THE
      SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE PROVISIONS OF ANY
      APPLICABLE STATE SECURITIES LAWS, BUT HAVE BEEN ACQUIRED BY THE REGISTERED
      HOLDER HEREOF FOR PURPOSES OF INVESTMENT AND IN RELIANCE ON STATUTORY EXEMPTIONS
      UNDER THE ACT, AND UNDER ANY APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES
      AND THE SECURITIES ISSUED UPON EXERCISE HEREOF MAY NOT BE SOLD, PLEDGED,
      TRANSFERRED OR ASSIGNED, NOR MAY THIS WARRANT BE EXERCISED, EXCEPT IN A
      TRANSACTION WHICH IS EXEMPT UNDER THE PROVISIONS OF THE ACT AND ANY APPLICABLE
      STATE SECURITIES LAWS OR PURSUANT TO AN EFFECTIVE REGISTRATION
      STATEMENT.

     

    COMMON
      STOCK PURCHASE WARRANT

     

    Date
      of
      Issuance: ____________________, 2007

     

    For
      value
      received, Aura Sound, Inc. a California Company (the “Company”),
      hereby grants to ________________, or its permitted transferees and assigns,
      the
      right to purchase from the Company a total of _________(“X”, as defined below)
      shares of the Company’s common stock (“Common
      Stock”),
      at a
      price per share equal to $ ______ (“A”, as defined below, the “Initial
      Exercise Price”).
      The
      exercise price and number of Warrant Shares (defined below), and the amount
      and
      kind of other securities for which this Warrant is exercisable shall be
      determined pursuant to the following formula:

     

    X
      = (
      200,000/A)

     

    Where: 
      X = the
      number of Warrant Shares to be issued.

     

    A
      = the
      lesser of: (1) the per share price of the Company’s initial public offering or
      reverse takeover; or (2) the price at which the next round of equity is
      sold.

     

    This
      Warrant is being issued in connection with the Loan Agreement between Aura
      Sound, Inc. and __________________ dated _____________, 2007 (the “Loan
      Agreement”).
      Certain capitalized terms used herein are defined in Section 4 hereof.


     

    This
      Warrant is subject to the following provisions: 

     

    SECTION
      1. Exercise
      of Warrant.
      

     

    (a) Terms
      of Warrants; Exercise Period.
      Subject
      to the terms of this Warrant, the Registered Holder shall have the right,
      commencing on the date hereof and expiring on the five-year anniversary hereof
      (the “Expiration
      Date”),
      to
      exercise this Warrant, from time to time and in whole or in part, and receive
      from the Company the number of Warrant Shares which the Registered Holder may
      at
      the time be entitled to receive on exercise of this Warrant and payment of
      the
      Exercise Price then in effect for the Warrant Shares. To the extent not
      exercised prior to the Expiration Date, this Warrant shall become void and
      all
      rights thereunder and all rights in respect thereof under this Agreement shall
      cease as of such time.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b) Net
      Issue Exercise.
      In lieu
      of the payment methods set forth in Section
      1(a)
      above,
      the Registered Holder may elect to exchange all or some of this Warrant for
      Warrant Shares equal to the value of the amount of the Warrant being exchanged
      on the date of exchange. If the Registered Holder elects to exchange this
      Warrant as provided in this Section
      1(b),
      Registered Holder shall tender to the Company the Warrant for the amount being
      exchanged, along with written notice of Registered Holder’s election to exchange
      some or all of the Warrant, and the Company shall issue to Registered Holder
      the
      number of Warrant Shares computed using the following formula:

     

    
      	
              X
                =

            	
              Y
                (A-B)

            
	 	
              A

            
	 	 	 
	
              Where:
                X =

            	 	
              The
                number of Warrant Shares to be issued to Registered
                Holder.

            
	 	 	 
	
              Y
                =

            	 	
              the
                number of Warrant Shares purchasable under the amount of the Warrant
                being
                exchanged (as adjusted to the date of such
                calculation).

            
	 	 	 
	
              A
                =

            	 	
              The
                Fair Market Value of one Warrant Share.

            
	 	 	 
	
              B
                =

            	 	
              Initial
                Exercise Price (as adjusted to the date of such
                calculation).

            


    

     

    Upon
      any
      Net Issue Exercise, the Company will cause to be delivered to the Company’s
      transfer agent an opinion of counsel that the holding period under Rule 144
      with
      respect to any Warrant Shares issued to Registered Holder as a result of such
      Net Issue Exercise commenced as of the Date of Issuance of this Warrant.


     

    (c) Exercise
      Procedure.

     

    (i) This
      Warrant shall be deemed to have been exercised on the date specified in a
      written notice from the Registered Holder to the Company (the “Exercise
      Time”)
      and
      within three business days following the Exercise Time, the Registered Holder
      shall deliver the following to the Company: 

     

    (A) a
      completed Exercise Agreement, as described in Section 1(c) below;

     

    (B) this
      Warrant; and

     

    (C) either
      (I) a check payable to the Company in an amount equal to the product of the
      Exercise Price (as such term is defined in Section 2) multiplied by the number
      of Warrant Shares being purchased upon such exercise (the “Aggregate
      Exercise Price”),
      (II)
      the surrender to the Company of shares of Common Stock of the Company having
      a
      Fair Market Value equal to the Aggregate Exercise Price, or (III) the delivery
      of a notice to the Company that the Registered Holder is exercising the Warrant
      by authorizing the Company to reduce the number of Warrant Shares subject to
      the
      Warrant by that number of shares having an aggregate Fair Market Value in excess
      of the total Exercise Price for such shares equal to the Aggregate Exercise
      Price.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (ii) Certificates
      for Warrant Shares purchased upon exercise of this Warrant shall be delivered
      by
      the Company to the Registered Holder within five business days after the date
      of
      the Exercise Time. Unless this Warrant has expired or all of the purchase rights
      represented hereby have been exercised, the Company shall prepare a new Warrant,
      substantially identical hereto, representing the rights formerly represented
      by
      this Warrant that have not expired or been exercised and shall, within such
      five-day period, deliver such new Warrant to the Person designated for delivery
      in the Exercise Agreement. 

     

    (iii) The
      Warrant Shares issuable upon the exercise of this Warrant shall be deemed to
      have been issued to the Registered Holder at the Exercise Time, and the
      Registered Holder shall be deemed for all purposes to have become the record
      holder of such Warrant Shares at the Exercise Time. 

     

    (iv) The
      Company shall not close its books against the transfer of this Warrant or of
      any
      Warrant Shares issued or issuable upon the exercise of this Warrant in any
      manner which interferes with the timely exercise of this Warrant. 

     

    (v) The
      Company shall make any governmental filings or obtain any governmental approvals
      necessary in connection with the exercise of this Warrant by the Registered
      Holder.

     

    (vi) The
      Company shall at all times reserve and keep available out of its authorized
      but
      unissued capital stock, solely for the purpose of issuance upon the exercise
      of
      this Warrant, the maximum number of Warrant Shares issuable upon the exercise
      of
      this Warrant. All Warrant Shares that are so issuable shall, when issued and
      upon the payment of the Exercise Price therefor, be duly and validly issued,
      fully paid and nonassessable and free from all taxes, liens and charges. The
      Company shall take all such actions as may be necessary to assure that all
      such
      Warrant Shares may be so issued without violation by the Company of any
      applicable law or governmental regulation or any requirements of any domestic
      securities exchange upon which securities of the Company may be listed (except
      for official notice of issuance which shall be immediately delivered by the
      Company upon each such issuance). 

     

    (d) Exercise
      Agreement.
      Upon
      any exercise of this Warrant, the Registered Holder shall deliver an Exercise
      Agreement in the form set forth in Exhibit
      I
      hereto,
      except that if the Warrant Shares are not to be issued in the name of the Person
      in whose name this Warrant is registered, the Exercise Agreement shall also
      state the name of the Person to whom the certificates for the Warrant Shares
      are
      to be issued, and if the number of Warrant Shares to be issued does not include
      all the Warrant Shares purchasable hereunder, it shall also state the name
      of
      the Person to whom a new Warrant for the unexercised portion of the rights
      hereunder is to be issued.

     

    SECTION
      2. Adjustment
      of Exercise Price and Number of Shares.
      In
      order to prevent dilution of the rights granted under this Warrant, the Initial
      Exercise Price shall be subject to adjustment from time to time as provided
      in
      this Section 2 (such price or such price as last adjusted pursuant to the terms
      hereof, as the case may be, is herein called the “Exercise
      Price”),
      and
      the number of Warrant Shares obtainable upon exercise of this Warrant shall
      be
      subject to adjustment from time to time as provided in this Section 2.


     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (a) Reorganization,
      Reclassification, Consolidation, Merger or Sale.
      In case
      of any reclassification, capital reorganization, consolidation, merger, sale
      of
      all or substantially all of the Company’s assets to another Person or any other
      change in the Common Stock of the Company, other than as a result of a
      subdivision, combination, or stock dividend provided for in Section 2(b) below
      (any of which, a “Change
      Event”),
      then,
      as a condition of such Change Event, lawful provision shall be made, and duly
      executed documents evidencing the same from the Company or its successor shall
      be delivered to the Registered Holder, so that the Registered Holder shall
      have
      the right at any time prior to the expiration of this Warrant to purchase,
      at a
      total price equal to that payable upon the exercise of this Warrant (subject
      to
      adjustment of the Exercise Price as provided in Section 2), the kind and amount
      of shares of stock and other securities and property receivable in connection
      with such Change Event by a holder of the same number of shares of Common Stock
      as were purchasable by the Registered Holder immediately prior to such Change
      Event. In any such case appropriate provisions shall be made with respect to
      the
      rights and interest of the Registered Holder so that the provisions hereof
      shall
      thereafter be applicable with respect to any shares of stock or other securities
      and property deliverable upon exercise hereof, and appropriate adjustments
      shall
      be made to the purchase price per share payable hereunder, provided the
      aggregate purchase price shall remain the same.

     

    (b) Subdivisions,
      Combinations and Other Issuances.
      If the
      Company shall at any time prior to the expiration of this Warrant (i) subdivide
      its Common Stock, by split up or otherwise, or combine its Common Stock, or
      (ii)
      issue additional shares of its Common Stock or other equity securities as a
      dividend with respect to any shares of its Common Stock, the number of shares
      of
      Common Stock issuable on the exercise of this Warrant shall forthwith be
      proportionately increased in the case of a subdivision of stock, or
      proportionately decreased in the case of a combination. Appropriate adjustments
      shall also be made to the purchase price payable per share, but the aggregate
      purchase price payable for the total number of Warrant Shares purchasable under
      this Warrant (as adjusted) shall remain the same. Any adjustment under this
      Section 2(b) shall become effective at the close of business on the date the
      subdivision or combination becomes effective, or as of the record date of such
      dividend, or in the event that no record date is fixed, upon the making of
      such
      dividend.

     

    (c) Issuance
      of New Warrant.
      Upon
      the occurrence of any of the events listed in this Section 2 that results in
      an
      adjustment of the type, number or exercise price of the securities underlying
      this Warrant, the Registered Holder shall have the right to receive a new
      warrant reflecting such adjustment upon the Registered Holder tendering this
      Warrant in exchange. The new warrant shall otherwise have terms identical to
      this Warrant.

     

    (d) Notices.
      

     

    (i) The
      Company shall give written notice to the Registered Holder of this Warrant
      at
      least 10 days prior to the date on which the Company closes its books or takes
      a
      record for determining rights to vote with respect to any event described in
      this Section 2 or any dissolution or liquidation. 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (ii) The
      Company shall also give written notice to the Registered Holder of this Warrant
      at least 10 days prior to the date on which any event described in this Section
      2 or any dissolution or liquidation shall take place. 

     

    SECTION
      3. Registration
      Rights.
      

     

    (a) Demand
      Registration.
      

     

    (i) As
      soon
      as practicable, but in no event later than the Filing Deadline, the Company
      shall file with the SEC a Registration Statement on Form SB-2 covering the
      resale of all the Registrable Securities. If Form SB-2 is unavailable for
      such a Registration, the Company shall register the resale of the Registrable
      Securities on another appropriate form reasonably acceptable to the Holders
      of
      at least a majority of the Registrable Securities and undertake to register
      the
      Registrable Securities on Form SB-2 as soon as such form is available,
      provided that the Company shall maintain the effectiveness of the Registration
      Statement then in effect until such time as a Registration Statement on
      Form SB-2 covering the Registrable Securities has been declared effective
      by the SEC. The Company shall use its reasonable best efforts to have such
      Registration Statement declared effective by the SEC as soon as practicable,
      but
      in no event later than the Effectiveness Deadline.

     

    (ii) The
      Company shall prepare and file with the SEC such amendments and supplements
      to
      the Registration Statement filed under this Section 3(a)(i) as may be reasonably
      necessary to keep such Registration Statement effective until all Registrable
      Securities have been sold pursuant to such Registration Statement or pursuant
      to
      Rule 144. The Company shall comply with the provisions of the Act with respect
      to the disposition of all Registrable Securities covered by such Registration
      Statement during such period in accordance with the intended methods of
      disposition by the Holders as set forth in such Registration Statement


     

    (iii) In
      the
      event the Registration Statement required to be filed with the SEC pursuant
      to
      Section 3(a)(i) is not filed with the SEC by the Filing Deadline, the
      Company shall issue to the Registered Holder an additional warrant for each
      30-day period (or a portion thereof) during which time such Registration
      Statement has not been filed with the SEC, which additional warrants shall
      be
      issued on the first day of each 30-day period commencing on the Filing Deadline.
      In addition, if the Registration Statement required to be filed with the SEC
      pursuant to Section 3(a)(i) is not declared effective by the SEC by the
      Effectiveness Deadline, the Company shall issue to the Registered Holder an
      additional warrant for each 30-day period (or a portion thereof) during which
      time such Registration Statement has not been declared effective by the SEC,
      which additional warrants shall be issued on the first day of each 30-day period
      commencing on the Effectiveness Deadline. Each such additional warrant (each,
      an
“Additional
      Warrant”)
      shall
      be identical to this Warrant, except that: (A) it shall be exercisable for
      a
      number of shares equal to 10% of the number of shares into for which this
      Warrant may be exercised; (B) the exercise price shall be 125% of the Exercise
      Price; and (C) it shall be dated the date the Company is obligated to issue
      the
      Warrant under this Section 3(a)(iii). 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (b) Piggyback
      Registration.

     

    (i) If,
      at
      any time commencing on the date hereof and expiring on the Expiration Date,
      the
      Company proposes to file a Registration Statement (other than under a
      Registration Statement pursuant to Form S-8 or Form S-4) to register its
      securities, and all of the Registrable Securities are not then covered by an
      effective Registration Statement, the Company shall: (A) give written notice
      by
      registered mail, at least 20 days prior to the filing of such Registration
      Statement to the Holders of its intention to do so; and (B) include all
      Registrable Securities in such Registration Statement with respect to which
      the
      Company has received written requests for inclusion therein within 15 days
      of
      actual receipt of the Company’s notice.

     

    (ii) The
      Company shall have the right at any time after it shall have given written
      notice pursuant to this Section 3(a) (irrespective of whether a written request
      for inclusion of any Registration Securities shall have been made) to elect
      not
      to file any such Registration Statement, or to withdraw the same after the
      filing but prior to the effective date thereof.

     

    (iii) If
      the
      Registration Statement pursuant to this Section 3(a) relates to a firmly
      underwritten public offering and the managing underwriter(s) advise the Company
      in writing that in their opinion the number of securities proposed to be
      included in the Registration Statement (including the Registrable Securities)
      exceeds the number of securities which can be sold therein without adversely
      affecting the marketability of the public offering, the Company will include
      in
      such Registration Statement the number of securities requested to be included
      which in the opinion of such underwriter(s) can be sold without adversely
      affecting the marketability of the offering, pro rata among the respective
      holders of all securities proposed to be included in the Registration Statement.
      

     

    (c) Covenants
      of the Company with Respect to Registration.
      In
      connection with each Registration under this Section 3, the Company covenants
      and agrees as follows:

     

    (i) The
      Company shall use its best efforts to have any Registration Statement declared
      effective at the earliest practicable time. The Company will promptly notify
      each Holder of included Registrable Securities and confirm such advice in
      writing, (A) when such Registration Statement becomes effective, (B) when any
      post-effective amendment to such Registration Statement becomes effective and
      (C) of any request by the SEC for any amendment or supplement to such
      Registration Statement or any prospectus relating thereto or for additional
      information.

     

    (ii) The
      Company shall furnish to each Holder of included Registrable Securities such
      number of copies of such Registration Statement and of each such amendment
      and
      supplement thereto (in each case including each preliminary prospectus and
      summary prospectus) in conformity with the requirements of the Act, and such
      other documents as such Holders may reasonably request in order to facilitate
      their disposition of the Registrable Securities.

     

    (iii) If
      at any
      time the SEC should institute or threaten to institute any proceedings for
      the
      purpose of issuing a stop order suspending the effectiveness of any Registration
      Statement, the Company will promptly notify each Registered Holder of
      Registrable Securities and will use all reasonable efforts to prevent the
      issuance of any such stop order or to obtain the withdrawal thereof as soon
      as
      possible. 

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (iv) The
      Company will use its good faith reasonable efforts and take all reasonably
      necessary action which may be required in qualifying or registering the
      Registrable Securities included in a Registration Statement for offering and
      sale under the securities or blue sky laws of such states as reasonably are
      required by the Holders, provided that the Company shall not be obligated to
      execute or file any general consent to service of process or to qualify as
      a
      foreign corporation to do business under the laws of any such
      jurisdiction.

     

    (v) The
      Company shall use its good faith reasonable efforts to cause such Registrable
      Securities covered by a Registration Statement to be registered with or approved
      by such other governmental agencies or authorities of the United States or
      any
      State thereof as may be reasonably necessary to enable the Holder(s) thereof
      to
      consummate the disposition of such Registrable Securities.

     

    (vi) The
      Company shall furnish to each Holder that has included Registrable Securities
      in
      a Registration Statement and to the managing underwriter, if any, a signed
      counterpart, addressed to such Holder or underwriter, of (i) an opinion of
      counsel to the Company, dated the effective date of such Registration Statement
      (and, if such Registration Statement includes an underwritten public offering,
      an opinion dated the date of the closing under the underwriting agreement),
      and
      (ii) a “Cold Comfort” letter dated the effective date of such Registration
      Statement (and, if such registration includes an underwritten public offering,
      a
      letter dated the date of the closing under the underwriting agreement) signed
      by
      the independent public accountants who have issued a report on the Company’s
      financial statements included in such Registration Statement, in each case
      covering substantially the same matters with respect to such Registration
      Statement and, in the case of such accountants’ letter, with respect to events
      subsequent to the date of such financial statements, as are customarily covered
      in opinions of issuer’s counsel and in accountants’ letters delivered to
      underwriters in underwritten public offerings of securities.

     

    (vii) The
      Company shall deliver promptly to each Holder that has included Registrable
      Securities in a Registration Statement and to the managing underwriter, if
      any,
      copies of all correspondence between the SEC and the Company, its counsel or
      auditors and all non-privileged memoranda relating to discussions with the
      SEC
      or its staff with respect to the Registration Statement and permit each such
      Holder and underwriter to do such investigation, upon reasonable advance notice,
      with respect to information contained in or omitted from the Registration
      Statement as it deems reasonably necessary to comply with applicable securities
      laws or rules of the NASD. Such investigation shall include access to books,
      records and properties and opportunities to discuss the business of the Company
      with its officers and independent auditors, all to such reasonable extent and
      at
      such reasonable times and as often as any such Holder shall reasonably
      request.

     

    (viii) All
      expenses incident to the Company’s performance of or compliance with this
      Agreement, including without limitation all registration and filing fees, fees
      and expenses of compliance with securities or blue sky laws, printing expenses,
      messenger and delivery expenses, and fees and disbursements of counsel for
      the
      Company and all independent certified public accountants, underwriters
      (excluding discounts and commissions) and other Persons retained by the Company
      will be borne by the Company. In no event shall the Company be obligated to
      pay
      any discounts or commissions with respect to the Registrable Shares sold by
      any
      Holder. In connection with each Registration Statement, the Company will
      reimburse the Holders of included Registrable Securities for the reasonable
      fees
      and disbursements of one counsel chosen by the Holders of a majority of the
      included Registrable Securities. 

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (d) Indemnification
      and Contribution

     

    (i) The
      Company shall indemnify each Holder of the Registrable Securities included
      in
      any Registration Statement, each of its officers, directors and agents
      (including brokers and underwriters selling Registrable Securities on behalf
      of
      the Holder), and each Person, if any, who controls such Holder within the
      meaning of Section 15 of the Act or Section 20(a) of the Exchange Act against
      all losses, claims, damages, expenses and/or liabilities (including all expenses
      reasonably incurred in investigating, preparing or defending against any claim
      whatsoever) to which any of them may become subject under the Act, the Exchange
      Act, any state securities laws or otherwise, arising from such Registration
      Statement, including, without limitation, any and all losses, claims, damages,
      expenses and liabilities caused by (I) any untrue statement or alleged untrue
      statement of a material fact contained in the Registration Statement, or (II)
      any omission or alleged omission to state in the Registration Statement a
      material fact required to be stated therein or necessary to make the statements
      therein not misleading in light of the circumstances under which they were
      made,
      except insofar as such losses, claims, damages or liabilities are caused by
      any
      such untrue statement or omission or alleged untrue statement or omission based
      upon information furnished in writing to Company by the Holder expressly for
      use
      therein.

     

    (ii) If
      requested by the Company prior to the filing of any Registration Statement
      covering the Registrable Securities, each Holder of the Registrable Securities
      to be included in such Registration Statement shall severally, and not jointly,
      indemnify the Company, its officers and directors and each Person, if any,
      who
      controls the Company within the meaning of Section 15 of the Act or Section
      20(a) of the Exchange Act, against all losses, claims, damages, expenses and/or
      liabilities (including all expenses reasonably incurred in investigating,
      preparing or defending against any claim whatsoever) to which they may become
      subject under the Act, the Exchange Act or otherwise, arising from written
      information furnished by such Holder, or their successors or assigns, for
      specific inclusion in such Registration Statement, except that the maximum
      amount which may be recovered from each Holder pursuant to this Section 3(c)(ii)
      or otherwise shall be limited to the amount of net proceeds received by the
      Holder from the sale of the Registrable Securities under such Registration
      Statement.

     

    (iii) In
      case
      any proceeding (including any governmental investigation) shall be instituted
      involving any Person in respect of which indemnity may be sought pursuant to
      this Section 3(c), such Person (an “Indemnified
      Party”)
      shall
      promptly notify the Person against whom such indemnity may be sought (the
“Indemnifying
      Party”)
      in
      writing and the Indemnifying Party shall assume the defense thereof, including
      the employment of counsel reasonably satisfactory to such Indemnified Party,
      and
      shall assume the payment of all fees and expenses; provided that the failure
      of
      any Indemnified Party so to notify the Indemnifying Party shall not relieve
      the
      Indemnifying Party of its obligations hereunder except to the extent (and only
      to the extent that) that the Indemnifying Party is materially prejudiced by
      such
      failure to notify. In any such proceeding, any Indemnified Party shall have
      the
      right to retain its own counsel, but the fees and expenses of such counsel
      shall
      be at the expense of such Indemnified Party unless (A) the Indemnifying Party
      and the Indemnified Party shall have mutually agreed to the retention of such
      counsel or (B) in the reasonable judgment of such Indemnified Party
      representation of both parties by the same counsel would be inappropriate due
      to
      actual or potential differing interests between them. It is understood that
      the
      Indemnifying Party shall not, in connection with any proceeding or related
      proceedings in the same jurisdiction, be liable for the reasonable fees and
      expenses of more than one separate firm of attorneys (in addition to any local
      counsel) at any time for all such Indemnified Parties (including in the case
      of
      Holder, all of its officers, directors and controlling persons) and that all
      such fees and expenses shall be reimbursed as they are incurred. In the case
      of
      any such separate firm for the Indemnified Parties, the Indemnified Parties
      shall designate such firm in writing to the Indemnifying Party. The Indemnifying
      Party shall not be liable for any settlement of any proceeding effected without
      its written consent (which consent shall not be unreasonably withheld or
      delayed), but if settled with such consent, or if there be a final judgment
      for
      the plaintiff, the Indemnifying Party shall indemnify and hold harmless such
      Indemnified Parties from and against any loss or liability (to the extent stated
      above) by reason of such settlement or judgment. No Indemnifying Party shall,
      without the prior written consent of the Indemnified Party, effect any
      settlement of any pending or threatened proceeding in respect of which any
      Indemnified Party is or could have been a party and indemnity could have been
      sought hereunder by such Indemnified Party, unless such settlement includes
      an
      unconditional release of such Indemnified Party from all liability arising
      out
      of such proceeding.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (iv) To
      the
      extent any indemnification by an Indemnifying Party is prohibited or limited
      by
      law, the Indemnifying Party agrees to make the maximum contribution with respect
      to any amounts for which, he, she or it would otherwise be liable under this
      Section 3(c) to the fullest extent permitted by law; provided, however, that
      (A)
      no contribution shall be made under circumstances where a party would not have
      been liable for indemnification under this Section 3(c) and (B) no seller of
      Registrable Securities guilty of fraudulent misrepresentation (within the
      meaning used in the Act) shall be entitled to contribution from any party who
      was not guilty of such fraudulent misrepresentation.

     

    (e) Nothing
      contained in this Agreement shall be construed as requiring the Holders to
      exercise their Warrants prior to the filing of any Registration Statement or
      the
      effectiveness thereof.

     

    (f) The
      Company shall not, directly or indirectly, enter into any merger, business
      combination or consolidation in which (i) the Company shall not be the surviving
      corporation and (ii) the shareholders of the Company are to receive, in whole
      or
      in part, capital stock or other securities of the surviving corporation, unless
      the surviving corporation shall, prior to such merger, business combination
      or
      consolidation, agree in writing to assume the obligations of the Company under
      this Agreement, and for that purpose references hereunder to “Registrable
      Securities”
shall
      be deemed to include the securities which the Holders would be entitled to
      receive in exchange for Registrable Securities under any such merger, business
      combination or consolidation, provided that to the extent such securities to
      be
      received are convertible into shares of Common Stock of the issuer thereof,
      then
      any such shares of Common Stock as are issued or issuable upon conversion of
      said convertible securities shall also be included within the definition of
      “Registrable
      Securities.”

     

    SECTION
      4. Definitions.
      The
      following terms have the meanings set forth below: 

     

    “Act”
means
      the Securities Act of 1933, as amended.

     

    “Equity
      Securities”
means
      the capital stock of a person or entity and/or any options, warrants, calls,
      rights, commitments, convertible securities and other securities pursuant to
      which the holder, directly or indirectly, has the right to acquire (with or
      without additional consideration) capital stock or equity of such person or
      entity.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    “Effectiveness
      Deadline”
shall
      mean 180 days from closing of Merger as defined in the Loan
      Agreement

     

    “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended.

     

    “Fair
      Market Value”
shall
      be determined on a per Share basis as of the close of the business day preceding
      the date of exercise, which determination shall be made as follows: (a) if
      the
      Common Stock is listed on a national securities exchange or admitted to unlisted
      trading privileges on such an exchange or quoted on either the National Market
      System or the Small Cap Market of the automated quotation service operated
      by
      The Nasdaq Stock Market, Inc., the Fair Market Value shall be the last reported
      sale price of that security on such exchange or system on the day for which
      the
      current market price is to be determined or, if no such sale is made on such
      day, the average of the highest closing bid and lowest asked price for such
      day
      on such exchange or system; (b) if the Common Stock is not so listed or quoted
      or admitted to unlisted trading privileges, the Fair Market Value shall be
      the
      average of the last reported highest bid and lowest asked prices quoted on
      the
      Nasdaq Electronic Bulletin Board, or, if not so quoted, then by the National
      Quotation Bureau, Inc. on the last business day prior to the day for which
      the
      Fair Market Value is to be determined; or (c) if the Common Stock is not so
      listed or quoted or admitted to unlisted trading privileges and bid and asked
      prices are not reported, the Fair Market Value shall be determined by the
      Company’s Board of Directors in its reasonable, good faith
      judgment.

     

    “Filing
      Deadline”
shall
      be identical in meaning to the filing deadline set forth in the private
      placement memorandum for the sale of the Company’s common stock in the
      offering

     

    “Holders”
means
      the Registered Holder, and the registered holders of all other Warrants
      (including Additional Warrants) originally issued pursuant the Loan Agreement,
      and the registered holders of the Registrable Securities. 

     

    “Loan
      Closing Date”
means
      the date upon which the Loan is made to Vertical Lend pursuant to the terms
      of
      the Loan Agreement. 

     

    “Person”
means
      an individual, a limited liability company, a partnership, a joint venture,
      a
      corporation, a trust, an unincorporated organization and a government or any
      department or agency thereof. 

     

    “Registered
      Holder”
means
      the registered holder of this Warrant. 

     

    “Registrable
      Securities”
means
      the Warrant Shares and any securities issued with respect to the Warrant Shares
      by virtue of a stock dividend, stock split, reclassification or reorganization,
      provided that the Warrant Shares and such other securities shall no longer
      by
      Registrable Securities once they have been sold or transferred pursuant to
      an
      effective Registration Statement under the Act or pursuant to Rule
      144.

     

    “Registration”
shall
      mean a registration of Registrable Securities under the Act pursuant to Section
      3 of this Agreement.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    “Registration
      Statement”
shall
      mean the Registration Statement, as amended from time to time, filed with the
      SEC in connection with a Registration, and each prospectus that is used in
      connection with such Registration Statement (including any preliminary
      prospectus).

     

    “Rule
      144”
means
      Rule 144 of the SEC under the Act.

     

    “SEC”
means
      the United States Securities and Exchange Commission, or any successor
      regulatory agency.

     

    “Warrant”
means
      the right to purchase one or more Warrant Shares pursuant to the terms of this
      Warrant, as the same may be transferred, divided or exchanged pursuant to the
      terms hereof.

     

    “Warrant
      Shares”
means
      shares of the Common Stock issuable upon exercise of the Warrant; provided,
      however, that if there is a change such that the securities issuable upon
      exercise of the Warrant are issued by a Person other than the Company or there
      is a change in the class of securities so issuable, then the term “Warrant
      Shares”
shall
      mean shares of the security issuable upon exercise of the Warrant if such
      security is issuable in shares, or shall mean the equivalent units in which
      such
      security is issuable if such security is not issuable in shares.

     

    SECTION
      5. No
      Voting Rights; Limitations of Liability.
      This
      Warrant shall not entitle the holder hereof to any voting rights or other rights
      as a stockholder of the Company. No provision hereof, in the absence of
      affirmative action by the Registered Holder to purchase Warrant Shares, and
      no
      enumeration herein of the rights or privileges of the Registered Holder shall
      give rise to any liability of such Registrable Holder for the Exercise Price
      or
      as a stockholder of the Company. 

     

    SECTION
      6. Warrant
      Transferable.
      Subject
      to compliance with applicable securities laws and the terms of this Section
      6,
      this Warrant and all rights hereunder are transferable, in whole or in part,
      without charge to the Registered Holder upon surrender of this Warrant with
      a
      properly executed Assignment (in the form of Exhibit
      II
      hereto)
      at the principal office of the Company.

     

    SECTION
      7. Warrant
      Exchangeable for Different Denominations.
      This
      Warrant is exchangeable, upon the surrender hereof by the Registered Holder
      at
      the principal office of the Company, for new Warrants of like tenor representing
      in the aggregate the purchase rights hereunder, and each of such new Warrants
      shall represent such portion of such rights as is designated by the Registered
      Holder at the time of such surrender. The date the Company initially issues
      this
      Warrant shall be deemed to be the “Date of Issuance” hereof regardless of the
      number of times new certificates representing the unexpired and unexercised
      rights formerly represented by this Warrant shall be issued. All Warrants
      representing portions of the rights hereunder are referred to herein as the
      “Warrants.” 

     

    SECTION
      8. Replacement.
      Upon
      receipt of evidence reasonably satisfactory to the Company of the ownership
      and
      the loss, theft, destruction or mutilation of any certificate evidencing this
      Warrant, and in the case of any such loss, theft or destruction, upon receipt
      of
      indemnity reasonably satisfactory to the Company, or, in the case of any such
      mutilation upon surrender of such certificate, the Company shall (at the expense
      of the Registered Holder) execute and deliver in lieu of such certificate a
      new
      certificate of like kind representing the same rights represented by such lost,
      stolen, destroyed or mutilated certificate and dated the date of such lost,
      stolen, destroyed or mutilated certificate. 

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    SECTION
      9. Notices.
      All
      notices, requests, deliveries, consents and other communications provided for
      herein shall be in writing and shall be effective upon delivery in person,
      faxed, or mailed by certified or registered mail, return receipt requested,
      postage pre-paid, addressed as follows:

     

    
      if
        to
        Borrower, to:

      Arthur
        Liu

      AuraSound,
        Inc.

      11839
        East Smith Ave

      Santa
        Fe Springs, CA 90670

       

      
        with
          a
          copy to:

        Kevin
          Friedmann

        Richardson
          & Patel, LLP

        The
          Chrysler Building 

        405
          Lexington Avenue, 26th Floor 

        New
          York, NY 10174

      

    

     

    
      if
        to
        the Lender, to:

       

      with
        a copy to:

    

     

    or,
      in
      any case, at such other address or addresses as shall have been furnished in
      writing to the Company (in the case of a Registered Holder of Warrants) or
      to
      the Registered Holders of Warrants (in the case of the Company) in accordance
      with the provisions of this paragraph.

     

    SECTION
      10. Amendment
      and Waiver.
      Except
      as otherwise provided herein, the provisions of the Warrants may be amended
      and
      the Company may take any action herein prohibited, or omit to perform any act
      herein required to be performed by it, only if the Company has obtained the
      written consent of the Holders representing a majority of the Warrant Shares
      obtainable upon exercise of the then-outstanding Warrants; provided, however,
      that no such action may change the Exercise Price of the Warrants or the number
      of shares or class of capital stock obtainable upon exercise of each Warrant
      without the written consent of all Holders.

     

    SECTION
      11. Descriptive
      Headings; Governing Law.
      

     

    (a) The
      descriptive headings of the several Sections of this Warrant are inserted for
      convenience only and do not constitute a part of this Warrant. 

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (b) All
      issues and questions concerning the construction, validity, enforcement and
      interpretation of this Agreement shall be governed by, and construed in
      accordance with, the laws of the State of California, without giving effect
      to
      any choice of law or conflict of law rules or provisions (whether of the State
      of California or any other jurisdiction) that would cause the application of
      the
      laws of any jurisdiction other than the State of California.

     

    SECTION
      12. Warrant
      Register.
      The
      Company shall maintain at its principal executive office books for the
      registration and the registration of transfer of this Warrant. The Company
      may
      deem and treat the Registered Holder as the absolute owner hereof
      (notwithstanding any notation of ownership or other writing thereon made by
      anyone) for all purposes and shall not be affected by any notice to the
      contrary.

     

    SECTION
      13. Fractions
      of Shares.
      The
      Company may, but shall not be required, to issue a fraction of a Warrant Share
      upon the exercise of this Warrant in whole or in part. As to any fraction of
      a
      share which the Company elects not to issue, the Company shall make a cash
      payment in respect of such fraction in an amount equal to the same fraction
      of
      the market price of a Warrant Share on the date of such exercise (as determined
      by the board of directors in its reasonable discretion).

     

    SECTION
      14. Attorneys’
      Fees.
      If any
      action, suit, arbitration or other proceeding is instituted to remedy, prevent
      or obtain relief from a default in the performance by any party to this Warrant
      of its obligations under this Warrant, the prevailing party shall recover all
      of
      such party’s attorneys’ fees incurred in each and every such action, suit,
      arbitration or other proceeding, including any and all appeals or petitions
      therefrom. As used in this Section, attorneys’ fees shall be deemed to mean the
      full and actual costs of any legal services actually performed in connection
      with the matters involved calculated on the basis of the usual fee charged
      by
      the attorney performing such services and shall not be limited to “reasonable
      attorneys’ fees” as defined in any statute or rule of court.

     

    *
      * * *
      *

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be signed and attested
      by its duly authorized officers and to be dated as of the Date of Issuance
      hereof. 

    
      	 	 	 
	 	
            
	
            	By:  	/s/Arthur Liu
	 	
              

              Arthur
                Liu

              Chairman

              AuraSound,
                Inc.

            


    

    


    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      I

     

    EXERCISE
      AGREEMENT

     

    
      	To:	
              Dated:                           
                

            


    

     

    The
      undersigned, pursuant to the provisions set forth in the attached Warrant
      (Certificate No. W-____), hereby subscribes for the purchase of ______ Warrant
      Shares covered by such Warrant and makes payment herewith in full therefor
      at
      the price per share provided by such Warrant. Please issue the Warrant Shares
      in
      the following names and amounts:

     

    
      	Name	
              Number
                of Warrant
                Shares

            


    

     

     

    
      	
            	 	Signature	
            
	
            	 	 	
              

            
	 	 	
              Address

            	 
	 	 	 	
              
 


    

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    


    EXHIBIT
      II

     

    ASSIGNMENT

     

    FOR
      VALUE
      RECEIVED, _____________________________ hereby sells, assigns and transfers
      all
      of the rights of the undersigned under the attached Warrant (Certificate No.
      W-_____) with respect to the number of the Warrant Shares covered thereby set
      forth below, unto: 

     

    
      	
              Name
                of Assignee

            	 	
              Address

            	 	
              No.
                of Shares

            
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 


    

    


    
      	
            	 	Signature	
            
	
            	 	 	
              

            
	 	 	
              
                Witness

              

            	 
	 	 	 	
              
 


    

     

    The
      Assignee agrees to be bound by the terms of the Warrant.

     

    
      	
            	 	Signature	
            
	
            	 	 	
              

            
	 	 	
              
                Witness

              

            	 
	 	 	 	
              
 




    
      
        
        

      

      
        16