10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For quarterly period ended March 31, 2002

Commission file number: 0-16946

LabOne, Inc.

10101 Renner Blvd.

Lenexa, Kansas 66219

(913) 888-1770

Incorporated in Missouri

I.R.S. Employer Identification Number: 43-1039532

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes /X/    No /  /

Number of shares outstanding of only class of Registrant's common stock, $.01 par value, as of April 30, 2002 - 10,864,629 net of 2,185,391 shares held as treasury stock.

LabOne, Inc.

Form 10-Q for the First Quarter, 2002

Table of Contents

PART I.   FINANCIAL INFORMATION

ITEM 1.   Financial Statements:

ITEM 2.   Management's Discussion and Analysis of Financial Condition and Results of Operations

ITEM 3.   Quantitative and Qualitative Disclosures About Market Risk

PART II.   OTHER INFORMATION

PART I. FINANCIAL INFORMATION

ITEM 1 - Financial Statements

LabOne, Inc. and Subsidiaries
Consolidated Balance Sheets

	March 31,	December 31,
	2002	2001
ASSETS
Current assets:
Cash and cash equivalents	$     6,949,472	5,949,591
Accounts receivable - trade, net of allowance for doubtful       accounts of $4,027,001 in 2002 and $3,570,717 in 2001	47,333,073	42,064,790
Inventories	4,232,841	4,570,300
Prepaid expenses and other current assets	4,029,886	3,999,580
Deferred income taxes	2,947,173	2,569,774
Total current assets	65,492,445	59,154,035
Property, plant and equipment	102,673,064	106,306,499
Less accumulated depreciation	54,236,759	58,703,907
Net property, plant and equipment	48,436,305	47,602,592
Other assets:
Intangible assets, net of accumulated amortization	85,020,464	81,797,354
Bond issue costs, net of accumulated amortization       of $62,593 in 2002 and $58,227 in 2001	129,553	133,920
Deposits and other assets	104,857	103,898
Total assets	$ 199,183,624	188,791,799
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$   15,281,238	14,432,682
Accrued payroll and benefits	8,063,779	9,076,925
Other accrued expenses	2,067,435	2,201,214
Other current liabilities	508,801	481,692
Income taxes payable	1,898,222	380,511
Notes payable and current portion of long-term payable	130,000	130,000
Current portion of long-term debt	1,867,326	1,872,505
Total current liabilities	29,816,801	28,575,529
Long-term payable	193,594	274,415
Long-term debt	46,557,215	40,558,380
Series A subordinated debt	15,000,000	15,000,000
Deferred income taxes - noncurrent	2,908,477	2,792,938
Stockholders' equity:
Preferred stock, $.01 par value per share;       3,000,000 total authorized shares:
Series B-1 (convertible), 45,000 shares          authorized; 35,000 shares issued	35,000,000	35,000,000
Series B-1 dividend payable in kind, 1,643          shares in 2002 and 933 shares in 2001	1,642,665	933,332
Common stock, $.01 par value per share; 40,000,000       shares authorized, 13,050,020 shares issued	130,500	130,500
Additional paid-in capital	53,643,891	53,923,552
Accumulated comprehensive loss - Equity adjustment       from foreign currency translation	(900,169)	(870,270)
Retained earnings	48,699,080	46,309,167
	138,215,967	135,426,281
Less treasury stock of 2,233,849 shares in 2002       and 2,245,999 shares in 2001	33,508,430	33,835,744
Total stockholders' equity	104,707,537	101,590,537
Total liabilities and stockholders' equity	$ 199,183,624	188,791,799

See accompanying notes to consolidated financial statements and management's
discussion and analysis of financial condition and results of operations.

LabOne, Inc. and Subsidiaries
Consolidated Statements of Operations

	Three months ended
	March 31,
	2002	2001
Sales	$ 70,641,035	50,044,803
Cost of sales
Cost of sales expenses	48,357,797	34,344,418
Depreciation expense	870,176	645,811
Total cost of sales	49,227,973	34,990,229
Gross profit	21,413,062	15,054,574
Selling, general and administrative
Selling, general and administrative expenses	14,309,201	11,000,557
Depreciation expense	1,349,569	1,194,189
Amortization expense	69,432	1,053,241
Total selling, general and administrative	15,728,202	13,247,987
Earnings from operations	5,684,860	1,806,587
Interest expense	(884,020)	(650,233)
Investment income	16,014	112,086
Other, net	(846)	(17,128)
Earnings before income taxes	4,816,008	1,251,312
Income tax expense	1,716,762	854,302
Net earnings	$   3,099,246	397,010
Basic earnings per share	$     0.21	0.04
Diluted earnings per share	$     0.19	0.04
Computation of earnings per share amounts
Net earnings	$   3,099,246	397,010
Preferred dividend on B-1 preferred stock	(709,333)	—
Net earnings available to common shareholders	$   2,389,913	397,010
Basic weighted average common shares outstanding	11,159,409	10,725,349
Stock options	280,353	2,449
Convertible preferred stock	4,361,165	—
Warrants	94,260	—
Diluted weighted average common shares outstanding	15,895,187	10,727,798

See accompanying notes to consolidated financial statements and management's
discussion and analysis of financial condition and results of operations.

LabOne, Inc. and Subsidiaries
Consolidated Statement of Stockholders' Equity
Three Months Ended March 31, 2002

				Accumulated
			Additional	other			Total
	Common	Preferred	paid-in	comprehensive	Retained	Treasury	stockholders'	Comprehensive
	stock	stock	capital	income	earnings	stock	equity	income
Balance at December 31, 2001	$  130,500	35,933,332	53,923,552	(870,270)	46,309,167	(33,835,744)	101,590,537
Comprehensive income:
Net Income	—	—	—	—	3,099,246	—	3,099,246	3,099,246
Equity adjustment from       foreign currency translation	—	—	—	(29,899)	—	—	(29,899)	(29,899)
Comprehensive income								$ 3,069,347
Preferred stock dividend	—	709,333	—	—	(709,333)	—	—
Stock options (12,150 shares)	—	—	(279,661)	—	—	327,314	47,653
Balance at March 31, 2002	$  130,500	36,642,665	53,643,891	(900,169)	48,699,080	(33,508,430)	104,707,537

See accompanying notes to consolidated financial statements and management's
discussion and analysis of financial condition and results of operations.

LabOne, Inc. and Subsidiaries
Consolidated Statements of Cash Flows

	Three months ended March 31,
	2002	2001
Cash provided by (used for) operations:
Net Income	$  3,099,246	397,010
Adjustments to reconcile net earnings to net          cash provided by operations:
Depreciation and amortization	2,295,193	2,899,258
Provision for loss on accounts receivable	1,409,621	325,015
(Gain) loss on disposal of property and equipment	(28,049)	11,281
Stock compensation	47,653	—
Provision for deferred taxes	(262,504)	809,157
Changes in:
Accounts receivable	(6,677,904)	(3,794,856)
Income taxes	1,517,711	1,349,335
Inventories	337,459	39,293
Prepaid expenses and other current assets	(18,383)	(1,398,020)
Accounts payable	848,556	247,357
Accrued payroll & benefits	(1,013,146)	633,354
Other accrued expenses	(208,622)	(124,483)
Other current liabilities	27,109	(41,216)
Other	(959)	(21,872)
Net cash provided by operations	1,372,981	1,330,613
Cash provided by (used for) investment transactions:
Property, plant and equipment, net	(2,941,913)	(1,933,447)
Acquisition of businesses	(3,398,923)	(1,434,298)
Net cash used for investment transactions	(6,340,836)	(3,367,745)
Cash provided by (used for) financing transactions:
Line of credit, net	6,000,000	2,000,000
Payments on long-term debt	(8,617)	(6,989)
Net cash provided by financing transactions	5,991,383	1,993,011
Effect of foreign currency translation	(23,647)	(11,550)
Net increase (decrease) in cash and cash equivalents	999,881	(55,671)
Cash and cash equivalents - beginning of period	5,949,591	1,571,734
Cash and cash equivalents - end of period	$ 6,949,472	1,516,063
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$    943,098	688,164
Income taxes	$    517,768	17,914

See accompanying notes to consolidated financial statements and management's
discussion and analysis of financial condition and results of operations.

LabOne, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
March 31, 2002 and 2001

The accompanying consolidated financial statements include the accounts of LabOne, Inc. and its wholly-owned subsidiaries Osborn Group, Inc. (Osborn), Lab One Canada Inc., Systematic Business Services, Inc. (SBSI) and ExamOne World Wide, Inc. (ExamOne). All significant intercompany transactions have been eliminated in consolidation.

The financial information furnished herein as of March 31, 2002 and for the periods ended March 31, 2002 and 2001 is unaudited; however, in the opinion of management, it reflects all adjustments, consisting of normal recurring adjustments, which are necessary to fairly state the Company's financial position, the results of its operations and cash flows. The balance sheet information as of December 31, 2001 has been derived from the audited financial statements as of that date. The financial statements have been prepared in conformity with generally accepted accounting principles appropriate in the circumstances, and included in the financial statements are certain amounts based on management's estimates and judgments.

The financial information herein is not necessarily representative of a full year's operations because levels of sales, capital additions and other factors fluctuate throughout the year. These same considerations apply to all year-to-year comparisons. Certain information and note disclosures normally included in the Company's annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These condensed, consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2001.

Forward Looking Statements

This Quarterly report on Form 10-Q may contain "forward-looking statements," including, but not limited to: projections of revenues, income or loss, margins, capital expenditures, cost savings and synergies, the payment or non-payment of dividends and other financial items, statements of plans and objectives, statements of future economic performance and statements of assumptions underlying such statements. Forward-looking statements involve known and unknown risks and uncertainties. Many factors could cause actual results to differ materially from those that may be expressed or implied in such forward-looking statements, including, but not limited to, the volume, pricing and mix of laboratory tests and other services provided by the Company, the extent of market acceptance of the Company's testing and other services in the healthcare and substance abuse industries, intense competition, the loss of one or more significant customers, bad debt expense, general economic conditions and other facto rs detailed from time to time in the Company's reports and registration statements filed with the Securities and Exchange Commission, including the Cautionary Statement filed as Exhibit 99 to the Company's Annual Report on Form 10-K for the year ended December 31, 2001. Investors are cautioned not to put undue reliance on any forward-looking statement.

Recent Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 141 "Business Combinations" (SFAS 141) and Statement of Financial Accounting Standards No. 142 "Goodwill and Other Intangible Assets" (SFAS 142). SFAS 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001. It also specifies the types of acquired intangible assets that require recognition and reporting separately from goodwill. SFAS 142 requires that goodwill and intangible assets with indefinite useful lives no longer will be amortized, but instead tested for impairment at least annually in accordance with the provisions in the statement. SFAS 142 also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to their residual values and reviewed for impairment. The Company has concluded that the customer list acquired from the purchase of GIB Laboratories is not goodwill and recognized the final amortization of this customer list of $69,000 in January 2002. The Company had unamortized goodwill in the amount of $85.0 million at March 31, 2002. If SFAS 142 had been in effect in the first quarter 2001, the net income for that quarter would have been $1.2 million or $0.12 per share.

Business Segment Information

The Company operates two divisions: risk assessment services and clinical (comprised of healthcare and substance abuse testing). The following table presents selected financial information for each segment:

	Three Months Ended
	March 31,
	2002	2001
Sales:
Risk assessment services	$ 50,480,411	$ 32,720,178
Clinical:
Healthcare	14,073,306	10,813,845
Substance abuse testing	6,087,318	6,510,780
Total sales	$ 70,641,035	$ 50,044,803
Operating income (loss):
Risk assessment services	$ 9,322,225	$ 6,552,937
Clinical:
Healthcare	2,669,366	622,503
Substance abuse testing	424,311	933,245
General corporate expense	(6,731,042)	(6,302,098)
Total earnings from operations	5,684,860	1,806,587
Other expense	(868,852)	(555,275)
Earnings before income taxes	$  4,816,008	$  1,251,312

Operating income (loss) of each line of business is computed as sales less directly identifiable expenses. In computing operating income (loss) of the lines of business, none of the following items has been allocated: general corporate expenses such as administrative, management, and information systems expenses; investment income; goodwill; or other income (expenses). The risk assessment services segment operating income for 2002 includes intersegment charges of $1.9 million for the quarter from the healthcare segment primarily for hepatitis and other miscellaneous medical testing and $0.5 million from the SAT segment for drug screening and confirmations.

Contingencies

In the normal course of business, LabOne had certain lawsuits pending at March 31, 2002. On March 5, 2002, a complaint was filed by a paramedical services company against LabOne and others in the United States District Court for the Northern District of Texas. The suit claims that LabOne interfered with the contractual rights of the paramedical services company with several of its affiliate examiners and wrongfully recruited employees to work for LabOne. The suit seeks injunctive relief and damages. By Orders filed March 13 and March 27, 2002, the court denied all injunctive relief requested by the plaintiff.

Although LabOne cannot predict the outcome of such proceeding or other claims made against it, management believes that the ultimate resolution of these claims will not have a material adverse impact on the Company's financial position.

ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations.

RESULTS OF OPERATIONS

SELECTED FINANCIAL DATA

	Three months ended
	March 31,
	2002	2001	% Inc.
Sales	$ 70,641,035	$ 50,044,803	41%
Net earnings	$ 3,099,246	$ 397,010	681%
Basic earnings per common share	$ 0.21	$ 0.04
Diluted earnings per common share	$ 0.19	$ 0.04

LabOne provides high-quality laboratory testing, investigative services and paramedical examinations for the insurance industry; laboratory testing services for the healthcare industry; and substance abuse testing services for employers.

LabOne's Risk Assessment division provides underwriting and claims support services including teleunderwriting, specimen collection and paramedical examinations, laboratory testing, telephone inspections, motor vehicle reports, claims investigation services and medical information retrieval to the insurance industry. The laboratory tests performed by the Company are specifically designed to assist an insurance company in objectively evaluating the mortality and morbidity risks posed by policy applicants. The majority of the testing is performed on specimens of individual life insurance policy applicants but also includes specimens of individuals applying for individual and group medical and disability policies.

LabOne's Clinical division includes laboratory testing services for the healthcare industry as an aid in the diagnosis and treatment of patients. LabOne operates a highly automated and centralized laboratory, which the Company believes has significant economic advantages over other conventional laboratory competitors. LabOne markets its clinical testing services to managed care companies, insurance companies, self-insured groups and physicians.

LabOne's Clinical division also includes substance abuse testing services provided to employers who adhere to drug screening guidelines. LabOne is certified by the Substance Abuse and Mental Health Services Administration to perform substance abuse testing services for federally regulated employers and currently markets these services throughout the country to both regulated and nonregulated employers. The Company's rapid turnaround times and multiple testing options help clients reduce downtime for affected employees and meet federally mandated drug screening guidelines.

FIRST QUARTER ANALYSIS

Net sales increased 41% in the first quarter 2002 to $70.6 million from $50.0 million in the first quarter 2001. The increase of $20.6 million is due to increases in risk assessment services revenue of $17.7 million and healthcare laboratory revenue of $3.3 million, partially offset by a decrease in substance abuse testing (SAT) revenue of $0.4 million.

The risk assessment services division revenue increased $17.7 million to $50.5 million primarily due to growth of ExamOne revenue and the acquisition of the Osborn Group effective September 1, 2001. The total number of insurance applicants tested in the first quarter 2002 increased by 43% as compared to the same quarter last year. Specimens attributable to Osborn represent 85% of this increase and $8.2 million of revenue for the quarter. Average revenue per insurance applicant increased 3%. Information services revenue increased 65% primarily due to growth in SBSI services and tele-underwriting services. Revenue attributable to the Osborn acquisition was $8.9 million for the quarter.

During the first quarter, healthcare revenue increased 30% to $14.1 million as compared to $10.8 million in the prior year due to a 21% increase in average revenue per patient and an 8% increase in testing volumes. SAT revenue decreased 6% to $6.1 million in 2002 from $6.5 million in 2001 due to an 11% decrease in testing volumes, partially offset by a 5% increase in average revenue per specimen.

Cost of sales increased $14.2 million or 41% in the first quarter 2002 as compared to the prior year, due primarily to increases in outside services including paramed collections and physician statement fees, payroll, lab and kit supplies, and postage expense. Paramedical services increased primarily due to continued growth of the ExamOne paramedical operations. Payroll, lab and kit supplies, and postage increased due to the additional specimen volume in the risk assessment and healthcare laboratory testing segments. Risk assessment cost of sales, including all of the above mentioned factors, increased to $37.0 million in 2002 from $22.6 million in the first quarter 2001. Healthcare cost of sales were $7.5 million as compared to $7.3 million in the first quarter 2001. SAT cost of sales expenses decreased to $4.7 million as compared to $5.1 million in the first quarter 2001 primarily due to savings on testing reagents.

As a result of the above factors, gross profit for the quarter increased $6.4 million or 42% from $15.1 million in 2001 to $21.4 million in 2002. Risk assessment gross profit increased $3.4 million on an increase in revenue of $17.7 million. Healthcare gross profit increased $3.0 million on an increase in revenue of $3.3 million. SAT gross profit remained flat on a decrease in revenue of $0.4 million.

Selling, general and administrative expenses increased $2.5 million (19%) in the first quarter 2002 as compared to the prior year. Increases in payroll expenses and bad debt accruals were partially offset by the elimination of goodwill amortization. Amortization expense declined $1.0 million for the quarter. Risk assessment overhead expenditures increased to $4.1 million in 2002 from $3.5 million in the first quarter 2001 primarily due to payroll and travel expense, partially offset by the elimination of goodwill amortization that related to this segment. Healthcare overhead expenditures were $3.9 million as compared to $2.9 million in 2001 due primarily to an increase in payroll and bad debt expense. SAT overhead expenditures increased to $1.0 million as compared to $0.5 million in 2001 primarily due to bad debt accruals.

Operating income increased from $1.8 million in the first quarter 2001 to $5.7 million in 2002. The risk assessment segment operating income was $9.3 million in 2002 as compared to $6.5 million in the first quarter 2001. The healthcare segment operating income was $2.7 million in 2002 as compared to $0.6 million in 2001. The SAT segment declined to an operating income of $0.4 million in the first quarter 2002 from $0.9 million in 2001. Administrative operating expenses increased to $6.7 million from $6.3 million in the first quarter 2001 primarily due to higher payroll expenses partially offset by the elimination of corporate goodwill amortization.

Non operating expense increased $0.3 million primarily due to increased interest expense. The effective income tax rate was 36% in the first quarter 2002. The effective income tax rate was 68% in 2001 due to nondeductible amortization expense.

The combined effect of the above factors resulted in net income of $3.1 million in the first quarter 2002 as compared to net income of $0.4 million in 2001. Preferred dividends earned were $0.7 million and earnings available to common shareholders were $2.4 million in the first quarter 2002.

Basic earnings per share in the first quarter 2002 were $0.21 and fully diluted earnings per share $0.19. Basic and diluted earnings per share were $0.04 in 2001. The basic weighted average number of shares outstanding in the first quarter of 2002 and 2001 were 11,159,409 and 10,725,349, respectively. The fully diluted weighted average number of shares outstanding in 2002 and 2001 were 15,895,186 and 10,727,798, respectively.

FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

LabOne's working capital position increased by $5.1 million to $35.7 million at March 31, 2002 from $30.6 million at December 31, 2001. This increase is due to an increase in accounts receivable from $42.1 million at December 31, 2001 to $47.3 million as of March 31, 2002, related to the increase in revenue.

Net additions to property, plant and equipment in the first three months of 2002 were $2.9 million primarily due to software and information systems development. Additionally, on January 23, 2002, the Company acquired substantially all the assets of Bodimedex, a paramedical business located in Boston, Massachusetts for $3.4 million. Additions in 2001 were $1.9 million, primarily related to software and information systems development, and $1.4 million related to paramedical purchases.

Borrowings on the line of credit in the three month period increased $6.0 million to $34 million. The total line of credit available is $35 million and expires May 31, 2002. The current interest rate, plus financing fees, on the line of credit is approximately 4.1% and is based on a 30 day LIBOR rate. The Company is currently in discussions with several banks for a new three year facility that would increase this line of credit in 2002. Interest on the industrial revenue bonds issued to finance the construction of the Company's facility is based on a taxable seven-day variable rate which, including letter of credit and remarketing fees, is approximately 3.1% as of May 1, 2002.

During the first quarter 2002, the Company did not repurchase any shares of common stock. The total number of shares of LabOne stock held in treasury at March 31, 2002 was approximately 2.2 million at a total cost of $33.5 million or $15.00 per share.

At March 31, 2002, LabOne had total cash and investments of $6.9 million as compared to $5.9 million at December 31, 2001. The Company expects to fund operations from a combination of cash flows from operations and short-term borrowings.

ITEM 3 - Quantitative and Qualitative Disclosures about Market Risk.

An interest rate risk exposure exists due to LabOne's liability of $14.5 million in industrial revenue bonds and $34.0 million borrowing on its line of credit. The interest expense incurred on the bonds is based on a taxable seven-day variable rate which, including letter of credit and remarketing fees, is approximately 3.1% as of May 1, 2002. The interest expense on the line of credit is based on the 30-day LIBOR rate plus 2.25% and is currently approximately 4.1%. Any future increase in interest rates would result in additional interest expense which could be material and could result in a decision to enter into a long-term interest rate swap transaction. An assumed 10% increase in interest rates (representing approximately 40 basis points) would potentially increase interest expense on these instruments by $0.2 million annually.

PART II. OTHER INFORMATION

ITEM 1 - Legal Proceedings

The description under "Contingencies" in Part I is incorporated herein.

ITEM 2 - Changes in Securities and Use of Proceeds

At the special meeting of shareholders held on January 31, 2002, shareholders approved the termination of the 19.9% limit on the percentage of outstanding shares of Common Stock which may be issued upon conversion of shares of Series B-1 Cumulative Convertible Preferred Stock and exercise of Series B Warrants. Shareholders also approved the automatic conversion of all outstanding shares of Series B-2 Cumulative Convertible Preferred Stock into Series B-1 Cumulative Convertible Preferred Stock. Each share of Series B-2 Preferred Stock automatically converted into one share of Series B-1 Convertible Preferred Stock without any further action required by LabOne or any holder of Series B-2 Preferred Stock. The stated value of each share of Series B-1 Convertible Preferred Stock issued upon conversion of Series B-2 Preferred Stock was the stated value which a share of Series B-1 Convertible Preferred Stock issued on August 31, 2001 had on January 31, 2002, at the 8% per year dividend rate. The conver sion price of each share of Series B-1 Convertible Preferred Stock into which Series B-2 Preferred Stock converted on January 31, 2002, is $8.32 per Common Share. If all shares of Series B-1 Convertible Preferred Stock, accumulated dividends and Series B Warrants outstanding as of April 30, 2002 were converted to Common Stock, the result would be an increase in common shares outstanding of approximately 4,783,000 shares.

ITEM 4 - Submission of Matters to a Vote of Security Holders

(a) Special meeting of stockholders held on January 31, 2002.

(c) Brief description of each matter voted:

(1) The termination of the 19.9% limit on the percentage of outstanding shares of Common Stock which may be issued upon conversion of shares of Series B-1 Cumulative Convertible Preferred Stock and exercise of Series B Warrants. Of the 9,964,121 votes cast, 6,770,932 were in favor and 114,024 were opposed. There were 449,098 abstentions and 2,630,067 shares unvoted.

(2) The automatic conversion of all outstanding shares of Series B-2 Cumulative Convertible Preferred Stock into Series B-1 Cumulative Convertible Preferred Stock. Of the 9,964,121 votes cast, 7,201,244 were in favor and 86,699 were opposed. There were 46,111 abstentions and 2,630,067 shares unvoted.

(3) The amendment of Article X of the Articles of Incorporation of LabOne governing certain future business combinations. Of the 11,568,026 votes cast, 8,403,094 were in favor and 85,537 were opposed. There were 449,330 abstentions and 2,630,065 common shares unvoted.

(4) The election of three directors to the Board of Directors of LabOne. For each of Messrs. D. Scott Mackesy (class A director), Sean M. Traynor (class B director), and W. Roger Drury (class C director), there were 9,880,664 votes cast in favor and 83,453 shares withheld. There were 0 abstentions and 839,654 shares unvoted for all directors. Directors who were not up for election and continued in office include Messrs. W. Thomas Grant II, Paul B. Queally, James R. Seward, and John E. Walker.

ITEM 6 - Exhibits and Reports on Form 8-K

(a) Exhibits

10.1 Lease Agreement dated as of November 28, 2001, between Townsend Summit LLC and LabOne, Inc.

10.2 Modification and Extension Agreement dated as of March 26, 2002, between Commerce Bank N.A. and LabOne, Inc.

(b) Reports on Form 8-K

A Form 8-K current report dated January 31, 2002 was filed with the Commission reporting under Item 9. Regulation FD Disclosure, the results of the Special Meeting of Shareholders approving the removal of restrictions on the conversion of the Series B-1 Cumulative Convertible Preferred Stock into LabOne common stock, the conversion of series B-2 Cumulative Preferred Stock into Series B-1 Cumulative Convertible Preferred Stock, and the election of D. Scott Mackesy, Sean M. Traynor and W. Roger Drury to the Company's board of directors.

A Form 8-K current report dated February 26, 2002 was filed with the Commission reporting under Item 9. Regulation FD Disclosure, the content of the year 2001 fiscal results conference call to investors.

A Form 8-K current report dated May 7, 2002 was filed with the Commission reporting under Item 9. Regulation FD Disclosure, the content of the first quarter conference call to investors.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

LabOne, Inc.

Date:  May 14, 2002	By /s/ John W. McCarty John W. McCarty Executive V.P. and Chief Financial Officer
Date:  May 14, 2002	By /s/ Joseph C. Benage Joseph C. Benage Secretary

EX-10

LEASE AGREEMENT (as Amended January 28, 2002)

FROM

TOWNSEND SUMMIT, LLC,

LANDLORD

TO

LABONE, INC.

TENANT

PREMISES:

_______________________________________

DATED: November 28, 2001

Table of Contents

Page

1. PREMISES DEMISED. *

2. TERM. *

3. RENTAL. *

4. DELIVERY OF THE PREMISES. *

5. USE OF PREMISES BEFORE COMMENCEMENT DATE. *

6. USE. *

7. TENANT'S CARE OF THE PREMISES. *

8. LANDLORD'S SERVICES AND OBLIGATIONS. *

9. HAZARDOUS WASTES/ENVIRONMENTAL COMPLIANCE. *

10. ASSIGNMENT AND SUBLEASE. *

11. DAMAGE OR DESTRUCTION. *

12. CONDEMNATION. *

13. INSURANCE. *

14. SUBROGATION AND WAIVER. *

15. INDEMNIFICATION AND HOLD HARMLESS. *

16. SUBORDINATION AND NON-DISTURBANCE. *

17. LANDLORD'S RIGHT OF ENTRY. *

18. DEFAULTS; REMEDIES. *

19. SURRENDER; HOLDING OVER. *

20. QUIET ENJOYMENT. *

21. MUTUAL REPRESENTATION OF AUTHORITY. *

22. LANDLORD'S LIABILITY. *

23. REAL ESTATE BROKERS. *

24. ATTORNEYS' FEES. *

25. ESTOPPEL CERTIFICATE. *

26. NO RECORDING. *

27. WAIVERS; CONSENT TO JURISDICTION. *

28. GOVERNING LAW. *

29. NOTICES. *

30. COUNTERPARTS. *

31. ENTIRE AGREEMENT. *

32. SEVERABILITY AND INTERPRETATION. *

33. HEIRS, SUCCESSORS, AND ASSIGNS; PARTIES. *

34. SURVIVAL. *

35. FORCE MAJEURE. *

36. TIME OF THE ESSENCE. *

37. HEADINGS. *

38. RULES AND REGULATIONS. *

39. LEASE BINDING UPON DELIVERY; NO OPTION. *

40. TENANT'S FINANCIAL STATEMENTS. *

41. SECURITY DEPOSIT. *

42. TENANT'S RIGHT OF FIRST REFUSAL. *

43. STORAGE SPACE. *

44. COMMUNICATIONS EQUIPMENT; GENERATOR. *

45. EXTERIOR SIGNAGE. *

EXHIBITS

A. Drawing of the Premises

B. The Land

C. Landlord's Work

D. Tenant's Work Letter

E. Janitorial Schedule

F. Rules and Regulations for Use of the Communication Equipment and AC System

G. Rules and Regulations

H. Subordination, Attornment and Non-Disturbance Agreement

I. Confirmation of Lucent Indemnity

LEASE AGREEMENT

THIS LEASE AGREEMENT made this 28^th day of November, 2001 between TOWNSEND SUMMIT, LLC ("Landlord"), a Delaware limited liability company, having an office at c/o Townsend Capital, LLC, 210 West Pennsylvania Avenue, Suite 700, Towson, Maryland 21204 and LABONE, INC., a Missouri corporation ("Tenant"), having an office at 10101 Renner Boulevard, Lenexa, Kansas 66219.

W I T N E S S E T H:

1. PREMISES DEMISED.

(a) Landlord leases and demises to Tenant and Tenant rents and leases from Landlord approximately 50,105 of RSF (as herein defined) (the "Premises"), which is shown on Exhibit "A" attached hereto and made a part hereof, and located in the south building (the "Building") of that certain group of buildings known as the Summit Technology Center, Lee's Summit, Missouri (collectively, the "Project").

(b) The parties agree that for purposes of this Lease, the rentable square footage ("RSF") of the Project is 1,313,545 RSF. The parties further agree that calculation of the RSF of the Premises shall be determined by Landlord's architect (i) determining the usable square footage of the Premises in accordance with the Building Owners and Managers Association's Standard Method for Measuring Floor Area in Office Buildings (ANSI/BOMA Z65.1-1996) ("BOMA Standards"), and (ii) adding thereto a ten percent (10%) load factor. Following such measurement of the Premises according to BOMA Standards, which shall occur as soon as reasonably practical following completion of Landlord's Work (as defined below), Landlord shall advise Tenant in writing of the RSF of the Premises. Promptly following the completion of such measurement, the parties shall execute an amendment to this Lease (i) confirming such measurement, (ii) adjusting the Base Rental and Monthly Base Rental payable under the Lease (to the extent the measu rement of the Premises differs from Landlord's initial estimate contained in Paragraph 1(a)), (iii) confirming "Tenant's Pro Rata Share", which for purposes of this Lease shall be a percentage calculated by dividing the RSF of the Premises by the RSF of the Project from time to time (the parties acknowledging that the RSF of the Project may vary from time to time in the event Landlord demolishes one or more of the buildings comprising the Project and/or incorporates new buildings into the Project, Landlord hereby reserving such rights), and (iv) to the extent necessary, specifying any milestone dates contained herein, including, without limitation, the Commencement Date, the Expiration Date and the date of the first payment of Monthly Base Rental for the Premises. The Tenant's Pro Rata Share is 3.81%.

(c) The Project and the land upon which the Project is located, more particularly described on Exhibit "B" attached hereto and by this reference incorporated herein (the "Land"), are referred to herein collectively as the "Property".

(d) The Premises shall include the appurtenant right to use, in common with others, cafeteria, auditorium, public restrooms, public lobbies, entrances, stairs, corridors, elevators, and other public portions of the Project, subject in all instances and under all circumstances to Landlord's right to alter, modify and, to the extent necessary, to temporarily block off access to portions of such public areas if Landlord deems it desirable or appropriate to do so. Notwithstanding the foregoing, Landlord may charge a fee (to be retained by Landlord as its sole property) for use of the common conference room(s), auditorium(s) and other similar facilities in the Project and may determine in its sole discretion the scheduling for usage thereof by tenants. Any such fees shall not exceed the fees charged for comparable facilities in comparable properties in the Kansas City, Missouri metropolitan area. Landlord shall at all times during the Term maintain and make available for Tenant's use a cafeteria and an audi torium within the Project in locations designated by Landlord, in its sole discretion (subject to Tenant's payment of any applicable usage fees for the auditorium). All the windows and outside walls of the Premises, and any space in the Premises used for shafts, pipes, conduits, ducts, telephone ducts and equipment, electric or other utilities, sinks or other Project facilities, and the use thereof and access thereto through the Premises for the purposes of operation, maintenance, inspection, display and repairs are hereby reserved to Landlord. No easement for light, air or view is granted or implied hereunder, and the reduction or elimination of Tenant's light, air or view will not affect Tenant's liability or obligations under this Lease.

(e) Parking Areas. Tenant shall have the non-exclusive right to use one hundred fifty (150) parking spaces in the North Parking Lot of the Property depicted on Exhibit "A" and two hundred fifty (250) parking spaces in the South Parking Lot of the Property depicted on Exhibit "A", for the use by Tenant and its employees in common with others entitled thereto, subject, however, to the other terms and provisions of this Lease. Tenant agrees to furnish Landlord upon request with the license numbers of all automobiles of Tenant and its employees, and agrees to keep such list current. If Tenant or its employees park their automobiles in areas other than those designated on Exhibit "A", Landlord shall have the right with respect to each such automobile to affix a notice of violation of this rule on such automobiles. Further, upon not less than two (2) business days' prior written notice to Tenant (and without any requirement to give any further notice thereafter), La ndlord shall have the right to commence having violating automobiles towed away at Tenant's expense (and Landlord shall have no liability in connection with any damage to such automobile resulting therefrom) and/or fining Tenant $20 per day for each day or portion thereof Tenant's or Tenant's employees' automobile(s) are parked in violation of this provision. Landlord shall have the right to enlarge, reduce and re-arrange the layout or location of the parking areas and Property lawns and other green space and to designate specific parking spaces for use by Tenant from time to time. Any re-arrangement of the parking areas that affects Tenant or designation of specific parking spaces for use by Tenant shall be done in a fashion that does not reduce the number of parking spaces to be made available to Tenant as set forth above and that, to the extent practical, minimizes interference with Tenant. Tenant and its employees shall not park their automobiles within any fire lanes or driveways on the Property Land or within any areas in which parking is prohibited by applicable governing ordinance.

2. TERM.

(a) This Lease shall be effective on the date hereof, but the initial term of this Lease (the "Initial Term") shall not commence until the later of (i) the date Landlord has completed Landlord's Work described on Exhibit C, and (ii) January 1, 2002 (the "Commencement Date"). The Initial Term shall expire at 11:59 p.m. on December 31, 2011 (the "Expiration Date"), unless sooner terminated as herein provided. Notwithstanding the foregoing, Tenant shall be entitled to enter the Premises commencing on the date of this Lease for the purposes of completing Tenant's Improvements described on Exhibit "D", attached hereto and by this reference incorporated herein, connecting telephones, installing computer systems, delivering furniture and doing such other work as Tenant deems necessary or appropriate to ready the Premises for Tenant's use.

(b) "Lease Year" as used herein shall mean (i) each and every consecutive twelve (12) month period during the Term of this Lease, or (ii) in the event of Lease expiration or termination, the period between the last complete Lease Year and said expiration or termination. The first such twelve (12) month period shall commence on the Commencement Date. If the Commencement Date is any day other than the first day of the month, then the first Lease Year shall include the partial month in which the Commencement Date occurs and the next consecutive twelve (12) months.

(c)

(i) Provided there is no uncured Event of Default (as hereinafter defined) under this Lease, subject to applicable grace and cure periods, from the time of giving the Option Notice (defined below) through the Renewal Term Commencement Date (as defined below), Tenant shall have the option to renew this Lease for one (1) additional term of five (5) Lease Years (the "Renewal Term") by giving Landlord written notice (the "Option Notice") at least nine (9) months prior to the Expiration Date. If Tenant fails to deliver to Landlord the Option Notice on or before such deadline, time being of the essence hereunder, the option to renew this Lease for the Renewal Term shall terminate and be of no further force or effect and Tenant shall have no further right to extend or renew this Lease. The Renewal Term shall be on all of the same terms and conditions as set forth in this Lease, except that (A) the Renewal Term shall commence on the day following the Expiration Date (the "Renewal Term Commencement Date "), and shall expire on the day prior to the fifth (5^th) anniversary of the Renewal Term Commencement Date (the "Renewal Term Expiration Date"); (B) the Base Rental for the Renewal Term shall be the Fair Market Rent (as hereinafter defined); and (C) Tenant shall have no further rights to renew this Lease.

(ii) "Fair Market Rent" shall be determined as set forth below. Within thirty (30) days after Tenant exercises an option to renew, Landlord shall furnish to Tenant a notice in writing ("Landlord's Notice") which sets forth the Landlord's determination of Fair Market Rent for the Renewal Term effective as of the Commencement Date of the Renewal Term. If the Tenant disagrees with the estimate of Fair Market Rent submitted by Landlord in Landlord's Notice, then within thirty (30) days after receipt of Landlord's Notice, Tenant shall have the right either to terminate the Option Notice or to submit to Landlord an appraisal by a qualified real estate appraiser of Fair Market Rent for the Renewal Term effective as of the Commencement Date of the Renewal Term. (If Tenant elects to terminate the Option Notice, then the Lease shall terminate at the end of the Initial Term.) If the higher estimate is not more than 110% of the lower estimate, the Fair Market Rent shall be established as the average of the two es timates. If not, Landlord and the appraiser selected by Tenant, acting on behalf of Tenant, shall, within fifteen (15) days after Tenant's appraisal has been submitted, jointly appoint a third qualified real estate appraiser (the "Referee"). If Landlord and the appraiser selected by Tenant are unable to agree upon the selection of a Referee, then the Referee shall be selected within fifteen (15) days thereafter by an arbitrator pursuant to the rules of the American Arbitration Association.

    The Referee shall, within thirty (30) days after appointment, render his decision which decision shall be strictly limited to choosing one of the two determinations made by Landlord and the appraiser selected by Tenant with respect to Fair Market Rent. The decision of the Referee shall be binding upon Landlord and Tenant. Tenant shall pay for its appraisal, and the cost of the Referee shall be shared equally by Landlord and Tenant. In determining Fair Market Rent, Landlord and the appraiser selected by Tenant shall each take into account the following: (a) the amount of space and length of term taken by Tenant; (b) the creditworthiness and quality of Tenant; (c) the amenities offered at the Premises; (d) any special or unusual features of the Premises as it relates to Tenant's business; and (e) rent in comparable buildings in the relevant competitive market but excluding concessions offered to new tenants such as free rent, tenant improvement allowances, moving allowances and o ther such concessions. In addition, in determining Fair Market Rent, Landlord and the appraiser selected by Tenant shall exclude from consideration: (i) base building and tenant improvements installed by Tenant; (ii) alterations installed by Tenant at its expense during the Term; and (iii) concessions offered to new tenants such as free rent, tenant improvement allowances, moving allowances and other concessions; and (iv) all other amenities, improvements, services and other benefits offered by Landlord and/or enjoyed by Tenant at the Premises.

(d) The Initial Term and the Renewal Term, if Tenant exercises its renewal option, are sometimes referred to herein as the "Term".

3. RENTAL.

Base Rental. Tenant shall pay to Landlord at the address of Landlord indicated herein, or at such other place as Landlord may designate in writing, without demand, deduction or setoff, an annual base rental (said rent, as the same may be adjusted from time to time, is herein referred to as the "Base Rental"), due and payable in equal monthly installments (the "Monthly Base Rental") in advance commencing on January 13, 2002 (and not on the Commencement Date) and Monthly Base Rental for January 2002 only shall be the agreed upon amount of $20,472.90 and continuing on the first (1st) day of each calendar month during the Term according to the Base Rental Table. The annual Base Rental and monthly Base Rental for each Lease Year falling within the Initial Term shall be in amounts as set forth below:

Lease Year	Base Rental/RSF	Annual Base Rental	Monthly Base Rental
1	$ 8.00/RSF	$400,840.00	$33,403.33
2-3	$10.00/RSF	$501,050.00	$41,754.17
4-5	$10.25/RSF	$513,576.25	$42,798.02
6-8	$10.75/RSF	$538,628.75	$44,885.73
9-10	$11.75/RSF	$588,733.75	$49,061.15

Should this Lease commence on other than the first (1st) day or terminate at any time other than the last day of a calendar month, the amount of Base Rental due from Tenant shall be proportionately adjusted based on that portion of the month that this Lease is in effect. Tenant shall also pay all other sums of money that shall become due from Tenant under this Lease other than Base Rental ("Additional Rent") within the time periods set forth herein and without deduction, offset or counterclaim except as specifically and expressly (and not impliedly) provided in this Lease, and if no such period is established, then within thirty (30) days of receipt of Landlord's written demand therefor containing the amount due and a reasonably detailed statement as to the nature of such Additional Rent. As used in this Lease, "Rent" shall mean Base Rental and Additional Rent.

(b) Tenant shall pay any and all Base Rental, Additional Rent and costs, expenses and obligations of every kind and nature whatsoever relating to the Premises without setoff, deduction, counterclaim or abatement, except as specifically and expressly (and not impliedly) provided in this Lease.

(c) Payment of Operating Expenses and Taxes.

(i) Commencing with calendar year 2003 and for each calendar year thereafter falling wholly or partially within the Term, Tenant shall pay to Landlord as Additional Rent Tenant's Pro Rata Share of  the amount by which Operating Expenses for such calendar year or portion thereof exceed Operating Expenses for the Base Year ("Tenant's Pro Rata Share of Operating Expenses"), and  the amount by which Taxes for such calendar year or portion thereof exceed Taxes for the Base Year ("Tenant's Pro Rata Share of Taxes"). Operating Expenses and Taxes for the Base Year and each subsequent calendar year during the Term shall be expressed on a per RSF basis (based on the RSF of the entire Project from time to time) and then multiplied by the RSF of the Premises for purposes of determining Tenant's Pro Rata Share of Operating Expenses and Tenant's Pro Rata Share of Taxes.

(ii) On or before December 1, 2002, and then at least thirty (30) days prior to each subsequent calendar year during the Term, Landlord shall advise Tenant in writing of its reasonable estimate of Tenant's Pro Rata Share of Operating Expenses and Tenant's Pro Rata Share of Taxes for the upcoming calendar year. Commencing on January 1, 2003 and on the first day of the first month of each calendar year and on the first day of each month thereafter, Tenant shall pay as Additional Rent, one-twelfth (1/12th) of the estimated Tenant's Pro Rata Share of Operating Expenses and Tenant's Pro Rata Share of Taxes concurrently with the Monthly Base Rental payment.

(iii) Within ninety (90) days after the close of each calendar year, Landlord shall deliver to Tenant an itemized statement prepared by Landlord's property management company or chief operating officer, or by a certified public accountant ("Landlord's Statement") showing in reasonable detail the  actual Operating Expenses and Taxes for the previous year broken down by component expenses;  Base Year Operating Expenses and Base Year Taxes;  the increase, if any, in Operating Expenses and Taxes;  Tenant's Pro Rata Share of Operating Expenses and Tenant's Pro Rata Share of Taxes;  the amount paid by Tenant during the previous year towards Tenant's Pro Rata Share of Operating Expenses and Tenant's Pro Rata Share of Taxes; and  the amount Tenant owes to Landlord, or the amount of the refund Landlord owes to Tenant, on account of any underpayment or overpayment by Tenant. Any such amount due from Tenant to Landlord shall be paid within ten (10) days after receipt of the most recent Landlord's Statement. Any such refund due from Landlord to Tenant shall be credited against the next due payment of the estimated Tenant's Pro Rata Share of Operating Expenses and Tenant's Pro Rata Share of Taxes or refunded within ninety (90) days if after the end of the Lease Term.

(iv) Landlord's failure to submit a Landlord's Statement to Tenant within ninety (90) days after the expiration of any calendar year shall not affect Tenant's obligations to pay Tenant's Pro Rata Share of Operating Expenses and Tenant's Pro Rata Share of Taxes.

(v) Within forty-five (45) days of Tenant's receipt of the most recent Landlord's Statement and upon written notice delivered to Landlord within such forty-five (45) day period (the "Audit Notice"), Tenant shall have the right during normal business hours to inspect Landlord's accounting and other records directly related to the determination of Taxes and Operating Expenses. In no event, however, shall such records be deemed to include Landlord's federal, state or local income tax returns or Landlord's organizational documents. If after such inspection, Tenant notifies Landlord in writing (the "Audit Report") that Tenant disputes any amounts set forth in the most recent Landlord Statement, a certification (the "Certification") as to the proper amount may be made by an independent certified public accountant (the "CPA") selected by Landlord, but which is independent of Landlord, approved by Tenant and at Tenant's sole expense; provided, however, that if the Certification proves that the Operating Expense s or Taxes set forth in such Landlord's Statement were overstated by more than five percent (5%), then the cost of the CPA and the cost of the Certification shall be paid by Landlord. Landlord shall cooperate in good faith with Tenant and the CPA to provide to Tenant and the CPA all accounting and other records directly related to the determination of Taxes and Operating Expenses required by the CPA to permit the CPA to make such Certification. Promptly following the parties' receipt of such Certification or, alternatively, if Landlord accepts the findings of the Audit Report without the Certification, the parties shall make such appropriate payments or reimbursements, as the case may be, within thirty (30) days. Tenant shall have no right to audit Landlord's accounting or other records directly related to the determination of Taxes and Operating Expenses if Tenant fails to provide the Audit Notice in accordance with this Paragraph.

(d) Tenant shall also pay before any penalties or fines are assessed to the appropriate governmental authority any use and occupancy tax in connection with the Premises. In the event Landlord is required by law to collect such tax, Tenant shall pay such use and occupancy tax to Landlord as Additional Rent within ten (10) days of demand and Landlord shall remit any amounts so paid to Landlord to the appropriate governmental authority to a timely fashion.

(e) For the purposes hereof, the following definitions shall apply:

(i) "Base Year" shall mean calendar year 2002. Notwithstanding the foregoing, and irrespective of the actual cost of natural gas utilized at the Project during the Base Year, for purposes of this Lease the cost of natural gas utilized at the Project during the Base Year shall be deemed to be $3.50 per MmBtu.

(ii)"Operating Expenses" shall mean:

(A) all costs and expenses incurred and expenditures made by Landlord in the operation and management of the Property, exclusive of Taxes (as hereinafter defined). Operating Expenses include, without limitation, (i) costs of cleaning, security, janitorial service, rubbish removal, heating, electricity, air conditioning, utilities, tempered water, maintenance and repairs, maintenance of the grounds, snow removal and window cleaning, (ii) service contracts or other agreements with independent contractors for any of the foregoing (including, but not limited to, elevator and HVAC maintenance), (iii) management fees (not to exceed three percent (3%) of the gross income from the Project if management is provided by a company affiliated with Landlord), (iv) wages, salaries, benefits, payroll taxes and unemployment compensation insurance for employees of Landlord or any contractor of Landlord engaged in the cleaning, operating, management, maintenance or security of the Property, (v) the cost of all insurance in cluding, without limitation, casualty, liability and loss of rent insurance equal to twelve (12) months rent for the gross rent roll (including Additional Rent), (vi) reasonable legal fees other than those (a) relating to disputes with tenants (b) relating to enforcement of leases, (c) relating to Environmental Laws, Remedial Work and Legal Requirements for conditions existing prior to the date of this Lease, or (d) relating to the defense of Landlord's title, (vii) an allowance for depreciation over the useful life (as determined by Landlord in accordance with GAAP) of any capital improvements to the Property that are (a) intended to effect economies in the operation or maintenance of the Property, but only to the extent of actual savings in Operating Expenses, or (b) required under any governmental law or regulation that was not applicable to the Property on the date of full execution of this Lease, (viii) payments other than Taxes to the city in which the Building is located and other agencies o r governmental agencies including, but not limited to, water and sewer charges related to the use or occupancy of the Project, (ix) fees and charges of any association development agreement, or special district affecting the Property, and (x) supplies. If Tenant pays separately for its own electricity or pays a separate electricity charge hereunder, then the cost of all electricity furnished to all tenants shall be excluded from Operating Expenses, provided that the cost of electricity to common areas and for any central air conditioning and/or heating facilities ("Central Plant") on the Property shall be included in Operating Expenses.

(B) The term "Operating Expenses" shall not include: (a) repairs or other work (including rebuilding) occasioned by fire, windstorm or other casualty or condemnation (b) any cost (such as electricity or overtime services) to the extent such costs are separately charged to and payable by Tenant hereunder or any other tenant in the Project, (c) leasing commissions and expenses associated with procuring tenants, including, without limitation, lease concessions and lease take-over obligations and the cost of renovating, preparing or improving space for tenants or other occupants of the Project, (d) interest on and amortization of debt, (e) interest and penalties for late payment of taxes, (f) rent payable under any ground lease or other lease to which this Lease is subject, (g) expenses resulting from any violation by Landlord of the terms of any ground or underlying lease or mortgage to which this Lease is subordinate, (h) fines and penalties (to the extent not attributable to any act or omission of Tenant or its agents, employees or contractors) which, under this Lease, are the responsibility of Landlord, (i) interest and principal payments for any loan and fees and costs associated with any financing or refinancing of mortgage debt on the Property, or debt associated with the Property, (j) any item for which reimbursement is actually made to Landlord from another source (e.g., insurance proceeds or payment from another tenant), (k) costs to perform Landlord's Work described on Exhibit C, (l) advertising and promotional expenses, (m) any expense or cost arising out of the gross negligence or willful misconduct of Landlord or due to any material breach by Landlord of any material warranty, representation or covenant of Landlord contained in this Lease, (n) Taxes, as defined below, (o) costs to perform Landlord's obligations under clauses (i) - (iii) of Paragraph 8(e) below, (p) any expense, the inclusion of which in Operating Expenses would duplicate another expense already included in O perating Expenses, and (q) expenses for any services provided to fewer than all of the tenants in the Project (but without regard to any particular tenant's actual use or not of any service made available to all tenants in the Project on a uniform basis).

(C) Operating Expenses shall be determined in accordance with GAAP.

(D) With respect to any calendar year in which the Project is not occupied to the extent of ninety percent (90%) of the RSF thereof, those Operating Expenses which fluctuate with occupancy (including, but not limited to, janitorial service, maintenance contracts, repairs, supplies, trash removal, management fees, utility services and the like) shall, for the purposes hereof only, be increased for such period to the amount which would have been incurred had the Project been occupied to the extent of ninety percent (90%) of the RSF thereof.

(iii) "Taxes" shall mean:

(A) All payments in lieu of taxes, real estate taxes, personal property taxes, assessments (special or otherwise), sewer and water rents, rates and charges, and any other governmental levies, impositions and charges of a similar nature ("Impositions"), which may be levied, assessed or imposed on or in respect of all or any part of the Property and any improvements, fixtures and equipment of Landlord, real or personal, located in or around the Property.

(B) Any reasonable and appropriate expenses incurred by Landlord in contesting any of the foregoing or the assessed valuation of all or any part of the Property.

(C) If at any time during the Term the methods of taxation prevailing at the date hereof shall be altered so that in lieu of or as a substitute for the whole or any part of the Impositions now levied, assessed or imposed on all or any part of the Property, there shall be levied, assessed or imposed (i) an Imposition based on the income or rents received therefrom whether or not wholly or partially as a capital levy or otherwise, or (ii) an Imposition measured by or based in whole or in part upon all or any part of the Property and imposed on Landlord, then all Impositions shall be deemed to be Taxes.

(D) "Taxes" shall not include any penalties or interest paid by the Landlord on account of taxes.

(f) Tenant Electric Charge. Notwithstanding the foregoing, Tenant shall pay directly to the electricity provider (or, upon Landlord's request to Landlord, on the first day of each calendar month with its installments of Monthly Base Rental) for all electricity used at or in connection with the Premises, including, but not limited to, electricity for lights, office machinery and equipment, computer equipment, any appliances, and air conditioning, other than electricity for operation of the Central Plant, which shall be included in Operating Expenses ("Tenant Electric"). If Landlord bills Tenant for electricity, then the current charge for Tenant Electric shall be based upon the same rate that Landlord is billed by the applicable utility company and consumption determined by an electric sub-meter at the Premises. If there is not presently an electric sub-meter at the Premises, Tenant shall install such a sub-meter at the Premises as part of Tenant's Improvements (as hereinafter defined)

(g) Adjustment for Partial Years. Should the Term commence at any time other than the first day or terminate on other than the last day of a calendar year the amount of Additional Rent due from Tenant shall be proportionately adjusted based on that portion of the year that this Lease was in effect.

(h) Additional Rent not Base Rental. Tenant's payments of Additional Rent shall not be deemed payments of Base Rental as that term is construed relative to governmental wage and price controls or analogous governmental actions affecting the amount of Rent which Landlord may charge Tenant for the Premises.

(i) Late Charge. Tenant acknowledges that Tenant's failure to pay Base Rental and Additional Rent promptly may cause Landlord to incur unanticipated costs which are impractical or extremely difficult to ascertain and may include, without limitation, processing and accounting charges and late charges imposed on Landlord by any ground lease, mortgage or deed of trust. As a result, if Landlord does not receive any payment within five (5) days of the due date, Tenant shall pay Landlord, a late charge equal to five percent (5%) of the overdue amount, which charge Landlord and Tenant agree represents a fair and reasonable estimate of the costs Landlord will incur by reason of late payment. Landlord's acceptance of the late charge shall in no event constitute a waiver of Tenant's default with respect to any overdue amount nor prevent Landlord from exercising any other rights or remedies granted under this Lease and/or applicable law.

4. DELIVERY OF THE PREMISES.

(a) Landlord shall deliver possession of the Premises to Tenant for the purpose of completing the work described in Paragraph 4(b) hereof on the date of this Lease in compliance with the applicable building code, but otherwise in its "AS IS, WHERE IS" condition, except for  Landlord's obligation to complete the work described on Exhibit "C" attached hereto (the "Landlord's Work"), and  Landlord's ongoing maintenance and repair obligations set forth in this Lease. If Landlord, for any reason whatsoever, cannot deliver possession of the Premises to Tenant on the date of this Lease, then, at the option of Tenant (1) the Commencement Date and the Expiration Date hereunder shall be postponed for the same period as the delay after the date of this Lease that Landlord is delayed in delivering possession to Tenant, or (2) this Lease shall be void. Tenant must elect which of those two (2) options it wishes to have apply by written notice to Landlord given within one (1) business day after th e date of this Lease. If Tenant fails to timely notify Landlord of its election, then the option described in clause (1) shall apply.

(b) Tenant will complete the tenant improvements within the Premises as described in and in accordance with Exhibit "D" (the "Tenant Improvements") in a good and workmanlike manner, in compliance with all certificates, permits, and required approvals, applicable laws, statutes, ordinances, orders, codes, rules and regulators of all federal, state, county, city and local departments and agencies, including, without limitation, the Americans with Disabilities Act of 1990 (as amended) (collectively, the "Legal Requirements") and free of all construction liens and claims. All materials used by Tenant shall be new or like new. Tenant shall be responsible for obtaining all certificates of occupancy for the Premises and Landlord shall reasonably cooperate with Tenant in obtaining any such certificate at no out-of-pocket expense to Landlord.

(c) By taking possession of the Premises on or following the date of this Lease, Tenant shall be deemed to have accepted the Premises as being in good and satisfactory order, condition and repair for the use intended under this Lease, except for the completion of Landlord's Work. Tenant shall, at Tenant's sole cost and expense, keep the Premises and every part thereof in good condition and repair, excepting damage thereto from fire or other casualty and ordinary wear and tear, condemnation, and from the negligence or misconduct of other tenants or of Landlord, its agents, employees, invitees, contractors, subcontractors and others for whom Landlord is legally responsible. Landlord shall have no obligation whatsoever to alter, remodel, improve, repair, decorate or paint the Premises or any part thereof except as otherwise expressly provided herein or agreed upon in writing by Landlord, and the parties hereto affirm that Landlord has made no representations to Tenant respecting the condition of the Premis es, the Building or the Property except as specifically herein set forth in writing.

5. USE OF PREMISES BEFORE COMMENCEMENT DATE.

Tenant may, upon written notice to Landlord, without incurring any liability for payment of Rent, enter upon the Premises on and after the date of this Lease to construct the Tenant Improvements in the Premises, at Tenant's risk and expense, and subject to all other terms and conditions of this Lease, including, but not limited to, the insurance requirements set forth at Paragraphs 13 and 14 hereof. In exercising the foregoing rights, Tenant shall not cause any interference with or delay to Landlord or any of its employees, agents, representatives, contractors or invitees in performing any demolition or building systems work to the Building. Tenant's indemnity in Paragraph 15 shall apply to Tenant's entry under this Paragraph 5. Landlord and Tenant shall each use reasonable efforts to refrain from interfering with the other's work described herein.

6. USE.

(a) The Premises hereby leased may be used only for general office use, use as a call center, assembly of specimen collection kits and uses accessory and incidental thereto and no other uses. Tenant agrees to conduct its business in the manner and according to the generally accepted business principles of the business or profession in which Tenant is engaged.

(b) Notwithstanding anything to the contrary provided in Paragraph 6(a), Tenant shall not use or occupy the Premises or any portion thereof, permit or suffer the same to be used or occupied and/or do, or permit or suffer anything to be done, in or on the Premises or any part thereof, that would, in any manner or respect:

(i) violate any certificate of occupancy or Legal Requirement in force relating to the Premises or the Rules (as hereinafter defined) or cause an unreasonable amount of use of any of the services provided in the Building;

(ii) make void or voidable any insurance then in force with respect to the Premises, or render it impossible to obtain fire or other insurance thereon required to be furnished by Landlord or Tenant under this Lease;

(iii) cause structural or other injury to the Premises, or constitute a private or public nuisance or waste;

(iv) render the Premises incapable of being used or occupied after the expiration or sooner termination of the term of this Lease for the purposes for which the same were permitted to be used and occupied on the day upon which Tenant shall first open the Premises for business to the public, except for ordinary wear and tear and damage by fire or other casualty and repairs for which Tenant is not responsible under this Lease; and/or

(v) violate the provisions of Paragraph 9 hereof .

7. TENANT'S CARE OF THE PREMISES.

(a) Tenant will take good care of the Premises and all of Tenant's Improvements and all other improvements constructed by Tenant and the fixtures and appurtenances therein, and will neither commit nor suffer any active or permissive waste or injury thereof. Tenant's responsibilities in conjunction therewith shall include, but not be limited to, the cleaning of draperies, the shampooing and/or re-stretching of the carpeting located in the Premises, and the regular painting and decorating of the Premises so as to maintain the Premises in good condition and repair in accordance with the standards within the Project. All such repair work and maintenance and any alterations permitted by Landlord or by this Lease without the requirement to obtain Landlord's consent shall be done at Tenant's sole cost and expense by persons requested by Tenant and, except as otherwise provided in Paragraph 7(b) below, consented to in writing by Landlord. Tenant shall, at Tenant's expense, but under the direction of Landlo rd and performed by persons requested by Tenant and consented to in writing by Landlord, promptly repair any injury or damage to the Premises or Building caused by the misuse or neglect thereof by Tenant, by Tenant's contractors, subcontractors, customers, employees, licensees, agents, or invitees permitted or invited (whether by express or implied invitation) on the Premises by Tenant, or by Tenant moving in or out of the Premises.

(b) Tenant will not, without Landlord's prior written consent, make alterations, additions or improvements in or about Premises and will not do anything to or on the Premises which will increase the rate of fire or other insurance on the Building or the Property. Notwithstanding the foregoing, and without any requirement to obtain Landlord's approval of the persons performing the work, Tenant may make reasonable, non-structural modifications and improvements to the interior of the Premises at any time that do not exceed an aggregate cost of $25,000 for all such modifications and improvements made within any six (6) month period. (For example, Tenant could not make non-structural modifications or improvements costing $20,000 in February of a particular year and then make additional non-structural modifications or improvements costing $15,000 in May of that same year without obtaining Landlord's consent, but could make non-structural modifications or improvements costing $25,000 in February of a particula r year and then make additional non-structural modifications or improvements costing $25,000 in August of that same year without obtaining Landlord's consent.). All alterations, additions or improvements of a permanent nature made or installed by Tenant in the Premises shall become the property of Landlord at the expiration or early termination of this Lease. Landlord reserves the right to require Tenant to remove any improvements or additions made to the Premises by Tenant and to repair and restore the Premises to their condition prior to such alteration, addition or improvement, reasonable wear and tear, unrepaired casualty not caused by Tenant, and condemnation excepted, unless Landlord has agreed in writing, at or prior to the time Tenant requests the right to make such alteration, addition or improvement, that such item need not be removed by Tenant at the expiration or early termination of the Lease.

(c) No later than the last day of the Term or earlier termination as provided herein, Tenant will remove all Tenant's personal property and repair all injury done by or in connection with installation or removal of said property and surrender the Premises (together with all keys, access cards or entrance passes to the Premises and/or Building) in as good a condition as they were at the beginning of the Term, reasonable wear and tear, unrepaired casualty not caused by Tenant, condemnation and obligations of Landlord excepted. All property of Tenant remaining in the Premises after expiration or earlier termination of the Term shall be deemed conclusively abandoned and may be removed by Landlord, and Tenant shall reimburse Landlord for the cost of removing the same, subject however, to Landlord's right to require Tenant to remove any improvements or additions made to the Premises by Tenant pursuant to the preceding Paragraph.

(d)

(i) Except as otherwise provided in Paragraph 7(b) above, in doing any work in the Premises Tenant will use only contractors, subcontractors or workers consented to by Landlord in writing prior to the time such work is commenced, such consent not to be unreasonably withheld. Further, in connection with any work in the Premises, including work of the type described in Paragraph 7(b) above, either (A) Tenant, at its expense, shall obtain prior to commencement of any work in the Premises a performance and payment bond from its contractor, on the latest edition of the A.I.A. form, covering such contractor's obligations, in which Landlord shall be named as a dual obligee, in the total amount of the cost of the work to be performed, or (B) ALL SUCH CONTRACTORS OR WORKERS APPROVED IN WRITING BY LANDLORD AND THEIR SUBCONTRACTORS AND MATERIALMEN WILL BE REQUIRED TO EXECUTE AND DELIVER TO LANDLORD (i) A FULL AND FINAL LIEN WAIVER WITH RESPECT TO THE WORK TO BE PERFORMED OR MATERIALS TO BE PROVIDED BY SUCH CON TRACTOR, WORKER, SUBCONTRACTOR OR MATERIALMAN IN ADVANCE OF PERFORMING ANY WORK IN OR PROVIDING ANY MATERIALS TO THE PREMISES, AND (ii) AN INSTRUMENT IN FORM AND SUBSTANCE SATISFACTORY TO LANDLORD, THE HOLDER OF ANY MORTGAGE COVERING ALL OR ANY PART OF THE PROPERTY AND ANY TITLE INSURANCE COMPANY INSURING TITLE TO ALL OR ANY PART OF THE PROPERTY, WHEREBY SUCH CONTRACTOR, ITS SUBCONTRACTORS AND ITS AND THEIR MATERIALMEN AGREE (IRRESPECTIVE OF ANY DEFAULT OR FAILURE TO PAY BY TENANT OR ANY SUCH CONTRACTOR, SUBCONTRACTOR OR MATERIALMAN) PROVIDING THAT THEY AND EACH OF THEM WILL LOOK SOLELY TO THE DEFAULTING PARTY AND/OR ANY EXISTING PAYMENT BOND, OR BOTH, FOR SATISFACTION UPON SUCH DEFAULT., AND NO CONTRACTOR, WORKER, SUBCONTRACTOR OR MATERIALMAN WILL BE PERMITTED TO COMMENCE ANY WORK IN OR PROVIDE ANY MATERIALS TO THE PREMISES UNTIL SUCH FULL AND FINAL LIEN WAIVER AND INSTRUMENT IS SO EXECUTED AND DELIVERED TO LANDLORD.

(ii) Tenant shall promptly remove any lien or claim of lien for material or labor claimed against the Premises or Building, or both, by such contractors or workmen if such claim should arise, and hereby indemnifies and holds Landlord harmless from and against any and all losses, costs, damages, expenses or liabilities including, but not limited to, attorney's fees, incurred by Landlord, as a result of or in any way related to such claims or such liens. All work shall be performed in accordance with the Legal Requirements. If Tenant fails to bond off in a manner reasonably acceptable to Landlord or otherwise release of record any such lien within 30 days after the filing thereof, Landlord may remove such lien by paying the full amount thereof or by bonding or in any other manner Landlord reasonably deems appropriate, without investigating the validity thereof and irrespective of the fact that Tenant may contest the propriety or the amount thereof, and Tenant, upon demand, shall pay Landlord the amount s o paid out by Landlord in connection with the discharge of such lien, together with expenses incurred in connection therewith, including attorneys' fees. Nothing contained herein shall be construed as a consent on the part of Landlord to subject Landlord's estate in the Premises to any lien or liability under the laws of the State of Missouri.

(e) All personal property brought into the Premises by Tenant, its employees, licensees and invitees shall be at the sole risk of Tenant, and Landlord shall not be liable for theft thereof or of money deposited therein or for any damages thereto, such theft or damage being the sole responsibility of Tenant.

(f)

(i) Tenant, at its expense, shall comply with all present or future Legal Requirements affecting the Premises and with any reasonable requirements of the insurance companies insuring Landlord against damage, loss or liability for accidents in or connected with the Premises to the extent that the same shall affect or be applicable to (i) Tenant's particular manner of use of the Premises (as opposed to its mere use thereof), (ii) alterations and improvements made by Tenant, or (iii) a breach by Tenant of its obligations under this Lease, it being understood that Tenant shall not be, and Landlord shall be, responsible for complying with Legal Requirements or insurance requirements imposed on the Building generally and which would have to be complied with whether or not Tenant was then in occupancy of the Premises. Nothing herein contained, however, shall be deemed to impose any obligation upon Tenant to make any structural changes or repairs unless necessitated by Tenant's acts or omissions or by reason of a particular use by Tenant of the Premises. Landlord shall be responsible for complying with all Legal Requirements affecting the design, construction and operation of the Building or relating to the performance by Landlord of any duties or obligations to be performed by it hereunder.

(ii) The parties acknowledge that Title III of the Americans With Disabilities Act of 1990 and the regulations and rules promulgated thereunder, as all of the same may be amended and supplemented from time to time (collectively referred to herein as the "ADA") establish requirements for accessibility and barrier removal, and that such requirements may or may not apply to the Premises and the Property depending on, among other things: (1) whether Tenant's business is deemed a "public accommodation" or "commercial facility", (2) whether such requirements are "readily achievable", and (3) whether a given alteration affects a "primary function area" or triggers "path of travel" requirements. The parties hereby agree that: (a) Landlord shall be responsible for ADA Title III compliance in the common areas, the Premises and the Property (except for compliance requirements triggered by the Tenant Improvements) (b) Tenant shall be responsible for ADA Title III compliance within the Premises to th e extent compliance requirements are triggered by the Tenant Improvements, and (c) Landlord may perform, or require that Tenant perform, and Tenant shall be responsible for the cost of, ADA Title III "path of travel" requirements triggered by alterations within the Premises made subsequent to the commencement of the Term at the request of Tenant.

8. LANDLORD'S SERVICES AND OBLIGATIONS.

(a) Provided Tenant is in compliance with the terms and conditions of this Lease, Landlord shall furnish the following services (the cost of which services shall be reimbursed to Landlord in accordance with Paragraph 3 herein):

(i) Air conditioning and heating (during heating and cooling seasons determined by Landlord) during Ordinary Business Hours within a temperature range of between 68 degrees F and 76 degrees F, but consistent with and subject to all Federal and local energy conservation regulations ("Building Standard HVAC Services"). Building Standard HVAC Services shall not include Tenant Specialized HVAC Systems or any HVAC service for any Tenant Specialized HVAC Systems. To the extent Tenant requires Building Standard HVAC Services beyond Ordinary Business Hours, then Tenant shall pay Landlord therefor such amount as Landlord and Tenant shall mutually agree upon from time to time; provided, however, until Landlord and Tenant mutually agree otherwise, the charge for Building Standard HVAC Services beyond Ordinary Business Hours shall be $54.00 per hour. To the extent any Tenant Specialized HVAC System requires Landlord to provide chilled water or any other service (other than any electricity already separately metere d to the Premises), then Tenant shall pay Landlord therefor such amount as Landlord and Tenant shall mutually agree upon from time to time. "Tenant Specialized HVAC Systems" shall mean any special space conditioning systems or equipment required to accommodate tenant specific loads such as computer rooms, clean rooms or manufacturing cells or to accommodate environmental criteria such as temperature, humidity, and odor or particulate contamination control greater than that of a typical office environment. Tenant Specialized HVAC Systems shall not be considered a part of the Central Plant, and Tenant shall at Tenant's sole expense maintain Tenant's Specialized HVAC Systems in good order and repair. Anything in the foregoing to the contrary notwithstanding, Tenant shall have the right to access and use the Premises at all times and Landlord will supply (A) Building Standard HVAC Services at any time subject to scheduling with Landlord and to Tenant's payment of the charges for any Building Standard HVAC Ser vices supplied beyond Ordinary Business Hours, and (B) any other mutually agreed upon service Tenant requires in connection with Tenant Specialized HVAC Systems subject to scheduling with Landlord and to Tenant's payment of the charges for such services as have been mutually agreed upon by Landlord and Tenant.

(ii) Such security services that Landlord shall elect to provide in its sole and absolute discretion (it being agreed that Landlord shall have no obligation to provide any security services).

(iii) Domestic potable water for drinking, lavatory or toilet purposes (but this shall not be construed as requiring Landlord to install plumbing facilities in the Premises).

(iv) Periodic changing of Building standard light bulbs in ceilings of the Premises. Tenant shall be responsible for all other light bulbs and the changing thereof.

(v) Janitorial service in accordance with Exhibit "E", Cleaning Specification, which is attached hereto.

(vi) Electricity to operate the Building and Property, and to operate the Premises during Ordinary Business Hours as described in the Rules by providing electric current in reasonable amounts necessary for normal office uses, lighting, and heating, ventilating and air conditioning ("HVAC"); PROVIDED, HOWEVER, all electrical costs to operate any Tenant Specialized HVAC Systems shall be at Tenant's sole cost and expense and shall not be included in Operating Costs.

(vii) Grounds care, including the sweeping of walks and parking areas and the maintenance of landscaping in a first class building manner.

(viii) General management, including supervision, inspections and management functions.

(b) The services provided for in Paragraph 8(a) herein are predicated on and are in anticipation of certain usage of the Premises by Tenant as follows:

(i) Services shall be provided for the Building during Ordinary Business Hours as described in the Rules.

(ii) That said usage of the Premises by Tenant will not require the HVAC system to function beyond design loads currently applicable to the Building.

(iii) Electric power usage and consumption for the Premises shall be based on office standard lighting acceptable to Landlord during Ordinary Business Hours and 110 volt service for small office machines and devices not exceeding 20 amp circuit requirements. Heavier power use items shall not be used or installed unless expressly permitted elsewhere in this Lease or upon Landlord granting its written consent thereto.

(iv) Should Tenant's total rated electrical design load in the Premises exceed the Building standard electrical design load of 5 watts per square foot on an RSF basis, as determined by Landlord from time to time, or if the Premises electrical design requires electrical service in excess of Tenant's allocated capacity on an RSF basis, as such capacity is determined by Landlord in Landlord's reasonable judgment, Landlord shall notify Tenant and Tenant shall conform to the Building standard. If Tenant fails to do so within a reasonable period of time following notice from Landlord, Landlord may (at Tenant's expense), if reasonably possible, install additional electrical equipment such as (but not limited to) panel boards, transformers, and switchgear (the "Additional Electrical Equipment") as necessary to accommodate the aforesaid requirements. If the Additional Electrical Equipment is installed, then Landlord may install meter(s) (at Tenant's expense) as deemed necessary by Landlord to measure the electri cal power provided through the Additional Electrical Equipment.

(c) If Tenant uses any services in an amount or for a period in excess of that provided for herein, Landlord also reserves the right to charge Tenant as Additional Rent a reasonable sum as reimbursement for the direct cost of such added services plus five percent (5%) for Landlord's overhead. In the event of disagreement as to the reasonableness of such additional charge, the opinion of the appropriate local utility company or an independent professional engineering firm selected by Landlord shall prevail.

(d) Unless due to Landlord's gross negligence or willful misconduct (in which case Landlord may be liable for direct damages, and direct damages only, incurred by Tenant), Landlord shall not be liable for any damages directly or indirectly, and Tenant shall have no right of set-off or reduction in Rent, resulting from any interruption in connection with the furnishing of services or utility services referred to herein, including, but not limited to, any interruption in services or utility services due to breakage, shortage of labor, shortage of fuel or for any other cause. Without limitation on the foregoing, under no circumstances shall Landlord incur liability for damages caused directly or indirectly by any malfunction of Tenant's computer systems resulting from or arising out of the failure or malfunction of any electrical, air conditioning or other system serving the Building, and Tenant hereby expressly waives the right to make any such claim against Landlord. In no event shall Landlord be liable for special, exemplary or consequential damages.

(e) During the Term, Landlord shall perform in a good and workmanlike manner in compliance with all applicable Legal Requirements, all maintenance, repairs and replacements to:  the structural components of the Premises, including without limitation the roof, roofing system, exterior walls, bearing walls, support beams, foundations, columns, exterior doors and windows and lateral support to the Premises;  assure water tightness of the Premises (including caulking of the flashings) and repairs to the roof, roofing system, curtain walls, windows, and skylights if required to assure water tightness;  the plumbing, fire sprinkler, heating, ventilation and air conditioning systems, electrical and mechanical lines and equipment associated therewith;  elevators;  the exterior improvements to the Property, including walkways, shrubbery and landscaping;  the glass including cleaning and replacements; and  at no cost to Tenant and excluding the same from Operating Expenses, the P remises caused by the gross negligence or willful misconduct of Landlord, its agents, independent contractors, representatives or employees. Notwithstanding the foregoing, all electrical wiring and equipment in the Premises after the same leave the main circuit breaker board and enter the Premises shall be the responsibility of Tenant.

(f) Landlord shall have no obligation or liability with respect to or in any way connected with the Premises, or service to the Premises, except as set forth in this Lease. Landlord shall not be deemed to have committed a breach of any repair obligations unless it makes repairs negligently or fails or omits to make repairs which are its obligation under this Lease.

9. HAZARDOUS WASTES/ENVIRONMENTAL COMPLIANCE.

(a) Definitions. As used in this Paragraph, the following terms have the indicated meanings:

(i) "Hazardous Material" means any chemical, compound, material, mixture, living organism or substance that is now or hereafter defined or listed in, or otherwise classified pursuant to, any Environmental Laws as a "hazardous substance", "hazardous material", "hazardous waste", "extremely hazardous waste", "infectious waste", "toxic substance", "toxic substance", "toxic pollutant" or any other formulation intended to define, list or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity or toxicity, including any petroleum polychlorinated biphenyls ("PCBs"), asbestos, radon, natural gas, natural gas liquids, liquefied natural gas or synthetic gas usable for fuel (or mixtures of natural gas and such synthetic gas).

(ii) "Environmental Laws" means any and all present and future federal, state and local laws (whether under common law, statute, rule, regulation or otherwise), requirements under permits issued with respect thereto, and other requirements of any "Governmental Authority" relating to any Hazardous Material or to any activity involving a Hazardous Material, including without limitation the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq., the Clean Water Act, 33 U.S.C. 1251 et seq., the Clean Air Act, 42 U.S.C. 7401 et seq., the Toxic Substance Control Act, 15 U.S.C. 2601 et seq., and the Safe Drinking Water Act, 42 U.S.C. 300f through 300j, as all of the foregoing may be amended from time to time.

(iii) "Governmental Authority" means all federal, state, and local governmental agency, authorities, and courts.

(iv) "Remedial Work" means any investigation, monitoring, cleanup, containment removal, storage, or restoration work and any loss, cost, expense, claim or liability arising out of such work.

(b) Warranties. Throughout the term of this Lease, Tenant shall: (i) prevent the presence, use, generation, release, discharge, storage, disposal, or transportation of any Hazardous Materials on, under, in, above, to, or from the Premises, the Building or the Property, by Tenant, its agents, independent contractors, representatives and employees, other than in strict compliance with all applicable Environmental Laws and the terms of this Lease: (ii) conduct all activities of Tenant and of its agents, independent contractors, representatives and/or employees on the Premises in accordance with applicable Environmental Laws; (iii) not conduct any activities of Tenant and of its agents, independent contractors, representatives and/or employees on the Premises, the Building or the Property which is regulated as an activity subject to pre-treatment standards pursuant to 40 C.F.R. Section 403 et. seq.; (iv) obtain all permits required for its operations under any Environmental Law (and, if request ed by Landlord, provide copies of permits, amendments and variances thereto to Landlord); (v) not conduct any operations of Tenant or of its agents, independent contractors, representatives and/or employees as to constitute hazardous waste treatment storage or disposal facilities pursuant to 42 U.S.C. Section 6924 or other similar Environmental Law; (vi) not install or operate, any underground storage tank; (vii) not install or operate any underground injection well; and (viii) conduct its operations and activities so as to not disrupt or interfere with any tenants of Landlord.

(c) Tenant's Indemnification. Tenant shall indemnify, defend, and hold Landlord harmless from and against: (i) any Remedial Work required under any Environmental Law or by any Governmental Agency in the Premises due to the activities of Tenant and/or its agents, independent contractors, representatives and/or employees or with respect to any activities of Tenant and/or its agents, independent contractors, representatives and/or employees in the Property, (ii) any breach of this Paragraph 9 of this Lease; and (iii) any claims of third parties for loss, injury, expense, or damage arising out of the presence, release, or discharge of any Hazardous Materials on, under, in, above, to, or from the Premises, or in the Property if due to the activities of Tenant. In the event any Remedial Work is so required under any applicable federal, state, or local law, rule, regulation or order due to the activities of Tenant and/or its agents, independent contractors, representatives and/or employees, Tenant s hall promptly perform or cause to be performed such Remedial Work in compliance with such law, rule, regulation, or order. In the event Tenant shall fail to commence the Remedial Work in a timely fashion, or shall fail to prosecute diligently the Remedial Work to completion, such failure shall constitute an event of default on the part of Tenant under the terms of this Lease, and Landlord, in addition to any other rights or remedies afforded it hereunder, may, but shall not be obligated to, cause the Remedial Work to be performed, and Tenant shall promptly reimburse Landlord for any and all costs and expenses, including attorneys fees, related thereto upon demand. This provision shall expressly survive the expiration or earlier termination of the Lease. Landlord and Landlord's representatives are authorized to enter the Premises at any time to inspect the Remedial Work. Tenant shall keep Landlord apprised of all efforts to perform the Remedial Work and shall provide Landlord with copies of all correspondence , reports, or other documents pertaining to the Remedial Work within 48 hours of Tenant's receipt of such documentation.

(d) Notice. Tenant shall:

(i) within 24 hours after receipt of any notice, demands, lawsuits, or other correspondence (collectively, "Notices") from any Government Agency or private party with respect to Hazardous Materials or knowledge of any Notice or any of the circumstances described below, notify Landlord and provide Landlord with all copies of any such Notices and any other information known by Tenant, including, but not limited to, the following:

(A) The violation of any Environmental Law;

(B) The loss of any permit issued in accordance with any Environmental Law;

(C) Any action undertaken by any Government Agency or private party under or in accordance with any Environmental Law;

(D) The institution of any lawsuit under or in accordance with any Environmental Law by any Governmental Authority or any private party; or

(E) The service of a potentially responsible party demand letter from any private or Governmental party or Governmental Authority.

(ii) Notify Landlord immediately of any release, threatened release or discharge of Hazardous Materials on, under, to or from the Leased Premises, the Building or the Property.

(e) Right of Entry, Inspection, and Testing. Except in the event of any emergency (when Landlord may enter without notice of any kind provided that it will endeavor to give notice in advance or immediately thereafter if reasonable to do so), Landlord and its agents shall have the right to enter the Premises upon 24 hours notice to Tenant and inspect the Premises and Tenant's business operations. Landlord's entry and inspection shall not interfere with Tenant's normal business operations. Landlord shall be permitted to conduct tests and take samples at the Premises.

(f) Existing Environmental Building Materials. Tenant acknowledges that the Project may contain building materials which include asbestos containing materials and wall coverings which may include lead-based paints("Existing Environmental Building Materials"). As of the date of this Lease, the Existing Environmental Building Materials do not violate applicable laws. Tenant accepts that fact that the Project may contain the Existing Environmental Building Materials. Landlord agrees to indemnify and hold Tenant harmless from any costs, expenses, or liabilities, including reasonable attorneys' fees, which may arise during the Term in connection with the Existing Environmental Building Materials.

(g) Landlord's Indemnification. Landlord agrees to indemnify and hold harmless Tenant from and against any loss, injury, expense or damage incurred or suffered by Tenant arising out of or from any Hazardous Materials introduced onto the Property by Landlord.

(h) Confirmation of Lucent Indemnification. Landlord agrees to provide Tenant with a confirmation in the form attached hereto as Exhibit I of the agreement of Lucent Technologies Inc. to extend to Tenant the benefit of Lucent's indemnification obligations set forth in that certain Environmental Representations, Warranties, Indemnification and Release Agreement dated September 26, 1997 between Lucent Technologies Inc. and Landlord.

(i) Rent Abatement. In the event the performance of any Remedial Work in the Premises, the need for which did not arise out of any activities of Tenant and/or its agents, independent contractors, representatives and/or employees in the Property, renders the Premises untenantable in whole or in part (as determined by an independent architect mutually acceptable to Landlord and Tenant), then so long as any portion of the Premises remains untenantable, and provided Tenant does not occupy any portion of the Premises that is untenantable during such period of untenantability, the Rent, Additional Rent and other periodic charges due from Tenant under this Lease shall abate in proportion to that portion of the Premises that is untenantable.

10. ASSIGNMENT AND SUBLEASE.

(a) Except as set forth herein, Tenant shall not sublet any part of the Premises, nor assign, pledge or encumber this Lease or any interest herein, without the prior written consent of Landlord, which consent may not be unreasonably withheld by Landlord. Landlord shall be entitled to deny consent to an assignment or sublease if, by way of illustration but not limitation, the financial statements of the proposed assignee or sublessee are unsatisfactory. Consent by Landlord to one assignment or sublease shall not destroy or waive this provision, and all later assignments and subleases shall likewise be made only upon prior written consent of Landlord. In the event a sublease or assignment is consented to by Landlord, any sublessees or assignees shall become liable directly to Landlord for all obligations of Tenant hereunder without relieving or in any way modifying Tenant's liability hereunder, but rather Tenant and its transferee shall be jointly and severally liable therefor. In the event Landlord gives its consent to any such assignment or sublease, fifty percent (50%) of any rent or other cost to the assignee or subtenant, less reasonable expenses incurred by Tenant to effectuate the assignment or sublease (including, but not limited to, brokerage commissions and tenant allowances or concessions), for all or any portion of the Premises over and above the Rent payable by Tenant for such space shall be due and payable, and shall be paid, to Landlord. In the event a sublease or assignment is made as herein provided, Tenant shall pay Landlord a charge equal to the actual costs incurred by Landlord, in Landlord's reasonable judgment (including, but not limited to, the use and time of Landlord's personnel), for all of the necessary legal and accounting services required to accomplish such assignment or subletting, as the case may be. Any transfer, assignment or sublease of all or any portion of the Premises or Tenant's interest under this Lease made without Landlord's consent shall be void and of no fo rce or effect. Landlord's consent to any sublease or assignment hereunder shall not waive Landlord's rights as to any subsequent sublease or assignment.

(b) Landlord may, within thirty (30) days after submission of Tenant's written request for Landlord's consent to an assignment or subletting, cancel this Lease as to the portion of the Premises proposed to be sublet or assigned as of the date such proposed transfer is to be effective. If Landlord cancels this Lease as to any portion of the Premises, then this Lease shall cease for such portion of the Premises and Tenant shall pay to Landlord all Rent accrued through the cancellation date relating to the portion of the Premises covered by such proposed transfer. Thereafter, Landlord may lease such portion of the Premises to the prospective transferee (or to any other person) without liability to Tenant.

(c) Unless Tenant is a publicly traded corporation or partnership, the sale or transfer of Tenant's voting stock (if a corporation) or partnership interests (if a partnership) resulting in the transfer of control of a majority of such stock or interests shall be deemed an assignment of this Lease requiring the prior written consent of Landlord. Further, unless Tenant is a publicly traded corporation or partnership and the surviving entity of any merger or consolidation involving Tenant is also a publicly traded entity, the occupancy of the Premises by any successor firm of Tenant or by any firm into which or with which Tenant may become merged or consolidated shall be deemed an assignment of this Lease requiring the prior written consent of Landlord.

(d) Any assignment or sublease by Tenant to a Tenant Affiliate (as such term is defined below) shall be made on prior notice to Landlord but shall not require the consent of Landlord. Any such sublease or assignment shall otherwise be subject to all of the terms and conditions of this Paragraph 10. For purposes of this Lease, the term "Tenant Affiliate" shall mean any parent or wholly owned subsidiary of Tenant or any corporation succeeding to substantially all of the assets of Tenant by way of sale, merger or other reorganization, provided that the successor has a tangible net worth equal to or better than the tangible net worth of Tenant as of the date of this Lease.

(e) In the event of any assignment of this Lease or sublease of all or part of the Premises, Tenant shall not be released from any of its obligations under this Lease.

11. DAMAGE OR DESTRUCTION.

(a) Tenant shall promptly notify Landlord of any damage to the Premises or the Building occasioned by fire, the elements, casualty or any other cause. If more than twenty-five percent (25%) of the Premises are destroyed or substantially damaged by storm, fire, earthquake or other casualty or any other cause, either Landlord or Tenant shall have the option to cancel this Lease as of the date of the occurrence of the storm, earthquake, fire or other casualty or any other cause by giving written notice to the other within sixty (60) days from the date of such damage or destruction.

If the option to cancel this Lease is not elected by either Landlord or Tenant, then Landlord shall commence the process of restoration of the Premises (as limited by 11(d) below) to a tenantable condition within sixty (60) days from the date of receipt by Landlord of all of the insurance proceeds paid with respect to such casualty, and proceed with due diligence to complete said restoration of the Premises using standard working methods and procedures.

In the event Landlord fails to complete such restoration with reasonable diligence within two hundred forty (240) days of the date of receipt by Landlord of all of the insurance proceeds paid with respect to such casualty, as described above, this Lease may be terminated upon written notice from either party to the other given not more than ten (10) days following the expiration of said two hundred forty (240) day period. In the event such notice is not given, then this Lease shall remain in force and effect and Rent shall commence upon delivery of the Premises to Tenant in a tenantable condition (evidenced by notice to Tenant that the Premises are in Landlord's judgment substantially repaired). In the event such damage or destruction occurs within six (6) months of the expiration of the Term, Tenant may, at its option on written notice to Landlord given within thirty (30) days of such destruction or damage, terminate this Lease as of the date of such destruction or damage. Tenant shall not have th e right to cancel this Lease if the damage to the Premises is the result of Tenant's willful misconduct.

(b) Unless this Lease is terminated pursuant to Paragraph 11(a) above, in the event of damage to the Premises or the Building occasioned by fire, the elements, casualty or any other cause, Landlord shall, subject to the rights of Landlord's mortgagee and zoning laws and building codes then in existence, commence and thereafter pursue diligently and as expeditiously as practicable, the repair and restoration of damage to the Premises, using standard working methods and procedures; provided, however, that for purposes of this Paragraph 11, Landlord shall not be obligated to commence any repair or restoration unless and until insurance proceeds are actually received by Landlord and Landlord's repair obligations shall be limited to the extent of the insurance proceeds actually received by Landlord therefor which have not been required by the holder of any mortgage or deed to secure debt encumbering any portion of the Property to be applied toward the reduction of any indebtedness secured by the Prop erty. Notwithstanding the foregoing, if Landlord fails to complete the restoration within three hundred sixty (360) days from the date of the casualty, then Tenant may, by written notice to Landlord given at any time prior to the earlier of (i) thirty (30) days after the expiration of such three hundred sixty (360) day period, and (ii) completion of repairs and restoration, terminate this Lease.

(c) To the extent Landlord receives proceeds under its loss of rents insurance coverage, and only to such extent (unless a failure of Landlord to receive loss of rents proceeds is due to a failure of Landlord to maintain loss of rents insurance equal to twelve (12) months rent for the gross rent roll of the Project), the Rent, Additional Rent and other periodic charges due from Tenant under this Lease shall abate in proportion to that part of the Premises rendered unfit for use in Tenant's business as a result of such damage or casualty. The nature and extent of interference to Tenant's ability to conduct business in the Premises shall be considered in determining the amount of said abatement, and the abatement shall commence and continue from the date the damage occurred until ten (10) days after the date Landlord substantially completes the repair and restoration of the Premises and gives notice to Tenant that said repairs and restoration are substantially completed, or until Tenant again uses the Prem ises or the portions thereof rendered unusable, whichever occurs first.

(d) Notwithstanding anything to the contrary contained or implied elsewhere in this Lease, Landlord is not and shall not be obligated to repair or restore damage to Tenant's trade fixtures, furniture, furnishings, equipment or other personal property, or any Tenant's Work or other improvements made to the Premises by Tenant.

(e) If during the Term of this Lease, the Building is so damaged by fire or other casualty or any other cause (regardless of whether the Premises also are damaged) such that (i) in Landlord's reasonable judgment repair and restoration of the Building is not economically feasible; (ii) the holder of any mortgage or deed to secure debt encumbering the Building or the Property shall not allow adequate insurance proceeds to be made available for repair and restoration; (iii) the damage is not covered by Landlord's insurance; (iv) the zoning laws or building codes then in existence will not permit the reconstruction of the Building as of right (without variance); or (v) the Lease is in the last twelve (12) months of its Term, then Landlord may cancel this Lease by giving written notice thereof within sixty (60) days after Landlord knows of the damage to the Building or said mortgagee notifies Landlord of its decision regarding the use of insurance proceeds for restoration, whichever is later. Any such cancellation notice must specify the cancellation date, which shall be at least thirty (30) but no more than sixty (60) days after the date notice of cancellation is given.

EX-10

SECOND MODIFICATION AND EXTENSION AGREEMENT

THIS SECOND MODIFICATION AND EXTENSION AGREEMENT ("Second Modification") is entered into as of March 26, 2002, by and between COMMERCE BANK, N.A. ("Bank") and LABONE, INC. ("Company")

WITNESSETH:

WHEREAS, pursuant to that certain Letter Agreement dated December 17, 2002, by and between Bank and Company, as modified by that certain Modification and Extension Agreement dated March 8, 2002 ("First Modification"), Bank agreed to extend a Line of Credit to Company in the maximum principal amount of $35,000,000, and to make advances to Company, subject to certain terms, limitations and conditions contained therein;

WHEREAS, to evidence the borrowings and the related obligations under the Line of Credit, Company has delivered to Bank that certain Line of Credit Note ("Note") dated of even date with the Letter Agreement;

WHEREAS, pursuant to the terms of the Letter Agreement, Company's right to request advances from Bank automatically terminated on March 10, 2002 ("Termination Date"), and all sums outstanding on such date were due and payable in full; and

WHEREAS, Bank and Company have agreed to further modify the Letter Agreement and the Note as hereinafter set forth.

NOW, THEREFORE, for and in consideration of the mutual covenants and agreements herein contained, Bank and Company do hereby mutually agree as follows:

1. Terms used herein, which are defined in the Letter Agreement, shall have the meanings given to them in the Letter Agreement.

2. The third paragraph of the Letter Agreement, titled "Repayment, Maturity", is hereby further modified by deleting the date "March 31, 2002" and inserting in lieu thereof the date "May 31, 2002". The Note is hereby further modified consistent with the foregoing modification.

3. Except as modified herein and by the First Modification, all other terms, provisions, conditions and obligations imposed under the terms of the Letter Agreement and Note shall remain in full force and effect and are hereby ratified and certified by Bank and Company.

4. This Second Modification shall be governed by, and construed in accordance with, the laws of the State of Missouri.

IN WITNESS WHEREOF, Bank and Company have executed this Second Modification as of the date first above written.

COMMERCE BANK, N.A.

By: /s/ Pam Hill
Title: Vice President

LABONE, INC.

By: /s/ John McCarty
Title: Exec. VP and CFO

Acknowledged:

By the execution hereof, the undersigned hereby acknowledge that their respective obligations under the Corporate Guaranty executed by each of them shall also apply to the Letter Agreement and Note as modified by the terms hereof.

SYSTEMATIC BUSINESS SERVICES, INC.

By: /s/ John McCarty
Title: Exec. VP and CFO

EXAMONE WORLD WIDE, INC.

By: /s/ John McCarty
Title: Exec. VP and CFO