FOURTH AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT

THIS FOURTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Fourth
Amendment”) dated as of the 17th day of July, 2009, is by and between
BIOANALYTICAL SYSTEMS, INC. (“Borrower”) and NATIONAL CITY BANK (“Bank”);

W I T N E S S E T H:

WHEREAS, as of January 4, 2005, the parties hereto entered into a certain Credit
Agreement, as amended (as amended, the “Agreement”);

WHEREAS, the parties desire to further amend the Agreement, subject to the terms
contained therein;

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 2.  Credit

2.1           Line of Credit Commitment.  Section 2.1 of the Agreement is hereby
amended by substituting the following new Section 2.1 in lieu of the existing
Section 2.1:

2.1  Line of Credit Commitment.  Subject to the terms and conditions of this
Agreement, Bank shall make Advances under the Line of Credit available to
Borrower in a maximum principal amount equal to the lesser of: (a) Three Million
Dollars ($3,000,000), or (b) the Borrowing Base.  Advances under the Line of
Credit shall be evidenced by the Replacement Credit Note in the form attached
hereto.  All Advances under the Line of Credit (whether currently outstanding or
to be made) shall constitute Eurodollar Rate Advances.

2.2 Interest; Unused Fees and Rate Selection.  Section 2.2 of the Agreement is
hereby amended by substituting the following new Section 2.2 in lieu of the
existing Section 2.2:

2.2.1.  Line of Credit – Interest.  Prior to maturity or Default, the
outstanding principal balance of Advances under the Line of Credit shall bear
interest at a per annum rate equal to LIBOR plus Five Percent (5%).  In the
event that LIBOR shall become unavailable, the outstanding principal balance of
Advances under the Line of Credit shall bear interest at a per annum rate equal
to the Prime Rate plus Two Percent (2%).
 
 
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2.2.2.  General.  Interest shall be due and payable for the exact number of days
principal is outstanding and shall be calculated on the basis of a three hundred
sixty (360) day year.  Any change in the interest rates occasioned by a change
in LIBOR shall be effective on the same day as the change in LIBOR.  After the
maturity of any Facility, whether by acceleration or otherwise, and while and so
long as there shall exist any uncured Default, the Facilities shall bear
interest at a per annum rate equal to Four Percent (4%) above the otherwise
applicable rates.

2.2.3.  Unused Fee/Reduction of Line of Credit Commitment.  Borrower shall pay
to Bank from and after the date hereof until the date on which Bank’s commitment
under the Line of Credit is terminated in whole, an unused fee accruing at the
rate of the Applicable Fee per annum on the average daily unborrowed portion of
the Line of Credit minus outstanding Letters of Credit.  All such unused fees
payable under this clause shall be payable quarterly in arrears on the last day
of each fiscal quarter of Borrower occurring after the date hereof (with the
first such payment being calculated for the period from the date hereof and
ending on March 31, 2005), and, in addition, on the date on which the Bank’s
commitment under the Line of Credit is terminated in whole.  Such unused fee
shall be calculated on the basis of the actual number of days elapsed and a
three hundred sixty (360) day year.  Borrower may permanently reduce the Bank’s
commitment under the Line of Credit, in whole or in part, in integral multiples
of One Million Dollars ($1,000,000), upon at least three (3) Banking Days’
written notice to Bank, which notice shall specify the amount of any such
reduction; provided, however, that the amount of Bank’s commitment under the
Line of Credit may not be reduced below the aggregate principal amount
outstanding thereunder.

2.2.4.  Interest Rate Selection – Eurodollar Rate Option.  [Intentionally left
blank].
 
2.4  Issuance of Letters of Credit.  Section 2.4 of the Agreement is hereby
amended by substituting the following new Section 2.4 in lieu of the existing
Section 2.4:

2.4  Issuance of Letters of Credit.  Subject to the terms and conditions hereof,
the Line of Credit, at the option of Borrower upon delivery of a proper Letter
of Credit Application, in the form prescribed by Bank, may also be utilized in
the form of Letters of Credit issued by Bank for the account of Borrower.  Each
Letter of Credit shall have an expiration date not later than the earlier of
twelve (12) months from the date of issuance, or the Line of Credit Maturity
Date.  The aggregate of the Letters of Credit outstanding at any time plus the
aggregate amount of unreimbursed drawings under the Letters of Credit shall not
exceed the lesser of the unborrowed available portion of the Line of Credit or
Seven Hundred Fifty Thousand Dollars ($750,000.00).  The amount of any Letter of
Credit outstanding at any time for all purposes hereof shall be the maximum
amount which could be drawn thereunder under any circumstances from and after
the date of determination.  The Letters of Credit and each unreimbursed drawing
thereunder shall count against and reduce the available amount under the Line of
Credit by the amount of any Letter of Credit outstanding unless and until such
Letter of Credit expires by its terms or otherwise terminates or the amount of a
drawing thereunder is reimbursed, in which event the Line of Credit shall be
reinstated by the amount of such Letter of Credit or the amount of such
reimbursement, as the case may be.  Each such Letter of Credit shall conform to
the general requirements of Bank for the issuance of such credits, as to form
and substance, shall be subject to the Uniform Customs and Practices for
Documentary Credits (1993 Revision) International Chamber of Commerce
Publication No. 500 or International Standby Practices Publication 590 of the
International Chamber of Commerce and shall be a letter of credit which Bank may
lawfully issue.  If and to the extent a drawing is at any time made under any
Letter of Credit, Borrower agrees to pay to Bank immediately and unconditionally
upon demand for reimbursement, in lawful money of the United States, an amount
equal to each amount which shall be so drawn, together with interest from the
date of such drawing to and including the date such payment is reimbursed to
Bank or converted to an Advance under the Line of Credit as provided
herein.  Until demand for reimbursement, such interest shall be calculated at a
variable per annum rate equal to LIBOR plus Five Percent (5%), and interest
shall be calculated after such demand at a variable per annum rate equal to
LIBOR plus Nine Percent (9%).  In the event that LIBOR shall become unavailable,
such interest shall be calculated at a variable per annum rate equal to the
Prime Rate plus Two Percent (2%), and interest shall be calculated after such
demand at a variable per annum rate equal to the Prime Rate plus Six Percent
(6%).  All such interest shall be calculated on the basis that an entire year’s
interest is earned in three hundred sixty (360) days.  Bank shall convert
automatically the reimbursement obligations of Borrower arising out of any such
drawing into Advances under the Line of Credit so long as the Line of Credit has
not expired, and Borrower hereby irrevocably authorizes Bank to refinance,
without notice to Borrower, the reimbursement obligation of Borrower arising out
of any such drawing into Advances under the Line of Credit, evidenced by the
Credit Note and for all purposes under, on and subject to the terms and
conditions of this Agreement, without regard to the conditions precedent to
making an Advance under the Line of Credit or to any requirement of this
Agreement that each Advance be a minimal amount or multiple.  This Agreement and
the other Loan Documents shall supersede any terms of any letter of credit
applications or other documents which are irreconcilably inconsistent with the
terms hereof or thereof.  Borrower agrees to pay to Bank, at the time of
issuance, Letter of Credit fees equal to the Applicable Fee of the face amount
of each commercial Letter of Credit and the Applicable Fee per annum of each
standby Letter of Credit.  Such Letter of Credit fees shall be due and payable
upon issuance and thereafter quarterly in advance on the first day of each
calendar quarter and shall be calculated on the basis that an entire year
consists of three hundred sixty (360) days.  Such fees shall not be reduced or
refundable for any reason.  Borrower shall also pay Bank’s reasonable and
customary costs of issuing, servicing, and negotiating draws under the Letters
of Credit.  Borrower hereby authorizes Bank to collect such fees by deducting
the amount thereof from any account of Borrower at Bank.
 
 
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2.9.1.  Line of Credit.  Section 2.9.1 of the Agreement is hereby amended by
substituting the following new Section 2.9.1 in lieu of the existing Section
2.9.1:

Borrower shall give Bank email, telex or telegraphic notice of its intention to
borrow under the Line of Credit (a “Borrowing Base Request”) by not later than
10:00 a.m. (Indianapolis time) on the proposed borrowing date, which shall be a
Banking Day.  With each draw request, Borrower shall submit the necessary
documentation including, but not limited to, a Borrowing Base reconciliation and
any accompanying backup documentation, such as sales journals, copies of
invoices, or other supporting information as deemed reasonably necessary by the
Bank in its sole discretion (collectively, the “Borrowing Base
Documentation”).  It shall be an Event of Default if any Borrowing Base
Documentation contains any misrepresentations.  Each Borrowing Base Request once
received by Bank shall be irrevocable, subject to Section 2.13 hereof.  Borrower
agrees that Bank may rely on any such email, telex or telegraphic Borrowing Base
Request made by any Person whom Bank in good faith believes to be
authorized.  Each Borrowing Base Request, including the accompanying Borrowing
Base report, shall in and of itself constitute a representation and warranty on
behalf of Borrower that no Default or Unmatured Default (except the Waived
Default expressly waived herein, as provided by Article 6) has occurred and is
continuing or would result from the making of the Advance requested by the
Borrowing Base Request and that the requested Advance shall not cause the
principal balance of the Line of Credit to exceed the maximum amount available
under the Line of Credit from time to time.  Provided that there is availability
under the Line of Credit, Bank shall use its commercially reasonable best
efforts to deposit each Advance into the Operating Account (as such term is
defined in paragraph 5.2.15) no later than 2:00 p.m. (Indianapolis time) on the
Banking Day upon which the Borrower makes a Borrowing Base Request.

Article 5.  Covenants

5.2.15  Banking Relationship.  Section 5.2.15 of the Agreement is hereby amended
by substituting the following new Section 5.2.15 in lieu of the existing Section
5.2.15:

Maintain all of its banking accounts with Bank except for the Excluded Account
(as defined below), including, without limitation, operating, lockbox and
autoline accounts (collectively, the “Operating Account”).  "Excluded Accounts"
shall be accounts maintained in West Lafayette, IN, Evansville, IN and
McMinnville, OR (locations where Bank does not have branches) for use in local
transactions.  The balances of funds in those accounts will not exceed $10,000
each in West Lafayette and Evansville, and $5,000 in McMinnville (collectively,
the “Excluded Account Cap”).  Borrower shall also maintain a segregated
depository account at Bank in Bank’s name as account number ______________(the
“Cash Collateral Account”).  “Excluded Payments” shall mean deposits made into
the Excluded Accounts, provided that such deposits do not cause the balance of
the respective Excluded Account to exceed the Excluded Account Cap.  Borrower
agrees that all receipts from the sale of inventory, collection of accounts, and
all other revenues (collectively, the “Cash Collateral”) shall be immediately
deposited into the Cash Collateral Account.  Borrower shall not commingle any of
the Cash Collateral with any other funds or assets, and will deliver the Cash
Collateral (including all checks and other instruments representing proceeds of
Borrower’s inventory, accounts receivable and all other revenues, but not
including any Excluded Payments) in the form received by Borrower no later than
the first business day after the same are received by Borrower.  Until so
delivered, all such cash, checks, deposits and other property shall be held in
trust by Borrower for the benefit of Bank.  Borrower shall have no legal or
equitable title to the Cash Collateral Account or any funds thereto.  Bank shall
credit the Cash Collateral deposited into the Cash Collateral Account to the
Obligations on the first Banking Day following receipt of collected funds and
reduce the Obligations by such amounts.  Notwithstanding any other provision of
this Agreement, at any time and from time to time when the Obligations of
Borrower to Bank are paid in full, including all reasonable attorneys’ fees and
other reasonable expenses incurred by Bank in connection with the Obligations,
Bank will transfer all remaining funds in the Cash Collateral Account to the
Operating Account.  Bank shall have authority to endorse in the name of Bank
and/or Borrower any check or similar instrument payable to Borrower that may
come into the possession of Bank as Cash Collateral.
 
 
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5.2.17  Inventory and Appraisal of Equipment:  The following is hereby added to
the Agreement as Section 5.2.17:

On or before August 15, 2009, provide Bank with a complete inventory of all
equipment owned or leased by Borrower and BAS Evansville, Inc.  Such inventory
shall indentify any and all security interests held by lenders in each item of
equipment and whether such equipment is being leased.  For each piece of
equipment that is neither being leased nor subject to any security interests
other than a security interest held by Bank and/or National City Leasing
Corporation, Borrower shall submit an appraisal provided by an accredited
appraiser acceptable to Bank in its sole discretion to Bank on or before August
15, 2009.  The appraisal shall include both a fair market valuation and a
liquidation valuation.

5.2.18  Field Exam:  The following is hereby added to the Agreement as Section
5.2.18:

Allow Bank to conduct a field exam(s) of Borrower and/or BAS Evansville, Inc. at
the reasonable discretion of the Bank.  Representatives and agents of Bank, may
enter upon the premises of Borrower and/or BAS Evansville, Inc. at any time
during their business hours. Such representatives are authorized to copy and
preserve all corporate records and shall have access to all manufacturer systems
and web based interfaces as determined in their sole discretion, and, further
may observe the Borrower’s compliance with the terms and provisions of this
Agreement, and the Loan Documents, and may verify sales, payments, and the terms
of any sale with customers and any third party, but shall not in any respect
participate in the management of the day-to-day business operations of the
Borrower and/or BAS Evansville, Inc.  So long as any of the Obligations are
outstanding, or any Obligation may arise pursuant to the Loan Documents, the
Bank may conduct field exams and/or audits of the Borrower and/or BAS
Evansville, Inc., the frequency of which is solely within the discretion of the
Bank.  In addition, the Borrowers shall use their best efforts to accommodate
the Bank with the observation and investigation permitted hereby.
 
 
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5.3.2  Fixed Charge Coverage Ratio.  Section 5.3.2 of the Agreement is hereby
amended by substituting the following new Section 5.3.2 in lieu of the existing
Section 5.3.2:

5.3.2  Fixed Charge Coverage Ratio.  Maintain its Fixed Charge Coverage Ratio at
not less than 1:00 to 1:00 as of June 30, 2009 (calculated by annualizing
results for the three (3) month period ended June 30, 2009 by multiplying the
numerator and denominator in the Fixed Charge Coverage Ratio by four (4)), at
not less than 1.25 to 1:00 as of September 30, 2009 (calculated by annualizing
the results for the six (6) month period ended September 30, 2009 by multiplying
the numerator and denominator in the Fixed Charge Coverage Ratio by two (2)),
and at not less than 1.50 to 1.00 as of December 31, 2009 (calculated by
annualizing the nine (9) month period ended December 31, 2009 by multiplying the
numerator and denominator in the Fixed Charge Coverage Ratio by one and
thirty-three one hundredths (1.33)).

5.3.3  Tangible Net Worth.  Section 5.3.3 of the Agreement is hereby amended by
substituting the following new Section 5.3.3 in lieu of the existing Section
5.3.3:
           
5.3.3  Tangible Net Worth.  Maintain its Tangible Net Worth (determined as of
the end of the fiscal quarter) at not less than Twelve Million Dollars
($12,000,000) as of June 30, 2009, and increasing as of the last day of each
fiscal quarter thereafter by an amount equal to Fifty Percent (50%) of
Borrower's net income (without reduction for any net losses for such fiscal
quarter). 
 
PART II.  WAIVER
 
            Subject to the satisfaction of Part IV hereof, Bank hereby waives,
for the fiscal periods ending December 31, 2008, March 31, 2009 and June 30,
2009, compliance with the provisions of Section 5.3.2 (Fixed Charge Coverage
Ratio) of the Agreement, and further waives, for the fiscal periods ending March
31, 2009 and June 30, 2009, compliance with the provisions of Section 5.3.3
(Tangible Net Worth) of the Agreement, the merger of BASi Northwest Laboratory,
Inc. with and into the Borrower, the dissolution of BASi Maryland, Inc., as well
as any Default or Unmatured Default by Borrower for noncompliance therewith
(collectively, the “Waived Default”).  These waivers shall be in force and
effect solely for the referenced period, unless otherwise agreed by Bank in the
exercise of its sole discretion.  Notwithstanding the terms of this Section,
Bank is not waiving any default by the Borrower resulting from Borrower’s
failure to comply with Section 5.3.2 and 5.3.3 as amended by this Fourth
Amendment for the period ending on June 30, 2009.
 
 
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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;

(b)           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)           Capitalized terms used in writing by Bank, 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)           Except to the extent set forth above, 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 for changes reflecting transactions permitted by the Agreement;

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

(dd)           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.
 
 
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PART IV.  CONDITIONS PRECEDENT

Notwithstanding anything contained in this Fourth Amendment to the contrary,
Bank shall not have any obligation under this Fourth Amendment until each of the
following conditions precedent have been fulfilled to the satisfaction of Bank:

(a)           Bank shall have received this Fourth Amendment, duly executed in
the form prescribed by Bank;

(b)           Bank shall have received a Reaffirmation of Guaranty, in the form
prescribed by Bank, duly executed by each Guarantor in existence as of the date
hereof;

(c)           Bank shall have received the Replacement Promissory Note duly
executed in the form prescribed by Bank;

(d)           Bank shall have received a duly executed certificate of the
Secretary of Borrower (i) certifying as to attached copies of Resolutions of the
Board of Directors of Borrower authorizing the execution, delivery and
performance of this Fourth Amendment, and (ii) 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;

(e)           Borrower shall have paid Bank a $7,500 non-refundable waiver fee;
and

(f)           All legal matters incident to this Fourth Amendment shall be
reasonably satisfactory to Bank and its counsel.

PART V.  EXPENSES

Borrower shall reimburse Bank for all reasonable legal fees and other expenses
incurred by Bank in connection with this Fourth Amendment and the transactions
contemplated hereby.  Bank is hereby authorized to debit Borrower’s operating
account maintained at Bank for such legal fees and expenses.

PART VI.  COUNTERPARTS

This Agreement may be executed in counterparts, each of which shall constitute
an original, but all of which when taken together shall constitute but one
agreement.

[signatures on following pages]
 
 
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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:
/s/ Michael R. Cox    
Printed:
Michael R. Cox    
Its:
VP - Finance  

 
STATE OF INDIANA
)
 
)SS:
COUNTY OF Tippecanoe
)

 
Personally appeared before me, a Notary Public in and for said County and State,
Michael R. Cox of said corporation, known to me as the person named herein, who
after being duly sworn upon his oath, stated to me that he has been duly
authorized and empowered to execute the foregoing Agreement on behalf of said
corporation.

In Witness Whereof, I have hereunto set my hand and Notarial Seal, this 17th day
of July, 2009.

My Commission Expires:
  /s/ Lina L. Reeves-Kerner   3/17/2016  
Notary
 
My County of Residence:
  Lina L. Reeves-Kerner   Tippecanoe  
Printed
 

 

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“BANK”
         
NATIONAL CITY BANK
                 
By:
/s/ John H. Goggins            
Its:
Vice President  

 
 
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