AURA SYSTEMS, INC.
a Delaware corporation
SUBSCRIPTION AGREEMENT
THE SECURITIES WHICH ARE BEING SUBSCRIBED FOR HAVE NOT BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER
THE SECURITIES ACT OF 1933 (THE "ACT"), IN RELIANCE UPON
CERTAIN EXEMPTIONS FROM REGISTRATION PROVIDED IN THE ACT AND
THE RULES AND REGULATIONS THERETO, NOR HAVE SUCH SECURITIES
BEEN REGISTERED OR QUALIFIED UNDER ANY STATE'S SECURITIES
LAWS. ACCORDINGLY, IT IS UNLAWFUL TO CONSUMMATE A SALE OR
TRANSFER OF SUCH SECURITIES UNLESS (1) SUCH SECURITIES ARE
SUBSEQUENTLY REGISTERED OR QUALIFIED UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS OR EXEMPTIONS THEREFROM ARE
AVAILABLE, AND (2) THE PROPOSED SALE OR TRANSFER WILL NOT
CONSTITUTE A VIOLATION OF THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
This Subscription Agreement by the undersigned ("Subscriber") is for
shares ("Shares") of Common Stock of Aura Systems, Inc. ("Aura" or the
"Company"), a Delaware corporation.
1. Purchase and Sale of Shares. Subject to the terms and conditions set
forth in this Agreement, the Company covenants and agrees to sell to Subscriber
on the Closing Date (as hereinafter defined) the Shares, and Subscriber agrees
to purchase from the Company, on the Closing Date, the number of Shares set
forth below, for the purchase price of Two Dollars ($2.00) per Share. Subscriber
shall pay the full subscription price upon execution of this Agreement by
delivering good funds by wire transfer in United States Dollars an escrow
account for the Offering proceeds (the "Escrow Account") maintained by the Law
Offices of Xxxxx & Associates ("Escrow Agent"), 0000 Xxxxxxx Xxxx Xxxx, Xxxxx
Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000, or by check payable to "Xxxxx &
Associates - Escrow Account." The subscription price shall be wired by
Subscriber to the Escrow Account at Xxxxx Fargo Bank, N.A., San Francisco,
California, U.S.A., ABA No. 121 000 248, Account No. 0765-053426.
2. Closing Instructions to Escrow Agent. The closing of the purchase
and sale of the Shares pursuant to Section 1 hereof shall take place at Xxxxx
Fargo Bank, N.A., San Francisco, California, U.S.A., ABA No. 121 000 248,
Account No. 0765-053426 on the date (the "Closing" or the "Closing Date") the
following conditions are fulfilled:
(a) Conditions to Subscriber's Obligation to Close. The
obligation of the Subscriber to purchase the Shares offered by the
Company are conditioned on the fulfillment or waiver by Subscriber of
the following on or prior to the Closing Date:
(i) the execution and delivery by the Company of this Agreement and
the Escrow Agreement in the form attached hereto as Exhibit A;
(ii) the Company shall have received and accepted proceeds from
Subscribers in this Offering of $300,000.
(iii) The Company shall have closed the transactions
contemplated by the Settlement Agreement and Release of Claims dated
March 6, 2000, as amended or supplemented from time to time, by and
between the Company and The Isosceles Fund Limited.
(b) Conditions to the Company's Obligation to Close. The
obligation of the Company to sell the Shares offered hereunder is
conditioned on the fulfillment or waiver by the Company of the
following on or prior to the Closing Date:
(i) the execution and delivery by the Subscriber of this
Agreement and the Escrow Agreement in the form attached hereto as
Exhibit A;
(ii) the Company shall have received and accepted proceeds from
Subscribers in this Offering of $300,000.
(iii) The Company shall have closed the transactions
contemplated by the Settlement Agreement and Release of Claims dated
March 6, 2000, as amended or supplemented from time to time, by and
between the Company and The Isosceles Fund Limited.
(c) Instructions to Escrow Agent. The Company and the
Subscriber hereby instruct the Escrow Agent as follows: On the Closing Date the
Escrow Agent shall release payment of the Subscription proceeds to the Company
and the Company shall cause the Escrow Agent to deliver the Shares to Subscriber
at the address set forth in this Agreement. If the Closing Date shall not have
occurred for any reason by March 17, 2000, the Company shall cause the Escrow
Agent to return Subscriptions proceeds plus accrued interest to Subscriber
promptly upon termination of the Offering.
3. [Intentionally Omitted]
4. Warranties of the Subscriber. The Subscriber represents and
warrants as follows (for persons subscribing jointly, the representations and
warranties set forth below are true as to all such persons. For revocable
trusts, the representations and warranties set forth below are also true as to
each grantor of the trust. For corporations, partnerships, trusts and other
entities formed specifically to invest in Aura (including any entity in which
any one of the beneficial owners may elect not to participate in the investment)
the representations and warranties set forth below are also true as to every
person having a beneficial interest in such corporation, partnership, trust or
other entity):
(a) The Subscriber is acquiring the Shares for his own account (or if the
Subscriber is a trustee, an agent subscribing for a corporation or other
entity, or a partner subscribing for a partnership, for the account of the
entity which is represented) for investment and not with a view to resale
or distribution. He has not offered or sold any portion of his Shares and
has no present intention of dividing his Shares with others or of reselling
or otherwise disposing of any portion thereof either currently or after the
passage of a fixed or determinable period of time or upon the occurrence of
nonoccurrence of any predetermined event or circumstance.
(b) The Subscriber is aware that the Shares are speculative and that he may
lose his entire investment and he can afford to bear the risks of an
investment in Aura, including the risk of losing his entire investment.
(c) The Subscriber or his purchaser representative both:
(1) Have been provided an opportunity to
obtain information concerning Aura
and any other relevant matters as
Subscriber has requested; and
(2) Have been given the opportunity to
ask questions of and receive answers
from Aura concerning the terms and
conditions of the offering of the
Shares.
(d) Subscriber has advised the Company that he
is an "accredited investor" within the
meaning of Regulation D of the Securities
Act of 1933 and the Company is relying on
this representation.
(e) The Subscriber is aware that he must bear the economic risk of his
investment in Aura for an indefinite period of time because: (1) the Shares
have not been registered under the Securities Act of 1933, as amended (the
"Act"), or qualified under the California Corporate Securities Law of 1968
or any other state securities laws, and therefore cannot be sold, assigned
or otherwise disposed of unless appropriate exemptions from such
registration or qualification requirements are available; and (2) Aura will
place a legend on the certificates evidencing the Shares stating that the
Securities have not been registered under the Act or any state securities
laws and setting forth the limitations on resale contained above and Aura
will also require that its registrar and transfer agent make a notation of
such restrictions in its appropriate records. He further understands and
agrees that Aura will not honor any attempt by him to sell, transfer of
otherwise dispose of the Shares in the absence of either an effective
Registration Statement and qualification under applicable Blue Sky laws or
exemptions therefrom.
(f) The Subscriber acknowledges that a legend will be placed on any
certificates or instruments evidencing the Shares substantially as set
forth on the first page of this Subscription Agreement for as long as
necessary to comply with the Act and applicable state securities laws.
(g) The Subscriber is over the age of twenty-one years (if an individual), and
is knowledgeable and experienced with respect to investment matters such as
a proposed purchase of Shares. He has such knowledge and experience in
business and financial matters as to be capable of evaluating the merits
and risks of this investment and has the capacity to protect his own
interests in connection with this investment.
(h) The Subscriber agrees to indemnify and hold harmless Aura and its
directors, officers, affiliates and agents from and against any and all
losses, damages and liabilities (including, but not limited to, court costs
and reasonable attorneys' fees) arising or resulting from, or attributable
to, any breach of the representations and warranties set forth in this
Paragraph or the fact that any of the representations, acknowledgements or
understandings set forth in this Paragraph are untrue or without adequate
factual basis to be considered true and not misleading.
(i) The Securities offered hereby were not offered to the Subscriber by way of
general solicitation or general advertising.
(j) The Subscriber has adequate means of providing for his current needs and
possible personal contingencies, and he has no need now, and anticipates no
need in the foreseeable future, to sell this investment, and consequently,
without limiting the generality of the foregoing, he is able to hold his
securities for an indefinite period of time and has a sufficient net worth
to sustain a loss of his entire investment in Aura in the event such loss
should occur.
(k) The Subscriber has decided to subscribe to purchase the securities on the
basis of his own independent investigation and has relied on no oral
statements, representations or warranties as to the quality of the
investment other than from his purchaser representative.
5. Warranties of the Company. The Company represents and
warrants to, and agrees with, Subscriber that the Shares, when issued (i) will
be free and clear of any security interests, liens, claims or other encumbrances
other than restrictions upon transfer under applicable securities laws, (ii)
will have been duly and validly authorized and delivered 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, and (iv)
will not subject the Subscriber to personal liability by reason of being a
shareholder.
6. Registration Rights. The Company agrees that within 120
days following the Closing Date the Company shall file a Registration Statement
with the SEC covering the resale of the Common Stock purchased by Subscriber and
shall use its best efforts to cause such Registration Statement to become and
remain effective until such Shares may be sold without registration..
7. Applicable Law. This Subscription Agreement shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of Delaware.
8 Survival. All representations, warranties and covenants
contained in this Subscription Agreement shall survive the acceptance of the
subscription and the issuance of the Securities.
9. Number of Shares. Subject to acceptance by Aura, the
undersigned hereby irrevocably subscribes for Shares in accordance with the
terms and conditions of this Subscription Agreement, as follows:
150,000 Shares at $2.00 per Share for an aggregate subscription
price of $300,000.
One Hundred Percent (100%) of the subscription price must accompany
this Subscription Agreement.
10. Items to be Delivered by Subscriber. The following items
must be delivered herewith:
A. Completed and executed Subscription Agreement.
B. Completed and executed Escrow Agreement.
C. Check payable to "Xxxxx & Associates. - Escrow Account" or wire
transfer to the Escrow Account designated in Paragraph 1 of this Agreement.
SECURITIES ARE TO BE REGISTERED AS FOLLOWS: (check one)
[ ] INDIVIDUAL OWNERSHIP [ ] TRUST
(One signature required (Authorized Trustee(s)
below) must sign)
[ ] TENANTS IN COMMON [ ] COMMUNITY PROPERTY
(All tenants must (Both spouses must
sign below) sign below)
[ ] JOINT TENANTS WITH RIGHT [ ] PARTNERSHIP
OF SURVIVORSHIP (Authorized Partner(s)
(All tenants must sign)
sign below)
[X] CORPORATION OR OTHER ENTITY
(Authorized officer(s) or
agent(s) must sign)
AURA SYSTEMS, INC.
a Delaware corporation
SIGNATURE PAGE
FOR PARTNERSHIPS, CORPORATIONS AND OTHER ENTITIES
THE ISOSCELES FUND LIMITED
Name of partnership, corporation or other entity
(please print or type)
By___________________________________________________
Signature of general partner, authorized officer or
authorized agent
Principal Office Bahamas Financial Centre
Address: 0xx Xxxxx, Xxxxxxx & Xxxxxxxxx Xxxxxxx
Xxxxxx, Xxxxxxx
Attention: Xx Xxxxxx Xxxxxx
Tel: (000) 000 0000
Fax: (000) 000 0000
SUBSCRIPTION AMOUNT: 150,000 Shares at $2.00 per Share for an aggregate
subscription price of $300,000
Executed at Nassau, Bahamas this 16 day of March, 2000
**********************************************************
The foregoing subscription for 150,000 Shares is accepted this _ day of
March, 2000.
Aura Systems, Inc.
By_______________________________
Signature of authorized officer
