<PAGE>

                                                                   Exhibit 10.4


The Company also issued another Convertible Subordinated Promissory Note,
substantially identical in all material respects to this Exhibit 10.4, except 
for the following details:

<TABLE>
<CAPTION>
                                            Principal Amount of
             Investor                        Convertible Note
             --------                       -------------------
            <S>                             <C>
            Ellison Morgan                        $237,500

</TABLE>

THIS SUBORDINATED PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY OTHER APPLICABLE SECURITIES LAWS. IT MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED UNDER CIRCUMSTANCES THAT WOULD RESULT IN A
VIOLATION OF THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933 OR SUCH
OTHER LAWS.

                          IMAGING TECHNOLOGIES CORPORATION

                      CONVERTIBLE SUBORDINATED PROMISSORY NOTE

$ 437,500.00                                                  September 17, 1998

          Imaging Technologies Corporation, a Delaware corporation (the
"Company"), for value received, hereby promises to pay to the order of American
Industries, Inc. (the "Holder"), the principal sum of Four Hundred Thirty Seven
Thousand Five Hundred Dollars ($437,500), together with simple interest on the
unpaid balance from the date hereof until paid in accordance with the terms
hereof at a rate of sixteen percent (16%) per annum, interest to accrue on the
basis of a 365-day year for the number of days actually elapsed. Interest shall
be payable monthly in arrears with the first interest payment due September 30,
1998. Unless otherwise provided in Sections 3 and 4 hereof, both principal and
all outstanding interest shall be due and payable on September 16, 2000 (the
"Maturity Date").

          This Promissory Note is issued pursuant to that certain Subordinated
Note Purchase Agreement, dated as of the date hereof (the "Purchase Agreement"),
between the Company and the purchasers listed on SCHEDULE A attached thereto,
and is entitled to the benefits thereof. All terms not otherwise defined herein
shall have the meaning given such terms in the Purchase Agreement.

          Section 1 PAYMENT. All payments made in accordance with this
Promissory Note are to be made in lawful money of the United States of America
at the address of the Holder as indicated on the signature page hereof, or at
such other location as the Holder may designate from time to time by written
notice to the Company.

          The Company shall pay all costs and expenses, including reasonable
attorney's fees, for services to collect this Promissory Note, regardless of
whether litigation ensues and, if so, for services prior to trial or hearing, on
trial and in any appeal or appeals therefrom. The Company hereby waives notice
of default, presentment or demand for payment, protest or notice of nonpayment
or dishonor and all other notices or demands relative to this instrument.

          Section 2 PREPAYMENT. The Company, at its option, may at any time on
or after the date hereof, prepay in whole or in part, without penalty, the
principal sum, together with accrued interest to the date of payment,
outstanding under this Promissory Note by giving written notice (the "Prepayment
Notice") to the Holder at least fifteen (15) days prior to the date of such
prepayment (the "Prepayment Date"). The Company shall not prepay any of the
other Subordinated Notes, the non-convertible subordinated promissory note
issued pursuant to that 


***  Certain confidential portions of this Exhibit were omitted by means of 
blackout of the text (the "Mark"). This Exhibit has been filed separately with 
the Secretary of the Commission without the Mark pursuant to the Company's 
Application Requesting Confidential Treatment under Rule 24b-2 under the 1934 
Act.

<PAGE>

certain Subordinated Note Purchase Agreement, dated as of the date hereof
between the Company and the purchaser listed on SCHEDULE A thereto (together
with the Subordinated Notes, the "Notes"), or any other subordinated debt of the
same rank as the Notes (the "Other Subordinated Debt") unless, at the time of
such prepayment, the Company pays to the holders of all of the Notes (including
the holder of this Promissory Note) a prepayment in the same proportionate
amount as the prepayment made to the holders of the other Notes or to the
holders of the Other Subordinated Debt (based on the total amount owed to the
holders of the other Notes or to the holders of the Other Subordinated Debt).

          Section 3 ACCELERATION OF MATURITY DATE OF PROMISSORY NOTE.

          3.1 GENERAL. Upon the occurrence of an Acceleration Event (as
hereinafter defined), the entire unpaid principal amount, together with the
accrued but unpaid interest thereon, of this Promissory Note shall become
immediately due and payable in cash subject to Section 4 hereof (hereinafter,
the "Acceleration").

          3.2 ACCELERATION EVENTS. An "Acceleration Event" shall be deemed to
have occurred upon the earlier of (i) (A) the acquisition by any person (as such
term is defined in Section 13(d) or 14(d) of the Securities Exchange Act of
1934, as amended (the "1934 Act") of the power to direct the management and
business of the Company, whether by ownership of voting securities, by contract
or by other arrangement; (B) the individuals who, as of the date of this
Promissory Note, are directors of the Company shall cease for any reason to
constitute a majority of the Board of Directors of the Company, unless the
election or appointment, or nomination for election or appointment, of any new
member of the Board of Directors was approved by a vote of a majority of the
Board of Directors, in which event such new member shall, for purposes of this
Promissory Note, be considered as a member of the Board of Directors; (C) a
merger or consolidation involving the Company, if the stockholders of the
Company immediately before such merger or consolidation, do not, as a result of
such merger or consolidation, own, directly or indirectly, more than 50 percent
of the combined voting power or ownership interests of the Company or the entity
resulting from such merger or consolidation; or (D) the dissolution or the
complete or partial liquidation, or the sale or other disposition of all or
substantially all of the assets, of the Company; (ii) the commencement by or
against the Company of any case or proceeding under any bankruptcy,
reorganization, insolvency or moratorium law, or any other law or laws for the
relief of debtors, or the appointment of any receiver, trustee or assignee to
take possession of the properties of the Company; provided, however, that in the
event that such case, proceeding or appointment does not occur with the consent
of the Company, then the Acceleration Event shall be deemed to occur only in the
event that such case, proceeding or appointment is not dismissed within ninety
(90) days of the commencement of such case, proceeding or appointment; (iii) the
liquidation or dissolution of the Company; (iv) the commencement of any lawsuit
or foreclosure proceeding against the Company by the holders of any Senior
Indebtedness (as defined in Section 4); (v) the Company's failure in a material
respect to observe any covenant or obligation binding on it under the Purchase
Agreement or this Promissory Note; (vi) any of the representations and
warranties of the Company contained in Section 3 of the Purchase Agreement being
false or misleading in a material respect on and as of the Closing (as defined
in the Purchase Agreement); (vii) acceleration of the maturity date of any
Senior Indebtedness resulting from the Company's 



                                       2
<PAGE>

breach or default thereunder; or (viii) upon the closing of any equity or
convertible debt financing in which the Company receives net proceeds in excess
of $5,000,000.

          3.3 SPECIAL LIMITED ACCELERATION. Upon the closing of any equity or
convertible debt financing in which the Company receives net proceeds in excess
of $2,000,000 but less than or equal to $5,000,000, fifty percent (50%) of the
entire unpaid principal amount, together with fifty percent (50%) of the accrued
but unpaid interest thereon, of this Promissory Note shall become immediately
due and payable in cash subject to Section 4 hereof (hereinafter, the "Special
Limited Acceleration").

          3.4 ADDITIONAL INTEREST ON UNPAID AMOUNTS. All amounts due and owing
to Holder hereunder that are not paid by the Company when due shall accrue
additional interest at the rate of two percent (2%) per annum in excess of the
interest rate set forth hereunder, interest to accrue from the date of such
non-payment on the basis of a 365 day year for the number of days actually
elapsed.

          Section 4 SUBORDINATION.

          4.1 SENIOR INDEBTEDNESS. As used herein, the term "Senior
Indebtedness" shall mean the principal of and unpaid interest on the following
indebtedness of the Company: (i) all secured indebtedness of the Company,
whether now existing or hereinafter incurred, (ii) the principal of and unpaid
interest on any amounts borrowed or to be borrowed from, or owing to, a bank,
trust company, insurance company or other financial institutions regularly
engaged in the business of lending money, or a combination thereof, on an
unsecured basis, whether now existing or hereinafter incurred, and (iii) amounts
owed or to be owed to equipment lessors pursuant to equipment lease lines
approved by the Company's Board of Directors, whether now existing or
hereinafter incurred. In no event (a) will the Senior Indebtedness owing to
Imperial Bank and/or any other financial institution that may lend money to the
Company to replace all or a portion of the debt owed to Imperial Bank exceed
$12,000,000 in the aggregate or (b) will all other Senior Indebtedness exceed
$8,000,000 in the aggregate. The Company shall give notice to the Holder of any
additional Senior Indebtedness incurred after the date hereof within a
reasonable time period after the date such additional Senior Indebtedness is
incurred.

          4.2 SUBORDINATION. The Company has agreed and the Holder, by its
acceptance of this Promissory Note, covenants, expressly for the benefit of the
present and future holders of Senior Indebtedness, that the payment of the
principal of and interest on this Promissory Note, and all other obligations of
the Company to pay money to the Holder under this Promissory Note, is expressly
subordinated in right of payment to the prior payment, or provision for payment,
in full of the Senior Indebtedness of the Company in accordance with the
provisions of this Section 4.2. The Company shall not pay, and the Holder shall
not be entitled to receive, other than in connection with the purchase of
securities of the Company through forgiveness of the indebtedness evidenced by
this Promissory Note, any amount in respect of the principal of or interest on
this Promissory Note or any other obligation of the Company to pay money to the
Holder on this Promissory Note upon the occurrence and continuance of any of the
following: (a) with respect to any payment that is contractually due hereunder,
prior to the date on which the payment is contractually due (including, without
limitation, any payments which shall become due and payable on the Maturity
Date, in case of an Acceleration Event or in the 


                                       3
<PAGE>

event of the Special Limited Acceleration) as provided under this Promissory
Note, (b) an event of default under any agreement evidencing solely the Senior
Indebtedness, or (c) an event of default relating to the payment when due of the
principal of or interest on the Senior Indebtedness. Notwithstanding any other
provision of this Promissory Note or of the Purchase Agreement to the contrary,
the foregoing payment restrictions shall not apply if (i) in the case of an
event of default, such event of default shall have been cured or permitted by
the holder(s) of Senior Indebtedness, (ii) the event of default, or the benefits
of the subordination provisions hereunder, shall have been waived in writing to
the Holder by the holder(s) of the Senior Indebtedness, (iii) the outstanding
Senior Indebtedness shall have been paid in full, or (iv) no event of default
has occurred and is continuing under any of the Senior Indebtedness and the
payment is contractually due (including, without limitation, any payments which
shall become due and payable on the Maturity Date, in case of an Acceleration
Event or in the event of the Special Limited Acceleration) as provided under
this Promissory Note.

          Section 5 CONVERSION.

          5.1 OPTION TO CONVERT PROMISSORY NOTE. The Holder shall have the
option, exercisable in the manner set forth in Section 5.3 below prior to the
Maturity Date or earlier payment in full of the entire principal amount and any
accrued but unpaid interest on this Promissory Note, to convert at any time and
from time to time in minimum increments of $100,000 all or any portion of the
principal amount outstanding on this Promissory Note into fully paid and
nonassessable shares of the Company's Common Stock. The number of shares of
Common Stock to be issued upon such conversion shall be equal to the quotient
obtained by dividing (x) the entire principal amount of this Promissory Note by
(y) $2.025 (the "Conversion Price," which is subject to adjustment as provided
in Section 5.2 below).

          5.2 ADJUSTMENT TO CONVERSION PRICE. In the event the Company does 
not, ***  the Conversion Price with respect to ten percent (10%) of the 
outstanding principal amount of this Promissory Note will be reduced to 
$1.0125; PROVIDED, HOWEVER, that the Conversion Price with respect to all of 
the remaining outstanding principal amount of this Promissory Note shall 
remain at $2.025.

          5.3 MECHANICS AND EFFECT OF CONVERSION. No fractional shares of Common
Stock will be issued upon any conversion of this Promissory Note. In lieu of any
fractional share to which the Holder would otherwise be entitled, the Company
will pay to the Holder in cash that amount of the unconverted principal and
interest on this Promissory Note. Upon any conversion of this Promissory Note
pursuant to this Section 5, the Holder shall surrender this Promissory Note,
duly endorsed, at the principal offices of the Company or any transfer agent for
the Company. At its expense, the Company will, as soon as practicable
thereafter, issue and deliver to the Holder at such principal office, a
certificate or certificates for the number of shares of Common Stock to which
the Holder is entitled upon such conversion, together with the payment 


*** Portions of this page have been omitted pursuant to a request for 
Confidential Treatment and filed separately with the Commission.


                                       4
<PAGE>

of all accrued but unpaid interest on this Promissory Note and any cash payable
in lieu of any fractional share to which the Holder is entitled upon such
conversion under the terms of this Promissory Note. The conversion will be
deemed effective on the date the Holder surrenders this Promissory Note to the
Company and, from and after such date, the Company will be forever released from
all its obligations and liabilities under this Promissory Note with regard to
the entire principal amount and accrued interest, including without limitation
the obligation to pay such principal amount and accrued interest.

          5.4 NOTICES TO HOLDER. In the event of: (i) any taking by the Company
of a record of the holders of the Company's Common Stock for the purpose of
determining the holders thereof who are entitled to receive any dividend (other
than a cash dividend payable out of earned surplus at the same rate as that of
the last such cash dividend theretofore paid) or other distribution, or any
right to subscribe for, purchase or otherwise acquire any shares of stock of any
class or any other securities or property, or to receive any other right; or
(ii) any capital reorganization of the Company, any reclassification or
recapitalization of the Company's Common Stock or any transfer of all or
substantially all of the assets of the Company to any other person, or any
consolidation or merger involving the Company; or (iii) any voluntary or
involuntary dissolution, liquidation or winding-up of the Company; the Company
will mail to the Holder, at least fifteen (15) days prior to any record date or
prior to any date on which any such reorganization, reclassification, transfer,
consolidation, merger, dissolution, liquidation or winding-up is expected to
become effective, a notice specifying: (a) the date on which any such record is
to be taken for the purpose of such dividend, distribution or right, and the
amount and character of such dividend, distribution or right; and (b) the date
on which any such reorganization, reclassification, transfer, consolidation,
merger, dissolution, liquidation or winding-up is expected to become effective
and the record date for determining the stockholders entitled to vote thereon,
if any.

          Section 6 MISCELLANEOUS.

          6.1 TRANSFER OF PROMISSORY NOTE. Except as prohibited or limited by
the terms of the Purchase Agreement, this Promissory Note shall be transferable
or assignable without the prior written consent of the Company. Any attempted
disposition of this Promissory Note (in whole or in part) not in accordance with
the Purchase Agreement shall be void and of no force or effect.

          6.2 TITLES AND SUBTITLES. The titles and subtitles used herein are for
convenience only and are not to be considered in construing or interpreting this
Promissory Note.

          6.3 NOTICES, ETC. All notices and other communications required or
permitted under this Promissory Note shall be in writing and may be delivered in
person, by facsimile, overnight delivery service or registered or certified
mail, addressed to the Company, or to the Holder at their respective addresses
set forth on the signature pages hereto or at such other address as the Company
or the Holder shall have furnished to the other party in writing. All notices
and other communications shall be effective upon the earlier of actual receipt
thereof by the person to whom notice is directed or (i) in the case of notices
and communications sent by personal delivery or facsimile, one business day
after such notice or communication arrives at the applicable address or was
successfully sent to the applicable facsimile number, (ii) in the case 



                                       5
<PAGE>

of notices and communications sent by overnight delivery service, at noon (local
time) on the second business day following the day such notice or communication
was sent, and (iii) in the case of notices and communications sent by United
States mail, seven days after such notice or communication shall have been
deposited in the United States mail.

          6.4 AMENDMENTS AND WAIVERS. Any term of this Promissory Note may be
amended and the observance of any term of this Promissory Note may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Holder. Any
amendment or waiver effected in accordance with this Section 6.4 shall be
binding upon the Holder and the Company.

          6.5 SEVERABILITY. If any provision of this Promissory Note shall be
determined to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

          6.6 GOVERNING LAW. This Promissory Note shall be governed in all
respects by and construed in accordance with the laws of the State of Oregon
without any regard to conflicts of laws principles. Each party hereby
irrevocably submits to the non-exclusive jurisdiction of the state and federal
courts sitting in Portland, Multnomah County, Oregon, for the adjudication of
any dispute hereunder or in connection herewith, and hereby waives, and agrees
not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper. Each party hereby waives personal
service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Promissory Note and agrees that such service shall
constitute good and sufficient service of process and notice thereof.

          6.7 ENTIRE AGREEMENT. This Promissory Note, together with the Purchase
Agreement, constitutes the full and entire understanding and agreement between
the parties with regard to the subjects hereof and thereof.

          6.8 COUNTERPARTS. This Promissory Note may be executed in any number
of counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

          6.9 SUCCESSORS AND ASSIGNS. The provisions hereof shall inure to the
benefit of, and be binding upon, the successors, permitted assigns, heirs,
executors and administrators of the parties to this Promissory Note.

                  [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                       6
<PAGE>


          IN WITNESS WHEREOF, this Promissory Note has been duly executed and
delivered under its corporate seal as of the date first above written.

                                        IMAGING TECHNOLOGIES CORPORATION


                                   By:  /S/  BRIAN BONAR
                                      ------------------------------
                                        Brian Bonar, President and
                                        Chief Executive Officer

                       Address:  11031 Via Frontera
                                 San Diego, CA  92127

ACKNOWLEDGED AND AGREED TO:

AMERICAN INDUSTRIES, INC.

By:       /S/  HOWARD HEDINGER
    ----------------------------
Name:
     ---------------------------
Title:    President

Address:  1750 NW Front Avenue, Suite 106
Portland, Oregon  97209


                                       7
<PAGE>


                                      SCHEDULE 1

        NAME

 ***




***  Portions of this page have been omitted pursuant to a request for 
Confidential Treatment and file separately with the Commission.