EXHIBIT 4.2

                                 LEASE AGREEMENT
                                     between
                             CITY OF LENEXA, KANSAS
                                       and
                                  LABONE, INC.
                                 ---------------

                          Dated as of September 1, 1998
                                 ---------------

                                   $20,000,000
                             City of Lenexa, Kansas
                        Taxable Industrial Revenue Bonds
                             (LabOne, Inc. Project)
                                  Series 1998A
                                       and
                                   $5,000,000
                             City of Lenexa, Kansas
                  Taxable Subordinate Industrial Revenue Bonds
                             (LabOne, Inc. Project)
                                  Series 1998B
                                       and
                                   $8,000,000
                             City of Lenexa, Kansas
                  Taxable Subordinate Industrial Revenue Bonds
                             (LabOne, Inc. Project)
                                  Series 1998C
                                 ---------------


CERTAIN OF THE RIGHTS, TITLE AND INTEREST OF THE CITY OF LENEXA, KANSAS, TO THIS
LEASE  AGREEMENT HAVE BEEN ASSIGNED TO INTRUST BANK,  N.A., AS TRUSTEE UNDER THE
TRUST INDENTURE DATED AS OF SEPTEMBER 1, 1998, BETWEEN THE CITY AND THE TRUSTEE.






<PAGE>



                                      

                                TABLE OF CONTENTS



                                                                     Page

Parties.................................................................1
Recitals................................................................1


                                    ARTICLE I
            DEFINITIONS, CONSTRUCTION AND CERTAIN GENERAL PROVISIONS

Section 1.1    Definitions..............................................1
Section 1.2    Rules of Interpretation..................................1

                                   ARTICLE II
                                 REPRESENTATIONS

Section 2.1    Representations by the Issuer............................2
Section 2.2    Representations by the Lessee............................3

                                   ARTICLE III
            CONVEYANCE AND CONSTRUCTION OF THE PROJECT, PROJECT FUNDS

Section 3.1    Conveyance of Project to Issuer..........................5
Section 3.2    Use of Proceeds of the Bonds.............................5
Section 3.3    Agreement to Complete Construction of the Project........5
Section 3.4    Operation of the Project Funds...........................5
Section 3.5    Right of Entry by Issuer.................................6

                                   ARTICLE IV
             GRANTING PROVISIONS, LEASE PAYMENTS AND OTHER PAYMENTS,
                    AND ASSIGNMENTS OF ISSUER'S RIGHTS, ETC.

Section 4.1    Grant of Leasehold Estate................................6
Section 4.2    Possession and Use of Project............................7
Section 4.3    Lease Payments...........................................7
Section 4.4    Additional Payments......................................8
Section 4.5    Obligations of Lessee Unconditional......................9
Section 4.6    Lessee's Remedies........................................9
Section 4.7    Assignment of Issuer's Rights............................9
Section 4.8    Letter of Credit.........................................9
Section 4.9    Net Lease...............................................10


                                       i
<PAGE>



                                    ARTICLE V
          MAINTENANCE; MODIFICATIONS; INSURANCE; ASSIGNMENT OF PROJECT;
                          LOSS OF OR DAMAGE TO PROJECT

Section 5.1    Maintenance and Modification of Project by Lessee........11
Section 5.2    Assignment or Sublease by Lessee.........................12
Section 5.3    Taxes, Assessments and Other Charges.....................12
Section 5.4    Granting of Easements....................................13
Section 5.5    Insurance and Bonds Required.............................13
Section 5.6    Damage, Destruction, Condemnation or Loss of Title.......14
Section 5.7    Utilities................................................15
Section 5.8    Depreciation and Investment Tax Credit...................15
Section 5.9    Ad Valorem Taxes.........................................16

                                   ARTICLE VI
                              PARTICULAR COVENANTS

Section 6.1    Indemnification..........................................16
Section 6.2    Further Assurances and Corrective Instruments............17
Section 6.3    Recording and Filing of Documents........................17
Section 6.4    Litigation Notice........................................17
Section 6.5    Covenant to Enter into Agreement or Contract
                  to Provide Ongoing Disclosure.........................17

                                   ARTICLE VII
               ASSIGNMENT OF ISSUER'S RIGHTS UNDER LEASE AGREEMENT

Section 7.1    Assignment by the Issuer.................................18
Section 7.2    Restriction on Transfer of Issuer's Rights...............18

                                  ARTICLE VIII
                         EVENTS OF DEFAULT AND REMEDIES

Section 8.1    Events of Default Defined................................18
Section 8.2    Remedies on Default......................................19
Section 8.3    No Remedy Exclusive......................................22
Section 8.4    Agreement to Pay Attorneys' Fees and Expenses............22
Section 8.5    Issuer and Lessee to Give Notice of Default..............22
Section 8.6    Performance of Lessee's Obligations......................22
Section 8.7    Remedial Rights Assigned to the Trustee..................23
Section 8.8    Letter of Credit Provider to Direct Trustee..............23


                                   ARTICLE IX
       PREPAYMENT AND ACCELERATION OF LEASE PAYMENTS; PURCHASE OF PROJECT

Section 9.1    Prepayment at the Option of the Lessee...................23
Section 9.2    Optional Prepayment Upon Certain Events..................23


                                       ii
<PAGE>



Section 9.3    Mandatory Prepayment Upon Certain Events.................23
Section 9.4    Purchase of Project; Required Prepayment.................24
Section 9.5    Notice of Prepayment.....................................25
Section 9.6    Precedence of this Article...............................25

                                    ARTICLE X
                                  MISCELLANEOUS

Section 10.1   Authorized Representatives...............................25
Section 10.2   Term of Lease Agreement..................................26
Section 10.3   Notices..................................................26
Section 10.4   Performance Date Not a Business Day......................26
Section 10.5   Binding Effect...........................................26
Section 10.6   Amendments, Changes and Modifications....................26
Section 10.7   Execution in Counterparts................................26
Section 10.8   No Pecuniary Liability...................................27
Section 10.9   Extent of Covenants of the Issuer; No Personal
                 or Pecuniary Liability.................................27
Section 10.10  Effect of Default of Letter of Credit Provider
                 or Payment of Parity Bonds.............................28
Section 10.11  Severability.............................................28
Section 10.12  Governing Law............................................28

        Signatures and Seals

Exhibit A  - Description of Project


                                      iii

<PAGE>



                                LEASE AGREEMENT


      THIS LEASE  AGREEMENT  dated as of September 1, 1998 (this  "Agreement" or
"Lease Agreement"),  between the CITY OF LENEXA, KANSAS, a municipal corporation
organized and existing under the laws of the state of Kansas (the "Issuer"), and
LABONE,  INC., a Delaware  corporation  (the  "Lessee").  Capitalized  terms not
defined  elsewhere  herein shall have the meaning set forth in the  Indenture as
more fully described in Section 1.1.

                              RECITALS:

      1. The Issuer is  authorized  under the  provisions  of K.S.A.  12-1740 to
12-1749d,  inclusive, as amended (the "Act"), to purchase,  acquire,  construct,
improve and equip certain  facilities  within its  jurisdiction  for  commercial
purposes,  to enter into leases and  lease-purchase  agreements with any person,
firm or corporation for the  facilities,  to issue revenue bonds for the purpose
of paying the cost of the  facilities,  and to pledge the income and revenues to
be derived from the  operation of such  facilities  to secure the payment of the
principal of and interest on such bonds.

      2. The  Lessee has  requested  that the Issuer  finance  the  acquisition,
construction  and equipping of a commercial  facility as more fully described on
Exhibit A to this Lease Agreement (the "Project"),  by the Issuer's  acquisition
of the Project and the lease of the Project to the Lessee  pursuant to the terms
of this Lease Agreement.

      3. Pursuant to the Act and the Indenture, the Issuer has issued its Series
1998A Bonds and Series 1998B Bonds for the above-stated purpose.

      4.  Concurrently  with the issuance and delivery of the Bonds,  the Lessee
will cause to be  delivered  to the Trustee  the Letter of Credit  issued by the
Letter of Credit  Provider which can be drawn upon to pay the principal of (upon
redemption,  acceleration  or maturity),  the purchase  price and up to 57 days'
interest on the Series 1998A Bonds.

      5. Under the terms of this Lease Agreement,  the Lessee has agreed to make
rental  payments  in  amounts  and at the times  sufficient  to  timely  pay the
principal of and premium, if any, and interest on the Bonds.

      NOW, THEREFORE,  in consideration of the premises and the mutual covenants
and agreements  herein set forth,  the Issuer and the Lessee do hereby  covenant
and agree as follows:


                              ARTICLE I
      DEFINITIONS, CONSTRUCTION AND CERTAIN GENERAL PROVISIONS

      Section 1.1 Definitions.  All capitalized  terms not elsewhere  defined in
this  Lease  Agreement  have  the  meanings  set  forth  in  Section  101 of the
Indenture.


<PAGE>


      Section 1.2    Rules of Interpretation.

      (a) Words of the masculine gender shall be deemed and construed to include
correlative words of the feminine and neuter genders.

      (b) Unless the context  shall  otherwise  indicate,  words  importing  the
singular  number shall  include the plural and vice versa,  and words  importing
person  shall  include  firms,  partnerships,   associations  and  corporations,
including public bodies, as well as natural persons.

      (c)  The  words  "herein,"  "hereby,"   "hereunder,"  "hereof,"  "hereto,"
"hereinbefore,"  "hereinafter"  and other  equivalent  words refer to this Lease
Agreement  and not  solely to the  particular  article,  section,  paragraph  or
subparagraph hereof in which such word is used.

      (d) Reference herein to a particular article or a particular section shall
be construed to be a reference to the specified article or section hereof unless
the context or use clearly  indicates  another or  different  meaning or intent.
Reference  herein  to a  schedule  or an  exhibit  shall  be  construed  to be a
reference to the specified  schedule or exhibit hereto unless the context or use
clearly indicates another or different meaning or intent.

      (e) Wherever an item or items are listed after the word  "including," such
listing is not intended to be a listing that excludes items not listed.

      (f) The table of contents,  captions and headings in this Lease  Agreement
are for  convenience  only and in no way define,  limit or describe the scope or
intent of any provisions or sections of this Lease Agreement.

                                   ARTICLE II
                                 REPRESENTATIONS

      Section 2.1  Representations  by the Issuer.  The Issuer represents to the
Lessee that:

      (a) The Issuer is a  municipal  corporation  duly  organized  and  validly
existing under the laws of the State.  The Issuer has acquired title to the real
property constituting a part of the Project.

      (b) The Issuer has lawful power and authority  under the Act to enter into
this  Lease  Agreement  and the  Indenture  and to  carry  out  its  obligations
hereunder and under the Indenture.  By proper action of its governing  body, the
Issuer has been duly  authorized  to execute and deliver  this Lease  Agreement,
acting by and through its duly  authorized  officers.  The Indenture,  the PILOT
Agreement and this Lease  Agreement have been duly executed and delivered by the
Issuer and each constitutes a valid, legal,  binding and enforceable  obligation
of the Issuer  (subject to  bankruptcy,  insolvency  or  creditors'  rights laws
generally  and  principles  of equity  generally)  without  offset,  defense  or
counterclaim.  The execution,  delivery and  performance of the Indenture,  this
Lease  Agreement and the PILOT Agreement by the Issuer will not violate any law,
regulation,  order or decree  of any  governmental  authority  and,  except  for
certain consents,  approvals,  authorizations,  orders or filings required to be
made with the Kansas  Board of Tax Appeals and the County  Appraiser  of Johnson
County, Kansas, all consents, approvals, authorizations, orders or filings of or
with any court or governmental


                                       2
<PAGE>


agency or body, if any, required for the execution,  delivery and performance of
such documents by the Issuer have been obtained or made.

      (c) The Project  constitutes  a "facility"  within the meaning of the Act,
and the lease of the Project to the Lessee and the  application  of the proceeds
received  by the  Issuer  from the sale of the  Bonds  for the  purposes  herein
specified will further the public purposes of the Act.

      (d) To finance the costs of the Project,  the Issuer proposes to issue the
Bonds in the  aggregate  principal  amount of  $33,000,000.  The Bonds will bear
interest,  be scheduled to mature,  be in such series and be subject to purchase
and  redemption  prior to  maturity in  accordance  with the  provisions  of the
Indenture.  The Bonds  are to be issued  under  and  secured  by the  Indenture,
pursuant to which the Project and the rents,  revenues and  receipts  derived by
the Issuer  pursuant  to this Lease  Agreement,  other  than  Unassigned  Issuer
Rights,  will be pledged  and  assigned  to the  Trustee  for the benefit of the
Bondowners  as security for payment of the principal  of,  premium,  if any, and
interest on the Bonds and to the Letter of Credit Provider to secure the payment
of the obligations  payable to the Letter of Credit Provider under the Letter of
Credit Provider Documents.

      (e) To its knowledge, no member of the governing body of the Issuer or any
other  officer  of the  Issuer  has any  significant  or  conflicting  interest,
financial,  employment  or  otherwise,  in the  Lessee,  the  Project  or in the
transactions contemplated hereby.

      Section 2.2.   Representations by the Lessee.

      (a) The Lessee is a corporation  organized  under the laws of the state of
Delaware.  The Lessee is not in violation of any provision of its Organizational
Documents.  The Lessee is duly  authorized  to do  business in the State and has
lawful power and authority to enter into each of the Lessee Documents, acting by
and through its officers.

      (b) The Lessee has the requisite authority to own or lease and operate its
properties  and to carry on its business and has obtained all material  permits,
licenses, consents and approvals as are necessary or required therefor.

      (c) The Lessee has the power and  authority  to enter  into,  execute  and
deliver  the  Lessee  Documents,  and  to  perform  its  obligations  under  and
consummate the  transactions  contemplated by the Lessee  Documents,  and has by
proper  corporate  action,  duly  authorized  the  execution and delivery of the
Lessee  Documents and the  performance  of the Lessee's  duties and  obligations
thereunder.

      (d) The Lessee  Documents are valid and binding  agreements of the Lessee,
enforceable in accordance  with their  respective  terms,  except as enforcement
thereof  may  be  limited  by  applicable  bankruptcy,  insolvency,  moratorium,
reorganization  or other laws or  equitable  principles  of general  application
affecting remedies or creditors' rights or by general equitable principles which
may limit the right to obtain equitable remedies.

      (e) The execution and delivery of the Lessee  Documents,  the consummation
of the  transactions  contemplated  hereby and thereby and the fulfillment of or
compliance with the


                                       3
<PAGE>


terms and  conditions  hereof and thereof  will not (with the passage of time or
the giving of notice, or both) conflict with or result in or constitute a breach
of or  default  under any  indenture,  mortgage,  deed of trust,  lease or other
agreement or  instrument to which the Lessee is a party or by which it or any of
its property is bound, or violate any provision of the Organizational  Documents
of the Lessee, or of any constitutional or statutory provision, or of any order,
rule or  regulation  of any court or  governmental  authority  applicable to the
Lessee or its property.

      (f)  There  is not  now  pending  or,  to  the  knowledge  of the  Lessee,
threatened, any suit, action or proceeding against or affecting the Lessee by or
before  any  court,  arbitrator,  administrative  agency  or other  governmental
authority which, if decided adversely to the Lessee, would materially affect the
validity of any of the transactions contemplated by the Lessee Documents and the
Indenture,  or is  reasonably  likely to  materially  impair the  ability of the
Lessee to perform its obligations  under the Lessee  Documents or the Indenture,
or as contemplated  hereby or thereby,  nor, to the knowledge of the Lessee,  is
there any basis therefor.

      (g) The Lessee agrees that during the term of this Lease Agreement it will
maintain  its  existence,  will not  dissolve  or  otherwise  dispose  of all or
substantially all of its assets, and will not transfer a controlling interest in
the Lessee  except as provided in the next  sentence.  The Lessee may,  with the
prior written consent of the Letter of Credit  Provider and the Issuer,  without
violating the agreement contained in this Section, sell or otherwise transfer to
another  legal  entity all or  substantially  all of its  assets as an  entirety
including  by merger or  consolidation,  and,  if Lessee so  elects,  thereafter
dissolve, if

      (i) the transferee  entity shall be a legal entity  organized and existing
      under the laws of one of the states of the United States of America or the
      District of Columbia  and shall be  qualified to do business in the State,
      and

      (ii) the transferee  entity shall assume in writing all of the obligations
      of the Lessee under the Lessee Documents and the Letter of Credit Provider
      Documents,  in which event the Issuer if  requested  by the Lessee,  shall
      release  the Lessee in writing  from the  Lessee's  obligations  under the
      Lessee  Documents  to which the Issuer is a party,  concurrently  with and
      contingent upon such transfer; and

      (iii) prior to the transfer, the Trustee and the Issuer are furnished with
      written  notice  of such  proposed  transfer  and a  certificate  from the
      Authorized  Lessee  Representative  stating  that in the  opinion  of such
      Authorized Lessee  Representative  none of the covenants contained in this
      Lease Agreement will be violated as a result of such transfer.

      (h) As of the date of the  issuance of the Bonds,  the Lessee is not aware
of any  hazardous,  toxic,  radioactive  or  similarly  regulated  substance  or
material at the Project site, the removal of which is required by the provisions
of the Comprehensive Environmental Response,  Compensation and Liability Act, 42
U.S.C.  ss.9601 et seq.,  the Superfund  Amendments and  Reauthorization  Act of
1986, or any other federal, state or local environmental statute,  regulation or
ordinance  ("Environmental  Laws"). The Lessee agrees that it is responsible for
maintaining  the Project in compliance with all  Environmental  Laws. The Lessee
agrees to indemnify  the Issuer,  the Trustee and the  Bondowners  and agrees to
defend  and hold them  harmless  from and  against  all loss,  cost,  damage and
expense (including, without limitation,


                                       4
<PAGE>


reasonable  attorneys' fees and costs associated  incurred in the investigation,
defense and  settlement of claims) that they may incur,  directly or indirectly,
as a result of or in connection  with the assertion  against them or any of them
of any claim  relating to the presence on, escape or removal from the Project of
any  hazardous   substance  or  other  material   regulated  by  any  applicable
Environmental Law, or compliance with any applicable  Environmental Law, whether
before,  during  or after the term of this  Lease  Agreement,  including  claims
relating to personal injury or damage to property.  The Lessee further agrees to
give immediate  written notice to the Issuer,  the Letter of Credit Provider and
the  Trustee  of  any  violation  with  respect  to  the  Project  site  of  any
Environmental Law of which violation the Lessee has actual knowledge.


                                   ARTICLE III
            CONVEYANCE AND CONSTRUCTION OF THE PROJECT; PROJECT FUNDS

      Section 3.1. Conveyance of Project to Issuer. The Lessee shall prior to or
concurrently  with the issuance of the Bonds  deliver to the Issuer title to the
Project as described on Exhibit A to this  Agreement,  including the site,  such
improvements as are then completed,  installed or in progress and such equipment
that has been acquired.  The Lessee shall also concurrently with such conveyance
make  provisions for the discharge of any liens or  encumbrances  on the Project
other than  Permitted  Encumbrances.  Except for personal  property  that is not
acquired with funds  deposited in the Project  Funds,  all  improvements  to the
Project,  materials for work in progress at the Project and equipment  installed
at  the  Project  shall  immediately  become  the  property  of the  Issuer  and
constitute  part of the Project.  In the event this  Agreement is deemed to be a
security  agreement  with  respect to any of such  improvements,  equipment  and
personal  property,  the Lessee hereby grants Issuer a security interest in such
such  improvements,   equipment  and  personal  property  and  all  attachments,
accessions,   additions,   substitutions,   replacement  and  proceeds   thereof
(including insurance proceeds)  (collectively  "Collateral") to secure all Lease
Payments and all  obligations,  covenants and  agreements to be performed by the
Lessee  hereunder,  and agrees that this security interest shall be prior to all
other security interests in the Collateral.

      Section 3.2. Use of Proceeds of the Bonds. The proceeds of the sale of the
Bonds  shall be  deposited  with the  Trustee  and  applied as  provided  in the
Indenture and this Lease Agreement.

      Section 3.3. Agreement to Complete Construction of the Project. The Lessee
agrees to cause the acquisition, construction and equipping of the Project to be
diligently  and  continuously  prosecuted  and to be completed  with  reasonable
dispatch,  and to provide (from its own funds if required) all moneys  necessary
to complete the Project.

      Section 3.4.   Operation of the Project Funds.

      (a)  Disbursements  from the Project  Funds.  Moneys in the Project  Funds
shall be disbursed by the Trustee only in  accordance  with the terms of Section
403 of the Indenture.  If there are not  sufficient  funds  available  under the
terms of the Indenture to fully acquire,  construct and equip the Project,  then
the Lessee will forthwith provide additional funds


                                       5
<PAGE>


necessary  for such  acquisition,  construction  and equipment and make payments
directly to  contractors,  suppliers  or other  applicable  parties for property
acquired or installed  and services  rendered.  The Lessee shall hold the Issuer
and the Trustee whole and harmless  from any  obligation to pay any costs of the
Project in excess of moneys in the Project Funds.

      (b)  Completion Certificate.

            (i) The  Lessee  shall  deliver to the  Trustee,  the Issuer and the
      Letter  of Credit  Provider  within 90 days  after the  completion  of the
      Project a certificate of an Authorized Lessee Representative:

                (1) stating that the acquisition,  construction and equipping of
           the Project have been fully completed and the date of completion;

                (2) stating  that he has made such investigation of such sources
           of  information  as are  deemed  by him  to be  necessary,  including
           pertinent  records  of the  Lessee,  and is of the  opinion  that the
           construction  of the  Project has been fully paid for and no claim or
           claims exist  against the Issuer or the Lessee or against the Project
           out of which a lien based on furnishing  labor or material  exists or
           might  ripen;  provided,  however,  there  may be  excepted  from the
           foregoing statement any claim or claims out of which a lien exists or
           might  ripen in the event  that the Lessee  intends  to contest  such
           claim or  claims  in  which  event  such  claim  or  claims  shall be
           described;  provided, further, that it shall be stated that funds are
           on deposit in the  Project  Funds or other  separate  trust or escrow
           accounts  are  available  through  enumerated  bank loans  (including
           letters  of credit)  or  federal  or state  government  grants to the
           Lessee for the Project  sufficient to make payment of the full amount
           which might in any event be payable in order to satisfy such claim or
           claims (with respect to the amount of funds  remaining in the Project
           Funds or the amount of  available  bank loans  (including  letters of
           credit) or federal or state government grants, such Authorized Lessee
           Representative may rely upon a certificate of the Trustee); and

                 (3)  stating  that  all  permits  necessary,  if  any,  for the
           occupancy  and use of the Project have been  obtained and are in full
           force and effect.

            (ii)If the statement of an Authorized  Lessee  Representative  filed
      with the Trustee,  the Issuer and the Letter of Credit Provider responsive
      to subparagraph  (1) states that there is a claim or claims in controversy
      which  create or might  ripen into a lien,  there  shall be filed with the
      Trustee,  the Issuer and the Letter of Credit  Provider a statement of the
      Authorized  Lessee  Representative  when and as such claim or claims  have
      been fully paid or otherwise settled.

      (c) Disposition of Project Funds Moneys After Completion. After payment by
the Trustee of all Written  Requests  theretofore  tendered to the Trustee under
the  provisions of Section 403 of the Indenture and after receipt by the Trustee
of the  statement  mentioned in subsection  (b) of this Section,  the balance of
moneys in the  Project  Funds  shall be  transferred  and applied as provided in
Section 403(c) of the Indenture.


                                       6
<PAGE>



      Section 3.5. Right of Entry by Issuer.  The duly authorized  agents of the
Issuer shall have the right at any reasonable time and upon reasonable notice to
Lessee prior to the  completion  of the Project to have access to the Project or
any part thereof for the purpose of inspecting the acquisition,  installation or
construction thereof.

                                   ARTICLE IV
   GRANTING PROVISIONS, LEASE PAYMENTS AND OTHER PAYMENTS, AND ASSIGNMENTS OF
                             ISSUER'S RIGHTS, ETC.

      Section 4.1. Grant of Leasehold  Estate.  The Issuer hereby rents,  leases
and lets the  Project to the Lessee,  and the Lessee  hereby  rents,  leases and
hires the Project from the Issuer,  subject to Permitted  Encumbrances,  for the
rentals and upon and subject to the terms and conditions herein contained, for a
term  commencing on the date hereof and ending on the final maturity date of the
Bonds (the "Lease Term"),  unless sooner  terminated in a manner provided for in
this Lease Agreement.

      Section 4.2.   Possession and Use of Project.

      (a) The Issuer  covenants  and agrees that as long as the Lessee is not in
default  under this Lease  Agreement,  the Lessee shall have sole and  exclusive
possession of the Project  (subject to Permitted  Encumbrances  and the Issuer's
right of  access  pursuant  to  Section  3.5 and the  Trustee's  right of access
pursuant to Section 8.2) and shall and may peaceably and quietly have,  hold and
enjoy the  Project  during the Lease Term.  The Issuer,  at the request and sole
expense of the Lessee,  will  cooperate with the Lessee in order that the Lessee
may have quiet and peaceable possession and enjoyment of the Project.

      (b) Subject to the  provisions of this Section,  the Lessee shall have the
right to use the Project for any lawful purpose allowed by law and  contemplated
by the Act. The Lessee shall comply with all statutes, laws, ordinances, orders,
judgments,  decrees,  regulations,  directions and  requirements of all federal,
state, local and other governments or governmental authorities, now or hereafter
applicable to the Project or to any  adjoining  public ways, as to the manner of
use or the  condition  of the Project or of adjoining  public  ways.  The Lessee
shall also comply with the mandatory requirements,  rules and regulations of all
insurers under the insurance policies carried by the Lessee. The Lessee will pay
all costs, expenses, claims, fines, penalties and damages that may in any manner
arise out of, or be imposed as a result of, the  failure of the Lessee to comply
with the provisions of this Section.  The Lessee has the right,  at its own cost
and expense,  to contest or review by legal or other appropriate  procedures the
validity or legality of any such governmental  statute,  law, ordinance,  order,
judgment, decree, regulation, direction or requirement, or any such requirement,
rule or regulation  of an insurer,  and during such contest or review the Lessee
may refrain from complying therewith.

      Section 4.3.   Lease Payments.

      (a) Subject to the  Lessee's  right to acquire the Project from the Issuer
under Article IX, the Lessee agrees to make rental payments  ("Lease  Payments")
to the Trustee at its principal  corporate trust office,  for the account of the
Issuer, for deposit in the Bond Funds, in federal or


                                       7
<PAGE>


other  immediately  available  funds,  during normal business hours on or before
11:00 a.m.  Trustee's  local time, on each Lease Payment Date or Purchase  Date,
the amount of such payment being as follows:

            (i) the  amount of the  principal  of the Bonds  coming  due on each
      Lease  Payment  Date,  whether  at  stated  maturity,   by  redemption  or
      acceleration or otherwise;

           (ii) the amount of  interest  on the Bonds  coming due on such Lease
      Payment Date;

          (iii) the amount of redemption  premium,  if any, on the Bonds coming
      due on such Lease Payment Date; and

           (iv) on each Purchase  Date,  Interest Rate Mode  Conversion  Date or
      Substitute  Letter of Credit Date,  the purchase price of any Series 1998A
      Bonds  required  to be  purchased  pursuant  to Section  306 or 307 of the
      Indenture.

      (b) The amounts  received by the Trustee  under the Letter of Credit shall
be credited against the Lessee's  corresponding  Lease Payments due with respect
to the Series 1998A Bonds,  and the Lessee's  obligation to make Lease  Payments
shall  therefore  be deemed  satisfied  to the extent of such  amounts  that are
received by the Trustee under the Letter of Credit.

      (c) Except for such interest of the Lessee as may hereafter arise pursuant
to Section 507 of the Indenture, the Lessee and the Issuer each acknowledge that
neither  the Lessee nor the  Issuer  has any  interest  in the Bond Fund and any
moneys  deposited  therein shall be in the custody of and held by the Trustee in
trust for the benefit of the Bondowners and the Letter of Credit Provider.

      Section 4.4.   Additional Payments.

      (a) The Lessee shall pay, when due, the following amounts to the following
persons, all as "Additional Payments" under this Lease Agreement:

            (i) To the Trustee,  when due, all  reasonable  fees and charges for
      its services  rendered under the Indenture or this Lease Agreement and all
      reasonable  expenses  (including  without  limitation  reasonable fees and
      charges of any paying agent, bond registrar, counsel, accountant, engineer
      or other person)  incurred in the performance of the duties of the Trustee
      under the  Indenture  or this Lease  Agreement  for which the  Trustee and
      other persons are entitled to repayment or reimbursement;

            (ii)To  the  Issuer  all  reasonable   expenses  (including  without
      limitation  reasonable attorneys' fees) incurred by the Issuer in relation
      to  the  transactions   contemplated  by  this  Lease  Agreement  and  the
      Indenture,  which are not  otherwise  to be paid by the Lessee  under this
      Lease Agreement or the Indenture;

            (iii) To the appropriate  person,  such payments as are required (i)
      as payment for or reimbursement of any and all reasonable costs,  expenses
      and liabilities  incurred by the Issuer,  the Letter of Credit Provider or
      the Trustee or any of them in satisfaction of


                                       8
<PAGE>


      any obligations of the Lessee  hereunder that the Lessee does not perform,
      or incurred in the defense of any action or proceeding with respect to the
      Project,  this  Lease  Agreement,  the  Indenture,  or  the  other  Lessee
      Documents or (ii) as reimbursement  for expenses paid, or as prepayment of
      expenses to be paid, by the Issuer or the Trustee and that are incurred as
      a result  of a  request  by the  Lessee  or a  requirement  of this  Lease
      Agreement and that the Lessee is not otherwise  required to pay under this
      Lease Agreement;

            (iv)To the Trustee, the cost of printing any Replacement Bonds; and

            (v) To the Remarketing  Agent, the fees and expenses  required to be
      paid under the Remarketing Agreement.

      (b)  Additional  Payments  shall be deemed  past due for  purposes of this
Lease Agreement if such remain unpaid after 30 days following the date when due.
Any past due Additional Payments which are due to the Issuer, the Trustee or the
Letter of Credit  Provider  shall  continue as an obligation of the Lessee until
they are paid and shall bear  interest  (except as may be otherwise  provided in
the Letter of Credit Documents with respect to obligations owed to the Letter of
Credit  Provider) at the prime rate of interest  announced  from time to time by
the Trustee plus four percent during the period such Additional  Payments remain
unpaid.

      Section 4.5. Obligations of Lessee Unconditional. The Lessee covenants and
agrees  with and for the  express  benefit  of the  Issuer and the Owners of the
Bonds and the Letter of Credit  Provider  that it will pay all amounts due under
Sections  4.3 and  4.4  and it  will  perform  its  obligations,  covenants  and
agreements  under this Lease  Agreement,  without notice or demand,  and without
abatement, deduction, set-off, counterclaim,  recoupment or defense or any right
of  termination  or  cancellation  arising  from any  circumstances  whatsoever,
whether now existing or hereafter arising,  and regardless of whether or not the
Project is completed, any change in the tax or other law of the United States of
America, the State or any political subdivision of either thereof, any change in
the  Issuer's  legal  organization  or  status,  or any  default  of the  Issuer
hereunder,  and  regardless of the  invalidity of any action of the Issuer,  and
regardless of the invalidity of any portion of this Lease Agreement, and, to the
extent  permitted by law, the Lessee hereby waives the provisions of any statute
or other law now or  hereafter  in effect  contrary  to any of its  obligations,
covenants or agreements under this Lease Agreement or which releases or purports
to release  the Lessee  therefrom.  Nothing  in this  Lease  Agreement  shall be
construed  as a waiver by the Lessee of any rights or claims the Lessee may have
against the Issuer  under this Lease  Agreement or  otherwise,  but any recovery
upon such rights or claims shall be had from the Issuer separately, it being the
intent of this Lease  Agreement  that the Lessee  shall be  unconditionally  and
absolutely  obligated to perform fully all of its  obligations,  agreements  and
covenants  under this Lease Agreement for the benefit of the Owners of the Bonds
and the Letter of Credit Provider.

      Section 4.6. Lessee's Remedies. Nothing contained in this Article shall be
construed to release the Issuer from the  performance  of any of its  agreements
herein, and if the Issuer should fail to perform any such agreements, the Lessee
may institute such action against the Issuer as the Lessee may deem necessary to
compel such performance so long as such action


                                       9
<PAGE>


shall not violate the  Lessee's  agreements  in Section 4.5 or diminish or delay
the amounts  required to be paid by the Lessee pursuant to Sections 4.3 and 4.4.
The Lessee,  however,  acknowledges and agrees that any pecuniary  obligation of
the Issuer  created by or arising out of this Lease  Agreement  shall be payable
solely out of the proceeds  derived from this Lease  Agreement,  the sale of the
Bonds, any insurance and condemnation  awards, or amounts received upon the sale
or other disposition of the Project upon a default by the Lessee or otherwise.

      Section 4.7.  Assignment  of Issuer's  Rights.  Under the  Indenture,  the
Issuer will, as additional security for the Bonds, assign, transfer,  pledge and
grant a security  interest  in its rights  under  this  Lease  Agreement  to the
Trustee (except for the Unassigned  Issuer's Rights).  The Issuer and the Lessee
agree to cooperate in the execution and delivery of all instruments necessary to
file and continue such security interest.  The Trustee is hereby given the right
to enforce, either jointly with the Issuer or separately, the performance of the
obligations of the Lessee, and the Lessee hereby consents to the same and agrees
that the Trustee may enforce such rights as payments  required  under this Lease
Agreement directly to the Trustee.  The Issuer and the Lessee recognize that the
Trustee and the Letter of Credit Provider are third party creditor-beneficiaries
of this Lease Agreement.

      Section 4.8.   Letter of Credit.

      (a) The Lessee will cause the Letter of Credit  Provider  to maintain  the
Letter of Credit in full  force and effect in an amount  equal to the  principal
amount of the Outstanding  Parity Bonds plus (so long as the Parity Bonds are in
the Weekly Mode or the Monthly Mode) 57 days' interest  thereon  computed at the
Maximum Rate.  Upon any conversion of the Interest Rate Mode to an Interest Rate
Mode other than a Weekly Mode or Monthly Mode,  the Lessee will cause the Letter
of Credit Provider to increase the interest component of the Letter of Credit to
cover 210 days'  interest on the Parity Bonds at the rate or rates then borne by
the Parity Bonds.

      (b) The Lessee may  (without  penalty or premium)  provide and the Trustee
shall  accept any  Substitute  Letter of Credit,  provided  that any  Substitute
Letter of Credit shall meet the following requirements:

            (i) the Issuer shall approve in writing the issuer of the Substitute
      Letter of Credit or the Trustee shall receive  written  confirmation  from
      the  Rating  Agency  that the credit  rating on the Parity  Bonds with the
      Substitute Letter of Credit will be not less than the credit rating on the
      Parity Bonds on the date of their original issuance.

            (ii)the form and  content of such  Substitute  Letter of Credit are
      reasonably acceptable to the Trustee;

           (iii) the amount which may be drawn under such  Substitute  Letter of
      Credit is at least equal to the principal  amount of the Parity Bonds then
      Outstanding  plus (so long as the Parity  Bonds are in the Weekly  Mode or
      the Monthly Mode) an amount equal to 57 days' interest on the Parity Bonds
      at the Maximum Rate (210 days' interest at the


                                       10
<PAGE>


      rate or rates  borne by the  Parity  Bonds if the  Parity  Bonds are in an
      Interest Rate Mode other than a Weekly Mode or Monthly Mode);

            (iv)  the  other  terms  of  the Substitute  Letter  of  Credit  are
      substantially  similar in all material respects to the predecessor Letter
      of Credit;

            (v)  replacement  of such  predecessor  Letter of  Credit  with such
      Substitute  Letter of Credit will not reduce the credit  rating or ratings
      on the  Parity  Bonds then in effect,  if any (as  evidenced  by a written
      confirmation  received from each Rating Agency maintaining a credit rating
      on the Parity  Bonds prior to the  delivery of such  Substitute  Letter of
      Credit);

            (vi)  an  opinion of Bond Counsel acceptable to the Trustee shall be
      delivered to the Trustee to the effect that such substitution is permitted
      by this Lease Agreement; and

            (vii) an opinion  of  counsel  acceptable  to the  Trustee  has been
      delivered to the Trustee to  substantially  the same effect as the opinion
      delivered in connection  with the issuance of the initial Letter of Credit
      and, in addition, to the effect that the exemption of the Parity Bonds (or
      any securities  evidenced  thereby) from the registration  requirements of
      the Securities Act of 1933, as amended, and the exemption of the Indenture
      from  qualification  under the Trust  Indenture  Act of 1939,  as amended,
      shall not be impaired by the  substitution  of such  Substitute  Letter of
      Credit or that the applicable  registration or qualification  requirements
      of such acts have been satisfied.

      (c) Upon acceptance of the Substitute Letter of Credit,  the Trustee shall
return the predecessor Letter of Credit to the provider thereof.

      Section  4.9.  Net Lease.  The  Issuer and the Lessee  agree that (a) this
Lease  Agreement  is  intended  to be a net lease,  (b) the Lease  Payments  are
designed to provide the Issuer and the Trustee  funds  adequate in amount to pay
all  principal of and interest and any  purchase  price and  redemption  premium
accruing on the Bonds as the same become due and payable, (c) to the extent that
the Lease Payments are not sufficient to provide the Issuer and the Trustee with
funds sufficient for the foregoing  purposes,  the Lessee will pay, upon demand,
as Additional Payments, such additional sums of money, in cash, as may from time
to time be required  for such  purposes,  and (d) if, after all of the Bonds are
deemed to be paid in accordance  with Article XII of the Indenture and provision
has been made for payment of all other sums payable under the Indenture and this
Lease Agreement in accordance with Article XII of the Indenture,  the Trustee or
the Issuer holds  unexpended funds received in accordance with the terms of this
Lease Agreement,  the unexpended funds shall,  after deduction for all sums then
due and owing by the Lessee under this Lease Agreement,  and except as otherwise
provided in this Lease Agreement and the Indenture, become the absolute property
of and be paid over to the Lessee.


                                       11
<PAGE>


                                    ARTICLE V
          MAINTENANCE; MODIFICATIONS; INSURANCE; ASSIGNMENT OF PROJECT;
                         LOSS OF OR DAMAGE TO PROJECT V

      Section 5.1.   Maintenance and Modification of Project by Lessee.

      (a)  The  Lessee  will at its own  expense  (i)  keep  the  Project  in as
reasonably safe condition as its operations  shall permit,  (ii) with respect to
the Project,  comply with all  applicable  health and safety  standards  and all
other  industrial  requirements  or  restrictions  enacted or promulgated by the
State, or any political  subdivision or agency thereof,  or by the government of
the United States of America or any agency  thereof,  and (iii) keep the Project
in good repair and in good  operating  condition  and make from time to time all
necessary repairs thereto and renewals and replacements  thereof.  The Lessee is
not  obligated  to operate,  maintain,  preserve,  repair,  replace or renew any
element or unit of the Project the maintenance,  repair,  replacement or renewal
of which  becomes,  in the sole judgment of the Lessee and subject to the Letter
of Credit  Provider  Documents,  uneconomical  to the Lessee  because of damage,
destruction or obsolescence,  or change in economic or business  conditions,  or
change in government  standards and regulations.  The Lessee shall not permit or
suffer  others to commit a nuisance in or about the  Project or itself  commit a
nuisance in connection with its use or occupancy of the Project. The Lessee will
pay all costs and expenses of operation of the Project.

      (b) The Lessee may, subject to the Letter of Credit Provider Documents and
at its own  expense,  make from  time to time any  additions,  modifications  or
improvements to the Project that it may deem desirable for its business purposes
and that do not materially  impair the structural  strength or effective use, or
materially  decrease the value, of the Project;  provided that no such addition,
modification  or  improvement  shall result in a change in the  character of the
Project  in a  manner  that  would  result  in  any of  the  representations  or
warranties  contained  herein  with  respect  to the  Project  or the use of the
proceeds of the Bonds being or becoming false,  untrue,  misleading or breached.
The Lessee will not do or permit  others  under its control to do any work in or
in  connection   with  the  Project  or  related  to  any  repair,   rebuilding,
restoration,  replacement, alteration of or addition to the Project, or any part
thereof,  unless all  requisite  municipal  and other  governmental  permits and
authorizations  shall have first been  procured and paid for. All such work will
be done in  compliance  with all  applicable  building,  zoning and other  laws,
ordinances, governmental regulations and requirements and in accordance with the
requirements,  rules and regulations of all insurers under the policies required
to be carried  under the  provisions  of this Lease  Agreement.  All  additions,
modifications or improvements  made by the Lessee pursuant to this Section shall
(i) be made in a workmanlike  manner and in strict  compliance with all laws and
ordinances applicable thereto, (ii) when commenced,  be prosecuted to completion
with due diligence,  and (iii) other than personal  property and trade fixtures,
when completed, be deemed a part of the Project.

      (c) The  Lessee  will not do or suffer  anything  to be done  whereby  the
Project,  or any part  thereof,  may be  encumbered  by any  mechanic's or other
similar lien and if,  whenever and so often as any  mechanic's  or other similar
lien is  filed  against  the  Project,  or any part  thereof,  the  Lessee  will
discharge the same of record within 30 days after the date of filing. Nothing in
this Lease Agreement is to be construed to constitute  authorization  or consent
by the Issuer nor will the Issuer be liable for any labor or materials furnished
to the Lessee or anyone claiming by,


                                       12
<PAGE>


through or under the Lessee upon credit,  and that  mechanic's  or similar liens
for any such  labor,  services  or  materials  will not  attach to or affect the
estate of Issuer in and to the Project, or any part thereof. Notwithstanding the
foregoing,  the Lessee  will have the right to contest  any such  mechanic's  or
other similar lien if within said 30-day period stated above it (i) notifies the
Issuer,  the  Letter  of Credit  Provider  and the  Trustee  in  writing  of its
intention so to do, and if requested by the Issuer,  deposits with the Trustee a
surety bond issued by a surety  company  acceptable to the Issuer as surety,  in
favor of the  Issuer  or cash,  in the  amount of the lien  claim so  contested,
indemnifying  and protecting  the Issuer from and against any  liability,  loss,
damage, cost and expense of whatever kind or nature growing out of or in any way
connected with said asserted lien and the contest  thereof,  and (ii) diligently
prosecutes  such contest,  at all times  effectively  staying or preventing  any
official  or  judicial  sale of the  Project  or any part  thereof  or  interest
therein,  under  execution or  otherwise,  and (iii)  promptly pays or otherwise
satisfies any final  judgment  adjudging or enforcing  such contested lien claim
and thereafter promptly procures record release or satisfaction thereof.

      Section 5.2.  Assignment or Sublease by Lessee. The Lessee will not assign
any of its right,  title and  interest  in, to and under  this  Lease  Agreement
without  the  prior  written  consent  of the  Issuer  and the  Letter of Credit
Provider  except as  provided in Section  2.2(g).  The Lessee may  sublease  the
Project to a single party or entity,  with the prior  written  consent of Issuer
and the  Letter of Credit  Provider.  The Lessee may  sublease  portions  of the
Project for use by others in the normal course of its business  without Issuer's
prior consent or approval. In the event of any such subleasing, the Lessee shall
remain fully liable for the performance of its duties and obligations hereunder.
Any such  sublease  shall be subject  and  subordinate  in all  respects  to the
provisions of this Lease Agreement.

      Section 5.3.   Taxes, Assessments and Other Charges.

      (a) The Lessee  shall pay all taxes,  assessments  and charges of any kind
whatsoever  that may at any time be lawfully  assessed or levied against or with
respect to the Project  (including any tax upon or with respect to the income or
profits of the Issuer from the Project that, if not paid,  would become a charge
on the  payments to be made under this Lease  Agreement  prior to or on a parity
with the charge thereon created by the Indenture and including ad valorem, sales
and excise  taxes,  assessments  and charges upon the  Lessee's  interest in the
Project), all utility and other charges incurred in the operation,  maintenance,
use,  occupancy  and  upkeep of the  Project  and all  assessments  and  charges
lawfully  made by any  governmental  body for  public  improvements  that may be
secured by lien on the Project.

      (b) The Lessee may, after giving written notice thereof to the Issuer, the
Letter of Credit Provider and the Trustee, at its expense, in its own name or in
the  Issuer's  name,  contest in good faith the  validity  or amount of any tax,
assessment or other governmental  charge;  provided,  however,  the Lessee shall
institute  appropriate legal proceedings to contest such charge at least 10 days
before such charge becomes delinquent;  and, provided further, that if requested
by the Issuer,  the Lessee shall  deposit with the Trustee cash or a surety bond
of a surety company  acceptable to the Issuer,  in favor of the Issuer, in a sum
of at least the amount of the charge so contested,  assuring the payment of such
contested charge together with all interest and penalties to accrue thereon. The
Lessee shall hold the Issuer whole and harmless  from any costs and expenses the
Issuer may incur related to any of the above.


                                       13

<PAGE>

      (c) The Lessee shall furnish to the Issuer,  the Letter of Credit Provider
and the  Trustee,  upon  request,  proof of payment  of any taxes,  governmental
charges,  utility  charges,  insurance  premiums or other charges required to be
paid by the Lessee under this Lease Agreement.

      Section  5.4.  Granting of  Easements.  If no Event of Default  under this
Lease  Agreement has occurred and is continuing,  the Lessee may, at any time or
times,  (a) grant  easements,  licenses  and other rights or  privileges  in the
nature of easements with respect to any property  included in the Project,  free
from any  rights  of the  Issuer  or the  Bondowners,  or (b)  release  existing
easements,  licenses,  rights-of-way and other rights or privileges, all with or
without  consideration  and  upon  such  terms  and  conditions  as  the  Lessee
determines, and the Issuer agrees, to the extent that it may legally do so, that
it will execute and deliver any  instrument  necessary or appropriate to confirm
and grant or release any such easement, license,  right-of-way or other right or
privilege or any such agreement or other arrangement, upon receipt by the Issuer
of: (i) a copy of the  instrument  of grant or release  or of the  agreement  or
other  arrangement,  (ii) a written  application signed by the Authorized Lessee
Representative  requesting such instrument,  and (iii) a certificate executed by
the Lessee  stating  (aa) that such grant or release is not  detrimental  to the
proper  conduct  of the  business  of the  Lessee,  and (bb) that such  grant or
release will not impair the  effective  use or interfere  with the efficient and
economical operation of the Project and will not materially adversely affect the
security of the  Bondowners.  If the  instrument of grant shall so provide,  any
such easement or right and the rights of such other parties  thereunder shall be
superior to the rights of the Issuer and the right of the  Bondowners  and shall
not be affected by any  termination  of this Lease  Agreement  or default on the
part of the  Lessee  hereunder.  If no  Event of  Default  has  occurred  and is
continuing,  any payments or other consideration  received by the Lessee for any
such grant or with respect to or under any such  agreement or other  arrangement
shall be and  remain  the  property  of the  Lessee,  but,  in the  event of the
termination of this Lease Agreement  because of an Event of Default,  all rights
then  existing of the Lessee  with  respect to or under such grant will inure to
the benefit of and be exercisable by the Issuer.

      Section 5.5.   Insurance and Bonds Required.

      (a) The Lessee  shall  cause the Project to be kept  continuously  insured
against such risks as are customarily  insured  against by companies  conducting
activities  similar to those of the Lessee in  connection  with the  Project and
shall pay as the same become due all premiums in respect thereof, such insurance
to include the following policies of insurance:

           (i)  Property  Casualty  Insurance:  insurance  insuring  the Project
      against loss or damage by fire, lightning, flood, earthquake and all other
      risks covered by the extended coverage  insurance  endorsement then in use
      in the State in an amount not less than the amount customarily  maintained
      for  similar  types of  businesses  issued by such  insurance  company  or
      companies authorized to do business in the State as may be selected by the
      Lessee;

           (ii) Liability Insurance:  comprehensive  general accident and public
      liability insurance  (including coverage for all losses whatsoever arising
      from the ownership,


                                       14
<PAGE>


      maintenance,  operation  or use of any  automobile,  truck or other  motor
      vehicle  in or upon the  Project),  in an  amount  not less  than  amounts
      customarily maintained for similar types of businesses; and

            (iii)    Workers'  Compensation  Insurance:  workers'  compensation
      and unemployment coverages as required by the laws of the State.

      (b) Not less than 30 days prior to the  expiration  dates of the  expiring
policies,  originals or copies of renewal  policies  required by this Section or
certificates  evidencing  such insurance shall be delivered by the Lessee to the
Letter of Credit  Provider and the Trustee.  All policies of such  insurance and
all renewals  thereof (i) shall contain a provision  that such insurance may not
be cancelled by the issuer  thereof  without at least 30 days' written notice to
the Lessee,  the  Trustee,  the Issuer and the Letter of Credit  Provider,  (ii)
shall  name  the  Lessee  as the  insured  and the  Trustee  and the  Issuer  as
additional  insured and loss payees,  as their  interests in the Project appear,
(iii) shall be issued by an insurance  company  qualified  under the laws of the
State to assume the risks covered therein; and (iv) may be subject to reasonable
deductible.

      (c) Nothing in this Lease  Agreement  shall be construed as preventing the
Lessee from  satisfying  the  insurance  requirements  herein set forth by using
blanket  policies of insurance  provided  each and all of the  requirements  and
specifications of this Lease Agreement respecting insurance are complied with.

      (d) In addition to the insurance policies listed in Section 5.5(a) of this
Lease  Agreement,  the Lessee shall obtain a policy of owner's title  insurance,
insuring the  Issuer's  fee simple  title to the Project,  (subject to Permitted
Encumbrances)  and  insuring the Letter of Credit  Provider and the Trustee,  as
their  interests in the Project  appear,  in an amount equal to the value of the
site and  improvements  constituting  a part of the  Project.  Such policy shall
contain full coverage against mechanics' liens and no survey exception.

      Section 5.6.   Damage, Destruction, Condemnation or Loss of Title.

      (a) The Lessee shall notify the Issuer,  the Letter of Credit Provider and
the Trustee  immediately  in the case of damage to or destruction of the Project
or any  portion  thereof  resulting  from  fire or other  casualty  (hereinafter
referred to as a "casualty loss") or of a condemnation or loss of title.

      (b) In the event of a casualty loss, a condemnation or a loss of title for
which the Net  Proceeds  do not  exceed  $250,000,  the Lessee  shall  forthwith
repair,  reconstruct,  restore, replace and improve the Project to substantially
the same or an  improved  condition  or utility  value as existed  prior to such
casualty loss or forthwith make such  replacements of or repairs or improvements
to the Project or portions  thereof made necessary by such  condemnation or loss
of title.  Such Net Proceeds shall be paid directly to the Lessee and applied to
the extent necessary to the payment of the costs of such repair, reconstruction,
restoration, replacement and improvement. Any remaining balance not required for
such purpose  shall be paid by the Lessee to the Trustee for deposit in the Bond
Fund.


                                       15
<PAGE>


      (c) If Net Proceeds exceed  $250,000,  the Net Proceeds shall be deposited
with the  Trustee  and,  at the  option of the  Lessee,  with the prior  written
consent of the Letter of Credit  Provider,  by written  notice  delivered to the
Trustee,  the Letter of Credit  Provider and the Issuer within 60 days after the
determination  of the  amount  of  such  Net  Proceeds  or 180  days  after  the
occurrence  of such  casualty  loss,  condemnation  or loss of title,  whichever
occurs first, the Lessee shall either:

            (i) Option A - Repairs and Improvements: use Net Proceeds to repair,
      reconstruct,  restore,  replace and equip the Project  and, in such event,
      such Net Proceeds shall be deposited in a separate  account of the Project
      Funds and, so long as no Default  exists,  shall be disbursed from time to
      time by the Trustee  upon  receipt of a Written  Request  therefor for the
      purpose of restoring or  rebuilding  the  Project,  subject to  reasonable
      disbursement  requirements to insure that the restoration or rebuilding is
      timely completed in a good and workmanlike manner, free of liens for labor
      and materials.  Upon the completion of such use as certified in writing by
      the  Lessee,   any  remaining   balance  not  required  for  such  repair,
      reconstruction,   restoration,   replacement  and  improvement   shall  be
      deposited in the Bond Fund and applied in accordance  with the  provisions
      of the Indenture; or

            (ii)Option B - Redemption  of Bonds:  (1) prepay all Lease  Payments
      pursuant to Section  9.2 and cause all the Bonds to be  redeemed  (without
      premium or penalty) in accordance with paragraph (b) of Section 302 of the
      Indenture at the earliest  practical  date,  or (2) prepay Lease  Payments
      pursuant  to  Section  9.2 and  cause  part of the  Bonds  to be  redeemed
      (without  premium or penalty)  pursuant to paragraph (b) of Section 302 of
      the Indenture if the property  suffering such casualty loss,  condemnation
      or loss of title was not  essential  to the use of the Project and the use
      of such funds for prepayment under such  circumstances  will not result in
      any of the  representations  or warranties  respecting the Project and the
      use of the  proceeds  of the Bonds  being  false,  untrue,  misleading  or
      breached.

      (d) In the event Net Proceeds do not exceed  $250,000 or the Lessee elects
Option A, (i) the Lessee shall complete the repair, reconstruction, restoration,
replacement and improvement of the Project, whether or not such Net Proceeds are
sufficient  to pay for the same;  (ii) the Lessee  shall not be  entitled to any
reimbursement from the Issuer, the Trustee, the Letter of Credit Provider or the
Bondowners or any abatement or diminution of its obligations hereunder by reason
of any  inability  to use all or any part of the  Project  during  any period in
which the Project is damaged or destroyed  or by reason of any payments  made by
the Lessee for such  purpose in excess of the Net  Proceeds;  and (iii) all such
repairs, reconstructions, restorations, replacements and improvements shall be a
part of the Project.

      (e) The Issuer shall  cooperate  fully with the Lessee in the handling and
conduct of any prospective or pending  condemnation  proceedings with respect to
the Project as long as the Issuer is not the condemning  authority.  In no event
will  the  Issuer  voluntarily  settle  or  consent  to  the  settlement  of any
prospective  or pending  condemnation  proceedings  with  respect to the Project
without the written consent of the Lessee.


                                       16
<PAGE>


      Section 5.7.  Utilities.  All utilities  and utility  services used by the
Lessee in, on or about the Project  shall be paid for by the Lessee and shall be
contracted for by the Lessee in the Lessee's own name. The Lessee shall,  at its
sole cost and expense,  procure any and all permits,  licenses or authorizations
necessary in connection therewith.



<PAGE>


      Section 5.8.  Depreciation  and Investment  Tax Credit.  The Issuer agrees
that any  depreciation  or investment  tax credit with respect to the Project or
any part  thereof  shall be made  available  to the Lessee,  and the Issuer will
fully  cooperate  with the Lessee in any effort by the Lessee to avail itself of
any such depreciation or investment tax credit.

      Section 5.9. Ad Valorem Taxes. The Issuer and the Lessee  acknowledge that
under existing law the Issuer's interest in the property  acquired,  constructed
or installed  with the  proceeds of the Bonds is entitled to an  exemption  from
general ad valorem and  property  taxes for a period of 10 calendar  years after
the calendar year in which the Bonds are issued,  provided certain procedures as
required  by law are  met.  The  Issuer  and the  Lessee  acknowledge  that  the
agreement  with  respect to such  exemption  and  Lessee's  obligations  to make
certain payments in lieu of taxes is set forth in full in the PILOT Agreement.

                                   ARTICLE VI
                              PARTICULAR COVENANTS

      Section 6.1.   Indemnification.

      (a) The Lessee  releases the Issuer and the Trustee from,  agrees that the
Issuer and the Trustee shall not be liable for, and  indemnifies  the Issuer and
the Trustee against,  all liabilities,  losses,  damages  (including  attorneys'
fees),  causes of action (including  negligent acts), suits,  claims,  costs and
expenses,  demands and judgments of any nature imposed upon or asserted  against
the Issuer or the Trustee  (except by reason of the gross  negligence of Trustee
or Issuer) on account of:

           (i)  any loss or damage to property  or injury to or death of or loss
      by any person that may be occasioned by any cause whatsoever pertaining to
      the construction, maintenance, operation and use of the Project;

           (ii) any  breach  or  default  on  the  part  of  the  Lessee  in the
      performance  of any  covenant or  agreement of the Lessee under this Lease
      Agreement,  the other Lessee Documents or any related document, or arising
      from  any  act or  failure  to act by the  Lessee,  or any of its  agents,
      contractors, servants, employees or licensees;

           (iii) violation of any law,  ordinance or  regulation  affecting
      the ownership, occupancy or use of the Project;

           (iv)  the  authorization, issuance  and  sale of the  Bonds,  and the
      provision  of any  information  furnished  by  the  Lessee  in  connection
      therewith  concerning  the  Project or the Lessee or arising  from (1) any
      errors or omissions  of any nature  whatsoever  such that the Bonds,  when
      delivered  to  the   Bondowners,   are  not  validly  issued  and  binding
      obligations  of the  Issuer  or (2) any  fraud  or  misrepresentations  or
      omissions contained in

                                       17
<PAGE>


      the proceedings of the Issuer or the Trustee  furnished by or attributable
      to the Lessee  relating to the issuance of the Bonds or  pertaining to the
      financial  condition  of the  Lessee  which,  if  known  to  the  original
      purchaser of the Bonds,  might  reasonably be considered a material factor
      in its decision to purchase the Bonds; and

            (v) any claim or action or  proceeding  with  respect to the matters
      set forth in subsections (i), (ii), (iii) and (iv) above brought thereon.

    (b) The Lessee  agrees to indemnify  the Issuer and the Trustee for and to
hold it harmless against all liabilities,  claims,  costs and expenses  incurred
without  negligence  or  willful  misconduct  on the part of the  Issuer and the
Trustee, on account of any action taken or omitted to be taken by the Issuer and
the Trustee in accordance with the terms of this Lease Agreement, the Bonds, the
other Lessee Documents or the Indenture or any action taken at the request of or
with the consent of the Lessee,  including  the costs and expenses of the Issuer
and the Trustee in defending itself against any such claim, action or proceeding
brought in connection  with the exercise or  performance of any of its powers or
duties under this Lease Agreement,  the other Lessee Documents, the Bonds or the
Indenture.

      (c) In case any action or proceeding is brought  against the Issuer or the
Trustee in respect of which indemnity may be sought hereunder, the party seeking
indemnity shall promptly give notice of that action or proceeding to the Lessee,
and the Lessee upon  receipt of that notice  shall have the  obligation  and the
right to assume the defense of the action or proceeding;  provided, that failure
of a party to give that  notice  shall not  relieve  the Lessee  from any of its
obligations under this Section unless that failure prejudices the defense of the
action or proceeding by the Lessee. At its own expense, an indemnified party may
employ separate legal counsel and  participate in the defense.  The Lessee shall
not be liable for any settlement without its consent.

      (d) The  indemnification  set forth above is intended to and shall include
the  indemnification  of all affected  council  members,  officials,  directors,
officers, attorneys, accountants, financial advisors, staff and employees of the
Issuer and the Trustee,  respectively.  That  indemnification is intended to and
shall be  enforceable by the Issuer and the Trustee,  respectively,  to the full
extent permitted by law.

      Section 6.2. Further Assurances and Corrective Instruments. Subject to the
Indenture, the Issuer and the Lessee from time to time may execute,  acknowledge
and deliver, or cause to be executed,  acknowledged and delivered,  Supplemental
Lease Agreements and such further  instruments as may reasonably be required for
correcting  any  inadequate  or  incorrect  description  of the  Project and for
carrying  out the  intention  or  facilitating  the  performance  of this  Lease
Agreement.

      Section 6.3. Recording and Filing of Documents.  The Lessee will cause all
appropriate financing and continuation statements and other security instruments
to be recorded and filed in such manner and in such places as may be required by
law to fully preserve and protect the rights and security of the Bondowners, the
Trustee,  the Issuer and the Letter of Credit Provider.  The Lessee will pay all
fees and expenses,  including reasonable legal fees, incurred in connection with
such recordings and filings.


                                       18
<PAGE>


      Section 6.4.  Litigation  Notice.  The Lessee  shall give the Issuer,  the
Trustee,  the Remarketing  Agent and the Letter of Credit Provider prompt notice
of any action,  suit or proceeding  by it or against it at law or in equity,  or
before any governmental  instrumentality  or agency, or of any of the same which
may be threatened,  which, if adversely determined,  would materially impair the
right of the Lessee to carry on the business which is contemplated in connection
with the  Project,  or would  materially  and  adversely  affect  its  business,
operations,  properties,  assets or condition. Within one Business Day after the
filing by or against the Lessee of a petition in  bankruptcy,  the Lessee  shall
notify  the  Trustee  and the  Letter of Credit  Provider  in  writing as to the
occurrence of such filing.

      Section  6.5.  Covenant  to Enter into  Agreement  or  Contract to Provide
Ongoing Disclosure. The Lessee agrees that the initial offering and underwriting
of the Bonds is exempt  from the  requirements  of  Paragraph  (b)(5)(i)  of the
Securities and Exchange  Commission  Rule 15c2-12 under the Securities  Exchange
Act of 1934,  as amended (17 CFR Part 240,  Section  240.15c2-12)  (the  "Rule")
pursuant to  Paragraph  (d)(1) of the Rule.  If as a result of a  conversion  of
Interest  Rate  Mode  or as a  result  of any  amendment  or  supplement  to the
Indenture or this Lease Agreement,  the Bonds cease to be exempt under the Rule,
the  Lessee  will  enter  into  an  agreement  or  contract,   constituting   an
undertaking,  to provide  ongoing  disclosure as may be necessary to comply with
the Rule as then in effect. The covenant and agreement contained in this Section
6.5 is for the benefit of the  Bondowners  as  required  by the Rule.  It is the
Lessee's express  intention that this Section 6.5 be assigned pursuant to and in
accordance  with Section 706 of the  Indenture to the Trustee for the benefit of
the Bondowners and that each Bondowner be a beneficiary of this Section 6.5 with
the right to enforce this Section 6.5 against the Lessee.

                                   ARTICLE VII
               ASSIGNMENT OF ISSUER'S RIGHTS UNDER LEASE AGREEMENT

      Section  7.1.  Assignment  by the  Issuer.  The  Issuer,  by  means of the
Indenture and as security for the payment of the principal of,  purchase  price,
and redemption  premium,  if any, and interest on the Bonds, and the obligations
payable to the  Letter of Credit  Provider  under the Letter of Credit  Provider
Documents,  will assign,  pledge and grant a security interest in certain of its
rights,  title and  interests in, to and under this Lease  Agreement,  including
Lease Payments and Additional  Payments and other revenues,  moneys and receipts
received by it pursuant to this Lease Agreement,  to the Trustee  (reserving its
rights to Unassigned Issuer's Rights).

      Section 7.2.  Restriction on Transfer of Issuer's Rights.  Unless required
by law, the Issuer will not sell, assign, encumber, mortgage, transfer or convey
the Project,  this Lease Agreement or any interest therein except the pledge and
assignment of the Project and this Lease Agreement  pursuant to the Indenture to
secure the Bonds or as  otherwise  provided  in this Lease  Agreement  or in the
Indenture.


                                       19
<PAGE>


                                  ARTICLE VIII
                         EVENTS OF DEFAULT AND REMEDIES

      Section  8.1 Events of Default  Defined.  The term  "Event of  Default" or
"Default" shall mean any one or more of the following events:

      (a)  Failure by the Lessee to make  timely  payment of any Lease  Payment,
when due, or any  Additional  Payment  within 30 days after notice to the Lessee
that such Additional Payment is due.

      (b) Failure by the Lessee to observe and perform any  covenant,  condition
or  agreement  on the part of the  Lessee  under  this  Lease  Agreement  or the
Indenture,  other than as referred to in the preceding  subparagraph (a) of this
Section,  for a period of 60 days after written  notice of such default has been
given to the Lessee and the Letter of Credit Provider by the Issuer,  the Letter
of Credit  Provider or the  Trustee  during  which time such  default is neither
cured by the  Lessee or the Letter of Credit  Provider  nor waived in writing by
the Issuer, the Letter of Credit Provider and the Trustee, provided that, if the
failure stated in the notice cannot be corrected  within the 60-day period,  the
Issuer,  the Letter of Credit Provider and the Trustee may consent in writing to
an extension of such time prior to its expiration and the Issuer,  the Letter of
Credit Provider and the Trustee will not unreasonably  withhold their consent to
such an extension if corrective action is instituted by the Lessee or the Letter
of Credit Provider within the 60-day period and diligently pursued to completion
and if such consent, in their judgment, does not materially adversely affect the
interests of the  Bondowners;  provided,  however,  that any such default may be
waived by the  Letter of Credit  Provider  alone so long as the Letter of Credit
Provider has honored all proper draws submitted to it by the Trustee.

      (c) Any material representation or warranty by the Lessee herein or in any
certificate  or other  instrument  delivered  under or  pursuant  to this  Lease
Agreement or the  Indenture or in  connection  with the financing of the Project
shall  prove to have  been  false,  incorrect,  misleading  or  breached  in any
material respect on the date when made,  unless waived in writing by the Issuer,
the Letter of Credit Provider and the Trustee.

      (d) The  Indenture at any time shall prove not to be a valid,  binding and
enforceable  agreement of the Issuer or shall not constitute a valid  assignment
of the rights of the Issuer under this Lease Agreement  described in Section 7.1
purportedly  assigned  under the  Indenture and effective to vest in the Trustee
all such rights of the Issuer in, to and under this Lease  Agreement,  including
the right to enforce this Lease Agreement in accordance with its terms.

      (e) The occurrence of an Event of Bankruptcy with respect to the Lessee.

      (f) Abandonment of the Project by the Lessee.


                                       20

<PAGE>


      Section 8.2.   Remedies on Default.

      (a) If the  principal  of all  Bonds  then  Outstanding  and the  interest
accrued thereon has been declared  immediately  due and payable  pursuant to the
provisions of Section 802 of the Indenture, all Lease Payments for the remainder
of the Lease Term shall become  immediately  due and payable without any further
act or  action on the part of the  Issuer or the  Trustee  and the  Trustee,  as
assignee of the Issuer, may immediately proceed (subject to Section 8.8) to take
any one or more of the remedial steps set forth in subparagraph (b) below.

      (b) Subject to Section 8.8, whenever any Event of Default has occurred and
is  continuing,  the Issuer may take any one or more of the  following  remedial
steps:

           (i) by written  notice to the Lessee declare all Lease Payments to be
      immediately due and payable, together with interest on overdue payments of
      principal and redemption  premium, if any, and, to the extent permitted by
      law, interest,  at the rate or rates of interest then applicable under and
      specified in the respective Bonds, without presentment, demand or protest,
      all of which are expressly waived;

           (ii) take  whatever  other action at law or in equity,  as may appear
      necessary  or desirable  to collect the amounts  payable  pursuant to this
      Lease  Agreement  then due and  thereafter to become due or to enforce the
      performance and observance of any obligation, agreement or covenant of the
      Lessee under this Lease Agreement or the Indenture;

           (iii) give the Lessee  written  notice of intention to terminate this
      Lease  Agreement  on a date  specified  therein,  which  date shall not be
      earlier than 30 days after such notice is given,  and if all defaults have
      not then been cured,  on the date so  specified,  the  Lessee's  rights to
      possession  of the  Project  shall  cease and this Lease  Agreement  shall
      thereupon be terminated,  and the Issuer may re-enter and take  possession
      of the Project;

            (iv)without  terminating this Lease Agreement,  re-enter the Project
      to take possession  thereof  pursuant to legal  proceedings or pursuant to
      any notice  provided  for by law,  and having  elected to re-enter or take
      possession of the Project without  terminating this Lease  Agreement,  the
      Issuer shall use  reasonable  diligence  to re-let the  Project,  or parts
      thereof,  for such term or terms and at such  rental  and upon such  other
      terms and conditions as the Issuer may deem  advisable,  with the right to
      make  alterations  and  repairs to the  Project,  and no such  re-entry or
      taking of possession of the Project by the Issuer shall be construed as an
      election on the Issuer's part to terminate  this Lease  Agreement,  and no
      such  re-entry or taking of  possession  by the Issuer  shall  relieve the
      Lessee of its obligation to pay Lease Payments or Additional  Payments (at
      the time or times provided herein),  or any of its other obligations under
      this Lease  Agreement,  all of which shall survive such re-entry or taking
      of possession, and the Lessee shall continue to pay the Lease Payments and
      Additional  Payments provided for in this Lease Agreement until the end of
      the Lease Term,  whether or not the Project  shall have been re-let,  less
      the proceeds, if any, of any re-letting of the Project after deducting all
      of  the  Issuer's  reasonable  expenses  in or  in  connection  with  such
      re-letting, including


                                       21

<PAGE>


      without limitation all repossession costs,  brokerage  commissions,  legal
      expenses,  expenses  of  employees,   alteration  costs  and  expenses  of
      preparation  for  re-letting.  The  proceeds  of any  re-letting  shall be
      deposited in the Bond Fund.  Having elected to re-enter or take possession
      of the Project without  terminating this Lease  Agreement,  the Issuer may
      (subject,  however, to any restrictions  against termination of this Lease
      Agreement  in the  Indenture),  by notice to the Lessee  given at any time
      thereafter while the Lessee is in default in the payment of Lease Payments
      or Additional Payments or in the performance of any other obligation under
      this Lease Agreement, elect to terminate this Lease Agreement on a date to
      be specified in such notice,  which date shall be not earlier than 30 days
      after  re-entry,  and if all  Events of  Default  shall not have then been
      cured,  on the date so specified this Lease  Agreement  shall thereupon be
      terminated; and

            (v) take whatever action at law or in equity may appear necessary or
      appropriate to enforce its Unassigned  Issuer's Rights;  provided that the
      Issuer will not take any action  which would  prejudice  the rights of the
      Trustee.

      (c) If in accordance with any of the foregoing  provisions of this Article
the Issuer shall have the right to elect to re-enter and take  possession of the
Project, the Issuer may enter and expel the Lessee and those claiming through or
under the Lessee and remove the property and effects of both or either (forcibly
if  necessary)  without  being  guilty of any  manner of  trespass  and  without
prejudice to any  remedies for arrears of rent or preceding  breach of covenant.
The  Issuer  may take  whatever  action  at law or in equity  which  may  appear
necessary or desirable to collect rent then due and thereafter to become due, or
to enforce  performance and observance of any obligation,  agreement or covenant
of the Lessee under this Lease Agreement.

      (d) Upon the  occurrence of an Event of Default by the Lessee,  the Issuer
grants to the Trustee a reasonable time within which to obtain possession of the
Project,  to institute  and with  reasonable  diligence to complete  foreclosure
proceedings or otherwise acquire the Lessee's  leasehold estate under this Lease
Agreement prior to the Issuer's exercise of any remedy under paragraph  (b)(iii)
of this Section.  The Issuer's right to terminate this Lease Agreement shall end
when  the  Trustee  obtains  possession  of  the  Project  as  aforesaid,  which
possession shall be deemed to include possession by a receiver.

      (e) If this Lease Agreement shall terminate prior to the expiration of the
Lease Term  (including  the rejection of this Lease  Agreement by the trustee of
the Lessee in a proceeding  under the Bankruptcy  Code),  the Issuer shall enter
into a new lease for the Project with the  Trustee,  or its designee or nominee,
for the remainder of the Lease Term, effective as of the date of termination, at
the same rent and upon the same terms,  covenants  and  conditions  contained in
this Lease Agreement,  except that such new lease shall not guarantee possession
of the Project to the new tenant as against the Lessee or anyone  claiming under
the Lessee,  and the Issuer,  simultaneously  with the execution and delivery of
such new lease,  shall turn over to the new tenant all moneys, if any, then held
by the Issuer under this Lease  Agreement on behalf of the Lessee,  on condition
that:


                                       22
<PAGE>


            (i) the Trustee shall make written request for such new lease within
      30 days after the date of such termination, and

            (ii)on  the  commencement  date of the  term of the new  lease,  the
      Trustee shall pay or cause to be paid,  solely from moneys available under
      the  Indenture,  to the  Issuer  on  that  date  all  expenses,  including
      reasonable  counsel fees, court costs and  disbursements,  incurred by the
      Issuer in connection  with any such default and  termination as well as in
      connection with the execution and delivery of such new lease.

Any new lease  entered  under the terms of this  paragraph (d) will provide that
the new lease  will not be  terminated  by the  Issuer  during  the  period  the
Trustee, or its nominee or designee, is the tenant.

      (f) In the  enforcement  of the  remedies  provided in this  Section,  the
Trustee  may treat all  expenses of  enforcement,  including  reasonable  legal,
accounting and advertising  fees and expenses,  as Additional  Payments then due
and payable by the Lessee.

      (g) Any amount collected pursuant to action taken under this Section shall
be paid to the  Trustee and  applied,  first,  to the payment of any  reasonable
costs,  expenses  and fees  incurred by the Issuer or the Trustee as a result of
taking  such action and,  next,  any balance  shall be used to satisfy any Lease
Payments then due by payment into the Bond Funds and applied in accordance  with
the Indenture and, then, to satisfy any other Additional Payments then due or to
cure any other Event of Default.

      (h) Notwithstanding  the foregoing,  the Trustee shall not be obligated to
take any step that in its opinion will or might cause it to expend time or money
or otherwise incur liability,  unless and until satisfactory  indemnity has been
furnished to the Trustee at no cost or expense to the Trustee.

      (i) The provisions of this Section are subject to the limitation  that the
annulment of a declaration  that the Bonds are immediately due and payable shall
automatically  constitute  an annulment of any  corresponding  declaration  made
pursuant to  subparagraph  (b)(i) of this Section and a waiver and rescission of
the consequences of such declaration and of the Event of Default with respect to
which such declaration has been made, provided that no such waiver or rescission
shall  extend to or affect any other or  subsequent  Default or impair any right
consequent  thereon.  If any covenant,  condition or agreement contained in this
Lease Agreement is breached or any Event of Default has occurred and such breach
or Event of Default is  thereafter  waived by the Trustee,  such waiver shall be
limited to such particular breach or Event of Default.

      Section 8.3.   No Remedy  Exclusive.  Subject to Section  8.8,  no remedy
herein  conferred  or  reserved  is  intended  to be  exclusive  of  any  other
available  remedy  or  remedies,  but  each  and  every  such  remedy  shall be
cumulative  and shall be in  addition to every  other  remedy  given under this
Lease  Agreement  or now or  hereafter  existing  at  law  or in  equity  or by
statute.  No


                                       23
<PAGE>


delay or omission to exercise any right or power  accruing  upon  Default  shall
impair any such right or power or shall be construed to be a waiver thereof, but
any such right and power may be exercised  from time to time and as often as may
be deemed  expedient.  In order to entitle the  Trustee to  exercise  any remedy
reserved to it in this  Article,  it shall not be  necessary to give any notice,
other than such notice as may be herein expressly required.

      Section 8.4. Agreement to Pay Attorneys' Fees and Expenses.  In connection
with any Event of Default by the Lessee,  if the  Trustee or the Issuer  employs
attorneys  or incurs  other  expenses  for the  collection  of  amounts  payable
hereunder or the  enforcement of the  performance or observance of any covenants
or agreements on the part of the Lessee herein contained, the Lessee agrees that
it  will,  on  demand  therefor,  pay such  party  the  reasonable  fees of such
attorneys and such other reasonable expenses so incurred by such party.

      Section 8.5.  Issuer and Lessee to Give Notice of Default.  The Issuer and
the Lessee  shall  each,  at the  expense of the  Lessee,  promptly  give to the
Trustee,  the Remarketing Agent and the Letter of Credit Provider written notice
of any Default of which the Issuer or the Lessee, as the case may be, shall have
actual  knowledge  or written  notice,  but the  Issuer  shall not be liable for
failing to give such notice.

      Section 8.6. Performance of Lessee's  Obligations.  If the Lessee fails to
keep or perform any of its  obligations  as provided in this Lease  Agreement in
respect of (a) maintenance of insurance,  (b) payments of taxes, assessments and
other charges,  (c) repairs and maintenance of the Project,  (d) compliance with
legal or  insurance  requirements,  or in the  making  of any other  payment  or
performance  of any other  obligation,  then the  Issuer,  the  Letter of Credit
Provider  or the  Trustee  may (but  shall not be  obligated  so to do) upon the
continuance  of such  failure on the  Lessee's  part for 15 days after notice of
such failure is given to the Lessee by the Issuer, the Letter of Credit Provider
or the Trustee,  and without waiving or releasing the Lessee from any obligation
hereunder,  as an additional but not exclusive remedy,  make any such payment or
perform any such obligation,  and all sums so paid by the Issuer,  the Letter of
Credit Provider or the Trustee and all necessary  incidental  costs and expenses
incurred  by the  Issuer,  the  Letter  of Credit  Provider  or the  Trustee  in
performing such obligations shall be deemed to be Additional  Payments and shall
be paid to the Issuer, the Letter of Credit Provider or the Trustee on demand.

      Section 8.7.  Remedial Rights Assigned to the Trustee.  Upon the execution
and delivery of the  Indenture,  the Issuer will  thereby  have  assigned to the
Trustee all rights and remedies conferred upon or reserved to the Issuer by this
Lease  Agreement,  reserving only the  Unassigned  Issuer's  Rights.  Subject to
Section 8.8, the Trustee shall have the exclusive  right to exercise such rights
and remedies conferred upon or reserved to the Issuer by this Lease Agreement in
the same manner and to the same extent, but under the limitations and conditions
imposed thereby and hereby.  The Trustee,  the Letter of Credit Provider and the
Bondowners   shall  be  deemed  third  party  creditor   beneficiaries   of  all
representations, warranties, covenants and agreements contained herein.


                                       24
<PAGE>


      Section 8.8. Letter of Credit  Provider to Direct  Trustee.  Any provision
herein to the contrary notwithstanding,  unless an Event of Default described in
subparagraph  (a),  (b),  (c),  (f) or (g) of Section 801 of the  Indenture  has
occurred  and is  continuing,  the Issuer and the  Trustee,  as  assignee of the
Issuer,  (a) shall exercise the remedies provided for under this Lease Agreement
only if and as  directed  in writing by the  Letter of Credit  Provider  and (b)
shall not waive any Event of Default  without the prior  written  consent of the
Letter of Credit Provider. Any direction from the Letter of Credit Provider must
be in accordance  with the  provisions of law and of this Lease  Agreement.  The
Issuer and the Trustee  shall have the right to decline to follow any  direction
if the Issuer or the Trustee,  as applicable,  in good faith determines that the
proceeding so directed would involve it in personal liability.

                                   ARTICLE IX
       PREPAYMENT AND ACCELERATION OF LEASE PAYMENTS; PURCHASE OF PROJECT

      Section 9.1.  Prepayment at the Option of the Lessee. Upon the exercise by
the  Lessee  of its  option  to cause the  Bonds or any  portion  thereof  to be
redeemed  pursuant to Section 302(a) of the  Indenture,  the Lessee shall prepay
(without premium or penalty) Lease Payments in whole or in part at the times and
at the prepayment prices sufficient to redeem all or a corresponding  portion of
the Bonds then  Outstanding in accordance  with said  paragraph.  At the written
direction of the Lessee with the prior  written  consent of the Letter of Credit
Provider,  such  prepayments  shall be applied to the redemption of the Bonds in
whole or in part in accordance with said paragraph.

      Section 9.2. Optional  Prepayment Upon Certain Events. Upon the occurrence
of any of the  conditions  or events set forth in  Section  302(b) or (f) of the
Indenture,  the Lessee shall have the option,  with the prior written consent of
the Letter of Credit Provider,  to prepay Lease Payments, in whole or in part at
any time, at the time and at the prepayment prices sufficient to redeem all or a
corresponding  portion of the Bonds then  Outstanding  in  accordance  with said
paragraph.

      Section 9.3. Mandatory Prepayment Upon Certain Events. If the Bonds or any
portion  thereof  are  subject  to  mandatory  redemption  for any other  reason
described  in Section  302 of the  Indenture,  the Lessee  shall  (except to the
extent Bonds are purchased in lieu of  redemption as provided in Section  302(e)
of the  Indenture)  prepay  Lease  Payments  in  whole  at the  time  and at the
prepayment  prices  sufficient  to redeem all of the Bonds then  Outstanding  in
accordance  with Section 302 of the Indenture.  The Lessee will promptly  notify
the  Issuer,  the Letter of Credit  Provider  and the  Trustee in writing of the
occurrence  and  existence  of any  event or  condition  which  could  result in
mandatory prepayment under this Section.

      Section 9.4.   Purchase of Project; Required Prepayment.

      (a) Except during the continuance of an Event of Default, the Lessee shall
have the option to purchase the Project at any time,  prior to the expiration of
the Lease Term and within 10 days following the expiration of the Lease Term and
to terminate this Lease Agreement if


                                       25
<PAGE>


(i) the Bonds  have  been paid in full or if  provision  is  otherwise  made for
payment of the Bonds in such manner that the Indenture will be discharged  under
Article  XII of the  Indenture  on or before the date of  termination,  (ii) the
Lessee  provides the Trustee,  the Letter of Credit Provider and the Issuer with
an opinion of Bond  Counsel to the  effect  that all such  conditions  have been
satisfied  and (iii)  written  notice has been  provided  to the Rating  Agency,
provided that this Lease  Agreement  may not be terminated  unless and until (a)
all of the Lessee's  obligations  under the Lessee Documents have been satisfied
and (b) all of the Lessee's  obligations  with respect to the Issuer's fees have
been  satisfied  and the Lessee has so  certified to the Issuer and the Trustee.
All  obligations  of the  Lessee  under  Sections  4.3  and  6.1  shall  survive
termination of this Lease Agreement until payment in full of the Bonds.

      (b) Notwithstanding the foregoing, the Lessee may not terminate this Lease
Agreement unless and until the Trustee has on deposit an amount equal to the sum
of the following:

            (i) Available  Funds for payment of the principal  of,  premium,  if
      any, and interest on the Parity Bonds and funds (whether or not such funds
      constitute  Available Funds) for payment of the principal of, premium,  if
      any,  and interest on the  Subordinate  Bonds are on deposit in any of the
      funds and accounts  established under the Indenture and available for that
      purpose which are sufficient to discharge the Indenture in accordance with
      Article XII of the Indenture; plus

            (ii)to the extent not paid under  subparagraph  (i) above, an amount
      equal to the Trustee's fees,  expenses and charges under the Indenture and
      any other  amounts  due under  Section  6.1,  accrued  and,  to the extent
      determinable,  to accrue  until the Bonds are fully paid and  redeemed and
      all other advances, fees, costs and expenses reasonably incurred and to be
      incurred  on or  before  the  termination  date by the  Trustee  under the
      Indenture and by the Issuer and the Trustee under this Lease Agreement and
      the other Lessee Documents; plus

            (iii)    the sum of $100.

    (c) On the purchase  date, a closing shall be held at any office  mutually
agreed upon among the Issuer,  the Lessee and the Trustee  (which closing may be
conducted by first-class mail or recognized overnight delivery service).  At the
closing the Issuer and the Trustee shall, upon  acknowledgment of receipt of the
sum set forth in  paragraph  (b) above,  execute  and deliver to the Lessee such
release and other instruments as the Lessee  reasonably  determines is necessary
to terminate this Lease Agreement,  including  documents conveying to the Lessee
legal title to the Project,  as it then exists,  subject to the  following:  (i)
those liens and encumbrances,  if any, to which title to the Project was subject
when conveyed to the Issuer;  (ii) those liens and  encumbrances  created by the
Lessee or to the  creation or  suffering  of which the Lessee  consented;  (iii)
those liens and encumbrances resulting from the failure of the Lessee to perform
or observe any of the agreement on its part  contained in this Lease  Agreement;
(iv) Permitted  Encumbrances  other than the Indenture and this Lease Agreement;
and (v) if the Project or any part  thereof is being  condemned,  the rights and
title of any condemning


                                       26
<PAGE>


authority.   All  further   obligations  of  the  Lessee  hereunder  (except  as
specifically  provided  in  Sections  4.3 and 6.1)  shall  thereupon  terminate,
provided,  however,  that the  Lessee  shall  also  remain  obligated  to pay or
reimburse the Issuer,  and the Trustee for the payment of all other fees,  costs
and expenses  unaccounted  for in the sum paid in accordance  with paragraph (b)
above and reasonably incurred before or subsequent to such closing in connection
with the Bonds.

      (d) The Lessee hereby agrees to purchase,  and the Issuer hereby agrees to
sell,  the  Project  for the sum of $100 at the  expiration  of the  Lease  Term
following full payment of the Bonds or provision for payment thereof having been
made in accordance with the provisions of the Indenture.

      Section  9.5.  Notice of  Prepayment.  To  exercise  an option  granted by
Section 9.1, 9.2 or 9.4, the Lessee shall give written notice to the Issuer, the
Letter of Credit  Provider and the Trustee which shall specify  therein the date
upon which a prepayment of Lease Payments will be made,  which date shall be not
less than 45 days from the date the notice is received by the Trustee, and which
shall  contain  the  written  consent of the Letter of Credit  Provider.  In the
Indenture,  the Issuer has  directed  the  Trustee to  forthwith  take all steps
(other  than the payment of the money  required  to redeem the Bonds)  necessary
under the applicable provisions of the Indenture to effect any redemption of the
then  Outstanding  Bonds,  in whole or in part,  pursuant  to Section 302 of the
Indenture.

      Section  9.6.  Precedence  of  this  Article.  The  rights,   options  and
obligations of the Lessee set forth in this Article may be exercised or shall be
fulfilled,  as the case  may be,  whether  or not a  Default  exists  hereunder,
provided that such Default will not result in nonfulfillment of any condition to
the exercise of any such right or option,  and provided  further that no amounts
payable  pursuant  to this Lease  Agreement  shall be prepaid in part during the
continuance of an Event of Default described in Section 8.1(a).

                                    ARTICLE X
                                  MISCELLANEOUS

      Section 10.1.  Authorized Representatives.

      (a)  Whenever  under this Lease  Agreement  the  approval of the Issuer is
required  or the Issuer is  required  or  permitted  to take some  action,  such
approval shall be given or such action shall be taken by the  Authorized  Issuer
Representative  and the Lessee,  the Letter of Credit  Provider  and the Trustee
shall be authorized to act on any such approval or action.

      (b)  Whenever  under this Lease  Agreement  the  approval of the Lessee is
required  or the Lessee is  required  or  permitted  to take some  action,  such
approval shall be given or such action shall be taken by the  Authorized  Lessee
Representative,  and the Issuer,  the Letter of Credit  Provider and the Trustee
shall be authorized to act on any such approval or action.


                                       27
<PAGE>


      (c)  Whenever  under this Lease  Agreement  the  approval of the Letter of
Credit  Provider  is  required  or the Letter of Credit  Provider is required or
permitted to take some action, such approval shall be given or such action shall
be taken by the Authorized  Letter of Credit  Provider  Representative,  and the
Issuer,  the  Lessee  and the  Trustee  shall be  authorized  to act on any such
approval or action.

      Section  10.2.  Term of Lease  Agreement.  This Lease  Agreement  shall be
effective  from and after its execution and delivery and shall  continue in full
force and  effect  until the Bonds are deemed to be paid  within the  meaning of
Article XII of the  Indenture  and  provision has been made for paying all other
sums  payable by the Lessee to the  Issuer,  the  Trustee,  the Letter of Credit
Provider and the paying agents for the Bonds under this Lease  Agreement and the
Indenture  to the date of the  retirement  of the  Bonds.  The  indemnifications
provided by Section 6.1 shall survive the termination of this Lease Agreement.

      Section 10.3. Notices.  All notices,  certificates or other communications
hereunder shall be  sufficiently  given and shall be deemed given when delivered
by hand  delivery  or on the third day  following  the day on which the same has
been mailed by  registered  or certified  mail,  postage  prepaid,  addressed as
specified in Section 1303 of the Indenture.  Notice to the  Bondowners  shall be
given, if necessary,  in the manner provided in Section 1303 of the Indenture. A
duplicate  copy  of  each  notice,  certificate  or  other  communication  given
hereunder  to any party  mentioned  in Section  1303 shall be given to all other
parties  mentioned  therein (other than the Bondowners unless a copy is required
to be  furnished  to them by other  provisions  of this  Lease  Agreement).  The
Issuer,  the Lessee, the Letter of Credit Provider or the Trustee may, by notice
given  hereunder,   designate  any  further  or  different  addresses  to  which
subsequent notices, certificates or other communications shall be sent to it.

      Section  10.4.  Performance  Date Not a Business  Day. If the last day for
performance of any act or the exercising of any right, as provided in this Lease
Agreement,  shall  not be a  Business  Day,  such  payment  may be  made  or act
performed or right exercised on the next succeeding Business Day.

      Section 10.5.  Binding  Effect.  This Lease  Agreement  shall inure to the
benefit of and shall be binding upon the Issuer, the Lessee and their respective
successors and assigns,  subject to the provisions  contained in Sections 2.2(g)
and 5.2.

      Section 10.6. Amendments,  Changes and Modifications.  Except as otherwise
provided in this Lease Agreement or in the Indenture, subsequent to the issuance
of Bonds  and prior to all of the Bonds  being  deemed to be paid in  accordance
with Article XII of the Indenture  and  provision  being made for the payment of
all sums  payable  under the  Indenture  in  accordance  with Article XII of the
Indenture,  this  Lease  Agreement  may  not be  effectively  amended,  changed,
modified,  altered or terminated  without the concurring  written consent of the
Trustee  and the  Letter  of  Credit  Provider,  given  in  accordance  with the
Indenture.


                                       28
<PAGE>


      Section  10.7.  Execution in  Counterparts.  This Lease  Agreement  may be
executed in several counterparts,  each of which shall be an original and all of
which shall constitute but one and the same instrument;  provided, however, that
for  purposes  of Article 9 of the  Uniform  Commercial  Code of the  State,  no
security  interest  in this Lease  Agreement  may be created by the  transfer or
possession of any counterpart  hereof other than the counterpart  containing the
receipt  therefor  executed  by the  Trustee  on or  immediately  following  the
signature page hereof delivered, pledged and assigned to the Trustee.

      Section  10.8.  No  Pecuniary  Liability.  No  provision,  representation,
covenant or agreement contained in this Lease Agreement or in the Indenture, the
Bonds,  or any  obligation  herein or therein  imposed  upon the Issuer,  or the
breach  thereof,  shall  constitute  or give rise to or impose upon the Issuer a
pecuniary  liability (except to the extent of any rental payments,  revenues and
receipts derived by the Issuer pursuant to this Lease  Agreement).  No provision
hereof shall be construed to impose a charge  against the general  credit of the
Issuer or any personal or pecuniary  liability  upon any  director,  official or
employee of the Issuer.

      Section 10.9.  Extent  of  Covenants  of  the  Issuer;   No  Personal  or
Pecuniary Liability.

      (a) No covenant, agreement or obligation contained in this Lease Agreement
shall be deemed to be a  covenant,  agreement  or  obligation  of any present or
future council  member,  officer,  employee or agent of the Issuer in his or her
individual  capacity,  and  neither  the  council  members of the Issuer nor any
officer thereof  executing the Bonds shall be liable  personally on the Bonds or
be subject to any personal liability or accountability by reason of the issuance
thereof. No council member, officer, employee or agent of the Issuer shall incur
any personal liability with respect to any other action taken by him pursuant to
this Indenture or the Act, provided such member, officer, employee or agent acts
in good faith.

      (b) No agreements or provisions  contained in this Lease Agreement nor any
agreement,  covenant or  undertaking  by the Issuer  contained  in any  document
executed by the Issuer in connection with the Project, or the issuance, sale and
delivery of the Bonds shall give rise to any  pecuniary  liability of the Issuer
or a charge against its general credit, or shall obligate the Issuer financially
in any way except as may be payable  from the Lease  Payments  by the Lessee and
the  proceeds  of the Bonds.  No failure of the Issuer to comply  with any term,
condition,  covenant  or  agreement  herein or in any  document  executed by the
Issuer in  connection  with the issuance and sale of the Bonds shall subject the
Issuer to  liability  for any claim for  damages,  costs or other  financial  or
pecuniary  charge  except to the extent  that the same can be paid or  recovered
from the Lease  Payments  or proceeds  of the Bonds.  Nothing in this  Indenture
precludes a proper party in interest from seeking and  obtaining,  to the extent
permitted  by law,  specific  performance  against the Issuer for any failure to
comply with any term, condition,  covenant or agreement herein, provided that no
costs,  expenses or other monetary  relief will be  recoverable  from the Issuer
except as may be  payable  from the  repayments  by the  Lessee  under the Lease
Agreement or from the proceeds of the Bonds.

      (c) No  recourse  shall  be had for the  payment  of the  principal  of or
premium or interest  on any of the Bonds or for any claim based  thereon or upon
any obligation, covenant or


                                       29
<PAGE>


agreement  contained in this Lease Agreement against any past, present or future
officer,  council member,  employee or agent of the Issuer,  or of any successor
corporation,  as such,  either  directly or through the Issuer or any  successor
corporation,  under any rule of law or equity, statute or constitution or by the
enforcement of any assessment or penalty or otherwise, and all such liability of
any such  officers,  council  members,  employees or agents,  as such, is hereby
expressly  waived and  released as a condition  of, and  consideration  for, the
execution of this Lease Agreement and the issuance of such Bonds.

      (d) Anything in this Lease Agreement to the contrary  notwithstanding,  it
is expressly understood and agreed by the parties hereto that (i) the Issuer may
rely conclusively on the truth and accuracy of any certificate, opinion, notice,
or other  instrument  furnished to the Issuer by the Trustee or the Lessee as to
the existence of any fact or state of affairs  required  hereunder to be noticed
by the Issuer;  (ii) the Issuer shall not be under any  obligation  hereunder to
perform any record keeping or to provide any legal  services;  and (iii) none of
the  provisions  of this Lease  Agreement  shall require the Issuer to expend or
risk its own funds or otherwise incur financial  liability in the performance of
any of its duties or in the  exercise of any of its rights or powers  under this
Lease Agreement,  unless it shall first have been adequately  indemnified to its
satisfaction against the cost, expenses, and liability which may be incurred.

      Section 10.10.  Effect of Default of Letter of Credit  Provider or Payment
of Parity  Bonds.  Notwithstanding  anything  contained  to the contrary in this
Lease Agreement, any and all rights given to the Letter of Credit Provider under
the Lease  Agreement  including,  but not  limited to, the giving of consents or
approvals or the direction of proceedings, shall be null and void (a) during any
time that an Event of Default  has  occurred  and is  continuing  under  Section
801(f) or (g) of the  Indenture,  and (b) if the Parity  Bonds have been paid in
full or  provision  has  been  made  for the  payment  of all  Parity  Bonds  in
accordance  with  Article XII of the  Indenture  and all  obligations  owing the
Letter of Credit Provider under the Letter of Credit Documents have been paid or
provision has been made for payment of such obligations.

      Section 10.11. Severability.  If any provision of this Lease Agreement, or
any covenant, stipulation, obligation, agreement, act or action, or part thereof
made,  assumed,  entered into or taken  thereunder,  or any  application of such
provision,  is for any reason held to be illegal or invalid,  such illegality or
invalidity  shall not affect any other  provision of this Lease Agreement or any
other  covenant,  stipulation,  obligation,  agreement,  act or action,  or part
thereof, made, assumed, entered into, or taken, each of which shall be construed
and enforced as if such illegal or invalid  portion were not  contained  herein.
Such  illegality or invalidity of any  application  thereof shall not affect any
legal  and  valid  application  thereof,  and  each  such  provision,  covenant,
stipulation,  obligation,  agreement,  act or action, or part thereof,  shall be
deemed to be effective, operative, made, entered into or taken in the manner and
to the full extent permitted by law.


                                       30
<PAGE>


      Section 10.12. Governing Law. This Lease  Agreement  shall be governed by
and construed in accordance with the laws of the State.




                 [remainder of page intentionally left blank]



                                       31
<PAGE>


      IN WITNESS  WHEREOF,  the Issuer and the  Lessee  have  caused  this Lease
Agreement to be executed in their respective names.

                                    CITY OF LENEXA, KANSAS


[SEAL]
                                    By:  /S/ Joan Bowman
                                         ---------------------
                                            Joan Bowman, Mayor

ATTEST:



By:  /s/ Sandra Howell
     --------------------
      Sandra Howell, City Clerk












Lease Agreement
LabOne, Inc. Project

                                       32
<PAGE>



                                  LABONE, INC.,
                                  a Delaware corporation

                                  LABONE, INC.



                                   /s/ Kurt Gruenbacher
                                  -----------------------------------
[SEAL]                            Kurt Gruenbacher
                                  Vice President/Finance
                                  Chief Accounting Officer & Treasurer

ATTEST:


/s/ Gregg R. Sadler
---------------------------
Gregg R. Sadler, Secretary













Lease Agreement
LabOne, Inc. Project


                                       33
<PAGE>


                                ACKNOWLEDGMENT


State of Kansas      )
                     )
County of Johnson    )

      The foregoing instrument was acknowledged before me on September 11, 1998,
by Joan Bowman, Mayor and Sandra Howell, City Clerk.


(SEAL)                       /s/ Mary Sue Fry
                           -----------------------------------
                           Mary Sue Fry, Notary Public

My appointment expires: June 24, 2001


                                       34
<PAGE>


                                 ACKNOWLEDGMENT


State of Kansas      )
                     )
County of Johnson    )

      The foregoing instrument was acknowledged before me on September 11, 1998,
by Kurt Gruenbacher, Vice President/Finance, Chief Accountant Officer
and Treasurer and Gregg R. Sadler, Secretary.

                                /s/ Pam A. Moyers
                               ------------------------------
                               Notary Public

(Seal)

My Appointment Expires:
March 22, 2000
-----------------------



                                       35
<PAGE>


                         UNIFORM COMMERCIAL CODE RECEIPT


      Receipt of this original  counterpart of the foregoing  Lease Agreement is
hereby acknowledged this 11th day of September 1998.


                                    INTRUST BANK, N.A.


                                    ------------------------------
                                    By:  J. Steven Larigan
                                         Vice President


[NOTE:  The Trustee should sign only on the copy of the Lease Agreement
received by it.]























Lease Agreement
LabOne, Inc. Project

                                       36
<PAGE>




                                    EXHIBIT A

                         Series 1998A and 1998B Project

      The following property acquired,  constructed and installed by the City of
Lenexa, Kansas (the "Issuer") in connection with the issuance by the City of its
$20,000,000  principal amount of Taxable Industrial Revenue Bonds (LabOne,  Inc.
Project)  Series 1998A and $5,000,000  principal  amount of Taxable  Subordinate
Industrial Revenue Bonds (LabOne, Inc. Project), Series 1998B:

           (a) The following described real estate in Johnson County, Kansas:

      Lot 1, LAB ONE,  a  subdivision  in the City of  Lenexa,  Johnson  County,
Kansas,  according  to  the  recorded  plat  thereof;  being  more  particularly
described as follows:

All that part of the West  One-Half  of Section  5,  Township  13,  Range 24, in
Lenexa, Johnson County, Kansas, described as follows:

Commencing at the Northwest  corner of the Northwest  Quarter of said Section 5;
thence South 2 degrees, 20 minutes, 28 seconds East, along the West line of said
Northwest  Quarter,  a distance  of 84.98  feet;  thence  North 87  degrees,  39
minutes,  32 seconds  East,  a distance of 30.00  feet,  to a point on the South
right-of-way line of 95th street,  as now established;  thence North 42 degrees,
38 minutes,  37 seconds East, along said South  right-of-way line, a distance of
42.44 feet;  thence North 87 degrees,  37 minutes,  42 seconds East,  continuing
along said South right-of-way line, a distance of 622.67 feet, to a point on the
West right-of-way line of Interstate Highway No. 435, as now established; thence
Southerly,  along  said  West  right-of-way  line,  the  following  courses  and
distances:  South 47 degrees,  22 minutes,  13 seconds East, a distance of 63.67
feet; thence South 85 degrees,  31 minutes, 18 seconds East a distance of 369.40
feet; thence South 8 degrees, 08 minutes, 18 seconds East, a distance of 1167.18
feet; thence South 5 degrees, 59 minutes, 24 seconds East, a distance of 1330.12
feet, TO THE POINT OF BEGINNING;  thence South 1 degree, 08 minutes,  05 seconds
East, a distance of 664.75 feet; thence South 7 degrees,  44 minutes, 12 seconds
East, a distance of 837.06 feet; thence South 19 degrees, 51 minutes, 36 seconds
West, a distance of 613.53 feet, thence South 66 degrees, 37 minutes, 19 seconds
West, a distance of 341.85 feet to a point on the Northerly right-of-way line of
Kansas Highway No. 10, as now  established  (said point being the  Northeasterly
corner  of  a  trance   conveyed  to  Holland   Associates   by   Department  of
Transportation  Deed  recorded in Volume 2631,  at Page 776);  thence  Westerly,
along the former  Northerly  right-of-way  line of said  highway  (and along the
Southerly and Westerly line of said "Holland Tract"),  the following courses and
distances;  South 65 degrees,  07 minutes, 53 seconds West, a distance of 726.80
feet  measured  (Holland  deed South 65 degrees,  05 minutes  West 727.0  feet);
thence North 10 degrees,  40 minutes, 45 seconds East,  measured,  (Holland deed
North 10 degrees, 43 minutes East), a distance of 306.50 feet; thence Northerly,
along the Northerly  right-of-way line of said highway  (departing said "Holland
Tract") the following courses and distances: thence North 2 degrees, 18 minutes,
21 seconds West, a distance of 250.35 feet; thence North 74 degrees, 21 minutes,
32 seconds West, a distance of 113.60 feet; thence North 2 degrees,  37 minutes,
44 seconds West, a distance of 333.57 feet; thence North 10 degrees, 49 minutes,
15 seconds West, a distance of 168.90 feet; thence South 87 degrees, 41 minutes,
45 seconds West, a distance of 15.00 feet, to a point on the East


                                  A-1
<PAGE>


right-of-way line of Renner Road, as now established; thence North 2 degrees, 18
minutes,  15 seconds  West,  along said East  right-of-way  line,  a distance of
993.65 feet;  thence North 53 degrees,  15 minutes,  45 seconds East,  departing
said East right-of-way line, a distance of 276.66 feet; thence South 36 degrees,
44 minutes, 15 seconds East, a distance of 216.57 feet; thence North 87 degrees,
41 minutes, 45 seconds East, a distance of 149.36 feet; thence North 58 degrees,
30  minutes,  04  seconds  East,  a  distance  of 844.31  feet,  to the Point of
Beginning.


said real property constituting the Project site as referred to in the Indenture
and the  Lease  Agreement  entered  into by the  Issuer  concurrently  with  the
issuance  of the  above-referenced  bonds  (the  "Indenture"  and the  "Lease"),
subject to the Permitted Encumbrances.

           (b) All buildings,  building additions,  improvements,  machinery and
equipment now constructed,  located or installed on the Project site, all or any
portion   of  the  costs  of  which   were  paid  from  the   proceeds   of  the
above-referenced   bonds,   together  with  any  substitutions  or  replacements
therefor,  the  property  described  in  paragraphs  (a) and (b) of this Exhibit
together constituting the "Series 1998A and 1998B Project" as referred to in the
Indenture and the Lease Agreement;  provided however,  that the Series 1998A and
1998B Project shall not include  furnishings,  machinery and equipment described
under "Series 1998C Project" in this Exhibit.


                              Series 1998C Project

      All  furnishings,  machinery and equipment now located or installed on the
Project site,  architectural  expenses relating to the Project and off-site road
development all or any portion of the costs of which were paid from the proceeds
of the Issuer's $8,000,000  principal amount of Taxable  Subordinate  Industrial
Revenue  Bonds  (LabOne,   Inc.  Project),   Series  1998C,  together  with  any
substitutions or replacements therefor, the property described in this paragraph
constituting  the "Series 1998C Project" as referred to in the Indenture and the
Lease Agreement, including the following:

      facilities equipment including conveyors, coolers,generators, UPS
         system, etc.
      laboratory equipment
      computer equipment
      furniture and fixtures










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