Exhibit 10.3
                                  ------------




            FORM OF AMENDMENT NO. 2 TO SECURITIES EXCHANGE AGREEMENT


         THIS  AMENDMENT NO. 2 TO SECURITIES  EXCHANGE  AGREEMENT  (this "Second
Amendment")  is entered into as of the 11th day of October,  2005 by and between
GROEN BROTHERS  AVIATION,  INC., a Utah  corporation (the "Company") and Goldman
Sachs & Co., a New York  corporation,  as custodian for a designated holder (the
"Beneficial  Owner")  of  the  Company's  Series  B  15%  Cumulative  Non-Voting
Preferred Stock ("Series B Preferred  Stock") (in such custodial  capacity,  the
"Series B Holder").


                                    RECITALS:

         WHEREAS,  the  Company  and the  Beneficial  Owner are  parties to that
certain Securities Exchange Agreement,  dated as of February 4, 2002, as amended
(the "Exchange Agreement"); and

         WHEREAS,  in  connection  with the grant of authority to the Company by
the Series B Holder for the Company to further amend its Third Restated Articles
of  Incorporation  in the form of the Second  Amendment to the  Company's  Third
Restated  Articles of  Incorporation  (which,  among other  things,  extends the
"Maturity Date" of the Series B Preferred Stock from October 31, 2005 to January
1,  2007),  the Company has agreed to (i) issue to the Series B Holder a warrant
to purchase up to 623,446 shares of the Company's common stock,  (ii) replace an
existing  warrant held by the Series B Holder to purchase up to 2,500,000 shares
of Company common stock (in which the Beneficial Owner has a beneficial interest
in up to 358,302 of the number of shares issuable thereunder) with an equivalent
warrant to purchase up to 358,502  shares of Company  common stock and having an
expiration date of January 1, 2009, and (iii) issue to the Series B Holder 1,534
additional  shares of Series B  Preferred  Stock on January 1, 2007  (subject to
reduction as provided herein).

         NOW,  THEREFORE,  in consideration of good and valuable  consideration,
the  receipt,  sufficiency  and adequacy of which are hereby  acknowledged,  the
Company and the Series B Holder,  intending to be legally bound, hereby agree as
follows:

         1. Recitals;  Capitalized  Terms.  The foregoing  recitals are true and
correct and are incorporated herein by this reference,  as if set forth in their
entirety.  Any capitalized  term not defined in this Second Amendment shall have
the meaning ascribed to it in the Exchange Agreement.

         2. Issuance of Additional  Warrants to Purchase  Company  Common Stock;
Replacement of Existing  Warrant to Purchase  Company Common Stock;  Issuance of
Additional Shares of Series B Preferred Stock. The Exchange  Agreement is hereby
further amended to include the following:

<PAGE>

         A. Issuance of Additional Warrants to Purchase Company Common Stock. As
of the date hereof,  the Company shall issue to the Series B Holder a Warrant to
purchase up to 623,446 shares of the Company's common stock,  exercisable at the
purchase price per share of $0.30 and having an exercise expiration date at 5:00
pm EST,  January  1, 2009 (to be  represented  by warrant  purchase  certificate
number WPC-10.11.05-A-1).

         B.  Replacement of Existing  Warrant to Purchase  Company Common Stock.
The  Company  shall issue on the date hereof a warrant to the Series B Holder to
purchase up to three  hundred fifty eight  thousand  three hundred two (358,302)
shares  of  Company  common  stock at an  exercise  price of $0.30 per share and
having an  expiration  date of  January  1, 2009 (to be  represented  by Warrant
Purchase  Certificate Number  WPC-10.11.05-B-1).  Such warrant shall replace the
Beneficial  Owner's  interest in up to 358,302  shares of Company  common  stock
issuable upon exercise of, and shall cancel the Beneficial  Owner's interest in,
that  certain  Warrant to  purchase  up to two  million  five  hundred  thousand
(2,500,000) shares of Company common stock issued to the Series B Holder for the
benefit of the Beneficial Owner and certain other beneficial  owners on or about
October 31, 2003 under Warrant Purchase Certificate Number WPC-10.31.03.

         C.  Issuance  of  Additional  Shares of Series B Preferred  Stock.  The
Company  shall issue one  thousand  five hundred  thirty four (1,534)  shares of
Series B Preferred Stock (the "Additional  Share Amount") to the Series B Holder
on  January  1,  2007  (all of which  shares  shall be  immediately  subject  to
redemption as provided in the  Company's  Articles of  Incorporation  as then in
effect -  subject  in all  events  to the  rights  of the  holders  of  Series B
Preferred  Stock with regard to any  amendments  thereof).  Notwithstanding  the
foregoing,  the Additional  Share Amount shall be reduced to the extent that the
Company  redeems any shares of Series B Preferred Stock from the Series B Holder
in accordance  with the terms of, and as permitted  by, the Second  Amendment to
the Company's Third Restated Articles of Incorporation.  The amount by which the
Additional Share Amount shall be reduced shall be determined by reference to the
following table:



               [The Remainder of the Page is Intentionally Blank]




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<PAGE>
<TABLE>
<CAPTION>

                                   Amount of Redemption Payment
 Month in which Redemption       among all Holders of Series B
      Payment Occurs                    Preferred Stock                  Percentage Reduction
                              aggregate Stated Value, not including              of
                                (accrued and unpaid dividends)            Additional Share Amount

      <S>                                 <C>                                  <C>
       November 2005                      $10,000,000                          35.0%
       December 2005                      $10,000,000                          30.0%
       January 2006                       $10,000,000                          27.5%
       February 2006                      $10,000,000                          25.0%
        March 2006                        $10,000,000                          20.0%
        April 2006                        $10,000,000                          17.5%
         May 2006                         $10,000,000                          15.0%
         June 2006                        $10,000,000                          15.0%
         July 2006                        $10,000,000                          10.0%
        August 2006                       $10,000,000                          10.0%
      September 2006                      $10,000,000                          10.0%
       October 2006                       $10,000,000                          5.0%
       November 2006                      $10,000,000                          5.0%
       December 2006                      $10,000,000                          0.0%
</TABLE>


         To the extent that a particular  aggregate redemption payment among all
holders of Series B Preferred Stock is less than the assumed  $10,000,000 amount
set forth in the table above,  then the  percentage  reduction to the Additional
Share Amount shall be determined by  multiplying  the  percentage  reduction set
forth in the table  above  opposite  the month in which the  redemption  payment
occurred  by a  fraction,  the  numerator  of which is the dollar  amount of the
aggregate  redemption payment among all holders of Series B Preferred Stock made
in such month and the denominator of which is $10,000,000.  For example,  if the
Company  redeems  $1,000,000 of Series B Preferred  Stock in November 2005, then
the  Additional  Share  Amount  shall be reduced by three and  one-half  percent
(3.5%) (35.0% times 1/10th)  (thereby  reducing the  Additional  Share Amount by
53.69  shares).  To the extent that the Company  shall redeem shares of Series B
Preferred  Stock in more  than  one  monthly  period,  then  the  amount  of the
reduction of the Additional Share Amount shall be separately calculated for each
such monthly period in accordance  with the foregoing  table after giving effect
to the  reduction in the  Additional  Share Amount  resulting  from the previous
redemption.  For example,  if in addition to the November 2005 redemption in the
previous  example,  the Company  redeemed an  additional  $2,000,000 of Series B
Preferred Stock in March 2006, the remaining Additional Share Amount of 1,480.31
shares would be reduced by an  additional  four percent (4%) (20.0% times 1/5th)
(thereby  reducing the remaining  Additional Share Amount by 59.21 shares for an
aggregated reduction of 112.90 shares).



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<PAGE>

         3. Outstanding  Shares. The Company hereby represents and warrants that
the total number of shares of common stock issued and outstanding as of the date
of this Agreement is 134,372,136.

         4.  Ratification.  Except  as  specifically  provided  in  this  Second
Amendment, the Exchange Agreement is ratified and confirmed as written.

         5.  Conflict.  In the  event of any  conflict  between  the  terms  and
conditions  set  forth in the  Exchange  Agreement  and  those set forth in this
Second Amendment, the terms and conditions of this Amendment shall control.

         6.  Execution in  Counterparts.  This  Amendment may be executed by the
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and both of which when taken together shall  constitute
one and the same agreement.


                        [SIGNATURES APPEAR ON NEXT PAGE]



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<PAGE>

         IN WITNESS  WHEREOF,  this  Amendment has been duly signed on behalf of
the Company and The Series B Holders as of the day and year first above written.


                                       GROEN BROTHERS AVIATION, INC.


                                       By: /s/ David Groen
                                       -------------------
                                       Name: David Groen
                                       Title: President & CEO


                                       GOLDMAN SACHS & CO., as custodian


                                       By: /s/ Denise Salazar
                                       ----------------------
                                       Name: Denise Salazar
                                       Title: Senior Analyst



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