Exhibit "A"

                                ESCROW AGREEMENT

         This ESCROW  AGREEMENT (the  "Agreement")  is made as of the 6th day of
March, 2000, by and among Aura Systems, Inc. (the "Company"), Guzik & Associates
(the  "Escrow  Agent"),  located at 1800 Century  Park East,  Fifth  Floor,  Los
Angeles, CA 90067-1501 and The Isosceles Fund Limited ("ISOSCELES"),  located at
Bahamas  Financial  Center,  3rd Floor,  Shirley &  Charlotte  Streets,  Nassau,
Bahamas with reference to the following facts:

                              W I T N E S S E T H:

         WHEREAS,  the Company has previously  issued to ISOSCELES a Convertible
Note dated October 27, 1998, in the original principal amount of $1,000,000 (the
"Convertible  Note") pursuant to a certain Securities Purchase Agreement between
ISOSCELES  and  the  Company  dated  as of  October  27,  1998,  (the  "Purchase
Agreement"), which Convertible Note is presently owned by ISOSCELES; and

         WHEREAS, the obligations of the Company under the Note are secured by a
certain Security Agreement dated as of October 27, 1998; and

         WHEREAS,  ISOCELES  and the  Company  have  entered  into a  Settlement
Agreement and Release of Claims dated as of March 6, 2000, as  supplemented by a
certain Addendum to Settlement Agreement and Release of Claims dated as of March
6, 2000 (the Settlement Agreement, as supplemented, is referred to herein as the
"Settlement  Agreement"),  in order to provide for (1) the issuance to ISOSCELES
of  Three  Million  (3,000,000)  shares  of  the  Company's  Common  Stock  (the
"Conversion Shares") pursuant to the Convertible Note, (iii) the issuance by the
Company  to  ISOSCELES  of a warrant  entitling  ISOSCELES  from time to time to
purchase  Thousand  (50,000) shares of the Company's Common Stock at an exercise
price of $0.375 per share (the  "Settlement  Warrants"),  (iv) the surrender and
cancellation  of the  Convertible  Note,  (iv) the release by ISOSCELES  and the
Company of claims  against  each other,  including  all rights under the 400,000
Warrants issued by the Company in October 1998 (the "Note Warrants"); and

         WHEREAS,   pursuant  to  the   Settlement   Agreement   and  a  certain
Subscription Agreements ISOSCELES has agreed to purchase an aggregate of 150,000
restricted  shares of the Company's Common Stock (the  "Restricted  Shares") for
the aggregate consideration of $300,000; and

                  WHEREAS,  in order to  implement  the terms of the  Settlement
Agreement  and the  Subscription  Agreement  the parties are entering  into this
Escrow  Agreement (the "Escrow  Agreement")  with Guzik & Associates,  as escrow
agent  ("Escrow  Agent") to  facilitate  the  consummation  of the  transactions
contemplated by this Agreement and the Subscription Agreement.

         NOW,  THEREFORE,  in consideration of the mutual covenants and promises
herein contained and other good and valuable consideration,  receipt of which is
hereby acknowledged, it is hereby agreed by and between the parties as follows:

                  NOW, THEREFORE, the parties hereto hereby agree as follows:

         1. The Company and ISOSCELES hereby severally  appoint the Escrow Agent
as escrow agent,  and the Escrow Agent hereby accepts such  appointment  for the
purpose and on the terms and conditions set forth in this Escrow Agreement.

2. The Escrow Agent will accept from ISOSCELES the Escrow Funds representing the
subscription amount for the Restricted Shares, and will accept the documents and
certificates enumerated in Section 3(i)-(vi) below.

3. The Company and ISOSCELES hereby instruct the Escrow Agent as follows: On the
Closing Date the Escrow Agent shall:

(i) release payment of the $300,000 of  Subscription  proceeds to the Company or
as otherwise directed by the Company;

(ii) deliver to ISOSCELES a certificate  evidencing  150,000  Restricted Shares,
respectively;

(iii) deliver to ISOSCELES a  certificate  evidencing  the 3,000,000  Conversion
Shares,

(iv) deliver to ISOSCELES a legal opinion from the Company's counsel in the form
of Exhibit B attached hereto;

(v) deliver to ISOSCELES  certificates  evidencing 50,000  Settlement  Warrants,
respectively;

(vi)              deliver to the Company a letter from  ISOSCELES  stating  that
                  the  Convertible   Note  and  the  Note  Warrants  were  never
                  delivered to ISOSCELES,

(vii)             deliver to the Company executed UCC-2  Termination  Statements
                  to be furnished by ISOSCELES to Escrow Agent.

         The  Closing  Date  shall be deemed to occur upon  satisfaction  of the
following conditions:

                  (a)  Escrow   Agent   shall  have   received   duly   executed
         counterparts of this Agreement from the Company and ISOSCELES and shall
         have received duly executed counterparts of the Subscription Agreement,

                  (b)  Escrow  Agent  shall  have  received  each  of the  items
         enumerated in Paragraph 3(i)-(vii) inclusive.

         If the Closing Date shall not have occurred for any reason by March 17,
2000, the Escrow Agent shall return  Subscriptions  proceeds,  certificates  and
documents to the person furnishing such items to Escrow Agent.


          4. It is  understood  and agreed by the parties to this  Agreement  as
     follows:

                  (a) The  Escrow  Agent is not and  shall not be deemed to be a
         trustee  for any  party  for any  purpose  and is  merely  acting  as a
         depository  and in a ministerial  capacity  hereunder  with the limited
         duties herein prescribed.

                  (b) The Escrow  Agent does not have and shall not be deemed to
         have any  responsibility in respect of any instruction,  certificate or
         notice  delivered  to  it  other  than  faithfully  to  carry  out  the
         obligations  undertaken in this  Agreement and to follow the directions
         in such  instruction  or notice  provided in accordance  with the terms
         hereof.

                  (c) The  Escrow  Agent is not and  shall  not be  deemed to be
         liable for any action taken or omitted by it in good faith and any rely
         upon,  and act in accordance  with,  the advice of its counsel  without
         liability  on its part for any action  taken or  omitted in  accordance
         with such  advice.  In any  event,  its  liability  hereunder  shall be
         limited to liability for gross  negligence,  willful  misconduct or bad
         faith on its part.

                  (d) The  Escrow  Agent may  conclusively  rely upon and act in
         accordance with any certificate,  instruction notice, letter, telegram,
         cablegram,  fax transmission or other written instrument believed by it
         to be genuine and signed by the Company and ISOSCELES.

                  (e)  The  Company  and  ISOSCELES   agree  to  save  harmless,
         indemnify  and defend the Escrow Agent for,  from and against any loss,
         damage,  liability,  judgment,  cost and expense whatsoever,  including
         attorney's fees, suffered or incurred by it by reason of, or on account
         of, any misrepresentation made to it or as to its status for activities
         as Escrow  Agent  under this  Agreement  except  for any loss,  damage,
         liability,  judgment,  cost or expense resulting from gross negligence,
         willful misconduct or bad faith on the part of the Escrow Agent.

                  (f) The Escrow Agent shall not be required to defend any legal
         proceeding which may be instituted against it in respect of the subject
         matter of this  Agreement.  If any such legal  proceeding is instituted
         against  it, the Escrow  Agent  agrees  promptly to give notice of such
         proceeding to the Company and ISOSCELES.  The Escrow Agent shall not be
         required  to  institute  legal  proceedings  of  any  kind.  Any  legal
         proceedings  arising out of or  relating to the subject  matter of this
         Agreement shall be brought in a court of competent  jurisdiction in Los
         Angeles County, California, U.S.A.

                  (g) The Escrow  Agent  shall not, by act,  delay,  omission or
         otherwise,  be  deemed to have  waived  any right or remedy it may have
         either  under this  Agreement  or  generally,  unless such waiver be in
         writing,  and no waiver shall be valid unless it is in writing,  signed
         by the Escrow  Agent,  and only to the  extent  expressly  therein  set
         forth.  A waiver by the Escrow Agent under the terms of this  Agreement
         shall not be construed as a bar to, or waiver of, the same or any other
         such  right  or  remedy  which  it would  otherwise  have on any  other
         occasion.

                  (h) The Escrow  Agent may refrain from taking any action other
than keeping all property held by it in Escrow if it is uncertain concerning its
duties or rights under this Escrow  Agreement or receives claims or demands from
any  person or entity  or  receives  a final  judgment  by a court of  competent
jurisdiction if it deems that necessary or advisable.

                         (i) The parties acknowledge and agree that Escrow Agent
is acting as legal counsel
to the  Company in this  transaction  and  expects to  continue  to act as legal
counsel for the Company in the future.  ISOSCELES  acknowledges  that the Escrow
Agent shall have no duty or obligation to disclose any information to any party,
it being understood that Escrow Agent's duties are ministerial in nature only.

         5.  Communication  to and from the Escrow  Agent shall be  delivered by
messenger or forwarded by facsimile  transmission,  regular,  or certified mail,
and shall be effective when received.

         6. The Escrow Agent's  obligations  under this Escrow  Agreement  shall
terminate  on the date it shall no longer  hold any of the funds,  documents  or
instruments delivered in escrow pursuant to the terms of this Agreement.

         7.  This  Escrow  Agreement  shall  be  governed  by and  construed  in
accordance with the laws of the State of California.

         8. This Escrow  Agreement  may be executed in several  counterparts  by
facsimile  signature,  each of which shall be  original,  and such  counterparts
shall together constitute but on and the same instrument.



<PAGE>


         IN  WITNESS  WHEREOF,  each of the  parties  hereto has  executed  this
Agreement effective as of the date and year first written above.



                         AURA SYSTEMS, INC.



                         By:
                         Title:


      Escrow Agent:

                         Guzik & Associates



                         By:
Samuel S. Guzik



                         THE ISOSCELES FUND LIMITED

                         By___________________________________
                         Title:_________________________________












                                   EXHIBIT "B"

The Isosceles Fund Limited

Bahamas Financial Centre

3rd Floor, Shirley & Charlotte Streets

Nassau, Bahamas

March [__] 2000

Ladies and Gentlemen,

         We have acted as Counsel to Aura Systems  Inc., a Delaware  Corporation
(the  "Company"),  in  connection  with the issuance of 3,000,000  shares of the
Company's Common Stock under a certain Convertible Note dated October 27, 1998.

         In so  acting  we have  examined  originals  or  copies,  certified  or
otherwise identified to our satisfaction, of such corporate records, agreements,
documents, and other instruments,  and such certificates or comparable documents
of public officials and of officers and representatives of the Company, and have
made such  enquiries of such officers and  representatives  of the Company as we
have deemed  relevant and necessary as a basis for the opinions  hereinafter set
forth.

         In such examination, we have assumed the genuineness of all signatures,
the legal  capacity  of  natural  persons,  the  authenticity  of all  documents
submitted  to us as  originals,  the  conformity  to original  documents  of all
documents  submitted to us as certifies or photo static and the  authenticity of
the originals of such latter documents. As to questions of fact material to this
opinion  that  have not been  independently  established,  we have  relied  upon
certificates  or  comparable  documents of officers and  representatives  of the
Company.

Based on the foregoing,  and subject to the qualifications stated herein, we are
of the opinion that:

1.            The  Conversion  Shares  have been duly  authorized  and have been
              validly issued, and are fully paid and non-assessable.

2.            For purposes of  determining  the holding period of the Conversion
              Shares under Rule 144(d)  under the  Securities  Act of 1933,  the
              holding period of the Conversion  Shares  commenced on the date of
              issuance of the Convertible Note on October 27,1998

3.            The  Company  currently  meets  the  current  public   information
              requirements under Rule 144 (c) under the Securities Act of 1933.

         The opinions expressed herein are limited to U.S. law and the corporate
laws of the State of Delaware  and we express no opinion as to the effect on the
matters covered by this letter of the law of any other jurisdiction



         Very truly yours,