AURA SYSTEMS INC
Term Sheet v10
Series B Cumulative Convertible Preferred
*These amounts do not include any conversion of the Intercreditor Bridge Loans
Senior to common stock, Series A and any future series of preferred stock.
# of Preferred shares:
Minimum: 1,000,000 shares
Maximum: 3,000,000 shares
25% of the newly issued common shares on an as if converted basis, for a total of a
minimum of 62,500,000 warrants and a maximum of 187,500,000 warrants.
Warrants will be for 7 years with an exercise price at $0.02. The underlying common
stock resulting from (i) conversion of Series B (ii) exercise of the warrants will be
Conversion to common:
$0.02 conversion price (on investment plus accrued dividends), for a minimum of
____________ and a maximum of __________ common shares initially issuable
8% per year
Dividends will be cumulative and will accrue annually.
Dividends will not be paid in cash, but will accrue and be paid upon conversion or
liquidation through credit for them in the conversion price and liquidation preference.
The Company shall have the right to force conversion under the following:
a. The existence of an effective SEC Registration for the underlying common stock.
b. The closing quoted price shall be greater than $0.10 for 20 consecutive trading
c. The number of authorized common shares has been increased.
d. The Company is not in a quiet period.
In addition, upon conversion of a majority of the Series B, the remainder of the
Series B shall automatically convert.
Anti Dilution Provisions:
Investment plus accrued dividends.
Same as common on an as if converted basis. Additional separate class voting rights
on customary fundamental change and protective provisions.