Document:

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                                                                    EXHIBIT 10.8

                              EMPLOYMENT AGREEMENT

This Agreement, made this 1st day of January, 2000 by and between Advanced
Photonix, Inc., a Delaware corporation (hereinafter called "Company"), and Brock
Koren, an individual (hereinafter called "Employee").

                              W I T N E S S E T H :

Company wishes to employ Employee and Employee wishes to enter into the employ
of the Company on the terms and conditions contained in this Agreement.

NOW, THEREFORE, in consideration of the facts, mutual promises and covenants
contained herein and intending to be legally bound hereby, Company and Employee
agree as follows:

1. Employment

Company hereby employs Employee and Employee hereby accepts employment by the
Company for the period and upon the terms and conditions contained in this
Agreement. Both the Company and individual acknowledge and agree that this
Agreement supercedes all previous Employment Agreements between the parties.

2. Office and Duties

a) Employee shall serve Company generally as President and Chief Executive
Officer. In his capacity, Employee shall have such authority and such
responsibilities as the Board of Directors reasonably may determine from time to
time.

b) Throughout the term of this Agreement, Employee shall devote his entire
working time, energy, skill and best efforts to the performance of his duties
hereunder in a manner which will faithfully and diligently further the business
and interests of the Company. Notwithstanding the foregoing, Employee shall be
permitted to maintain memberships on the Boards of Directors and in
organizations identified to the Company in writing, provided that such
activities shall not, at any time, preclude Company or any Subsidiary (as herein
defined) of the Company, from obtaining contracts from any such company or
organization. Employee shall also be permitted to serve as a director or
consultant of additional organizations and participate in other activities for
the federal government and other groups upon the prior written approval by the
Company, which approval shall not unreasonably be withheld; provided, however,
that no such activities shall, at any time, exclude Company or any subsidiary of
the Company from obtaining contracts from the government or any other
organizations. For purposes of this Agreement, any corporation with respect to
which Company has the ability to control more than fifty percent of the voting
power shall be a "subsidiary" and all such corporations shall be "Subsidiaries".

3. Term

This Agreement shall be for a term of two years, commencing on January 1, 2000,
and ending on December 31, 2001, unless sooner terminated as hereinafter
provided. Unless either party elects to terminate this Agreement at the end of
the original or any renewal term by giving the other party notice of such
election at least ninety (90) days before the expiration of the then current
term, this Agreement shall be deemed to have been extended for an additional
term of one (1) year commencing on the day after the expiration of the then
current term.

4. Compensation and Benefits

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a) For all the services rendered by the Employee to the Company, Employee shall
receive a base salary at the rate of $175,000 per year, ("Base Salary"), payable
in reasonable installments in accordance with Company's regular payroll
practices in effect from time to time.

b) Employee shall be eligible for additional salary increases as well as cash
and stock bonuses during the term of this Agreement at the discretion of the
Board of Directors. Incentive cash bonus will be $25,000 or greater on an annual
basis.

c) Benefits to the Employee shall be the same as those customarily provided by
the Company to other employees except employee shall accrue vacation at three
weeks per year from October 19, 1999 and follow the normal progression from that
date as outlined in the Company's employee manual.

5. Expenses

Company will reimburse Employee for all reasonable expenses incurred by Employee
in connection with the performance of the Employee's duties hereunder, upon
receipt of appropriate documentation and in accordance with Company's regular
reimbursement procedures and practices in effect from time to time.

6. Disability

a) If Employee becomes unable to perform his duties hereunder due to partial or
total disability or incapacity resulting from a mental or physical illness,
injury or other cause, Company will continue the payment of Employee's Base
Salary at its current rate for a period of twenty-six (26) weeks following the
date Employee is first unable to perform his duties due to such disability or
incapacity. Thereafter, Company shall have no obligation for Base Salary or
other compensation payments to Employee during the continuance of such
disability of incapacity.

b) If Employee is unable to perform his duties hereunder due to partial or total
disability or incapacity resulting from a mental or physical illness, injury or
any other cause for a period of twenty-six (26) consecutive weeks or for a
cumulative period of twenty-six (26) weeks during any twelve month period,
Company shall have the right to terminate this Agreement thereafter, in which
event company shall have no further obligations or liabilities hereunder after
the date of such termination.

7. Death

If Employee dies, all payments hereunder shall cease at the end of the month in
which Employee's death shall occur and Company shall have no further obligations
or liabilities hereunder to Employee's estate or legal representative or
otherwise.

8. Discharge for Cause

Company may discharge Employee at any time for criminal conduct (whether or not
related to Employee's employment), intoxication or drug addiction (if either of
these conditions impairs the Employee's ability to perform his duties),
insubordination, gross negligence, any violation of any express direction or any
reasonable rule or regulation established by the Company from time to time
regarding the conduct of its business, any misrepresentation made in this
Agreement, or any violation by Employee of the terms and conditions of this
Agreement, in which event Company shall have no further obligations or
liabilities hereunder after the date of such discharge.

9. Termination of Employment

(a) In the event Company shall terminate Employee's employment during the term
of this agreement (the "termination date"), other than as a result of disability
as set forth in Paragraph 6 or for cause as set forth in Paragraph 8, at any
time prior to the expiration date of this Agreement as set forth in Paragraph

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3, Company shall be obligated to continue Employee's compensation and benefits
set forth in Paragraph 4 and 5 hereof until the later of the expiration date of
this Agreement or twelve months from the termination date. In either such event,
(i) Company's liability to Employee as a result of any such termination shall be
limited as set forth above and (ii) Employee shall have the obligation to
mitigate his damages by using his best efforts to seek employment for which he
is suitably trained and experienced elsewhere. In the event Employee's
compensation from any such employment during the applicable period in which he
is entitled to receive compensation and benefits as set forth in this paragraph
shall be less than that available to him under this Agreement, Company shall pay
Employee any such difference. Employment from consulting activities defined in
Paragraph 2.b) and identified to the Company in writing will not be considered
for purposes of this section.

(b) In the event Company terminates Employee's employment after termination of
this agreement, other than as a result of disability or for cause, Company shall
continue compensation and medical benefits for a period of twelve months after
such termination. Employee shall have the obligation to mitigate his damages by
using his best efforts to seek employment for which he is suitably trained and
experienced elsewhere. In the event Employee's compensation from any such
employment during the applicable period in which he is entitled to receive
compensation and benefits as set forth in this paragraph shall be less than that
available to him under this Agreement, Company shall pay Employee any such
difference. Employment from consulting activities identified to the Company in
writing will not be considered for purposes of this section.

10. Company Property

All research, technology developed or being developed, advertising, sales,
manufacturers' and other materials or article or information, including without
limitation data processing reports, customer sales analyses, invoices, price
lists or information, samples or any other materials or data of any kind
furnished to Employee by Company, learned by Employee from Company's direction
or for Company's use or otherwise in connection with Employee's employment
hereunder, are and shall remain the sole and confidential property of Company;
provided, however, the foregoing shall not apply to any such material in the
public domain other than by reason of a breach of this Paragraph 10. If the
Company requests the return of such materials at any time during or at or after
the termination of Employee's employment, Employee shall immediately deliver the
same to Company.

11. Noncompetition, Trade Secrets, Etc.

a) During the term of this Agreement and for a period of one year after the
termination of his employment with the Company for any reason whatsoever,
Employee shall not, directly or indirectly, solicit, induce, encourage or
attempt to influence any client, customer, salesman or supplier of Company to
cease to do business with or to terminate his employment with Company and shall
not utilize for any such purpose any names and addresses of customers or clients
of Company or any data on or relating to past, present or prospective (at the
time of termination of Employee's employment) customers or clients of Company.

b) During the term of this Agreement, Employee shall not engage in (as a
principal, partner, director, officer, agent, employee, consultant or otherwise)
or be financially interested in any business operating within the United States,
which is involved in business activities which are the same as the business
activities carried on by Company, or being definitely planned by Company,
including exploitation of the technology developed by Company or being developed
by Company at the time of the termination of Employee's employment. However,
nothing contained in this paragraph 11 shall prevent Employee from holding for
investment no more than five percent (5%) of any class of equity securities of a
company whose securities are traded on a national securities exchange.

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c) During the term of this Agreement and at all times thereafter, Employee shall
not use for his personal benefit, or disclosure, communicate or divulge to, or
use for the direct or indirect benefit of any person, firm, association or
company other than Company, any material referred to in this paragraph 11 or any
confidential information regarding the business methods, business policies,
procedures, techniques, research or development projects or results, trade
secrets, or other knowledge or processes of or developed by Company or any names
and addresses of customers or clients or any data on or relating to past,
present or prospective customers or clients or any other confidential
information relating to or dealing with the business operations or activities of
Company, made known to Employee or learned or acquired by Employee while in the
employ of Company.

d) Any and all writings, inventions, improvements, processes, procedures and/or
techniques which Employee may make, conceive, discover or develop, either solely
or jointly with any other person or persons, at any time during the term of this
Agreement, whether during working hours or at any other time and whether at the
request or upon the suggestion of the Company or otherwise, which relate to or
are useful in connection with any business now or hereafter carried on or
contemplated by the Company, including developments or expansions of its present
fields of operations, shall be the sole and exclusive property of Company.
Employee shall make full disclosure to Company of all such writings, inventions,
improvements, processes, procedures and techniques, and shall do everything
necessary or desirable to vest the absolute title thereto in Company. Employee
shall write and prepare all specifications and procedures regarding such
inventions, improvements, processes, procedures and techniques and otherwise aid
and assist Company so the Company can prepare and present applications for
copyright or Letters of Patent wherever possible, as well as reissues, renewals,
and extensions thereof in all countries in which it may desire to have copyright
or patent protection. Employee shall not be entitled to any additional or
special compensation or reimbursement regarding any and all such writings,
inventions, improvements, processes, procedures and techniques.

e) Employee acknowledges that the restrictions contained in the foregoing
subparagraphs a), b), and c), in view of the nature of the business in which
Company is engaged are reasonable and necessary in order to protect the
legitimate interests of Company, and that any violation thereof would result in
irreparable injuries to Company, and Employee therefore acknowledges that, in
the event of his violation of any of these restrictions, Company shall be
entitled to obtain from any court of competent jurisdiction preliminary and
permanent injunctive relief as well as damages and an equitable accounting of
all earnings, profits and other benefits arising from such violation, which
rights shall be cumulative and in addition to any other rights or remedies to
which Company may be entitled.

f) If the period of time or the area specified in subparagraphs a) or b) above
should be adjudged unreasonable in any proceeding, then the period of time shall
be reduced by such number of months or the area shall be reduced by the
elimination of such portion thereof or both so that such restrictions may be
enforced in such area and for such time as is adjusted to be reasonable. If
Employee violates any of the restrictions extended for that period beginning at
the time of the commencement of any such violation and running until such time
as such violation shall be cured by Employee to the satisfaction of Company, on
a day to day basis.

12. Prior Agreements

Employee represents to Company a) that there are no restrictions, agreements or
understandings whatsoever to which Employee is a party which would prevent or
make unlawful his execution of this Agreement and his employment hereunder shall
not constitute a breach of any contract, agreement or understanding, oral or
written, to which he is a party or by which he is bound and b) that he is free
and able to execute this Agreement and to enter into employment by Company.

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13. Personal Rights and Obligations

This Agreement and all rights and obligations hereunder are personal and shall
not be assignable by either party except as provided in this subparagraph, and
any purported assignment in violation thereof shall be null and void. Any
person, firm or corporation succeeding to the business of Company (or that
portion of the business with which Employee is involved) by merger,
consolidation, purchase of assets or otherwise, must assume by contract or
operation of law the obligations of Company hereunder and in such a case
Employee shall continue to honor this Agreement with such person, firm or
corporation substituted for Company as the employer; provided, however, that
Company shall, if it still exists as a separate entity, notwithstanding such
assumption and/or assignment, remain liable and responsible for the fulfillment
of the terms and conditions of this Agreement on the part of the Company.

14. Miscellaneous

a) Indulgences, Etc.

Neither the failure nor any delay on the part of either party to exercise any
right, remedy, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power or
privilege preclude any other or further exercise of the same or any other right,
remedy, power or privilege, nor shall any waiver of any right, remedy, power or
privilege with respect to any occurrence be construed as a waiver of such right,
remedy, power or privilege with respect to any other occurrence. No waiver shall
be effective unless it is in writing and is signed by the party asserted to have
granted such waiver.

b) Notices

All notices, requests, demands and other communications required or permitted
under this Agreement shall be in writing and shall be deemed to have been duly
given, made and received only when delivered (personally, by courier service
such as Federal Express, or by other messenger) or when deposited in the United
States mails, registered or certified mail, postage prepaid, return receipt
requested, addressed as set forth below:

(i) if to Employee:             (ii) if to Company:
Brock Koren                          Advanced Photonix, Inc.
3043 Vista Grande                    1240 Avenida Acaso
Camarillo, CA 93012                  Camarillo, CA 93012

In addition, notice by mail shall be by air mail if posted outside of the
continental United States.

Any party may alter the address to which communications or copies are to be sent
by giving notice of such change of address in conformity with the provisions of
this paragraph for the giving of notice.

c) Binding Nature of Agreement

This Agreement shall be binding upon and inure to the benefit of Company and its
successors and assigns and shall be binding upon Employee, his heirs and legal
representatives.

d) Execution in Counterparts

This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original as against any party whose signature appears
thereon, and all of which shall together constitute one and the same instrument.
This Agreement shall become binding when one or more counterparts hereof,
individually or taken together, shall bear the signatures of all of the parties
reflected hereon as the signatories.

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e) Provisions Separable

The provisions of this Agreement are independent of and separable from each
other, and no provision shall be affected or rendered invalid or unenforceable
by virtue of the fact that for any reason any other or others of them may be
invalid or unenforceable in whole or in part.

f) Entire Agreement

This Agreement contains the entire understanding among the parties hereto with
respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements and understandings, inducements or conditions,
express or implied, oral or written, except as herein contained. The express
terms hereof control and supersede any course of performance and/or usage of the
trade inconsistent with any of the terms hereof. This Agreement may not be
modified or amended other than by agreement in writing.

g) Paragraph Headings

The paragraph headings in this Agreement are for convenience only; they form no
part of this Agreement and shall not affect its interpretation.

h) Gender, Etc.

Words used herein, regardless of the number and gender specifically used, shall
be deemed and construed to include any other number, singular or plural, and any
other gender, masculine, feminine or neuter, as the context indicates is
appropriate.

i) Number of Days

In computing the number of days for purposes of this Agreement, all days shall
be counted, including Saturdays, Sundays and holidays; provided, however, that
if the final day of any time period falls on a Saturday, Sunday or holiday on
which federal banks are or may elect to be closed, then the final day shall be
deemed to be the next day which is not a Saturday, Sunday or holiday.

IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date first above written.

ADVANCED PHOTONIX, Inc.                      EMPLOYEE

By:                                          By:
/s/ Hayden Leason                            /s/ Brock Koren
-----------------------------------          -----------------------------------
Hayden Leason                                Brock Koren
Chairman

Attest:

/s/ Patrick J. Holmes
-----------------------------------
Patrick J. Holmes
Executive Vice PresidentExhibit 4.1

                          NINTH AMENDMENT TO THE THIRD
                      AMENDED AND RESTATED CREDIT AGREEMENT

                                                       Dated as of June 15, 2000

                  NINTH AMENDMENT TO THE THIRD AMENDED AND RESTATED CREDIT
AGREEMENT (this "Amendment") among Glenoit Corporation (the "Borrower"), the
Lenders named in the Credit Agreement (defined below) (the "Lenders"), Banque
Nationale de Paris (the "Agent"), as Agent, Arranger, Issuing Bank and Swing
Line Bank, Fleet National Bank, as Syndication Agent, and LaSalle National Bank,
as Documentation Agent.

                  PRELIMINARY STATEMENTS:

                  (1) The Borrower, the Lenders, the Agent, the Arranger, the
Issuing Bank, the Swing Line Bank, the Syndication Agent and the Documentation
Agent have entered into a Third Amended and Restated Credit Agreement, dated as
of February 12, 1999 (as the same has been and in the future may be amended and
modified from time to time, the "Credit Agreement"). Capitalized terms not
otherwise defined in this Amendment have the same meanings as specified in the
Credit Agreement as amended hereby.

                  (2) Section 2.06(b)(iii) of the Credit Agreement provides that
the Borrower is obligated to prepay an aggregate principal amount of Working
Capital Advances, Swing Line Advances and Letter of Credit Advances in an amount
by which such Advances plus the Available Amount of all Letters of Credit then
outstanding (together with such Advances, the "Outstanding Amount") exceeds the
Loan Value of Eligible Collateral, based upon the most recent Borrowing Base
Certificate.

                  (3) On February 23, 2000, Borrower delivered to the Agent a
Borrowing Base Certificate dated February 23, 2000 (the "February BB
Certificate") reflecting that the Outstanding Amount exceeded the Loan Value of
Eligible Collateral. The Borrower was then obligated under Section 2.06(b)(iii)
of the Credit Agreement to make a principal prepayment in the approximate amount
of $2,000,000, which the Borrower failed to make.

                  (4) The failure of the Borrower to make the principal
prepayment required by Section 2.06(b)(iii) of the Credit Agreement as aforesaid
constitutes on Event of Default under Section 6.01(a) of the Credit Agreement
(the "Section 2.06(b)(iii) Event of Default"), which the Borrower has
acknowledged by its letter to the Agent, dated February 23, 2000.

                  (5) Section 5.04 of the Credit Agreement sets forth the
financial covenants of the Borrower. On April 9, 2000, the Borrower delivered a
letter to the Agent confirming that the Borrower is in breach of the Section
5.04 covenants as of April 1, 2000. The breach of such covenants constitutes an
Event of Default under Section 6.01(c) of the Credit Agreement (the "Covenant
Events of Default").

                  (6) On April 14, 2000, the Agent delivered to the Borrower and
United States Trust Company of New York, the Indenture Trustee under the
Subordinated Debt Documents (the "Indenture Trustee"), a letter (the
"Subordinated Debt Notice") (i) confirming that, as a result of the Section
2.06(b)(iii) Event of Default, the Borrower was prohibited from making any
<PAGE>
payments whatsoever in respect of the Subordinated Notes, and (ii) notifying the
Company and the Indenture Trustee that if, but only if, the Section 2.06(b)(iii)
Event of Default is determined not to be a payment default and the Borrower is
not otherwise in payment default under the Credit Agreement, the Subordinated
Debt Notice shall constitute a Blockage Notice (as defined in the Subordinated
Debt Documents) based on the Covenant Events of Default.

                  (7) Pursuant to the terms and conditions set forth in that
certain Seventh Amendment to the Third Amended and Restated Credit Agreement,
dated as of April 28, 2000 (the "Seventh Amendment"), the Lenders agreed that,
provided the Borrower is working diligently to devise a restructuring plan
acceptable to its creditors and equity holders, the Lenders may, in their
discretion, continue to provide Working Capital Advances and issue Letters of
Credit on the conditions, for the limited period and for the limited purposes
set forth in the Seventh Amendment.

                  (8) Over the past several weeks, the Borrower and its equity
holders have been pursuing a potential restructuring of the Borrower and its
subsidiaries. In order to provide the Loan Parties with the necessary liquidity
with which to operate during such period, the Loan Parties requested and the
Lenders, subject to the terms and conditions set forth in the Eighth Amendment
to the Third Amended and Restated Credit Agreement, dated as of May 25, 2000
(the "Eighth Amendment"), consented through June 15, 2000 (a) to increase the
Available Amount of Letters of Credit and the available amount of Working
Capital Loans for the limited purposes set forth therein, and (b) to the
issuance by the Lenders, in their discretion, of Standby Letters of Credit in
the limited amounts, and for the limited purposes set forth therein.

                  (9) The Borrower is currently in the process of attempting to
effectuate its proposed restructuring plan. In order to provide the Loan Parties
with the necessary liquidity with which to operate while the Borrower undertakes
to implement its restructuring proposal, the Loan Parties have requested and the
Lenders, subject to the terms and conditions of the Credit Agreement as amended
hereby, have consented to the extension of the terms of the Eighth Amendment
through July 5, 2000.

                  SECTION 1. Extension of Amendment Period. The Amendment
Period, as defined in the Eighth Amendment, is hereby extended through and
including July 5, 2000.

                  SECTION 2. Conditions of Effectiveness of Amendment. This
Amendment shall become effective as of the date first above written when, and
only when, the following conditions precedent shall have been satisfied:

                  (a) The Agent shall have received counterparts of this
         Amendment executed by the Borrower, the Agent and the required number
         of Lenders.

                  (b) The Borrower shall have reimbursed or otherwise paid all
         reasonable costs and expenses of the Agent paid or incurred in
         connection with the Borrower or the Credit Agreement, and theretofore
         presented to the Borrower for payment, including, without limitation,
         in connection with the preparation, execution, delivery and
         administration of this Amendment (including, without limitation, (a)
         all outstanding fees and disbursements of (a) Shearman & Sterling and
         Kramer Levin Naftalis & Frankel, LLC ("Kramer

                                      -2-
<PAGE>
         Levin") in their capacity as counsel to the Agent, and (b) Zolfo Cooper
         LLP, in its capacity as consultant to the Agent's counsel ("Zolfo
         Cooper").

                  SECTION 3. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:

                  (a) Each Loan Party is a corporation duly organized, validly
         existing and in good standing under the laws of the jurisdiction of its
         organization.

                  (b) The execution, delivery and performance by the Borrower of
         this Amendment and the Loan Documents, as amended hereby, to which it
         is or is to be a party, is within the Borrower's corporate powers, has
         been duly authorized by all necessary corporate action and does not (i)
         contravene the Borrower's charter or by-laws, (ii) violate any law
         (including, without limitation, the Securities Exchange Act of 1934, as
         amended, and the Racketeer Influenced and Corrupt Organizations Chapter
         of the Organized Crime Control Act of 1970), rule or regulation
         (including, without limitation, Regulation X of the Board of Governors
         of the Federal Reserve System), or any order, writ, judgment,
         injunction, decree, determination or award, binding on or affecting the
         Borrower or any of its Subsidiaries or any of their properties, (iii)
         conflict with or result in the breach of, or constitute a default
         under, any contract, loan agreement, indenture, mortgage, deed of
         trust, lease or other instrument binding on or affecting the Borrower,
         any of its Subsidiaries or any of their properties or (iv) except for
         the Liens created under the Loan Documents, result in or require the
         creation or imposition of any Lien upon or with respect to any of the
         properties of the Borrower or any of its Subsidiaries.

                  (c) No authorization or approval or other action by, and no
         notice to or filing with, any governmental authority or regulatory body
         or any other third party is required for the due execution, delivery,
         recordation, filing or performance by the Borrower of this Amendment or
         any of the Loan Documents, as amended hereby, to which it is or is to
         be a party.

                  (d) With the exception of the Section 2.06(b)(iii) Event of
         Default and the Covenant Events of Default described herein, there are
         no other Defaults or Events of Default by Borrower as of the date
         hereof.

                  (e) This Amendment has been duly executed and delivered by the
         Borrower. This Amendment and each of the Loan Documents, as amended
         hereby, to which the Borrower is a party are legal, valid and binding
         obligations of the Borrower, enforceable against the Borrower in
         accordance with their respective terms, except as enforceability may be
         limited by bankruptcy, insolvency, reorganization, moratorium or other
         laws relating to or limiting creditors' rights or by equitable
         principles generally.

                  (f) There is no action, suit, investigation, litigation or
         proceeding affecting the Borrower or any of its Subsidiaries
         (including, without limitation, any Environmental Action) pending or
         threatened before any court, governmental agency or arbitrator that (i)
         would be reasonably likely to have a Material Adverse Effect or (ii)
         purports to affect

                                      -3-
<PAGE>

         the legality, validity or enforceability of this Amendment or any of
         the Loan Documents, as amended hereby.

                  SECTION 4. Definitions. For the purposes of this Amendment,
"Majority Working Capital Lenders" shall mean, at any time, Lenders owed or
holding at least 51% of the sum of (a) the aggregate principal amount of the sum
of all Working Capital Advances, Swing Line Advances and Letter of Credit
Advances outstanding at such time, (b) the aggregate Available Amount of all
Letters of Credit outstanding at such time, and (c) the aggregate Unused Working
Capital Commitments at such time.

                  SECTION 5. Reference to and Effect on the Credit Agreement,
the Loan Documents, and the Subordinated Notes.

                  (a) On and after the effectiveness of this Amendment, each
         reference in the Credit Agreement to "this Agreement", "hereunder",
         "hereof" or words of like import referring to the Credit Agreement, and
         each reference in the Notes and each of the other Loan Documents to
         "the Credit Agreement", "thereunder", "thereof" or words of like import
         referring to the Credit Agreement, shall mean and be a reference to the
         Credit Agreement, as amended by this Amendment.

                  (b) The Credit Agreement, the Notes and each of the other Loan
         Documents, as specifically amended by this Amendment, are and shall
         continue to be in full force and effect and are hereby in all respects
         ratified and confirmed. Without limiting the generality of the
         foregoing, the Collateral Documents and all of the Collateral described
         therein do and shall continue to secure the payment of all Obligations
         of the Loan Parties under the Loan Documents, in each case as amended
         by this Amendment.

                  (c) The Borrower hereby agrees that (i) the Borrower is truly
         and justly indebted to the Secured Parties, without defense,
         counterclaim or offset of any kind in the full amount of the Secured
         Obligations and (ii) the Secured Obligations are secured by valid,
         perfected, enforceable and unavoidable first priority Liens and
         security interests upon the Collateral senior to all other security
         interests and liens upon the Collateral (except as set forth in the
         Third Amended and Restated Security Agreement and the Credit
         Agreement), granted by the Loan Parties to the Agent for the ratable
         benefit of the Secured Parties.

                  (d) The execution, delivery and effectiveness of this
         Amendment shall not, except as expressly provided herein, operate as a
         waiver of any right, power or remedy of any Lender Party or the Agent
         under any of the Loan Documents, nor constitute a waiver of any
         provision of any of the Loan Documents.

                  (e) This Amendment shall not constitute a waiver of the
         Section 2.06(b)(iii) Event of Default, the Covenant Events of Default
         or any other Default or Event of Default existing as of the date
         hereof, nor shall this Amendment authorize or be deemed to authorize
         any payment by the Borrower in respect of the Subordinated Notes or
         terminate or be deemed to terminate the payment block existing in
         respect of the Subordinated Notes.

                                      -4-
<PAGE>

                  SECTION 6. Fees; Costs and Expenses. The Borrower agrees to
         pay on demand all reasonable costs and expenses of the Agent in
         connection with the preparation, execution, delivery and
         administration, modification and amendment of this Amendment and the
         other instruments and documents to be delivered hereunder (including,
         without limitation, the reasonable fees and disbursements of counsel
         and financial advisor to the Agent) in accordance with the terms of
         Section 8.04 of the Credit Agreement.

                  SECTION 7. Execution in Counterparts. This Amendment may be
         executed in any number of counterparts and by different parties hereto
         in separate counterparts, each of which when so executed shall be
         deemed to be an original and all of which taken together shall
         constitute but one and the same agreement. Delivery of an executed
         counterpart of a signature page to this Amendment by telecopier shall
         be effective as delivery of a manually executed counterpart of this
         Amendment.

                  SECTION 8. Governing Law. This Amendment shall be governed by,
         and construed in accordance with, the laws of the State of New York.

                                      -5-
<PAGE>
                  IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly authorized,
as of the date first above written.

                                        GLENOIT CORPORATION

                                        By /s/ Thomas J. O'Gorman
                                        Name:  Thomas J. O'Gorman
                                        Title: President and CEO

                                        AGENT
                                        -----

                                        BANQUE NATIONALE DE PARIS,
                                                 as Agent and as a Lender

                                        By /s/ David A. Barcus
                                        Name:  David A. Barcus
                                        Title: Director

                                        By /s/ Elie Doft
                                        Name:  Elie Doft
                                        Title: Associate

                                        LENDERS
                                        -------

                                        BOEING CAPITAL CORPORATION

                                        By /s/ David Nelson
                                        Name:  David Nelson
                                        Title: Special Credits

                                        CENTURA BANK

                                        By /s/ Lowry D. Perry
                                        Name:  Lowry D. Perry
                                        Title: Bank Officer

                                      -6-
<PAGE>
                                      COMERICA

                                      By /s/ David W. Day
                                      Name:  David W. Day
                                      Title: Vice President

                                      DEUTSCHE FINANCIAL SERVICES

                                      By /s/ Philip G. Porcher IX
                                      Name:  Philip G. Porcher IX
                                      Title: Vice President

                                      FIRST SOURCE FINANCIAL LLP,
                                      By First Source Financial, Inc., as its
                                             Agent/Manager

                                      By /s/ Robert Horak
                                      Name:  Robert Horak
                                      Title: Vice President

                                      FLEET BANK, N.A.

                                      By /s/ Michael S. Haines
                                      Name:  Michael S. Haines
                                      Title: Senior Vice President

                                      FLOATING RATE PORTFOLIO

                                      By:  INVESCO Senior Secured Management,
                                             Inc., as attorney in fact

                                      By /s/ Gregory Stoeckle
                                      Name:  Gregory Stoeckle
                                      Title: Authorized Signatory

                                      -7-
<PAGE>
                                         LASALLE BANK NATIONAL ASSOCIATION

                                         By /s/ Margaret P. Hager
                                         Name:  Margaret P. Hager
                                         Title: First Vice President

                                         KZH ING-1 LLC

                                         By /s/ Peter Chin
                                         Name:  Peter Chin
                                         Title: Authorized Agent

                                         KZH ING-2 LLC

                                         By /s/ Peter Chin
                                         Name:  Peter Chin
                                         Title: Authorized Agent

                                         KHZ ING-3 LLC

                                         By /s/ Peter Chin
                                         Name:  Peter Chin
                                         Title: Authorized Agent

                                         METROPOLITAN LIFE
                                                  INSURANCE COMPANY

                                         By /s/ Jacqueline D. Jenkins
                                         Name:  Jacqueline D. Jenkins
                                         Title: Director

                                      -8-
<PAGE>
                                           VAN KAMPEN SENIOR FLOATING
                                                    RATE FUND

                                           By /s/ Darvin Pierce
                                           Name:  Darvin Pierce
                                           Title: Vice President

                                           VAN KAMPEN PRIME RATE
                                                    INCOME TRUST

                                           By /s/ Darvin Pierce
                                           Name:  Darvin Pierce
                                           Title: Vice President

                                           FLEET BUSINESS CREDIT CORPORATION

                                           By /s/ Mark Pickering
                                           Name:  Mark Pickering
                                           Title: Vice President

                                      -9-

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