PROMISSORY NOTE

Borrower:  BIOANALYTICAL SYSTEMS, INC.        Lender:  Bank One, Indiana, NA
           2701 KENT AVENUE                            Commercial Loan Corp.
           WEST LAFAYETTE, IN 47906                    111 Monument Circle
                                                       Indianapolis, IN 46277

Principal Amount: $3,500,000.00                      Date of Note: April 1, 2000

PROMISE TO PAY. For value received,  BIOANALYTICAL  SYSTEMS,  INC.  ("Borrower")
promises to pay to Bank One, Indiana NA ("Lender"), or order, in lawful money of
the United States of America, the principal amount of Three Million Five Hundred
Thousand & 00/100 Dollars  ($3,500,000.00) ("Total Principal Amount") or so much
as may  be  outstanding,  together  with  interest  on  the  unpaid  outstanding
principal balance from the date advanced until paid in full.

PAYMENT.  This Note  shall be  payable  as  follows:  Interest  shall be due and
payable  monthly as it accrues,  commencing on April 30, 2000 and  continuing on
the same day of each month  thereafter  during  the term of this  Note,  and the
outstanding principal balance of this Note, together with all accrued but unpaid
interest,  shall be due and payable on April 1, 2001.  The annual  interest rate
for this Note is computed on a 365/360 basis;  that is, by applying the ratio of
the annual interest rate over a year of 360 days,  multiplied by the outstanding
principal balance, multiplied by the actual number of days the principal balance
is  outstanding.  Borrower  will pay Lender at the address  designated by Lender
from time to time in writing. If any payment of principal of or interest on this
Note shall become due on a day which is not a Business  Day,  such payment shall
be made on the next succeeding  Business Day. As used herein, the term "Business
Day" shall mean any day other than a Saturday,  Sunday or any other day on which
national  banking  associations  are authorized to be closed.  Unless  otherwise
agreed to, in writing, or otherwise required by applicable law, payments will be
applied first to accrued, unpaid interest, then to principal,  and any remaining
amount to any unpaid collection costs, late charges and other charges, provided,
however,  upon delinquency or other default,  Lender reserves the right to apply
payments among  principal,  interest,  late charges,  collection costs and other
charges at its discretion.  The books and records of Lender shall be prima facie
evidence of all outstanding principal of and accrued but unpaid interest on this
Note.  If this Note is  governed by or is  executed  in  connection  with a loan
agreement, this Note is subject to the terms and provisions thereof.

VARIABLE INTEREST RATE. The interest rate on this Note is subject to fluctuation
based upon the Prime Rate of interest in effect from time to time (the  "Index")
(which rate may not be the lowest, best or most favorable rate of interest which
Lender may charge on loans to its  customers).  "Prime Rate" shall mean the rate
announced from time to time by Lender as its prime rate. Each change in the rate
to be charged on this Note will become effective  without notice on the same day
as the Index changes.  Except as otherwise provided herein, the unpaid principal
balance of this Note will  accrue  interest  at a rate per annum which will from
time to time be equal to the sum of the Index,  minus 0.500%.  NOTICE:  Under no
circumstances  will the interest rate on this Note be more than the maximum rate
allowed by applicable law.


<PAGE>

PREPAYMENT.  Borrower  may pay  without  fee all or a portion  of the  principal
amount owed hereunder  earlier than it is due. All prepayments  shall be applied
to the indebtedness  owing hereunder in such order and manner as Lender may from
time to time determine in its sole discretion.

LATE  CHARGE.  If a payment  is 10 days or more late,  Borrower  will be charged
5.000% of the regularly scheduled payment or $25.00, whichever is greater.

DEFAULT.  Borrower  will be in  default  if any of the  following  happens:  (a)
Borrower  fails to make any payment of principal or interest when due under this
Note or any other indebtedness owing now or hereafter by Borrower to Lender; (b)
failure of  Borrower  or any other  party to comply  with or  perform  any term,
obligation,  covenant  or  condition  contained  in this  Note  or in any  other
promissory note, credit agreement, loan agreement, guaranty, security agreement,
mortgage, deed of trust or any other instrument,  agreement or document, whether
now or hereafter  existing,  executed in connection with this Note (the Note and
all such other instruments, agreements, and documents shall be collectively know
herein as the "Related Documents");  (c) Any representation or statement made or
furnished to Lender  herein,  in any of the Related  Documents or in  connection
with any of the foregoing is false or misleading  in any material  respect;  (d)
Borrower  or any other  party  liable for the  payment of this Note,  whether as
maker, endorser,  guarantor, surety or otherwise, becomes insolvent or bankrupt,
has a  receiver  or trustee  appointed  for any part of its  property,  makes an
assignment  for the benefit of its  creditors,  or any  proceeding  is commenced
either by any such party or against it under any bankruptcy or insolvency  laws;
(e) the occurrence of any event of default specified in any of the other Related
Documents or in any other agreement now or hereafter  arising  between  Borrower
and Lender;  (f) the occurrence of any event which permits the  acceleration  of
the maturity of any indebtedness owing now or hereafter by Borrower to any third
party;  or  (g)  the  liquidation,  termination,  dissolution,  death  or  legal
incapacity  of Borrower or any other party  liable for the payment of this Note,
whether as maker, endorser, guarantor, surety, or otherwise.

LENDER'S RIGHTS. Upon default,  Lender may at its option, without further notice
or demand (i) declare the entire unpaid  principal  balance on this Note and all
accrued unpaid interest  immediately  due, (ii) refuse to advance any additional
amounts under this Note, (iii) foreclose all liens securing payment hereof, (iv)
pursue  any other  rights,  remedies  and  recourses  available  to the  Lender,
including without limitation,  any such rights,  remedies or recourses under the
Related  Documents,  at law or in equity,  or (v) pursue any  combination of the
foregoing.  Upon default  resulting  from the  bankruptcy  or  insolvency of the
Borrower as  described  in clause (e) above under the  heading  "DEFAULTS",  the
unpaid principal  balance of this Note and all accrued but unpaid interest shall
automatically become due and payable immediately and shall not be subject to the
discretion  of  Lender.  Upon  default,  including  failure  to pay  upon  final
maturity,  Lender, at its option, may also do one or both of the following:  (a)
increase the variable  interest rate on this Note 3,000 percentage  points,  and
(b) add any unpaid accrued interest to principal and such sum will bear interest


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<PAGE>

therefrom  until paid at the rate provided in this Note (including any increased
rate).  The  interest  rate  will not  exceed  the  maximum  rate  permitted  by
applicable  law.  Lender  may hire an  attorney  to help  collect  this  Note if
Borrower does not pay and Borrower will pay Lender's reasonable  attorneys' fees
and all other costs of  collection,  unless  prohibited by applicable  law. This
Note will be repaid under all  circumstances  without relief from any Indiana or
other  valuation and  appraisement  laws. This Note has been delivered to Lender
and  accepted by Lender in the State of Indiana.  Subject to the  provisions  on
arbitration, this Note shall be governed by and construed in accordance with the
laws  of the  State  of  Indiana  without  regard  to any  conflict  of  laws or
provisions thereof.

PURPOSE.  Borrower  agrees  that no  advances  under this Note shall be used for
personal, family, or household purposes and that all advances hereunder shall be
used solely for business, commercial, agricultural or other similar purposes.

JURY  WAIVER.  THE  BORROWER  AND  LENDER  (BY  ITS  ACCEPTANCE  HEREOF)  HEREBY
VOLUNTARILY,  KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE  (WHETHER BASED UPON CONTRACT,  TORT
OR OTHERWISE)  BETWEEN OR AMONG THE BORROWER AND LENDER ARISING OUT OF OR IN ANY
WAY  RELATED TO THIS  NOTE,  ANY OTHER  RELATED  DOCUMENT,  OR ANY  RELATIONSHIP
BETWEEN LENDER AND BORROWER.  THIS PROVISION IS A MATERIAL  INDUCEMENT TO LENDER
TO PROVIDE THE FINANCING EVIDENCED BY THIS NOTE.

DISHONORED  ITEM FEE.  Borrower  will pay a fee to Lender of $20.00 if  Borrower
makes a payment on Borrower's  loan and the check or  preauthorized  charge with
which Borrower pays is later dishonored.

RIGHT OF SETOFF.  Unless a lien  would be  prohibited  by law or would  render a
nontaxable  account  taxable,  Borrower grants to Lender a contractual  security
interest in, and hereby assigns,  conveys,  delivers,  pledges, and transfers to
Lender all Borrower's right,  title and interest in and to, Borrower's  accounts
with Lender (whether checking, savings, or any other account), including without
limitation all accounts held jointly with someone else and all accounts Borrower
may open in the future.  Borrower  authorizes Lender, to the extent permitted by
applicable  law, to charge or setoff all sums owing on this Note against any and
all such accounts.



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<PAGE>

LINE OF CREDIT.  This Note  evidences a revolving  line of credit.  Borrower may
request advances and make payments hereunder from time to time, provided that it
is understood and agreed that the aggregate  principal  amount  outstanding from
time to time hereunder shall not at any time exceed the Total Principal  Amount.
The unpaid principal  balance of this Note shall increase and decrease with each
new  advance  or  payment  hereunder,  as the case may be.  Subject to the terms
hereof,  Borrower may borrow, repay and reborrow hereunder.  Advances under this
Note,  as well as  directions  for  payment  from  Borrower's  accounts,  may be
requested  orally or in writing by Borrower or by an authorized  person.  Lender
may,  but need not,  require  that all oral  requests be  confirmed  in writing.
Borrower  agrees to be liable for all sums either:  (a)  advanced in  accordance
with  the  instructions  of an  authorized  person  or  (b)  credited  to any of
Borrower's accounts with Lender.

ARBITRATION.  Lender and Borrower  agree that upon the written  demand of either
party,  whether made before or after the  institution of any legal  proceedings,
but prior to the  rendering of any judgment in that  proceeding,  all  disputes,
claims and controversies  between them, whether  individual,  joint, or class in
nature,  arising from this Note, any Related  Documents or otherwise,  including
without  limitation  contract  disputes  and tort  claims,  shall be resolved by
binding arbitration pursuant to the Commercial Rules of the American Arbitration
Association   ("AAA").   Any  arbitration   proceeding  held  pursuant  to  this
arbitration  provision  shall be conducted  in the city  nearest the  Borrower's
address  having an AAA regional  office,  or any other place  selected by mutual
agreement  of the  parties.  No act to take or dispose of any  collateral  shall
constitute  a waiver of this  arbitration  agreement  or be  prohibited  by this
arbitration  agreement.  This arbitration provision shall not limit the right of
either party during any dispute,  claim or controversy to seek,  use, and employ
ancillary, or preliminary rights and/or remedies, judicial or otherwise, for the
purposes  of  realizing  upon,  preserving,   protecting,  foreclosing  upon  or
proceeding  under  forcible  entry and detainer for  possession  of, any real or
personal  property,  and any such  action  shall not be deemed  an  election  of
remedies.  Such remedies include,  without  limitation,  obtaining a relief or a
temporary restraining order, invoking a power of sale under any deed of trust or
mortgage,   obtaining   injunctive   writ  of  attachment  or  imposition  of  a
receivership,  or exercising any rights relating to personal property, including
exercising the right of set-off, or taking or disposing of such property with or
without judicial process pursuant to the Uniform  Commercial Code. Any disputes,
claims, or controversies  concerning the lawfulness or reasonableness of an act,
or exercise of any right or remedy,  concerning  any  collateral,  including any
claim to rescind,  reform,  or otherwise  modify any  agreement  relating to the
collateral,  shall also be  arbitrated;  provided,  however;  that no arbitrator
shall have the right or the power to enjoin or restrain any act of either party.
Judgment upon any award  rendered by any  arbitrator may be entered in any court
having jurisdiction.  The statute of limitations,  estoppel,  waiver, laches and
similar  doctrines which would otherwise by applicable in an action brought by a
party shall be applicable in any arbitration proceeding, and the commencement of
an arbitration  proceeding  shall be deemed the  commencement  of any action for
these purposes.  The Federal Arbitration Act (Title 9 of the United States Code)
shall  apply  to the  construction,  interpretation,  and  enforcement  of  this
arbitration provision.



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<PAGE>

RENEWAL  AND  EXTENSION.  This  Note is given  in  replacement,  renewal  and/or
extension  of,  but  not  extinguishing  the  indebtedness  evidenced  by,  that
promissory  note  dated  April 2, 1999  executed  by  Borrower  in the  original
principal amount of $3,500,000.00,  and is not a novation thereof.  All interest
evidenced  by  the  Note  being  replaced,  renewed,  and/or  extended  by  this
instrument shall continue to be due and payable until paid.

ADDITIONAL  PROVISION REGARDING LATE CHARGES. In the "Late Charge" provision set
forth above,  the following  language is hereby added after the word  "greater":
"up to the maximum amount of One Thousand Five Hundred  Dollars  ($1,500.00) per
late charge."

ADDITIONAL PROVISION. Additional terms and conditions of this Note are contained
in the Addendum dated as of the date of this Note,  which is attached hereto and
to which reference is hereby made.

GENERAL  PROVISIONS.  Lender may delay or forego  enforcing any of its rights or
remedies under this Note without losing them.  Borrower and any other person who
signs,  guarantees or endorses this Note,  to the extent  allowed by law,  waive
presentment, demand for payment, protest and notice of dishonor. Upon any change
in the terms of this Note, and unless otherwise  expressly stated in writing, no
party who signs this Note, whether as maker,  guarantor,  accommodation maker or
endorser,  shall be released from liability.  All such parties agree that Lender
may renew or  extend  (repeatedly  and for any  length of time)  this  Note,  or
release any party or guarantor or collateral; or impair, fail to realize upon or
perfect Lender's security interest in the collateral;  and take any other action
deemed necessary by Lender without the consent of or notice to anyone.  All such
parties  also agree that Lender may modify  this Note  without the consent of or
notice to anyone other than the party with whom the modification is made.

PRIOR TO SIGNING THIS NOTE,  BORROWER READ AND  UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE,  INCLUDING THE VARIABLE INTEREST RATE PROVISIONS.  BORROWER AGREES TO
THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS NOTE.

BORROWER:

BIOANALYTICAL SYSTEMS, INC.



By:  ----------------------------------
       AUTHORIZED SIGNER



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