Document:

10.21.1

                      FIRST AMENDMENT TO SECURITY AGREEMENT

         THIS FIRST  AMENDMENT  TO SECURITY  AGREEMENT,  dated as of October 22,
1999 (the  "Amendment")  is entered  into  between  and among RGC  INTERNATIONAL
INVESTORS, LDC, a Cayman Islands limited duration company ("Secured Party"), and
AURA SYSTEMS, INC., a Delaware corporation ("Debtor").

                                                Preliminary Statement

         WHEREAS,  Debtor and Secured Party are parties to that certain Security
Agreement,  dated as of October 7, 1998,  (the  "Existing  Security  Agreement")
pursuant  to which  Debtor has  granted a lien on,  and  security  interest  in,
certain of its assets as security for, among other things, the repayment of that
certain Convertible Senior Secured Note, dated as of October 7, 1998 and amended
and restated  effective as of October 22, 1999, payable from Debtor to the order
of Secured Party (the "Note"); and

         WHEREAS,  Debtor has requested,  and Secured Party has agreed, to amend
the Existing  Security  Agreement in certain  respects to effect such  requested
modifications.

         NOW,  THEREFORE,  in  consideration  of the  premises and of the mutual
covenants herein contained and intending to be legally bound hereby,  the Debtor
and Secured Party hereby amend the Existing Security Agreement,  but only to the
extent  and on the terms and  conditions  specifically  set  forth  herein.  All
capitalized  terms  used  herein  and  not  otherwise  defined  shall  have  the
respective meanings ascribed to them in the Existing Security Agreement.

1.       Amendment to the Existing Security Agreement.

         (a) Section 3.5 - Section 3.5 of the  Existing  Security  Agreement  is
hereby  amended  by  deleting  the  section  in its  entirety  and  substituting
"[RESERVED]" in place thereof.

         (b) Section 3.9 - Section 3.9 of the  Existing  Security  Agreement  is
hereby amended by deleting the first sentence thereof in its entirety.

         (c) Section 7 - Section 7 of the Existing Security  Agreement is hereby
amended by deleting the definition of "Permitted Liens" contained therein in its
entirety and substituting in place thereof the following definition:

<PAGE>

         "Permitted   Liens"  shall  mean  (a)  any  liens  for  current  taxes,
         assessments,  and other  governmental  charges not yet due and payable;
         (b) any mechanic's, materialman's, carrier's, warehousemen's or similar
         liens for sums not yet due; (c) easements, rights-of-way,  restrictions
         and other similar  encumbrances on the real property or fixtures of the
         Debtor incurred in the ordinary  course of business which  individually
         or in the aggregate are not  substantial  in amount and which do not in
         any case  materially  detract  from the value or  marketability  of the
         property  subject thereto or interfere with the ordinary conduct of the
         business of the  Debtor;  (d) liens  (other  than liens  imposed on any
         property  of the Debtor  pursuant  to ERISA or Section 412 of the Code)
         incurred or deposits made in the ordinary course of business, including
         liens in connections with workers' compensation, unemployment insurance
         and other types of social  security and liens to secure  performance of
         tenders, statutory obligations, surety and appeal bonds (in the case of
         appeal bonds such lien shall not secure any  reimbursement or indemnity
         obligation in an amount greater than $100,000),  bids,  leases that are
         not  capital  leases,  performance  bonds,  sales  contracts  and other
         similar obligations,  in each case, not incurred in connection with the
         obtaining of credit or the payment of a deferred  purchase  price;  (e)
         liens on and security  interests in the Collateral  created in favor of
         the Secured  Party;  (f)  purchase  money liens to secure the  deferred
         purchase  price of property not to exceed the lower of the cost or fair
         market value of the property  that is purchased in the ordinary  course
         of business  consistent  with past  practice;  (g) liens  evidenced  by
         perfected  security interests existing on October 1, 1999 and listed in
         the "lien searches"  attached hereto as Schedule 7.2(a) and made a part
         hereof and liens  evidenced  by  judgments  entered  against the Debtor
         prior to October 1, 1999 and listed in Schedule  7.2(b) and made a part
         hereof; and (h) liens existing after October 1, 1999 so long as no such
         lien (excluding judgment liens),  individually,  evidences indebtedness
         of more than $100,000 and so long as all such liens (including judgment
         liens),  in the  aggregate,  evidence  indebtedness  of not  more  than
         $500,000.

         (d) Section 7.1 - Section 7.1 of the  Existing  Security  Agreement  is
hereby amended by deleting the section in its entirety and substituting in place
thereof the following:

         "7.1 Except as otherwise  permitted by Section 1.3 of the Notes,  sell,
         assign (by operation of law or otherwise),  or otherwise dispose of any
         of the Collateral  except sales or inventory in the ordinary  course of
         business."

         (e)  Section  10 - Section 10 of the  Existing  Security  Agreement  is
hereby  amended  by  inserting  the  following  language  at the end of the last
sentence thereof:

                    ";   provided,   however,   that  in  connection   with  any
                    disposition   of  assets  by  Aura   Ceramics,   Inc.,   MYS
                    Corporation,  Aura Sound,  Inc. or  Electrotec  Productions,
                    Inc.  in  accordance  with  Section  1.3 of the  Notes,  the
                    Secured Party Agrees to execute termination  statements with
                    respect to such  dispositions  as  reasonably  requested  by
                    Debtor on or after the consummation of such transactions."

2.       Effect of Amendment.

<PAGE>

         This  Amendment  amends the  Existing  Security  Agreement  only to the
extent  and in the  manner  herein  set  forth,  and in all other  respects  the
Existing Security Agreement is ratified and confirmed.

3.       Counterparts.

         This  Amendment  may be signed in any number of  counterparts,  each of
which shall be an  original,  with the same effect as if the  signatures  hereto
were upon the same instrument.

4.       Governing Law.

         This Amendment and all rights and obligations of the parties  hereunder
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  Amendment,  the  agreements  entered  into in
connection  herewith  or the  transactions  contemplated  hereby or thereby  and
irrevocably  agree that all claims in respect of such suit or proceeding  may be
determined  in such  courts.  Both parties  irrevocably  waive the defense of an
inconvenient  forum to the maintenance of such suit or proceeding.  Both parties
further  agree that  service of process  upon a party mailed by first class mail
shall be deemed in every respect  effective service of process upon the party in
any such suit or proceeding. Nothing herein shall affect either party's right to
serve  process in any other manner  permitted by law.  Both parties agree that a
final non-appealable judgment in any such suit or proceeding shall be conclusive
and may be enforced in other  jurisdictions  by suit on such  judgment or in any
other lawful manner.

<PAGE>

         IN WITNESS  WHEREOF,  Debtor and  Secured  Party have caused this First
Amendment  to  Security  Agreement  to be  executed  by their  proper  corporate
officers thereunto duly authorized as of the day and year first above written.

AURA SYSTEMS, INC.

By:______________________________
      Name:
      Title:

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

By: ______________________________
         Wayne D. Bloch
         Managing Director

<PAGE>

                                                         1SETTLEMENT AGREEMENT
                       AND COMPLETE RELEASE OF ALL CLAIMS

         This   Settlement   Agreement  and  Complete   Release  of  All  Claims
("Agreement")  dated as of October 22,  1999,  is made and  entered  into by RGC
International Investors, LDC, a Cayman Islands limited duration company (?RGC?),
and AURA SYSTEMS, INC.( the "Company").

                              W I T N E S S E T H:

                         WHEREAS,  the  Company  has  previously  issued  to RGC
                    Convertible  Debentures in the original aggregated principal
                    amount of $21,500,000 (the ?Convertible Debentures?) and has
                    issued  Warrants  (?Warrants?)  to  RGC,  which  Convertible
                    Debentures and Warrants are presently owned by RGC; and

         WHEREAS,  the  Company  has  previously  issued to RGC its  Convertible
Senior Secured Note dated October 7, 1998, in the original  principal  amount of
$3,000,000 (the ?Secured Note?); and

         WHEREAS,  the Secured Note is secured by a certain  Security  Agreement
between the Company and RGC (the ?Aura Security Agreement?); and

         WHEREAS,  in order to provide for additional security for the repayment
of the Secured Note, certain subsidiaries of the Company entered into a Guaranty
Agreement (the ?Guaranty Agreements?) in favor of RGC, which Guaranty Agreements
were secured by Security  Agreements  between each of such  subsidiaries and RGC
(the ?Subsidiary Security Agreements?); and

         WHEREAS,  pursuant to a certain Securities Purchase Agreement,  annexed
hereto as Exhibit  ?A,? RGC  proposes to sell its  interests in the  Convertible
Debentures;

         WHEREAS,  RGC and the Company  have agreed  that  outstanding  Warrants
owned by RGC will be exchanged for  1,000,000 new warrants (the ?New  Warrants?)
and that the terms of the Secured  Notes,  the Aura  Security  Agreement and the
Subsidiary  Security  Agreements  will be  amended as of the  Closing  under the
Securities Purchase Agreement; and

         WHEREAS, RGC and the Company desire to enter into this Agreement, to be
effective upon (i) the Closing of the purchase and sale of the Convertible Notes
under the  Securities  Purchase  Agreement,  (ii) the  amendment  of the Secured
Notes, the Aura Security Agreement and the Subsidiary Security  Agreements,  and
(iii) the issuance of the New Warrants in exchange for the outstanding  Warrants
owned by RGC.

         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:

<PAGE>

         1. Release by RGC. Effective as of the ?Effective Date? (as such quoted
term is  hereafter  defined)  RGC,  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, or which they at any time hereafter may, own, hold or claimed to
have,  or claimed to own,  provided  however,  that nothing in this  Paragraph 1
shall  affect  the  rights of RGC  under the  Secured  Note,  the Aura  Security
Agreement,  the Subsidiary Security Agreements,  the Guarantee Agreements or the
Securities  Purchase  Agreement  (as  each  such  agreement  may be  amended  as
contemplated in the ?Whereas? clauses set forth above).

         2. Release by the Company.  Effective as of the  ?Effective  Date?  (as
such quoted term is hereafter defined) the Company, for itself, its subsidiaries
and   for    their    respective    employees,    agents,    predecessors    and
successors-in-interest,  hereby  irrevocably  and  unconditionally  releases and
forever  discharges RGC and its investment  manager and each of their respective
officers, directors,  employees,  partners, agents, attorneys, and shareholders,
former  officers,   directors,   employees,   partners,  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, or which they at any time hereafter may, own, hold or claimed to
have,  or claimed to own,  provided  however,  that nothing in this  Paragraph 2
shall affect the rights of the Company under the Secured Note, the Aura Security
Agreement,  the Subsidiary Security Agreements,  the Guarantee Agreements or the
Securities  Purchase  Agreement  (as  each  such  agreement  may be  amended  as
contemplated in the ?Whereas? clauses set forth above).

3. Waiver of Defaults.  RGC hereby  waives any and all defaults  existing on the
Effective Date (as hereafter defined) (including events, facts and circumstances
existing  on the  Effective  Date (as  hereafter  defined)  which with notice or
passage of time or both could become events of default)  under the Secured Note,
the  Aura  Security  Agreement,  the  Subsidiary  Security  Agreements,  or  the
Guarantee  Agreements.  Notwithstanding  the foregoing,  the waiver set forth in
this Section 3 shall not be applicable to any defaults existing on the Effective
Date which have not been  disclosed to RGC in writing if such  defaults are both
(i) material, and (ii) relate to breaches of covenants in the Secured Notes, the
Aura Security  Agreement or the Subsidiary  Security  Agreements which covenants
are not being  eliminated in their  entirety by the  amendments to the foregoing
documents as of the Effective Date.

<PAGE>

         4. 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
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 waive all such rights and benefits  pertaining to the subject matter of
this Agreement.

         5. 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.

         6. 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, and agrees to indemnify, defend,
and hold the other party harmless from any  liability,  loss,  claims,  demands,
damages,  costs,  expenses or attorneys  fees  incurred by it as a result of any
person or entity,  including  but not limited  to,  underwriters  and  insurance
carriers, asserting such assignment, transfer, or subrogation.

         7.  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 this Agreement.

         8. Legal Fees.  If any party files a lawsuit based on legal claims that
either  party has  released,  the party  filing a lawsuit will pay for all costs
incurred  by the  defending  party,  including  reasonable  attorneys  fees,  in
defending against the claims asserted by that party.

         9. 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.

         10.  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 the feminine and neuter genders.

<PAGE>

         11. 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.

         12. 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 referred to in this Agreement.

         13.  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.

         14.  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.

         15. Effective Date of Agreement.  This Agreement shall become effective
upon the  consummation  of all of the following  events:  (i) the Closing of the
purchase  and sale of the  Convertible  Debentures  pursuant  to the  Securities
Purchase  Agreement,  and (ii) the  amendment  of the  Secured  Notes,  the Aura
Security  Agreement  and the  Subsidiary  Security  Agreements,  and  (iii)  the
issuance of the New Warrants in exchange for the  outstanding  Warrants owned by
RGC (the  ?Effective  Date?).  If the Effective  date shall not have occurred by
October 22, 1999,  this  Agreement  shall become null and void,  and each of the
respective  parties shall be restored to their  positions prior to entering into
this Agreement.

<PAGE>

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

AURA SYSTEMS, INC.

By:____________________________
      Zvi Kurtzman, CEO

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

By:____________________________
       Wayne D. Bloch,
       Managing Director

<PAGE>

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