Item 1.01 Entry into a Material Definitive Agreement
On March 14, 2022, Aura Systems, Inc. (the "Company") reached an agreement with
former director Robert Kopple and his related entities (collectively the "Kopple
Parties") to resolve all remaining litigation between them stemming from the
previously disclosed litigation originally brought by the Kopple Parties against
the Company and various other defendants in 2017.
In connection with this litigation the Kopple Parties claimed to be owed in
excess of $13 million as a result of various loans made by the Kopple Parties
between 2013 and 2016. Additionally, the Kopple Parties were seeking the current
equivalent of the approximately 23 million warrants, exercisable for seven years
at a price of $0.10 per share, which they claimed should have been originally
issued to them pursuant to a 2014 agreement with the Company.
Under the terms of the settlement, the Company has agreed to pay the Kopple
Parties an aggregate amount of $10 million over a period of seven years; $3
million of which is to be paid within approximately three months, after which,
interest will accrue on the unpaid balance at a rate of 6%, compounded annually.
All amounts, including all accrued interest, are to be paid no later than eight
years from the date of the initial payment. The Company may prepay any amount at
any time without penalty. Plaintiffs will additionally receive seven-year
warrants to purchase up to an aggregate of approximately 3.3 million shares of
the Company's common stock at a price of $0.85 per share. The settlement also
provides for standard mutual general release provisions and includes customary
representations, warranties, and covenants, including certain increases in the
amount payable to the Kopple Parties and the right of such parties to enter
judgment against the Company if the Company remains in uncured default in its
payment obligations under the settlement.
The settlement resolves all claims asserted against the Company by the Kopple
Parties without any admission, concession or finding of any fault, liability or
wrongdoing by the Company.
Item 8.01 Other Events.
A press release, dated March 18, 2022, with respect to the settlement described
in Item 1.01 of this Current Report, is attached hereto as Exhibit 99.1.
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