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                                                                   Exhibit 10.21
                           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 Loan shall
be paid in arrears on the first Business Day of each calendar month and at the
Reducing Non-Revolving Maturity Date. Accrued interest on each Reducing
Non-Revolving Loan shall be payable on demand after the occurrence of an Event
of Default.

     4.  This Note is issued under and is subject to the terms of that certain
Loan Agreement dated as of August 9, 2002, by and between Borrower and Lender
(as amended from time to time, the "Loan Agreement"). Capitalized terms not
defined herein have the meanings set forth in the Loan Agreement.

     5.  It is expressly provided that if any of the Events of Default described
in Section 7.1(g) or Section 7.1(h) of the Loan Agreement shall occur, the
entire unpaid balance of

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the principal and interest hereunder shall be immediately due and payable in
accordance with the terms of the Loan Agreement. It is also expressly provided
that upon the occurrence of any other Event of Default, the entire remaining
unpaid balance of the principal and interest may be declared by Lender to be
immediately due and payable in accordance with the terms of the Loan Agreement.

     6.  Borrower may repay Revolving Loans at any time without penalty or
premium.

     7.  The unpaid principal balance of the Reducing Non-Revolving Loans made
hereunder shall be the total amount advanced hereunder, less the amount of the
principal payments made hereon. This Note is given to avoid the execution of an
individual note for each Reducing Non-Revolving Loan made by Lender to Borrower.
This Note evidences a reducing non-revolving credit and up to the Reducing
Non-Revolving Commitment Amount and during the Reducing Non-Revolving Commitment
Period, Borrower may borrow and prepay but not reborrow amounts prepaid. Lender
is hereby authorized to record the date and amount of each Revolving Loan it
makes hereunder and the date and amount of each payment of principal and
interest thereon on a schedule annexed hereto and constituting a part of this
Note or maintained in connection herewith. Any such recordation by Lender shall
constitute prima facie evidence of the accuracy of the information so recorded;
provided, however, that the failure to make any such recordation or any error in
any such recordation shall not affect the obligations of Borrower hereunder.

     8.  Each maker, surety, guarantor and endorser of this Note expressly
waives all notices, demands for payment, presentations for payment, notices of
intention to accelerate the maturity, protest and notice of protest.

     9.  In the event this Note is placed in the hands of an attorney for
collection, or suit is brought on the same, or the same is collected through
bankruptcy or other judicial proceedings, Borrower agrees and promises to pay
reasonable attorneys' fees and collection costs, including all out-of-pocket
expenses and the allocated costs and disbursements of internal counsel, incurred
by Lender.

     10. This Note has been executed and delivered in and shall be governed by
and construed in accordance with the laws of the State of Washington, excluding
its conflict of laws rules. Borrower hereby irrevocably submits to the
non-exclusive jurisdiction of any state or federal court sitting in the City of
Walla Walla, Walla Walla County, Washington, in any action or proceeding brought
to enforce or otherwise arising out of or relating to this Note and hereby
waives any objection to venue in any such court and any claim that such forum is
an inconvenient forum.

     BORROWER:                            KEY TECHNOLOGY, INC., an Oregon
                                          corporation


                                          By  /s/ Ted R. Sharp
                                              ----------------------------------
                                          Its C.F.O.
                                              ----------------------------------

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