Master Lease Equipment

Exhibit 10.21 MASTER EQUIPMENT LEASE

This Master Equipment Lease dated as of NOVEMBER 15, 2002 ("Master Lease") between FIFTH THIRD BANK, INDIANA (CENTRAL) , a (an) INDIANA corporation (hereinafter called together with its successors and assigns, if any, "Lessor"), 251 N. ILLINOIS ST., STE 1000, INDIANAPOLIS, IN 46204 and BIOANALYTICAL SYSTEMS, INC. a (an) INDIANA CORPORATION (hereinafter called "Lessee"), 2701 KENT AVENUE, WEST LAFAYETTE, IN 47906-1382. TERMS AND CONDITIONS OF LEASE

In consideration of the premises and of the rentals and the covenants hereinafter mentioned to be kept and performed by Lessee, Lessor hereby leases the equipment (including all replacement parts, repairs, additions and accessories thereto) listed on Equipment Schedule A attached hereto on the date hereof or as attached hereto at any time in the future or listed or described in any other document which refers to and incorporates the terms of this Master Lease (collectively "Equipment"), upon the following terms and conditions:

Section 1. Acquisition and Lease of Equipment . (a) Lessor will, subject to the terms of this Master Lease, purchase the Equipment set forth in Equipment Schedule A and simultaneously lease such Equipment to Lessee. The approximate purchase price for each unit of Equipment is as set forth in Equipment Schedule A. Lessee acknowledges either:
(i) that Lessee has approved any written Supply Contract (as defined by the uniform version of the Uniform Commercial Code (UCC) Section 2A-103 (y) as adopted in the state of Lessor's principle place of business) covering the Equipment purchased from the "Supplier" (as defined by UCC Section 2A-103(x)) thereof for lease to Lessee; or
(ii) that Lessor has informed or advised Lessee, in writing, either previously or by this Master Lease of the following:
(1) the identity of the Supplier;
(2) that the Lessee may have rights under the Supply Contract; and
(3) that the Lessee may contact the Supplier for a description of any such rights Lessee may have under the Supply Contract.
(b) Lessor hereby authorizes Lessee to accept delivery of the Equipment from the manufacturer or the Supplier. Upon delivery and installation of each item of Equipment, if such Equipment is in good working order, and complies with the specifications of the purchase order, Lessee shall execute and deliver to Lessor a Certificate of Acceptance in form acceptable to Lessor. Lessor shall be under no obligation to purchase the Equipment until it has received the Acceptance Certificate executed by Lessee.
(c) Lessor shall be under no obligation to purchase any item of Equipment if there shall exist an Event of Default or any condition, event or act which, with notice or lapse of time or both, would became an Event of Default.


Section 2. Term and Rent . (a) This Master Lease shall commence on the date set forth above and shall continue in effect thereafter so long as any Equipment Schedule A entered into pursuant to this Master Lease remains in effect. The term of each Equipment Schedule A shall commence upon the Effective Date specified in each Schedule and shall continue for the term specified unless earlier terminated pursuant to the terms hereof. Unless otherwise stated in Equipment Schedule A, each Equipment Schedule A term shall be automatically extended for successive monthly periods until terminated by either party giving to the other not less than ninety (90) days prior written notice of termination. Any such termination shall be effective only on the last day of the term specified in Equipment Schedule A or any successive period.
(b) As rent for the Equipment, Lessee agrees to pay to Lessor the rent specified in Equipment Schedule A. All payments provided for in this Master Lease shall be made to the Lessor at the address of the Lessor set forth above, or at such other place as the Lessor, or its assigns, shall specify in writing. The rent specified in Equipment Schedule A shall be adjusted for any errors, increase or decrease in the purchase price of the Equipment. The payment of the rent specified in Equipment Schedule A also shall be secured by any presently existing or hereafter acquired property pledged to Lessor or any affiliate of Fifth Third Bancorp for any indebtedness of Lessee owed to Lessor and all affiliates of Fifth Third Bancorp, whether direct or contingent, due or to become due; provided, however, that this provision shall not apply to a "consumer credit transaction" as defined in Title I, Consumer Credit Protection Act 15 U.S. C.A. Sections 1601 et. seq., as amended or any applicable state statute containing similar provisions.
(c) This Master Lease is a net lease and Lessee acknowledges and agrees that Lessee's obligation to make all payments hereunder, and the rights of Lessor in and to all such payments, shall be absolute and unconditional and shall not be subject to any abatement of rent or reduction thereof, including but not limited to, abatements or reductions due to any present or future claims of Lessee against Lessor, the manufacturer of the Equipment, the Supplier, or any party under common ownership or affiliated with Lessor, by reason of any defect in the Equipment, the condition, design, operation or fitness for use thereof, or by reason of any failure of Lessor to perform any of its obligations hereunder, or by reason of any other cause. It is the intention of the parties hereto that the rent payable by Lessee hereunder shall continue to be payable in all events and in the manner and at the times herein provided unless the obligation to pay shall be terminated pursuant to the provisions of this Lease.


Section 3. Tax Indemnification . (a) The terms of this Master Lease, including payment amounts, have been made in reliance on the fact that Lessor, its successors and assigns, shall be entitled to such deductions, credits and other benefits (the "Tax Benefits") as are provided to an owner of property, to the extent permitted under applicable law and provisions of the Internal Revenue Code of 1986 (the "Code"), as amended, including but not limited to depreciation and amortization deductions allowable under Sections 167, 168 and 169 of the Code and any amendments or additions thereto relating to the leased property (the "Deductions").


- 2 - (b) If the Lessor or its successor or assigns shall lose, during the term of this Master Lease, its right to claim all or any part of such Tax Benefits or Deductions or any part of such Tax Benefits or Deductions is disallowed, the rental set forth in Equipment Schedule A shall be increased by an amount which, in the reasonable opinion of Lessor, will cause Lessor's total net return (after all taxes) to be equal to the net return which Lessor would have received had such Tax Benefits or Deductions not been disallowed.
(c) In the event Lessor's claim of all or any part of such Tax Benefits or Deductions with respect to the Equipment is disallowed or lost after the term of the Lease, Lessee shall pay Lessor a lump sum which, in the reasonable opinion of Lessor will cause Lessor's total net return (after all taxes) to be equal to the net return Lessor would have received had such Tax Benefits or Deductions not been disallowed.
(d) In the event that this Master Lease is, for any reason, canceled or prepaid prior to the expiration of its term the Lessee agrees to pay to Lessor, in addition to all other amounts payable under this Master Lease, a lump sum amount which, in the reasonable opinion of Lessor, will cause Lessor's net return (when combined with all other payments hereunder but excluding any prepayment penalties and after all taxes) to be equal to the net return Lessor would have received had this Master Lease not been terminated prior to the expiration of its term.
(e) The rent shall not be so increased (or the lump sum payment shall not be due) if and to the extent that the Lessor shall have lost the right to claim such a Tax Benefit or Deduction as a direct result of any one of the following events:
(i) a casualty occurrence with respect to the Equipment if Lessee shall have paid the Lessor pursuant to the provisions of Section 13 hereof;
(ii) the failure of Lessor to claim the Tax Benefit or Deduction on its income tax return for the appropriate year; or
(iii) the failure of Lessor to have sufficient tax liability to fully use such Tax Benefits or Deductions.
(f) Lessee agrees that neither it nor any corporation controlled by it, in control of it, or under common control with it, directly or indirectly, will at any time take any action or file any returns or other documents inconsistent with the foregoing and that each of such corporations will file such returns, take such action and execute such documents as may be reasonable and necessary to facilitate accomplishment of the intent thereof. Lessee agrees to copy and make available for inspection and copying by Lessor such records as will enable Lessor to determine whether it is entitled to the benefit of any amortization or depreciation deduction or tax credit which may be available from time to time with respect to the Equipment.
(g) If, under any circumstances or for any reason whatsoever, except for acts of the Lessor,
(i) Lessor shall become liable for additional tax as a result of Lessee having added an attachment or made an alteration to the Equipment which would increase the productivity or capability of the Equipment so as to violate the provisions of Rev. Proc. 75-21, 1975-1 C.B. 715, as modified by Rev. Proc. 79-48, 1979-2 C.B. 529 (and as either or both may hereafter be modified or superseded);


- 3 - (ii) the statutory full-year marginal federal tax rate for corporations with a December 31 tax year-end is different than the statutory tax rate in effect on the date of this Master Lease; or
(iii) Lessor shall not have or shall lose the right to claim, or there shall be disallowed or recaptured all or any portion of the Federal tax depreciation deductions with respect to any item of Equipment based on depreciation of the Lessor's full cost of such item of Equipment and computed on the basis of a method of depreciation provided by the Code as Lessor in its complete discretion may select; then Lessee agrees to pay Lessor upon demand an amount which, after deduction of all taxes required to be paid by Lessor in respect of the receipt thereof under the laws of any federal, state or local government or taxing authority of the United States or of any taxing authority or government subsidiary of any foreign country, shall be equal to the sum of:
(1) an amount equal to the additional income taxes which would be paid or payable by Lessor in consequence of the failure to obtain the benefit of a depreciation deduction calculated under the assumption that Lessor's income is taxed at the highest applicable rate (without regard to the actual taxes paid by Lessor), and
(2) any interest and/or penalty which may be assessed in connection with any of the foregoing.
(h) The provisions of this Section 3 shall survive the expiration or earlier termination of this Master Lease.


Section 4. Acceptance, Use and Maintenance of Equipment . (a) Lessor hereby authorizes Lessee to accept delivery of the Equipment from the manufacturer or Supplier. Upon delivery and installation of each item of Equipment, if such Equipment is in good working order, Lessee shall execute and deliver to Lessor a Certificate of Acceptance in a form acceptable to Lessor.
(b) Lessor shall have no obligation and assumes no liability for any matter relating to the ordering, manufacture, shipment, installation, erection, testing, adjusting or servicing of any item of Equipment, or for any failure or delay in obtaining or delivering any item of Equipment. Lessee shall provide and maintain a suitable installation environment for each item of Equipment with all appropriate utilities, wiring and other facilities prescribed or recommended by the appropriate manufacturer's installation and operating manuals.
(c) Lessee shall cause the Equipment to be operated by competent employees and in accordance with the manufacturer's operating manuals and shall pay all expenses of operating the Equipment. The Equipment shall be maintained at the location(s) specified in Equipment Schedule A and shall not be removed from such location(s) without the written consent of the Lessor. Lessor will have the right, from time to time during reasonable business hours, to enter upon the Lessee's premises or any other premises where the Equipment may be located, for the purpose of confirming the existence, location, condition or proper maintenance of the Equipment.


- 4 - (d) Lessee, at its own cost and expense, shall keep all Equipment in good repair, condition and working order and shall furnish all parts, mechanisms, devices and servicing required therefor. All such parts, mechanisms, and devices shall immediately become the property of Lessor and part of the Equipment for all purposes.
(e) Lessee shall comply with and conform to all laws, ordinances and regulations, present or future, in any way relating to the possession, use or maintenance of the Equipment throughout the term of this Master Lease.
(f) Lessee shall pay or satisfy and discharge any and all claims against, through or under Lessee and its successors and assigns, which, if unpaid, might constitute or become a lien or a charge upon any of the Equipment, and any liens or charges which may be levied against or imposed upon the Equipment as a result of the failure of Lessee to perform or observe any of its covenants or agreements under this Master Lease and any other liens or charges which arise by virtue of claims against, through or under any other party other than Lessor, but Lessee shall not be required to pay or discharge any such claims so long as it shall, in good faith and by appropriate legal proceedings contest the validity thereof in any reasonable manner which will not, in the reasonable opinion of Lessor, affect or endanger the interest of Lessor or other rights of any assignee under this Master Lease hereof in and to the Equipment or diminish the value thereof. Lessee's obligations under this Section shall survive the termination of this Master Lease.


Section 5. No Agency . Lessee acknowledges and agrees that neither the manufacturer, the Supplier, nor any salesman, representative, nor other agent of the manufacturer or Supplier, is an agent of Lessor. No salesman, representative or agent of the manufacturer or Supplier is authorized to waive or alter any term or condition of this Master Lease and no representation as to the Equipment or any other matter by the manufacturer or Supplier shall in any way affect Lessee's duty to pay rent and perform its obligations as set forth in this Master Lease.

Section 6. Disclaimer of Warranties . LESSEE ACKNOWLEDGES THAT: LESSOR IS NOT THE MANUFACTURER OF THE EQUIPMENT NOR THE MANUFACTURER'S AGENT NOR A DEALER THEREIN; THE EQUIPMENT IS OF A SIZE, DESIGN, CAPACITY, DESCRIPTION AND MANUFACTURE SELECTED BY LESSEE; LESSEE IS SATISFIED THAT THE EQUIPMENT IS SUITABLE AND FIT FOR ITS PURPOSES; AND LESSOR MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED AS TO THE DESIGN, OPERATION OR CONDITION, OR AS TO THE QUALITY OF THE MATERIAL, EQUIPMENT OR WORKMANSHIP IN THE EQUIPMENT LEASED HEREUNDER, AND LESSOR MAKES NO WARRANTY OF MERCHANTABILITY OR FITNESS OF THE EQUIPMENT FOR ANY PARTICULAR PURPOSE OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, IT BEING AGREED THAT ALL SUCH RISKS AS BETWEEN LESSOR AND LESSEE, ARE TO BE BORNE BY LESSEE AND THE BENEFITS OF ANY AND ALL IMPLIED WARRANTIES OF LESSOR ARE HEREBY WAIVED BY LESSEE. LESSOR SHALL NOT BE RESPONSIBLE FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES. Lessor agrees that Lessee shall be entitled to the benefit of any manufacturer's warranties on the Equipment to the extent permitted by applicable law.

- 5 -

Section 7. Identification; Personal Property . No right, title or interest in the Equipment shall pass to Lessee other than the right to maintain possession and use of the Equipment for the full lease term. Lessor may require plates or markings to be conspicuously affixed to or placed on the Equipment indicating Lessor is the owner. However, if any item of Equipment leased hereunder is to be operated by the public, such plates or markings need not be placed in a conspicuous part of the Equipment. The Equipment is, and shall at all times be ...