Document:

EMPLOYMENT
      AGREEMENT

     

    THIS
      AGREEMENT ("Agreement") is made and entered into effective the 6th day of
      November, 2007 by and among BIOANALYTICAL SYSTEMS, INC. (“BASi”, “Company”) a
      corporation organized under the laws of the State of Indiana, and Edward M.
      Chait, ("Employee") as Chief Business Officer of BASi. This agreement replaces
      and supersedes the employment agreement between BASi and Employee dated August
      1, 2005.

     

    Preliminary
      Statements:

     

    A.        BASi
      is engaged in the business of providing contract research services and
      manufacturing and distributing scientific instruments. The Company is in the
      business of conducting laboratory experiments and research on behalf of other
      businesses (“Business”) which is expected to add significantly to the value of
      the Company and BASi.

     

    B.        Employee
      is experienced in the Business, and is familiar with the management and
      operations of the Company. The Company wishes to continue to employ Employee
      on
      the terms and conditions contained herein. 

     

    In
      consideration of the premises and mutual covenants and agreements contained
      herein, the parties hereby agree as follows:

     

    ARTICLE
      1

     

    Term,
      Compensation, and Benefits

     

    Section
      1.1.
      Term
      The
      Company hereby agrees to employ the Employee, and the Employee hereby accepts
      employment with the Company, on the terms and conditions set forth in this
      Agreement until December 30, 2010 (the “Initial Term”). The Initial Term shall
      be extended for successive one year periods (the "Additional Terms," and
      together with the Initial Term, the "Employment Period"), except that if either
      Employee or Company gives the other party written notice at least ninety days
      (90) before the end of the Initial Term, or any extended term, then this
      Agreement shall expire at the end of its then current term. The Employee shall
      take absences at such time as shall be approved by the Chief Executive
      Officer.

     

    Section
      1.2 Compensation
      and Benefits

     

    Section
      1.2.1 Salary:
      BASi
      will pay an initial base salary of $13,750.00 per month. Salary shall be paid
      in
      equal semi-monthly installments in arrears. All amounts to be paid hereunder
      shall be paid in accordance with normal payroll procedures of the Company and
      shall be subject to all required withholdings and deductions.

     

    Section
      1.2.2. Stock Options:
      Employee
      has been granted options to purchase BASi shares. Such options will continue
      under their initial terms and conditions. Company may also grant additional
      options to employee at the discretion of its Board of Directions, with terms
      and
      conditions determined at the time of grant. 

     

    Section
      1.2.3.
      Bonus:
      Employee will also be eligible for bonus grants under bonus plans adopted by
      the
      Company at the discretion of the Compensation Committee of the Board of
      Directors. 

     

    
      
        
        

      

      
        Page
          1

        
          

        

      

      
        
        

      

    

     

    Section
      1.2.4 Vacation
      Policy: During
      the initial term, Employee will accumulate one (1) vacation day per month in
      accordance with policies described in the BASi Employee Handbook. Employee
      shall
      also be granted an additional ten days vacation at the start of the initial
      term, and again at the start of any subsequent term, effectively granting
      employee 15 years seniority. Employee's compensation shall continue to be paid
      in full during this period. Any vacation at the end of any year ending on an
      anniversary date shall carry over to the following one-year period commencing
      on
      such anniversary date (the “Following Year”), but shall not carry over beyond
      the Following Year. Vacation time not used prior to the expiration will be
      banked for short-term disability as described in the BASi Employee Handbook.
      

     

    Section
      1.2.5 Other
      Benefits:
      During
      the Employment Period, the Employee shall be entitled to participate in all
      employee benefit plans which are generally made available to employees of the
      Company, subject to the eligibility, qualification, waiting period and other
      terms and conditions of such plans as they shall be in effect from time to
      time
      unless listed herein as exceptions from those terms and conditions. The
      highlights of the benefits are as follows: group health insurance (after ninety
      days); two weeks unpaid vacation (optional); term life insurance ($100,000);
      long term disability insurance; and a 401K deferred tax savings incentive/profit
      sharing plan. Optional participation benefits include a flexible spending
      account, dental, vision, and short-term disability. 

     

    ARTICLE
      2

     

    Duties

     

    Section
      2.1. Duties
      During
      the Employment Period, the Employee will be the ranking operations officer
      of
      the company, with responsibility for the commercial operation in the CRO
      Services and instrument manufacturing segment of our business. The Employee
      will
      lead the GM site managers, Director of Manufacturing and Engineering R&D,
      provide operational and technical support for the Business Development and
      Marketing areas of the company. The Employee will be called upon to perform
      certain services for the Company including, without limitation, the following:
      

     

    
      	
              a) 

            	
              Manage
                all of the company’s commercial operating units

            
	
              b) 

            	
              Motivate,
                lead and teach qualified staff to meet or exceed
                expectations.

            
	
              c) 

            	
              Develop
                and manage resources (staff, facilities, and equipment) to deliver
                new
                business and maintain current clients.

            
	
              d) 

            	
              Work
                jointly with the CEO, CSO and Corporate Director of Quality Assurance
                to
                insure scientific regulatory compliance and with the CFO to ensure
                SEC
                compliance. You would be expected to provide accurate financial
                information and meet all financial disclosure
                requirements..

            
	
              e) 

            	
              Manage
                and foster new and existing relationships with clients in cooperation
                with
                the Vice President of Business Development.

            
	
              f) 

            	
              Enhance
                the professional image of BASi in public forums. 

            
	
              g) 

            	
              Engage
                in benchmarking against competitors, understanding of best practices
                and
                guide the company to alternate strategies and generally become
                knowledgeable about the drug development and medical device
                industries.

            

    

    
    

    
      	 	
              h)

            	
               Manage
                the company’s Engineering R&D and Intellectual
                Property

            

    

    
      	 	
              i)

            	
               Deliver
                revenues and profits based on budgeted
                expectations

            

    

    

    Section
      2.2.
      The
      Employee shall serve the Company by performing such other services as the
      Company may reasonably require to conduct the Company’s business. The Company
      shall also have the absolute right and power to direct and control the Employee
      in carrying out duties assigned by the Company, including, but not limited
      to,
      the right (1) to review, modify and cancel all work performed, and (2) to assign
      specific duties to be performed, including the general means and manner by
      which
      such duties shall be performed. Notwithstanding any other provisions of this
      Agreement, the Company shall not impose employment duties or constraints of
      any
      kind upon the Employee which would require the Employee to violate any
      ordinance, regulation, statute or other law. The Employee shall devote his
      full
      working time, attention and energy to the performances of the duties imposed
      hereunder. The Employee shall conform to such hours of work as may from time
      to
      time reasonably be required of him and shall not be entitled to receive any
      additional remuneration for work outside his normal hours. The Employee will
      NOT
      be held
      financially, legally, or otherwise liable for any past practices or actions
      or
      decisions made by BASi, or its predecessors prior to the start of the Employee’s
      beginning date of employment.

     

    
      
        
        

      

      
        Page
          2

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      3

     

    Confidentiality
      and Other Matters

     

    Section
      3.1.
      Confidentiality
      Agreement.
      The
      Employee, prior to and during the term of employment under this Agreement,
      has
      had and will have access to and has become or will become familiar with
      information, whether or not originated by the Employee, which is used in or
      related to the Business or the business of BASi or certain subsidiaries or
      affiliates of BASi and is (a) proprietary to, about, or created by the Company
      its subsidiaries or its affiliates; (b) designated as confidential by the
      Company, its subsidiaries or its affiliates; or (c) not generally known to
      or
      ascertainable by proper means by the public ("Confidential
      Information").

     

    Further,
      the Employee has had and will have access to items proprietary to the Company,
      its subsidiaries or its affiliates ("Proprietary Items"). "Proprietary Items"
      shall mean all legally-recognized rights which result from or are derived from
      the Employee's work product or the work product of others made for the Company,
      its subsidiaries or its affiliates, including all past, present and future
      work
      product made for the Company, its subsidiaries or its affiliates, or with
      knowledge, use or incorporation of Confidential Information, including, but
      not
      limited to works of authorship, developments, inventions, innovations, designs,
      discoveries, improvements, trade secrets, trademarks, applications, techniques,
      know-how and ideas, whether or not patentable or copyrightable, conceived or
      made or developed by the Employee (solely or in cooperation with others) or
      others during the term of this Agreement or prior to or during his tenure with
      the Company, or which are reasonably related to the Business or the business
      of
      BASi or certain subsidiaries or affiliates of BASi or the actual or demonstrably
      anticipated research and development of the Company.

     

    The
      Employee agrees that any Confidential Information and Proprietary Items will
      be
      treated in full confidence and shall not be used, directly or indirectly, by
      him, nor shall the same be disclosed to any other firms, organizations, or
      persons outside of the Company's employees bound by similar agreement, during
      the term of this Agreement or at any time thereafter, except as required in
      the
      course of his employment with the Company. All Confidential Information and
      Proprietary Items, whether prepared by the Employee or otherwise, coming into
      his possession, shall remain the exclusive property of the Company and shall
      not
      be permanently removed from the premises of the Company under any circumstances
      whatsoever, without the prior written consent of the Company.

     

    The
      Employee will not be obliged to keep information confidential to the extent
      that
      the information has ceased to be confidential and has entered the public domain
      otherwise than due to the Employee's acts. The provisions of this Section
      3.1
      shall be
      in addition to, and shall not affect, the Employee's common law duty of fidelity
      to the Company.

     

    Section
      3.2.
      The
      parties foresee that the Employee may make inventions or create other
      intellectual property in the course of his duties hereunder and agree that
      in
      this respect the Employee has a special responsibility to further the interests
      of the Company and its affiliates.

     

    
      
        
        

      

      
        Page
          3

        
          

        

      

      
        
        

      

    

     

    Section
      3.3
      The
      Employee agrees that during the Employee’s employment with the Company and for
      an additional period of the two (2) years immediately following termination
      of
      the Employee’s employment with the Company, the Employee shall not directly or
      indirectly, as an individual or as a director, officer, contractor, employee,
      consultant, partner, investor or in any other capacity with any corporation,
      partnership or other person or entity, other than the Company (an “Other
      Entity”), (i) contact or communicate any then current material customer or
      client of the Company in the Business, or any person or entity with which the
      Company is then engaged in material discussions regarding that person or entity
      becoming a client or customer of the Company in the Business, for the purpose
      of
      inducing any such customer or client to move its account from the Company to
      another company in the Business; provided, however, that nothing in this
      sentence shall prevent the Employee from becoming employed by or providing
      consulting services to any such customer or client of the Company in the
      Business, or (ii) solicit any other employee of the Company for employment
      or a
      consulting or other services arrangement with an Other Entity. The restrictions
      of this Section
      3.3
      shall
      not be deemed to prevent the Employee from owning not more than 5% of the issued
      and outstanding shares of any class of securities of an issuer whose securities
      are listed on a national securities exchange or registered pursuant to Section
      12(g) of the Securities Exchange Act of 1934, as amended. In the event a court
      of competent jurisdiction determines that the foregoing restriction is
      unreasonable in terms of geographic scope or otherwise then the court is hereby
      authorized to reduce the scope of said restriction and enforce this Section
      3.3
      as so
      reduced. If any sentence, word or provision of this Section
      3.3
      shall be
      determined to be unenforceable, the same shall be severed herefrom and the
      remainder shall be enforced as if the unenforceable sentence, word or provision
      did not exist. Notwithstanding any provision of this Agreement to the contrary,
      the terms and conditions of this Section
      3.3
      shall
      survive for a period of two (2) years following termination of the Employee’s
      employment with the Company, at which time the terms and conditions of this
      Section
      3.3
      shall
      terminate.

     

    Section
      3.4 The
      employee agrees to abide by all the conditions of the Company Code of Conduct
      and
      Ethics.

     

    ARTICLE
      4

     

    Termination
      of Employment

     

    Section
      4.1.
      Resignation
      by the Employee.
      The
      Employee may resign from his employment with the Company at any time by
      providing written notice to the Company of resignation at least ninety days
      (90)
      prior to the effective date of the resignation (the "Resignation Date”).
      Employee may resign at any time for “good reason,” due to (a) a material breach
      of this Agreement by the Company which continues after the Employee has given
      the Company thirty days (30) written notice of such breach, or (b) the
      assignment to the Employee of duties materially inconsistent with this Agreement
      other than in accordance with the terms of this Agreement, and the Company
      has
      not rectified such assignment within thirty days (30) after the Employee has
      given the Company written notice of such breach. A termination by the Employee
      for “good reason” shall entitle the Employee to the same compensation and
      benefits as if the Employee had been terminated by the Company without cause.
      In
      the event of a termination by the Employee for “good reason,” the provisions of
Section
      3.3
      shall
      not apply and shall be of no force or effect. Upon any resignation by the
      Employee, the Employee shall use reasonable best efforts to assist the Company
      in good faith to effect a smooth transition. If employee voluntarily resigns
      his
      position without “good reason” prior to the termination of this contract the
      compensation terms of this agreement are null and void.

     

    Section
      4.2.
      Termination
      by the Company without Cause.
      At any
      time, the Company may, in its sole and absolute discretion, terminate the
      Employee's employment with the Company (the actual date of termination being
      referred to as the "Termination Date") without cause, by providing written
      notice thereof to the Employee ("Termination Notice") at least ninety days
      (90)
      prior to the Termination Date. In the event of termination of the Employee's
      employment pursuant to this Section, the Company shall continue to pay to the
      Employee the Employee’s then current Annual Salary throughout such ninety-day
      (90) notice period and shall pay the Employee as compensation for loss of office
      (a) twelve months Annual Salary at the Employee’s then current salary in equal
      monthly installments over the twelve month period following the Termination
      Date, provided that such payments shall cease if the Employee becomes employed
      by a company which is in the Business during such twelve month period, and
      (b)
      all vacation accrued as of the Termination Date calculated in accordance with
      Section
      1.2.4.
      Upon
      receipt by the Employee of a Termination Notice pursuant to this Section
      4.2,
      (a) the
      Employee shall assist the Company in good faith to effect a smooth transition,
      and (b) the Company may request the Employee to vacate the premises owned by
      the
      Company and used in connection with the Business within a reasonable time,
      provided that the obligation of the Company to make payments to the Employee
      pursuant to this Section
      4.2
      and the
      other provisions of this Agreement shall not be affected, provided further,
      that
      in the event of a termination by the Company without cause pursuant to this
      Section
      4.2,
      the
      provisions of Section
      3.3
      shall
      not apply and shall be of no further force or effect.

     

    
      
        
        

      

      
        Page
          4

        
          

        

      

      
        
        

      

    

     

    Section
      4.3.
      Termination
      by the Company With Cause.
      This
      Agreement shall be deemed to be terminated and the employment relationship
      between the Employee and the Company shall be deemed severed upon written notice
      to the Employee by the Company after the occurrence of any of the
      following:

     

    
      	
              a)

            	
              The
                final, non-appealable imposition of any restrictions or limitations
                by any
                governmental authority having jurisdiction over the Employee to such
                an
                extent that he cannot render the services for which he was
                employed.

            
	
               

            	
               

            
	
              b)

            	
              The
                Employee (i) willfully and continually fails or refuses (without
                proper
                cause) to substantially perform the duties of his employment and
                to adhere
                in all material respects to the provisions of this Agreement and
                the
                written policies of the Company, which failure shall not be remedied
                within thirty (30) days after written notice from the Company to
                the
                Employee, or (ii) conducts himself in a fraudulent manner, or (iii)
                conducts himself in an unprofessional or unethical manner which in
                the
                reasonable judgment of the Board of Directors of the Company is
                detrimental to the Company.

            
	
               

            	
               

            
	
              c)

            	
              The
                Employee willfully and continually fails or refuses to adhere to
                any
                written agreements to which the Employee and the Company or any of
                its
                affiliates are parties, which failure shall not be remedied within
                thirty
                (30) days after written notice from the Company to the
                Employee.

            
	
               

            	
               

            
	
              d)

            	
              In
                the event of death of the Employee during employment. In such event
                the
                Company shall pay to the estate of the Employee the compensation
                earned by
                the Employee prior to his death but not yet paid to him by the Company.
                

            

    

     

    ARTICLE
      5

     

    Change
      in Control

    

    The
      Board
      of Directors of the Company (“the Board”) has determined that it is in the best
      interests of the Company and its shareholders to assure that the Company will
      have the continued dedication of the Executive, notwithstanding the possibility
      or occurrence of a Change in Control of the Company. The Board believes it
      is
      imperative to diminish the inevitable distraction of the Employee by virtue
      of
      the personal uncertainties and risks created by a pending or threatened Change
      in Control and to encourage the Executive’s full attention and dedication to the
      Company currently and in the event of any pending, threatened or actual Change
      in Control, and to provide the Employee with compensation and benefits
      arrangements upon a Change in Control which are consistent with the Employee’s
      significant leadership position and which are competitive. (See Addendum A
      for
      Definition of Change in Control)

    

     Section
      5.1 Involuntary Termination/Change in Control. In
      the
      case of involuntary termination of the Employee, resulting from a Change in
      Control of the Company, and due to one or more of the following conditions
      being
      met up to one year following such Change in Control:

     

    
      	 	
              a.

            	
              Elimination
                or diminution of the Employee’s position, authority, duties and
                responsibilities relative to the most significant of those held,
                exercised
                and assigned at any time during the six month period immediately
                preceding
                a Change in Control;

            

    

     

    
      
        
        

      

      
        Page
          5

        
          

        

      

      
        
        

      

    

     

    
      	 	
              b.

            	
              Change
                in location requiring the Employee’s services to be performed at a
                location other than the location where the Employee was employed
                immediately preceding a Change in Control, other than any office
                which is
                the headquarters of the Company and is less than 35 miles from such
                location.

            

    

     

    The
      Employee will receive written notice of involuntary termination and will be
      paid
      compensation in terminal pay, annual bonus, and participation in benefits,
      savings and retirement plans as summarized below.

    

    Section
      5.2 Voluntary Termination/Change in Control. In
      the
      event of change in control, which does not result in involuntary termination
      of
      the Employee or diminution of the Employee’s position, authority, duties and
      responsibilities, the Employee may elect to voluntarily terminate within one
      year of the Change in Control and may elect the Change in Control provisions
      summarized below.

    

    Section
      5.3 Terminal Pay.
      The
      Employee will receive terminal pay, to be paid in equal installments in
      semi-monthly installments, at least equal to two (2) years annual base salary
      payable to the Employee by the Company in respect of the twelve-month period
      immediately preceding termination.

    

    Section
      5.4 Special Bonus.
      In
      addition to the Terminal Pay and Annual Bonus, the Employee will be eligible,
      based on performance, for any special bonus program which may be instituted
      by
      the Company in recognition of particular assignments, duties or responsibilities
      required during the crucial transition period leading up to, or following,
      the
      Change in Control.

    

    Section
      5.5 Benefits, Savings and Retirement Plans.
      During
      the period of terminal payments, the Employee will remain in employee status
      for
      benefits purposes only and will be entitled to participate in all benefits,
      savings and retirement plans, practices, policies and programs of the Company
      applicable generally to other peer executives of the Company, with the
      expectation that the Employee continues to make all applicable employee
      contributions to said program(s). 

     

    ARTICLE
      6

    

    Guarantee

    BASi
      hereby unconditionally and irrevocably guarantees to the Employee the due
      performance by the Company of all its obligations under or in respect of the
      terms of this Agreement and shall as primary obligor and not as surety on demand
      pay to the Employee all sums due to be paid by the Company to the Employee.
      This
      guarantee shall be a continuing guarantee and shall inure to the benefit of
      the
      Employee, his heirs, successors and assigns.

     

    ARTICLE
      7

     

    Miscellaneous

     

    Section
      7.1.
      Relationship
      between the Parties.
      The
      relationship between the Company and the Employee shall be that of an employer
      and an employee, and nothing contained herein shall be construed or deemed
      to
      give the Employee any interest in any of the assets of the Company.

     

    
      
        
        

      

      
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          6

        
          

        

      

      
        
        

      

    

     

    Section
      7.2.
      Notices.
      Any
      notice required or permitted to be given under this Agreement shall be in
      writing and delivered personally or sent by certified mail, addressed to the
      party entitled to receive said notice, at the following addresses:

     

    
      	
               

            	
              If
                to Company:

            	
              Bioanalytical
                Systems 

            
	
               

            	
               

            	
              2701
                Kent Avenue

            
	
               

            	
               

            	
              West
                Lafayette, IN 47906

            
	
               

            	
               

            	
               

            
	
               

            	
              If
                to Employee:

            	
              Edward
                Chait

            
	
               

            	
               

            	
              308
                Rosebank Lane

            
	
               

            	
               

            	
              West
                Lafayette, IN 47906

            

    

                                   

    or
      at
      such other address as may be specified from time to time in notices given in
      accordance with the provisions of this Section
      7.2.

     

    Section
      7.3 Enforceability.
      Both
      the Company and the Employee stipulate and agree that if any portion, paragraph
      sentence, term or provision of this Agreement shall to any extent be declared
      illegal, invalid or unenforceable by a duly authorized court of competent
      jurisdiction, then, (a) the remainder of this Agreement or the application
      of
      such portion, paragraph, sentence, term or provision in circumstances other
      than
      those as to which it is so declared illegal, invalid or unenforceable, shall
      not
      be affected thereby, (b) this Agreement shall be construed in all respects
      as if
      the illegal, invalid or unenforceable matter had been omitted and each portion
      and provision of this Agreement shall be valid and enforceable to the fullest
      extent permitted by law and (c) the illegal, invalid or unenforceable portion,
      paragraph, sentence, term or provision shall be replaced by a legal, valid
      and
      enforceable provision which most closely reflects the intention of the parties
      hereto as reflected herein.

     

    Section
      7.4.
      Nonwaiver.
      The
      failure of either party hereto to insist in any one or more instances upon
      performance of any of the provisions of this Agreement or to pursue its or
      his
      rights hereunder shall not be construed as a waiver of any such provisions
      or as
      the relinquishment of any such rights.

     

    Section
      7.5.
      Succession.
      This
      Agreement shall inure to the benefit of and be binding upon the parties hereto
      and upon their heirs, personal representatives, and successor entities. This
      Agreement may not be assigned by either party without prior written agreement
      of
      both parties.

     

    Section
      7.6.
      Governing Law.
      The
      laws of the United States and the State of Indiana shall govern the construction
      and enforceability of this Agreement.

     

    Section
      7.7.
      Entire
      Agreement.
      This
      Agreement constitutes the entire Agreement between the parties as to the subject
      matter contained herein and all other agreements or understandings are hereby
      superseded and terminated.

     

    Section
      7.8.
      Collective
      Agreements.
      There
      are no collective agreements which directly affect the terms and conditions
      of
      the Employee's employment.

     

    Section
      7.9.
      Grievance
      and Disciplinary Procedures.
      If the
      Employee wishes to obtain redress of any grievance relating to his employment
      or
      if he is dissatisfied with any reprimand, suspension or other disciplinary
      steps
      taken by the Company, he shall apply in writing to the Chairman of the board
      of
      directors of the Company, setting out the nature and details of any such
      grievance or dissatisfaction.

     

    Section
      7.10.
      Heading.
      The
      headings of the sections are inserted for convenience only and do not effect
      the
      interpretation or construction of the sections.

     

    
      
        
        

      

      
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          7

        
          

        

      

      
        
        

      

    

     

    Section
      7.11. Remedies.
      Employee acknowledges that a remedy at law for any breach or threatened breach
      of the provisions of Sections 3.1 through 3.3 of this Agreement would be
      inadequate and therefore agrees that the Company shall be entitled to injunctive
      relief, both preliminary and permanent, in addition to any other available
      rights and remedies in case of any such breach or threatened breach; provided,
      however, that nothing contained herein shall be construed as prohibiting the
      Company from pursuing any other remedies available for any such breach or
      threatened breach. Employee further acknowledges and agrees that in the event
      of
      a breach by Employee of any provision of Sections 3.1 through 3.3 of this
      agreement, the Company shall be entitled, in addition to all other remedies
      to
      which the Company may be entitled under this Agreement to recover from Employee
      its reasonable costs including attorney's fees if the Company is the prevailing
      party in an action by the Company. This Agreement is entered into by the Company
      for itself and in trust for each of its affiliates with the intention that
      each
      company will be entitled to enforce the terms of this Agreement directly against
      Employee.

     

    IN
      WITNESS WHEREOF, the Company and the Employee have executed, or caused to be
      executed, this Agreement as of the day and year first written
      above.

     

    
      	
              "COMPANY"

            	
              "EMPLOYEE"

            
	
               

            	
               

            
	 	 
	
              /s/ Richard
                M. Shepperd

            	 	
              /s/  Edward
                Chait

            	 
	
              Richard
                M. Shepperd

            	 
	
              President
                & CEO 

            	
              Edward
                Chait

            
	
              Bioanalytical
                Systems, Inc.

            	
               

            

    

    

    
      
        
        

      

      
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          8

        
          

        

      

      
        
        

      

    

     

    ADDENDUM
      A

    Edward
      Chait Employment Agreement

    

    A
“Change
      in Control” shall mean the occurrence of any of the following
      events:

    

    
      	 	
              1.

            	
              Approval
                by stockholders of the Company of (a) any consolidation or merger
                of the
                Company in which the Company is not the continuing or surviving
                corporation or pursuant to which shares of stock of the company would
                be
                converted into cash, securities or other property, other than a
                consolidation or merger of the company in which holders of its common
                stock immediately prior to the consolidation or merger have substantially
                the same proportionate ownership of common stock of the surviving
                corporation immediately after the consolidation or merger as immediately
                before, or (b) a sale, lease, exchange or other transfer (in one
                transaction or a series of related transactions) of all or substantially
                all the assets of the company.

            

    

    

    
      	 	
              2.

            	
              A
                change in the majority of members of the board within a 24-month
                period
                unless the election or nomination for election by the Company stockholders
                of each new director was approved at a vote of two thirds of the
                directors
                then still in office who were in office at the beginning of the 24-month
                period.

            

    

    

    
      	 	
              3.

            	
              Either
                (A) receipt by the Company of a report on schedule 13D, or an amendment
                to
                such a report, filed with the Securities and Exchange Commission
                (“SEC”)
                pursuant to Section 13(d) of the Securities Exchange Act of 1934
                (the
                “1934 Act”) disclosing that any person, group, corporation or other entity
                is the beneficial owner, directly or indirectly, of 20 per cent or
                more of
                the outstanding stock of the company or (B) actual knowledge by the
                company of facts, on the basis of which any person is required to
                file
                such a report on schedule 13D, or an amendment to such a report,
                with the
                SEC (or would be required to file such a report or amendment upon
                the
                lapse of the applicable period of time Specified in Section 13(d)
                of the
                1934 Act) disclosing that such a person is the beneficial owner,
                directly
                or indirectly, of 20 per cent or more of the outstanding stock of
                the
                company.

            

    

    

    
      	 	
              4.

            	
              Purchase
                by any person (as defined in section 13(d) of the 1934 Act), corporation
                or other entity, other than the company or a wholly-owned subsidiary
                of
                the company, of shares pursuant to a tender or exchange offer, to
                acquire
                any stock of the Company (or securities convertible into stock) for
                cash,
                securities or any other consideration provided that, after consummation
                of
                the offer, such person, group, corporation or other entity is the
                beneficial owner (as defined in rule 13d-3 under the 1934 Act), directly
                or indirectly, of 20 per cent or more of the outstanding stock of
                the
                Company (calculated as provided in paragraph (d) of Rule 13d-3 under
                the
                1934 Act in the case of rights to acquire
                stock.

            

    

    

    
      
        
        

      

      
        Page
          9

        
          

        

      

      
        
        

      

    

    

    ADDENDUM
      A, Page 2

     

    5.
      The
      Company combines with another company and is the surviving corporation but,
      immediately after the combination, the shareholders of the Company immediately
      prior to the combination do not hold, directly or indirectly, more than 50
      per
      cent of the Voting Stock of the combined company (there being excluded from
      the
      number of shares held by such shareholders, but not from the Voting Stock of
      the
      combined company, any shares received by affiliates (as defined in the rules
      of
      the Securities and Exchange Commission) of such other company in exchange for
      stock of such other company). 

     

    
      
        
        

      

      
        Page
          10BIOANALYTICAL
      SYSTEMS, INC.

    

    EMPLOYEE
      INCENTIVE STOCK OPTION AGREEMENT

    

    THIS
      AGREEMENT, made this 6th day of November, 2007, by and between Bioanalytical
      Systems, Inc., an Indiana corporation with its principal office at 2701 Kent
      Avenue, West Lafayette, Indiana (hereinafter called “Company”), and Edward M.
      Chait, residing at 308 Rosebank Lane, West Lafayette, IN 47906 (hereinafter
      called the “Grantee”), pursuant to the terms, conditions and limitations
      contained in the Company’s 1997 Employee Incentive Stock Option Plan
      (hereinafter called the “Plan”), a copy of which is attached hereto as Exhibit
      A.

    

    WITNESSETH
      THAT:

    

    WHEREAS,
      in the interests of affording an incentive to the Grantee to give his best
      efforts to the Company as a key employee, the Company wishes to provide that
      the
      Grantee shall have an option to buy Common Shares of the Company:

     

    NOW,
      THEREFORE, it is hereby mutually agreed to as follows:

    

    1.
      The
      Company hereby grants to the Grantee the right and option to purchase, on the
      terms and conditions hereinafter set forth, all or any part of an aggregate
      of
      30,000 shares (hereinafter called “Subject Shares”) of the presently authorized,
      but unissued, or treasury, Common Shares of the Company, hereinafter called
      the
“Common Shares”) at a purchase price of $8.60 per share, exercisable in whole or
      in part from time to time subject to the limitation that no option may be
      exercised with respect to fewer than twenty-five (25) shares then subject to
      opinion hereunder, in which event any exercise must be as to all such shares
      and
      subject to the further limitation that the options represented by the Agreement
      shall be exercisable in three equal installments as set forth in Section 6(e)
      of
      the Plan. The option may be exercised as to the shares covered by the first
      installment from and after the first anniversary of the grant of the option,
      with second and third installments becoming exercisable on the two succeeding
      anniversary dates. The option shall expire as to all shares subject to purchase
      hereunder on the 10th
      anniversary date of this Agreement if not exercised on or before such
      date.

    

    2.
      Subject to the limitation specified in Section 1 hereof and in Section 6(e)
      of
      the Plan the Grantee may from time to time exercise this option by delivering
      a
      written notice of exercise and subscription agreement to the Secretary of the
      Company specifying the number of whole shares to be purchased, accompanied
      by
      payment (i) in cash, (ii) by certified check or bank cashier’s check, (iii)
      through the tender to the Company of Common Shares of the Company owned by
      the
      Optionee or by withholding of Common Shares of the Company that are subject
      to
      the option, which Common Shares shall be valued, for purposes of determining
      the
      extent to which the purchase price has been paid, at their fair market value
      on
      the date of exercise as determined in Section 6(c) of the Plan, or (iv) by
      a
      combination of the methods described in (i), (ii), or (iii). The Company may,
      in
      its sole discretion, refuse to withhold Common Shares of the Company as payment
      of the exercise price of the option. Such exercise shall be effective upon
      receipt by the Secretary of such written notice, subscription agreement and
      payment of the purchase price. Only the Grantee may exercise the option during
      the lifetime of the Grantee. No fractional shares may be purchased at any time
      hereunder.

    

    3.
      Upon
      the effective exercise of the option, or any part thereof, certificates
      representing the shares so purchased, marked fully paid and non-assessable,
      shall be delivered to the person who exercised the option, except as provided
      in
      Section 6(j) of the Plan. Until certificates representing such shares shall
      have
      been issued and delivered, the Grantee shall not have any of the rights or
      privileges of a shareholder of the Company in respect of any such shares.

    

    4.
      In the
      event that, prior to the delivery by the Company of all the Subject Shares,
      there shall be an increase or reduction in the number of Common Shares of the
      Company issued and outstanding by reason of any subdivision or consolidation
      of
      Common Shares or any other capital adjustment, the number of shares then subject
      to this option shall be increased or decreased as provided in Section (g) of
      the
      Plan.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    5.
      The
      option and the rights and privileges conferred by this Option Agreement shall
      not be assigned or transferred by the Grantee in any manner except by will
      or
      under the laws of descent and distribution. In the event of any attempted
      assignment or transfer in violation of this Section 5, the option, rights and
      privileges conferred by this Option Agreement shall become null and
      void.

    

    6.
      Nothing herein contained shall be deemed to create any limitation nor
      restriction upon such rights as the Company would otherwise have to terminate
      a
      person as an employee of the Company.

    

    7.
      The
      option, rights and privileges herein conferred are granted subject to the terms
      and conditions set forth herein and in the Plan.

    

    8.
      Any
      notices to be given or served under the terms of this Option Agreement shall
      be
      addressed to the Secretary of the Company at 2701 Kent Avenue, West Lafayette,
      Indiana, and to the Grantee at the address set forth on page one of this Option
      Agreement, or such other address or addresses as either party may hereafter
      designate in writing to the other. Any such notice shall be deemed to have
      been
      duly given or served, and deposited in the United States mail.

    

    9.
      The
      interpretation by the Incentive Stock Option Committee, appointed by the
      Company’s Board of Directors to administer the Plan, or any provisions of the
      Plan or of this Option Agreement shall be final and binding on the Grantee
      unless otherwise determined by the Company’s Board of Directors.

    

    10.
      This
      Option Agreement shall be governed by the laws of the State of
      Indiana.

    

    IN
      WITNESS WHEREOF, the Company and the Grantee have signed this Option Agreement
      as of the day and year first above written.

     

    
      
        	 	 	 	“COMPANY”
	 	 	 	 	 	 
	 	 	 	
                BIOANALYTICAL
                  SYSTEMS, INC. 

              
	 	 	 	 	 	 
	 	 	 	
                By: 

              	 	 
	 	 	 	 	
                /s/
                  Richard M. Shepperd

              	 
	 	 	 	 	
                Richard
                  M. Shepperd,

              	 
	
                ATTEST: 

              	 	 	President
                & C.E.O.	 
	
                 

              	
                /s/ 
                  Michael R. Cox

              	 	 	 	 
	 	 	 	
                “GRANTEE” 

              
	 	 	 	 	 	 
	 	 	 	
                By: 

              	 	 
	 	 	 	 	
                /s/
                  Edward Chait

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