Document:

EXHIBIT
10.1

 

AURA
SYSTEMS, INC.

 

-
and -

 

Jiangsu
AoLunTe Electrical Machinery Industrial CO., LTD.

 

 

 

SINO-FOREIGN
COOPERATIVE JOINT

VENTURE
CONTRACT

 

for
the establishment and operation of

 

Jiangsu
Shengfeng Mobile Power Technology

CO.
LTD.

 

 

 

    	 

    	 	 	 

    

 

Table
of Contents

 

	1.	DEFINITION	1
	2.	PARTIES TO THIS CONTRACT	7
	3.	ESTABLISHMENT OF THE JOINT VENTURE	8
	4.	PURPOSE AND SCOPE OF THE JOINT VENTURE	8
	5.	TOTAL INVESTMENT, REGISTERED CAPITAL AND COOPERATIVE
    CONDITIONS	9
	6.	TRANSFER OF OWNERSHIP INTEREST	12
	7.	REPRESENTATIONS, WARRANTIES AND OBLIGATIONS	12
	8.	RESPONSIBILITIES OF THE PARTIES	14
	9.	INTELLECTUAL PROPERTY AND TECHNOLOGY	16
	10.	PURCHASE OF MATERIALS AND PRODUCTS	18
	11.	USE OF PRODUCTS	19
	12.	OTHER COMMERCIAL AGREEMENTS	19
	13.	MINIMUM SALES TARGETS	20
	14.	BOARD OF DIRECTORS	20
	15.	SUPERVISORS	28
	16.	MANAGEMENT OF THE JOINT VENTURE	29
	17.	LABOR MANAGEMENT	32
	18.	TAXATION AND INSURANCE	32
	19.	FINANCE AND ACCOUNTING	32
	20.	CAPITAL INVESTMENT IN AURA	35
	21.	CASH FLOW DISTRIBUTION	35
	22.	FOREIGN EXCHANGE	36
	23.	CONFIDENTIALITY AND NON-COMPETITION	36
	24.	BUSINESS PRACTICE	38
	25.	TERM, TERMINATION AND LIQUIDATION	38
	26.	BREACH OF CONTRACT	41
	27.	FORCE MAJEURE	42
	28.	POTENTIAL INITIAL PUBLIC OFFERING	43
	29.	DISPUTE RESOLUTION	43
	30.	GOVERNING LAW	44
	31.	MISCELLANEOUS	44
	Schedule 1- Intellectual Property and Technology
    License Agreement	49
	Appendix 1 - Licensed
    Technology	72
	Appendix 2 - Components	73
	Schedule 2 -AoLunTe Asset Contribution Agreement	75
	Schedule 3- Key Terms of Consulting Services Agreement	76
	Schedule 4-Major Decisions	77
	Schedule 5- Securities Purchase Agreement	79

 

    	 

    	 	 	 

    

 

THIS
CONTRACT is made and entered into on January 27, 2017, by and between:

 

	(1)	Jiangsu
    AoLunTe Electrical Machinery Industrial Co., Ltd., a limited liability company incorporated and validly existing under the
    laws of People’s Republic of China (“PRC” or “China”), with its registered office at
    Liyang, Jiangsu, PRC (“AoLunTe”); and
	 	 
	(2)	Aura
    Systems, Inc., a corporation organized and validly existing under the laws of Delaware, U.S., with its business place at 10541
    Ashdale Street, Stanton, California 90680 (“Aura”).

 

Each
of AoLunTe and Aura shall hereinafter individually be referred to as a “Party” and collectively as the “Parties”.

 

Recital:

 

After
friendly consultations conducted in accordance with the principles of equality and mutual benefit, the Parties have agreed to
establish a Sino-foreign cooperative joint venture at Liyang, the PRC, in accordance with the Law of the People’s Republic
of China on Sino-Foreign Cooperative Joint Venture (中华人民共和国中外合作经营企业法)
(“Cooperative Joint Venture Law”) and its implementing rules (中华人民共和国中外合作经营企业法实施细则)
(“Cooperative Joint Venture Regulations”) and other relevant PRC laws and regulations, and the provisions
of this Contract.

 

Operative
Provisions:

 

	 	1.	DEFINITION

 

	 	1.1	Unless
    the terms or context of this Contract provide otherwise: 

 

	 	“Affiliate(s)”	 	Means,
                                         with respect to any Person, any other Person controlling or controlled by or under common
                                         control with such specified Person.

         

        For
        purpose of this definition, “control” when used with respect to any specified Person means the power to direct
        the management and policies of such Person, directly or indirectly, whether through the ownership of fifty percent (50%)
        or more shares or registered capital with voting right, or voting securities, by contract or otherwise, and the terms
        “controlling”, “controlled by”, “under common control with” and
        “controlled” have meanings correlative to the foregoing;

         

	 	“Affiliated
    Transaction”	 	Means
                                         any and all transactions between the Joint Venture and AoLunTe or their respective Affiliates
                                         and/or between the Joint Venture and Aura or their respective Affiliates;

         

	 	“Additional
    Capital”	 	Means
                                         any and all additional capital to be provided or secured by each of the Parties when
                                         necessary in accordance with Section 5.5;

         

	 	“Approval”	 	Means
any consent, approval, authorization, permission, order, registration, filing, clearance, qualification, license, permit, certificate
or declaration by any Government Authority or other public, regulatory or governmental agency or authorities in the PRC;

 

    	 	- 1 -	 

    	 	 	 

    

 

	 	“Articles
    of Association”	 	Means
                                         the articles of association of the Joint Venture, to be signed by the Parties simultaneously
                                         with this Contract and its amendments from time to time;

         

	 	“Auditor”	 	Means
                                         an international accounting firm registered in the PRC, engaged at the Joint Venture’s
                                         own expense upon resolution of the Board, which shall be the auditor of the Joint Venture
                                         and which shall be independent from the Parties and independent from the Joint Venture;

         

	 	“AuraGen”	 	Means
    Aura’s patented, integrated, mobile power generator and power management system that installs in a motor vehicle and
    delivers, on-location, both AC and DC electricity for any end user;
	 	 	 	 
	 	“Business”	 	Means
                                         the activities that the Joint Venture will be engaged in based on Section 4.2 and subject
                                         to its Business License;

         

	 	“Board
                                         of Directors” or “Board”

         
	 	Means
    the board of directors of the Joint Venture established in accordance with this Contract;
	 	 	 	 
	 	“Business
                                         License”

         
	 	Means
                                         the business license of the Joint Venture as issued, amended and replaced, as the case
                                         may be, from time to time by the Registration Authority;

         

	 	“Certificate
    of Approval”	 	Means
                                         the certificate of approval issued by the Examination and Approval Authority approving
                                         this Contract and the Articles of Association;

         

	 	“Chairman”	 	Means
                                         the Chairman of Board as provided in Section 14.2.1;

         

	 	“Confidential
    Information”	 	Means
technology and know-how as well as trade secrets, strategic business or marketing information, business projections, secret processes
and other processes, data, formulae, programs, manuals, designs, sketches, photographs, plans, drawings, specifications, reports,
studies, findings, non-patented inventions and ideas, and other information relating to the production, packaging, use, pricing,
or sales and distribution, whether of a technical, engineering, operational, business or economic nature, whenever designated
as “Confidential” by AoLunTe or Aura or their Affiliates and provided by AoLunTe, Aura or their Affiliates in connection
with the establishment of the Joint Venture and any matters related thereto, the implementation of and/or the conduct of the business
contemplated by this Contract and the other contracts contemplated herein. Confidential Information, however, shall not include
information which is now or hereafter becomes part of the public domain through authorized publication, information which the
receiving Party can demonstrate was in its possession at the time of receipt, and information which hereafter comes into the possession
of the receiving Party and was or is not acquired by the receiving Party directly or indirectly from the providing Party or sources
under an obligation of secrecy to such providing Party;

 

    	 	- 2 -	 

    	 	 	 

    

 

	 	“Contract”
    or “this Contract”	 	Means
                                         this Sino-foreign Cooperative Joint Venture Contract, as may be amended and supplemented
                                         from time to time;

         

	 	“Consulting
                                         Services Agreement”

         
	 	Means
                                         the consulting services agreement to be entered into between Aura and the Joint Venture,
                                         the key terms of which are set out in Schedule 3;

         

	 	“Cooperative
                                         Condition”

         
	 	Means
                                         the Cooperative Condition to be provided by Aura as specified in Section 5.3.1;

         

	 	“Customer”
    	 	Means
                                         a customer of the Joint Venture’s products;

         

	 	“Deadlock”	 	Means
the circumstances provided in Section 14.12.1;

         

	 	“Director”	 	Means
                                         any member of the Board;

         

	 	“Dispute”	 	Means
                                         any dispute, controversy or claim arising out of or in connection with the interpretation
                                         or implementation of this Contract including without limitation any question regarding
                                         its existence, validity, interpretation, termination, or any claim for the threatened,
                                         alleged, or actual breach of this Contract by either Party;

         

	 	“Distributable
    Profit”	 	Means
                                         net profits of the Joint Venture to be calculated and distributed to the Parties in accordance
                                         with Section 21.2

         

	 	“Effective
    Date”	 	Means
                                         the effective date of this Contract, which shall be the date on which all of conditions
                                         in Section 31.1 have been fulfilled;

         

	 	“Encumbrance”	 	Means
any mortgage, charge, claim, equitable interest, lien, option, pledge, security interest, right of first refusal, right to acquire,
hypothecation, title retention, right of set-off, counterclaim, trust arrangement or similar restriction of any kind (including
any restriction on use, voting, equity transfer, receipt of income, or exercise of any other ownership interest);

 

    	 	- 3 -	 

    	 	 	 

    

 

	 	“Ownership
    Interest”	 	Means,
                                         with respect to each Party, such Party’s percentage ownership interest in the Joint
                                         Venture, as set forth in Section 5.10;

         

	 	“Establishment
    Date”	 	Means
                                         the first business day after receipt of Certificate of Approval for Joint Venture

         

	 	“Examination
    and Approval Authority”	 	Means
                                         the National Development and Reform Commission and Ministry of Commerce of the PRC, or
                                         their authorized local division or any successor government institution or agency empowered
                                         to approve the Feasibility Study Report, this Contract and the Articles of Association
                                         of the Joint Venture and any amendments, supplements, modifications or termination hereof
                                         or thereof;

         

	 	“Feasibility
                                         Study Report”

         

         
	 	Means
                                         the Feasibility Study Report, jointly prepared by the Parties on the execution date of
                                         this Contract, regarding the feasibility of establishment of the Joint Venture;

         

	 	“Financial
                                         Controller”

         
	 	Means
                                         the financial controller of the Joint Venture as specified in Section 16.1;

         

	 	“Financial
    Year”	 	Means
                                         a calendar year beginning on 1 January and ending on 31 December, except the exceptions
                                         provided in Section 19.4;

         

	 	“General
    Manager”	 	Means
                                         the General Manager of the Joint Venture as specified in Section 16.1;

         

	 	“Government
    Authority”	 	Means
                                         any governmental authority, judicial or administrative body or any other authorities
                                         having or asserting jurisdiction over the Person or matter with respect to this Contract
                                         including their local branch offices;

         

	 	“Intellectual
                                         Property” or “IP”

         

         

         

         

         

         

         

         

         
	 	Means
any intellectual and industrial property rights including but not limited to all rights in patents, utility models, semi-conductor
topography rights; copyrights, authors’ rights, trade marks, brands, domain names, trade secrets, know-how and other rights
in information, drawings, logos, plans, database rights, technical notes, prototypes, processes, methods, algorithms, any technical-related
documentation, any software, registered designs and other designs, in each case, whether registered or unregistered and including
applications for registration, and all rights or forms of protection having equivalent or similar effect anywhere in the world;

 

    	 	- 4 -	 

    	 	 	 

    

 

	 	“IP
    and Technology License Agreement” or “Technology License”	 	Means
                                         the Intellectual Property and Technology License Agreement to be entered into between
                                         Aura and the Joint Venture in the agreed form as attached as Schedule 1 in
                                         accordance with Section 5.3.1;

         

	 	“IP
    Governance Committee”	 	Means
    the IP Governance Committee as provided in Section 9.2.1;
	 	 	 	 
	 	“Joint
                                         Venture” or “JV”

         

         

         

         

         
	 	Means
                                         [Jiangsu Shengfeng Mobile Power Technology CO. LTD], a Sino-foreign cooperative
                                         joint venture to be formed in Liyang, Jiangsu, PRC by the Parties in accordance with
                                         the Cooperative Joint Venture Law, the Cooperative Joint Venture Regulations
                                         and other relevant laws and regulations of the PRC and the terms and conditions of
                                         this Contract and the Articles of Association;

         

	 	“Licensed
                                         Technology”

         
	 	has
                                         the meaning ascribed to it in the Technology License;

         

	 	“Management
    Personnel”	 	Means
                                         the Joint Venture’s General Manager, Financial Controller, Manufacturing VP, QA
                                         Manager and other management personnel designated as such by the Board;

         

	 	“Manufacturing
    VP”	 	Means
    the vice president of manufacturing of the Joint Venture as specified in Section 16.1;
	 	“Minimum
    Sales Target”	 	Means
    the minimum sales target of the Joint Venture for a Financial Year as specified in Section 13.1;
	 	“New
                                         Products”

         
	 	Means
    products other than the Selected Mobile Power Products;
	 	“Person”

         
	 	Means
                                         any individual, company, legal person enterprise, non-legal person enterprise, joint
                                         venture, partnership, wholly owned entity, unit, trust or other entity or organization,
                                         including, without limitation, any government or political subdivision or any agency
                                         or instrumentality of a government or political subdivision and other body corporate
                                         or unincorporated; Person also includes a reference to that Person’s legal representatives,
                                         assignees, successors or heirs;

         

	 	“PRC”
                                         or “China”

         
	 	Means
                                         the People’s Republic of China and, for the purpose of this Contract, shall exclude
                                         the Special Administrative Region of Hong Kong, the Special Administrative Region of
                                         Macau, and Taiwan;

         

	 	“QA
                                         Manager”

         
	 	Means
the quality assessment manager of the Joint Venture as specified in Section 16.1;

 

    	 	- 5 -	 

    	 	 	 

    

 

	 	“Registration
    Authority”	 	Means
                                         the State Administration for Industry and Commerce, or its local division or any successor
                                         government institution or agency empowered to issue a Business License to the Joint Venture;

         

	 	“Registered
    Capital”	 	Means
                                         the registered capital of the Joint Venture as specified in Section 5.1.2 and the Business
                                         License of the Joint Venture;

         

	 	“Representative”

         
	 	Means
    the representative of the Joint Venture;
	 	“RMB”
    or “Renminbi”	 	Means
                                         Renminbi, the lawful currency of the PRC;

         

	 	“Selected
                                         Mobile Power Products”

         
	 	Means
                                         5-kW series and 8.5-kW series of the mobile power products based on the AuraGen technology,
                                         including any assembly, subassembly, component, and any part thereof as well as such
                                         other products as may be agreed upon from time to time between Aura and the JV;

         

	 	“AoLunTe
    Asset Contribution Agreement”	 	Means
                                         the asset contribution agreement to be entered into by AoLunTe and the Joint Venture
                                         with respect to the contribution of tangible and intangible assets to the Joint Venture
                                         as Registered Capital, the form of which is set out in Schedule 2 attached
                                         hereto;

         

	 	“Site”	 	Means
    that area of 32,000 square meters 32,000 m2) located at ZhongguanCun, Liyang ,China];
	 	“Supermajority”	 	Means
                                         an affirmative vote of not less than 2/3 of disinterested members of the Board;

         

	 	“Supervisor”	 	Means
                                         the Supervisor of the Joint Venture as provided in Section 15.1;

         

	 	“Technical
    Data”	 	Means
    recorded information, regardless of form of media on which it is recorded, relating to the design, development or production
    of the Product. The term includes technical information of a scientific or technical nature, and computer software. Computer
    software includes computer programs and associated data comprising a series of instructions, rules, routines or statements
    that allow or cause a computer to execute an operation or series of operations. It also includes source code listings, design
    details, algorithms, processes, flow charts, formula and related material that would enable the computer program to be produced,
    created or completed;
	 	 	 	 
	 	“Term”	 	Means
the term of this Contract as set forth in Section 25.1 hereof, as extended pursuant to Section 25.2 hereof;

 

    	 	- 6 -	 

    	 	 	 

    

 

	 	“Third
    Party”	 	Means
                                         any Person other than the Parties to this Contract;

         

	 	“Three
    Funds”	 	Means
                                         the Reserve Fund, the Enterprise Expansion Fund and the Staff and Workers Incentive and
                                         Welfare Fund of the Joint Venture as specifiedin Section 21.1;

         

	 	“Total
    Investment”	 	Means
                                         the total investment of the Joint Venture as specified in Section 5.1.1 and the Approval
                                         Certificate of the Joint Venture;

         

	 	“USD”
    or “United States Dollars”	 	Means
                                         United States dollars, the lawful currency of the United States of America;

         

	 	“Vice
    Chairman”	 	Means
the Vice Chairman of the Joint Venture as provided in Section 14.2.1.

 

	 	1.1	Unless
    the context otherwise requires, the singular includes the plural and vice versa; words used in any gender in this Contract
    shall include references to all other genders; 
	 	 	 
	 	1.2	The
    headings and sub-headings are inserted for ease of reference only and shall not affect the construction of this Contract.
	 	 	 
	 	1.3	Any
    references in this Contract to statutory provisions are references to those provisions as in force at the execution date of
    this Contract but include all statutory modifications, re-enactment, replacements and extensions of those provisions and any
    subordinate legislation or regulations made under such provisions. 
	 	 	 
	 	1.4	The
    expressions the “shareholder” and the “company” shall, where context permits, include their respective
    successors, personal representatives and permitted assignees.
	 	 	 
	 	1.5	References
    to any document (including this Contract) are references to that document as amended, consolidated, supplemented, novated
    or replaced from time to time.

 

	 	2.	PARTIES
    TO THIS CONTRACT
	 	 	 
	 	2.1	Corporate
    Particulars of AoLunTe: Jiangsu AoLunTe Electrical Machinery Industrial Co., Ltd.

 

	 	Place
    of Incorporation:	PRC
	 	Legal
    address:	Liyang,
    Jiangsu
	 	Representative:	Hebiao
    Song
	 	Position:	Representative
	 	Nationality:	China

 

	 	2.2	Corporate
    Particulars of Aura: Aura Systems, Inc.

 

	 	

        Place
        of Incorporation:
	

        State
        of Delaware, USA

	 	Legal
    address:	10541
    Ashdale Street, Stanton, California 90680
	 	Representative:	Melvin
    Gagerman
	 	Position:	CEO
	 	Nationality:	USA

 

    	 	- 7 -	 

    	 	 	 

    

 

	 	3.	ESTABLISHMENT
    OF THE JOINT VENTURE
	 	 	 
	 	3.1	Establishment
    of the Joint Venture
	 	 	 
	 	 	The
    Parties hereby agree to establish the Joint Venture Company as a Sino-foreign cooperative joint venture with limited liability
    in accordance with the Cooperative Joint Venture Law, the Cooperative Joint Venture Regulations, the Company
    Law and other relevant laws and regulations of the PRC, and the provisions of this Contract and the Articles of Association.
	 	 	 
	 	3.2	Name
    and Address of the Joint Venture 

 

	 	3.2.1	The
    name of the Joint Venture shall be: 
	 	 	 	 
	 	 	English:	[Jiangsu
    Shengfeng Mobile Power Technology CO. LTD]
	 	 	Chinese:	[江苏晟丰移动电源科技有限公司]
	 	 	 	 
	 	3.2.2	The
    legal address of the Joint Venture shall be [ZhongguanCu, Liyang,China].

 

	 	3.3	Sino-foreign
    Cooperative Joint Venture with Limited Liability
	 	 	 
	 	 	The
    Joint Venture shall be organized as a Sino-foreign cooperative Joint Venture with limited liability under PRC laws, liable
    for its own debts with its own assets.
	 	 	 
	 	3.4	Profits
    and Losses
	 	 	 
	 	 	Subject
    to the terms and conditions of this Contract, the profits, risks and losses of the Joint Venture shall be in proportion to
    Ownership Interests by the Parties, provided that the liability of each Party for losses of the Joint Venture shall be limited
    to its capital contributed in or Cooperative Condition provided to the Joint Venture in accordance with Section 5.
	 	 	 
	 	4.	PURPOSE
    AND SCOPE OF THE JOINT VENTURE
	 	 	 
	 	4.1	Purpose
	 	 	 
	 	 	The
    Joint Venture will be established for the purposes of manufacturing and distributing the Selected Mobile Power Products in
    the PRC and to gain maximum economic benefits. By introducing Aura’s advanced mobile power technology and power management
    system into the PRC, the Joint Venture will boost the development and prosperity of the commercial mobile power sector of
    the PRC.
	 	 	 
	 	4.2	Scope
    of Business
	 	 	 
	 	 	The
    business scope of the Joint Venture shall be: manufacturing, marketing and sale, repair and maintenance of Selected Mobile
    Power Products for commercial and military use subject to the approval by the Examination and Approval Authority and the registration
    with the Registration Authority (“Business Scope”).

 

    	 	- 8 -	 

    	 	 	 

    

 

	 	4.3	Business
    Plan

 

	 	4.3.1	Notwithstanding
    the Business Scope specified in 4.2, the business of the Joint Venture shall be limited to the manufacturing, marketing and
    sale, repair and maintenance of Selected Mobile Power Products for commercial and military use.
	 	 	 
	 	 	Without
    the approval by a Supermajority of the Board, the Joint Venture shall not engage in design, research and development, manufacturing,
    marketing and sale, repair and maintenance of New Products. In the event that the Board gives its approval to the foregoing,
    the terms of this Contract shall automatically apply to such New Products. The foregoing notwithstanding, in no event shall
    the Joint Venture engage in any design, research, or development of the Selected Mobile Power Products without the express,
    prior written consent of Aura.

 

	 	5.	TOTAL
    INVESTMENT, REGISTERED CAPITAL AND COOPERATIVE CONDITIONS
	 	 	 
	 	5.1	Total
    Investment and Registered Capital

 

	 	5.1.1	The
    total investment amount of the Joint Venture (“Total Investment”) shall be USD$10 million.
	 	 	 
	 	5.1.2	The
    registered capital of the Joint Venture (“Registered Capital”) shall be USD $10 million.

 

	 	5.2	Capital
    Contribution

 

	 	5.2.1	The
    Parties hereby agree AoLunTe shall contribute to the Registered Capital:

 

	 	(a)	cash
    of RMB equal to USD $500,000 (equal to 5% of the Registered Capital); and
	 	 	 
	 	(b)	tangible
    assets and intangible assets (including but not limited to equipment, land and facilities of the Site), as listed in Schedule
    2, which are valued at USD $9.25 million(equal to 92.5% of the Registered Capital).

 

	 	5.2.2	The
    parties hereby agree that AoLunTe shall contribute the Registered Capital based upon the following timeline:

 

	 	(a)	cash
    contribution of RMB equal to USD $500,000 (equal to 5% of the Registered Capital) shall be made within thirty (30) days after
    the Establishment Date.
	 	 	 
	 	(b)	tangible
    assets and intangible assets (including but not limited to equipment, land and facilities of the Site), as listed in Schedule
    2, which are valued at USD $9.25 million(equal to 92.5% of the Registered Capital) shall be made using best efforts but in
    no event later than one hundred and eighty (180) days after the Establishment Date.

 

    	 	- 9 -	 

    	 	 	 

    

 

 

	 	5.3	Cooperative
    Condition

 

	 	5.3.1	The
    Parties hereby agree Aura shall provide the following cooperative condition (“Cooperative Condition”):an
    exclusive, non-assignable, and royalty-free license in the PRC to use Aura’s Intellectual Property with respect to the
    Selected Mobile Power Products, the form of which is set forth in Schedule 1, The Intellectual Property and
    Technology License Agreement(the “Technology License”) and the due performance of its obligations thereunder.
	 	 	 
	 	5.3.2	The
    Technology Licensing Agreement shall be signed by both parties within fifteen (15) days after the Establishment Date. All
    materials relating to the licensed technology as reasonably needed for the joint venture to accomplish its business purpose,
    including but not limited to applicable technical manuals and technical drawings shall be delivered by Aura within thirty
    (30) days from the date of signing the Technology Licensing Agreement to the IP Governance Committee of the Joint Venture.
    Aura shall be deemed to have provided its Cooperative Condition upon the delivery of all the materials relating to the Licensed
    Technology to the IP Governance Committee. The Technology License shall become effective upon AoLunTe’s first instalment
    of its capital contribution, and not before. 
	 	 	 
	 	5.3.3	Cash
    of RMB which equals to USD $250,000(equal to 2.5% of the Registered Capital)shall be contributed by Aura to
    the Registered Capital within forty-five (45) days after the Establishment Date.
	 	 	 
	 	 	AoLunTe
                                         shall purchase from Aura product that is equivalent of aggregate USD $1,250,000 in four
                                         payments after the Establishment Date. The first three payments amount to USD $500,000,
                                         USD $250,000; USD $250,000 shall be made by letter of credit separately (The next letter
                                         of credit shall be opened after the products of previous order have been received by
                                         AoLunTe). Aura shall deliver the products upon receipt of the fourth order from AoLunTe
                                         since AoLunTe has paid to Aura USD $250,000 in advance for the products in 2014.

 

	 	5.4	Conditions
    Precedent to the Contribution of the Registered Capital and Provision of Cooperative Condition
	 	 	 
	 	 	The
    obligation of any Party to make its contribution or provide its Cooperative Condition pursuant to Section 5.2 and 5.3 hereof
    shall be subject to the fulfillment or waiver of each of the following conditions (“Conditions Precedent”):

 

	 	5.4.1	each
    of the Examination and Approval Authority having issued an approval for establishment of the Joint Venture, and any required
    changes to this Contract and the Articles of Association having been agreed to in writing by the Parties; and
	 	 	 
	 	5.4.2	a
    Business License having been issued to the Joint Venture which authorizes the full Business Scope of the Joint Venture described
    in Section 4.2 or any required changes thereto having been agreed to in writing by the Parties.

 

	 	5.5	Balance
    between the Total Investment and Registered Capital
	 	 	 
	 	 	Both
    Parties shall provide additional capital (“Additional Capital”) or secure loans from Third Party financial
    institutions to cover the balance between the Total Investment and Registered Capital on terms and conditions approved by
    a Supermajority of the Board of Directors.

 

    	 	- 10 -	 

    	 	 	 

    

 

 

	 	5.6
    	Capital
    Verification
	 	 	 
	 	 	A
    qualified accountant registered in the PRC and selected by a Supermajority of the Board shall be engaged by the Joint Venture
    to verify the capital contribution by AoLunTe and provide a capital verification report accordingly.
	 	 	 
	 	5.7	Failure
    to Make Contributions to Registered Capital or Provide the Cooperative Condition

 

	 	5.7.1	If
    any Party (“Breaching Party”) fails to make capital contribution or provide its Cooperative Condition,
    in whole or in part, to the Joint Venture within the period set forth in Sections 5.2 and 5.3, the Breaching Party shall pay
    the other Party (“Non-Breaching Party”) liquidated damages of USD $2,000 per day from the first day of
    the breach until the day on which the default capital or Cooperative Condition is provided in full by the Breaching Party.
	 	 	 
	 	5.7.2	The
    provisions of this Section shall not prejudice any other rights or remedies the Non-Breaching Party may have under this Contract
    or under any applicable laws and regulations with respect to the failure of the Breaching Party to make capital contribution
    or provide the Cooperative Conditions.

 

	 	5.8	Increase
    or Decrease of Registered Capital
	 	 	 
	 	 	Any
    increase or reduction in the Registered Capital of the Joint Venture shall be unanimously approved by the Board of Directors
    and submitted to the Examination and Approval Authority for approval. Upon receipt of such approval, the Joint Venture shall
    register the increase or reduction in the Registered Capital with the Registration Authority.
	 	 	 
	 	5.9	Profit
    Distribution Adjustment
	 	 	 
	 	 	Both
    Parties hereby agree that if any New Product is introduced into the Joint Venture, then the Parties shall share the relevant
    profit in a ratio as determined by a Supermajority of the Board of the Joint Venture.
	 	 	 
	 	5.10	Ownership
    Interest and Encumbrance of Ownership Interest in Joint Venture

 

	 	5.10.1	The
    Parties agree that in consideration of AoLunTe’s capital contribution and Aura’s provision of the Cooperative
    Condition hereunder, AoLunTe shall be entitled to 51% Ownership Interest in the Joint Venture, and Aura shall be entitled
    to 49% Ownership Interest in the Joint Venture.
	 	 	 
	 	5.10.2	Without
    the prior written consent of the other Party and proper Board approvals, no Party shall create any Encumbrance over any part
    of its respective Ownership Interest.
	 	 	 
	 	5.10.3	Both
    parties agree that the profits of the Joint Venture are distributed in accordance with their respective Ownership Interests.
    The losses and risks shared by the parties shall be limited to the parties’ respective capital contributions as set
    forth in Sections 5.2 and 5.3.3.

 

    	 	- 11 -	 

    	 	 	 

    

 

	 	6.	TRANSFER
    OF OWNERSHIP INTEREST
	 	 	 
	 	6.1	Except
    in accordance with this Contract, no Party shall assign, sell, transfer or otherwise dispose of all or any part of its Ownership
    Interest in the Joint Venture.
	 	 	 
	 	6.2	Transfer
    to Third Party
	 	 	 
	 	 	Transfer
    of the Ownership Interest in the Joint Venture to any Third Party by either Party shall be subject to the other Party’s
    prior written consent.
	 	 	 
	 	 	 
	 	7.	REPRESENTATIONS,
    WARRANTIES AND OBLIGATIONS
	 	 	 
	 	7.1	General
    Representations and Warranties
	 	 	 
	 	 	Each
    Party hereby represents and warrants that, as of the execution date of this Contract and as of a date on which a Party provides
    its capital contribution or Cooperative Condition to the Joint Venture in accordance with Section 5.2 and 5.3 herein:

 

	 	7.1.1	it
    is a separate legal entity, duly organized, validly existing and in good standing under the laws of jurisdiction of the Party;
	 	 	 
	 	7.1.2	it
    has all requisite power, authority and approval to enter into this Contract and to perform its obligations hereunder;
	 	 	 
	 	7.1.3	neither
    the execution of this Contract, nor the performance of its obligations hereunder, will conflict with, or result in a breach
    of, or constitute a default under, any provision of its business license, articles of association, by-laws, or any law, rule,
    regulation, order, judgment or decree, authorization or approval of any government agency or body, or of any contract or agreement
    or instrument to which it is a party or is subject to;
	 	 	 
	 	7.1.4	it
    has duly authorized, executed and delivered this Contract and that this Contract constitutes a legal, valid and binding obligation
    enforceable in accordance with its terms; and
	 	 	 
	 	7.1.5	there
    is no lawsuit, arbitration, or legal, administrative or other proceedings or governmental investigation, pending or, to the
    best of its knowledge, threatened against it with respect to the subject matter of this Contract or that would affect in any
    way its ability to enter into or perform this Contract.

 

	 	7.2	Warranty
    for Representative and General Manager
	 	 	 
	 	 	For
    the avoidance of doubt, in respect of any action of the Representative or the General Manager of the Joint Venture, the Party
    responsible for the appointment or nomination of such individuals shall be solely responsible to indemnify the Joint Venture
    and the other Party for all losses, costs and expenses caused by any unauthorized action taken by such individuals. If so
    required, such Party shall also provide the Joint Venture and the other Party with necessary parent guarantees, powers of
    attorney and corporate undertakings at the request of the Joint Venture or the other Party so as to ensure immediate relief
    and remedy in case of any unauthorized actions taken by the Representative or the General Manager. For the avoidance of doubt,
    “unauthorized action” under this Section refers to any action of the Representative or the General Manager not
    expressly duly authorized by the Board or this Contract but taken in his/her capacity as the Representative or General Manager,
    provided however, that “unauthorized action” shall not include measures taken by the Representative or the General
    Manager in situations where such measure is undertaken in good faith and immediate action is necessary to prevent a materially
    adverse effect on the Joint Venture for which prior Board approval cannot reasonably be obtained in time.

 

    	 	- 12 -	 

    	 	 	 

    

 

	 	7.3	AoLunTe’s
    Additional Representation and Warranty

 

	 	7.3.1	In
    addition to the representations and warranties set forth in Section 7.1 and 7.2 AoLunTe warrants to Aura that it has sufficient
    funds to perform its obligation for contribution of Registered Capital under this Contract. 
	 	 	 
	 	7.3.2	The
    tangible assets as Schedule 2 attached hereto and contributed by AoLunTe are free of any and all Encumbrances

 

	 	7.4	Aura’s
    Additional Representation and Warranty
	 	 	 
	 	 	In
    addition to the representations and warranties set forth in Section 7.1 and 7.2, Aura warrants to AoLunTe that:

 

	 	7.4.1	Aura
    owns all right and title to the Licensed Technology, and to the best of Aura’s knowledge, the Licensed Technology is
    free of any claim or other encumbrance of any third party. None of the Licensed Technology is or ever has been declared invalid
    or unenforceable, or is the subject of a pending or threatened action for opposition, cancellation, declaration of invalidity,
    unenforceability or misappropriation or like claim, action or proceeding.
	 	 	 
	 	7.4.2	Aura
    is not aware of any notice or claim, threatened or pending, that the use of the Licensed Technology in accordance with the
    terms of this Contract and the Technology License infringes any third party’s Intellectual Property rights.
	 	 	 
	 	7.4.3	No
    current debts and liabilities on Aura’s part shall be imparted unto the Joint Venture. During the operation of the Joint
    Venture, Aura shall not voluntarily terminate the cooperation with AoLunTe by withdrawing the Technology License except as
    permitted or required by law, this Contract, the Intellectual Property and Technology License Agreement, or other contract
    between the parties.
	 	 	 
	 	7.4.4	AoLunTe
    shall arrange for the procurement of the production personnel and production equipment necessary for the manufacture and production
    of the Selected Mobile Power Products in accordance with the instructions by Aura based on Aura’s understanding and
    experience of the Licensed Technology. Aura shall guarantee that the Selected Mobile Power Products represent the highest
    technical level Aura has mastered prior to the signing of this contract. In any case, the overall technical level of the Selected
    Mobile Power Products produced by the Joint Venture shall not be inferior to the one of the similar products marketed by Aura
    prior to the signing of this contract.
	 	 	 
	 	7.4.5	To
    the best actual knowledge of Aura, the licenses currently contemplated to be granted under this Contract are not prohibited
    by the existing laws, regulations and/or policies of the United States. In the event that such transfer to the Joint Venture
    is or becomes prohibited by any laws, regulations and/or policies of the United States, Aura agrees that it will not hold
    AoLunTe responsible for any liabilities incurred as a result of such prohibition except in the event of material misrepresentations
    by AoLunTe or in the event of a breach by AoLunTe of this Contract or any other agreement entered into by AoLunTe.

 

    	 	- 13 -	 

    	 	 	 

    

 

 

	 	7.5	Each
    Party shall, unconditionally and irrevocably, indemnify the other Party, and hold the other Party indemnified, without limitation
    in point of time, against all direct losses, expenses and liabilities (including legal fees) arising from a breach of any
    of the representations, warranties, undertakings and other provisions set out in Section 7.
	 	 	 
	 	8.	RESPONSIBILITIES
    OF THE PARTIES
	 	 	 
	 	8.1	Undertakings
    of the Parties

 

	 	8.1.1	The
    Parties undertake and agree to do all things necessary, including without limitation giving all necessary instructions and
    directions to the Directors nominated by them pursuant to Section 14.1, and shall ensure that the Directors pass resolutions
    which may from time to time be necessary to ensure preparing and submitting all application documents to the Examination and
    Approval Authority, the Registration Authority and other relevant Government Authority for the establishment of the Joint
    Venture; and all such document are true and accurate.
	 	 	 
	 	8.1.2	The
    Parties attend to all matters which are necessary for and instrumental to the completion of all the formalities for the establishment
    of the Joint Venture, including, but not limited to, the following:

 

	 	(a)	passing
    a Board resolution authorizing the investment in the PRC in the form of a cooperative joint venture on terms set out in this
    Contract and the Articles of Association;
	 	 	 
	 	(b)	preparing
    and submitting all relevant documents to the relevant Government Authority; and
	 	 	 
	 	(c)	making
    all required contributions to the Registered Capital and providing the Cooperative Condition to the Joint Venture in accordance
    with this Contract and the Articles of Association.

 

	 	8.2	Responsibilities
    of AoLunTe
	 	 	 
	 	 	In
    addition to the obligations set forth in Section 8.1 herein, AoLunTe shall have the following responsibilities:

 

	 	8.2.1	Entering
    into the AoLunTe Asset Contribution Agreement with the Joint Venture in accordance with this Contract;
	 	 	 
	 	8.2.2	assisting
    the Joint Venture in obtaining all necessary approvals, permits, licenses and other documents required for the establishment
    and operation of the Joint Venture and opening Renminbi and foreign currency bank accounts;
	 	 	 
	 	8.2.3	assisting
    the Joint Venture in completing all necessary procedures to ensure that the Joint Venture has the exclusive right to use the
    Site for the Term;

 

    	 	- 14 -	 

    	 	 	 

    

 

	 	8.2.4	assisting
    the Joint Venture in design and construction of the plant of the Joint Venture, including completing all necessary approval
    and registration for the planning, design and construction of the plant;
	 	 	 
	 	8.2.5	procuring
    activity such that the Joint Venture shall at all times be given sufficient water supply, fuel supply, power supply, transportation,
    communications, and other services required for the facilities of the Joint Venture;
	 	 	 
	 	8.2.6	assisting
    the Joint Venture in applying for and obtaining the most preferential tax and customs duty treatment and other investment
    incentives available under the laws and regulations of the PRC;
	 	 	 
	 	8.2.7	assisting
    the Joint Venture, if necessary, in handling all licenses, approvals and registrations for the importation of technology contemplated
    herein and obtaining the products certification as required by the relevant PRC law;
	 	 	 
	 	8.2.8	assisting
    the Joint Venture, if necessary, in making import customs declarations, obtaining relevant import licenses, approvals and
    reductions of and exemptions from customs duties and taxes for any initial machinery and equipment to be imported by the Joint
    Venture;
	 	 	 
	 	8.2.9	assisting
    the Joint Venture in recruiting various types of qualified Chinese personnel and assisting the expatriate employees of the
    Joint Venture in obtaining all necessary entry visas and work permits under PRC law;
	 	 	 
	 	8.2.10	handling
    other matters as requested by the Board of Directors from time to time.
	 	 	 

 

	 	8.3	Responsibilities
    of Aura
	 	 	 
	 	 	In
    addition to the obligations set forth in Section 8.1 herein, Aura shall have the following responsibilities:

 

	 	8.3.1	entering
    into the Technology License in the agreed form as Schedule 1 attached hereto with the Joint Venture;
	 	 	 
	 	8.3.2	entering
    into the Product Supply Agreement with the Joint Venture;
	 	 	 
	 	8.3.3	entering
    into the Consulting Services Agreement with the Joint Venture;
	 	 	 
	 	8.3.4	handling
    export license and other procedures for the Joint Venture necessary for the export of technology from the United States pursuant
    to the Technology License and the export of the products pursuant to the Product Supply Agreement from the United States into
    the PRC;
	 	 	 
	 	8.3.5	providing
    necessary technical support to the Joint Venture at the Joint Venture’s reasonable request in accordance with the Technology
    License;
	 	 	 
	 	8.3.6	assisting
    the Joint Venture in recruiting expatriate personnel, if it is necessary;
	 	 	 
	 	8.3.7	assisting
    the Joint Venture in purchasing equipment and machinery from overseas, if it is necessary that Aura assist in this regard;
    and
	 	 	 
	 	8.3.8	handling
    other matters as requested by the Board of Directors from time to time.

 

    	 	- 15 -	 

    	 	 	 

    

 

	 	9.	INTELLECTUAL
    PROPERTY AND TECHNOLOGY

 

	 	9.1	Compliance
    with the Technology License
	 	 	 
	 	 	Both
    Parties shall cause the Joint Venture to strictly comply with all provisions in the Technology License, under which Aura shall
    license the Joint Venture to use certain of its proprietary technology and know-how in accordance with the terms and conditions
    of the Technology License with the Joint Venture in the form attached as Schedule 1, as well as all other intellectual
    property agreements to which the Joint Venture may enter into in the future.
	 	 	 
	 	9.2	Intellectual
    Property Governance Committee

 

	 	9.2.1	At
    the first Board Meeting, anintellectual property governance committee comprised of members appointed by AoLunTe and Aura (the
    “IP Governance Committee”),shall be formed by the Board, which shall report directly to the Board. The
    IP Governance Committee shall advise the Board on matters in relation to intellectual property in connection with the Joint
    Venture. Advice provided by the IP Governance Committee shall be for the reference of the Board and shall not be binding on
    the Board.
	 	 	 
	 	9.2.2	The
    IP Governance Committee shall have the full responsibility for all IP-related matters and any changes to be made to the Licensed
    Technology.
	 	 	 
	 	9.2.3	The
    IP Governance Committee shall maintain continuing communication with the Person or Persons as designated by Aura from time
    to time regarding all matters arising from or in connection with the Technology License.
	 	 	 
	 	9.2.4	The
    IP Governance Committee shall consist of three (3) members, two (2) of whom shall be appointed by Aura and one (1) of whom
    shall be appointed by AoLunTe. The terms of the members shall be as the appointing Party thinks fit. The IP Governance Committee
    is further authorized to call upon Joint Venture personnel for assistance or seek assistance from Third Party professional
    advisors in order to carry out its tasks.

 

	 	9.3	Employment
    IP Agreement and Reward Policy

 

	 	9.3.1	The
    Joint Venture shall cause each of its employees to sign an employment IP agreement with (or shall include provisions relating
    to employment IP in the labor contract of) each of its employees to ensure that all rights, titles and interests in any Intellectual
    Property created during the course of employment with the Joint Venture are fully owned by the Joint Venture. Such agreement
    (or such provisions in the labor contract) shall provide that if the Intellectual Property is deemed not to automatically
    vest in the Joint Venture, for any reason whatsoever, the employee agrees to assign to the Joint Venture all rights to any
    such Intellectual Property. In the event that any of the aforementioned Intellectual Property was created based on or derived
    from the Licensed Technology, the ownership of such Intellectual Property shall be dealt with in accordance with the Technology
    License.

 

    	 	- 16 -	 

    	 	 	 

    

 

	 	9.3.2	The
    Joint Venture shall establish an effective reward policy to remunerate employees for their employment IP in accordance with
    any applicable laws including, but not limited to, PRC patent law and labor laws.

 

	 	9.4	Intellectual
    Property Policy
	 	 	 
	 	 	Each
    Party agrees that each will cause the Joint Venture to establish an IP policy for the purpose of managing its Intellectual
    Property. The policy will establish and define different levels of Intellectual Property owned by the Joint Venture or licensed/disclosed
    to the Joint Venture by AoLunTe or Aura and set differing levels of access aligned with the needs of the Joint Venture’s
    organizational structure.
	 	 	 
	 	9.5	Information
    Technology Security Measures
	 	 	 
	 	 	[Section
    intentionally omitted.]
	 	 	 
	 	9.6	Physical
    Security Measures
	 	 	 
	 	 	Each
    Party agrees that each will cause the Joint Venture to implement effective physical security measures to secure the Intellectual
    Property and Confidential Information owned by the Joint Venture or licensed / disclosed to the Joint Venture by AoLunTe or
    Aura, including, but not limited to, security guards at the entrance to collect items that present security problems (e.g.
    cameras and flash drives).
	 	 	 
	 	9.7	Audits
	 	 	 
	 	 	Aura
    shall be provided access to the engineering and manufacturing facilities of the Joint Venture as frequently as required by
    Aura to audit the Joint Venture’s compliance with any provisions of this Section 9 and of the Technology License.
	 	 	 
	 	9.8	Intellectual
    Property Enforcement
	 	 	 
	 	 	The
    Parties agree that AoLunTe shall and shall cause the Joint Venture to provide Aura with all necessary assistance to enforce
    its IP rights with respect to the Licensed Technology in the PRC.
	 	 	 
	 	9.9	Undertaking
	 	 	 
	 	 	The
    Parties agree that the technology and know-how licensed to the Joint Venture by Aura is provided only for the use of the Joint
    Venture and all rights licensed to the Joint Venture by Aura under the Technology License shall not be considered as assets
    of the Joint Venture in any event. AoLunTe hereby undertakes to Aura that:

 

	 	9.9.1	AoLunTe
    and its Affiliates shall not at any time during or after the Term use such technology and know-how licensed by Aura to the
    Joint Venture pursuant to the Technology License in any way; and
	 	 	 
	 	9.9.2	in
    respect of such Intellectual Property licensed by Aura to the Joint Venture pursuant to the Technology License, AoLunTe and
    its Affiliates shall comply with the confidentiality obligations set forth in the Technology License.

 

    	 	- 17 -	 

    	 	 	 

    

 

 

	 	9.10	Limitations
    of use of Intellectual Property
	 	 	 
	 	 	This
    Contract, unless otherwise expressly provided in this Contract or the Technology License, does not offer or grant to AoLunTe
    any rights in or license under any present or future Intellectual Property owned or controlled by Aura. During the Term of
    and after the termination of this Contract, regardless of how the Contract is terminated, AoLunTe shall not, directly or through
    any Third Party,

 

	 	(a)	adopt
    or seek to register or take any other action to use or establish anywhere in the world rights in any IP that belongs to Aura;
	 	 	 
	 	(b)	modify,
    reverse assemble, decompile, reverse engineer or otherwise attempt to derive source code (or the proprietary algorithms, structure
    or organization) from any Selected Mobile Power Products or New Products developed, manufactured or supplied by Aura or its
    Affiliates, Aura’s supplied equipment, or Aura’s IP; or
	 	 	 
	 	(c)	itself
    do anything, or assist any other person or entity to do or omit to do anything, which diminishes the rights of Aura as an
    owner or a licensee in any of Aura’s IP.

 

	 	10.	PURCHASE
    OF MATERIALS AND PRODUCTS
	 	 	 
	 	10.1
    	During
    the Term of this Contract, with respect to any product or parts purchased by the Joint Venture from Aura, Aura agrees that
    the Joint Venture shall enjoy the full benefit of any and all lower prices and any other more favourable terms and conditions
    contained in any other agreement entered into by Aura or its affiliates with a third party for the sale of any product or
    parts of substantially-similar configuration and in the same or lesser quantities as the Selected Mobile Products described
    in this Contract. With respect to any parts purchased by the Joint Venture from Aura, Aura shall sell such parts to the Joint
    Venture at a price of cost plus 20%. The relevant cost of such parts to be purchased by the Joint Venture shall be determined
    by a Third Party valuation company jointly appointed by the Parties. 
	 	 	 
	 	10.2	All
    the mechanical and electrical parts of the Mobile Power Products except the rotor shall be produced or purchased by JV from
    third parties. All the information about the suppliers for the purchased parts shall be disclosed to JV by Aura within 10
    business days after the investment into aura stock is completed. Selection of suppliers shall be made by JV at its sole discretion
    on the conditions that (i) All the purchased parts of the Mobile Power Products must be approved in writing by Aura’s
    quality control manager, (ii) all purchased components or parts anywhere in the world must be purchased from a qualified supplier.
    Qualified supplier is one who can meet the required specification, quality, warranty, production capacity, financial stability
    and has the required ISO ratings. Aura retains its right to purchase any item anywhere in the world including china. With
    respect to items related to Mobile Power products, Aura retains its right to purchase any item for its use anywhere outside
    of China. The JV shall have the right to compete for any item that Aura plans to buy in China related to its Mobile Power
    Products applications outside of China and will get preference treatment as long as it is competitive on price and terms.
	 	 	 
	 	10.3	The
    rotor and any parts associated with it, included but not limited to the casting shall be supplied by Aura to JV. Within one
    year after the Establishment date Aura shall have manufactured the finished rotor in a new company in Liyang and may select
    at its own discretion to purchase some rotor parts or components in China and if possible in Liyang. However some parts or
    components for the rotor particularly the specialty casting may not be available in Liyang or anywhere else in China and Aura
    will purchase those wherever they are available at its discretion.

 

    	 	- 18 -	 

    	 	 	 

    

 

	 	10.4	The
    new company in Liyang to manufacture the rotor, will be 100% owned by Aura. Aura at its sole discretion may sell a minority
    passive interest in the new company to AoLunTe at any time. Aura may at its sole discretion sell up to 49% of that rotor manufacturing
    company to AoLunTe. In the event that AoLunTe is interested in a passive investment into Aura’s rotor manufacturing
    company in Liyang, the parties will negotiate in good faith a reasonable price for the % ownership desired at that time. Aura
    shall not license any third party other then AoLunTe to produce any part of the Mobile Power Products in China.
	 	 	 
	 	10.5	Aura
    shall authorize JV to produce Control Unit on the Establishment Date. The imbedded software is Aura’s trade secret,
    and it shall be provided to the JV free of charge by Aura.
	 	 	 
	 	10.6
    	If
    any portion of clause 10 of this Contract with respect to the Intellectual property conflicts with the License Agreement,
    the Contract shall prevail
	 	 	 
	 	11.	USE
    OF PRODUCTS
	 	 	 
	 	11.1	All
    Selected Mobile Power Products distributed in the PRC shall contain the label “Powered by Aura Systems, Inc.”
    in addition to a label of the Joint Venture proposed by AoLunTe and approved by Aura in writing.
	 	 	 
	 	11.2	AoLunTe
    agrees not to modify, disassemble, or reverse engineer any part of Selected Mobile Power Products or to modify, disassemble
    or reverse engineer any source or object code provided with the Selected Mobile Power Products. 
	 	 	 
	 	11.3	AoLunTe
    shall not repair or modify the Selected Mobile Power Products without prior written consent of Aura. 
	 	 	 
	 	11.4	AoLunTe
    agrees that the Selected Mobile Power Products will at all times be used and operated in compliance with all applicable laws
    and regulations. 
	 	 	 
	 	11.5	Any
    maintenance or upgrades to Selected Mobile Power Products shall be performed by the Joint Venture or Aura or any other persons
    approved in writing by Aura, unless superseded by any future agreements.
	 	 	 
	 	12.	OTHER
    COMMERCIAL AGREEMENTS
	 	 	 
	 	12.1	Consulting
    Services
	 	 	 
	 	 	Both
    Parties agree that Aura shall provide consulting services to the Joint Venture in connection with the business of the Joint
    Venture (“Consulting Services”) during the Term upon the request of the Joint Venture. Upon establishment
    of the Joint Venture, Aura shall enter into a Consulting Services Agreement for this purpose, the key terms of which are set
    out in Schedule 3.
	 	 	 
	 	12.2	Purchase
    of Products from the Joint Venture
	 	 	 
	 	 	If
    Aura, in its sole discretion, wishes to purchase products of the Joint Venture or any part thereof for use outside of the
    PRC, the Joint Venture shall sell such products or parts to Aura at a price of cost plus 20%. The relevant cost of such products
    or any part thereof to be purchased by Aura shall be determined by a Third Party valuation company jointly appointed by the
    Parties. Aura shall enter into a product purchase agreement with the Joint Venture as required for this purpose, and such
    product purchase agreement shall adopt the form of the standard Aura supplier agreement.

 

    	 	- 19 -	 

    	 	 	 

    

 

 

	 	13.	MINIMUM
    SALES TARGETS
	 	 	 
	 	13.1	The
    Parties agree that each shall use their commercially reasonable efforts to support the Joint Venture to achieve the following
    minimum sales targets (“Minimum Sales Targets”):

 

	 	13.1.1	Annual
    sales revenue of USD $500,000 for the first complete Financial Year after the Establishment Date;
	 	 	 
	 	13.1.2	Annual
    sales revenue of USD $3,000,000 for the second complete Financial Year after the Establishment Date;
	 	 	 
	 	13.1.3	Minimum
    sales targets as determined by the Board of the Joint Venture for subsequent Financial Years.

 

	 	13.2	In
    the event that any of the above Minimum Sales Targets is not met for a relevant Financial Year, then Aura may elect, in its
    sole and absolute discretion, to immediately terminate this Contract, in which case the Technology License shall immediately
    terminate and liquidation commence in accordance with Section 25.6. In the event that any of the above Minimum Sales Targets
    is not met for a relevant Financial Year and Aura elects to not terminate this Contract pursuant to this Section 13.2, then
    the Technology License shall automatically and without further act become non-exclusive pursuant to Section 2.1(c) of the
    Technology Agreement.
	 	 	 
	 	13.3	At
    no time may the joint Venture sell any Products and/or components below the following margins without unanimous consent of
    the Board:

 

	 	a.
    Cost plus 35% in the case of any Products;
	 	 
	 	b.
    Cost plus 40% in the case of any Product components.

 

	 	14.	BOARD
    OF DIRECTORS
	 	 	 
	 	14.1	Formation
    of the Board

 

	 	14.1.1	The
    Board shall be established on the Establishment Date of the Joint Venture.
	 	 	 
	 	14.1.2	The
    Board shall be the highest authority of the Joint Venture. It shall discuss and determine all strategic business and financial
    issues and operational issues of the Joint Venture in accordance with the provisions of this Contract and the Articles of
    Association of the Joint Venture.
	 	 	 
	 	14.1.3	The
    Board shall consist of six (6) Directors, three (3) of whom shall be nominated by AoLunTe and three (3) of whom shall be nominated
    by Aura. The Chairman of the board shall have one vote that is equal to any other board member and in an event of a tie vote;
    the Chairman can not break the tie vote.

 

    	 	- 20 -	 

    	 	 	 

    

 

	 	14.1.4	Each
    Party shall cause the Directors nominated by it to perform the obligations specified in this Contract and as required under
    relevant PRC laws and regulations.
	 	 	 
	 	14.1.5	Directors
    shall each be appointed for a term of three (3) years and may serve consecutive terms if re-nominated by the Party originally
    nominated such Director. Each Party shall notify in writing the Joint Venture and the other Party of its nomination of director(s)
    for the next three-year term within thirty days prior to the expiry of existing three-year term, unless the existing term
    is early terminated. 
	 	 	 
	 	14.1.6	Each
    Party may at any time remove and/or replace any Director it has nominated by giving written notice to the other Party and
    the Board of the Joint Venture. If a vacancy on the Board arises because of the removal, retirement, resignation, illness,
    injury, disability, death or for any other reason, the Party which originally nominated such Director is entitled to nominate
    within sixty (60) days a successor who shall serve for the remainder of that Director’s term. Before the successor is
    appointed, the Party may request any of its remaining Directors to act as proxy.
	 	 	 
	 	14.1.7	The
    Directors nominated by each Party shall meet all the requirements and qualification under Chinese laws. Each director shall
    be an individual with experience in management and relevant expertise. 
	 	 	 
	 	14.1.8	Under
    every circumstance (except for the first Board of Directors), the nominating Party shall give prior written notice to the
    other Party and the Joint Venture of nomination, re-nomination, dismissing, replacement of any director and personal information
    of the replacement director. The Joint Venture shall record such information and report such change and information with relevant
    authorities. 
	 	 	 
	 	14.1.9	In
    the case that a Party is no longer a stakeholder of the Joint Venture, it shall have the obligation to execute documents required
    by relevant authorities or under laws for the purpose of dismissing the directors nominated by such Party.

 

	 	14.2	Chairman
    and Vice Chairman of the Board

 

	 	14.2.1	The
    Board shall have one (1) Chairman and one (1) Vice Chairman. A Director appointed by AoLunTe shall serve as the Chairman of
    the Board (“Chairman”) and the Representative of the Joint Venture, and one (1) Director nominated by Aura
    shall serve as the Vice Chairman of the Board (“Vice Chairman”).
	 	 	 
	 	14.2.2	If
    the Chairman cannot perform his duties for any reason, he/she shall, in writing, delegate to the Vice Chairman, or another
    Director to perform such duties. The Chairman and whoever performs the duties of the Chairman pursuant to this Section shall
    represent the Joint Venture externally within the scope of authorization of the Board. The Chairman shall exercise the following
    powers and duties:

 

    	 	- 21 -	 

    	 	 	 

    

 

 

	 	 	(a)	to
    convene and chair Board meetings;
	 	 	 	 
	 	 	(b)	to
    supervise and coordinate activities of the committees under the Board;
	 	 	 	 
	 	 	(c)	to
    supervise the implementation of Board resolutions;
	 	 	 	 
	 	 	(d)	the
    Chairman shall have no power to sign any legal document, agreement, any document related to IP, or any other document binding
    upon the Joint Venture, without the Board’s approval;
	 	 	 	 
	 	 	(e)	accountable
    to the Board and report to the Board; and
	 	 	 	 
	 	 	(f)	any
    other power conferred by the Board.

 

	 	14.2.3	All
    the notices concerning nomination or dismissal of the Chairman shall be effective, as between the Parties, on the effective
    date as appointed under the notice, or on the day when both the Joint Venture and Aura receive such notice, whichever is later.
    Notwithstanding the foregoing, the Chairman shall serve as the Representative of the Joint Venture starting the day when his
    or her nomination is registered with Registration Authority.

 

	 	14.3	Powers
    of the Board

 

	 	14.3.1	All
    Major Decisions of the Board of Directors shall be adopted by Supermajority at a meeting at which a quorum is present and
    at least one Aura nominated Director and one AoLunTe appointed Director have voted in favour of it. A list of Major Decisions
    is contained in Schedule 4.
	 	 	 
	 	14.3.2	Except
    as otherwise provided in this Contract, all decisions of the Board of Directors shall be approved by a simple majority of
    Directors.
	 	 	 
	 	14.3.3	Any
    Director shall be entitled to submit a matter which the Director deems important and which shall be decided by a vote of the
    Board after the Director gives notice of the matter and submitting such matter as an agenda item to the Chairman thirty (30)
    days prior to a Board meeting.

 

	 	14.4	Personal
    Liability of Directors

 

	 	14.4.1	A
    Director, including the Chairman and the Vice Chairman shall not have personal liability for action he/she undertakes on behalf
    of the Joint Venture within the scope of authority of this Contract, the Articles of Association or the Board resolutions
    unless his or her action: 

 

	 	(a)	is
    outside the scope of the approval or authorization given to him by this Contract, the Articles of Association or the Board
    of Directors’ resolutions; or
	 	 	 
	 	(b)	is
    in breach of the laws and regulations of the PRC and any other applicable laws and/or the terms of this Contract at the time.

 

	 	14.4.2	Any
    Director, including the Chairman and Vice Chairman, acting in violation of this Contract, the Articles of Association or the
    Board of Director’s resolutions shall indemnify and hold harmless the Joint Venture against all losses caused to or
    liabilities and expenses incurred by the Joint Venture. Either Party shall unconditionally and irrevocably indemnify and keep
    indemnified on demand the other Party and the Joint Venture from and against all losses, costs and expenses (including without
    limitation legal expenses) which the other Party and the Joint Venture may incur or sustain from or in consequence of violation
    of this Contract, violation of the Articles of Association or the Board of Director’s resolutions on the part of a Director
    during such time as he is appointed by such Party as Director in accordance with Section 14.13.8, provided however, that no
    indemnity by either Party shall be required in the event that the actions of the Director giving rise to indemnity under this
    section are otherwise a violation of the laws and/or regulations of the PRC.

 

    	 	- 22 -	 

    	 	 	 

    

 

 

	 	14.4.3	The
    Joint Venture shall, to the extent permitted by law, indemnify any Director for damages or losses incurred in good faith by
    such Director in the performance of his or her obligations

 

	 	14.5	Board
    Meetings

 

	 	14.5.1	The
    first Board meeting shall take place within thirty(30) days of the Establishment Date. At least one (1) regular Board meeting
    shall be held each Financial Year. The meetings of the Board may be convened at any time by the Chairman or upon request of
    at least two (2) Directors or the Supervisor. 
	 	 	 
	 	14.5.2	Meetings
    of the Board shall be convened and chaired by the Chairman. If the Chairman cannot convene the meeting, the Chairman’s
    appointee should convene and chair the meeting on his behalf.
	 	 	 
	 	14.5.3	Meetings
    of the Board shall take place in the location and at such times as may be agreed by the Board. 
	 	 	 
	 	14.5.4	Subject
    to the Articles of Association and applicable PRC Law, each Director must declare any interest he may have in respect of any
    matter to be decided by the Board. In the event a Director declares that he has an interest in any matter before the Board
    meeting, he shall not then be entitled to vote in respect of the relevant matter. 

 

	 	14.6
    	Quorum

 

	 	14.6.1	No
    business shall be transacted and no resolution shall be made at any meeting of the Board or of a duly appointed committee
    of the Board unless there shall be present throughout the meeting a quorum consisting of not less than four (4) Directors
    present comprising at least two (2) Directors who are appointed by AoLunTe and two (2) Directors who are appointed by Aura.
    
	 	 	 
	 	14.6.2	If
    a quorum is not present within one (1) hour(or such longer period as those Directors present may agree) after the time appointed
    for a Board meeting (the “First Board Meeting”), then unless the Board agrees otherwise, the First Board
    Meeting shall stand adjourned to the same day of the next week at the same time and place (the “Second Board Meeting”)
    and notice of the Second Board Meeting including the date, time and place of the Second Board Meeting shall be given to all
    Directors not less than forty-eight (48) hours before the Second Board Meeting is to be held (provided that the Second Board
    Meeting may only deal with matters which were on the agenda of the First Board Meeting). 

 

    	 	- 23 -	 

    	 	 	 

    

 

	 	14.6.3	If
    a quorum is not present within one (1) hour (or such longer period as those Directors present may agree) after the time appointed
    for the Second Board Meeting, then unless the Board agrees otherwise, the Second Board Meeting shall stand adjourned to the
    same day of the next week at the same time and place (the “Third Board Meeting”) and written notice of
    the Third Board Meeting including the date, time and place of the Third Board Meeting shall be given to all Directors not
    less than forty-eight(48) hours before the Third Board Meeting is to be held (provided that the Third Board Meeting may only
    deal with matters which were on the agenda of the First Board Meeting). 
	 	 	 
	 	14.6.4	If
    a quorum is not present within one (1) hour(or such longer period as those Directors present may agree) after the time appointed
    for the Third Board Meeting, the Directors present shall be deemed to constitute a quorum for the Third Board Meeting and
    any resolutions to be taken at the Third Board Meeting shall be deemed to have been validly taken notwithstanding that a quorum
    may not be present, provided no further resolutions shall be adopted at that meeting other than the resolutions referred to
    in the notice convening the First Board Meeting. No decisions shall be taken at a meeting of the Board on any matter that
    has not been specified on the agenda prepared by the Joint Venture and contained in the notice for such meeting, unless all
    Directors approve such matters.

 

	 	14.7	Mode
    of Meetings and Resolutions

 

	 	14.7.1	Board
    meetings may be held via telephone or other telecommunications means so long as all participating Directors or their representatives
    can talk to and are able to hear each other.
	 	 	 
	 	14.7.2	Resolutions
    of the Board may be adopted by written resolution, so long as a document (which expression shall include a facsimile of the
    document) containing such resolutions is signed, or different counterparts of such a document are signed, by all Directors.
    The date of the adoption of such resolutions shall be the last date on which the document (or a counterpart thereof) is signed
    by all Directors. Written resolutions adopted pursuant to this Section 14.7.2 shall have the same effect as resolutions adopted
    at Board meetings held by the Directors in person.

 

	 	14.8	Notice
    and Agenda of Meetings
	 	 	 
	 	 	The
    venue, time and agenda for each Board meeting shall be decided by the Board. Notice of place and time, and notice of agenda,
    in respect of a Board meeting shall be given in English and Chinese in the case of regular Board meetings and shall be sent
    at least fifteen (15) days prior to such meeting, and in the case of an interim Board meeting, at least ten (10) days prior
    to such meeting. Requirements with respect to the time limit for notices under this Section may be waived by all Directors
    in writing.
	 	 	 
	 	14.9	Entrustment
    of Representatives
	 	 	 
	 	 	Where
    a Director cannot attend any Board meeting to exercise his rights or perform his duties, he may entrust another Director of
    the Board to attend, vote and perform on his behalf. Where an entrustment is made to a representative, the entrusting Director
    shall sign a proxy and the proxy shall be delivered to the Chairman or the appointee performing the Chairman’s duties
    at any Board meeting, before or at the beginning of such meeting. If a proxy is to be handed in after a Board meeting, the
    other Directors must unanimously accept the belated proxy.

 

    	 	- 24 -	 

    	 	 	 

    

 

	 	14.10	Voting
    Rights

 

	 	14.10.1	Each
    Director or his/her representative has only one (1) vote. If a Director is also entrusted by one or more Director(s) to act
    as his/her or their representative(s), in addition to the one (1) vote he is entitled to, he/she is also entitled to one (1)
    additional vote in respect of each entrusting Director. The Chairman shall not have any additional or casting vote.
	 	 	 
	 	14.10.2	If
    a Board meeting notice has been sent pursuant to Section 14.8, any Director or his/her entrusted representative who fails
    to attend a Board meeting shall be deemed to have waived his right to vote at such meeting.

 

	 	14.11	Minutes
    of Meetings

 

	 	14.11.1	The
    minutes of all Board meetings and the written resolutions referred to in Section 14.7.2 shall be prepared in both Chinese
    and English. Minutes of a Board meeting shall be signed by the Chairman and kept in the Joint Venture’s books of Board
    minutes. The two language versions shall have equal validity and meaning. 
	 	 	 
	 	14.11.2	The
    General Manager’s office shall keep and preserve books of minutes of Board meetings. In addition to containing the minutes
    of each Board meeting and each written resolution referred to in Section 14.7.2, the Joint Venture’s minute books will
    also record the appointment, replacement and resignation of each Director and each person entrusted as a representative to
    act for any Director and contain documents relating thereto, and will also contain the notice and agenda dispatched in respect
    of each Board meeting and other documents submitted to the Board.
	 	 	 
	 	14.11.3	Any
    Party shall be entitled to inspect the above-mentioned minute books and to make copies thereof at any time. The Joint Venture
    shall facilitate such inspections and photocopying.

 

	 	14.12	Deadlock

 

	 	14.12.1	A
    deadlock (“Deadlock”) shall be deemed to have occurred for the purpose of this Contract if:

 

	 	(a)	the
    Board fails to decide on a matter that it has considered at not less than three (3) duly convened Board meetings; or
	 	 	 
	 	(b)	with
    regard to any matter being decided, a quorum is not present at not less than two (2) consecutive Board meetings called in
    accordance with Section 14.6 to decide on such matters, provided that each Party has instructed the Directors appointed by
    it to attend the Board meetings.
	 	 	 
	 	In the event of a Deadlock, the Chairman or any Director shall notify the Parties in writing within seven (7) days of the deemed occurrence of the Deadlock and its circumstances.

 

    	 	- 25 -	 

    	 	 	 

    

 

	 	14.12.2	Resolution
    of Deadlock

 

	 	(a)	Good-faith
    Discussions among Senior Executives of the Parties
	 	 	 
	 	 	If
    any Deadlock occurs, each Party shall first delegate two (2) senior executives to participate in good-faith discussions to
    resolve the Deadlock. The Parties agree that such good-faith discussions shall be held at least three (3) times within 6 months
    after the service of the notice, unless the Deadlock is resolved at an earlier point in time.
	 	 	 
	 	(b)	Arbitration
	 	 	 
	 	 	If
    the Deadlock is still not resolved after the three (3) good-faith discussions, and if mutually agreed by the Parties, then
    the matter subject to Deadlock shall be referred to Arbitration in accordance with the provisions of Section 29.2 hereof.
    The arbitration award shall be final and binding on the Parties, and the Parties agree to be bound thereby and to act accordingly.
	 	 	 
	 	 	If
    the Deadlock does not go to Arbitration, then:

 

	 	(i)	If
    the Deadlock does not materially affect the Joint Venture’s continuous operations, the Joint Venture shall continue
    to operate; or
	 	 	 
	 	(ii)	If
    the Deadlock materially impacts the Joint Venture’s continuous operations, and losses in the amount of at least ten
    (10) million RMB have been incurred due to the deadlock within a financial year, either Party shall have the right to early
    terminate this Contract in accordance with the provisions of Section 25. In the event that a Deadlock occurs due to lack of
    quorum, only a Party who instructed the majority of the Directors appointed by it to be present at the meetings (and such
    Directors actually were present at the meetings) may exercise early termination right.
	 	 	 
	 	(c)	Deadlock
    on Annual Budget
	 	 	 
	 	 	If
    any Deadlock occurs with respect to an approval of annual budget, each Party shall first delegate two (2) senior executives
    to participate in good-faith discussions to resolve the Deadlock. If the Deadlock cannot be resolved after three (3) good-faith
    discussions within three (3) months after the service of the notice, then the matter subject to Deadlock shall be referred
    to Arbitration in accordance with the provisions of Section 29.2 hereof. The arbitration award shall be final and binding
    on the Parties, and the Parties agree to be bound thereby and to act accordingly.

 

	 	14.12.3	Both
    Parties shall continue to perform their obligations under this Contract during the period of Deadlock.

 

    	 	- 26 -	 

    	 	 	 

    

 

 

	 	14.13	Miscellaneous

 

	 	14.13.1	The
    Board shall ensure that the audited accounts of the Joint Venture for each Financial Year shall be prepared within six (6)
    weeks from the end of the Financial Year in question and shall be circulated to the Parties, as far as possible, not later
    than four (4) months from the end of the said Financial Year.
	 	 	 
	 	14.13.2	The
    Board shall ensure that: 

 

	 	(a)	the
    monthly unaudited financial statements and the quarterly operational review of the Joint Venture are prepared promptly at
    the end of each month and at the end of each quarter (as the case may be) and copies delivered to the Board within twenty
    (20) days from the end of the month, or quarter, in question; and
	 	 	 
	 	(b)	the
    draft projected annual budget plan of the Joint Venture shall be prepared promptly (and in any event not later than thirty
    (30) days prior to the end of each Financial Year) and circulated to all the Directors and the Chairman shall promptly convene
    a Board meeting to discuss the same and the Directors shall provide their comments or raise questions regarding such projected
    budget as soon as possible.

 

	 	14.13.3	Each
    of the Directors shall, from time to time upon giving notice in writing to the Board, be entitled immediately to examine the
    books and accounts of the Joint Venture. A Director shall be entitled to inform the Party nominating him of such matters concerning
    the Joint Venture’s Business as such Party may from time to time reasonably request. Each Party receiving such information
    undertakes to keep the information confidential pursuant to Section 23.1.
	 	 	 
	 	14.13.4	The
    Board shall ensure that the Joint Venture shall keep proper books of account and have its accounts audited or certified annually.
    The appointment and removal of the Auditors may be determined by the Board.
	 	 	 
	 	14.13.5	The
    Board shall procure that a bank account or bank accounts are opened in the name of the Joint Venture with such bank or banks
    as may be determined by the Board. 
	 	 	 
	 	14.13.6	The
    Joint Venture shall bear all costs of travelling, including air travel, suitable accommodation, meals and local transportation
    that are incurred by Directors in attending Board meetings.
	 	 	 
	 	14.13.7	Each
    of the Parties undertakes and agrees that at all times during the term of this Contract, it shall do all things necessary
    and shall take or shall cause the passing of all required Board resolutions and the taking of all other actions which may
    from time to time be necessary with respect to the conduct of the affairs of the Joint Venture and to give effect to the provisions
    of this Contract generally, including, but without limiting the generality of the foregoing, the giving of all necessary directions
    to its nominee on the Board or on any other duly approved committee of the Board (if any) to ensure that full and complete
    effect in all respects is given to the provisions of this Contract.

 

    	 	- 27 -	 

    	 	 	 

    

 

 

	 	14.13.8	 Each
    of the Parties undertakes and agrees unconditionally and irrevocably to indemnify and keep indemnified on demand the other
    Party and the Joint Venture from and against all losses, costs and expenses (including without limitation legal expenses)
    which the other Party and the Joint Venture may incur or sustain from or in consequence of violation of this Contract, the
    violation of the Articles of Association or the Board of Director’s resolutions of its Director during such time as
    he is nominated by such Party as Director, provided however, that no indemnity by either Party shall be required in the event
    that the actions of the Director giving rise to indemnity under this section are otherwise a violation of the laws and/or
    regulations of the PRC. This indemnity shall be without prejudice to any other rights and remedies of the other Party and
    the Joint Venture in relation to any such violation of this Contract, violation of the Articles of Association or the Board
    of Director’s resolutions of its Director and all other rights and remedies are expressly reserved to the other Party
    and the Joint Venture.

 

	 	15.	SUPERVISORS
	 	 	 
	 	15.1	Appointment
    of the Supervisor
	 	 	 
	 	 	The
    Joint Venture shall have one (1) supervisor (“Supervisor”) to be appointed by Aura. The Supervisor shall
    be a PRC national. The term of office of the Supervisor shall be three (3) years and may be reappointed by the said Party
    to serve consecutive terms.
	 	 	 
	 	15.2	Functions
    and Powers
	 	 	 
	 	 	The
    Supervisors shall exercise the following functions and powers:

 

	 	(a)	examining
    the financial affairs of the Joint Venture;
	 	 	 
	 	(b)	supervising
    the acts of the Directors and Management Personnel when performing their duties for the Joint Venture; requesting for rectification
    of conduct of any Director or any member of Management Personnel if such conduct have harmed the interests of the Joint Venture;
    and proposing to dismiss any Director or any member of Management Personnel violating the laws, administrative regulations,
    this Contract, the Articles of Association or the resolutions of the Board;
	 	 	 
	 	(c)	attending
    the meetings of the Board as a non-voting attendee and making inquiries or suggestions to the matters to be resolved by the
    Board;
	 	 	 
	 	(d)	proposing
    convention of interim Board meetings;
	 	 	 
	 	(e)	making
    proposals to the Parties;
	 	 	 
	 	(f)	initiating
    any legal proceedings against any Directors or Management Personnel as provided under PRC Law; and
	 	 	 
	 	(g)	other
    functions and powers as designated by the Parties from time to time.

 

    	 	- 28 -	 

    	 	 	 

    

 

	 	15.3	Expenses
	 	 	 
	 	 	The
    expenses necessary for a Supervisor to perform his/her duties shall be borne by the Joint Venture.
	 	 	 
	 	16.	MANAGEMENT
    OF THE JOINT VENTURE
	 	 	 
	 	16.1	Management
    Organization
	 	 	 
	 	 	The
    Joint Venture shall establish a management team to be responsible for the Joint Venture’s daily operation and management.
    Such team shall include a general manager (the “General Manager”), a financial controller (the “Financial
    Controller”), a Vice President of Manufacturing (“Manufacturing VP”), a quality assessment manager
    (“QA Manager”)and such other personnel as determined by the Board (the “Management Personnel”).
    The Management Personnel shall be responsible to and under the leadership of the Board. Remuneration for the Management Personnel
    shall be comparable to industry standards for similar positions, determined and approved by the Board and reviewed annually.
	 	 	 
	 	16.2	Appointment
    of Management Personnel

 

	 	16.2.1	The
    General Manager shall be appointed by the Board upon the nomination by AoLunTe, and shall be a PRC national with background
    in dealing with PRC authorities, local original equipment manufacturers and government entities. The General Manager or his
    consultant shall be fluent in English. The Financial Controller shall be appointed by the Board upon the nomination by Aura,
    and shall be a PRC national.
	 	 	 
	 	16.2.2	Manufacturing
    VP and QA Manager shall be appointed by the Board upon the nomination by Aura. 
	 	 	 
	 	16.2.3	Each
    of the other members of the Management Personnel shall be appointed or removed by the Board. The Board has the authority to
    dismiss at any time any Management Personnel who, as the Board determines, has engaged in any fraudulent act, has grossly
    neglected his/her duties or has engaged in criminal activities.

 

	 	16.3	Function
    and Power of the General Manager
	 	 	 
	 	 	The
    General Manager shall be responsible for the day-to-day operation and management of the Joint Venture, including, without
    limitation to, the following: 

 

	 	16.3.1	To
    formulate a comprehensive organisational structure and management system for consideration and approval by the Board; 
	 	 	 
	 	16.3.2	To
    exercise management powers in relation to the operation, finance and human resources of the Joint Venture, and to organize
    and handle the daily operations and management of the Joint Venture;
	 	 	 
	 	16.3.3	To
    formulate Joint Venture’s policies, rules and regulations, define and designate departmental job responsibilities, and
    direct and supervise department activities as approved by the Board;
	 	 	 
	 	16.3.4	To
    formulate the business plan of establishing a branch and submit it to the Board;

 

    	 	- 29 -	 

    	 	 	 

    

 

	 	16.3.5	To
    formulate and, after approval by the Board, implement the Joint Venture’s annual budget plan, business plans, financial
    budgets, insurance plans, profits distribution plans and pricing policies;
	 	 	 
	 	16.3.6	To
    formulate and submit an alternative fund management plan to the Board of Directors in the event the General Manager objects
    to the plan proposed by the Financial Controller in accordance with Section 16.4.6; provided, however, if the General Manager
    submits an alternative plan, then the General Manager will deliver to the Financial Controller a copy of any proposal or suggested
    plan no less than ten (10) days prior to submittal to the Board of Directors;
	 	 	 
	 	16.3.7	To
    formulate and submit an alternative financial strategy to the Board of Directors in the event the General Manager objects
    to the strategy proposed by the Financial Controller in accordance with Section 16.4.7; provided, however, if the General
    Manager submits an alternative strategy, then the General Manager will deliver to the Financial Controller a copy of any proposal
    or suggested strategy no less than ten (10) days prior to submittal to the Board of Directors;
	 	 	 
	 	16.3.8	To
    formulate and implement important management system of the Joint Venture as approved by the Board and the operational procedures,
    rules and systems of each department of the Joint Venture; and
	 	 	 
	 	16.3.9	To
    perform other duties conferred on him/her by this Contract, the Articles of Association, or the Board.

 

	 	16.4	Responsibilities
    of the Financial Controller
	 	 	 
	 	 	The
    Financial Controller, under the supervision of the Board, shall be responsible for the financial management of the Joint Venture,
    which shall include, without limitation, the following responsibilities:

 

	 	16.4.1	management
    of fiscal affairs of the Joint Venture;
	 	 	 
	 	16.4.2	establishment
    and management of the accounting systems and procedures of the Joint Venture;
	 	 	 
	 	16.4.3	maintenance
    of accounting books and records of the Joint Venture; 
	 	 	 
	 	16.4.4	management
    of insurance matters for the Joint Venture; 
	 	 	 
	 	16.4.5	submission
    of financial reports to the General Manager and the Board of Directors as and when required;
	 	 	 
	 	16.4.6	formulation
    of the fund management plan and implemention of the fundraising, use, collection and supervision of the large-amount fund;
    
	 	 	 
	 	16.4.7	formulation
    and implementation of the financial strategy;
	 	 	 
	 	16.4.8	to
    design the corporate tax saving optimization plan and assist the Joint Venture in applying for and obtaining the most preferential
    tax and customs duty treatment and other investment incentives available under the laws and regulations of the PRC; and
	 	 	 
	 	16.4.9	to
    assist the General Manager in formulating the annual budget plan, financial plan, insurance plan, profit distribution plan,
    policy for Affiliated Transactions and pricing policy, which will be implemented after the Board’s approval.

 

    	 	- 30 -	 

    	 	 	 

    

 

	 	16.5	Responsibilities
    of the Manufacturing VP

 

	 	a.	ensure
    that all engineering and manufacturing activities of the Joint Venture, including but not limited to all components, subassemblies,
    raw materials, packaging, wires, cable connectors and manuals, in accordance to the standards and specifications set out in
    the engineering specifications provided by Aura to the Joint Venture;
	 	 	 
	 	b.	work
    closely with the Parties to ensure production of high quality and safe products;
	 	 	 
	 	c.	ensure
    that all manufacturing activities shall follow accepted world quality and safety procedures and standards;
	 	 	 
	 	d.	to
    perform other duties conferred on him/her by this Contract, the Articles of Association, or the Board.

 

	 	16.6	Responsibilities
    of the QA Manager

 

	 	a.	developing
    an overall quality plan for the JV;
	 	 	 
	 	b.	developing
    an accepted criteria for quality of finished goods;
	 	 	 
	 	c.	selecting
    and supervising quality inspectors for incoming parts;
	 	 	 
	 	d.	selecting
    and supervising quality inspectors for the manufacturing process;
	 	 	 
	 	e.	meeting
    and maintaining all ISO qualifications;
	 	 	 
	 	f.	reporting
    directly to the General Manager;
	 	 	 
	 	g.	controlling
    manufacturing processes to ensure quality;
	 	 	 
	 	h.	overseeing
    all field reports and correction items; and
	 	 	 
	 	i.	overseeing
    the training of manufacturing personnel.

 

	 	16.7	Concurrent
    Positions
	 	 	 
	 	 	Except
    the General Manager, all Management Personnel, are forbidden from concurrently serving or working in any other company, unit,
    entity or organization whatsoever unless approved by the Board. The foregoing notwithstanding, the General Manager may not
    concurrently advise or otherwise concurrently serve as an agent of any company, entity, unit or organization that is in competition
    with the Joint Venture and/or Aura.

 

    	 	- 31 -	 

    	 	 	 

    

 

	 	17.	LABOR
    MANAGEMENT

 

	 	17.1	Governing
    Principles

 

Significant
and material matters relating to the recruitment, employment, management, dismissal, resignation, wages, welfare benefits, subsidies,
social insurance and other matters concerning the employees of the Joint Venture shall be determined by the Board in accordance
with applicable laws and regulations of the PRC. The General Manager shall implement plans approved by the Board.

 

	 	17.2	Employment

 

The
employees of the Joint Venture shall be employed in accordance with the terms of individual employment contracts entered into
between the Joint Venture and each individual employee. Such employment contracts shall be in a form and substance approved by
the General Manager and the majority of the Board.

 

	 	17.3	Compliance
    with Employment Laws

 

The
Joint Venture shall comply with the rules and regulations of the PRC government concerning labor protection. Social insurance
for the Joint Venture’s employees shall be handled in accordance with PRC Law.

 

	 	18.	TAXATION
    AND INSURANCE

 

	 	18.1	Tax

 

	 	18.1.1	The
    Joint Venture shall pay tax in accordance with PRC Law.

 

	 	18.1.2	The
    Joint Venture shall apply for, and be entitled to, all preferential treatments in accordance with PRC law. The tax liability
    of the Joint Venture, the Parties and their employees, as appropriate, shall be handled in accordance with PRC law.

 

	 	18.2	Insurance

 

	 	18.2.1	Subject
    to the approval of the Board, the Joint Venture shall take out the required insurance from a reputable insurance company authorized
    to do business in the PRC.

 

	 	18.2.2	The
    types, coverage, amounts and duration of insurance coverage shall be determined by the General Manager and the Financial Controller,
    subject to the direction of the Board in compliance with PRC law.

 

	 	18.2.3	Upon
    request, the Joint Venture shall provide the Parties certificate(s) of insurance attesting to any of the insurance described
    above within five (5) business days of the Parties’ request.

 

	 	19.	FINANCE
    AND ACCOUNTING

 

	 	19.1	Financial
    Control Procedures

 

	 	19.1.1	The
    General Manager and the Financial Controller shall formulate accounting systems and procedures of the Joint Venture in accordance
    with both International Financial Reporting Standards (“IFRS”) and the PRC Generally Accepted Accounting
    Principles (“PRC GAAP”) (IFRS and PRC GAAP are jointly referred to as “Accounting Standards”)
    and the provisions of applicable PRC Law and submit to the Board for approval. The General Manager and Financial Controller
    shall also formulate procedures to identify, quantify, and reconcile any material differences between PRC GAAP and IFRS. The
    procedures to accomplish this reconciliation must be submitted to the Board for approval. The reconciliation between PRC GAAP
    and IFRS must occur monthly and must be provided to the Board in accordance with the due dates of the financial reports discussed
    in Section 19.3.1. The approved accounting systems and procedures shall be filed with the relevant local finance and tax authorities
    for the record, if required.

 

    	 	- 32 -	 

    	 	 	 

    

 

	 	19.1.2	The
    Joint Venture shall adopt Renminbi as its bookkeeping base currency and the United States Dollar or other foreign currencies
    as supplementary bookkeeping currencies.

 

	 	19.1.3	All
    accounting records, vouchers, books and statements of the Joint Venture shall be made and kept in Chinese. All accounting
    statements of the Joint Venture and other important accounting documents, as determined by the Board, shall be made in Chinese
    and English. Along with translation from Chinese to English, such accounting statements of the Joint Venture shall include
    reconciliation for each accounting statement from PRC GAAP to IFRS. The Parties and their accountants, auditors and other
    duly authorised representatives shall have full and equal access to the accounts and books and records of the Joint Venture,
    which shall be kept at the legal address of the Joint Venture. Subject to prior notice sent to the Joint Venture, each Party
    and its authorised representatives shall have access to the Joint Venture’s books and records at all times provided
    that, in doing so, each Party shall not cause any disruption to the operations of the Joint Venture.

 

	 	19.1.4	Each
    of the Parties shall ensure that its nominated Directors approve that the Joint Venture implements as soon as possible an
    adequate system of internal financial and accounting controls that provides reasonable assurance that access to assets is
    controlled, that there is segregation of duties between employees dealing with the Joint Venture’s finances, that transactions
    are authorised, that assets are regularly reviewed to ensure that the accounting records of the Joint Venture accurately record
    their existence and that transactions are properly recorded and classified. Adherence to this system of internal financial
    and accounting controls shall be audited in the annual procedures performed by the Joint Venture’s Auditor as appointed
    in section 19.2.1 below.

 

	 	19.1.5	For
    the purposes of preparing the Joint Venture’s accounts and statements, calculating declared dividends to be distributed
    to the Parties, and for any other purposes where it may be necessary to effect a currency conversion, pursuant to this Contract
    or otherwise, such conversion shall be in accordance with the median of the relevant foreign currency buying and selling rates
    announced by the People’s Bank of China, or other legally recognized rate, on the date of actual receipt or payment.

 

    	 	- 33 -	 

    	 	 	 

    

 

	 	19.2	Audits

 

	 	19.2.1	The
    Auditor shall be nominated by Aura and approved by the Board. The nominated Auditor shall be engaged as the Joint Venture’s
    Auditor to examine and verify the annual financial report, effectiveness of the accounting system, internal controls and procedures,
    investment certificates to be issued to the Parties, financial reports on the liquidation of the Joint Venture and any other
    financial documents as required by the Board. The Auditor’s report shall be delivered to each Party with the annual
    financial report.

 

	 	19.2.2	Each
    Party may, at its own expense, appoint an accountant or auditor (who may be either an accountant registered abroad or registered
    in China) to make other audits of the accounts of the Joint Venture on behalf of such Party. Access to the Joint Venture’s
    financial records shall be given to such auditor and such auditor shall keep confidential all documents examined while conducting
    audits. Subject to prior notice sent to the Joint Venture, each Party and its authorised representatives (which can be its
    employee) shall have access to the Joint Venture’s books and records at all times provided that, in doing so, each Party
    shall not cause any disruption to the operations of the Joint Venture.

 

	 	19.3	Financial
    Reports

 

	 	19.3.1	The
    Joint Venture shall furnish the Parties with general financial reports prepared in accordance with Accounting Standards and
    PRC Law, on a monthly basis, within five (5) days after each calendar month end, so that the Parties will continuously be
    informed of the Joint Venture’s performance. Such general financial reports prepared in accordance with Accounting Standards
    and PRC Law shall also include reconciliation from PRC GAAP to IFRS. Such financial reports shall include: (i) monthly income
    statement and balance sheet; (ii) details of transactions between the Parties and the Joint Venture; (iii) tax and treasury
    information and (iv) a narrative written summary that describes in English significant highlights of the Joint Venture for
    the financial reporting month, including analysis of significant variances between reported results and planned or budgeted
    amounts, and an explanation of significant changes in account balances in the current period as compared to prior periods.

 

	 	19.3.2	The
    Joint Venture shall furnish the Parties with an annual financial report (in Chinese and English) (which shall include balance
    sheet, income statement, statement of changes of Shareholders’ equity and statement of cash flow for the Financial Year)
    prepared in accordance with Accounting Standards and the applicable PRC Law, within three (3) months after the end of the
    Financial Year, together with an audit report from the Auditor. Each of the financial statements within such annual report
    shall also be reported in accordance with IFRS, based on the reconciliation form PRC GAAP to IFRS.

 

	 	19.3.3	The
    General Manager and Financial Controller may, from time to time, be required to execute and deliver customary representation
    letters to the Auditor that is appointed to conduct the various audits cited in Section 19.2 above. In addition, the General
    Manager and Financial Controller may from time to time be required to complete certain internal controls documentation and
    respond to various internal control surveys and other quarterly questionnaires that will be provided to the Joint Venture
    by Aura and are intended to satisfy the requirements of the Sarbanes-Oxley Act of 2002.

 

    	 	- 34 -	 

    	 	 	 

    

 

	 	19.4	Financial
    Year

 

The
Joint Venture shall adopt the calendar year as its Financial Year, which shall begin on 1 January and end on 31 December of the
same year, except that the first Financial Year of the Joint Venture shall commence on the date that the Joint Venture is granted
its Business License and shall end on the immediately succeeding 31 December. The last Financial Year of the Joint Venture shall
start on January 1 of the year of termination and end on the date of termination or expiry.

 

	 	19.5	Annual
    Plan and Budget

 

Without
limiting the foregoing, the General Manager shall be responsible for the preparation of the annual operating plans and budgets
of the Joint Venture. The operating plans and budgets for the next Financial Year shall be submitted to the Board of Directors
for examination and approval no later than thirty (30) days prior to the end of each Financial Year and shall include detailed
plans and projections regarding:

 

	 	19.5.1	procurement
    of machinery, equipment and other capital expenditures of the Joint Venture;

 

	 	19.5.2	plans
    and policies with respect to the businesses and operation of the Joint Venture;

 

	 	19.5.3	estimated
    revenues, expenditures and profits of the Joint Venture;

 

	 	19.5.4	staffing
    levels and plans for training personnel of the Joint Venture; and

 

	 	19.5.5	marketing
    and promotion plans for the services provided by the Joint Venture and service price proposals.

 

	 	20.	CAPITAL
    INVESTMENT IN AURA

 

AolunTe
shall purchase Aura’s common shares equivalent of USD $2,000,000 in accordance with Securities Purchase Agreement, which
is attached hereto as Schedule 5. The first instalment of one million US dollars shall be paid into an escrow account mutually
designated by Aura and AolunTe no later than February 22 and be released from the escrow account to Aura on the first business
day of: (1) delivery of certificate of five million shares, and (2) the receipt of Certificate of Approval for Joint Venture,
whichever occurs later. The second instalment of one million US dollars shall be paid into the same escrow account in 30 days
after the Establishment Day and be released upon receipt of the certificate of the remaining five million shares and the completion
of the annual meeting of Aura Shareholders.

 

	 	21.
    	CASH
    FLOW DISTRIBUTION

 

	 	21.1	Annual
    Allocation to Three Funds

 

After
making up accumulative losses from previous years (if any), allocation(s) shall be made from the Joint Venture’s remaining
after-tax profits for such Financial Year to the Three Funds in accordance with applicable PRC Laws.

 

The
amount allocated to the Enterprise Expansion Fund and the Staff and Workers Incentive and Welfare Fund shall be determined by
the Board based on the business performance of the Joint Venture, provided that the amount to be allocated to the Reserve Fund
shall in no circumstances exceed ten percent (10%) of the Joint Venture’s after-tax distributable profits for such Financial
Year. The Joint Venture shall have no obligation to make any allocation to the Reserve Fund once the cumulative allocations to
such Fund has reached fifty percent (50%) of the Joint Venture’s Registered Capital.

 

    	 	- 35 -	 

    	 	 	 

    

 

	 	21.2	Cash
    Flow Determination

 

Subject
to the provisions set out in Section 21.1, the positive cash flow, if any, of the Joint Venture shall be distributed by the Board
in accordance with the following principle:

 

	 	(a)	To
    pay enterprise income tax according to applicable PRC Laws;

 	 	(b)	To
    make allocations to the Three Funds;

 

	 	(c)	Reserved
    for the anticipated expenditures, which include CAPEX budget, normal working capital needs, investment plan, expansion plan,
    and other expenditures to meet the company’s development goal approved by the board during its strategic planning session.

 

The
distributable cashflow comprises the annual cash flow deducting (a),(b),(c),.

 

	 	(d)	Remainder,
    if any, distributed based on the existing ownership percentage.

 

AoLunTe
shall provide all necessary assistance to Aura for remittance of any cash distribution to Aura in USD.

 

	 	22.	FOREIGN
    EXCHANGE

 

	 	22.1	Bank
    Accounts and Foreign Exchange Control

 

The
Joint Venture shall handle foreign exchange transactions in accordance with relevant laws and regulations of the PRC. The Joint
Venture shall open foreign exchange and Renminbi accounts at banks within China authorized and approved by the State Administration
of Foreign Exchange to conduct foreign exchange operations. The Joint Venture may, with approval of the relevant PRC Government
Authority, also open foreign exchange accounts outside the PRC.

 

	 	22.2	Foreign
    Exchange Requirements

 

Unless
otherwise specified in this Contract or in contracts entered into by the Joint Venture pursuant to a valid resolution of the Board
and subject to the applicable law, all expenses, loan repayments, labor compensation and other charges of the Joint Venture paid
to PRC enterprises or individuals shall be paid in RMB.

 

	 	23.	CONFIDENTIALITY
    AND NON-COMPETITION

 

	 	23.1	Confidentiality

 

	 	23.1.1	From
    time to time prior to and during the term of this Contract, either Party may disclose Confidential Information to the other
    Party. Additionally, the Parties may, from time to time during the term of this Contract, obtain Confidential Information.
    Each of the Parties receiving such information shall, from the Establishment Date and thereafter without limitation in time:

 

    	 	- 36 -	 

    	 	 	 

    

 

	 	(a)	maintain
    the confidentiality of such information; and

 

	 	(b)	not
    disclose it to any person or entity, except to its employees and/or consultants who need to know such information to perform
    their responsibilities.

 

	 	23.1.2	Confidential
    Information shall not apply to information that:

 

	 	(a)	is
    or becomes public knowledge otherwise than through the receiving Party’s breach of this Contract; or

 

	 	(b)	was
    obtained by the receiving Party from a Third Party having no obligation of confidentiality with respect to such information.

 

	 	23.1.3	Each
    Party shall advise its appointed Directors and other employees receiving such information of the existence of and the importance
    of complying with the obligations set forth in Section 23.1.

 

	 	23.1.4	Each
    of the Parties and the Joint Venture shall formulate specific rules and regulations to cause its appointed Directors, senior
    staff, and other employees to comply with the confidentiality obligation set forth in this Section 23. The Joint Venture shall
    require that all employees of the Joint Venture execute confidentiality agreements in form and substance satisfactory to the
    Parties.

 

	 	23.1.5	This
    Section 23 shall continue to apply after termination of this Contract, howsoever occurring, except in respect of any Confidential
    Information which may come into the public domain otherwise than by virtue of a breach of obligations imposed by this Section
    23 or which may be required by PRC law.

 

	 	23.2	Non-Competition

 

	 	23.2.1	During
    the term of this Contract, neither Party shall either on its own account or in conjunction with or on behalf of or, directly
    or indirectly, through any person, firm or joint venture, in whatever capacity bid on any programs for which the Board of
    Directors has approved the Joint Venture to bid, unless the Customer specifically rejects the Joint Venture as the supplier
    of the Selected Mobile Power Products in which case Aura may pursue the business. The Board of Directors shall make assessment
    of the Joint Venture’s capability to bid on any programs in good faith and shall not unreasonably withhold its approval
    in this regard.

 

	 	23.2.2	Each
    Party hereby undertakes and covenants to and for the benefit of the other Party and the Joint Venture that it shall not, during
    the term of this Contract, solicit or entice away or endeavour to solicit or entice away from the Joint Venture any person
    who is an employee of the Joint Venture, whether or not such person would commit a breach of contract by reason of leaving
    the employment of the Joint Venture.

 

    	 	- 37 -	 

    	 	 	 

    

 

However,
for avoidance of doubt, the Parties agree that neither Party may hire the employees of the Joint Venture within two (2) years
after his/her labor contract with the Joint Venture is terminated; provided, however, that in the event this Contract is terminated
pursuant to Section 13.2 above, Aura may hire the employees of the Joint Venture at any time following the termination date of
this Contract.

 

	 	23.2.3	Neither
    party shall solicit or entice or endeavour to solicit or entice the Customer to transfer to it the business that the Joint
    Venture has already undertaken by means of breach of contract or in any other way. Each undertaking contained in Section 23
    shall be read and construed independently of the other covenants contained in this Contract so that if one or more of such
    covenants should be held to be invalid for any reason whatsoever then the remaining covenants shall be valid to the extent
    that they are not held to be so invalid; provided, however, that in the event this Contract is terminated pursuant to Section
    13.2 above, the prohibitions of this section 23.2.3 shall not apply to Aura at any time following the termination date of
    this Contract.

 

	 	23.2.4	Each
    Party acknowledges that the restrictions contained in Section 23.2.1 are considered reasonable by it but if any such restriction
    shall be found to be void or voidable but would be valid if some part or some parts thereof were deleted or the period or
    area of application reduced, such restriction shall apply with such modification as may be necessary to make it valid and
    effective.

 

	 	24.	BUSINESS
    PRACTICE

 

	 	24.1	Both
    Parties undertake that they shall at any time comply with applicable laws and regulations in the PRC in the process of establishment
    of the Joint Venture, collaboration with each other, supply of products or the relevant services to the Joint Venture or the
    Customer.

 

	 	24.2	Both
    Parties further undertake that they shall cause the Joint Venture and its Directors, officers or employees, at any time during
    the Term of this Contract, comply with all the applicable laws and regulations in carrying out the Joint Venture’s business
    and which are applicable to the Parties (including but not limited to anti-bribery and anti-corruption laws and regulations
    of the PRC, the United States Foreign Corrupt Practices Act, and PRC and United States export control laws).

 

	 	24.3	Without
    limiting the foregoing, both Parties shall ensure that the Joint Venture does not market, distribute, sell or otherwise transfer
    any of its products or transfer any Intellectual Property to any country or government which is on the restricted list of
    the US.

 

	 	25.	TERM,
    TERMINATION AND LIQUIDATION

 

	 	25.1	Term

 

The
term of the Joint Venture shall be thirty (30) years (the “Term”), which shall commence on the Establishment
Date, except as extended or shortened as provided in this Contract

 

	 	25.2	Extension
    of Term

 

One
(1) year prior to the expiration of the Term, the Parties may discuss the extension of the Term. If both Parties agree and the
Board approves, an application for such extension shall be submitted to the Examination and Approval Authority for approval no
less than six (6) months prior to the expiration of the Term.

 

    	 	- 38 -	 

    	 	 	 

    

 

	 	25.3	Expiration
    of Term

 

The
Joint Venture shall be dissolved and this Contract terminated in accordance with Cooperative Joint Venture Law, the Cooperative
Joint Venture Regulations and the Articles of Association upon expiration of the Term (if not extended pursuant to Section 25.2
above) in which case the dissolution shall be automatic.

 

	 	25.4	Early
    Termination

 

	 	25.4.1	This
    Contract may be terminated at any time upon the written agreement of all of the Parties, in which case the Parties shall instruct
    the Directors to vote to liquidate the Joint Venture in accordance with this Contract and the relevant laws and regulations
    of the PRC.

 

	 	25.4.2	A
    Party may terminate this Contract by providing written notice (the “Termination Notice”) to the other Party:

 

	 	(a)	if
    any of the Parties (the “Breaching Party”) is in material breach of this Contract and, where such breach
    is capable of remedy, fails to remedy it within thirty (30) Days after the service of a written notice from the other Party
    (the “Non-Breaching Party”) of such default, the Non-breaching Party shall have the right to terminate;

 

	 	(b)	if
    the conditions or consequences of Force Majeure events (as hereinafter defined in Section 27) significantly interferes with
    the normal functioning of the Joint Venture and the Parties have been unable to find a solution for a period in excess of
    six (6) months, either Party shall have the right to terminate this Contract;

 

	 	(c)	if
    any additional or different conditions are imposed by any Government Authority on this Contract or the Articles of Association
    which are not agreed by the Parties, either Party shall have the right to terminate this Contract;

 

	 	(d)	if
    the Joint Venture’s operation is interrupted for more than twelve consecutive months, or the Joint Venture is unable
    to pay its due debts, either Party shall have the right to terminate;

 

	 	(e)	if
    the Joint Venture is ordered to suspend its operation for consecutive six (6) months due to violation of PRC laws, either
    Party shall have the right to terminate;

 

	 	(f)	if
    any transfer or reorganization of AoLunTe’s ownership imposes any negative impact upon the Joint Venture’s operation,
    or results in AoLunTe’s ownership being held directly or indirectly by any of Aura’s competitors, Aura shall have
    the right to terminate;

 

	 	(g)	if
    cumulative operational losses after one (1) year of operation (excluding amortization, depreciation and other non cash items)
    exceed RMB 10,000,000; provided, however, that only AoLunTe may exercise the right to terminate this Contract under this provision,
    24.4.2(g); or

 

    	 	- 39 -	 

    	 	 	 

    

 

	 	(h)	if
    any other reason for termination stipulated in this Contract arises, the relevant Party may terminate this Contract in accordance
    with the Contract.

 	 	25.5	Negotiations

 

In
the event that either Party gives the Termination Notice where it is entitled to do so pursuant to Section 25.4.2 of a desire
to terminate this Contract, the Parties shall within a period of six (6) months after such Termination Notice is given
conduct negotiations and endeavour to resolve the situation which resulted in the giving of such Termination Notice. In the event
that matters are not resolved to the satisfaction of all the Parties within six (6) months of such Termination Notice, or the
Party received the Termination Notice definitively refuses to commence negotiations within the period stated above, each Party
shall cause its appointed Directors to vote to terminate this Joint Venture and, with the approval of the Board, the Joint Venture
shall submit a termination application to the Examination and Approval Authority for approval.

 

	 	25.6	Liquidation

 

	 	25.6.1	In
    the event that this Contract is terminated pursuant to Sections 25.3 to 25.5, the Board shall, within a period of ten (10)
    days, appoint a liquidation committee that shall have the power to represent the Joint Venture in all legal matters. The liquidation
    committee shall value and, subject to the approval of the Examination and Approval Authority, liquidate the Joint Venture’s
    assets in accordance with the applicable PRC laws and regulations and the principles set out therein.

 

	 	25.6.2	The
    liquidation committee shall consist of six (6) members. The number of members that shall be appointed by a Party shall be
    equivalent to the number of Directors of the Board that such Party nominated to the Board at that time. Members of the liquidation
    committee may, but need not be, Board Directors or senior employees of the Joint Venture. When permitted by PRC law, either
    Party may also appoint professional advisors to be members of or assist the liquidation committee. The Board shall report
    the formation of the liquidation committee to the relevant governmental department(s) in charge of the Joint Venture.

 

	 	25.6.3	The
    liquidation committee shall conduct a thorough examination of the Joint Venture’s assets and liabilities, on the basis
    of which it shall, in accordance with the relevant provisions of this Contract, develop a liquidation plan which, if unanimously
    approved by the Board, shall be executed under the liquidation committee’s supervision.

 

	 	25.6.4	In
    developing and executing the liquidation plan, the liquidation committee shall use every effort to obtain the highest possible
    price for the Joint Venture’s assets.

 

    	 	- 40 -	 

    	 	 	 

    

 

	 	25.6.5	For
    the avoidance of doubt, the Parties hereby agree that when developing the liquidation plan, the liquidation committee shall
    reflect that the Technology License shall be terminated upon the liquidation and the Joint Venture’s right to use Aura’s
    IP pursuant to the Technology License shall not be considered as assets of the Joint Venture.

 

	 	25.6.6	The
    liquidation expenses, including remuneration to members and advisors to the liquidation committee, shall be paid out of the
    Joint Venture’s assets in priority to the claims of other creditors.

 

	 	25.6.7	After
    the liquidation and division of the Joint Venture’s assets and the settlement of all of its outstanding debts, the balance
    shall be allocated to the Parties, until the cumulative allocation received by the Parties reach the amount of Registered
    Capital they have respectively contributed. Provided that all outstanding debts of the Joint Venture have been settled, the
    tangible and intangible assets contributed by AoLunTe to the Registered Capital of the Joint Venture shall be distributed
    to AoLunTe and forms a portion of the aforementioned allocation. The Registered Capital and Cooperative condition the Parties
    contributed to the Joint Venture shall not be regarded as the liquidation assets.

 

	 	25.6.8	Any
    remaining assets after the allocation above will be distributed between the Parties according to their respective Ownership
    Interests.

 

	 	25.6.9	In
    accordance with the Chinese laws and regulations, debts owed to third party creditors shall be limited to the parties’
    respective capital contributions as set forth in Sections 5.2 and 5.3.3 when executing the liquidation plan.

 

	 	25.6.10	On
    completion of all liquidation procedures, the liquidation committee shall submit a final report approved by the Board and
    an independent accountant registered abroad or in the PRC to the Examination and Approval Authority, hand in the Business
    License to the original Registration Authority and complete all other formalities for nullifying the Joint Venture’s
    registration. Any Party shall have a right to obtain copies of all the Joint Venture’s accounting books and other documents
    at its own expense.

 

	 	26.	BREACH
    OF CONTRACT

 

	 	26.1	Breach
    of Contract

 

If
a Party fails to perform any of its material obligations under this Contract or if any of a Party’s representations or warranties
under this Contract are untrue or materially inaccurate, such Party shall be deemed to have breached this Contract.

 

	 	26.2	Indemnity

 

The
Party in breach shall have ninety (90) days from receipt of notice from the other Party specifying the breach to correct such
breach. If, after such ninety (90) days period, the breach is not corrected, then the Party in breach shall be liable to the other
Party for all direct and foreseeable damages. In the event all Parties are in breach of the Contract, each Party shall bear its
respective liability according to actual circumstances. Early termination of this Contract by either Party under Section 25.4
shall not exclude or affect in any way that Party’s right to damages or any other remedy whether under this Section 26 or
otherwise.

 

    	 	- 41 -	 

    	 	 	 

    

 

	 	26.3	Continued
    Implementation of Contract

 

During
the period of breach, the Parties shall in all other respects continue their implementation of this Contract.

 

	 	27.	FORCE
    MAJEURE

 

	 	27.1	“Force
    Majeure” means all events which are beyond the reasonable control of a Party to this Contract and which are unforeseen,
    or if foreseen, reasonably unavoidable, which arise after the date of the signature of this Contract and which prevent total
    or partial performance of this Contract by such Party. Such events shall include, without limitation, earthquake, typhoon,
    flood, fire, war, threat of war, blockade, embargo, act of vandalism, lightning, storm, wind, tidal wave, failures of international
    or domestic transportation, acts of government or public agencies, epidemics, strikes and any other events which cannot be
    foreseen, prevented or controlled, including events which are recognized as Force Majeure in general international commercial
    practice.

 

	 	27.2	If
    a Party is aware of the likelihood of a situation constituting Force Majeure arising, or is claiming Force Majeure, it shall
    notify the other Party in writing forthwith of the same, the cause and extent of non-performance or likely non-performance
    occasioned thereby, the date or likely date of commencement thereof and the means proposed to be adopted to remedy or abate
    the Force Majeure; and the Parties shall, without prejudice to the other provisions of this Section 27, consult each other
    with a view to taking such steps as may be appropriate to prevent and/or mitigate the effects of such Force Majeure.

 

	 	27.3	The
    Party affected shall be excused performance of its obligations under or pursuant to this Contract (except its obligations
    under Section 23) and applicable laws to the Parties to the extent and for such time period that performance of such obligations
    is delayed, hindered or prevented by such Force Majeure. The Party shall continue to perform all its obligations hereunder
    that are not affected by the Force Majeure event to the extent a Force Majeure condition has not frustrated the purpose of
    this Contract. A Force Majeure may excuse a delay in making any payment due hereunder where the delay in payment was caused
    by the Force Majeure, but otherwise the Parties shall continue to make payments due hereunder.

 

	 	27.4	The
    Party subject to Force Majeure shall:

 

	 	(a)	resume
    performance as expeditiously as possible after termination of the Force Majeure or the Force Majeure has abated to an extent
    which permits resumption of such performance;

 

	 	(b)	notify
    the other Party when the Force Majeure has terminated or abated to an extent which permits resumption of performance to occur;
    and

 

	 	(c)	keep
    the other Party regularly informed during the course of the Force Majeure as to when resumption of performance shall or is
    likely to occur.

 

    	 	- 42 -	 

    	 	 	 

    

 

	 	27.5	If
    the Parties are unable to agree that an event of Force Majeure has occurred, the matter shall be handled in accordance with
    Section 29.

 

	 	27.6	If,
    upon execution of this Contract, any Party’s interest is negatively affected by promulgation or abolishment of any law,
    or amendment or change to any law, or any competent authority’s change to, withdrawal of, or refusal to renew, any license,
    approval, permit or other consent (collectively “Change of Law”), the Parties shall negotiate for necessary
    adjustment so as to maintain each Party’s benefit under this Contract to a level no inferior to the status prior to
    such Change of Law.

 

	 	28.	POTENTIAL
    INITIAL PUBLIC OFFERING

 

	 	28.1	If,
    at any time during the Term, both Parties agree that the Joint Venture has met certain financial benchmarks and other requirements
    mutually agreed by the Parties, the Parties may enter into discussions with respect to listing the shares of the Joint Venture
    (or other securities as otherwise agreed) on a public exchange in the PRC or U.S. (“IPO”).

 

	 	28.2	Before
    the IPO, the Parties acknowledge that restructuring of the Joint Venture (and any applicable Affiliates) may take place to
    comply with the relevant listing rules and regulations, provided that such restructuring shall not affect the Parties’
    Ownership Interests in the Joint Venture or any of their rights and obligations under this Contract.

 

	 	28.3	In
    the event of an IPO of the shares of the Joint Venture, both Parties’ Ownership Interests in the Joint Venture shall
    be diluted equally.

 

	 	28.4	All
    decisions with respect to the IPO, including the appointment of underwriters, bankers, accountants shall be unanimously approved
    by the Board of Directors and in the event that the Board of Directors is unable to reach consensus on any issues, the Board
    shall designate an independent third party to decide on such issues.

 

	 	29.	DISPUTE
    RESOLUTION

 

	 	29.1	Consultations

 

In
the event any dispute, controversy or claim arising out of or in connection with the interpretation or implementation of this
Contract including without limitation any question regarding its existence, validity, interpretation, termination, or any claim
for the threatened, alleged, or actual breach of this Contract by either Party (each a “Dispute”), the Parties
shall attempt in the first instance to resolve such dispute through friendly consultations. If the Dispute is not resolved in
this manner within sixty (60) days after the date on which one Party has served written notice on the other Party for the commencement
of consultations, then either Party may refer the dispute to arbitration in accordance with the provisions of Section 29.2 hereof.

 

	 	29.2	Arbitration

 

In
the event a Dispute is not resolved through the consultation above, the dispute shall be submitted to the Hong Kong International
Arbitration Centre (“Tribunal”) in Hong Kong, for arbitration pursuant to its then effective arbitration rules,
subject to the following:

 

	 	(a)	any
    arbitration will be conducted with three (3) arbitrators, AoLunTe and Aura each shall appoint one (1) arbitrator, with the
    third arbitrator to be appointed by the Tribunal;

 

    	 	- 43 -	 

    	 	 	 

    

 

	 	(b)	in
    reaching a decision, the arbitrators shall apply and adhere to the laws specified in Section 30 of this Contract;

 

	 	(c)	the
    arbitration shall be conducted in both Chinese and English;

 

	 	(d)	this
    Section is without prejudice to each Party’s right to seek interim relief against the other Party (such as an injunction)
    through the courts to protect its rights and interests in respect of infringements of Intellectual Property rights.

 

	 	29.3	Effect
    of Arbitration Award

 

Subject
to Section 29.2, the arbitration award shall be final and binding on the Parties, and the Parties agree to be bound thereby and
to act accordingly.

 

	 	29.4	Costs

 

In
the event of a Dispute, the costs of arbitration shall be borne by the Party as designated in the arbitration award.

 

In
the event of a Deadlock, the costs of arbitration shall be borne by the Joint Venture.

 

	 	29.5	Continuing
    Rights and Obligations

 

When
any dispute occurs and when any dispute is under arbitration, except for the matters under dispute, the Parties shall continue
to exercise their remaining respective rights, and fulfil their remaining respective obligations under this Contract.

 

	 	30.	GOVERNING
    LAW

 

The
formation, validity, interpretation, and implementation of this Contract shall be governed by the laws of the PRC, which are published
and publicly available.

 

	 	31.	MISCELLANEOUS

 

	 	31.1	Effectiveness

 

This
Contract shall become effective upon the fulfilment of the following conditions:

 

	 	(a)	Both
    Parties have executed this Contract in both English and Chinese;

 

	 	(b)	the
    respective boards of each Party have approved this Contract and the Appendices; and

 

	 	(c)	this
    Contract, with the Appendices attached, the Feasibility Study Report and the Articles of Association have been approved by
    the Examination and Approval Authority.

 

    	 	- 44 -	 

    	 	 	 

    

 

	 	31.2	Restriction
    on Assignment

 

Any
Party hereto shall not assign the benefit of any provision of this Contract, nor transfer any of their respective obligations
hereunder except with the prior written consent of the other Party hereto.

 

	 	31.3	Severability

 

If
any provision of this Contract should be or become fully or partially invalid, voidable, illegal or unenforceable in any respect
for any reason whatsoever, but would be valid or legal if some part or some parts thereof were deleted or the period or area of
application reduced, such restriction shall apply with such modification as may be necessary to make it valid and effective. The
validity, legality and enforceability of the remaining provisions of this Contract shall not in any way be affected or impaired
thereby.

 

	 	31.4	Waiver

 

Unless
otherwise provided for, failure or delay on the part of any Party to exercises any right or privilege under this Contract shall
not operate as a waiver of such right or privilege nor shall any partial exercise of any right or privilege preclude any further
exercise thereof. Any waiver by a Party of a breach of any term or provision of this Contract shall not be construed as a waiver
by such Party of any subsequent breach, its rights under such term or provision, or any of its other rights hereunder.

 

	 	31.5	Entire
    Agreement

 

This
Contract, together with any documents referred to herein, which are hereby incorporated by reference as an inseparable and integral
part of this Contract, constitutes the entire agreement among the Parties with reference to the subject matter hereof, and supersedes
any agreements, contracts, representations and understandings, oral or written, made prior to the signing of this Contract.

 

	 	31.6	Amendment

 

Amendments
to this Contract and the other contracts contemplated herein may be made only by a written agreement in English and Chinese signed
by duly authorized representatives of each of the Parties and, unless prior approval from the Examination and Approval Authority
is statutorily required, will become effective as soon as the amendments are filed with the Examination and Approval Authority
for record.

 

	 	31.7	Discrepancy/Order
    of Precedence

 

The
rights and obligations of the Parties established by and under this Contract shall continue to exist throughout the Term and shall
not be prejudiced by the establishment of the Joint Venture, the adoption of the Articles of Association or the execution of any
of the contracts contemplated herein. In the event of any conflict or inconsistency between this Contract on the one hand and
the Articles of Association or other contracts contemplated herein on the other, this Contract shall prevail.

 

	 	31.8	Successors

 

The
Parties agree and ensure that this Contract shall be binding upon and inure to the benefit of the respective permitted successors
and permissible assignees of each of the Parties.

 

    	 	- 45 -	 

    	 	 	 

    

 

	 	31.9	Language
    and Counterparts

 

This
Contract is executed in the Chinese and English language in five (5) originals. Both of the two language versions shall have equal
legal effect. All the Counterparts together constitute one and the same instrument.

 

	 	31.10	No
    Agency Relationship

 

Neither
Party is the agent of the other Party nor does either Party have any power to bind the other Party or to assume or to create any
obligation of responsibility, express or implied, on behalf of the other Party in the other Party’s name. Neither this Contract
nor any of the other contracts contemplated herein shall be construed as constituting AoLunTe and Aura as partners or as creating
any other form of legal association which would impose liability upon one Party for the act or failure to act of the other Party.

 

	 	31.11	Release
    of Information

 

The
Parties hereby agree that publicity materials (including, but not limited to, publications or releases to media or to the general
public, and advertising) relating to the other Party’s and Joint Venture’s work shall require mutual written consent,
such consent shall not be unreasonably withheld.

 

	 	31.12	Notices

 

Notices
or other communications required to be given by any Party or the Joint Venture pursuant to this Contract shall be written in English
and Chinese and may be delivered personally, sent by registered airmail (postage prepaid) by a recognized courier service, or
sent by facsimile transmission to the address of the other Party set forth below or such other address notified in lieu thereof.
The dates on which notices shall be deemed to have been effectively given shall be determined as follows:

 

	 	(a)	Notices
    given by personal delivery shall be deemed effectively given on the date of personal delivery.

 

	 	(b)	Notices
    given by registered airmail (postage prepaid) shall be deemed effectively given on the seventh (7th) day after the date on
    which they were mailed (as indicated by the postmark).

 

	 	(c)	Notices
    given by air courier shall be deemed effectively given on the date of delivery (as indicated by the airway bill).

 

	 	(d)	Notices
    given by facsimile transmission shall be deemed effectively given on the first (1st) business day following the date of transmission.

 

	 	(e)	Notices
    given by email shall be deemed effectively given on the first (1st) business day following the date on which they were sent.
    

 

For
the purpose of notices, the addresses of the Parties are as follows:

 

To
AoLunTe

 

	 	Address:	ZhongguanCun,
    Liyang, China
	 	Postal
    Code:	213300
	 	Fax:	[  ]
	 	Attention:	CEO

 

    	 	- 46 -	 

    	 	 	 

    

 

To
Aura

 

	 	Address:	10541
    Ashdale street, Stanton, California 90680, USA
	 	Postal
    Code:	90680
	 	Fax:	[  ]
	 	Attention:	CEO

 

	 	31.13	Transaction
    Costs

 

Except
as otherwise provided in this Contract, all costs and expenses incurred by each party in connection with the preparation and negotiation
of this Contract, including (without limitation) all legal fees and costs, all costs and fees incurred in connection with either
party’s due diligence, all fees and costs incurred in connection with the translation of this Contract (or any provisions
hereof) into the Chinese or English languages, shall be paid by each party. Round-trip airplane tickets and reasonable accommodation
incurred by Aura or its representatives, shall be paid exclusively by AoLunTe.

 

	 	31.14	In
    the event that the Establishment Date is after February 22, 2017 this entire Joint Venture agreement is null and void and
    Aura will not have any obligations to enter into this joint Venture.

 

[The
remainder of this page is intentionally left blank]

 

    	 	- 47 -	 

    	 	 	 

    

 

 

  

    	 	- 48 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016

 

Schedule
1- Intellectual Property and Technology License Agreement

 

AURA
SYSTEMS, INC.

 

-
and -

 

[Jiangsu
Shengfeng Mobile Power Technology CO. LTD]

 

 

 

INTELLECTUAL
PROPERTY AND

TECHNOLOGY LICENSE AGREEMENT

 

 

 

    	 

    	 

    

 

TABLE
OF CONTENTS

 

	1.
    DEFINITION	1
	2.
    PARTIES TO THIS CONTRACT	7
	3.
    ESTABLISHMENT OF THE JOINT VENTURE	8
	4.
    PURPOSE AND SCOPE OF THE JOINT VENTURE	8
	5.
    TOTAL INVESTMENT, REGISTERED CAPITAL AND COOPERATIVE CONDITIONS	9
	6.
    TRANSFER OF OWNERSHIP INTEREST	12
	7.
    REPRESENTATIONS, WARRANTIES AND OBLIGATIONS	12
	8.
    RESPONSIBILITIES OF THE PARTIES	14
	9.
    INTELLECTUAL PROPERTY AND TECHNOLOGY	16
	10.
    PURCHASE OF MATERIALS AND PRODUCTS	18
	11.
    USE OF PRODUCTS	19
	12.
    OTHER COMMERCIAL AGREEMENTS	19
	13.
    MINIMUM SALES TARGETS	20
	14.
    BOARD OF DIRECTORS	20
	15.
    SUPERVISORS	28
	16.
    MANAGEMENT OF THE JOINT VENTURE	29
	17.
    LABR MANAGEMENT	32
	18.
    TAXATION AND INSURANCE	32
	19.
    FINANCE AND ACCOUNTING	32
	20.
    PROFITS DISTRIBUTION	35
	21.
    FOREIGN EXCHANGE	36
	22.
    CONFIDENTIALITY AND NON-COMPETITION	36
	23.
    BUSINESS PRACTICE	38
	24.
    TERM, TERMINATION AND LIQUIDATION	38
	25.
    BREACH OF CONTRACT	41
	26.
    FORCE MAJEURE	42
	27.
    POTENTIAL INITIAL PUBLIC OFFERING	43
	28.
    DISPUTE RESOLUTION	43
	29.
    GOVERNING LAW	44
	30.
    MISCELLANEOUS	44
	Schedule
    1 	49
	Intellectual
    Property and Technology License Agreement	49
	1.
    DEFINITION	51
	2.
    LICENSE GRANT	55
	3.
    OBLIGATION TO PROVIDE LICENSED TECHNOLOGY	58
	4.
    IMPROVEMENTS	58
	5.
    AURA’S WARRANTIES, RIGHTS AND OBLIGATIONS	60
	6.
    COMPANY’S OBLIGATIONS	61
	7.
    CONFIDENTIALITY	62
	8.
    THIRD PARTY INFRINGEMENT OF AURA’S IP	63
	9.
    THIRD PARTY INFRINGEMENT ACTIONS AGAINST THE COMPANY	64
	10.
    LIABILITY, INDEMNITY AND INSURANCE	65
	11.
    TERMINATION AND LIABILITY FOR BREACH OF CONTRACT	66
	12.
    DISPUTE RESOLUTION	67
	13.
    MISCELLANEOUS	69
	Schedule
    2	75
	AoLunTe
    Asset Contribution Agreement	75
	Schedule
    3	76
	Schedule
    4 	77
	Major
    Decisions	77

 

    	 

    	 

    

 

DLA
Draft: 1 December 2016

 

THIS
AGREEMENT is made on _______________________ (“Effective Date”).

 

BETWEEN:

 

Aura
Systems, Inc., a corporation organized and validly existing under the laws of Delaware, U.S., with its business place at 10541
Ashdale Street, Stanton California 90680(“Aura”); and

 

[Jiangsu
Shengfeng Mobile Power Technology CO .LTD], a Sino-foreign cooperative joint venture incorporated and validly existing
under the laws of People’s Republic of China (“PRC”) with its principal business address at [Zhongguancun,
liyang, China](the “Company”).

 

Each
of Aura and the Company shall hereinafter individually be referred to as a “Party” and collectively as the
“Parties”.

 

BACKGROUND:

 

	A.	WHEREAS,
    Aura is engaging in the design, development, manufacture, integration, assembly, service/maintenance and the sale of certain
    mobile power products and it owns and controls certain advanced technologies and know-how relating to the manufacturing, design,
    and assembly of the aforesaid products;
	 	 
	B.	WHEREAS,
    the Company is a limited liability Sino-foreign cooperative joint venture established in accordance with the Sino Foreign
    Cooperative Joint Venture Contract (“Joint Venture Contract”) executed between Aura and Jiangsu AoLunTe
    Electrical Machinery Industrial Co., Ltd(“AoLunTe”). The Company is intended to be engaged in the Business
    Scope as defined in the Joint Venture Contract in relation to certain mobile power products.
	 	 
	C.	WHEREAS,
    according to the Joint Venture Contract, Aura shall provide the Company with an exclusive, non-assignable, and royalty-free
    limited license within the Territory to use certain Intellectual Property in accordance with the terms of this Agreement as
    a cooperative condition contributed by Aura to the Company (“Cooperative Condition”).
	 	 
	D.	WHEREAS,
    the Company desires to obtain, and Aura agrees to grant to the Company, a limited license within the Territory to use certain
    advanced technologies and know-how owned and controlled by Aura for the purpose of manufacture, integration, assembly and/or
    the sale of the certain mobile power products on the terms and conditions set forth in this Agreement.
	 	 
	E.	NOW,
    THEREFORE, in consideration of the foregoing promises and the mutual covenants herein contained, and for other good and valuable
    consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

 

IT
IS AGREED:

 

	1.	DEFINITION

 

		1.1	Unless
                                         the terms or context of this Agreement provide otherwise:

 

	 	“Affiliate”	 	means,
    with respect to any Person, any other Person controlling or controlled by or under common control with such specified Person.
    
	 	 	 	 
	 	 	 	For
    purposes of this definition, “control” when used with respect to any specified Person means the power to
    direct the management and policies of such Person, directly or indirectly, whether through the ownership of fifty percent
    (50%) or more shares or registered capital with voting right, or voting securities, by contract or otherwise, and the terms
    “controlling”, “controlled by”, “under common control with” and “controlled”
    have meanings correlative to the foregoing;

 

    	 	- 51 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016

 

	 	“Applicable
    Law”	 	means
    applicable law, enactments, regulations and regulatory policies which are in force in the Territory from time to time;
	 	 	 	 
	 	“Approval”	 	means
    any consent, approval, authorization, permission, order, registration, filing, clearance, qualification, license, permit,
    certificate or declaration by any Government Authority or other public, regulatory or governmental agency or authorities in
    the PRC;
	 	 	 	 
	 	“Approved
    Customer”	 	means
    [customers of the Products within the Territory approved by the Board of the Company];
	 	 	 	 
	 	“Aura
    Components”	31.14	means
    the parts and components listed in Part B of Appendix 2 that Aura will supply to the Company pursuant to the Components Supply
    Contract;
	 	 	 	 
	 	“Breach”	 	has
    the meaning given in Section ;
	 	 	 	 
	 	“Business”	 	means
    any business that the Company conducts or intends to conduct and that is not inconsistent with the Company’s business
    license;
	 	 	 	 
	 	“Claim”	31.15	has
    the meaning given in Section 10.2;
	 	 	 	 
	 	“Confidential
    Information”	31.16	has
    the meaning given in Section 7.1;
	 	 	 	 
	 	 "Cooperative
    Condition"	31.17	means
    the Cooperative Condition provided by Aura to the Company based on the terms and conditions of the Joint Venture Contract;
	 	 	 	 
	 	“Day”	31.18	refers
    to a calendar day;
	 	 	 	 
	 	“Defaulting
    Party” or “Breaching Party”	31.19	has
    the meaning given in Section ;
	 	 	 	 
	 	“Dispute”	31.20	has
    the meaning given in Section 12.1;

 

    	 	- 52 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016

 

	 	“Effective
    Date”	31.21	means
    the date given at the beginning of this Agreement;
	 	 	 	 
	 	“Government
    Authority”	31.22	means
    any governmental authority, judicial or administrative body or any other authorities having or asserting jurisdiction over
    the Person or matter with respect to this Agreement including their local branch offices;
	 	 	 	 
	 	“Improvements”	31.23	has
    the meaning given in Section 4.1;
	 	 	 	 
	 	“Infringement”	31.24	has
    the meaning given in Section 8.1;
	 	 	 	 
	 	“Intellectual
    Property” or “IP”	31.25	means
    any intellectual and industrial property rights including but not limited to all rights in patents, utility models, semi-conductor
    topography rights; copyrights, authors’ rights, trade marks, brands, domain names. trade secrets, know-how and other
    rights in information, drawings, logos, plans, database rights, technical notes, prototypes, processes, methods, algorithms,
    any technical-related documentation, any software, registered designs and other designs, in each case, whether registered
    or unregistered and including applications for registration, and all rights or forms of protection having equivalent or similar
    effect anywhere in the world;
	 	 	 	 
	 	“Joint
    Venture Contract”	31.26	means
    the Sino-Foreign Cooperative Joint Venture Contract entered into by AoLunTe and Aura on _____________in relation to
    the establishment of the Company;
	 	 	 	 
	 	“Licensed
    Components”	31.27	means
    the parts and components listed in Part A of Appendix 2 that the Company will manufacture by utilizing the Licensed Technology;
	 	 	 	 
	 	“Licensed
    Technology”	31.28	means[all
    the technologies, technical knowledge and technology information licensed by Aura to the Company under this Agreement for
    the manufacture of the Licensed Components, include without limitation all patents, patentable rights, copyright, design rights,
    utility models, trade secrets, rights in inventions, rights in data, database rights, rights in know-how and confidential
    information, which may be detailed in Appendix 1 and which may take the forms of formulae, diagrams, blueprints, plans, models,
    tables, drawings, designs, process data, computer software, means of testing and quality control, manuals and instructions
    written or recorded, or any other media or devices such as disk, tape, and/or read-only memories];

 

    	 	- 53 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016

 

	 	“Licensed
    Technology Delivery Completion Date”	31.29	means
    the date on which all the conditions set forth in Section 3.1 are satisfied;
	 	 	 	 
	 	“Non-Defaulting
    Parties”	31.30	has
    the meaning given in Section ;
	 	 	 	 
	 	“Components
    Supply Contract”	31.31	means
    the parts and components supply contract to be entered into between the Company and Aura from time to time, in relation to
    the supply of the Aura Components or other parts and components to the Company by Aura;
	 	 	 	 
	 	“Person”	31.32	means
    any individual, company, legal person enterprise, non-legal person enterprise, joint venture, partnership, wholly owned entity,
    unit, trust or other entity or organization, including, without limitation, any government or political subdivision or any
    agency or instrumentality of a government or political subdivision and other body corporate or unincorporated; Person also
    includes a reference to that Person’s legal representatives, assignees, successors or heirs;
	 	 	 	 
	 	“PRC”	31.33	means
    the People’s Republic of China;
	 	 	 	 
	 	“Proceeding”	31.34	has
    the meaning given in Section 9.1;
	 	 	 	 
	 	“Products”	 	means5-kW
    and 8.5-kW mobile power products based on the Licensed Technology, including any assembly, subassembly, component, and any
    part thereof as well as such other products as may be agreed upon from time to time between Aura and the Company;
	 	 	 	 
	 	“Relevant
    Claim”	31.35	has
    the meaning given in Section 10.4; 
	 	 	 	 
	 	“Trademark
    License Agreement”	31.36	means
    the Trademark License Agreement to be entered into between the Company and Aura on or about the date hereof in the form to
    be agreed by the parties in relation to license of certain Aura trademark(s), the key terms of which are set out in Appendix
    3;

 

    	 	- 54 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016

 

	 	“Term”	31.37	has
    the meaning given in Section 11.1;
	 	 	 	 
	 	“Territory”	31.38	means
    the People’s Republic of China and, for the purpose of this Agreement, shall exclude the Special Administrative Region
    of Hong Kong, the Special Administrative Region of Macau, and Taiwan; and
	 	 	 	 
	 	“Third
    Party”	31.39	means
    any Person other than the Parties to this Agreement.

 

	 	1.2	Unless
    the context otherwise requires, the singular includes the plural and vice versa; words used in any gender in this Agreement
    shall include references to all other genders. 
	 	 	 
	 	1.3	The
    headings and sub-headings are inserted for ease of reference only and shall not affect the construction of this Agreement.
	 	 	 
	 	1.4	Any
    references in this Agreement to statutory provisions are references to those provisions as in force at the date of this Agreement
    but include all statutory modifications, re-enactment, replacements, and extensions of those provisions and any subordinate
    legislation or regulations made under such provisions. 
	 	 	 
	 	1.5	The
    expression the “Company” shall, where context permits, include their respective successors, personal representatives
    and permitted assigns.
	 	 	 
	 	1.6	References
    to any document (including this Agreement) are references to that document as amended, consolidated, supplemented, novated
    or replaced from time to time.
	 	 	 
	 	1.7	Any
    capitalized term not defined in this Agreement shall have the meaning provided for such in the Joint Venture Contract. 

 

    	 	- 55 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016

 

	2.	LICENSE
                                         GRANT

 

		2.1	License
                                         Grant

 

	 	 	(a)	Subject
    to the terms and conditions of this Agreement and with effect from the Effective Date and continuing until [_________], Aura
    hereby grants to the Company an exclusive, non-assignable, and royalty-free license, with no right to sublicense, to use the
    Licensed Technology in the Territory solely in connection with:

 

	 	i.	manufacture
    of the Licensed Components;
	 	 	 
	 	ii.	assembly,
    testing, maintenance, and support of the Products;
	 	 	 
	 	iii.	demonstrating,
    distributing, offering to sell and selling the Products, either directly or indirectly, to Approved Customers; and
	 	 	 
	 	iv.	distributing
    the embedded Licensed Technology only as embedded within the Products.

 

	 	 	(b)	Notwithstanding
    the forgoing, the sale of the Products by the Company will require the Company to license to its customers the right to use
    that of the Licensed Technology embedded in Company’s Product for the purpose of operation, updates, and maintenance.
    The Company may only license Aura’s embedded Licensed Technology know-how to Approved Customers pursuant to an End User
    License Agreement approved in writing in advance by Aura governing such Approved Customers’ use of the embedded Licensed
    Technology. The End User License Agreement shall be added to the Product either during the manufacturing and assembly process
    or during the distribution process.
	 	 	 	 
	 	 	(c)	Furthermore,
    in the event that any of the Minimum Sales Targets (as defined in the Joint Venture Contract) is not met and Aura elects not
    to terminate the Joint Venture Contract, the parties agree that the license granted by Aura under Section 2.1(a) above shall
    become a non-exclusive, non-assignable, and royalty-free license, with no right to sublicense immediately upon written notice
    by Aura. All other provisions of this Agreement remain unchanged and the parties undertake to execute any documents and do
    any acts necessary to give effect to the foregoing.
	 	 	 	 
	 	 	(d)	For
    the avoidance of doubt, Aura grants the Company no rights with respect to the Licensed Technology other than the limited license
    set forth in Section 2.1 and the Company agrees that it shall take no action, either directly or indirectly, inconsistent
    with Aura’s IP rights other than as expressly permitted hereunder.

 

		2.2	Acknowledgement
                                         of Aura’s Rights

 

The
Company acknowledges the following:

 

	 	 	(a)	The
    Licensed Technology under which the Licensed Components are manufactured by the Company is highly advanced and requires very
    high standards to be fulfilled in order to produce high quality products.
	 	 	 	 
	 	 	(b)	The
    Company acknowledges that Aura’s ownership of the entire right, title and interest in and to the Licensed Technology
    throughout the world. The Company acknowledges that all use of the Licensed Technology shall not create in the Company any
    ownership or title in the Licensed Technology.

 

    	 	- 56 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016

 

		2.3	Limitation
                                         of License

 

The
conditions under which the license is granted include, but are not limited to, the following:

 

	 	 	(a)	The
    license is personal to the Company, and does not extend to any Affiliate of the Company unless otherwise explicitly specified
    in this Agreement. The license granted herein is strictly limited to the Licensed Technology, the Licensed Components, the
    Products and the Territory specified in this Agreement. The Parties agree that Aura’s Licensed Technology will suffer
    harm if the Company fails to follow all restrictions on the use of the Licensed Technology set forth herein.
	 	 	 	 
	 	 	(b)	The
    Company acknowledges that any right to use the Licensed Technology is limited to the rights expressly granted herein.
	 	 	 	 
	 	 	(c)	During
    the Term of and after the termination of this Agreement, regardless of how the Agreement is terminated, the Company shall
    not, directly or indirectly:

 

	 	 	i.	Adopt,
    or seek to register, or take any other action to establish anywhere in the world ownership rights in any Intellectual Property
    that belongs to Aura;
	 	 	 	 
	 	 	ii.	translate,
    reverse assemble, decompile, disassemble, reverse engineer or otherwise attempt to derive source code (or the underlying ideas,
    algorithms, structure or organization) from any Licensed Technology or components purchased from Aura; 
	 	 	 	 
	 	 	iii.	modify
    or create any modifications to the Licensed Technology;
	 	 	 	 
	 	 	iv.	modify
    or create any modifications to the components purchased from Aura or the Licensed Components;
	 	 	 	 
	 	 	v.	modify
    or create any modifications to the design, form, fit or function of any Product; 
	 	 	 	 
	 	 	vi.	prepare,
    develop, make or have made, sell or otherwise distribute any derivative work based upon any Licensed Technology or embedded
    software; 
	 	 	 	 
	 	 	vii.	sublicense,
    rent, lease, loan, timeshare, sell, distribute, assign or transfer any rights in, grant a security interest in, or transfer
    possession of any Licensed Technology or embedded software, except as expressly provided in the Agreement; 
	 	 	 	 
	 	 	viii.	manufacture
    or have manufactured any Aura Component which shall be purchased from Aura as agreed by the Parties; 
	 	 	 	 
	 	 	ix.	rent,
    sell, lease, loan, or otherwise distribute any Product, Aura Component, Licensed Component for use outside of the Territory,
    except as expressly provided in this Agreement;
	 	 	 	 
	 	 	x.	integrate
    or otherwise incorporate any Aura Component or Licensed Component into any other product or material other than the Products,
    except with the express prior written approval of Aura;

 

	 	 	xi.	adapt,
    implement or otherwise exploit the Licensed Technology or embedded software to develop, create, produce, sell or distribute
    any products or things other than the Products;
	 	 	 	 
	 	 	xii.	obfuscate,
    alter or remove any of Aura’s proprietary rights notices, marking or legends appearing on or in the Product or Aura
    Components; or 
	 	 	 	 
	 	 	xiii.	itself
    do anything, or assist any other Person to do anything, or omit to undertake any reasonable action, which diminishes the rights
    of Aura in the Licensed Technology or its Intellectual Property and/or impairs any registration of the Licensed Technology.

 

    	 	- 57 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016

 

	3.	OBLIGATION
                                         TO PROVIDE LICENSED TECHNOLOGY

 

	 	3.1	The
    obligation of Aura to provide the Licensed Technology in accordance with the terms of this Agreement during the Term shall
    be deemed to have been fulfilled upon satisfaction of the following conditions:

 

	 	 	(a)	[Aura
    has delivered to the Company all items listed in Appendix 1; and
	 	 	 	 
	 	 	(b)	[any
    other conditions].

 

	 	3.2	Aura
    may update Appendix 1 (Licensed Technology) from time to time. The updated Appendix 1 shall be deemed incorporated into this
    Agreement upon Aura providing notice of the updated Appendix 1 to the Company.

 

	4.	IMPROVEMENTS

 

	 	4.1	The
    Parties acknowledge and agree that “Improvement” shall mean any and all modifications to the Licensed Technology
    or the Intellectual Property devised and/or implemented either by the Company independently of Aura or jointly by the Company
    and Aura.
	 	 	 
	 	4.2	For
    the avoidance of doubt, modifications devised and/or implemented by Aura pursuant to separate written commissioned development
    arrangements for the Company (“Commissioned Development”) shall not be included in the meaning of Improvements
    for purposes of this Agreement. The Parties may enter into separate commissioned development agreements for the development
    of any modifications or other technology and such agreements shall expressly specify the party that is to own the right, title
    and interests in and to any Commissioned Development devised or implemented as a result of such commissioned development agreement;
    in the absence of such ownership specification, the Commissioned Development shall be considered and treated as an Improvement
    and ownership shall be as specified in Section 4.3 below.

 

    	 	- 58 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016

 

	 	4.3	Ownership
    of Improvements
	 	 	 
	 	 	Aura
    and the Company agree that Aura exclusively shall own all right, title, and interest in and to any and all Improvements. If
    the Improvements are deemed not to vest in Aura, for any reason whatsoever, the Company agrees to, and hereby does, irrevocably
    assign, transfer and convey to Aura all rights, title and interests in and to any Improvements. In the event that, as a matter
    of law, any of the foregoing rights are not assignable by the Company to Aura, the Company shall, and hereby does, grant to
    Aura an exclusive, irrevocable, worldwide, perpetual, royalty-free, paid-up sub-licensable right and license to all such rights
    for any purpose whatsoever.
	 	 	 
	 	4.4	Protection
    of Improvements
	 	 	 
	 	 	Aura
    may, using such legal counsel it selects to prepare, file, prosecute, maintain and extend applications to protect the Intellectual
    Property Rights associated with the Improvements in countries of Aura’s choosing (including without limitation the Territory),
    provided that such application shall not violate any confidentiality obligations set forth in this Agreement.
	 	 	 
	 	4.5	Assistance
	 	 	 
	 	 	The
    Company shall both during and after termination of this Agreement provide such assistance as Aura may require to establish
    Aura’s ownership rights in and to the Improvements, including but not limited to, providing assistance in securing and
    enforcing patent protection, copyright registrations and other proprietary rights in any and all countries, and signing all
    documents necessary for patent, copyright, other applications and registrations, and any assignments thereof, and supplemental
    filings or declarations and all other legal documents as Aura may request.
	 	 	 
	 	4.6	Consideration
	 	 	 
	 	 	The
    Parties acknowledge that consideration for the ownership, assignment, transfer, or conveyance of the Improvements consists
    of the favorable terms of the license and the substantial benefits derived by the Company from the trademark license from
    Aura to the Company set forth in the Trademark License Agreement, therefore no further consideration payable in respect thereof
    is necessary.
	 	 	 
	 	4.7	Notice
	 	 	 
	 	 	The
    Company agrees to immediately provide full details to Aura of any developments relating to any Improvements conceived, developed,
    created, or made by the Company alone or in conjunction with Aura. The Company shall keep complete, clear, and accurate records
    with respect to any Improvements, research and development planned or in progress, technologies developed or in early stages
    of development, including but not limited to any technical specifications, technical drawings, software code, designs, prototypes,
    technical notes, that may form the basis of or lead to the creation of any Improvements. Aura or its designated representative
    shall have the right to inspect and audit the records at any reasonable time during business hours and the Company shall make
    such records available upon Aura’ request. The audit shall be conducted at Aura’ expense. Within thirty (30) Days
    following the end of each calendar quarter during the Term of this Agreement, the Company shall prepare and deliver to Aura
    a written report in English, describing in detail any Improvements made or conceived during such calendar quarter.

 

    	 	- 59 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016

 

	 	4.8	Rights
    of Third Parties and Employees
	 	 	 
	 	 	To
    the fullest extent necessary and permitted under applicable contracts or laws, the Company shall obtain an assignment from
    each of its employees, contractors, and third parties involved in the conception, development, creation, or making of any
    Improvements of all rights, title and interests in the Improvements for the benefit of the Company, in order that the Company
    may in turn assign such ownership rights to Aura as required under Section 4.3 above.

 

	5.	AURA’S
                                         WARRANTIES, RIGHTS AND OBLIGATIONS

 

	 	5.1	Aura’s
    Warranties 
	 	 	 
	 	 	As
    at the Effective Date of this Agreement, Aura warrants that in respect of the Licensed Technology:

 

	 	 	(a)	Aura
    or its Affiliate is the sole unencumbered legal and beneficial owner and, where registered, the sole registered proprietor
    of all the Licensed Technology.

 

	 	5.2	Other
    than as set out in this Agreement, no representation, warranty or condition, express or implied, statutory or otherwise is
    given by Aura to the Company in respect of the Licensed Technology and any other representations and warranties are hereby
    expressly excluded save to the extent prohibited by Applicable Law. For the avoidance of doubt, nothing in this Agreement
    shall constitute any representation or warranty or condition that any registrable Licensed Technology is not subject to challenge
    or invalidation. 
	 	 	 
	 	5.3	Aura’
    Rights

 

	 	 	(a)	Aura
    shall have access to the Products manufactured by the Company utilizing the Licensed Technology under this Agreement, in order
    to ensure that the Products are manufactured with the quality required by Aura.
	 	 	 	 
	 	 	(b)	Aura
    may, at its discretion, submit quality reports indicating insufficiencies in the manufacturing process or quality to the Company.
    If such a quality report is submitted to the Company, then the Company must correct the stated insufficiencies or submit to
    Aura a plan for correcting the insufficiencies suitable to Aura within thirty (30) days. Failure to submit a timely response
    suitable to Aura, in its sole and reasonable discretion, shall be considered a material breach.

 

	 	5.4	Aura’s
    Obligations
	 	 	 
	 	 	In
    the event that there are any errors in the Licensed Technology, Aura shall correct any errors or omissions in the information
    relating to the Licensed Technology from time to time without incurring any liability to the Company.

 

    	 	- 60 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016

 

	6.	COMPANY’S
                                         OBLIGATIONS

 

	 	6.1	Recordable
    of License
	 	 	 
	 	 	To
    the extent required by applicable PRC laws and regulations, the Company shall, at its own cost, effect the recordable of this
    Agreement with the relevant PRC recordable authorities within sixty (60) Days from the execution of this Agreement including,
    without limitation, preparation, execution and filing of any necessary documentation to the relevant PRC recordable or Approval
    authorities. The Company shall furnish Aura with any and all copies of the documentation issued by the relevant PRC recordable
    or Approval authorities as evidence of the recordable application. Aura shall provide reasonable assistance, at the Company’s
    cost, to enable the Company to comply with this Section 6.1.
	 	 	 
	 	6.2	Quality
    Control
	 	 	 
	 	 	The
    Company shall ensure that the Products are safe for the use for which they were intended. In order to maintain the quality
    of the Products manufactured by the Company under this Agreement and to develop a method to continuously reduce the costs
    of producing the Products, Aura shall provide quality control standards to the Company and the Company shall establish a quality
    management system and quality operating standards (QOS) that are appropriate for the Company’s business and that govern
    each process in the manufacture of the Products to add value in the overall manufacturing process, to obtain results of process
    performance and effectiveness and to achieve continual improvement of each process based upon an objective measurement. The
    QOS shall at all times meet or exceed all quality control standards prescribed by Aura. At a minimum, the QOS shall include
    at least all of the following: (i) a continuous improvement plan aimed at the elimination of manufacturing defects and (ii)
    documentation of all processes and procedures, including root cause analysis, corrective action development and tracking plans,
    recovery and communication plans, and a statistical measurement process. The documentation of the documented QOS processes
    and procedures, and any reports generated by these shall be made available to Aura upon request for auditing purposes for
    compliance with the requirements hereunder, which audits shall occur on a basis not more frequent than quarterly.
	 	 	 
	 	6.3	Reports

 

	 	 	(a)	Within
    thirty (30) Days following the end of each calendar quarter during the term of this Agreement, the Company shall prepare and
    deliver to Aura a written report in English describing in detail any Improvements made or conceived during such calendar quarter.
	 	 	 	 
	 	 	(b)	Within
    ninety (90) Days following the end of each calendar year during the term of this Agreement, the Company shall prepare and
    deliver to Aura a written summary report in English describing the manufacturing, research and development, and commercialization
    of Products during such calendar year.

 

    	 	- 61 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016

 

	 	6.4	Employee
    IP Agreement
	 	 	 
	 	 	The
    Company shall cause each of its employees to execute a written Employee IP Agreement (or shall include provisions relating
    to employment IP in its employees’ labor contracts), by the terms of which each such employee acknowledges and agrees
    that (i) he or she has no rights, title or interests whatsoever in or to any of the Products, Improvements, or Intellectual
    Property Rights that may arise from the employee’s execution of his or her tasks or duties, (ii) to the extent such
    employee acquires any such rights by operation of law or otherwise, he or she irrevocably assigns any and all such rights
    to the Company, and (iii) he or she shall maintain in confidence all confidential information belonging to Aura and the Company
    and not make use of any such confidential information during or after employment for any purpose other than for fulfilling
    his or her assignments in or responsibilities for the Company. The Company shall furnish Aura with copies of any such Employee
    IP Agreement executed by the Company’s employees, as and when requested by Aura.
	 	 	 
	 	6.5	Additional
    Obligations

 

	 	 	(a)	The
    Company shall obtain at its own expense all licenses, permits and consents necessary for the import and sales of the Aura
    Components in the Territory;
	 	 	 	 
	 	 	(b)	The
    Company shall only make use of the Licensed Technology for the purposes authorized in this Agreement;
	 	 	 	 
	 	 	(c)	The
    Company shall comply with all regulations and practices in force in the Territory to safeguard Aura’ rights in the Licensed
    Technology; 
	 	 	 	 
	 	 	(d)	The
    Company acknowledges and agrees that the exercise of the license granted to the Company under this Agreement is subject to
    all Applicable Laws in the Territory, and the Company understands and agrees that it shall at all times be solely liable and
    responsible for such due observance and performance. For the avoidance of doubt, any noncompliance with the Applicable Law
    or infringement of any Third Party’s right due to defects in the Licensed Technology and / or the kits / equipment provided
    by Aura shall be excluded from the above acknowledgement and agreement; and
	 	 	 	 
	 	 	(e)	The
    Company shall, and cause its directors, officers or employees, at any time during the Term of this Agreement, comply with
    all the Applicable Laws and regulations to carry out its Business (including but not limited to the PRC anti-bribery and anti-corruption
    laws and regulations, the United States Foreign Corrupt Practices Act, and the PRC and United States export control laws).

 

	7.	CONFIDENTIALITY

 

	 	7.1	“Confidential
    Information” means technology and know-how as well as trade secrets, strategic business or marketing information,
    business projections, secret processes and other processes, data, formulae, programs, manuals, designs, sketches, photographs,
    plans, drawings, specifications, reports, studies, findings, non-patented inventions and ideas, and other information relating
    to the production, packaging, use, pricing, or sales and distribution, whether of a technical, engineering, operational, business
    or economic nature, which is designated as “Confidential” by Aura or its Affiliates and provided by Aura
    to the Company in connection with the Licensed Technology, the Improvements and any matters related thereto, the implementation
    of and/or the conduct of the business contemplated by this Agreement and the other contracts contemplated herein.

 

    	 	- 62 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016

 

	 	7.2	Confidentiality
    Obligation
	 	 	 
	 	 	During
    the Term of this Agreement and following the expiration or earlier termination of this Agreement, the Company shall maintain
    in confidence all Confidential Information disclosed by Aura and shall not disclose or grant the use of such Confidential
    Information without express written permission of Aura except on a need-to-know basis to those directors, officers, employees,
    consultants, contractors or permitted assignees, to the extent such disclosure is reasonably necessary in connection with
    the Company’s activities as expressly authorized by this Agreement.
	 	 	 
	 	7.3	The
    Company shall obtain written confidentiality agreements from its employees and any Third Party consultant or subcontractors
    performing work on the Company’s behalf, which contain terms and obligations with respect to access to or use of any
    Confidential Information no less restrictive than those set forth in this Agreement. The Company shall notify Aura promptly
    upon discovery of any unauthorized use or disclosure of any Confidential Information.
	 	 	 
	 	7.4	If
    Confidential Information is required to be disclosed by the Company pursuant to a requirement of a governmental authority,
    such Confidential Information may be disclosed pursuant to such requirement so long as the Company, to the extent possible,
    provides Aura with timely prior notice of such requirement and coordinates with Aura in an effort to limit the nature and
    scope of such required disclosure. 
	 	 	 
	 	7.5	This
    Section 7 shall remain in full force and effect notwithstanding any expiration or termination of this Agreement.

 

	8.	THIRD
                                         PARTY INFRINGEMENT OF AURA’S IP

 

	 	8.1	The
    Company shall promptly deliver a notice, in writing, to Aura if the Company becomes aware of any infringement (whether known,
    suspected, or threatened), of any of the Licensed Technology or Aura’s Intellectual Property by any party during the
    Term of this Agreement, including by Sheng Feng or any of its Affiliates (an “Infringement”).
	 	 	 
	 	8.2	Subject
    to Section 8.4 below, Aura shall have the exclusive right, at Aura’s expense, to commence, prosecute and settle any
    proceedings with respect to an Infringement. Aura shall have the sole right to appoint counsels and shall pay all expenses
    of any such proceedings including, without limitation, legal fees and related costs, and shall recover all damages awarded.
    
	 	 	 
	 	8.3	If
    necessary or requested by Aura during or after the Term of this Agreement, the Company shall join as a party, as permitted
    by Applicable Law, to the Infringement proceedings and render other reasonable assistance. At Aura’s request and expense,
    the Company shall provide reasonable assistance to Aura in connection with the Infringement proceedings. Aura shall not settle
    any Infringement proceedings involving the Company’s rights without obtaining the Company’s prior written consent,
    which shall not be unreasonably withheld or delayed. Aura shall give the Company an opportunity to make suggestions and comments
    regarding any such proceedings and shall keep the Company reasonably informed of, and shall regularly consult with the Company
    regarding, the status of any such proceedings. The Company shall not take any legal action nor engage in the settlement of
    any legal matter with respect to the Products, Licensed Technology and other IP rights of Aura without the written consent
    of Aura. The Company shall at all times cooperate fully with Aura in such legal proceedings.
	 	 	 
	 	8.4	In
    the event of Infringement by AoLunTe the Company, or any of their respective Affiliates, the Company shall indemnify
    and hold harmless Aura with respect to any damages, liabilities, costs, fees, or other expenses of any nature (including reasonable
    legal fees and related costs) caused by such Infringement. 

 

    	 	- 63 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016

 

	9.	THIRD
                                         PARTY INFRINGEMENT ACTIONS AGAINST THE COMPANY

 

	 	9.1	If
    a Third Party initiates an action, suit or proceeding against the Company in the Territory claiming that a patent or other
    right owned by it is infringed by the manufacture, use, sale or importation of any Licensed Technology (a “Proceeding”),
    Aura shall have the sole right, at its own expense, but not the obligation, to defend against such Proceeding. In the event
    that Aura elects to defend against such Proceeding, Aura shall have the sole right to direct the defense and to elect whether
    to settle such claim. In the event that Aura elects not to defend against a particular Proceeding, then it shall so notify
    the Company in writing within five (5) Days after it first received written notice of the actual initiation of such Proceeding
    and, during such five (5) Day period, shall take such reasonable measures as may be necessary to preserve the Company’s
    legal right to defend against such Proceeding. In such event, the Company shall defend, at its own expense, against such Proceeding
    and shall have the right to direct the defense thereof, including without limitation the right to settle such claim (but only
    with the written consent of Aura, not to be unreasonably withheld). In any event, the Parties shall reasonably assist one
    another and cooperate in any such litigation at the other’s request without expense to the requesting Party. Each Party
    may, at its own expense, and with its own counsel join any defense directed by the other Party. The Company shall provide
    Aura with prompt written notice of the initiation of any such Proceeding, or of any allegation of infringement of which such
    Party becomes aware, and shall promptly furnish Aura with a copy of each communication relating to the alleged infringement
    that is received by the Company.
	 	 	 
	 	9.2	Aura
    shall indemnify the Company against any awards awarded by a court pursuant to a final, unappealable judgment or decree in
    any Proceeding subject to Section 9.1, that may be assessed against the Company due to Infringement arising from the Company’s
    manufacture, use, sale or importation of any Licensed Technology, except to the extent caused by the Company.
	 	 	 
	 	9.3	If
    a payment due from Aura under this Section 9 is subject to tax (whether by way of direct assessment or withholding at its
    source), the Company shall be entitled to receive from Aura such amounts as shall ensure that the net receipt, after tax,
    to the Company in respect of the payment is the same as it would have been were the payment not subject to tax.

 

    	 	- 64 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016

 

	10.	LIABILITY,
                                         INDEMNITY AND INSURANCE

 

	 	10.1	To
    the fullest extent permitted by law, Aura shall not be liable to the Company for any costs, expenses, losses or damages (whether
    direct, indirect or consequential and whether economic or other) arising from the Company’s exercise of the rights granted
    to it under this Agreement, unless the said costs, expenses, losses or damages are directly caused by Aura’s breach
    of its representations and warranties in Section 5.
	 	 	 
	 	10.2	The
    Company shall indemnify Aura against all liabilities, costs, expenses, damages or losses, including any direct, indirect or
    consequential losses, loss of profit, loss of reputation and all interests, penalties and legal and other reasonable professional
    costs and expenses (each a “Claim”) suffered or incurred by Aura arising out of or in connection with the
    Company’s exercise of its rights granted under this Agreement or any breach by the Company of the terms of this Agreement,
    including any product liability claim relating to Products manufactured, supplied or put into use by the Company.
	 	 	 
	 	10.3	The
    Company shall not be required to indemnify Aura to the extent (but only to the extent) that a Claim results from Aura’s
    negligence or misconduct or a material defect in the Licensed Technology.
	 	 	 
	 	10.4	If
    any Third Party makes a claim, or notifies the Company of an intention to make a claim, against Aura which may reasonably
    be considered likely to give rise to a liability under this indemnity (a “Relevant Claim”), the Company
    shall:

 

	 	 	(a)	as
    soon as reasonably practicable, give written notice of the Relevant Claim to Aura specifying the nature of the Relevant Claim
    in reasonable detail;
	 	 	 	 
	 	 	(b)	not
    make any admission of liability, agreement or compromise in relation to the Relevant Claim without the prior written consent
    of Aura;
	 	 	 	 
	 	 	(c)	give
    Aura and its professional advisers access at reasonable times (on reasonable prior notice) to its premises and its officers,
    directors, employees, agents, representatives or advisers, and to any relevant assets, accounts, documents and records within
    the power or control of the Company, so as to enable Aura and its professional advisers to examine them and to take copies
    for the purpose of assessing the Relevant Claim; and
	 	 	 	 
	 	 	(d)	subject
    to Aura providing security to the Company to the Company’s reasonable satisfaction against any claim, liability, costs,
    expenses, damages or losses which may be incurred, take such action as Aura may reasonably request to avoid, dispute, compromise
    or defend the Relevant Claim.

 

	 	10.5	If
    a payment due from the Company under this Section is subject to tax (whether by way of direct assessment or withholding at
    its source), Aura shall be entitled to receive from the Company such amounts as shall ensure that the net receipt, after tax,
    to Aura in respect of the payment is the same as it would have been were the payment not subject to tax.
	 	 	 
	 	 	required
    insurance from a reputable insurance company authorized to do business in the PRC.
	 	 	 
	 	10.7	Nothing
    in this Agreement shall have the effect of excluding or limiting any liability for death or personal injury caused by negligence
    or for fraud.

 

    	 	- 65 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

 

	11.	TERMINATION
                                         AND LIABILITY FOR BREACH OF CONTRACT

 

	 	11.1	Expiration
	 	 	 
	 	 	Unless
    earlier terminated pursuant to Sections 11.2, 11.3 or 11.4 the term of this Agreement (“Term”) shall commence
    on the Effective Date and shall continue until the Joint Venture Contract expires or is terminated.
	 	 	 
	 	11.2	Termination
    for Cause
	 	 	 
	 	 	A
    Party shall have the right to terminate this Agreement by providing written notice (“Termination Notice”)
    to the other Party if any of the following events occur:

 

	 	 	(a)	any
    of the Parties (“Defaulting Party”) is in Breach of this Agreement and, where such default is capable of
    remedy, fails to remedy it within thirty (30) Days after the service of a written notice from the other Party (“Non-defaulting
    Parties”) of such default; or
	 	 	 	 
	 	 	(b)	the
    conditions or consequences of Force Majeure events (as hereinafter defined in Section 13.4) significantly interferes with
    the normal functioning of either Party and the Parties have been unable to find a solution for a period in excess of six (6)
    months.
	 	 	 	 
	 	 	(c)	any
    other reasons for termination stipulated in this Agreement have arisen.

  

	 	11.3	Reorganization
	 	 	 
	 	 	Aura may, at its
    sole discretion, determine to have the rights and licenses granted to the Company under this Agreement be provided through
    a subsidiary or affiliate of Aura. For the avoidance of doubt, nothing in this Section shall affect Aura’ obligations
    under this Agreement.
	 	 	 
	 	11.4	Cessation of
    Business
	 	 	 
	 	 	This Agreement shall
    terminate immediately if:

 

(a)
the Company becomes insolvent;

 

(b)
a termination application is filed by the Company with the Examination and Approval Authority to liquidate the Company; or

 

(c)
the Company has filed against it a petition under any bankruptcy code (or any similar petition under any insolvency law of any
jurisdiction).

 

    	 	- 66 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

		11.5	Effect
                                         of Expiration or Termination

 

	 	 	(a)	Upon
    expiration or termination of this Agreement, the Company shall (i) cease all use of the Licensed Technology, and (ii) immediately
    return or destroy or cause to be returned or destroyed (at Aura’ option) all tangible Confidential Information, all
    copies made available by or through the Company, molds, if supplied, and permanently erase all Confidential Information from
    any computer and storage media, return all equipment according to the terms of any such equipment supply contract, and certify
    in writing to Aura that it has complied with the requirements of this Section. In addition Aura shall have the right to purchase
    any inventory held by the Company.
	 	 	 	 
	 	 	(b)	The
    Company agrees that upon expiration or termination of this Agreement, Aura shall have a right of first refusal to purchase
    the Company’s ownership share of the Improvements. In the event that Aura elects to purchase the Company’s ownership
    share of the Improvements from the Company, Aura shall give written notice of its election to the Company. Within the [30-Day]
    period after the Company receives such written notice, the Parties shall negotiate a mutually agreeable agreement for the
    purchase of the Company’s ownership share of the Improvements.
	 	 	 	 
	 	 	(c)	Expiration
    or termination of this Agreement shall not relieve the Parties of any obligation accruing prior to such expiration or termination,
    and the provisions of Sections 7 (Confidentiality), 9 (Third Party Infringement Actions Against the Company), 12 (Dispute
    Resolution), 11.5(a), and 11.5(b) shall survive the expiration or termination of this Agreement.

 

	 	11.6	Nothing
    in this Section 11 shall prevent Aura from seeking an injunction against the Company or its Affiliates to prevent an infringement
    of any Licensed Technology or its IP. 
	 	 	 
	 	11.7	If
    a Party (“Defaulting Party”) fails to perform any of its obligations under this Agreement or is in breach
    of any of the representations and warranties hereunder, such Party commits a material breach of this Agreement (“Breach”).
	 	 	 
	 	11.8	The
    Defaulting Party shall be liable for all losses, damages, costs or expenses whatsoever suffered or incurred by the other Parties
    including reasonable attorney fees (“Non-Defaulting Parties”).

 

	12.	DISPUTE
                                         RESOLUTION

 

	 	12.1	Consultations
	 	 	 
	 	 	In
    the event of any dispute, controversy or claim arising out of or in connection with the interpretation or implementation of
    this Agreement including without limitation any question regarding its existence, validity, interpretation, termination, or
    any claim for the threatened, alleged, or actual breach of this Agreement by either Party (each a “Dispute”),
    the Parties shall attempt in the first instance to resolve such dispute through friendly consultations. If the Dispute is
    not resolved in this manner within sixty (60) Days after the date on which one Party has served written notice on the other
    Party for the commencement of such consultations, then either Party may refer the Dispute to arbitration in accordance with
    the provisions of Section 12.2 hereof.

 

    	 	- 67 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

	 	12.2	Arbitration
	 	 	 
	 	 	In
    the event that a Dispute is not resolved through the consultations in Section 12.1, the Dispute shall be submitted to [the
    Hong Kong International Arbitration Centre (“HKIAC”) in Hong Kong], for arbitration under the Hong Kong
    International Arbitration Centre Administered Arbitration rules then in force, subject to the following:

 

	 	 	(a)	any
    arbitration shall be conducted with three arbitrators; the Company and Aura each shall appoint one (1) arbitrator, with the
    third arbitrator to be appointed by [the HKIAC];
	 	 	 	 
	 	 	(b)	any
    arbitration proceedings commenced pursuant to this Agreement shall commence within ten (10) Days of the appointment of the
    arbitrators and shall conclude within fourteen (14) Days of such commencement, unless the proceedings are otherwise extended
    by mutual written agreement;
	 	 	 	 
	 	 	(c)	in
    reaching a decision, the arbitrator shall apply and adhere to the laws specified in Section 13.2 of this Agreement;
	 	 	 	 
	 	 	(d)	the
    arbitration shall be conducted in both Chinese and English; and
	 	 	 	 
	 	 	(e)	this
    Section 12.2 is without prejudice to each Party’s right to seek interim relief against the other Party (such as an injunction)
    through the courts to protect its rights and interests in respect of infringements of Intellectual Property rights.

 

	 	12.3	Effect
    of Arbitration Award
	 	 	 
	 	 	Subject
    to Section 12.2(e), the arbitration award shall be final and binding on the Parties, and the Parties agree to be bound hereby
    and to act accordingly.
	 	 	 
	 	12.4	Costs
	 	 	 
	 	 	The
    costs of arbitration (including, without limitation, attorney fees) shall be borne by the Party as designated in the arbitration
    award.
	 	 	 
	 	12.5	Continuing
    Rights and Obligations
	 	 	 
	 	 	When
    any dispute occurs and when any dispute is under arbitration, except for the matters under dispute, the Parties shall continue
    to exercise their remaining respective rights, and fulfill their remaining respective obligations under this Agreement.
	 	 	 
	 	12.6	Waiver
    of Immunity
	 	 	 
	 	 	In
    any arbitration proceedings and any legal proceedings to enforce any arbitration award and in any legal action among the Parties
    pursuant to or relating to this Agreement, each Party expressly waives the defense of sovereign immunity and any other defense
    based on the fact or allegation that it is an agency or instrumentality of a sovereign state.

 

    	 	- 68 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

	13.	MISCELLANEOUS

 

	 	13.1	Effectiveness
	 	 	 
	 	 	This
    Agreement shall take effect upon the execution of this Agreement by both Parties.
	 	 	 
	 	13.2	Governing
    Law
	 	 	 
	 	 	This
    Agreement shall be governed by and construed in accordance with the laws of [the PRC], without regard to the conflicts of
    law principles thereof.
	 	 	 
	 	13.3	Further
    Assurances
	 	 	 
	 	 	Each
    Party shall (and shall use reasonable endeavors to procure that any Affiliate shall) at its own costs, from time to time on
    request, do all acts and/or execute all documents in a form reasonably satisfactory to the other Party which that other Party
    may reasonably consider necessary for giving full effect to this Agreement and securing to that other Party the full benefit
    of the rights, powers and remedies conferred upon that other Party pursuant to this Agreement.
	 	 	 
	 	13.4	Force
    Majeure
	 	 	 
	 	 	Neither
    Party shall be held liable or responsible to the other party nor be deemed to have defaulted under or breached this Agreement
    for failure or delay in fulfilling or performing any term of this Agreement to the extent, and for so long as, such failure
    or delay is caused by or results from causes beyond the reasonable control of the affected party including but not limited
    to fire, floods, embargoes, war, acts of war (whether war be declared or not), insurrections, riots, civil commotions, strikes,
    or other labor disturbances, acts of God or acts, omissions or delays in acting by any governmental authority. 
	 	 	 
	 	13.5	No
    Assignment
	 	 	 
	 	 	Neither
    this Agreement nor any right or obligation hereunder may be assigned or otherwise transferred (whether voluntarily, by operation
    of law, in connection with a change in control or otherwise) by Aura or the Company; provided, however, that Aura may, without
    such consent, assign this Agreement and its rights and obligations hereunder:

 

	 	 	a.	in
    connection with the transfer or sale of all or substantially all of its business or assets related to this Agreement; or 
	 	 	 	 
	 	 	b.	in
    the event of its merger, consolidation, change in control or other similar transaction.

 

	 	 	Any
    permitted assignee shall assume all obligations of its assignor under this Agreement. Any purported assignment or transfer
    in violation of this Section 13.5 shall be void.

 

    	 	- 69 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

	 	13.6	Entire
    Agreement
	 	 	 
	 	 	This
    Agreement contains the entire understanding of the parties with respect to the subject matter hereof. All express or implied
    representations, agreements and understandings, either oral or written, heretofore made are expressly superseded by this Agreement.
	 	 	 
	 	13.7	Severability
	 	 	 
	 	 	If
    any provision of this Agreement should be or become fully or partially invalid, illegal or unenforceable in any respect for
    any reason whatsoever, the validity, legality and enforceability of the remaining provisions of this Agreement shall not in
    any way be affected or impaired thereby.
	 	 	 
	 	13.8	No
    Partnership or Agency
	 	 	 
	 	 	Nothing
    in this Agreement shall be deemed to constitute a partnership between the Parties, nor constitute either Party the agent of
    the other Party or, in the case of the Company, any of Aura’s Affiliates, for any purpose.
	 	 	 
	 	13.9	Waiver
	 	 	 
	 	 	The
    waiver by a party of any right hereunder, or of any failure to perform or breach by the other party hereunder, shall not be
    deemed a waiver of any other right hereunder or of any other breach or failure by the other party hereunder whether of a similar
    nature or otherwise.
	 	 	 
	 	13.10	Amendments
	 	 	 
	 	 	Any
    amendment to this Agreement shall not be binding on the Parties unless set out in writing, expressed to amend this Agreement
    and signed by authorized representatives of each of the Parties.
	 	 	 
	 	13.11	Counterparts
	 	 	 
	 	 	This
    Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together
    shall constitute one and the same instrument.
	 	 	 
	 	13.12	Languages
	 	 	 
	 	 	This
    Agreement is signed in both English and Chinese. Both the English version and the Chinese version of this Agreement are of
    equal effect.
	 	 	 
	 	13.13	Notices
	 	 	 
	 	 	Any
    consent, notice or report required or permitted to be given or made under this Agreement by one of the parties to the other
    shall be in writing in the English language and addressed to such other party at its address indicated below, or to such other
    address as the addressee shall have last furnished in writing to the addressor, and shall be effective upon receipt by the
    addressee.

 

    	 	- 70 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

	 	 	To
    Aura	 	 
	 	 	 	 	 
	 	 	Address:	10541
    Ashdale Street Stanton California	 
	 	 	 	 	 
	 	 	Postal
    Code:	90680	 
	 	 	 	 	 
	 	 	Fax:	 	 
	 	 	 	 	 
	 	 	Attention:	CEO	 
	 	 	 	 	 
	 	 	To
    the Company	 	 
	 	 	 	 	 
	 	 	Address:	 	 
	 	 	 	 	 
	 	 	Postal
    Code:	 	 
	 	 	 	 	 
	 	 	Fax:	 	 
	 	 	 	 	 
	 	 	Attention:	 	 

 

IN
WITNESS WHEREOF, the Parties or their duly authorized representatives have executed this Agreement on the Effective Date.

 

	SIGNED
    by _________________, the authorized 	 	 
	representative,
    for and on behalf of	 	 
	AURA
    systems, INC.	 	 
	in
    the presence of	 	 
	 	 	 

 

	SIGNED
    by _________________, the authorized 	 	 
	representative,
    for and on behalf of	 	 
	[Name
    of JV]	 	 
	 	 	 
	in
    the presence of	 	 
	 	 	 
	Company
    seal:	 	 

 

    	 	- 71 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

Appendix
1 - Licensed Technology

 

[Aura
to detail exactly what is being provided, e.g. manuals, programs, drawings, etc.]

 

	 	1.	Engineering
    drawings of the generator components (not including the rotor)
	 	 	 
	 	2.	User
    manuals
	 	 	 
	 	3.	Installation
    manual
	 	 	 
	 	4.	Service
    manual
	 	 	 
	 	5.	Training
    manual
	 	 	 
	 	6.	Sales
    training manual
	 	 	 
	 	7.	Sales/marketing
    presentation
	 	 	 
	 	8.	Production
    equipment specifications
	 	 	 
	 	9.	Testing
    equipment specifications
	 	 	 
	 	10.	Production
    floor plan

 

    	 	- 72 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

Appendix
2 - Components

Part
A - Licensed Components

 

	 	GENERATOR	 	licensed
	 	 	 	 
	 	 	Housing
    Cast parts	Build
    to print	ok
	 	 	Stator
    and winding	Build
    to print	ok
	 	 	Vacuum
    impregnation	To
    specs	ok
	 	 	Cooling
    fans	Build
    to print	ok
	 	 	Cover	Build
    to print	ok
	 	 	Connecting
    block	Build
    to print	ok
	 	 	Shaft	Build
    to print	ok
	 	 	Power
    & signal cable	Build
    to print	ok
	 	 	 	 	 
	 	ECU	 	 	 
	 	 	 	 	 
	 	 	Chassis
    Cast part	Build
    to print	ok
	 	 	Cover	Build
    to print	ok
	 	 	Chokes	Build
    to print	ok
	 	 	Bus
    bars	Build
    to print	ok
	 	 	Internal
    cable harness	Build
    to print	ok
	 	 	Speed
    sensor	 	ok
	 	 	All
    Circuit boards	Build
    to print	OK
	 	 	Thermo
    sensors	 	ok
	 	 	 	 	 
	 	ICS	 	 	 
	 	 	 	 	 
	 	 	Chassis	Build
    to print	ok
	 	 	 	 	 
	 	Control
    Panel	Build
    to print	ok

 

    	 	- 73 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

Part
B - Aura Components

 

Not
licensed to build

 

	 	 	Rotor
	 	 	 
	 	 	All
    imbedded software

 

    	 	- 74 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

Schedule
2 -AoLunTe Asset Contribution Agreement

 

	1.	 	Land site consisting of about 32,000 square meters costing
    approximately	 	$	1,180,000	 
	2.	 	Construction of about 16,000 square meters of manufacturing facility
    costing approximately	 	$	2,000,000	 
	3	 	Construction of about 12,400 square meters of office and laboratory
    facility costing approximately	 	$	3,000,000	 
	4.	 	Furniture, fixtures and equipment costing approximately	 	$	3,070,000	 
	 	 	 	 	$	9,250,000	 
	5.	 	Working Capital	 	$	500,000	 
	 	 	Total USD	 	$	9,750,000	 

 

    	 	- 75 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

Schedule
3- Key Terms of Consulting Services Agreement

 

Aura
and AoLunTe agree the following key terms shall be included in the Consulting Services Agreement (the “Agreement”):

 

	 	●	Aura
    shall provide consulting services to the Joint Venture in accordance with the terms of the Agreement.
	 	 	 
	 	●	For
    a maximum period of six (6) months from the first day Aura provides the Consulting Service on request by AoLunTe, Aura agrees
    to provide up to 160 hours per month of technical support free of hourly charges. The Joint Venture shall reimburse Aura for
    all out-of-pocket costs and expenses, including (but not limited to)transportation, visa costs, lodging, venue and facility
    rental, meals and catering and other per diem subsistence costs that Aura incurs in performing its obligations to provide
    the technical support;
	 	 	 
	 	●	After
    the six(6) month period, the Joint Venture may, on an as-needed basis, contract with Aura for consulting services at Aura’s
    standard consulting hourly rate in effect at the time such services are rendered, unless agreed otherwise, in writing, by
    Aura and the Joint Venture. All other terms shall be mutually agreed upon by Aura and the Joint Venture.
	 	 	 
	 	●	Any
    intellectual property developed by Aura employees or agents, in collaboration with employees of the Joint Venture, shall be
    deemed exclusive property of Aura and shall be incorporated into and subject to the Technology License agreement between Aura
    and the Joint Venture. But the Joint Venture has the right to use such intellectual property freely. Aura shall not, with
    any reason, charge the Joint Venture any fee for using the intellectual property.
	 	 	 
	 	●	The
    Joint Venture shall pay for all travel, lodging, venue and facility rental, meals and catering and other per diem subsistence
    costs incurred by its employees.
	 	 	 
	 	●	In
    addition to any hourly charges for technical consulting, the Joint Venture shall reimburse Aura for all out-of-pocket costs
    and expenses, including (but not limited to)transportation, visa costs, lodging, venue and facility rental, meals and catering
    and other per diem subsistence costs that Aura incurs in performing its obligations to provide technical support under the
    Agreement.

 

    	 	- 76 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

Schedule
4-Major Decisions

 

Except
as otherwise provided in this Contract, a “Major Decision” is any decision regarding:

 

	1)	any
    amendment of the Articles of Association;
	 	 
	2)	increase
    or decrease of the Registered Capital;
	 	 
	3)	any
    merger or division by the Joint Venture;
	 	 
	4)	any
    termination of this Joint Venture Contract;
	 	 
	5)	any
    dissolution or liquidation of the Joint Venture;
	 	 
	6)	any
    change in the form of legal organization of the Joint Venture;
	 	 
	7)	any
    change of the Business of the Joint Venture;
	 	 
	8)	increasing
    or reducing, or permitting to be increased or reduced the loan capital of the Joint Venture or granting any option to any
    person over any equity or loan capital of the Joint Venture;
	 	 
	9)	transfer,
    sale, lease, license or other manner of disposition of the Business or assets of the Joint Venture, in whole or in part, whether
    by a single transaction or series of transactions related or not;
	 	 
	10)	the
    acquisition of the business or assets, in all or in part, of any other company or entity;
	 	 
	11)	creating
    or issuing any debenture, mortgage, charge, lien, encumbrance or other security over any assets of the Joint Venture;
	 	 
	12)	acquisition
    or disposition of loan capital of any corporate (including that of the Joint Venture or any subsidiary) or entering into or
    terminate any partnership or profit sharing arrangement with any Person;
	 	 
	13)	establishment
    of subsidiaries;
	 	 
	14)	entering
    into any transaction that is not in the ordinary course of business and on an arm’s length basis;
	 	 
	15)	opening
    any bank accounts and establishment of procedures for withdrawing funds, applying for corporate credit cards, and issuing
    and signing checks;
	 	 
	16)	declaration
    and distribution of dividends;
	 	 
	17)	determination
    of the amounts to be allocated to each of the Three Funds (employee welfare funds);
	 	 
	18)	bringing
    any claim that may have a material impact on the Business of the Joint Venture;
	 	 
	19)	determining
    the powers, responsibilities, and remuneration of the General Manager and the Financial Controller as well as determining
    the powers and responsibilities of the Manufacturing VP, QA Manager, and other Management Personnel who may be appointed by
    the Board;

 

    	 	- 77 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

	20)	making
    a composition or arrangements with creditors;
	 	 
	21)	examining
    and approving significant reports including long-term business and production plans, annual operating plans and budgets, and
    financial reports;
	 	 
	22)	any
    change of its Auditor;
	 	 
	23)	selection
    of insurers and determination of insurance coverage and premium amounts for the Joint Venture;
	 	 
	24)	approval
    of any Affiliated Transaction;
	 	 
	25)	approval
    of any bidding for and investment into any New Products;
	 	 
	26)	approval
    of the basic by-laws of the Joint Venture, including without limitation the human resources management rules and the financial
    management rules;
	 	 
	27)	any
    capital expenditure (namely the purchase of any fixed assets or intangible assets, the useful year of which shall be no less
    than one (1) year) with an amount exceeding RMB 5,000,000;
	 	 
	28)	any
    transaction between the Joint Venture and a Person controlled by or under common control with or influenced materially and
    substantially, directly or indirectly, by the Director(s), Management Personnel or their immediate family members;
	 	 
	29)	any
    authority to be given to the Legal Representative for any action to be undertaken by the Legal Representative;
	 	 
	30)	granting
    or revoking any powers of attorney by the Joint Venture;
	 	 
	31)	entering
    into any agreement, commitment or arrangement to do any of the foregoing; and
	 	 
	32)	any
    uses of the Selected Mobile Power Products in conjunction with any other products or programs that have not been previously
    authorized by the Board;
	 	 
	33)	any
    other important matters in relation to the Joint Venture’s operation.

 

    	 	- 78 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

Schedule
5- Securities Purchase Agreement

 

This
SECURITIES PURCHASE AGREEMENT (the “Agreement”), is entered into this [_____] day of [__________],
2016, by and among Aura Systems, Inc., a Delaware corporation with principal place of business at [address] (the “Company”),
and [________________________________], a corporation organized under the laws of [________________________________] with principal
place of business at [address] (“the Purchaser”).

 

RECITALS

 

WHEREAS,
the Company has authorized the issuance and sale of up to TEN MILLION (10,000,000) shares of Common Stock at a price per share
of $0.20 (the “Subscription Shares”); and

 

WHEREAS,
Purchaser wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, the Subscription
Shares, for an aggregate purchase price of Two Million Dollars] U.S. Dollars ($2,000,000.00); and

 

WHEREAS,
payment for the Subscription Shares and the stock certificates evidencing the Subscription Shares shall be held in escrow by an
escrow agent nominated by the Company (the “Escrow Agent”) pending the Closing, pursuant to a separate
escrow agreement substantially in the form attached hereto as Exhibit A, dated of even date herewith and entered into by and among
the Escrow Agent, the Company, and the Purchaser (the “Escrow Agreement”).

 

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

 

1. DEFINITIONS.

 

“Aggregate
Purchase Price” means Two Million U.S. Dollars ($2,000,000.00.

 

“Applicable
Laws” means all applicable provisions of all (i) constitutions, treaties, statutes, laws, rules, regulations and ordinances
of any Governmental Authority and all common law duties, (ii) Consents of any Governmental Authority and (iii) orders, writs,
decisions, rulings, judgments or decrees of any Governmental Authority binding upon, or applicable to, the Company or Purchaser,
as the case may be.

 

“Business
Day” means any day that is not a Saturday, a Sunday, or a day on which banking institutions in the City of Los Angeles,
California, are authorized or required by law to close.

 

“Common
Stock” means (i) the Company’s shares of common stock, $0.0001 par value per share, and (ii) any capital stock
into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.

 

“Consents”
means all consents, approvals, authorizations, waivers, permits, grants, franchises, licenses, findings of suitability, exemptions
or orders of, or any registrations, certificates, qualifications, declarations or filings with, or any notices to, any Governmental
Authority or other Person.

 

    	 	- 79 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, all
as the same shall be in effect at the time.

 

“GAAP”
means U.S. generally accepted accounting principles and practices set forth in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the
accounting profession, all as in effect on the date in question, applied on a basis consistent with prior periods.

 

“Governmental
Authority” means any nation or government, and any state or political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining to government (including the SEC and any court,
tribunal or arbitrator(s) of competent jurisdiction, and any other stock exchange or self-regulatory organization, including the
OTC Bulletin Board and OTC Markets Inc.

 

“Initial
Unit” means one unit consisting of 5,000,000 shares of Common Stock.

 

“Initial
Unit Purchase Price” means one million U.S. Dollars ($1,000,000).

 

“Indebtedness”
means, with respect to any Person and without duplication, (i) any indebtedness, liabilities or other obligations, contingent
or otherwise, for borrowed money (whether in the form of a term loan, revolving line of credit, credit extension or otherwise);
(ii) all obligations evidenced by any bonds, notes, debentures or similar instruments; (iii) all obligations to pay the deferred
purchase or acquisition price of property or services (other than obligations to trade creditors incurred in the ordinary course
of business that are not past due by more than ninety (90) days); (iv) all indebtedness created or arising under any conditional
sale or other title retention agreement with respect to property acquired by such Person (even though the rights or remedies of
the seller or lender under such agreement in the event of default are limited to repossession or sale of such property); (v) all
capitalized lease obligations; (vi) all reimbursement and other obligations in respect of any letters of credit, bankers’
acceptances, bank guaranties, surety bonds (whether payment, performance or otherwise) and similar instruments, whether or not
matured, issued for the account of such Person or as to which such Person is otherwise liable for reimbursement of drawings or
payments; (vii) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing
any Indebtedness or other obligation payable or performable by another Person in any manner, whether directly or indirectly, and
including any obligation of such Person, direct or indirect, and (viii) all other obligations which are required to be classified
as long-term liabilities on the balance sheet of such Person under GAAP. The Indebtedness of any Person shall include all recourse
Indebtedness of any partnership or joint venture in which such Person is a general partner or joint venturer.

 

    	 	- 80 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

“International
Jurisdiction” means the applicable securities laws of the securities regulators having application in the jurisdiction
in which the Purchaser is resident.

 

“Material
Adverse Effect” means any event, matter, condition or circumstance which (a) has or could reasonably be expected to
have a material adverse effect on or material adverse change in, as the case may be, the business, assets, condition (financial
or otherwise), results of operations, properties (whether real, personal or otherwise), profitability or prospects of the Company;
(b) could materially impair the ability of the Company to perform or observe its obligations under this Agreement or any other
Transaction Document to which it is a party; (c) could materially impair the rights, powers or remedies of the Purchaser under
this Agreement or any other Transaction Document; or (d) materially adversely affects the legality, binding affect, validity or
enforceability of this Agreement or any other Transaction Document.

 

“Organizational
Documents” means, collectively, with respect to any Person that is an entity, the articles of incorporation, certificate
of incorporation, certificate of formation, articles of organization, bylaws, limited liability company agreement, operating agreement,
partnership agreement and similar organizational documents of such Person, as applicable.

 

“Person”
means any entity, corporation, company, association, joint venture, joint stock company, partnership, trust, organization,
individual (including personal representatives, executors and heirs of a deceased individual), nation, state, government (including
agencies, departments, bureaus, boards, divisions and instrumentalities thereof), trustee, receiver or liquidator, as well as
any syndicate or group that would be deemed to be a Person under Section 13(d)(3) of the Exchange Act. “SEC”
means the Securities and Exchange Commission, or any successor agency.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, all as the
same shall be in effect at the time.

 

“Stockholder
Approval” means the Company’s receipt of affirmative approval of the Company’s stockholders at a special
or annual meeting of its stockholders of resolutions (1) electing a new board of at least seven (7) directors; and (ii) approving
an amendment to the Articles of Incorporation to effect up to a 1-for-7 reverse stock split of the Common Stock.

 

“Subsequent
Unit” means unit consisting of 5,000,000 shares of Common Stock (pre 7:1 reverse split)

 

“Subsequent
Unit Purchase Price” means one million Dollars ($1,000,000.00)

 

“Subsequent
Subscription Dates” means the third (3rd) Business Day following the date of the Company’s receipt of Stockholder
Approval.

 

“Shares”
means any shares of, or securities convertible into or exercisable for any shares of, any class of the Company’s capital
stock.

 

    	 	- 81 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

“Subsidiaries”
means any Person in which the Purchaser, directly or indirectly, (i) owns any of the outstanding capital stock or holds any equity
or similar interest of such Person or (ii) controls or operates all or any part of the business, operations or administration
of such Person, and each of the foregoing, is individually referred to herein as a “Subsidiary.”

 

“Tax”
or “Taxes” means all income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, property, environmental, windfall profit, customs, vehicle, airplane, boat, vessel or other title or registration, capital
stock, franchise, employees’ income withholding, foreign or domestic withholding, social security, unemployment, disability,
real property, personal property, sales, use, transfer, value added, alternative, add-on minimum and other tax, fee, assessment,
levy, tariff, charge or duty of any kind whatsoever and any interest, penalty, addition or additional amount thereon imposed,
assessed or collected by or under the authority of any governmental body or payable under any tax-sharing agreement or any other
contract.

 

“Transaction
Documents” means, collectively, this Agreement, the Escrow Agreement, and each of the other agreements and instruments
entered into or delivered by any of the parties hereto in connection with the transactions contemplated hereby and thereby, as
may be amended from time to time.

 

“U.S.
Person” shall have the meaning ascribed thereto in Rule 902 of Regulation S promulgated under the Securities Act and
for the purpose of this Agreement includes, without limitation: (a) any citizen of the United States of America, (b) any natural
person resident in the United States of America; (c) any partnership or corporation organized or incorporated under the laws of
the United States of America; (d) any estate of which any executor or administrator is a U.S. Person; (e) any trust of which any
trustee is a U.S. Person; (f) any agency or branch of a foreign entity located in the United States of America; (g) any non-discretionary
account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a
U.S. Person; (h) any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary
organized, incorporated or (if an individual) resident in the United States of America; and (i) any partnership or corporation
if: (1) organized or incorporated under the laws of any foreign jurisdiction; and (2) formed by a U.S. Person principally
for the purpose of investing in securities not registered under the Securities Act, unless it is organized or incorporated, and
owned, by accredited investors (as defined in Rule 501(a) under the Securities Act) who are not natural persons, estates or trusts.

 

    	 	- 82 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

2.
PURCHASE AND SALE OF SUBSCRIPTION
SHARES; CLOSING.

 

2.1.
Sale and Purchase of Initial Unit. The Company hereby sells to Purchaser and Purchaser hereby irrevocably subscribes for
and agrees to purchase from Company the Initial Unit for the Initial Unit Purchase Price. Subject to the satisfaction (or waiver)
of the conditions set forth in the Escrow Agreement and in Sections 7 and 8 below, the Company shall sell and issue to Purchaser,
and Purchaser shall purchase from the Company on the Closing Date the Initial Unit for the Initial Unit Purchase Price.

 

2.2.
Sale and Purchase of Subsequent Units. On the Subsequent Subscription Date, the Company agrees to sell to Purchaser, and
Purchaser irrevocably subscribes for and agrees to purchase from Company the Subsequent Unit for the Subsequent Unit Purchase
Price. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 7 and 8 below, the Company shall sell and
issue to Purchaser, and Purchaser shall purchase from the Company on the Subsequent Subscription Date the Subsequent Unit for
the Subsequent Unit Purchase Price.

 

2.3
Closing. The closing (the “Closing”) of the purchase of the Initial Unit by the Purchaser under this
Agreement shall occur at 10:00 a.m., California time, at the offices of the Company’s legal counsel on the first (1st)
Business Day on which the last of all of the conditions precedent set forth in Sections 7 and 8 below are satisfied or waived
or such other Business Day as may be mutually agreed upon by the Company and Purchaser (such date being referred to as the “Closing
Date”).

 

2.4. Payment
of Initial Unit Purchase Price; Delivery of Initial Unit. At the Closing: (i) Purchaser shall: (1) duly execute this Agreement
and each of the other Transaction Documents to which it is a party and deliver the same to both the Company and Escrow Agent;
and (2) by wire transfer of immediately available funds in accordance with the Escrow Agent’s written wire instructions,
pay the Initial Unit Purchase Price to the Escrow Agent for the Initial Unit; and (ii) the Company shall (a) duly execute this
Agreement and each of the other Transaction Documents to which it is a party and deliver the same to both the Purchaser and Escrow
Agent; and (b) deliver to the Escrow Agent a certificate representing the Initial Unit.

 

2.5. Payment
of Subsequent Unit Purchase Price; Delivery of Subsequent Unit. On the Subsequent Subscription Date: (i) Purchaser shall direct
the Subsequent Unit Escrow agent to, by wire transfer of immediately available funds in accordance with the Company’s written
wire instructions, pay the Subsequent Unit Purchase Price to the Company for the Subsequent Unit; and (ii) the Company shall deliver
to the Subsequent Unit Escrow agent a certificate representing the Subsequent Unit.

 

3. COVENANTS
OF PURCHASER. Purchaser covenants, acknowledges and agrees
as follows:

 

3.1. No
Registration. The Subscription Shares being acquired hereunder have not been registered under the Securities Act, any foreign
law or regulation, or under any “blue sky” securities laws of any state of the United States and are characterized
as “restricted securities” inasmuch as such Subscription Shares are being acquired from the Company in a transaction
not involving a public offering within the meaning of the Securities Act. Such Subscription Shares may not be offered or sold
in the United States or to any U.S. Person except pursuant to an effective registration statement under the Securities Act, or
pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, and in
each case only in accordance with applicable state and provincial securities laws. Neither the Company nor any other Person is
under any obligation to register the Subscription Shares under the Securities Act or any foreign laws or regulations or any “blue
sky” securities laws of any state of the United States or to comply with the terms and conditions of any exemption thereunder.
The Company will refuse to register any purported transfer of any of the Subscription Shares not made in accordance with the provisions
of Regulation S promulgated under the Securities Act, pursuant to an effective registration statement under the Securities Act
or pursuant to an available exemption from, or in a transaction not subject to, the registration requirements of the Securities
Act.

 

    	 	- 83 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

3.2. Independent
Investigation. Purchaser has conducted its own independent investigation of the Company and to the extent deemed necessary
or advisable by Purchaser, has retained and relied upon qualified professional advice regarding the investment, tax and legal
merits and consequences of this Agreement and an investment in the Subscription Shares, including without limitation, resale restrictions
applicable to the Subscription Shares and compliance with applicable laws of the jurisdiction in which Purchaser is resident in
connection with the distribution of the Subscription Shares hereunder. Purchaser’s decision to execute this Agreement and
purchase the Subscription Shares has not been based upon any oral or written representation made by or on behalf of the Company
and such decision is based solely upon Purchaser’s own investigation of the Company and a review of information regarding
the Company. Purchaser and its advisors, if any, have had a reasonable opportunity to ask questions of and receive answers from
the Company, including its executive officers, regarding the transaction contemplated by this Agreement and to obtain such information
about the Company and the transaction contemplated by this Agreement as deemed necessary or advisable by Purchaser and its advisors.
Purchaser and its advisors have been furnished with all materials relating to the business, finances and operations of the Company
and with all materials relating to the offer and sale of the Subscription Shares which have been requested by Purchaser or its
advisors, except to the extent that the same does not exist or cannot be obtained by the Company without undue expense or effort.

 

3.3. Reliance
on Representations and Warranties. The Purchaser understands that the Subscription Shares are being offered and sold to it
in reliance upon specific exemptions from the registration requirements of United States federal and applicable state securities
laws, including Regulation S promulgated under the Securities Act of 1933, as amended. Such exemption depends, in part, on the
accuracy and truthfulness of the representations of Purchaser made in this Agreement and the other Transaction Documents. The
Company is relying upon the truth and accuracy of such representations, warranties, agreements, acknowledgments, and understandings
of Purchaser set forth herein and therein in order to determine the applicability of such exemptions and the suitability of the
Purchaser to acquire the Subscription Shares.

 

3.4. No
Sale to Non-US Persons. None of the Subscription Shares may be offered or sold to a U.S. Person or for the account or benefit
of a U.S. Person prior to the end of the expiration of the Restricted Period or as otherwise permitted under the Securities Act,
specifically Regulation S, and Applicable Law.

 

    	 	- 84 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

3.5. No
Government Review. Neither the SEC nor any other securities commission or similar regulatory authority has reviewed or passed
on, or made any recommendation or endorsement of, the merits of any of the Subscription Shares or the fairness or suitability
of any investment in the Subscription Shares.

 

3.6. Subsequent
Unit Purchase Price Escrow. Prior to the Closing, Purchaser shall establish an escrow account in the United States with an
escrow agent reasonably acceptable to the Company (the “Subsequent Unit Escrow”). On the Closing Date,
Purchaser shall deposit the Subsequent Unit Purchase Price in the Subsequent Unit Escrow. The terms of the Subsequent Unit Escrow
shall require at a minimum that: (1) the Subsequent Unit Escrow agent maintain in the Purchaser’s name the Subsequent Unit
Purchase Price until the Subsequent Subscription Date; and (2) upon delivery by the Company to the Subsequent Unit Escrow agent
of a certificate representing the Subsequent Unit, the Subsequent Unit Escrow agent shall immediately pay the Subsequent Unit
Purchase Price to the Company.

 

4. PURCHASER’S
REPRESENTATIONS AND WARRANTIES. Purchaser represents
and warrants (which representations and warranties shall survive the Closing Date) to the Company that:

 

4.1. Organization;
Authority. Purchaser is a corporation duly organized, validly existing and in good standing under the laws of [the
People’s Republic of China] and has the requisite power and authority to own its properties and to carry on its
business as now being conducted and as presently proposed to be conducted. Each of Purchaser’s Subsidiaries are
entities duly organized and validly existing and in good standing under the laws of the respective jurisdiction in which it
is formed, and has the requisite power and authorization to own its respective properties and to carry on its business as now
being conducted and as presently proposed to be conducted. Purchaser has all requisite power and authority to enter into and
to consummate the transactions contemplated by this Agreement and the other Transaction Documents to which it is a party and
otherwise to carry out its obligations hereunder and thereunder. Purchaser and each of its Subsidiaries is duly qualified to
do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the business
conducted by it makes such qualification necessary.

 

4.2. Truthfulness
of Information. All information which has been furnished to the Company with respect to Purchaser and Purchaser’s Subsidiaries
(including, without limitation, information relating to financial position, jurisdiction, and business experience) is correct
and complete. The Company and others may rely upon the truth and accuracy of the acknowledgements, representations, warranties,
covenants and agreements contained in this Agreement, and Purchaser agrees that if any of such acknowledgements, representations
and agreements are no longer accurate or have been breached, the Purchaser shall promptly notify the Company in writing of such.

 

4.3. Foreign
Status. Purchaser and each Purchaser Subsidiary is not a U.S. Person. At the time of the origination of contact concerning
this Agreement Purchaser and each Purchaser Subsidiary was, and on the date of the execution and delivery of this Agreement the
Purchaser is, outside of the United States.

 

    	 	- 85 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

4.4. Purchase
for Own Account; No Contemplated Distribution. Purchaser is not an underwriter of, or dealer in, the shares of the Company’s
common stock, nor is the Purchaser participating, pursuant to a contractual agreement or otherwise, in the distribution of the
Subscription Shares. Purchaser is acquiring the Subscription Shares for its own account (and not for the account or benefit of,
directly or indirectly, any U.S. Person) and not with a view towards, or for resale in connection with, the public sale or distribution
thereof. No other Person has a direct or indirect beneficial interest in the Subscription Shares. Purchaser will not, during the
period commencing on the date of issuance of the Subscription Shares and ending on the 12-month anniversary of such date, or such
shorter period as may be permitted by Regulation S or other applicable securities law (“Restricted Period”),
directly or indirectly offer, sell, pledge or otherwise transfer the Subscription Shares in the United States, or to a U.S. Person
for the account or benefit of a U.S. Person, or otherwise in a manner that is not in compliance with Regulation S. Neither Purchaser
nor any of Purchaser’s Subsidiaries was formed for the purpose of purchasing the Subscription Shares.

 

4.5. No
Hedging or Short Selling. Purchaser has not in the United States, engaged in, and prior to the expiration of the Restricted
Period will not engage in, any short selling of or any hedging transaction with respect to the Subscription Shares, including
without limitation, any put, call or other option transaction, option writing or equity swap.

 

4.6. Authorized
Transfers. Purchaser will, after expiration of the Restricted Period, offer, sell, pledge or otherwise transfer the Subscription
Shares only pursuant to registration under the Securities Act or an available exemption therefrom and, in accordance with all
Applicable Laws.

 

4.7. No
Directed Selling Efforts. Purchaser has not acquired the Subscription Shares as a result of, and Purchaser neither has nor
will engage, either directly or indirectly, in any “directed selling efforts” (as defined in Rule 902(b) of Regulation
S promulgated under the Securities Act) in the United States in respect of any of the Subscription Shares, which would include
any activities undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market
in the United States for the resale of any of the Subscription Shares. Such activity includes, without limitation, the mailing
of printed material to investors residing in the United States, the holding of promotional seminars in the United States, and
the placement of advertisements with radio or television stations broadcasting in the United States or in publications for the
general circulation in the United States that refer to the offering of the Subscription Shares in reliance on Regulation S.

 

4.8. No
Scheme to Evade Registration. The Purchaser’s acquisition of the Subscription Shares is not a transaction (or any element
of a series of transactions) that is part of a scheme or plan to evade the registration provisions of the Securities Act or other
Applicable Law.

 

    	 	- 86 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

4.9. Validity;
Enforcement. The performance of this Agreement and of each of the Transaction Documents to which Purchaser or Purchaser’s
Subsidiaries is a party, and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized
by all necessary action on the part of Purchaser and its Subsidiaries (as applicable) and this Agreement and of each of the Transaction
Documents to which Purchaser or any of Purchaser’s Subsidiaries is a party has been duly and validly authorized, executed
and delivered on behalf of Purchaser or such Subsidiary (as applicable). At the Closing and at the Subsequent Subscription Date,
this Agreement and each Transaction Document to which Purchaser is a party will be a legal, valid and binding obligation of Purchaser
under Applicable Laws, including the laws of the International Jurisdiction, enforceable against Purchaser in accordance with
its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
conveyance or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability
and except as rights of indemnity or contribution may be limited by federal or state securities or other laws or the public policy
underlying such laws. At the Closing and at the Subsequent Subscription Date, the Transaction Documents to which each Subsidiary
of Purchaser is a party will be duly executed and delivered by each such Subsidiary, and shall constitute the legal, valid and
binding obligations of each such Subsidiary, enforceable against each such Subsidiary in accordance with their respective terms,
except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights
and remedies and except as rights to indemnification and to contribution may be limited by federal or state securities law.

 

4.10. Purchaser
Sophistication; Professional Advice. Purchaser is aware that an investment in the Company is speculative and involves certain
risks, including the possible loss of the entire investment. Purchaser is an “accredited investor” within the meaning
of Rule 501(a) promulgated under the Securities Act and by reason of Purchaser’s business and financial experience, Purchaser
has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits
and risks of the investment in the Subscription Shares, has the capacity to protect its own interests, and is able to bear the
economic risk of such investment for an indefinite period of time, including without limitation the complete loss of such investment.
Purchaser is knowledgeable of, or has been independently advised as to, the applicable securities laws of the International Jurisdiction
which would apply to the acquisition of the Subscription Shares. Purchaser is permitted to purchase the Subscription Shares under
the Applicable Laws of the International Jurisdiction to which it is subject and such laws do not require the Company or Purchaser,
as the case may be, to make any filings or seek any approvals of any kind whatsoever in the International Jurisdiction in connection
with the issue and sale or resale of any of the Subscription Shares. Purchaser will, if requested by the Company, prior to the
Closing and the Subsequent Subscription Date, and at Purchaser’s sole cost and expense, deliver to the Company a certificate
or opinion of local counsel from the International Jurisdiction which will confirm the matters referred to in this Paragraph 4.10
to the reasonable satisfaction of the Company (the “Opinion of Purchaser’s Counsel”).

 

4.11. No
Conflicts. The execution, delivery and performance of this Agreement and each of the Transactional Documents by the Purchaser
and its Subsidiaries, and the consummation by Purchaser and its Subsidiaries of the transactions contemplated hereby and thereby,
do not violate and will not result in or cause (upon the giving of notice or the passage of time or both) a default or violation
under (i) the Organizational Documents of Purchaser or any of its Subsidiaries, (ii) any rights of termination, amendment, acceleration
or cancellation of, any agreement, indenture or instrument to which Purchaser or any of its Subsidiaries is a party or (iii) any
Applicable Law applicable to Purchaser or any of its Subsidiaries or by which any property or asset of the Purchaser or any of
its Subsidiaries is bound or affected, including without limitation Applicable Law of the International Jurisdictions to which
the Purchaser or any of its Subsidiaries is subject.

 

    	 	- 87 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

4.12. Consents.
The execution and delivery by Purchaser of this Agreement and each of the Transaction Documents to which it is a party, and the
consummation by Purchaser of the transactions contemplated hereby and thereby, do not and will not require the Consent of any
Governmental Authority or any other Person, including without limitation any Governmental Authority or Person in the Internationals
Jurisdiction to which the Company and any of its Subsidiaries is subject, other than Consents that have already been obtained
or made.

 

4.13. Brokers.
Neither the Purchaser, nor any of its Subsidiaries or affiliates, nor any Person acting on its or their behalf has paid or is
obligated to pay any fee or commission to any broker, finder, investment banker or other intermediary in connection with this
Agreement, any Transaction Document or any of the transactions contemplated hereby and thereby.

 

4.14. No
Solicitation. No Subscription Shares were offered or sold to Purchaser by means of any form of general solicitation or general
advertising, and in connection therewith Purchaser has not (i) received or reviewed any advertisement, article, notice or other
communication published in a newspaper or magazine or similar media or broadcast over television or radio whether closed circuit,
or generally available, or (ii) attended any seminar meeting or industry investor conference whose attendees were invited by any
general solicitation or general advertising.

 

5. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to Purchaser that:

 

5.1. Organization
and Qualification. The Company is duly organized and validly existing and in good standing under the laws of the State
of Delaware, and has the requisite power and authorization to own its properties and to carry on its business as now being
conducted and as presently proposed to be conducted.

 

5.2. Authorization;
Enforcement; Validity. The Company has the requisite power and authority to execute, deliver, carry out and perform its obligations
under this Agreement and each other Transaction Document to which it is a party, including, the power and authority to sell, issue
and deliver the Subscription Shares. This Agreement has been duly executed and delivered by the Company and, at the Closing and
the Subsequent Subscription Date, each of the Subscription Shares and the Transaction Documents to which the Company is a party
and which is delivered as of that date will be duly executed and delivered by the Company. At the Closing, this Agreement and
each Transaction Document will be a legal, valid and binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer
or conveyance or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to
enforceability, and except as rights of indemnity or contribution may be limited by federal or applicable state securities laws
or the public policy underlying such law. 

 

5.3. Issuance
of Subscription Shares. The issuance of the Subscription Shares has been, or by the time of the Closing or Subsequent Subscription
Date (as applicable), will be, duly authorized, and upon issuance in accordance with the terms of the Transaction Documents will
be validly issued, fully paid and non-assessable, and free from all preemptive or similar rights, taxes, liens, charges and other
encumbrances with respect to the issue thereof.

 

    	 	- 88 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

5.4. No
Conflicts. The execution, delivery and performance of this Agreement and the other Transaction Documents by the Company and
the consummation by the Company of the transactions contemplated hereby and thereby does not and will not (upon the giving of
notice or the passage of time or both): (i) result in a violation of the Company’s Organizational Documents, (ii) conflict
with, or constitute a default under, or give to others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which the Company is a party or (iii) result in a violation of any Applicable Law applicable
to the Company or by which any property or asset of the Company is bound or affected except to the extent such violations or conflict
could not reasonably be expected to have a Material Adverse Effect.

 

5.5. No
General Solicitation; Brokers. Neither the Company, nor any of its affiliates, nor any Person acting on its or their behalf,
has engaged in any form of general solicitation or general advertising in connection with the offer or sale of the Subscription
Shares. The Company has not paid nor is obligated to pay any fee or commission to any broker, finder, investment banker or other
intermediary, in connection with this Agreement or any other Transaction Documents or any of the transactions contemplated hereby
or thereby. 

 

5.6. No
Additional Agreements. The Company does not have any agreement or understanding with Purchaser with respect to the transactions
contemplated by this Agreement or the other Transaction Documents other than as specified herein and therein.

 

5.7. Refusal
of Registration. The parties hereby acknowledge and agree that the Company shall be required, as a term of this contract,
to refuse to register any transfer of the Subscription Shares not made in accordance with the provisions of Regulation S, or pursuant
to an effective registration, or another exemption from registration, under the Securities Act.

 

5.8. SEC
Documents; Financial Statements. Except as set forth in Schedule 1 of the Disclosure Letter, since February 2006, the Company
has filed when due (including any applicable extensions) all reports, schedules, forms, statements and other documents required
to be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act (all of the foregoing filed prior to the
date hereof and all exhibits included therein and financial statements, notes and schedules thereto and documents incorporated
by reference therein being hereinafter referred to as the “SEC Documents”). All such SEC Documents are
available online through the EDGAR system. Except to the extent that any SEC Document has been revised or superseded by a later-filed
SEC Document, as of their respective dates: (i) the SEC Documents complied in all material respects with the requirements of the
Securities Act or 1934 Act, as the case may be; (ii) the financial statements of the Company included in the SEC Documents complied
in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect
thereto as in effect as of the time of filing. The financial statements of the Company included in the SEC Documents have been
prepared in accordance with U.S. generally accepted accounting principles, consistently applied, during the periods involved (except
(a) as may be otherwise indicated in such financial statements or the notes thereto, or (b) in the case of unaudited interim statements,
to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects
the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments which will not be material, either
individually or in the aggregate). No other information provided by or on behalf of the Company to the Purchaser which is not
included in the SEC Documents contains any untrue statement of a material fact or omits to state any material fact necessary in
order to make the statements therein not misleading, in the light of the circumstance under which they are or were made.

 

    	 	- 89 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

5.9. Requested
Disclosure. The Company has provided the Purchaser with all information requested by the Purchaser in connection with its
decision to purchase the Subscription Shares. Neither this Agreement, the exhibits and schedules hereto, the other Transaction
Documents nor any other document delivered by the Company to Purchaser in connection herewith or therewith or with the transactions
contemplated hereby or thereby, contain any knowingly untrue statement of a material fact nor omit to state a material fact necessary
in order to make the statements contained herein or therein, in light of the circumstances in which they are made, not misleading.

 

5.10. Equity
Capitalization. As of the date hereof, the authorized capital stock of the Company consists solely of 150,000,000 shares of
Common Stock, of which, 113,985,916 shares are issued and outstanding and 15,000,000 shares are reserved for issuance. All of
such outstanding shares are duly authorized and have been, or upon issuance will be, validly issued and are fully paid and non-assessable.
As of the date hereof, approximately 26,000,000 shares of the Company’s issued and outstanding Common Stock are owned by
Persons who are “affiliates” (as defined in Rule 405 of the Securities Act and calculated based on the assumption
that only officers, directors and holders of at least 10% of the Company’s issued and outstanding Common Stock are “affiliates”
without conceding that any such Persons are “affiliates” for purposes of federal securities laws) of the Company.
Except as set forth in the SEC Documents or in Schedule 2 attached to the Disclosure Letter: (i) none of the Company’s capital
stock is subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company;
(ii) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, or exercisable or exchangeable for, any capital stock of the Company or
contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional capital
stock of the Company or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating
to, or securities or rights convertible into, or exercisable or exchangeable for, any capital stock of the Company; (iii) there
are no outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments
evidencing Indebtedness of the Company or by which the Company is or may become bound; (iv) there are no financing statements
securing obligations in any amounts filed in connection with the Company; (v) there are no agreements or arrangements under which
the Company is obligated to register the sale of any of their securities under the Securities Act; (vi) there are no outstanding
securities or instruments of the Company which contain any redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company is or may become bound to redeem a security of the Company; and (vii) there
are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the
Subscription Shares.

 

    	 	- 90 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

5.11. Transactions
With Affiliates. Except as set forth in the SEC Documents or in Schedule 3 of the Disclosure Letter, none of the officers,
directors, employees or “affiliates” (as defined in Rule 405 of the Securities Act and calculated based on the assumption
that only officers, directors and holders of at least 10% of the Company’s issued and outstanding Common Stock are “affiliates”
without conceding that any such Persons are “affiliates” for purposes of federal securities laws) of the Company is
presently a party to any agreement, transaction, financial or other arrangement, obligation or commitment with the Company other
than for the payment of employment compensation in the ordinary course of business or other ordinary course services. The Company
has not loaned or advanced funds to any officer, director, employee or stockholder of the Company.

 

5.12. Indebtedness.
Except as set forth in the SEC Documents or in Schedule 4 of the Disclosure Letter, the Company (i) does not have any outstanding
Indebtedness, and (ii) is not in violation of any term of, or in default under, any contract, agreement or instrument relating
to any Indebtedness, except where such violations and defaults would not result, individually or in the aggregate, in a Material
Adverse Effect.

 

5.13. Absence
of Litigation. Except as set forth in the SEC Documents or in Schedule 5 of the Disclosure Letter, there is no action, suit,
proceeding, inquiry or investigation before or by any court or Governmental Authority pending or, to the knowledge of the Company,
threatened against the Company or any of the Company’s officers or directors. There is not in effect any order, judgment,
decree, injunction or ruling of any Governmental Authority against, relating to or affecting the Company or any officer, or director
thereof, enjoining, barring, suspending, prohibiting or otherwise limiting the same from conducting or engaging in any aspect
of the business of the Company. The Company is not in default under any order, judgment, decree, injunction or ruling of any Governmental
Authority, nor is the Company subject to or a party to any order, judgment, decree or ruling arising out of any action, suit,
arbitration or other proceeding under any Applicable Laws, respecting antitrust, monopoly, restraint of trade, unfair competition
or similar matters.

 

5.14. Use
of Initial Unit Proceeds. The Company shall use the proceeds from the sale of the Initial Unit for the purposes set forth
in Schedule 6 attached to the Disclosure Letter and for no other purposes.

 

    	 	- 91 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

6. LEGENDS.

 

6.1. Legends.
Purchaser understands and agrees that upon the issuance of the Subscription Shares, and until such time as no longer required
under Applicable Law, including the Securities Act, each certificate representing the Subscription Shares shall bear restrictive
legends in substantially the following form (and a stop-transfer order may be placed against transfer of the Subscription Shares):

 

“THE
SECURITIES REPRESENTED HEREBY HAVE BEEN OFFERED IN AN OFFSHORE TRANSACTION TO A PERSON WHO IS NOT A U.S. PERSON (AS DEFINED IN
REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”)) PURSUANT TO REGULATION
S UNDER THE SECURITIES ACT (“REGULATION S”).”

 

“NONE
OF THE SECURITIES REPRESENTED HEREBY HAS BEEN REGISTERED UNDER THE SECURITIES ACT, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE
OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES (AS DEFINED IN REGULATION S ) OR TO U.S. PERSONS (AS DEFINED IN
REGULATION S) EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. HEDGING TRANSACTIONS MAY NOT
BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.”

 

Any
other legend required to be placed thereon by Applicable Law.

 

6.2 Stop-Transfer.
Purchaser consents to the Company making a notation on its records or giving instructions to any transfer agent of the Company
in order to implement the restrictions on transfer of the Subscription Shares. The Purchaser understands that the transfer agent
for the Company will be instructed to place a “stop transfer” order against the Subscription Shares and the Company
will refuse to register and cause its transfer agent to refuse to register any transfer of the Subscription Shares not made in
accordance with the provisions of Regulation S or pursuant to registration under the Securities Act or pursuant to an exemption
from the registration requirements of the Securities Act. Any proposed transfer is subject to the right of the Company to require
a certificate of transfer from the Purchaser and the proposed transferee with respect to the compliance of the proposed transfer
with applicable U.S. federal and state securities laws and, in the Company’s discretion, the delivery of an opinion of counsel
satisfactory to the Company with respect to the proposed transaction in form and substance satisfactory to the Company.

 

    	 	- 92 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

7. CONDITIONS
TO THE COMPANY’S OBLIGATION TO SELL. The
obligations of the Company to consummate the transactions contemplated hereby, including the obligation to issue and sell the
Subscription Shares, is subject to the following conditions precedent, each of which shall be satisfied or waived in the sole
and absolute discretion of the Company on or prior to the Closing Date or the Subsequent Subscription Date (as applicable):

 

7.1. Execution
of Documents. Purchaser shall have duly executed this Agreement and each of the other Transaction Documents to which it is
a party and delivered the same to the Company and Escrow Agent.

 

7.2. Payment
for Subscription Shares. Purchaser shall have delivered (a) to the Escrow Agent the Initial Unit Purchase Price for the Initial
Unit being purchased by Purchaser at the Closing or (b) to the Subsequent Unit Escrow agent the Subsequent Unit Purchase Price
for the Subsequent Unit being purchased by Purchaser on the Subsequent Subscription Date, as the case may be.

 

7.3. Representations
and Warranties. The representations and warranties of Purchaser shall be true and correct in all material respects as of the
date when made and as of the Closing Date and as of the Subsequent Subscription Date as though originally made at that time (except
for representations and warranties that speak as of a specific date, which shall be true and correct as of such date), and Purchaser
shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by
this Agreement and the other Transaction Documents to be performed, satisfied or complied with by Purchaser at or prior to the
Closing Date and the Subsequent Subscription Date (as the case may be), including without limitation, delivery to the Company
of the Opinion of Purchaser’s Counsel.

 

7.4. Purchase
Permitted by Applicable Law. The consummation of the transactions contemplated by this Agreement and the other Transaction
Documents shall not be prohibited by or violate any Applicable Laws, including the laws of any International Jurisdiction to which
the Purchaser and its Subsidiaries are subject, and shall not be enjoined (temporarily or permanently) under, or prohibited by
or contrary to, any injunction, order, decree or ruling of any Governmental Agency or other Person.

 

8. CONDITIONS
TO PURCHASER’S OBLIGATION TO PURCHASE. The
obligation of Purchaser hereunder to purchase the Initial Unit at the Closing and the Subsequent Unit at the Subsequent Subscription
Date is subject to the following conditions precedent, each of which shall be satisfied or waived in the sole and absolute discretion
of the Purchaser on or prior to the Closing Date or Subsequent Subscription Date as the case may be:

 

8.1. Closing
Documents. The Company shall have duly executed and delivered to Purchaser and Escrow Agent each of the Transaction Documents
to which it is a party and the Company shall have duly executed and delivered to the Escrow Agent a certificate evidencing the
Initial Unit or Subsequent Unit, as the case may be.

 

8.2. Representations
and Warranties. Each of the representations and warranties made by the Company in this Agreement shall be true and correct
in all material respects as of the date when made and as of the Closing Date as though originally made at that time and the Company
shall have performed, satisfied and complied in all material respects with each of the covenants and obligations of the Company
in this Agreement to be performed or satisfied by it on or prior to the Closing Date or the Subsequent Subscription Date as applicable.

 

    	 	- 93 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

9. INDEMNIFICATION.

 

9.1. Indemnification.
(a) Purchaser will defend, indemnify and hold harmless the Company and the Company’s directors, officers, employees, agents,
attorneys, advisors and shareholders (collectively, the “Company Indemnitees”) from and against any
and all losses, costs, penalties, fees, liabilities, claims, damages and expense whatsoever (including, but not limited to, any
and all fees, costs and expenses reasonably incurred in investigating, preparing or defending against any claim, lawsuit, administrative
proceeding or investigation whether commenced or threatened) (the “Indemnified Liabilities”) arising
out of, based upon, or relating to: (i) any misrepresentation or omission made by Purchaser herein or in any other Transaction
Document; (ii) any breach (or threatened breach) of any representation, warranty, covenant, agreement, acknowledgement or obligation
of the Purchaser contained herein or in any other Transaction Document; and (iii) any document furnished by Purchaser to the Company
in connection with this Agreement or any of the other Transaction Documents. To the extent that the foregoing undertaking by the
Purchaser may be unenforceable for any reason, the Purchaser shall make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities which is permissible under Applicable Law.

 

(b)
Promptly after receipt by any Indemnitee of notice of any demand, claim or circumstances which would or might give rise to a claim
or the commencement of any action, proceeding or investigation in respect of which indemnity may be sought pursuant to this Section
9, such Indemnitee shall promptly notify the Purchaser in writing and the Purchaser shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to such Indemnitee, and shall assume the payment of all fees and expenses; provided,
however, that the failure of any Indemnitee so to notify the Purchaser shall not relieve the Purchaser of its obligations
hereunder except to the extent that the Purchaser is actually and materially prejudiced by such failure to notify. In any such
proceeding, any Indemnitee shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be
at the expense of such Indemnitee unless: (i) the Purchaser and the Indemnitee shall have mutually agreed to the retention of
such counsel; (ii) the Purchaser shall have failed promptly to assume the defense of such proceeding and to employ counsel reasonably
satisfactory to such Indemnitee in such proceeding; or (iii) in the reasonable judgment of counsel to such Indemnitee, representation
of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. The Purchaser
shall not be liable for any settlement of any proceeding effected without its prior written consent, which consent shall not be
unreasonably withheld, delayed or conditioned. Without the prior written consent of the Indemnitee, which consent shall not be
unreasonably withheld, delayed or conditioned, the Purchaser shall not effect any settlement of any pending or threatened proceeding
in respect of which any Indemnitee is or could have been a party and indemnity could have been sought hereunder by such Indemnified
Party, unless such settlement includes an unconditional release of such Indemnitee from all liability arising out of such proceeding.

 

    	 	- 94 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016

10. MISCELLANEOUS.

 

10.1. Governing
Law. IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED
IN THAT STATE (WITHOUT REGARD TO CHOICE OF LAW OR CONFLICTS OF LAW PROVISIONS) AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA.

 

10.2. Consent
to Jurisdiction and Venue. ANY SUIT, LEGAL ACTION OR SIMILAR PROCEEDING ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT
SHALL BE BROUGHT EXCLUSIVELY IN THE COURTS OF THE STATE OF CALIFORNIA SITTING IN THE CITY OF LOS ANGELES OR, IF SUCH COURTS DO
NOT HAVE JURISDICTION, THEN IN THE COURTS OF THE UNITED STATES FOR THE CENTRAL DISTRICT OF CALIFORNIA SITTING IN THE CITY OF LOS
ANGELES. PURCHASER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS AND HEREBY
IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO
THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE
OF SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE
PROCESS IN ANY MANNER PERMITTED BY LAW.

 

10.3. Waiver
of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING.

 

10.4. Counterparts.
This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same instrument.
In the event that any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format
(.pdf) file of an executed signature page, such signature page shall create a valid and binding obligation of the party executing
(or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.

 

10.5. Attorneys
Fees. In any action, suit or other proceeding arising from or relating to this Agreement, the prevailing party shall be entitled
to recover its attorneys’ fees and expenses incurred in connection therewith.

 

10.6. Headings;
Gender. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation
of, this Agreement. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine,
feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,” “include”
and words of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision
in which they are found.

 

    	 	- 95 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

10.7. Severability.
If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity
or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations
of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties.

 

10.8. Entire
Agreement. This Agreement, the Subscription Shares, the other Transaction Documents and the schedules and exhibits attached
hereto and thereto and the instruments referenced herein and therein constitute the entire understanding and agreement between
the Purchaser and the Company with respect to the subject matter hereof and thereof and supersede all other prior oral or written
agreements, understandings, negotiations, discussions and undertakings between the Purchaser and the Company relating to the subject
matter hereof or thereof.

 

10.9. Publicity.
Each party will consult with the other before issuing, and provide each other the opportunity to review, comment upon and concur
with and use reasonable efforts to agree on, any press release or other public statement with respect to the transactions contemplated
by this Agreement, and shall not issue any such press release or make such other public announcement prior to such consultation,
provided however, that either party may make such statements and release such information without prior consultation as
such party reasonably determines is required under Applicable Laws, including without limitation, for purposes of complying with
the securities laws of the United States.

 

10.10. Consent
to Amendments. No provision of this Agreement or the other Transaction Documents may be amended, supplemented, or otherwise
modified other than by an instrument in writing signed by the Company and the Purchaser.

 

10.11. Waiver;
Cumulative Remedies. No waiver shall be effective unless it is in writing and signed by an authorized representative of the
waiving party. The Company has not, directly or indirectly, made any agreements with Purchaser relating to the terms or conditions
of the transactions contemplated by the Transaction Documents except as set forth in the Transaction Documents. No failure or
delay on the part of any party to this Agreement in exercising any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy hereunder. The remedies herein provided are cumulative and not exclusive of
any remedies provided by law.

 

    	 	- 96 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

10.12. Notices.
All notices, requests, demands and other communications which are required or may be given under this Agreement shall be in writing
and in the English language and shall be deemed given and effective on the earliest of (i) the next Business Day after the date
of transmission, if such notice or communication is delivered via facsimile prior to 3:00 p.m. California time on a Business Day,
(ii) the second Business Day after the date of transmission, if such notice or communication is delivered via facsimile on a day
which is not a Business Day or later than 3:00 p.m. California time on a Business Day; (iii) the third Business Day following
the date of mailing, if sent by internationally recognized overnight courier service, or (iv) upon actual receipt by the party
to whom such notice is required to be given, in each case properly addressed to the party to receive the same and, provided confirmation
of transmission, deposit, or delivery, as the case may be, is mechanically or electronically generated and kept on file by the
sending party. The addresses, and facsimile numbers for such communications shall be:

 

If
to the Company:

 

Aura
Systems, Inc.

10541 Ashdale Street

Stanton California 90680

United
States of America

Attention: Chief Executive Officer

Telephone: (310) 643-5300

Facsimile: (310) 643-7457

 

If
to Purchaser:

 

[name]

 

[address]

 

[address]

 

Attention:

 

Telephone:

 

Facsimile:

 

or
at such other address or addresses or facsimile number and/or to the attention of such other Person as the recipient party may
specify by written notice given in accordance with this Section 10.12.

 

10.13. Successors
and Assigns. Neither party shall sell, assign, transfer or delegate any of its rights or obligations hereunder or under any
other Transaction Document, or any interest herein or therein, by operation of law or otherwise, without the prior written consent
of the other party, provided however, that Purchaser may sell, offer or transfer its interests in the Subscription Shares
to the extent provided by, and in accordance with, Applicable Law. Any sale, assignment, transfer or delegation in contravention
of this provision is void. This Agreement shall otherwise inure to the benefit of, and be binding upon, the parties and its respective
successors and assigns. 

 

    	 	- 97 -	 

    	 	 	 

    

 

DLA
Draft: 1 December 2016 

 

10.14. No
Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, other than
the Indemnitees referred to in Section 9 above.

 

10.15. Survival.
The covenants set forth in Section 3 above, Purchaser’s representations and warranties set forth in Section 4 above, the
Company’s representations and warranties set forth in Section 5 above, section 6, the indemnification provisions set forth
in section 9 above, and this Article 10 shall, in each case, survive the Closing.

 

10.16. Further
Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.

 

10.17. Construction.
The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and
no rules of strict construction will be applied against any party. This Agreement shall be deemed to be jointly drafted by the
Company and the Purchaser and shall not be construed against any Person as the drafter hereof.

 

10.18. Currency.
Unless otherwise expressly indicated, all dollar amounts referred to in this Agreement and the other Transaction Documents are
in United States Dollars (“U.S. Dollars”), and all amounts owing under this Agreement and all other
Transaction Documents shall be paid in U.S. Dollars.

 

[Signature
page to follow]

 

    	 	- 98 -	 

    	 	 	 

    

 

DLA Draft:
1 December 2016 

 

IN
WITNESS WHEREOF, Purchaser and the Company have caused their respective signature page to this Agreement to be duly executed
as of the date written below.

 

	 	 	 	COMPANY:
	 	 	 	Aura Systems, Inc.
	 	Date:
    ___________, 2016	 	a Delaware Corporation
	 	 	 	 	 
	 	 	 	By:	 
	 	 	 	 	Melvin
    Gagerman
	 	 	 	 	Chief
    Executive Officer
	 	 	 	 	 
	 	 	 	PURCHASER:
	 	 	 	 	 
	 	 	 	 	[name]
	 	Date:
    ___________, 2016	 	 	 
	 	 	 	 	 
	 	 	 	By:	 
	 	 	 	 	[name]
	 	 	 	 	Its:
    

 

    	 	- 99 -Exhibit

Execution Version

REGISTRATION RIGHTS AGREEMENT
BY AND AMONG
SWIFT ENERGY COMPANY
AND
THE PURCHASERS 

TABLE OF CONTENTS
ARTICLE I  DEFINITIONS    1
		
	Section 1.01
	Definitions    1

		
	Section 1.02
	Registrable Securities    3

ARTICLE II   REGISTRATION RIGHTS    4
		
	Section 2.01
	Mandatory Registration    4

		
	Section 2.02
	Failure to File or Become Effective; Liquidated Damages    4

		
	Section 2.03
	Blackout and Delay Rights    5

		
	Section 2.04
	Sale Procedures    6

		
	Section 2.05
	Cooperation by Holders    9

		
	Section 2.06
	Expenses    9

		
	Section 2.07
	Indemnification    10

		
	Section 2.08
	Rule 144 Reporting    11

		
	Section 2.09
	Transfer or Assignment of Registration Rights    12

ARTICLE III  MISCELLANEOUS    12
		
	Section 3.01
	Communications    12

		
	Section 3.02
	Successor and Assigns    13

		
	Section 3.03
	Assignment of Rights    13

		
	Section 3.04
	Recapitalization, Exchanges, Etc. Affecting the Shares    13

		
	Section 3.05
	Aggregation of Registrable Securities    13

		
	Section 3.06
	Specific Performance    13

		
	Section 3.07
	Counterparts    13

		
	Section 3.08
	Headings    14

		
	Section 3.09
	Governing Law    14

		
	Section 3.10
	Severability of Provisions    14

		
	Section 3.11
	Entire Agreement    14

		
	Section 3.12
	Amendment    14

		
	Section 3.13
	No Presumption    15

		
	Section 3.14
	Obligations Limited to Parties to Agreement    15

		
	Section 3.15
	Independent Nature of Purchaser’s Obligations    16

		
	Section 3.16
	Interpretation    16

i

REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of January 26, 2017, by and among Swift Energy Company, a Delaware corporation (the “Company”), and each of the Persons set forth on Schedule A to the Share Purchase Agreement (as defined below) (each, a “Purchaser” and collectively, the “Purchasers”).
WHEREAS, this Agreement is made in connection with the Closing of the issuance and sale of Common Shares to the Purchasers pursuant to the Share Purchase Agreement, dated as of January 20, 2017, by and among the Company and the Purchasers (the “Share Purchase Agreement”); and
WHEREAS, the Company has agreed to provide the registration and other rights set forth in this Agreement for the benefit of the Purchasers pursuant to the Share Purchase Agreement.
NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each party hereto, the parties hereby agree as follows:
ARTICLE I 
DEFINITIONS
Section 1.01    Definitions. Capitalized terms used herein without definition shall have the meanings given to them in the Share Purchase Agreement.  The terms set forth below are used herein as so defined:
“Affiliate” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with, the Person in question. As used herein, the term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise. 
“Agreement” has the meaning specified therefor in the introductory paragraph of this Agreement.
“Allowed Delay Deadline” has the meaning specified therefor in Section 2.03 of this Agreement.
“Business Day” means any day other than a Saturday, Sunday, any federal holiday or any other day on which banking institutions in the State of Colorado or the State of New York are authorized or required to be closed by law or governmental action.
“Commission” means the U.S. Securities and Exchange Commission.
“Common Shares” means shares of the Company’s common stock, par value $0.01 per share.

1

“Closing Date” means the date on which the consummation of the purchase and sale of the Common Shares to the Purchasers pursuant to the Share Purchase Agreement occurs.
“Company” has the meaning specified therefor in the introductory paragraph of this Agreement.
“Cut Back Shares” has the meaning specified therefor in Section 2.04 of this Agreement.
“Effective Date” means the date that the applicable Registration Statement has been declared effective by the Commission.
“Effectiveness Deadline” has the meaning specified therefor in Section 2.02(a)(ii) of this Agreement.
“Effectiveness Failure” has the meaning specified therefor in Section 2.02(a)(ii) of this Agreement.
“Effectiveness Period” has the meaning specified therefor in Section 2.01(a) of this Agreement.
 “Filing Failure” has the meaning specified therefor in Section 2.02(a)(i) of this Agreement.
“Holder” means the record holder of any Registrable Securities.
“Liquidated Damages” has the meaning specified therefor in Section 2.02(a) of this Agreement.
“Liquidated Damages Multiplier” means the product obtained by multiplying (x) the Common Share Offering Price by (y) the number of Registrable Securities held by a Holder that may not be disposed of without restriction and without the need for current public information pursuant to any section of Rule 144 (or any successor rule or regulation to Rule 144 then in force) under the Securities Act.
“Listing Failure” has the meaning specified therefor in Section 2.02(a)(iii) of this Agreement.
“Maintenance Failure” has the meaning specified therefor in Section 2.02(a)(iv) of this Agreement.
“Mandatory Shelf Filing Date” has the meaning specified therefore in Section 2.01(a) of this Agreement.
“National Exchange” has the meaning specified therefor in Section 2.02(a)(iii) of this Agreement.
“Person” means an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, association, government agency or political subdivision thereof or other entity.

2

“Purchaser” and “Purchasers” have the meanings specified therefor in the introductory paragraph of this Agreement.
“Registrable Securities” means the Common Shares to be acquired by the Purchasers pursuant to the Share Purchase Agreement and includes any type of interest issued to the Holder as a result of Section 3.04.
“Registration Expenses” has the meaning specified therefor in Section 2.02(b) of this Agreement.
“Registration Statement” has the meaning specified therefor in Section 2.01(a) of this Agreement. 
“Restriction Termination Date” has the meaning specified therefor in Section 2.04 of this Agreement.
“SEC Restrictions” has the meaning specified therefor in Section 2.04 of this Agreement.
“Selling Holder” means a Holder who is selling Registrable Securities pursuant to a registration statement.
“Share Purchase Agreement” has the meaning specified therefor in the recitals of this Agreement. 
Section 1.02    Registrable Securities. Any Registrable Security will cease to be a Registrable Security (a) when a registration statement covering such Registrable Security becomes or has been declared effective by the Commission and such Registrable Security has been sold or disposed of pursuant to such effective registration statement; (b) when such Registrable Security has been disposed of pursuant to any section of Rule 144 (or any similar provision then in effect) under the Securities Act; (c) when such Registrable Security is held by the Company or one of its subsidiaries or Affiliates, except for Registrable Securities issued to Affiliates (in which case, such Registrable Securities shall cease to be Registrable Securities when such Affiliate sells or transfers its Registrable Securities to another Affiliate or the Company or one of its subsidiaries); (d) when such Registrable Security has been sold or disposed of in a private transaction in which the transferor’s rights under this Agreement are not assigned to the transferee of such securities pursuant to Section 2.09 hereof or (e) when such Registrable Security becomes eligible for resale without restriction and without the need for current public information pursuant to any section of Rule 144 (or any similar provision then in effect) under the Securities Act, provided that this Section 1.02(e) shall not apply to any Holder of such Registrable Security that is an affiliate (as defined in Rule 144(a)(1)) of the Company for so long as such Holder is an affiliate).
ARTICLE II 
REGISTRATION RIGHTS
Section 2.01    Mandatory Registration. Following the date hereof, but no later than ninety (90) days following the Closing Date (such date, the “Mandatory Shelf Filing Date”), the Company 

3

shall prepare and use its commercially reasonable efforts to file a registration statement with the Commission providing for registration and resale, on a continuous or delayed basis pursuant to Rule 415, of all of the Registrable Securities then outstanding from time to time; such registration statement shall be on Form S-3 (or any equivalent or successor form) under the Securities Act (the registration statement on such form, as amended or supplemented, the “Registration Statement”). The Company shall use its commercially reasonable efforts to cause the Registration Statement to be declared effective under the Securities Act by the Commission as soon as reasonably practicable after the Mandatory Shelf Filing Date, but in any event no later than the earlier of (A) if the Registration Statement is subject to review by the Commission, one hundred and fifty (150) days following the Closing Date, and (B) if the Registration Statement is not subject to review by the Commission, five (5) days following the date of receipt of such notice from the Commission (such earlier date, the “Effectiveness Deadline”). The Company shall use its commercially reasonable efforts to keep the Registration Statement continuously effective under the Securities Act until the earlier of (A) the date when all of the Registrable Securities covered by such Registration Statement have been sold, and (B) the date on which all of the Common Shares sold to the Purchasers pursuant to the Share Purchase Agreement cease to be Registrable Securities hereunder (such period, the “Effectiveness Period”). The Registration Statement when effective (including the documents incorporated therein by reference) will comply as to form in all material respects with all applicable requirements of the Securities Act and the Exchange Act and will not contain an 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 not misleading (in the case of any prospectus contained in such Registration Statement, in the light of the circumstances under which a statement is made).  As soon as practicable following the date that the Registration Statement becomes effective, but in any event within two (2) Business Days of such date, the Company shall provide the Holders with written notice of the effectiveness of the Registration Statement. 
Section 2.02    Failure to File or Become Effective; Liquidated Damages. 
(a)    If:
(i)    the Company has not filed the Registration Statement with the Commission on or prior to the Mandatory Shelf Filing Date (a “Filing Failure”), 
(ii)    the Registration Statement is not declared effective by the Commission on or before the Effectiveness Deadline (an “Effectiveness Failure”), 
(iii)    the Common Shares are not listed and quoted for trading on either the New York Stock Exchange or the NASDAQ Stock Market LLC (such exchange on which the Common Shares are to be listed, the “National Exchange”) within one hundred and eighty (180) days following the Closing Date (a “Listing Failure”), or
(iv)    other than during an Allowed Delay, on any day during the Effectiveness Period after the Common Shares have been listed and quoted for trading on the National Exchange, sales of all of the Registrable Securities required to be included on such Registration Statement cannot be made pursuant to such Registration Statement (including, without limitation, because of a failure to keep such Registration Statement effective, a 

4

failure to disclose such information as is necessary for sales to be made pursuant to such Registration Statement, a suspension or delisting of the Common Shares on the National Exchange or by reason of a stop order) or the prospectus contained therein is not available for use for any reason (a “Maintenance Failure”),
then, as partial relief for the damages to each Holder by reason of any such delay in, or reduction of, its ability to sell the Registrable Securities (which remedy shall not be exclusive of any other remedies available at law or in equity), the Company shall pay to each Holder of Registrable Securities relating to such Registration Statement, as liquidated damages and not as a penalty, an amount in cash equal to one percent (1%) of the Liquidated Damages Multiplier of such Holder:  (1) on the date of such Filing Failure, Effectiveness Failure, Listing Failure or Maintenance Failure, as applicable, and (2) on every thirty (30) day anniversary of such Filing Failure, Effectiveness Failure, Listing Failure or Maintenance Failure, until such failure is cured (in each case, prorated for periods totaling less than thirty (30) days).  The payments to which the Holders shall be entitled pursuant to this Section 2.02(a) are referred to herein as “Liquidated Damages.”  
(b)    Following the initial payment of Liquidated Damages for any particular event or failure (which shall be paid on the date of such event or failure, as set forth above), without limiting the foregoing, if an event or failure giving rise to Liquidated Damages is cured prior to any thirty (30) day anniversary of such event or failure, then payment of such Liquidated Damages shall be made on the third (3rd) Business Day after such cure.  In the event the Company fails to make Liquidated Damages payments in a timely manner in accordance with the foregoing, such Liquidated Damages payments shall bear interest at the rate of one percent (1%) per month (prorated for partial months) until paid in full.  
(c)    Notwithstanding the foregoing, (i) no Liquidated Damages shall be owed to any Holder (other than with respect to a Listing Failure or a Maintenance Failure resulting from a suspension or delisting of the Common Shares on the National Exchange) with respect to any period during which all of such Holder’s Registrable Securities may be sold by such Holder without restriction under Rule 144 (including, without limitation, volume restrictions) and without the need for current public information required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable) and (ii) no Liquidated Damages shall be owed to any Holder to the extent such Holder shall have received Liquidated Damages in excess of 10% of the aggregate Purchase Price of such Holder. For the avoidance of doubt, no more than one payment of Liquidated Damages shall be payable by the Company at any given time, notwithstanding that more than one failure giving rise to Liquidated Damages shall have occurred and is continuing (e.g., an Effectiveness Failure and a Listing Failure continuing simultaneously); provided that payment of Liquidated Damages shall continue in accordance with this Section 2.02(c) until all failures giving rise to such payments are cured.
Section 2.03    Blackout and Delay Rights. For not more than twenty (20) consecutive days or for a total of not more than forty-five (45) days in any twelve (12) month period, the Company may suspend the use of the prospectus included in the Registration Statement in the event that the Company determines in good faith that such suspension is necessary to (A) delay the disclosure of material nonpublic information concerning the Company, the disclosure of which at the time is not, in the good faith opinion of the Company, in the best interests of the Company or (B) amend or 

5

supplement the Registration Statement or the related prospectus so that the Registration Statement or prospectus shall not include an 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 the case of the prospectus in light of the circumstances under which they were made, not misleading (an “Allowed Delay”); provided, that the Company shall promptly (i) notify each Purchaser in writing of the commencement of an Allowed Delay, but shall not (without the prior written consent of an Purchaser) disclose to such Purchaser any material nonpublic information giving rise to an Allowed Delay, (ii) advise the Purchasers in writing to cease all sales under the Registration Statement until the end of the Allowed Delay and (iii) use commercially reasonable efforts to terminate an Allowed Delay as promptly as practicable.
Section 2.04    Sale Procedures. In connection with its obligations under this Article II, the Company will, as expeditiously as possible:
(a)    prepare and file with the Commission such amendments and supplements to the Registration Statement and the prospectus used in connection therewith as may be necessary to keep the Registration Statement effective for the Effectiveness Period and as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by the Registration Statement; 
(b)    make available to each Selling Holder (i) as far in advance as reasonably practicable before filing the Registration Statement or any other registration statement contemplated by this Agreement or any supplement or amendment thereto, upon request, copies of reasonably complete drafts of all such documents proposed to be filed (including exhibits and each document incorporated by reference therein to the extent then required by the rules and regulations of the Commission), and provide each such Selling Holder the opportunity to object to any information pertaining to such Selling Holder and its plan of distribution that is contained therein and make the corrections reasonably requested by such Selling Holder with respect to such information prior to filing the Registration Statement or such other registration statement or supplement or amendment thereto, and (ii) such number of copies of the Registration Statement or such other registration statement and the prospectus included therein and any supplements and amendments thereto as such Selling Holder may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities covered by such Registration Statement or other registration statement;
(c)    if applicable, use its commercially reasonable efforts to register or qualify the Registrable Securities covered by the Registration Statement or any other registration statement contemplated by this Agreement under the securities or blue sky laws of such jurisdictions as the Selling Holders shall reasonably request in writing by the time the Registration Statement is declared effective by the Commission; provided, however, that the Company will not be required to qualify generally to transact business in any jurisdiction where it is not then required to so qualify or to take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject;
(d)    promptly notify each Selling Holder, at any time when a prospectus relating thereto is required to be delivered by any of them under the Securities Act, of (i) the filing of the Registration Statement or any other registration statement contemplated by this Agreement or any prospectus 

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or prospectus supplement to be used in connection therewith, or any amendment or supplement thereto, and, with respect to such Registration Statement or any other registration statement or any post-effective amendment thereto, when the same has become effective; and (ii) the receipt of any written comments from the Commission with respect to any filing referred to in clause (i) and any written request by the Commission for amendments or supplements to the Registration Statement or any other registration statement or any prospectus or prospectus supplement thereto;
(e)    immediately notify each Selling Holder, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of (i) the happening of any event as a result of which the prospectus or prospectus supplement contained in the Registration Statement or any other registration statement contemplated by this Agreement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any prospectus contained therein, in the light of the circumstances under which a statement is made); (ii) the issuance or express threat of issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any other registration statement contemplated by this Agreement, or the initiation of any proceedings for that purpose; or (iii) the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the applicable securities or blue sky laws of any jurisdiction.  Following the provision of such notice, the Company agrees to as promptly as practicable amend or supplement the prospectus or prospectus supplement or take other appropriate action so that the prospectus or prospectus supplement does not include an 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 not misleading in the light of the circumstances then existing and to take such other commercially reasonable action as is necessary to remove a stop order, suspension, threat thereof or proceedings related thereto;
(f)    upon request and subject to appropriate confidentiality obligations, furnish to each Selling Holder copies of any and all transmittal letters or other correspondence with the Commission or any other governmental agency or self-regulatory body or other body having jurisdiction (including any domestic or foreign securities exchange) relating to the Registration Statement;
(g)    otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder;
(h)    cause all such Registrable Securities registered pursuant to this Agreement to be listed on each securities exchange or nationally recognized quotation system on which similar securities issued by the Company are then listed;
(i)    use its commercially reasonable efforts to cause the Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Company to enable the Selling Holders to consummate the disposition of such Registrable Securities;

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(j)    provide a transfer agent and registrar for all Registrable Securities covered by such registration statement not later than the Effective Date; and
(k)    if requested by a Selling Holder, (i) incorporate in a prospectus supplement or post-effective amendment such information as such Selling Holder reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering and (ii) make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment.
The Company will not name a Holder as an underwriter as defined in Section 2(a)(11) of the Securities Act in any Registration Statement without such Holder’s consent.  If the staff of the Commission requires the Company to name any Holder as an underwriter as defined in Section 2(a)(11) of the Securities Act, and such Holder does not consent thereto, then such Holder’s Registrable Securities shall not be included on the Registration Statement and the Company shall have no further obligations hereunder with respect to Registrable Securities held by such Holder.
If at any time the Commission takes the position that the offering of some or all of the Registrable Securities in the Registration Statement is not eligible to be made on a delayed or continuous basis under the provisions of Rule 415 under the Securities Act or requires any Purchaser to be named as an “underwriter,” the Company shall use its reasonable best efforts to persuade the Commission that the offering contemplated by the Registration Statement is a valid secondary offering and not an offering “by or on behalf of the issuer” as defined in Rule 415 and that none of the Purchasers is an “underwriter.”  The Purchasers shall have the right to participate or have their counsel participate in any meetings or discussions with the Commission regarding the Commission’s position and to comment or have their counsel comment on any written submission made to the Commission with respect thereto.  No such written submission with respect to this matter shall be made to the Commission to which the Purchasers’ counsel reasonably objects.  In the event that, despite the Company’s reasonable best efforts and compliance with the terms of this Section 2.04, the Commission refuses to alter its position, the Company shall (i) remove from the Registration Statement such portion of the Registrable Securities (the “Cut Back Shares”) and/or (ii) agree to such restrictions and limitations on the registration and resale of the Registrable Securities as the Commission may require to assure the Company’s compliance with the requirements of Rule 415 (collectively, the “SEC Restrictions”). Any cut-back imposed on the Purchasers pursuant to this Section 2.04 shall be allocated among the Purchasers on a pro rata basis unless the SEC Restrictions otherwise require or provide or the Purchasers otherwise agree.  No Liquidated Damages shall accrue as to any Cut Back Shares until such date as the Company is able to effect the registration of such Cut Back Shares in accordance with any SEC Restrictions (such date, the “Restriction Termination Date” of such Cut Back Shares). From and after the Restriction Termination Date applicable to any Cut Back Shares, all of the provisions of Article II (including the Liquidated Damages provisions) shall again be applicable to such Cut Back Shares; provided, however, that (i) the Filing Deadline for the Registration Statement including such Cut Back Shares shall be ten (10) Business Days after such Restriction Termination Date, and (ii) the date by which the Company 

8

is required to obtain effectiveness with respect to such Cut Back Shares under Article II shall be the 90th day immediately after the Restriction Termination Date. For the avoidance of doubt, for purposes of this Section 2.04, the term “reasonable best efforts” shall not require the Company to institute or maintain any action, suit or proceeding against the Commission or any member of the staff of the Commission.
Each Selling Holder, upon receipt of notice from the Company of the happening of any event of the kind described in subsection (e) of this Section 2.04, shall forthwith discontinue offers and sales of the Registrable Securities by means of a prospectus or prospectus supplement until such Selling Holder’s receipt of the copies of the supplemented or amended prospectus contemplated by subsection (e) of this Section 2.04 or until it is advised in writing by the Company that the use of the prospectus may be resumed and has received copies of any additional or supplemental filings incorporated by reference in the prospectus, and, if so directed by the Company, such Selling Holder will deliver to the Company (at the Company’s expense) all copies in their possession or control, other than permanent file copies then in such Selling Holder’s possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice.
Section 2.05    Cooperation by Holders. The Company shall have no obligation to include Registrable Securities of a Holder in the Registration Statement who has failed to timely furnish such information that the Company determines, after consultation with its counsel, is reasonably required in order for the registration statement or prospectus supplement, as applicable, to comply with the Securities Act.
Section 2.06    Expenses.  
(a)    The Company will pay all reasonable Registration Expenses as determined in good faith.  In addition, except as otherwise provided in Section 2.07 hereof, the Company shall not be responsible for legal fees incurred by Holders in connection with the exercise of such Holders’ rights hereunder.
(b)    “Registration Expenses” means all expenses incident to the Company’s performance under or compliance with this Agreement to effect the registration of Registrable Securities on the Registration Statement pursuant to Section 2.01, and the disposition of such Registrable Securities, including, without limitation, all registration, filing, securities exchange listing and fees associated with the National Exchange, all registration, filing, qualification and other fees and expenses of complying with securities or blue sky laws, fees of the Financial Industry Regulatory Authority, fees of transfer agents and registrars, all word processing, duplicating and printing expenses, any transfer taxes and the fees and disbursements of counsel and independent public accountants for the Company, including the expenses of any special audits or “cold comfort” letters required by or incident to such performance and compliance.
Section 2.07    Indemnification.  
(a)    Indemnification by the Company.  In the event of any registration of any securities of the Company under the Securities Act pursuant to this Agreement, the Company will, and hereby does, indemnify and hold harmless the seller of any Registrable Securities covered by such 

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registration statement, its directors and officers, each other Person who participates in the offering or sale of such securities and each other Person, if any, who controls such seller, within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which such seller or any such director or officer or controlling person may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such securities were registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Company will reimburse such seller and each such director, officer, and controlling person for any legal or any other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, liability, action or proceeding; provided that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, any such preliminary prospectus, final prospectus, summary prospectus, amendment or supplement in reliance upon and in conformity with information regarding such seller furnished by such seller (or any representative of such seller) to the Company in writing or electronically specifically stating that it is for use in the preparation thereof. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such seller or any such director, officer or controlling person and shall survive the transfer of such securities by such seller.
(b)    Indemnification by the Sellers.  The Company may require, as a condition to including any Registrable Securities in any registration statement filed pursuant to Section 2.01 above, that the Company shall have received an undertaking satisfactory to it from the prospective seller of such securities, to indemnify and hold harmless (in the same manner and to the same extent as set forth in Section 2.07(a) above) the Company, each director of the Company, each officer of the Company and each other Person, if any, who controls the Company within the meaning of the Securities Act, with respect to any statement or alleged statement in or omission or alleged omission from such registration statement, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, if such statement or alleged statement or omission or alleged omission was made in reliance upon and in conformity with information regarding such seller furnished by such seller (or any representative of such seller) to the Company in writing or electronically specifically stating that it is for use in the preparation of such registration statement, preliminary prospectus, final prospectus, summary prospectus, amendment or supplement. The maximum liability of each seller for any such indemnification shall not exceed the amount of proceeds received by such seller from the sale of his/its Registrable Securities. Such indemnity shall remain in full force and effect, regardless of any investigation made by or on behalf of the Company or any such director, officer or controlling Person and shall survive the transfer of such securities by such seller.
(c)    Notices of Claims, etc.  Promptly after receipt by an indemnified party of notice of the commencement of any action or proceeding involving a claim referred to in Section 2.06(a) or 

10

(b) above, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party, give written notice to the latter of the commencement of such action; provided that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations under Section 2.06(a) or (b) above, except to the extent that the indemnifying party is actually prejudiced by such failure to give notice. In case any such action is brought against an indemnified party, unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist in respect of such claim, the indemnifying party shall be entitled to participate in and to assume the defense thereof, jointly with any other indemnifying party similarly notified to the extent that it may wish, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the consent of the indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.
(d)    Other Indemnification.  Indemnification similar to that specified in Sections 2.07(a), (b) and (c) above (with appropriate modifications) shall be given by the Company and each seller of Registrable Securities with respect to any required registration or other qualification of securities under any Federal or state law or regulation of any governmental authority other than the Securities Act.
(e)    Indemnification Payments.  The indemnification required by this Section 2.07 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or expense, loss, damage or liability is incurred.
Section 2.08    Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the Commission that may permit the sale of the Registrable Securities to the public without registration, the Company agrees to use its commercially reasonable efforts to:
(a)    make and keep public information regarding the Company available, as those terms are understood and defined in Rule 144 under the Securities Act, at all times from and after the date hereof;
(b)    file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act at all times from and after the date hereof; and
(c)    so long as a Holder owns any Registrable Securities, furnish, unless otherwise available via EDGAR, to such Holder forthwith upon request a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed as such Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing such Holder to sell any such securities without registration.

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Section 2.09    Transfer or Assignment of Registration Rights. The rights to cause the Company to register Registrable Securities granted to the Purchasers by the Company under this Article II may be transferred or assigned by any Purchaser to one or more transferees or assignees of Registrable Securities; provided, however, that (a) unless the transferee or assignee is an Affiliate of, and after such transfer or assignment continues to be an Affiliate of, such Purchaser, the amount of Registrable Securities transferred or assigned to such transferee or assignee shall represent at least $1.0 million of Registrable Securities (based on the Common Share Price), (b) the Company is given written notice prior to any said transfer or assignment, stating the name and address of each such transferee or assignee and identifying the securities with respect to which such registration rights are being transferred or assigned, and (c) each such transferee or assignee assumes in writing responsibility for its portion of the obligations of such Purchaser under this Agreement.
ARTICLE III 
MISCELLANEOUS
Section 3.01    Communications. All notices and other communications provided for or permitted hereunder shall be made in writing by facsimile, electronic mail, courier service or personal delivery:
(a)    if to a Purchaser, to the respective address listed on Schedule A to the Share Purchase Agreement.
(b)    if to a transferee of an Purchaser, to such Holder at the address provided pursuant to Section 2.09 above; and
(c)    if to the Company:
Swift Energy Company  
575 Dairy Ashford, Suite 1200    
Houston, TX 77079
Attention: Christopher M. Abundis, Vice President, General Counsel and Secretary
Email: chris.abundis@swiftenergy.com  
with a copy to:
Vinson & Elkins L.L.P.
1001 Fannin Street
Suite 2500
Houston, TX 77002-6760
Attention: David P. Oelman 
Email: doelman@velaw.com
and    
Vinson & Elkins L.L.P. 
1001 Fannin Street 

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Suite 2500 
Houston, TX 77002-6760 
Attention: James M. Prince  
Email: jprince@velaw.com
All such notices and communications shall be deemed to have been received at the time delivered by hand, if personally delivered; when receipt acknowledged, if sent via facsimile or sent via Internet electronic mail; and when actually received, if sent by courier service or any other means.
Section 3.02    Successor and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties, including subsequent Holders of Registrable Securities to the extent permitted herein.
Section 3.03    Assignment of Rights. All or any portion of the rights and obligations of any Purchaser under this Agreement may be transferred or assigned by such Purchaser only in accordance with Section 2.09 hereof.
Section 3.04    Recapitalization, Exchanges, Etc. Affecting the Shares. The provisions of this Agreement shall apply to the full extent set forth herein with respect to any and all shares of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) that may be issued in respect of, in exchange for or in substitution of, the Registrable Securities, and shall be appropriately adjusted for combinations, share splits, recapitalizations, pro rata distributions of shares and the like occurring after the date of this Agreement.
Section 3.05    Aggregation of Registrable Securities. 
All Registrable Securities held or acquired by Persons who are Affiliates of one another shall be aggregated together for the purpose of determining the availability of any rights and applicability of any obligations under this Agreement.
Section 3.06    Specific Performance. Damages in the event of breach of this Agreement by a party hereto may be difficult, if not impossible, to ascertain, and it is therefore agreed that each such Person, in addition to and without limiting any other remedy or right it may have, will have the right to an injunction or other equitable relief in any court of competent jurisdiction, enjoining any such breach, and enforcing specifically the terms and provisions hereof, and each of the parties hereto hereby waives any and all defenses it may have on the ground of lack of jurisdiction or competence of the court to grant such an injunction or other equitable relief.  The existence of this right will not preclude any such Person from pursuing any other rights and remedies at law or in equity that such Person may have.
Section 3.07    Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same Agreement.

13

Section 3.08    Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
Section 3.09    Governing Law. THIS AGREEMENT, AND ALL CLAIMS OR CAUSES OF ACTION (WHETHER IN CONTRACT OR TORT) THAT MAY BE BASED UPON, ARISE OUT OF OR RELATE TO THIS AGREEMENT OR THE NEGOTIATION, EXECUTION OR PERFORMANCE OF THIS AGREEMENT (INCLUDING ANY CLAIM OR CAUSE OF ACTION BASED UPON, ARISING OUT OF OR RELATED TO ANY REPRESENTATION OR WARRANTY MADE IN OR IN CONNECTION WITH THIS AGREEMENT), WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.  ANY ACTION AGAINST ANY PARTY RELATING TO THE FOREGOING SHALL BE BROUGHT IN ANY FEDERAL OR STATE COURT OF COMPETENT JURISDICTION LOCATED WITHIN THE STATE OF DELAWARE, AND THE PARTIES HERETO HEREBY IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT LOCATED WITHIN THE STATE OF DELAWARE OVER ANY SUCH ACTION.  THE PARTIES HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH DISPUTE BROUGHT IN SUCH COURT OR ANY DEFENSE OF INCONVENIENT FORUM FOR THE MAINTENANCE OF SUCH DISPUTE.  EACH OF THE PARTIES HERETO AGREES THAT A JUDGMENT IN ANY SUCH DISPUTE MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
Section 3.10    Severability of Provisions. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting or impairing the validity or enforceability of such provision in any other jurisdiction.
Section 3.11    Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein.  There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the rights granted by the Company set forth herein.  This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.
Section 3.12    Amendment. This Agreement may be amended only by means of a written amendment signed by the Company and the Holders of a majority of the then outstanding Registrable Securities; provided, however, that no such amendment shall materially and adversely affect the rights of any Holder hereunder without the consent of such Holder.
Section 3.13    No Presumption. If any claim is made by a party relating to any conflict, omission or ambiguity in this Agreement, no presumption or burden of proof or persuasion shall be implied by virtue of the fact that this Agreement was prepared by or at the request of a particular party or its counsel.  

14

Section 3.14    Obligations Limited to Parties to Agreement. Each of the Parties hereto covenants, agrees and acknowledges that no Person other than the Purchasers (and their permitted transferees and assignees) and the Company shall have any obligation hereunder and that, notwithstanding that one or more of the Purchasers may be a corporation, partnership or limited liability company, no recourse under this Agreement or under any documents or instruments delivered in connection herewith or therewith shall be had against any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the Purchasers or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the foregoing, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any applicable Law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the Purchasers or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the foregoing, as such, for any obligations of the Purchasers under this Agreement or any documents or instruments delivered in connection herewith or therewith or for any claim based on, in respect of or by reason of such obligation or its creation, except in each case for any transferee or assignee of a Purchaser hereunder.
Section 3.15    Independent Nature of Purchaser’s Obligations. The obligations of each Purchaser under this Agreement are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser under this Agreement.  Nothing contained herein, and no action taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement.  Each Purchaser shall be entitled to independently protect and enforce its rights, including without limitation, the rights arising out of this Agreement, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose.
Section 3.16    Interpretation. Article and Section references are to this Agreement, unless otherwise specified.  All references to instruments, documents, contracts and agreements are references to such instruments, documents, contracts and agreements as the same may be amended, supplemented and otherwise modified from time to time, unless otherwise specified. The word “including” shall mean “including but not limited to.” Whenever any determination, consent or approval is to be made or given by an Purchaser under this Agreement, such action shall be in such Purchaser’s sole discretion unless otherwise specified.

[Signature pages to follow]

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IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first above written.
SWIFT ENERGY COMPANY 

By:    /s/ Christopher M. Abundis
Name:   Christopher M. Abundis
Title:     Vice President, General Counsel and Secretary

Signature Page to  
    Registration Rights Agreement

PURCHASERS:

SVMF 71, LLC

By:    /s/ James Dougherty        
Name: James Dougherty
Title:   Fund Chief Financial Officer

Signature Page to  
Registration Rights Agreement

MatlinPatterson Global Advisers LLC as Advisor for MatlinPatterson Global Opportunities Master Fund L.P.

By:    /s/ Michael Lipsky        
Name: Michael Lipsky
Title:   Senior Portfolio Manager

Signature Page to  
Registration Rights Agreement

CVI Investments Inc. by Heights Capital Management its Authorized Agent

By:    /s/ Martin Kobinger        
Name: Martin Kobinger
Title:   Investment Manager

Signature Page to  
Registration Rights Agreement

DW Value Master Fund, Ltd.

By:    DW Partners, LP, its investment manager
		
	By:
	DW Investment Partners, LLC, its general partner

By:    /s/ Shawn Singh        
Name: Shawn Singh
Title:   Authorized Signatory

Signature Page to  
Registration Rights Agreement

HUTCHIN HILL CAPITAL PRIMARY FUND, LTD

		
	By:
	Hutchin Hill Capital LP, its Investment Manager

By:    /s/ Scott A. Kislin        
Name: Scott A. Kislin
Title:   Chief Legal Officer

Signature Page to  
Registration Rights Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00266-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00266-of-00352.parquet"}]]