$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 July 31, 2007 (the "Term Loan Maturity Date") the unpaid principal balance of the Term Loan
made by Lender in the initial amount of Four Million Dollars ($4,000,000) evidenced by this Note, together with
interest thereon from the date hereof until maturity at a per annum rate equal to one percent (1%) 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 three percent (3%) 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. Borrower shall repay to Lender the principal amount of the Term Loan evidenced by this Note in consecutive
quarterly installments commencing on November 1, 2002 and continuing on the first Business Day of each
February, May, August and November thereafter in the amount of Two Hundred Thousand Dollars ($200,000)
and shall repay the balance of the principal outstanding of the Term Loan on the Term Loan Maturity Date.
3. Accrued but unpaid interest on the Term Loan sh