Exhibit 10.8(e)

 

PROMISSORY NOTE

 

Principal

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Loan Date

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Maturity

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Loan No

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Call / Coll

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Account

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Officer

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Initials

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$10,000,000.00   05-25-2004   06-30-2005   932900001-5       932900001-5   22163
   

 

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. Any item above
containing “***” has been omitted due to text length limitations.

 

Borrower:   

IRIS International, Inc.

9172 Eton Avenue

Chatsworth, CA 91311-5805

  Lender:   

California Bank & Trust

Los Angeles Commercial Banking

550 South Hope Street, Suite 300

Los Angeles, CA 90071

 

Principal Amount: $10,000,000.00   Initial Rate: 4.250%   Date of Note: May 25,
2004

 

PROMISE TO PAY. IRIS International, Inc. (“Borrower”) promises to pay to
California Bank & Trust (“Lender”), or order, in lawful money of the United
States of America, the principal amount of Ten Million & 00/100 Dollars
($10,000,000.00) or so much as may be outstanding, together with interest on the
unpaid outstanding principal balance of each advance. Interest shall be
calculated from the date of each advance until repayment of each advance.

 

PAYMENT. Borrower will pay this loan in one payment of all outstanding principal
plus all accrued unpaid interest on June 30, 2005. In addition. Borrower will
pay regular monthly payments of all accrued unpaid interest due as of each
payment date, beginning June 30, 2004, with all subsequent interest payments to
be due on the last day of each month after that. Unless otherwise agreed or
required by applicable law, payments will be applied first to any accrued unpaid
interest; then to principal; then to any unpaid collection costs; and then to
any late charges. The annual interest rate for this Note is computed on a
365/360 basis; that is, by applying the ratio of the annual interest rate over a
year of 360 days, multiplied by the outstanding principal balance, multiplied by
the actual number of days the principal balance is outstanding. Borrower will
pay Lender at Lender’s address shown above or at such other place as Lender may
designate in writing.

 

VARIABLE INTEREST RATE. Subject to designation of a different interest rate
index by Borrower as provided below, the interest rate on this Note is subject
to change from time to time based on changes in an index which is the rate of
interest set from time to time by Bank as its Prime Rate. California Bank &
Trust Prime Rate is determined by Bank as a means of pricing credit extensions
to some customers and is neither tied to any external rate of interest or index
nor is it necessarily the lowest rate of interest charged by Bank at any given
time for any particular class of customers or credit extensions (the “Index”).
The Index is not necessarily the lowest rate charged by Lender on its loans and
is set by Lender in its sole discretion. If the Index becomes unavailable during
the term of this loan, Lender may designate a substitute index after notifying
Borrower. Lender will tell Borrower the current Index rate upon Borrower’s
request. The interest rate change will not occur more often than each day.
Borrower understands that Lender may make loans based on other rates as well.
The Index currently is 4.000%. The interest rate to be applied to the unpaid
principal balance of this Note will be at a rate of 0.250 percentage points over
the Index, resulting in an initial rate of 4.250%. NOTICE: Under no
circumstances will the interest rate on this Note be more than the maximum rate
allowed by applicable law.

 

INTEREST RATE OPTIONS. On the terms and subject to the conditions set forth
herein, Borrower will be able to select, from one of the following Rate Options,
an interest rate which will be applicable to a particular dollar increment of
amounts outstanding, or to be disbursed, under this Note. Principal shall be
payable as specified herein in the “Payment” section, and interest shall be
payable as specified for each Rate Option. The following Rate Options are
available to Borrower:

 

(A) Default Option. The interest rate margin and index described in the
“VARIABLE INTEREST RATE” paragraph herein (the “Default Option”).

 

(B) LIBOR. A margin of 2.250 percentage points over LIBOR. For purposes of this
Note, LIBOR shall mean Lender’s LIBOR rate for the relevant Interest Period
determined as of the start of each Interest Period, with an initial rate as set
forth below. The length of the Interest Period selected shall be designated
Three Months, though the actual length of such periods shall be calculated as
set forth below. The initial Interest Period, unless commenced on the first
business day of a month, shall, notwithstanding the length of the Interest
Period selected by Borrower, (i) for Interest Periods beginning before the 25th
of each calendar month, end on the first business day of the month following
commencement of the initial Interest Period; and (ii) for Interest Periods
beginning on or after the 25th of each calendar month, end on the first business
day of the second month following commencement of the initial Interest Period.
All subsequent Interest Periods shall commence on the first business day of the
relevant month and end on the first business day of the month determined by the
length of the Interest Period selected by Borrower. The Bank’s calculation
pursuant to the provision of the length of the Interest Periods shall be in its
sole and absolute discretion and shall conclusively bind the Borrower absent
manifest error. Lender’s LIBOR rate shall mean the rate per annum quoted by
Lender as Lender’s LIBOR rate based upon quotes from the London Interbank
Offered Rate from the British Bankers Association Interest Settlement Rates, as
quoted for U.S. Dollars by Bloomberg, or other comparable services selected by
the Lender. This definition of Lender’s LIBOR rate is to be strictly interpreted
and is not intended to serve any purpose other than providing an index to
determine the interest rate used herein. Lender’s LIBOR rate may not necessarily
be the same as the quoted offered side in the Eurodollar time deposit market by
any particular institution or service applicable to any interest period.
Interest based on this Rate Option is a floating rate and will change on and as
of the date of a change in LIBOR (the “Interest Period”). Adjustments in the
interest rate due to changes in the maximum nonusurious interest rate allowed
(the “Highest Lawful Rate”) shall be made on the effective day of any change in
the Highest Lawful Rate. Under this Rate Option, Borrower shall make monthly
interest payments on the same day of the month, with a final payment of all
accrued and unpaid interest on the last day of such Interest Period and, in the
case of an Interest Period greater than three (3) months, at three month (3
month) intervals after the first day of such Interest Period.

 

The following provisions concerning Rate Options are a part of this Note:

 

Selection of Rate Options. Provided Borrower is not in default under this Note,
Borrower may request (a “Rate Request”) that a $100,000.00 increment or any
amount in excess thereof (an “Increment”) of the outstanding principal of, or
amounts to be disbursed under, this Note bear interest at the selected rate.
Borrower may make this Rate Request by telephonic notice, however no later than
10:00 AM PDT three (3) business days prior to the effective date of the Rate
Request to permit Lender to quote the rate requested.

 

Applicable Interest Rate. Borrower’s Rate Request will become effective, and
interest on the increment designated will be calculated at the rate (the
“Effective Rate”), which Borrower requested, for the applicable Interest Period,
subject to the following:

 

(1) Notwithstanding any Rate Request, interest shall be calculated on the basis
of the Default Option if (a) Lender, in good faith, is unable to ascertain the
requested Rate Option by reason of circumstances then affecting the applicable
money market or otherwise, (b) it becomes unlawful or impracticable for Lender
to maintain loans based upon the requested Rate Option, or (c) Lender, in good
faith, determines that it is impracticable to maintain loans based on the
requested Rate Option because of increased taxes, regulatory costs, reserve
requirements, expenses or any other costs or charges that affect such Rate
Options. Upon the occurrence of any of the events described in this “Interest
Rate Options” section, any increment to which a requested Rate Option applies
shall be immediately (or at the option of Lender, at the end the current
Interest Period), without further action of Lender or Borrower, converted to an
increment to which the Default Option applies.

 

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     PROMISSORY NOTE      Loan No: 932900001-5    (Continued)    Page 2

 

(2) Borrower may have no more than a total of 1 Effective Rates applicable to
amounts outstanding under this Note at any given time.

 

(3) A Rate Request shall be effective as to amounts to be disbursed under this
Note only if, on the effective date of the Rate Requests, such amounts are in
fact disbursed to or for Borrower’s account in accordance with the provisions of
this Note and any related loan documents.

 

(4) Any amounts of outstanding principal for which a Rate Request has not been
made, or is otherwise not effective, shall bear interest until paid in full at
the Default Option.

 

(5) Any amounts of outstanding principal bearing interest based upon a Rate
Option shall bear interest at such rate until the end of the Interest Period
therefor, and thereafter shall bear interest based upon the Default Option
unless a new Rate Request for a Rate Option complying with the terms hereof has
been made and has become effective.

 

(6) If Borrower is in default under this Note (“Default”), then Lender shall no
longer be obligated to honor any Rate Requests.

 

(7) No Interest Period shall extend beyond the maturity date of this Note.

 

Notices: Authority to Act. Borrower acknowledges and agrees that the agreement
of Lender herein to receive certain notices by telephone is solely for
Borrower’s convenience. Lender shall be entitled to rely on the authority of the
person purporting to be a person authorized by Borrower to give such notice, and
Lender shall have no liability to Borrower on account of any action taken by
Lender in reliance upon such telephonic notice. Borrower’s obligation to repay
all sums owing under the Note shall not be affected in any way or to any extent
by any failure by Lender to receive written confirmation of any telephonic
notice or the receipt by Lender of a confirmation which is at variance with the
terms understood by Lender to be contained in the telephonic notice.

 

PREPAYMENT; MINIMUM INTEREST CHARGE. In any event, even upon full prepayment of
this Note, Borrower understands that Lender is entitled to a minimum interest
charge of $200.00. Other than Borrower’s obligation to pay any minimum interest
charge, Borrower may pay without penalty all or a portion of the amount owed
earlier than it is due. Early payments will not, unless agreed to by Lender in
writing, relieve Borrower of Borrower’s obligation to continue to make payments
of accrued unpaid interest. Rather, early payments will reduce the principal
balance due. Borrower agrees not to send Lender payments marked “paid in full”,
“without recourse”, or similar language. If Borrower sends such a payment,
Lender may accept it without losing any of Lender’s rights under this Note, and
Borrower will remain obligated to pay any further amount owed to Lender. All
written communications concerning disputed amounts, including any check or other
payment instrument that indicates that the payment constitutes “payment in full”
of the amount owed or that is tendered with other conditions or limitations or
as full satisfaction of a disputed amount must be mailed or delivered to:
California Bank & Trust, Los Angeles Commercial Banking, 550 South Hope Street,
Suite 300, Los Angeles, CA 90071.

 

LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged
6.000% of the regularly scheduled payment or $500.00, whichever is less.

 

INTEREST AFTER DEFAULT. Upon default, the variable interest rate on this Note
shall immediately increase to 5.250 percentage points over the Index, if
permitted under applicable law.

 

DEFAULT. Each of the following shall constitute an event of default (“Event of
Default”) under this Note:

 

Payment Default. Borrower fails to make any payment when due under this Note.

 

Other Defaults. Borrower fails to comply with or to perform any other term,
obligation, covenant or condition contained in this Note or in any of the
related documents or to comply with or to perform any term, obligation, covenant
or condition contained in any other agreement between Lender and Borrower.

 

Default in Favor of Third Parties. Borrower or any Grantor defaults under any
loan, extension of credit, security agreement, purchase or sales agreement, or
any other agreement, in favor of any other creditor or person that may
materially affect any of Borrower’s property or Borrower’s ability to repay this
Note or perform Borrower’s obligations under this Note or any of the related
documents.

 

False Statements. Any warranty, representation or statement made or furnished to
Lender by Borrower or on Borrower’s behalf under this Note or the related
documents is false or misleading in any material respect, either now or at the
time made or furnished or becomes false or misleading at any time thereafter.

 

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 or by any governmental agency against
any collateral securing the loan. This includes a garnishment of any of
Borrower’s accounts, including deposit accounts, with Lender. However, this
Event of Default shall not apply if there is a good faith dispute by Borrower as
to the validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding and if Borrower gives Lender written notice of
the creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount determined
by Lender, in its sole discretion, as being an adequate reserve or bond for the
dispute.

 

Events Affecting Guarantor. Any of the preceding 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 evidenced by this Note. In the event of a death,
Lender, at its option, may, but shall not be required to, permit the Guarantor’s
estate to assume unconditionally the obligations arising under the guaranty in a
manner satisfactory to Lender, and, in doing so, cure any Event of Default.

 

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 this
Note is impaired.

 

Insecurity. Lender in good faith believes itself insecure.

 

Cure Provisions. If any default, other than a default in payment is curable and
if Borrower has not been given a notice of a breach of the same provision of
this Note within the preceding twelve (12) months, it may be cured (and no event
of default will have occurred) if Borrower, after receiving written notice from
Lender demanding cure of such default: (1) cures the default within fifteen (15)
days; or (2) if the cure requires more than fifteen (15) days, immediately
initiates steps which Lender deems in Lender’s sole discretion to be sufficient

 

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     PROMISSORY NOTE      Loan No: 932900001-5    (Continued)    Page 3

 

to cure the default and thereafter continues and completes all reasonable and
necessary steps sufficient to produce compliance as soon as reasonably
practical.

 

LENDER’S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, and then
Borrower will pay that amount.

 

ATTORNEYS’ FEES; EXPENSES. Lender may hire or pay someone else to help collect
this Note if Borrower does not pay. Borrower will pay Lender 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, expenses for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), and appeals. Borrower also
will pay any court costs, in addition to all other sums provided by law.

 

JURY WAIVER. Lender and Borrower hereby waive the right to any jury trial in any
action, proceeding, or counterclaim brought by either Lender or Borrower against
the other.

 

GOVERNING LAW. This Note will be governed by, construed and enforced in
accordance with federal law and the laws of the State of California. This Note
has been accepted by Lender in the State of California.

 

CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender’s request to
submit to the jurisdiction of the courts of Los Angeles County, State of
California.

 

COLLATERAL. Borrower acknowledges this Note is secured by the following
collateral described in the security instrument listed herein: inventory,
chattel paper, accounts, equipment and general intangibles described in a
Commercial Security Agreement dated February 7, 2002.

 

LINE OF CREDIT. This Note evidences a straight line of credit. Once the total
amount of principal has been advanced, Borrower is not entitled to further loan
advances. Advances under this Note may be requested either orally or in writing
by Borrower or as provided in this paragraph. Lender may, but need not, require
that all oral requests be confirmed in writing. All communications,
instructions, or directions by telephone or otherwise to Lender are to be
directed to Lender’s office shown above. Borrower agrees to be liable for all
sums either: (A) advanced in accordance with the instructions of an authorized
person or (B) credited to any of Borrower’s accounts with Lender. The unpaid
principal balance owing on this Note at any time may be evidenced by
endorsements on this Note or by Lender’s internal records, including daily
computer print-outs. Lender will have no obligation to advance funds under this
Note if: (A) Borrower or any guarantor is in default under the terms of this
Note or any agreement that Borrower or any guarantor has with Lender, including
any agreement made in connection with the signing of this Note; (B) Borrower or
any guarantor ceases doing business or is insolvent; (C) any guarantor seeks,
claims or otherwise attempts to limit, modify or revoke such guarantor’s
guarantee of this Note or any other loan with Lender; (D) Borrower has applied
funds provided pursuant to this Note for purposes other than those authorized by
Lender; or (E) Lender in good faith believes itself insecure.

 

DEPOSIT AGREEMENT SECURITY. Borrower hereby grants a security interest to Lender
in any and all deposit accounts (checking, savings, money market or time) of
Borrower at Lender, now existing or hereinafter opened, to secure its
Indebtedness hereunder. This includes all deposit accounts Borrower holds
jointly with someone else.

 

FINANCIAL STATEMENT CERTIFICATIONS. The undersigned hereby certifies to
California Bank & Trust (“Bank”) that all financial information (“Information”)
submitted to Bank now and at all times during the terms of this loan does, and
will, fairly and accurately represent the financial condition of the
undersigned, all Borrowers and Guarantors. Financial Information includes, but
is not limited to all Business Financial Statements (including Interim and
Year-End financial statements that are company prepared and/or CPA-prepared),
Business Income Tax Returns, Borrowing Base Certificates, Accounts Receivable
and Accounts Payable Agings, Personal Financial Statements and Personal Income
Tax Returns. The undersigned understands that the Bank will rely on all
financial information, whenever provided, and that such information is a
material inducement to Bank to make, to continue to make, or otherwise extend
credit accommodations to the undersigned. The undersigned covenants and agrees
to notify Bank of any adverse material changes in her/his/its financial
condition in the future. The undersigned further understands and acknowledges
that there are criminal penalties for giving false financial information to
federally insured financial institutions.

 

TERM OUT OF EACH ADVANCE UNDER THE NON-REVOLVING LINE OF CREDIT. Borrower
covenants and agrees with Lender, that for each advance upon the end of the
three (3) month interest only payment period, the non-revolving feature of this
loan will be discontinued and the loan balance will be converted to a fully
amortized, sixty (60) month installment loan, with payments of Principal
including Interest at an interest rate based on the Pricing Matrix Addendum.

 

SELECTION OF RATE OPTIONS (DURING TERM OUT PERIOD). Provided Borrower is not in
default under this Note, Borrower may request (a “Rate Request”) that the entire
outstanding principal amount under this Note (so long as such principal amount
is $100,000 or greater) bear interest at the selected rate. Borrower may make
this Rate Request by telephonic notice, however no later than 10:00 AM PDT three
(3) business days prior to the effective date of the Rate Request to permit
Lender to quote the rate requested.

 

INTEREST RATE. See Pricing Matrix Addendum attached hereto.

 

SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and
upon Borrower’s heirs, personal representatives, successors and assigns, and
shall inure to the benefit of Lender and its successors and assigns.

 

GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person who
signs, guarantees or endorses this Note, to the extent allowed by law, waive any
applicable statute of limitations, presentment, demand for payment, and notice
of dishonor. Upon any change in the terms of this Note, and unless otherwise
expressly stated in writing, no party who signs this Note, whether as maker,
guarantor, accommodation maker or endorser, shall be released from liability.
All such parties agree that Lender may renew or extend (repeatedly and for any
length of time) this loan or release any party or guarantor or collateral; or
impair, fail to realize upon or perfect Lender’s security interest in the
collateral; and take any other action deemed necessary by Lender without the
consent of or notice to anyone. All such parties also agree that Lender may
modify this loan without the consent of or notice to anyone other than the party
with whom the modification is made. The obligations under this Note are joint
and several.

 

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     PROMISSORY NOTE      Loan No: 932900001-5    (Continued)    Page 4

 

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO
THE TERMS OF THE NOTE.

 

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.

 

BORROWER:

       

IRIS INTERNATIONAL, INC.

        By:   /s/ CESAR GARCIA       By:   /s/ MARTIN PARAVATO     Cesar Garcia,
President/CEO of IRIS International, Inc.           Martin Paravato,
CFO/Secretary of IRIS International, Inc.

 

LASER PRO Lending, Ver. 5.23.30.004 Copr, Harland Financial Solutions, Inc.
1997, 2004. All Rights Reserved. Ÿ CA