X) the principal amount
of all Debentures not yet converted and (Y) the Held Shares Value (as defined
below). The "Held Shares Value" means, for shares acquired by the Investor upon
a conversion within the thirty (30) days preceding the Restricted Sale Date, but
not yet sold by the Investor, the principal amount of the Debentures converted
into such Conversion Shares; provided, however, that if the Investor effected
more than one conversion during such thirty (30) day period and sold less than
all of such shares, the sold shares shall be deemed to be derived first from the
conversions in the sequence of such conversions (that is, for example, until the
number of shares from the first of such conversions have been sold, all shares
shall be deemed to be from the first conversion; thereafter, from the second
conversion until all such shares are sold). By way of illustration and not in
limitation of the foregoing, if the Registration Statement is timely filed but
is not declared effective until one hundred sixty-five (165) days after the
Initial Closing Date, the Periodic Amount will aggregate eight percent (8%) of
the Purchase Price of the Debentures (2% for days 91-120, plus 3% for days
121-150, plus 3% for days 151-165).
(Sixteen)
(Seventeen) (iv) Each Periodic Amount will be payable by the Company in cash or
other immediately available funds to the Investor monthly, without requiring
demand therefor by the Investor.
(Eighteen)
(Nineteen) (v) The parties acknowledge that the damages which may be incurred by
the Investor if the Registration Statement is not filed by the Required Filing
Date or if the Registration Statement has not been declared effective by a
Required Effective Date, including if the right to sell Registrable Securities
under a previously effective Registration Statement is suspended, may be
difficult to ascertain. The parties agree that the Periodic Amounts represent a
reasonable estimate on the part of the parties, as of the date of this
Agreement, of the amount of such damages.
(Twenty)
(Twenty-one) (vi) Notwithstanding the foregoing, the amounts payable by the
Company pursuant to this provision shall not be payable to the extent any delay
in the effectiveness of the Registration Statement occurs because of an act of,
or a failure to act or to act timely by the Initial Investor or its counsel, or
in the event all of the Registrable Securities may be sold pursuant to Rule 144
or another available exemption under the Act.
(Twenty-two)
(Twenty-three) (vii) "Computation Date" means (A) the date which is the earlier
of (1) thirty (30) days after the Required Filing Date, any relevant Required
Effective Date or a Restricted Sale Date, as the case may be, or (2) the date
after the Required Filing Date, such Required Effective Date or Restricted Sale
Date on which the Registration Statement is

                                       5
<PAGE>

filed (with respect to payments due as contemplated by Section 2(b)(i) hereof)
or is declared effective or has its restrictions removed (with respect to
payments due as contemplated by Section 2(b)(ii) hereof), as the case may be,
and (B) each date which is the earlier of (1) thirty (30) days after the
previous Computation Date or (2) the date after the previous Computation Date on
which the Registration Statement is filed (with respect to payments due as
contemplated by Section 2(b)(i) hereof) or is declared effective or has its
restrictions removed (with respect to payments due as contemplated by Section
2(b)(ii) hereof), as the case may be.
(Twenty-four)
(Twenty-five) (viii) Anything in the preceding provisions of this Section 2(b)
to the contrary notwithstanding, if, but only if, the Registration Statement is
declared effective within one hundred twenty (120) days following the Initial
Closing Date, the provisions of Section 2(b)(ii) shall not apply to the fact
that the Registration Statement was initially declared effective after the
Initial Required Effective Date, and the Company will not have any obligation to
pay any Periodic Amount to the Initial Investor with respect thereto; provided,
however, that the provisions of Section.2(b)(ii) shall continue to apply to all
other events described therein.
(Twenty-six)
17. Obligations of the Company. In connection with the registration of the
Registrable Securities, the Company shall do each of the following.
18.
(One) Prepare promptly, and file with the SEC by the Required Filing Date a
Registration Statement with respect to not less than the number of Registrable
Securities provided in Section 2(a) above, and thereafter use its reasonable
best efforts to cause such Registration Statement relating to Registrable
Securities to become effective by the Required Effective Date and keep the
Registration Statement effective at all times during the period (the
"Registration Period") continuing until the earliest of (i) the date that is two
(2) years after the last day of the calendar month following the month in which
the Effective Date occurs, (ii) the date when the Investors may sell all
Registrable Securities under Rule 144 or (iii) the date the Investors no longer
own any of the Registrable Securities, which Registration Statement (including
any amendments or supplements thereto and prospectuses contained therein) shall
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances in which they were made, not misleading;
(Two)
(Three) (b) Prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus used in connection with the Registration Statement as may be
necessary to keep the Registration Statement effective at all times during the
Registration Period, and, during the Registration Period, comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities of the Company covered by the Registration Statement
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in the Registration Statement;
(Four)

                                       6
<PAGE>

(Five) (c) The Company shall permit a single firm of counsel designated by the
Initial Investors to review the Registration Statement and all amendments and
supplements thereto a reasonable period of time (but not less than three (3)
business days) prior to their filing with the SEC, and not file any document in
a form to which such counsel reasonably objects.
(Six)
(Seven) (d) Notify each Investor, such Investor's legal counsel identified to
the Company (which, until further notice, shall be deemed to be Krieger &
Prager, ATTN: Samuel Krieger, Esq.; each, an "Investor's Counsel"), and any
managing underwriters immediately (and, in the case of (i)(A) below, not less
than five (5) days prior to such filing) and (if requested by any such Person)
confirm such notice in writing no later than one (1) business day following the
day (i)(A) when a Prospectus or any Prospectus supplement or post-effective
amendment to the Registration Statement is proposed to be filed; (B) whenever
the SEC notifies the Company whether there will be a "review" of such
Registration Statement; (C) whenever the Company receives (or a representative
of the Company receives on its behalf) any oral or written comments from the SEC
in respect of a Registration Statement (copies or, in the case of oral comments,
summaries of such comments shall be promptly furnished by the Company to the
Investors); and (D) with respect to the Registration Statement or any
post-effective amendment, when the same has become effective; (ii) of any
request by the SEC or any other Federal or state governmental authority for
amendments or supplements to the Registration Statement or Prospectus or for
additional information; (iii) of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement covering any or all
of the Registrable Securities or the initiation of any Proceedings for that
purpose; (iv) if at any time any of the representations or warranties of the
Company contained in any agreement (including any underwriting agreement)
contemplated hereby ceases to be true and correct in all material respects; (v)
of the receipt by the Company of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any
Proceeding for such purpose; and (vi) of the occurrence of any event that to the
best knowledge of the Company makes any statement made in the Registration
Statement or Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires any revisions to the Registration Statement, Prospectus or other
documents so that, in the case of the Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. In addition, the Company shall furnish the Investors with
copies of all intended written responses to the comments contemplated in clause
(C) of this Section 3(d) not later than one (1) business day in advance of the
filing of such responses with the SEC so that the Investors shall have the
opportunity to comment thereon.
(Eight)
(Nine) (e) Furnish to each Investor and such Investor's Counsel (i) promptly
after the same is prepared and publicly distributed, filed with the SEC, or
received by the Company, one (1) copy of the Registration Statement, each
preliminary prospectus and prospectus, and each amendment or supplement thereto,
and (ii) such number of copies of a prospectus, and all amendments and
supplements thereto and such other documents, as such Investor

                                       7
<PAGE>
may reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such Investor;
(Ten)
(Eleven) (f) As promptly as practicable after becoming aware thereof, notify
each Investor of the happening of any event of which the Company has knowledge,
as a result of which the prospectus included in the Registration Statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and use its best efforts promptly to prepare a supplement or
amendment to the Registration Statement or other appropriate filing with the SEC
to correct such untrue statement or omission, and deliver a number of copies of
such supplement or amendment to each Investor as such Investor may reasonably
request;
(Twelve)
(Thirteen) (g) As promptly as practicable after becoming aware thereof, notify
each Investor who holds Registrable Securities being sold (or, in the event of
an underwritten offering, the managing underwriters) of the issuance by the SEC
of a Notice of Effectiveness or any notice of effectiveness or any stop order or
other suspension of the effectiveness of the Registration Statement at the
earliest possible time;
(Fourteen)
(Fifteen) (h) Notwithstanding the foregoing, if at any time or from time to time
after the date of effectiveness of the Registration Statement, the Company
notifies the Investors in writing of the existence of a Potential Material
Event, the Investors shall not offer or sell any Registrable Securities, or
engage in any other transaction involving or relating to the Registrable
Securities, from the time of the giving of notice with respect to a Potential
Material Event until such Investor receives written notice from the Company that
such Potential Material Event either has been disclosed to the public or no
longer constitutes a Potential Material Event; provided, however, that the
Company may not so suspend the right to such holders of Registrable Securities
during the periods the Registration Statement is required to be in effect other
than during a Permitted Suspension Period. The term "Permitted Suspension
Period" means one or more suspension periods during any consecutive 12-month
period which suspension periods, in the aggregate, do not exceed fifty (50)
days, provided, however, that no one such suspension period shall either (i) be
for more than twenty (20) days or (ii) begin less than ten (10) business days
after the last day of the preceding suspension (whether or not such last day was
during or after a Permitted Suspension Period).
(Sixteen)
(Seventeen) (i) Use its reasonable efforts to secure and maintain the
designation of all the Registrable Securities covered by the Registration
Statement on the "OTC Bulletin Board Market" of the National Association of
Securities Dealers Automated Quotations System ("NASDAQ") within the meaning of
Rule 11Aa2-1 of the SEC under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the quotation of the Registrable Securities on The
NASDAQ Bulletin Board Market; and, without limiting the generality of the
foregoing, to arrange for at least two market makers to register with the
National Association of Securities Dealers, Inc. ("NASD") as such with respect
to such Registrable Securities;
(Eighteen)

                                       8
<PAGE>

(Nineteen) (j) Provide a transfer agent and registrar, which may be a single
entity, for the Registrable Securities not later than the effective date of the
Registration Statement;
(Twenty)
(Twenty-one) (k) Cooperate with the Investors to facilitate the timely
preparation and delivery of certificates for the Registrable Securities to be
offered pursuant to the Registration Statement and enable such certificates for
the Registrable Securities to be in such denominations or amounts as the case
may be, as the Investors may reasonably request, and, within three (3) business
days after a Registration Statement which includes Registrable Securities is
ordered effective by the SEC, the Company shall deliver, and shall cause legal
counsel selected by the Company to deliver, to the transfer agent for the
Registrable Securities (with copies to the Investors whose Registrable
Securities are included in such Registration Statement) an appropriate
instruction and opinion of such counsel; and
(Twenty-two)
(Twenty-three) (l) Take all other reasonable actions necessary to expedite and
facilitate disposition by the Investor of the Registrable Securities pursuant to
the Registration Statement.
(Twenty-four)
19. Obligations of the Investors. In connection with the registration of the
Registrable Securities, the Investors shall have the following obligations:
20.
(One) It shall be a condition precedent to the obligations of the Company to
complete the registration pursuant to this Agreement with respect to the
Registrable Securities of a particular Investor that such Investor shall furnish
to the Company such information regarding itself, the Registrable Securities
held by it, and the intended method of disposition of the Registrable Securities
held by it, as shall be reasonably required to effect the registration of such
Registrable Securities and shall execute such documents in connection with such
registration as the Company may reasonably request. At least ten (10) days prior
to the first anticipated filing date of the Registration Statement, the Company
shall notify each Investor of the information the Company requires from each
such Investor (the "Requested Information") if such Investor elects to have any
of such Investor's Registrable Securities included in the Registration
Statement. If at least two (2) business days prior to the filing date the
Company has not received the Requested Information from an Investor (a
"Non-Responsive Investor"), then the Company may file the Registration Statement
without including Registrable Securities of such Non-Responsive Investor;
(Two)
(Three) Each Investor, by such Investor's acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of the Registration
Statement hereunder, unless such Investor has notified the Company in writing of
such Investor's election to exclude all of such Investor's Registrable
Securities from the Registration Statement; and
(Four)
(Five) Each Investor agrees that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 3(e) or 3(f), above,
such Investor will

                                       9
<PAGE>

immediately discontinue disposition of Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities until such
Investor's receipt of the copies of the supplemented or amended prospectus
contemplated by Section 3(e) or 3(f) and, if so directed by the Company, such
Investor shall deliver to the Company (at the expense of the Company) or destroy
(and deliver to the Company a certificate of destruction) all copies in such
Investor's possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice. (Six)
21. Expenses of Registration. (a) All reasonable expenses (other than
underwriting discounts and commissions of the Investor) incurred in connection
with registrations, filings or qualifications pursuant to Section 3, but
including, without limitation, all registration, listing, and qualifications
fees, printers and accounting fees, the fees and disbursements of counsel for
the Company and a fee for a single counsel for the Investors not exceeding, in
the aggregate for all Investors, $3,500, shall be borne by the Company.
22.
23. (b) Except as and to the extent specifically set forth in Exhibit 1 attached
hereto, neither the Company nor any of its subsidiaries has, as of the date
hereof, nor shall the Company nor any of its subsidiaries, on or after the date
of this Agreement, enter into any agreement with respect to its securities that
is inconsistent with the rights granted to the Investors in this Agreement or
otherwise conflicts with the provisions hereof. Except as and to the extent
specifically set forth in Exhibit 1 attached hereto, neither the Company nor any
of its subsidiaries has previously entered into any agreement granting any
registration rights with respect to any of its securities to any Person. Without
limiting the generality of the foregoing, without the written consent of the
Investors holding a majority of the Registrable Securities, the Company shall
not grant to any person the right to request the Company to register any
securities of the Company under the Securities Act unless the rights so granted
are subject in all respects to the prior rights in full of the Investors set
forth herein, and are not otherwise in conflict or inconsistent with the
provisions of this Agreement and the other Transaction Agreements.
24.
25. Indemnification. In the event any Registrable Securities are included in a
Registration Statement under this Agreement:
26.
(One) To the extent permitted by law, the Company will indemnify and hold
harmless each Investor who holds such Registrable Securities, the directors, if
any, of such Investor, the officers, if any, of such Investor, each person, if
any, who controls any Investor within the meaning of the Securities Act or the
Exchange Act (each, an "Indemnified Person" or "Indemnified Party"), against any
losses, claims, damages, liabilities or expenses (joint or several) incurred
(collectively, "Claims") to which any of them may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such Claims (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon any of the following statements, omissions or
violations in the Registration Statement, or any post-effective amendment
thereof, or any prospectus included therein: (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
any post-effective amendment thereof or the omission or alleged omission to
state therein a material fact required to

                                       10
<PAGE>

be stated therein or necessary to make the statements therein not misleading,
(ii) any untrue statement or alleged untrue statement of a material fact
contained in the final prospectus (as amended or supplemented, if the Company
files any amendment thereof or supplement thereto with the SEC) or the omission
or alleged omission to state therein any material fact necessary to make the
statements made therein, in light of the circumstances under which the
statements therein were made, not misleading or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation under the Securities Act, the Exchange
Act or any state securities law (the matters in the foregoing clauses (i)
through (iii) being, collectively, "Violations"). Subject to clause (b) of this
Section 6, the Company shall reimburse the Investors, promptly as such expenses
are incurred and are due and payable, for any legal fees or other reasonable
expenses incurred by them in connection with investigating or defending any such
Claim. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a) shall not (I) apply to
a Claim arising out of or based upon a Violation which occurs in reliance upon
and in conformity with information furnished in writing to the Company by or on
behalf of any Indemnified Person expressly for use in connection with the
preparation of the Registration Statement or any such amendment thereof or
supplement thereto, if such prospectus was timely made available by the Company
pursuant to Section 3(c) hereof; (II) be available to the extent such Claim is
based on a failure of the Investor to deliver or cause to be delivered the
prospectus made available by the Company; or (III) apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of the Company, which consent shall not be unreasonably withheld. Each
Investor will indemnify the Company and its officers, directors and agents
(each, an "Indemnified Person" or "Indemnified Party") against any claims
arising out of or based upon a Violation which occurs in reliance upon and in
conformity with information furnished in writing to the Company, by or on behalf
of such Investor, expressly for use in connection with the preparation of the
Registration Statement, subject to such limitations and conditions as are
applicable to the Indemnification provided by the Company to this Section 6.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Indemnified Person and shall survive
the transfer of the Registrable Securities by the Investors pursuant to Section
9.
(Two)
(Three) Promptly after receipt by an Indemnified Person or Indemnified Party
under this Section 6 of notice of the commencement of any action (including any
governmental action), such Indemnified Person or Indemnified Party shall, if a
Claim in respect thereof is to be made against any indemnifying party under this
Section 6, deliver to the indemnifying party a written notice of the
commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume control of the
defense thereof with counsel mutually satisfactory to the indemnifying party and
the Indemnified Person or the Indemnified Party, as the case may be. In case any
such action is brought against any Indemnified Person or Indemnified Party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate in, and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, assume the defense
thereof, subject to the provisions herein stated and after notice from the
indemnifying party to such Indemnified Person

                                       11
<PAGE>

or Indemnified Party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such Indemnified Person or Indemnified
Party under this Section 6 for any legal or other reasonable out-of-pocket
expenses subsequently incurred by such Indemnified Person or Indemnified Party
in connection with the defense thereof other than reasonable costs of
investigation, unless the indemnifying party shall not pursue the action of its
final conclusion. The Indemnified Person or Indemnified Party shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and reasonable out-of-pocket expenses of such
counsel shall not be at the expense of the indemnifying party if the
indemnifying party has assumed the defense of the action with counsel reasonably
satisfactory to the Indemnified Person or Indemnified Party. The failure to
deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party under this Section 6,
except to the extent that the indemnifying party is prejudiced in its ability to
defend such action. The indemnification required by this Section 6 shall be made
by periodic payments of the amount thereof during the course of the
investigation or defense, as such expense, loss, damage or liability is incurred
and is due and payable.
(Four)
27. Contribution. To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that
(a) no contribution shall be made under circumstances where the maker would not
have been liable for indemnification under the fault standards set forth in
Section 6; (b) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any seller of Registrable Securities who
was not guilty of such fraudulent misrepresentation; and (c) contribution by any
seller of Registrable Securities shall be limited in amount to the net amount of
proceeds received by such seller from the sale of such Registrable Securities.
28.
29. Reports under Exchange Act. With a view to making available to the Investors
the benefits of Rule 144 promulgated under the Securities Act or any other
similar rule or regulation of the SEC that may at any time permit the Investors
to sell securities of the Company to the public without registration ("Rule
144"), the Company agrees to:
30.
(One) make and keep public information available, as those terms are understood
and defined in Rule 144;
(Two)
(Three) file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act; and
(Four)
(Five) furnish to each Investor so long as such Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144, the Securities Act
and the Exchange Act, (ii) a copy of the

                                       12
<PAGE>

most recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company and (iii) such other information as may be
reasonably requested to permit the Investors to sell such securities pursuant to
Rule 144 without registration.
(Six)
31. Assignment of the Registration Rights. The rights to have the Company
register Registrable Securities pursuant to this Agreement shall be
automatically assigned by the Investors to any transferee of the Registrable
Securities (or all or any portion of any unconverted Debenture or unexercised
Warrant) only if: (a) the Investor agrees in writing with the transferee or
assignee to assign such rights, and a copy of such agreement is furnished to the
Company within a reasonable time after such assignment, (b) the Company is,
within a reasonable time after such transfer or assignment, furnished with
written notice of (i) the name and address of such transferee or assignee and
(ii) the securities with respect to which such registration rights are being
transferred or assigned, (c) immediately following such transfer or assignment
the further disposition of such securities by the transferee or assignee is
restricted under the Securities Act and applicable state securities laws, and
(d) at or before the time the Company received the written notice contemplated
by clause (b) of this sentence the transferee or assignee agrees in writing with
the Company to be bound by all of the provisions contained herein. In the event
of any delay in filing or effectiveness of the Registration Statement as a
result of such assignment, the Company shall not be liable for any damages
arising from such delay, or the payments set forth in Section 2(c) hereof
arising from such delay. 32.
33. Amendment of Registration Rights. Any provision of this Agreement may be
amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and Investors who hold an sixty-seven (67%)
percent interest of the Registrable Securities. Any amendment or waiver effected
in accordance with this Section 10 shall be binding upon each Investor and the
Company.
34.
35. 11. Miscellaneous.
36.
37. (a) A person or entity is deemed to be a holder of Registrable Securities
whenever such person or entity owns of record such Registrable Securities. If
the Company receives conflicting instructions, notices or elections from two or
more persons or entities with respect to the same Registrable Securities, the
Company shall act upon the basis of instructions, notice or election received
from the registered owner of such Registrable Securities.
38.
39. (b) Notices required or permitted to be given hereunder shall be given in
the manner contemplated by the Agreement, (i) if to the Company or to the
Initial Investor, to their respective address contemplated by the Agreement, and
(iii) if to any other Investor, at such address as such Investor shall have
provided in writing to the Company, or at such other address as each such party
furnishes by notice given in accordance with this Section 11(b).
40.

                                       13
<PAGE>

41. (c) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
42.
43. (d) This Agreement shall be governed by and interpreted 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 jurisdiction of the federal courts
whose districts encompass any part of the City of Wilmington or the state courts
of the State of Delaware sitting in the City of Wilmington in connection with
any dispute arising under this 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. To
the extent determined by such court, the Company shall reimburse the Buyer for
any reasonable legal fees and disbursements incurred by the Buyer in enforcement
of or protection of any of its rights under this Agreement.
44.
45. (e) If any provision of this Agreement shall be invalid or unenforceable in
any jurisdiction, such invalidity or unenforceability shall not affect the
validity or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction.
46.
47. (f) Subject to the requirements of Section 9 hereof, this Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties hereto.
48.
49. (g) All pronouns and any variations thereof refer to the masculine, feminine
or neuter, singular or plural, as the context may require.
50.
51. (h) The headings in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning thereof.
52.
53. (i) This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same agreement. This Agreement, once executed by a party, may be delivered to
the other party hereto by telephone line facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.
54.
55. (j) The Company acknowledges that any failure by the Company to perform its
obligations under Section 3(a) hereof, or any delay in such performance could
result in loss to the Investors, and the Company agrees that, in addition to any
other liability the Company may have by reason of such failure or delay, the
Company shall be liable for all direct damages caused by any such failure or
delay, unless the same is the result of force majeure. Neither party shall be
liable for consequential damages.
56.

                                       14
<PAGE>

            (k) This Agreement constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof. This Agreement may be amended only by an instrument in writing signed by
the party to be charged with enforcement thereof.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

            IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized as of the
day and year first above written.

                                COMPANY:
                                AMBIENT CORPORATION

                                By:
                                Name:
                                Title:

                                INITIAL INVESTOR:

                                           [Print Name of Initial Investor]

                                By:
                                Name:
                                Title:

<PAGE>

                                    EXHIBIT 1

            Shares Permitted to Be Included in Registration Statement
            ---------------------------------------------------------

                             Shares of       Owned/Description of Right to
Shareholder Name            Common Stock                 Acquire
----------------            ------------     -----------------------------
                              1,300,000    Warrants, issued February 15,
Englewood Holding,                         2000, exercisable at $1.00/share,
Inc.("Consultant")                         with piggy back registration rights

See attached Schedule A
"Shares to Be Registered"

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