REDUCING NON-REVOLVING NOTE
$4,000,000.00 August 9, 2002 Walla Walla, Washington
FOR VALUE RECEIVED, the undersigned, KEY TECHNOLOGY, INC., an Oregon corporation (the
"Borrower"), hereby promises to pay to the order of BANNER BANK, a Washington banking corporation (the
"Lender") on the Reducing Non-Revolving Maturity Date the unpaid principal balance of all Reducing Non-
Revolving Loans made by Lender under this Note, in a maximum amount not to exceed Four Million Dollars
($4,000,000), together with interest thereon from the date hereof until maturity at a per annum rate equal to two
percent (2%) above the Prime Rate (changing as such Prime Rate changes); provided, however, that after the
occurrence and during the continuation of an Event of Default, interest shall accrue at a per annum rate equal to
four percent (4%) above the Prime Rate (changing as such Prime Rate changes). Notwithstanding anything herein
to the contrary, interest shall not accrue at a rate in excess of the maximum rate permitted by applicable law.
Borrower further agrees as follows:
1. All payments of principal and interest on this Note shall be made by paying the same in United States Dollars
and in immediately available funds to Lender in accordance with wire transfer instructions as may be provided to
Borrower from time to time, at its main office, Walla Walla, Washington, not later than 2:00 p.m. (Walla Walla
time) on the date on which such payment shall become due. If such payment is received after 2:00 p.m., then it
will be deemed received on the next Business Day.
2. On each day that the aggregate outstanding principal balance of all Reducing Non-Revolving Loans exceeds
the Reducing Non-Revolving Commitment Amount, Borrower shall repay Reducing Non-Revolving Loans in
such an amount as is necessary to reduce such aggregate outstanding principal balance to an amount equal to or
less than the Reducing Non-Revolving Commitment Amount.
3. Accrued but unpaid interest on each Reducing Non-Revolving Lo