ex10_2.htm


    
      

    

    Exhibit
      10.2

     

    
      
        
          	 WELLS
                  FARGO HSBC TRADE BANK	
                   REVOLVING
                    CREDIT LOANS NOTE

                



      

      
        

      

       

      
        	 $10,000,000 	
                 Seattle,
                  Washington

              
	 	
                 December
                  21,
                  2007

              


      

    

                            
      

    FOR
      VALUE
      RECEIVED, the undersigned KEY TECHNOLOGY, INC., an Oregon corporation
      ("Borrower") promises to pay to the order of WELLS FARGO HSBC TRADE BANK,
      NATIONAL ASSOCIATION ("Trade Bank") at its office at 999 Third Avenue, 11th
      Floor, Seattle, WA 98104, or at such other place as the holder hereof may
      designate, in lawful money of the United States of America and in immediately
      available funds, the principal sum of Ten Million Dollars ($10,000,000), or
      so
      much thereof as may be advanced and be outstanding, with interest thereon,
      to be
      computed on each advance from the date of its disbursement (computed on the
      basis of a 360-day year, actual days elapsed) either (i)
      at a
      fluctuating rate per annum one and three-quarters percent (1.75%) below the Prime Rate in effect from
      time to time, or (ii) at a
      fixed rate per annum determined by WELLS FARGO BANK, NATIONAL ASSOCIATION
      ("Bank") to be one percent (1%) above Bank's LIBOR in
      effect on the first day of the applicable Fixed Rate Term. When interest is
      determined in relation to the Prime Rate, each change in the rate of interest
      hereunder shall become effective on the date each Prime Rate change is announced
      within Bank.  With respect to each LIBOR option selected hereunder,
      Trade Bank is hereby authorized to note the date, principal amount, interest
      rate and Fixed Rate Term applicable thereto and any payments made thereon on
      Trade Bank's books and records (either manually or by electronic entry) and/or
      on any schedule attached to this Note, which notations shall be prima facie
      evidence of the accuracy of the information noted.

    


    1.            
      DEFINITIONS:  As used herein, the following
      terms shall have the meanings set forth after each:

    


    
      	
               

            	
              1.1

            	
              "Business
                Day" means any day except a Saturday, Sunday or any other
                day
                designated as a holiday under Federal or California statute or
                regulation.

            


    

    


    1.2       
      "Fixed
      Rate Term" means a period commencing on a Business Day and
      continuing for thirty (30), sixty (60), ninety (90) or one hundred eighty (180)
      days, as designated by Borrower, during which  all or a portion of the
      outstanding principal balance of this Note bears interest determined in relation
      to Bank's LIBOR; provided however, that no Fixed Rate Term may be selected
      for a
      principal amount less than Five Hundred Thousand Dollars ($500,000); and
      provided further, that no Fixed Rate Term shall extend beyond the scheduled
      maturity date hereof. If any Fixed Rate Term would end on a day which is not
      a
      Business Day, then such Fixed Rate Term shall be extended to the next succeeding
      Business Day.

    


    
      	
               

            	
              1.3

            	
              "LIBOR"
                means the rate per annum (rounded upward, if necessary, to the nearest
                whole 1/8 of 1%) and determined pursuant to the following
                formula:

            


    

    


    
      	
              LIBOR

            	
              =

            	
              Base
                LIBOR

            
	
               

            	 	
              100%
                - LIBOR Reserve Percentage

            


    

    


    
      	
               

            	
              (a)

            	
              "Base
                LIBOR" means the rate per annum for United States dollar deposits
                quoted by Bank as the Inter-Bank Market Offered Rate, with the
                understanding that such rate is quoted by Bank for the purpose of
                calculating effective rates of interest for loans making reference
                thereto, on the first day of a Fixed Rate Term for delivery of funds
                on
                said date for a period of time approximately equal to the number
                of days
                in such Fixed Rate Term and in an amount approximately equal to the
                principal amount to which such Fixed Rate Term
                applies.  Borrower understands and agrees that Bank may base its
                quotation of the Inter-Bank Market Offered Rate upon such offers
                or other
                market indicators of the Inter-Bank Market as Bank in its discretion
                deems
                appropriate including, but not limited to, the rate offered for U.S.
                dollar deposits on the London Inter-Bank
                Market.

            


    

    


    
      	
               

            	
              (b)

            	
              "LIBOR
                Reserve Percentage" means the reserve percentage prescribed by
                the Board of Governors of the Federal Reserve System (or any successor)
                for "Eurocurrency Liabilities" (as defined in Regulation D of the
                Federal
                Reserve Board, as amended), adjusted by Bank for expected changes
                in such
                reserve percentage during the applicable Fixed Rate
                Term.

            


    

    
       

      
        
        

      

      
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    1.4           "Prime
      Rate" means the rate most recently announced by Bank at its
      principal office in San Francisco, California as its Prime Rate, with the
      understanding that the Prime Rate is one of Bank’s base rates and serves as the
      basis upon which effective rates of interest are calculated for those loans
      making reference thereto, and is evidenced by the recording thereof after its
      announcement in such internal publication or publications as Bank may
      designate.  Any change in an interest rate resulting from a change in
      the Prime Rate shall become effective as of 12:01 a.m. of the Business Day
      on
      which each change in the Prime Rate is announced by Bank.

    


    2.            
      INTEREST:

    


    
      	
               

            	
              2.1

            	
              Payment
                of Interest.  Interest accrued on this Note shall
                be payable on the last day of each month, commencing December 31,
                2007.

            


    

    


    
      	
               

            	
              2.2

            	
              Selection
                of Interest Rate Options.  At any time any portion
                of this Note bears interest determined in relation to Bank's LIBOR,
                it may
                be continued by Borrower at the end of the Fixed Rate Term applicable
                thereto so that all or a portion thereof bears interest determined
                in
                relation to the Prime Rate or in relation to Bank's LIBOR for a new
                Fixed
                Rate Term designated by Borrower.  At any time any portion of
                this Note bears interest determined in relation to the Prime Rate,
                Borrower may convert all or a portion thereof so that it bears interest
                determined in relation to Bank's LIBOR for a Fixed Rate Term designated
                by
                Borrower.  At the time each advance is requested hereunder or
                Borrower wishes to select the LIBOR option for all or a portion of
                the
                outstanding principal balance hereof, and at the end of each Fixed
                Rate
                Term, Borrower shall give Trade Bank notice specifying (a) the interest
                rate option selected by Borrower, (b) the principal amount subject
                thereto, and (c) if the LIBOR option is selected, the length of the
                applicable Fixed Rate Term.  Any such notice may be given by
                telephone (or such other electronic method as Trade Bank may permit)
                so
                long as, with respect to each LIBOR selection, (i) if required by
                Trade
                Bank, Trade Bank receives written confirmation from Borrower not
                later
                than three (3) Business Days after such telephone notice is given,
                and
                (ii) such notice is given to Trade Bank prior to 10:00 a.m., California
                time, on the first day of the Fixed Rate Term.  For each LIBOR
                option requested hereunder, Trade Bank will quote the applicable
                fixed
                rate to Borrower at approximately 10:00 a.m., California time, on
                the
                first day of the Fixed Rate Term.  If Borrower does not
                immediately accept the rate quoted by Trade Bank, any subsequent
                acceptance by Borrower shall be subject to a redetermination by Trade
                Bank
                of the applicable fixed rate; provided however, that if Borrower
                fails to
                accept any such rate by 11:00 a.m., California time, on the Business
                Day
                such quotation is given, then the quoted rate shall expire and Trade
                Bank
                shall have no obligation to permit a LIBOR option to be selected
                on such
                day.  If no specific designation of interest is made at the time
                any advance is requested hereunder or at the end of any Fixed Rate
                Term,
                Borrower shall be deemed to have made a Prime Rate interest selection
                for
                such advance or the principal amount to which such Fixed Rate Term
                applied.

            


    

    


    3.            
      ADDITIONAL LIBOR PROVISIONS.

    


    
      	
               

            	
              3.1

            	
              If
                Trade Bank at any time shall determine that for any reason adequate
                and
                reasonable means do not exist for ascertaining Bank's LIBOR, then
                Trade
                Bank shall promptly give notice thereof to Borrower.  If such
                notice is given and until such notice has been withdrawn by Trade
                Bank,
                than (i) no new LIBOR option may be selected by Borrower, and (ii)
                any
                portion of the outstanding principal balance hereof which bears interest
                determined in relation to Bank's LIBOR, subsequent to the end of
                the Fixed
                Rate Term applicable thereto, shall bear interest determined in relation
                to the Prime Rate.

            


    

    


    
      	
               

            	
              3.2

            	
              If
                any law, treaty, rule, regulation or determination of a court or
                governmental authority or any change therein or in the interpretation
                or
                application thereof (each, a "Change in Law") shall make it unlawful
                for
                Trade Bank (i) to make LIBOR options available hereunder, or (ii)
                to
                maintain interest rates based on Bank's LIBOR, then in the former
                event,
                any obligation of Trade Bank to make available such unlawful LIBOR
                options
                shall immediately be canceled, and in the latter event, any such
                unlawful
                LIBOR-based interest rates then outstanding shall be converted, at
                Trade
                Bank's option, so that interest on the portion of the outstanding
                principal balance subject thereto is determined in relation to the
                Prime
                Rate; provided however, that if any such Change in Law shall permit
                any
                LIBOR-based interest rates to remain in effect until the expiration
                of the
                Fixed Rate Term applicable thereto, then such permitted LIBOR-based
                interest rates shall continue in effect until the expiration of such
                Fixed
                Rate Term.  Upon the occurrence of any of the foregoing events,
                Borrower shall pay to Trade Bank immediately upon demand such amounts
                as
                may be necessary to compensate Trade Bank for any fines, fees, charges,
                penalties or other costs incurred or payable by Trade Bank as a result
                thereof and which are attributable to any LIBOR options made available
                to
                Borrower hereunder, and any reasonable allocation made by Trade Bank
                among
                its operations shall be conclusive and binding upon
                Borrower.

            


    

    
       

      
        
        

      

      
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              3.3

            	
              If
                any Change in Law or compliance by Trade Bank with any request or
                directive (whether or not having the force of law) from any central
                bank
                or other governmental authority
                shall:

            


    

    


    
      	
               

            	
              (a)

            	
              subject
                Trade Bank to any tax, duty or other charge with respect to any LIBOR
                options, or change the basis of taxation of payments to Trade Bank
                of
                principal, interest, fees or any other amount payable hereunder (except
                for changes in the rate of tax on the overall net income of Trade
                Bank);
                or

            


    

    


    
      	
               

            	
              (b)

            	
              impose,
                modify or hold applicable any reserve, special deposit, compulsory
                loan or
                similar requirement against assets held by, deposits or other liabilities
                in or for the account of, advances or loans by, or any other acquisition
                of funds by any office of Trade Bank;
                or

            


    

    


    
      	
               

            	
              (c)

            	
              impose
                on Trade Bank any other condition;

            


    

    


    and
      the
      result of any of the foregoing is to increase the cost to Trade Bank of making,
      renewing or maintaining any LIBOR options hereunder and/or to reduce any amount
      receivable by Trade Bank in connection therewith, then in any such case,
      Borrower shall pay to Trade Bank immediately upon demand such amounts as may
      be
      necessary to compensate Trade Bank for any additional costs incurred by Trade
      Bank and/or reductions in amounts received by Trade Bank which are attributable
      to such LIBOR options.  In determining which costs incurred by Trade
      Bank and/or reductions in amounts received by Trade Bank are attributable to
      any
      LIBOR options made available to Borrower hereunder, any reasonable allocation
      made by Trade Bank among its operations shall be conclusive and binding upon
      Borrower.

    


    4.            
      BORROWING AND REPAYMENT:

    


    
      	
               

            	
              4.1

            	
              Borrowing
                and Repayment.  Borrower may from time to time
                during the term of this Note borrow, partially or wholly repay its
                outstanding borrowings, and reborrow, subject to all of the limitations,
                terms and conditions of this Note and of any document executed in
                connection with or governing this Note; provided however, that the
                total
                outstanding borrowings under this Note shall not at any time exceed
                the
                principal amount stated above.  The unpaid principal balance of
                this obligation at any time shall be the total amounts advanced hereunder
                by the holder hereof less the amount of principal payments made hereon
                by
                or for any Borrower, which balance may be endorsed hereon from time
                to
                time by the holder.  The outstanding principal balance of this
                Note shall be due and payable in full on June 30,
                2009.

            


    

    


    
      	
               

            	
              4.2

            	
              Advances.  Advances
                hereunder, to the total amount of the principal sum stated above,
                may be
                made by the holder at the oral or written request of Jim Brausen
                or David
                Camp, any one acting alone, who are authorized to request advances
                and
                direct the disposition of any advances until written notice of the
                revocation of such authority is received by the holder at the office
                designated above, or (b) any person, with respect to advances deposited
                to
                the credit of any account of any Borrower with the holder, which
                advances,
                when so deposited, shall be conclusively presumed to have been made
                to or
                for the benefit of each Borrower regardless of the fact that persons
                other
                than those authorized to request advances may have authority to draw
                against such account.  The holder shall have no obligation to
                determine whether any person requesting an advance is or has been
                authorized by any Borrower.

            


    

    


    
      	
               

            	
              4.3

            	
              Application
                of Payments.  Each payment made on this Note shall
                be credited first, to any interest then due and second, to the outstanding
                principal balance hereof.  All payments credited to principal
                shall be applied first, to the outstanding principal balance of this
                Note
                which bears interest determined in relation to the Prime Rate, if
                any, and
                second, to the outstanding principal balance of this Note which bears
                interest determined in relation to Bank's LIBOR, with such payments
                applied to the oldest Fixed Rate Term
                first.

            


    

    


    
      	
               

            	
              4.4

            	
              Prepayment.

            


    

    


    
      	
               

            	
              (a)

            	
              Prime
                Rate.  Borrower may prepay principal on any portion
                of this Note which bears interest determined in relation to the Prime
                Rate
                at any time, in any amount and without
                penalty.

            


    

     

    
      
        
        

      

      
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              (b)

            	
              LIBOR.  Borrower
                may prepay principal on any portion of this Note which bears interest
                determined in relation to Bank's LIBOR at any time and in the minimum
                amount of Five Hundred Thousand Dollars ($500,000); provided however,
                that
                if the outstanding principal balance of such portion of this Note
                is less
                than
                said amount, the minimum prepayment amount shall be the entire outstanding
                principal balance thereof.  In consideration of Trade Bank
                providing this prepayment option to Borrower, or if any such portion
                of
                this Note shall become due and payable at any time prior to the last
                day
                of the Fixed Rate Term applicable thereto by acceleration or otherwise,
                Borrower shall pay to Trade Bank immediately upon demand a fee which
                is
                the sum of the discounted monthly differences for each month from
                the
                month of prepayment through the month in which such Fixed Rate Term
                matures, calculated as follows for each such
                month:

            


    

     

    
      	
               

            	
              (1)

            	
              Determine
                the amount of interest which would have accrued each month on the
                amount
                prepaid at the interest rate applicable to such amount had it remained
                outstanding until the last day of the Fixed Rate Term applicable
                thereto.

            


    

    


    
      	
               

            	
              (2)

            	
              Subtract
                from the amount determined in (1) above the amount of interest which
                would
                have accrued for the same month on the amount prepaid for the remaining
                term of such Fixed Rate Term at Bank's LIBOR in effect on the date
                of
                prepayment for new loans made for such term and in a principal amount
                equal to the amount prepaid.

            


    

    


    
      	
               

            	
              (3)

            	
              If
                the result obtained in (2) for any month is greater than zero, discount
                that difference by Bank's LIBOR used in (2)
                above.

            


    

    


    Each
      Borrower acknowledges that prepayment of such amount may result in Trade Bank
      incurring additional costs, expenses and/or liabilities, and that it is
      difficult to ascertain the full extent of such costs, expenses and/or
      liabilities.  Each Borrower, therefore, agrees to pay the
      above-described prepayment fee and agrees that said amount represents a
      reasonable estimate of the prepayment costs, expenses and/or liabilities of
      Trade Bank.  If Borrower fails to pay any prepayment fee when due, the
      amount of such prepayment fee shall thereafter bear interest until paid at
      a
      rate per annum five percent (5%) above the
      Prime Rate in effect from time to time (computed on the basis of a 360-day year, actual days elapsed).

    


    
      	
               

            	
              5.

            	
              EVENTS
                OF DEFAULT:  This Note is made pursuant to and is
                subject to the terms and conditions of that certain Credit Agreement
                between Borrower and Trade Bank dated as of July 27, 2006, as amended
                from
                time to time ("Credit Agreement").  Any default in the payment
                or performance of any obligation under this Note, or any defined
                event of
                default under the Credit Agreement, shall constitute an "Event of
                Default"
                under this Note.

            


    

    


    6.            
      MISCELLANEOUS:

    


    
      	
               

            	
              6.1

            	
              Remedies.  Upon
                the occurrence of any Event of Default, the holder of this Note,
                at the
                holder's option, may declare all sums of principal and interest
                outstanding hereunder to be immediately due and payable without
                presentment, demand, protest or notice of dishonor, all of which
                are
                expressly waived by each Borrower, and the obligation, if any, of
                the
                holder to extend any further credit hereunder shall immediately cease
                and
                terminate.  Each Borrower shall pay to the holder immediately
                upon demand the full amount of all payments, advances, charges, costs
                and
                expenses, including reasonable attorneys' fees (to include outside
                counsel
                fees and all allocated costs of the holder's in-house counsel), incurred
                by the holder in connection with the enforcement of the holder's
                rights
                and/or the collection of any amounts which become due to the holder
                under
                this Note, and the prosecution or defense of any action in any way
                related
                to this Note, including without limitation, any action for declaratory
                relief, and including any of the foregoing incurred in connection
                with any
                bankruptcy proceeding relating to any
                Borrower.

            


    

    


    
      	
               

            	
              6.2

            	
              Obligations
                Joint and Several.  Should more than one person or
                entity sign this Note as a Borrower, the obligations of each such
                Borrower
                shall be joint and several.

            


    

    


    
      	
               

            	
              6.3

            	
              Governing
                Law.  This Note shall be governed by and construed
                in accordance with the laws of the State of California, except to
                the
                extent Trade Bank has greater rights or remedies under Federal law,
                whether as a national bank or otherwise, in which case such choice
                of
                California law shall not be deemed to deprive Bank of any such rights
                and
                remedies as may be available under Federal
                law.

            


    

     

    
      
        
        

      

      
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    This
      Note supersedes and replaces that certain Revolving Credit Loans
      Note dated July 27, 2006, in the maximum amount of $10,000,000, executed by
      Borrower in favor of Trade Bank.

    


    “BORROWER”

    


    KEY
      TECHNOLOGY, INC.

    


    By:  /s/
      David M. Camp

    


    Title:  President
      and CEO

    


    


    Borrower’s
      Address:

    150
      Avery
      Street

    Walla
      Walla, WA 99362

    


    
      
        
        

      

      
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    ADDENDUM
      TO PROMISSORY NOTE

    


    


    THIS
      ADDENDUM is attached to and made a
      part of that certain promissory note executed by KEY TECHNOLOGY, INC., an
      Oregron corporation ("Borrower") and payable to WELLS FARGO HSBC TRADE BANK,
      NATIONAL ASSOCIATION, or order, dated as of December 21, 2007 in the principal
      amount of Ten Million Dollars ($10,000,000) (the "Note").

    


    The
      following arbitration provision is
      hereby incorporated into the Note:

    


    ARBITRATION:

    


    1.           Arbitration.  The
      parties hereto agree, upon demand by any party, to submit to binding arbitration
      all claims, disputes and controversies between or among them (and their
      respective employees, officers, directors, attorneys, and other agents), whether
      in tort, contract or otherwise arising out of or relating to in any way (i)
      the
      loan and related loan and security documents which are the subject of this
      Note
      and its negotiation, execution, collateralization, administration, repayment,
      modification, extension, substitution, formation, inducement, enforcement,
      default or termination; or (ii) requests for additional credit.

    


    2.           Governing
      Rules.  Any arbitration proceeding will (i) proceed in a
      location in California selected by the American Arbitration Association (“AAA”);
      (ii) be governed by the Federal Arbitration Act (Title 9 of the United States
      Code), notwithstanding any conflicting choice of law provision in any of the
      documents between the parties; and (iii) be conducted by the AAA, or such other
      administrator as the parties shall mutually agree upon, in accordance with
      the
      AAA’s commercial dispute resolution procedures, unless the claim or counterclaim
      is at least $1,000,000.00 exclusive of claimed interest, arbitration fees and
      costs in which case the arbitration shall be conducted in accordance with the
      AAA’s optional procedures for large, complex commercial disputes (the commercial
      dispute resolution procedures or the optional procedures for large, complex
      commercial disputes to be referred to, as applicable, as the
“Rules”).  If there is any inconsistency between the terms hereof and
      the Rules, the terms and procedures set forth herein shall
      control.  Any party who fails or refuses to submit to arbitration
      following a demand by any other party shall bear all costs and expenses incurred
      by such other party in compelling arbitration of any dispute.  Nothing
      contained herein shall be deemed to be a waiver by any party that is a bank
      of
      the protections afforded to it under 12 U.S.C. §91 or any similar applicable
      state law.

    


    3.           No
      Waiver; Provisional Remedies, Self-Help and
      Foreclosure.  The arbitration requirement does not limit
      the right of any party to (i) foreclose against real or personal property
      collateral; (ii) exercise self-help remedies relating to collateral or proceeds
      of collateral such as setoff or repossession; or (iii) obtain provisional or
      ancillary remedies such as replevin, injunctive relief, attachment or the
      appointment of a receiver, before during or after the pendency of any
      arbitration proceeding.  This exclusion does not constitute a waiver
      of the right or obligation of any party to submit any dispute to arbitration
      or
      reference hereunder, including those arising from the exercise of the actions
      detailed in sections (i), (ii) and (iii) of this paragraph.

    


    4.           Arbitrator
      Qualifications and Powers.  Any arbitration proceeding in
      which the amount in controversy is $5,000,000.00 or less will be decided by
      a
      single arbitrator selected according to the Rules, and who shall not render
      an
      award of greater than $5,000,000.00.  Any dispute in which the amount
      in controversy exceeds $5,000,000.00 shall be decided by majority vote of a
      panel of three arbitrators; provided however, that all three arbitrators must
      actively participate in all hearings and deliberations.  The
      arbitrator will be a neutral attorney licensed in the State of California or
      a
      neutral retired judge of the state or federal judiciary of California, in either
      case with a minimum of ten years experience in the substantive law applicable
      to
      the subject matter of the dispute to be arbitrated.  The arbitrator
      will determine whether or not an issue is arbitratable and will give effect
      to
      the statutes of limitation in determining any claim.  In any
      arbitration proceeding the arbitrator will decide (by documents only or with
      a
      hearing at the arbitrator's discretion) any pre-hearing motions which are
      similar to motions to dismiss for failure to state a claim or motions for
      summary adjudication.  The arbitrator shall resolve all disputes in
      accordance with the substantive law of California and may grant any remedy
      or
      relief that a court of such state could order or grant within the scope hereof
      and such ancillary relief as is necessary to make effective any
      award.  The arbitrator shall also have the power to award recovery of
      all costs and fees, to impose sanctions and to take such other action as the
      arbitrator deems necessary to the same extent a judge could pursuant to the
      Federal Rules of Civil Procedure, the California Rules of Civil Procedure or
      other applicable law.  Judgment upon the award rendered by the
      arbitrator may be entered in any court having jurisdiction.  The
      institution and maintenance of an action for judicial relief or pursuit of
      a
      provisional or ancillary remedy shall not constitute a waiver of the right
      of
      any party, including the plaintiff, to submit the controversy or claim to
      arbitration if any other party contests such action for judicial
      relief.

    
       

      
        
        

      

      
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    5.           Discovery.  In
      any arbitration proceeding discovery will be permitted in accordance with the
      Rules.  All discovery shall be expressly limited to matters directly
      relevant to the dispute being arbitrated and must be completed no later than
      20
      days before the hearing date and within 180 days of the filing of the dispute
      with the AAA.  Any requests for an extension of the discovery periods,
      or any discovery disputes, will be subject to final determination by the
      arbitrator upon a showing that the request for discovery is essential for the
      party's presentation and that no alternative means for obtaining information
      is
      available.

    


    6.           Class
      Proceedings and Consolidations.  The resolution of any
      dispute arising pursuant to the terms of this Note shall be determined by a
      separate arbitration proceeding and such dispute shall not be consolidated
      with
      other disputes or included in any class proceeding.

    


    7.           Payment
      Of Arbitration Costs And Fees.  The arbitrator shall
      award all costs and expenses of the arbitration proceeding.

    


    8.           Real
      Property Collateral; Judicial Reference.  Notwithstanding
      anything herein to the contrary, no dispute shall be submitted to arbitration
      if
      the dispute concerns indebtedness secured directly or indirectly, in whole
      or in
      part, by any real property unless (i) the holder of the mortgage, lien or
      security interest specifically elects in writing to proceed with the
      arbitration, or (ii) all parties to the arbitration waive any rights or benefits
      that might accrue to them by virtue of the single action rule statute of
      California, thereby agreeing that all indebtedness and obligations of the
      parties, and all mortgages, liens and security interests securing such
      indebtedness and obligations, shall remain fully valid and
      enforceable.  If any such dispute is not submitted to arbitration, the
      dispute shall be referred to a referee in accordance with California Code of
      Civil Procedure Section 638 et seq., and this general reference agreement is
      intended to be specifically enforceable in accordance with said Section
      638.  A referee with the qualifications required herein for
      arbitrators shall be selected pursuant to the AAA’s selection
      procedures.  Judgment upon the decision rendered by a referee shall be
      entered in the court in which such proceeding was commenced in accordance with
      California Code of Civil Procedure Sections 644 and 645.

    


    9.           Miscellaneous. To
      the maximum extent practicable, the AAA, the arbitrators and the parties shall
      take all action required to conclude any arbitration proceeding within 180
      days
      of the filing of the dispute with the AAA.  No arbitrator or other
      party to an arbitration proceeding may disclose the existence, content or
      results thereof, except for disclosures of information by a party required
      in
      the ordinary course of its business or by applicable law or
      regulation.  If more than one agreement for arbitration by or between
      the parties potentially applies to a dispute, the arbitration provision most
      directly related to the documents between the parties or the subject matter
      of
      the dispute shall control.  This Note may be amended or modified only
      in writing signed by each party hereto.  If any provision of this Note
      shall be held to be prohibited by or invalid under applicable law such provision
      shall be ineffective only to the extent of such prohibition or invalidity,
      without invalidating the remainder of such provision or any remaining provisions
      of this Note.  This arbitration provision shall survive termination,
      amendment or expiration of any of the documents or any relationship between
      the
      parties.

    


    IN
      WITNESS WHEREOF, this Addendum has been executed as of the same date as the
      Note.

    


    “BORROWER”

    


    KEY
      TECHNOLOGY, INC.

    


    By:  /s/
      David M. Camp

    


    Title:  President
      and CEO

     

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