ANY
      SECURITIES REPRESENTED BY THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE UNITED
      STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 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 1933 ACT, AND UNDER ANY APPLICABLE STATE
      SECURITIES LAWS. THESE SECURITIES MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR
      ASSIGNED EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER THE PROVISIONS OF THE
      1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EFFECTIVE
      REGISTRATION STATEMENT. ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION
      WILL
      BE SUBJECT TO LIMITATIONS UNDER UNITED STATES INCOME TAX LAWS, INCLUDING
      LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE
      CODE.

     

    SECURED
      PROMISSORY NOTE

     

    $500,000.00

    Los
      Angeles, California

    February
      5, 2007

     

    FOR
      VALUE
      RECEIVED, Aura Sound, Inc., a California corporation (“Borrower”),
      hereby promises to pay to the order of Apex Investment Fund, Ltd. in lawful
      money of the United States at the address of Lender set forth herein, the
      principal amount of Five Hundred Thousand Dollars ($500,000) (the “Loan”),
      together with Interest. This Promissory Note (“Note”)
      has
      been executed by Borrower on the date set forth above (the “Effective
      Date”)
      pursuant to the Loan Agreement entered into as of the date hereof between Lender
      and Borrower (the “Loan
      Agreement”).
      

     

    1. Interest.
      From
      the Effective Date and continuing until payment in full of the Loan, the Loan
      shall bear interest at 12.00% per annum compounded annually (the “Interest
      Rate”).

     

    2. Maturity
      Date.
      All or
      any portion of the Loan, all accrued Interest thereon and all other sums due
      hereunder, shall be due and payable on demand by Lender on the earlier of (i)
      the date that is one hundred twenty (120) days following the Effective Date;
      and
      (ii) the date on which the Company has received an aggregate of $1,000,000
      from
      the sale(s) of its Equity Securities (defined below), from and after the
      Effective Date, in one or a series of transactions (the “Maturity
      Date”).
      “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. 

     

    3. Secured
      Indebtedness.
      The
      indebtedness represented by this Note is secured pursuant to a Security
      Agreement dated as of the Effective Date, by and between Lender and Borrower
      (the “Security
      Agreement”).
      

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    4. Application
      of Payments.

     

    4.1 Except
      as
      otherwise expressly provided herein, payments under this Note shall be applied
      (i) first to the repayment of any sums incurred by Lender for the payment
      of any expenses in enforcing the terms of this Note, (ii) then to the
      payment of Interest, and (iii) then to the reduction of the
      Loan.

     

    4.2 Upon
      payment in full of the Loan and applicable accrued and unpaid Interest thereon,
      this Note shall be marked “Paid in Full” and returned to Borrower.

     

    5. Waiver
      of Notice.
      Borrower hereby waives diligence, notice, presentment, protest and notice of
      dishonor.

     

    6. Transfer.
      This
      Note may be transferred by Lender at any time, provided that such transfer
      complies with applicable securities laws.

     

    7. Events
      of Default.
      The
      occurrence of any of following events (each an “Event
      of Default”),
      not
      cured in any applicable cure period, shall constitute an Event of Default of
      Borrower:

     

    7.1 The
      failure to make when due any payment described in this Note, the Loan Agreement
      or the Security Agreement, whether before, on or after the Maturity Date, by
      acceleration or otherwise; 

     

    7.2 A
      breach
      of any representation, warranty, covenant or other provision of this Note,
      the
      Loan Agreement or the Security Agreement, which, if capable of being cured,
      is
      not cured within three days following notice thereof to Borrower or within
      three
      days of Borrower becoming aware of such breach; or

     

    7.3 (i) The
      application for the appointment of a receiver or custodian for Borrower or
      the
      property of Borrower, (ii) the entry of an order for relief or the filing
      of a petition by or against Borrower under the provisions of any bankruptcy
      or
      insolvency law, (iii) any assignment for the benefit of creditors by or
      against Borrower, or (iv) the insolvency of Borrower.

     

    Upon
      the
      occurrence of any Event of Default that is not cured within any applicable
      cure
      period, if any, Lender may elect, by written notice delivered to Borrower,
      to
      take at any time any or all of the following actions: (i) declare this Note
      to be forthwith due and payable, whereupon the entire unpaid Loan, together
      with
      all accrued and unpaid Interest thereon, and all other cash obligations
      hereunder, shall become forthwith due and payable, without presentment, demand,
      protest or any other notice of any kind, all of which are hereby expressly
      waived by Borrower, anything contained herein to the contrary notwithstanding,
      (ii) exercise any and all remedies provided under the Security Agreement,
      and (iii) exercise any and all other remedies provided hereunder or
      available at law or in equity.

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

     

    8. Miscellaneous.

     

    8.1 Successors
      and Assigns.
      Subject
      to the exceptions specifically set forth in this Note, the terms and conditions
      of this Note shall inure to the benefit of and be binding upon the respective
      executors, administrators, heirs, successors and assigns of the
      parties.

     

    8.2 Loss
      or Mutilation of Note.
      Upon
      receipt by Borrower of evidence satisfactory to Borrower of the loss, theft,
      destruction or mutilation of this Note, together with indemnity reasonably
      satisfactory to Borrower, in the case of loss, theft or destruction, or the
      surrender and cancellation of this Note, in the case of mutilation, Borrower
      shall execute and deliver to Lender a new promissory note of like tenor and
      denomination as this Note.

     

    8.3 Notices.
      Any
      notice, demand, offer, request or other communication required or permitted
      to
      be given pursuant to the terms of this Note shall be in writing and shall be
      deemed effectively given the earlier of (i) when received, (ii) when
      delivered personally, (iii) one business day after being delivered by
      facsimile (with receipt of appropriate confirmation), (iv) one business day
      after being deposited with an overnight courier service, or (v) four days
      after being deposited in the U.S. mail, First Class with postage prepaid, and
      addressed to the recipient at the address set forth below unless another address
      is provided to the other party in writing:

     

    
      	
              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:

              Apex
                Investment Fund, Ltd., 

              The
                Penthouse

              Washington
                Mall I

              Church
                Street

              Hamilton,
                HM 11, Bermuda 

              Attention:
                Susan E. Fairhurst

               

            
	
              with
                a copy to:

            


    

    


    
      
         

      

      
        -3-

        
          

        

      

      
         

      

       

    

    8.4 Governing
      Law.
      This
      Note shall be governed in all respects by the laws of the State of California
      as
      applied to agreements entered into and performed entirely within the State
      of
      California by residents thereof, without regard to any provisions thereof
      relating to conflicts of laws among different
      jurisdictions.

     

    8.5 Waiver
      and Amendment.
      Any
      term of this Note may be amended, waived or modified only with the written
      consent of Borrower and Lender.

     

    8.6 Remedies;
      Costs of Collection; Attorneys’ Fees.
      No
      delay or omission by Lender in exercising any of its rights, remedies, powers
      or
      privileges hereunder or at law or in equity and no course of dealing between
      Lender and the undersigned or any other person shall be deemed a waiver by
      Lender of any such rights, remedies, powers or privileges, even if such delay
      or
      omission is continuous or repeated, nor shall any single or partial exercise
      of
      any right, remedy, power or privilege preclude any other or further exercise
      thereof by Lender or the exercise of any other right, remedy, power or privilege
      by Lender. The rights and remedies of Lender described herein shall be
      cumulative and not restrictive of any other rights or remedies available under
      any other instrument, at law or in equity. If an Event of Default occurs,
      Borrower agrees to pay, in addition to the Loan and Interest payable thereon,
      reasonable attorneys’ fees and any other reasonable costs incurred by Lender in
      connection with its pursuit of its remedies under this Note.

     

    9. Default
      Interest.
      Borrower does hereby agree that whenever an Event of Default exists (including
      upon the failure of Borrower to pay the Loan in full on the Maturity Date),
      Lender shall be entitled to receive and Borrower shall pay interest on the
      entire unpaid principal sum and any other amounts due Lender at a rate (the
      “Default
      Rate”)
      equal
      to the higher of (a) the highest prime rate of interest per annum published
      in
      the Money Rate Table of the Western Edition of The Wall Street Journal, as
      adjusted on a daily basis, plus twelve and one-quarter percent (12.25%) per
      annum, or (b) 20.00% per annum, in either case compounded annually. The
      Default Rate shall be computed retroactively from the Loan Closing Date until
      the date Borrower cures the Event of Default and such cure is accepted by
      Lender. This charge shall be added to the Loan, and shall be secured by the
      Security Agreement. This section, however, shall not be construed as an
      agreement or privilege to extend the date of the payment of the Loan, nor as
      a
      waiver of any other right or remedy accruing to Lender by reason of the
      occurrence of any Event of Default.

     

    10. Savings
      Clause.
      It is
      expressly stipulated and agreed to be the intent of Borrower and Lender at
      all
      times to comply with applicable state law or applicable United States federal
      law (to the extent that United States federal law permits Lender to contract
      for, charge, take, reserve, or receive a greater amount of interest than under
      state law) and that this paragraph shall control every other covenant and
      agreement in this Note, the Loan Agreement and the Security Agreement. If the
      applicable law (state or federal) is ever judicially interpreted so as to render
      usurious any amount called for hereunder or thereunder, or contracted for,
      charged, taken, reserved, or received with respect to the Loan, or if Lender’s
      exercise of the option to accelerate the Maturity Date, or if any prepayment
      by
      Borrower results in Borrower having paid any interest in excess of that
      permitted by applicable law, then it is Lender’s express intent that all excess
      amounts theretofore collected by Lender shall be credited on the principal
      balance of this Note and all other indebtedness evidenced hereby and the
      provisions of this Note, the Loan Agreement and the Security Agreement
      immediately be deemed reformed and the amounts thereafter collectible hereunder
      and thereunder reduced, without the necessity of the execution of any new
      documents, so as to comply with the applicable law, but so as to permit the
      recovery of the fullest amount otherwise called for hereunder or thereunder.
      All
      sums paid or agreed to be paid to Lender for the use, forbearance, or detention
      of the Loan shall, to the extent permitted by applicable law, be amortized,
      prorated, allocated, and spread throughout the full stated term of the Loan
      until payment in full so that the rate or amount of interest on account of
      the
      Loan does not exceed the maximum lawful rate from time to time in effect and
      applicable to the Loan for so long as the Loan is outstanding. Notwithstanding
      anything to the contrary contained herein or in the Loan Agreement and the
      Security Agreement, it is not the intention of Lender to accelerate the maturity
      of any interest that has not accrued at the time of such acceleration or to
      collect unearned interest at the time of such acceleration.

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

     

    11. Register.
      Borrower shall keep a register of this Note as to both principal and any
      interest. Lender may transfer this Note, but such transfer may only be effected
      by surrender of this Note to the Borrower by the transferor Lender, and by
      issuance of a new Note with identical terms (other than the Lender, which shall
      be the transferor rather than the transferor). This registration requirement
      is
      intended to qualify the Note for the portfolio interest exemption of U.S Revenue
      Code sections 87(h)(2)(B) or 881(c)(2)(B) and shall be interpreted
      accordingly.

     

    


    IN
      WITNESS WHEREOF, Borrower has caused this Note to be signed on the Effective
      Date.

    
      	 	 	 
	
              Dated: February
                5, 2007

            	
              BORROWER:

            
	 
 	 
 	 
 
	
            	By:  	/s/Arthur
              Liu
	 	
              

              Arthur
                Liu

              Chairman

              AuraSound,
                Inc.

            


    

    


    
      
         

      

      
        -5-