Document:

10.5 Employment Agreement with Mr. Manu Ohri

                              Employment Agreement

         EMPLOYMENT  AGREEMENT  dated as of July 1,  1999 by and  between  ENOVA
HOLDINGS,  INC.,  a  Nevada  corporation,   PEGO  SYSTEMS,  INC.,  a  California
corporation,  (collectively referred to as the "Company") and Mr. Manu Ohri (the
"Executive).

         WHEREAS, the Company is in the business of environmental consulting and
the manufacturing of certain related environmental products (the "Business");

         WHEREAS, the Executive is an experienced executive in the Business; and

         WHEREAS,   the  Company  and  the  Executive  desire  to  establish  an
employment relationship with each other.

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
covenants hereinafter set forth, the parties hereto agree as follows:

1.   Employment. The Company agrees that the Company shall employ the Executive,
     and the Executive  accepts  employment  with the Company,  on the terms and
     conditions set forth herein.

2.   Term. The term of employment (the  "Employment  Term") under this Agreement
     shall commence as of the date hereof and continue, subject to the terms and
     conditions of this  Agreement,  for a period of thirty-six (36) months from
     such date.

3.   Position. The Company shall employ the Executive for the Employment Term as
     its President & Chief Executive Officer to perform when and where necessary
     such duties  relating to the overall  operation  of the Company as may from
     time to time be assigned by the Chairman or by the Board of Directors.  The
     Executive  agrees to accept such  employment and to devote his best efforts
     in and to the faithful performance of his duties hereunder to the exclusion
     of all other  employment,  subject to the general  direction and control of
     the Board of  Directors of the Company.  The parties  agree that  Executive
     shall not be required to relocate.

4.   Elected  to Board.  The  Company  shall use its best  efforts  to cause the
     Executive  to be elected to the Board of  Directors  of the  Company at the
     next Annual Meeting of Shareholders of the Company.

5.   Compensation.

     a.   In  consideration  of the services to be rendered by the Executive for
          his duties pursuant to Section 3 of this Agreement, including, without
          limitation,  any  services  rendered by the  Executive  as a director,
          officer or  employee  of the  Company  or of any of its  subsidiaries,
          divisions or affiliated companies, and in full payment for the due and
          faithful  performance  of said  services,  the  Company  shall pay the
          Executive and the  Executive  agrees to accept a salary at the rate of
          $140,000 for the first year, $168,000 for the second year and $201,600
          in the third  year  (the  "Base  Compensation").

<PAGE>

     b.   Payments to the Executive of his Base Compensation  hereunder shall be
          made  periodically on the dates established by the Company for payment
          of other  executive  employees,  but not less  frequently  than once a
          month.  All  payments  under  this  agreement  shall be subject to all
          deductions and withholdings as required by law.

     c.   The  Executive  shall be  entitled  to  reimbursement  for  reasonable
          expenses incurred by him in connection with his employment  hereunder,
          upon the presentation of proper vouchers  therefore in accordance with
          the usual  procedures of the Company.  Such expenses  shall not exceed
          $1,000 per month without the authorization of the Board.

     d.   The Executive  shall be entitled to participate in and receive medical
          and  dental  benefits  for  the  Executive  and his  dependent  at the
          Company's expense,  in accordance with the provisions of the Company's
          benefits plan or program currently in effect. The Company will provide
          the Executive (i) a life insurance policy in the amount of $1,000,000;
          (ii) three weeks  vacation  benefit  annually;  (iii) a long-term  and
          short-term  disability  coverage in accordance  with the provisions of
          any of  the  Company's  employee  benefit  plans  or  programs  now or
          hereafter in effect,  to the same extent that employees of the Company
          in  positions  similar  to that of the  Executive  have  the  right to
          participate in such plans and programs.

     e.   The  Executive  shall be  entitled  during the  Employment  Term to an
          automobile allowance equal to $650 per month.

     f.   The Executive  shall be entitled during the Employment Term to receive
          membership  dues for  business  and  professional  associations.  Such
          expenses shall not exceed $2,500 annually without the authorization of
          the Board.

6.   Termination.  The  employment  of the  Executive  may be  terminated by the
     Company upon the occurrence of any of the following events:

     a.   Subject  to  Section  7(a)  below,  the  Company  may  terminate  such
          employment  at any time without good cause upon written  notice to the
          Executive;

     b.   Such  employment  shall  terminate  automatically  on the death of the
          Executive;

     c.   The Company may terminate  Executive's  employment at any time for any
          reason or no reason upon giving a written notice to the Executive.  In
          such event,  the Company shall pay to Executive an amount equal to six
          months Base Compensation.  For purposes of this Agreement "good cause"
          shall include the following circumstances:

          i.   If there is a repeated  and  demonstrable  failure on the part of
               the  Executive  to  perform   material   duties  of   Executive's
               management position in a competent manner and where the Executive
               fails to  substantially  remedy the failure  within a  reasonable
               period of time after  receiving  written  notice of such  failure
               from the Company  (three  written  notices shall be sufficient to
               establish "repeated and demonstrable" failure);

          ii.  If the Executive is convicted of a criminal offense;

<PAGE>

          iii. If the  Executive  or any  member of his or his  spouse's  family
               makes any personal  profit at the expense of the Company  without
               prior written consent of the Company.

          iv.  If the  Executive  fails to fully  observe the  fiduciary  duties
               appropriate to his position; and

          v.   If the Executive  disobeys  reasonable  instructions given in the
               course of  employment  by the Board of  Directors  of the Company
               that  are  not  inconsistent  with  the  Executive's   management
               position  and not remedied by the  Executive  within a reasonable
               period  of  time,   after   receiving   written  notice  of  such
               disobedience.  A "reasonable  period of time" shall be determined
               in good faith by the Board (with the  Executive  not  voting,  if
               Executive  is then a member of the Board),  but in no event shall
               such period be more than thirty (30) days.

     d.   The Executive may terminate his employment  hereunder upon thirty days
          written notice to the Company.

7.   Payments  on  Termination;  Change  of  Control.  Upon  termination  of the
     Executive's  employment  for  any  reason,  the  Company  shall  pay to the
     Executive,  or if  the  termination  is as a  result  of the  death  of the
     Executive,  to his  personal  representative,  any accrued  but  previously
     unpaid  Basic   Compensation   prorated  to  the  effective  date  of  such
     termination.

     In the event the Company terminates the Executive's employment without good
     cause,  the Company shall make severance  payments equal to and in the same
     manner as the Executive's Basic  Compensation in effect at the time of such
     termination  for the remaining term of this  Employment  Agreement.  To the
     extent Executive  receives  compensation  from any form of employment after
     such  termination  for any  part of the  period  during  which  termination
     payments are being made to the  Executive by the Company,  Executive  shall
     immediately  so inform the Company,  and the  termination  payment  payable
     pursuant to this subparagraph will be reduced at the rate of $0.75 for each
     dollar of compensation so received by the Executive.

     In the event the Company  terminates the  Executive's  employment with good
     cause in the first year, the severance amount would be equal to Executive's
     base salary for 12 months;  if Executive's  employment is terminated in the
     second year,  the severance  amount will be equal to his base salary for 18
     months;  and if  Executive's  employment has been in effect for longer than
     two years,  the  severance  amount  will equal 24 months of base pay at the
     time of termination.  In addition,  the Company shall provide and Executive
     shall receive (i) his base salary accrued  through the date of termination;
     (ii) all  accrued  vacation  pay and  accrued  bonuses,  if any, to date of
     termination;  (iii)  any  bonus  which  would  have  been  paid but for the
     termination, prorated through the date of termination, based upon Company's
     performance and in accordance with the terms,  provisions and conditions of
     any Company  incentive  bonus plan in which  Executive  may be designated a

<PAGE>

     participant;  (iv) for a period of 12 months after the date of termination,
     at the Company's  expense,  coverage to Executive  under the Company's life
     insurance and disability insurance policies;  coverage to Executive and his
     dependents medical and dental insurance under the Company's health plan; if
     any of the  Company's  medical and dental,  life  insurance,  or disability
     insurance  plans are not  continued  or if  Executive  is not  eligible for
     coverage  hereunder  because  of the  termination  of his  employment,  the
     Company shall pay the amount  required for  Executive to obtain  equivalent
     coverage; (v) reasonable  outplacement services;  (vi) office,  secretarial
     support,  and  access to  equipment  and  supplies  for a period of six (6)
     months  after  termination.  Also upon  termination  of  employment  by the
     Company without good cause,  all equity options,  restricted  equity grants
     and similar  rights held by the Executive with respect to securities of the
     Company  shall  automatically  become  vested and shall become  immediately
     exercisable.

8.   Covenant Not to Compete.

     a.   The  Executive  agrees that during the  Employment  Term, he will not,
          directly or indirectly, have any ownership interest of five percent or
          more in a corporation,  firm, trust,  association or other entity that
          is in competition with the Company.

     b.   The Executive  shall not,  during the Employment  Term and at any time
          within one year after the  termination  his employment with Company by
          the Executive or by the Company with cause,  in any manner,  engage or
          become  interested  in  (as  owner,  stockholder,  partner,  director,
          officer,  employee,  consultant  or otherwise)  any business  which is
          competitive  with the business  conducted by the Company or any of its
          affiliates at the time of the termination of his employment hereunder.
          This Section 8 shall not apply if the Company  terminates  Executive's
          employment without cause. The Executive's  ownership of less than five
          percent of the stock of a publicly owned company, which competes, with
          the Company shall not be  considered a violation of the  provisions of
          this Section 8(b).

     c.   Without  limiting  the rights of the  Company  hereunder,  the parties
          agree  that in the  event the  Executive  violates  (in  other  than a
          willful violation) any of the provisions of the Section 8, the Company
          may  give  the  Executive  30  days  notice  of  such   violation  and
          opportunity to cure it; in the event the violation is not cured within
          such 30-day period,  such violation will be grounds for termination of
          this Agreement and the Executive's  employment hereunder for cause, in
          addition  to  any  other  remedies  available  to the  Company.  It is
          expressly understood that the limitations  contained in this Section 8
          shall be in addition to, and not in substitution of, any provisions of
          a  separate   non-competition   agreement  entered  into  between  the
          Executive and the Company.  To the extent any provision  herein is not
          consistent  with  such  non-competition   agreement,   the  terms  and
          provisions of the non-competition agreement shall apply.

9.   Inventions.

     a.   For  purposes  of the  Agreement,  "Invention"  shall mean any and all
          machines,  apparatuses,  compositions  of matter,  methods,  know-how,
          processes, designs, configurations, uses, ideas, concepts, or writings
          of any kind, discovered,  conceived,  developed, made, or produced, or
          any improvements to them, and shall include, but not be limited to the
          definition of an invention contained in the United States Patent Laws.

<PAGE>

     b.   The  Executive   understands  and  agrees  that  all  Inventions,   or
          trademarks or copyrights relating thereto,  which reasonably relate to
          the  business of the Company  and which are  conceived  or made by him
          during his employment by the Company either alone or with others,  are
          the  sole  and  exclusive  property  of  the  Company.  The  Executive
          understands and agrees that all Inventions,  trademarks, or copyrights
          described  above in this  Section  9(a)  are the  sole  and  exclusive
          property  of the  Company  whether or not they are  conceived  or made
          during regular working hours.

     c.   The Executive agrees that he will disclose  promptly and in writing to
          the Company all Inventions within the scope of this Agreement, whether
          he considers  them to be patentable or not,  which he, either alone or
          with others, conceives or makes (whether or not during regular working
          hours).  The  Executive  hereby  assigns  and agrees to assign all his
          right,  title,  and interest in and to those Inventions that relate to
          the business of the Company and agrees not to disclose any of these to
          others without the written consent of the Company,  except as required
          by the conditions of his employment.

     d.   The  Executive  agrees that he will at any time during his  employment
          hereunder,  or after  this  Employment  Agreement  terminates,  on the
          request of the Company,  (i) execute specific  assignments in favor of
          the Company,  or its nominee, of any of the Inventions covered by this
          Agreement,  (ii)  execute  all papers and  perform all lawful acts the
          Company   considers   necessary  or  advisable  for  the  preparation,
          application  procurement,  maintenance,  enforcement,  and  defense of
          patent  applications  and  patents  of the United  States and  foreign
          countries for these  Inventions,  for the perfection or enforcement of
          any trademarks or copyrights relating to such Inventions,  and for the
          transfer of any interest the Executive may have, and (iii) execute any
          and all papers and lawful documents required or necessary to vest sole
          right,  title, and interest in the Company or its nominee of the above
          Inventions,  patent  applications,   patents,  or  any  trademarks  or
          copyrights  relating  thereto.  The  Executive  will, at the Company's
          expense, execute all documents (including those referred to above) and
          do all other acts necessary to assist in the  preservation  of all the
          Company's interests arising under this Agreement.

10.  Secrecy.

     a.   For purposes of this Agreement,  "proprietary  information" shall mean
          any  information  relating to the business of the Company that has not
          previously been publicly  released by duly authorized  representatives
          of the Company and shall include (but shall not be limited to) Company
          information encompassed in all computer code, software, notes, written
          concepts,  drawings,  designs, plans,  proposals,  marketing and sales
          plans,  financial  information,  costs, pricing information,  customer
          information,  and all  methods,  concepts,  or ideas in or  reasonably
          related to the business of the Company.

     b.   The  Executive  agrees to regard  and  preserve  as  confidential  all
          proprietary  information pertaining to the Company's business that has
          been or may be  obtained  by the  Executive  prior  to or  during  his
          employment  by the  Company  (whether  before,  during  or  after  the
          Employment Term hereof), whether he has such information in his memory
          or in writing or other  physical  form. The Executive will not use for
          his benefit or  purposes,  nor disclose to others,  either  during the
          Employment Term or thereafter, except as required by the conditions of
          his employment hereunder,  any proprietary  information connected with
          the business or developments of the Company.

<PAGE>

     c.   The  Executive  agrees not to remove from the premises of the Company,
          except as an employee of the Company in pursuit of the business of the
          Company  or  any  of  its  subsidiaries,  or  except  as  specifically
          permitted in writing by the Company, any document or object containing
          or  reflecting  any  proprietary   information  of  the  Company.  The
          Executive  recognizes  that all such  documents  and objects,  whether
          developed by him or by someone else, are the exclusive property of the
          Company. A breach of this provision shall be considered good cause for
          termination.  Upon  termination of his employment  hereunder,  for any
          reason,  the Executive shall  forthwith  deliver up to the Company all
          proprietary information,  including,  without limitation, all lists of
          customers,  correspondence,  accounts, records and any other documents
          or  property  made or held by him or under his  control in relation to
          the business or affairs of the Company or its affiliates,  and no copy
          of any such proprietary information shall be retained by him.

11.  Injunctive Relief. The Executive acknowledges that in the event of a breach
     or threatened  breach by the Executive of any of the provisions of Sections
     8, 9 or 10, monetary damages will not adequately compensate the Company and
     the Company  shall be entitled to an injunction  restraining  the Executive
     from the  commission of such breach,  in addition to any other  remedies or
     rights the Company may have.

12.  Notices. Any notice required or permitted to be given hereunder shall be in
     writing and shall be delivered  by prepaid  registered  or certified  mail,
     return  receipt  requested.  Such duly mailed  notice shall be deemed given
     when dispatched. The address for mailed notices shall be:

     a.   For the Executive:

                           Mr. Manu Ohri
                           1199 N. Palo Loma Place
                           Orange, CA 92869
                           (714) 538-1496

     b.   For the Company:

                           Enova Holdings, Inc. and/or Pego Systems, Inc.
                           1196 East Willow Street
                           Long Beach, CA 90806
                           Telephone: (562) 426-1321
                           Facsimile:  (562) 490-0633

          Any party may  notify  the other  parties  in  writing  of a change of
          address by serving notice in the manner provided in this Section.

13.  No  Conflicting  Agreements.  Except as set  forth  herein,  the  Executive
     represents  and warrants  that neither the  execution  and delivery of this
     Agreement  nor the  performance  of his duties  hereunder  violates or will
     violate the  provisions of any agreement to which he is a party or by which
     he is bound.

<PAGE>

14.  Governing  Law;  Entire  Agreement.   This  Agreement  shall  be  construed
     according  to the laws of the  State of  California,  and  constitutes  the
     entire  understanding  between the parties,  superseding  and replacing all
     prior  understandings  and  agreements  relating to employment  between the
     Company  and  the   Executive  and  the  parties  shall  cause  such  other
     agreements,  if any, to be terminated.  This Agreement cannot be changed or
     terminated except by an instrument in writing signed by each of the parties
     hereto.

15.  Amendments.  If any provision of this Agreement or the application  thereof
     shall for any reason be invalid or  unenforceable,  such provision shall be
     limited  only to the extent  necessary  in the  circumstances  to make such
     provision  valid and  enforceable  and its partial or total  invalidity  or
     unenforceability  shall in any event not affect the remaining provisions of
     this Agreement which shall continue in full force and effect.

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

ENOVA HOLDINGS, INC. / PEGO SYSTEMS, INC.

By________________________________
     Chairman

EXECUTIVE:

By________________________________
     Mr. Manu OhriNON-QUALIFIED STOCK OPTION

THIS NON-QUALIFIED  STOCK OPTION (the "Option") is granted this 16th day of May,
1995, by ADVANCED  PHOTONIX,  INC., a Delaware  corporation (the "Company"),  to
BERNHARDT DENMARK (the "Optionee").

                                               W I T N E S S E T H:
1. Grant. The Company hereby grants to the Optionee an Option to purchase on the
terms and conditions  hereinafter  set forth all or part of an aggregate of Four
Hundred  Thousand  (400,000)  shares of the Company's Class A Common Stock,  par
value $.001 per share, (the "Option Shares"), at the purchase price of $2.25 per
share (the "Option Price"), subject to adjustment as provided herein.

2. Term. The Option granted  hereunder shall expire in all events five (5) years
from the date hereof.

3.  Time of  Exercise.  The  Option  shall be  immediately  exercisable  in full
commencing  on the date of  grant,  except  that the  Option  may in no event be
exercised (i) with respect to fractional  shares or (ii) after expiration of the
Option term specified  under  Paragraph 2 hereof.

4. No Rights as Stockholder until Exercise.

                                      - 1 -
<PAGE>

Optionee shall have no rights as a stockholder with respect to Shares subject to
this Agreement  until a stock  certificate  therefor has been issued to Optionee
and is fully paid for.

5. Transfers.  The Option is not transferable by the Optionee  otherwise than by
will or  pursuant to the laws of descent  and  distribution  in the event of the
Optionee's  death,  in which event the Option may be  exercised  for the term of
this agreement by the heirs or legal representatives of the Optionee. The Option
may be exercised  during the lifetime of the Optionee only by the Optionee.  Any
attempt at assignment, transfer, pledge or disposition of the Option contrary to
the provisions hereof or the levy of an execution, attachment or similar process
upon the Option shall be null and void and without  effect.  Any exercise of the
Option by a person other than the Optionee  shall be  accompanied by appropriate
proofs of the right of such person to exercise the Option.

6. Method of Exercise  and  Payment.  When  exercisable  under  Paragraph 3, the
Option may be exercised  by written  notice,  pursuant to  Paragraph  13, to the
Company's  Secretary or Treasurer  specifying  the number of Option Shares to be
purchased  and,  unless  the  Option  Shares  are  covered  by  a  then  current
registration statement or a Notification under Regulation A under

                                      - 2 -
<PAGE>

the   Securities   Act  of  1933  (the   "Act"),   containing   the   Optionee's
acknowledgement,  in form and substance satisfactory to the Company,  certifying
that the Optionee (a) is purchasing  such Option Shares for investment  purposes
only and not for  distribution  or resale (other than a  distribution  or resale
which,  in the  opinion  of counsel  satisfactory  to the  Company,  may be made
without  violating  the  registration  provisions  of the  Act) and (b) has been
advised and  understands  that (i) the Option  Shares  have not been  registered
under the Act and are  "restricted  securities"  within the  meaning of Rule 144
under the Act and are subject to  restrictions  on transfer;  and (ii) except as
expressly  provided  herein,  the Company is under no obligation to register the
Option Shares under the Act or to take any action which would make  available to
the  Optionee  any  exemption  from  such  registration.  The  notice  shall  be
accompanied  by payment in full of the Option  Price of the Option  Shares being
purchased.  Payment  shall be in cash or by  certified or cashiers  check.  Such
exercise shall be effective  upon the actual receipt by the Company's  Secretary
or Treasurer of such written notice and payment.

7.  Adjustment  on Changes  in Common  Stock.  In the  event,  that prior to the
delivery by the Company of all of the

                                      - 3 -
<PAGE>

Option  Shares in  respect  of which the Option is  granted,  there  shall be an
increase  or  decrease  in the  number of issued  shares of Common  Stock of the
Company as a result of a subdivision or consolidation of shares or other capital
adjustment,  or the payment of a stock dividend or other increase or decrease in
such shares,  effected  without  receipt of  consideration  by the Company,  the
remaining  number of Option  Shares  still  subject to the Option and the Option
Price  therefor  shall  be  adjusted  in a  manner  determined  by the  Board of
Directors  of the Company so that the adjusted  number of Option  Shares and the
adjusted  Option  Price  shall be the  substantial  equivalent  of the number of
Option Shares  subject to the Option and the Option Price  therefor  immediately
prior to such change.  For purposes of this  Paragraph,  no adjustment  shall be
made as a result of the  issuance of Common Stock upon the  conversion  of other
securities  of the Company  which are  convertible  into the Common  Stock.  The
decision of the Board of Directors shall be final and binding.

8. Reorganization,  Consolidation, Mergers. In case of any reorganization of the
Company,  or any other  corporation  the stock or securities of which are at the
time deliverable on the exercise of this Option,  or in case the Company or such
other corporation shall consolidate with or merge into another

                                      - 4 -
<PAGE>

corporation,  the Optionee, upon the exercise of this Option thereafter and upon
payment of the Option Price, shall be entitled to receive, in lieu of the Option
Shares called for hereby, the securities and/or other property  (including cash)
to which the Optionee  would have been  entitled upon the  consummation  of such
reorganization, consolidation or merger if the Optionee had purchased the Option
Shares  called for  hereby  immediately  prior  thereto,  and in such case,  the
provisions  of this Option shall be applicable  to the  securities  and/or other
property thereafter deliverable upon the exercise of this Option.

9. Legal  Requirements.  If the listing,  registration or  qualification  of the
Option Shares upon any securities exchange or under any federal or state law, or
the consent or approval of any  governmental  regulatory  body is necessary as a
condition  of or in  connection  with the  purchase of such Option  Shares,  the
Company shall not be obligated to issue or deliver the certificates representing
the Option  Shares as to which the Option  has been  exercised  unless and until
such listing, registration,  qualification,  consent or approval shall have been
effected or obtained.  If registration is considered  unnecessary by the Company
or its  counsel,  the  Company  may place a legend on the  Option  Shares  being
issued, calling attention to the fact

                                      - 5 -
<PAGE>

that they have been acquired for investment and have not been registered.

10.      Registration Rights.
(a)  During  the period  commencing  on the date  hereof and ending on the tenth
anniversary of the date hereof,  the Company shall give the Optionee thirty (30)
days prior written notice of its intention to engage in a registration of Common
Stock under the Federal  securities  laws (other than a  registration  of Common
Stock in connection with any stock plan, stock purchase plan, savings or similar
plan,  or an  acquisition,  merger or  exchange  of stock),  and shall  offer to
include the Option  Shares  (which,  for  purposes of this  Paragraph  10, shall
include  shares issued as a stock  dividend or stock split on the Option Shares)
in such registration.  At the written request of the Optionee, the Company shall
include  the  Option  Shares (or such  portion  of the  Option  Shares as may be
requested by the Optionee) in the  registration  statement;  provided,  however,
that if, in the reasonable judgment of the managing  underwriter,  if any (which
underwriter shall be in all cases a nationally  recognized  underwriting  firm),
the inclusion of the Option Shares would materially  adversely affect the public
offering of the Common Stock, the number of Option Shares to be registered shall

                                      - 6 -
<PAGE>

be reduced,  pro rata,  together with the shares of other shareholders to whom a
similar  registration  right also has been granted by the  Company,  so that the
public offering shall not be materially adversely affected.

(b)  During  the period  commencing  on the date  hereof and ending on the tenth
anniversary  of the date hereof,  the  Optionee  shall have the right to request
that the  Company  register  the Option  Shares  (or such  portion of the Option
Shares as may be requested by the Optionee) under the Federal securities laws by
giving written  notice of such request to the Company.  Upon the receipt of such
request, and provided that sufficient  financial  statements are available,  the
Company  shall  promptly,  but no  later  than  120 days  after  receipt  of the
Optionee's  request,  cause  a  registration  statement  to be  filed  with  the
Securities and Exchange  Commission,  and shall commence to use its best efforts
to case such registration statement to be declared effective.  The right granted
to the Optionee under this subparagraph  10(b) to request  registration shall be
exercisable only on one occasion unless the registration  statement covering the
Option Shares is for whatever  reason not declared  effective by the  Securities
and  Exchange  Commission,  in which case the  undersigned  shall be entitled to
exercise his right to request

                                      - 7 -
<PAGE>

registration hereunder until a registration statement with
respect to the Option Shares is declared effective.

(c) The Company  shall bear the costs and  expenses of any  registration  of the
Option  Shares under  subparagraphs  10(a) and 10(b) on such number of occasions
during  the  period  that  such  registration  may be  sought  by the  Optionee;
provided,  however,  that  the  Optionee  shall  bear  the  cost of fees for the
Optionee's  counsel,  and any registration fees,  transfer taxes or underwriting
discounts and commissions applicable to the Option Shares sold hereunder.

(d) Whenever the Company shall register any of the Option Shares pursuant to any
of the  provisions  of this  Paragraph  10, the Company shall also be obligated,
with the cost of performing such obligation to be incurred by the Company, to do
the following:

(i)  Prepare  for  filing  with the  Securities  and  Exchange  Commission  such
amendments  and  supplements to said  registration  statement and the prospectus
used in  connection  therewith  as may be  necessary  to keep said  registration
statement effective and to comply with the provisions of the Act with respect to
the sale of the Option  Shares  covered by said  registration  statement for the
period necessary to complete the

                                      - 8 -
<PAGE>

proposed  offering of the Option  Shares,  which period shall be no greater than
one year from the date of effectiveness of the registration statement;

(ii) Furnish to the Optionee such copies of preliminary  and final  prospectuses
and such other  documents as the Optionee may  reasonably  request to facilitate
the offering of the Option Shares;

(iii) Use reasonable efforts to register or qualify the Option Shares covered by
the  registration  statement  under  the  securities  or blue  sky  laws of such
jurisdictions  as the  Optionee  may  reasonably  request and at the  Optionee's
expense; provided, however, that the Company will not be required to (A) qualify
generally to do business in any jurisdiction  where it would not be required but
for this clause (iii); (B) subject itself to taxation in such jurisdiction;  (C)
consent to general service of process in jurisdiction; (D) register in any state
requiring  as a  condition  to such  registration,  escrow or  surrender  or any
securities of any security holder; and (E) incur expenses in excess of $2,000 in
connection with such registration or qualification;

(iv) Furnish to the Optionee an opinion of counsel for the Company for inclusion
as an exhibit to the

                                      - 9 -
<PAGE>

registration  statement  pursuant to the requirements of the Act and a letter or
letters of the independent  certified public  accountants of the Company in form
and substance customary for similar offerings;

(v)  Permit  the  Optionee  or  the  Optionee's   counsel  or  other  authorized
representatives to inspect and copy such corporate  documents and records as may
be reasonably requested by the Optionee;

(vi)  Furnish  the  Optionee  with  a  copy  of  all  documents  filed  and  all
correspondence  to or from the Securities and Exchange  Commission in connection
with the offering.

(e) In connection with the registration of the Option Shares, the Optionee shall
furnish the Company  with  appropriate  information  as may be  necessary  to be
included in the registration statement covering the Option Shares.

(f) The Company  shall  indemnify  the  Optionee  against  all  losses,  claims,
damages, liabilities,  expenses or actions in respect thereof (whether under the
Act, common law or otherwise)  caused by any untrue  statement or alleged untrue
statement  of  a  material  fact  relating  to  the  Company  contained  in  any
registration  statement  under which the Option Shares are registered  under the
Act, any preliminary or final prospectus

                                     - 10 -
<PAGE>

contained  therein,  or any  amendment or supplement  thereto,  or caused by any
omission or alleged omission  required to be stated therein or necessary to make
the statements  therein not misleading;  and will reimburse the Optionee for any
legal  or  out-  of-pocket  expenses  reasonably  incurred  by the  Optionee  in
connection with the investigation or defense against such loss,  claim,  damage,
liability or action;  provided,  however, that if such losses, claims,  damages,
liabilities or expenses are caused by any untrue statement or omission contained
in information furnished in writing to the Company by the Optionee expressly for
use therein, the indemnification provided above shall be afforded to the Company
by the  Optionee.  The Company  further  agrees  that,  in  connection  with any
underwritten  public  offering,  it will also enter into customary  contribution
arrangement  with the  Optionee,  and,  if, and to the extent  requested  by any
underwriters or broker-dealers through whom the Option Shares may be sold, then,
with such underwriters or broker-dealers.

11. Withholding Taxes. Optionee hereby agrees that the Company may withhold from
Optionee's  compensation  the  appropriate  amount of  federal,  state and local
withholding  taxes  attributable to Optionee's  exercise of this Option.  At the
Company's

                                     - 11 -
<PAGE>

discretion,  the amount  required  to be  withheld  may be withheld in cash from
wages,  fees or other  amounts  due from the  Company to the  Optionee  or (with
respect to compensation  income  attributable to the exercise of this Option) in
kind from the Shares  otherwise  deliverable  to  Optionee  on  exercise of this
Option.

12. Governing Law. The  interpretation  and construction of this Agreement,  and
all  matters  relating  hereto,  shall be  governed  by the laws of the State of
California  applicable to agreements  executed and to be performed solely within
the state.

13.  Notices.  Any notice to be given to the Company  shall be  addressed to the
Secretary or Treasurer of the Company at its principal executive office, and any
notice to be given to the  Optionee  shall be  addressed  to the Optionee at the
address then appearing on the corporate records of the Company, or at such other
address as either party  hereafter  may  designate in writing to the other.  Any
such notice shall be deemed to have been duly given when deposited in the United
States Mail,  addressed as  aforesaid,  registered or certified  mail,  and with
proper postage and registration or certification fees prepaid.

                                     - 12 -

<PAGE>

14. Miscellaneous.  In no event shall this Option be deemed to be an "incentive"
option as such term is defined under Section 422A of the Code.

IN WITNESS  WHEREOF,  the Company  has  granted  this option on the day and year
first above written.

 ADVANCED PHOTONIX, INC.

By:  /s/ James W. Ward
     -----------------
     James W. Ward, President

ACCEPTANCE BY:

By:  /s/ Bernhardt Denmark
    ----------------------
     Bernhardt Denmark

                                     - 13 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00000-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00000-of-00352.parquet"}]]