Document:

FIRST AMENDMENT TO
                             NOTE PURCHASE AGREEMENT

          THIS FIRST AMENDMENT (this "AMENDMENT"), dated as of December __,
1999, to the Note Purchase Agreement, dated as of March 27, 1998, by and among
DRESDNER KLEINWORT BENSON PRIVATE EQUITY PARTNERS LP, a Delaware limited
partnership ("the PURCHASER"), and GARDENBURGER, INC., an Oregon corporation
(the "COMPANY").

          WHEREAS, the parties hereto have entered into the Note Purchase
Agreement, dated as of March 27, 1998 (the "AGREEMENT"); unless otherwise
defined herein, all capitalized terms used herein (including the recitals
hereto) shall have the meanings assigned to such terms in the Agreement, as
amended hereby;

          WHEREAS, the Company has entered into a Loan and Security Agreement
dated as of December 23, 1999 (the "NEW SENIOR CREDIT AGREEMENT") with Banc of
America Commercial Finance Corporation through its Commercial Funding Division
("BOFA") pursuant to which, among other things, the Company will refinance its
obligations under the existing Senior Credit Agreement (as defined in the
Agreement prior to giving effect to this Amendment) and will receive a credit
facility with an aggregate maximum borrowing availability of $25,000,000;

          WHEREAS, the Company has requested the Purchaser to amend the
Agreement and the Convertible Notes on the terms and conditions set forth in
this Amendment;

          NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants contained herein, the parties hereto agree as follows.

          1. CONSENTS. Subject to the terms and conditions set forth herein, the
Purchaser hereby consents, pursuant to paragraph 2N of the Agreement, to the
Company entering into the New Senior Credit Agreement. Nothing contained herein
shall be deemed to constitute a waiver of any other Event of Default that may
heretofore or hereafter occur or have occurred and be continuing or to modify
any provision of the Agreement except as expressly set forth herein. No consent
or waiver and, except as otherwise specifically provided herein, no other change
of the terms or provisions of the Agreement is intended or implied. This
Amendment shall not constitute a waiver by the Purchaser of any existing
defaults under the Agreement, whether or not the Purchaser has knowledge of the
same, and shall not constitute a waiver of any future defaults.

          2. AMENDMENTS.

          (a) Subparagraph 2C(ix) of the Agreement is hereby amended by
     replacing the reference to "$20,000,000" therein with "$27,500,000".

<PAGE>

          (b) The definition of "Senior Credit Agreement" in the Agreement is
     hereby amended and restated in its entirety to read as follows:

               "SENIOR CREDIT AGREEMENT" means the Loan and Security Agreement
          dated as of December 23, 1999 among the Company and Banc of America
          Commercial Finance Corporation through its Commercial Funding Division
          (the "Bank"), as such agreement may be amended, restated, supplemented
          or otherwise modified from time to time pursuant to and in accordance
          with paragraph 2N hereof; provided that if the Company enters into a
          loan agreement with a financial institution other than the Bank with
          terms that would be permitted as an amendment to Senior Indebtedness
          pursuant to paragraph 2N, such loan agreement shall thereafter be
          deemed to be the Senior Credit Agreement.

          (c) The definition of "Senior Indebtedness" in the Agreement is hereby
     amended by replacing the reference to "20,000,000" therein with
     "27,500,000."

          (d) The following provision is hereby added at the end of subparagraph
     6P(ii) of the Agreement as clause (c):

               (c) In the event of any Bankruptcy Event, the Registered Holders
          hereby expressly consent to the granting by Company to the holders of
          Senior Indebtedness of senior liens and priorities in connection with
          any post-petition financing of the Company by such holders of Senior
          Indebtedness.

          (e) The introductory clause of subparagraph 2D(b) of the Agreement is
     hereby amended and restated in its entirety to read as follows:

          "So long as any Convertible Notes remain outstanding (provided that
          during the Term as described in paragraph 2D(c) below, the following
          covenants set forth in this subparagraph 2D(b) shall not be
          effective), the Company agrees:"

          (f) The following provision is hereby added following subparagraph
     2D(b) of the Agreement as subparagraph 2D(c):

          "During the period commencing with the effective date of the financing
          arrangements pursuant to the Senior Credit Agreement as in effect on
          the Amendment Effective Date (the "New Credit Facility"), and
          continuing throughout the three-year term of the New Credit Facility
          (hereinafter the "Term"), but only for so long as any Convertible

<PAGE>

          Notes remain outstanding, the Company will not incur cumulative 'net
          cash losses' in excess of Five Million Dollars ($5,000,000). 'Net cash
          losses' shall mean pre-tax income or loss, in each case as determined
          in accordance with generally accepted accounting principles, (a) in
          the case of pre-tax income, increased by any non-cash charges and cash
          proceeds from new issuances of capital stock or subordinated debt and
          decreased by any amounts paid as debt service, or (b) in the case of
          pre-tax loss, increased by any amounts paid as debt service and
          decreased (offset) by any non-cash charges and cash proceeds from new
          issuances of capital stock or subordinated debt. Non-cash charges
          include, but are not limited to, depreciation, amortization, and
          accrued but unpaid interest or dividends. The covenant set forth in
          this paragraph 2D(c) shall apply in lieu of the covenants set forth in
          Section 2D(b) above throughout the Term."

          (g) The following definition shall be added to paragraph 5A of the
     Agreement immediately following the definition of affiliated therein:

              "AMENDMENT EFFECTIVE DATE" means December 30, 1999."

          (h) The first sentence of Section 2 of the Convertible Notes is hereby
     amended and restated in its entirety to read as follows:

          "Interest will accrue at the rate of seven percent (7%) per annum
          (computed on the basis of a 360-day year, as appropriate, and the
          actual number of days elapsed in any year) on the unpaid principal
          amount of this Convertible Note outstanding from time to time;
          provided that such rate shall be deemed automatically to be (i) eight
          percent (8%) during any period in which the aggregate amount
          outstanding under the Senior Credit Agreement exceeds $15,000,000, up
          to and including $20,000,000 and (ii) nine percent (9%) during any
          period in which the aggregate amount outstanding under the Senior
          Credit Agreement exceeds $20,000,000; and provided further, that in no
          event shall such rate be higher than the highest rate then permitted
          under applicable law (it being further agreed that any increase in the
          interest rate pursuant to this Section 2 will terminate as of the
          close of business on the next Business Day on which the aggregate
          amount outstanding under the Senior Credit Agreement declines below
          the applicable threshold (subject to subsequent increases pursuant to
          this Section 2) and the interest rate will revert to (a) seven percent
          (7%) if such aggregate amount outstanding is below $15,000,001 and (b)
          eight percent (8%) if such aggregate amount outstanding is above
          $15,000,000 and below $20,000,001."

          3. RATIFICATION OF AGREEMENT.

<PAGE>

          (a) To induce the Purchaser to enter into this Amendment, the Company
     represents and warrants that after giving effect to this Amendment, no
     violation of the terms of the Agreement exist.

          (b) Except as expressly set forth in this Amendment, the terms,
     provisions and conditions of the Agreement and the Investment Documents are
     unchanged, and said agreements, as amended, shall remain in full force and
     effect and are hereby confirmed and ratified.

          4. CONDITIONS. This Amendment shall become effective as of the
Amendment Effective Date upon (i) the execution of the counterparts hereof by
the Company and the Purchaser, and (ii) the receipt by the Purchaser of evidence
of the effectiveness of the New Senior Credit Agreement.

          5. BINDING ON SUCCESSORS AND ASSIGNS. All the terms and provisions of
this Amendment shall be binding upon and inure to the benefit of the parties
hereto, their respective successors, assigns and legal representatives. Whenever
in this Amendment any of the parties hereto is referred to, such reference shall
be deemed to include the successors and assigns of such party.

          6. FURTHER ASSURANCES. Each of the Company and the Purchaser, as the
case may be, shall duly execute and deliver, or cause to be executed and
delivered, such further instruments and perform or cause to be performed such
further acts as may be necessary or proper in the reasonable opinion of the
Purchaser to carry out the provisions and purposes of this Amendment.

          7. EFFECT OF AMENDMENT. To the extent any terms and conditions in the
Agreement shall contradict or be in conflict with any provisions of this
Amendment, the provisions of this Amendment shall govern.

          8. EXPENSES. All expenses of the Purchaser incurred in connection with
this Amendment, including reasonable expenses of Purchaser's counsel, will be
paid by the Company.

          9. COUNTERPARTS. This Amendment may be executed in separate
counterparts, each of which shall be an original and all of which taken together
shall constitute one and the same agreement.

                                    * * * * *

<PAGE>

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

                        DRESDNER KLEINWORT BENSON PRIVATE EQUITY PARTNERS LP

                        By:   Dresdner Kleinwort Benson Private Equity LLC
                        Its:  General Partner

                              By:   /s/ Alexander P. Coleman
                                    ----------------------------------------
                              Its:  Authorized Person

                        GARDENBURGER, INC.

                        By:      /s/ Richard C. Dietz
                                 -------------------------------------------
                        Its:     Executive Vice President and CFOExhibit 10.5

                              EMPLOYMENT AGREEMENT

This  Agreement,  made this 1st day of  January,  2000 by and  between  Advanced
Photonix,  Inc., a Delaware  corporation  (hereinafter  called  "Company"),  and
Patrick J. Holmes, 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 Executive Vice President, Secretary
& Chief Financial 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.

                                  Page 1 of 7
<PAGE>

4. Compensation and Benefits
a) For all the services rendered by the Employee to the Company,  Employee shall
receive a base salary at the rate of $125,000 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 $15,000 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 a rate
of three weeks per year since  original date of employment 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.

                                  Page 2 of 7
<PAGE>

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 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.

                                  Page 3 of 7
<PAGE>

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.

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.

                                  Page 4 of 7
<PAGE>

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.

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:
Patrick J. Holmes                           Advanced Photonix, Inc.
259 High Meadow St.                         1240 Avenida Acaso
Simi Valley, CA 93065                       Camarillo, CA 93012

                                  Page 5 of 7
<PAGE>

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.

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.

                                  Page 6 of 7
<PAGE>

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

ADVANCED PHOTONIX, Inc.                               EMPLOYEE

By: /s/Hayden Leason                                By:/s/ P. J. Holmes
----------------------------                        ----------------------------
Hayden Leason                                         Patrick J. Holmes
Chairman

Attest:

/s/ Brock Koren
-----------------------------
Brock Koren
President & Chief Executive Officer

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