Document:

THIRD AMENDMENT TO EMPLOYMENT AGREEMENT

         This Third Amendment To Employment Agreement (the "Amendment") is made
as of this 4th day of October, 2000, by and between American Utilicraft
Corporation, a Delaware corporation (hereinafter "Company"), and James Carey
(hereinafter "Employee"), and is intended to be effective as of January 1, 1997.

         WHEREAS, Company and Employee are parties to that certain Employment
Agreement dated as of August 15, 1991, as amended to date (the "Employment
Agreement"); and

         WHEREAS, in recognition of Employee's efforts and commitment to the
Company during its development stage, the Company and Employee desire to amend
the Employment Agreement as provided herein.

NOW, THEREFORE, the parties hereto agree as follows:

1. Paragraph 4 of the Employment Agreement is hereby deleted in its entirety and
replaced with the following:

         "4(a) As compensation for services rendered under this Agreement, the
Employee shall initially receive a base salary of Sixty Thousand Dollars
($60,000) per annum, and shall be adjusted as follows: (i) effective January 1,
1997, Employee's base salary shall be increased to One Hundred Thousand Dollars
($100,000) per annum, (ii) effective January 1, 1998, Employee's base salary
shall be increased to One Hundred Twenty Five Thousand Dollars ($125,000) per
annum, and (iii) effective upon the Company's registration statement filed in
connection with the Company's financing with Swartz Private Equity, LLC becoming
effective, and the Company becoming a reporting company under the Exchange Act
of 1934, as amended, the Employee's salary shall be increased to One Hundred
Seventy Five Thousand Dollars ($175,000) per annum.

         (b) The Company and Employee acknowledge that due to the fact that the
Company has been and will continue to be a development stage company, it has not
had, and in the foreseeable future may not have, sufficient funds to pay
Employee his entire base salary each year. The Company and Employee agree that
to the extent that the Company has not, or in the future does not, pay Employee
his entire base salary for a given year, such underpayment shall be deemed
deferred compensation and shall be reflected in the Company's books as such. The
Company agrees to pay to Employee his deferred compensation at such time as the
Company has the excess available funds to do so."

2. Paragraph 14 is hereby amended by deleting the reference to "paragraph 4(a),
(b) or (c)" at the end of such Paragraph, and replacing it with "Paragraph
4(a)".

3. Paragraph 15(e)(i) is hereby amended by deleting the reference to "paragraph
4(a), (b) or (c)" at the end of such Paragraph, and replacing it with "Paragraph
4(a)".

<PAGE>

4. Except as expressly provided herein, this Amendment shall not alter, amend,
or otherwise modify the terms and provisions of the Employment Agreement.

5. The parties hereto may execute this Amendment simultaneously, in any number
of counterparts or by annexing signature pages hereto, or on facsimile copies,
each of which shall be deemed an original, but all of which together shall
constitute one and the same document.

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date first above written.

American Utilicraft Corporation.                     Employee

By:                                               /s/ James Carey
   ----------------------------------             ------------------------------
Name:                                             James Carey
      -------------------------------
Title:
       ------------------------------FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

         This First Amendment To Employment Agreement (the "Amendment") is made
as of this 4th day of October, 2000, by and between American Utilicraft
Corporation, a Delaware corporation (hereinafter "Company"), and Thomas Dapogny
(hereinafter "Employee"), and is intended to be effective as of July 15, 2000.

         WHEREAS, Company and Employee are parties to that certain Employment
Agreement dated as of July 15, 2000 (the "Employment Agreement"); and

         WHEREAS, the Company and Employee desire to amend the Employment
Agreement as provided herein.

NOW, THEREFORE, the parties hereto agree as follows:

1. Paragraph 4 of the Employment Agreement is hereby deleted in its entirety and
replaced with the following:

         "4(a) As compensation for services rendered under this Agreement, the
Employee shall initially receive a base salary of One Hundred Thousand Dollars
($100,000) per annum, and effective upon the Company's registration statement
filed in connection with the Company's financing with Swartz Private Equity, LLC
becoming effective, and the Company becoming a reporting company under the
Exchange Act of 1934, as amended, the Employee's salary shall be increased to
One Twenty Five Thousand Dollars ($125,000) per annum.

         (b) The Company and Employee acknowledge that due to the fact that the
Company has been and will continue to be a development stage company, it has not
had, and in the foreseeable future may not have, sufficient funds to pay
Employee his entire base salary each year. The Company and Employee agree that
to the extent that the Company has not, or in the future does not, pay Employee
his entire base salary for a given year, such underpayment shall be deemed
deferred compensation and shall be reflected in the Company's books as such. The
Company agrees to pay to Employee his deferred compensation at such time as the
Company has the excess available funds to do so."

2. Paragraph 14 is hereby amended by deleting the reference to "paragraph 4(a),
(b) or (c)" at the end of such Paragraph, and replacing it with "Paragraph
4(a)".

3. Paragraph 15(e)(i) is hereby amended by deleting the reference to "paragraph
4(a), (b) or (c)" at the end of such Paragraph, and replacing it with "Paragraph
4(a)".
<PAGE>

4. Except as expressly provided herein, this Amendment shall not alter, amend,
or otherwise modify the terms and provisions of the Employment Agreement.

5. The parties hereto may execute this Amendment simultaneously, in any number
of counterparts or by annexing signature pages hereto, or on facsimile copies,
each of which shall be deemed an original, but all of which together shall
constitute one and the same document.

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date first above written.

American Utilicraft Corporation.                     Employee

By:                                               /s/ Thomas Dupongy
   ----------------------------------             ------------------------------
Name:                                             Thomas Dupongy
      -------------------------------
Title:
       ------------------------------THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
REGISTERED OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS AND THEREFORE
THESE SECURITIES MAY NOT BE TRANSFERRED WITHOUT REGISTRATION THEREUNDER OR
PURSUANT TO AN EXEMPTION FROM REGISTRATION.

                         AMERICAN UTILICRAFT CORPORATION
                    CONVERTIBLE SUBORDINATED PROMISSORY NOTE

$1,000,000.00                                                      July 11, 2000

         1.       PRINCIPAL.
                  ---------

                  FOR VALUE RECEIVED, the undersigned, American Utilicraft
Corporation ("Maker"), promises to pay to the Douglas E. Smith, trustee of the
Smith Family Trust ("Payee"), or order, at ________________________, or at such
other place as the holder of this Note shall specify, in lawful money of the
United States of America, the maximum sum of One Million Dollars ($1,000,000) or
such lesser amount as may be advanced hereunder pursuant to the terms hereof
(the "Maximum Principal Amount") and to pay interest on each advance hereunder
at the rate of six percent (6%) per annum from the date of each such advance
until this Note is fully paid.

         2.       PAYMENT OF PRINCIPAL AND INTEREST.
                  ---------------------------------

                  Unless sooner converted into shares of common stock of Maker
as provided for herein, all principal of and interest accruing on this Note
shall be due and payable on the date which is three (3) years from the date
hereof (the "Due Date"). In the event that Payee converts the principal amount
of the Note into common stock as provided in Section 3 below, Maker shall have
the option to pay all accrued interest in either cash or stock (based on the
applicable Conversion Price). In the event that Payee does not convert the
principal amount of the Note, then on the Due Date the Maker shall also pay to
the Payee as a premium an amount equal to thirty percent (30%) of the then
outstanding principal amount.

                  Interest shall be calculated on the unpaid principal balance
of this Note on the basis of a year of 360 days and the actual number of days
elapsed until payment, unless such calculation would result in a usurious rate,
in which case interest shall be calculated on the basis of a year of 365 or 366
days, as the case may be. Interest shall accrue and be payable under this Note
whether or not Maker, or Maker's successors or assigns, should avail themselves
of the protection of the United States bankruptcy laws. From and after the
occurrence of an "event of default" as set forth in Section 8 hereof, interest
shall continue to accrue on the unpaid principal balance of this Note at the
same interest rate as set forth in Section 1 of this Note.

<PAGE>

         3.       CONVERSION OF NOTE.
                  ------------------

                  The Payee shall have the right to convert some or all of the
outstanding principal balance of this Note at any time into shares of the
Maker's common stock by giving written notice to the Maker of Payee's election
to convert and the date of such conversion. The conversion price shall be the
lesser of (i) $3.00 per share and (ii) eight percent (80%) of the market value
of Maker's common stock on the date of conversion which shall be the closing
price of Maker's common stock as reported on the stock exchange for such date;
provided, however, that the conversion price shall not be less than $1.00 per
share (the "Conversion Price").

         4.       WARRANTS.
                  --------

                  For each $500,000 advanced by Payee hereunder, Maker shall
issue to Payee a warrant to purchase 75,000 shares of the Maker's common stock,
at an exercise price equal to $___ per share. Maker agrees to use its reasonable
best efforts to include the shares of common stock issuable upon exercise of the
Warrant in its registration statement on Form SB-2 to be filed in connection
with the Swartz equity line agreement.

         5.       PREPAYMENT.
                  ----------

                  A. This Note may be prepaid at any time or from time to time,
in whole or in part.

                  B. Each such prepayment shall include all interest then
accrued but unpaid on this Note, plus a premium equal to thirty percent (30%) of
the principal amount being repaid.

                  C. Any partial prepayment of the outstanding principal balance
shall in no way release, discharge or affect the obligation of the Maker to
continue to make any other payments of principal or interest provided for herein
until this Note is paid in full.

         6.       APPLICATION OF PAYMENTS.
                  -----------------------

                  Each payment on this Note (whether made when due or otherwise)
shall be credited first, to late charges, fees and other charges due, including
collection costs and attorneys' fees, second against interest then due, and the
remainder of such payment shall be credited against the unpaid principal.

         7.       WAIVER.
                  ------

                  Maker and all endorsers, guarantors and all persons liable, or
to become liable on this Note (each, other than Maker, hereinafter referred to
in this Section as the "Applicable Party"), jointly and severally, waive
presentment, protest and demand, notice of protest, demand, dishonor and
nonpayment of this Note, notice of acceleration, notice of intent to accelerate,
and any and all other notices or matters of a like nature, and consent to any
and all renewals and extensions of the time of payment hereof. Each Applicable
Party agrees that at any time and from time to time, without notice (i) the
terms of payment herein, or (ii) the terms of any guaranty of this Note may be
modified, increased, changed or exchanged, in whole or in part, without in any
way affecting the liability of any Applicable Party.

<PAGE>

         8.       DEFAULT BY MAKER.
                  ----------------

                  Any one or more of the following shall constitute an "Event of
Default" by Maker under the terms of this Note:

                  A. If Maker fails to pay any payment, whether at maturity or
otherwise, of principal and/or interest upon the due date thereof.

                  B. If Maker defaults in the performance or observance of any
of the covenants, conditions or agreements set forth in this Note.

                  C. If Maker breaches any representation or warranty contained
in this Note and such breach is not cured within thirty (30) calendar days after
written notice to Maker; provided however that, no cure period shall be required
for a breach which by its nature cannot be cured.

                  D. If Maker institutes proceedings to be adjudicated a
voluntary bankrupt; consents to the filing of a bankruptcy proceeding against
Maker; files or consents to filing of a petition or answer or consent seeking
reorganization under the federal bankruptcy laws or any other similar applicable
federal or state law; consents to the appointment or a receiver of liquidator or
trustee or assignee in bankruptcy or insolvency of the Maker or a substantial
part of Maker's property; an assignment for the benefit of creditors is made by
the Maker; or Maker admits in writing of Maker's inability to pay Maker's debts
generally as they become due.

         9.       REMEDIES UPON DEFAULT.
                  ---------------------

                  If an Event of Default occurs, at the option of Payee, and
upon written demand, the Payee may accelerate the due date of this Note and
declare the entire outstanding principal balance hereof, including all fees and
costs (if any), and accrued but unpaid interest, immediately due and payable in
full.

                  Each of the options, rights and remedies provided herein or
available at law or in equity which may be exercised by Payee may be exercised
separately or concurrently with any one or more other options, rights or
remedies available to Payee. Failure to exercise any option, right or remedy
shall not constitute a waiver of the right of the Payee to exercise such option,
right or remedy in the event of or with respect to any prior, subsequent or
concurrent transaction or occurrence of the same or a different kind or
character.

         10.      ATTORNEYS' FEES.
                  ---------------

                  Maker agrees to pay all costs of collection or enforcement of
this Note when incurred, including, but not limited to, reasonable attorneys'
fees. If any suit or action is instituted to enforce this Note, Maker promises
to pay, in addition to the costs and disbursements allowed by law, such sum as
the court may adjudge as reasonable attorneys' fees in such suit or action.
Maker shall also pay all reasonable attorneys' fees and costs incurred by Payee
in connection with any modification, amendment or consent related to any
renegotiation or modification of this Note.

<PAGE>

         11.      SEVERABILITY.
                  ------------

                  Every provision of this Note is intended to be severable. If
any term or provision hereof is declared by a court of competent jurisdiction to
be illegal or invalid for any reason whatsoever, such illegality or invalidity
shall not affect the balance of the terms and provisions hereof, which terms and
provisions shall remain binding and enforceable.

         12.      GOVERNING LAW.
                  -------------

                  This Note shall be governed by and construed in accordance
with the laws of the State of California.

         13.      NOTICES.
                  -------

                  All notices, statements or demands shall be in writing and
shall be served in person, by telegraph, by express mail, by certified mail or
by private overnight delivery. Service shall be deemed conclusively made (i) at
the time of service, if personally served, (ii) at the time (as confirmed in
writing by the telegraphic agency) of delivery thereof to the addressee, if
served telegraphically, (iii) twenty-four (24) hours (exclusive of weekends and
national holidays) after deposit in the United States mail, properly addressed
and postage prepaid, if served by express mail, (iv) five (5) calendar days
after deposit in the United States mail, properly addressed and postage prepaid,
return receipt requested, if served by certified mail, (v) twenty-four (24)
hours after delivery by the party giving the notice, statement or demand to the
private overnight deliverer, if served by private overnight delivery and (vi) at
the time of electronic transmission, if a copy of such notice is mailed within
twenty-four (24) hours after the transmission.

         Any notice or demand to Maker shall be given to:

                                    American Utilicraft Corporation
                                    300 Petty Road N.E., Suite B
                                    Lawrenceville, Georgia  30043
                                    Facsimile: (678) 376-9093
                                    Attn:  Chief Executive Officer

                  Any notice or demand to Payee shall be given to:

                                    Douglas E. Smith
                                    ___________________________________
                                    ___________________________________

         Any party hereto may change its address for the purpose of receiving
notices, demands or other communications as herein provided by a written notice
given in the manner aforesaid to the other party or parties hereto.

<PAGE>

         14.      SUCCESSORS AND ASSIGNS.
                  ----------------------

                  All the terms and provisions of this Note shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.

         15.      ASSIGNABILITY.
                  -------------

                  Maker's obligation hereunder is nontransferable and
nonassignable without the prior written consent of Payee.

         16.      AMENDMENT.
                  ---------

                  Neither this Note nor any term or provision hereof may be
modified, amended or altered except by a written instrument approved by Payee
and signed by Maker.

         17.      HEADINGS.
                  --------

                  Headings at the beginning of each numbered Section of this
Note are intended solely for convenience and are not to be deemed or construed
to be a part of this Note.

         18.      TIME OF THE ESSENCE.
                  -------------------

                  TIME IS EXPRESSLY DECLARED TO BE THE ESSENCE of each
obligation of the Maker hereunder and in all matters concerning this Note,
including all acts or things to be done or performed in connection herewith, and
specifically of every provision of this Note in which time is an element.

         19.      COMPLIANCE WITH USURY LAWS.
                  --------------------------

                  Maker and Payee intend to comply with all applicable usury
laws. In fulfilling this intention, all agreements between Maker and Payee are
expressly limited so that the amount of interest paid or agreed to be paid to
Payee for the use, forbearance, or detention of money under this Note shall not
exceed the maximum amount permissible under applicable law.

                  If for any reason payment of any amount required under this
Note shall be prohibited by law, then the obligation shall be reduced to the
maximum allowable by law. If for any reason Payee receives as interest an amount
that would exceed the highest lawful rate, then the amount that would constitute
excessive interest shall be applied to the reduction of the principal of this
Note and not to the payment of interest. If any conflict arises between this
provision and any provision of any other agreement between Maker and Payee, then
this provision shall control.

<PAGE>

         20.      LEGAL REPRESENTATION.
                  --------------------

                  Payee agrees and represents that such party has been
represented by such party's own legal counsel with regard to all aspects of this
Note, or if such party is acting without legal counsel, that such party has had
adequate opportunity and has been encouraged to seek the advice of such party's
own legal counsel prior to the execution of this Agreement.

         21.      JURISDICTION.
                  ------------

                  Any action whatsoever brought upon or relating to this Note
shall be instituted and prosecuted in the state courts of California, County of
Orange, or the federal district court therefore, and each party waives the right
to change the venue. The parties hereto further consent to accept service of
process in any such action or proceeding by certified mail, return receipt
requested.

"MAKER"                                    "PAYEE"

American Utilicraft Corporation            Smith Family Trust

/S/JOHN DUPONT                             /S/DOUGLAS E. SMITH
------------------------------------       ------------------------------------
John Dupont, Chief Executive Officer       Douglas E. Smith, Trustee

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