Promissory Note (Term Loan)




Exhibit 10.18





PROMISSORY NOTE

(Term Loan)





	
$5,410,000.00	
	
Indianapolis, Indiana

October 29, 2002







        
FOR VALUE  RECEIVED the  undersigned  Bioanalytical  Systems,  Inc.,  an Indiana
corporation  (“Maker”)  promises to pay to the order of Union Planters
Bank,  N.A.  (“Payee”),   on  or  before  November 1,  2012  (the
“Maturity  Date”),  the principal sum of Five Million Four Hundred Ten
Thousand Dollars and No Cents ($5,410,000.00) or such lesser sum as is indicated
on Payee’s  records as having been disbursed by Payee to or for the benefit
of Maker,  together with interest prior to the Maturity Date, upon the terms set
forth in this Promissory Note. 



        1.        
Definitions.    In  addition  to  the  terms  defined
elsewhere  in this  Promissory  Note,  the  following  terms  have the  meanings
indicated for purposes of this Promissory Note:


	

	
                
a.        
"Loan  Agreement"  means that certain Loan Agreement of even date herewith among
Maker and BAS Evansville,  Inc., as Borrowers,  and Payee, as Lender,  as may be
amended from time to time.







        
Capitalized terms used in this Promissory Note and not otherwise defined in this
Promissory  Note  shall  have the  meanings  ascribed  to such terms in the Loan
Agreement. 



        2.        
Interest.    Interest  shall accrue on any  principal
balance  outstanding  hereunder from and including the date hereof at a rate per
annum equal to the Fixed Rate. All  computations of interest and fees under this
Agreement shall be made on the basis of a year of three hundred sixty (360) days
and calculated  for the actual days elapsed.  Any change in the rate of interest
occasioned  by a change in the Prime Rate shall be  effective on the same day as
the change in the Prime Rate. 



        3.        
Repayment. Maker will repay this Loan in consecutive monthly installments
of principal and interest,  based on the applicable interest rate and the months
remaining in an  amortization  period that begins on the date hereof and extends
for a period of two hundred  forty (240) months  thereafter.  Maker’s  said
installment payments shall commence on December 1, 2002, and shall continue
on the first day of each calendar month until the Maturity Date. On the Maturity
Date, the balance,  plus accrued interest,  then unpaid shall be due and payable
immediately.  To the extent  that the  amortization  period  extends  beyond the
Maturity Date, the final payment on the Maturity Date will be a balloon  payment
in  an  amount  sufficient  to  repay  all  remaining  indebtedness  under  this
Promissory  Note.  Principal  and  interest  payments  after  any  change in the
applicable  interest rate or any partial  prepayment will be calculated based on
the number of months remaining in the two hundred forty (240) month amortization
period of this Promissory Note at such time. 



        
In any and all events,  the entire remaining  balance of this Promissory Note is
due and payable on the Maturity  Date.  Acceptance by Payee of any payment which
is less than payment in full of all amounts due and owing at such time shall not
constitute a waiver of Payee’s  right to receive payment in full at such or
any other time. 





        
Each payment of principal and interest due under this  Promissory  Note shall be
made by Maker to Payee at any of its offices.  All sums paid on this  Promissory
Note shall be applied  first to fees and costs of Payee in  connection  with the
enforcement  of  the  terms  and  conditions  of the  Loan  Agreement  and  this
Promissory Note, second to interest accrued to the date of payment,  and finally
to principal.  Each payment due under this Promissory Note shall be made without
set-off or  counterclaim  in immediately  available  funds on a Business Day not
later than 3:30 p.m.  Lafayette, Indiana time. All sums received after such
time shall be deemed  received on the next Business Day. If any  installment  of
principal or interest under this  Promissory Note is payable on a day other than
a Business Day, the maturity of such  installment  shall be extended to the next
succeeding  Business Day, and interest shall be payable during such extension of
maturity. 



        
All sums payable hereunder will be payable with  attorneys’  fees and costs
of collection and without relief from valuation and appraisement laws. Maker and
all endorsers  hereof hereby severally waive  presentment for payment,  protest,
notice of protest,  notice of  non-payment  and all other  notices or demands in
connection with the delivery, acceptance,  performance,  default, endorsement or
guaranty  of this  Promissory  Note,  notice  of loans  made,  credit  extended,
collateral  received or delivered,  or other action taken in reliance hereon and
all  other  demands  and  notices  of any  description.  Further,  Maker and all
endorsers hereof hereby severally  consent to extensions of time with respect to
sums payable hereunder and any collateral for this indebtedness.  Maker consents
to any extension or postponement of the time of payment or any other  indulgence
to any  substitution,  exchange or release of or failure to perfect any security
interest  in such  collateral,  to the  adding or release of any party or person
primarily or secondarily  liable,  to the acceptance of partial payment thereon,
and the settlement,  compromise or adjustment of any thereof, all in such manner
and at such time as Payee may deem advisable. 



        4.        
Prepayment.  Maker may prepay all or any part of the principal balance of
this Promissory Note at any time without premium or penalty. Amounts prepaid may
not be reborrowed.



        5.        
Default  Rate  and  Late  Charge.  After  maturity  (by  acceleration  or
otherwise) the unpaid balance (both principal and unpaid pre-maturity  interest)
shall bear  interest at a Default  Rate equal to four percent (4%) over the rate
of interest in effect  immediately prior to maturity.  If any payment under this
Promissory  Note is not  received  by the  holder  hereof  within  fifteen  (15)
calendar  days after the payment is due,  Maker will pay to the holder  hereof a
late charge of the lesser of five percent  (5.0%) of the overdue  payment amount
or One Thousand Dollars and No Cents ($1,000.00). 



        6.        
Notices. All notices to be given pursuant to this Promissory Note will be
sufficient if given by personal  service,  or by guaranteed  overnight  delivery
service,  or by postage  prepaid  mailing by certified or  registered  mail with
return receipt  requested,  to the parties as set forth below,  or to such other
address as a party may request by notice  given  pursuant to this  Section.  Any
time period  provided in the giving of any notice  hereunder shall commence upon
the date of personal service, the day after delivery to the guaranteed overnight
delivery  service,  or two (2) days after mailing  certified or registered mail.
However, any failure to give notice in accordance with the terms of this Section
will not  invalidate  such  notice if such  notice  was in fact in  writing  and
actually received by the party to whom it was directed. 



– 2 –



	
	
MAKER:	
Bioanalytical Systems, Inc.

2701 Kent Avenue

West Lafayette, Indiana 47906

Attention:  Douglas P. Wieten




	
	
LENDER:	
UNION PLANTERS BANK, N.A.

437 South Street

P.O. Box 780

Lafayette, IN 47902-0780

Attention:  Daniel R. House







        7.        
Governing  Law.  This  Promissory  Note and all  rights  and  obligations
hereunder, including matters of construction,  validity and performance, will be
governed by the Uniform  Commercial Code and other  applicable laws of the State
of Indiana.  Whenever  possible each provision of this  Promissory  Note will be
interpreted in such a manner as to be effective and valid upon  applicable  law,
but if any  provision of this  Promissory  Note will be prohibited by or invalid
under  applicable law, such provision will be ineffective  only to the extent of
such  prohibition  without  invalidating  the remainder of such provision or the
remaining provisions of this Promissory Note. 



        8.        
Setoff.  Payee shall have the right at any time to apply Payee’s own
debt or liability to Maker or to any other party liable on this  Promissory Note
in whole or partial  payment of this  Promissory Note or other present or future
liabilities  of Maker to Payee,  without  any  requirement  of mutual  maturity.




        9.        
Related  Documents.  This  Promissory  Note is made  pursuant to the Loan
Agreement  and is  secured  by the real  estate  mortgages  and  other  security
instruments  therein  referred to. The terms,  conditions and definitions of the
Loan Agreement are  incorporated in this  Promissory Note by this reference.  If
any  installment  due on this  Promissory Note is not paid when due, or if there
should be an Event of Default under the Loan Agreement which is not cured within
the grace period (if any)  allowed for the cure  thereof,  the unpaid  principal
balance  hereof  together with interest  accrued  thereon,  at the option of the
holder  hereof,  immediately  become due and payable  without  notice or demand.




        
The real estate  mortgages  and other  security  instruments  referred to in the
preceding paragraph may also secure the payment of other obligations of Maker. A
default in the payment of any of such other  obligations,  after any  applicable
notice  and  periods of grace or cure,  shall  constitute  a default  hereunder.
Nothing  herein  shall in any way lessen or impair the rights of the holder with
respect to this Promissory Note. This Promissory Note and the other  obligations
referred  to above  shall  remain  separate  obligations  of Maker  and shall be
separately  enforceable  according  to their  respective  terms.  The holder may
institute  separate  proceedings with respect to each  simultaneously or in such
order and such times as the holder may elect.  The  pendency of any  proceedings
with respect to this  Promissory Note or other  obligation  shall not be grounds
for the abatement or for hindering,  delaying or preventing any proceedings with
respect to any other obligation.  Default under each shall constitute a separate
cause of action and the institution of proceedings  upon one, but not all, shall
not be construed as splitting a cause of action by the holder. 



– 3 –




        10.        
Waiver.  Each endorser and any other party liable on this Promissory Note
severally  waives  demand,  presentment,  notice of dishonor  and  protest,  and
consents to any extension or  postponement  of time of its payment without limit
as to the number or period, to any  substitution,  exchange or release of all or
any part of the collateral,  to the addition of any party, and to the release or
discharge of, or suspension of any rights and remedies  against,  any person who
may be liable for the payment of this  Promissory  Note. No delay on the part of
Payee in the  exercise  of any right or remedy  shall  operate  as a waiver.  No
single or partial  exercise by Payee of any right or remedy  shall  preclude any
other  future  exercise of it or the  exercise of any other right or remedy.  No
waiver  or  indulgence  by Payee of any  default  shall be  effective  unless in
writing and signed by Payee,  nor shall a waiver on one occasion be construed as
a bar to or waiver of that right on any future occasion. 



        11.        
Miscellaneous.  This  Promissory  Note  shall be  binding  on  Maker  and
Maker’s successors, and shall inure to the benefit of Payee, its successors
and assigns.  Any reference to Payee shall include any holder of this Promissory
Note.  Section  headings are for  convenience  of  reference  only and shall not
affect the  interpretation  of this Promissory  Note. This Promissory  Note, the
Loan Agreement and the Instruments embody the entire agreement between Maker and
Payee  regarding  the terms of the loan  evidenced by this  Promissory  Note and
supersede  all  oral  statements  and  prior  writings  relating  to that  Loan.




        12.        
WAIVER  OF  JURY  TRIAL.  MAKER,  AFTER  CONSULTING  OR  HAVING  HAD  THE
OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY,  VOLUNTARILY,  AND INTENTIONALLY
WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION  BASED UPON OR
ARISING OUT OF THIS PROMISSORY  NOTE, THE INSTRUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED  BY  THE  LOAN  AGREEMENT  OR  ANY  COURSE  OF  CONDUCT,   DEALING,
STATEMENTS,  WHETHER ORAL OR WRITTEN,  OR ACTIONS OF PAYEE. MAKER SHALL NOT SEEK
TO CONSOLIDATE,  BY COUNTERCLAIM OR OTHERWISE,  ANY ACTION IN WHICH A JURY TRIAL
CANNOT BE OR HAS NOT BEEN WAIVED.  THESE  PROVISIONS SHALL NOT BE DEEMED TO HAVE
BEEN  MODIFIED  IN ANY  RESPECT  OR  RELINQUISHED  BY PAYEE  EXCEPT BY A WRITTEN
INSTRUMENT EXECUTED BY PAYEE. 



        
IN WITNESS WHEREOF, Maker has executed this Promissory Note this 29th
day of October, 2002.


	
	
BIOANALYTICAL-SYSTEMS. INC.







By:  /s/ Peter T. Kissinger

Peter T. Kissinger, Ph.D.

Chairman and Chief Executive Officer







– 4 –




Schedule E

to

Loan Agreement among Union Planters Bank, N.A.,

Bioanalytical Systems, Inc. and BAS Evansville, Inc.



Terms of Loan (West Lafayette)






	
Loan Amount:	
$2,250,000.00



	
Interest Rate:	
Prior to the Loan (West  Lafayette)  Conversion Date and so long as there exists
no Event  of  Default,  the  outstanding  principal  balance  of the Loan  (West
Lafayette)  shall bear interest at a variable rate which is equal to the rate of
interest  announced  from  time to time by Union  Planters  Bank,  N.A.  (or any
financial  institution  which may succeed to the commercial  lending business of
Union Planters Bank,  N.A.) as its prime rate  (“Prime  Rate”),  which
rate  shall  change  on the same date as the date of each  change in said  Prime
Rate. The Prime Rate is a reference rate and does not necessarily  represent the
lowest or best rate actually charged to any customer. Lender may make commercial
loans or other  loans at rates of  interest  at,  above or below the Prime Rate.



BORROWER  WILL  SELECT ONE OF THE  FOLLOWING  OPTIONS  AND NOTIFY  LENDER OF ITS
SELECTION  AT  LEAST  THIRTY  (30)  DAYS  PRIOR  TO THE  LOAN  (WEST  LAFAYETTE)
CONVERSION DATE:









	
	
1.	
The Prime Rate.









	
	
2.	
A fixed rate which is equal to the then current weekly or monthly average, as
selected by Lender in its sole discretion, of the one (1) year U.S. Treasury
Constant Maturity Index as published by The Federal Reserve Board of the United
States in the most recent H.15 on or before fifteen days prior to the Loan (West
Lafayette) Conversion Date, plus 225 basis points.










	
	
3.	
A fixed rate which is equal to the then current weekly or monthly average, as
selected by Lender in its sole discretion, of the three (3) year U.S. Treasury
Constant Maturity Index as published by The Federal Reserve Board of the United
States in the most recent H.15 on or before fifteen days prior to the Loan (West
Lafayette) Conversion Date, plus 250 basis points.










	
	
4.	
A fixed rate which is equal to the then current weekly or monthly average, as
selected by Lender in its sole discretion, of the five (5) year U.S. Treasury
Constant Maturity Index as published by The Federal Reserve Board of the United
States in the most recent H.15 on or before fifteen days prior to the Loan (West
Lafayette) Conversion Date, plus 275 basis points.












	

	
If the Federal  Reserve Board of the United States  discontinues  publication of
the H.15, Lender in its sole discretion will select another authoritative source
for the applicable index.









	
Maturity:	
November l, 2012









	
Amortization Period:	
240 months









	
Advances:	
Prior to the Loan (West  Lafayette)  Conversion  Date,  Borrower may request and
receive Advances under the Loan (West Lafayette)  Promissory Note so long as the
balance  outstanding at any one time does not exceed the lesser of  (a) Two
Million Two Hundred  Fifty  Thousand  Dollars  and No Cents  ($2,250,000.00)  or
(b) Seventy-Five  percent  (75%)  of the  value of the  Real  Estate  (West
Lafayette)   as   determined   by  an   independent   appraiser   acceptable  to
Lender.









	
Payments:	
Borrower shall pay the principal amount of the Loan (West Lafayette)  Promissory
Note, and accrued interest thereon, as follows:









	

	
(1)	
Prior to the Loan (West Lafayette) Conversion Date, consecutive monthly payments
of interest only, commencing December 1, 2002;









	

	
(2)	
Commencing on the Loan (West  Lafayette)  Conversion  Date, and continuing until
the Loan (West Lafayette)  Maturity Date,  consecutive  monthly  installments of
principal  and  interest  based on the  applicable  interest  rate and the years
remaining under the amortization period, and









	

	
(3)	
On the Loan (West Lafayette) Maturity Date, the principal balance,  plus accrued
interest,  then unpaid shall be due and payable immediately.  To the extent that
the  amortization  period exceeds the Loan (West  Lafayette)  Maturity Date, the
final  payment  on the Loan  (West  Lafayette)  Maturity  Date will be a balloon
payment in an amount  sufficient to repay all remaining  indebtedness  under the
Loan (West Lafayette) Promissory Note.









	

	
(4)	
Principal and interest payments after any change in the interest rate or partial
prepayments will be calculated based on the number of years remaining under the
amortization period of the Loan (West Lafayette) Promissory Note at the time of
such change.









	
Prepayments:	
Borrower  shall  have the  right to  prepay  all or any  portion  of the  amount
outstanding under the Loan (West Lafayette) Promissory Note accruing interest at
the Prime Rate at any time  without  premium  or  penalty.  In all other  cases,
Borrower may prepay all or any part of the  principal  balance of the Loan (West
Lafayette)  Promissory Note on one Business  Day’s notice provided that, in
addition to all  principal,  accrued and unpaid  interest and costs owing at the
time of prepayment, Borrower pays a prepayment premium equal to:












[A]  The  NPV (NPV  calculations  will be based on the original
contracted  Loan (West  Lafayette)  Promissory Note rate) of interest that would
have accrued on the amount  prepaid  (under the original terms and conditions of
the Loan (West  Lafayette)  Promissory  Note) at the original  LIBOR / SWAP rate
through the maturity date:



Minus



[B]  The  NPV (NPV  calculations  will be based on the  current
LIBOR / SWAP rate concurrent with the date of prepayment) of interest that would
have accrued on the amount  prepaid  (under the original terms and conditions of
the Loan (West  Lafayette)  Promissory  Note) at the  current  LIBOR / SWAP rate
through the maturity date.



[A] - [B] = Prepayment Premium



In no event  shall the  prepayment  premium be less than  zero.  Borrower’s
notice of its intent to prepay shall be irrevocable.  If the balance of the Loan
(West Lafayette)  Promissory Note is accelerated in accordance with the terms of
the Loan (West Lafayette)  Promissory  Note, the resulting  balance due shall be
considered  a  prepayment  due  and  payable  as of the  date  of  acceleration.



Borrower agrees that the prepayment premium is a reasonable estimate of loss and
not a penalty.  The prepayment  premium is payable as liquidated damages for the
loss of bargain,  and its payment shall not in any way reduce,  affect or impair
any other  obligation  of Borrower  under the Loan (West  Lafayette)  Promissory
Note.   As   used   herein,    the   following    terms   have   the   following
definitions:



NPV:    
Net Present Value



LIBOR/SWAP:    LIBOR  (London Interbank Offered Rate)
is fixed each morning by the British Bankers Association (BBA). The LIBOR / SWAP
rates to be used will be on the day of prepayment.  Union  Planters  Corporation
uses the LIBOR / SWAP as shown in  Bloomberg  (USSWAP  Mid) (day count  adjusted
from actual/360 to actual/actual).



Bloomberg:    
Is an independent  source for LIBOR/SWAP rates which Union Planters  Corporation
and  most   well   respected   financial   institutions   subscribe   to.   Type
USSWAP<GO> to see the US Government Composite rate screen.