[form of Additional Investment Right]

FORM OF ADDITIONAL INVESTMENT RIGHT]


NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.


ADVANCED PHOTONIX, INC.


ADDITIONAL INVESTMENT RIGHT


Additional Investment Right No.: __________ Principal Amount of Additional Notes: __________ Date of Issuance: October 12, 2004 ("Issuance Date")


Advanced Photonix, Inc., a Delaware corporation (the "Company"), hereby certifies that, for value received, the receipt and sufficiency of which are hereby acknowledged, [SMITHFIELD FIDUCIARY LLC][OTHER BUYERS], the registered holder hereof or its permitted assigns (the "Holder"), is entitled, subject to the terms set forth below to purchase from the Company, at the Exercise Price (as defined below) then in effect, at any time or times on or after the date hereof, but not after 11:59 P.M., New York Time, on the Expiration Date (as defined below), up to a total of $ ______(1), in principal amount of Additional Notes (as defined in the Securities Purchase Agreement (as defined below)) and up to ______(2) Additional Warrants (as defined in the Securities Purchase Agreement). (collectively, the "Additional Investment Right Securities"). Except as otherwise defined herein, capitalized terms in this Additional Investment Right shall have the meanings set forth in Section 15 or in that certain Securities Purchase Agreement, dated as of October 11, 2004, by and among the Company and the buyers referred to therein, including the Holder (the "Securities Purchase Agreement"). This Additional Investment Right (including all Additional Investment Rights issued in exchange, transfer or replacement hereof, each an "AIR" and collectively, the "AIRs") is one of the Additional Investment Rights (as defined in the Securities Purchase Agreement) issued pursuant to Section 1 of the Securities Purchase Agreement.


1. EXERCISE OF AIR.


(a) Mechanics of Exercise. Subject to the terms and conditions hereof, this AIR may be exercised by the Holder hereof on any day beginning after the date hereof and ending on and including the date which is one year following the Effective Date (as defined in the Registration Rights Agreement) (the "Expiration Date"), in whole or in part, by (i) delivery of a written notice, in the form attached hereto as Exhibit A (the "Exercise Notice"), of such Holder's election to exercise this AIR, with a copy of such Exercise Notice delivered, in addition to any other permitted form of delivery, via overnight courier to the Company (such delivery of a copy not affecting the date of delivery of the Exercise Notice for all purposes hereunder), (ii) payment to the Company of an amount equal to $1.00 for each $1.00 of principal amount of Additional Notes and related Additional Warrants as to which this AIR is being exercised (the "Exercise Price") in cash or wire transfer of immediately available funds. The date the Exercise Notice and the Exercise Price are delivered to the Company (as determined in accordance with the notice provisions hereof) is an "Exercise Date." The Holder of this AIR shall not be required to deliver the original AIR in order to effect an exercise hereunder. Execution and delivery of the Exercise Notice with respect to less than all of the Additional Notes shall have the same effect as cancellation of the original AIR and issuance of a new AIR evidencing the right to purchase the remaining number of Additional Notes. On or before the first Business Day following the Exercise Date, the Company shall transmit by facsimile an acknowledgment of confirmation of receipt of the Exercise Notice and the Exercise Price to the Holder hereof. On or before the third Business Day following the Exercise Date, the Company shall issue and deliver to the address as specified in the Exercise Notice an Additional Note, registered in the name of the Holder of this AIR or its designee, in the principal amount as to which the Holder of this AIR is entitled pursuant to such exercise and Additional Warrants, registered in the name of the Holder of this AIR or its designee, for the number of Additional Warrants to which the Holder of this AIR is entitled pursuant to such exercise. On the Exercise Date, the Holder of this AIR shall be deemed for all corporate purposes to have become the Holder of record of the Additional Note with respect to which this AIR has been exercised, irrespective of the date of delivery of such Additional Note. Upon surrender of this AIR to the Company following one or more partial exercises, the Company shall as soon as practicable and in no event later than three Business Days after receipt of the AIR and at its own expense, issue a new AIR (in accordance with Section 4(d)) representing the right to purchase the number of Additional Notes purchasable immediately prior to such exercise under this AIR, less the principal amount of Additional Notes with respect to which this AIR is exercised. The Company shall pay any and all taxes which may be payable with respect to the issuance and delivery of Additional Notes upon exercise of this AIR.


(b) Company's Failure to Timely Deliver Additional Notes. If the Company shall fail for any reason or for no reason to issue to the Holder within five Business Days of the Exercise Date, Additional Notes and Additional Warrants, the Company shall pay as additional damages in cash to such Holder on each day after such fifth Business Day that the issuance of such Additional Notes and Additional Warrants is not timely effected an amount equal to 1.5% of the principal amount of the Additional Notes into which this AIR is exercisable.


(c) Absolute and Unconditional Obligation. The Company's obligations to issue and deliver Additional Notes in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person. Nothing herein shall limit the Holder's right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company's failure to timely deliver Additional Notes upon exercise of the AIR as required pursuant to the terms hereof.


2. PURCHASE RIGHTS; FUNDAMENTAL TRANSACTION.


(a) Purchase Rights. If at any time the Company grants, issues or sells any Options (as defined in the Additional Notes), Convertible Securities (as defined in the Additional Notes) or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of Common Stock (the "Purchase Rights"), then the Holder of this AIR will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder had held the number of shares of Common Stock acquirable upon conversion of all of the Additional Notes issuable upon complete exercise of this A ...