Under the Agreement TARDEC will provide a motor test laboratory facility and personnel to set up and perform the tests on an AuraGen as an electric motor and generator. In addition TARDEC will undergo a trial test machining of special material to ascertain if the material is suitable as a substitute for motor/generator rotor base iron material. This material has the potential to significantly increase the magnetic field density of the AuraGen rotor resulting in more power from the existing package.

The Company retains title to any Subject Invention made solely by Aura’s employees under the Statement of Work (“SOW”). When an Aura inventor and a Government employee make a Subject Invention, Aura will retain title and TARDEC will assign its rights in the Subject Invention to Aura subject to Government License and a right to share in royalties collected from third parties. Aura retains exclusive rights to the underlying AuraGen technology.

Mel Gagerman, Aura’s CEO stated, “We are looking forward to working closely with the Army to characterize the AuraGen as an electric motor and to experiment with new rotor materials. A motor based on the Auragen technology has enormous possibilities for industrial and commercial applications and could potentially provide a paradigm shift in the manufacturing of induction motors particularly from one half horsepower to tens of horsepower range. In addition the availability of the U.S. Army TARDEC resources of equipment and personal we can utilize the government’s capital investment in test equipment to advance our product. TARDEC’s mission is to develop and integrate the right technology solutions to improve the effectiveness of the current force.

The AuraGen, in addition to the military application, is used in industries such as refrigeration trucks, emergency services, utilities, recreational and commercial marine, oil and gas industry and government services. For more information see the Company’s website http://www.aurasystems.com/.