EXECUTION
      COPY

    


    _______________________________

    


    ASSET
      PURCHASE AGREEMENT

     

    BY
      AND AMONG

     

    AURA
      SYSTEMS, INC. AND

     

    EMERALD
      COMMERCIAL LEASING, INC.

    


    MAY
      15, 2008

    _______________________________

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    Schedule
      1.1 and General Assignment and Bill of Sale

    


    
      	
              Schedule
                1.1

            	
              Inventory
                (Assets)

            


    

    


    General
      Assignment and Bill of Sale


    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    


    ASSET
      PURCHASE AGREEMENT

    


    This
      Asset Purchase Agreement (this “Agreement”), dated May 15, 2008, effective as of
      May 15, 2008, is made by and between Aura Systems, Inc., a Delaware corporation
      (the “Buyer”), having its principal place of business at 2330 Utah Avenue, El
      Segundo, California 90245 and Emerald Commercial Leasing, Inc. a Georgia
      corporation (the “Seller”), having its principal place of business at 4225
      Moreland Avenue, Conley, Georgia 30288.

    


    RECITALS

     

    WHEREAS,
      Seller
      is
      engaged in the business of leasing complete refrigeration transport systems,
      which include, among other things, the design and installation of generators,
      and refrigeration systems onto commercial diesel vehicles for use in interstate
      commerce in the United States (the “Business”); and

     

    WHEREAS,
      Buyer
      desires to purchase and Seller desires to sell certain inventory assets relating
      to refrigeration transport systems as described below; and

     

    WHEREAS,
      this
      Agreement sets forth the terms and conditions upon which the Buyer will purchase
      from Seller, and Seller will sell to Buyer, the aforementioned inventory assets
      for the consideration provided herein.

    


    NOW
      THEREFORE,
      In
      consideration of the foregoing, the mutual representations, warranties and
      covenants set forth herein, and for other good and valuable consideration,
      the
      receipt and sufficiency of which are hereby acknowledged, the parties to this
      Agreement hereby agree as follows:

     

    ARTICLE
      I

    PURCHASE
      AND SALE OF ASSETS

     

    1.1 Agreement
      of Sale and Purchase.
      Seller
      hereby sells, bargains, assigns, transfers and conveys to Buyer and Buyer hereby
      purchases and acquires the following assets (the “Assets”) of Seller on the
      terms and conditions set forth in this Agreement: 

     

    (a) all
      right, title and interest of the Seller in and to the inventory attached hereto
      in Schedule 1.1 (the “Assets”).

     

    Seller
      is
      retaining any and all other assets and liabilities of the Business.


     

    1.2 Purchase
      Price.
      The
      purchase price for the Assets is $384,894.89. 

     

    1.3 Time
      and Place of Closing.
      The
      closing of described herein (the “Closing”) shall take place simultaneously with
      the execution of this Agreement. The date and time at which the Closing actually
      occurs is hereinafter referred to as the “Closing Date.”


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.4 Execution
      and Delivery of Documents of Title by the Seller.
      At the
      Closing, the Seller shall execute and deliver to the Buyer a general assignment
      and bill of sale in form and substance acceptable to Buyer, (the “Bill of Sale”)
      and such deeds, conveyances, certificates of title, assignments, assurances
      and
      other instruments and documents as the Buyer may reasonably request in order
      to
      effect the sale, conveyance, and transfer of the Assets from the Seller to
      the
      Buyer. Such instruments and documents shall be sufficient to convey to the
      Buyer
      good and marketable title in all of the Assets. The Seller will, from time
      to
      time after the Closing Date, take such additional actions and execute and
      deliver such further documents as the Buyer may reasonably request in order
      to
      more effectively sell, transfer and convey the purchased Assets to the Buyer
      and
      to place the Buyer in position to operate and control all of the purchased
      Assets.

     

    1.5 Allocation
      of the Purchase Price.
      The
      purchase price for the assets shall be allocated to the Assets as set forth
      in
      the attached Schedule 1.1, which represent the fair market value allocable
      to
      each of the Assets to be purchased by Buyer under this Agreement, were arrived
      at by arm’s length negotiations, and shall be used by each party in reporting
      the transaction contemplated by this Agreement for federal income tax purposes.
      As to assets purchased at Buyer’s cost, such shall be noted in Schedule 1.1.


     

    1.6 Waiver
      of Compliance with the Bulk Sales Act.
      In
      connection with the transactions contemplated hereby, only if applicable, the
      parties shall waive compliance with the provisions of Article 6 of the Uniform
      Commercial Code - Bulk Transfers and the Bulk Sales Act, to the extent
      applicable, and any other applicable United States, state or provincial bulk
      sales act or statute (“Bulk Sales Acts”).

     

    1.7 Payment
      Terms. Subsequent
      to the Closing, Buyer shall pay for each asset item in accordance with the
      pricing set forth in Schedule 1.1, upon Buyer’s sale to third parties of its all
      electric refrigeration transport mobile power systems, incorporating items
      comprising the Assets contained in Schedule 1.1, net fifteen calendar days
      of
      Buyer’s receipt of payment for each such asset item sold. Payment to Seller of
      the purchase price in total for the Assets shall be without interest to Buyer
      and within a period not to exceed two years from the date Buyer takes physical
      possession of the Assets. 

     

    ARTICLE
      II

    REPRESENTATIONS
      AND WARRANTIES

    OF
      THE SELLER 

     

    2.1 The
      Seller hereby represents and warrants to the Buyer that the following statements
      are true and correct. 

     

    (a) Organization
      and Qualification.
      The
      Seller is a corporation duly organized, validly existing and in good standing
      under the laws of the state of its incorporation. The Seller has full corporate
      power and authority to own, use and lease its properties and to conduct its
      business as such properties are currently owned, used or leased and as such
      business is currently conducted. The Seller is qualified to do business as
      a
      foreign corporation and is in good standing in each jurisdiction in which the
      conduct of its business would require such qualification.


    
      
        
        

      

      
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    (b) Authority;
      No Violation.
      The
      Seller has all requisite corporate power and authority to enter into this
      Agreement and to carry out the transactions contemplated hereby or thereby.
      The
      execution, delivery and performance by the Seller of this Agreement have been
      duly and validly authorized and approved by all necessary corporate action.
      This
      Agreement constitutes the legal and binding obligation of the Seller,
      enforceable in accordance with its terms. Assuming the accuracy of the
      representations and warranties of the Buyer hereunder, the entering into of
      this
      Agreement by the Seller does not, and the consummation by the Seller of the
      transactions contemplated hereby, including specifically the transfer of the
      Assets to the Buyer by the Seller, will not violate the provisions of
      (i) any applicable laws of the United States or any other state or
      jurisdiction in which the Seller does business, or (ii) the Seller’s
      Articles of Incorporation or Bylaws.

     

    2.2 The
      Seller hereby represents and warrants that it has no any actual knowledge that
      any of the following statements are not true or correct in all material
      respects. 

     

    (a) No
      Violation.
      The
      consummation, execution, delivery and performance of this Agreement will not
      conflict with any provision of, or result in a default or acceleration of any
      obligation under, result in any change in the rights or obligations of the
      Seller under or require any consent under, any Lien, contract agreement,
      license, lease, instrument, indenture, order, arbitration award, judgment,
      or
      decree to which the Seller is a party or by which it is bound, or to which
      any
      property of the Seller is subject and which now has a material adverse effect
      on
      the Seller.

     

    (b) Consents.
      No
      consent, waiver, approval, order or authorization of, or registration,
      declaration or filing with, any court, administrative agency or commission
      or
      other federal, state, county, local or other foreign governmental authority,
      instrumentality, agency or commission (“Governmental Entity”) or any third
      party, including a party to any agreement with the Seller, is required by or
      with respect to the Seller in connection with the execution and delivery of
      this
      Agreement and any related agreement, if any, to which the Seller is a party.
      

     

    (c) Title
      to the Purchased Assets.
      Seller
      has good and marketable title to all of the Assets, free and clear of all
      charges, liens, commitments, claims, restrictions, leases or encumbrances of
      every kind and nature. 

     

    (d) Condition
      of Assets.
      At the
      time of delivery to Buyer, the Assets shall be in good repair and operating
      condition, suitable for its intended uses, and Buyer shall have the right to
      inspect the Assets prior to the closing. 

     

    (e) Liabilities.
      Seller
      does not have and will not have after the date of this Agreement any debts,
      liabilities or obligations of any nature, whether accrued, absolute, contingent
      or otherwise for which Buyer may become liable as a result of the transactions
      contemplated by this Agreement.


    
      
        
        

      

      
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    (f) Litigation.
      There
      are no claims pending or threatened (or any facts which could lead to such
      a
      claim) by, or against the Seller before any federal, state, local or foreign
      court or any other governmental or administrative agency or tribunal or any
      arbitrator or arbitration panel, and there are no judgments, orders, rulings,
      charges, decrees, injunctions, notices of violation or other mandates against
      the Seller to which the Seller is a party with respect to the business, property
      or assets of the Seller.

     

    (g) Brokers.
      Neither
      the Seller nor anyone acting on their behalf has engaged, retained, nor incurred
      any liability to any broker, finder or agent or has agreed to pay any brokerage
      fees, commissions, finder’s fees or other fees with respect to this Agreement or
      the transactions contemplated hereby.

     

    (h) Disclosure
      of Material Information.
      There is
      no fact or circumstance known to the Seller which now or hereafter has a
      material adverse effect on the Seller and which has not been set forth in this
      Agreement or in any other document delivered or to be delivered in connection
      herewith. Without limiting the generality of the foregoing, the Seller has
      not
      heretofore taken any actions, nor is there any existing fact or circumstance
      relating to Seller, which now or hereafter has a material adverse effect on
      Buyer after the consummation of the purchase and sale of the Assets contemplated
      hereby.

     

    (i) No
      Misleading Statements.
      No
      representation, warranty or statement of Seller set forth in this Agreement
      or
      any Schedule to this Agreement contains or will contain any untrue statements
      of
      a material fact.

     

    ARTICLE
      III

    REPRESENTATIONS
      AND WARRANTIES OF THE BUYER

     

    The
      Buyer
      hereby represents and warrants to the Seller as follows:

     

    3.1 Organization
      and Qualification.
      The
      Buyer is a corporation duly organized, validly existing and in good standing
      under the laws of the state of Delaware, with full corporate power and authority
      to own, use or lease its properties and to conduct its business as such
      properties are owned, used or leased and as such business is conducted.


     

    3.2 Authority.
      The
      Buyer has the requisite corporate power and authority to enter into this
      Agreement and to carry out the transactions contemplated hereby or thereby.
      The
      execution, delivery and performance of this Agreement and any related document
      by the Buyer has been duly and validly authorized and approved by all necessary
      corporate action. 

     

    3.3 Brokers.
      The
      Buyer has not engaged, retained, or incurred any liability to any broker, finder
      or agent or has agreed to pay any brokerage fees, commissions, finder’s fees or
      other fees with respect to this Agreement or the transactions contemplated
      hereby.

     

    3.3 No
      Misleading Statements.
      No
      representation, warranty or statement of Buyer set forth in this Agreement
      or
      any Schedule to this Agreement contains or will contain any untrue statements
      of
      a material fact.


    
      
        
        

      

      
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    ARTICLE
      IV

    NO
      ASSUMPTION OF LIABILITIES AND INDEMNIFICATION 

     

    4.1 Assumption
      of Liabilities.
      Buyer
      is not assuming and shall not be obligated or liable for any of the liabilities,
      obligations, contracts or commitments of Seller, whether now existing or arising
      in the future. If Buyer pays or performs any expense, liability, obligation,
      contract or commitment of Seller, Buyer shall be entitled to indemnification
      from Seller pursuant to Section 4.2 below; provided that Buyer will promptly
      notify Seller upon receipt of any such claim and will not pay or perform on
      such
      claim if Seller provides Buyer with assurances which are, in Buyer’s
      determination, adequate to the effect that Seller will pay or perform what
      is
      properly due to the claimant. 

     

    4.2 Indemnification
      of Buyer.
      Seller
      agrees to indemnify and hold harmless Buyer and its officers, directors,
      stockholders, employees, and agents, from, against and in respect of:


     

    (a) Any
      and
      all losses, damages or deficiencies resulting from any and all
      misrepresentations or breaches of any warranty, provision or term by Seller
      made
      or contained in this Agreement or any Schedule hereto; 

     

    (b) The
      assertion against Buyer of any claim by any creditor of or claimant against
      Seller relating to an obligation or liability of Seller or to the operation,
      ownership, use or maintenance prior to Closing of the Assets or Business of
      Seller; and

     

    (c) The
      reasonable costs and expenses incident to any and all actions, suits,
      proceedings, claims, demands, assessments or judgments in respect of any matter
      for which Buyer is indemnified under Section 4.2(a) or (b) above, including
      legal and accounting fees and expenses. 

     

    4.3 Indemnification
      of Seller.
      Buyer
      agrees to indemnify and hold harmless Seller and its officers, directors,
      stockholders, employees, and agents, from, against and in respect of:


     

    (d) Any
      and
      all losses, damages or deficiencies resulting from any and all
      misrepresentations or breaches of any warranty, provision or term by Buyer
      made
      or contained in this Agreement or any Schedule hereto; 

     

    (e) The
      assertion against Seller of any claim by any creditor of or claimant against
      Buyer relating to the operation, ownership, use or maintenance after the Closing
      of the Assets of Seller; and

     

    (f) The
      reasonable costs and expenses incident to any and all actions, suits,
      proceedings, claims, demands, assessments or judgments in respect of any matter
      for which Seller is indemnified under Section 4.3(a) or (b) above, including
      legal and accounting fees and expenses. 

     

    4.4 Cooperation.
      If a
      party to this Agreement (the “Indemnifying Party”) is indemnifying the other
      party to this Agreement (the “Indemnified Party”), the Indemnified party agrees
      to provide the Indemnifying Party such cooperation, information or assistance
      as
      the Indemnifying Party may reasonably request. 


    
      
        
        

      

      
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    ARTICLE
      V

    MISCELLANEOUS

     

    5.1 Fees
      and Expenses.
      Each of
      the parties hereto will pay and discharge its own expenses and fees in
      connection with the negotiation of and entry into this Agreement and the
      consummation of the transactions contemplated hereby.

     

    5.2 Notices.
      All
      notices, requests, demands, consents and communications necessary or required
      under this Agreement shall be made in the manner specified, or, if not
      specified, shall be delivered by hand or sent by registered or certified mail,
      return receipt requested, or by telecopy (receipt confirmed) or e-mail
      to:

     

    if
      to the
      Buyer:

     

    Aura
      Systems, Inc.

    Melvin
      Gagerman, CEO and Chairman

    233
      Utah
      Avenue

    El
      Segundo, California 90245

    Facsimile
      Transmission Number: (310) 643-7457

     

    if
      to the
      Seller:

     

    Emerald
      Commercial Leasing, Inc.

    Joseph
      Dickman, President and Sole Stockholder

    4255
      Moreland Avenue

    Conley,
      GA 30288

    Facsimile
      Transmission Number: (404) 763-1628

     

    All
      such
      notices, requests, demands, consents and other communications shall be deemed
      to
      have been duly given or sent two (2) days following the date on which mailed,
      or
      on the date on which delivered by hand or by facsimile transmission (receipt
      confirmed), as the case may be, and addressed as aforesaid.

     

    5.3 Successors
      and Assigns.
      All
      covenants and agreements set forth in this Agreement and made by or on behalf
      of
      any of the parties hereto shall bind and inure to the benefit of the successors
      and assigns of such party, whether or not so expressed, except that neither
      party may assign or transfer any of their respective rights or obligations
      under
      this Agreement without the consent in writing of the other, except in connection
      with a merger of such party with a third party or a sale of all or substantially
      all the assets or stock of such party to a third party.

     

    5.4 Counterparts;
      Descriptive Headings; Variations in Pronouns.
      This
      Agreement may be executed in any number of counterparts and by the different
      parties hereto on separate counterparts, each of which when so executed and
      delivered shall be an original, but all of which together shall constitute
      one
      and the same instrument, and it shall not be necessary in making proof of this
      Agreement to produce or account for more than one such counterpart. The headings
      of the sections and paragraphs of this Agreement have been inserted for
      convenience of reference only and shall not be deemed to be part of this
      Agreement. All pronouns and any variations thereof refer to the masculine,
      feminine or neuter, singular or plural, as the identity of the person or persons
      may require.


    
      
        
        

      

      
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    5.5 Severability;
      Entire Agreement.
      If any
      provision contained herein is held unenforceable, the enforceability of any
      such
      provision in every other respect and of the remaining provisions hereof shall
      not be in any way impaired or affected. This Agreement, including the Schedule
      and Bill of Sale referred to herein, is complete, and all promises,
      representations, understandings, warranties and agreements with reference to
      the
      subject matter hereof, and all inducements to the making of this Agreement
      relied upon by any of the parties hereto, have been expressed herein or in
      said
      Schedule and Bill of Sale. This Agreement may not be amended except by an
      instrument in writing signed on behalf of the Seller and the Buyer.

     

    5.6 Attorneys’
      Fees.
      In any
      action or proceeding brought to enforce any provision of this Agreement the
      successful party shall be entitled to recover reasonable attorneys’ fees in
      addition to any other available remedy.

     

    5.7 Course
      of Dealing.
      No
      course of dealing and no delay on the part of any party hereto in exercising
      any
      right, power, or remedy conferred by this Agreement shall operate as a waiver
      thereof or otherwise prejudice such party’s rights, powers and remedies. The
      failure of any of the parties to this Agreement to require the performance
      of a
      term or obligation under this Agreement or the waiver by any of the parties
      to
      this Agreement of any breach hereunder shall not prevent subsequent enforcement
      of such term or obligation or be deemed a waiver of any subsequent breach
      hereunder. No single or partial exercise of any rights, powers or remedies
      conferred by this Agreement shall preclude any other or further exercise thereof
      or the exercise of any other right, power or remedy.

     

    5.8 GOVERNING
      LAW.
      THIS
      AGREEMENT, INCLUDING THE VALIDITY HEREOF AND THE RIGHTS AND OBLIGATIONS OF
      THE
      PARTIES HEREUNDER, SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
      LAWS OF THE STATE OF CALIFORNIA WITHOUT
      REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
      JURISDICTION
      AND VENUE FOR ANY ACTION COMMENCED SHALL BE IN LOS ANGELES SUPERIOR COURT OR
      THE
      UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA. THIS AGREEMENT
      IS
      MADE SUBJECT TO AND IN ACCORDANCE WITH THE SECURITIES LAWS OF THE UNITED
      STATES.

    


    [Remander
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    IN
      WITNESS WHEREOF
      the
      parties hereto have executed this Agreement under seal as of the date first
      set
      forth above.

     

    
      	
              ATTEST:

            	 	EMERALD
              COMMERCIAL LEASING, INC.
	 	 	 	 
	 
	 	
              By:
                

            	 

	 	 	Name:
              Joseph Dickman
	 	 	Title:
              President and Sole Stockholder
	 	 	 	 
	
              ATTEST:

            	 	AURA
              SYSTEMS, INC.
	 	 	 	 
	 
	 	
              By:
                

            	 

	 	 	Name:
              Melvin Gagerman
	 	 	Title:
              Chairman and Chief Executive Officer


    


    
      
        
        

      

      
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