ASSIGNMENT AND ASSUMPTION OF
                              SPECIFIED LIABILITIES


THIS  ASSIGNMENT  AND  ASSUMPTION,  made as of the 3rd day of May,  2000, by and
between  AURA  CERAMICS,  INC.,  a Delaware  corporation  ("Seller"),  and ALPHA
CERAMICS, INC., a Minnesota corporation ("Buyer").

WHEREAS,  Buyer,  Seller and Aura Systems,  Inc., a Delaware  corporation,  have
entered into that certain Asset Purchase Agreement dated as of February 29, 2000
(the "Asset Purchase Agreement");

WHEREAS,  the Asset Purchase  Agreement provides that Buyer is to acquire all of
the assets of Seller,  other than the "Retained Assets" (as such term is defined
in Section 2.2 of the Asset Purchase Agreement); and

WHEREAS,  the Asset Purchase  Agreement provides that Buyer is to assume certain
specified  liabilities  of  Seller  as set  forth in  Section  2.3 of the  Asset
Purchase Agreement.

NOW,  THEREFORE,  in consideration of the transactions as described in the Asset
Purchase  Agreement,  and other good and  valuable  consideration,  the receipt,
sufficiency and mutuality of which are hereby  acknowledged,  the parties hereto
hereby agree as follows:

1.  ASSUMPTION.  Buyer hereby assumes and agrees to pay according to their terms
all of the "Assumed Liabilities",  as that term is defined in Section 2.3 of the
Asset Purchase Agreement.

2.  RETAINED  LIABILITIES.  Seller shall remain  unconditionally  liable for all
"Retained  Liabilities",  which  term is  defined  in  Section  2.3 of the Asset
Purchase  Agreement as all  obligations,  liabilities and commitments of Seller,
presently  existing  or  contingent  arising  out  of  events  or  circumstances
occurring  on or prior to the Closing Date (as that term is defined in the Asset
Purchase  Agreement).  Buyer is not  assuming  or agreeing to pay or perform the
Retained  Liabilities  or any other  liabilities,  obligations or commitments of
Seller other than the Assumed Liabilities.

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                                                          SELLER:

Date: May ___, 2000                                       AURA CERAMICS, INC.


                                                          By:
                                                              Its:

                                                          By:
                                                              Its:


                                                          BUYER:

Date: May ____, 2000                                      ALPHA CERAMICS, INC.


                                                          By:
                                                              James E. Sloane
                                                              Its: President