Document:

July
      22,
      2005

    

    Dr.
      Simon
      Hemmings

    2
      Ivanhoe
      Road

    Lichfield

    Staffs
      WS14 9AY

    

    Dear
      Simon:

    

    The
      Board
      of Directors of Bioanalytical Systems, Inc. (the "Company") has approved the
      grant of non-qualified stock options to you. This letter will serve as notice
      of
      the grant, effective as of July 22, 2005 (the "date
      of
      grant"), of an option to purchase (the "Option") 3000 of the Common Shares
      of
      the Company (the "Option Shares") on the terms and conditions set forth herein,
      and upon your execution and delivery to the Company
      of the copy of this letter included herein will constitute our agreement as
      to
      those terms. This
      Option has not been granted under the terms of the USA Company's employee stock
      option plans, and is not a "qualified" stock option as defined by the U.S.
      Internal Revenue Service. You
      are
      urged to consult with your tax advisors concerning the tax effect of the grant
      and exercise of this Option.

    

    
      	1.	
              OPTION
                PRICE. The
                purchase price of the Option Shares is $5.74 per share (the "Option
                Price").

            

    

    

    
      	2.	
              MEDIUM
                AND TIME OF PAYMENT. You
                must pay the Option Price with respect to the Option
                Shares being purchased at the time you exercise the Option. The Option
                Price may be paid either (a) in cash; (b) by certified check or by
                bank
                cashier's check; (c) if you can do so without violating
                Section 16(b) of the Securities Exchange Act of 1934, through the
                tender
                to the Company
                of outstanding Common Shares or through the withholding and surrender
                to
                the Company
                of Option Shares being purchased, which shall be valued, for purposes
                of
                determining the
                extent to which the purchase price has been paid, at the fair market
                value
                of the Common Shares
                on the date of exercise of the Option; or (d) or by a combination
                of (a),
                (b) or (c).

            

    

    

    
      	3.	
              TERM
                AND EXERCISABILITY OF OPTIONS. The
                Option is effective immediately upon your acceptance
                of this letter and may be exercised in full or in part at any time
                and
                from time to time until
                the Option expires or it is earlier terminated under the provisions
                herein. The Option will be considered
                to have been effectively exercised only upon delivery to the Company
                of
                the Option Price
                and a "Notice of Exercise" in the form attached hereto, and the
                satisfaction to all other conditions
                described in this letter. The Option shall expire as to all unexercised
                Option Shares at the
                close of business on the tenth anniversary of the date of this letter
                (or
                on the next business day if that date is a Saturday, Sunday or
                holiday).

            

    

    

    
      	4.	
              CESSATION
                OF SERVICE WITH THE COMPANY. In
                the event you cease to serve as an employee
                of the Company or any of its subsidiaries, this Option shall terminate
                immediately upon termination
                of employment as to any unexercised Option Shares; provided, however,
                that
                if termination
                of employment is due to retirement with the consent of the Company
                or is
                due to a permanent and total disability; you shall have the right
                to
                exercise the Option with respect to the Common shares for which it
                could
                have been exercised on the effective date of termination of employment
                at
                any time within three months after the termination date, if termination
                is
                due to retirement
                with the consent of the Company, or at anytime within 12 months after
                termination date,
                if termination is due to permanent and total disability. In the event
                of
                your death while serving
                as an employee of the Company or any of its subsidiaries, your personal
                representative shall have the right to exercise this Option with
                respect
                to the Common Shares for which it could have
                been exercised on the date of your death. Whether termination is
                a
                retirement with the consent
                of the Company or due to permanent and total disability, and whether
                an
                authorized leave of
                absence on military or government service shall be deemed to constitute
                termination of employment
                for the purposes of this Option, shall be determined by the Board
                of
                Directors in its sole discretion, which determination shall be final
                and
                conclusive

            

    

    

    DRUG
      SAFETY ASSESSMENT • CLINICAL RESEARCH • ANALYTICAL CHEMISTRY • BIOANALYSIS •
INSTRUMENTATION WEST LAFAYETTE • EVANSVILLE • BALTIMORE • MCMINNVILLE • WARWICK
WWW.BIOANALYTICAL.COM• BASI ON THE NASDAQ

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	5.	
              RECAPITALIZATION.
                The
                number of Option Shares and the Option Price each shall be proportionally
                adjusted for any increase or decrease in the number of issued shares
                of
                the Common
                shares resulting from a subdivision or consolidation of shares of
                the
                Company, the payment
                of a share dividend, a share split or other increase or decrease
                in the
                outstanding Common
                Shares effected without receipt of consideration by the Company (including
                an increase or decrease effected as a part of the Recapitalization
                of the
                Company, as defined herein). In the event
                that there shall be a recapitalization or reorganization of the Company
                or
                a reclassification of its
                outstanding shares (each a "Recapitalization") as a result of which
                other
                shares (the "New Shares")
                are issued in exchange for Common Shares, then there shall be substituted
                for the Option Shares
                then issuable hereunder that number of New Shares into which those
                Option
                Shares have been converted had they been outstanding at the effective
                date
                of the Recapitalization.

            

    

    

    
      	6.	
              MERGER,
                DISSOLUTION.
                If
                the Company shall enter into any agreement of merger or consolidation
                (whether or not it shall be the surviving entity thereunder), the
                Company
                shall have the
                right to terminate this Option as of any date specified in a written
                notice given to you not less than
                30 days prior to the termination date. If the merger or consolidation
                described in that notice is
                not consummated within 180 days following the termination date of
                this
                Option specified in the notice,
                this Option thereafter shall be deemed to have been continuously
                in effect
                since the date hereof.
                In the event of the sale of all or substantially all of the assets
                of the
                Company and the distribution
                of the proceeds thereof to shareholders in liquidation of the company,
                the
                Company shall
                give you 30 days prior written notice specifying record date for
                the
                purpose of determining the
                shareholders entitled to participate in that distribution and this
                Option
                shall expire as to all Option Shares that remain unexercised as of
                the
                date of that distribution.

            

    

    

    
      	7.	
              NONASSIGNABILITY.
                This
                Option is not assignable or transferable except by will or under
                the
                laws
                of descent and distribution. During your lifetime, this Option shall
                be
                exercisable only by you
                (or if you become incapacitated, by your legal guardian or
                attorney-in-fact).

            

    

    

    
      	8.	
              ISSUANCE
                OF SHARES AND COMPLIANCE WITH SECURITIES LAWS. The
                Company may
                postpone the issuance and delivery of certificates representing Common
                Shares until (a) the admission
                of such shares to listing on any exchange on which shares of the
                Company
                of the same class
                are then listed and (b) the completion of any requirements for
                registration or other qualification
                of the shares under any state or Federal law, rule or regulation
                or the
                rules and regulations
                of any exchange upon which the Common shares are traded as the Company
                shall determine
                to be necessary or advisable. The Company shall use its reasonable
                commercial efforts to
                complete any required registration or other qualification. You have
                no
                right to require the Company
                to register the Common Shares acquired upon the exercise of this
                Option
                under federal or
                state securities laws. As a condition to the effective exercise of
                this
                Option you may be required
                to make such representations and furnish such information as may,
                in the
                opinion of counsel
                for the Company, be appropriate to permit the Company to determine
                whether
                registration or qualification of those shares is required in connection
                with that transaction.

            

    

    

    
      	9.	
              RIGHTS
                AS A SHAREHOLDER. You
                shall have no rights as a shareholder with respect to Common
                Shares subject to this Option until the date of issuance of a certificate
                to you. A certificate
                will not be issued until you have exercised the Option, fully paid
                for the
                Common Shares
                acquired thereby and satisfied all other details described in this
                letter.
                No adjustment will be
                made for dividends or other rights for which the record date is prior
                to
                the date a certificate is issued.

            

    

    

    
      
        
          	10.	
                  NO
                    OBLIGATION TO EXERCISE OPTION. The
                    grant of this Option imposes no obligation upon
                    you to exercise the
                    Option.

                

        

      

    

    

    
      	11.	
              NO
                OBLIGATION TO CONTINUE EMPLOYMENT. The
                grant of this Option to you does not constitute any contract of employment
                between you and the Company, and does not impose any obligation of
                the
                Company to continue your
                employment.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	12.	
              WITHHOLDINGS.
                As
                a condition to the effective exercise of this option, the Company
                may
                right
                to require you to remit to the Company amounts sufficient to satisfy
                any
                applicable withholding requirements set forth in the Internal Revenue
                Code
                of 1986, as amended, or under state
                or local law relating to the Option. The Company shall have the right,
                to
                the extent permitted by
                law, to deduct from any payment of any kind otherwise due to you
                any
                federal, state or local taxes
                of any kind required by law to be withheld with respect to the exercise
                of
                the Option.

            

    

    

    
      	13.	
              POWER
                AND AUTHORITY. The
                Board of Directors shall have the full power and authority to take
                all actions and make all determinations required or provided for
                under the
                terms of this Option;
                to interpret and construe the provisions of this letter, which
                interpretation or construction shall
                be final, conclusive and binding on the Company and you; and to take
                any
                and all other actions
                and make any and all other determinations not consistent with the
                specific
                terms and provisions
                of this letter which the Board of Directors deems necessary or
                appropriate.

            

    

    

    Please
      acknowledge your receipt of this letter and your agreement to the terms set
      forth herein by signing and
      returning the copy enclosed for that purpose.

    

      
        	
                Very
                  Truly Yours,

              
	 
	
                /s/
                  Peter T. Kissinger

              
	Peter T.
                Kissinger 
	
                President

              

      

    

     

    Accepted
      and agreed to: ____________________

    Date:____________________A
      Form Of

    HOLDER’S
      STOCK PURCHASE AGREEMENT AND RECEIPT

    PER
      TERMS OF THE CONVERTABLE DEBENTURE NOTE

    (Number
      USCS _______) Dated the _____th
      March 20_____

    

    I,
      (full
      legal name) __________________________ located at
      ______________________________________________, being the undersigned, hereby
      declare that I, by virtue of my signature here below, irrevocably wish to
      purchase the securities listed herewith:

    

      
        	 	
                Name
                  of Corporation

              	 	 	 	 	
                USCorp

              	 	 
	 	 	 	 	 	 	 	 	 
	 	
                Description
                  of the Securities of the
Corporation

              	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	
                Number
                  of Shares

              	 	
                Unit
                  Par Value

              	 	
                Class
                  of Stock

              	 	
                Type
                  of Stock

              	 
	 	 	 	
                $0.01

              	 	
                Class
                  A Common

              	 	
                Unregistered
                  

              	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	
                Total
                  Price

              	 	
                $ USD

              	 

      

    

    

    The
      undersigned Buyer acknowledges: 

    (1)
      That USCorp Class A common shares are trading under the symbol USCS;

    (2)
      That no future trading activity can be guaranteed, nor can any price be
      guaranteed; 

    (3)
      That he has received adequate information about the Company upon which to make
      an informed investment decision; 

    (4)
      That by reason of his knowledge and experience in financial and business matters
      in general, and investments in particular, Buyer is capable of evaluating the
      merits and risks of an investment for himself in the securities referenced
      above; 

    (5)
      That the Buyer has agreed to buy the shares identified above with full knowledge
      of such disclosures; 

    (6)
      The Buyer declares that he has read, agrees to and fully understands the
      meaning, terminology and interpretation of the conditions listed herein, and
      therefore may not, now or in the future, make any claims to the contrary;

    (7)
      That he understands that except as contained herein, no warranties or
      representations as to the value of any of the Securities, which are the subject
      of this Stock Purchase Agreement and Receipt, have been made by the
      Company;

    (8
      That all pronouns used in this agreement shall be understood and construed
      to
      apply whether the party referred to is an individual, partnership, joint
      venture, corporation, and the masculine, feminine and nurture pronouns shall
      include the other and maybe used interchangeably with the same
      meaning.

    (9)
      That neither of the Parties makes any claim of value or promise of profit for
      the other and the buyer indemnifies and holds harmless the Company in the event
      that he should incur a loss. 

    (10)
      That USCorp declares that it has full right to sell said shares and that all
      shares referred to in this Stock Purchase Agreement and Receipt will be validly
      issued, fully paid and non-assessable, unencumbered and free from liens with
      respect to their issuance. 

    

    The
      undersigned Buyer agrees to pay the sum of
      $                      
      in
      currency of the United States upon receipt of this Document.

    

    USCorp
      shall deliver a certificate through the Company’s appointed Corporate Transfer
      Agent. The USCorp Class A Common Stock shall be issued as follows: in the
      name(s) of _____________________________________,
      Residing at ___________________________________________________________________________________________.

     

    In
      witness thereof,
      this                  th
      day of
      __________, 20___

    

      
        	
                For
                  Holder, _______________________________

              	
                For
                  Seller, USCorp

              
	
                 

              	 
	
                _________________________________________

              	
                ______________________________________

              
	
                [Name],
                  [Title]

              	
                Robert
                  Dultz, Chairman and CEO

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