Exhibit 10.8(c)

 

CHANGE IN TERMS AGREEMENT

 

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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$6,500,000.00   05-25-2004   06-30-2006   932900001-1       932900001-1   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: $6,500,000.00   Initial Rate: 5.000%   Date of Agreement: May
25, 2004

 

DESCRIPTION OF EXISTING INDEBTEDNESS.

 

The Business Loan Agreement (Asset Based) and Promissory Note each dated
February 7, 2002, in the original amount of $6,500,000.00, as amended by those
certain Change In Terms Agreements dated March 11, 2002, April 24, 2003 and
October 8, 2003, from International Remote Imaging Systems, Inc. to Lender.

 

DESCRIPTION OF COLLATERAL.

 

1) All inventory, equipment, accounts (including but not limited to all
health-care-insurance receivables), chattel paper, instruments (including but
not limited to all promissory notes), letter-of-credit rights, letters of
credit, documents, deposit accounts, investment property, money, other rights to
payment and performance, and general intangibles (including but not limited to
all software and all payment intangibles); all fixtures; all attachments,
accessions, accessories, fittings, increases, tools, parts, repairs, supplies,
and commingled goods relating to the foregoing property, and all additions,
replacements of and substitutions for all or any part of the foregoing property;
all insurance refunds relating to the foregoing property; all good will relating
to the foregoing property; all records and data and embedded software relating
to the foregoing property, and all equipment, inventory and software to utilize,
create, maintain and process any such records and data on electronic media; and
all supporting obligations relating to the foregoing property; all whether now
existing or hereafter arising, whether now owned or hereafter acquired or
whether now or hereafter subject to any rights in the foregoing property; and
all products and proceeds (including but not limited to all insurance payments)
of or relating to the foregoing property.

 

DESCRIPTION OF CHANGE IN TERMS.

 

1) The Maturity date is hereby amended from June 30, 2004 to June 30, 2006.

 

2) The Borrower’s Name is hereby changed from International Remote Imaging
Systems, Inc. to IRIS International, Inc.

 

3) The Commercial Guarantees executed by Statspin, Inc. and Advanced Digital
Imaging Research, LLC are each hereby increased from $8,000,000.00 to
$16,500,000.00.

 

4) Excess Availability Covenant and Working Capital Covenants are hereby deleted
in their entirety.

 

5) Borrower covenants and agrees with Lender that, while this Agreement is in
effect, Borrower will permit employees or agents of Lender at any reasonable
time, but at least annually, to inspect any and all Collateral for the Loan or
Loans, as well as 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 as may be deemed necessary. Any such inspection or
examination shall be at Borrower’s expense.

 

6) Covenant to provide Lender a Profit & Loss Statement, as soon as available,
but in no event later than twenty (20) days after month end, on a monthly basis
is hereby deleted in its entirety.

 

7) Current Ratio. Borrower covenants and agrees with Lender that, while this
Agreement is in effect, Borrower shall maintain a minimum Current Ratio of 1.500
to 1.000, monitored on a quarterly basis.

 

8) Tangible Net Worth. Borrower covenants and agrees with Lender that, while
this Agreement is in effect, Borrower shall maintain a minimum Tangible Net
Worth of not less than $17,500,000.00.

 

9) Pre-Tax Profitability. Borrower covenants and agrees with Lender that, while
this Agreement is in effect, Borrower shall maintain a minimum pre-tax
profitability of $1,500,000.00 for December 31, 2004 and December 31, 2005.

 

10) Borrower covenants and agrees with Lender that, while this Agreement is in
effect, Borrower shall not incur losses for two consecutive quarters.

 

11) Interest Rate. See Pricing Matrix Addendum attached hereto.

 

12) Letter of Credit Subline and Foreign Exchange Subline. See Letter of Credit
Subline and Foreign Exchange Subline attached hereto.

 

13) Usage Fee. Borrower covenants and agrees with Lender that, while this
Agreement is in effect, Borrower shall be assessed quarterly, a 18% fee on the
undisbursed balance of the line of credit. Such fee shall be waived if the
combined quarterly average usage exceeds 60% of the respective commitment
amounts.

 

14) All other terms and conditions remain the same.

 

CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of
the original obligation or obligations, including all agreements evidenced or
securing the obligation(s), remain unchanged and in full force and effect.
Consent by Lender to this Agreement does not waive Lender’s right to strict
performance of the obligation(s) as changed, nor obligate Lender to make any
future change in terms. Nothing in this Agreement will constitute a satisfaction
of the obligation(s). It is the intention of Lender to retain as liable parties
all makers and endorsers of the original obligation(s), including accommodation
parties, unless a party is expressly released by Lender in writing. Any maker or
endorser, including accommodation makers, will not be released by virtue of this
Agreement. If any person who signed the original obligation does not sign this
Agreement below, then all persons signing below acknowledge that this Agreement
is given conditionally, based on the representation to Lender that the
non-signing party consents to the changes and provisions of this Agreement or
otherwise will not be released by it. This waiver applies not only to any
initial extension, modification or release, but also to all such subsequent
actions.

 

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

 

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     CHANGE IN TERMS AGREEMENT      Loan No: 932900001-1    (Continued)    Page
2

 

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.

 

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.

 

REAFFIRMATION OF GUARANTY OBLIGATIONS. An exhibit, titled “REAFFIRMATION OF
GUARANTY OBLIGATIONS,” 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.

 

LETTER OF CREDIT SUBLINE EXHIBIT. An exhibit, titled “Letter of Credit Subline
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.

 

FOREIGN EXCHANGE SUBLINE EXHIBIT. An exhibit, titled “Foreign Exchange Subline
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.

 

PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS
OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT.

 

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

 

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PRICING MATRIX ADDENDUM

 

Debt to Tangible Net Worth

 

Between 1.01:1.00 and 1.25:1.00    Prime + .25% or 3 Month Libor + 2.250% Less
than 1.00:1.00    Prime + 0% or 3 Month Libor + 2.000%

 

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

 

Subject: IRIS International $10MM NR/TL

 

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Commercial Security Agreement