REPLACEMENT PROMISSORY NOTE

FOR VALUE RECEIVED, the undersigned BIOANALYTICAL SYSTEMS, INC., an Indiana corporation (the “ Borrower ”), hereby promises to pay to the order of NATIONAL CITY BANK, as successor by merger to National City Bank of Indiana (“ Bank ”), or its assigns, at its principal office at Indianapolis, Indiana, or at such other place as the holder hereof may designate in writing, in lawful money of the United States of America and in immediately available funds, the principal sum of Three Million Dollars ($3,000,000.00), or so much thereof as may be advanced and outstanding from time to time, together with interest on the unpaid principal balance existing from time to time at the per annum rates and on the dates set forth in the Agreement (hereinafter defined).  The entire unpaid balance of principal, and all accrued and unpaid interest thereon, shall be due and payable on the Line of Credit Maturity Date, and Borrower shall make such mandatory principal payments as are required to be made under the terms of Section 2.3 of the Agreement.

Bank shall, and is hereby authorized to, record in accordance with its usual practice, the date and amount of each advance and each principal payment hereunder.

This Note is issued pursuant to, is entitled to the benefit of, and is subject to the provisions of that certain Amended and Restated Credit Agreement between Borrower and Bank dated as of January 4, 2005, as amended January 16, 2007, as further amended October 24, 2007, as further amended January 16, 2009, and as further amended of even date herewith (as amended, and as the same may be further amended from time to time (the “ Agreement ”).  Advances under this Note shall be made in accordance with the Agreement.  The Agreement, among other things, contains a description of the collateral securing this Note, the definitions of the proper nouns used herein and provisions for acceleration of the maturity hereof upon the happening of certain stated events.

Subject to the terms of the Agreement, Borrower may borrow, repay, reborrow and repay the principal amount of this Note at any time and from time to time.

If Borrower fails to make the payment of any installment of principal or interest, as provided in the Agreement, when due, or upon the occurrence of any other Default, then in any of such events, or at any time thereafter prior to such Default being cured, the entire principal balance of this Note, and all accrued and unpaid interest thereon, irrespective of the maturity date specified herein, together with reasonable attorneys’ fees and other costs incurred in collecting or enforcing payment or performance hereof and with