Document:

Exhibit 10.3

April 1, 2004

Mr. Michael R. Cox

5521 Turkey Foot Road

Zionsville, IN  46027

Dear Mike:

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 February 27, 2004 (the “date
of grant”), of an option to purchase (the “Option”) 25,000 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
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 $4.58 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
as to the shares covered by the first installment six months after the grant of
the option and the second installment after the first anniversary of the grant
of the option.. 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.

	
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,

Peter T. Kissinger

President

Accepted and agreed to:  

Date:Exhibit 10.4 - Fourth Amendment to Credit Agreement

FOURTH AMENDMENT TO

CREDIT AGREEMENT

        THIS FOURTH AMENDMENT made as of
the 14th day of May, 2004, by and between BIOANALYTICAL SYSTEMS, INC.
("Borrower") and THE PROVIDENT BANK ("Bank");

W I T N E S S E T H: 

        WHEREAS, as of October 29, 2002,
the parties hereto entered into a certain Credit Agreement, as amended (as
amended, the “Agreement”); and

        WHEREAS, the parties desire to
further amend the Agreement to, among other things, revise certain financial
covenants and to add collateral, subject to the terms contained
herein;

        NOW, THEREFORE, in consideration
of the premises, and the mutual promises herein contained, the parties agree
that the Agreement shall be, and it hereby is, amended as provided herein and
the parties further agree as follows:

PART I.    AMENDATORY PROVISIONS

Article 1.    Definitions

        Section
1.1    Defined Terms.    Section
1.1 of the Agreement is hereby amended by substituting the following definitions
in lieu of the like existing definitions:

        “Borrowing
Base” means, on any date of determination, an amount equal to (a)
Eighty Percent (80%) of Borrower’s Eligible Accounts (excluding any
Accounts, or any portion thereof, which are considered unacceptable to Bank),
plus (b) the lesser of (i) Fifty Percent (50%) of Borrower’s raw
materials and finished goods Eligible Inventory or (ii) Sixty-Seven Percent
(67%) of Borrower’s Eligible Accounts, minus (c) the maximum credit
limit under Borrower’s corporate credit card issued by Bank,
plus (d) until the earlier of December 31, 2004 or upon the sale of Borrower’s
Baltimore, Maryland real estate, the sum of (i) One Million Five Hundred
Thousand Dollars ($1,500,000), minus (ii) the product of (A) Twenty-Five
Thousand Dollars ($25,000), multiplied by (B) as of any relevant date, the
number of full calendar months that have elapsed after the month of October
2002. (For example, in June, 2003, the amount added as part of the Borrowing
Base under clause (d) above will be One Million Five Hundred Thousand Dollars
($1,500,000) minus One Hundred Seventy-Five Thousand Dollars ($175,000)
(seven times Twenty-Five Thousand Dollars ($25,000)), or a total of One Million
Three Hundred Twenty-Five Thousand Dollars ($1,325,000)).

        “Fixed Charge Coverage
Ratio” means, with respect to Borrower, (a) the sum of (i) EBITDA,
minus (ii) Unfunded Capital Expenditures, plus (iii) Rentals,
divided by (b) the sum of (i) interest expense, plus (ii)
mandatory payments of all long term Indebtedness, plus (iii) taxes paid,
plus (iv) Rentals; in each instance determined for the trailing four (4)
quarter period ending on the date of determination, except that for purposes of
determining the Fixed Charge Coverage Ratio for the fiscal periods ending
December 31, 2003, June 30, 2004 and September 30, 2004, Unfunded Capital
Expenditures shall be exclusive of Unfunded Capital Expenditures related to
Borrower’s $1,810,000 construction project and new equipment purchased by
Borrower. The Fixed Charge Coverage Ratio shall be determined from the Financial
Statements.

	

	
FOURTH AMENDMENT TO
CREDIT AGREEMENT	
PAGE 1

Article 3.    Security and Guaranty

        Section 3.1
Security.    Section 3.1 of the Agreement is hereby
amended by substituting the following paragraphs (c) and (d) in lieu of the
existing paragraph (c) thereof:

	
 
	
        (c)        a
Deed of Trust, Security Agreement and Fixture Filing, in the form prescribed by
Bank, constituting a first priority mortgage lien upon Borrower’s
Baltimore, Maryland real estate; and

	
 
	
        (d)        a
such other security interests as may be described in the Loan Documents.

Article 5.    Covenants

        Section
5.3.    Financial
Covenants.    Section 5.3 of the Agreement is hereby
amended by adding a new Section 5.3.6 as follows:

	
 
	
        5.3.6    
Minimum EBITDA.    Obtain EBITDA of not less than (a)
Three Million Seven Hundred Thousand Dollars ($3,700,000) as of June 30, 2004,
and (b) Four Million Eight Hundred Thousand Dollars ($4,800,000) as of September
30, 2004.

PART II.    WAIVER

        Bank hereby waives compliance by
Borrower with the provisions of Section 5.3.3 (Fixed Charge Coverage Ratio) of
the Agreement for fiscal period ending March 31, 2004. This waiver shall be in
force and effect solely for the referenced period, unless otherwise agreed by
Bank in the exercise of its sole discretion.

PART III.    CONTINUING EFFECT

        Except as expressly modified
herein:

	
 
	
        (a)        All
terms, conditions, representations, warranties and covenants contained in the
Agreement shall remain the same and shall continue in full force and effect,
interpreted, wherever possible, in a manner consistent with this Fourth
Amendment; provided, however, in the event of any irreconcilable
inconsistency, this Fourth Amendment shall control; 

	

	
FOURTH AMENDMENT TO
CREDIT AGREEMENT	
PAGE 2

	
 
	
        (b)        All
The representations and warranties contained in the Agreement shall survive this
Fourth Amendment in their original form as continuing representations and
warranties of Borrower; and 

	
 
	
        (c)        All
Capitalized terms used in this Fourth Amendment, and not specifically herein
defined, shall have the meanings ascribed to them in the Agreement. 

        In consideration hereof,
Borrower represents, warrants, covenants and agrees that:

	
 
	
        (aa)        All
Each representation and warranty set forth in the Agreement, as hereby amended,
remains true and correct as of the date hereof in all material respects, except
to the extent that such representation and warranty is expressly intended to
apply solely to an earlier date and except changes reflecting transactions
permitted by the Agreement; 

	
 
	
        (bb)        All
There currently exist no offsets, counterclaims or defenses to the performance
of the Obligations (such offsets, counterclaims or defenses, if any, being
hereby expressly waived); 

	
 
	
        (cc)        All
Except as expressly waived in writing by Bank, there has not occurred any
Default or Unmatured Default; and 

	
 
	
        (dd)        All
After giving effect to this Fourth Amendment and any transactions contemplated
hereby, no Default or Unmatured Default is or will be occasioned hereby or
thereby. 

PART IV.    CONDITIONS PRECEDENT

        Notwithstanding anything
contained in this Fourth Amendment to the contrary, Bank shall have no
obligation under this Fourth Amendment until each of the following conditions
precedent have been fulfilled to the satisfaction of Bank:

        (a)        
Each of the conditions set forth in Section 6.2 of the Agreement shall have been
satisfied;

        (b)        
Bank shall have received this Fourth Amendment, duly executed, and Bank shall
have received the Participant’s Consent attached hereto, duly executed by
Fifth Third Bank (Central Indiana);

        (c)        
A duly executed certificate of the Secretary or any Assistant Secretary of
Borrower (A) certifying as to attached copies of Resolutions of the Board of
Directors of Borrower authorizing the execution, delivery and performance of the
Loan Documents, as amended, (B) certifying as complete and correct as to
attached copies of the Articles of Incorporation and By-Laws of Borrower or
certifying that such Articles of Incorporation or By-Laws have not been amended
(except as shown) since the previous delivery thereof to Bank;

        (d)        
Bank shall have received the Deed of Trust for Borrower’s Baltimore,
Maryland real estate, duly executed by Borrower in the form prescribed by
Bank;

        (e)        
Bank shall have received a satisfactory clean title search for Borrower’s
Baltimore, Maryland real estate;

	

	
FOURTH AMENDMENT TO
CREDIT AGREEMENT	
PAGE 3

        (f)        
Bank shall have received satisfactory evidence of insurance as required by the
Deed of Trust for Borrower’s Baltimore real estate;

        (g)        
Bank shall have received a $32,000 amendment/waiver fee from Borrower, and
Borrower shall have reimbursed Bank for all legal fees and other expenses
incurred by Bank in connection with this Fourth Amendment and the transactions
contemplated hereby.

        IN WITNESS WHEREOF, Borrower and
Bank have caused this Fourth Amendment to be executed by their respective
officers duly authorized as of the date first above written.

	 	
“BORROWER”

BIOANALYTICAL SYSTEMS, INC.

By:  Michael R. Cox

Its:  VP-Finance

“BANK”

THE PROVIDENT BANK

By:  Jeffrey A. Salesman

Its:  Vice President

	

	
FOURTH AMENDMENT TO
CREDIT AGREEMENT	
PAGE 4

PARTICIPANT’S CONSENT

        The undersigned, the
“Participant” under that certain Participation Agreement dated
as of October 29, 2002 between the The Provident Bank (the
“Bank”) and the undersigned, hereby consents to the execution
and delivery by the Bank and Bioanalytical Systems, Inc. of the attached Fourth
Amendment to Credit Agreement and further consents to the terms contained
therein. The undersigned further agrees that the obligations of the undersigned
under the Participation Agreement are hereby ratified, confirmed and reaffirmed
in all respects.

        IN WITNESS WHEREOF, the
undersigned has caused this Consent to be executed by its officer duly
authorized as of the 14th day of May, 2004.

	 	
FIFTH THIRD BANK (CENTRAL INDIANA)

By:  Sheridan Sanders

Its:  Vice President

	

	
FOURTH AMENDMENT TO
CREDIT AGREEMENT	
PAGE 5

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