<PAGE>   1
                                                                 EXHIBIT 10.7(d)


October 4, 1997


Dr. Thomas F. Kelley
StatSpin
85 Morse St.
Norwood, MA 02062


Dear Tom,

Recognizing 1) your desire to scale back your activities now and your eventual
departure from StatSpin, and 2) the desire of both parties to effect a smooth
transition to new, or revised, StatSpin management, IRIS is willing to amend
your Employment Agreement as follows and under these provisions:

1.    You agree to help in the identification of potential candidates for a new
      general manager and participate in the screening/hiring process as
      requested by me.

2.    The Agreement will be considered modified to meet the intent of the
      following changes and these changes become effective on the date this
      letter is ratified by the Board of Directors.

3.    Your working time will be at least 24 hours per week (exclusive of travel
      to/from and participation at Director's meetings, trade shows, etc.). Your
      salary will be reduced to $72,000 on an annual basis. Your general
      responsibilities and duties will remain unchanged. Your Benefits
      (paragraph 7), Stock Options (paragraph 5), etc. will remain unchanged.
      Any Bonus (paragraph 4) will be based on annual compensation. The modified
      Agreement will terminate on January 31, 1998. After that date, IRIS would
      agree to pay you one-half of the on-going compensation remaining under
      your Employment Agreement, in return for the availability of your services
      not to exceed, on average, ten (10) hours per week through January 30,
      1999. Termination as described in paragraph 8 of the Agreement will remain
      unchanged.

4.    With respect to your activities at ImagePath, while you are employed by
      IRIS or StatSpin, you agree to the following:

      -     Those activities will not interfere with the discharge of your
            duties and responsibilities on behalf of StatSpin and IRIS.

      -     IRIS will be granted non-exclusive distribution to ImagePath
            products on terms no less favorable than those of any other
            distributor.




 /s/ FHD                                                          /s TFK
F.H.D.                                                           T.F.K.

Date:  10-4-97                                                   Date:  10/16/97
       -------                                                          --------


<PAGE>   2
      -     Should you become aware that an actual rather than potential
            conflict arises between ImagePath and IRIS with respect to your
            management and fiduciary responsibilities, you agree to bring it to
            the immediate attention of the IRIS Board of Directors through
            notice to me and be prepared to resign from your participation in
            all management and directorship capacities at either ImagePath or
            IRIS.

5.    You agree to waive any claims you have against IRIS that stem from
      previously expressed personal grievances.

If all of the above is acceptable to you, please sign, date and return one copy
of this letter. Also, please initial and date the first page.

I will recommend to the IRIS Board of Directors that they accept and ratify this
letter in its executed form as an amendment to your Employment Agreement at the
forthcoming regular Board of Directors meeting on October 5, 1997.



Sincerely,                                  Accepted by:


/s/ F.H. Deindoerfer                        /s/ T.F. Kelley
    -------------------------                   ----------------------------
F. H. Deindoerfer                           Thomas F. Kelley
Chairman
                                            Date:  10/16/97