EXHIBIT 10.2

                                AMENDMENT AGREEMENT

                   THIS AMENDMENT  AGREEMENT,  dated as of December 28, 1998, by
and among AURA SYSTEMS,  INC., a Delaware corporation ("Aura"),  NEWCOM, INC., a
Delaware corporation (the "Company"),  and the holders of Securities (as defined
below) named on the signature pages hereto (the "Original Holders").

                                W I T N E S S E T H:

                   WHEREAS,  pursuant  to the several  Subscription  Agreements,
each dated as of November 30, 1998,  by and between the Company and the Original
Holders  (the  "subscription  Agreements"),  the Company  issued to the Original
Holders  shares (the "Initial  Shares") of Common  Stock,  $.001 par value ("the
Common  Stock"),  of the Company and in connection  therewith the Company issued
certain Repricing Rights (as defined in the Subscription  Agreements) and Common
Stock Purchase Warrants (the "Initial Warrants") to the Original Holders;

                   WHEREAS,  pursuant to the several Note  Purchase  Agreements,
each dated as of December 28, 1998,  by and between the Company and the Original
Holders (the "Note Purchase Agreements"), the Company has agreed, upon the terms
and conditions of the Note Purchase Agreements, to issue to the Original Holders
Secured  Promissory  Notes  (the  "Notes")  of the  Company  and  in  connection
therewith  the  Company has agreed to issue  additional  Common  Stock  Purchase
Warrants (the "Additional Warrants") to the Original Holders; and

                   WHEREAS, Aura beneficially owns a majority of the outstanding
Common  Stock of the  Company  and is a party to the Parent  Company  Agreement,
dated as of November 30, 1998, with the Company and the Original Holders; and

                   WHEREAS,   as  a  condition   precedent  to  the   respective
obligations  of the  Original  Holders to  purchase  the Notes and  acquire  the
Additional Warrants,  the Original Holders require the execution and delivery of
this Agreement by Aura and the Company;

                   NOW  THEREFORE,  in  consideration  of the  premises  and the
mutual covenants contained herein and other good and valuable consideration, the
receipt and  sufficiency  of which are hereby  acknowledged,  the parties hereto
agree as follows:

                   1.   Definitions.   (a)  The following terms shall have the 
following meanings (such meanings to be equally applicable to both the singular 
and plural forms of the terms defined):

                   "Aura SEC  Reports"  means (1) Aura's  Annual  Report on Form
10-K for the fiscal year ended February 28, 1998, (2) Aura's  Quarterly  Reports
on Form 10-Q for the fiscal quarters ended May 31, 1998 and August 31, 1998, and
(3)  Aura's   definitive   proxy  statement  for  its  1998  Annual  Meeting  of
Stockholders, in each case as filed with the SEC.

                   "Holders" means the Original Holders and each other holder of
Repricing Rights and Securities.

                   "Securities" means the Initial Shares, Repricing Shares, the 
Aura Repricing Shares, the Notes, the Initial Warrants and the Additional 
Warrants.

                   (b) Capitalized  terms defined in the introductory  paragraph
or the  recitals to this  Agreement  or in the  amendments  to the  Subscription
Agreements and the  Registration  Rights  Agreements  made hereby shall have the
respective  meanings  therein  provided.  Capitalized  terms used herein and not
otherwise  defined  herein shall have the  respective  meanings set forth in the
Note  Purchase  Agreements  and, if not  defined  therein,  in the  Subscription
Agreements.

                   2.  Amendment  of  Subscription   Agreements.   Each  of  the
respective Subscription Agreements is hereby amended as follows:

         (a) Section 1 is amended by adding the following new definitions:

         "Amendment  Agreement"  means  the  Amendment  Agreement,  dated  as of
December 28, 1998, between and among the Company,  Aura, the Buyer and the Other
Buyers.

         "Aura Common Stock" means the Common Stock, $.005 par value, of
Aura.

         "Aura  Repricing  Rate"  means  the  number  of Aura  Repricing  Shares
issuable upon exercise of each Repricing Right pursuant to Section 3(I) equal to
(a) the product of (1) the  Repricing  Rate and (2) the Average  Market Price of
the Common Stock on the Exercise Date divided by (b) the Average Market Price of
the Aura Common Stock on such  Exercise Date (as if, for purposes of this clause
(b), the term "Average Market Price" referred to the Aura Common Stock).

         "Aura  Repricing  Shares"  means  shares of Aura Common Stock issued or
issuable to a holder of Repricing Rights upon the exercise thereof.

         "Cash  Consideration"  means  the  product  of (a) the  number  of Aura
Repricing  Shares  issuable upon each exercise of Repricing  Rights  pursuant to
Section  3(l) and (b) the then current par value of the Aura Common Stock (which
is $.005 as of December 28, 1998).

         "Cash Consideration  Reserve" means the funds received by Aura from the
Buyer from time to time pursuant to Section 3(l), plus accrued interest thereon,
which are held in trust by Aura from the  account of the Buyer  unless and until
paid to Aura as Cash  Consideration  upon exercise of Repricing  Rights for Aura
Repricing Shares.

         "Note Purchase  Agreements" means the several Note Purchase Agreements,
dated as of December 28, 1998,  by and between the Company and each of the Buyer
and the Other Buyers.

         "Notes"  means  the  Secured  Promissory  Notes of the  Company  in the
aggregate  principal  amount  of  $1,000,000  issued  to the Buyer and the Other
Buyers pursuant to the Note Purchase Agreements.

                   (b) Section 3 is amended to add a new Section 3(I) at the end
thereof as follows:

         (I) Aura Repricing Shares. (1) Notwithstanding anything to the contrary
in this Agreement,  the Buyer may elect in its sole discretion to receive shares
of Aura Common Stock in lieu of receiving  shares of Common Stock of the Company
upon exercise of Repricing  Rights  pursuant to this Section 3. On each Exercise
Date,  the Buyer shall be entitled to  exercise  any whole  number of  Repricing
Rights  for  fully  paid and  nonassessable  Aura  Repricing  Shares at the Aura
Repricing  Rate if upon each  exercise  the Buyer pays Aura,  or has  previously
deposited  in the Cash  Consideration  Reserve  for Aura,  the  applicable  Cash
Consideration. Upon receipt of such Exercise Notice and such Cash Consideration,
Aura and the Company shall be obligated to deliver the certificates for the Aura
Common Stock  representing such Aura Repricing Shares as and when required under
this Agreement.

         (2)  In  order  to  make  funds  available  to  Aura  to pay  the  Cash
Consideration  if and when  required,  at the  closing  under the Note  Purchase
Agreement  the Buyer  will  deliver to Aura the sum of  $1,000.00  to be held in
trust by Aura as the Cash Consideration Reserve. Upon each exercise of Repricing
Rights for Aura Repricing  Shares,  the Buyer hereby authorizes and directs Aura
to deduct from its Cash  Consideration  Reserve the Cash  Consideration due with
respect to such exercise.  Such deduction  shall  constitute  payment in full to
Aura of the  applicable  Cash  Consideration.  The  Buyer  may from time to time
deposit additional funds in the Cash  Consideration  Reserve to provide adequate
funds to cover future  exercises of Repricing  Rights.  Upon request,  Aura will
provide  the  Buyer  with  a  statement   of  the  balance  held  in  such  Cash
Consideration  Reserve.  Aura shall return the balance of the Cash Consideration
Reserve, plus accrued interest thereon, to the Buyer within ten Business Days of
receiving a request therefor from the Buyer.

         (3) To exercise  Repricing  Rights for full shares of Aura Common Stock
representing  Aura  Repricing  Shares on any Exercise  Date, the Buyer shall (A)
transmit by telephone line facsimile (or otherwise  deliver),  for receipt on or
prior to 11:59  p.m.  Eastern  Time,  on such date,  a copy of a fully  executed
Exercise  Notice,  in the form  attached  hereto as  Exhibit B to the  Amendment
Agreements  to  Aura  with a copy  to the  Company  and (B) if  there  shall  be
insufficient fund in the Cash  Consideration  Reserve,  deliver by check,  money
order of wire transfer to an account  designated by Aura, the Cash Consideration
for such  exercise.  Upon  receipt by Aura of an  executed  Exercise  Notice and
payment of the Cash  Consideration,  which  payment  shall be deemed made on the
Exercise  Date by reason of Aura's right to deduct the Cash  Consideration  from
the Cash  Consideration  Reserve if sufficient funds are available,  Aura shall,
within three Trading Days  following the Exercise Date, (A) issue and deliver to
the address  specified in the Exercise Notice, a certificate,  registered in the
name of the Buyer or its designee,  for the number of Aura  Repricing  Shares to
which the holder shall be entitled,  or (B) credit such aggregate number of Aura
Repricing  Shares to the Buyer's or its  designee's  account with the Depository
Trust Company as specified in the Exercise Notice. The certificates for any Aura
Repricing  Shares issued to the Buyer prior to the SEC Effective Date shall bear
the restrictive legend specified in Section 6(b). On and after the SEC Effective
Date all Aura  Repricing  Shares  issued to or upon the order of the Buyer shall
not  bear  any   restrictive   legends  or  be  subject  to  any   stop-transfer
restrictions.

         (4) The Person or Persons entitled to receive the Aura Repricing Shares
issuable upon an exercise of Repricing  Rights shall be treated for all purposes
as the  record  holder or  holders of such  shares of Aura  Common  Stock on the
Exercise Date.

         (5) If the Buyer shall have given an Exercise Notice for Aura Repricing
Shares  as  provided  herein,   Aura's  obligation  to  issue  and  deliver  the
certificates for Aura Common Stock  representing the Aura Repricing Shares shall
be absolute  and  unconditional,  irrespective  of any action or inaction by the
Buyer to enforce the same,  any waiver or consent with respect to any  provision
hereof, the recovery of any judgment against any Person or any action to enforce
the same,  any failure or delay in the  enforcement  of any other  obligation of
Aura or the  Company  to the Buyer,  or any  setoff,  counterclaim,  recoupment,
limitation or  termination,  or any breach or alleged breach by the Buyer or any
other  Person of any  obligation  to Aura or the  Company  or any  violation  or
alleged  violation of law by the Buyer or any other Person,  and irrespective of
any other  circumstance  which might  otherwise limit such obligation of Aura to
the Buyer in connection with the issuance and delivery of Aura Repricing Shares.
The number of Aura Repricing Shares to be issued in connection with a particular
Exercise  Date is,  absent  manifest  error,  conclusively  the  number  of Aura
Repricing Shares stated in the applicable Exercise Notice. If in connection with
a particular  Exercise Date Aura determines that manifest error has been made by
virtue of the  computation of Aura  Repricing  Shares or other  information  set
forth in the applicable  Exercise  Notice,  Aura shall have the right within one
Trading  Day after the Buyer gives such  Exercise  Notice to notify the Buyer of
such error,  which  notice  shall state the number of Aura  Repricing  Shares in
dispute,  and,  notwithstanding  such notice from Aura,  Aura shall issue to the
Buyer the number of Aura Repricing Shares not in dispute as and when required by
this  Agreement.  If Aura shall  have  notified  the Buyer of any such  manifest
error,  and Aura and the Buyer do not agree as to a resolution  of such manifest
error on or before the date of such notice by Aura of an error in such  Exercise
Notice,  Aura shall on the date such  notice is given  submit the dispute to the
Auditors  for  determination  and shall  instruct  the  Auditors to resolve such
dispute and to notify Aura and the Buyer of their determination,  which shall be
binding on all parties,  within two Trading Days after such dispute is submitted
to the  Auditors.  Immediately  after  receipt of timely notice of the Auditors'
determination  (but in any event within four  Trading Days after the  applicable
Exercise Notice is given to Aura),  Aura shall issue to the Buyer any additional
Aura Repricing Shares to which the Buyer is entitled based on the  determination
of  the  Auditors.   If  the  Auditors  shall  fail  to  notify  Aura  of  their
determination  within four Trading Days after the applicable  Exercise Notice is
given to Aura,  then Aura shall within four  Trading  Days after  receipt of the
applicable  Exercise  Notice,  issue to the Buyer any additional  Aura Repricing
Shares to which the Buyer is entitled based on the applicable  Exercise  Notice.
Such  immediate  and prompt action shall be taken by all the parties in order to
assure that there shall be full  compliance with Aura's  unqualified  obligation
that all Aura  Repricing  Shares  issuable upon each Exercise Date be issued and
delivered by the due dates therefor as provided herein.

         (6) If within  three  Trading Days after the  Company's  receipt of the
Exercise Notice (or such longer period  specified in Section 3(l)(5)) Aura shall
for  any  reason  fail  to  issue  a  certificate  (which  shall  be free of all
restrictive legends other than those required by Section 6(b)) for the number of
Aura Repricing Shares to which the Buyer is entitled or to credit the Buyer's or
its designee's account with the Depository Trust Company for such number of Aura
Repricing Shares to which the Buyer is entitled upon the Buyer's exercise of the
Repricing Rights, the Buyer shall have the right to rescind such exercise Notice
or, commencing seven Business Days after the Exercise Date, to deliver a copy of
the applicable  Exercise Notice to the Repricing Escrow Agent with a notice that
the Buyer is  requesting  Common Stock in lieu of Aura Common Stock by reason of
Aura's failure to timely deliver Aura Repricing  Shares in accordance  with this
Section  3(l)(6).  Promptly  but not later  than  three  Trading  Days after its
receipt of such Exercise Notice, the Repricing Escrow Agent shall, in accordance
with the Escrow  Agreement,  release the Escrow Shares from escrow in the amount
of the  Repricing  Shares  specified  in such  Exercise  Notice and deliver such
shares in  accordance  with such Exercise  Notice.  In addition to such right to
receive  Escrow  Shares  and all other  available  remedies  which the Buyer may
pursue hereunder and under applicable law, Aura shall, on a weekly basis, pay as
additional  damages (and not as a penalty) to such Buyer for each day after such
third Trading Day that such Aura  Repricing  Shares or Repricing  Shares are not
timely  delivered  an amount  equal to 0.2% of the product of (1) the sum of the
number of Aura  Repricing  Shares  not  issued  to the  Buyer on a timely  basis
pursuant  to  Section  3(c)(2)  and to which the Buyer is  entitled  and (2) the
Closing  Price of the Aura Common Stock on such third  Trading Day. In addition,
if in connection  with such late delivery of Aura  Repricing  Shares the Closing
Price on the date of  delivery  is less  than the  Closing  Price on such  third
Trading Day when such  shares  were due,  then Aura shall be required to pay the
Buyer, within two Trading Days after such late delivery,  an amount equal to the
product of (A) the number of such Aura  Repricing  Shares and (B) the difference
between such  respective  Closing  Prices.  As used in this clause (6), the term
"Closing  Price" shall refer to the closing sale price of the Aura Common Stock.
Any failure of the Repricing  Escrow Agent to deliver  shares to the Buyer shall
not relieve Aura of its obligations under this Section 3(l)(6).

         (7) Notwithstanding  anything to the contrary in this Agreement,  in no
event shall the Buyer be entitled to exercise any Repricing  Rights in excess of
that number of Repricing Rights upon exercise of which the sum of (x) the number
of shares of Aura Common  Stock  beneficially  owned by the Buyer and all of its
Aggregated  Persons (other than shares of Aura Common Stock deemed  beneficially
owned through the ownership of unexercised  Repricing Rights and the unexercised
or unconverted  portion of any instrument which contains  limitation  similar to
those set forth in this  sentence)  and (y) the number of shares of Aura  Common
Stock  issuable or  deliverable  upon the  exercise  of the number of  Repricing
Rights with respect to which the  determination  in this sentence is being made,
would result in beneficial  ownership by the Buyer and all Aggregated Persons of
the Buyer of more than 9.9% of the outstanding  shares of Aura Common Stock. For
purposes of the immediately  preceding sentence,  beneficial  ownership shall be
determined in accordance with Section 13(d) of the 1934 Act and Regulation 13D-G
thereunder,  except  as  otherwise  provided  in clause  (x) of the  immediately
preceding sentence.

         (8) Unless the Stockholder  Approval shall have been obtained or waived
by the Nasdaq,  Aura shall not be required to issue Aura Repricing Shares to the
extent such issuance would violate the Stockholder Approval Rule.

                   (d)  Section 3(e)(2) is amended to add the following words at
the end of clause (x) thereof after the words "Section 3(g)(2)":  "or Section 
3(I)(7),. . . "

                   3. Amendment of Registration  Rights Agreements.  Each of the
respective Registration Rights Agreements is hereby amended, effective as of the
date of this Agreement, as follows:

                   (a)  Section 1 is amended to add a new definition as follows:

         "Note Purchase  Agreements" means the several Note Purchase Agreements,
dated as of  December  28,  1998,  between  the  Company and each of the Initial
Investor and the Other Buyers.

                   (b) The term  "Warrant  Shares" as used in each  Registration
Rights Agreement is amended to refer to the shares of Common Stock issuable upon
exercise of (i) the  Warrants  issued  pursuant to the  applicable  Registration
Rights  Agreement  and  (ii)  the  Common  Stock  Purchase  Warrants  issued  in
connection with the applicable Note Purchase Agreement.

                   (c) For purposes of Section 2(f), the term  "Purchase  Price"
shall mean for each  Investor the sum of (1) the Purchase  Price for the Initial
Shares as defined  in the  applicable  Registration  Rights  Agreement  for such
Investor  and (2) the Purchase  Price for the Note as defined in the  applicable
Note Purchase Agreement for such Investor.

                   4.   Representations, Warranties, etc. by Original Holders.  
Each of the Original Holders, severally and not jointly, represents and warrants
to, and covenants and agrees with, Aura as follows:

                   (a) Purchase for  Investment.  Upon  issuance and delivery of
any Aura Repricing Shares,  the Original Holder will acquire such Aura Repricing
Shares for its own account for  investment  only and not with a view towards the
public sale or distribution thereof;

                   (b)  Accredited   Investor;.   The  Original   Holder  is  an
"accredited  investor" as that term is defined in Rule 501 of the General  Rules
and Regulations under the 1933 Act by reason of Rule 501(a)(3);

                   (c) Reoffers and Resales;. All subsequent offers and sales of
the Aura  Repricing  Shares by the  Original  Holder  shall be made  pursuant to
registration of the Aura Repricing  Shares being offered and sold under the 1933
Act or pursuant to an exemption from registration; and

                   (d) Company  Reliance.  The Original Holder  understands that
the Aura  Repricing  Shares are being  offered  to it in  reliance  on  specific
exemptions from the registration requirements of United States federal and state
securities laws and that Aura is relying upon the truth and accuracy of, and the
Original Holder's compliance with, the representations,  warranties, agreements,
acknowledgments  and  understandings  of the Original Holder set forth herein in
order to determine the  availability  of such  exemptions and the eligibility of
the Original Holder to receive an offer of the Aura Repricing Shares.

                   5.   Aura Representations, Warranties, etc.

                   Aura  represents  and warrants to, and  covenants  and agrees
with, each Original Holder that:

                   (a) Organization  and Authority;.  Aura is a corporation duly
organized and validly existing under the laws of Delaware, and has all requisite
corporate  power and authority to execute,  deliver and perform its  obligations
under this Agreement and the Aura  Registration  Rights  Agreement and the other
documents  and  agreements  delivered  by Aura in  connection  herewith,  and to
consummate  the  transactions  contemplated  hereby  and  thereby.  Aura is duly
qualified to do business as a foreign corporation and is in good standing in all
jurisdictions  wherein such  qualification  is necessary and where failure so to
qualify  could  have a  material  adverse  effect on the  business,  properties,
operations,  condition (financial or other),  results of operations or prospects
of Aura.

                   (b)  Capitalization.  The  authorized  capital  stock of Aura
consists of  200,000,000  shares of Common Stock of which  91,181,259  shares of
Aura Common Stock were  outstanding on December 27, 1998, all of which are fully
paid and nonassessable.  Other than as set forth in the preceding sentence, Aura
does not have  outstanding  any material amount of securities (or obligations to
issue any such  securities)  convertible  into,  exchangeable  for or  otherwise
entitling the holders thereof to acquire shares of Aura Common Stock,  except as
disclosed in the Aura SEC Reports.  Aura has duly reserved  from its  authorized
and unissued  shares of Aura Common Stock the full number of shares required for
(a) all options,  warrants,  convertible  securities and other rights to acquire
shares of Aura  Common  Stock which are  outstanding  and (b) all shares of Aura
Common Stock and options and other rights to acquire shares of Aura Common Stock
which may be issued or granted  under the stock  option and similar  plans which
have been adopted by Aura.

                   (c) Concerning the Aura Repricing  Shares and the Aura Common
Stock.  The Aura Repricing  Shares and the Repricing Rights with respect thereto
have been duly  authorized.  The Aura Repricing Shares when issued in accordance
with  this  Agreement,   will  be  duly  and  validly  issued,  fully  paid  and
non-assessable  and will not subject the holder thereof to personal liability by
reason of being such holder.  There are no preemptive  or similar  rights of any
shareholder  of Aura or any other  Person to acquire  any of the Aura  Repricing
Shares. Aura has duly reserved 11,677,487 shares of Common Stock for issuance of
the Aura  Repricing  Shares and such shares shall  remain so reserved.  The Aura
Common  Stock is listed  for  trading  on the  Nasdaq  and (1) Aura and the Aura
Common Stock meet the criteria for continued  listing and trading on the Nasdaq;
(2) Aura has not been  notified  since  January  1,  1996 by the  Nasdaq  of any
failure or  potential  failure to meet the criteria  for  continued  listing and
trading on the Nasdaq and (3) no  suspension of trading in the Aura Common Stock
is in effect. Aura knows of no reason that the Aura Repricing Shares will not be
eligible for listing on the Nasdaq.

                   (d) Information  Provided.  The information provided by or on
behalf of Aura to the  Original  Holders  in  connection  with the  transactions
contemplated by this Agreement,  including,  without limitation, the information
contained  in the Aura SEC Reports,  does not contain any untrue  statement of a
material fact or omit to state any material fact  necessary in order to make the
statements therein, in the light of the circumstances under which they are made,
not misleading, it being understood that, for purposes of this Section 5(d), any
statement  contained  in such  information  shall be  deemed to be  modified  or
superseded  for  purposes of this Section 5(d) to the extent that a statement in
any document  included in such information  which was prepared or filed with the
SEC on a later date  modifies or replaces  such  statement,  whether or not such
later prepared or filed statement so states.

                   (e)  Absence  of  Certain  Changes;  Liabilities.  Except  as
disclosed in the Aura SEC Reports,  since  February 28, 1998,  there has been no
material  adverse  change and no material  adverse  development in the business,
properties, operations, condition (financial or other), results of operations or
prospects of Aura. Except as and to the extent disclosed,  reflected or reserved
against in the financial  statements  of Aura and the notes thereto  included in
the Aura SEC Reports,  Aura has no material  (individually  or in the aggregate)
liabilities,  debts  or  obligations  (including  guaranties)  whether  accrued,
absolute,  contingent or otherwise,  and whether due or to become due, to any of
its officers, directors, security holders, or lenders or any of their respective
Affiliates.  Subsequent  to February 28, 1998,  the Company has not incurred any
liabilities,   debts  or  obligations  of  any  nature   whatsoever   which  are
individually  or in the  aggregate  material  to the  Company  other  than those
incurred in the  ordinary  course of its  business or  disclosed in the Aura SEC
Reports.

                   (f) SEC Filings.  Aura has timely  filed all required  forms,
reports  and other  documents  required  to be filed with the SEC under the 1934
Act. All of such forms, reports and other documents complied, when filed, in all
material respects, with all applicable requirements of the 1933 Act and the 1934
Act.

                   (g) No  Solicitation.  No form  of  general  solicitation  or
general advertising was used by Aura or, to the best of its knowledge, any other
Person acting on behalf of Aura,  in respect of or in connection  with the offer
of the Repricing Rights or the Aura Repricing  Shares.  Neither Aura nor, to its
knowledge,  any  Person  acting  on  behalf  of Aura  has,  either  directly  or
indirectly,  sold or offered  for sale to any  Person any of the Aura  Repricing
Rights or the Aura Repricing  Shares or, within the six months prior to the date
hereof,  any other  similar  security  of Aura  except as  contemplated  by this
Agreement;  and neither Aura nor any Person authorized to act on its behalf will
sell or offer for sale any shares of Aura Common Stock or other  securities,  or
solicit any offers to buy any shares of Common Stock or other securities,  so as
thereby  to cause  the  issuance  of any of the  Aura  Repricing  Shares  or the
issuance of the  Repricing  Rights to be in  violation  of Section 5 of the 1933
Act.

                   (h) Certain Issuances of Securities.  Aura has not issued any
shares of Aura Common Stock or shares of any series of preferred  stock or other
securities convertible into,  exchangeable for or otherwise entitling the holder
to acquire  shares of Aura Common  Stock  which are  subject to the  Stockholder
Approval Rule and which could be integrated  with the issuance of Aura Repricing
Shares to the Holders under the Stockholder Approval Rule.

                   (i)  Absence  of  Rights  Agreement.  Aura has not  adopted a
shareholder  rights plan or similar  arrangement  relating to  accumulations  of
beneficial ownership of Aura Common Stock or a change in control of Aura.

                   (j)  Amendment  Agreement.  This  Agreement has been duly and
validly authorized, executed and delivered by Aura and this Agreement is a valid
and binding  obligation of Aura  enforceable in Accordance with its term subject
as to  enforceability  to  general  principles  of  equity  and  to  bankruptcy,
insolvency,  moratorium  and other  similar laws  affecting the  enforcement  of
creditors' rights generally.

                   (k) Non-contravention.  The execution and delivery by Aura of
this Agreement and consummation by Aura of the transactions contemplated by this
Agreement,  do not and will not,  with or  without  the  giving of Notice of the
lapse  of  time,  or both  (i)  result  in any  violation  of any  terms  of the
Certificate of Incorporation of by-laws of Aura, (ii) conflict with or result in
a breach  by Aura or the  Company  of any of the  terms  or  provisions  of,  or
constitute  a result in a breach by Aura or the  Company  of any of the terms or
provisions  of, or constitute a default  under,  or result in the  modification,
amendment,  termination or  cancellation  of, result in the  acceleration of any
obligation of Aura or the Company under, or result in the creation or imposition
of any lien, security interest, charge or encumbrance upon any of the properties
or assets of Aura or the company pursuant to, any indenture,  mortgage,  deed of
trust or other  agreement or  instrument to which Aura or the Company is a party
or by which Aura or the Company or any of their respective  properties or assets
is bound or affected, or (iii) violate or contravene any applicable law, rule or
regulation  or any  applicable  decree,  judgment or order of any court,  United
States  federal  or  state  regulatory  body,  administrative  agency  or  other
governmental  body having  jurisdiction over Aura of the Company or any of their
respective properties or assets.

                   (l) Approvals.  No authorization,  approval or consent of, or
filing with, any court,  governmental body,  regulatory agency,  self-regulatory
organization,  or stock exchange or market or the security holders of or lenders
to Aura, or any other third party, is required to be obtained or made by Aura or
the Company for the execution,  delivery and performance by Aura and the Company
of this  Agreement  and by the Company of the Note Purchase  Agreements  and the
other agreements, transactions and instruments contemplated hereby and thereby.

                   6.   CERTAIN COVENANTS AND ACKNOWLEDGMENTS.

                   (a)  Transfer  Restrictions.  Aura and the  Original  Holders
acknowledge  and agree  that (1)  except as  provided  in the Aura  Registration
Rights  Agreement with respect to the resale of the Aura Repricing  Shares,  the
Aura  Repricing  Shares  have not been and are not being  registered  for resale
under  the 1933  Act,  and the  Securities  may not be  transferred  unless  (A)
subsequently  registered  for resale  thereunder  or (B) the  holder  shall have
delivered to Aura an opinion of counsel,  reasonably satisfactory in form, scope
and  substance  to  Aura,  to the  effect  that  the  Securities  to be  sold or
transferred  may be sold or  transferred  pursuant  to an  exemption  from  such
registration;  (2) any resale of the  Securities  made in  reliance  on Rule 144
promulgated  under the 1933 Act may be made only in accordance with the terms of
Rule  144 and  further,  if Rule  144 is not  applicable,  any  such  resale  of
Securities under  circumstances in which the seller,  or the person through whom
the sale is made,  may be deemed to be an  underwriter,  as that term is used in
the 1933 Act, may require  compliance  with some other  exemption under the 1933
Act or the rules and regulations of the SEC thereunder; and (3) neither Aura nor
any other Person is under any obligation to register the Securities  (other than
registration  of the resale of the Aura  Repricing  Shares  pursuant to the Aura
Registration  Rights  Agreement)  under the 1933 Act or to comply with the terms
and conditions of any exemption  thereunder (other than pursuant to Section 6(d)
hereof and pursuant to the Aura Registration Rights Agreement).

                   (b)  Restrictive Legends.

                   (1) Each Original Holder  acknowledges  and agrees that until
such time as the Aura Repricing Shares have been registered for resale under the
1933  Act as  contemplated  by  the  Aura  Registration  Rights  Agreement,  the
certificates for the Aura Shares may bear a restrictive  legend in substantially
the following form (and a stop-transfer  order may be placed against transfer of
the certificates for the Aura Repricing Shares):

The securities  represented by this  certificate  have not been registered under
the  Securities Act of 1933, as amended.  The securities  have been acquired for
investment  and may not be resold,  transferred or assigned in the absence of an
effective  registration statement for the securities under the Securities Act of
1933,  as amended,  or an opinion of counsel that  registration  is not required
under said Act.

                   (2) Once the Registration  Statement  required to be filed by
Aura pursuant to Section 2 of the Aura  Registration  Rights  Agreement has been
declared effective,  thereafter (1) upon request of an Original Holder Aura will
substitute certificates without restrictive legend for certificates for any Aura
Repricing  Shares  issued  prior  to the date  such  Registration  Statement  is
declared  effective by the SEC which bear such restrictive legend and remove any
stop-transfer  restriction relating thereto promptly, but in no event later than
three Trading Days after  surrender of such  certificates by the Original Holder
and (2) Aura shall not place any restrictive legend on certificates for any Aura
Repricing Shares issued or impose any stop-transfer restriction thereon.

                   (c) Aura  Registration  Rights  Agreement.  On or before  the
Closing  Date,  Aura  and each of the  Original  Holders  agree to enter  into a
separate  Aura  Registration  Rights  Agreement in the form  attached  hereto as
Exhibit A.

                   (d) Form D. Aura agrees to file a Form D with  respect to the
Securities as required  under  Regulation D and to provide a copy thereof to the
Original  Holders  promptly  after such filing.  The Original  Holders  agree to
cooperate with Aura in connection with such filing and, upon request of Aura, to
provide all information relating to the Original Holders reasonably required for
such filing.

                   (e) Authorization for Trading;  Reporting Status.  Within two
Business  Days after the Closing Date under the Note Purchase  Agreements,  Aura
shall file a  notification  for  listing of  additional  shares  with the Nasdaq
relating to the Aura Repricing Shares and on or prior to such date shall provide
evidence of such filing to the Original Holders. So long as the Original Holders
own any of the Aura Repricing  Shares or the Repricing  Rights,  Aura shall file
all reports required to be filed with the SEC pursuant to Section 13 or 15(d) of
the 1934 Act and Aura shall not  terminate  its status as an issuer  required to
file  reports  under  the  1934  Act  even  if the  1934  Act or the  rules  and
regulations thereunder would permit such termination.

                   (f) Blue Sky Laws. On or before the Closing Date,  Aura shall
take such  action as and to the  extent it shall be  necessary  or  required  to
qualify,  or to  obtain  an  exemption  for the  Repricing  Rights  and the Aura
Repricing Shares for issuance to the Original Holders pursuant to this Agreement
under such of the  securities  or "blue sky" laws of  jurisdictions  as shall be
applicable to the issuance to the Original  Holders of the Repricing  Rights and
the Aura Repricing Shares pursuant to this Agreement.  The Company shall furnish
copies of all  filings,  applications,  orders  and grants or  confirmations  of
exemptions  relating  to such  securities  or "blue sky" laws on or prior to the
Closing Date under the Note Purchase Agreement.

                   (g)  Exercise  Notice.  Aura,  the Company  and the  Original
Holders  agree  that the form of  Exercise  Notice  attached  as Annex VI to the
Subscription  Agreements  is hereby  amended and replaced in its entirety by the
form of Exercise Notice annexed hereto as Exhibit B.

                   (h) Certain Issuances of Securities.  Unless Aura obtains the
Stockholder  Approval or a waiver  thereof from the Nasdaq,  Aura will not issue
any shares of Aura Common  Stock or shares of any series of  preferred  stock or
other securities convertible into,  exchangeable for, or otherwise entitling the
holder to  acquire,  shares of Aura  Common  Stock which would be subject to the
requirements of the Stockholder Approval Rule and which would be integrated with
the  issuance  of  Repricing  Rights or Aura  Repricing  Shares to the Buyer for
purposes of the Stockholder Approval Rule.

                   7.   Miscellaneous.

                   (a)  Governing Law.  This Agreement shall be governed by and
interpreted in accordance with the laws of the State of California.

                   (b)   Counterparts.   This   Agreement  may  be  executed  in
counterparts  and by the parties hereto on separate  counterparts,  all of which
together shall constitute one and the same instrument.  A facsimile transmission
of this Agreement bearing a signature on behalf of a party hereto shall be legal
and binding on such party.

                   (c) Headings, etc. The headings, captions and footers of this
Agreement are for convenience of reference and shall not form part of, or affect
the interpretation of, this Agreement.

                   (d) Severability. If any provision of this Agreement shall be
invalid   or   unenforceable   in   any   jurisdiction,   such   invalidity   or
unenforceability  shall  not  affect  the  validity  of  enforceability  of  the
remainder of this Agreement or the validity or  enforceability of this Agreement
in any other jurisdiction.

                   (e) Amendments. No amendment, modification, waiver, discharge
or  termination  of any provision of this Agreement nor consent to any departure
by the Holders,  Aura or the Company  therefrom  shall in any event be effective
unless the same shall be in writing  and signed by the party to be charged  with
enforcement,  and then shall be effective only in the specific  instance and for
the purpose for which given.  No course of dealing  between the parties  thereto
shall operate as an amendment of this Agreement.

                   (f)  Waivers.  Failure of any party to exercise  any right or
remedy under this Agreement or otherwise, or delay by a party in exercising such
right or remedy,  or any  course of  dealings  between  the  parties,  shall not
operate as a waiver  thereof or any  amendment  hereof,  nor shall any single or
partial   exercise  of  any  such  right  or  power,   or  any   abandonment  or
discontinuance of steps to enforce such a right or power,  preclude any other or
further exercise there of exercise of any other right or power.

                   (g)  Notices.  Any notices  required or permitted to be given
under the terms of this  Agreement  shall be delivered  personally  (which shall
include telephone line facsimile  transmission with answer back confirmation) or
by courier and shall be effective  upon receipt,  if delivered  personally or by
courier,  in the case of the  Company  addressed  to the  Company at its address
shown in the introductory paragraph of the Subscription  Agreements,  Attention:
Chief  Executive  Officer  (telephone line facsimile  transmission  number (818)
597-1002),  in the case of Aura  addressed  to Aura at 2335  Alaska  Avenue,  El
Segundo,  California 90245,  Attention:  Chief Financial Officer (telephone line
facsimile  transmission  number (818) 643-8719) or, in the case of each Original
Holder, at its address or telephone line facsimile  transmission number shown on
the signature page of this Agreement or, in the case of any Holder who is not an
Original  Holder,  to such address as such Holder shall have provided in writing
to the  Company  and Aura for such  purpose  or, in each such  case,  such other
address or telephone  line facsimile  transmission  number as a party shall have
provided by notice to the other parties in accordance with this provision.

                   (h) Assignment.  Each Original Holder shall have the right to
assign its rights and  obligations  under this Agreement to any party to whom it
assigns its rights under its Subscription  Agreement,  Note Purchase  Agreement,
Registration Rights Agreement or Aura Registration Rights Agreement. Each Holder
shall be entitled to the rights and benefits of the Original  Holders under this
Agreement.

                   (i)  Survival  of   Representations   and   Warranties.   The
respective representations, warranties, covenants and agreements of Aura and the
Company  contained  in  this  Agreement  or  made  by  or  on  behalf  of  them,
respectively,  pursuant to this Agreement  shall survive the delivery of payment
for the Notes pursuant to the Note Purchase  Agreements and shall remain in full
force and effect regardless of any investigation made by or on behalf of them or
any Person controlling or advising any of them.

                   (j) Effect of  Amendments;  Entire  Agreement.  Except to the
extent  expressly  amended  hereby,  the terms and  provisions of the respective
Subscription  Agreements and Registration Rights Agreements are hereby confirmed
and shall remain in full force and effect.  This  Agreement  and, as so amended,
the other  agreements and instruments  contemplated  hereby set forth the entire
agreement  between the parties  hereto with respect to the subject matter hereof
and supersede all prior agreements and understandings,  whether written or oral,
with respect thereto. Aura hereby becomes a party to the respective Subscription
Agreements in order to give effect to the provisions of this Agreement.
~
                   IN WITNESS WHEREOF,  this Agreement has been duly executed by
the  parties  hereto  by their  respective  officers  or  other  representatives
thereunto duly authorized as of the date first set forth above.

                                      AURA SYSTEMS, INC.



                                          By: ___________________________
                                              Name:
                                              Title:


                                      NEWCOM, INC.



                                          By:______________________________
                                             Name:
                                             Title:


                                     [ORIGINAL HOLDERS]



                                          By:______________________________
                                             Name:
                                             Title:

                                             Address:






                                             Facsimile No.:


Exhibit A

                           REGISTRATION RIGHTS AGREEMENT

                   THIS REGISTRATION RIGHTS AGREEMENT,  dated as of December 28,
1998 (this "Agreement"),  is made by and between AURA SYSTEMS,  INC., a Delaware
corporation (the  "Company"),  and the person named on the signature page hereto
(the "Initial Investor").

                                W I T N E S S E T H:

                   WHEREAS, in connection with the Amendment Agreement, dated as
of December 28, 1998,  between the Initial  Investor,  the other investors named
therein,  NewCom, Inc., a Delaware corporation ("NewCom"),  and the Company (the
"Amendment  Agreement"),  the Company has agreed,  upon the terms and subject to
the  conditions of the  Amendment  Agreement,  to issue to the Initial  Investor
shares of Common Stock,  $.005 par value (the "Common  Stock"),  of the Company,
from time to time upon the exercise of certain Repricing Rights described in the
Amendment Agreement; and

                   WHEREAS,  to induce  the  Initial  Investor  to  execute  and
deliver the  Amendment  Agreement,  the  Company  has agreed to provide  certain
registration rights under the Securities Act of 1933, as amended,  and the rules
and regulations thereunder, or any similar successor statute (collectively,  the
"Securities  Act"),  and applicable  state  securities  laws with respect to the
Registrable  Securities (as defined below) issuable to the Investors pursuant to
the Subscription Agreement;

                   NOW,  THEREFORE,  in  consideration  of the  premises and the
mutual covenants contained herein and other good and valuable consideration, the
receipt and  sufficiency of which are hereby  acknowledged,  the Company and the
Initial Investor hereby agree as follows:

                   1.   Definitions.

                   (a) As used in this Agreement, the following terms shall have
the following meanings:

                   "Computation  Date" means,  if an event  described in Section
2(f)(1) occurs, any of (1) the date which is 30 days after such event occurs, if
any such event is continuing on such date,  (2) each date which is 30 days after
a Computation  Date,  if any such event is continuing on such date,  and (3) the
date on which all such events cease to continue.

                   "Exchange Act" means the Securities Exchange Act of 1934, as 
amended.

                   "Initial  Registration  Amount"  means  134% of the number of
Aura Repricing Shares issuable pursuant to the Amendment  Agreement assuming (A)
all of the Buyer's  Repricing  Rights issued at the First Closing were exercised
on the SEC Filing Date (without  regard to any  limitations on exercise) and (B)
the Average  Market Price on the SEC Filing Date was 50% of the lower of (x) the
Average Market Price on the Closing Date and (y) the Average Market Price on the
SEC Filing Date.

                   "Investor" or "Investors"  means the Initial Investor and any
transferee  or assignee  who agrees to become  bound by the  provisions  of this
Agreement in accordance with Section 9 hereof.

                   "Nasdaq" means the Nasdaq National Market.

                   "Other Registration Rights Agreements" means the registration
rights  agreements  dated the date  hereof  between  the Company and each of the
Other Buyers.

                   "register,"  "registered,"  and  "registration"  refer  to  a
registration  effected  by  preparing  and filing a  Registration  Statement  or
Statements in compliance  with the Securities Act and pursuant to Rule 415 under
the Securities Act or any successor rule providing for offering  securities on a
continuous  basis ("Rule 415"), and the declaration or ordering of effectiveness
of such  Registration  Statement by the United  States  Securities  and Exchange
Commission (the "SEC").

                   "Registrable Securities" means the Aura Repricing Shares.

                   "Registration Amount" means the sum of (i) the number of Aura
Repricing Shares previously issued pursuant to the Amendment Agreement plus (ii)
the  number  of Aura  Repricing  Shares  issuable  pursuant  to all  unexercised
Repricing  Rights  (without  regard to  limitations  on  exercise)  equal to the
greater  of (A) the  number of such Aura  Repricing  Shares  issuable  as if the
Average Market Price on the date of determination of the Registration Amount was
66.7% of the lower of (x) the Average  Market  Price on the Closing Date and (y)
the Average  Market Price on the SEC  Effective  Date and (B) the number of such
Aura Repricing  Shares issuable based on the Average Market Price on the date of
determination of the Registration Amount.

                   "Registration  Period" means the period from the Closing Date
to the  earlier of (i) the date  which is two years  after the date on which the
last  Aura  Repricing  Shares  may be issued to the  Investors  pursuant  to the
Subscription Agreement, (ii) the date on which each Investor may sell all of its
Registrable  Securities  (including  Registrable  Securities which may be issued
from time to time) without  registration  under the  Securities  Act pursuant to
Rule 144, without  restriction on the manner of sale or the volume of securities
which may be sold in any period and  without the  requirement  for the giving of
any notice to, or the making of any filing  with,  the SEC and (iii) the date on
which the Investors no longer beneficially own any Registrable Securities.

                   "Registration  Statement"  means a registration  statement of
the Company under the Securities Act, including any amendment thereto.

                   "Rule 144" means Rule 144  promulgated  under the  Securities
Act or any  other  similar  rule or  regulation  of the SEC that may at any time
permit a holder of any  securities  to sell  securities  of the  Company  to the
public without registration under the Securities Act.

                   "SEC  Effective   Date"  means  the  date  the   Registration
Statement is first declared effective by the SEC.

                   "SEC Filing Date" means the date the  Registration  Statement
is first filed with the SEC pursuant to Section 2(a).

                   "Subscription  Agreement" means the  Subscription  Agreement,
dated as of November 30, 1998, between NewCom and the Initial Investor.

                   (b) Capitalized  terms defined in the introductory  paragraph
or the recitals to this  Agreement  shall have the respective  meanings  therein
provided.  Capitalized  terms used herein and not otherwise defined herein shall
have the  respective  meanings set forth in the Amendment  Agreement and, if not
defined therein, in the Subscription Agreement.

                   2.   Registration.

                   (a) Mandatory  Registration.  The Company shall prepare,  and
not later than January 29, 1999,  file with the SEC a Registration  Statement on
Form S-3  which,  on the date of filing  with the SEC,  covers the resale by the
Initial Investor or its assignees of a number of shares of Common Stock at least
equal to the  Initial  Registration  Amount.  If (i) at any time the  number  of
shares of Common Stock  included in the  Registration  Statement  required to be
filed as provided in the first  sentence of this Section 2(a) shall be less than
the then  applicable  Registration  Amount or (ii) the Second Tranche Shares and
the Aura Repricing Shares issuable upon exercise of the Second Tranche Repricing
Rights are not  permitted to be included in the initial  Registration  Statement
filed pursuant to this Section 2(a),  then promptly,  but in no event later than
20 days after such  insufficiency  shall occur,  the Company shall file with the
SEC an additional Registration Statement on Form S-3 (which shall not constitute
a post-effective  amendment to the Registration  Statement filed pursuant to the
first sentence of this Section  2(a)),  covering such number of shares of Common
Stock at least equal to the difference  between the Registration  Amount and the
number of shares previously registered.  For all purposes of this Agreement such
additional  Registration  Statement  shall  be  deemed  to be  the  Registration
Statement  required to be filed by the Company  pursuant to Section 2(a) of this
Agreement,  and the  Company  and the  Investors  shall have the same rights and
obligations with respect to such additional Registration Statement as they shall
have with respect to the initial Registration  Statement required to be filed by
the  Company  pursuant  to this  Section  2(a).  No  securities  other  than the
Registrable  Securities  and the  securities  registrable  pursuant to the Other
Registration  Rights  Agreements may be included in any  Registration  Statement
filed pursuant to this Agreement.

                   (b)  Certain  Offerings.   If  any  offering  pursuant  to  a
Registration  Statement pursuant to Section 2(a) hereof involves an underwritten
offering,  Investors  who  hold  a  majority  in  interest  of  the  Registrable
Securities subject to such underwritten  offering shall have the right to select
one legal counsel and an investment banker or bankers and manager or managers to
administer  the  offering,  which  investment  banker or  bankers  or manager or
managers shall be reasonably satisfactory to the Company. The Investors who hold
the  Registrable  Securities to be included in such  underwriting  shall pay all
underwriting  discounts  and  commissions  and other fees and  expenses  of such
investment  banker or bankers and manager or managers so selected in  accordance
with this Section 2(b) (other than fees and expenses relating to registration of
Registrable Securities under federal or state securities laws, which are payable
by the Company  pursuant to Section 5 hereof) with respect to their  Registrable
Securities  and the fees and  expenses of such legal  counsel so selected by the
Investors.

                   (c) Other  Registrations.  The Company  will not file another
registration statement with the SEC covering shares of Common Stock prior to the
SEC Effective Date, other than registration statements on Form S-4 or S-8.

                   (d)  Piggy-Back  Registrations.  If at any time  the  Company
shall  determine  to  prepare  and file  with the SEC a  Registration  Statement
relating to an offering  for its own account or the account of others  under the
Securities Act of any of its equity  securities,  other than on Form S-4 or Form
S-8 or their then equivalents  relating to equity securities to be issued solely
in  connection  with  any  acquisition  of any  entity  or  business  or  equity
securities  issuable in connection  with stock option or other employee  benefit
plans,  the Company shall send to each Investor who is entitled to  registration
rights  under this Section 2(d)  written  notice of such  determination  and, if
within  ten (10) days after  receipt  of such  notice,  such  Investor  shall so
request in writing, the Company shall include in such Registration Statement all
or  any  part  of  the  Registrable  Securities  such  Investor  requests  to be
registered,  except that if, in connection with any underwritten public offering
for the account of the Company, the managing underwriter(s) thereof shall impose
a  limitation  on the number of shares of Common  Stock which may be included in
the Registration  Statement  because,  in such  underwriter(s)'  judgment,  such
limitation  is  necessary  to effect an orderly  public  distribution,  then the
Company shall be obligated to include in such  Registration  Statement only such
limited  portion  of the  Registrable  Securities  with  respect  to which  such
Investor  has  requested  inclusion  hereunder.  Any  exclusion  of  Registrable
Securities  shall  be made pro rata  among  the  Investors  seeking  to  include
Registrable  Securities,  in proportion to the number of Registrable  Securities
sought to be included by such  Investors;  provided,  however,  that the Company
shall not  exclude  any  Registrable  Securities  unless the  Company  has first
excluded  all  outstanding  securities  the holders of which are not entitled by
right to inclusion of securities in such  Registration  Statement;  and provided
further,  however,  that,  after  giving  effect  to the  immediately  preceding
proviso,  any exclusion of  Registrable  Securities  shall be made pro rata with
holders of other  securities  having the right to include such securities in the
Registration Statement, based on the number of securities for which registration
is  requested  except  to the  extent  such pro  rata  exclusion  of such  other
securities is prohibited under any written agreement entered into by the Company
with the holder of such other securities prior to the date of this Agreement, in
which case such other  securities  shall be excluded,  if at all, in  accordance
with the  terms of such  agreement.  No right  to  registration  of  Registrable
Securities  under this Section 2(d) shall be construed to limit any registration
required  under Section 2(a) hereof.  The  obligations of the Company under this
Section  2(d) may be waived by  Investors  holding a majority in interest of the
Registrable  Securities  and shall  expire  after the Company has  afforded  the
opportunity for the Investors to exercise registration rights under this Section
2(d) for two registrations;  provided, however, that any Investor who shall have
had any  Registrable  Securities  excluded  from any  Registration  Statement in
accordance  with this Section 2(d) shall be entitled to include in an additional
Registration  Statement  filed by the  Company  the  Registrable  Securities  so
excluded.  Notwithstanding  any  other  provision  of  this  Agreement,  if  the
Registration  Statement  required to be filed  pursuant to Section  2(a) of this
Agreement  shall have been ordered  effective  by the SEC and the Company  shall
have maintained the effectiveness of such Registration  Statement as required by
this Agreement and if the Company shall  otherwise have complied in all material
respects with its obligations  under this Agreement,  then the Company shall not
be  obligated  to  register  any  Registrable  Securities  on such  Registration
Statement referred to in this Section 2(d).

                   (e)   Eligibility   for  Form  S-3.  The  Company  meets  the
requirements  for  the use of  Forms  S-3 for  registration  of the  Registrable
Securities  for resale by the  Investors.  The  Company  shall file all  reports
required  to be filed by the  Company  with the SEC in a timely  manner so as to
maintain such eligibility for the use of Form S-3.

                   (f) Certain  Payments by the Company.  (1) If (A) the Company
fails to file the  Registration  Statement with the SEC on or before January 29,
1999 or (B) the Registration  Statement is not declared  effective by the SEC on
or before March 30, 1999,  the Company shall pay the Initial  Investor an amount
in cash equal to 2.0% of the  Purchase  Price on the first  Computation  Date to
occur and 3.0% of the Purchase Price on each subsequent  Computation  Date (such
amounts to be pro rated for periods less than 30 days).

                   (2) If the Registration Statement shall cease to be available
for use by any Investor  for the sale of any  Registrable  Securities  for 15 or
more  days  (whether  or not  consecutive)  for any  reason  (including  without
limitation by reason of events described in Sections 3(f) and 3(g)), the Company
shall pay such  Investor an amount in cash equal to 0.2% of the  Purchase  Price
for each day on which such unavailability occurs. Such payments shall be made in
arrears every 30 days after such unavailability first occurs.

                   (3) Any overdue payments  required by this Section 3(f) shall
bear  interest as provided in Section 6(o) of the  Subscription  Agreement.  The
payments  required by this Section 3(f) shall be in addition to any other rights
and remedies of the Investors under this Agreement,  the Subscription  Agreement
and applicable law.

                   3.  Obligations  of  the  Company.  In  connection  with  the
registration of the Registrable Securities, the Company shall:

                   (a)  prepare  promptly,  and file with the SEC not later than
January  29,  1999,  a  Registration  Statement  with  respect  to the number of
Registrable  Securities provided in Section 2(a), and thereafter to use its best
efforts to cause each Registration  Statement relating to Registrable Securities
to  become  effective  as soon as  possible  after  such  filing,  and  keep the
Registration  Statement  effective  pursuant to Rule 415 at all times during the
Registration  Period;  submit to the SEC,  within three  business days after the
Company learns that no review of the Registration  Statement will be made by the
staff of the SEC or that the  staff of the SEC has no  further  comments  on the
Registration  Statement,  as the case  may be, a  request  for  acceleration  of
effectiveness of the Registration Statement to a time and date not later than 48
hours  after  the  submission  of such  request;  notify  the  Investors  of the
effectiveness  of the  Registration  Statement  on  the  date  the  Registration
Statement is declared effective; and the Company represents and warrants to, and
covenants  and  agrees  with,  the  Investors  that the  Registration  Statement
(including  any  amendments or supplements  thereto and  prospectuses  contained
therein),  at the time it is first filed with the SEC, at the time it is ordered
effective  by the  SEC  and at all  times  during  which  it is  required  to be
effective  hereunder  (and each such  amendment and supplement at the time it is
filed  with the SEC and at all times  during  which it is  available  for use in
connection  with the offer  and sale of the  Registrable  Securities)  shall not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein,  or necessary to make the statements  therein, in
light of the circumstances in which they were made, not misleading;

                   (b) prepare and file with the SEC such amendments  (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus  used  in  connection  with  the  Registration  Statement  as  may be
necessary to keep the Registration  Statement  effective at all times during the
Registration  Period,  and,  during the  Registration  Period,  comply  with the
provisions  of  the  Securities  Act  with  respect  to the  disposition  of all
Registrable  Securities  of the Company  covered by the  Registration  Statement
until such time as all of such  Registrable  Securities have been disposed of in
accordance  with the intended  methods of  disposition  by the seller or sellers
thereof as set forth in the Registration Statement;

                   (c) furnish to each Investor whose Registrable Securities are
included in the Registration Statement and its legal counsel, (1) promptly after
the same is prepared and publicly distributed, filed with the SEC or received by
the Company,  one copy of the Registration  Statement and any amendment thereto,
each  preliminary  prospectus  and  prospectus  and each amendment or supplement
thereto,  each  letter  written by or on behalf of the Company to the SEC or the
staff of the SEC and each  item of  correspondence  from the SEC or the staff of
the SEC relating to such  Registration  Statement (other than any portion of any
thereof which contains information for which the Company has sought confidential
treatment)  and  (2)  such  number  of  copies  of  a  prospectus,  including  a
preliminary  prospectus,  and all  amendments and  supplements  thereto and such
other documents,  as such Investor may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such Investor;

                   (d) use  reasonable  efforts to (i)  register and qualify the
Registrable   Securities  covered  by  the  Registration  Statement  under  such
securities  or blue sky laws of such  jurisdictions  as the Investors who hold a
majority in interest of the  Registrable  Securities  being  offered  reasonably
request, (ii) prepare and file in those jurisdictions such amendments (including
post-effective   amendments)   and   supplements  to  such   registrations   and
qualifications as may be necessary to maintain the effectiveness  thereof at all
times until the end of the Registration Period, (iii) take such other actions as
may be necessary to maintain such  registrations and qualifications in effect at
all times  during  the  Registration  Period  and (iv)  take all  other  actions
reasonably necessary or advisable to qualify the Registrable Securities for sale
in such jurisdictions; provided, however, that the Company shall not be required
in connection  therewith or as a condition thereto (I) to qualify to do business
in any jurisdiction  where it would not otherwise be required to qualify but for
this  Section  3(d),  (II) to  subject  itself to general  taxation  in any such
jurisdiction,  (III) to file a general consent to service of process in any such
jurisdiction,  (IV) to provide  any  undertakings  that cause more than  nominal
expense or burden to the Company or (V) to make any change in its Certificate of
Incorporation  or  by-laws,  which in each  case the Board of  Directors  of the
Company  determines to be contrary to the best  interests of the Company and its
shareholders;

                   (e) in the event that the  Registrable  Securities  are being
offered in an  underwritten  offering,  enter into and perform  its  obligations
under an underwriting agreement, in usual and customary form, including, without
limitation,  customary  indemnification and contribution  obligations,  with the
underwriters of such offering;

                   (f) as promptly as  practicable  after becoming aware of such
event or  circumstance,  notify each  Investor of any event or  circumstance  of
which the Company has knowledge, as a result of which the prospectus included in
the Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements  therein,  in light of the circumstances  under
which they were made,  not  misleading,  and use its best  efforts  promptly  to
prepare a supplement or amendment to the Registration  Statement to correct such
untrue statement or omission,  file such supplement or amendment with the SEC at
such time as shall permit the Investors to sell Registrable  Securities pursuant
to the Registration Statement as promptly as practical,  and deliver a number of
copies of such  supplement  or amendment to each  Investor as such  Investor may
reasonably request;

                   (g) as promptly as  practicable  after becoming aware of such
event, notify each Investor who holds Registrable  Securities being sold (or, in
the  event  of an  underwritten  offering,  the  managing  underwriters)  of the
issuance by the SEC of any stop order or other  suspension of  effectiveness  of
the Registration Statement at the earliest possible time;

                   (h)  permit a single  firm of counsel  designated  as selling
shareholders'  counsel by the  Investors  who hold a majority in interest of the
Registrable  Securities  being  sold to review and  comment on the  Registration
Statement and all amendments and supplements thereto a reasonable period of time
prior to their filing with the SEC;

                   (i) make generally  available to its security holders as soon
as practical,  but not later than ninety (90) days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 under the Securities Act) covering a twelve-month  period beginning not
later than the first day of the  Company's  fiscal  quarter next  following  the
effective date of the Registration Statement;

                   (j) at the  request of the  Investors  who hold a majority in
interest of the  Registrable  Securities  being  sold,  furnish on the date that
Registrable  Securities  are  delivered to an  underwriter,  if any, for sale in
connection with the Registration  Statement (i) a letter,  dated such date, from
the Company's  independent certified public accountants in form and substance as
is customarily given by independent certified public accountants to underwriters
in an underwritten public offering,  addressed to the underwriters;  and (ii) an
opinion,  dated such date, from counsel representing the Company for purposes of
such Registration Statement, in form and substance as is customarily given in an
underwritten public offering, addressed to the underwriters and the Investors;

                   (k)  make  available  for  inspection  by any  Investor,  any
underwriter  participating  in any  disposition  pursuant  to  the  Registration
Statement,  and any  attorney,  accountant  or other agent  retained by any such
Investor  or  underwriter  (collectively,   the  "Inspectors"),   all  pertinent
financial and other records, pertinent corporate documents and properties of the
Company  (collectively,  the  "Records"),  as shall be  reasonably  necessary to
enable each  Inspector to exercise its due diligence  responsibility,  and cause
the Company's officers,  directors and employees to supply all information which
any  Inspector  may  reasonably  request  for  purposes  of such due  diligence;
provided,  however,  that each Inspector  shall hold in confidence and shall not
make any disclosure  (except to an Investor) of any Record or other  information
which the  Company  determines  in good faith to be  confidential,  and of which
determination the Inspectors are so notified,  unless (i) the disclosure of such
Records is  necessary  to avoid or correct a  misstatement  or  omission  in any
Registration Statement,  (ii) the release of such Records is ordered pursuant to
a  subpoena  or  other  order  from a court  or  government  body  of  competent
jurisdiction  or (iii) the  information  in such Records has been made generally
available  to the public  other than by  disclosure  in violation of this or any
other agreement.  The Company shall not be required to disclose any confidential
information  in such Records to any  Inspector  until and unless such  Inspector
shall  have  entered  into  confidentiality  agreements  (in form and  substance
satisfactory   to  the  Company)   with  the  Company   with  respect   thereto,
substantially  in the form of this Section 3(k).  Each  Investor  agrees that it
shall,  upon learning that disclosure of such Records is sought in or by a court
or  governmental  body of competent  jurisdiction  or through other means,  give
prompt  notice to the  Company  and  allow the  Company,  at the  Company's  own
expense, to undertake  appropriate action to prevent disclosure of, or to obtain
a protective order for, the Records deemed confidential.  The Company shall hold
in confidence  and shall not make any  disclosure of  information  concerning an
Investor  provided to the Company  pursuant  to Section  4(e) hereof  unless (i)
disclosure  of such  information  is  necessary  to comply with federal or state
securities  laws, (ii) the disclosure of such  information is necessary to avoid
or correct a misstatement or omission in any Registration  Statement,  (iii) the
release of such  information  is ordered  pursuant  to a subpoena or other order
from a  court  or  governmental  body of  competent  jurisdiction  or (iv)  such
information  has been made  generally  available  to the  public  other  than by
disclosure in violation of this or any other agreement.  The Company agrees that
it shall,  upon  learning  that  disclosure  of such  information  concerning an
Investor  is  sought  in  or  by a  court  or  governmental  body  of  competent
jurisdiction  or through other means,  give prompt notice to such  Investor,  at
such  Investor's  own  expense,  to  undertake  appropriate  action  to  prevent
disclosure of, or to obtain a protective order for, such information;

                   (l) use its best  efforts  (i) to cause  all the  Registrable
Securities  covered by the Registration  Statement to be listed on the Nasdaq or
such other principal  securities market on which securities of the same class or
series  issued by the Company are then listed or traded or (ii) if securities of
the same class or series as the  Registrable  Securities  are not then listed on
Nasdaq or any such  other  securities  market,  to cause all of the  Registrable
Securities  covered by the  Registration  Statement to be listed on the New York
Stock Exchange, the American Stock Exchange or the Nasdaq National Market;

                   (m) provide a transfer  agent and  registrar,  which may be a
single entity, for the Registrable  Securities not later than the effective date
of the Registration Statement;

                   (n)  cooperate  with  the  Investors  who  hold   Registrable
Securities being offered and the managing  underwriter or underwriters,  if any,
to facilitate the timely  preparation and delivery of certificates  (not bearing
any  restrictive  legends)  representing  Registrable  Securities  to be offered
pursuant to the  Registration  Statement and enable such  certificates  to be in
such denominations or amounts as the case may be, as the managing underwriter or
underwriters,  if any, or the Investors may reasonably request and registered in
such names as the managing underwriter or underwriters, if any, or the Investors
may request;  and,  within three  business days after a  Registration  Statement
which  includes  Registrable  Securities  is ordered  effective  by the SEC, the
Company shall deliver to the transfer agent for the Registrable Securities (with
copies to the  Investors  whose  Registrable  Securities  are  included  in such
Registration Statement) an instruction substantially in the form attached hereto
as Exhibit 1 and shall cause legal counsel selected by the Company to deliver to
the Investors an opinion of such counsel in the form attached  hereto as Exhibit
2 (with a copy to the Company's transfer agent);

                   (o) during the period the  Company is  required  to  maintain
effectiveness  of the  Registration  Statement  pursuant  to Section  3(a),  the
Company  shall not bid for or purchase any Common Stock or any right to purchase
Common  Stock or attempt to induce any person to purchase  any such  security or
right if such bid,  purchase or attempt  would in any way limit the right of the
Investors to sell Registrable  Securities by reason of the limitations set forth
in Regulation M under the Exchange Act; and

                   (p) take all other reasonable  actions  necessary to expedite
and  facilitate  disposition  by the  Investors  of the  Registrable  Securities
pursuant to the Registration Statement.

                   4.  Obligations  of the  Investors.  In  connection  with the
registration  of the  Registrable  Securities,  the  Investors  shall  have  the
following obligations:

                   (a) It shall be a condition  precedent to the  obligations of
the Company to complete the registration pursuant to this Agreement with respect
to the Registrable  Securities of a particular Investor that such Investor shall
furnish to the  Company  such  information  regarding  itself,  the  Registrable
Securities  held by it and the intended method of disposition of the Registrable
Securities held by it as shall be reasonably required to effect the registration
of such  Registrable  Securities  and shall execute such documents in connection
with such registration as the Company may reasonably  request. At least four (4)
days prior to the first anticipated  filing date of the Registration  Statement,
the Company shall notify each Investor of the information  the Company  requires
from each such Investor (the "Requested  Information") if any of such Investor's
Registrable Securities are eligible for inclusion in the Registration Statement.
If at least one (1)  business  day prior to the filing  date the Company has not
received  the  Requested   Information  from  an  Investor  (a   "Non-Responsive
Investor"),  then  the  Company  may  file the  Registration  Statement  without
including Registrable  Securities of such Non-Responsive  Investor but shall not
be relieved of its  obligation  to file a  Registration  Statement  with the SEC
relating to the Registrable Securities of such Non-Responsive  Investor promptly
after such Non-Responsive Investor provides the Requested Information;

                   (b)  Each  Investor  by  such  Investor's  acceptance  of the
Registrable  Securities  agrees to  cooperate  with the  Company  as  reasonably
requested by the Company in connection  with the  preparation  and filing of the
Registration Statement hereunder,  unless such Investor has notified the Company
in  writing  of such  Investor's  election  to  exclude  all of such  Investor's
Registrable Securities from the Registration Statement;

                   (c) In the event Investors  holding a majority in interest of
the Registrable  Securities being registered determine to engage the services of
an  underwriter,  each Investor agrees to enter into and perform such Investor's
obligations  under an  underwriting  agreement,  in usual  and  customary  form,
including,  without  limitation,   customary  indemnification  and  contribution
obligations,  with the managing underwriter of such offering and take such other
actions as are  reasonably  required  in order to  expedite  or  facilitate  the
disposition of the Registrable Securities, unless such Investor has notified the
Company in writing of such Investor's election to exclude all of such Investor's
Registrable Securities from the Registration Statement;

                   (d) Each  Investor  agrees  that,  upon receipt of any notice
from the Company of the happening of any event of the kind  described in Section
3(f)  or  3(g),  such  Investor  will  immediately  discontinue  disposition  of
Registrable  Securities  pursuant to the  Registration  Statement  covering such
Registrable  Securities  until  such  Investor's  receipt  of the  copies of the
supplemented or amended prospectus  contemplated by Section 3(f) or 3(g) and, if
so directed by the Company,  such Investor  shall deliver to the Company (at the
expense of the Company) or destroy (and deliver to the Company a certificate  of
destruction) all copies in such Investor's possession of the prospectus covering
such Registrable Securities current at the time of receipt of such notice; and

                   (e)  No  Investor  may   participate   in  any   underwritten
registration  hereunder  unless such Investor (i) agrees to sell such Investor's
Registrable  Securities on the basis provided in any  underwriting  arrangements
approved by the Investors entitled hereunder to approve such arrangements,  (ii)
completes  and executes  all  questionnaires,  powers of attorney,  indemnities,
underwriting  agreements and other documents reasonably required under the terms
of such underwriting  arrangements and (iii) agrees to pay its pro rata share of
all  underwriting  discounts  and  commissions  and other fees and  expenses  of
investment  bankers and any manager or managers of such  underwriting  and legal
expenses  of  the  underwriters  applicable  with  respect  to  its  Registrable
Securities,  in each case to the extent not payable by the  Company  pursuant to
the terms of this Agreement.

                   5. Expenses of Registration.  All reasonable expenses,  other
than  underwriting  discounts  and  commissions  and other fees and  expenses of
investment bankers and other than brokerage commissions,  incurred in connection
with registrations,  filings or qualifications pursuant to Section 3, including,
without limitation, all registration,  listing and qualifications fees, printers
and accounting  fees and the fees and  disbursements  of counsel for the Company
and the Investors,  shall be borne by the Company,  provided,  however, that the
Investors  shall  bear the  fees and  out-of-pocket  expenses  of the one  legal
counsel selected by the Investors pursuant to Section 2(b) hereof.

                   6. Indemnification.  In the event any Registrable  Securities
are included in a Registration Statement under this Agreement:

                   (a)  To  the  extent  permitted  by  law,  the  Company  will
indemnify and hold harmless each Investor who holds such Registrable Securities,
the directors, if any, of such Investor, the officers, if any, of such Investor,
each  person,  if any,  who  controls  any  Investor  within the  meaning of the
Securities  Act  or  the  Exchange  Act,  any  underwriter  (as  defined  in the
Securities Act) for the Investors,  the directors,  if any, of such  underwriter
and the  officers,  if any, of such  underwriter,  and each person,  if any, who
controls any such  underwriter  within the meaning of the  Securities Act or the
Exchange  Act (each,  an  "Indemnified  Person"),  against any  losses,  claims,
damages,  liabilities  or expenses  (joint or several)  incurred  (collectively,
"Claims") to which any of them may become subject under the Securities  Act, the
Exchange Act or  otherwise,  insofar as such Claims (or actions or  proceedings,
whether  commenced or threatened,  in respect thereof) arise out of or are based
upon  any  of  the  following   statements,   omissions  or  violations  in  the
Registration  Statement,  or  any  post-effective   amendment  thereof,  or  any
prospectus  included  therein:  (i)  any  untrue  statement  or  alleged  untrue
statement  of a material  fact  contained in the  Registration  Statement or any
post-effective  amendment  thereof or the omission or alleged  omission to state
therein a material fact  required to be stated  therein or necessary to make the
statements  therein not misleading,  (ii) any untrue statement or alleged untrue
statement of a material  fact  contained in any  preliminary  prospectus if used
prior to the effective date of such Registration  Statement, or contained in the
final prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement  thereto with the SEC) or the omission or alleged omission
to state  therein  any  material  fact  necessary  to make the  statements  made
therein,  in light of the circumstances  under which the statements therein were
made, not misleading or (iii) any violation or alleged  violation by the Company
of the Securities Act, the Exchange Act, any state securities law or any rule or
regulation  under the Securities  Act, the Exchange Act or any state  securities
law (the matters in the foregoing clauses (i) through (iii) being, collectively,
"Violations").  Subject  to the  restrictions  set  forth in  Section  6(d) with
respect  to the  number  of legal  counsel,  the  Company  shall  reimburse  the
Investors and each such  underwriter  or  controlling  person,  promptly as such
expenses  are  incurred  and are due and  payable,  for any legal  fees or other
reasonable  expenses  incurred  by  them in  connection  with  investigating  or
defending  any such Claim.  Notwithstanding  anything to the contrary  contained
herein, the indemnification  agreement contained in this Section 6(a): (I) shall
not apply to a Claim  arising out of or based upon a Violation  which  occurs in
reliance upon and in  conformity  with  information  furnished in writing to the
Company by any  Indemnified  Person or underwriter for such  Indemnified  Person
expressly  for  use in  connection  with  the  preparation  of the  Registration
Statement,  the prospectus or any such amendment thereof or supplement  thereto,
if such prospectus was timely made available by the Company  pursuant to Section
3(c) hereof; (II) with respect to any preliminary  prospectus shall not inure to
the  benefit of any such person  from whom the person  asserting  any such Claim
purchased the  Registrable  Securities  that are the subject  thereof (or to the
benefit of any person  controlling  such  person)  if the  untrue  statement  or
omission of material fact contained in the preliminary  prospectus was corrected
in the  prospectus,  as then amended or  supplemented,  if such  prospectus  was
timely made available by the Company pursuant to Section 3(c) hereof;  and (III)
shall not apply to amounts paid in settlement of any Claim if such settlement is
effected  without the prior written consent of the Company,  which consent shall
not be  unreasonably  withheld.  Such  indemnity  shall remain in full force and
effect regardless of any  investigation  made by or on behalf of the Indemnified
Person and shall  survive the  transfer  of the  Registrable  Securities  by the
Investors pursuant to Section 9.

                   (b) In connection with any Registration Statement in which an
Investor is  participating,  each such  Investor  agrees to  indemnify  and hold
harmless,  to the same extent and in the same manner set forth in Section  6(a),
the  Company,  each  of its  directors,  each  of its  officers  who  signs  the
Registration Statement, each person, if any, who controls the Company within the
meaning of the Securities Act or the Exchange Act, any underwriter and any other
shareholder selling securities pursuant to the Registration  Statement or any of
its  directors  or  officers  or any person who  controls  such  shareholder  or
underwriter  within  the  meaning  of the  Securities  Act or the  Exchange  Act
(collectively and together with an Indemnified Person, an "Indemnified  Party"),
against any Claim to which any of them may become subject,  under the Securities
Act, the Exchange  Act or  otherwise,  insofar as such Claim arises out of or is
based upon any  Violation,  in each case to the extent  (and only to the extent)
that such  Violation  occurs in reliance  upon and in  conformity  with  written
information  furnished  to the  Company by such  Investor  expressly  for use in
connection with such  Registration  Statement;  and such Investor will reimburse
any legal or other  expenses  reasonably  incurred by any  Indemnified  Party in
connection with  investigating or defending any such Claim;  provided,  however,
that the indemnity  agreement  contained in this Section 6(b) shall not apply to
amounts paid in settlement of any Claim if such  settlement is effected  without
the  prior  written  consent  of  such  Investor,  which  consent  shall  not be
unreasonably withheld;  provided,  further,  however, that the Investor shall be
liable  under  this  Section  6(b) for only  that  amount of a Claim as does not
exceed the amount by which the net  proceeds to such  Investor  from the sale of
Registrable  Securities pursuant to such Registration Statement exceeds the cost
of such Registrable Securities to such Investor.  Such indemnity shall remain in
full force and effect  regardless of any  investigation  made by or on behalf of
such  Indemnified  Party and  shall  survive  the  transfer  of the  Registrable
Securities by the Investors pursuant to Section 9.  Notwithstanding  anything to
the contrary contained herein, the  indemnification  agreement contained in this
Section 6(b) with respect to any preliminary  prospectus  shall not inure to the
benefit of any Indemnified Party if the untrue statement or omission of material
fact contained in the preliminary  prospectus was corrected on a timely basis in
the prospectus, as then amended or supplemented.

                   (c) The Company shall be entitled to receive indemnities from
underwriters,  selling brokers,  dealer managers and similar securities industry
professionals participating in any distribution,  to the same extent as provided
above,  with  respect to  information  so  furnished  in writing by such persons
expressly for inclusion in the Registration Statement.

                   (d)  Promptly  after  receipt  by an  Indemnified  Person  or
Indemnified  Party  under this  Section 6 of notice of the  commencement  of any
action  (including  any  governmental   action),   such  Indemnified  Person  or
Indemnified Party shall, if a Claim in respect thereof is to be made against any
indemnifying  party under this  Section 6, deliver to the  indemnifying  party a
written notice of the commencement thereof and the indemnifying party shall have
the right to  participate  in,  and,  to the  extent the  indemnifying  party so
desires,  jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel selected by the  indemnifying  party
but reasonably acceptable to the Indemnified Person or the Indemnified Party, as
the case may be; provided,  however,  that an Indemnified  Person or Indemnified
Party shall have the right to retain its own counsel  with the fees and expenses
to be paid by the indemnifying  party, if, in the reasonable  opinion of counsel
retained by the indemnifying  party, the  representation  by such counsel of the
Indemnified  Person or  Indemnified  Party and the  indemnifying  party would be
inappropriate  due to actual  or  potential  differing  interests  between  such
Indemnified  Person or Indemnified Party and any other party represented by such
counsel in such  proceeding.  In such event,  the Company shall pay for only one
separate legal counsel for the  Investors;  such legal counsel shall be selected
by the Investors  holding a majority in interest of the  Registrable  Securities
included in the Registration  Statement to which the Claim relates.  The failure
to deliver written notice to the indemnifying  party within a reasonable time of
the commencement of any such action shall not relieve such indemnifying party of
any liability to the Indemnified  Person or Indemnified Party under this Section
6, except to the extent that the indemnifying party is prejudiced in its ability
to defend such action. The  indemnification  required by this Section 6 shall be
made by  periodic  payments  of the  amount  thereof  during  the  course of the
investigation or defense, as such expense, loss, damage or liability is incurred
and is due and payable.

                   7.  Contribution.  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 it
would  otherwise be liable under  Section 6 to the fullest  extent  permitted by
law;  provided,   however,   that  (a)  no  contribution  shall  be  made  under
circumstances  where the maker  would not have been  liable for  indemnification
under the fault  standards set forth in Section 6, (b) no seller of  Registrable
Securities guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to  contribution  from any seller
of   Registrable   Securities   who  was   not   guilty   of   such   fraudulent
misrepresentation  and (c) contribution by any seller of Registrable  Securities
shall be limited  in amount to the  amount by which the net  amount of  proceeds
received by such seller from the sale of such Registrable Securities exceeds the
purchase price paid by such seller for such Registrable Securities.

                   8.  Reports  under  Exchange  Act.  With  a  view  to  making
available to the Investors the benefits of Rule 144, the Company agrees to:

                   (a) make  and keep  public  information  available,  as those
terms are understood and defined in Rule 144;

                   (b) file  with the SEC in a timely  manner  all  reports  and
other  documents  required  of the  Company  under  the  Securities  Act and the
Exchange Act; and

                   (c) furnish to each  Investor so long as such  Investor  owns
Registrable  Securities,  promptly upon request,  (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144 and the
Exchange Act,  (ii) a copy of the most recent annual or quarterly  report of the
Company and such other  reports and  documents so filed by the Company and (iii)
such other information as may be reasonably requested to permit the Investors to
sell such securities pursuant to Rule 144 without registration.

                   9. Assignment of Registration  Rights. The rights to have the
Company  register  Registrable  Securities  pursuant to this Agreement  shall be
automatically  assigned by the Investors to any transferee of all or any portion
of such securities (or all or any portion of the Repricing  Rights) only if: (a)
the Investor  agrees in writing with the  transferee  or assignee to assign such
rights,  and a copy of such  agreement  is  furnished  to the  Company  within a
reasonable time after such  assignment,  (b) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of (i) the
name and address of such  transferee  or assignee and (ii) the  securities  with
respect to which such registration rights are being transferred or assigned, (c)
immediately  following  such transfer or assignment  the further  disposition of
such securities by the transferee or assignee is restricted under the Securities
Act and  applicable  state  securities  laws,  and (d) at or before the time the
Company received the written notice  contemplated by clause (b) of this sentence
the transferee or assignee agrees in writing with the Company to be bound by all
of the provisions  contained  herein.  In connection  with any such transfer the
Company shall, at its sole cost and expense, promptly after such assignment take
such actions as shall be reasonably  acceptable to the Initial Investor and such
transferee to assure that the Registration  Statement and related prospectus are
available for use by such transferee for sales of the Registrable  Securities in
respect of which the rights to registration have been so assigned. In connection
with any such  assignment,  each Investor shall have the right to assign to such
transferee  such  Investor's  rights  under  the  Amendment  Agreement  and  the
Subscription  Agreement by notice of such  assignment to the Company.  Following
such  notice of  assignment  of rights  under the  Amendment  Agreement  and the
Subscription  Agreement,  the Company  shall be obligated to such  transferee to
perform all of its covenants under the Amendment  Agreement and the Subscription
Agreement as if such transferee were the Buyer under the Subscription  Agreement
and an original Holder under the Amendment Agreement.

                   10. Amendment of Registration  Rights.  Any provision of this
Agreement  may be  amended  and the  observance  thereof  may be waived  (either
generally   or  in  a   particular   instance   and  either   retroactively   or
prospectively),  only with the written  consent of the Company and Investors who
hold a majority in interest of the  Registrable  Securities.  Any  amendment  or
waiver  effected in  accordance  with this Section 10 shall be binding upon each
Investor and the Company.

                   11.  Miscellaneous.

                   (a)  A  person  or  entity  is  deemed  to  be  a  holder  of
Registrable  Securities  whenever  such  person  or entity  owns of record  such
Registrable  Securities.  If  the  Company  receives  conflicting  instructions,
notices or elections  from two or more  persons or entities  with respect to the
same  Registrable   Securities,   the  Company  shall  act  upon  the  basis  of
instructions,  notice or election  received  from the  registered  owner of such
Registrable Securities.

                   (b) Notices required or permitted to be given hereunder shall
be in  writing  and shall be deemed to be  sufficiently  given  when  personally
delivered (by hand, by courier,  by telephone  line  facsimile  transmission  or
other  means)  (i) if to  the  Company,  at  2335  Alaska  Avenue,  El  Segundo,
California 90245, Attention:  Chief Financial Officer,  telephone line facsimile
transmission number (310) 643-8719, (ii) if to the Initial Investor, at

Attention:
 ,  telephone  line  facsimile  transmission  number  and  (iii) if to any other
Investor, at such address as such Investor shall have provided in writing to the
Company,  or at such other address as each such party  furnishes by notice given
in accordance with this Section 11(b).

                   (c)  Failure  of any  party to  exercise  any right or remedy
under this Agreement or otherwise,  or delay by a party in exercising such right
or remedy, shall not operate as a waiver thereof.

                   (d)  This  Agreement  shall  be  enforced,  governed  by  and
construed in accordance  with the laws of the State of California  applicable to
agreements  made and to be performed  entirely  within such State.  In the event
that any  provision  of this  Agreement  is invalid or  unenforceable  under any
applicable  statute  or  rule  of law,  then  such  provision  shall  be  deemed
inoperative  to the extent that it may  conflict  therewith  and shall be deemed
modified to conform with such statute or rule of law. Any provision hereof which
may prove invalid or  unenforceable  under any law shall not affect the validity
or enforceability of any other provision hereof.


                   (e) This Agreement constitutes the entire agreement among the
parties  hereto  with  respect  to  the  subject  matter  hereof.  There  are no
restrictions,  promises, warranties or undertakings,  other than those set forth
or  referred to herein.  This  Agreement  supersedes  all prior  agreements  and
understandings  among the  parties  hereto with  respect to the  subject  matter
hereof.

                   (f)  Subject to the  requirements  of Section 9 hereof,  this
Agreement  shall inure to the benefit of and be binding upon the  successors and
assigns of each of the parties hereto.

                   (g) All  pronouns  and any  variations  thereof  refer to the
masculine, feminine or neuter, singular or plural, as the context may require.

                   (h) The headings in this  Agreement  are for  convenience  of
reference only and shall not limit or otherwise affect the meaning hereof.

                   (i) The Company  acknowledges that any failure by the Company
to perform its obligations under this Agreement,  including, without limitation,
the Company's  obligations  under Section 3(n), or any delay in such performance
could  result in  damages to the  Investors  and the  Company  agrees  that,  in
addition  to any  other  liability  the  Company  may have by reason of any such
failure or delay,  the Company shall be liable for all direct and  consequential
damages caused by any such failure or delay.

                   (j)  This   Agreement   may  be   executed  in  two  or  more
counterparts,  each of which shall be deemed an original  but all of which shall
constitute one and the same agreement. This Agreement, once executed by a party,
may be  delivered  to  the  other  party  hereto  by  telephone  line  facsimile
transmission  of a copy of this Agreement  bearing the signature of the party so
delivering this Agreement.

     IN WITNESS  WHEREOF,  the parties  have caused  this  Agreement  to be duly
executed by their  respective  officers  thereunto duly authorized as of day and
year first above written.


                                   NEWCOM, INC.



                                        By:______________________________
                                           Name:
                                           Title:


                                   [INITIAL INVESTOR]



                                        By:________________________________
                                           Name:
                                           Title:



                                      EXHIBIT 1
                                          to
                                     Registration
                                        Rights
                                      Agreement

                                [Company Letterhead]

                                      [Date]

Interwest Transfer Company,
as Transfer Agent, Warrant Agent and Registrar
P.O. Box 17136
Salt Lake City, Utah 84117


Ladies and Gentlemen:

         This letter shall serve as our irrevocable  authorization and direction
to you to  transfer or  re-register  the  certificates  for the shares of Common
Stock, $.005 par value (the "Common Stock"),  of Aura Systems,  Inc., a Delaware
corporation  (the  "Company"),  represented by certificate  numbers  _______ and
_______ for an aggregate of _______ shares (the "Outstanding  Shares") of Common
Stock presently  registered in the name of [Name of Investors] upon surrender of
such  certificate(s)  to  you,  notwithstanding  the  legend  appearing  on such
certificates.  The  transfer  or  re-registration  of the  certificates  for the
Outstanding Shares by you should be made at such time as you are requested to do
so by the record holder of the Outstanding  Shares.  The certificate issued upon
such transfer or re-registration  should be registered in such name as requested
by the  holder of record of the  certificate  surrendered  to you and should not
bear any legend  which would  restrict  the  transfer of the shares  represented
thereby.  In  addition,  you are hereby  directed  to remove  any  stop-transfer
instruction  relating  to the  Outstanding  Shares.  Certificates  for shares of
Common  Stock  issued on or after  the date  hereof  to the  investors  or their
assigns  upon the  exercise  of  certain  Repricing  Rights  should not bear any
restrictive legend and should not be subject to any stop-transfer restriction.

         Contemporaneously  with the  delivery  of this  letter,  the Company is
delivering  to you an opinion of Guzik & Associates  as to  registration  of the
Outstanding  Shares and the shares of Common Stock issuable upon the exercise of
certain Repricing Rights under the Securities Act of 1933, as amended.

         Should you have any questions  concerning  this matter,  please contact
me.

Very truly yours,

AURA SYSTEMS, INC.



By:_____________________________
   Name:
   Title:

Enclosure
cc: [Names of Investors]

~                                     EXHIBIT 2
                                         to
                                    Registration
                                       Rights
                                      Agreement

                                                          , 1999


[Names and Addresses of Investors]





                                 AURA SYSTEMS INC.
                               Shares of Common Stock

Ladies and Gentlemen:

              We are counsel to Aura Systems,  Inc., a Delaware corporation (the
"Company"), and we understand that the Company has issued to [Name of Investors]
(the "Holders") certain Repricing Rights to acquire shares (the "Common Shares")
of the  Company's  Common  Stock,  $.005 par value  (the  "Common  Stock").  The
Repricing   Rights  were  issued,   to  the  Holders  pursuant  to  the  several
Subscription Agreements,  dated as of November 30, 1998, between the Holders and
NewCom, Inc. a Delaware corporation (the "Subscription Agreements"),  as amended
by the Amendment  Agreement,  dated as of December 28, 1998,  among the Company,
NewCom and the  Holders  (the  "Amendment  Agreement").  Pursuant to the several
Registration  Rights  Agreements,  dated as of December  28,  1998,  between the
Company and the Holders  (the  "Registration  Rights  Agreements"),  the Company
agreed with each  Holder,  among other  things,  to register for resale the Aura
Repricing Shares (as such term is defined in the Amendment  Agreement) under the
Securities Act of 1933, as amended (the "1933 Act"),  upon the terms provided in
the  Registration  Rights  Agreements.   Pursuant  to  the  Registration  Rights
Agreements,  on , 1999 the Company  filed a  Registration  Statement on Form S-3
(File No. 333-__________) (the "Registration Statement") with the Securities and
Exchange  Commission  (the "SEC") relating to the Aura Repricing  Shares,  which
names the Holders as selling stockholders thereunder.

           [Other introductory and scope of examination language to be inserted]

         Based on the foregoing, we are of the opinion that:

    (1) Since the Closing  Date,  the Company has timely  filed with the SEC all
forms,  reports and other documents  required to be filed with the SEC under the
Securities Exchange Act of 1934, as amended (the "1934 Act"). All of such forms,
reports and other documents complied, when filed, in all material respects, with
all applicable requirements of the 1933 Act and the 1934 Act;

    (2) The Registration  Statement and the Prospectus  contained therein (other
than the financial  statements and schedules and other financial and statistical
information  contained or incorporated by reference therein, as to which we have
not been  requested to and do not express any opinion)  comply as to form in all
material respects with the applicable requirements of the 1933 Act and the rules
and regulations promulgated thereunder; and

    (3) The Registration  Statement has become effective under the 1933 Act, and
to the best of our knowledge after due inquiry,  no stop order  proceedings with
respect  thereto  have  been  instituted  or  threatened  by the  SEC.  The Aura
Repricing  Shares have been  registered  under the 1933 Act and may be resold by
the respective Holders pursuant to the Registration Statement.

              We  have  participated  in the  preparation  of  the  Registration
Statement and the Prospectus, including review and discussions with officers and
other representatives of the Company,  representatives of the independent public
accountants for the Company,  and your  representatives at which the contents of
the  Registration  Statement and the  Prospectus  contained  therein and related
matters were discussed,  and, although we are not passing upon and do not assume
any responsibility for the accuracy,  completeness or fairness of the statements
contained in the Registration Statement and the Prospectus contained therein, on
the basis of the  foregoing,  nothing has come to our attention that leads us to
believe  either that the  Registration  Statement  at the time the  Registration
Statement became  effective  contained an untrue statement of a material fact or
omitted to state a material fact  required to be stated  therein or necessary to
make the statements therein not misleading,  or that the Prospectus contained in
the Registration  Statement,  as of its date, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated  therein
or necessary to make the statements  therein,  in the light of the circumstances
under which they were made, not misleading (it being understood that we have not
been  requested  to and do not  express any view with  respect to the  financial
statements and schedules and other  financial and  statistical  data included or
incorporated  by  reference  in the  Registration  Statement  or the  Prospectus
contained therein).

              Paragraph  (3) of this  opinion  may be relied  upon by  Interwest
Transfer Company, as Transfer Agent,  Warrant Agent and Registrar (the "Transfer
Agent") as if addressed to the Transfer Agent.

              Very truly yours,





cc: Interwest Transfer Company,
    as Transfer Agent, Warrant Agent and Registrar



Exhibit B


                                  EXERCISE NOTICE

TO:  NewCom, Inc.                            Aura Systems, Inc.
     31166 Via Colinas                       2335 Alaska Avenue
     Westlake Village, California 91326      El Segundo, California  90245

     Attention:  Chief Executive Officer     Attention:  Chief Financial Officer

     Facsimile No.:  (818) 597-1002          Facsimile No.:  (310) 643-8719

                   This  Exercise  Notice is given  pursuant to the terms of (i)
the  Subscription  Agreement,  dated as of November  30,  1998,  as amended (the
"Subscription  Agreement"),  by and between NewCom, Inc., a Delaware corporation
(the  "Company"),  and the  undersigned  (the  "Buyer")  and (ii) the  Amendment
Agreement,  dated as of  December  28,  1998,  by and  among the  Company,  Aura
Systems, Inc. a Delaware corporation  ("Aura"),  the Buyer and the other parties
named therein.  Capitalized  terms used herein and not otherwise  defined herein
have the  respective  meanings  provided in the  Subscription  Agreement and the
Amendment  Agreement.  The Buyer  hereby  notifies the Company and, if the Buyer
elects to receive Aura Repricing Shares, Aura as follows:

                    (1) Exercise Date:  _____________________

                    (2) No. of Initial Repricing Rights outstanding:
          -----------------------

                    (3) No. of Initial Repricing Rights exercised hereby:
          --------------------

                    (4) Repricing Price:  ___________________

                    (5) Average Market Price:  _______________

                    (6) Repricing Rate:  ________________

                    (7)  Number  of  Repricing  Shares  due  to the  Buyer  upon
          exercise of such Initial Repricing Rights:

                    (8)  No. of Second Tranche Repricing Rights outstanding:

                    (9)  No. of Second Tranche Repricing Rights exercised 
          hereby:

                    (10) Repricing Price:

                    (11) Average Market Price:

                    (12) Repricing Rate:

                    (13)  Number  of  Repricing  Shares  due to the  Buyer  upon
          exercise of such Second Tranche Repricing Rights:

                    (14) If the Buyer elects to receive Aura Repricing Shares 
          in lieu of Repricing Shares, items 14-16 are completed as follows:  
          the Average Market Price of the Aura Common Stock is

                    (15) the Aura Repricing Rate is

                    (16) the  number of Aura  Repricing  Shares due to the Buyer
          is:

                    (17)  Please  issue the number of  Repricing  Shares or Aura
          Repricing  Shares, as the case may be, stated in items 7 and 13 or 16,
          as the case may be, in the  name(s)  and to the address or the account
          specified  immediately below or, if additional space is necessary,  on
          an attachment hereto:

                        Delivery Instructions
                        for Common Stock:





                        Address:

                        SS or Tax ID Number:


                                          NAME OF BUYER:

Date:


                                          By:________________________________
                                            Name:
                                            Title: