Change in Terms Agreement



 Exhibit 10.8(c) 
  
 CHANGE IN TERMS AGREEMENT 
  

															
	 Principal

	 	 Loan Date

	 	 Maturity

	 	 Loan No

	 	 Call / Coll

	 	 Account

	 	 Officer

	 	 Initials


	$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 

  











					
	 	  	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 
  









  
 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 
  









  
 Commercial Security
Agreement