**EMPLOYMENT
      AGREEMENT**





This
      EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of May 15, 2008,
      between AURA SYSTEMS INC., a Delaware Corporation (the “Company”) and JOSEPH
      DICKMAN, an individual (the “Employee”).





WHEREAS,
      the Compensation Committee of the Board of Directors of the Company (the
“Compensation Committee”) has approved and authorized the entry into this
      Agreement with the Employee; and





WHEREAS,
      the parties desire to enter into this Agreement setting forth the terms and
      conditions for the employment relationship of the Employee with the
      Company.





NOW,
      THEREFORE, in consideration of the promises and mutual covenants and agreements
      herein contained and intending to be legally bound hereby, the Company and
      the
      Employee hereby agree as follows:




**1:
      TERM.**





The
      term
      of this Agreement shall be for a period of three (3) years commencing as of
      August 1, 2008 (the “Effective Date”) and expiring on July 31, 2011. This period
      shall hereinafter be referred to as the “Employment Term”.





**2:
      DUTIES/RESPONSIBILITIES.**





2.1:
      Position. The Company hereby agrees to employ the Employee, and the Employee
      hereby agrees to serve the Company, during the Term of Employment under the
      title of Vice President, Sales.





2.2:
      No
      Restriction on Employment. Employee represents and warrants that there are
      no
      agreements or arrangements, whether written or oral, in effect which would
      prevent Employee from rendering exclusive services as prescribed in this
      Agreement to the Company during the term hereof, and that he has not made and
      will not make any commitment, agreement or arrangement, or do any act in
      conflict with this Agreement.





2.3:
      Duties. In his capacity as Vice President, Sales, the Employee shall personally
      and diligently devote his full working attention and energies to the performance
      of such duties and responsibilities as are consistent with this position,
      including, but not limited to any duties and responsibilities as may be
      designated to him and which are not inconsistent with the Employee’s position.
      Employee agrees to use his best efforts to perform such duties faithfully and
      efficiently and shall regularly both consult with the senior executive officers
      of the Company and report directly to the Company’s Chief Executive Officer.


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                  AGREEMENT
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**3:
      COMPENSATION.**





3.1:
      Compensation. As compensation to Employee for all services rendered under this
      Agreement, the Company shall:





(i)
      upon
      full execution of this Agreement issue to Employee one hundred thousand
      (100,000) shares of the Company’s common stock;





(ii)
      grant Employee an option to purchase up to one hundred and fifty thousand
      (150,000) shares of the Company’s common stock at a fixed exercise price of
      three dollars ($3.00) per share each year for three years in accordance with
      the
      schedule set forth in EXHIBIT A. Such options shall vest monthly; and





(iii)
      the
      Company shall pay the Employee a salary at an annual rate of Three Hundred
      Thousand Dollars ($300,000) (the “Base Salary”). This Base Salary may be
      increased at such times, if any, and in such amounts as determined by the
      Compensation Committee in its discretion. Base Salary payments shall be made
      in
      equal installments in accordance with Company's then prevailing payroll
      policy.





3.2:
      Benefits. During the Employment Term the Employee shall be eligible to
      participate in the regular Company health insurance benefits, vacation, and
      other employee benefit plans, programs and policies established by the Company
      generally for its employees or senior management.





3.3:
      Bonus. If, as set forth in EXHIBIT B, during the Employment Term the Company
      meets certain revenue and collection milestones from the sale of mobile
      refrigeration systems, Employee shall receive an option, each year for three
      years, to purchase up to fifty thousand (50,000) shares of the Company’s common
      stock at a fixed exercise price of three dollars ($3.00) per share as set forth
      in EXHIBIT B.





3.4:
      Business Expenses. Subject to prior written approval of the Employee’s direct
      report, during the Employment Term, the Employee shall be authorized to incur
      business expenses carrying out his duties and responsibilities in connection
      with his employment. The Company will reimburse the Employee for such expenses
      upon presentation of appropriate vouchers or receipts, in accordance with its
      corporate expense reimbursement policies.





3.5:
      Stock Holding Period. Employee understands that any securities offered and/or
      issued under this agreement are subject to significant limitations on resale
      under applicable securities laws. Employee understands that reliance upon Rule
      144 under the Securities Act for resales of the Securities requires, among
      other
      conditions, a holding period and volume limitations prior to the resale. The
      Employee understands and hereby acknowledges that the Company is under no
      obligation to register any of the Securities under the Securities Act, any
      applicable state securities or “blue sky” laws or any applicable foreign
      securities laws.


EMPLOYMENT
                AGREEMENT
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                of 12





3.6:
      Stock Legends. The Employee consents to the placement of the legend set forth
      below, or a substantial equivalent thereof, on any certificate or other document
      evidencing any securities granted to him by the Company:





THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY
      APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED
      OR HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION
      STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER THE SECURITIES ACT
      OR
      AN EXEMPTION FROM THE SECURITIES ACT. ANY SUCH TRANSFER MAY ALSO BE SUBJECT
      TO
      COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS AND THE LAWS OF OTHER
      APPLICABLE JURISDICTIONS.





The
      Employee further consents to the placement of one or more restrictive legends
      on
      any securities issued in connection with this Agreement as may be required
      by
      applicable securities laws. Such Employee is aware that the Company will make
      a
      notation in its appropriate records with respect to the restrictions on the
      transferability of the securities.





3.7:
      Stock Issuance. All options and shares referenced herein shall be issued subject
      to and in accordance with the Securities Laws of the United States and Blue
      Sky
      laws. Employee agrees to execute any and all documents and agreements with
      respect to the issuance and exercise requested by the Company.





**4:
      RESTRICTIVE COVENANTS.**





4.1:
      Protection of Company’s Interests. To the extent allowed by law, the Employee
      shall not, without the prior written consent of the Company, perform services
      for any person, firm or corporation and/or engage in any activity which would
      be
      directly or indirectly competitive with the Company both during the Employment
      Term and for a period of twelve (12) months following expiration of this
      Agreement. The foregoing will not prevent Employee from holding at any time
      less
      than 5% of the outstanding capital stock of any company whose stock is publicly
      traded.





4.2:
      Antisolicitation. The Employee promises and agrees that while employed with
      Company, and for a period of twelve (12) months following expiration of this
      Agreement or any prior termination thereof, Employee will not, directly or
      indirectly, influence or attempt to influence any person, firm, association,
      partnership, corporation, or other entity that is a contracting party with,
      or
      known to be in negotiation with, the Company or any of its present or future
      subsidiaries or affiliates to: (i) terminate any agreement with the Company,
      except to the extent the Employee is acting on behalf of the Company in good
      faith, or (ii) hire or attempt to hire for employment any person who is employed
      by the Company, or attempt to influence any such person to terminate employment
      with the Company, except to the extent the Employee is acting on behalf of
      the
      Company in good faith.


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                AGREEMENT
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                12





4.3:
      Right to Property, Trade Secrets and Company Materials. To the extent permitted
      by law, all rights worldwide with respect to any and all intellectual or other
      property of any nature produced, created or suggested by the Employee during
      the
      Employment Term or resulting from Employee’s services shall be deemed to be a
      work made for hire and shall be the sole and exclusive property of the Company.
      Employee agrees to execute, acknowledge and deliver to Company at Company's
      request, such further documents as Company finds appropriate to evidence
      Company's rights in such property. Further, the Employee agrees that all styles,
      designs, formulae, lists, materials, books, files, reports, correspondence,
      records, and other documents (“Company Material”) used, prepared, or made
      available to the Employee, shall be and shall remain the property of the
      Company. Upon the termination of his employment or the expiration of this
      Agreement, all Company Materials shall be returned immediately to the Company,
      and the Employee shall not make or retain any copies thereof.





4.4:
      Confidential Information. During the Term of this Agreement and thereafter,
      the
      Employee shall not either directly or indirectly disclose or use any
      Confidential Information of the Company, its affiliates or subsidiaries, except
      as may be required in the course of his employment by the Company, as may be
      otherwise allowed with the written permission of the Company, its affiliates
      or
      subsidiaries, or as may be required by law; provided, however, that, if the
      Executive is required by any subpoena, court order, regulation, or law to
      disclose such information, he shall promptly notify the Company and cooperate
      with the Company in seeking a protective order or other appropriate remedy.
      “Confidential Information” shall mean information about the Company, its
      subsidiaries and affiliates, and their respective clients and customers that
      is
      not available to the general public and that was learned by the Employee in
      the
      course of his employment by the Company, including (without limitation) any
      data, formulae, information, proprietary knowledge, trade secrets and client
      and
      customer lists and all papers, resumes, records and the documents containing
      such Confidential Information. The Employee acknowledges that such Confidential
      Information is specialized, unique in nature and of great value to the Company,
      and that such information gives the Company a competitive advantage. Upon the
      expiration or termination of the Employment Term, Employee shall promptly return
      to Company all such information that exists in written or other form (and all
      copies thereof) under Employee’s control.





4.5:
      Disparaging Comments by Employee. While employed with Company, and for a period
      of twelve (12) months following expiration of this Agreement or any prior
      termination thereof, the Employee shall not publicly criticize or disparage
      the
      Company, any subsidiary, affiliate or any director, officer, executive, or
      agent
      of the Company or any subsidiary or affiliate, except as may be required by
      law.





4.6:
      Disparaging Comments by Company. While the Employee is employed with Company,
      and for a period of twelve (12) months following expiration of this Agreement
      or
      any prior termination thereof, the Company shall not issue any disparaging
      statements about the Employee.


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                AGREEMENT
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                12





4.7:
      Breach of Restrictive Covenants. Any material breach by the Employee of the
      provisions of Sections 4.1 through 4.6 (inclusive) of this Agreement shall
      relieve the Company of all obligations to make any further payments to the
      Employment pursuant to this Agreement. The Employee acknowledges that the
      restrictions contained in this Section 4 are reasonable and necessary to protect
      the legitimate interests of the Company and that any breach by the Employee
      of
      any portion of this Section 4 will result in irreparable injury to the Company.
      The Employee agrees that the Company’s remedies at law would be inadequate in
      the event of a breach or threatened breach of this Section 4 and, accordingly,
      that the Company shall be entitled, in addition to its rights at law, to
      temporary, preliminary, and permanent injunctive relief and other equitable
      relief, without the need to post a bond.





**5:
      TAXES.**





The
      Company makes no representations regarding the tax implications of the
      compensation and/or securities provided for in this Agreement. The Company
      advises the Employee to consult with a tax professional and/or their attorney
      regarding such implications and the Employee’s responsibilities regarding
      fulfillment of his taxation obligations. By accepting this offer, Employee
      acknowledge and agrees that (i) Employee shall be liable for all taxes assessed
      by any federal, state, or local authorities with respect to the compensation
      and/or securities provided herein and (ii) that the Company is authorized to
      withhold for all such customary
      withholdings and such excise or other taxes as
      is
      required by law otherwise deemed necessary by the Company.





**6:
      NAME AND LIKENESS.**





The
      Company shall have the right to use Employee’s name, refer to Employee’s prior
      professional services and Employee’s services hereunder and likeness in
      connection with its business.





**7:
      INDEMNIFICATION.**





7.1:
      Scope of Indemnification. Employee shall be indemnified and held harmless by
      the
      Company to the fullest extent permitted by law or by the Company’s bylaws or
      resolutions of the Company's Board of Directors from any claim, liability,
      loss,
      cost or expense of any nature reasonably incurred by the Employee, and not
      otherwise received by him from another source, such as insurance, by reason
      of
      the fact that he is or was a director, officer or employee of the Company or
      serving at the request of the Company as a director, officer, member, employee
      or agent of another corporation, limited liability corporation, partnership,
      joint venture, trust or other enterprise, including service with respect to
      employee benefit plans.





7.2:
      Limits on Indemnification. Notwithstanding the foregoing, the indemnification
      provided in Section 7.1 will not apply and no indemnity
      pursuant to this Agreement shall be provided by the Company :





(i)
      for
      any loss, costs, damages, and expenses arising out of or relating in any way
      to
      any employment of Employee by any former employer or the termination of any
      such
      employment;


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                AGREEMENT
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(ii) on
      account of any suit in which a final, unappealable judgment is rendered against
      Employee for an accounting of profits made from the purchase or sale by Employee
      of securities of the Company in violation of the provisions of the Securities
      Exchange Act of 1934, as amended;





(iii)
      for
      damages that have been paid directly to Employee by an insurance carrier under
      a
      policy of directors' and officers' liability insurance maintained by the
      Company;





(iv)
      with
      respect to remuneration paid to Employee if it shall be determined by a final
      judgment or other final adjudication that such remuneration was in violation
      of
      law;





(v)
      on
      account of Employee’s conduct which is finally adjudged to have been intentional
      misconduct, gross misconduct, a knowing violation of law or a transaction from
      which Employee derived an improper personal benefit; or





(vi)
      if a
      final decision by a court having jurisdiction in the matter shall determine
      that
      such indemnification is not lawful.





7.3:
      Insurance. In the same amount and to the same extent, if any, as the Company
      covers its other officers and directors, the Company shall cover the Employee
      under directors and officers liability insurance throughout the Employment
      Term.





**8:
      TERMINATION.**





8.1:
      General. Employee’s employment hereunder shall terminate upon the earlier of:
      (i) the expiration of the Employment Term, (ii) the death of Employee, (iii)
      the
      expiration of a continuous period of thirty (90) calendar days during which
      Employee is unable to perform his material duties due to physical or mental
      incapacity (during which period the Company shall continue to provide Employee
      with all participatory benefits
      previously made available to Employee and to pay Employee his Base Salary as
      set
      forth in Section 3.1; provided that the Base Salary shall be reduced by all
      amounts paid to Employee on account of disability or other insurance, worker's
      compensation, social security or other payments made to Employee arising out
      of
      his disability which in each case, where applicable, are paid under or pursuant
      to any plan or arrangement provided at the cost of the Company; and
      notwithstanding the foregoing, all such payments by the Company shall cease
      upon
      the earlier termination or expiration of this Agreement), (iv) termination
      by
      the Company due to "Just Cause," (v) termination by Employee due to a material
      breach of this Agreement by the Company ("Good Reason"), (vi) termination by
      the
      Company without just cause, or (vii) termination by Employee without Good
      Reason. The exercise of the right of the Company or Employee to terminate this
      Agreement pursuant to clauses (iv) or (v) hereof, as the case may be, shall
      not
      abrogate the rights and remedies of the terminating party in respect of the
      breach giving rise to such termination.





8.2:
      Just
      Cause. "Just cause" hereunder shall be defined and limited to mean:





(i)
      Employee’s failure or refusal, as determined by the Board in its sole
      discretion, to perform specific directives of the Board which are consistent
      with the scope and nature of Employee’s duties and responsibilities as set forth
      herein (including the duties described in Section 2), which failure or refusal
      continues after notice thereof and a reasonable time to cure;


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                AGREEMENT
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(ii)
      Employee’s conviction for a felony or any crime involving moral turpitude,
      fraud, or misrepresentation, or the presentation of proof satisfactory to the
      Board in the exercise of its reasonable judgment of Employee’s misappropriation
      or embezzlement of funds or assets from the Company;





(iii)
      any
      intentional act having the purpose and effect of injuring the reputation,
      business or business relationships of the Company in any material respect;
      and





(iv)
      any
      breach by Employee of any material provision of this Agreement, including,
      without limitation, the restrictive covenants contained in Section 4
      hereof.





8.3:
      Company Obligations Upon Termination. If Employee’s employment hereunder is
      terminated pursuant to:





(i)
      Section 8.1(i), the Company shall have no further obligations or liabilities
      hereunder, except that Employee shall be entitled to receive the cash equivalent
      of any accrued but unused vacation time and any approved unreimbursed
      expenses;





(ii)
      Section 8.1(ii), (iii), (iv) or (v), the Company shall have no further
      obligations or liabilities hereunder except that Employee shall be entitled
      to
      receive that portion of his Base Salary (as described in Section 3.1(iii))
      which
      has accrued through the effective date of such termination, the cash equivalent
      of any accrued but unused vacation time and any approved unreimbursed
      expenses.





(iii)
      Section 8.1(vi), the Employee shall continue to receive payment of his Base
      Salary as prescribed in Section 3.1(iii) for the remaining term of this
      Agreement. Employee shall also be entitled to receive reimbursement of any
      approved unreimbursed expenses accrued through the effective date of such
      termination





(iv)
      Section 8.1(vii), the Company shall have no further obligations or liabilities
      hereunder except that Employee shall be entitled to receive that portion of
      his
      Base Salary (as described in Section 3.1(iii)) which has accrued through the
      effective date of such termination as well as reimbursement for any approved
      unreimbursed expenses.





8.4:
      Effect of Termination on Securities. If Employee’s employment hereunder is
      terminated pursuant to Section 8.1(ii), (iii), (iv) or (v), the Company may,
      at
      its sole discretion, rescind any or all options which are granted hereunder
      but
      not yet vested at the time of termination.





**9:
      ASSIGNMENT.**





9.1:
      General. This Agreement is personal to each of the parties hereto. No party
      may
      assign or delegate any rights or obligations hereunder without first obtaining
      the written consent of the other party hereto, except that this Agreement shall
      be binding upon and inure to the benefit of any successor corporation to the
      Company.


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                AGREEMENT
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9.2:
      Company Successorship. The Company shall require any successor (whether direct
      or indirect, by purchase, merger, consolidation or otherwise) to all or
      substantially all of the business and/or assets of the Company to expressly
      assume and agree to perform this Agreement in the same manner and to the same
      extent that the Company would be required to perform it if no such succession
      had taken place. As used in this Agreement, “Company” shall mean the Company as
      hereinbefore defined and any successor to its business and/or assets as
      aforesaid which assumes this Agreement by operation of law, or
      otherwise.





9.3:
      Employee Sucessorship. This Agreement shall inure to the benefit of and be
      enforceable by the Employee and his personal or legal representatives,
      executors, administrators, successors, heirs, distributees, devisees and
      legatees.





**10:
      NOTICE.**





For
      the
      purpose of this Agreement, notices and all other communications provided for
      in
      this Agreement shall be in writing and shall be deemed to have been duly given
      when delivered or mailed by United States certified or registered mail, return
      receipt requested, postage prepaid, addressed to the respective addresses set
      forth below, or to such other addresses as either party may have furnished
      to
      the other in writing in accordance herewith, except that notice of a change
      of
      address shall be effective only upon actual receipt:





If
                to Company:
            If
                to Employee:Aura
                Systems, Inc.
            Joseph
                Dickman2330
                Utah Avenue
            ______________________El
                Segundo, California 90245
            ______________________Attn:
                _____________________





**11:
      AMENDMENTS OR ADDITIONS.**





No
      modification, waiver or discharge or addition made to this Agreement shall
      be
      binding unless agreed to in writing and signed by both the Employee and such
      officer(s) as may be specifically designated by the Board.





**12:
      SECTION HEADINGS.**





The
      section headings used in this Agreement are included solely for convenience
      and
      shall not affect, or be used in connection with, the interpretation of this
      Agreement.


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                AGREEMENT
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                12





**13:
      SEVERABILITY.**





The
      provisions of this Agreement shall be deemed severable and the invalidity or
      unenforceability of any provision shall not affect the validity or
      enforceability of the other provisions hereof.





**14:
      COUNTERPARTS.**





This
      Agreement may be executed in counterparts, each of which shall be deemed to
      be
      an original, but both of which together will constitute one and the same
      instrument.





**15:
      ARBITRATION.**





Any
      dispute or controversy arising under or in connection with this Agreement shall
      be settled exclusively by arbitration, conducted before a panel of three
      arbitrators in Los Angeles, California, in accordance with the rules of the
      American Arbitration Association then in effect. Judgment may be entered on
      the
      arbitrator’s award in any court having jurisdiction.





**16:
      ENTIRE AGREEMENT.**





This
      Agreement constitutes the final written expression of all terms to which the
      Company and Employee have agreed and is a complete and exclusive statement
      of
      those terms. Both the Company and Employee acknowledges that, in agreeing to
      enter into this Agreement, neither has relied on any representation, warranty,
      collateral contract or other assurance (except those set out in this Agreement
      and any documents referred to in it) made by or on behalf of any other party
      or
      any other person whatsoever before the execution of this Agreement.





**17:
      WAIVER.**





No
      waiver
      by either party hereto at any time of any breach by the other party hereto
      of,
      or compliance with, any condition or provision of this Agreement to be performed
      by such other party shall be deemed a waiver of similar or dissimilar provisions
      or conditions at the same or at any prior or subsequent time. A party’s failure
      to insist upon performance under this Agreement shall neither constitute a
      waiver of that party’s right to insist upon performance thereafter, nor a waiver
      of any rights or remedies provided under this Agreement or under
      law.





**18:
      GOVERNING LAW.**





The
      validity, interpretation, construction and performance of this Agreement shall
      be governed by the laws of the State of California without regard to its
      conflicts of law principles. In addition, this Agreement shall be subject to
      and
      in accordance with the securities laws of the United States. All references
      to
      the Compensation Committee shall be deemed also to refer to any committee of
      the
      Board however designated that performs similar functions.


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                AGREEMENT
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IN
      WITNESS WHEREOF, each of the parties hereto has executed this Agreement on
      the
      date first indicated above.





COMPANY:AURA
                SYSTEMS, INC.a
                Delaware corporationBy:Melvin
                GagermanChief
                Executive Officer/Chairman
                of the BoardEMPLOYEE:By:


JOSEPH
      DICKMAN


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                AGREEMENT
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                12





**EXHIBIT
      A**


Three-Year
      Stock Option Schedule





**Year**
            
            **Number of Vesting Options**1
                (____2008-____2009)
            
            
            150,0002
                (____2009-____2010)
            
            
            150,0003
                (____2010-____2011)
            
            
            150,000Total
            
            
            450,000





All
      options issued herein pursuant to Section 3.1(ii) shall have an expiration
      date
      of July 31, 2013.


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                AGREEMENT
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                of 12





**EXHIBIT
      B**


Bonus
      Schedule Based on Revenue and Collection Milestones








**Year**
            
            **Revenue From Sale of
                Mobile Refrigeration Systems**
            
            **Number of Options
                Granted if Revenue**
              **Met**
            
            **Date Options To Be
                Issued (if at all)**1
                __/08-__/09
            
            $
            8
                million
            
            
            50,000
            
            
            ___
                20092
                __/09-__/10
            
            $
            14
                million
            
            
            50,000
            
            
            ___
                20103
                __/10-__/11
            
            $
            20
                million
            
            
            50,000
            
            
            ___
                2011








All
      options issued herein pursuant to Section 3.3 shall have an expiration date
      of
      July 31, 2013.


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                  AGREEMENT
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