**SEVERANCE
      AGREEMENT**





THIS
      SEVERANCE AGREEMENT ("Agreement") is entered into by and between Cheri B.
      Podzimek ("Employee") and APA Enterprises, Inc. ("APA") and its wholly-owned subsidiary,
      APA Cables and Networks, Inc. ("APACN").





BACKGROUND





Employee
      is currently an employee at will of APACN and serves as its
      President.





AGREEMENT





1. Separation
      from Employment as a Result of Change of Control of APACN. If there
      is
      a Change of Control (as defined below) of APA, or if APA sells all or
      substantially all of the
      assets or stock of APACN (a "Subsidiary Sale") and within six months after
      the
      Change of Control of APA or within six months after the closing of the
      Subsidiary Sale Employee's employment
      with APACN is involuntarily terminated for any reason other than Cause (as defined
      below) or Employee voluntarily terminates her employment for Good Reason (as
      defined below),
      she shall be entitled to payment of any bonus accrued at the time of termination
      and to continuation
      of her salary then in effect for the number of months set forth below, payable
      on the payroll schedule then in effect at APA, provided that if the termination
      follows a Subsidiary Sale "bonus"
      and "salary then in effect" shall refer to such amounts as of the date
      immediately preceding
      the Subsidiary Sale:




Termination
                After
            Number
                of Months of PayJune
                30, 2005
            9
                monthsJune
                30, 2007
            12
                months





2. Salary
      Continuation in the Event of Termination Without Cause.  In the
      event
      that Employee's employment with APACN is involuntarily terminated for a reason
      other than Cause in the absence of a Change of Control of APA or a Subsidiary
      Sale, she shall receive any bonus accrued at the date of termination and
      continuation of her salary then in effect for the number of months set forth
      below, payable on the salary schedule as then in effect at APACN.




Termination
                After
            Number
                of Months of PayJune
                30, 2005
            3
                monthsJune
                30, 2007
            6
                monthsJune
                30, 2009
            12
                months





3. Benefits. In the
      event of termination of Employee as described in Section 1 or Section
      2
      above, APA shall provide Employee the option to continue coverage under APA's group
      life, health and dental benefits, if any, at a level comparable to the benefits
      which Employee
      was receiving or entitled to receive immediately prior to termination, subject
      to the  terms
      and
      conditions of APA's insurance or other plan then in effect, but only if such continuation
      is at no cost to APA or APACN. Employee, at her sole expense, shall be entitled
      to such continued coverage for the maximum period required by applicable federal
      and state laws following termination of employment or, if earlier, until
      Employee is eligible for medical coverage through her employment with another
      employer.





4. No
      Employment Agreement. This
      Agreement is not intended to create any agreement
      of employment for any period of time or to alter the "at will" status of
      Employee's employment with APACN in any manner.





5. Cause. A
      termination of employment shall be for "Cause" only if it is based in whole
      or
      in part on:





(i) material
      dishonesty by Employee involving APA or APACN;




(ii) willful
        violation of any law, rule, or regulation;





(iii) failure
      or refusal to perform a material requirement of Employee's duties, or
      failure or refusal to comply with a reasonable, important general policy of
      APA
      or APACN
      or
      APA's Board of Directors after receipt by Employee of written notice specifying
      in detail the failure or refusal and a reasonable time in which to
      perform;





(iv) breach
      of
      fiduciary duty to APA or APACN; or





(v) Employee's
      (a) death or (b) disability (by reason of physical or mental disease,
      defect, accident or illness) such that Employee is (or in the opinion of two independent
      physicians, one selected by APA and one by Employee or her representative, for
      purposes of making this determination) will be unable for an aggregate of 180
      or
      more days during any continuous 12-month period to render the services required
      of her in Employee's then current position with APACN.





6. Change
      of Control. A Change
      of Control has occurred if there has been:





(i) the
      consummation of any consolidation or merger of APA in which APA is
      not
      the continuing or surviving corporation or pursuant to which shares of APA's common
      stock would be converted into cash, securities, or other property, other than
      a merger
      of
      APA in which the holders of APA's common stock immediately prior to the merger
      have the same proportionate ownership of common stock of the surviving
      corporation immediately after the merger; or





(ii) any
      sale,
      lease, exchange, or other transfer (in one transaction or a series of
      related transactions) of all, or substantially all, of the assets of APA;
      or





(iii) approval
      by the shareholders of APA of any plan or proposal for the liquidation
      or dissolution of APA; or





(iv) any
      person (as such term is used in Sections 13(d) and 14(d)(2) of the Securities
      Exchange Act of 1934, as amended (the "Exchange Act") shall become
      the  beneficial
      owner (within the meaning of Rule 13d-3 under the Exchange Act) of 30% or more
      of
      APA's outstanding stock; or


2


(v) during
      any period of two consecutive years, individuals who at the beginning of such
      period constitute the entire Board of Directors of APA shall cease for any
      reason to constitute a majority thereof unless the election, or the nomination
      for election by APA's shareholders, of each new director was approved by at
      least two-thirds of the directors then still in office who were directors at
      the
      beginning of the two-year period.





7. Good
      Reason. "Good
      Reason" shall mean any of the following (without Employee's
      express written consent):





(i) Assignment
      to Employee by the Company of duties inconsistent with Employee's
      position, duties, responsibilities, and status with the Company immediately
      prior to a Change in Control or a Subsidiary Sale, or a change in Employee's
      titles or offices
      as in effect immediately prior to a Change in Control or a Subsidiary Sale,
      or
      her removal from or any failure to reelect or reappoint her to any of such
      positions, except in connection
      with the termination of her employment for disability or Cause or as a result
      of
      her death or by her other than for Good Reason;





(ii) A
      reduction by the Company of Employee's base salary and bonus as in effect on
      the
      date hereof or as the same may be increased from time to time during the term
      of
      this Agreement;





(iii) If
      at the
      time of a Change in Control or a Subsidiary Sale Employee is employed
      at APACN's principal executive offices, a relocation of such principal executive
      offices to a location more than fifty miles outside of the Minneapolis-St.
      Paul Metropolitan
      Area or, if Employee is not employed at APACN's principal executive offices,
      Employee's relocation to any place other than the location at which the Employee performed
      Employee's duties prior to a Change in Control or a Subsidiary Sale, except
      for
      required travel by Employee on the Company's business to an extent substantially consistent
      with Employee's business travel obligations at the time of a Change in Control
      or a Subsidiary Sale;





(iv) Any
      material breach by the Company of any provision of this Agreement; or





(v) Any
      failure by the Company to obtain the assumption of this Agreement by
      any
      successor or assign of the Company.





8. General
      Release. The
      benefits set forth herein shall be payable to Employee only if Employee executes
      prior to the first payment of the salary continuation, and in any event within
      45
      days after termination of employment, a general release of all claims against
      APA and APACN,
      known and unknown, in form and substance satisfactory to APA.


3


9. Governing
      Law. This
      Agreement shall be governed by and construed and enforced
      pursuant to the laws of the State of Minnesota applicable to contracts made
      and
      entirely to
      be
      performed in that state.





10. Forfeiture. If after
      termination of employment Employee violates any continuing obligation to APA
      or
      APACN, such as an obligation to not compete, to assign invention, or to maintain
      the confidentiality of information, then the benefits set forth herein shall
      terminate upon the
      date
      of such violation and all unpaid benefits shall be irrevocably
      forfeited.





11. Notice. Employee
      agrees that she shall provide APA and APACN with not less than
      30
      days' advance notice of voluntary termination of employment by her and that
      she
      will be available for consultation on transition matters for a period of 60
      days
      after the expiration of the 30-day
      notice period. Employee acknowledges that she will not be entitled to any
      severance payment or bonus upon voluntary termination. Employee acknowledges
      that failure to provide the
      required advance notice or to be available for consultation, as stated above,
      could result in injury to APA and APACN not easily quantifiable in money damages
      and that this covenant shall be specifically enforceable.





APA
                  ENTERPRISES, INC.By:
              /s/
                Anil K. JainIts:
              PresidentAPA
                  CABLES AND NETWORKS, INC.By:
              /s/
                Anil K. JainIts:
              CEO/s/
                Cheri B. PodzimekCheri
                  B. Podzimek
  4