Document:

THIS WARRANT AND THE SHARES  ISSUABLE UPON THE EXERCISE OF THIS WARRANT
         HAVE NOT BEEN REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
         NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD, TRANSFERRED OR
         ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH
         SECURITIES UNDER SAID ACT OR, AN OPINION OF COUNSEL, IN FORM, SUBSTANCE
         AND  SCOPE,   CUSTOMARY   FOR   OPINIONS   OF  COUNSEL  IN   COMPARABLE
         TRANSACTIONS,  THAT  REGISTRATION  IS NOT  REQUIRED  UNDER  SUCH ACT OR
         UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.

                                               Right to
                                               Purchase
                                               1,000,000
                                               Shares of
                                               Common  Stock,   par  value
                                               $0.005
                                               per share

                             STOCK PURCHASE WARRANT

         THIS CERTIFIES THAT, for value received,  RGC INTERNATIONAL  INVESTORS,
LDC  ("RGC") or its  registered  assigns,  is  entitled  to  purchase  from AURA
SYSTEMS, INC., a Delaware corporation (the "Company"),  at any time or from time
to time  during  the  period  specified  in  Paragraph  2  hereof,  One  Million
(1,000,000) fully paid and  nonassessable  shares of the Company's Common Stock,
par value $0.005 per share (the "Common Stock"),  at an exercise price of $0.375
per share (the  "Exercise  Price").  The term "Warrant  Shares," as used herein,
refers to the shares of Common Stock purchasable  hereunder.  The Warrant Shares
and the  Exercise  Price are subject to  adjustment  as provided in  Paragraph 4
hereof.

         This  Warrant  is  subject  to the  following  terms,  provisions,  and
conditions:

<PAGE>

         1. Manner of Exercise;  Issuance of  Certificates;  Payment for Shares.
Subject to the  provisions  hereof,  this Warrant may be exercised by the holder
hereof,  in whole or in part, by the surrender of this Warrant,  together with a
completed  exercise  agreement  in  the  form  attached  hereto  (the  "Exercise
Agreement"),  to the Company during normal business hours on any business day at
the Company's principal executive offices (or such other office or agency of the
Company  as it may  designate  by notice  to the  holder  hereof),  and upon (i)
payment to the Company in cash,  by certified or official  bank check or by wire
transfer  for the account of the Company of the  Exercise  Price for the Warrant
Shares specified in the Exercise  Agreement or (ii) if the resale of the Warrant
Shares  by  the  holder  is  not  then  registered   pursuant  to  an  effective
registration  statement  under  the  Securities  Act of 1933,  as  amended  (the
"Securities Act"), delivery to the Company of a written notice of an election to
effect a "Cashless Exercise" (as defined in Section 11(c) below) for the Warrant
Shares  specified in the  Exercise  Agreement.  The Warrant  Shares so purchased
shall be deemed to be issued to the holder hereof or such holder's designee,  as
the record  owner of such  shares,  as of the close of  business  on the date on
which this Warrant shall have been surrendered, the completed Exercise Agreement
shall have been delivered,  and payment shall have been made for such shares (or
an election  to effect a Cashless  Exercise  has been made) as set forth  above.
Certificates  for the Warrant  Shares so purchased,  representing  the aggregate
number of shares specified in the Exercise Agreement,  shall be delivered to the
holder hereof  within a reasonable  time,  not exceeding two (2) business  days,
after this Warrant shall have been so exercised.  The  certificates so delivered
shall be in such  denominations  as may be  requested  by the holder  hereof and
shall be  registered  in the name of such  holder or such other name as shall be
designated  by such holder.  If this Warrant shall have been  exercised  only in
part, then, unless this Warrant has expired,  the Company shall, at its expense,
at the  time of  delivery  of such  certificates,  deliver  to the  holder a new
Warrant  representing  the number of shares with  respect to which this  Warrant
shall not then have been exercised.

                  Notwithstanding  anything in this Warrant to the contrary,  in
no event  shall the holder of this  Warrant be  entitled to exercise a number of
Warrants (or portions  thereof) in excess of the number of Warrants (or portions
thereof)  upon  exercise  of which the sum of (i) the number of shares of Common
Stock  beneficially owned by the holder and its affiliates (other than shares of
Common Stock which may be deemed beneficially owned through the ownership of the
unexercised  Warrants and the  unexercised or  unconverted  portion of any other
securities  of the Company  subject to a limitation  on  conversion  or exercise
analogous to the limitations  contained herein) and (ii) the number of shares of
Common Stock  issuable upon exercise of the Warrants (or portions  thereof) with
respect to which the determination  described herein is being made, would result
in  beneficial  ownership by the holder and its  affiliates of more than 4.9% of
the  outstanding  shares  of  Common  Stock.  For  purposes  of the  immediately
preceding sentence,  beneficial ownership shall be determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation
13D-G thereunder, except as otherwise provided in clause (i) hereof.

         2. Period of Exercise.  This Warrant is exercisable at any time or from
time to time on or after  October 22,  1999 (the  "Issue  Date") and before 5:00
p.m.,  New York City time on the fifth (5th)  anniversary of the Issue Date (the
"Exercise Period").

         3. Certain Agreements of the Company.  The Company hereby covenants and
agrees as follows:

                  (a) Shares to be Fully Paid.  All Warrant  Shares  will,  upon
issuance in accordance with the terms of this Warrant, be validly issued,  fully
paid, and nonassessable and free from all taxes, liens, and charges with respect
to the issue thereof.

<PAGE>

                  (b)  Reservation of Shares.  During the Exercise  Period,  the
Company  shall at all times have  authorized,  and  reserved  for the purpose of
issuance upon exercise of this Warrant,  a sufficient number of shares of Common
Stock to provide for the exercise of this Warrant.

                  (c) Listing.  The Company shall promptly secure the listing of
the shares of Common  Stock  issuable  upon  exercise of the  Warrant  upon each
national  securities  exchange or automated quotation system, if any, upon which
shares of Common Stock are then listed  (subject to official  notice of issuance
upon exercise of this Warrant) and shall  maintain,  so long as any other shares
of Common  Stock shall be so listed,  such listing of all shares of Common Stock
from time to time issuable  upon the exercise of this  Warrant;  and the Company
shall  so list on each  national  securities  exchange  or  automated  quotation
system, as the case may be, and shall maintain such listing of, any other shares
of capital  stock of the Company  issuable  upon the exercise of this Warrant if
and so long as any  shares of the same  class  shall be listed on such  national
securities exchange or automated quotation system.

                  (d)  Certain  Actions  Prohibited.  The  Company  will not, by
amendment  of its  charter or through  any  reorganization,  transfer of assets,
consolidation,  merger,  dissolution,  issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed by it hereunder,  but will at all times in
good faith assist in the carrying out of all the  provisions of this Warrant and
in the taking of all such action as may reasonably be requested by the holder of
this  Warrant in order to protect the  exercise  privilege of the holder of this
Warrant  against  dilution or other  impairment,  consistent  with the tenor and
purpose of this Warrant.  Without limiting the generality of the foregoing,  the
Company  (i) will not  increase  the par value of any  shares  of  Common  Stock
receivable  upon the exercise of this Warrant  above the Exercise  Price then in
effect,  and (ii) will take all such actions as may be necessary or  appropriate
in  order  that the  Company  may  validly  and  legally  issue  fully  paid and
nonassessable shares of Common Stock upon the exercise of this Warrant.

                  (e) Successors and Assigns.  During the Exercise  Period,  the
Company shall maintain its corporate existence and shall not merge,  consolidate
or sell all or substantially all of the Company's assets, except in the event of
a merger or consolidation  or sale of all or substantially  all of the Company's
assets,  where (i) the successor or acquiring entity and, if an entity different
from the successor or acquiring  entity,  the entity whose  securities for which
the Warrant shall become entitled to purchase pursuant to Section 4(e),  assumes
the Company's  obligations  hereunder and under the agreements  and  instruments
entered into in  connection  herewith and (ii) the entity whose  securities  for
which the Warrant shall become entitled to purchase pursuant to Section 4(e), is
a publicly  traded  corporation  whose  Common  Stock is listed  for  trading on
Nasdaq, Nasdaq SmallCap, NYSE or AMEX.

         4. Antidilution  Provisions.  During the Exercise Period,  the Exercise
Price and the number of Warrant Shares shall be subject to adjustment  from time
to time as provided in this Paragraph 4.

<PAGE>

         In the event that any  adjustment  of the  Exercise  Price as  required
herein results in a fraction of a cent,  such Exercise Price shall be rounded up
to the nearest cent.

                  (a)  Adjustment  of  Exercise  Price and Number of Shares upon
Issuance of Common Stock.  Except as otherwise  provided in Paragraphs  4(c) and
4(e)  hereof,  if and whenever on or after the Issue Date of this  Warrant,  the
Company issues or sells,  or in accordance  with Paragraph 4(b) hereof is deemed
to have issued or sold, any shares of Common Stock for no consideration or for a
consideration per share (before deduction of reasonable  expenses or commissions
or underwriting  discounts or allowances in connection  therewith) less than the
Market  Price  (as  hereinafter  defined)  on the date of  issuance  (or  deemed
issuance) of such Common Stock (a "Dilutive  Issuance"),  then  immediately upon
the Dilutive Issuance,  the Exercise Price will be reduced to a price determined
by multiplying  the Exercise Price in effect  immediately  prior to the Dilutive
Issuance by a fraction, (i) the numerator of which is an amount equal to the sum
of (x) the number of shares of Common  Stock  actually  outstanding  immediately
prior  to the  Dilutive  Issuance,  plus  (y)  the  quotient  of  the  aggregate
consideration, calculated as set forth in Paragraph 4(b) hereof, received by the
Company  upon such  Dilutive  Issuance  divided  by the  Market  Price in effect
immediately prior to the Dilutive Issuance, and (ii) the denominator of which is
the total number of shares of Common Stock Deemed Outstanding (as defined below)
immediately after the Dilutive Issuance.

                  (b) Effect on Exercise Price of Certain  Events.  For purposes
of  determining  the adjusted  Exercise Price under  Paragraph 4(a) hereof,  the
following will be applicable:

<PAGE>

(i)Issuance of Rights or Options. If the Company in any manner  issues or grants
any warrants,  rights or options,  whether or not  immediately  exercisable,  to
subscribe for or to purchase Common Stock or other  securities  convertible into
or  exchangeable  for Common Stock  ("Convertible  Securities")  (such warrants,
rights and  options to  purchase  Common  Stock or  Convertible  Securities  are
hereinafter  referred to as "Options")  and the price per share for which Common
Stock is  issuable  upon the  exercise  of such  Options is less than the Market
Price on the date of issuance or grant of such  Options,  then the maximum total
number of shares of Common Stock  issuable upon the exercise of all such Options
will, as of the date of the issuance or grant of such  Options,  be deemed to be
outstanding  and to have been  issued and sold by the Company for such price per
share.  For purposes of the preceding  sentence,  the "price per share for which
Common Stock is issuable  upon the exercise of such  Options" is  determined  by
dividing (i) the total amount,  if any, received or receivable by the Company as
consideration for the issuance or granting of all such Options, plus the minimum
aggregate  amount of additional  consideration,  if any,  payable to the Company
upon  the  exercise  of all  such  Options,  plus,  in the  case of  Convertible
Securities  issuable  upon the exercise of such Options,  the minimum  aggregate
amount of  additional  consideration  payable  upon the  conversion  or exchange
thereof at the time such  Convertible  Securities  first become  convertible  or
exchangeable,  by (ii) the  maximum  total  number of  shares  of  Common  Stock
issuable  upon the exercise of all such Options  (assuming  full  conversion  of
Convertible  Securities,  if applicable).  No further adjustment to the Exercise
Price  will be made upon the  actual  issuance  of such  Common  Stock  upon the
exercise of such  Options or upon the  conversion  or  exchange  of  Convertible
Securities issuable upon exercise of such Options.

(ii  Issuance of Convertible Securities.  If the Company in any manner issues or
sells any Convertible Securities,  whether or not immediately convertible (other
than where the same are issuable upon the exercise of Options) and the price per
share for which Common  Stock is issuable  upon such  conversion  or exchange is
less  than  the  Market  Price  on the  date of  issuance  of  such  Convertible
Securities,  then the maximum  total number of shares of Common  Stock  issuable
upon the conversion or exchange of all such  Convertible  Securities will, as of
the  date of the  issuance  of such  Convertible  Securities,  be  deemed  to be
outstanding  and to have been  issued and sold by the Company for such price per
share.  For the  purposes of the  preceding  sentence,  the "price per share for
which Common Stock is issuable  upon such  conversion or exchange" is determined
by dividing (i) the total amount,  if any, received or receivable by the Company
as consideration  for the issuance or sale of all such  Convertible  Securities,
plus the minimum aggregate amount of additional  consideration,  if any, payable
to the  Company  upon the  conversion  or  exchange  thereof  at the  time  such
Convertible  Securities first become  convertible or  exchangeable,  by (ii) the
maximum total number of shares of Common Stock  issuable upon the  conversion or
exchange  of all such  Convertible  Securities.  No  further  adjustment  to the
Exercise  Price will be made upon the actual  issuance of such Common Stock upon
conversion or exchange of such Convertible Securities.

(iii)Change in Option Price or Conversion Rate. If there is a change at any time
in (i) the amount of  additional  consideration  payable to the Company upon the
exercise of any Options;  (ii) the amount of additional  consideration,  if any,
payable to the  Company  upon the  conversion  or  exchange  of any  Convertible
Securities;   or  (iii)  the  rate  at  which  any  Convertible  Securities  are
convertible into or exchangeable for Common Stock (other than under or by reason
of  provisions  designed to protect  against  dilution),  the Exercise  Price in
effect at the time of such change will be readjusted to the Exercise Price which
would  have  been in  effect  at such  time  had  such  Options  or  Convertible
Securities still outstanding provided for such changed additional  consideration
or changed  conversion rate, as the case may be, at the time initially  granted,
issued or sold.

(iv)Treatment of Expired Options and  Unexercised Convertible Securities. If, in
any case,  the total number of shares of Common Stock  issuable upon exercise of
any Option or upon conversion or exchange of any Convertible  Securities is not,
in fact, issued and the rights to exercise such Option or to convert or exchange
such Convertible Securities shall have expired or terminated, the Exercise Price
then in effect will be readjusted to the Exercise Price which would have been in
effect  at the  time of such  expiration  or  termination  had  such  Option  or
Convertible  Securities,  to the extent  outstanding  immediately  prior to such
expiration or termination  (other than in respect of the actual number of shares
of Common Stock issued upon exercise or conversion thereof), never been issued.

<PAGE>

(v)      Calculation of Consideration Received.  If any Common Stock, Options or
Convertible  Securities are issued,  granted or sold for cash, the consideration
received  therefor for  purposes of this Warrant will be the amount  received by
the Company therefor,  before deduction of reasonable commissions,  underwriting
discounts or  allowances  or other  reasonable  expenses paid or incurred by the
Company in  connection  with such  issuance,  grant or sale.  In case any Common
Stock, Options or Convertible  Securities are issued or sold for a consideration
part or all of which shall be other than cash,  the amount of the  consideration
other  than  cash  received  by the  Company  will  be the  fair  value  of such
consideration,  except where such consideration consists of securities, in which
case the amount of  consideration  received  by the  Company  will be the Market
Price thereof as of the date of receipt.  In case any Common  Stock,  Options or
Convertible Securities are issued in connection with any acquisition,  merger or
consolidation in which the Company is the surviving  corporation,  the amount of
consideration  therefor  will be deemed to be the fair value of such  portion of
the net assets and business of the non-surviving  corporation as is attributable
to such Common Stock, Options or Convertible Securities, as the case may be. The
fair value of any consideration other than cash or securities will be determined
in good faith by the Board of Directors of the Company.

(vi)   Exceptions to Adjustment of Exercise Price. No adjustment to the Exercise
Price will be made (i) upon the exercise of any warrants, options or convertible
securities  granted,  issued and  outstanding  on the date of  issuance  of this
Warrant;  (ii) upon the grant or  exercise  of any  stock or  options  which may
hereafter be granted or exercised under any employee benefit plan of the Company
now existing or to be implemented in the future, so long as the issuance of such
stock or options is  approved by a majority  of the  independent  members of the
Board of Directors of the Company or a majority of the members of a committee of
independent directors  established for such purpose;  (iii) upon the exercise of
the Warrants;  or (iv) upon  aggregate  issuance of up to  $10,000,000 of Common
Stock in a private  placement  undertaken  by the  Company  at a price per share
greater than or equal to $0.27.

                  (c) Subdivision or Combination of Common Stock. If the Company
at any time subdivides (by any stock split,  stock  dividend,  recapitalization,
reorganization,  reclassification  or  otherwise)  the  shares of  Common  Stock
acquirable  hereunder into a greater number of shares,  then,  after the date of
record for effecting such subdivision,  the Exercise Price in effect immediately
prior to such subdivision will be proportionately reduced. If the Company at any
time  combines  (by  reverse  stock  split,  recapitalization,   reorganization,
reclassification  or otherwise) the shares of Common Stock acquirable  hereunder
into a smaller  number of shares,  then,  after the date of record for effecting
such  combination,  the  Exercise  Price  in  effect  immediately  prior to such
combination will be proportionately increased.

                  (d)  Adjustment in Number of Shares.  Upon each  adjustment of
the Exercise Price pursuant to the provisions of this Paragraph 4, the number of
shares of Common Stock  issuable upon exercise of this Warrant shall be adjusted
by multiplying a number equal to the Exercise Price in effect  immediately prior
to such  adjustment  by the  number  of shares of  Common  Stock  issuable  upon
exercise of this Warrant  immediately  prior to such adjustment and dividing the
product so obtained by the adjusted Exercise Price.

<PAGE>

                  (e)   Consolidation,   Merger   or   Sale.   In  case  of  any
consolidation  of the  Company  with,  or merger of the  Company  into any other
corporation, or in case of any sale or conveyance of all or substantially all of
the assets of the  Company  other  than in  connection  with a plan of  complete
liquidation of the Company, then as a condition of such consolidation, merger or
sale or conveyance,  adequate  provision will be made whereby the holder of this
Warrant will have the right to acquire and receive upon exercise of this Warrant
in lieu of the shares of Common Stock  immediately  theretofore  acquirable upon
the exercise of this Warrant, such shares of stock,  securities or assets as may
be issued or payable  with respect to or in exchange for the number of shares of
Common Stock immediately  theretofore acquirable and receivable upon exercise of
this  Warrant had such  consolidation,  merger or sale or  conveyance  not taken
place. In any such case, the Company will make  appropriate  provision to insure
that the provisions of this Paragraph 4 hereof will  thereafter be applicable as
nearly as may be in  relation  to any shares of stock or  securities  thereafter
deliverable  upon the exercise of this Warrant.  The Company will not effect any
consolidation,  merger or sale or  conveyance  unless prior to the  consummation
thereof,  the successor or acquiring  entity (if other than the Company) and, if
an entity  different  from the successor or acquiring  entity,  the entity whose
capital  stock or assets  the  holders of the Common  Stock of the  Company  are
entitled  to  receive  as a  result  of such  consolidation,  merger  or sale or
conveyance  assumes by written instrument the obligations under this Paragraph 4
and the  obligations  to deliver to the holder of this  Warrant  such  shares of
stock, securities or assets as, in accordance with the foregoing provisions, the
holder of this Warrant may be entitled to acquire.

                  (f) Distribution of Assets.  In case the Company shall declare
or make any  distribution  of its assets  (including  cash) to holders of Common
Stock  as a  partial  liquidating  dividend,  by way of  return  of  capital  or
otherwise,  then, after the date of record for determining stockholders entitled
to such distribution,  but prior to the date of distribution, the holder of this
Warrant  shall be entitled upon exercise of this Warrant for the purchase of any
or all of the shares of Common Stock  subject  hereto,  to receive the amount of
such assets which would have been payable to the holder had such holder been the
holder of such shares of Common  Stock on the record date for the  determination
of stockholders entitled to such distribution.

                  (g) Notice of  Adjustment.  Upon the  occurrence  of any event
which  requires any  adjustment of the Exercise  Price,  then,  and in each such
case, the Company shall give notice thereof to the holder of this Warrant, which
notice shall state the Exercise  Price  resulting  from such  adjustment and the
increase or decrease in the number of Warrant  Shares  purchasable at such price
upon exercise,  setting forth in reasonable detail the method of calculation and
the facts  upon which  such  calculation  is based.  Such  calculation  shall be
certified by the chief financial officer of the Company.

                  (h) Minimum Adjustment of Exercise Price. No adjustment of the
Exercise  Price shall be made in an amount of less than 1% of the Exercise Price
in effect at the time such adjustment is otherwise  required to be made, but any
such lesser  adjustment  shall be carried  forward and shall be made at the time
and  together  with the next  subsequent  adjustment  which,  together  with any
adjustments  so  carried  forward,  shall  amount  to not  less  than 1% of such
Exercise Price.

<PAGE>

                  (i) No Fractional Shares. No fractional shares of Common Stock
are to be issued upon the exercise of this Warrant,  but the Company shall pay a
cash  adjustment  in respect of any  fractional  share which would  otherwise be
issuable in an amount equal to the same  fraction of the Market Price of a share
of Common Stock on the date of such exercise.

                  (j)      Other Notices.  In case at any time:

                    (i)The  Company  shall  declare any dividend upon the Common
                    Stock  payable  in  shares of stock of any class or make any
                    other  distribution  (including  dividends or  distributions
                    payable in cash out of retained  earnings) to the holders of
                    the Common Stock;

                    (ii) the Company  shall offer for  subscription  pro rata to
                    the  holders of the Common  Stock any  additional  shares of
                    stock of any class or other rights;

                    (iii)  there  shall  be any  capital  reorganization  of the
                    Company,   or  reclassification  of  the  Common  Stock,  or
                    consolidation or merger of the Company with or into, or sale
                    of  all  or   substantially   all  its  assets  to,  another
                    corporation or entity; or

                    (iv) there shall be a voluntary or involuntary  dissolution,
                    liquidation or winding-up of the Company;

then,  in each such case,  the Company  shall give to the holder of this Warrant
(a) notice of the date on which the books of the Company shall close or a record
shall be taken for  determining  the holders of Common Stock entitled to receive
any such dividend,  distribution,  or subscription rights or for determining the
holders of Common Stock entitled to vote in respect of any such  reorganization,
reclassification,  consolidation,  merger,  sale,  dissolution,  liquidation  or
winding-up  and (b) in the  case of any such  reorganization,  reclassification,
consolidation,  merger, sale, dissolution,  liquidation or winding-up, notice of
the date (or,  if not then  known,  a  reasonable  approximation  thereof by the
Company) when the same shall take place. Such notice shall also specify the date
on which the holders of Common Stock shall be entitled to receive such dividend,
distribution, or subscription rights or to exchange their Common Stock for stock
or  other  securities  or  property   deliverable   upon  such   reorganization,
reclassification,  consolidation,  merger, sale,  dissolution,  liquidation,  or
winding-up,  as the case  may be.  Such  notice  shall be given at least 30 days
prior to the record date or the date on which the Company's  books are closed in
respect thereto. Failure to give any such notice or any defect therein shall not
affect the validity of the proceedings  referred to in clauses (i), (ii),  (iii)
and (iv) above.

                  (k)  Certain   Events.   If  any  event  occurs  of  the  type
contemplated by the adjustment  provisions of this Paragraph 4 but not expressly
provided for by such  provisions,  the Company will give notice of such event as
provided in Paragraph  4(g) hereof,  and the Company's  Board of Directors  will
make an appropriate adjustment in the Exercise Price and the number of shares of
Common Stock  acquirable upon exercise of this Warrant so that the rights of the
holder of this Warrant shall be neither enhanced nor diminished by such event.

<PAGE>

                  (l)      Certain Definitions.

                         (i) "Common  Stock Deemed  Outstanding"  shall mean the
                    number of shares of Common Stock actually  outstanding  (not
                    including shares of Common Stock held in the treasury of the
                    Company), plus (x) pursuant to Paragraph 4(b)(i) hereof, the
                    maximum total number of shares of Common Stock issuable upon
                    the exercise of Options,  as of the date of such issuance or
                    grant of such Options, if any, and (y) pursuant to Paragraph
                    4(b)(ii)  hereof,  the  maximum  total  number  of shares of
                    Common  Stock  issuable  upon   conversion  or  exchange  of
                    Convertible  Securities,  as of the date of issuance of such
                    Convertible Securities, if any.
                         (ii)  "Market  Price,"  as of any  date,  (i) means the
                    average of the last  reported  sale prices for the shares of
                    Common Stock on the Nasdaq  National  Market  ("Nasdaq") for
                    the five (5) trading days immediately preceding such date as
                    reported by  Bloomberg  Financial  Markets or an  equivalent
                    reliable  reporting  service  mutually   acceptable  to  and
                    hereafter  designated  by the holder of this Warrant and the
                    Company  ("Bloomberg"),   or  (ii)  if  Nasdaq  is  not  the
                    principal trading market for the shares of Common Stock, the
                    average of the last  reported  sale prices on the  principal
                    trading  market for the Common  Stock during the same period
                    as reported by Bloomberg, or (iii) if market value cannot be
                    calculated  as of such date on any of the  foregoing  bases,
                    the  Market   Price  shall  be  the  fair  market  value  as
                    reasonably  determined  in good  faith  by (a) the  Board of
                    Directors  of  the  Corporation  or,  at  the  option  of  a
                    majority-in-interest  of  the  holders  of  the  outstanding
                    Warrants by (b) an independent investment bank of nationally
                    recognized  standing in the valuation of businesses  similar
                    to  the   business  of  the   corporation.   The  manner  of
                    determining  the Market  Price of the Common Stock set forth
                    in the foregoing  definition shall apply with respect to any
                    other  security  in respect of which a  determination  as to
                    market value must be made hereunder.
                         (iii) "Common Stock," for purposes of this Paragraph 4,
                    includes the Common Stock,  par value $0.005 per share,  and
                    any  additional  class  of stock of the  Company  having  no
                    preference as to dividends or  distributions on liquidation,
                    provided  that  the  shares  purchasable  pursuant  to  this
                    Warrant shall include only shares of Common Stock, par value
                    $0.005  per  share,  in  respect  of which  this  Warrant is
                    exercisable,  or shares  resulting  from any  subdivision or
                    combination  of such  Common  Stock,  or in the  case of any
                    reorganization, reclassification,  consolidation, merger, or
                    sale of the character  referred to in Paragraph 4(e) hereof,
                    the stock or other  securities  or property  provided for in
                    such Paragraph.

         5. Issue Tax. The issuance of certificates  for Warrant Shares upon the
exercise  of this  Warrant  shall be made  without  charge to the holder of this
Warrant or such shares for any issuance  tax or other costs in respect  thereof,
provided  that the  Company  shall not be  required  to pay any tax which may be
payable in respect of any transfer  involved in the issuance and delivery of any
certificate in a name other than the holder of this Warrant.

<PAGE>

         6. No Rights or Liabilities  as a  Shareholder.  This Warrant shall not
entitle the holder  hereof to any voting rights or other rights as a shareholder
of the  Company.  No provision of this  Warrant,  in the absence of  affirmative
action by the holder hereof to purchase Warrant Shares,  and no mere enumeration
herein of the rights or privileges of the holder hereof,  shall give rise to any
liability  of such  holder for the  Exercise  Price or as a  shareholder  of the
Company,  whether  such  liability is asserted by the Company or by creditors of
the Company.

         7.       Transfer, Exchange, and Replacement of Warrant.

                  (a)  Restriction  on  Transfer.  This  Warrant  and the rights
granted  to the  holder  hereof  are  transferable,  in whole  or in part,  upon
surrender of this Warrant,  together with a properly executed  assignment in the
form  attached  hereto,  at the office or agency of the  Company  referred to in
Paragraph 7(e) below,  provided,  however, that any transfer or assignment shall
be subject to the  conditions  set forth in  Paragraph  7(f)  hereof.  Until due
presentment  for  registration  of  transfer  on the books of the  Company,  the
Company may treat the  registered  holder  hereof as the owner and holder hereof
for all  purposes,  and the  Company  shall not be affected by any notice to the
contrary.
                  (b) Warrant  Exchangeable  for Different  Denominations.  This
Warrant is  exchangeable,  upon the surrender hereof by the holder hereof at the
office or agency of the Company  referred to in  Paragraph  7(e) below,  for new
Warrants of like tenor  representing  in the aggregate the right to purchase the
number of shares of Common Stock which may be purchased hereunder,  each of such
new Warrants to represent  the right to purchase  such number of shares as shall
be designated by the holder hereof at the time of such surrender.

                  (c)   Replacement   of  Warrant.   Upon  receipt  of  evidence
reasonably  satisfactory  to the  Company of the loss,  theft,  destruction,  or
mutilation  of this  Warrant  and,  in the  case of any  such  loss,  theft,  or
destruction,  upon delivery of an indemnity agreement reasonably satisfactory in
form and amount to the  Company,  or, in the case of any such  mutilation,  upon
surrender and cancellation of this Warrant,  the Company,  at its expense,  will
execute and deliver, in lieu thereof, a new Warrant of like tenor.

                  (d) Cancellation;  Payment of Expenses.  Upon the surrender of
this Warrant in  connection  with any  transfer,  exchange,  or  replacement  as
provided in this  Paragraph  7, this Warrant  shall be promptly  canceled by the
Company.  The Company shall pay all taxes (other than securities transfer taxes)
and all other  expenses  (other  than legal  expenses,  if any,  incurred by the
holder  hereof or  transferees)  and  charges  payable  in  connection  with the
preparation, execution, and delivery of Warrants pursuant to this Paragraph 7.

                  (e)  Register.  The Company shall  maintain,  at its principal
executive  offices  (or such  other  office or agency of the  Company  as it may
designate by notice to the holder hereof), a register for this Warrant, in which
the Company  shall  record the name and address of the person in whose name this
Warrant has been issued,  as well as the name and address of each transferee and
each prior owner of this Warrant.

<PAGE>

                  (f) Exercise or Transfer Without Registration. If, at the time
of the surrender of this Warrant in connection with any exercise,  transfer,  or
exchange of this  Warrant,  this Warrant (or, in the case of any  exercise,  the
Warrant Shares issuable hereunder), shall not be registered under the Securities
Act and under  applicable  state  securities  or blue sky laws,  the Company may
require, as a condition of allowing such exercise,  transfer,  or exchange,  (i)
that the holder or transferee of this  Warrant,  as the case may be,  furnish to
the  Company a written  opinion  of  counsel,  which  opinion  and  counsel  are
acceptable  to the  Company,  to the effect  that such  exercise,  transfer,  or
exchange may be made without  registration  under said Act and under  applicable
state  securities or blue sky laws,  (ii) that the holder or transferee  execute
and deliver to the Company an investment letter in form and substance acceptable
to the Company and (iii) that the  transferee  be an  "accredited  investor"  as
defined in Rule 501(a)  promulgated  under the Securities Act;  provided that no
such opinion,  letter or status as an "accredited investor" shall be required in
connection  with a transfer  pursuant to Rule 144 under the Securities  Act. The
first holder of this Warrant, by taking and holding the same,  represents to the
Company that such holder is acquiring this Warrant for investment and not with a
view to the distribution thereof.

         8.       [Intentionally Omitted].

         9. Notices. All notices, requests, and other communications required or
permitted to be given or delivered hereunder to the holder of this Warrant shall
be in writing, and shall be personally delivered,  or shall be sent by certified
or registered mail or by recognized overnight mail courier,  postage prepaid and
addressed,  to such holder at the address  shown for such holder on the books of
the  Company,  or at such  other  address as shall  have been  furnished  to the
Company  by  notice  from  such  holder.  All  notices,   requests,   and  other
communications  required or permitted to be given or delivered  hereunder to the
Company shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed,  to the office of the Company at 2335 Alaska  Avenue,  El
Segundo,  California  90245  Attention:  President,  or at such other address as
shall  have been  furnished  to the holder of this  Warrant  by notice  from the
Company.  Any  such  notice,  request,  or  other  communication  may be sent by
facsimile,  but  shall  in such  case be  subsequently  confirmed  by a  writing
personally  delivered or sent by certified or  registered  mail or by recognized
overnight  mail  courier as provided  above.  All notices,  requests,  and other
communications  shall be  deemed to have  been  given  either at the time of the
receipt  thereof by the person entitled to receive such notice at the address of
such person for  purposes of this  Paragraph 9, or, if mailed by  registered  or
certified mail or with a recognized overnight mail courier upon deposit with the
United States Post Office or such overnight mail courier,  if postage is prepaid
and the mailing is properly addressed, as the case may be.

<PAGE>

         10.  Governing  Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE  APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED IN THE STATE OF DELAWARE  (WITHOUT  REGARD TO  PRINCIPLES OF
CONFLICT OF LAWS). BOTH PARTIES  IRREVOCABLY  CONSENT TO THE JURISDICTION OF THE
UNITED  STATES  FEDERAL  COURTS AND THE STATE  COURTS  LOCATED IN DELAWARE  WITH
RESPECT TO ANY SUIT OR PROCEEDING BASED ON OR ARISING UNDER THIS AGREEMENT,  THE
AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS  CONTEMPLATED
HEREBY OR THEREBY AND IRREVOCABLY  AGREE THAT ALL CLAIMS IN RESPECT OF SUCH SUIT
OR PROCEEDING MAY BE DETERMINED IN SUCH COURTS.  BOTH PARTIES  IRREVOCABLY WAIVE
THE  DEFENSE  OF AN  INCONVENIENT  FORUM  TO THE  MAINTENANCE  OF  SUCH  SUIT OR
PROCEEDING.  BOTH  PARTIES  FURTHER  AGREE THAT  SERVICE OF PROCESS UPON A PARTY
MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF
PROCESS  UPON THE PARTY IN ANY SUCH SUIT OR  PROCEEDING.  NOTHING  HEREIN  SHALL
AFFECT EITHER  PARTY'S  RIGHT TO SERVE PROCESS IN ANY OTHER MANNER  PERMITTED BY
LAW. BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR
PROCEEDING  SHALL BE CONCLUSIVE  AND MAY BE ENFORCED IN OTHER  JURISDICTIONS  BY
SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER.

         11.      Miscellaneous.

                  (a) Amendments. This Warrant and any provision hereof may only
be amended by an  instrument  in writing  signed by the  Company  and the holder
hereof.

                  (b)  Descriptive  Headings.  The  descriptive  headings of the
several  paragraphs of this Warrant are inserted for purposes of reference only,
and shall not  affect  the  meaning  or  construction  of any of the  provisions
hereof.

                  (c)  Cashless  Exercise.   Notwithstanding   anything  to  the
contrary  contained in this Warrant,  if the resale of the Warrant Shares by the
holder  hereof is not then  registered  pursuant  to an  effective  registration
statement   under  the  Securities   Act,  this  Warrant  may  be  exercised  by
presentation  and  surrender  of this  Warrant to the  Company at its  principal
executive  offices with a written  notice of the holder's  intention to effect a
cashless  exercise,  including a  calculation  of the number of shares of Common
Stock to be issued upon such  exercise in  accordance  with the terms  hereof (a
"Cashless Exercise"). In the event of a Cashless Exercise, in lieu of paying the
Exercise Price in cash, the holder hereof shall  surrender this Warrant for that
number of shares of Common Stock determined by multiplying the number of Warrant
Shares to which it would  otherwise be entitled by a fraction,  the numerator of
which shall be the difference between the then current Market Price per share of
the Common Stock and the Exercise  Price,  and the denominator of which shall be
the then current Market Price per share of Common Stock.

<PAGE>

                  (d) Remedies.  The Company acknowledges that a breach by it of
its obligations  hereunder will cause  irreparable  harm to the holder hereof by
vitiating  the  intent  and  purpose of the  transactions  contemplated  hereby.
Accordingly, the Company acknowledges that the remedy at law for a breach of its
obligations  under this Warrant will be inadequate and agrees, in the event of a
breach or threatened  breach by the Company of the provisions of this Agreement,
that the holder  hereof  shall be entitled,  in addition to all other  available
remedies in law or in equity, to an injunction or injunctions to prevent or cure
any breaches of the provisions of this Warrant and to enforce  specifically  the
terms and provisions of this Warrant,  without the necessity of showing economic
loss and without any bond or other security being required.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.

                               AURA SYSTEMS, INC.

                       By:                     _____________________________

                       Name:                   _____________________________

                       Title:                  _____________________________

                                 Dated as of October 22, 1999

<PAGE>

1-PH/1096751.3

                           FORM OF EXERCISE AGREEMENT

                                                  Dated:  ________ __, 199_

To: Aura Systems, Inc.

         The  undersigned,  pursuant to the  provisions  set forth in the within
Warrant,  hereby agrees to purchase  ________  shares of Common Stock covered by
such Warrant, and makes payment herewith in full therefor at the price per share
provided by such Warrant in cash or by  certified or official  bank check in the
amount of,  or, if the resale of such  Common  Stock by the  undersigned  is not
currently registered pursuant to an effective  registration  statement under the
Securities  Act of 1933, as amended,  by surrender of  securities  issued by the
Company  (including a portion of the Warrant) having a market value (in the case
of a portion of this Warrant, determined in accordance with Section 11(c) of the
Warrant) equal to $_________.  Please issue a certificate  or  certificates  for
such shares of Common  Stock in the name of and pay any cash for any  fractional
share to:

                 Name:                      ___________________________________

                 Signature:                    ________________________________
                 Address:                      ________________________________

                 Note:    The above signature  should  correspond  exactly with
                          the name on the face of the within Warrant.

and,  if said  number  of shares of  Common  Stock  shall not be all the  shares
purchasable under the within Warrant,  a new Warrant is to be issued in the name
of said undersigned  covering the balance of the shares  purchasable  thereunder
less any fraction of a share paid in cash.

<PAGE>

                               FORM OF ASSIGNMENT

         FOR  VALUE  RECEIVED,   the  undersigned  hereby  sells,  assigns,  and
transfers  all the  rights of the  undersigned  under the within  Warrant,  with
respect  to the  number  of shares of Common  Stock  covered  thereby  set forth
hereinbelow, to:

Name of Assignee            Address                             No of Shares

,   and   hereby   irrevocably    constitutes   and   appoints    ______________
________________________  as agent and attorney-in-fact to transfer said Warrant
on the books of the within-named corporation, with full power of substitution in
the premises.

Dated:  ________ __, 199_

In the presence of:

-------------------------

                              Name:        ____________________________________

                              Signature:   _________________________________

                              Title of Signing Officer or
Agent (if any):

                              Address:     __________________________________

                 Note:    The above signature  should  correspond  exactly with
                          the name on the face of the within Warrant.

<PAGE>10.21.4

         THE CONVERTIBLE  SENIOR SECURED NOTE DATED OCTOBER 7, 1998 MADE BY AURA
         SYSTEMS,  INC.  IN  FAVOR  OF RGC  INTERNATIONAL  INVESTORS,  LDC  (THE
         "CONVERTIBLE  SENIOR  SECURED  NOTE"),  IS HEREBY  AMENDED AND RESTATED
         EFFECTIVE AS OF OCTOBER 22, 1999. ALL  LIABILITIES  AND  OBLIGATIONS OF
         AURA SYSTEMS,  INC.  UNDER THE  CONVERTIBLE  SENIOR  SECURED NOTE SHALL
         HEREAFTER BE EVIDENCED BY THIS NOTE.

              AMENDED AND RESTATED CONVERTIBLE SENIOR SECURED NOTE

El Segundo, California                                           $3,000,000.00
October 7, 1998

                  FOR VALUE RECEIVED, Aura Systems, Inc., a Delaware corporation
(hereinafter called the "Borrower"),  hereby promises to pay to the order of RGC
International  Investors, LDC or registered assigns (the "Holder") the principal
amount of Three Million Dollars  ($3,000,000.00) in equal quarterly installments
of $283,679.00  beginning on the 22nd day of January, 2000 and continuing on the
22nd day of each successive  April,  July,  October and January until payment in
full of the  principal  amount;  provided,  however,  that if at any  time  such
quarterly  payments are less frequent than any regularly  scheduled  payments of
principal or interest to the holders of unsecured claims  ("Unsecured  Scheduled
Payments")  pursuant to any plan of  reorganization,  repayment or restructuring
between  the  Borrower  and that  certain  Unofficial  Creditors'  Committee  of
Borrower,  organized as of July 26, 1999, or any similarly  situated  committee,
then, following payment of the next quarterly  installment due after the date of
the first Unsecured Scheduled Payment,  this Note shall be thereafter payable in
equal  monthly  installments  of  $94,009.00 on the 22nd day of each month until
payment in full of the principal amount.

                  Any remaining unpaid principal balance of this Note,  together
with  accrued but unpaid  interest,  shall be due and payable in full on October
22, 2002 (the  "Maturity  Date").  The  Borrower  may prepay the  principal  and
interest  on this Note,  without  premium or  penalty,  at any time prior to the
Maturity Date.

                  Interest shall accrue on the unpaid  principal  balance hereof
at the rate of eight  percent  (8%) per annum from  October 22, 1999 (the "Issue
Date")  until the same  becomes  due and  payable,  whether at  maturity or upon
acceleration  or by prepayment or otherwise,  and shall be computed on the basis
of a 365-day  year and the  actual  number  of days  elapsed.  Accrued  interest
hereunder shall be payable in arrears on the date for principal  payments as set
forth above.  Any amount of principal or interest on this Note which is not paid
when due shall bear interest at the rate of sixteen  percent (16%) per annum (or
such  lesser  amount as is allowed by law) from the due date  thereof  until the
same is paid  ("Default  Interest"),  such  Default  Interest to be payable upon
demand.

<PAGE>

                  All payments of principal and accrued  interest  shall be made
in lawful money of the United States of America.  All payments  shall be made at
such  address as the Holder  shall  hereafter  give to the  Borrower  by written
notice made in accordance with the provisions of this Note.  Whenever any amount
expressed  to be due by the  terms of this Note is due on any day which is not a
business day, the same shall instead be due on the next  succeeding day which is
a business  day and,  in the case of any  payment  date which is not the date on
which this Note is paid in full, the extension of the due date thereof shall not
be taken into account for purposes of determining  the amount of interest due on
such date.  As used in this  Note,  the term  "business  day" shall mean any day
other than a Saturday,  Sunday or a day on which commercial banks in the city of
New York,  New York are  authorized  or  required by law or  executive  order to
remain closed.  Each  capitalized term used herein,  and not otherwise  defined,
shall have the meaning  ascribed  thereto in that  certain  Securities  Purchase
Agreement,  dated  October 7, 1998,  pursuant to which this Note was  originally
issued (the "Purchase Agreement").

                  This Note is a secured  obligation and is subject to the terms
of (i) that certain Security Agreement,  dated as of October 7, 1998 and amended
as of October  22,  1999,  by and  between  the Holder  and the  Borrower,  (the
"Borrower Security Agreement"),  (ii) those certain Guarantee Agreements,  dated
as of October 7, 1998, by and between each of the  Borrower's  subsidiaries  and
the  Holder  (the  "Guarantee  Agreements),  and (iii)  those  certain  Security
Agreements,  dated as of October 7, 1998, and amended as of October 22, 1999, by
and between each of the Borrower's  subsidiaries and the Holder (the "Subsidiary
Security  Agreements" and, together with the Borrower Security Agreement and the
Guarantee  Agreements,   the  "Security  Agreements").   All  terms,  covenants,
conditions and agreements contained in the Security Agreements are hereby made a
part of this Note as if they were fully set forth herein,  and Borrower promises
and agrees to keep,  observe and perform the same in  accordance  with the terms
thereof.

                  The Convertible Senior Secured Note dated October 7, 1998 made
by Aura  Systems,  Inc.  in  favor  of RGC  International  Investors,  LDC  (the
"Convertible  Senior  Secured  Note") is amended and  restated  effective  as of
October 22, 1999.  All  liabilities  and  obligations  of the Borrower under the
Convertible Senior Secured Note shall hereafter be evidenced by this Note.

                  Upon  the  occurrence  of an  Event  of  Default  (as  defined
herein),  the entire unpaid principal  indebtedness of this Note,  together with
all  interest  accrued  and Default  Interest  together  with all other  charges
provided  for  herein or in the  Security  Agreements,  shall,  at the option of
Holder,  become  due and  payable  immediately,  without  presentation,  demand,
protest or further notice (all of which are expressly  waived by Borrower),  and
payment of same may be enforced and recovered in whole or in part at any time by
the Holder.

                  Borrower  agrees to pay on demand any  costs,  indemnification
claims, or other expenses arising under the Security Agreements and all costs of
collection, including without limitation attorneys' fees, incurred by the Holder
hereof with respect to any default by Borrower  hereunder;  such amounts,  until
paid by Borrower,  shall be added to the principal  hereof and be secured by the
Security Agreements.

<PAGE>

                  Any and all payments received by the Holder hereof following a
default by Borrower may, at the Holder's option,  be applied to any and all sums
payable by Borrower hereunder in whatever order and manner the Holder may elect,
including,  without limitation,  the following:  first to the payment of any and
all costs and  expenses  incurred  by the Holder with  respect to such  default,
second to payments  overdue  hereunder (in whatever order the Holder may elect),
third to  accrued  interest  and fourth to  principal.  The Holder may make such
application  notwithstanding  any  contrary  request  or  purported  conditional
payment by Borrower.

                  The granting by the Holder hereof,  with or without notice, of
any  forbearance  or any  extension  of time for  payment  of any sum or for the
performance  of any covenant,  condition or agreement due hereunder or under the
Security Agreements,  or the granting of any other indulgence,  or the taking or
releasing  or  subordinating  of any  security or  additional  security  for the
indebtedness  evidenced hereby,  or any other  modification or amendment of this
Note or the  Security  Agreements,  shall in no way  release  or  discharge  the
liability  of  Borrower  on this Note,  whether or not  granted or done with the
knowledge or consent of Borrower.  No failure or delay on the part of the Holder
in the exercise of any power,  right or privilege  hereunder  shall operate as a
waiver  thereof,  nor shall any single or partial  exercise  of any such  power,
right or privilege  preclude other or further  exercise  thereof or of any other
right,  power or  privileges.  All rights and remedies  existing  hereunder  are
cumulative to, and not exclusive of, any rights or remedies otherwise available.

                  BORROWER  HEREBY  IRREVOCABLY   AUTHORIZES  AND  EMPOWERS  ANY
ATTORNEY OR THE PROTHONOTARY OR CLERK OF ANY COURT OF RECORD WITHIN THE STATE OF
DELAWARE  OR  ELSEWHERE  TO APPEAR  FOR  BORROWER  AND IN CASE ANY  DEFAULT  HAS
OCCURRED HEREUNDER OR UNDER THE SECURITY  AGREEMENTS,  WITH OR WITHOUT COMPLAINT
OR DECLARATION  FILED, TO CONFESS AND ENTER JUDGMENT,  OR A SERIES OF JUDGMENTS,
AGAINST  BORROWER IN FAVOR OF THE THEN  HOLDER OF THIS NOTE AS OF ANY TERM,  FOR
THE UNPAID BALANCE OF THE PRINCIPAL DEBT HEREOF  (INCLUDING  WITHOUT  LIMITATION
ALL SUMS  ADVANCED OR PAID BY ANY HOLDER TO OR ON BEHALF OF BORROWER OR ADDED TO
THE  PRINCIPAL  HEREOF  PURSUANT  TO THE  TERMS  OF THIS  NOTE  OR THE  SECURITY
AGREEMENTS) TOGETHER WITH UNPAID INTEREST AND DEFAULT INTEREST THEREON, COSTS OF
SUIT AND REASONABLE  ATTORNEY'S FEES AND COSTS.  THIS NOTE OR A COPY VERIFIED BY
AFFIDAVIT  SHALL BE SUFFICIENT  WARRANT FOR ANY SUCH ATTORNEY TO SO PROCEED.  ON
SUCH  JUDGMENT OR JUDGMENTS  ONE OR MORE  EXECUTIONS  MAY ISSUE  FORTHWITH.  THE
AUTHORITY  GRANTED  HEREIN TO CONFESS  JUDGMENT  SHALL NOT BE  EXHAUSTED  BY ANY
EXERCISE  THEREOF BUT SHALL  CONTINUE AND MAY BE EXERCISED FROM TIME TO TIME AND
AT ALL TIMES UNTIL  PAYMENT IN FULL OF ALL THE AMOUNTS DUE  HEREUNDER  AND UNDER
THE SECURITY AGREEMENTS, ANY LAW, RULE OF COURT OR CUSTOM NOTWITHSTANDING.

<PAGE>

                  Any notice  herein  required or permitted to be given shall be
in  writing  and may be  personally  served or  delivered  by courier or sent by
United  States  mail and  shall be deemed to have been  given  upon  receipt  if
personally served (which shall include telephone line facsimile transmission) or
sent by courier or three (3) days after  being  deposited  in the United  States
mail, certified,  with postage pre-paid and properly addressed, if sent by mail.
For the  purposes  hereof,  the  address  of the  Holder  shall be c/o Rose Glen
Capital   Management,   L.P.,  3  Bala  Plaza  East,  Suite  200,  Bala  Cynwyd,
Pennsylvania  19004,  facsimile  number:  (610)  617-0570 and the address of the
Borrower shall be Aura Systems, Inc., 2335 Alaska Avenue, El Segundo, California
90245,  facsimile number:  (310) 643-8719.  Both the Holder and the Borrower may
change the  address  for  service  by service of written  notice to the other as
herein provided.

                  This Note is transferrable at the Holder's option and shall be
binding upon  Borrower  and its  successors  and  assigns.  The rights under and
benefits  of this Note shall  inure to Holder and its  successors  and  assigns.
Notwithstanding  anything in this Note to the contrary, this Note may be pledged
as  collateral in  connection  with a bona fide margin  account or other lending
arrangement.

                  This Note and any  provision  hereof may only be amended by an
instrument in writing signed by the Borrower and the Holder. The term "Note" and
all references  thereto,  as used  throughout this  instrument,  shall mean this
instrument as originally executed, or if later amended or supplemented,  then as
so amended or supplemented.

                  If any  term  or  provision  of this  Note or the  application
thereof to any person or circumstance shall be invalid, illegal or unenforceable
in any  respect,  the  remainder  of this Note shall be  construed  without such
provision,  and  the  application  of such  term  or  provision  to  persons  or
circumstances  other  than  those  as to which it is held  invalid,  illegal  or
unenforceable,  as the case may be, shall not be affected thereby, and all other
terms and provisions of this Note shall be valid and  enforceable to the fullest
extent permitted by law and equity.

                  This   Agreement   shall  be  governed  by  and  construed  in
accordance with the laws of the State of Delaware  applicable to agreements made
and to be performed in the State of Delaware  (without  regard to  principles of
conflict of laws). Both parties  irrevocably  consent to the jurisdiction of the
United  States  federal  courts and the state  courts  located in Delaware  with
respect to any suit or proceeding based on or arising under this Agreement,  the
agreements entered into in connection herewith or the transactions  contemplated
hereby or thereby and irrevocably  agree that all claims in respect of such suit
or proceeding may be determined in such courts.  Both parties  irrevocably waive
the  defense  of an  inconvenient  forum  to the  maintenance  of  such  suit or
proceeding.  Both  parties  further  agree that  service of process upon a party
mailed by first class mail shall be deemed in every respect effective service of
process  upon the party in any such suit or  proceeding.  Nothing  herein  shall
affect either  party's  right to serve process in any other manner  permitted by
law. Both parties agree that a final non-appealable judgment in any such suit or
proceeding  shall be conclusive  and may be enforced in other  jurisdictions  by
suit on such judgment or in any other lawful manner.

<PAGE>

                  The following additional terms shall apply to this Note:

                          ARTICLE I - CERTAIN COVENANTS

                  1.1  Distributions  on Capital Stock.  So long as the Borrower
shall have any  obligation  under this Note,  the Borrower shall not without the
Holder's  written  consent (a) pay,  declare or set apart for such payment,  any
dividend or other distribution  (whether in cash,  property or other securities)
on shares of capital  stock  other than  dividends  on shares of the  Borrower's
common  stock,  par value $0.005 per share (the "Common  Stock"),  solely in the
form of  additional  shares of Common  Stock or (b)  directly or  indirectly  or
through any subsidiary  make any other payment or distribution in respect of its
capital stock.

                  1.2 Restriction on Stock Repurchases.  So long as the Borrower
shall have any  obligation  under this Note,  the Borrower shall not without the
Holder's  written consent redeem,  repurchase or otherwise  acquire (whether for
cash or in exchange for property or other  securities  or  otherwise) in any one
transaction or series of related transactions any shares of capital stock of the
Borrower  or any  warrants,  rights or options to  purchase  or acquire any such
shares;  provided,  however,  that  this  Paragraph  1.2  shall not be deemed to
prohibit (a) the repurchase by the Borrower of (i) that certain Convertible Term
Debenture,  due June 27, 1999,  issued to JNC Opportunity  Fund, Ltd., (ii) that
certain Convertible  Debenture issued on December 31, 1997 to CEFEO Investments,
Ltd., (iii) that certain note issued to Isosceles Fund Ltd. on October 27, 1998,
or (iv) those certain Variable Interest  Convertible Notes of the Company issued
on September  30, 1997,  and held by Infinity  Investors  Ltd. and certain other
funds that are advised by H.W. Finance,  in each case on terms no more favorable
than  those  given  to  Holder  pursuant  to that  certain  Securities  Purchase
Agreement,  dated as of October  13,  1999,  by and  between the Holder and Algo
Technologies, Inc., a California corporation (the "Algo Purchase Agreement"), or
(b) the  issuance by the Borrower of shares of Common Stock to each of Excalibur
Limited  Partnership,  P.R.I.F.,  L.P. and Gundyco in trust for RRSP  50-9886-19
(collectively,  the "NewCom Investors") in an amount not in excess of the shares
to which such parties are entitled  pursuant to those  certain  "Aura  Repricing
Rights"  contained in those certain  Subscription  Agreements,  each dated as of
November 30, 1998, between NewCom,  Inc. and the NewCom Investors (as amended by
that certain Amendment Agreement,  dated December 28, 1998, between NewCom, Inc.
and the NewCom Investors).

                  1.3  Sale of  Assets.  So  long as  Borrower  shall  have  any
obligation  under this Note, the Borrower shall not, and shall not permit any of
its Significant  Subsidiaries (as defined in Section 2.3 herein) to, sell, lease
or otherwise  dispose of any of its or their assets outside the ordinary  course
of business without the Holder's written consent;  provided,  however, that this
Paragraph 1.3 shall not be deemed to prohibit (a) any such disposition of assets
the  entire  proceeds  of  which  are  used to  repay  this  Note,  (b) any such
disposition  of assets by Aura  Ceramics,  Inc. or (c) any such  disposition  of
assets effected prior to October 1, 1999 by MYS Corporation, AuraSound, Inc. and
Electrotec Productions, Inc.

<PAGE>

                  1.4  Advances  and Loans.  So long as Borrower  shall have any
obligation  under this Note, the Borrower shall not without the Holder's written
consent  lend  money,  give credit or make  advances  to, or  otherwise  make an
investment  in, any  person,  firm,  joint  venture or  corporation,  including,
without limitation, officers, directors, employees,  subsidiaries and affiliates
of the Borrower, except loans, credits or advances (a) in existence or committed
on the Issue  Date and which the  Borrower  has  informed  the Holder in writing
prior to the  date  hereof,  and (b) made in the  ordinary  course  of  business
(including intercompany transactions consistent with past practice).

                  1.5 Contingent Liabilities. So long as Borrower shall have any
obligation  under this Note, the Borrower shall not without the Holder's written
consent assume, guarantee,  endorse, contingently agree to purchase or otherwise
become  liable upon the  obligation  of any  person,  firm,  partnership,  joint
venture or corporation,  except by the endorsement of negotiable instruments for
deposit or  collection  and except  assumptions,  guarantees,  endorsements  and
contingencies  (a) in  existence  or  committed  on the Issue Date and which the
Borrower has informed  the Holder in writing  prior to the date hereof,  and (b)
similar transactions in the ordinary course of business.

                  1.6  Seniority  of Note.  So long as  Borrower  shall have any
obligation  under this Note, the Borrower  shall not incur any  obligation  with
respect  to  indebtedness  which is  senior  in right of  payment  to this  Note
(including,  without  limitation,  making any  obligation  outstanding as of the
Issue Date senior in right of payment to this Note) other than  obligations with
respect to indebtedness incurred in connection with a Permitted Lien (as defined
in the Borrower  Security  Agreement);  provided,  however,  that the  foregoing
language shall not be deemed to restrict or otherwise limit  Borrower's  ability
to make  payments  with  respect  to  indebtedness  which is  junior in right of
payment to this Note to the  extent  that (i) at the time of such  payment,  the
Borrower is not  otherwise in default  under the terms of this Note and (ii) the
making  of such  payment  by the  Borrower  would not  result in the  Borrower's
inability to make payments of principal and interest hereunder.

                         ARTICLE II - EVENTS OF DEFAULT

                  The Borrower shall be in default under this Note if any one or
more of the following events (each an "Event of Default") occurs:

                  2.1 Failure to Pay Principal or Interest.  The Borrower  fails
to pay the principal  hereof or interest  thereon when due, whether at maturity,
upon acceleration or otherwise,  and such failure continues uncured for a period
of (10) days;

<PAGE>

                  2.2 Breach of  Covenants.  The Borrower  breaches any material
covenant or other material term or condition  contained in this Note or Sections
2, 3, 4, 5, 6 or 7 of the Security  Agreement or any  subsidiary of the Borrower
breaches any material  covenant or other material law or condition  contained in
Sections  2, 3, 4, 5, 6 or 7 of any  Subsidiary  Security  Agreement,  and  such
breach  continues for a period of ten (10) days after written  notice thereof to
the Borrower from the Holder;

                  2.3  Receiver or  Trustee.  The  Borrower  or any  Significant
Subsidiary  (as defined  below) of the Borrower shall make an assignment for the
benefit of creditors,  or apply for or consent to the  appointment of a receiver
or trustee for it or for a substantial part of its property or business, or such
a receiver or trustee shall  otherwise be appointed.  For purposes  hereof,  the
term "Significant Subsidiary" shall mean any subsidiary of the Borrower which on
the Issue Date fits (based upon the financial  statements of the Borrower  dated
as of and for the periods ending  September 30, 1999) or which may in the future
fit  within  the  definition  set  forth  in  Rule  1-02(w)  of  Regulation  S-X
promulgated under the Securities Act of 1933, as amended, but shall specifically
exclude NewCom, Inc.;

                  2.4 Judgments.  Any money  judgment,  writ or similar  process
shall be entered or filed against the Borrower or any Significant  Subsidiary of
the Borrower or any of its  property or other  assets for more than  $1,000,000,
and shall  remain  unvacated,  unbonded  or  unstayed  (by court order or by the
written  agreement  of the judgment  creditor)  for a period of twenty (20) days
unless otherwise  consented to by the Holder in its sole  discretion;  provided,
however,  that the  existing  judgment  against the  Borrower and certain of its
subsidiaries in favor of NEC  Technologies,  Inc.  entered in Case No. YC033592,
Los Angeles Superior Court, pursuant to a Settlement  Agreement,  dated December
17, 1998, in the amount of $2,951,854  (plus  interest)  shall not constitute an
Event of Default under this Paragraph 2.4;

                  2.5  Bankruptcy.  Bankruptcy,  insolvency,  reorganization  or
liquidation proceedings or other proceedings for relief under any bankruptcy law
or any law for the  relief of debtors  shall be  instituted  by or  against  the
Borrower or any Significant Subsidiary of the Borrower;  provided, however, that
in the case of an involuntary  bankruptcy,  such  involuntary  bankruptcy  shall
continue undischarged or undismissed for a period of sixty (60) days;

                  2.6  Sale  of  Assets,   Merger.   The  sale,   conveyance  or
disposition  of all or  substantially  all of the assets of the  Borrower or the
consolidation, merger or other business combination of the Borrower with or into
any other  Person (as  defined  below) or Persons  when the  Borrower is not the
survivor.  "Person" shall mean any individual,  corporation,  limited  liability
company, partnership, association, trust or other entity or organization.

<PAGE>

                  IN WITNESS WHEREOF, Borrower has caused this Note to be signed
in its name by its duly authorized officer this 22nd day of October, 1999.

                               AURA SYSTEMS, INC.

                                    By:_____________________________________
                                      Name:
                                     Title:

ACKNOWLEDGED AND AGREED TO BY:

RGC INTERNATIONAL INVESTORS, LDC
By:      Rose Glen Capital Management, L.P., Investment Manager
         By:      RGC General Partner Corp., as General Partner

By: ______________________________
         Wayne D. Bloch
         Managing Director

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