Document:

September
        28, 2007

       

      VIA
        E-MAIL and OVERNIGHT COURIER

       

      Candice
        B. Kissinger

      c/o
        David
        Given

      Baker
        Daniels LLP

      600
        East
        96th
        Street,
        Suite 600

      Indianapolis,
        IN 46240

       

      Re: Severance
        Agreement and Release of All Claims

       

      Dear
        Candice:

       

      As
        communicated to you in June , 2007, the Board of Directors and management
        team
        of Bioanalytical Systems, Inc. have determined to make a change that will
        result
        in the elimination of your position with the Company. You were initially
        placed
        on a two-week paid leave. That leave was subsequently extended to August
        28,
        2007, to give you sufficient time to consult with counsel. As you are aware,
        BASi announced your separation effective as of August 28 in its Form 8-K
        filed
        with the SEC that same date.

       

      Following
        the discussions between your counsel and counsel for BASi, BASi is prepared
        to
        offer you a severance package with the terms detailed in this letter. Because
        this severance offer is a modified version of the original offer presented
        to
        you on August 11, 2007, the period spelled out in paragraph 19 below to consider
        this Agreement has already expired. However, in an effort to facilitate the
        resolution of these discussions, BASi will give you until October 5 to consider
        this modified version of the Agreement and to return an executed copy to
        BASi.

       

      BASi
        has
        paid you all compensation due and owing for service prior to your separation
        date (including payment for all accrued but unused vacation), and you will
        not
        be entitled to any additional compensation from BASi or to participate in
        any of
        BASi's benefit plans (except as otherwise specifically provided herein) other
        than as set forth in the Agreement below. In addition, to the extent you
        have
        not already done so, you are expected to return all keys, computers, key
        cards,
        files and other Company property, of any kind, to the Company by October
        5,
        2007. 

       

      	A.  	
              Terms.

            

       

      	1.  	
              Definitions.
                The terms “you” and “your” and “Kissinger” mean Candice B.
                Kissinger, and
                anyone who has or obtains any legal right or claims through her.
“BASi”
                and “Company” mean Bioanalytical Systems, Inc. and include its past and
                present officers, directors, employees, agents, related corporations
                and
                entities, affiliates, principals, shareholders, attorneys, trustees,
                subsidiaries, predecessors, successors and assigns, any and all employee
                benefit plans (and any fiduciary of such plans) sponsored by BASi.
                “Agreement” means this letter agreement which contains the terms of the
                severance package and which includes a release of all claims arising
                out
                of Kissinger employment relationship with BASi and the termination
                of the
                employment relationship. “The Parties” means Kissinger and
                BASi.

            

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

        Candice
          B. Kissinger

        c/o
          David
          Given

        September
          28, 2007

        Page
          2

      

       

       

      	2.  	
              No
                Admission of Liability.
                This Agreement shall not in any way be construed as (a) an admission
                by
                BASi that it has acted wrongfully with respect to you or any other
                person,
                or that you have any rights whatsoever against BASi, or (b) an admission
                by Kissinger that she acted wrongfully with respect to BASi or any
                other
                person, or that BASi has any rights whatsoever against
                Kissinger.

            

       

      	3.  	
              Resignation.
                Pursuant to this Agreement, Kissinger will be deemed to have resigned
                her
                employment and her position as an officer of BASi effective as of
                August
                28, 2007. Kissinger further agrees to resign her membership on the
                BASi
                Board of Directors immediately upon the Release Effective Date.
                

            

       

      	4.  	
              Claims
                released by Kissinger.
                By
                signing this Agreement, Kissinger unconditionally and fully releases
                and
                forever discharges BASi from (a) any and all possible claims, known
                or
                unknown, arising out of or from her employment with BASi under any
                and all
                possible legal, equitable, tort, contract or statutory theories,
                including
                but not limited to any claims for constructive or wrongful discharge
                or
                breach of contract, except for any claims relating to accrued and
                vested
                rights under a retirement plan; (b) any and all claims arising on
                or
                before the date Kissinger signs this Agreement, including but not
                limited
                to any charges, claims, demands or actions under Title VII of the
                Civil Rights Act of 1964 and the Equal Pay Act, 42 U.S.C.
                § 2000e et
                seq.,
                Section 1981 of the Civil Rights Act of 1866, 42 U.S.C. § 1981, the
                Age Discrimination in Employment Act, the Older Workers’ Benefit
                Protection Act, the Americans with Disabilities Act, 42 U.S.C.
                § 12101
                et seq.,
                the Indiana Civil Rights Law, the Employee Retirement Income Security
                Act,
                29 U.S.C. § 1001 et
                seq.,
                the United States Constitution, the Indiana Constitution, any and
                all
                amendments to said statutes, and any other federal, state or local
                statute
                or law, ordinance or regulation, dealing in any way with employment
                or
                employment-related benefits and all claims for costs and attorneys’ fees;
                and (c) all claims Kissinger may have against BASi arising out of
                Kissinger employment and/or termination of employment with BASi.
                Kissinger
                agrees and understands that any claims she may have under the
                aforementioned laws, statutes or any other federal, state or local
                law,
                ordinance, rule or regulation are effectively waived by this Agreement.
                Kissinger further acknowledges and agrees that she has received all
                compensation from BASi to which she is entitled on account of her
                service
                prior to her separation effective August 28, 2007, including pay
                for
                accrued but unused vacation. BASi and Kissinger acknowledge and agree,
                however, that the release/waiver of claims set forth in this paragraph
                4
                does not release, affect or relinquish (i) any of Kissinger's rights
                as a
                shareholder of BASi, (ii) any of Kissinger's rights (or BASi's
                obligations) under this Agreement or any other agreement between
                BASi and
                Kissinger executed concurrently with or subsequent to this Agreement,
                (iii) any rights Kissinger may have with respect to any vested benefits
                under any of the Company's employee retirement and/or welfare benefit
                plans, including without limitation under any applicable 401(k) plan
                or
                (iv) any rights Kissinger may have for indemnification of any third-party
                claim relating to Kissinger's service as an employee, officer and/or
                director of BASi. Kissinger understands that the signing of this
                Agreement
                prevents her from making any further claims against BASi in connection
                with her employment and the termination of her employment with BASi.
                Kissinger agrees not to bring any lawsuits against BASi relating
                to the
                claims she has given up, released and waived, nor will she allow
                any suit
                to be brought on her behalf.

            

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

        Candice
          B. Kissinger

        c/o
          David
          Given

        September
          28, 2007

        Page
          3

      

       

       

      	5.  	
              BASi
                Claims against Kissinger.
                BASi represents and acknowledges that its senior management is unaware
                of
                any claims it may have against Kissinger as of the date of this Agreement,
                including claims arising out of her service as an employee, officer
                and/or
                member of the Board of Directors. 

            

       

      	6.  	
              Waiver
                of Re-employment.
                Kissinger waives any right or claim of reinstatement to employment
                with
                BASi and agrees not to seek further employment with BASi. If Kissinger
                does seek employment with BASi, BASi is under no obligation to consider
                her for employment.

            

       

      	7.  	
              Payments
                and Benefits to be Provided to Kissinger.
                In exchange for and in consideration of Kissinger's agreement to
                release
                claims against BASi as described in paragraph 4 and in consideration
                of
                the other promises contained in this Agreement, BASi agrees as
                follows:

            

       

      	a.  	
              BASI
                agrees to pay Kissinger a severance benefit of One Hundred Seventy-Five
                Thousand Dollars and No Cents ($175,000.00), less tax and other deductions
                required by law. One half of this amount (Eighty-Seven Thousand Five
                Hundred Dollars and No Cents ($87,500.00), will be paid in a lump-sum
                payment on BASi's first regular payroll date following the Release
                Effective Date. The remaining half of this amount will be paid in
                six (6)
                equal monthly installments beginning in November 2007 and ending
                in April
                2008. Unless Kissinger notifies BASi’s payroll department of a different
                bank account, these amounts will be deposited in the bank account
                that
                Kissinger has previously designated for direct
                deposit;

            

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

        Candice
          B. Kissinger

        c/o
          David
          Given

        September
          28, 2007

        Page
          4

      

       

       

      	b.  	
              Additionally,
                BASi shall pay Kissinger an additional monthly payment equal to the
                monthly premium cost to Kissinger to continue health insurance coverage
                for Kissinger and any covered dependents under BASi’s group health
                insurance program pursuant to the federal law known as COBRA (the
“Monthly
                Payment”) for a period of twelve (12) consecutive months. Kissinger may
                use the Monthly Payment to pay COBRA premiums or for any other purpose.
                The first Monthly Payment shall be paid to Kissinger on BASi’s first
                regular payroll date following the Release Effective Date and the
                Monthly
                Payments shall continue thereafter for eleven (11) consecutive months.
                These payments will be deposited in the bank account that Kissinger
                has
                previously designated for direct deposit, unless Kissinger notifies
                BASi's
                payroll department of a different bank
                account.

            

       

      	c.  	
              Kissinger
                agrees that all of her stock options, including vested and unvested
                stock
                options, shall be irrevocably terminated and of no further effect
                as of
                the date hereof.

            

       

      	d.  	
              Kissinger,
                if she so desires, shall promptly contact the National Life Insurance
                Company to convert the life insurance on Kissinger's life to Kissinger.
                BASi shall provide reasonable assistance to Kissinger to support
                any such
                conversion of such life insurance policy to an individual policy
                (if such
                right is available under the policy). BASi shall have no obligation
                to
                fund this policy following Kissinger's separation effective as of
                August
                28, 2007. 

            

       

      	8.  	
              Acknowledgement.
                Kissinger acknowledges that she is not entitled to any of the payments
                and
                benefits listed in paragraphs 6(a)-(b) of this Agreement unless she
                signs this Agreement.

            

       

      	9.  	
              Non-Disparagement.
                In consideration of the promises made in this Agreement, Kissinger
                and
                BASi each agree that she/it shall not make any false, negative or
                disparaging remarks or comments to any person and/or entity about
                the
                other party to this Agreement, nor shall Kissinger or BASi make any
                statement that may subject the other party to potential embarrassment,
                humiliation or any other negative consequence; provided, however,
                nothing
                in this paragraph 9 shall prohibit either party from making any
                statements as may be required or compelled by law, including without
                limitation pursuant to any judicial or administrative process. The
                Parties
                agree to the issuance of the press release/media statement attached
                hereto
                as Exhibit A, and each party shall have the right to make statements
                consistent with such press release/media
                statement.

            

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

        Candice
          B. Kissinger

        c/o
          David
          Given

        September
          28, 2007

        Page
          5

      

       

       

      	10.  	
              Confidentiality.
                The parties understand that BASi will be required to file this Agreement
                with the SEC as part of its reporting obligations. Otherwise, BASi
                and
                Kissinger each agree to keep strictly confidential and not to disclose
                any
                of the terms of this Agreement to any third parties; provided, however,
                (a) any Party may disclose the terms of this Agreement as may be
                required
                by applicable law or by judicial or administrative process; (b) any
                Party
                may disclose the terms of this Agreement in any action or proceeding
                to
                enforce this Agreement or relating to the enforcement of this Agreement;
                (c) BASi may disclose the terms of this Agreement to its management,
                its
                counsel and its accountants; and (d) Kissinger may disclose the terms
                of
                this Agreement to her immediate family, her counsel, her accountants
                and
                her financial advisors, provided that such individuals in turn agree
                to
                keep same confidential and not make any disclosures in any manner
                that is
                inconsistent with the terms of this
                Agreement.

            

       

      	11.  	
              Consultation
                with Attorney.
                Kissinger agrees that she has read this Agreement and the releases
                contained herein, that she understands all of the terms hereof, that
                she
                has not been coerced, threatened or intimidated into signing this
                Agreement, and that she executes this Agreement voluntarily and with
                full
                knowledge of its meaning and consequences and that she has had sufficient
                opportunity to consult with her attorney regarding this Agreement.
                Kissinger further acknowledges that BASi hereby advises her that
                she
                should consult with an attorney before executing this
                Agreement.

            

       

      	12.  	
              Severability.
                Kissinger agrees that if she breaches any obligation set forth in
                this
                Agreement, BASi shall have the right to set off an amount from future
                payments described in this Agreement equal to the damages caused
                by such
                breach, in addition to any other remedies to which BASi may be entitled
                under law. The Parties further understand and agree that in the event
                that
                this Agreement is ever held to be invalid or unenforceable, in whole
                or in
                part, as to any particular type of claim or charge or as to any particular
                circumstances, this Agreement shall remain fully valid and enforceable
                as
                to all other claims, charges and
                circumstances.

            

       

      	13.  	
              Restrictive
                Covenants.
                Kissinger agrees that for the two (2) years immediately following
                the
                effective date hereof (which, in the event of a breach of this
                Paragraph 13
                by
                Kissinger, shall be extended automatically by a number of days equal
                to
                the number of days during which the breach exists) (the “Restricted
                Period”),
                Kissinger shall not directly or
                indirectly:

            

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

        Candice
          B. Kissinger

        c/o
          David
          Given

        September
          28, 2007

        Page
          6

      

       

       

      	a.  	
              Customer
                Non-Solicitation.
                Contact, solicit or communicate with any Customer of the Company,
                or any
                Prospective Customer of the Company, for the purpose
                of:

            

       

      	i.  	
              diverting
                or influencing or attempting to divert or influence any Business
                of the
                Company to a Competitor of the Company;

            

       

      	ii.  	
              marketing,
                selling, distributing, leasing or providing any products or services
                in
                competition with the services or products offered by the Company
                with
                respect to the Company’s Business; or

            

       

      	iii.  	
              otherwise
                interfering in any fashion with the Company’s Business or the Company's
                relationship with any of its Customers or Prospective Customers with
                respect to the Company’s Business. 

            

       

      	b.  	
              Employee
                Non-Solicitation.
                Solicit, hire or employ any person who is then an employee of the
                Company
                or in any way (a) cause or assist or attempt to cause or assist any
                employee to leave the Company or (b) directly or indirectly seek to
                solicit, induce, bring about, influence, promote, facilitate, or
                encourage
                any employee of the Company to leave the Company.
                

            

       

      	c.  	
              Activities
                Not Prohibited.
                The restrictions of this Paragraph 13 shall not be deemed to prevent
                Kissinger from owning (1) 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 of the Securities
                Exchange Act of 1934, as amended, and/or (2) any issued and
                outstanding securities of BASi.

            

       

      	d.  	
              Modification.
                In the event a court of competent jurisdiction determines that any
                of the
                foregoing restrictions are unreasonable in terms of geographic scope
                or
                otherwise then Kissinger and the Company agree that the court is
                hereby
                authorized to reduce the scope of said restriction through application
                of
                the blue pencil doctrine and enforce this Paragraph 13 as so reduced.
                If
                any sentence, word or provision of this Paragraph 13 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. Kissinger acknowledges that all of the provisions contained
                in
                this Agreement, including the restrictions of the covenant not to
                compete,
                are reasonable and necessary to protect the legitimate interests
                of the
                Company.

            

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

        Candice
          B. Kissinger

        c/o
          David
          Given

        September
          28, 2007

        Page
          7

      

       

       

      	e.  	
              Definitions.
                

            

       

      	i.  	
              Competitor.
                A
                “Competitor” shall mean any person or entity that provides research or
                development resources to pharmaceutical, medical device or biotechnology
                companies, or that provides outsourced drug development services,
                biological services or products used in the development of pharmaceutical
                products or in pharmaceutical or biological research and competes
                with the
                Company's Business.

            

       

      	ii.  	
              Customer.
                A
                “Customer” of the Company is any person or entity which, within the
                twenty-four (24) month period preceding the date hereof, used, leased,
                received or purchased or contracted to use, lease, receive or purchase
                any
                of Company’s products or services.

            

       

      	iii.  	
              Prospective
                Customer.
                A
                “Prospective Customer” of the Company is any person or entity to which,
                within the twenty-four (24) month period preceding the date hereof,
                BASi
                submitted a proposal for services.

            

       

      	iv.  	
              Business.
                The "Business" is BASi's products and services offered as an alternative
                to its clients' internal product development, compliance, and quality
                control programs and outsourced drug development services, biological
                services and products useful in developing pharmaceutical products
                and
                performing pharmaceutical and biological research; provided, however,
                (A)
                the “Business” includes only those products and services that BASi is
                providing as of the date of separation of Kissinger’s employment with
                BASi, and (B) the "Business" does not include the development or
                commercialization of the technology that is subject to the License
                Agreement entered concurrently herewith between BASi and Phlebotics,
                Inc.

            

       

      	14.  	
              Acceptance
                of Agreement.
                To accept the terms of this Agreement, Kissinger must deliver this
                Agreement, after it has been signed and dated by her, to the undersigned
                in an envelope marked “Personal and Confidential" or to BASi's
                counsel.

            

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

        Candice
          B. Kissinger

        c/o
          David
          Given

        September
          28, 2007

        Page
          8

      

       

       

      	15.  	
              Representations.
                BASi and Kissinger each represent and warrant that in the making
                and
                execution of this Agreement, it/she is not relying on any representation,
                statement, or assertion of fact or opinion made by any agent, attorney,
                employee, or representative of the persons, parties, or corporations
                being
                released herein, and it/she hereby waives any right to rely upon
                all prior
                agreements and/or oral representations made by any agent, attorney,
                employee, or representative of such persons, parties, or corporations
                even
                though made for the purpose of inducing it/her to enter into this
                Agreement.

            

       

      	16.  	
              Return
                of BASi’s Property.
                Kissinger hereby represents and warrants that she has returned to
                BASi all
                of BASi’s property that was in her possession or control or that any such
                property will be returned to BASi by October 5, 2007. This includes,
                but
                is not limited to, keys, credit cards, phone cards, cellular telephones,
                pages, directories, computer hardware and software, books, documents,
                memoranda, and all other records, and copies
                thereof.

            

       

      	17.  	
              Cooperation
                and Transition Assistance.
                Kissinger agrees that for a period of sixty (60) days following the
                date
                hereof (the "Cooperation Period") she will be available to assist
                BASi
                with transitional matters relating to her former duties with BASi,
                without
                additional compensation, provided that Kissinger's obligation to
                provide
                assistance shall consist primarily of making herself reasonably available,
                as BASi may reasonably request, to respond to questions and confer
                with
                BASi's officers or other designated representatives on work transition
                matters and nothing herein shall preclude Kissinger from engaging
                in other
                full-time employment or business activities during the Cooperation
                Period.
                BASi, in turn, agrees to allow Kissinger to serve out her current
                terms on
                such boards (excluding the Board of Directors of BASi and all of
                its
                affiliates and subsidiaries) on which she currently sits, with the
                express
                understanding that she shall have no authority to speak or act on
                behalf
                of BASi in those capacities and may not represent that she has such
                authority. 

            

       

      	18.  	
              Miscellaneous.
                The Parties agree that this Agreement is deemed made and entered
                into in
                the State of Indiana and in all respects shall be interpreted, enforced
                and governed under the laws of the State of Indiana, unless otherwise
                preempted by federal law. Jurisdiction and venue for litigation of
                any
                dispute, controversy, or claim arising out of or in connection with
                this
                Agreement shall lie exclusively in the federal or state courts in
                Tippecanoe County, Indiana, and the Parties hereby consent to service
                of
                process from said courts. This Agreement shall inure to the benefit
                of and
                may be enforced by, and shall be binding on the Parties and their
                heirs,
                executors, administrators, personal representatives, assigns, and
                successors in interest. The language of all parts of this Agreement
                shall
                be in all cases construed as a whole, according to its fair meaning,
                and
                not strictly for or against the drafter.

            

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

        Candice
          B. Kissinger

        c/o
          David
          Given

        September
          28, 2007

        Page
          9

      

       

       

      	19.  	
              Time
                to Consider this Agreement.
                Kissinger understands that she has been given forty-five (45) days
                from
                the original date of delivery of this Agreement to consider the terms
                of
                this Agreement and that, following discussions between counsel for
                parties, such consideration period has been extended to and including
                October 5, 2007. Kissinger understands that she may sign this Agreement
                at
                any time during the forty-five day period, as extended. Kissinger
                understands that she may revoke this Agreement if she so chooses
                until
                seven (7) days after the date of execution. Kissinger further understands
                that this Agreement will not become effective or enforceable and
                that
                BASi’s obligations in paragraph 6 of this Agreement to make payments
                and provide benefits will not become effective or enforceable until
                seven
                (7) days from the date of Kissinger's execution of this Agreement
                and
                provided that the Agreement is not revoked during such seven day
                period
                ("Release Effective Date").

            

      

      	20.  	
              OWBPA
                Disclosures.
                Kissinger understands that the claims released by this Agreement
                include
                claims under the Age Discrimination in Employment Act, as modified
                by the
                Older Worker Benefit Protection Act ("OWBPA"). Kissinger acknowledges
                that
                she has been advised by BASi to consult with an attorney concerning
                the
                requirements of the OWBPA. By her signature below, Kissinger signifies
                her
                understanding that this Agreement satisfies the requirements of the
                OWBPA.
                In particular, Kissinger acknowledges that she has been advised (a)
                that
                the only employees being separated and offered severance benefits
                at this
                time are Kissinger and Peter Kissinger; (b) that there are no other
                employees in similar job classifications to these two individuals;
                (c)
                that Kissinger must sign this Agreement within the time limits described
                above in order to be eligible for benefits under it; and (d) that
                no
                further disclosures are required under the
                OWBPA.

            

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

        Candice
          B. Kissinger

        c/o
          David
          Given

        September
          28, 2007

        Page
          10

      

       

       

      
        	 	 	 
	 	Sincerely,
	 	 
	 	Bioanalytical
                Systems, Inc.
	 
 	 
 	 
 
	 	By:  	/s/
                R.M. Shepperd 
	 	
                
Richard
                M. Shepperd
	 	President
                and Chief Executive Officer 

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

        Candice
          B. Kissinger

        c/o
          David
          Given

        September
          28, 2007

        Page
          11

      

       

       

      My
        signature below represents my acceptance of all terms and conditions contained
        in this Agreement.

       

      

        
          	
                  /s/
                    Candice B. Kissinger

                	 	
                  September
                    28, 2007

                
	
                  
                    
Candice
                    B. Kissinger

                	 	
                  
                    
Date

                

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      EXHIBIT
        A

      

      

      

      For
        more information: 
        Richard M. Shepperd

      765.463.4527

      dshepperd@bioanalytical.com

       

      BASi
        Announces Resignations of Peter T. Kissinger, Ph.D. and Candice B. Kissinger
        and
        Selection of Peter T. Kissinger as Chairman Emeritus of the Board of
        Directors

      

      WEST
        LAFAYETTE, IN, October 2, 2007 — Bioanalytical Systems, Inc. (Nasdaq: BASI)
        announced today that Peter T. Kissinger, Ph.D. and Candice B. Kissinger have
        resigned from the Board of Directors of BASi. Dr. Kissinger has also resigned
        as
        the Chief Scientific Officer and Chairman of the Board, and Mrs. Kissinger
        resigned from the offices of Vice President, Secretary and Director of Research.
        In connection with their resignations, BASi has entered into a severance
        agreement with each of Dr. Kissinger and Mrs. Kissinger, as well as a license
        agreement for a new technology which Mrs. Kissinger has developed while with
        BASi. BASi also named Dr. Kissinger to be the Chairman Emeritus of its Board
        of
        Directors. This completes the negotiations regarding the departures of Dr.
        and
        Mrs. Kissinger that were previously disclosed by BASi.

      

      Richard
        M. Shepperd, President and Chief Executive Officer of BASi, noted today that
        "all of the people of BASi wish to express their thanks to Pete and Candice
        Kissinger for the leadership they have provided over their years with BASi.
        We
        acknowledge all of the fine work that Pete and Candice have accomplished
        for
        BASi. On behalf of the Board, I want to thank Pete and Candice for their
        many
        years of service with BASi. We know that they have had the best interests
        of
        BASi in mind throughout their tenures."

      

      Dr.
        Kissinger commented, “Candice and I had a wonderful thirty year run at BASi and
        it is a good time for us to move on to new opportunities. Our strengths and
        passions are on the technical side and we are excited to apply our skills
        to
        several entrepreneurial activities."

      

      BASi
        is a
        contract research and research products company providing services and
        laboratory instruments to the world’s leading drug development companies and
        life science research organizations. The Company focuses on developing
        innovative services and products that increase efficiency and reduce costs
        associated with taking new drugs to market. Visit www.bioanalytical.com for
        more
        about BASi.

       

      This
        release contains forward-looking statements that are subject to risks and
        uncertainties including, but not limited to, risks and uncertainties related
        to
        management transition matters, the development of products and services,
        changes
        in technology, industry standards and regulatory standards, and various market
        and operating risks detailed in the company’s filings with the Securities and
        Exchange Commission.

       

      #
        # # #
        #September
          28, 2007

         

        VIA
          E-MAIL and OVERNIGHT COURIER

         

        Peter
          T.
          Kissinger, Ph.D.

        c/o
          David
          Given

        Baker
          Daniels LLP

        600
          East
          96th
          Street,
          Suite 600

        Indianapolis,
          IN 46240

         

        Re: Severance
          Agreement and Release of All Claims

         

        Dear
          Peter:

         

        As
          communicated to you on June 29, 2007, the Board of Directors and management
          team
          of Bioanalytical Systems, Inc. have determined to make a change that will
          result
          in the elimination of your position with the Company. You were initially
          placed
          on a two-week paid leave and given continued access to Company facilities
          and
          systems, in exchange for certain obligations on your part. That leave was
          subsequently extended to August 28, 2007, to give you sufficient time to
          consult
          with counsel. As you are aware, BASi announced your separation effective
          as of
          August 28 in its Form 8-K filed with the SEC that same date.

         

        Following
          the discussions between your counsel and counsel for BASi, BASi is prepared
          to
          offer you a severance package with the terms detailed in this letter. Because
          this severance offer is a modified version of the original offer presented
          to
          you on August 11, 2007, the period spelled out in paragraph 19 below to
          consider
          this Agreement has already expired. However, in an effort to facilitate
          the
          resolution of these discussions, BASi will give you until October 5 to
          consider
          this modified version of the Agreement and to return an executed copy to
          BASi.

         

        BASi
          has
          paid you all compensation due and owing for service prior to your separation
          date (including payment for all accrued but unused vacation), and you will
          not
          be entitled to any additional compensation from BASi or to participate
          in any of
          BASi's benefit plans (except as otherwise specifically provided herein)
          other
          than as set forth in the Agreement below. In addition, to the extent you
          have
          not already done so, you are expected to return all keys, computers, key
          cards,
          files and other Company property, of any kind, to the Company by October
          5,
          2007. 

         

        	A.  	
                Terms.

              

         

        	1.  	
                Definitions.
                  The terms “you” and “your” and “Kissinger” mean Peter T.
                  Kissinger, and
                  anyone who has or obtains any legal right or claims through him.
“BASi”
                  and “Company” mean Bioanalytical Systems, Inc. and include its past and
                  present officers, directors, employees, agents, related corporations
                  and
                  entities, affiliates, principals, shareholders, attorneys, trustees,
                  subsidiaries, predecessors, successors and assigns, any and all
                  employee
                  benefit plans (and any fiduciary of such plans) sponsored by BASi.
                  “Agreement” means this letter agreement which contains the terms of the
                  severance package and which includes a release of all claims arising
                  out
                  of Kissinger employment relationship with BASi and the termination
                  of the
                  employment relationship. “The Parties” means Kissinger and
                  BASi.

              

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

          Peter
            T.
            Kissinger, Ph.D.

          c/o
            David
            Given

          September
            28, 2007

          Page
            2

        

         

         

        	2.  	
                No
                  Admission of Liability.
                  This Agreement shall not in any way be construed as (a) an admission
                  by
                  BASi that it has acted wrongfully with respect to you or any other
                  person,
                  or that you have any rights whatsoever against BASi, or (b) an
                  admission
                  by Kissinger that he acted wrongfully with respect to BASi or any
                  other
                  person, or that BASi has any rights whatsoever against
                  Kissinger.

              

         

        	3.  	
                Resignation.
                  Pursuant to this Agreement, Kissinger will be deemed to have resigned
                  his
                  employment and his position as an officer of BASi effective as
                  of August
                  28, 2007. Kissinger further agrees to resign his membership on
                  the BASi
                  Board of Directors immediately following his appointment to an
                  unpaid
                  Chairman Emeritus position. 

              

         

        	4.  	
                Claims
                  released by Kissinger.
                  By
                  signing this Agreement, Kissinger unconditionally and fully releases
                  and
                  forever discharges BASi from (a) any and all possible claims, known
                  or
                  unknown, arising out of or from his employment with BASi under
                  any and all
                  possible legal, equitable, tort, contract or statutory theories,
                  including
                  but not limited to any claims for constructive or wrongful discharge
                  or
                  breach of contract, except for any claims relating to accrued and
                  vested
                  rights under a retirement plan; (b) any and all claims arising
                  on or
                  before the date Kissinger signs this Agreement, including but not
                  limited
                  to any charges, claims, demands or actions under Title VII of the
                  Civil Rights Act of 1964 and the Equal Pay Act, 42 U.S.C.
                  § 2000e et
                  seq.,
                  Section 1981 of the Civil Rights Act of 1866, 42 U.S.C. § 1981, the
                  Age Discrimination in Employment Act, the Older Workers’ Benefit
                  Protection Act, the Americans with Disabilities Act, 42 U.S.C.
                  § 12101
                  et seq.,
                  the Indiana Civil Rights Law, the Employee Retirement Income Security
                  Act,
                  29 U.S.C. § 1001 et
                  seq.,
                  the United States Constitution, the Indiana Constitution, any and
                  all
                  amendments to said statutes, and any other federal, state or local
                  statute
                  or law, ordinance or regulation, dealing in any way with employment
                  or
                  employment-related benefits and all claims for costs and attorneys’ fees;
                  and (c) all claims Kissinger may have against BASi arising out
                  of
                  Kissinger employment and/or termination of employment with BASi.
                  Kissinger
                  agrees and understands that any claims he may have under the
                  aforementioned laws, statutes or any other federal, state or local
                  law,
                  ordinance, rule or regulation are effectively waived by this Agreement.
                  Kissinger further acknowledges and agrees that he has received
                  all
                  compensation from BASi to which he is entitled on account of his
                  service
                  prior to his separation effective August 28, 2007, including pay
                  for
                  accrued but unused vacation. BASi and Kissinger acknowledge and
                  agree,
                  however, that the release/waiver of claims set forth in this paragraph
                  4
                  does not release, affect or relinquish (i) any of Kissinger's rights
                  as a
                  shareholder of BASi, (ii) any of Kissinger's rights (or BASi's
                  obligations) under this Agreement or any other agreement between
                  BASi and
                  Kissinger executed concurrently with or subsequent to this Agreement,
                  (iii) any rights Kissinger may have with respect to any vested
                  benefits
                  under any of the Company's employee retirement and/or welfare benefit
                  plans, including without limitation under any applicable 401(k)
                  plan or
                  (iv) any rights Kissinger may have for indemnification of any third-party
                  claim relating to Kissinger's service as an employee, officer and/or
                  director of BASi. Kissinger understands that the signing of this
                  Agreement
                  prevents him from making any further claims against BASi in connection
                  with his employment and the termination of his employment with
                  BASi.
                  Kissinger agrees not to bring any lawsuits against BASi relating
                  to the
                  claims he has given up, released and waived, nor will he allow
                  any suit to
                  be brought on his behalf.

              

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

          Peter
            T.
            Kissinger, Ph.D.

          c/o
            David
            Given

          September
            28, 2007

          Page
            3

        

         

         

        	5.  	
                BASi
                  Claims against Kissinger.
                  BASi represents and acknowledges that its senior management is
                  unaware of
                  any claims it may have against Kissinger as of the date of this
                  Agreement,
                  including claims arising out of his service as an employee, officer
                  and/or
                  member of the Board of Directors. 

              

         

        	6.  	
                Waiver
                  of Re-employment.
                  Kissinger waives any right or claim of reinstatement to employment
                  with
                  BASi and agrees not to seek further employment with BASi. If Kissinger
                  does seek employment with BASi, BASi is under no obligation to
                  consider
                  him for employment.

              

         

        	7.  	
                Payments
                  and Benefits to be Provided to Kissinger.
                  In exchange for and in consideration of Kissinger's agreement to
                  release
                  claims against BASi as described in paragraph 4 and in consideration
                  of
                  the other promises contained in this Agreement, BASi agrees as
                  follows:

              

         

        	a.  	
                BASI
                  agrees to pay Kissinger a severance benefit of One Hundred Seventy-Five
                  Thousand Dollars and No Cents ($175,000.00), less tax and other
                  deductions
                  required by law. One half of this amount (Eighty-Seven Thousand
                  Five
                  Hundred Dollars and No Cents ($87,500.00), will be paid in a lump-sum
                  payment on BASi's first regular payroll date following the Release
                  Effective Date. The remaining half of this amount will be paid
                  in six (6)
                  equal monthly installments beginning in November 2007 and ending
                  in April
                  2008. Unless Kissinger notifies BASi’s payroll department of a different
                  bank account, these amounts will be deposited in the bank account
                  that
                  Kissinger has previously designated for direct
                  deposit;

              

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

          Peter
            T.
            Kissinger, Ph.D.

          c/o
            David
            Given

          September
            28, 2007

          Page
            4

        

         

         

        	b.  	
                Additionally,
                  BASi shall pay Kissinger an additional monthly payment equal to
                  the
                  monthly premium cost to Kissinger to continue health insurance
                  coverage
                  for Kissinger and any covered dependents under BASi’s group health
                  insurance program pursuant to the federal law known as COBRA (the
“Monthly
                  Payment”) for a period of twelve (12) consecutive months. Kissinger may
                  use the Monthly Payment to pay COBRA premiums or for any other
                  purpose.
                  The first Monthly Payment shall be paid to Kissinger on BASi’s first
                  regular payroll date following the Release Effective Date and the
                  Monthly
                  Payments shall continue thereafter for eleven (11) consecutive
                  months.
                  These payments will be deposited in the bank account that Kissinger
                  has
                  previously designated for direct deposit, unless Kissinger notifies
                  BASi's
                  payroll department of a different bank
                  account.

              

         

        	c.  	
                Kissinger
                  agrees that all of his stock options, including vested and unvested
                  stock
                  options, shall be irrevocably terminated and of no further effect
                  as of
                  the date hereof.

              

         

        	d.  	
                Kissinger,
                  if he so desires, shall promptly contact the National Life Insurance
                  Company to convert the life insurance on Kissinger's life to Kissinger.
                  BASi shall provide reasonable assistance to Kissinger to support
                  any such
                  conversion of such life insurance policy to an individual policy
                  (if such
                  right is available under the policy). BASi shall have no obligation
                  to
                  fund this policy following Kissinger's separation effective as
                  of August
                  28, 2007. 

              

         

        	8.  	
                Acknowledgement.
                  Kissinger acknowledges that he is not entitled to any of the payments
                  and
                  benefits listed in paragraphs 7(a)-(b) of this Agreement unless he
                  signs this Agreement.

              

         

        	9.  	
                Non-Disparagement.
                  In consideration of the promises made in this Agreement, Kissinger
                  and
                  BASi each agree that he/it shall not make any false, negative or
                  disparaging remarks or comments to any person and/or entity about
                  the
                  other party to this Agreement, nor shall Kissinger or BASi make
                  any
                  statement that may subject the other party to potential embarrassment,
                  humiliation or any other negative consequence; provided, however,
                  nothing
                  in this paragraph 9 shall prohibit either party from making any
                  statements as may be required or compelled by law, including without
                  limitation pursuant to any judicial or administrative process.
                  The Parties
                  agree to the issuance of the press release/media statement attached
                  hereto
                  as Exhibit A, and each party shall have the right to make statements
                  consistent with such press release/media
                  statement.

              

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

          Peter
            T.
            Kissinger, Ph.D.

          c/o
            David
            Given

          September
            28, 2007

          Page
            5

        

         

         

        	10.  	
                Confidentiality.
                  The parties understand that BASi will be required to file this
                  Agreement
                  with the SEC as part of its reporting obligations. Otherwise, BASi
                  and
                  Kissinger each agree to keep strictly confidential and not to disclose
                  any
                  of the terms of this Agreement to any third parties; provided,
                  however,
                  (a) any Party may disclose the terms of this Agreement as may be
                  required
                  by applicable law or by judicial or administrative process; (b)
                  any Party
                  may disclose the terms of this Agreement in any action or proceeding
                  to
                  enforce this Agreement or relating to the enforcement of this Agreement;
                  (c) BASi may disclose the terms of this Agreement to its management,
                  its
                  counsel and its accountants; and (d) Kissinger may disclose the
                  terms of
                  this Agreement to his immediate family, his counsel, his accountants
                  and
                  his financial advisors, provided that such individuals in turn
                  agree to
                  keep same confidential and not make any disclosures in any manner
                  that is
                  inconsistent with the terms of this
                  Agreement.

              

         

        	11.  	
                Consultation
                  with Attorney.
                  Kissinger agrees that he has read this Agreement and the releases
                  contained herein, that he understands all of the terms hereof,
                  that he has
                  not been coerced, threatened or intimidated into signing this Agreement,
                  and that he executes this Agreement voluntarily and with full knowledge
                  of
                  its meaning and consequences and that he has had sufficient opportunity
                  to
                  consult with his attorney regarding this Agreement. Kissinger further
                  acknowledges that BASi hereby advises him that he should consult
                  with an
                  attorney before executing this Agreement.

              

         

        	12.  	
                Severability.
                  Kissinger agrees that if he breaches any obligation set forth in
                  this
                  Agreement, BASi shall have the right to set off an amount from
                  future
                  payments described in this Agreement equal to the damages caused
                  by such
                  breach, in addition to any other remedies to which BASi may be
                  entitled
                  under law. The Parties further understand and agree that in the
                  event that
                  this Agreement is ever held to be invalid or unenforceable, in
                  whole or in
                  part, as to any particular type of claim or charge or as to any
                  particular
                  circumstances, this Agreement shall remain fully valid and enforceable
                  as
                  to all other claims, charges and
                  circumstances.

              

         

        	13.  	
                Restrictive
                  Covenants.
                  Kissinger agrees that for the two (2) years immediately following
                  the
                  effective date hereof (which, in the event of a breach of this
                  Paragraph
                  13 by Kissinger, shall be extended automatically by a number of
                  days equal
                  to the number of days during which the breach exists) (the “Restricted
                  Period”),
                  Kissinger shall not directly or
                  indirectly:

              

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

          Peter
            T.
            Kissinger, Ph.D.

          c/o
            David
            Given

          September
            28, 2007

          Page
            6

        

         

         

        	a.  	
                Customer
                  Non-Solicitation.
                  Contact, solicit or communicate with any Customer of the Company,
                  or any
                  Prospective Customer of the Company, for the purpose
                  of:

              

         

        	i.  	
                diverting
                  or influencing or attempting to divert or influence any Business
                  of the
                  Company to a Competitor of the Company;

              

         

        	ii.  	
                marketing,
                  selling, distributing, leasing or providing any products or services
                  in
                  competition with the services or products offered by the Company
                  with
                  respect to the Company’s Business; or

              

         

        	iii.  	
                otherwise
                  interfering in any fashion with the Company’s Business or the Company's
                  relationship with any of its Customers or Prospective Customers
                  with
                  respect to the Company’s Business. 

              

         

        	b.  	
                Employee
                  Non-Solicitation.
                  Solicit, hire or employ any person who is then an employee of the
                  Company
                  or in any way (a) cause or assist or attempt to cause or assist any
                  employee to leave the Company or (b) directly or indirectly seek to
                  solicit, induce, bring about, influence, promote, facilitate, or
                  encourage
                  any employee of the Company to leave the Company.
                  

              

         

        	c.  	
                Activities
                  Not Prohibited.
                  The restrictions of this Paragraph 13  shall not be deemed to prevent
                  Kissinger from owning (1) 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 of the
                  Securities
                  Exchange Act of 1934, as amended, and/or (2) any issued and
                  outstanding securities of BASi.

              

         

        	d.  	
                Modification.
                  In the event a court of competent jurisdiction determines that
                  any of the
                  foregoing restrictions are unreasonable in terms of geographic
                  scope or
                  otherwise then Kissinger and the Company agree that the court is
                  hereby
                  authorized to reduce the scope of said restriction through application
                  of
                  the blue pencil doctrine and enforce this Paragraph 13 as so reduced.
                  If
                  any sentence, word or provision of this Paragraph 13 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. Kissinger acknowledges that all of the provisions contained
                  in
                  this Agreement, including the restrictions of the covenant not
                  to compete,
                  are reasonable and necessary to protect the legitimate interests
                  of the
                  Company.

              

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

          Peter
            T.
            Kissinger, Ph.D.

          c/o
            David
            Given

          September
            28, 2007

          Page
            7

        

         

         

        	e.  	
                Definitions.
                  

              

         

        	i.  	
                Competitor.
                  A
                  “Competitor” shall mean any person or entity that provides research or
                  development resources to pharmaceutical, medical device or biotechnology
                  companies, or that provides outsourced drug development services,
                  biological services or products used in the development of pharmaceutical
                  products or in pharmaceutical or biological research and competes
                  with the
                  Company's Business.

              

         

        	ii.  	
                Customer.
                  A
                  “Customer” of the Company is any person or entity which, within the
                  twenty-four (24) month period preceding the date hereof, used,
                  leased,
                  received or purchased or contracted to use, lease, receive or purchase
                  any
                  of Company’s products or services.

              

         

        	iii.  	
                Prospective
                  Customer.
                  A
                  “Prospective Customer” of the Company is any person or entity to which,
                  within the twenty-four (24) month period preceding the date hereof,
                  BASi
                  submitted a proposal for services.

              

         

        	iv.  	
                Business.
                  The "Business" is BASi's products and services offered as an alternative
                  to its clients' internal product development, compliance, and quality
                  control programs and outsourced drug development services, biological
                  services and products useful in developing pharmaceutical products
                  and
                  performing pharmaceutical and biological research; provided, however,
                  (A)
                  the “Business” includes only those products and services that BASi is
                  providing as of the date of separation of Kissinger’s employment with
                  BASi, and (B) the "Business" does not include the development or
                  commercialization of the technology that is subject to the License
                  Agreement entered concurrently herewith between BASi and Phlebotics,
                  Inc.

              

         

        	14.  	
                Acceptance
                  of Agreement.
                  To accept the terms of this Agreement, Kissinger must deliver this
                  Agreement, after it has been signed and dated by him, to the undersigned
                  in an envelope marked “Personal and Confidential" or to BASi's
                  counsel.

              

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

          Peter
            T.
            Kissinger, Ph.D.

          c/o
            David
            Given

          September
            28, 2007

          Page
            8

        

         

         

        	15.  	
                Representations.
                  BASi and Kissinger each represent and warrant that in the making
                  and
                  execution of this Agreement, it/he is not relying on any representation,
                  statement, or assertion of fact or opinion made by any agent, attorney,
                  employee, or representative of the persons, parties, or corporations
                  being
                  released herein, and it/he hereby waives any right to rely upon
                  all prior
                  agreements and/or oral representations made by any agent, attorney,
                  employee, or representative of such persons, parties, or corporations
                  even
                  though made for the purpose of inducing it/him to enter into this
                  Agreement.

              

         

        	16.  	
                Return
                  of BASi’s Property.
                  Kissinger hereby represents and warrants that he has returned to
                  BASi all
                  of BASi’s property that was in his possession or control or that any such
                  property will be returned to BASi by October 5, 2007. This includes,
                  but
                  is not limited to, keys, credit cards, phone cards, cellular telephones,
                  pages, directories, computer hardware and software, books, documents,
                  memoranda, and all other records, and copies
                  thereof.

              

         

        	17.  	
                Cooperation
                  and Transition Assistance.
                  Kissinger agrees that for a period of sixty (60) days following
                  the date
                  hereof (the "Cooperation Period") he will be available to assist
                  BASi with
                  transitional matters relating to his former duties with BASi, without
                  additional compensation, provided that Kissinger's obligation to
                  provide
                  assistance shall consist primarily of making himself reasonably
                  available,
                  as BASi may reasonably request, to respond to questions and confer
                  with
                  BASi's officers or other designated representatives on work transition
                  matters and nothing herein shall preclude Kissinger from engaging
                  in other
                  full-time employment or business activities during the Cooperation
                  Period.
                  BASi, in turn, agrees to allow Kissinger to serve out his current
                  terms on
                  such boards (excluding the Board of Directors of BASi and all of
                  its
                  affiliates and subsidiaries) on which he currently sits, with the
                  express
                  understanding that he shall have no authority to speak or act on
                  behalf of
                  BASi in those capacities and may not represent that he has such
                  authority.
                  

              

         

        	18.  	
                Miscellaneous.
                  The Parties agree that this Agreement is deemed made and entered
                  into in
                  the State of Indiana and in all respects shall be interpreted,
                  enforced
                  and governed under the laws of the State of Indiana, unless otherwise
                  preempted by federal law. Jurisdiction and venue for litigation
                  of any
                  dispute, controversy, or claim arising out of or in connection
                  with this
                  Agreement shall lie exclusively in the federal or state courts
                  in
                  Tippecanoe County, Indiana, and the Parties hereby consent to service
                  of
                  process from said courts. This Agreement shall inure to the benefit
                  of and
                  may be enforced by, and shall be binding on the Parties and their
                  heirs,
                  executors, administrators, personal representatives, assigns, and
                  successors in interest. The language of all parts of this Agreement
                  shall
                  be in all cases construed as a whole, according to its fair meaning,
                  and
                  not strictly for or against the drafter.

              

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

          Peter
            T.
            Kissinger, Ph.D.

          c/o
            David
            Given

          September
            28, 2007

          Page
            9

        

         

         

        	19.  	
                Time
                  to Consider this Agreement.
                  Kissinger understands that he has been given forty-five (45) days
                  from the
                  original date of delivery of this Agreement to consider the terms
                  of this
                  Agreement and that, following discussions between counsel for parties,
                  such consideration period has been extended to and including October
                  5,
                  2007. Kissinger understands that he may sign this Agreement at
                  any time
                  during the forty-five day period, as extended. Kissinger understands
                  that
                  he may revoke this Agreement if he so chooses until seven (7) days
                  after
                  the date of execution. Kissinger further understands that this
                  Agreement
                  will not become effective or enforceable and that BASi’s obligations in
                  paragraph 7 of this Agreement to make payments and provide benefits
                  will not become effective or enforceable until seven (7) days from
                  the
                  date of Kissinger's execution of this Agreement and provided that
                  the
                  Agreement is not revoked during such seven day period ("Release
                  Effective
                  Date").

              

        

        	20.  	
                OWBPA
                  Disclosures.
                  Kissinger understands that the claims released by this Agreement
                  include
                  claims under the Age Discrimination in Employment Act, as modified
                  by the
                  Older Worker Benefit Protection Act ("OWBPA"). Kissinger acknowledges
                  that
                  he has been advised by BASi to consult with an attorney concerning
                  the
                  requirements of the OWBPA. By his signature below, Kissinger signifies
                  his
                  understanding that this Agreement satisfies the requirements of
                  the OWBPA.
                  In particular, Kissinger acknowledges that he has been advised
                  (a) that
                  the only employees being separated and offered severance benefits
                  at this
                  time are Kissinger and Candice Kissinger; (b) that there are no
                  other
                  employees in similar job classifications to these two individuals;
                  (c)
                  that Kissinger must sign this Agreement within the time limits
                  described
                  above in order to be eligible for benefits under it; and (d) that
                  no
                  further disclosures are required under the
                  OWBPA.

              

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

          Peter
            T.
            Kissinger, Ph.D.

          c/o
            David
            Given

          September
            28, 2007

          Page
            10

        

         

      

       

      
        	 	 	 
	 	Sincerely,
	 	 
	 	Bioanalytical
                Systems, Inc.
	 
 	 
 	 
 
	 	By:  	/s/
                R.M. Shepperd 
	 	
                
Richard
                M. Shepperd
	 	President
                and Chief Executive Officer 

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

        Peter
          T.
          Kissinger, Ph.D.

        c/o
          David
          Given

        September
          28, 2007

        Page
          11

      

      
 

      
        My
          signature below represents my acceptance of all terms and conditions contained
          in this Agreement.

        
 

      

      
        
          	
                  /s/
                    Peter T. Kissinger

                	 	
                  September
                    28, 2007

                
	
                  
                    
Peter
                    T. Kissinger, Ph.D.

                	 	
                  
                    
Date

                

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      EXHIBIT
        A

      

      

      

      For
        more information: 
        Richard M. Shepperd

      765.463.4527

      dshepperd@bioanalytical.com

       

      BASi
        Announces Resignations of Peter T. Kissinger, Ph.D. and Candice B. Kissinger
        and
        Selection of Peter T. Kissinger as Chairman Emeritus of the Board of
        Directors

      

      WEST
        LAFAYETTE, IN, October 2, 2007 — Bioanalytical Systems, Inc. (Nasdaq: BASI)
        announced today that Peter T. Kissinger, Ph.D. and Candice B. Kissinger have
        resigned from the Board of Directors of BASi. Dr. Kissinger has also resigned
        as
        the Chief Scientific Officer and Chairman of the Board, and Mrs. Kissinger
        resigned from the offices of Vice President, Secretary and Director of Research.
        In connection with their resignations, BASi has entered into a severance
        agreement with each of Dr. Kissinger and Mrs. Kissinger, as well as a license
        agreement for a new technology which Mrs. Kissinger has developed while with
        BASi. BASi also named Dr. Kissinger to be the Chairman Emeritus of its Board
        of
        Directors. This completes the negotiations regarding the departures of Dr.
        and
        Mrs. Kissinger that were previously disclosed by BASi.

      

      Richard
        M. Shepperd, President and Chief Executive Officer of BASi, noted today that
        "all of the people of BASi wish to express their thanks to Pete and Candice
        Kissinger for the leadership they have provided over their years with BASi.
        We
        acknowledge all of the fine work that Pete and Candice have accomplished
        for
        BASi. On behalf of the Board, I want to thank Pete and Candice for their
        many
        years of service with BASi. We know that they have had the best interests
        of
        BASi in mind throughout their tenures."

      

      Dr.
        Kissinger commented, “Candice and I had a wonderful thirty year run at BASi and
        it is a good time for us to move on to new opportunities. Our strengths and
        passions are on the technical side and we are excited to apply our skills
        to
        several entrepreneurial activities."

      

      BASi
        is a
        contract research and research products company providing services and
        laboratory instruments to the world’s leading drug development companies and
        life science research organizations. The Company focuses on developing
        innovative services and products that increase efficiency and reduce costs
        associated with taking new drugs to market. Visit www.bioanalytical.com for
        more
        about BASi.

       

      This
        release contains forward-looking statements that are subject to risks and
        uncertainties including, but not limited to, risks and uncertainties related
        to
        management transition matters, the development of products and services,
        changes
        in technology, industry standards and regulatory standards, and various market
        and operating risks detailed in the company’s filings with the Securities and
        Exchange Commission.

       

      #
        # # #
        #

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