exhibit 10.50

ESCROW AGREEMENT

                        This ESCROW AGREEMENT (this "Agreement"), dated as of
August 19, 2004, by and among AURA SYSTEMS, INC., a Delaware corporation (the
"Company"), the purchasers identified on the signature page of this Agreement
(each, a "Purchaser," and together with such other investors who participate in
the Offering, "Purchasers"), and Interwest Transfer Co., Inc., a Utah
corporation (the "Escrow Agent"), is made and entered into with reference to the
following facts:

Recitals

                        A.            The Company and the Purchasers have
entered into a certain Securities Purchase Agreement dated as of August 19, 2004
(the "Purchase Agreement") providing for the sale by the Company to the
Purchasers in a private placement a minimum of Five Million Dollars
($5,000,000.00) (the "Minimum Offering Amount") and a maximum of Fifteen Million
Dollars ($15,000,000) (the "Maximum Offering Amount") of its units ("Units") at
a purchase price of One Thousand Dollars ($1,000) per Unit, each Unit consisting
of (i) Two Hundred (200) shares of Series B Preferred Stock (the "Series B
Shares"), which Series B Shares are convertible into shares (the "Conversion
Shares") of the Company's Common Stock, par value $.005 per share (the "Common
Stock"), and (ii) Series B Warrants, each warrant entitling the holder to
purchase up to Twelve Thousand Five Hundred (12,500) shares of Common Stock.   
Capitalized terms that are used but not defined in this Agreement that are
defined in the Purchase Agreement shall have the meanings set forth in the
Purchase Agreement.

                        B.            Pursuant to the Purchase Agreement the
Purchasers and the Company have agreed to enter into this Agreement in order to
provide for the escrow of the Series B Shares and Series B Warrants comprising
the Units which have been paid for at Closing by Promissory Notes (such Series B
Shares and Series B Warrants, together with any property distributed in respect
of such Units, are referred to as the "Escrow Securities") on the terms set
forth in the Purchase Agreement and this Agreement.

                        C.        The Escrow Agent is willing to act as escrow
agent pursuant to the terms of this Agreement with respect to the holding of the
Escrow Securities.

                        NOW, THEREFORE, IT IS AGREED.

                                    1.         Deposit of Escrow Securities.

           

                                    Each Purchaser authorizes and instructs the
Company to deposit with the Escrow Agent the Escrow Securities, in the amounts
and denominations set forth in Schedule A to this Agreement, to be held pursuant
to the terms of the Purchase Agreement and this Agreement.

                                    2.         Terms of Escrow.

                       

a.                   The Escrow Agent shall hold the Escrow Securities in escrow
until May 16, 2005 (the "Escrow Termination Date"), at which time Escrow Agent
shall deliver the Escrow Securities, if any, to the Purchasers entitled thereto,
as set forth in Schedule "A," less only such Escrow Securities as shall have
previously released by Escrow Agent under the terms of this Agreement.

b.                  On or after each Payment Date under a Promissory Note, which
Payment Dates are set forth in Schedule "A," the Purchaser making such payment
shall notify the Escrow Agent and the Company of the date and amount of the
payment made, which notice shall instruct the Escrow Agent to deliver to the
Purchaser the number of Escrow Securities to be released to Purchaser in respect
of such payment ("Released Securities"), as set forth in Schedule "A." Such
notice is referred to as the "Release Notice." Unless the Escrow Agent is
furnished with a notice by the Company objecting to the release to the Purchaser
of the Released Securities within five (5) business days of the date of such
Purchaser's, the certificates evidencing the Released Securities shall be
delivered by the Escrow Agent to the Purchaser.

c.                    If the Escrow Agent, prior to the Escrow Termination Date,
receives notice of objection, dispute, or other assertion from the Company in
accordance with any of the provisions of this Agreement, the Escrow Agent shall
continue to hold the Escrow Securities until such time as the Escrow Agent shall
receive (i) written instructions jointly executed by the applicable Purchaser
and the Company, directing the disposition of the Escrow Securities (or portion
thereof), or (ii) a certified copy of a judgment, order or decree of a court of
competent jurisdiction, final beyond the right of appeal, directing the Escrow
Agent to distribute the Escrow Securities (or a portion thereof) to any party
hereto or as such judgment, order or decree shall otherwise specify (including
any such order direction the Escrow Agent to deposit the Escrow Securities into
the Court rendering such order, pending determination of any dispute between any
of the parties). In addition, the Escrow Agent shall have the right to deposit
the Escrow Securities with a court of competent jurisdiction without liability
to any party if said dispute is not resolved within 30 days of receipt of any
such notice of objection, dispute or otherwise. 

                                   

                                    3.         Duties and Obligations of the
Escrow Agent.

                                    a.        The parties hereto agree that the
duties and obligations of the Escrow Agent are only such as are herein
specifically provided and no other. The Escrow Agent's duties are as a
depositary only, and the Escrow Agent shall incur no liability whatsoever,
except as a direct result of its willful misconduct.

                                    b.        The Escrow Agent may consult with
counsel of its choice, and shall not be liable for any action taken, suffered or
omitted by it in accordance with the advice of such counsel.

                                    c.        The Escrow Agent shall not be
bound in any way by the terms of any other agreement to which Purchasers and the
Company are parties, whether or not it has knowledge thereof, and the Escrow
Agent shall not in any way be required to determine whether or not any other
agreement has been complied with by Purchasers or the Company, or any other
party thereto.  The  Escrow Agent shall not be bound by any modification,
amendment, termination, cancellation, rescission or supersession of this
Agreement unless the same shall be in writing and signed by each Purchaser and
the Company, and agreed to in writing by the Escrow Agent.

                                    d.        In the event that the Escrow Agent
shall be uncertain as to its duties or rights hereunder or shall receive
instructions, claims or demands which, in its opinion, are in conflict with any
of the provisions of this Agreement, it shall be entitled to refrain from taking
any action, other than to keep safely, the Escrow Securities until it shall
jointly be directed otherwise in writing by Purchasers and the Company or by a
final judgment of a court of competent jurisdiction.

                                    e.        The Escrow Agent shall be fully
protected in relying upon any written notice, demand, certificate or document
which it, in good faith, believes to be genuine. The Escrow Agent shall not be
responsible for the sufficiency or accuracy of the form, execution, validity or
genuineness of documents or securities now or hereafter deposited hereunder, or
of any endorsement thereon, or for any lack of endorsement thereon, or for any
description therein, nor shall the Escrow Agent be responsible or liable in any
account of the identity, authority or rights of the persons executing or
delivering or purporting to execute or deliver any such document, security or
endorsement.

                                    f.        The Escrow Agent shall not be
required to institute legal proceedings of any kind and shall not be required to
defend any legal proceedings which may be instituted against it or in respect of
the Escrow Securities.

                                    g.       If the Escrow Agent at any time, in
its sole discretion, deems it necessary or advisable to relinquish custody of
the Escrow Securities, it may do so by giving five (5) days written notice to
the parties of its intention and thereafter delivering the Escrow Securities to
any other escrow agent mutually agreeable to Purchasers and the Company and, if
no such escrow agent shall be selected within three days of the Escrow Agent's
notification to Purchasers and the Company of its desire to so relinquish
custody of the Escrow Securities, then the Escrow Agent may do so by delivering
the Escrow Securities (a) to any bank or trust company in Los Angeles County,
California, which is willing to act as escrow agent thereunder in place and
instead of the Escrow Agent, or (b) to the clerk or other proper officer of a
court of competent jurisdiction as may be permitted by law within State of Utah.
The fee of any such bank or trust company or court officer shall be borne by the
Company. Upon such delivery, the Escrow Agent shall be discharged from any and
all responsibility or liability with respect to the Escrow Securities and the
Company shall promptly pay to the Escrow Agent all monies which may be owned it
for its services hereunder, including, but not limited to, reimbursement of its
out-of-pocket expenses pursuant to paragraph (i) below.

                                    h.       This Agreement shall not create any
fiduciary duty on the Escrow Agent's part to Purchasers or the Company except as
expressly required by law. 

i.                     The reasonable out-of-pocket expenses paid or incurred by
the

 Escrow Agent in the administration of its duties hereunder, including, but not
limited to, all counsel and advisors' and agents' fees and all taxes or other
governmental charges, if any, shall be paid by the Company, within thirty (30)
days of invoicing.

4.     Indemnification.    Each of the Purchasers and the Company, jointly and
severally, hereby indemnify and hold the Escrow Agent and its members, partners,
employees, and attorneys harmless from and against, to the fullest extent
permitted by law, any and all losses, damages, taxes, liabilities and expenses
that may be incurred, directly or indirectly, by the Escrow Agent, arising out
of or in connection with its acceptance of appointment as the Escrow Agent
hereunder and/or the performance of its duties pursuant to this Agreement,
including, but not limited to, all legal costs and expenses of the Escrow Agent
incurred defending itself against any claim or liability in connection with its
performance hereunder and the costs of recovery of amounts pursuant to this
Section 4.

                                    5.         Miscellaneous.

a.        All notices, demands and other communications to be given or delivered
under or by reason of the provisions of this Agreement shall be in writing and
shall be deemed to duly given and received when delivered personally or
transmitted by facsimile, one business day after being deposited for next-day
delivery with a nationally recognized overnight delivery service, or three
business days after being deposited as first class mail with the United States
Postal Service, all charges or postage prepaid, and properly addressed to the
party to receive the same at the address indicated below or at such other
address as such party may have designated by advance written notice to the other
parties. The addresses for such communications shall be:

If to the Company:

Aura Systems, Inc.

2335 Alaska Avenue

El Segundo, CA  90245

Attention: Chief Financial Officer

Facsimile No.: (310) 643-8719

If to the Escrow Agent

Interwest Transfer Co., Inc.

Attn: Kurtis D. Hughes, V.P.

1981 East 4800 South, Suite 100

Salt Lake City, Utah 84117

Facsimile No (801) 272-9370

If to a Purchaser:

To the address designated by each Purchaser on the signature page of this
Agreement, with a copy (which shall not constitute notice hereunder) to its
counsel designated on the signature page, if any.

Each party shall provide notice to the other parties of any change in address.

b.                  Governing Law; Jurisdiction. This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
Utah applicable to contracts made and to be performed in the State of Utah. The
parties hereto irrevocably consent to the jurisdiction of the United States
federal courts for the District of Utah and the state courts located in the
County of Salt Lake in the State of Utah in any suit or proceeding based on or
arising under this Agreement or the transactions contemplated hereby in which
Escrow agent is a party and irrevocably agree that all claims in respect of such
suit or proceeding shall be determined in such courts. In the event Escrow Agent
is not a party to any such suit or proceeding, the parties hereto irrevocably
consent to the jurisdiction of the United States federal courts located in the
Central District in the State of California and the state courts located in the
County of Los Angeles in the State of California in any suit or proceeding based
on or arising under this Agreement or the transactions contemplated hereby and
irrevocably agree that all claims in respect of such suit or proceeding shall be
determined in such courts.,  The parties irrevocably waive the defense of an
inconvenient forum to the maintenance of such suit or proceeding. The parties
further agree that service of process upon a party mailed by the first class
mail shall be deemed in every respect effective service of process upon such
party in any suit or proceeding arising hereunder. Nothing herein shall affect a
party's right to serve process in any other manner permitted by law. The parties
hereto agree that a final non-appealable judgment in any such suit or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on such
judgment or in any other lawful manner.

c.                   Counterparts.  This Agreement may be executed in any number
of counterparts and, notwithstanding that any of the parties did not execute the
same counterpart, each of such counterparts (or facsimile copies thereof) shall,
for all purposes, be deemed an original, and all such counterparts shall
constitute one and the same instrument binding on all of the parties hereto. 
Delivery of an executed counterpart of a signature page to this Agreement by
facsimile shall be as effective as delivery of a manually executed counterpart
of a signature page of this Agreement.

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

e.                   Severability.  In the event that any provision of this
Agreement or the application of any provision hereof is declared to be illegal,
invalid or otherwise unenforceable by a court of competent jurisdiction, the
remainder of this Agreement shall not be affected except to the extent necessary
to delete such illegal, invalid or unenforceable provision unless the provision
held invalid shall substantially impair the benefit of the remaining portion of
this Agreement.

f.                    Scope of Agreement; Amendments. This Agreement and the
other agreements referred to herein (which other Agreements Escrow Agent need
not be concerned) set forth the entire agreement and understanding between the
parties as to the subject matter hereof and thereof and supersede all prior
discussions, negotiations, agreements and understandings (oral or written) with
respect to such subject matter.  This Agreement or any provision hereof may be
(i) amended only by mutual written agreement of the Company and the Purchasers
or (ii) waived only by written agreement of the waiving party.  No course of
dealing between or among the parties will be deemed effective to modify, amend
or discharge any part of this Agreement or any rights or obligations of any
party under or by reason of this Agreement.

g.                   Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors and
assigns. 

                        [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                                [SIGNATURE PAGE FOLLOWS]

                        IN WITNESS WHEREOF, the parties hereto have caused this
Escrow Agreement to be signed as of the day and year first above written.

                                                                        "THE
COMPANY":

                                                                       
                                               

                                                                        AURA
SYSTEMS, INC.

                                                                       
By:___________________________

                                                                             
Name:

                                                                             
Title:

                                                                        "ESCROW
AGENT":

                                                                       
INTERWEST TRANSFER CO., INC

                                                                       
By:____________________________

                                                                             
Its:_________________________

"PURCHASERS"

 American friends of Karen Chava Bnai Levi

       By  _______________________________

       Name:  ____________________________

       Title:    ____________________________

Address:  Aries Group attn: Z. Kurtzman

                 12100 Wilshire Blvd. Suite 705

                 Los Angeles, CA 90025

Facsimile: (310) 820-4118

 _______________________________

 Yair Ben Moshe                         

Address:  

                 7250 Beverly Blvd. Suite 101

                 Los Angeles, CA 90036

Facsimile: (323) 954-8848

 _______________________________

 Zvi Kurtzman                         

Address:   Aries Group attn: Z. Kurtzman

                 12100 Wilshire Blvd. Suite 705

                 Los Angeles, CA 90025

Facsimile:  310 820 4118

 _______________________________

Cipora Lavut

Address:   Aries Group attn: Cipora Lavut

                 12100 Wilshire Blvd. Suite 705

                 Los Angeles, CA 90025

Facsimile: (310) 820-4118

                

 _______________________________

Arthur J Schwartz

 

Address:   Aries Group

                 12100 Wilshire Blvd. Suite 705

                 Los Angeles, CA 90025

Facsimile: (310) 820-4118

_______________________________

Neal Kaufman

Address:   Aries Group

                 12100 Wilshire Blvd. Suite 705

                 Los Angeles, CA 90025

Facsimile: (310) 820-4118

_______________________________

David Maimon

Address:   P.O. Box 1406

                 Studio City, CA 91614

                

Facsimile: (323) 330-1390

                

Triple Net LLC

Address

Faxcimile

___________________________________

Shmuel Ben Moshe

Address

                 7250 Beverly Blvd. Suite 101

                 Los Angeles, CA 90036

Facsimile: (323) 954-8848

____________________________________

Izar Fernbach

Address

                 7250 Beverly Blvd. Suite 101

                 Los Angeles, CA 90036

Facsimile: (323) 954-8848

__________________________________

Yaska Ginsbeg

Address

Address:   P.O. Box 1406

                 Studio City, CA 91614

                

Facsimile: (323) 330-1390

SCHEDULE "A"

1.            Purchaser:  American Friends of Karen Chava Bnai Levi

Deposited Securities:

180,000            Series B Shares

11,250,000      Series B Warrants

Note Payment Dates and Released Securities Amounts:

Payment Date

Released Securities

Series B Warrants              Series B Shares

September 5, 2004

0

0

October 5, 2004

42,000

2,625,000

November 5, 2004

0

0

December 5, 2004

50,000

3,125,000

January 5, 2005

0

0

February 5, 2005

50,000

3,125.000

March 5, 2005

25,000

1,562,500

April 5, 2005

13,000

  812,500

May 5, 2005

0

0

2.            Purchaser:  Yair Ben Moshe

Deposited Securities:

342,000           Series B Shares

21,375,000      Series B Warrants

Note Payment Dates and Released Securities Amounts:

Payment Date

Released Securities

Series B Warrants              Series B Shares

September 5, 2004

20,000

1,250,000

October 5, 2004

13,000

   812,500

November 5, 2004

0

0

December 5, 2004

3,000

  187,500

January 5, 2005

8,000

  500,000

February 5, 2005

38,000

2,375,000

March 5, 2005

60,000

3,750,000

April 5, 2005

60,000

3,750,000

May 5, 2005

90,000

5,625,000

3.            Purchaser:  Zvi Kurtzman

Deposited Securities:

81,000             Series B Shares

5.062,500            Series B Warrants

Note Payment Dates and Released Securities Amounts:

Payment Date

Released Securities

Series B Warrants              Series B Shares

September 5, 2004

0

0

October 5, 2004

  6,000

   375,000

November 5, 2004

  7,000

   437,500

December 5, 2004

  4,000

   250,000

January 5, 2005

10,000

   625,000

February 5, 2005

0

0

March 5, 2005

14,000

   875,000

April 5, 2005

20,000

1,250,000

May 5, 2005

20,000

1,250,000

4.            Purchaser:  Cipora Lavut

Deposited Securities:

82,000             Series B Shares

5,125,000        Series B Warrants

Note Payment Dates and Released Securities Amounts:

Payment Date

Released Securities

Series B Warrants              Series B Shares

September 5, 2004

0

0

October 5, 2004

   6,000

  375,000

November 5, 2004

   7,000

  437,500

December 5, 2004

   4,000

  250,000

January 5, 2005

 10,000

  625,000

February 5, 2005

   2,000

  125,000

March 5, 2005

  13,000

  812,500

April 5, 2005

  20,000

1,250,000

May 5, 2005

  20,000

1,250,000

5.            Purchaser:  Arthur Schwartz

Deposited Securities:

36,000             Series B Shares

2,250,000        Series B Warrants

Note Payment Dates and Released Securities Amounts:

Payment Date

Released Securities

Series B Warrants              Series B Shares

September 5, 2004

0

0

October 5, 2004

 4,000

 250,000

November 5, 2004

0

0

December 5, 2004

 4,000

 250,000

January 5, 2005

 4,000

 250,000

February 5, 2005

 6,000

 375,000

March 5, 2005

 6,000

 375,000

April 5, 2005

 6,000

 375,000

May 5, 2005

 6,000

 375,000

6.            Purchaser:  Neal Kaufman

Deposited Securities:

18,000             Series B Shares

1,125,000            Series B Warrants

Note Payment Dates and Released Securities Amounts:

Payment Date

Released Securities

Series B Warrants              Series B Shares

September 5, 2004

0

October 5, 2004

2,000

125,000

November 5, 2004

0

December 5, 2004

3,000

187,500

January 5, 2005

3,000

187,500

February 5, 2005

4,000

250,000

March 5, 2005

3,000

187,500

April 5, 2005

3,000

187.500

May 5, 2005

0

0

7.            Purchaser:  David Maimon

Deposited Securities:

365,000           Series B Shares

22,812,500            Series B Warrants

Note Payment Dates and Released Securities Amounts:

Payment Date

Released Securities

Series B Warrants              Series B Shares

September 5, 2004

  0

0

October 5, 2004

   35,000

2,187,500

November 5, 2004

   15,000

  937,500

December 5, 2004

   15,000

   937,500

January 5, 2005

   20,000

1,250,000

February 5, 2005

   50,000

3,125,000

March 5, 2005

   60,000

3,750,000

April 5, 2005

   60,000

3,750,000

May 5, 2005

 100,000

6,250,000

8.            Purchaser:  Triple Net (Terry Turner)

Deposited Securities:

80,000 Series B Shares

5,000,000            Series B Warrants

Note Payment Dates and Released Securities Amounts:

Payment Date

Released Securities

Series B Warrants              Series B Shares

September 5, 2004

  0

0

October 5, 2004

  20,000

   1,250,000

November 5, 2004

  20,000

   1,250,000

December 5, 2004

  20,000

   1,250,000

January 5, 2005

  20,000

   1,250,000

February 5, 2005

  0

0

March 5, 2005

  0

0

April 5, 2005

  0

0

May 5, 2005

  0

0

9.            Purchaser:  Shmuel Ben Moshe

Deposited Securities:

40,000 Series B Shares

2,500,000            Series B Warrants

Note Payment Dates and Released Securities Amounts:

Payment Date

Released Securities

Series B Warrants              Series B Shares

September 5, 2004

  10,000

   625,000

October 5, 2004

  10,000

   625,000

November 5, 2004

  10,000

   625,000

December 5, 2004

  10,000

   625,000

January 5, 2005

  0

  0

February 5, 2005

  0

0

March 5, 2005

  0

0

April 5, 2005

  0

0

May 5, 2005

  0

0

10.            Purchaser:  Izar Fernbach

Deposited Securities:

10,000 Series B Shares

625,000            Series B Warrants

Note Payment Dates and Released Securities Amounts:

Payment Date

Released Securities

Series B Warrants              Series B Shares

September 5, 2004

  2000

0

October 5, 2004

  2,000

   125,000

November 5, 2004

  0

   0

December 5, 2004

  2,000

   125,000

January 5, 2005

  2,000

   125,000

February 5, 2005

  2,000

   125,000

March 5, 2005

  0

0

April 5, 2005

  0

0

May 5, 2005

  0

0

11.            Purchaser:  Yaska Ginsburg

Deposited Securities:

15,000 Series B Shares

937,500            Series B Warrants

Note Payment Dates and Released Securities Amounts:

Payment Date

Released Securities

Series B Warrants              Series B Shares

September 5, 2004

  4000

   250,000

October 5, 2004

  2,000

   125,000

November 5, 2004

  0

   0

December 5, 2004

  2,000

   125,000

January 5, 2005

  2,000

   125,000

February 5, 2005

  5,000

   312,500

March 5, 2005

  0

0

April 2005

  0

0

May 2005

  0

0