EXHIBIT
      10.4

    


    FIRST
      AMENDMENT TO BUSINESS LOAN AGREEMENT

    


    THIS
      FIRST AMENDMENT TO BUSINESS LOAN AGREEMENT, dated
      as
      of November 13,
      2007
      (this
      “Amendment”), is between ADVANCED PHOTONIX, INC., a Delaware corporation (the
“Borrower”) and FIFTH THIRD BANK (the “Bank”).

    


    RECITAL

    


    The
      Borrower and the Bank are parties to a Business Loan Agreement dated as of
      March
      6, 2007 (the “Loan Agreement”). The Borrower and the Bank desire to amend the
      Loan Agreement on the terms set forth herein.

    


    TERMS

    


    In
      consideration of the premises and of the mutual agreements herein contained,
      the
      parties hereby agree as follows:

    


    ARTICLE
      I. AMENDMENTS
      TO LOAN AGREEMENT.

    


    The
      Loan
      Agreement shall be amended as follows:

    


    1.1 Section
      I
      shall be amended and restated in its entirety to read as follows:

    


    A. Revolving
      Line of Credit to the Borrower in aggregate principal amount up to THREE MILLION
      DOLLARS ($3,000,000) expiring July 1, 2008, upon the terms and conditions herein
      set forth. 

    


    1.2 Section
      5.1 shall be amended by deleting the reference therein to “TWO MILLION AND
      00/100 ($2,000,000)” and inserting “THREE MILLION AND 00/100 ($3,000,000)” in
      place thereof.

    


    1.3 Section
      7.1 shall be amended and restated in its entirety to read as
      follows:

    


    
      	
              7.1

            	
              Permit
                the Debt Service Coverage Ratio at the end of any fiscal quarter,
                to be
                less than 1.0 to 1.0, commencing with the fiscal quarter ending December
                31, 2007 and calculated (i) as of December 31, 2007 for such fiscal
                quarter, (ii) as of March 31, 2008 for such fiscal quarter, and (iii)
                with
                respect to each fiscal quarter thereafter, as of the last day of
                each
                fiscal quarter for the four consecutive fiscal quarters then
                ending.

            


    

    


    ARTICLE
      II. REPRESENTATIONS.
      The
      Borrower represents and warrants to the Bank that:

    


    2.1 The
      execution, delivery and performance of this Amendment and the new Note delivered
      pursuant to Article III are within its powers, have been duly authorized and
      are
      not in contravention with any law, or the terms of its articles of incorporation
      or organization, or by-laws or operating agreement, or any undertaking to which
      it is a party or by which it is bound.

    


    2.2 The
      Amendment is, and the new Note when executed and delivered will be, valid and
      binding in accordance with their respective terms.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.3 After
      giving effect to the amendments herein contained, the representations and
      warranties contained in the Loan Agreement and other Loan Documents are true
      on
      and as of the date hereof with the same force and effect as if made on and
      as of
      the date hereof and no event of default has occurred and is
      continuing.

    


    ARTICLE
      III. CONDITIONS PRECEDENT.

    


    This
      Amendment shall not become effective until each of the following conditions
      are
      satisfied:

    


    3.1 This
      Amendment shall be signed by the Borrower and the Bank and the Consent and
      Agreement at the end hereof shall be signed by each Guarantor.

    


    3.2 The
      Borrower shall have executed and delivered a new Revolving Credit Note to the
      Bank, in form and substance satisfactory to the Bank.

    


    3.3 The
      Borrower shall have delivered such other certificates or agreements reasonably
      requested by the Bank in connection herewith.

    


    ARTICLE
      IV. MISCELLANEOUS.

    


    4.1 Bank
      acknowledges and accepts an update to Schedule 5 to the Security Agreement
      referred to in Section 1.6 above in the form of Schedule 5 attached
      hereto.

    


    4.2 Except
      as
      expressly amended hereby, the Loan Agreement and all other Loan Documents shall
      remain in full force and effect and are ratified and confirmed by the Borrower.
      Terms used but not defined herein shall have the respective meanings ascribed
      thereto in the Loan Agreement.

    


    4.3 This
      Amendment may be signed upon any number of counterparts with the same effect
      as
      if the signatures thereto and hereto were upon the same instrument and
      telecopied signatures shall be enforceable as originals.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, the parties have caused this Amendment to be executed and
      delivered as of the day and year first above written.

    


    
      	 	
              ADVANCED
                PHOTONIX, INC.

            
	 	 	 
	 	
              By: 

            	
              /s/
                Robin F. Risser

            
	 	 	
               
                Its: CFO

            
	 	 	 
	 	
              FIFTH
                THIRD BANK

            
	 	 	 
	 	
              By: 

            	
              /s/
                Tonya R. Gietzen

            
	 	 	
               
                Its: Vice President