EXHIBIT 10.8
                                                                    ------------


Loan #50759                                                   December 20, 2001
Walnut Creek, California

                                FIXED RATE NOTE

INTEREST ONLY                                                     $5,400,000.00

FOR  VALUE  RECEIVED,  the  undersigned,  as  "Maker",  promise  to pay to OWENS
FINANCIAL GROUP, INC., a California Corporation,  or order, "Payee", at P.O. BOX
2400,  Walnut  Creek,  California  94595,  or at  any  other  place  that  Payee
designates by notice to Maker, in United States Dollars, the sum of Five Million
Four  Hundred  Thousand  and  00/100  Dollars  plus  interest  from  the date of
disbursement,  on the unpaid  balance of the amount  disbursed,  at the rate set
forth below, principal and interest to be paid as follows:

1.   PAYMENTS.

     A) MONTHLY  PAYMENTS.  Maker's first  interest-only  payments will begin on
February  1, 2002 and shall  continue  on the first day of each and every  month
thereafter until the Maturity Date.

     B) FINAL PAYMENT.  The unpaid principal balance,  together with all accrued
and unpaid  interest,  shall be due and payable on  December  5, 2004  "Maturity
Date".

2.   INTEREST RATE.

     The interest rate shall be Twelve Percent (12.00%) per annum.

3.   DEED OF TRUST.

     This  promissory  note is secured by a deed of trust executed by INNOVATIVE
MICRO TECHNOLOGY, INC., a Delaware corporation.

4.   RIDER TO NOTE.

     Maker agrees that the covenants and agreements  contained in the Note Rider
of even  date  herewith  shall be  incorporated  into and shall  supplement  the
covenants  and  agreements  of this note if the Note  Rider is set forth in full
herein and is a part of this note.

5.   EXIT FEE.

     As additional  consideration  for the funding of this loan, Maker shall pay
to Owens Financial Group, Inc., a Calif.  Corp., an Exit Fee equal to N/A of the
face  amount  of the  Note.  This fee  shall be in  addition  to the  principal,
interest,  or any other charges or costs agreed to be paid by Maker  pursuant to
the terms of the note and or any other Loan Documents. The Exit Fee shall be due
and  payable  upon the  Maturity  Date or payoff of the loan,  whichever  occurs
first, and shall also be due and payable in the event of foreclosure  (judicial,
non-judicial,  or  deed-in-lieu).  If the Exit Fee is not paid in full or before
the Maturity  Date,  it shall bear  interest at the note rate,  plus  additional
interest at the Default Rate, as set forth in section 1(B) of the Rider to Note.


<PAGE>

IN WITNESS WHEREOF, Maker has signed and delivered this note effective as of the
date set forth above.

INNOVATIVE MICRO TECHNOLOGY, INC.,
a Delaware corporation


-----------------------------------
John S. Foster,
Chief Executive Officer, President and Chairman of the Board


------------------------------------
Peter T. Altavilla,
Chief Financial Officer, Controller and Secretary



                                      -7-
<PAGE>

                          RIDER TO NON-ASSUMABLE NOTE

Loan #50759

THIS RIDER IS  INCORPORATED  INTO AND SHALL BE DEEMED TO SUPPLEMENT  THE NOTE OF
EVEN  DATE  HEREWITH,   GIVEN  BY  THE  UNDERSIGNED   MAKER  IN  THE  AMOUNT  OF
$5,400,000.00

1.   LATE CHARGES AND ADDITIONAL INTEREST ON DELINQUENT PRINCIPAL
     BALANCES/PAYMENTS.

     A) LATE  CHARGE.  Maker  recognizes  that a default  in  making  any of the
payments   required,   pursuant   to  the  Note,  Deed  of  Trust  and/or  other
agreement(s),  securing the loan (the "Loan  Documents") when due will result in
Payee incurring  additional expenses in servicing the loan,  including,  but not
limited to, reasonable administrative, processing and accounting charges. If any
installment  and/or  payment of principal  and/or  interest,  including  balloon
payment,  if any, is note  received  by Payee  within ten (10) days from the due
date of such installment and/or payment,  Payee shall be entitled to damages for
the extra time and expense  incurred in handling  the  delinquent  account,  but
since it is extremely  difficult and impractical to ascertain the extent of such
damages  Maker  therefore  agrees that a reasonable  estimate of such damages to
Payee is an amount equal to TEN (10.00%)  PERCENT of each payment  which becomes
delinquent,  but such amount shall not exceed the maximum amount allowed by law.
Maker  therefore  agrees to pay this late charge without demand by Payee and not
later than the due date of the next  payment and agrees that the late  charge(s)
shall be secured by the Loan Documents referred to herein.

     B) ADDITIONAL  INTEREST ON DELINQUENT  PRINCIPAL  BALANCE,  PAYMENTS AND/OR
ADVANCES.  Maker  recognizes that Maker's  failure to pay the principal  balance
upon maturity (or any portion thereof as otherwise  required by the terms of the
Note) or any other payments  required to be made by Maker when due,  (other than
the regular  monthly  installments)  including  the Exit Fee, if any, or Maker's
failure  to  reimburse  Payee  for any  advances  made by Payee to  protect  its
interest  (including  but not  limited to  advances  to a senior  deed of trust,
property taxes, fire insurance,  and legal charges),  will result in the loss to
Payee of the use of its money, other administrative expenses, and in frustration
to Payee in meeting its loan commitments.

     Payee shall be entitled to damages for the detriment  caused  thereby,  but
since it is extremely  difficult and impractical to ascertain the extent of such
damages,  Maker therefore  agrees that a reasonable  estimate of such damages to
Payee is an amount equal to interest on the delinquent  and/or advanced  amounts
from the due date or date of such advance until paid in full at the rate of FIVE
(5.00%)  PERCENTAGE  POINTS above the interest rate in effect under this note at
the time of any  such  delinquency  or  default.  This  adjusted  rate  shall be
referred to as the  "Default  Rate",  but in no event to exceed the maximum rate
permitted by law. Maker therefore agrees to pay this additional interest without
demand by Payee and not later than the due date of the next  payment  and agrees
that the additional  interest shall be secured by the Loan documents referred to
herein.

     C)  RETURNED  CHECKS.  Maker  agrees to pay Payee the sum of $50.00 for any
returned checks.



<PAGE>

2.   PREPAYMENT PROVISION/PENALTY.

     If Maker  intends to prepay all or part of the note,  Maker  shall  provide
Payee with written notice (via certified mail or receipted delivery) thereof, at
least 0 days prior to the date of  prepayment.  A  prepayment  is any  principal
payment  made  before  the due date of such  payment.  If Maker  fails to timely
provide the required notice,  then,  notwithstanding  any other provision to the
contrary  in the Note or any other Loan  Document,  Maker shall pay to Payee the
lesser of: (a) 0 days  interest  on the amount so  prepaid,  or (b)  interest to
maturity on the amount so prepaid
INITIAL (P.A.) (J.F.)

3.   INTEREST COMPUTATION.

     All interest required to be paid pursuant to the terms of the Note shall be
computed  on the  basis of a three  hundred  sixty  (360)  day  year.

4.   USURY LIMITATION.

     Notwithstanding  anything in the note to the  contrary,  to the  extent the
interest  payments are subject to  limitation  by usury law, that portion of the
interest paid that is subject to and exceeds  applicable usury limitations shall
be applied to reduce the principal due under the note.

5.   DEFAULTS.

     A)  Events  of  Default.  Maker  shall be in  default  of the note upon the
occurrence of any of the following:

        (i) Failure of Maker to make any payments under the note when due;

        (ii)  Failure of Maker to perform or observe any of Maker's  obligations
under the note,  the deed of trust  securing  the note (the  "Deed of Trust") or
other agreements between the parties.

        (iii)  Maker's  sale,  transfer  and/or  assignment  of the  security as
provided for in Paragraph 7 of this Rider to Note;

        (iv) Maker's further encumbrance of the Security without Payee's written
consent as provided for in Paragraph 6 of this Rider to Note.

        (v) The  filing  by Maker  of a  voluntary  petition  in  bankruptcy,  a
petition for reorganization, arrangement or other relief under the United States
Bankruptcy  Act, or a voluntary  petition for the  appointment  of a receiver or
comparable  relief from creditors  under the laws of any state, or the making by
Maker of an assignment of all or substantially all of its assets for the benefit
of creditors;

        (vi) The adjudication of Maker as bankrupt or insolvent, the appointment
of a receiver of all or substantially  all of Maker's assets, or the entry of an
order of reorganization of Maker under the United States Bankruptcy Act;

        (vii) Failure of Maker to make any payments  under any  promissory  note
secured by any deed of trust or other secured  instrument  senior to the deed of
trust securing this promissory  note, or to observe and fully and timely perform
any of Maker's  obligations under any senior or superior security  Instrument or
deed of trust.

<PAGE>

     B) When Maker is in default,  the entire  unpaid  balance of  interest  and
principal of the note shall become  immediately  due and payable at the election
of payee.

6.   DUE ON  ENCUMBRANCE.

     Should Maker further  encumber the real  property  described in the deed of
trust securing this Note, or any part thereof or any interest  therein,  without
first  obtaining  the written  consent of the Payee,  which consent shall not be
unreasonably withheld,  then, at the option of Payee, all obligations secured by
this Note may be declared due and payable.  Consent to one  transaction  of this
type will not  constitute a waiver of the right to require  consent to future or
successive  transactions.  Maker shall provide Payee with a copy of the proposed
promissory note, deed of trust,  and/or any other security  documents that Payee
may reasonably request,  prior to Payee considering any request for consent to a
further encumbrance(s) on the real property.

7.   SALE, TRANSFER AND/OR ASSIGNMENT OF THE SECURITY.

     If any part of the real  property  described  in the Deed of Trust given as
security  for the note shall be sold,  transferred  or  assigned or agreed to be
sold,  or  transferred,  or assigned,  whether  voluntary or  involuntary  or by
operation  of law,  then  the note  shall at the  option  of the  Payee,  become
immediately and payable.

8.   ATTORNEY'S FEES AND COLLECTION  COSTS.

     In the event that Payee should,  prior to commencement of any legal action,
incur any expenses or attorney's  fees in enforcing the terms and  conditions of
the Note or Deed of Trust; or upon the commencement of Arbitration  proceedings;
or if legal action is  instituted  to enforce the terms of the Note; or upon any
default  by Maker  and/or any other  person  liable on the Note  and/or  Deed of
Trust, Payee shall be entitled to recover from Maker all costs of collection and
enforcement, including reasonable attorney's fees. For purposes of this section,
the award  and  recovery  of  attorney's  fees  shall  survive  the entry of any
judgment  thereon and shall include,  without  limitation,  fees incurred in the
following: (1) Post Judgment Motions; (2) Contempt Proceedings; (3) Garnishment,
levy,  debtor  and third  party  examinations;  (4)  Discovery;  (5)  Bankruptcy
proceedings or other litigation; and (6) appeals.

9.   REMEDIES CUMULATIVE.

     The rights and remedies of Payee under the note, the Deed of Trust, and any
other instrument or document securing the note are cumulative and may be pursued
singly,  successively,  or together against Maker, or the property  described in
the Deed of Trust,  and against  any other  funds or security  held by Payee for
Maker.

10.  NO WAIVER.

     Failure  of Payee to pursue  any right or remedy  under the note  shall not
constitute a waiver, release or election of Payee's right to pursue the right or
remedy on the basis of the same or subsequent breach.

11.  NOTICES.

     All notices given under the note shall be in writing.



<PAGE>

12.  PAYMENTS.

     Interest will be due for any portion of a day that the principal balance is
outstanding.

13.  RECONVEYANCE.

     Upon payment of all amounts  owing on this note,  Payee shall  instruct the
Trustee `under the Deed of Trust securing the note to reconvey the property from
the lien of the Deed of Trust.

14.  SEVERABILITY.

     If any part of the note is determined to be illegal or  unenforceable,  all
other parts shall remain in effect.

15.  GOVERNING LAW.

     The  parties  hereby  stipulate  that this Note  shall be  governed  by and
construed in  accordance  with the laws of the State of  California  and further
stipulate that the proper jurisdiction for any action challenging the provisions
of this  Note  and/or  any of the  other  Loan  documents  shall,  except  where
prohibited by law, be in the Superior Court of Contra Costa County, California.

IN WITNESS  WHEREOF  Maker has signed and delivered  this rider  effective as of
December 20, 2001

INNOVATIVE MICRO TECHNOLOGY, INC., a Delaware corporation


/s/ John S. Foster
_____________________________________
John S. Foster, Chief Executive Officer and Chairman of the Board


/s/ Peter T. Altavilla
______________________________________
Peter T. Altavilla, Chief Financial Officer, Controller and Secretary