EXHIBIT 10.17

                               AGREEMENT REGARDING
                            SEPARATION OF EMPLOYMENT



================================================================================
You have  forty-five  (45) days to decide  whether or not to sign this Agreement
Regarding  Separation  of  Employment.  This  period is designed to allow you to
consult  with a  financial  advisor,  accountant,  attorney or anyone else whose
advice you need.  We encourage you to consult with one or more of these types of
experts.
================================================================================

     If after  reviewing  this document,  you choose to agree to its terms,  you
should sign in the space on page 10. Please understand that you will not receive
the benefits  identified in this agreement unless you sign this document showing
that you agree to all of the terms set forth below.

================================================================================

     After  signing this  document,  you will have seven (7) days to revoke your
decision to agree to the terms of this document.


================================================================================


================================================================================

     This Agreement Regarding Separation of Employment  ("Agreement") is entered
into as of  this  30th  day of  July,  2002  by and  between  Joshua  A.  Hauser
("Executive"),  on the one hand, and Aura Systems,  Inc., a Delaware corporation
("Company"), on the other hand (collectively, the "Parties").

                                    RECITALS

     WHEREAS,  Executive has been employed by the Company as President and Chief
Executive  Officer,  pursuant to an Offer of Employment  Letter with the Company
dated February 26, 2002 (the "Offer Letter");

     WHEREAS,   Executive  and  the  Company  wish  to   voluntarily   terminate
Executive's employment  relationship completely by mutual agreement effective as
of July 23, 2002;

     WHEREAS,  the Company and Executive has determined  that it would be in the
best interest of Executive,  the Company and its shareholders to offer Executive
the  severance  set forth  herein,  in exchange  for  covenants  and  agreements
contained  herein  and in lieu  of any  payment  Executive  would  otherwise  be
entitled to receive under the Offer Letter.

     WHEREAS,  Executive  and  the  Chairman  of the  Board  of  Directors  have
negotiated the terms and conditions of this Agreement,  which Agreement has been
approved by the Board of Directors of the Company.

<PAGE>


     NOW  THEREFORE,  in  consideration  of the  promises  and mutual  covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are expressly  acknowledged,  the Parties agree and promise
as follows:


1.   TERMINATION  OF  EXECUTIVE'S   EMPLOYMENT.
     Pursuant  to this  Agreement,  Executive's  Offer  Letter  with  Company is
terminated  effective July 23, 2002 (the "Term Date").  Executive shall continue
as an at-will  employee  of the  Company  until July 31,  2002 (the  "Separation
Date").

2.   SEVERANCE PAYMENT.
     In consideration of Executive's  covenants and agreements contained herein,
the Company shall pay Executive as a severance benefit (the "Severance Benefit")
the following:

          A.  Executive  shall remain on the  Company's  payroll  until July 31,
          2002.

          B.  Executive  shall receive the total sum of  $175,000.00  payable in
          full upon the contemplated  closing of the real estate sale lease-back
          transaction  currently in  negotiations  between the Company and third
          parties (the "Closing"). Should the Closing not occur before August 1,
          2002, then Executive shall begin receiving monthly payments of $15,000
          per  month on the  first  day of each  month  until  such  time as the
          Closing  takes  place.  The  balance  remaining  shall then be due and
          payable upon receipt by the Company of the Closing proceeds. Should at
          any time Aura fail to make a payment  under the terms of this  Section
          2, following Executive's written notice of default and a 90 day period
          to cure each breach,  if any,  Executive  shall be entitled to receive
          payment of the full base cash  compensation  as set forth in the Offer
          Letter.

          C. Medical Benefits
          Executive  shall receive  continued  medical  benefits  until the cash
          portion  set forth in Section  2(B) above is fully  paid.  The medical
          benefits  shall  be  substantially  similar  to the  medical  benefits
          Executive   received  from  the  Company  prior  to   termination   of
          employment.

          D. Limitation of Benefits
          Except  for (i) the  Severance  Benefit  and (ii)  Executive's  salary
          through  the  Separation  Date,  Executive  shall not be  entitled  to
          receive any other  compensation  or  benefits  of any sort  including,
          without  limitation,   salary,   vacation,   bonuses,  stock  options,
          short-term or long-term disability benefits,  health care coverage and
          any severance  Executive might otherwise be entitled to received under
          the Employment  Agreement from the Company,  its affiliates,  or their
          respective partners,  principals,  officers, directors,  shareholders,
          managers, employees, agents, representatives,  or insurance companies,
          or their respective  predecessors,  successors or assigns at any time.
          Executive  affirms that the amount agreed to in this Section 2 is fair
          and  reasonable  and that  Executive is entering  into this  agreement
          because it makes litigation and/or further negotiation unnecessary.

<PAGE>


3.   NO  DISPARAGEMENTS.
     Executive  and the Company  agree that  neither  Executive  nor the Company
shall  make  any  oral or  written,  public  or  private,  statements  that  are
disparaging of Executive or the Company,  its  affiliates,  or their  respective
partners, principals,  officers, directors,  shareholders,  managers, employees,
agents, representatives, or their respective predecessors, successors or assigns
at any  time;  provided,  however,  nothing  in this  Section  3 shall  preclude
Executive  or the Company  from making  truthful  factual  statements  regarding
Executive or former officers, directors or employees of the Company. The Company
shall take all reasonably  appropriate  actions to apply to its  consultants the
same provisions as set forth in this Section 3.  Notwithstanding  the foregoing,
Executive  recognizes the  difficulties if not legal  impossibility of enforcing
Executive's rights against independent contractors of the Company.

4. NON-COMPETITION.
    (A) For a period of three (3) years  from the  Separation  Date,  Executive
shall not,  directly or  indirectly,  without the prior  written  consent of the
Company, provide consultative services or otherwise provide services to (whether
as an employee or a consultant,  with or without  pay),  own,  manage,  operate,
join, control, participate in, or be connected with (as a stockholder,  partner,
or otherwise), any business,  individual,  partner, firm, corporation,  or other
entity that is a competitor of the Company,  its  subsidiaries  or affiliates in
any business  now  conducted,  or  conducted at any time through the  Separation
Date, by the Company,  its  subsidiaries  or affiliates  (each such competitor a
"Competitor of the Company").  Executive and the Company  acknowledge  and agree
that the business of the Company  extends  throughout the United States,  Europe
and Asia, and that the terms of the  non-competition  agreement set forth herein
shall apply throughout the United States, Europe and Asia.

    (B)  Non-Solicitation  of Customers  and  Suppliers.  For a period of three
years from the Separation  Date,  Executive  shall not,  directly or indirectly,
influence or attempt to influence  customers or suppliers of the Company, or any
of its subsidiaries or affiliates, to divert their business to any Competitor of
the Company.

    (C)  Non-Solicitation of Employees.  Executive recognizes that he possesses
and will possess confidential  information about other employees of the Company,
its  subsidiaries  and  affiliates,  relating  to their  education,  experience,
skills, abilities,  compensation and benefits, and inter-personal  relationships
with  customers of the  Company,  its  subsidiaries  and  affiliates.  Executive
recognizes  that the information he possesses and will possess about these other
employees is not generally  known, is of substantial  value to the Company,  its
subsidiaries  and  affiliates in developing  their  business and in securing and
retaining  customers,  and has been and will be  acquired  by him because of his
business position with the Company,  its subsidiaries and affiliates.  Executive
agrees that for a period of three (3) years from the  Separation  Date,  he will
not, directly or indirectly, solicit or recruit any employee of the Company, its
subsidiaries  and  affiliates for the purpose of being employed by him or by any
company on whose behalf he is acting as an agent, representative or employee and
that he will not convey any such confidential information or trade secrets about
other  employees of the Company,  its  subsidiaries  and affiliates to any other
person.

<PAGE>

5. RETURN OF THE COMPANY'S DOCUMENTS AND PROPERTY.

   Executive agrees to return all records, documents, proposals, notes, lists,
files  and  any  and  all  other  materials   including,   without   limitation,
computerized  and/or  electronic  information that refers,  relates or otherwise
pertains to the  Company,  its  affiliates,  and/or their  respective  partners,
principals,  officers,  directors,  shareholders,  managers,  employees, agents,
representatives,  or  insurance  companies,  or their  respective  predecessors,
successors  or assigns at any time. In addition,  Executive  shall return to the
Company all property or equipment  that he has been issued  during the course of
his  employment  or which he  otherwise  currently  possesses.  Executive  shall
deliver to the Company before the Separation Date at Executive's  expense all of
the Company's records,  documents,  proposals, notes, lists, files and materials
and  property  and  equipment  that  are in  his  possession.  Executive  is not
authorized  to retain  any  copies of any such  records,  documents,  proposals,
notes,  lists,  files or materials.  Nor is he authorized to retain any other of
the Company's property or equipment.  Executive represents to his knowledge that
Executive has complied already with this provision.

6. PROPRIETARY INFORMATION.

   Executive  acknowledges  that  Executive  has had or may have had access to
proprietary information, trade secrets, and confidential material of the Company
or its  affiliates,  including,  but not limited to, all ideas,  information and
materials,  tangible or intangible,  not generally known to the public, relating
in any manner to the business of the Company, its personnel (including partners,
principals,  employees and contractors), its clients or others with whom it does
business  that  Executive  learned,  acquired,  or created,  or helped to create
during the  period of  Executive's  employment  with the  Company  ("Proprietary
Information").  Proprietary  Information  includes,  but is not  limited to, all
trade secrets, patents and pending patents, documents, computer programs, source
code, users manuals, algorithms,  compilations of technical, financial, legal or
other  data,   client  or   prospective   client  lists,   names  of  suppliers,
specifications,  designs,  business or  marketing  plans,  forecasts,  financial
information,  work in progress,  and other  technical  or business  information.
Executive  agrees,   without  limitation  in  time  or  until  such  Proprietary
Information   shall  become  public  other  than  by  Executive's   unauthorized
disclosure,  to maintain the  confidentiality of such information and to refrain
from divulging,  disclosing or using said Proprietary  Information for any other
purpose.  Executive  acknowledges  and  affirms  that all  existing  Proprietary
Information  is the  exclusive  property  of the Company  and  Executive  hereby
assigns to the Company any and all rights the Executive may have had or acquired
(or hereinafter may have or acquire) in any Proprietary  Information.  Executive
further  acknowledges  and  agrees  that the  Company  is the sole owner of such
Proprietary  Information  and  Executive  has no  claim  of  ownership  to  such
Proprietary Information.

7. COOPERATION IN LITIGATION.
   Executive  shall cooperate with the Company,  its  affiliates,  and each of
their   respective   attorneys,   barristers,    solicitors   or   other   legal
representatives  (collectively,  "Attorneys")  in  connection  with  any  claim,
litigation,  or  judicial  or  arbitral  proceeding  which is now pending or may
hereinafter be brought against the Company or its affiliates by any third-party.
Executive's  duty of  cooperation  shall  include,  but not be  limited  to, (a)
meeting with the Company's  and/or its affiliates'  Attorneys by telephone or in
person at mutually  convenient times and places in order to state truthfully his
knowledge of matters at issue and  recollection of events;  (b) appearing at the
Company's,  its affiliates'  and/or their Attorneys' request (and, to the extent
possible,  at a time  convenient  to Executive  that does not conflict  with the
needs or requirements of his then-current  employer) as a witness at depositions
or  trials,  without  necessity  of a  subpoena,  in order  to state  truthfully
Executive's knowledge of matters at issue; and (c) signing at the Company's, its
affiliates'  and/or their  Attorneys'  request  declarations  or affidavits that
truthfully  state matters of which  Executive has knowledge.  The Company and/or
its affiliates shall promptly reimburse  Executive for his actual and reasonable
travel or other expenses that he may incur in cooperating with the Company,  its
affiliates, and/or their Attorneys pursuant to this Section 7.

8. INDEMNIFICATION.
   The Company  shall  continue  to  indemnify  Executive  for all actions and
inactions related to his service as an officer or director of the Company to the
extent such actions and  inactions  are covered by the  Company's  Directors and
Officers insurance policy as then in effect ("Indemnified Actions'') through the
expiration  of  the  applicable  statute  of  limitations.  Notwithstanding  the
foregoing,  in the event such Indemnified  Actions result from Executive's gross
negligence or willful misconduct, the indemnification hereunder shall not apply.

9. COMPANY'S RELEASE OF CLAIMS.
   The Company does hereby fully and forever  release and discharge  Executive
of and  from  any and  all  claims,  demands,  causes  of  action,  charges  and
grievances,  of whatever kind or nature, whether known or unknown,  suspected or
unsuspected,  which the Company now owns or holds or has at any time before this
date owned or held against Executive, including, but not limited to, any and all
claims,  demands,  causes of action,  charges,  and grievances which are alleged
about,  set  forth  in,  arise  out of,  or are in any way  connected  with  any
transactions,  occurrences,  acts or omissions  concerning  any loss,  damage or
injury whatsoever resulting from any act committed or omission made prior to the
date of this Agreement;  or which are alleged about, set forth in, arise out of,
or are in any way  connected  with  Executive's  job  duties  in the  course  of
employment  with  the  Company  including,   but  not  limited  to,  Executive's
responsibilities.

10. EXECUTIVE'S RELEASE OF CLAIMS.
    Executive  making  this  release  on behalf of  Executive  and  Executive's
descendants,    spouse,    dependents,    and   Executive's   executor,   heirs,
administrators, assigns and anyone else claiming by, through or under Executive.
In exchange for the consideration  provided to Executive in Section 2, Executive
agrees to waive and  release  any claims of any kind that  Executive  has or may
have  against  the  Company,  and  any of the  members,  parents,  subsidiaries,
affiliates,   predecessors,   successors,   purchasers,   acquirers,  directors,
shareholders,   partners,   officers,   agents,  owners,  attorneys,   servants,
employees, trustees, plan administrators, fiduciaries, representatives, assigns,
past and/or  present,  of the  Company,  and each and all of them,  collectively
referred to as "Employer Releasees".

     This is a full release,  discharge and covenant not to sue and is effective
with respect to all claims, known or unknown,  which Executive ever had, now has
or may hereafter claim to have had,  against the Employer  Releasees,  including
but  not  limited  to (1)  Executive's  employment  with  the  Company,  (2) the
termination of that employment, (3) the design or administration of any employee
Benefit  Program,  (4) any rights  Executive may have to unpaid  bonuses  and/or
stock options, (5) any severance  obligation,  contract obligation and/or pay in
lieu of notice obligation. Without limiting the generality of the description in
the subparagraph above, the claims herein released include,  but are not limited
to,  claims based upon:  i)  Violations  of Title VII of the Civil Rights Act of
1964;

     ii) The Age Discrimination in Employment Act;

     iii) California  statutory or decisional law, including the California Fair
     Employment  and  Housing  Act,  pertaining  to  employment  discrimination,
     wrongful discharge or breach of public policy;

     iv) Any and all  State,  Federal  and local  laws as well as common law for
     breach  of  contract,  wrongful  termination,   employment  discrimination,
     alleged physical or personal injury, negligent or intentional infliction of
     emotional  distress,   defamation,   fraud,  concealment,   false  promise,
     negligent  misrepresentation,  intentional  interference  with  contractual
     relations,  breach of the  covenant  of good  faith and fair  dealing,  and
     misrepresentation generally; and

     v) The Employee Retirement Income Security Act.

          Executive hereby agrees that no action, suit or proceeding has been or
     shall be  brought or  complaint  filed or  initiated  by  Executive  or any
     executor,  heir, administrator or assign of Executive in any court, or with
     any governmental  body or commission with respect to any matter or cause of
     action based upon any facts that might have  occurred  prior to the date of
     this  Agreement  whether  known to Executive now or discovered by Executive
     hereafter.

          WAIVER OF SECTION 1542 RIGHTS.  Executive  expressly waives all rights
     related to Executive's  employment  under Section 1542 of the Civil Code of
     the State of California (or any similar provision of other applicable law),
     which reads as follows:

          "A general  release does not extend to claims which the creditor  does
     not know or  suspect  to exist in his  favor at the time of  executing  the
     release, which if known by him must have materially affected his settlement
     with the debtor."

          Executive  acknowledges  that  Executive  may have  claims  which  are
     covered  by the  terms  of  this  Agreement  which  Executive  has  not yet
     discovered.  Executive  acknowledges  that Executive intends to release any
     and all such  unknown or  unsuspected  claims.  Executive  understands  and
     agrees that Executive:

          i) has been  accorded  forty-five  (45) days within  which to consider
          this Agreement before executing it.

          ii) has carefully  read and fully  understand all of the provisions of
          this Agreement

          iii) is, through this Agreement, releasing the Employer Releasees from
          any and all claims Executive may have against them/

          iv) knowingly and voluntarily  agrees to all of the terms set forth in
          this Agreement.

          v) knowingly and voluntarily intends to be legally bound by the same.

          vi) was advised and hereby is advised in writing to consider the terms
          of this Agreement and consult with an attorney of  Executive's  choice
          prior to executing this Agreement.

          vii) understands that rights or claims under the Age Discrimination in
          Employment Act of 1967 (29 U.S.C.  621, et seq.) that may arise after
          the date this Agreement is executed are not waived.

          viii) understands that this Agreement does not prohibit Executive from
          filing a charge or complaint, including a challenge to the validity of
          this  Agreement,   with  the  EEOC  or  from   participating   in  any
          investigation or proceeding conducted by the EEOC.


11. NO ADMISSION OF LIABILITY.
    Executive  agrees that this Agreement and the payment by the Company of the
consideration  described in Section 2 is not an admission by Employer  Releasees
of any  wrongdoing  or  liability.  Employer  Releasees  specifically  deny  any
liability or wrongful acts against Executive. The parties have entered into this
Agreement in order to settle all disputes and differences  between them, without
admitting liability or wrongdoing by any party

12. ARBITRATION.
    Except as otherwise set forth in this Agreement, any dispute or controversy
between Executive,  on the one hand, and any Employer Releasee on the other hand
in any way arising out of, related to, or connected with this Agreement shall be
resolved  through  final  and  binding  arbitration.  MATTERS  COVERED  BY  THIS
AGREEMENT  WILL  NOT  BE  SUBJECT  TO  TRIAL  BY  JURY  OR  BY A  COURT  OF  ANY
JURISDICTION.

     Any demand for  arbitration  shall be made in writing to the other party or
parties to the Arbitration  within the statute of limitations that is applicable
to the  claim(s)  upon  which  arbitration  is  sought.  Any  failure  to demand
arbitration  within this time frame shall  constitute  a waiver of all rights to
raise any claims in any forum  arising  out of any  dispute  that was subject to
arbitration.  The Request For Arbitration  shall,  unless otherwise  required by
law,  clearly state "Request for Arbitration" at the beginning of the first page
and include the following information:

     1. A factual  description of the dispute in sufficient detail to advise the
     responding party of the nature of the dispute;

     2. The date when the dispute first arose;

     3. The names,  work  locations and telephone  numbers of any  co-workers or
     supervisors with knowledge of the dispute; and

     4. The relief requested by the requesting party.

     The party to whom the Request For  Arbitration  is  directed  will  respond
within  thirty  (30) days so that the parties to the  Arbitration  can begin the
process of selecting an Arbitrator. Such response may include any counterclaims.

     All disputes will be resolved by a single  Arbitrator.  The Arbitrator will
be mutually selected by the parties.

     Except as provided herein, the arbitration shall be conducted in accordance
with the then-existing  National Rules for the Resolution of Employment Disputes
of the American Arbitration Association;  provided, however, that the Arbitrator
shall allow the discovery  authorized by the Federal Rules of Civil Procedure or
any other discovery required by applicable state law in arbitration proceedings,
such as under the  California  Arbitration  Act. Also, to the extent that any of
the National Rules for the Resolution of Employment Disputes or anything in this
Agreement conflicts with any arbitration  procedures required by applicable law,
the arbitration  procedures  required by applicable law shall govern. It is also
agreed that nothing in this Agreement relieves any party to the Arbitration from
any obligation to exhaust certain administrative remedies before arbitrating any
claims or disputes under this Agreement.

     The  Arbitrator  shall issue a written  award that sets forth the essential
findings and conclusions on which the award is based.  The Arbitrator shall have
the authority only to determine the issue(s) submitted to him/her.  The issue(s)
must be identifiable in the "Request For Arbitration" or counterclaim(s). Except
as required by law, any  issue(s) not  identifiable  in those  documents  is/are
outside the scope of the Arbitrator's  jurisdiction and any award involving such
issues(s),  upon motion by a party,  shall be vacated.  The  Arbitrator's  award
shall be subject to correction,  confirmation,  or vacation,  as provided by any
applicable  law setting  forth the  standard of judicial  review of  arbitration
awards.

     Any arbitration shall take place in the County of Los Angeles, California.

     This Agreement and its validity,  construction and performance,  as well as
disputes  and/or  claims  arising  under this  Agreement  shall be  governed  by
applicable  federal  law or  the  California  Arbitration  Act,  whichever  more
comprehensively provides for the enforcement of this Agreement.

     Employer  Releasee(s)  will bear the arbitrator's fee and any other type of
expense or cost that  Executive  would not be required to bear if Executive were
free to bring the dispute or claim in court as well as any other expense or cost
that is unique to arbitration. Employer Releasee(s) and Executive shall each pay
their own attorneys'  fees incurred in connection  with the  Arbitration and the
Arbitrator will not have authority to award  attorneys' fees unless a statute or
contract at issue in the dispute  authorizes the award of attorneys' fees to the
prevailing party, in which case, the arbitrator shall have the authority to make
an award of attorneys' fees as required or permitted by applicable law. If there
is a dispute as to whether  Employer  Releasee(s) or Executive is the prevailing
party in the arbitration, the Arbitrator will decide this issue.

     Except  as may be  necessary  to enter  judgment  upon the  award or to the
extent  required  by  applicable  law,  all  claims,  defenses  and  proceedings
(including,  without  limited the generality of the foregoing,  the existence of
the controversy and the fact that there is an arbitration  proceeding)  shall be
treated  in a  confidential  manner by the  arbitrator,  the  parties  and their
counsel, and each of their agents, and employees and all others acting on behalf
or in concert  with them.  Any court  proceedings  relating  to the  arbitration
hereunder,  including,  without  limiting the  generality of the  foregoing,  to
prevent  or compel  arbitration  or to  confirm,  correct,  vacate or  otherwise
enforce an  arbitration  award shall be filed under seal with the court,  to the
extent permitted by law. 13.

13. BINDING EFFECT.
    This  Agreement  shall be binding  upon the  Parties  and their  respective
heirs, administrators,  representatives,  executors, successors and assigns, and
shall  inure  to  the  benefit  of  the  Parties  and  their  respective  heirs,
administrators, representatives, executors, successors and assigns.

14. REVOCATION.
    Executive understands that Executive may revoke this Agreement for a period
of seven (7) days following its execution by Executive.  Said revocation must be
in writing, must specifically revoke this Agreement, and must be received by the
Company or its  designated  representative,  prior to the end of the seventh day
following my execution of this  Agreement.  Upon expiration of the seven (7) day
period, this Agreement becomes effective, enforceable and irrevocable.

15. ATTORNEY'S FEES.
    Each party shall bear its own costs and attorney's fees in this matter.

16. VOLUNTARY AGREEMENT.
    Executive hereby acknowledges that Executive has been provided a forty-five
(45) day period to consider this Agreement and consult with counsel and that the
Company has encouraged  Executive to do so. Executive further  acknowledges that
Executive has read this Agreement and fully know,  understand and appreciate the
contents  and  effects  thereof,  and that  Executive  executes  this  Agreement
voluntarily and of Executive's own free will and accord. To the extent Executive
has taken less than  forty-five  (45) days to consider this  Agreement  prior to
execution, Executive acknowledges that Executive had sufficient time to consider
the  Agreement  and to consult with counsel and that  Executive  does not desire
additional time. Furthermore, Executive does so without any coercion of any kind
by the Company or Releasee.

17. SEVERABILITY.
    While the  provisions  contained in this  Agreement  are  considered by the
Parties  to be  reasonable  in all  circumstances,  it is  recognized  that some
provisions may fail for technical reasons.  Accordingly, it is hereby agreed and
declared that if any one or more of such provisions  shall,  either by itself or
themselves or taken with others,  be adjudged to be invalid as exceeding what is
reasonable  in all  circumstances  for the  protection  of the  interests of the
Company,  but would be valid if any particular  restrictions  or provisions were
deleted  or  restricted  or  limited  in a  particular  manner,  then  the  said
provisions  shall  apply  with any such  deletions,  restrictions,  limitations,
reductions,  curtailments,  or  modifications  as may be  necessary to make them
valid and effective and the remaining provisions shall be unaffected thereby.

18. ENTIRE AGREEMENT; MODIFICATION.
    This Agreement  constitutes the entire  understanding among the Parties and
may not be modified  without the express  written  consent of the Parties.  This
Agreement  supersedes all prior written and/or oral and all contemporaneous oral
agreements, understandings and negotiations regarding the subject matter hereof.
Notwithstanding the foregoing,  the provisions of the Employment Agreement shall
remain in effect, except as otherwise modified herein.

19. GOVERNING LAW.
    This Agreement shall be governed by and construed and enforced  pursuant to
the laws of the State of California applicable to contracts made and entirely to
be  performed  therein.  20. RULE OF  INTERPRETATION.  This  Agreement  shall be
interpreted  in accordance  with the plain meaning of its terms and not strictly
for or against any party to this Agreement.

     IN WITNESS  WHEREOF,  the Parties  have set their hand as of the date first
written above.



     I HEREBY AGREE TO THE TERMS AND  CONDITIONS  OF THE  FOREGOING  AGREEMENT
REGARDING SEPARATION OF EMPLOYMENT.


EXECUTIVE:


____________________________________




AURA SYSTEMS, INC.


By:    _________________________________

Its:   _________________________________