Document:

EXHIBIT 10.9
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               SEPARATION AGREEMENT AND GENERAL RELEASE
               ----------------------------------------

     Jay E. Schmidt ("Schmidt") and Banyan Strategic Realty Trust, a
Massachusetts business trust, ("BSRT") enter into this Separation Agreement
and General Release ("Agreement") this 1st day of October, 2000.

     WHEREAS, Schmidt is employed by BSRT pursuant to a written employment
agreement dated as of December 31, 1998 (the "Employment Agreement") and
serves as BSRT's Vice President-Acquisitions;

     WHEREAS, BSRT is in the process of marketing all, or substantially
all, of its assets for sale to third parties and does not intend to
reinvest any sale proceeds in new assets and, therefore, will no longer
require Mr. Schmidt's services;

     WHEREAS, the Agreement expires on December 31, 2000 but is
automatically renewed for an additional one (1) year period unless BSRT
notifies Schmidt by September 30, 2000 of its desire to terminate the
Agreement;

     WHEREAS, BSRT notified Schmidt on or before September 30, 2000 that
BSRT will not renew the Employment Agreement when it expires on
December 31, 2000; and

     WHEREAS, although the Employment Agreement contains provisions
stating rights and obligations of the parties in connection with a decision
by BSRT not to renew the Employment Agreement, BSRT and Schmidt are
desirous of altering these rights and obligations and of creating
additional rights and obligations.

     NOW THEREFORE, in consideration of the mutual promises contained
herein, the parties agree as follows:

     1.    RECITALS.  The recitals to this Agreement are incorporated by
reference into this Agreement and made a part of as though stated herein.

     2.    RESIGNATION.  Schmidt will resign from his position of First
Vice President-Acquisitions effective at 12:00 a.m. central time on October
2, 2000.

     3.    SEPARATION PAYMENTS.  BSRT shall pay Schmidt $280,804 no later
than October 1, 2000, subject to tax withholding in accordance with BSRT's
payroll practices.  Schmidt agrees that upon receipt of this payment, he
shall have no further right to, and BSRT shall have no further obligation
to pay Schmidt, any wages, unreimbursed expenses, accrued vacation or any
other benefits except for wages and accrued vacation as of October 1, 2000
and except for reimbursable expenses which relate to expenses incurred by
Schmidt in connection with performing his duties to BSRT prior to October
2, 2000 and for which he has not yet submitted the necessary documentation
or otherwise as provided herein; provided that if Schmidt fails to submit
the necessary documentation for these expenses by November 15, 2000, BSRT
will have no further obligation to reimburse Schmidt.

<PAGE>

     4.    CONFIDENTIALITY.  Each party agrees to keep the facts and terms
of this Agreement in strict confidence and to refrain from making any
negative or critical remarks about the other party; provided that nothing
herein shall prohibit Schmidt from disclosing the facts and terms of this
Agreement: (a) to taxing authorities for the purpose of determining or
reporting Schmidt's income to these authorities; (b) in connection with any
regulatory, administrative or judicial proceeding, including any proceeding
to enforce the terms of this Agreement; or (c) to the extent required by
law.

           Schmidt also agrees as a result of his employment with BSRT he
has acquired information of a special and unique nature and value that is
not generally known to the public or to BSRT's industry regarding BSRT,
including but not limited to, business, financial and other records of BSRT
and its affiliates including its and their joint venture partners, software
programs, employee records, mailing lists, tenant lists and profiles,
prospective tenant lists, accounts receivable and payable ledgers, plans
and projections, budgets, marketing data and other similar matters (all
such information being hereinafter referred to as "Confidential
Information").  Accordingly, Schmidt:

           (a)   will not, except as otherwise authorized by BSRT, divulge
to any person, firm, corporation, limited liability company, or
organization (hereinafter referred to as "Third Parties"), or use or cause
or authorize any Third Parties to use, the Confidential Information, except
as required by law or court order; and

           (b)   shall deliver, destroy or delete or cause to be
delivered, destroyed or deleted, as BSRT may request, any and all
Confidential Information, including drawings, notebooks, keys, data and
other documents and materials belonging to BSRT or its affiliates which is
in his possession or under his control relating to BSRT or its affiliates,
or the business of BSRT, regardless of the medium upon which it is stored,
and will deliver to BSRT any other property of BSRT or its affiliates which
is in his possession or under his control on or before October 1, 2000;
except that BSRT hereby transfers ownership of a "1996 Micron Notebook"
personal computer, serial number 962845-0006 which is in Schmidt's
possession to Schmidt.

           For purposes of this Section 4, the term Confidential
Information shall not include information which: (i) was in the public
domain at the time of execution of this Agreement; (ii) hereafter becomes
part of the public domain by publication or otherwise through no
unauthorized action of the Schmidt; or (iii) was received by Schmidt
through a source other than BSRT which is not under an obligation of
confidentiality to the BSRT.  Schmidt further acknowledges and agrees that
the Confidential Information is of great value to BSRT and its affiliates
and that the restrictions and agreements contained in this Agreement are
reasonably necessary to protect the Confidential Information and the
goodwill of BSRT's business.

     5.    EMPLOYMENT AGREEMENT.  This Agreement shall supersede the
Employment Agreement which shall be void and of no further effect upon the
later of: (a) the execution and delivery of this Agreement by each party;
or (b) October 1, 2000.

<PAGE>

     6.    RELEASE OF CLAIMS.  In consideration of the separation payment
and other promises contained herein, and as a natural inducement to BSRT to
enter into this Agreement, Schmidt hereby releases and forever discharges
BSRT and its officers, trustees, employees, investors, shareholders,
affiliates and agents from, and agrees not to sue any of these parties
concerning any and all actions, liabilities, and other claims for relief
and remuneration whatsoever, arising out of, or in any way connected with
his employment by BSRT, including all matters in equity, contract, tort, or
for retaliatory discharge, or pursuant to statute, whether presently known
or unknown, suspected or unsuspected, that Schmidt may possess arising from
any omissions, acts or facts existing as of October 1, 2000, including but
not limited to actions or claims under Title VII of the Civil Rights Act of
1964, as amended, the Americans with Disabilities Act, the Fair Labor
Standards Act, the Family and Medical Leave Act, the National Labor
Relations Act, as amended, and any Illinois or other state or local
statute, law or ordinance containing comparable prohibitions, including The
Illinois Human Rights Act, as well as any and all claims under the Employee
Retirement Income Security Act ("ERISA"), and any and all claims of any
kind for attorneys' fees or costs in connection with any case, controversy,
claim, charge, or otherwise; provided that nothing herein shall be deemed
to waive or release any claim: (a) under the Age Discrimination in
Employment Act of 1967, as amended; (b) arising after the date this
Agreement was executed; (c) for indemnification that Schmidt may have under
BSRT's Third Amended and Restated Declaration of Trust; or (d) to enforce
this Agreement.

           In consideration of the separation payment and other promises
contained herein, and as a natural inducement to Schmidt to enter into this
Agreement, BSRT hereby releases and forever discharges Schmidt from any and
all actions, liabilities and other claims for relief or remuneration
whatsoever, arising out of, or in any way connected with, Schmidt's
employment by BSRT or its affiliates or The Oak Realty Group, Inc.,
including all matters in equity, contract, tort or pursuant to statute
except for actions or claims: (x) alleging fraud or wilful misconduct by
Schmidt; or (y) brought by BSRT under the Loan Agreement, Non-Recourse
Promissory Note, Stock Pledge and Security Agreement entered into between
Schmidt and BSRT effective  January 12, 2000.

     7.    REPRESENTATIONS AND WARRANTIES.  Schmidt represents and
warrants that he:

           (a)   has executed and delivered this Agreement knowingly and
voluntarily;

           (b)   has read and understands this Agreement in its entirety;

           (c)   has been advised and directed orally and in writing (and
this SECTION 7(c) constitutes such written direction) to seek legal counsel
and any other advice he wishes with respect to the terms of this Agreement
before executing it, that he has sought such advice and has had the
opportunity to negotiate the terms of this Agreement; and

           (d)   has not been forced by any employee or agent of BSRT to
execute and deliver this Agreement.

<PAGE>

     8.    COBRA.  Schmidt shall have the right to continue his health
insurance coverage at group rates pursuant to the Consolidated Omnibus
Budget Reconciliation Act of 1985 ("COBRA") beginning the later of November
1, 2000 and the execution and delivery of this Agreement by each party;
provided, however, that this election must be made no later than sixty (60)
days after that date.  Schmidt's current health coverage will continue
through October 31, 2000.  Notwithstanding the above, if BSRT terminates
its health insurance plan prior to March 31, 2002, Schmidt acknowledges and
agrees that his individual coverage pursuant to COBRA shall terminate.  If,
after the termination of the plan, BSRT arranges for alternative health
insurance coverage for its employees, BSRT shall offer Schmidt the option
of participating in the alternative plan; provided that Schmidt shall
reimburse BSRT for the premium associated with providing Schmidt with
coverage under the alternative plan.

     9.    NO ADMISSION OF WRONGDOING.  This Agreement shall not in any
way be construed as an admission by Schmidt of any acts of wrongdoing
whatsoever against him by BSRT or any of its officers, trustees, employers,
agents or advisors.

     10.   COUNTERPARTS.  The Agreement may be executed in one or more
counterparts, each of which when so executed and delivered shall be deemed
to be an original, and all of which taken together shall constitute but one
and the same document.

     11.   NOTICE.  Any notice required or permitted hereunder shall be
made in writing: (a) either by actual or delivery of the notice into the
hands of the party entitled; or (b) by depositing the notice in the United
States mail certified or registered, return receipt requested, all postage
prepaid and addressed to the party to whom notice is to be given at the
party's respective address set forth below, or such other address as the
party may from time to time designate by written notice to the other party.

           If to BSRT:

           Banyan Strategic Realty Trust
           Suite 2900
           150 South Wacker Drive
           Chicago, Illinois 60606
           Attn: General Counsel

           with copies to:

           Shefsky & Froelich Ltd.
           444 North Michigan Avenue
           Suite 2500
           Chicago, Illinois 60611
           Attn: Michael J. Choate, Esq.

           If to Schmidt:

           8980 North Seneca Road
           Milwaukee, WI 53217

           with a copy to:

           Much Shelist Freed Denenberg Ament & Rubinstein, P.C.
           200 N. LaSalle Street
           Suite 2100
           Chicago, Illinois 60601
           Attn: Don Hershman, Esq.

<PAGE>

The notice shall be deemed to be received on the earlier of (x) the date of
its actual receipt by the party entitled thereto and (y) the third business
day following the date of mailing.

     12.   AMENDMENT AND WAIVER.  No amendment or modification to this
Agreement shall be valid or binding on the BSRT unless made in writing and
signed by an officer of BSRT duly authorized by the board or upon Schmidt
unless made in writing and signed by Schmidt. The waiver by BSRT or Schmidt
of the breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach.

     13.   ENTIRE AGREEMENT.  This Agreement and the Confidentiality
Agreement attached hereto constitutes the entire agreement between BSRT and
Schmidt with respect to the subject matter hereof. There are no
representations, warranties, agreements or commitments between the parties
hereto with respect to Schmidt's separation and release as set forth
herein.

     14.   GOVERNING LAW.  This Agreement shall be governed by and
construed in accordance with the internal laws (and not the law of
conflicts) of the State of Illinois.  The parties agree that any suit,
action or proceeding with respect to this Agreement shall be brought in the
courts of Cook County in the State of Illinois or in the U.S. District
Court for the Northern District of Illinois.  The parties hereto accept the
exclusive jurisdiction of those courts for the purpose of any such suit,
action or proceeding.  Venue for any such action, in addition to any other
venue permitted by statute, will be Cook County, Illinois.

     15.   SEVERABILITY.  If any provision of this Agreement shall, for
any reason, be held unenforceable, the provision shall be severed from this
Agreement unless, as a result of severance, the Agreement fails to reflect
the basis intent of the parties on the date hereof.

     16.   BENEFIT.  This Agreement shall be binding upon, and inure to
the benefit of, and shall be enforceable by, the successors, assigns,
transferees or heirs of the parties hereto.

     17.   COST OF ENFORCEMENT.  In any suit or proceeding seeking to
enforce the terms, covenants or conditions of this Agreement, the
prevailing party shall, in addition to all of the remedies and relief that
may be available under this Agreement or applicable law, recover his or its
reasonable attorneys' fees and costs as shall be determined and awarded by
the court or the arbitrator.

     IN WITNESS WHEREOF, this Agreement is entered into on the day and
year first written above.

                            BANYAN STRATEGIC REALTY TRUST

                            By:
                                  -------------------------------------
                                  Name: Robert G. Higgins
                                  Title: Vice President General Counsel

                            ________________________________
                            Jay E. SchmidtPortland Commercial Banking
                                                     1300 SW Fifth Avenue
                                                     P O Box 3131, MAC 6101-133
                                                     Portland, OR 97208-3131

    WELLS
    FARGO

                                         September 30, 2000

BARRETT BUSINESS SERVICES, INC.
4724 SW Macadam Avenue
Portland, OR 97201

Dear Mike:

      This letter amendment (this  "Amendment") is to confirm the changes agreed
upon  between  WELLS  FARGO  BANK,  NATIONAL  ASSOCIATION  ("Bank")  and BARRETT
BUSINESS SERVICES, INC. ("Borrower") to the terms and conditions of that certain
letter agreement  between Bank and Borrower dated as of May 31, 2000, as amended
from time to time (the "Agreement"). For valuable consideration, the receipt and
sufficiency  of which are hereby  acknowledged,  Bank and Borrower  hereby agree
that the Agreement shall be amended as follows to reflect said changes.

      1.     Paragraph V.9 is hereby deleted in its entirety,  and the following
substituted therefor:

                   "9,  Financial   Condition.   Maintain  Borrower's  financial
             condition as follows using generally accepted accounting principles
             consistently  applied and used  consistently  with prior  practices
             (except to the extent modified by the definitions herein):

                   (a) Current Ratio as of the and of each fiscal quarter not at
             any time less than 1.15 to 1.0,  with  "Current  Ratio"  defined as
             total current assets divided by total current liabilities.

                   (b)  EBITDA  not less than  $8,000,000.00  as of each  fiscal
             quarter end, determined on a trailing four-quarters basis including
             the current quarter then ended, with "EBITDA" defined as net profit
             before  tax plus  interest  expense  (net of  capitalized  interest
             expense), depreciation expense and amortization expense,

                   (c) Funded Debt to EBITDA  Ratio as of the end of each fiscal
             quarter not more than 2.25 to 1.0,  with  "Funded-Debt"  defined as
             all  borrowed  funds  plus  the  amount  of all  capitalized  lease
             obligations of Borrower.

                   (d)  EBITDA  Coverage  Ratio not less then 1.75 to 1.00 as of
             each fisoal quarter end, with "EBITDA" as defined  above,  and with
             "EBITDA  Coverage Ratio" defined as EBITDA divided by the aggregate
             of (i) total  interest  expense  for the  trailing  four  quarters,
             including  the  current  quarter  then ended,  plus (ii)  scheduled
             principal  payments on long-term debt and subordinated debt for the
             trailing four quarters, including the current quarter then ended."

<PAGE>
September 30, 2000
Page 2

      2.     Except as specifically provided herein, all terms and conditions of
the Agreement  remain in full force and effect,  without waiver or modification.
All terms defined in the Agreement shall have the same meaning when used herein.
This Amendment and the Agreement shall be read together, as one document.

      3.     Borrower   hereby  remakes  all   representations   and  warranties
contained in the  Agreement  and  reaffirms  all  covenants  set forth  therein.
Borrower further certifies that as of the date of Borrower's  acknowledgment set
forth  below  there  exists no  default or  defined  event of default  under the
Agreement  or any  promissory  note or other  contract,  instrument  or document
executed in connection therewith, nor any condition, act or event which with the
giving of notice or the passage of time or both would  constitute such a default
or defined event of default.

UNDER OREGON LAW, MOST  AGREEMENTS,  PROMISES AND COMMITMENTS MADE BY BANK AFTER
OCTOBER 3,1989  CONCERNING  LOANS AND OTHER CREDIT  EXTENSIONS WHICH ARE NOT FOR
PERSONAL,  FAMILY OR HOUSEHOLD PURPOSES  OR  SECURED  SOLELY  BY THE  BORROWER'S
RESIDENCE MUST BE IN WRITING,  EXPRESS CONSIDERATION AND BE SIGNED BY BANK TO BE
ENFORCEABLE.

       Your acknowledgment of this Amendment shall constitute  acceptance of the
foregoing terms and conditions.

                                   Sincerely,

                                   WELLS FARGO BANK,
                                      NAT10NAL ASSOCIATION

                                   By:  /s/ Julie Wilson
                                        Julie Wilson
                                        Vice President

Acknowledged and accepted as of 10-27-00.

BARRETT BUSINESS SERVICES, INC.

By:  /s/ Michael D. Mulholland
     Michael D. Mulholland
     Vice President-Finance

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