Document:

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

                                           Right to
                                           Purchase
                                           50,000
                                           Shares of
                                           Common  Stock,   par  value
                                           $0.005
                                           per share

                             STOCK PURCHASE WARRANT

         THIS  CERTIFIES  THAT, for value  received,  THE ISOSCELES FUND LIMITED
("Holder") or its registered assigns, is entitled to purchase from AURA SYSTEMS,
INC., a Delaware  corporation (the "Company"),  at any time or from time to time
during the period specified in Paragraph 2 hereof, FIFTY Thousand (50,000) fully
paid and  nonassessable  shares of the Company's  Common Stock, par value $0.005
per share (the "Common  Stock"),  at an exercise  price of $0.375 per share (the
"Exercise  Price").  The term  "Warrant  Shares," as used herein,  refers to the
shares of  Common  Stock  purchasable  hereunder.  The  Warrant  Shares  and the
Exercise Price are subject to adjustment as provided in Paragraph 4 hereof.

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

<PAGE>

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

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

         2. Period of Exercise.  This Warrant is exercisable at any time or from
time to time on or after March 17, 2000 (the "Issue Date") and before 5:00 p.m.,
New York  City  time on the  fifth  (5th)  anniversary  of the  Issue  Date (the
"Exercise Period").

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

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

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

<PAGE>

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

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

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

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

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

<PAGE>

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

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

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

<PAGE>

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

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

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

<PAGE>

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

     (vi)  Exceptions  to  Adjustment  of Exercise  Price.  No adjustment to the
Exercise  Price will be made (i) upon the exercise of any  warrants,  options or
convertible  securities granted,  issued and outstanding on the date of issuance
of this  Warrant;  (ii) upon the grant or exercise of any stock or options which
may  hereafter  be granted or exercised  under any employee  benefit plan of the
Company now existing or to be implemented in the future, so long as the issuance
of such stock or options is approved by a majority of the independent members of
the  Board of  Directors  of the  Company  or a  majority  of the  members  of a
committee of independent  directors  established for such purpose; or (iii) upon
the exercise of the Warrants.

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

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

<PAGE>

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

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

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

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

<PAGE>

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

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

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

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

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

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

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

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

<PAGE>

                  (l)      Certain Definitions.

     (i) "Common  Stock Deemed  Outstanding"  shall mean the number of shares of
Common Stock actually  outstanding (not including shares of Common Stock held in
the treasury of the Company), plus (x) pursuant to Paragraph 4(b)(i) hereof, the
maximum  total  number of shares of Common Stock  issuable  upon the exercise of
Options,  as of the date of such issuance or grant of such Options,  if any, and
(y) pursuant to Paragraph 4(b)(ii) hereof, the maximum total number of shares of
Common Stock issuable upon conversion or exchange of Convertible Securities,  as
of the date of issuance of such Convertible Securities, if any.

     (ii)  "Market  Price,"  as of any date,  (i) means the  average of the last
reported  sale  prices  for the shares of Common  Stock on the  Nasdaq  National
Market ("Nasdaq") for the five (5) trading days immediately  preceding such date
as reported by Bloomberg  Financial Markets or an equivalent  reliable reporting
service  mutually  acceptable to and hereafter  designated by the holder of this
Warrant and the Company  ("Bloomberg"),  or (ii) if Nasdaq is not the  principal
trading market for the shares of Common Stock,  the average of the last reported
sale prices on the principal trading market for the Common Stock during the same
period as reported by  Bloomberg,  or (iii) if market value cannot be calculated
as of such date on any of the  foregoing  bases,  the Market  Price shall be the
fair market  value as  reasonably  determined  in good faith by (a) the Board of
Directors of the Corporation or, at the option of a majority-in-interest  of the
holders of the  outstanding  Warrants by (b) an independent  investment  bank of
nationally  recognized  standing in the valuation of  businesses  similar to the
business of the  corporation.  The manner of determining the Market Price of the
Common Stock set forth in the foregoing  definition  shall apply with respect to
any other security in respect of which a  determination  as to market value must
be made hereunder.

     (iii) "Common Stock," for purposes of this Paragraph 4, includes the Common
Stock,  par value  $0.005 per share,  and any  additional  class of stock of the
Company having no preference as to dividends or  distributions  on  liquidation,
provided that the shares purchasable pursuant to this Warrant shall include only
shares of Common  Stock,  par value  $0.005 per share,  in respect of which this
Warrant is exercisable,  or shares resulting from any subdivision or combination
of such Common Stock,  or in the case of any  reorganization,  reclassification,
consolidation,  merger,  or sale of the character  referred to in Paragraph 4(e)
hereof,  the  stock  or  other  securities  or  property  provided  for in  such
Paragraph.

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

<PAGE>

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

         7.       Transfer, Exchange, and Replacement of Warrant.

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

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

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

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

<PAGE>

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

         8.       [Intentionally Omitted].

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

<PAGE>

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

         11.      Miscellaneous.

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

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

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

<PAGE>

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

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

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

               AURA SYSTEMS, INC.

               By:                     _____________________________
               Name:                   _____________________________
               Title:                  _____________________________

               Dated as of March  17, 2000

<PAGE>

1-PH/1156764.1
                           FORM OF EXERCISE AGREEMENT

To: Aura Systems, Inc.

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

         Name:                      ___________________________________

         Signature:                    ________________________________
         Address:                      ________________________________
                                       --------------------------------

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

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

<PAGE>

1-PH/1156764.1
                               FORM OF ASSIGNMENT

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

Name of Assignee                   Address                       No of Shares

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

Dated:  ________ __, 200_

In the presence of:

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

      Name:                     ____________________________________

      Signature:                   _________________________________

      Title of Signing Officer or
Agent (if any):
                                ----------------------------------
    Address:                    __________________________________
                                ----------------------------------

    Note:    The above signature  should  correspond  exactly with
             the name on the face of the within Warrant.SETTLEMENT AGGREEMENT
                              AND RELEASE OF CLAIMS

         This Settlement  Agreement and Release of Claims ("Agreement") dated as
of March 6, 2000,  is made and entered into by The  Isosceles  Fund  Limited,  a
Bahamian company ("ISOSCELES"),  and AURA SYSTEMS, INC., a Delaware company (the
"Company").

                             W I T H N E S S E T H:

         WHEREAS,  the Company has previously  issued to ISOSCELES a Convertible
Debenture dated October 27, 1998, in the original principal amount of $1,000,000
(the  "Convertible   Debenture")  pursuant  to  a  certain  Securities  Purchase
Agreement  between  ISOSCELES and the Company dated as of October 27, 1998, (the
"Purchase  Agreement"),  which  Convertible  Debenture  is  presently  owned  by
ISOSCELES; and

         WHEREAS, the obligations of the Company under the Debenture are secured
by a certain Security Agreement dated as of October 27, 1998; and

         WHEREAS,  the parties  desire to enter into this  Agreement in order to
provide for (i) the issuance to ISOSCELES of Three Million (3,000,000) shares of
the Company's Common Stock (the "Shares") pursuant to the Convertible Debenture,
(ii) the issuance by the Company to ISOSCELES of a warrant, in the form attached
hereto,  entitling  ISOSCELES  from  time  to time to  purchase  Fifty  Thousand
(50,000)  shares of Company's  Common  Stock at an exercise  price of $0.375 per
share (the  "Settlement  Warrant"),  and (iii) the surrender and cancellation of
the Convertible Debenture; and

         WHEREAS,  contemporaneously  with the  execution of this  Agreement the
parties are entering  into an Escrow  Agreement  (the "Escrow  Agreement")  with
Guzik  &  Associates,  as  escrow  agent  ("Escrow  Agent")  to  facilitate  the
consummation of the transactions contemplated by this Agreement.

         NOW,  THEREFORE,  in consideration of the mutual covenants and promises
herein contained and other good and valuable consideration,  receipt of which is
hereby acknowledged, it is hereby agreed by and between the parties as follows:

         1. The  Exchange.  The Company  shall notify  ISOSCELES  and the Escrow
Agent  within two (2)  business  days of the date that the Company  shall comply
with  the  current  public  information  requirements  of  Rule  144(c)  of  the
Securities Act of 1933 (the "Securities Act").  Within five business days of the
date  that  the  Company  shall  comply  with  the  current  public  information
requirements  of Rule  144(c) of the  Securities  Act of 1933  (the  "Securities
Act"),  the parties  shall  deliver to the Escrow Agent, 1800 Century Park East,
Fifth Floor, Los Angeles, California, to hold in escrow pending the consummation
of the exchange  contemplated by this Section 1, the following:  (A) the Company
shall deliver (i) a stock  certificate  evidencing  the Shares,  which are being
issued as a  partial  conversion  of the  Debenture,  registered  in the name of
ISOSCELES, together with a legal opinion of Escrow Agent to the effect that such
shares have been  validly  issued and may be resold  under Rule 144  promulgated
under the  Securities  Act of 1933 and that the  holding  period  for the Shares
under  such  Rule  commenced  on the date the  Debenture  was  issued,  (ii) the
Settlement Warrant,  registered in the name of ISOSCELES, and (iii) two executed
originals of this Agreement; and (B) ISOSCELES shall deliver (i) the Convertible
Debenture, and (ii) two executed originals of this Agreement.

         2.  Closing.  Subject to and in accordance  with the Escrow  Agreement,
Escrow Agent shall notify each of the Company and  ISOSCELES  when it shall have
received  all of the  items  required  to have  been  delivered  by the  parties
pursuant  to Section 1 (each a "Closing  Item" and  collectively,  the  "Closing
Items").  Promptly  thereafter,  Escrow Agent shall deliver without liability or
other  risk  to any  party, which  is  hereby  waived, (A) to the  Company:  the
Convertible Debenture, and one executed original of this Agreement and (B) to or
as directed by ISOSCELES:  the Settlement  Warrant,  the Shares (and the related
Rule 144 opinion) and one executed original of this Agreement (the date that all
of the Closing Items are received is the "Closing Date").  If Escrow Agent shall
not have  received all of the Closing  Items in  satisfactory  form on or before
March15,  2000,  this Agreement may be terminated by either party as if it never
existed and Escrow  Agent's sole duties and  obligations  shall be to return the
items deposited with it as set forth in the escrow agreement.

         3.  Warranties of ISOSCELES.  ISOSCELES  represents and warrants to the
Company as follows:

     (a)  Authorization;  Enforcement.  ISOSCELES  has all  requisite  power and
          authority to enter into and perform this  Agreement  and to consummate
          the exchange  contemplated  hereby.  This  Agreement has been duly and
          validly authorized by ISOSCELES. This Agreement has been duly executed
          by  ISOSCELES  and  upon  full  delivery  of the  Closing  Items  will
          constitute the valid and binding  obligation of ISOSCELES  enforceable
          against it in accordance with its terms.

     (b)  Information;   Acknowledgment  of  Risk.  The  Company  has  furnished
          ISOSCELES and its advisors, if any, with all materials relating to the
          business,  finances  and  operations  of the  Company  which have been
          requested by ISOSCELES and its  advisors.  ISOSCELES has been afforded
          the  opportunity  to ask  questions  of the Company  and has  received
          satisfactory  answers to such  questions  concerning  the terms of the
          securities offered, sold or exchanged hereby.  ISOSCELES is aware that
          the Shares are speculative, that an investment in the Company involves
          a high  degree of risk,  that it may lose its  entire  investment  and
          ISOSCELES  can  afford  to bear  the  risks  of an  investment  in the
          Company.  ISOSCELES  is a  sophisticated  investor  with  considerable
          experience in investments of this nature.  ISOSCELES acknowledges that
          the Company makes no representations or warranties with respect to the
          Company, the Shares other than those representations or warranties set
          forth in this  Agreement,  and ISOSCELES has in no way relied upon any
          other statement made or information provided by the Company.

     (c)  Accredited Investor.  ISOSCELES is an "accredited investor" within the
          meaning of Regulation D of the Securities Act of 1933 (the "Securities
          Act").

     (d)  Non-Affiliate Status. ISOSCELES is not presently or at any time within
          the  past  three  months,  and  on the  Closing  Date  will  not be an
          "affiliate"  of the  Company  as such  quoted  term is  defined in the
          Securities Act.

4. Warranties of the Company.  The Company  represents and warrants to ISOSCELES
as follows:

     (a)  Authorization;  Enforcement.  The Company has all requisite  power and
          authority to enter into and perform this  Agreement  and to consummate
          the exchange  contemplated  hereby.  This  Agreement has been duly and
          validly  authorized  by the  Company.  This  Agreement  has been  duly
          executed by the Company  and upon full  delivery of the Closing  Items
          will  constitute  the  valid and  binding  obligation  of the  Company
          enforceable against it in accordance with its terms.

     (b)  Ownership of Shares. On the Closing Date the Shares, when delivered to
          ISOSCELES in accordance  with the terms of this  Agreement (i) will be
          free and  clear of any  security  interests,  liens,  claims  or other
          encumbrances,  (ii) will have been  duly and  validly  authorized  and
          delivered,  full paid and  nonassessable and will be valid and binding
          obligations of the Company, (iii) will not have been, individually and
          collectively,  issued or sold in violation of any  preemptive or other
          similar  rights of the holders of any securities or obligations of the
          Company,  (iv) will not subject the ISOSCELES to personal liability by
          reason of being a shareholder, and (v) will be eligible for sale under
          Rule 144 of the Securities Act.

     (c)  No  Conflicts.  The  execution,  delivered  and  performance  of  this
          Agreement  by the Company and the  consummation  by the Company of the
          exchange  contemplated hereby do not and will not (i) conflict with or
          violate and provision of the company's certificate of incorporation or
          bylaws,  or (ii)  conflict  with, or constitute a default (or an event
          which  with  notice or lapse of time or both  would  become a default)
          under,  or give to others any rights or  termination,  acceleration or
          cancellation  (with or without  notice,  lapse of time or both) of any
          agreement or other  obligation  of the  Company,  or (iii) result in a
          violation of any law, rule, regulation,  order, judgment,  injunction,
          decree or other  restriction  of any court or government  authority to
          which the Company is subject  (including  federal and state securities
          laws and regulations).

     (d)  Filing, Consents and Approvals.  The Company is not required to obtain
          any consent, waiver, authorization or order of, give any notice to, or
          make any filing or  registration  with any court,  other  governmental
          authority, person or entity in connection with the execution,  deliver
          and  performance by the Company of this  Agreement  other than filings
          required to be made by it under the Securities Exchange Act of 1934.

         5. Release by  ISOSCELES.  Effective as of the Closing Date  ISOSCELES,
for    itself    and   for   its    employees,    agents,    predecessors    and
successors-in-interest,  hereby  irrevocably  and  unconditionally  releases and
forever  discharges the Company and each of its subsidiaries,  and each of their
respective officers, directors,  employees, agents, attorneys, and shareholders,
former officers,  directors, and employees,  agents, attorneys and shareholders,
predecessors  and  successors-in-interest  and  each  of them  from  any and all
claims,  causes of  action,  demands,  damages,  attorneys  fees,  or charges of
whatever  kind or nature known or unknown,  suspected or  unsuspected,  fixed or
contingent, which they now have, own, hold or claim to have, or claim to own, or
which  they at any time,  heretofore  had,  owned,  held,  or claimed to have or
claimed  to own,  from  the  beginning  of the  world  through  the date of this
Agreement, including claims arising out of the Action.

         6.  Release  by the  Company.  Effective  as of the  Closing  Date  the
Company,  for  itself,  its  subsidiaries  and  for  its  and  their  respective
employees,  agents, predecessors and successors-in-interest,  hereby irrevocably
and  unconditionally  releases and forever  discharge  ISOSCELES and each of its
officers,  directors,  employees,  agents,  attorneys, and shareholders,  former
officers  directors,   and  employees,   agents,   attorneys  and  shareholders,
predecessors,  and  successors-in-interest  and  each of them  from  any and all
claims,  causes of  action,  demands,  damages,  attorneys  fees,  or charges of
whatever  kind of nature know or unknown,  suspected  or  unsuspected,  fixed or
contingent,  which they now have,  own, hold, or claim to have, or claim to own,
or which they at any time  heretofore  had,  owned,  held, or claimed to have or
claimed  to own,  from  the  beginning  of the  world  through  the date of this
Agreement, including claims arising out of the Action.

         7. Effect of General  Release.  It is the intention of the parties that
this  Agreement  shall be effective as a full and final accord and  satisfactory
relief of each and every matter as  specifically  or  generally  referred to. In
furtherance  of that  intention,  the parties hereby  acknowledge  that they are
familiar  with  Section  1542 of the  California  Civil Code which  provides  as
follows:

         "A general release does not extend to claims which the creditor

         does not know or suspect to exist in its favor at the time of

         executing the release, which if known by him must have materially

         affected his settlement with the debtor."

         The parties  hereby waive and  relinquish all rights and benefits which
they have or may have up to the date of this Agreement under Section 1542 of the
California  Civil Code or the law of any other state or jurisdiction to the same
or similar affect to the full extent that they may lawfully wave all such rights
and benefits pertaining to the subject matter of this Agreement.

         8. Subsequent Discoveries. The parties acknowledge that there is a risk
that  subsequent to the execution of this  Agreement,  they will discover facts,
which are unknown or unanticipated at the time this Agreement is executed, which
if known by them on a date that this Agreement is executed,  may have materially
affected their decisions to execute this Agreement. The parties expressly assume
the risk of  discovery  of such  unknown and  unanticipated  facts and that this
Agreement shall be fully valid notwithstanding the discovery of any such facts.

         9. No Assignment  of Claims.  Each party  represents  and warrants that
they have not assigned or otherwise  transferred  or subrogated  any interest in
any claims which are the subject matter hereto.

         10.  Covenant Not to Sue. The parties  covenant and agree not to sue or
bring any action, whether federal,  state, or local, judicial or administrative,
now or at any future time,  against  each other or any of the released  parties,
with respect to any claim released hereby. The parties represent and warrant and
represent  that they have not  commenced any such action or proceeding as of the
execution date of the Agreement except the Action.

         11. Binding  Effect.  This Agreement shall be binding upon and inure to
the  benefit  of the  heirs,  administrators,  executors,  successors,  and  the
assignees of each of the parties.

         12.  Miscellaneous.  Whenever this Agreement so requires,  the singular
number shall  include the plural,  the plural shall include the singular and the
masculine gender shall include feminine and neutral genders.

         13. Severability.  If any portion of this Agreement shall be held to be
illegal or invalid by a court of  competent  jurisdiction,  the  validity of the
remainder of this Agreement shall not be affected.

         14. Entire  Agreement.  This  Agreement and the  agreements  referenced
herein  memorializes  and  constitutes  the entire  Agreement and  understanding
between the parties and supersedes and replaces all prior negotiations, proposed
Agreements and Agreements  whether written or unwritten.  Each of the parties to
this Agreement acknowledges that no other party nor any agent or attorney of any
other  party  has made any  promise,  representation,  or  warranty  whatsoever,
express or implied,  which is not expressly  contained in this  Agreement.  Each
party further  acknowledges  that it has not executed this Agreement in reliance
upon a collateral promise, representation, or warranty.

         15.  Governing Law. This Agreement shall be deemed to have been made in
the State of California and shall, for all purposes be governed by and construed
exclusively in accordance  with the laws thereof,  regardless of where any court
action or proceeding is brought in connection with this Agreement.

         16.  Counterparts.  This  Agreement  may be  executed  in  two or  more
counterparts, and an executed facsimile copy or counterpart shall be binding and
enforceable in the same manner as the original.

         IN WITNESS THEREOF,  the parties have executed this Agreement effective
as of the date first written above.

AURA SYSTEMS, INC.

By: ____________________________
         Zvi Kurtzman, CEO

ISOSCELES

By:_____________________________
         Name;
         Title:

<PAGE>

                            GENERAL POWER OF ATTORNEY

         I, the undersigned  Carl M. O'Connell,  of the Western  District of the
Island of New Providence, one of the Islands of the Commonwealth of the Bahamas,
in my capacity as Sole Director of International  Business  Companies  organized
under and in accordance with the International Business Companies Act of 1989 as
amended,  of the Commonwealth of The Bahamas,  and whose  Registered  Office and
Registered Agent is situated at Citco Bank and Trust Company (Bahamas)  Limited,
Bahamas  Financial  Centre,  3rd Floor,  Charlotte & Shirley  Streets,  P.O. Box
CB-13136, Nassau, Bahamas, do hereby nominate, constitute and appoint:

         Tarez Curry, Businesswoman, of Nassau, The Bahamas

                                    And

         Andrew Dipkin, Businessman, of Nassau, The Bahamas

as my true and lawful  attorneys-in-fact,  acting  singly or jointly,  with full
power  to  represent  me in any  and  all  dealings  related  to  achieving  the
objectives of any Company of which I am Sole Director,  and to conduct  business
on behalf of that  Company as the said  attorneys-in-fact  my deem  necessary or
desirable.

     This  Power-of-Attorney  shall  remain in effect  for the  period  start of
business on March 6, 2000 through the close of business on March 7, 2000.

         IN WITNESS WHEREOF,  I, the said Carl M. O'Connell have hereunto set my
hand and seal at Nassau,  New Providence in the Commonwealth of The Bahamas,  on
this 3rd day of March, 2000.

                                          ----------------------------------
                                            Carl M. O'Connell

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