Document:

U.S. BANK

                             BUSINESS LOAN AGREEMENT

<TABLE>
<CAPTION>
  PRINCIPAL     LOAN DATE     MATURITY     LOAN NO.    CALL    COLLATERAL    ACCOUNT     OFFICER   INITIALS
<S>             <C>          <C>           <C>                     <C>      <C>           <C>
$4,500,000.00   05-05-2000   02-01-2001    501-M133                70       4663012967    BKG03
</TABLE>

References  in the shaded  area are for  Lender's  use only and do not limit the
applicability of this document to any particular loan or item.

BORROWER: KEY TECHNOLOGY, INC.     LENDER: U.S. BANK NATIONAL ASSOCIATION
          150 AVERY STREET                 EASTERN WASHINGTON CORPORATE BANKING
          WALLA WALLA, WA 99360            428 WEST RIVERSIDE
                                           SPOKANE, WA 99201

================================================================================

THIS BUSINESS LOAN AGREEMENT BETWEEN KEY TECHNOLOGY,  INC. ("BORROWER") AND U.S.
BANK NATIONAL ASSOCIATION ("LENDER") IS MADE AND EXECUTED ON THE FOLLOWING TERMS
AND CONDITIONS.  BORROWER HAS RECEIVED PRIOR COMMERCIAL LOANS FROM LENDER OR HAS
APPLIED  TO  LENDER  FOR  A  COMMERCIAL   LOAN  OR  LOANS  AND  OTHER  FINANCIAL
ACCOMMODATIONS,  INCLUDING  THOSE  WHICH  MAY BE  DESCRIBED  ON ANY  EXHIBIT  OR
SCHEDULE   ATTACHED   TO  THIS   AGREEMENT.   ALL  SUCH   LOANS  AND   FINANCIAL
ACCOMMODATIONS, TOGETHER WITH ALL FUTURE LOANS AND FINANCIAL ACCOMMODATIONS FROM
LENDER TO BORROWER, ARE REFERRED TO IN THIS AGREEMENT INDIVIDUALLY AS THE "LOAN"
AND  COLLECTIVELY AS THE "LOANS."  BORROWER  UNDERSTANDS AND AGREES THAT: (A) IN
GRANTING,  RENEWING,  OR EXTENDING ANY LOAN,  LENDER IS RELYING UPON  BORROWER'S
REPRESENTATIONS, WARRANTIES, AND AGREEMENTS, AS SET FORTH IN THIS AGREEMENT; (B)
THE GRANTING, RENEWING, OR EXTENDING OF ANY LOAN BY LENDER AT ALL TIMES SHALL BE
SUBJECT TO LENDER'S SOLE JUDGMENT AND  DISCRETION;  AND (C) ALL SUCH LOANS SHALL
BE AND SHALL  REMAIN  SUBJECT  TO THE  FOLLOWING  TERMS AND  CONDITIONS  OF THIS
AGREEMENT.

TERM.  This  Agreement  shall be effective as of May 5, 2000, and shall continue
thereafter  until all  indebtedness  of Borrower to lender has been performed in
full and the parties terminate this Agreement in writing.

DEFINITIONS.  The following words shall have the following meanings when used in
this  Agreement.  Terms not otherwise  defined in this Agreement  shall have the
meanings attributed to such terms in the Uniform Commercial Code. All references
to dollar  amounts  shall mean amounts in lawful  money of the United  States of
America.

    AGREEMENT.  The word "Agreement" means this Business Loan Agreement, as this
    Business  Loan  Agreement  may be  amended  or  modified  from time to time,
    together  with all exhibits and  schedules  attached to this  Business  Loan
    Agreement from time to time.

    BORROWER. The word "Borrower" means Key Technology, Inc. The word "Borrower"
    also includes, as applicable, all subsidiaries and affiliates of Borrower as
    provided below in the paragraph titled "Subsidiaries and Affiliates."

    CERCLA.  The word "CERCLA" means the Comprehensive  Environmental  Response,
    Compensation, and Liability Act of 1980, as amended.

    COLLATERAL.  The word "Collateral" means and includes without limitation all
    property and assets granted as collateral  security for a Loan, whether real
    or  personal  property,  whether  granted  directly or  indirectly,  whether
    granted now or in the future,  and whether granted in the form of a security
    interest,  mortgage,  deed of trust,  assignment,  pledge, chattel mortgage,
    chattel trust,  factor's lien,  equipment  trust,  conditional  sale,  trust
    receipt,   lien,  charge,  lien  or  title  retention  contract,   lease  or
    consignment  intended as a security  device,  or any other  security or lien
    interest whatsoever, whether created by law, contract, or otherwise.

    ERISA. The word "ERISA" means the Employee Retirement Income Security Act of
    1974, as amended.

    EVENT OF  DEFAULT.  The words  "Event of Default"  mean and include  without
    limitation  any of the  Events of  Default  set forth  below in the  section
    titled "EVENTS OF DEFAULT."

    GRANTOR.  The word "Grantor" means and includes without  limitation each and
    all  of  the  persons  or  entities  granting  a  Security  Interest  in any
    Collateral for the indebtedness,  including without limitation all Borrowers
    granting such a Security Interest.

    GUARANTOR.  The word "Guarantor" means and includes without  limitation each
    and all of the guarantors, sureties, and accommodation parties in connection
    with any indebtedness.

    INDEBTEDNESS.  The word "Indebtedness" means and includes without limitation
    all Loans,  together with all other  obligations,  debts and  liabilities of
    Borrower  to  Lender,  or any one or more of them,  as well as all claims by
    Lender  against  Borrower,  or any  one or  more  of  them;  whether  now or
    hereafter  existing,  voluntary or involuntary,  due or not due, absolute or
    contingent,  liquidated  or  unliquidated;  whether  Borrower  maybe  liable
    individually or jointly with others;  whether Borrower may be obligated as a
    guarantor, surety, or otherwise; whether recovery upon such Indebtedness may
    be or hereafter may become barred by any statute of limitations; and whether
    such Indebtedness may be or hereafter may become otherwise unenforceable.

    LENDER.  The  word  "Lender"  means  U.S.  Bank  National  Association,   it
    successors and assigns.

    LOAN. The word "Loan" or "Loans" means and includes  without  limitation any
    and all  commercial  loans  and  financial  accommodations  from  Lender  to
    Borrower,   whether  now  or  hereafter  existing,  and  however  evidenced,
    including  without  limitation  those  loans  and  financial  accommodations
    described  herein or described  on any exhibit or schedule  attached to this
    Agreement from time to time.

    NOTE.  The word "Note"  means and  includes  without  limitation  Borrower's
    promissory note or notes, if any, evidencing  Borrower's Loan obligations in
    favor of Lender, as well as any substitute,  replacement or refinancing note
    or notes therefor.

    PERMITTED LIENS.  The words  "Permitted  Liens" mean: (a) liens and security
    interests  securing  Indebtedness owed by Borrower to Lender;  (b) liens for
    taxes, assessments, or similar charges either not yet due or being contested
    in good  faith;  (c)  liens  of  materialmen,  mechanics,  warehousemen,  or
    carriers, or other like liens arising in the ordinary course of business and
    securing obligations which are not yet delinquent;  (d) purchase money liens
    or purchase  money security  interests  upon or in any property  acquired or
    held by Borrower in the ordinary  course of business to secure  Indebtedness
    outstanding  on the date of this Agreement or permitted to be incurred under
    the paragraph of this Agreement titled  "Indebtedness and Liens";  (e) liens
    and security  interests  which, as of the date of this Agreement,  have been
    disclosed to and approved by the Lender in writing;  and (f) those liens and
    security  interests  which in the aggregate  constitute  an  Immaterial  and
    Insignificant  monetary  amount with respect to the net value of  Borrower's
    assets.

    RELATED  DOCUMENTS.  The words "Related  Documents" mean and include without
    limitation  all  promissory  notes,  credit  agreements,   loan  agreements,
    environmental agreements,  guaranties, security agreements, mortgages, deeds
    of trust, and all other instruments,  agreements and documents,  whether now
    or hereafter existing, executed in connection with the Indebtedness.

    SECURITY AGREEMENT.  The words "Security Agreement" mean and include without
    limitation any agreements, promises, covenants, arrangements, understandings
    or  other  agreements,  whether  created  by law,  contract,  or  otherwise,
    evidencing, governing, representing, or creating a Security Interest.

    SECURITY  INTEREST.  The words "Security  interest" mean and include without
    limitation any type of collateral  security,  whether in the form of a lien,
    charge,  mortgage,  deed of trust,  assignment,  pledge,  chattel  mortgage,
    chattel trust,  factor's lien,  equipment  trust,  conditional  sale,  trust
    receipt, lien or title retention contract,  lease or consignment intended as
    a  security  device,  or any other  security  or lien  interest  whatsoever,
    whether created by law, contract, or otherwise.

    SARA. The word "SARA" means the Superfund Amendments and Reauthorization Act
    of 1986 as now or hereafter amended.

CONDITIONS  PRECEDENT TO EACH ADVANCE.  Lender's  obligation to make the Initial
Loan Advance and each  subsequent  Loan Advance  under this  Agreement  shall be
subject to the fulfillment to Lender's satisfaction of all of the conditions set
forth in this Agreement and in the Related Documents.

    LOAN  DOCUMENTS.  Borrower shall provide to Lender in form  satisfactory  to
    Lender the  following  documents  for the Loan:  (a) the Note,  (b) Security
    Agreements  granting to Lender  security  interests in the  Collateral,  (c)
    Financing statements perfecting Lender's Security Interests; (d) evidence of
    Insurance as required below; and (e) any other documents required under this
    Agreement or by Lender or its counsel.

    BORROWER'S AUTHORIZATION. Borrower shall have provided in form and substance
    satisfactory to Lender properly certified resolutions,  duly authorizing the
    execution and delivery of this Agreement, the Note of the Related Documents,
    and such other  authorizations and other documents and instruments as Lender
    or its counsel, in their sole discretion, may require.

    PAYMENT OF FEES AND EXPENSES.  Borrower  shall have paid to Lender all fees,
    charges,  and other  expenses which are then due and payable as specified in
    this Agreement or any Related Document.

    REPRESENTATIONS AND WARRANTIES. The representations and warranties set forth
    in  this  Agreement,  in the  Related  Documents,  and in  any  document  or
    certificate delivered to Lender under this Agreement are true and correct.

    NO EVENT OF  DEFAULT.  There  shall not  exist at the time of any  advance a
    condition which would constitute an Event of Default under this Agreement.

REPRESENTATIONS  AND WARRANTIES.  Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each
<PAGE>

05-05-2000                 BUSINESS LOAN AGREEMENT                        PAGE 2
LOAN NO 501-M133                (CONTINUED)

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disbursement  of Loan  proceeds,  as of the date of any  renewal,  extension  or
modification of any Loan, and at all times any Indebtedness exists:

    ORGANIZATION.  Borrower is a corporation  which is duly  organized,  validly
    existing,  and in good standing under the laws of the State of Oregon and is
    validly  existing  and in good  standing in all states in which  Borrower is
    doing  business.  Borrower  has the  full  power  and  authority  to own its
    properties and to transact the  businesses in which it is presently  engaged
    or  presently  proposes  to engage.  Borrower  also is duly  qualified  as a
    foreign  corporation  and is in good  standing  in all  states  in which the
    failure to so qualify would have a material adverse effect on its businesses
    or financial condition.

    AUTHORIZATION.  The execution,  delivery,  and performance of this Agreement
    and all  Related  Documents  by  Borrower,  to the  extent  to be  executed,
    delivered  or  performed  by  Borrower  have  been  duly  authorized  by all
    necessary action by Borrower;  do not require the consent or approval of any
    other person, regulatory authority or governmental body; and do not conflict
    with,  result in a  violation  of,  or  constitute  a default  under (a) any
    provision of its articles of incorporation or  organization,  or bylaws,  or
    any  agreement or other  instrument  binding  upon  Borrower or (b) any law,
    governmental regulation, court decree, or order applicable to Borrower.

    FINANCIAL  INFORMATION.  Each  financial  statement of Borrower  supplied to
    Lender truly and completely  disclosed  Borrower's financial condition as of
    the date of the statement,  and there has been no material adverse change in
    Borrower's  financial  condition  subsequent  to the date of the most recent
    financial statement supplied to Lender.  Borrower has no material contingent
    obligations except as disclosed in such financial statements.

    LEGAL EFFECT.  This Agreement  constitutes,  and any instrument or agreement
    required  hereunder to be given by Borrower when delivered will  constitute,
    legal,  valid  and  binding  obligations  of  Borrower  enforceable  against
    Borrower in accordance with their respective terms.

    PROPERTIES.  Except  as  contemplated  by this  Agreement  or as  previously
    disclosed in Borrower's  financial statements or in writing to Lender and as
    accepted  by  Lender,  and  except  for  property  tax  liens  for taxes not
    presently  due and  payable,  Borrower  owns  and has  good  title to all of
    Borrower's properties free and clear of all Security Interests,  and has not
    executed any security  documents  or financing  statements  relating to such
    properties.  All of Borrower's  properties  are titled in  Borrower's  legal
    name, and Borrower has not used, or filed a financing  statement  under, any
    other name for at least the last five (5) years.

    HAZARDOUS  SUBSTANCES.  The terms "hazardous waste," "hazardous  substance,"
    "disposal,"  "release," and "threatened release," as used in this Agreement,
    shall  have the same  meanings  as set forth in the  "CERCLA,"  "SARA,"  the
    Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the
    Resource  Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or
    other  applicable  state or Federal  laws,  rules,  or  regulations  adopted
    pursuant to any of the foregoing. Except as disclosed to and acknowledged by
    Lender in writing,  Borrower  represents  and warrants  that: (a) During the
    period of  Borrower's  ownership of the  properties,  there has been no use,
    generation, manufacture, storage, treatment, disposal, release or threatened
    release of any hazardous  waste or substance by any person on, under,  about
    or from any of the  properties.  (b) Borrower has no knowledge of, or reason
    to  believe  that  there  has  been (i) any  use,  generation,  manufacture,
    storage,  treatment,   disposal,  release,  or  threatened  release  of  any
    hazardous waste or substance on, under,  about or from any of the properties
    by any  prior  owners or  occupants  of any of the  properties,  or (ii) any
    actual or threatened litigation or claims of any kind by any person relating
    to such matters. (c) Neither Borrower nor any tenant,  contractor,  agent or
    other  authorized  user  of any  of  the  properties  shall  use,  generate,
    manufacture,  store,  treat,  dispose of, or release any hazardous  waste or
    substance  on,  under,  about  or from any of the  properties;  and any such
    activity  shall be  conducted in  compliance  with all  applicable  federal,
    state,  and local  laws,  regulations,  and  ordinances,  including  without
    limitation those laws,  regulations and ordinances described above. Borrower
    authorizes  Lender and its agents to enter upon the  properties to make such
    inspections and tests as Lender may deem appropriate to determine compliance
    of the  properties  with this section of the Agreement.  Any  inspections or
    tests  made by  Lender  shall  be at  Borrower's  expense  and for  Lender's
    purposes  only and shall not be  construed to create any  responsibility  or
    liability  on the part of Lender to  Borrower  or to any other  person.  The
    representations and warranties  contained herein are based on Borrower's due
    diligence in investigating  the properties for hazardous waste and hazardous
    substances.  Borrower  hereby (a)  releases  and  waives  any future  claims
    against Lender for indemnity or contribution  in the event Borrower  becomes
    liable for  cleanup or other  costs  under any such laws,  and (b) agrees to
    indemnify  and hold  harmless  Lender  against any and all  claims,  losses,
    liabilities,  damages,  penalties, and expenses which Lender may directly or
    indirectly  sustain or suffer resulting from a breach of this section of the
    Agreement or as a consequence of any use, generation,  manufacture, storage,
    disposal, release or threatened release of a hazardous waste or substance on
    the properties.  The provisions of this section of the Agreement,  including
    the obligation to indemnify,  shall survive the payment of the  Indebtedness
    and the  termination  or  expiration  of this  Agreement  and  shall  not be
    affected by Lender's  acquisition of any interest in any of the  properties,
    whether by foreclosure or otherwise.

    LITIGATION AND CLAIMS. No litigation,  claim, investigation,  administrative
    proceeding or similar  action  (including  those for unpaid  taxes)  against
    Borrower is pending or threatened, and no other event has occurred which may
    materially  adversely affect Borrower's  financial  condition or properties,
    other than  litigation,  claims,  or other  events,  if any,  that have been
    disclosed to and acknowledged by Lender in writing.

    TAXES. To the best of Borrower's  knowledge,  all tax returns and reports of
    Borrower  that are or were  required to be filed,  have been filed,  and all
    taxes,  assessments and other  governmental  charges have been paid in full,
    except those presently being or to be contested by Borrower in good faith in
    the ordinary  course of business and for which  adequate  reserves have been
    provided.

    LIEN PRIORITY.  Unless otherwise  previously disclosed to Lender in writing,
    Borrower  has not  entered  into or  granted  any  Security  Agreements,  or
    permitted the filing or attachment of any Security Interests on or affecting
    any  of  the  Collateral   directly  or  indirectly  securing  repayment  of
    Borrower's  Loan  and  Note,  that  would be prior or that may in any way be
    superior  to  Lender's  Security   Interests  and  rights  in  and  to  such
    Collateral.

    BINDING EFFECT.  This Agreement,  the Note, all Security Agreements directly
    or indirectly  securing repayment of Borrower's Loan and Note and all of the
    Related  Documents  are binding  upon  Borrower  as well as upon  Borrower's
    successors,  representatives  and assigns,  and are legally  enforceable  in
    accordance with their respective terms.

    COMMERCIAL  PURPOSES.  Borrower  intends to use the Loan proceeds solely for
    business or commercial related purposes.

    EMPLOYEE BENEFIT PLANS.  Each employee benefit plan as to which Borrower may
    have an liability  complies in all  material  respects  with all  applicable
    requirements  of law  and  regulations,  and  (i) no  Reportable  Event  nor
    Prohibited  Transaction  (as defined in ERISA) has occurred  with respect to
    any such  plan,  (ii)  Borrower  has not  withdrawn  from  any such  plan or
    initiated  steps to do so, (iii) no steps have been taken to  terminate  any
    such plan,  and (iv)  there are no  unfounded  liabilities  other than those
    previously disclosed to Lender in writing.

    LOCATION OF BORROWER'S OFFICES AND RECORDS. Borrower's place of business, or
    Borrower's  Chief  executive  office if Borrower  has more than one place of
    business,  is located at 150 Avery  Street,  Walla Walla,  WA 99360.  Unless
    Borrower  has  designated  otherwise  in writing  this  location is also the
    office  or  offices  where  Borrower   keeps  its  records   concerning  the
    Collateral.

    INFORMATION.   All  information  heretofore  or  contemporaneously  herewith
    furnished  by Borrower to Lender for the purposes of or in  connection  with
    this  Agreement  or  any  transaction   contemplated   hereby  is,  and  all
    information  hereafter  furnished by or on behalf of Borrower to Lender will
    be, true and accurate in every material respect on the date as of which such
    information is dated or certified;  and none of such  information is or will
    be incomplete by omitting to state any material fact  necessary to make such
    information not misleading.

    SURVIVAL OF REPRESENTATIONS AND WARRANTIES.  Borrower understands and agrees
    that Lender,  without independent  investigation,  is relying upon the above
    representations  and  warranties  in  extending  Loan  Advances to Borrower.
    Borrower  further agrees that the foregoing  representations  and warranties
    shall be  continuing  in nature  and shall  remain in full  force and effect
    until such time as Borrower's  Indebtedness  shall be paid in full, or until
    this Agreement shall be terminated in the manner  provided above,  whichever
    is the last to occur.

AFFIRMATIVE  COVENANTS.  Borrower  covenants and agrees with Lender that,  while
this Agreement is in effect, Borrower will:

    LITIGATION.  Promptly  inform Lender in writing of (a) all material  adverse
    changes in  Borrower's  financial  condition,  and (b) all  existing and all
    threatened litigation, claims, investigations, administrative proceedings or
    similar actions  affecting  Borrower or any Guarantor which could materially
    affect the financial condition of borrower or the financial condition of any
    Guarantor.

    FINANCIAL  RECORDS.  Maintain  its  books and  records  in  accordance  with
    generally accepted accounting principles, applied on a consistent basis, and
    permit  Lender to  examine  and audit  Borrower's  books and  records at all
    reasonable times.

    FINANCIAL STATEMENTS.  Furnish Lender with, as soon as available,  but in no
    event later than one hundred  twenty (120) days after the end of each fiscal
    year,  Borrower's  balance  sheet and income  statement  for the year ended,
    audited by a certified  public  accountant  satisfactory to Lender,  and, as
    soon as available, but in no event later than forty five (45) days after the
    end of each fiscal  quarter,  Borrower's  balance  sheet and profit and loss
    statement  for the period  ended,  prepared and  certified as correct to the
    best  knowledge and belief by Borrower's  chief  financial  officer or other
    officer or person acceptable to Lender. All financial reports required to be
    provided under this Agreement shall be prepared in accordance with generally
    accepted accounting principles, applied on a consistent basis, and certified
    by Borrower as being true and correct.

    ADDITIONAL INFORMATION.  Furnish such additional information and statements,
    lists of  assets  and  liabilities,  agings  of  receivables  and  payables,
    inventory schedules, budgets, forecasts, tax returns, and other reports with
    respect to Borrower's  financial condition and business operations as Lender
    may request from time to time.

    INSURANCE.   Maintain  fire  and  other  risk  insurance,  public  liability
    insurance,  and such other  insurance  as Lender may require with respect to
    Borrower's properties and operations,  in form, amounts,  coverages and with
    insurance companies reasonably acceptable to Lender.  Borrower, upon request
    of  Lender,  will  deliver  to  Lender  from  time to time the  policies  or
    certificates  of  insurance  in  form  satisfactory  to  Lender,   including
    stipulations  that coverages will not be cancelled or diminished  without at
    least ten (10) days' prior written notice to Lender.  Each insurance  policy
<PAGE>

05-05-2000                 BUSINESS LOAN AGREEMENT                        PAGE 3
LOAN NO 501-M133                (CONTINUED)

================================================================================

    also shall include an endorsement providing that coverage in favor of Lender
    will not be impaired in any way by any act,  omission or default of Borrower
    or any other person.  In  connection  with all policies  covering  assets in
    which Lender holds or is offered a security interest for the Loans. Borrower
    will provide Lender with such loss payable or other  endorsements  as Lender
    may require.

    INSURANCE  REPORTS.  Furnish to lender,  upon request of Lender,  reports on
    each  existing  insurance  policy  showing  such  information  as Lender may
    reasonably request, including without limitation the following: (a) the name
    of the Insurer; (b) the risks Insured; (c) the amount of the policy; (d) the
    properties  insured;  (e) the then current  property  values on the basis of
    which  insurance  has been  obtained,  and the manner of  determining  those
    values; and (f) the expiration date of the policy. In addition, upon request
    of Lender  (however  not more often than  annually),  Borrower  will have an
    independent appraiser satisfactory to Lender determine,  as applicable,  the
    actual cash value or replacement  cost of any  Collateral.  The cost of such
    appraisal shall be paid by borrower.

    OTHER  AGREEMENTS.  Comply  with  all  terms  and  conditions  of all  other
    agreements,  whether now or  hereafter  existing,  between  Borrower and any
    other  party and notify  Lender  immediately  in  writing of any  default in
    connection with any other such agreements.

    LOAN  PROCEEDS.  Use  all  Loan  proceeds  solely  for  Borrower's  business
    operations,  unless  specifically  consented  to the  contrary  by Lender in
    writing.

    TAXES, CHARGES AND LIENS. Pay and discharge when due all of its indebtedness
    and  obligations,  including  without  limitation  all  assessments,  taxes,
    governmental  charges,  levies and liens, of every kind and nature,  imposed
    upon Borrower or its properties,  income,  or profits,  prior to the date on
    which penalties would attach,  and all lawful claims that, if unpaid,  might
    become  a lien or  charge  upon any of  Borrower's  properties,  income,  or
    profits.  Provided  however,  Borrower  will  not be  required  to  pay  and
    discharge any such assessment,  tax, charge,  levy, lien or claim so long as
    (a) the legality of the same shall be contested in good faith by appropriate
    proceedings,  and (b) Borrower shall have  established on its books adequate
    reserves with respect to such contested assessment, tax, charge, levy, lien,
    or  claim  in  accordance  with  generally  accepted  accounting  practices.
    Borrower,  upon demand of Lender, will furnish to Lender evidence of payment
    of the  assessments,  taxes,  charges,  levies,  liens and  claims  and will
    authorize the appropriate  governmental official to deliver to Lender at any
    time a written statement of any assessments,  taxes, charges,  levies, liens
    and claims against Borrower's properties, income, or profits.

    PERFORMANCE.  Perform and comply with all terms, conditions,  and provisions
    set forth in this Agreement and in the Related Documents in a timely manner,
    and promptly notify Lender if Borrower learns of the occurrence of any event
    which  constitutes  an Event of Default under this Agreement or under any of
    the Related Documents.

    OPERATIONS.  Maintain executive and management  personnel with substantially
    the  same  qualifications  and  experience  as the  present  executive,  and
    management  personnel;  provide  written  notice to Lender of any  change in
    executive  and  management  personnel;  conduct  its  business  affairs in a
    reasonable and prudent manner and in compliance with all applicable federal,
    state and municipal laws,  ordinances,  rules and regulations respecting its
    properties,   charters,   businesses  and  operations,   including   without
    limitation,  compliance  with Americans With  Disabilities  Act and with all
    minimum  funding  standards and other  requirements  of ERISA and other laws
    applicable to Borrower's employee benefit plans.

    INSPECTION.  Permit  employees or agents of Lender at any reasonable time to
    inspect any and all Collateral  for the Loan or Loans and  Borrower's  other
    properties and to examine or audit Borrower's books,  accounts,  and records
    and to make copies and memoranda of Borrower's books, accounts, and records.
    If Borrower now or at any time  hereafter  maintains any records  (including
    without limitation computer generated records and computer software programs
    for the  generation  of such  records) in the  possession  of a third party,
    Borrower,  upon request of Lender,  shall notify such party to permit Lender
    free access to such records at all  reasonable  times and to provide  Lender
    with copies of any records it may request, all at Borrower's expense.

    COMPLIANCE  CERTIFICATE.  Unless waived in writing by Lender, provide Lender
    QUARTERLY  and at the  time of each  disbursement  of Loan  proceeds  with a
    certificate executed by Borrower's chief financial officer, or other officer
    or person  acceptable to Lender,  certifying  that the  representations  and
    warranties  set forth in this  Agreement are true and correct as of the date
    of the  certificate  and  further  certifying  that,  as of the  date of the
    certificate, no Event of Default exists under this Agreement.

    ENVIRONMENTAL COMPLIANCE AND REPORTS.  Borrower shall comply in all respects
    with all environmental  protection federal,  state and local laws, statutes,
    regulations and ordinances;  not cause or permit to exist, as a result of an
    intentional or  unintentional  action or omission on its part or on the part
    of any third  party,  on property  owned and/or  occupied by  Borrower,  any
    environmental  activity where damage may result to the  environment,  unless
    such  environmental  activity  is  pursuant  to and in  compliance  with the
    conditions of a permit  issued by the  appropriate  federal,  state or local
    governmental authorities;  shall furnish to Lender promptly and in any event
    within thirty (30) days after receipt thereof a copy of any notice, summons,
    lien,   citation,   directive,   letter  or  other  communication  from  any
    governmental  agency  or  instrumentality   concerning  any  intentional  or
    unintentional  action or omission on Borrower's  part in connection with any
    environmental  activity  whether  or not there is damage to the  environment
    and/or other natural resources.

    ADDITIONAL  ASSURANCES.  Make, execute and deliver to Lender such promissory
    notes, mortgages, deeds of trust, security agreements, financing statements,
    instruments,  documents and other  agreements as Lender or its attorneys may
    reasonably  request to  evidence  and  secure  the Loans and to perfect  all
    Security Interests.

NEGATIVE  COVENANTS.  Borrower  covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender:

    INDEBTEDNESS  AND LIENS.  (a) Except for trade debt  incurred  in the normal
    course  of  business  and  indebtedness  to  Lender   contemplated  by  this
    Agreement,   create,  incur  or  assume  indebtedness  for  borrowed  money,
    including  capital leases,  (b) except as allowed as a Permitted Lien, sell,
    transfer,  mortgage, assign, pledge, lease, grant a security interest in, or
    encumber any of borrower's assets, including but not limited to any stock of
    any subsidiary, or (c) sell with recourse any of Borrower's accounts, except
    to Lender.

    CONTINUITY   OF   OPERATIONS.   (a)  Engage  in  any   business   activities
    substantially  different than those in which Borrower is presently  engaged,
    (b) cease operations,  liquidate,  merge,  transfer,  acquire or consolidate
    with any other  entity,  change  ownership,  change  its name,  dissolve  or
    transfer or sell Collateral out of the ordinary course of business,  (c) pay
    any  dividends  on  Borrower's  stock (other than  dividends  payable in its
    stock),  provided,  however that notwithstanding the foregoing,  but only so
    long as no Event of Default has occurred and is  continuing  or would result
    from the payment of dividends.  If Borrower is a "Subchapter S  Corporation"
    (as defined in the Internal Revenue Code of 1986, as amended),  Borrower may
    pay cash  dividends  on its stock to its  shareholders  from time to time in
    amounts  necessary to enable the  shareholders  to pay income taxes and make
    estimated income tax payments to satisfy their liabilities under federal and
    state law  which  arise  solely  from  their  status  as  Shareholders  of a
    Subchapter S  Corporation  because of their  ownership of shares of stock of
    Borrower, or (d) purchase or retire any of Borrower's  outstanding shares or
    alter or amend Borrower's capital structure.

    LOANS, ACQUISITIONS AND GUARANTIES.  (a) Loan, invest in or advance money or
    assets, (b) purchase, create or acquire any interest in any other enterprise
    or entity,  or (c) incur any obligation as surely or guarantor other than in
    the ordinary course of business.

CESSATION OF  ADVANCES.  If Lender has made any  commitment  to make any Loan to
Borrower,  whether  under this  Agreement or under any other  agreement,  Lender
shall have no  obligation to make Loan Advances or to disburse Loan proceeds if:
(a) Borrower or any Guarantor is in default under the terms of this Agreement or
any of the  Related  Documents  or any  other  agreement  that  Borrower  or any
Guarantor  has with Lender;  (b) Borrower or any  Guarantor  becomes  insolvent,
files a  petition  in  bankruptcy  or  similar  proceedings,  or is  adjudged  a
bankrupt;  (c) there occurs a material  adverse  change in Borrower's  financial
condition,  in the financial condition of any Guarantor,  or in the value of any
Collateral  securing  any Loan;  (d) any  Guarantor  seeks,  claims or otherwise
attempts to limit, modify or revoke such Guarantor's guaranty of the Loan or any
other loan with Lender; or (e) Lender in good faith deems itself insecure,  even
though no Event of Default shall have occurred.

DISCLOSURE.  ORAL  AGREEMENTS OR  COMMITMENTS TO LOAN MONEY,  EXTEND CREDIT,  OR
FORBEAR FROM ENFORCING  REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON
LAW.

YEAR 2000.  Borrower has reviewed  and  assessed  its  business  operations  and
computer  systems and  applications to address the "year 2000 problem" (that is,
that  computer  applications  and  equipment  used  by  Borrower,   directly  or
indirectly  through  third  parties,  may have been or may be unable to properly
perform  date-sensitive  functions  before,  during and after  January 1, 2000).
Borrower  represents and warrants that the year 2000 problem has not resulted in
and  will not  result  in a  material  diverse  change  in  Borrower's  business
condition  (financial  or  otherwise),  operations,  properties  or prospects or
ability to repay Lender.  Borrower agrees that this  representation and warranty
will be true and  correct on and shall be deemed  made by  Borrower on each date
Borrower  requests  any advance  under this  Agreement  or Note or delivers  any
Information to Lender. Borrower will promptly deliver to Lender such information
relating to this  representation  and warranty as Lender  requests  from time to
time.

NEGATIVE PLEDGE COVENANTS.  (a) Borrower covenants that no foreign subsidiary of
Borrower  shall  mortgage,  assign,  pledge,  grant a  security  interest  in or
encumber  any of its  assets to  secure an  obligation  or  obligations,  in the
aggregate, exceeding US $6,500,000.00 dollars.

(b) If any foreign subsidiary of Borrower mortgages,  assigns, pledges, grants a
security  interest in or encumbers  any of its assets to secure an obligation or
obligations, in the aggregate,  exceeding US $6,500,000.00 dollars, this will be
considered  an event of default  under the terms and  conditions as set forth in
the Section entitled "Events of Default".

ACCESS LAWS.  Without limiting the generality of any provision of this agreement
requiring  Borrower  to comply  with  applicable  laws,  rules and  regulations,
Borrower  agrees that it will at all times comply with  applicable laws relating
to disabled access  including,  but not limited to, all applicable titles of the
Americans with Disabilities Act of 1990.
<PAGE>

05-05-2000                 BUSINESS LOAN AGREEMENT                        PAGE 4
LOAN NO 501-M133                (CONTINUED)

================================================================================

FINANCIAL LOAN COVENANTS EXHIBIT.  An exhibit,  titled "FINANCIAL LOAN COVENANTS
EXHIBIT," is attached to this  Agreement and by this reference is made a part of
this  Agreement  just as if all the  provisions,  terms  and  conditions  of the
Exhibit had been fully set forth in this Agreement.

RIGHT OF SETOFF.  Borrower grants to Lender a contractual  security interest in,
and hereby  assigns,  conveys,  delivers,  pledges,  and transfers to Lender all
Borrower's right, title and interest in and to, Borrower's  accounts with Lender
(whether checking, savings, or some other account), including without limitation
all accounts  held jointly with someone else and all accounts  Borrower may open
in the  future,  excluding  however  all IRA and Keogh  accounts,  and all trust
accounts for which the grant of a security  interest would be prohibited by law.
Borrower authorizes Lender, to the extent permitted by applicable law, to charge
or setoff all sums owing on the indebtedness  against any and all such accounts,
and, at Lender's option, to  administratively  freeze all such accounts to allow
Lender to protect Lender's charge and setoff rights provided on this paragraph.

EVENTS OF DEFAULT.  Each of the following  shall  constitute an Event of Default
under this Agreement:

    DEFAULT ON INDEBTEDNESS. Failure of Borrower to make any payment when due on
    the Loans.

    OTHER  DEFAULTS.  Failure of  Borrower  or any  Grantor to comply with or to
    perform when due any other term, obligation, covenant or condition contained
    in this Agreement or in any of the Related Documents, or failure of borrower
    to  comply  with or to  perform  any other  term,  obligation,  covenant  or
    condition contained in any other agreement between Lender and Borrower.

    DEFAULT IN FAVOR OF THIRD PARTIES.  Should  Borrower or any Grantor  default
    under any loan, extension of credit,  security agreement,  purchase or sales
    agreement,  or any other  agreement,  in favor of any other credit or person
    that may materially  affect any of Borrower's  property or Borrower's or any
    Grantor's ability to repay the Loans or perform their respective obligations
    under this Agreement or any of the Related Documents.

    FALSE  STATEMENTS.  Any  warranty,   representation  or  statement  made  or
    furnished  to Lender by or on behalf of Borrower  or any Grantor  under this
    Agreement or the Related  Documents is false or  misleading  in any material
    respect at the time made or furnished, or becomes false or misleading at any
    time thereafter.

    DEFECTIVE COLLATERALIZATION.  This Agreement or any of the Related Documents
    ceases to be in full force and  effect  (including  failure of any  Security
    Agreement to create a valid and perfected Security Interest) at any time and
    for any reason.

    INSOLVENCY.  The  dissolution or  termination  of Borrower's  existence as a
    going  business,  the Insolvency of Borrower,  the appointment of a receiver
    for any part of  Borrower's  property,  any  assignment  for the  benefit of
    creditors,  any  type  of  creditor  workout,  or  the  commencement  of any
    proceeding under any bankruptcy or Insolvency laws by or against Borrower.

    CREDITOR  OR  FORFEITURE   PROCEEDINGS.   Commencement   of  foreclosure  or
    forfeiture   proceedings,   whether  by  judicial   proceeding,   self-help,
    repossession or any other method, by any creditor of Borrower,  any creditor
    of any Grantor against any collateral  securing the Indebtedness,  or by any
    governmental agency. This includes a garnishment,  attachment, or levy on or
    of any of Borrower's deposit accounts with Lender.

    EVENTS AFFECTING GUARANTOR. Any of the proceeding events occurs with respect
    to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes
    incompetent, or revokes or disputes the validity of, or liability under, any
    Guaranty of the Indebtedness.

    CHANGE IN OWNERSHIP. Any change in ownership of twenty-five percent (25%) or
    more of the common stock of Borrower.

    ADVERSE  CHANGE.  A material  adverse change occurs in Borrower's  financial
    condition,  or Lender believes the prospect of payment or performance of the
    Indebtedness is impaired.

    INSECURITY. Lender, in good faith, deems itself insecure.

EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where
otherwise provided in this Agreement or the Related  Documents,  all commitments
and  obligations of Lender under this Agreement or the Related  Documents or any
other  agreement  immediately  will terminate  (including any obligation to make
Loan  Advances or  disbursements),  and, at Lender's  option,  all  Indebtedness
immediately  will  become due and  payable,  all  without  notice of any kind to
Borrower,  except that in the case of an Event of Default of the type  described
in the "Insolvency"  subsection above, such acceleration  shall be automatic and
not  optional.  In  addition,  Lender  shall have all the  rights  and  remedies
provided in the Related  Documents or available at law, in equity or  otherwise.
Except as may be  prohibited  by  applicable  law,  all of  Lender's  rights and
remedies  shall be cumulative and may be exercised  singularly or  concurrently.
Election by Lender to pursue any remedy  shall not exclude  pursuit of any other
remedy,  and an  election to make  expenditures  or to take action to perform an
obligation  of  Borrower or of any Grantor  shall not affect  Lender's  right to
declare a default and to exercise its rights and remedies.

MISCELLANEOUS  PROVISIONS.  The following miscellaneous provisions are a part of
this Agreement:

    AMENDMENTS. This Agreement, together with any Related Documents, constitutes
    the entire  understanding and agreement of the parties as to the matters set
    forth in this  Agreement.  No alteration  of or amendment to this  Agreement
    shall be  effective  unless  given in  writing  and  signed  by the party or
    parties sought to be charged or bound by the alteration or amendment.

    APPLICABLE  LAW. This Agreement has been delivered to Lender and accepted by
    Lender in the State of Washington.  If there is a lawsuit,  Borrower  agrees
    upon Lender's  request to submit to the  jurisdiction  of the courts of King
    County,  the State of Washington.  Subject to the provisions or arbitration,
    this  Agreement  shall be governed by and construed in  accordance  with the
    laws of the State of Washington.

    ARBITRATION.  Lender  and  Borrower  agree  that all  disputes,  claims  and
    controversies  between them, whether  individual,  joint, o class in nature,
    arising  from this  Agreement or  otherwise,  including  without  limitation
    contract and tort disputes, shall be arbitrated pursuant to the Rules of the
    American  Arbitration  Association,  upon request of either party. No act to
    take  or  dispose  of any  Collateral  shall  constitute  a  waiver  of this
    arbitration agreement or be prohibited by this arbitration  agreement.  This
    includes,  without  limitation,  obtaining  injunctive relief or a temporary
    restraining  order;  invoking  a power  of sale  under  any deed of trust or
    mortgage;  obtaining a writ of attachment  or  imposition of a receiver;  or
    exercising any rights  relating to personal  property,  including  taking or
    disposing of such  property  with or without  judicial  process  pursuant to
    Article  9  of  the  Uniform  Commercial  Code.  Any  disputes,  claims,  or
    controversies  concerning  the lawfulness or  reasonableness  of any act, or
    exercise of any right,  concerning  any  Collateral,  including any claim to
    rescind,   reform,  or  otherwise  modify  any  agreement  relating  to  the
    Collateral,  shall also be arbitrated,  provided  however that no arbitrator
    shall  have the  right or the power to  enjoin  or  restrain  any act of any
    party.  Judgment upon any award rendered by any arbitrator may be entered in
    any court having jurisdiction.  Nothing in this Agreement shall preclude any
    party from seeking equitable relief from a court of competent  jurisdiction.
    The statute of limitations,  estoppel, waiver, laches, and similar doctrines
    which would otherwise be applicable in an action brought by a party shall be
    applicable  in  any  arbitration  proceeding,  and  the  commencement  of an
    arbitration  proceeding  shall be deemed the  commencement  of an action for
    these purposes. The Federal Arbitration Act shall apply to the construction,
    interpretation, and enforcement of this arbitration provision.

    CAPTION  HEADINGS.  Caption  headings in this Agreement are for  convenience
    purposes  only and are not to be used to interpret or define the  provisions
    of this Agreement.

    MULTIPLE  PARTIES;  CORPORATE  AUTHORITY.  All obligations of Borrower under
    this  Agreement  shall be joint and several,  and all references to Borrower
    shall mean each and every  Borrower.  This  means  that each of the  persons
    signing below is responsible for all obligations in this Agreement.

    CONSENT TO LOAN PARTICIPATION. Borrower agrees and consents to Lender's sale
    or transfer, whether now or later, of one or more participation interests in
    the Loans to one or more purchasers, whether related or unrelated to Lender.
    Lender may provide,  without any limitation  whatsoever,  to any one or more
    purchasers, or potential purchasers, any information or knowledge Lender may
    have about  Borrower or about any other  matter  relating  to the Loan,  and
    Borrower  hereby  waives any  rights to privacy it may have with  respect to
    such matters.  Borrower  additionally  waives any and all notices of sale of
    participation  interests,  as well as all notices of any  repurchase of such
    participation  interests.  Borrower  also agrees that the  purchasers of any
    such  participation  interests will be considered as the absolute  owners of
    such  interests in the Loans and will have all the rights  granted under the
    participation   agreement  or   agreements   governing   the  sale  of  such
    participation  interests.  Borrower  further  waives all rights of offset or
    counterclaim  that it may have now or later  against  Lender or against  any
    purchaser of such a participation  interest and unconditionally  agrees that
    either Lender or such purchaser may enforce Borrower's  obligation under the
    Loans  irrespective  of the  failure  or  insolvency  of any  holder  of any
    interest in the Loans.  Borrower  further  agrees that the  purchaser of any
    such  participation  interests may enforce its interest  irrespective of any
    personal claims or defenses that Borrower may have against Lender.

    COSTS AND  EXPENSES.  Borrower  agrees to pay upon  demand  all of  Lender's
    expenses,   including  without  limitation   attorneys'  fees,  incurred  in
    connection with the preparation,  execution,  enforcement,  modification and
    collection of this  Agreement or in connection  with the Loans made pursuant
    to this Agreement. Lender may pay someone else to help collect the Loans and
    to enforce this Agreement, and Borrower will pay that amount. This includes,
    subject to any limits under  applicable  law,  Lender's  attorneys' fees and
    Lender's  legal  expenses,  whether  or not  there  is a  lawsuit  including
    attorneys' fees for bankruptcy  proceedings  (including efforts to modify or
    vacate any  automatic  stay or  injunction),  appeals,  and any  anticipated
    post-judgment  collection services.  Borrower also will pay any court costs,
    in addition to all other sums provided by law.

    NOTICES.  All notices  required to be given  under this  Agreement  shall be
    given in writing, may be sent by telefacsimile (unless otherwise required by
    law), and shall be effective when actually  delivered or when deposited with
    a nationally  recognized overnight courier or deposited in the United States
    mail,  first  class,  postage  prepaid,  addressed  to the party to whom the
    notice is to be given at the address  shown above.  Any party may change its
    address for notices under this  Agreement by giving formal written notice to
    the other  parties,  specifying  that the purpose of the notice is to change
    the party's address.  To the extent permitted by applicable law, if there is
    more than one Borrower, notice to any Borrower will constitute notice to all
    Borrowers.  For notice  purposes,  Borrower will keep Lender informed at all
    times of Borrower's current address(es).
<PAGE>

05-05-2000                 BUSINESS LOAN AGREEMENT                        PAGE 5
LOAN NO 501-M133                (CONTINUED)

================================================================================

    SEVERABILITY.  If a court of competent  jurisdiction  finds any provision of
    this  Agreement  to  be  invalid  or  unenforceable  as  to  any  person  or
    circumstances,  such  finding  shall not render  that  provision  invalid or
    unenforceable  as to any other persons or  circumstances.  If feasible,  any
    such  offending  provision  shall be deemed to be  modified to be within the
    limits of enforceability or validity;  however,  if the offending  provision
    cannot be so modified, it shall be stricken and all other provisions of this
    Agreement in all other respects shall remain valid and enforceable.

    SUBSIDIARIES  AND  AFFILIATES OF BORROWER.  To the extent the context of any
    provisions  of  this  Agreement  makes  it  appropriate,  including  without
    limitation any representation,  warranty or covenant, the word "Borrower" as
    used herein  shall  include all  subsidiaries  and  affiliates  of Borrower.
    Notwithstanding  the foregoing  however,  under no circumstances  shall this
    Agreement be construed to require Lender to make any Loan or other financial
    accommodation to any subsidiary or affiliate of Borrower.

    SUCCESSORS  AND ASSIGNS.  All  covenants and  agreements  contained by or on
    behalf of Borrower  shall bind its successors and assigns and shall inure to
    the benefit of Lender,  its  successors  and  assigns.  Borrower  shall not,
    however,  have the right to assign its rights  under this  Agreement  or any
    interest therein, without the prior written consent of Lender.

    SURVIVAL. All warranties, representations, and covenants made by Borrower in
    this  Agreement  or in any  certificate  or other  instrument  delivered  by
    Borrower to Lender under this  Agreement  shall be  considered  to have been
    relied upon by Lender and will  survive the making of the Loan and  delivery
    to Lender of the Related Documents,  regardless of any investigation made by
    Lender or on Lender's behalf.

    WAIVER.  Lender  shall not be deemed to have  waived any  rights  under this
    Agreement  unless such  waiver is given in writing and signed by Lender.  No
    delay or  omission  on the part of Lender  in  exercising  any  right  shall
    operate as a waiver of such right or any other right.  A waiver by Lender of
    a provision of this Agreement  shall not prejudice or constitute a waiver of
    Lender's right otherwise to demand strict  compliance with that provision or
    any other  provision of this Agreement.  No prior waiver by Lender,  nor any
    course of dealing  between  Lender and Borrower,  or between  Lender and any
    Grantor,  shall  constitute  a waiver  of any of  Lender's  rights or of any
    obligations  of Borrower  or of any  Grantor as to any future  transactions.
    Whenever  the  consent  of Lender is  required  under  this  Agreement,  the
    granting  of such  consent by Lender in any  instance  shall not  constitute
    continuing  consent in subsequent  instances where such consent is required,
    and in all  cases  such  consent  may be  granted  or  withheld  in the sole
    discretion of Lender.

BORROWER  ACKNOWLEDGES  HAVING READ ALL THE  PROVISIONS  OF THIS  BUSINESS  LOAN
AGREEMENT,  AND BORROWER AGREES TO ITS TERMS.  THIS AGREEMENT IS DATED AS OF MAY
5, 2000.

BORROWER:

KEY TECHNOLOGY, INC.

BY: /s/ Ted R. Sharp
    --------------------------------------
     AUTHORIZED OFFICER, TITLE    CFO
                              ------------

LENDER:

U.S. BANK NATIONAL ASSOCIATION

BY: /s/ Bruce K. Green      VP
    --------------------------------------
     AUTHORIZED OFFICER

================================================================================
LASER PRO, Reg. U.S. Pat. & T.M. Off., Ver. 3.29 (C) Concentrex 2000  All rights
reserved. [WA-C40 KEY TECH.LN C12.0VL]
<PAGE>

                        FINANCIAL LOAN COVENANTS EXHIBIT

              ==================================================

BORROWER: KEY TECHNOLOGY, INC.       LENDER: U.S. BANK NATIONAL ASSOCIATION
          150 AVERY STREET                   EASTERN WASHINGTON CORPORATE
          WALLA WALLA, WA 99360              BANKING
                                             428 WEST RIVERSIDE
                                             SPOKANE, WA 99201

              ==================================================

THIS FINANCIAL  LOAN  COVENANTS  EXHIBIT IS ATTACHED TO AND BY THIS REFERENCE IS
MADE A PART OF EACH BUSINESS LOAN AGREEMENT OR NEGATIVE PLEDGE AGREEMENT,  DATED
MAY  5,  2000,  AND  EXECUTED  IN  CONNECTION  WITH A LOAN  OR  OTHER  FINANCIAL
ACCOMMODATIONS BETWEEN U.S. BANK NATIONAL ASSOCIATION AND KEY TECHNOLOGY, INC.

The following financial performance covenants shall be maintained:

<TABLE>
<CAPTION>
                   Closing thru    Beginning     Beginning     Beginning     Beginning
                    09/30/2000     09/30/2001    09/30/2002    09/30/2003     09/30/2004 & thereafter

                     Covenant       Covenant      Covenant      Covenant      Covenant

<S>                  <C>            <C>           <C>           <C>           <C>
Working Capital      $15.0MM        $19.0MM       $24.0MM       $26.0MM       $30.0MM
(minimum)

Current Ratio         1.50:1         1.80:1        2.25:1        2.25:1        2.25:1
(minimum)

Tangible Net         $19.0MM        $24.0MM       $30.5MM       $32.0MM       $35.0MM
Worth (minimum)

Debt/Tangible         2.50:1         2.00:1        1.25:1        1.25:1        1.00.1
Net Worth (max)

Capital Expend.        $500M          $500M       $1,000M       $1,000M       $1,500M
Unfunded (max)

Fixed Charge          1.10:1         1.50:1        2.00:1        2.00:1        2.00:1
Coverage *(min)

IBD/EBITDA            4.50:1         2.00:1        1.00:1        1.00:1        1.00:1
(maximum)
</TABLE>

*Based on rolling four-quarter calculations.

Covenants will be monitored quarterly.
Borrower will provide the Bank with a covenant compliance certificate quarterly.

Definitions:
Fixed Charge Coverage: defined as [EARNINGS before INTEREST, TAXES, DEPRECIATION
and AMORTIZATION minus CASH TAXES minus UNFUNDED CAPITAL  EXPENDITURE minus CASH
DIVIDENDS] divided by [INTEREST plus MANDATORY DEBT RETIREMENT].

FUNDED  DEBIT/EBITDA:   (All  Interest  Bearing  Debt  including  capital  lease
obligations)  divided by (Earnings  before  interest,  taxes,  depreciation  and
amortization).

THIS FINANCIAL LOAN COVENANTS EXHIBIT IS EXECUTED ON MAY 5, 2000.

BORROWER:

KEY TECHNOLOGY, INC.

BY: /s/ Ted R. Sharp
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     AUTHORIZED OFFICER, TITLE    CFO
                              ------------

LENDER:

U.S. BANK NATIONAL ASSOCIATION

BY: /s/ Bruce K. Green
    --------------------------------------
     AUTHORIZED OFFICER

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LASER PRO, Reg. U.S. Pat. & T.M. Off., Ver. 3.29 (C) Concentrex 2000  All rights
reserved. [WA-G60 KEY TECH.LN C12.0VL]LOAN  AGREEMENT
1          PARTIES
1.1        The  parties  to  this  agreement are
1.1.1      PSG Investment Bank Limited; and
1.1.2      Caledon Casino  Bid  Company  (Proprietary)  Limited
1.2        The  parties  agree  as  set  out  below.

2          INTERPRETATION
2.1        In  this  agreement, unless inconsistent with or otherwise indicated
           by the context  ~
2.1.1      "THE ACT" means the Western Cape Gambling and Racing Law, No. 4 of
           1996, as amended  from  time  to  time;
2.1.2      "THE/THIS  AGREEMENT"  means the agreement as set out herein,
           together with all  appendices  hereto;
2.1.3      "THE  BOARD"  means  the  Western  Cape  Gambling  and  Racing
           Board,  as established  in  terms  of  section  2  of  the  Act;
2.1.4      "THE BOARD GUARANTEE" means the guarantee, a copy whereof is annexed
           hereto as  SCHEDULE  1,  which  PSGIB  has furnished to the Board in
           respect of Bidco's obligation,  VIS-  -VIS  the  Board  and  arising
           out of the grant of the casino licence  by  the  Board to Bidco, to
           undertake all construction work required to implement  the  project;
2.1.5      "BIDCO"  means  Caledon  Casino  Bid  Company  (Proprietary)
           Limited, a private company  duly  incorporated  in  accordance  with
           the company  laws  of  the  Republic  of  South  Africa,  with
           registration  number 96/010708/07;
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2.1.6      "BUSINESS  DAY"  means  any  day  other  than  a Saturday, Sunday or
           public holiday  in  the  Republic of South Africa or a day on which
           commercial banks in the  Republic  of  South  Africa  generally  are
           not  open  for  business;
2.1.7      "THE  CASINO"  means  the  casino,  details  of which appear in the
           licence application,  which  Bidco will, if it obtains the casino
           licence, construct and operate on the property and includes both
           the permanent casino and the temporary casino  both  as  identified
           in  the  licence  application;
2.1.8      "THE  CASINO  LICENCE"  means the casino operation licence, as
           envisaged in section  27  of  the  Act,  for  which Bidco has applied
           in terms of the licence application;
2.1.9      "THE  CASINO  MANAGEMENT  AGREEMENT"  means the casino management
           agreement concluded between Bidco and Century on 3 December 1999, in
           terms whereof Century will  manage  the  casino  for  and  on  behalf
           of  Bidco;
2.1.10     "CENTURY"  means  Century  Casinos  Africa (Proprietary) Limited, a
           private company duly incorporated in accordance with the company laws
           of the Republic of South  Africa,  with  registration  number
           96/10501/07;
2.1.11     "COIL"  means Caledon Overberg Investments (Proprietary) Limited, a
           private company duly incorporated in accordance with the company laws
           of the Republic of South  Africa,  with  registration  number
           96/06728/07
2.1.12     "COMMENCEMENT OF OPERATIONS" means the first day on which the casino
            is open for business  to  the  general  public  whether  it  is  the
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           temporary  casino  or  the  permanent  casino (both as identified in
           the licence application)  that  is  open  for  business;
2.1.13     "THE CONSTRUCTION PERIOD" means the period which commences on the
           effective date  and  which terminates 18 (eighteen) months after the
           effective date, or on the  date  on  which  all  construction  work
           included  in  the project becomes practically  complete,  whichever
           is  the  earlier;
2.1.14     "THE  CONSTRUCTION CONTRACT" means the contract, envisaged in 3.3
           read with 4.1.2  and  10.5  below,  which  Bidco  will  conclude with
           the  contractor;
2.1.15     "THE  CONTRACTOR"  means  Concor  Holdings  (Proprietary)  Limited;
2.1.16     "THE CONTRACTOR'S GUARANTEE" means the guarantee envisaged in 10.5.2
           below, which  the  contractor  will  furnish  to  Bidco  in  terms
           of the construction contract;
2.1.17     "DEBT  EQUITY  RATIO"  means  the  ratio between the debts of Bidco
           and the equity  of  Bidco  where  ~
2.1.17.1   "DEBT"  means  all interest-bearing debt of any nature whatsoever of
           Bidco, including any cumulative redeemable preference shares issued
           by it together with any  share  premium  attributable  to  any such
           cumulative redeemable preference shares,  but  excluding  any  debt
           included  in  the  definition of "EQUITY" in 2.1.17.2  below,  as
           reflected in Bidco's management accounts as at the date on which
           the ratio is measured or as reflected in any audited financial
           statements of  Bidco  that  may have been prepared as at that date
           and on the basis that if there  is  any  conflict  between  any such
           management accounts and such audited financial  statements,  the
           audited  financial  statements  shall  prevail;
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2.1.17.2   "EQUITY"  means  the  aggregate  of the nominal values of all
           ordinary shares in Bidco in issue on the date on which the debt
           equity ratio is measured, the share premium  of  Bidco  attributable
           to any such ordinary shares, the shareholders' loans  (for  so  long
           as  they remain subordinated in the manner set out in the
           subordination  agreement),  any non-cumulative, non-redeemable
           preference shares issued  by  Bidco,  together  with  any  share
           premium attributable to any such shares,  the  capital  amount
           drawn-down  by  Bidco against the working capital facility and not
           yet repaid and Bidco's distributable reserves, all as reflected
           in  Bidco's management accounts prepared as at the date on which
           the debt equity ratio  is measured or in Bidco's audited financial
           statements prepared as at any such  a  date,  and  on the basis that
           if there is any conflict between any such management accounts and
           such audited financial statements, the audited financial statements
           shall prevail;
2.1.18     "DEBT  SERVICE  COVER  RATIO" means, in respect of any of Bidco's
           financial years,  the  ratio  for  that  year  between  ~
2.1.18.1   Bidco's  net  profit  before  interest  and tax as reflected in its
           audited financial  statements  for  the  financial  year in question
           and determined in accordance  with  generally  accepted  accounting
           principles; and
2.1.18.2   if  the  ratio  is determined in respect of the principal loan, all
           amounts which  became  payable by Bidco to PSGIB during the year in
           question in terms of the  principal  loan,  or,  if the ratio is
           determined in respect of the working capital  facility,  all amounts
           which became payable during the year in question by  Bidco  to PSGIB
           in  respect  of  the  working  capital  facility;
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2.1.19     "THE  EFFECTIVE  DATE"  means  the 5th (fifth) business day after
           the suspensive conditions  have  all  been  fulfilled  or  waived,
           as  the  case  may  be;
2.1.20     "THE  FINAL  DATE"  means the date on which Bidco has paid to PSGIB
           all and any  amounts  which  will  become  payable  by  it to PSGIB
           arising out of or in connection  with  this  agreement;
2.1.21     "FORTES"  means  Fortes  King  Hospitality (Proprietary) Limited, a
           private company duly incorporated in accordance with the company
           laws of the Republic of South  Africa,  with  registration  number
           80/00096/07;
2.1.22     "THE  HOTEL"  means the hotel known as the Overberger Hotel which
           currently consists  of 98 (ninety eight) bedrooms and which will,
           in the manner set out in the licence application, be altered and
           upgraded into a hotel which will consist of  86  (eighty  six)
           rooms  and  6  (six)  suites;
2.1.23     "THE  HOTEL  MANAGEMENT  AGREEMENT"  means  the  hotel management
           agreement entered  into  between  Bidco  and  Fortes  on 3 December
           1999, in terms whereof Fortes  will  manage  the  hotel  for  and
           on  behalf  of  Bidco;
2.1.24     "INTEREST  BASE  RATE" means 14.45% (fourteen point forty five
           PER CENTUM), nominal  annual  compounded  semi-annually  ;
2.1.25     "INTEREST COVER RATIO" means, in respect of any of Bidco's financial
           years, the  ratio  for  that  year  between  ~
2.1.25.1   Bidco's  net  profit  before  interest  and tax as reflected in its
           audited financial  statements  for  the  financial year in question
           and determined in accordance  with  generally  accepted  accounting
           principles; and
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2.1.25.2   the difference between all interest incurred by Bidco during that
           financial year in respect of all and any of its interest-bearing
           debt of any nature whatsoever, including  any  dividends  which
           Bidco has contracted to pay during that year in respect  of  any
           cumulative, redeemable preference shares issued by it, and the
           interest actually received by Bidco during that financial year,
           all as reflected in  Bidco's  audited  financial  statements  for
           the  year  in  question;
2.1.26     "THE  LICENCE  APPLICATION'  means  the application for a gambling
           licence, made  by Bidco to the Board in terms of the provisions of
           section 32 of the Act;
2.1.27     "LOAN  LIFE  COVER RATIO" means, at any particular point in time,
           the ratio between  ~
2.1.27.1   the  anticipated  revenue that Bidco will derive out of the project
           for the period from the date on which the determination is made until
           the final date, as reflected  in  the  most  recently updated project
           forecast;  and
2.1.27.2   all  amounts (including, without limitation, any capital repayments
           and any interest)  as reflected in the most recently updated project
           forecast, which, if the  ratio  is  determined in respect of the
           principal loan, will become due and payable  by  Bidco  to  PSGIB
           in  respect of the principal loan during the same period  or,  if
           the  ratio  is  determined  in  respect  of the working capital
           facility,  will  become due and payable by Bidco to PSGIB during the
           same period in  respect  of  the  working  capital  facility;
2.1.28     "THE  MINIMUM  RATIOS" means the various  minimum ratios referred
           to in 10.1.1,  10.1.2,  10.1.3  and  10.1.4  below;
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2.1.29     "THE  MODEL"  means  the computer model contained in a computer file
           which is in the  possession of PSGIB, which has been designed in
           order to update the project forecast  from  time  to time in order to
           take account of Bidco's actual trading results, a hard copy of which
           has been signed by the parties for the purposes of identification and
           which said hard copy has been lodged with Attorneys Werksmans of
           Johannesburg,  being  the attorneys who, as at the signature date,
           Represent Bidco;
2.1.30     "THE  PARTIES"  means  PSGIB  and  Bidco;
2.1.31     "THE  PRIME RATE" means the publicly quoted basic rate of interest
           (nominal annual) compounded monthly in arrears and calculated on a
           365 (three hundred and sixty  five)  day  year,  from  time to time
           published by First National Bank of Southern  Africa  Limited as
           being its prime overdraft rate, as certified by any manager of that
           bank, whose authority and/or appointment and/or qualification it
           will  not  be  necessary  to  prove;
2.1.32     THE  PRINCIPAL LOAN" means the loan made by PSGIB to Bidco in terms
           of the provisions  of  6  below;
2.1.33     "THE  PROJECT"  means  ~
2.1.33.1   the  construction  and furbishment of the casino, spa and health
           centre and tourist  village  emporium  on  the  property;
2.1.33.2   the conversion and upgrading of the hotel and the furbishment of the
           hotel;
2.1.33.3   all and any other construction work, identified in the licence
           application, which Bidco will become obliged, VIS- -VIS the Board,
           to undertake if it obtains the  casino licence including, without
           limitation, the construction of all roads and  other  infrastructure
           as  identified  in  the  licence  application;
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2.1.33.4   the  purchase  of  all and any necessary equipment required by Bidco
           in order to operate  the  casino  both  on  a  temporary  and  a
           permanent  basis;
2.1.33.5   the  operation  of  the  casino  and  the  hotel;
2.1.34     "PROJECT  COSTS"  means all and any costs incurred by Bidco in
           implementing the  project  including,  without  limitation,  all
           costs  incurred by Bidco in connection  with  the  project  prior
           to  the signature date, and an amount not exceeding  R2 500 000
           (two million five hundred thousand Rand) which will become payable
           by  Bidco  to  Fortes  in  respect of the furbishment of the hotel,
           and including  further  all  VAT  that may become payable by Bidco
           in respect of the aforesaid  costs;
2.1.35     "THE  PROJECT  FORECAST" means the banking case model which has been
           agreed by  the parties, which reflects the anticipated trading
           results of Bidco for the period  from  the commencement of operations
           until the final date, updated from time  to  time,  as envisaged in
           10.4 below, in accordance with the model and in order  to  take
           account  of  Bidco's  actual  trading  results;
2.1.36     "THE  PROPERTY"  means  the  properties  specified  in  SCHEDULE  2
2.1.37     "PSGIB"  means  PSG  Investment Bank Limited, a public company with
           a share capital duly incorporated in accordance with the company
           laws of the Republic of South  Africa,  with  registration  number
           98/17396/06;
2.1.38     "THE  RESERVE  ACCOUNT"  means  the reserve account envisaged in 7.3
           below;
2.1.39     "THE SHAREHOLDERS' LOANS" means the shareholders' loans of
           R30 000 000 (thirty million  Rand)  to  be  made  by  Century
           and Coil to Bidco on the terms and conditions  and  conditions  set
           out  in  5.2
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           below,  those  shareholders'  loans to be subordinated, in the manner
           set out in the subordination agreement, to the claims of PSGIB
           against Bidco arising out of or in connection with  this  agreement;
2.1.40     "THE  SIGNATURE  DATE" means the date of signature of this agreement
           by the party  signing  last  in  time;
2.1.41     "THE  SUBORDINATION  AGREEMENT"  means the  subordination  agreement,
           substantially  in  the  form  of  SCHEDULE  3,  to  be concluded
           between Fortes, Century,  Coil,  PSGIB  and  Bidco  on  the
           signature  date;
2.1.42     "THE  SUSPENSIVE  CONDITIONS"  means the suspensive conditions
           contained in 4.1  below;
2.1.43     "VAT"  means  value-added  Tax;
2.1.44     "THE  WORKING  CAPITAL  FACILITY"  means  the working capital
           facility made available  by  PSGIB  to  Bidco  in  terms  of  the
           provisions  of  7  below;
2.1.45     any  reference  to  the  singular  includes  the  plural  and  VICE
           VERSA;
2.1.46     any  reference  to  natural  persons includes legal persons and VICE
           VERSA;
2.1.47     any  reference  to  gender  includes  the  other  genders;
2.2        The  clause  headings  in this agreement have been inserted for
           convenience only  and  shall  not  be  taken  into  account  in  its
           interpretation.
2.3        Words  and  expressions defined in any sub-clause shall, for the
           purpose of the  clause  of  which  that sub-clause forms part, bear
           the meaning assigned to such  words  and  expressions  in  that
           sub-clause.
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2.4        If any provision in a definition is a substantive provision
           conferring rights or imposing obligations  on any party, effect shall
           be given to it as if it were a substantive clause in the body of the
           agreement, notwithstanding that it is only contained  in  the
           interpretation  clause.
2.5        If  any  period  is  referred to in this agreement by way of
           reference to a number  of  days,  the  days  shall  be  reckoned
           exclusively  of the first and inclusively  of  the  last day unless
           the last day falls on a day which is not a business  day,  in which
           case the day shall be the next succeeding business day.
2.6        This  agreement  shall  be  governed  by  and  construed and
           interpreted in accordance  with  the  law  of  the  Republic  of
           South  Africa.
3          INTRODUCTION
3.1        Bidco  has  applied  for  the  casino  licence.
3.2        If Bidco obtains the casino licence, it will undertake the project
           and will require  funds  to  do  so.
3.3        Bidco  has  commenced  negotiations  with  the  contractor  with  a
           view to concluding,  with  the  contractor, a  construction contract
           ("THE CONSTRUCTION CONTRACT")  in  terms  of  which  the  contractor
           will undertake to execute all construction  work  that  will  be
           required  to  be undertaken as a part of the project.
3.4        PSGIB  has  agreed  to  ~
3.4.1      make  the  principal  loan  to  Bidco on the terms and conditions
           contained herein;
3.4.2      grant  the  working  capital  facility to Bidco on the terms and
           conditions contained  herein.
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3.4.3      The Board has required Bidco, in anticipation of the grant of the
           casino licence to  Bidco, to procure that the Board guarantee is
           issued to the Board, and PSGIB has  issued  the  Board  guarantee
           to  the  Board.
4          SUSPENSIVE  CONDITIONS  AND  BOARD  GUARANTEE
4.1        This  agreement  is  subject  to  the  suspensive conditions that,
           within a period  of  2  (two)  months  after  the  signature  date~
4.1.1      the  Board  grants the casino licence to Bidco on the basis that
           Bidco will be  the  only person legally entitled to operate a casino
           in the Overberg region of  the  West  Cape Province, and on such
           further terms and conditions as may be acceptable  to  PSGIB  acting
           in  its  reasonable  discretion;
4.1.2      Bidco  concludes  the  construction  contract  with the contractor,
           that contract  to  contain  at  least  the  provisions  set  out
           in  10.5  below;
4.1.3      the  property  is  transferred  to  Bidco  in  the  office  of the
           relevant Registrar  of  Deeds,  and  the  mortgage  bond  envisaged
           in  12.1.1  below is registered  in  favour  of  PSGIB  over  the
           property;
4.1.4      the  general  notarial bond envisaged in 12.1.2 below is registered,
           in the office  of  the  relevant  Registrar  of  Deeds,  in  favour
           of  PSGIB.
4.2        The  suspensive  conditions  have been inserted into this agreement
           for the benefit  of  both  PSGIB  and Bidco, and in the circumstances
           the parties may in writing  agree to waive all or any of the
           suspensive conditions or to extend the period  for  fulfilment  of
           all  or  any  of  those  conditions.
4.3        If  the  suspensive  conditions are not fulfilled or waived as
           envisaged in 4.2  above  ~
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4.3.1      this  agreement  shall,  subject  to  4.5  below,  be  of  no  force
           or effect;
4.3.2      Bidco  shall  pay  to  PSGIB  the  legal  costs  incurred  by
           PSGIB in the negotiation  and preparation of this agreement, subject
           to a limit of R50 000,00 (fifty  thousand  Rand)  excluding
           value-added  tax;
4.3.3      thereafter,  but  subject  to  any  contrary  provisions of this
           agreement, neither one of the parties shall have any claim of any
           nature whatsoever against the  other  arising  herefrom.
4.4        Each  one  of  the  parties  undertakes  to  do  all  such things
           as may be reasonably  necessary  in  order  to  procure  the
           fulfilment of the suspensive conditions.
4.5        Insofar  as  PSGIB has issued the Board guarantee to the Board, the
           parties agree  that  if  the  suspensive  conditions  are  not
           fulfilled  or  waived  ~
4.5.1      Bidco  shall  nevertheless, and despite the provisions of 4.3 above,
           remain obliged  to register the mortgage bond envisaged in 12.1.1
           below and the general notarial  bond  envisaged  in  12.1.2  below
           in  favour  of  PSGIB;
4.5.2      if  PSGIB  becomes  obliged  to  make  payments of any amounts to
           the Board pursuant to the Board guarantee, Bidco shall, forthwith
           against demand by PSGIB, pay  to  PSGIB  all and any amounts which
           PSGIB become legally obliged to pay to the  Board  arising  out  of
           or  in  connection  with  the  Board  guarantee;
4.5.3      if  Bidco fails to make payment of any such an amount strictly on due
           date, that amount shall bear interest at a rate of interest from time
           to time equal to the  prime  rate;
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4.5.4      the  provisions  of  this  paragraph  4.5  (and  of paragraphs 12.1.1
           and 12.1.2 below)  shall continue to apply, despite the fact that the
           suspensive conditions have  not  been  fulfilled  or  waived.
5          BIDCO'S  SHAREHOLDERS'  AGREEMENT
5.1        Bidco  shall  procure  that  Century  and  Coil  shall  ~
5.1.1      subscribe for ordinary shares in Bidco at a total subscription price
           of R20 000  000 (twenty million Rand), those subscriptions to be
           made as and when Bidco incurs  project  costs;
5.1.2      lend  to  Bidco an amount of R30 000 000 (thirty million Rand) on
           the terms and  conditions  set  out  in  5.2  below.
5.2        The  loans  envisaged  in  5.1.2  above  must  be  made on the basis
           that ~
5.2.1      those loans will not accrue interest at a rate of interest which,
           from time to  time,  exceeds  the rate of interest payable by Bidco
           to PSGIB in respect of the  principal  loan;
5.2.2      the  claims  of  Century  and  Coil  against  Bidco  arising  out
           of or in connection  with the shareholders' loans, shall be
           subordinated to the claims of PSGIB  against  Bidco  arising out of
           or in connection with this agreement, that subordination  to  be
           effected  in  the  manner  set  out  in the subordination
           agreement.
5.3        Bidco  shall not, until the final date, declare any dividends in
           respect of the  ordinary  shares  envisaged  in  5.1.1  above  ~
5.3.1      other  than  out  of  cash  available to it, excluding any cash which
           it is obliged  to  hold  in  the  reserve  account;
5.3.2      if,  at the time of the declaration of those dividends, Bidco fails
           to comply with  all  or  any  of  the  minimum  ratios  or  if  as  a
           result  of  the
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           declaration  and/or  payment of those dividends Bidco will no longer
           comply with any  of  the  minimum  ratios.
6          THE  PRINCIPAL  LOAN
6.1        PSGIB  hereby lends, on the terms and conditions set out in this
           agreement, an  amount  not  exceeding  R47  500  000,00  (forty
           seven million five hundred thousand  Rand)  ("THE  PRINCIPAL
           LOAN")  to  Bidco,  which Bidco shall apply ~
6.1.1      as  to  an  amount  of  R40 000 000,00 (forty million Rand) in order
           to pay project  costs;
6.1.2      as  to an amount of R500 000,00 (five hundred thousand Rand), in
           respect of the  raising  fee  envisaged  in  6.11  below;
6.1.3      as  to  an  amount  of  R7  000  000,00  (seven million Rand) in
           respect of interest which accrues, during the construction period,
           on amounts drawn-down by Bidco  against  the principal loan and
           capitalised in terms of the provisions of 6.12  below.
6.2        Bidco  shall  not,  except  if  expressly  otherwise  authorised
           in  this agreement,  use  the  principal  loan  for any purpose
           whatsoever other than the purposes  set  out  in  6.1  above.
6.3        Bidco  shall,  once it has incurred project costs equal to the
           aggregate of the  proceeds  of  the  issue  of  the  shares
           envisaged in 5.1.1 above and the shareholders'  loans  ("THE
           THRESHOLD  COSTS")  obtain  a  certificate from its auditors
           ("THE  AUDITORS' DRAW-DOWN CERTIFICATE") in which the auditors
           certify that  Bidco  has  incurred  the  threshold  costs.
6.4        Once  Bidco  has incurred the  threshold costs, it shall deliver
           the auditors' draw-down  certificate  to  PSGIB.  Bidco  shall,
           subject  to 6.5 below, not be entitled  to draw-down any  amounts
           on  account  of  the  principal  loan
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           unless  and until it has delivered the auditors' draw-down
           certificate to PSGIB.
6.5        Bidco  shall  be  entitled  to draw, against the principal loan,
           the amount envisaged  in  6.1.2  above, on the date on which the
           suspensive conditions have been  fulfilled  or  waived,  as  the
           case  may  be.
6.6        Once  Bidco has delivered the auditor's draw-down certificate to
           PSGIB, and provided  that  the  suspensive  conditions have been
           fulfilled or waived, Bidco shall be entitled to draw-down amounts
           against the principal loan as and when it incurs project costs over
           and above the threshold costs. Bidco shall comply with the
           following  procedure  in  making  any  such  draw-downs  ~
6.6.1      if  the  draw-down  which  Bidco wishes to make relates to any
           construction work  undertaken  by  the  contractor,  Bidco shall
           obtain from the professional person  approved  as  envisaged  in
           9.5.3  below,  a  certificate in which that professional  person
           confirms  that the construction work to which the proposed
           draw-down  relates  has  been  completed;
6.6.2      if  the  proposed draw-down relates to any other project costs, Bidco
           shall obtain  from its then auditors a certificate confirming that
           those project costs have  been  incurred;
6.6.3      Bidco  shall  deliver  the  aforesaid certificates to PSGIB no later
           than 2 (two)  business  days prior to the date on which it wishes to
           make the draw-down in  question.
6.7        All  draw-downs  as  envisaged  in  6.6 above shall, subject to 6.8
           and 6.9 below,  be  made by Bidco on the dates and in the amounts set
           out in SCHEDULE 4.
6.8        If,  for  any reason whatsoever, Bidco will not, on any date set out
           in SCHEDULE 4,  be  in  a  position  to  comply with the provisions
           of  6.6  above
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           in regard to the draw-down scheduled for that date in terms of
           SCHEDULE 4, Bidco shall,  at least 2 (two) business days prior to
           the date in question, deliver to PSGIB written notice of its
           inability to make the draw-down in question. In that case,  Bidco
           shall  be  entitled  to make the draw-down in question at any date
           after  the  date set out in SCHEDULE 2, provided that it shall, at
           least 2 (two) business  days  prior  to  the  date  on  which  it
           makes  that  draw-down  ~
6.8.1      deliver  the  certificates  envisages  in  6.6  above  to  PSGIB;
6.8.2      at  the  same time deliver to PSGIB written notice of its intention
           to make that  draw-down.
6.9        If  Bidco  is  in a position to comply with the provisions of 6.6
           above in regard to any draw-down envisaged in Schedule 4 prior to
           the date for which that draw-down  is  scheduled  in  terms  of
           SCHEDULE  4, Bidco shall be entitled to draw-down  the  amount  in
           question  earlier provided that it shall, at least 2 (two) business
           days prior to the date on which it wishes to make that draw-down,
           deliver  to  PSGIB  ~
6.9.1      the  certificates  envisaged  in  6.6  above;  and
6.9.2      written  notices  of  the  date  on which it wishes to make that
           draw-down.
6.10       PSGIB  shall  pay the amount of all draw-downs which Bidco becomes
           entitled to  make in terms of this paragraph 6 into such a bank
           account as Bidco may from time  to  time  in  writing  instruct.
6.11       Bidco  shall pay to PSGIB, in respect of the principal loan, a
           raising fee equal to  R500  000  (five  hundred  thousand  Rand),
           excluding  VAT.  Payment of the aforesaid  raising fee shall become
           due on the signature date, and shall be made by  Bidco  to  PSGIB
           within 3 (three) business days after the signature date. If the
           suspensive  conditions  are  not
                                       16
<PAGE>
           fulfilled  (or waived), PSGIB shall remain entitled to receive or to
           retain that raising  fee.
6.12       All  amounts  drawn-down  by  Bidco against the principal loan shall
           accrue interest  at  a  rate equal to 2,75% (two comma seven five PER
           CENTUM) above the interest  base  rate,  expressed  as a nominal
           annual compounded 6 (six) monthly rate.  All  interest  which accrues
           during the construction period in respect of amounts  drawn-down  by
           Bidco  against the principal loan shall be capitalised.
6.13       Notwithstanding  anything to the contrary contained herein, PSGIB
           shall not be  obliged  to advance to Bidco any further amounts on
           account of the principal loan  ~
6.13.1     once all amounts previously drawn-down by Bidco against the principal
           loan, together with all capitalised interest on those amounts,
           reaches or exceeds R 47 500  000,00  (forty  seven  million  five
           hundred  thousand  Rand);  and/or
6.13.2     the  construction  period  has  expired  (so that, if on termination
           of the construction  period  Bidco  has not drawn-down the full
           amount of the principal loan,  PSGIB  shall  no longer be obliged to
           lend and advance the full amount of the  principal  loan  to  Bidco
           but shall be obliged, instead, only to lend and advance  to Bidco, on
           account of the principal loan, the amount which, on expiry of  the
           construction  period,  has  been  drawn-down by Bidco  together  with
           capitalised  interest  on  those  draw-downs).
7          THE  WORKING  CAPITAL  FACILITY  AND  THE  RESERVE  ACCOUNT
7.1        PSGIB  hereby  makes  a  working capital facility available to Bidco
           on the terms  and  conditions  set  out  in  this  agreement. The
           amount of the working capital  facility  shall  be  the  lesser of ~
                                       17
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7.1.1      R10  000  000,00  (ten  million  Rand);  or
7.1.2      the  difference between the amount of R13 500 000,00 (thirteen
           million five hundred  thousand  Rand)  and  the  retained income
           of Bidco as reflected in its audited  financial  statement  for
           its  first  financial  year  which commences immediately  after
           the  commencement  of  operations.
7.2        Subject to 7.4 below Bidco shall, out of the cash available to it
           from time to  time,  and  with effect from the date 1 (one) year
           after the commencement of operations,  maintain  the  following  2
           (two)  reserves  ~
7.2.1      a  debt  service reserve which shall, at all relevant times, be equal
           to at least the total of the next 1 (one) repayment to be made by it
           in respect of the principal loan and the next 1 (one) repayment to be
           made by it in respect of the working  capital  facility;
7.2.2      an  interest  reserve  which  shall,  at all relevant times, be equal
           to at least  the  aggregate  amount of the interest that will accrue
           in respect of the principal  loan for the next 6 (six) months and the
           interest that will accrue in respect of any amounts drawn-down by it
           against the working capital facility for the  next  6  (six)  months.
7.3        Subject  to  7.4  below,  Bidco  shall cause the amount of the debt
           service reserve  and  the interest reserve which it will be obliged
           to maintain in terms of  7.2  above,  to  be  deposited  in  an
           account maintained by it with a bank, registered  as such in terms of
           the Banks Act. The aforesaid account is referred to  herein  as the
           "RESERVE ACCOUNT" and Bidco shall, forthwith after it becomes
           obliged  to  establish the reserve account and to deposit funds into
           it, request PSGIB  to  advise  it  whether PSGIB wishes the reserve
           account to be maintained with  PSGIB.  PSGIB shall, within 2 (two)
           business days after receipt of Bidco's aforesaid request, in writing
           advise Bidco whether it wishes the reserve account to  be  opened
           with  PSGIB  or  not.  If  ~
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<PAGE>
7.3.1      PSGIB  advises  Bidco  that  it  requires Bidco to open the reserve
           account with PSGIB,  interest  shall  accrue, in respect of amounts
           held from time to time in the reserve account, at a rate of interest
           equal at least to the most favourable rate  of  interest paid by
           PSGIB to any of its other customers in respect of a 6 (six)  months
           call  deposit;
7.3.2      PSGIB  advises  Bidco in writing that it does not require Bidco to
           open the reserve  account  with  it,  Bidco  shall,  within  2  (two)
           business days after receiving PSGIB's aforesaid written advice, open
           the reserve account with a bank which  has  a credit rating of A
           (or an equivalent rating) or better, and shall, forthwith  after  it
           has  opened  that  account,  deposit into that account the amounts
           which  it  is  required  to  deposit.
7.4        Bidco  shall  be  entitled to elect not to maintain the reserve
           account but instead  to  furnish  to  PSGIB  an  unconditional
           guarantee  ~
7.4.1      by  a  bank  with a credit rating of A (or an equivalent rating or
           better);
7.4.2      for  an  amount  equal  from  time  to  time to the reserves which
           Bidco is obliged  to  maintain  in  terms  of  7.2  above;
7.4.3      in  such  a  form  as  PSGIB  may  in  its reasonable discretion
           determine.
           Bidco  shall  be  entitled  to exercise the election conferred on it
           in terms of this  paragraph  7.4  at  any  time  whilst, in terms of
           7.2 and 7.3 above it is obliged  to  maintain the reserve account.
           Bidco shall not, however, be entitled either  to  refuse  to
           establish the reserve account or to withdraw any amounts deposited
           by  it  into  the  reserve account unless and until it has caused
           the guarantee  envisaged  in  this  paragraph  7.4  to  be
           delivered  to  PSGIB.
                                       19
<PAGE>

7.5        Bidco shall not be entitled to draw-down any amounts against the
           working capital facility  unless  and  until  ~
7.5.1      it  has  drawn-down  the  principal loan in full or, as envisaged
           in 6.13.2 above,  it  has become disentitled to draw-down the full
           amount of the principal loan;  and
7.5.2      it  has  utilised  all  its  retained earnings, as reflected in its
           audited financial  statements  for  its  first  financial year
           after the commencement of operations,  with  the  exception of any
           amounts that it may require in order to deposit  into  the  reserve
           account,  in  order  to  meet  its  working capital requirements.
7.6        In  order  to  ensure  compliance with the provisions of 7.5.2
           above, Bidco shall,  before  it  draws-down  any  amount  on  account
           of the working capital facility,  obtain  from  its  auditors  a
           certificate  ("THE FACILITY DRAW-DOWN CERTIFICATE")  in  which  the
           auditors  certify  that Bidco has applied all its available  retained
           income  towards  its  working  capital  requirements.
7.7        As  and  when  Bidco  wishes  to  draw-down any amounts against the
           working capital  facility,  it  shall  deliver  a  written  notice
           to PSGIB ("A FACILITY DRAW-DOWN  NOTICE")  that  notice  to  ~
7.7.1      set  out the amount of the draw-down which Bidco wishes to make
           against the working  capital  facility;
7.7.2      specify  a  draw-down  date  which shall not be less than 5 (five)
           business days  after  receipt  by  PSGIB  of  the facility draw-down
           notice in question);
7.7.3      be  accompanied  by  the  relevant  facility  draw-down  certificate.
           Bidco  shall  not  be  entitled  to  make draw-downs against the
           working capital facility  more  frequently  than  once  in  every
           calendar  month.
                                       20
<PAGE>
7.8        PSGIB  shall  advance  the  amount  specified  in any facility
           draw-down notice, provided  that  the  facility draw-down notice
           complies with the requirements of 7.7  above,  on  the draw-down date
           stipulated in the facility draw-down notice.  All  advances  made by
           PSGIB to Bidco in respect of the working capital facility shall  be
           paid by PSGIB into such a bank account as Bidco may from time to time
           in  writing  specify.
7.9        All  amounts drawn-down by Bidco against the working capital facility
           shall accrue  interest  from  time to time at a rate equal to 3,75%
           (three comma seven five  PER  CENTUM)  above  the interest base rate,
           expressed as a nominal annual compounded  six-monthly  rate. All
           interest which accrues on the working capital facility  prior  to
           the  date on which Bidco has drawn-down the working capital facility
           in  full  shall  be  capitalised.
7.10       Notwithstanding anything to the contrary contained in this agreement,
           PSGIB shall  not  be  obliged to advance any further amounts on
           account of the working capital facility to Bidco once all amounts
           previously advanced by it to Bidco in respect  of  the working
           capital facility, excluding any capitalised interest in respect  of
           those  amounts,  reach  or exceed the maximum amount of the working
           capital  facility,  determined  in  accordance  with  7.1  above.
7.11       If  Bidco  has,  by the expiry of a period of 24 (twenty-four) months
           after the  commencement  of  operations,  not  made any draw-downs
           against the working capital  facility  ~
7.11.1     the  working  capital facility shall, with effect from the first day
           of the 25th  (twenty  fifth)  month  after  the  commencement of
           operations, IPSO FACTO terminate, and Bidco shall not, thereafter, be
           entitled to draw-down any amounts against  the  working  capital
           facility;
7.11.2     no  such  a  deemed  cancellation  of the working capital facility
           shall, in any manner  whatsoever,  entitle  Bidco  to  receive
           repayment  of
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<PAGE>
           any  commitment  fee,  as envisaged in 7.11 below, which it has paid
           to PSGIB in respect  of  the  working  capital  facility.
7.12       Bidco  shall,  with effect from the date on which the suspensive
           conditions have been fulfilled or waived (as the case may be) and
           monthly in advance, pay a monthly commitment fee to PSGIB in respect
           of the undrawn portion of the working capital  facility.  That
           commitment  fee  shall  ~
7.12.1     for so long as any portion of the working capital facility remains
           undrawn, be  calculated  on  the  1st  (first)  day  of  each  and
           every calendar month;
7.12.2     be  calculated, until it is possible to calculate the maximum amount
           of the working  capital facility in terms of the provisions of 7.1
           above, on the amount of  R10  000  000,00  (ten  million  Rand);
7.12.3     be equal to 40 (forty) basis points (nominal annual compounded
           annually) on the  amount of the undrawn facility on the date on which
           the calculation is made or, in the circumstances described in 7.12.2
           above, on the amount R10 000 000,00 (ten  million  Rand);
7.12.4     exclude  VAT.
           If  the commitment fee envisaged in this paragraph becomes payable
           for a portion of a month only, the amount payable in respect of that
           month shall be pro-rated.
7.13       Bidco's  obligation to pay the commitment fee envisaged in 7.11 above
           shall terminate  ~
7.13.1.1   with  effect  from  the  final  facility date as defined in 8.1.2
           below; or
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<PAGE>

7.13.1.2   with  effect  from  the date on which the working capital facility
           terminates by virtue  of  the  provisions  of  7.11.1  above.
8          REPAYMENT  OF  CAPITAL  AND  INTEREST
8.1        For  the  purposes  of  this  paragraph  ~
8.1.1      the  "FINAL  PRINCIPAL DATE" means the date on which all amounts
           drawn-down by  Bidco  against  the principal loan together with all
           capitalised interest on those  amounts reaches R47 500 000,00
           (forty seven million five hundred thousand Rand)  or  the  date 18
           (eighteen) months after the effective date, whichever is the earlier;
8.1.2      the  "FINAL FACILITY DATE" means the date on which Bidco has
           drawn-down the working  capital  facility  in full, or the last day
           of Bidco's second financial year  after  the  commencement  of
           operations,  whichever  is  the  earlier;
8.1.3      "THE  PRINCIPAL OUTSTANDING" means the aggregate of all amounts
           drawn-down, as  at  the  final  principal  date,  by Bidco on account
           of the principal loan, together with all capitalised interest, as at
           the final principal date, on those amounts;
8.1.4      "THE FACILITY OUTSTANDING" means the aggregate of all amounts
           drawn-down by Bidco,  as  at  the  final  facility  date, against the
           working capital facility together  with  all capitalised interest on
           the amount of those draw-downs as at the  final  facility  date.
8.2        Bidco  shall  repay  ~
8.2.1      the  principal  outstanding to PSGIB in 10 (ten) equal semi-annual
           payments, the first such payment to be made on the last day of the
           6th (sixth) month following upon  the  final  principal  date,  and
                                       23
<PAGE>

           subsequent  payments  to  be  made on the last day of each and every
           6th (sixth) month  thereafter;
8.2.2      the  facility  outstanding  to  PSGIB  in  10  (ten)  equal
           semi-annual instalments,  the  first  payment  to be made on the last
           day of the 6th (sixth) month  after  the  final facility date and the
           subsequent payments to be made on the  last  day  of  each  and
           every  6th  (sixth)  month  thereafter.
8.3        Bidco  shall  pay  to  PSGIB  ~
8.3.1      on  the last day of every 6th (sixth) month after the final principal
           date, all  interest  which  has  accrued  on  the balance of the
           principal outstanding during  the  immediately  preceding  6  (six)
           months;
8.3.2      on  the  last  day of each 6th (sixth) month after the final
           facility date, the  interest  which  has  accrued  on  the  facility
           outstanding  during  the immediately  preceding  6  (six)  months.
9          INCREASED  COSTS
9.1        If  any  of  the  following  occurs  ~
9.1.1      the  adoption,  change,  amendment,  variation,  replacement  or
           change in interpretation of any Law, with which PSGIB is required
           to comply, or any change in  any  circumstances  occurs  or  any
           duty  is  imposed at any time after the signature  date;  and/or
9.1.2      any  directive,  announcement, requirement, request or guidance
           (whether or not  having the force of law) of any central bank or
           any other fiscal, monetary, regulatory  or  other  authority;
9.1.3      and/or any change in banking practice as it affects or is applied
           generally by any financial  institution  in  the  Republic  of
           South  Africa;  and/or

                                       24
<PAGE>
9.1.4      a  requirement or a request by any statutory or monetary authority to
           pay taxes, levies  or  other  amounts whatsoever or to maintain
           special deposits or reserve assets,  in addition to those currently
           paid or maintained or reserved by PSGIB; and/or
9.1.5      any  compliance  by PSGIB with any capital adequacy or similar
           requirements howsoever  arising;
           which  imposes, modifies or deems applicable any capital or reserve
           requirements or  similar requirements in respect of the principal
           loan and/or working capital facility, or imposes on PSGIB any other
           requirements or conditions affecting its obligations  to  make  or
           maintain  the  principal  loan and/or working capital facility, with
           the  result that the cost to PSGIB of making or maintaining the
           principal  loan  and/or  the working capital facility is increased,
           Bidco shall, within 10 (ten) business days after receipt of a
           written demand from PSGIB , pay to  PSGIB  an  additional  amount
           as is sufficient to compensate PSGIB for such increased  cost.
9.2        PSGIB  shall  ~
9.2.1      notify  Bidco  immediately when it becomes aware of any event which
           will or may  entitle  it  to  make  a  demand  in  terms  of  9.1
           above;  and
9.2.2      at the same time provide Bidco with copies of all documents
           evidencing such increased  cost, as PSGIB may have in its possession
           and as Bidco may reasonably require.
10         POSITIVE  UNDERTAKINGS
10.1       Bidco  shall  ~
10.1.1     maintain  a debt equity ratio of 44:56 with effect from the last day
           of the 12th (twelfth)  month  after the commencement of operations
           and shall maintain a debt equity  ratio  of  40:60  with  effect
           from  the  last
                                       25
<PAGE>
           day  of  the  24th  (twenty-fourth)  month after the commencement of
           operations;
10.1.2     maintain,  for  each  of  its  financial  years
           commencing  with the first financial  year  which  follows
           immediately upon  the expiry of a period of 12 (twelve) months after
           the commencement of operations, an interest cover ratio of at  least
           2  (two);
10.1.3     maintain,  in  respect  of each of its financial years, commencing
           with the 1st (first) financial year following upon the expiry of 12
           (twelve) months after the  commencement of operations, a debt
           service cover ratio of at least 1,3 (one comma  three) in respect of
           the principal loan and a debt service cover ratio of at  least  1,7
           (one  comma  seven)  in respect of the working capital facility;
10.1.4     maintain,  in  respect  of each of its financial years, commencing
           with the first  financial year following upon the commencement of
           operations, a loan life cover  ratio of 1,5 (one comma five) in
           respect of the principal loan and a loan life  cover  ratio  of
           2,5  (two  comma five) in respect of the working capital facility;
10.1.5     supply  PSGIB  with  copies  of  its  monthly management accounts
           within 30 (thirty)  days  after  month-end  during  the period which
           expires at the end of Bidco's  first  financial  year  after  the
           commencement  of  operations,  and thereafter  quarterly  within  45
           (forty five) days after the expiry of each and every  quarter
           (and quarters shall be reckoned with effect from the first day of
           the  first  month  of  any  of  Bidco's  financial  years);
10.1.6     supply  PSGIB  with  a  copy of its audited financial statements
           within 120 (one  hundred  and  twenty)  days  of  each  financial
           year  end;
10.1.7     invite  at least 1 (one) representative of PSGIB to attend all board
           meetings of Bidco  and  provide  such  invitee  with  all
           documentation
                                       26
<PAGE>
           that  shall  form  the  subject matter of or be discussed at the
           board meetings;
10.1.8     acquire and maintain all licences required for its business and shall
           apply generally  accepted  practice  and  obey  all  regulations,
           safety standards and applicable  laws  in  the conduct of its
           business including, without limitation, all  obligations imposed on
           it in terms of either the Act or the casino licence;
           at  all  times  ensure  that it employs all such staff as may be
           reasonably required  by  it in order to operate its business, all
           such staff to be suitably qualified;
10.1.10    ensure  that  all  construction work required to be undertaken as a
           part of the project (as defined in the construction contract) is
           completed no later than 18  (eighteen)  months  after  the  effective
           date;
10.1.11    effect and maintain the insurance cover envisaged in 10.2 below
           with effect from  -
10.1.11.1  a  period  of  three  months  after  the signature date, in the case
           of the insurance  envisaged  in  10.2.1  below;
10.1.11.2  the  commencement  of  operations,  in  respect  of  all  other
           insurances envisaged  in  10.2  below;
10.1.12    subject to 7.4 above, maintain the reserve account in the manner set
           out in 7.2  read  with  7.2.2  above;
10.1.13    ensure  that, until the final date, it complies with all its
           obligations in terms  of  the Casino management agreement and with
           all its obligations in terms of  the  hotel  management agreement
           (both agreements as amended in terms of the subordination
           agreement);
                                       27
<PAGE>
10.1.14    comply  with  all  its  obligations  in  terms  of  the  construction
           contract.
           Any  failure  by  Bidco  to  comply with any of its obligations in
           terms of this paragraph  10.1  or  in  terms  of  10.2  and/or  10.
           3 below, shall constitute a material  breach  of  this  agreement.
10.2       Bidco shall, until the final date insure itself against all such
           risks as a prudent  man  of  business  would  insure  himself
           against,  including, without limitation  ~
10.2.1     property  all-risks  cover,  the  amount  of  that cover to be equal
           to the replacement  value  of  all  its  property  whether  movable
           or  immovable;
10.2.2     business interruption, the amount covered to be equal to at least 3
           (three) months'  of  net  monthly profits after interest and tax as
           forecast in the most recently  updated  project  forecast;
10.2.3     third-party  liability, the amount of that cover to be at least
           R10 000 000 (ten  million  Rand);
10.2.4     employee  fidelity  cover, the amount of that cover to be at least
           R500 000 (five  hundred  thousand  Rand)  per  event;
10.2.5     insurance  on  the lives of its key management staff, each such a
           policy to be  equal  to  at  least  twice the annual earnings of the
           employee in question.
10.3       Bidco  shall, against demand from PSGIB, deliver to PSGIB documentary
           proof of  the  fact  that the insurances envisaged in 10.2 above has
           been obtained and that  those  insurances have been maintained
           including, without limitation, that all  insurance  premiums  due
           in  terms  of  those  insurances  have been paid.
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<PAGE>
10.4       The  parties  shall  annually, no later than 22 (twenty two) business
           days after the  date  on  which  Bidco's  audited  financial
           statements for any particular financial year becomes available,
           update the project forecast in accordance with the model in order to
           take account of the actual trading results of Bidco during the
           financial  year in question as reflected in the aforesaid audited
           financial statements.
10.5       The construction contract shall, save if PSGIB in writing otherwise
           agrees, contain  at  least  the  following  terms  and  conditions  ~
10.5.1     in  return  for undertaking the construction work concerned, the
           contractor must  be  entitled  to  be  paid  a  fixed  sum of money
           ("THE CONTRACT PRICE");
10.5.2     the  contractor  must  be obliged to provide to Bidco a design,
           operability and performance guarantee acceptable to PSGIB and equal
           to at least 10% (ten PER CENTUM)  of  the  contract  price;
10.5.3     a  suitably  qualified  professional person approved by PSGIB acting
           in its reasonable  discretion,  must be appointed in order to
           certify the progress made by  the  contractor  from time to time in
           attending to the required construction work,  any  such  a
           certificate  to  reflect  the  value  of  the  work  done;
10.5.4     the  contract  price  must  be  payable  to  the contractor as and
           when the certificates  envisaged  in  10.5.3  above are issued,
           provided that, out of the amount  of any such a certificate and
           except if the contractor has delivered the retention  bond
           envisaged  in 10.5.6 below, Bidco must be entitled to retain an
           amount  of  10%  (ten  PER  CENTUM);
10.5.5     it  must provide for a period, not to be shorter than 3 (three)
           months after the date upon which the construction work to be
           undertaken by the contractor becomes practically  complete, during
           which  the
                                       29
<PAGE>
           contractor  will  be  liable to remedy defects that manifest
           themselves in those works;
10.5.6     Bidco  must  be obliged to pay the amounts retained by it on account
           of the contract price, on expiry of the period envisaged in 10.5.5
           above, provided that if  the  contractor  fails  to  attend  to  any
           required repairs, Bidco must be entitled  to effect those repairs
           and to deduct the reasonable costs of doing so from  any  of  the
           aforesaid  retained  amounts;
10.5.7     the  contractor  must be entitled, if it so chooses, to furnish a
           retention bond  to  Bidco  in respect of the retentions envisaged in
           10.5.4 above, and if the contractor furnishes such a retention bond,
           Bidco must no longer be entitled to  retain  the  amounts  envisaged
           in  10.5.4  above.
11         NEGATIVE  UNDERTAKINGS
           Bidco  shall,  until  the  final  date  ~
11.1       not incur, in any one of its financial years, any debts which,
           inclusive of interest  which  will  accrue  on those deeds,
           exceed R1 000 000,00 (one million Rand)  in  the  aggregate;
11.2       not  encumber any of its assets without the prior written consent of
           PSGIB;
11.3       not  dispose of any of its assets, otherwise than in the ordinary
           course of business,  without  the  prior  written  consent of PSGIB;
11.4       procure  that  each  one  of Century and Coil maintains its
           shareholding in Bidco  at  a  number of shares equal to at least 35%
           (thirty five PER CENTUM) of all  the  issued  shares  of  Bidco  of
           any  class  whatsoever;
                                       30
<PAGE>
11.5       ensure  that,  if either Century or Coil sells any of its shares in
           Bidco, PSGIB is  advised  forthwith;
11.6       procure  that there is no change in control of either Century or
           Coil ("THE COMPANY"),  and  for  this  purpose  control  shall
           mean  ~
11.6.1     the beneficial ownership of the majority of the issued equity shares
           of the company;  or
11.6.2     the  beneficial  ownership  of  issued  shares of the company
           entitling the beneficial  owner thereof to exercise less than a
           majority of votes attaching to all  the  issued  shares of the
           company, where such voting power is sufficiently dominant  relative
           to  the spread of other shareholdings that it constitutes DE FACTO
           control  of  the  company;  or
11.6.3     the right, through shareholding or otherwise, to control the
           composition of the  board  of directors of the company and, without
           prejudice to the generality of  the  aforegoing,  the  composition
           of  such  board shall be deemed to be so controlled  if  the  person
           or company holding the right may by the exercise of some  power,
           directly  or  indirectly,  appoint  or  remove the majority of the
           directors;  or
11.6.4     the  right  to  control  the  management  of  the  company;
11.7       ensure  that,  if there is a change of control of either Century or
           Coil as contemplated  in 11.6  above,  PSGIB  is  advised  forthwith;
11.8       not  breach  any  of  the  provisions  of  the  subordination
           agreement;
11.9       not  declare  any dividend in contravention of the provisions of 5.3
           above.
11.10      ensure  that  it  will  not, in respect of its use of the property,
           incur any environmental liability. Bidco hereby indemnifies PSGIB and
           holds PSGIB harmless against  all  and  any  claims  of  any  nature
           whatsoever
                                       31
<PAGE>
           that  may be made against it by any third party whatsoever arising
           in any manner whatsoever  out  of  or  in  connection  with  the use
           of the property by Bidco.
           Any  failure  by  Bidco  to  comply with any of its obligations in
           terms of this paragraph  11  shall  constitute  a  material  breach
           of  this  agreement.
12         SECURITY
12.1       As  security  for  the  proper  and timeous performance by Bidco of
           all its obligations  to  PSGIB  in terms of the provisions of this
           agreement (including, without  limitation,  the  obligation
           envisaged  in  4.5  above,  Bidco  ~
12.1.1     shall  forthwith  after  the  signature  date  at its cost register
           a first mortgage  bond  over the property in favour of PSGIB in such
           form and subject to such terms and conditions as PSGIB may
           reasonably require, that mortgage bond to provide  security  for  an
           amount  of  at least R65 000 000 (sixty five million Rand);
12.1.2     shall  forthwith  after  the  signature date at its cost register a
           general notarial  bond  over  all  its movable assets, that bond to
           be collateral to the mortgage  bond envisaged in 12.1.1 above, and
           that bond to be registered in such a  form  as  PSGIB  may
           reasonably  require;
12.1.3     shall,  if  PSGIB so requires, at its cost register a special
           notarial bond over  such  of  Bidco's  movable  assets  as  PSGIB may
           require, that bond to be registered  in  such  a  form  as  PSGIB
           may  reasonably  require;
12.1.4     hereby  cedes  to PSGIB all its right, title and interest in and to
           all and any  claims  which  it  may have against all and any of its
           debtors from time to time,  whether  those  claims  are  now  in
           existence or whether they come into existence  in  future;
                                       32
<PAGE>

12.1.5     hereby  cedes  to  PSGIB  all  its  right,  title  and  interest  in
           and to the contractor's  guarantee;
12.1.6     hereby  cedes  to  PSGIB  all  its  right, title and interest in and
           to all insurance  policies  referred  to  in  10.2  above;
12.1.7     hereby  cedes  to  PSGIB  all  its  right, title and interest in and
           to the reserve  account.
12.2       The  mortgage  bond  envisaged  in  12.1.1  above  and  the  notarial
           bonds envisaged in 12.1.2 above, shall be registered by Attorneys
           Hofmeyr, Herbstein & Gihwala.  Bidco  shall give to those attorneys
           all such reasonable assistance as they may require in order to
           procure registration of the aforesaid mortgage bond and  notarial
           bonds.
12.3       Bidco  shall,  as  soon  as  it  receives  the  contractor's
           guarantee, any insurance policy envisaged in 10.2 above or any
           documents evidencing the reserve account,  deliver  the  document
           in  question  to  PSGIB.
13         DEFAULT
13.1       An  event  of  default  shall  occur  if  ~
13.1.1     Bidco  fails to make any payment due and payable in terms of this
           agreement on  due  date  and  fails to remedy such failure within 7
           (seven) days after the receipt  by  Bidco  of  written  notice from
           PSGIB demanding that Bidco make the payment;  or
13.1.2     Bidco  fails  to  maintain the debt equity ratios stipulated in 10.1
           above, and  fails  to  remedy  that  breach  within  a period of 90
           (ninety) days after receipt  by  it of written notice from PSGIB
           requiring it to remedy that breach; or
13.1.3     the  construction  contract  is  cancelled for any reason prior to
           the date upon which the construction work  included  in the project
           has
                                       33
<PAGE>
           become  practically  complete, the casino management agreement is
           terminated for any  reason whatsoever prior to the final date or
           the hotel management agreement is  terminated  for  any  reason
           whatsoever  prior  to  the  final  date;  or
13.1.4     Bidco  commits  any  material  breach of any of its obligations in
           terms of this agreement (with the exception of the breach envisaged
           in 13.1.2 above) and, if  that  breach  is  capable  of  being
           remedied, fails to remedy it within 30 (thirty)  days  of  receipt
           of  written notice by it from PSGIB requiring it to remedy  that
           breach;  or
13.1.5     Bidco  commits  any  material  breach of any of its obligations in
           terms of this  agreement,  if  that  breach  is  not  capable  of
           being  remedied;  or
13.1.6     Bidco  commits  an act which is or would be an act of insolvency
           within the meaning of Section 8 of the Insolvency Act, 1936 and fails
           to remedy the default within  7  (seven) days of the receipt by Bidco
           of written notice requiring such default  to  be  remedied;  or
13.1.7     final judgement is entered against Bidco which is not paid within 7
           (seven) days  after  the date thereof, and which may, in the
           exclusive opinion of PSGIB, adversely effect the ability of Bidco to
           meet any of its obligations in terms of this  agreement,  and no
           steps are taken within that period to appeal against or set  aside
           that  judgement  (provided that it shall be deemed that an appeal or
           application,  once  noted  or  filed, shall have been abandoned by
           Bidco if that appeal  or application is not actively prosecuted in
           accordance with, and within the  time period of, the court rules
           governing the appeal or application, as the case  may  be);  or
13.1.8     Bidco  compromises  or attempts to compromise generally with its
           creditors; or
                                       34
<PAGE>

13.1.9     Bidco  is  provisionally  or  finally  wound-up;  or
13.1.10    Bidco  utilises the principal loan or the working capital loan
           for purposes other  than  that  set  out  in  this  agreement;  or
13.1.11    Bidco  loses  the casino licence, or the casino licence is suspended
           or not renewed  for  any  reason  whatsoever;  or
13.1.12    the  board  amends  the  casino licence so that Bidco will no longer
           be the only  person  lawfully  entitled  to operate a casino in the
           Overberg region; or the  construction work included in the project is
           not practically completed (in  the  sense  in  which  the  expression
           "PRACTICALLY COMPLETED" is normally understood  in  the construction
           industry) prior to the expiry of a period of 18 (eighteen)  months
           after  the  effective  date;
13.1.14    Bidco  fails  to  maintain  the insurances referred to in 10.1.11
           read with 10.2  above  until  the  final  date.
13.2       Upon the occurrence of an event of default, PSGIB shall, subject to
           13.3, be entitled  to  declare  the  whole  of  the principal loan
           amount and the working capital  amount  and  all  interest  accrued
           thereon  to be immediately due and payable.
13.3       If  Bidco  fails  to make any payment in terms of this agreement on
           the due date, then whether or not PSGIB has exercised its rights to
           accelerate repayment in terms of 13.2, the amount outstanding shall
           bear interest at 2% (two PER CENTUM)  above  the  prime  rate.
                                       35
<PAGE>
14         INSTRUMENTS
14.1       PSGIB  shall, at any time whilst any amounts remain owing to it by
           Bidco in terms  of this agreement, be entitled to require Bidco to
           issue promissory notes to  it  in  respect  of  the  amounts  thus
           owing.
14.2       If  PSGIB  exercises  the  right  conferred  on it in terms of 14.1
           above ~
14.2.1     Bidco  shall, no later than 5 (five) business days after receipt of
           written notice  from  PSGIB,  issue  the  promissory  notes  in
           question  to  PSGIB;
14.2.2     Bidco  shall  pay all and any stamp duty that may become payable in
           respect of  the  issue  of  those  promissory  notes.
15         RENUNCIATION  OF  BENEFITS
           Bidco  expressly  waives  and  renounces  the  legal benefits and
           exceptions NON NUMERATAE  PECUNIAE,  NON CAUSA DEBITI, revision of
           accounts and ERRORI CALCULI, and  it  declares  itself  to be fully
           acquainted with the meaning and affect of these  exceptions  and
           renunciation  thereof.
16         CESSION  AND  DELEGATION
16.1       PSGIB  shall not be entitled to delegate any of its obligations in
           terms of this  agreement  without  first  obtaining  Bidco's prior
           written consent, which consent  shall  not  be  withheld
           unreasonably,  it  being  recorded  that  the withholding  of  such
           consent shall not be unreasonable if the proposed delegee has  a
           worse  credit  rating  than  PSGIB.
16.2       PSGIB  shall  not cede its rights in terms of this agreement to any
           third person whatsoever without first obtaining the consent of
           Bidco, which consent shall not be  unreasonably  withheld.  Any
           person to whom PSGIB cedes, with the consent of Bidco,  its  rights
           in  terms  of  this  agreement
                                       36
<PAGE>
           shall,  however,  be  entitled  itself  to  cede those rights to
           any third party without  first  obtaining  Bidco's  consent.
17         ARBITRATION
17.1       Any  dispute  arising  from  or  in connection with this agreement
           shall be finally  resolved  in accordance with the rules of the
           Arbitration Foundation of Southern  Africa  by  an  arbitrator or
           arbitrators appointed by the Foundation.
17.2       The  provisions  of  this  clause  ~
17.2.1     constitute  an  irrevocable  consent  by  the parties to any
           proceedings in terms  hereof  and  no party shall be entitled to
           withdraw therefrom or claim at any  such  proceedings  that  it  is
           not  bound  by  such  provisions;
17.2.2     are  severable  from  the rest of this agreement and shall remain in
           effect despite  termination  of  or  invalidity  for  any  reason
           of  this  agreement.
18         NOTICES  AND  DOMICILIA
18.1       The  parties  choose  as  their  DOMICILIA  CITANDI  ET  EXECUTANDI
           their respective  addresses  set out in this clause for all purposes
           arising out of or in  connection  with this agreement at which
           addresses all processes and notices arising  out  of or in connection
           with this agreement, its breach or termination may  validly  be
           served  upon  or  delivered  to  the  parties.
18.2       For purposes of this agreement the parties' respective addresses
           shall be ~
18.2.1     PSGIB  at  3rd  Floor  ,  160  Jan  Smuts Avenue, Rosebank, marked
           "FOR THE ATTENTION  OF  NAOMI  BOOYSEN";
           facsimile  number  (011)  788-4361;
                                       37
<PAGE>
           Bidco  at  1  Nerina  Street,  Caledon  7230,  marked  "FOR THE
           ATTENTION OF THE MANAGING  DIRECTOR";
           facsimile  number  (028)  214  1270,
           or  at such other address of which the party concerned may notify
           the other/s in writing  provided  that  no street address mentioned
           in this sub-clause shall be changed  to  a  post  office  box  or
           POSTE  RESTANTE.
18.3       Any notice given in terms of this agreement shall be in writing and
           shall ~
18.3.1     if  delivered by hand be deemed to have been duly received by the
           addressee on  the  date  of  delivery;
18.3.2     if posted by prepaid registered post be deemed to have been received
           by the addressee  on  the  8th  (eighth)  day  following  the  date
           of  such  posting;
18.3.3     if  transmitted  by  facsimile  be  deemed  to  have  been  received
           by the addressee  on  the  day  following  the  date  of  despatch,
           unless  the  contrary  is  proved.
18.4       Notwithstanding  anything  to  the  contrary  contained  or implied
           in this agreement,  a  written  notice  or communication actually
           received by one of the parties  from  another  including  by  way
           of  facsimile  transmission shall be adequate  written  notice  or
           communication  to  such  party.
19         WHOLE  AGREEMENT
           This  agreement  constitutes  the  whole agreement between the
           parties as to the subject  matter  hereof and no agreements,
           representations or warranties between the  parties regarding the
           subject matter hereof other than those set out herein are
           binding  on  the  parties.
                                       38
<PAGE>
VARIATION
           No  addition  to  or  variation,  consensual  cancellation  or
           novation of this agreement  and  no waiver of any right arising
           from this agreement or its breach or  termination  shall  be  of
           any force or effect unless reduced to writing and signed  by  all
           the  parties  or  their  duly  authorised  representatives.
21         RELAXATION
           No latitude, extension of time or other indulgence which may be
           given or allowed by  any  party  to  the  other  parties  in
           respect  of  the performance of any obligation  hereunder,  and  no
           delay  or forbearance in the enforcement of any right  of  any
           party  arising  from  this  agreement,  and no single or partial
           exercise  of  any  right  by  any  party  under  this  agreement,
           shall  in any circumstances be construed to be an implied consent
           or election by such party or operate  as  a  waiver  or  a novation
           of or otherwise affect any of the party's rights  in terms of or
           arising from this agreement or estop or preclude any such
           party  from  enforcing  at  any  time  and  without  notice, strict
           and punctual compliance  with  each  and  every  provision  or  term
           hereof.
22         COSTS
22.1       PSGIB  shall  pay  the  costs  of and incidental to the preparation
           of this agreement;
22.2       Bidco  shall pay the amount of all charges and expenses of whatever
           nature, including,  without  derogating  from the generality of the
           aforegoing, attorney and  own  client  legal  cost  and  collection
           commission  incurred by PSGIB in securing  or  endeavouring  to
           secure fulfilment, of any obligations in terms of this  agreement.
                                       39
<PAGE>
SIGNED at Capetown                   on April 13, 2000
AS  WITNESS:
------------
/s/ James Forbes                          For:   PSG  INVESTMENT  BANK  LIMITED

/s/ James Forbes                                 /s/ Gernot Gunther

(Name  of  witness  in  print)                   Duly  Authorised

SIGNED at Capetown                   on April 13, 2000
AS  WITNESS:
------------

/s/ Gernot Gunther                        For:   CALEDON  CASINO  BID  COMPANY
                                                 (PROPRIETARY)  LIMITED

/s/ Gernot Gunther                               /s/ James Forbes

(Name  of  witness  in  print)                   Duly  Authorise

                                       40
<PAGE>

                                   SCHEDULE 2
                                   PROPERTIES

1.       Remaining  extent  of  the  farm  Oatlands  No.  408
         Registration  Division  Caledon  Road
         Measuring  22,6821  hectares

2.       Portion  1  of  the  Farm  Oatlands  No.  408
         Registration  Division  Caledon  Road
         Measuring  3,6015  hectares

3.       Portion  3  of  the  Farm  Caledon  Baths  No.  560
         Registration  Division  Caledon  Road
         Measuring  2,6732  hectares

4.       Remaining  extent  of  the  Farm  812
         Registration  Division  Caledon  Road
         Measuring  71,6142  hectares

5.       Erf  2842  Caledon  Township
         Registration  Division  Caledon  Road
         Measuring  11,5067  hectares

6.       Erf  2843  Caledon
         Registration  Division  Caledon  Road
         Measuring  65,7272  hectares

7.       Erf  2844  Caledon
         Registration  Division  Caledon  Road
         Measuring  29,8924  hectares

8.       Portion  1  of  the  Farm  812,
         in  the  municipality  of  Caledon
         measuring  20,9124  hectares.

                                       41
<PAGE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00013-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00013-of-00352.parquet"}]]