Document:

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%).

     

     

    
      
        	
                FOURTH
      AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

              	
                Page
  1

              

      

    

     

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    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.

     

     

    
      	
              FOURTH
      AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

            	
              Page 
    2

            

    

     

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    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.

     

     

    
      	
              FOURTH
      AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

            	
              Page 3

            

    

     

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    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.

     

     

    
      	
              FOURTH
      AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

            	
              Page
  4

            

    

     

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    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.

     

     

    
      	
              FOURTH
      AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

            	
              Page 5

            

    

     

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    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.

     

     

    
      	
              FOURTH
      AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

            	
              Page
  6

            

    

     

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    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]

     

     

    
      	
              FOURTH
      AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

            	
              Page
  7

            

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    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

            	 
      

    

     

    

      	
              FOURTH
      AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

            	
              Page
  8

            

    

     

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      	 
      	
              “BANK”

            
	 
      	 
      	 
      	 
      
	 
      	
              NATIONAL
      CITY BANK

            
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
              By:

            	/s/
      John H. Goggins	 
      
	 
      	 
      	 
      	 
      
	 
      	
              Its:

            	Vice
      President	 
      

    

    
    

     

     

    
      	
              FOURTH
      AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

            	
              Page
  9Side
Letter Agreement

    

    This Side
Letter Agreement (the “Agreement”), dated as
of July 14, 2009, is made by and among RINO International Corporation, a Nevada
corporation (the “Company”), and Blue
Ridge Investments LLC (“Blue Ridge”).
Reference is made to that certain Securities Purchase Agreement, dated September
27, 2007, by and among the Company, Innomind Group Limited, Dalian Innomind
Environment Engineering Co., Ltd. (“WOFE”), Dalian RINO
Environmental Engineering Science and Technology Co., Ltd. (“Dalian Rino”, and
together with WOFE and the Company, collectively, the “Rino Group”) and the
investors signatories thereto, as amended (the “Securities Purchase
Agreement”).

    

    WHEREAS,
pursuant to Section 4.13 of the Securities Purchase Agreement, Blue Ridge has
the right to designate one member to the Board of Directors of the Company or,
at Blue Ridge’s option, of WOFE or of Dalian Rino and the Rino Group is required
to take, all necessary corporate and other action to have any such designee
elected to the Board of the Company, WOFE or Dalian Rino, as applicable within
10 business days of receipt of a request to cause such designee to be elected
(the “Board
Designation Right”); and

     

    WHEREAS,
as of the date hereof, Blue Ridge has not exercised the Board Designation Right
and the parties hereto desire to replace Blue Ridge’s Board Designation Right
with a board observation right under the terms and conditions provided in this
Agreement.

     

    NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration the receipt and adequacy of which
are hereby acknowledged, the Company and Blue Ridge agree as
follows:

     

    Commencing
on the date hereof, Blue Ridge hereby waives and relinquishes the Board
Designation Right in exchange for a Board Observation Right as follows: for so
long as Blue Ridge shall hold 100,000 shares of the Company’s common stock, par
value $.0001 per share, it shall be entitled to have one representative of it
attend all meetings of the Board of Directors of the Company in a nonvoting
observer capacity and to be notified of all meetings of the Company's Board of
Directors; provided, that Blue Ridge shall, and shall cause each of its
representatives who may have access to any of the information made available at
any meeting of the Company's Board of Directors or provided by the Company to
its Board of Directors, agree to be subject to the Company’s Policy Statements
on Non-public Information Disclosure and Communications in substantially the
form attached hereto as Exhibit A, which
policy statements shall hereby be incorporated as part of this Agreement;
provided further, that the Company reserves the right not to provide information
to Blue Ridge or its representatives and to exclude them from any meeting or
portion thereof if attendance at such meeting by them would adversely affect the
attorney-client privilege between the Company and its counsel or if any of Blue
Ridge or its representatives is or becomes a competitor, or affiliated in any
manner with a competitor, of the Company.

     

    
       

      RINO
International Corporation

      Side
Letter Agreement with Blue Ridge Investments LLC

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    All
notices, requests, demands, and other communications provided herein shall be in
writing, shall be delivered by hand or by first-class mail, facsimile, or
electronic mail and shall be sent to the parties hereto at their respective
addresses, facsimile numbers or electronic mail addresses set forth below their
respective signatures on the signature pages.

     

    All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof.

    

    This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart.  In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.

     

     

    
      RINO
International Corporation

      Side
Letter Agreement with Blue Ridge Investments LLC

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    IN
WITNESS WHEREOF, the parties have executed and delivered this Side Letter
Agreement as of the date first written above.

    

    

    RINO
INTERNATIONAL CORPORATION

    

    

    By:_________________________________

    Name:  Zou
Dejun

    Title:  Chief
Executive Officer

    Date of
Signature: _____________________

    

    
      	
              Attn: 

            	
              Qiu
      Jianping

            

    

    
      	
              Address: 

            	
              11
      Youquan Road, Zhanqian Street,

            

    

    Jinzhou
District, Dalian,

    People’s
Republic of China 116100

    
      	
              Email: 

            	
              aqiu@rinogroup.com

            

    

    
      	
              Phone: 

            	
              011
      86 411 8766 2700

            

    

    

     

    BLUE
RIDGE INVESTMENTS, LLC

    

    

    By:_________________________________

    Name:

    Title:

    

    Attn: 
RINO 0807 Deal Team. 

    Email:
ISSG@bankofamerica.com

    Fax
+1-212-377-7972,

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      RINO
INTERNATIONAL CORPORATION

      
        
          

        

      

      POLICY
STATEMENTS ON

      NON-PUBLIC
INFORMATION DISCLOSURE AND COMMUNICATIONS

      

      

      July
2009

      

      
        	
                I. 

              	
                PURPOSE

              

      

       

      The
purpose of this policy (hereinafter the “Policy”)
of RINO International Corporation (the “Company”)
is to comply with federal and state securities laws governing (a) trading in
Company securities while in the possession of "material nonpublic information"
concerning the Company, and (b) tipping or disclosing material nonpublic
information to outsiders, and in order to prevent improper insider trading or
tipping by any of its directors, officers and employees, their family members,
and specially designated outsiders who have access to the Company's material
nonpublic information.

       

      
        	
                II. 

              	
                SCOPE

              

      

       

      
        	
                A.

              	
                This policy shall be applicable
      to all directors,
      officers and employees of the Company, their family members and
      certain outsiders who have access to material
      nonpublic information concerning the Company (collectively
      referred to as
      "Insiders" as defined below).

              

      

       

      
        	
                B.

              	
                The policy applies to any and all
      transactions in the Company's securities, including its common stock and
      options to purchase common stock, and any other type of securities that
      the Company may issue, such as preferred stock, convertible debentures,
      warrants and exchange-traded options or other derivative
      securities.

              

      

       

      
        	
                C.

              	
                The policy will be delivered to
      all directors, officers, employees and designated outsiders upon its
      adoption by the Company, and to all new directors, officers, employees and designated
      outsiders at the start of their employment or relationship with the
      Company.

              

      

      

      
        	
                III. 

              	
                DEFINITIONS

              

      

       

      
        	
                A. 

              	
                INSIDERS

              

      

       

      Any
person who possesses material nonpublic information is considered an insider
as to
that information. Insiders include the Company’s board members, officers,
employees, independent contractors and those persons in a special relationship
with the Company (e.g., its auditors, consultants or attorneys). The definition
of insider is specific to each transaction. In other words, an individual is an
insider with respect to each item of material nonpublic information of which he
or she is aware.

       

      
        	
                B. 

              	
                RELATED
      PERSONS

              

      

       

      For
purposes of this Policy, a Related Person includes:

       

      
        	
                 
      

              	
                ·

              	
                your
      spouse, minor children and anyone else living in your
      household,

              

      

       

      
        	
                 
      

              	
                ·

              	
                partnerships
      in which you are a general partner;

              

      

       

      
        	
                 
      

              	
                ·

              	
                trusts
      of which you are a trustee; and

              

      

       

      
        	
                 
      

              	
                ·

              	
                estates
      of which you are an executor or
executrix.

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      C.           MATERIAL
INFORMATION

       

      Information
about the Company is "material" if it would be expected to affect the investment
or voting decisions of the reasonable shareholder or investor, or if the
disclosure of the information would be expected to significantly alter the total
mix of the information in the marketplace about the Company. In simple terms,
material information is any type of information which could reasonably be
expected to affect the price of Company securities. While it is not possible to
identify all information that would be deemed "material," the following types of
information ordinarily would be considered material:

       

      
        	
                 
      

              	
                ·

              	
                Financial
      performance, especially quarterly and year-end earnings, and significant
      changes in financial performance or
liquidity.

              

      

       

      
        	
                 
      

              	
                ·

              	
                Company
      projections and strategic plans.

              

      

       

      
        	
                 
      

              	
                ·

              	
                Potential
      mergers and acquisitions or the sale of Company assets or
      subsidiaries.

              

      

       

      
        	
                 
      

              	
                ·

              	
                New
      major contracts, orders, suppliers, customers, or finance sources, or the
      loss thereof.

              

      

       

      
        	
                 
      

              	
                ·

              	
                Major
      discoveries or significant changes or developments in products or product
      lines, research or technologies.

              

      

       

      
        	
                 
      

              	
                ·

              	
                Significant
      changes or developments in supplies or inventory, including significant
      product defects, recalls or product
returns.

              

      

       

      
        	
                 
      

              	
                ·

              	
                Significant
      pricing changes.

              

      

       

      
        	
                 
      

              	
                ·

              	
                Stock
      splits, public or private securities/debt offerings, or changes in Company
      dividend policies or amounts.

              

      

       

      
        	
                 
      

              	
                ·

              	
                Significant
      changes in senior management.

              

      

       

      
        	
                 
      

              	
                ·

              	
                Significant
      labor disputes or negotiations.

              

      

       

      
        	
                 
      

              	
                ·

              	
                Actual
      or threatened major litigation, or the resolution of such
      litigation.

              

      

       

      D.           NONPUBLIC
INFORMATION

       

      Material
information is "nonpublic" if it has not been widely disseminated to the public
through major newswire services, national news services and financial news
services. For the purposes of this policy, information will be considered
public, i.e., no longer "nonpublic", after the close of trading on the second
full trading day following the Company's widespread public release of the
information.

      

      IV.           STATEMENTS
OF COMPANY POLICY AND PROCEDURES

      

      A.           TIMING
OF TRANSACTIONS

      

      
        	
                 
      

              	
                1.

              	
                No Trading
      During Trading Windows While in the Possession of Material Nonpublic
      Information. No
      Insiders possessing
      material nonpublic information concerning the Company may trade in Company
      securities even during applicable trading windows. Persons possessing such
      information may trade during a trading window only after the close of
      trading on the second full trading day following the
      Company's widespread public release of the
    information.

              

      

      

      
        	
                 
      

              	
                2.

              	
                As
      a general rule, if you know of material nonpublic information about the
      Company, you should not engage in any trading in the Company's securities
      until forty-eight (48) hours after the information is publicly announced.
      Please note the following policy on the permissible trading time after the
      release of the Company’s financial information (the "Earnings
      Dissemination Time"):

              

      

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                a.

              	
                If
      the information relates to the Company's financial performance, you should
      wait until forty-eight (48) hours after the Company issues its relevant
      earnings release.

              

      

      
        	
                 
      

              	
                b.

              	
                If
      the information relates to routine financial performance by the Company,
      you should wait until the beginning of trading on the day when at least
      twenty-four (24) hours has passed following the Company's publication of
      its periodic earnings release. For example, if the Company's routine
      quarterly earnings release is issued on Monday at 8:00 a.m., you may trade
      when the market opens on Tuesday. If the release is issued at 11:00 a.m.
      that day or at 5:00 p.m. after the market closes, you may trade when the
      market opens on Wednesday. The release of earnings will typically occur
      during January, April, July and
October.

              

      

      

      
        	
                 
      

              	
                3.

              	
                An
      exception to this rule is trading in compliance with SEC Rule 10b5-1
      pursuant to a contract, instruction or plan previously established at a
      time when you were not aware of material nonpublic information (a "10b5-1
      Plan"). Any 10b5-1 Plan should be cleared by the Chief Financial
      Officer before any trading is done in reliance on
  it. 

              

      

      

      
        	
                 
      

              	
                4.

              	
                Blackout Period. It is
      a violation of Company policy for a director, executive officer or certain
      employees with access to material nonpublic information (to be determined
      by the Company from time to time) to engage in any trading in the
      Company's securities during a "blackout period" that
      covers the following periods:

              

      

      

      
        	
                 
      

              	
                a.

              	
                The
      last two weeks of the month ending each calendar quarter (i.e., March,
      June, September and December); and

              

      

      
        	
                 
      

              	
                b.

              	
                The
      period from the end of that quarter until [forty-eight hours after the
      earnings release] [the earnings dissemination
  time.]

              

      

      

      Exceptions
may be made to trading during the blackout period pursuant to a 10b5-1 Plan only
with the prior approval of the Chief Executive Officer or Chief Financial
Officer.

      

      
        	
                 
      

              	
                5.

              	
                There
      is no exception to this Policy for transactions that may be necessary or
      justifiable for independent reasons (such as the need to raise money for
      an emergency expenditure).

              

      

       

      B.           COMMUNICATIONS

       

      It is
against the law and the policy of the Company for any person acting on behalf of
the Company to selectively disclose material nonpublic information to securities
professionals (including, for example, buy and sell-side analysts, institutional
investment managers and investment companies) or to stockholders of the Company
under circumstances where it is reasonably foreseeable that the stockholder may
be likely to trade on the basis of such information, unless the information is
simultaneously disclosed to the public generally.

       

      
        	
                 
      

              	
                1.

              	
                Authorized
      Company Representatives

              

      

      

      Senior
officials of the Company or any other officer, employee or agent of the Company
who regularly communicates with stockholders of the Company or securities
professionals may be deemed persons "acting on behalf of the Company". It is the
Company's intent to limit the number of spokespersons authorized to speak on
behalf of the Company. Accordingly, the only individuals authorized to represent
the Company in its dealing with securities professionals and stockholders,
including institutional investors, are the Chief Executive Officer and the Chief
Financial Officer and others designated in any writing by them referencing this
Policy (the "Authorized
Company Representatives"). In addition, by similar designation of the
Chief Executive Officer or the Chief Financial Officer, other individuals may be
authorized to represent the Company in dealings with the print and electronic
media, including news, financial and trade publications. If you are not
authorized to speak on behalf of the Company and receive requests for
information, please direct the inquiry to an appropriate authorized
person.

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      

      
        	
                 
      

              	
                2.

              	
                Investor/Analyst
      Conferences

              

      

      

      Whenever
practical, the Company will encourage investor and analyst conferences to be
open to the public and simultaneously web-cast. The planned portion of any
conference presentation should be reviewed in advance by the Company's Chief
Executive Officer or Chief Financial Officer. If the conference is not open to
the public, consideration should be given to appropriate dissemination of the
material to be presented. Special care should be given to statements made during
informal or one-on-one meetings with analysts or institutional investors to
avoid the inadvertent disclosure of material nonpublic information.

      

      
        	
                 
      

              	
                3.

              	
                Prompt
      Reporting of Communication
Violations

              

      

      

      If an
employee believes that material nonpublic information may have been disclosed to
a securities professional or stockholder, such employee must immediately contact
the Chief Executive Officer or Chief Financial Officer. In certain
circumstances, steps to protect the Company and the employee may still be
available. Applicable laws give the Company a short period, generally 24 hours,
after discovery of an inadvertent selective disclosure of material nonpublic
information, to disclose such information to the public.

      

      C.           OTHER
PROHIBITED ACTIVITIES

      

      
        	
                 
      

              	
                1.

              	
                No
      Insider may "tip" or disclose material nonpublic information concerning
      the Company to any outside person (including family members, analysts,
      individual investors, and members of the investment community and news
      media), unless required as part of that Insider's regular duties for the
      Company and authorized by the Board of Directors of the Company. In any
      instance in which such information is disclosed to outsiders, the Company
      will take such steps as are necessary to preserve the confidentiality of
      the information, including requiring the outsider to agree in writing to
      comply with the terms of this policy and/or to sign a confidentiality
      agreement. All inquiries from outsiders regarding material nonpublic
      information about the Company must be forwarded to Chief Executive
      Officer, Chief Financial Officer or the Board of Directors of the
      Company.

              

      

      

      
        	
                 
      

              	
                2.

              	
                No Insider may give trading
      advice of any kind about the Company to anyone while possessing
      material nonpublic
      information about the Company, except that Insiders
      should advise others not to trade if doing so might violate the law or
      this policy. The Company strongly discourages all Insiders from giving
      trading advice concerning the Company to third
      parties even when the Insiders do not possess material nonpublic
      information about the
Company.

              

      

      

      
        	
                 
      

              	
                3.

              	
                No Insider may trade in any
      interest or position relating to the future price of Company securities,
      such as a put, call or short
  sale.

              

      

      

      
        	
                 
      

              	
                4.

              	
                No Insider may (a) trade in the
      securities of any other public company while possessing material nonpublic
      information concerning that company, (b) "tip" or disclose material
      nonpublic information concerning any other public company to anyone,
      or (c) give trading
      advice of any kind to anyone concerning any other public company while
      possessing material nonpublic information about that
      company.

              

      

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

      VII.           POTENTIAL
CIVIL, CRIMINAL AND DISCIPLINARY SANCTIONS

       

      A.           CIVIL
AND CRIMINAL PENALTIES

       

      The
consequences of prohibited insider trading or tipping can be severe. Persons
violating insider trading or tipping rules may be required to disgorge the
profit made or the loss avoided by the trading, pay the loss suffered by the
person who purchased securities from or sold securities to the insider tippee,
pay civil penalties up to three times the profit made or loss avoided, pay a
criminal penalty of up to $1 million, and serve a jail term of up to ten years.
The Company and/or the supervisors of the person violating the rules may also be
required to pay major civil or criminal penalties.

       

      B.           COMPANY
DISCIPLINE

       

      Violation
of this policy or federal or state insider trading or tipping laws by any
director, officer or employee, or their family members, may subject the director
to dismissal proceedings and the officer or employee to disciplinary action by
the Company up to and including termination for cause.

       

      C.           REPORTING
OF VIOLATIONS

       

      Any
Insider who violates this policy or any federal or state laws governing insider
trading or tipping, or knows of any such violation by any other Insiders, must
report the violation immediately to the Board of Directors of the Company. Upon
learning of any such violation, the Board, in consultation with the Company's
legal counsel, will determine whether the Company should release any material
nonpublic information, or whether the Company should report the violation to the
SEC or other appropriate governmental authority.

       

      VIII.           INQUIRIES

       

      Please
direct all inquiries regarding any of the provisions or procedures of this
policy to the counsel of the Company.

       

      
        
           

        

        
          5

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