EXHIBIT 10.27

                            CONVERTIBLE DEMAND NOTE

                   THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
                 SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
                  BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF
                EXCEPT WHILE SUCH A REGISTRATION IS IN EFFECT OR
                   PURSUANT TO AN EXEMPTION FROM REGISTRATION
                                 UNDER SAID ACT

                               AURA SYSTEMS, INC.
                                 as the Borrower

$60,000.00                                               El Segundo, California
                                                              February 24, 2003


     FOR VALUE  RECEIVED,  the  undersigned,  AURA  SYSTEMS,  INC.,  a  Delaware
corporation (herein called the "Borrower"), whose principal office is located at
2335 Alaska  Avenue,  El  Segundo,  California  90245,  hereby  irrevocably  and
unconditionally  promises  to  pay  to the  order  of  ARIES  GROUP,  LTD.  (the
"Holder"),  at 12100  Wilshire  Boulevard,  Suite 705, Los  Angeles,  California
90025,  or to its  successors  and  registered  assigns,  in lawful money of the
United States of America,  in immediately  available funds, the principal sum of
Sixty Thousand Dollars ($60,000.00) plus all accrued and unpaid interest, all on
demand,  but in no event later than May 31,  2003.  Interest  payable  hereunder
shall  be  calculated  at the  rate of five  percent  (5.00%)  per  annum on the
principal  amount  outstanding  on the  basis of a 360-day  year and the  actual
number of days elapsed.  Accrued but unpaid interest shall be payable,  in cash,
on May 31, 2003.

     All amounts due hereunder  shall be paid to the Holder in U.S.  Dollars and
in  immediately  available  funds before 1:00 p.m., Los Angeles time, on demand,
or, if later, on the due date, May 31, 2003, at:

                  Bank:                     US Bank
                  ABA Number:               122235821
                  Credit:                   Aries Group, Ltd.
                  Account Number:   153492113995

or as otherwise directed in writing by the Holder.

     This Note is issued in conjunction  with the letter agreement dated January
27, 2003 which  contemplated  funding from  investors  represented  by Holder as
their agent (the  "Investors")  to be used to retire  certain debts of Borrower.
Per the terms of that  agreement,  the  Investors  and Borrower have agreed that
this Note shall be converted  into shares of Borrower's  Convertible  Redeemable
Preferred  Stock  ("Preferred  Stock")  with  each  dollar  of this  Note  being
converted into $2.20 of Preferred Stock.

     In the event that any amount of  principal  of or  interest on this Note is
not paid when due, then interest on any such past due amount shall be payable at
a rate per annum equal to the  greater of the  following:  (i)  fifteen  percent
(15%), or (ii) the rate announced by Citibank,  N.A., New York branch, as of the
relevant date as "prime" plus five percent (5%).

     Upon the  occurrence  of any  default or breach by the  Borrower  under the
Note, the entire principal amount hereof and the interest thereon to the date of
payment shall become immediately due and payable without further notice, and the
Borrower hereby waives all rights to notice and presentment.

     The Borrower  hereby waives  diligence,  presentment,  demand,  protest and
notice of every  kind,  and  warrants  to the  Holder of this Note  that,  as to
itself,  all actions and  approvals  required for the  execution and delivery of
this  Note as the  legal,  valid  and  binding  obligation  of the  undersigned,
enforceable  in  accordance  with the terms  hereof,  have  been duly  taken and
obtained.  The  non-exercise by the Holder of any of its rights hereunder in any
particular  instance  shall  not  constitute  a  waiver  thereof  in that or any
subsequent  instance.  A manually  signed copy of this Note shall be evidence of
the  rights of the Holder of this  Note.  This Note  shall be  binding  upon the
Borrower and its  successors  and assigns and inure to the benefit of the holder
of this Note and its successors and permitted assigns.

I.       REPRESENTATIONS AND WARRANTIES

          A. Borrower represents and warrants to the Holder that:

               (i)  Borrower has all requisite  corporate power and authority to
                    deliver and perform its obligations under this Note.

               (ii) The execution, delivery, and performance by Borrower of this
                    Note has been duly  authorized  by all  necessary  corporate
                    action of Borrower and does not and will not  (A) contravene
                    the terms of the Certificate of  Incorporation  or Bylaws of
                    Borrower  or result in a breach of or  constitute  a default
                    under any indenture or loan or credit agreement or any other
                    agreement, lease, or instrument to which Borrower is a party
                    or by which it or its assets may be bound or  affected,  (B)
                    violate any provision of any law, rule,  regulation,  order,
                    writ,  judgment,   injunction,  decree  or  like  instrument
                    binding  on or  affecting  Borrower,  or (C)  result  in, or
                    require, the creation or imposition of any lien upon or with
                    respect to any of the assets of Borrower.

               (iii)This  Note   constitutes   a  legal,   valid,   and  binding
                    obligation  of  Borrower,  enforceable  against  Borrower in
                    accordance with its terms.

               (iv) No authorization,  consent, approval, license, exemption of,
                    or filing or registration with, any governmental  authority,
                    or approval or consent of any other person,  is required for
                    the due execution,  delivery,  or performance by Borrower of
                    this  Note,  except  for the  filing of the  Certificate  of
                    Designation  attached hereto with the Delaware  Secretary of
                    State.

               (v)  Borrower has a pre-existing relationship with Holder and, by
                    reason of its business and  financial  experience,  Borrower
                    has the capacity to protect its own  interests in connection
                    with the Note and related transactions.


          B. Holder represents and warrants to Borrower that:

               (i)  Holder is acquiring  the shares (the  "Securities")  for its
                    own account, for investment and not with a view to resale or
                    distribution.  Holder has not offered or sold any portion of
                    its Securities and has no present  intention of dividing its
                    Securities with any third party or of reselling or otherwise
                    disposing of any portion  thereof either  currently or after
                    the  passage  of a fixed or  determinable  period of time or
                    upon the occurrence of  non-occurrence  of any predetermined
                    event or circumstance.

               (ii) Holder is aware that the Securities are speculative and that
                    it may lose its entire  investment and it can afford to bear
                    the risks of an investment in Borrower's company ("Borrower"
                    or the  "Company"),  including the risk of losing its entire
                    investment.

               (iii) Holder:

                    (a)  Has been provided an opportunity to obtain  information
                         concerning the Company and any other  relevant  matters
                         as Holder has requested; and

                    (b)  Has been given the  opportunity to ask questions of and
                         receive   answers  from  the  Company   concerning  the
                         Securities.

               (iv) Holder is aware that it must bear the  economic  risk of its
                    investment in the  Securities  for an  indefinite  period of
                    time because:  (1) the Securities  have not been  registered
                    under the Securities Act of 1933, as amended (the "Act"), or
                    qualified under the California  Corporate  Securities Law of
                    1968 or any  other  state  securities  laws,  and  therefore
                    cannot be sold,  assigned  or  otherwise  disposed of unless
                    appropriate    exemptions   from   such    registration   or
                    qualification  requirements are available; (2) Borrower will
                    place a legend on the certificates evidencing the Securities
                    (unless  and until a  Registration  Statement  covering  the
                    Securities is in effect)  stating that the  Securities  have
                    not been  registered  under the Act or any state  securities
                    laws and setting forth the  limitations on resale  contained
                    above and Borrower  will also require that its registrar and
                    transfer agent make a notation of such  restrictions  in its
                    appropriate  records  and (3) there is no public  market for
                    Preferred Shares. Holder further understands and agrees that
                    the  Borrower  will not honor any attempt by Holder to sell,
                    transfer  of  otherwise  dispose  of the  Securities  in the
                    absence of either an effective  Registration  Statement  and
                    qualification  under  applicable Blue Sky laws or exemptions
                    therefrom.

               (v)  Holder  acknowledges  that a legend  will be  placed  on any
                    certificates or instruments evidencing the Securities for as
                    long as  necessary  to  comply  with the Act and  applicable
                    state securities laws.

               (vi) Holder is an  "accredited  investor" as such term is defined
                    in Regulation D under the Act. Holder is  knowledgeable  and
                    experienced  with  respect to  investment  matters such as a
                    proposed  purchase of Securities.  Holder has such knowledge
                    and  experience in business and  financial  matters as to be
                    capable  of   evaluating   the  merits  and  risks  of  this
                    investment and has the capacity to protect its own interests
                    in connection with this investment.

               (vii)Holder has  decided to acquire the  Securities  on the basis
                    of its own  independent  investigation  and has relied on no
                    oral  statements,   representations  or  warranties  of  the
                    Company,  including its agents, consultants or employees, as
                    to the quality of the investment in the Securities.

               (viii) Holder  shall be entitled to  registration  rights for the
                    resale  of the  Securities  on the  terms  set  forth in the
                    Company's Certificate of Designation as filed with the State
                    of Delaware  and subject to the letter  agreement  set forth
                    above.

               (ix) In the event of a stock split,  reverse stock split or other
                    recapitalization,  appropriate  adjustments shall be made in
                    the  number of  shares  and/or  per share  price in order to
                    effect the intent and purpose of the applicable provisions

iI. Miscellaneous

          Notices. Notice to Holder shall be deemed to be provided on the day it
     is posted by email,  fax and overnight mail to the Holder's address on file
     with Borrower.  Holder shall use its best efforts to insure Holder actually
     receives on a timely basis any notice provided hereunder.

          Successors and Assigns. The rights and obligations of Borrower and the
     Holder of this Note shall be binding  upon and inure to the  benefit of the
     successors, assigns and transferees of the parties.

          Waiver  and  Amendment.  Any  provision  of this Note may be  amended,
     waived or modified upon the written consent of Borrower and the Holder.

          Assignment  by  Borrower.  Neither  this  Note nor any of the  rights,
     interests or obligations  hereunder may be assigned, by operation of law or
     otherwise,  in whole or in part,  by  Borrower,  without the prior  written
     consent of the Holder.

          Expenses;  Waivers.  If Borrower  defaults in the  performance  of its
     obligations under this Note, then Borrower shall pay all costs and expenses
     incurred by Holder in connection with the collection of amounts due and the
     enforcement of Holder's rights  hereunder and under the Security  Agreement
     including, without limitation, reasonable attorneys' fees and costs.

          Consent to Jurisdiction.  Borrower hereby  irrevocably  submits to the
     non-exclusive  jurisdiction  of the state and federal courts in and for the
     County of Los Angeles,  California, for the purposes of any suit, action or
     proceeding  arising out of or relating to this Note and hereby waives,  and
     agrees not to assert in any such suit,  action,  or  proceeding,  any claim
     that it is not personally subject to the jurisdiction of such courts,  that
     the suit, action or proceeding is brought in an inconvenient forum, or that
     the venue of the suit, action or proceeding is improper.  Borrower consents
     to process  being  served in any suit,  action or  proceeding  by overnight
     mail, next business day delivery,  by a commercially  recognized  overnight
     mail  delivery  service,  of a copy  thereof to Borrower at the address set
     forth on the first page of this Note, and Borrower agrees that such service
     shall constitute good and sufficient service of process and notice thereof.
     Nothing in this paragraph  shall affect or limit any right to serve process
     in any other matter permitted by law.

          No Impairment. Borrower will not avoid or seek to avoid the observance
     or performance of any of the terms to be observed or performed hereunder by
     Borrower,  but will at all times in good faith carry out the  provisions of
     this Note.

          Governing  Law.  This Note shall in all  respects be governed  by, and
     construed in accordance with, the laws of the State of California including
     all matters of construction, validity and performance, without reference to
     principles of conflicts of law.

          IN WITNESS  WHEREOF,  the  Borrower  has  caused  this Note to be duly
     executed by a duly  authorized  officer on the day and the year first above
     written.


                               AURA SYSTEMS, INC.



                       By:   /s/ David A. Rescino
                             --------------------
                             Name: David A. Rescino
                             Title: Senior VP / CFO