Document:

Enhanced Overnight Share Repurchase

 Exhibit 10.1 
  
 December 7, 2005 
  
 Laboratory Corporation of America Holdings 
 358 South Main Street 

Burlington, North Carolina 27215 
  

	 	Re:	Enhanced Overnight Share Repurchase 
(Reference Number NY-20574) 

  
 Ladies and Gentlemen: 
  
 SECTION 1. Initial Shares; Seller’s Initial Hedge. 
  

(a) Bank of America, N.A. (the “Seller”) will sell to Laboratory Corporation of America Holdings, a Delaware corporation (the
“Company”), and the Company will purchase from the Seller for settlement on December 12, 2005 (the “Purchase Date”), 4,803,996 shares (the “Initial Shares”) of common stock, par value $0.10 per share, of the Company (the “Common Stock”) at a purchase price (the “Purchase
Price”) equal to the number of the Initial Shares multiplied by $52.04. Such sale shall be effected in accordance with the Seller’s customary procedures. 
  
 (b) In connection with its purchase of the Initial Shares, and in addition to the payment of the Purchase Price, the Company
will pay on the Purchase Date a brokerage fee of $0.03 per Initial Share to Banc of America Securities LLC (“BAS”), which is registered as a broker and a dealer under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). 
  
 (c) Following the Purchase
Date, the Seller shall establish the Seller’s initial hedge of the price and market risk of the transactions contemplated hereby as a result of the Cap Price (the “Seller’s Initial Hedge”) (it being understood that the
Seller’s Initial Hedge shall not include the sale and purchase of the Initial Shares pursuant to Section 1(a) above). Subject to Section 7(b) below, upon the completion of the Seller’s Initial Hedge, the Seller shall determine the Cap
Price, the Hedge Execution Price and the Premium in the manner set forth below based on the Seller’s Initial Hedge, and shall deliver to the Company a supplemental terms notice substantially in the form of Appendix C hereto (the
“Supplemental Terms Notice”) within two Business Days following the completion of the Seller’s Initial Hedge. 

 (d) In addition, in consideration of the terms contained in this Letter Agreement, the Company hereby
agrees to pay the Premium to the Seller on the Premium Payment Date specified in the Supplemental Terms Notice, subject to Section 7(b) below. 
  
 SECTION 2. Definitions. 
  
 As used in this Letter Agreement, the following terms shall have the following meanings: 
  
 “Announcement Date” means the date of first public announcement of any corporate event involving the
Company or the Common Stock that, in the determination of the Calculation Agent, is, as of such date, or becomes at any date subsequent to such date but on or prior to the last day of the Averaging Period, a Friendly Transaction, or the first date
of public announcement by the Company that the Company is engaged in discussions with another party concerning a potential Friendly Transaction or is considering strategic alternatives that, if consummated, would be or include a Friendly Transaction
(as determined by the Calculation Agent in its reasonable discretion). 
  
 “Averaging Period” means the period of consecutive Trading Days commencing on the first Trading Day immediately following the Trade Date and ending on June 13, 2006; provided that the Seller may, in its absolute
discretion, accelerate the last day of the Averaging Period to any Trading Day on or after April 12, 2006 upon written notice to the Company (it being understood that such notice may be given on the same date that the Seller elects to be the last
day of the Averaging Period). 
  
 “Average Purchase
Price” means the arithmetic average of the Daily Average Prices for all Trading Days during the Averaging Period. 
  
 “BAS” has the meaning specified in Section 1(b). 
  

“Business Day” means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law or regulation to close in The City of New York. 
  
 “Calculation Agent” means BAS. 
  
 “Cap Fair Market Value” means the fair market value on the Measurement Date, as determined by the Calculation Agent, of a call option, written by the Seller, with a settlement amount equal to the
excess, if any, of the product of 0.50 and the Repurchase Cost (calculated without regard to the proviso to the definition thereof) over the product of 2,401,998 and the Cap Price, and a settlement date equal to the date that the Calculation Agent,
in its good faith reasonable discretion, as of the Measurement Date, expects will be the last day of the Averaging Period. 
  
 “Cap Price” means the price per share specified as such in the Supplemental Terms Notice, which shall be equal to 115% of the Hedge
Execution Price. 
  
 “Common Stock” has the
meaning specified in Section 1(a). 
  
 “Company”
has the meaning specified in Section 1(a). 
  
 “Daily
Average Price” means (i) for any Trading Day in the Averaging Period, the Reported VWAP for such Trading Day minus $0.70 or (ii) for any Trading Day in the Valuation 

  

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Period, the dollar volume weighted average price per share of Common Stock for that Trading Day based on transactions executed by the Seller or its
designated affiliate during that Trading Day in connection with the settlement of this Letter Agreement. 
  
 “Designee” has the meaning specified in Section 15. 
  
 “Exchange” means, at any time, the principal national securities exchange or automated quotation system, if
any, on which the Common Stock is listed or quoted at such time. 
  
 “Exchange Act” has the meaning specified in Section 1(b). 
  
 “Federal Funds Rate” means, for any day, the rate on such day for Federal Funds, as published by Bloomberg and found by pressing the following letters “FEDSOPEN” followed by pressing the
<Index> key and pressing the following letters “HP” followed by pressing the <Go> key; provided that if any such day is not a New York Banking Day, the Federal Funds Rate for such day shall be the Federal Funds Rate for
the immediately preceding New York Banking Day. 
  
 “Friendly Transaction” means any Merger Event or Tender Offer that is approved, agreed to or recommended by the Company or its board of directors, or negotiated by the Company or any authorized representative of the
Company, including without limitation (i) any transaction involving the merger of the Company with or into any third party and (ii) any transaction in which the Company or its board of directors has a legal obligation to make a recommendation to its
shareholders in respect of such transaction (whether pursuant to Rule 14e-2 under the Exchange Act or otherwise) and does not recommend that its shareholders reject such transaction. 
  
 “Hedge Execution Price” means the price per share specified as such in the Supplemental Terms Notice, which
shall be equal to the net volume weighted average price per share at which the Seller executes the Seller’s Initial Hedge, as determined by the Calculation Agent. 
  
 “Initial Shares” has the meaning specified in Section 1(a). 
  
 “ISDA Definitions” means the 2002 ISDA Equity Derivatives
Definitions, as published by the International Swaps and Derivatives Association, Inc. 
  
 “Make-Whole Payment Shares” has the meaning specified in Section 5(c). 
  
 “Maximum Deliverable Number” means 15,000,000, subject to adjustment pursuant to Section 7(a). 
  
 “Measurement Date” means the tenth Business Day prior to the
Announcement Date. 
  
 “Merger Event” has the
meaning specified in the ISDA Definitions. For purposes of the ISDA Definitions, the Shares are shares of Common Stock, the Issuer is the Company, the Merger Date shall be deemed to be the Announcement Date and the final Valuation Date shall be
deemed to be the last day of the Averaging Period. 
  
 “New York Banking Day” means any day except for a Saturday, Sunday or a day on which the Federal Reserve Bank of New York is closed. 
  

“Payment Shares” means Restricted Payment Shares or Make-Whole Payment Shares. 
  

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 “Premium” means the amount specified as such in the Supplemental Terms Notice, which
shall be an amount equal to the product of (i) 2,401,998 multiplied by (ii) the Hedge Execution Price multiplied by (iii) 1.2%. 
  
 “Premium Payment Date” means the date specified as such in the Supplemental Terms Notice, which shall be the third Business Day following
the completion of the Seller’s Initial Hedge. 
  
 “Private Placement Agreement” has the meaning specified in Section 6(a)(iii). 
  
 “Purchase Date” has the meaning specified in Section 1(a). 
  
 “Purchase Price” has the meaning specified in Section 1(a). 
  
 “Refund Shares” has the meaning specified in Section
5(a)(i)(A). 
  
 “Regulation M” means Regulation M
under the Exchange Act. 
  
 “Remaining Scheduled
Days” means the scheduled number of Trading Days remaining in the Averaging Period or the Valuation Period as of the time of any suspension of the Averaging Period or the Valuation Period, as the case may be. 
  
 “Reported VWAP” means, for any Trading Day, the dollar
volume weighted average price per share of Common Stock for that Trading Day based on transactions executed during that Trading Day on the Exchange, excluding (i) transactions that do not settle regular way, (ii) opening transactions (regular way)
reported in the consolidated system, (iii) transactions effected during the 10 minutes before the scheduled close of trading on the Exchange and 10 minutes before the scheduled close of the primary trading session in the market where the transaction
is effected and (iv) transactions on such day that do not satisfy the requirements of Rule 10b-18(b)(3) under the Exchange Act (in each case as determined by the Calculation Agent), as reported on Bloomberg Page “LH.N <Equity> AQR
SEC” (or any successor thereto) or, in the event such price is not so reported on such Trading Day for any reason, as reasonably determined by the Calculation Agent. 
  
 “Repurchase Cost” means the product of (i) the Average Purchase Price multiplied by (ii) the number
of Initial Shares; provided that, if such sum is greater than the product of the Cap Price and the number of the Initial Shares, the Repurchase Cost shall be the sum of (x) the Cap Price multiplied by 2,401,998 plus (y) the
Repurchase Cost calculated without regard to this proviso multiplied by 0.50. 
  
 “Requirements” has the meaning specified in Section 3(b). 
  
 “Restricted Payment Shares” has the meaning specified in Section 5(a)(ii). 
  
 “Restricted Share Amount” means the quotient of (i) the absolute value of the Settlement Amount divided
by (ii) the Restricted Share Value of a Restricted Payment Share. 
  
 “Restricted Share Value” means, with respect to any Restricted Payment Shares or Make-Whole Payment Shares, 95% of the value thereof per share to the Seller, determined by the Calculation Agent by commercially reasonable
means. 
  
 “Rule 10b-18” means Rule 10b-18 under
the Exchange Act. 
  

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 “Securities Act” means the Securities Act of 1933, as amended. 
  
 “Seller” has the meaning specified in Section 1(a).

  
 “Seller’s Initial Hedge” has the meaning
specified in Section 1(c). 
  
 “Settlement
Amount” means an amount equal to (i) the Purchase Price minus (ii) the Repurchase Cost, subject to adjustment as provided in Section 7(b). 
  
 “Settlement Balance” has the meaning specified in Section 5(c). 
  
 “Settlement Day” means any day that is not a Saturday, a Sunday or a day on which banking institutions or
trust companies in The City of New York are authorized or obligated by law or executive order to close. A Settlement Day “corresponds” to a Trading Day if it is the day for settlement of regular way transactions for equity securities
entered into on the Exchange on that Trading Day. 
  
 “Share Amount” means, for any Trading Day, the quotient of (i) the product of (A) the Valuation Fraction multiplied by (B) the absolute value of the Settlement Amount, divided by (ii) the Daily Average Price
for that Trading Day. 
  
 “Supplemental Terms
Notice” has the meaning specified in Section 1(c). 
  
 “Tender Offer” has the meaning specified in the ISDA Definitions. For purposes of the ISDA Definitions, the Issuer is the Company. 
  
 “Trade Date” means the date of completion of the Seller’s Initial Hedge (as determined by the Seller in good faith). 
  
 “Trading Day” means any day (i) other than a Saturday, a
Sunday or a day on which the Exchange is not open for business, (ii) during which trading of any securities of the Company on any national securities exchange has not been suspended and (iii) during which there has not been, in the Calculation
Agent’s judgment, a material limitation in the trading of Common Stock. 
  
 “Valuation Fraction” means a fraction, the numerator of which is one and the denominator of which is the number of Trading Days in the Valuation Period. 
  
 “Valuation Period” means, in the case of settlement pursuant
to Sections 5(a)(i)(A) or 5(a)(ii)(A), the period commencing on the first Trading Day immediately following the final day of the Averaging Period. The number of Trading Days in the Valuation Period shall be determined by the Seller in its discretion
and notified to the Company by the Seller prior to the commencement of the Valuation Period. Without limiting the generality of Section 3(b), in the case of settlement pursuant to Section 5(a)(i)(A), the number of Trading Days in the Valuation
Period shall be a number of Trading Days that the Seller reasonably expects, based on information provided to the Seller by the Company and readily available market information, will result in Share Amounts for each Trading Day during the Valuation
Period that will be less than or equal to the maximum number of shares of Common Stock that the Company could have purchased on such Trading Day in compliance with the conditions set forth in Rule 10b-18. For the avoidance of doubt, if the Company
elects either to receive a cash payment pursuant to Section 5(a)(i)(B) or make a cash payment pursuant to Section 5(a)(ii)(B), there will be no Valuation Period. 
  

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 SECTION 3. Seller Purchases. 
  
 (a) The Initial Shares may be sold short to the Company. It is understood that during the Averaging Period the Seller shall
purchase shares of Common Stock in connection with this Letter Agreement, which shares may be used to cover all or a portion of such short sale and, if the Settlement Amount is greater than zero, during the Valuation Period the Seller will purchase
shares of Common Stock to fulfill its obligations to deliver Refund Shares to the Company pursuant to Section 5. Such purchases will be conducted independently of the Company. The timing of such purchases by the Seller, the number of shares
purchased by the Seller on any day, the price paid per share of Common Stock pursuant to such purchases and the manner in which such purchases are made, including without limitation whether such purchases are made on any securities exchange or
privately, shall be within the absolute discretion of the Seller. It is the intent of the parties that this transaction comply with the requirements of Rule 10b5-1(c)(1)(i)(B) of the Exchange Act, and the parties agree that (i) this Letter Agreement
shall be interpreted to comply with the requirements of Rule 10b5-1(c), and (ii) they shall take no action that results in this transaction not so complying with such requirements. Without limiting the generality of the preceding sentence, the
Company acknowledges and agrees that (A) the Company does not have, and shall not attempt to exercise, any influence over how, when or whether the Seller effects any purchases of Common Stock in connection with this Letter Agreement, (B) during the
period beginning on (but excluding) the date of this Letter Agreement and ending on the last day of the Valuation Period, if any, neither the Company nor its officers or employees shall, directly or indirectly, communicate any information regarding
the Company or the Common Stock to any employee of the Seller or its affiliates responsible for trading the Common Stock in connection with the transactions contemplated hereby, (C) the Company is entering into this Letter Agreement in good faith
and not as part of a plan or scheme to evade compliance with federal securities laws including, without limitation, Rule 10b-5 promulgated under the Exchange Act and (D) the Company will not alter or deviate from this Letter Agreement or enter into
or alter a corresponding hedging transaction with respect to the Common Stock. The Company also acknowledges and agrees that any amendment, modification, waiver or termination of this Letter Agreement must be effected in accordance with the
requirements for the amendment of a “plan” as defined in Rule 10b5-1(c) under the Exchange Act. Without limiting the generality of the foregoing, any such amendment, modification, waiver or termination shall be made in good faith and not
as part of a plan or scheme to evade the prohibitions of Rule 10b-5 under the Exchange Act, and no such amendment, modification, waiver or termination shall be made at any time at which the Company or any officer or director of the Company is aware
of any material nonpublic information regarding the Company or the Common Stock. 
  
 (b) In the event that the Seller reasonably determines that it is appropriate with regard to any legal, regulatory or self-regulatory requirements or related policies and procedures (whether or not such requirements,
policies or procedures are imposed by law or have been voluntarily adopted by the Seller, and including without limitation Rule 10b-18, Rule 10b-5, Regulation 13D-G and Regulation 14E under the Exchange Act, “Requirements”), for the
Seller to refrain from purchasing Common Stock or to purchase fewer than the number of shares of Common Stock that the Seller would otherwise purchase on any Trading Day during the Averaging Period or, if the Settlement Amount is greater than zero,
the Valuation Period, then the Seller may, in its discretion, elect that the Averaging Period or the Valuation Period, as the case may be, be suspended as appropriate with regard to any Requirements. The Seller shall notify the Company upon the
exercise of the Seller’s rights pursuant to this Section 3(b) and shall subsequently notify the Company on the day the Seller believes that the circumstances giving rise to such exercise have changed. If the Averaging Period or the Valuation
Period is suspended by the Seller pursuant to this Section 3(b), at the end of such suspension the Seller shall determine the number of Trading Days remaining in the Averaging Period or the Valuation Period, as the case may be, which number shall
not exceed the Remaining Scheduled Days as of the time of such suspension. 

  

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 (c) The Company agrees that neither the Company nor any of its affiliates or agents shall take any action
that would cause Regulation M to be applicable to any purchases of Common Stock, or any security for which the Common Stock is a reference security (as defined in Regulation M), by the Company or any of its affiliated purchasers (as defined in
Regulation M) during the Averaging Period or, if the Settlement Amount is greater than zero, the Valuation Period. 
  
 (d) The Company shall, at least one day prior to the first day of the Averaging Period, notify the Seller of the total number of shares of Common Stock
purchased in Rule 10b-18 purchases of blocks pursuant to the once-a-week block exception contained in Rule 10b-18(b)(4) by or for the Company or any of its affiliated purchasers during each of the four calendar weeks preceding the first day of the
Averaging Period and during the calendar week in which the first day of the Averaging Period occurs (“Rule 10b-18 purchase”, “blocks” and “affiliated purchaser” each being used as defined in Rule 10b-18), which notice
shall be substantially in the form set forth as Appendix B hereto. 
  
 (e) From the date hereof through the last day of the Averaging Period or, if the Settlement Amount is greater than zero, through the last day of the Valuation Period, the Company shall (i) notify the Seller prior to the opening of trading
in the Common Stock on any day on which the Company makes, or expects to be made, any public announcement (as defined in Rule 165(f) under the Securities Act) of any merger, acquisition, or similar transaction involving a recapitalization relating
to the Company (other than any such transaction in which the consideration consists solely of cash and there is no valuation period), (ii) promptly notify the Seller following any such announcement that such announcement has been made, and (iii)
promptly deliver to the Seller following the making of any such announcement a certificate indicating (A) the Company’s average daily Rule 10b-18 purchases (as defined in Rule 10b-18) during the three full calendar months preceding the date of
the announcement of such transaction and (B) the Company’s block purchases (as defined in Rule 10b-18) effected pursuant to paragraph (b)(4) of Rule 10b-18 during the three full calendar months preceding the date of the announcement of such
transaction. In addition, the Company shall promptly notify the Seller of the earlier to occur of the completion of such transaction and the completion of the vote by target shareholders. The Company acknowledges that any such public announcement
may cause the Averaging Period or Valuation Period, as the case may be, to be suspended pursuant to Section 3(b). Accordingly, the Company acknowledges that its actions in relation to any such announcement or transaction must comply with the
standards set forth in Section 3(a). 
  
 SECTION 4. Company
Purchases. 
  
 Without the prior written consent of the
Seller, which consent shall not be unreasonably withheld or delayed, the Company shall not, and shall cause its affiliates and affiliated purchasers (each as defined in Rule 10b-18) not to, directly or indirectly (including, without limitation, by
means of a cash-settled or other derivative instrument) purchase, offer to purchase, place any bid or limit order that would effect a purchase of, or commence any tender offer relating to, any shares of Common Stock (or an equivalent interest,
including a unit of beneficial interest in a trust or limited partnership or a depository share) or any security convertible into or exchangeable for shares of Common Stock during the period beginning on, and including, the Purchase Date and ending
on, and including, the date all payments or deliveries of shares pursuant to Section 5 below have been made; provided that purchases of shares of Common Stock effected by or for a plan of the Company by an agent independent of the issuer that
satisfy the requirements of 

  

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Rule 10b-18(a)(13)(ii) (“plan” and “agent of the issuer” each being used as defined in Rule 10b-18) shall not be subject to the
requirements of this sentence; provided further that, for purposes of this Section 4, the Seller hereby consents to the Rule 10b5-1 Stock Purchase Plan entered into between the Company and an affiliate of the Seller on the date of this Letter
Agreement. During such time, any purchases of Common Stock (or any security convertible into or exchangeable for shares of Common Stock) by the Company shall be made through BAS, which is an affiliate of the Seller, pursuant to a letter
substantially in the form of Appendix A hereto and subject to such conditions as the Seller shall impose, and shall be in compliance with Rule 10b-18 or otherwise in a manner that the Company and the Seller believe is in compliance with applicable
requirements (including, without limitation, Rule 10b-5, Regulation 13D-G and Regulation 14E under the Exchange Act). Notwithstanding the foregoing, the Seller acknowledges that directors, officers and employees of the Company shall be entitled, in
their discretion, to exercise stock options granted by the Company pursuant to existing equity compensation plans without restriction or obligation to the Seller or BAS hereunder. 
  
 SECTION 5. Purchase Price Adjustment and Settlement. 
  
 (a) After the expiration of the Averaging Period, 
  
 (i) if the Settlement Amount is greater than zero, as an adjustment to the Purchase Price, the Company shall
elect either for 
  
 (A) the Seller to transfer
to the Company, for no additional consideration, a number of shares of Common Stock equal to the sum of the Share Amounts for each of the Trading Days in the Valuation Period (the “Refund Shares”) in the manner provided in Section
5(b), or 
  
 (B) the Seller to make a cash
payment to the Company in immediately available funds in an amount equal to the Settlement Amount on the Settlement Day corresponding to the last Trading Day of the Averaging Period, and 
  
 (ii) if the Settlement Amount is less than zero, as an adjustment to the Purchase Price, the Company shall
elect to 
  
 (A) transfer to the Seller, for no
additional consideration, a number of shares of Common Stock, which will not be registered for resale, equal to the Restricted Share Amount (the “Restricted Payment Shares”) on the Settlement Day corresponding to the last Trading
Day of the Averaging Period in the manner provided in Section 5(b), and any Make-Whole Payment Shares as provided in Section 5(c), or 
  
 (B) make a cash payment to the Seller in immediately available funds in an amount equal to the absolute value of the Settlement Amount on
the Settlement Day corresponding to the last Trading Day of the Averaging Period. 
  
 The Company shall give written notice to the Seller not later than 10 Trading Days prior to the then scheduled last Trading Day of the Averaging Period of the Company’s election, if the Settlement Amount is
greater than zero, for the Seller to deliver Refund Shares or make a cash payment or, if the Settlement Amount is less than zero, for the Company to deliver Payment Shares or to make a cash payment. Once made, such election will be irrevocable. If
the Company fails to make such an election by the 

  

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election deadline, the Company shall have been deemed to have elected to receive or deliver, as the case may be, a cash payment. If the Company elects to
deliver Payment Shares pursuant to this Section 5(a)(ii), the Calculation Agent shall have the right to adjust the Settlement Amount to compensate the Seller for its cost of funds at the Federal Funds Rate during the Valuation Period. 
  
 (b) Delivery of Refund Shares or Restricted Payment Shares shall be made as
follows: 
  
 (i) if Refund Shares are to be
transferred to the Company, the Seller shall deliver the shares to the Company on the fourth Settlement Day following the last day of the Valuation Period, and 
  

(ii) if Restricted Payment Shares are to be transferred to the Seller, on the Settlement Day corresponding to the last Trading Day in
the Averaging Period, the Company shall deliver to the Seller a number of Restricted Payment Shares equal to the Restricted Share Amount, and the Company shall deliver any additional Make-Whole Payment Shares as provided in Section 5(c). 

 
 (c) If Restricted Payment Shares are delivered in accordance with Section
5(b)(ii), on the last Trading Day of the Averaging Period a balance (the “Settlement Balance”) shall be established with an initial balance equal to the absolute value of the Settlement Amount. Following the delivery of Restricted
Payment Shares or any Make-Whole Payment Shares, Seller shall sell all such Restricted Payment Shares or Make-Whole Payment Shares in a commercially reasonable manner. At the end of each Trading Day upon which sales have been made, the Settlement
Balance shall be reduced by an amount equal to 95% of the aggregate proceeds received by Seller upon the sale of such Restricted Payment Shares or Make-Whole Payment Shares. If, on any Trading Day, all Restricted Payment Shares and Make-Whole
Payment Shares have been sold and the Settlement Balance has not been reduced to zero, the Company shall (i) deliver to Seller or as directed by Seller on the Settlement Day corresponding to such Trading Day an additional number of Shares (the
“Make-Whole Payment Shares”) equal to (x) the Settlement Balance as of such Trading Day divided by (y) the Restricted Share Value of the Make-Whole Payment Shares or (ii) promptly deliver to Seller cash in an amount equal to the
then remaining Settlement Balance. This provision shall be applied successively until either the Settlement Balance is reduced to zero or the aggregate number of Restricted Payment Shares and Make-Whole Payment Shares equals the Maximum Deliverable
Number. 
  
 SECTION 6. Payment Shares. 
  
 (a) The Company may only deliver Restricted Payment Shares pursuant to
Section 5(a)(ii)(A) and Make-Whole Payment Shares pursuant to Section 5(c) subject to satisfaction of the following conditions: 
  
 (i) all Restricted Payment Shares and Make-Whole Payment Shares shall be delivered to the Seller (or any affiliate of the Seller
designated by the Seller) pursuant to the exemption from the registration requirements of the Securities Act provided by Section 4(2) thereof; 
  
 (ii) BAS, the Seller and any potential purchaser of any such shares from the Seller (or any affiliate of the Seller designated by the
Seller) identified by BAS or the Seller shall have been afforded a commercially reasonable opportunity to conduct a due diligence investigation with respect to the Company customary in scope for private placements of equity securities (including,
without limitation, the right to have made available to them for inspection all relevant financial and other records, pertinent corporate documents and other information reasonably requested by them); and 

  

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 (iii) an agreement (a “Private Placement Agreement”) shall have been
entered into between the Company and the Seller (or any affiliate of the Seller designated by the Seller) in connection with the private placement of such shares by the Company to the Seller (or any such affiliate) and the private resale of such
shares by the Seller (or any such affiliate), substantially similar to private placement purchase agreements customary for private placements of equity securities, in form and substance commercially reasonably satisfactory to the Seller, which
Private Placement Agreement shall include, without limitation, provisions substantially similar to those contained in such private placement purchase agreements relating to the indemnification of, and contribution in connection with the liability
of, the Seller and its affiliates, and shall provide for the payment by the Company of all fees and expenses in connection with such resale, including all fees and expenses of counsel for the Seller, and shall contain representations, warranties and
agreements of the Company reasonably necessary or advisable to establish and maintain the availability of an exemption from the registration requirements of the Securities Act for such resales. 
  
 If the Settlement Amount is less than zero and the Company has elected to deliver Restricted
Payment Shares and any of the above conditions is not satisfied as of the last Trading Day of the Averaging Period and on each date when any Make-Whole Payment Shares are to be delivered, the Company shall, in lieu of delivery of the Restricted
Payment Shares or such Make-Whole Payment Shares, as the case may be, make a cash payment to the Seller in immediately available funds in an amount equal to the absolute value of the Settlement Amount or the then remaining Settlement Balance, as the
case may be, in either case on the second Settlement Day following the date when such delivery would have otherwise been required and shall reimburse the Seller for all reasonable out-of-pocket expenses it incurs in connection with the anticipated
delivery of the Restricted Payment Shares or the Make-Whole Payment Shares, including, without limitation, the reasonable fees and expenses of outside counsel to the Seller incurred in connection thereof. 
  
 (b) If the Company elects to deliver Restricted Payment Shares pursuant to
Section 5(a)(ii)(A) above, the Company shall not take or cause to be taken any action that would make unavailable either (i) the exemption set forth in Section 4(2) of the Securities Act for the sale of any Restricted Payment Shares or Make-Whole
Payment Shares by the Company to the Seller or (ii) an exemption from the registration requirements of the Securities Act reasonably acceptable to the Seller for resales of Restricted Payment Shares and Make-Whole Payment Shares by the Seller.

  
 (c) If the Settlement Amount is less than zero and the Company
elects to deliver Restricted Payment Shares pursuant to Section 5(a)(ii)(A), then, if necessary, the Company shall use its best efforts to cause the number of authorized but unissued shares of Common Stock to be increased to an amount sufficient to
permit the Company to fulfill its obligations under Section 5 above. 
  
 (d) The Company expressly agrees and acknowledges that the public disclosure of all material information relating to the Company is within the Company’s control. 
  
 (e) Notwithstanding the provisions of Section 5(a) above, if the Company has elected to deliver any Payment Shares
hereunder, the Company shall not be required to deliver more than the Maximum Deliverable Number of shares of Common Stock as Payment Shares hereunder. 
  

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 SECTION 7. Adjustment of Terms. 
  
 (a) In the event (i) of any corporate event involving the Company or the Common Stock (including, without limitation, a
stock split, stock dividend, bankruptcy, insolvency, reorganization, Merger Event, Tender Offer, rights offering, recapitalization, spin-off or issuance of any securities convertible or exchangeable into shares of Common Stock), or the announcement
of any such corporate event, (ii) the Seller determines, in its reasonable discretion, after its exercise of commercially reasonable efforts, that it is unable or it is impracticable to establish, re-establish, substitute or maintain a hedge of its
position in respect of the transactions contemplated by this Letter Agreement or (iii) the Seller determines, in its reasonable discretion, that it is unable to borrow Common Stock at a rebate rate greater than or equal to zero basis points per
annum, then, in each case, the terms of the transaction (including, without limitation, the number of Trading Days in the Averaging Period, any Daily Average Price, the Cap Price and the Settlement Amount) described herein shall be subject to
adjustment by the Calculation Agent as in the exercise of its good faith judgment, applying commercially reasonable standards, it deems appropriate under the circumstances (including, without limitation, adjustments to account for the economics of
and changes in the price or volatility of the Common Stock following the announcement of any such corporate event). 
  
 (b) In the event that the Calculation Agent determines that an Announcement Date has occurred, then, in addition to any adjustments effected pursuant to
Section 7(a), (i) the definition of Repurchase Cost shall be amended by deleting the proviso thereto, effective as of the Announcement Date, and (ii) if the Announcement Date occurs during the Averaging Period, the Settlement Amount shall be
increased by an amount equal to the forward value on the last day of the Averaging Period of the Cap Fair Market Value, as reasonably determined by the Calculation Agent. In addition, in the event that the Calculation Agent determines prior to the
date the Supplemental Terms Notice is executed that the Announcement Date for a Friendly Transaction has occurred, then the parties shall not be obligated to execute the Supplemental Terms Notice and the Company shall not be obligated to pay the
Premium to the Seller. 
  
 (c) Notwithstanding the authority
provided to the Calculation Agent in subsections (a) and (b) of this Section 7, in the event of a corporate event (such as certain reorganizations, mergers, or other similar events) in which all holders of Common Stock may receive consideration
other than the common equity securities of the continuing or surviving entity, the adjustments referred to in such subsection shall permit the Company to satisfy its settlement obligations hereunder by delivering the consideration received by
holders of Common Stock upon such corporate event, in such proportions as in the exercise of its good faith judgment the Calculation Agent deems appropriate under the circumstances. 
  
 SECTION 8. Governing Law; Waiver of Jury Trial. 
  
 (a) THIS LETTER AGREEMENT SHALL BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. The parties hereto irrevocably
submit to the non-exclusive jurisdiction of the Federal and state courts located in the Borough of Manhattan, in the City of New York in any suit or proceeding arising out of or relating to this Letter Agreement or the transactions contemplated
hereby. 
  
 (b) EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND
ALL RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS LETTER AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. 
  

 11 

 SECTION 9. Assignment and Transfer. 
  
 The rights and duties under this Letter Agreement may not be assigned or transferred by the Company or the Seller without
the prior written consent of the other party; provided that the Seller may assign any of its rights or duties hereunder to any of its affiliates without the prior written consent of the Company. 
  
 SECTION 10. No Condition of Confidentiality. 
  
 The Seller and the Company hereby acknowledge and agree that the Seller has
authorized the Company to disclose this Letter Agreement and the transactions contemplated hereby to any and all persons, and there are no express or implied agreements, arrangements or understandings to the contrary, and the Seller hereby waives
any and all claims to any proprietary rights with respect to this Letter Agreement and the transactions contemplated hereby, and authorizes the Company to use any information that the Company receives or has received with respect to this Letter
Agreement and the transactions contemplated hereby in any manner. 
  
 SECTION 11. Calculations. 
  
 The Calculation
Agent shall make all calculations, applying commercially reasonable standards, in respect of this Letter Agreement. 
  
 SECTION 12. Representations, Warranties and Agreements of the Company. 
  
 The Company represents and warrants to, and agrees with, the Seller as follows: 
  
 (a) The Company acknowledges and agrees that it is not relying, and has not
relied, upon the Seller or any affiliate of the Seller with respect to the legal, accounting, tax or other implications of this Letter Agreement and that it has conducted its own analyses of the legal, accounting, tax and other implications hereof.
The Company further acknowledges and agrees that neither the Seller nor any affiliate of the Seller has acted as its advisor in any capacity in connection with this Letter Agreement or the transactions contemplated hereby. The Company is entering
into this Letter Agreement with a full understanding of all of the terms and risks hereof (economic and otherwise), has adequate expertise in financial matters to evaluate those terms and risks and is capable of assuming (financially and otherwise)
those risks. 
  
 (b) The Company has all corporate power and
authority to enter into this Letter Agreement and to consummate the transactions contemplated hereby. This Letter Agreement has been duly authorized and validly executed and delivered by the Company and constitutes a valid and legally binding
obligation of the Company, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and to general equitable principles. 
  
 (c) If Payment Shares are delivered pursuant to Section 5(a)(ii), such
Payment Shares, when delivered, shall have been duly authorized and shall be duly and validly issued, fully paid and nonassessable and free of preemptive or similar rights, and such delivery shall pass title thereto free and clear of any liens or
encumbrances. 
  
 (d) The Company is not entering into this Letter
Agreement to facilitate a distribution of the Common Stock (or any security convertible into or exchangeable for Common Stock) or in connection with a future issuance of securities. 
  

 12 

 (e) The Company is not entering into this Letter Agreement to create actual or apparent trading activity
in the Common Stock (or any security convertible into or exchangeable for Common Stock) or to raise or depress or otherwise manipulate the price of the Common Stock (or any security convertible into or exchangeable for Common Stock). 
  
 (f) The execution and delivery by the Company of, and the compliance by the
Company with all of the provisions of, this Letter Agreement and the consummation of the transactions herein contemplated will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or any other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets
of the Company or any of its subsidiaries is subject, nor will such action result in any violation of the provisions of the Certificate of Incorporation or By-laws or other constitutive documents of the Company or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their respective properties, except for such conflicts, breaches or violations that would not have a material adverse
effect on the ability of the Company to perform its obligations under this Letter Agreement. 
  
 (g) On the Purchase Date and on each day to and including the final day of the Valuation Period (i) the assets of the Company at their fair valuation exceed the liabilities of the Company, including any contingent
liabilities known to the Company as of the date hereof, (ii) the capital of the Company is adequate to conduct the business of the Company and (iii) the Company has the ability to pay its debts and obligations as such debts mature and does not
intend to, or does not believe that it will, incur debt beyond its ability to pay as such debts mature. 
  
 (h) Except as otherwise contemplated by (i) below, no consent, approval, authorization, order, registration, qualification or filing of or with any court
or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their respective properties is required for the execution and delivery by the Company of, and the compliance by the Company with all the terms
of, this Letter Agreement or the consummation by the Company of the transactions contemplated hereby. 
  
 (i) The Company has made, and shall use its best efforts during the Averaging Period and the Valuation Period (if any) to make, all filings, if any,
required to be made by it with the Securities and Exchange Commission, any securities exchange or any other regulatory body with respect to the transactions contemplated hereby. 
  
 (j) As of the date hereof and as of the date, if any, that the Company elects to transfer any Payment Shares to the Seller
or for the Seller to transfer any Refund Shares to the Company, (i) none of the Company and its executive officers and directors is, or will be, as the case may be, aware of any material nonpublic information regarding the Company or the Common
Stock and (ii) all reports and other documents filed by the Company with the Securities and Exchange Commission pursuant to the Exchange Act when considered as a whole (with the more recent such reports and documents deemed to amend inconsistent
statements contained in any earlier such reports and documents), do not or will not, as the case may be, contain any untrue statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances in which they were made, not misleading. 
  
 (k) The Company has publicly disclosed on both May 3, 2005 and the date of this Letter Agreement its intention to institute a program for the acquisition of shares of Common Stock. 
  

 13 

 (l) In the event that the Seller or the Calculation Agent or any of their affiliates becomes involved in
any capacity in any action, proceeding or investigation brought by or against any person in connection with any matter referred to in this Letter Agreement, the Company shall reimburse the Seller or the Calculation Agent or such affiliate for its
reasonable legal and other out-of-pocket expenses (including the cost of any investigation and preparation) incurred in connection therewith within 30 days of receipt of notice of such expenses, and shall indemnify and hold the Seller or the
Calculation Agent or such affiliate harmless on an after-tax basis against any losses, claims, damages or liabilities to which the Seller or the Calculation Agent or such affiliate may become subject in connection with any such action, proceeding or
investigation, except to the extent that any losses, claims, damages, liabilities or expenses incurred by the Seller or the Calculation Agent or such affiliate result from the gross negligence, bad faith or willful misconduct of the Seller or the
Calculation Agent or a breach by the Seller or the Calculation Agent of any of its covenants or obligations hereunder. If for any reason the foregoing indemnification is unavailable to the Seller or the Calculation Agent or such affiliate or
insufficient to hold it harmless, then the Company shall contribute to the amount paid or payable by the Seller or the Calculation Agent or such affiliate as a result of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one hand and the Seller or the Calculation Agent or such affiliate on the other hand in the matters contemplated by this Letter Agreement or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits received by the Company on the one hand and the Seller or the Calculation Agent or such affiliate on the other
hand in the matters contemplated by this Letter Agreement but also the relative fault of the Company and the Seller or the Calculation Agent or such affiliate with respect to such losses, claims, damages or liabilities and any other relevant
equitable considerations. The relative benefits received by the Company, on the one hand, and the Seller or the Calculation Agent or such affiliate, on the other hand, shall be in the same proportion as the Purchase Price bears to the brokerage fee
referred to in Section 1(b). The reimbursement, indemnity and contribution obligations of the Company under this Section 12(l) shall be in addition to any liability that the Company may otherwise have, shall extend upon the same terms and conditions
to the partners, directors, officers, agents, employees and controlling persons (if any), as the case may be, of the Seller or the Calculation Agent and their affiliates and shall be binding upon and inure to the benefit of any successors, assigns,
heirs and personal representatives of the Company, the Seller or the Calculation Agent, any such affiliate and any such person. The Company also agrees that neither the Seller, the Calculation Agent nor any of such affiliates, partners, directors,
officers, agents, employees or controlling persons shall have any liability to the Company for or in connection with any matter referred to in this Letter Agreement except to the extent that any losses, claims, damages, liabilities or expenses
incurred by the Company result from the gross negligence, bad faith or willful misconduct of the Seller or the Calculation Agent or a breach by the Seller or the Calculation Agent of any of its covenants or obligations hereunder. The foregoing
provisions shall survive any termination or completion of this Letter Agreement. 
  
 (m) For the avoidance of doubt, the parties agree that the commissions incorporated in the definitions of Share Amount and Restricted Share Value and in Section 5(c) above are commercially reasonable fees for
BAS’s activities in connection with Settlement under Section 5. 
  
 (n) The parties hereto agree and acknowledge that the Seller is a “financial institution” within the meaning of Section 101(22) of Title 11 of the United States Code (the “Bankruptcy Code”). The parties hereto
further agree and acknowledge that this Letter Agreement is either (i) a “securities contract,” as such term is defined in Section 741(7) of the Bankruptcy Code, in which case each payment and delivery pursuant to Section 5 is a
“settlement payment,” as such term is defined in Section 741(8) of the Bankruptcy Code, and that the Seller is entitled to the protections afforded by, among other sections, Sections 362(b)(6), 546(e) and 555 

  

 14 

 
of the Bankruptcy Code, or (ii) a “swap agreement,” as such term is defined in Section 101(53B) of the Bankruptcy Code, in which case each party is
a “swap participant,” as such term is defined in Section 101(53C) of the Bankruptcy Code, and that the Seller is entitled to the protections afforded by, among other sections, Section 362(b)(17), 546(g) and 560 of the Bankruptcy Code.

  
 (o) The Company shall not declare any dividend on the Common
Stock for which the ex-dividend date occurs from and including the date of this Letter Agreement through and including the last day of the Averaging Period. 
  
 (p) The Company accepts and agrees to be bound by the contractual terms and conditions as set forth in the Supplemental Terms Notice. Upon receipt of the
Supplemental Terms Notice, the Company shall promptly execute and return such Supplemental Terms Notice to the Seller; provided that the Company’s failure to so execute and return the Supplemental Terms Notice shall not affect the
binding nature of the Supplemental Terms Notice, and the terms set forth therein shall be binding on the Company to the same extent, and with the same force and effect, as if the Company had executed a written version of the Supplemental Terms
Notice. 
  
 (q) The Company and the Seller agree and acknowledge
that (i) the transactions contemplated by this Letter Agreement will be entered into in reliance on the fact that this Letter Agreement and the Supplemental Terms Notice form a single agreement between the Company and the Seller, and the Seller
would not otherwise enter into such transactions, (ii) this Letter Agreement, as supplemented by the Supplemental Terms Notice, is a “qualified financial contract”, as such term is defined in Section 5-701(b)(2) of the General Obligations
Law of New York (the “General Obligations Law”); (iii) the Supplemental Terms Notice, regardless of whether the Supplemental Terms Notice is transmitted electronically or otherwise, constitutes a “confirmation in writing sufficient to
indicate that a contract has been made between the parties” hereto, as set forth in Section 5-701(b)(3)(b) of the General Obligations Law; and (iv) this Letter Agreement constitutes a prior “written contract”, as set forth in Section
5-701(b)(1)(b) of the General Obligations Law, and each party hereto intends and agrees to be bound by this Letter Agreement, as supplemented by the Supplemental Terms Notice. 
  
 (r) The Company and the Seller further agree and acknowledge that this Letter Agreement, as supplemented by the Supplemental
Terms Notice, constitutes a contract “for the sale or purchase of a security”, as set forth in Section 8-113 of the Uniform Commercial Code of New York. 
  
 SECTION 13. Acknowledgments and Agreements With Respect To Hedging and Market Activity. 
  
 (a) The Company acknowledges and agrees that: 
  
 (i) During the Averaging Period and, if applicable, the
Valuation Period, the Seller and its affiliates may buy or sell shares of Common Stock or other securities or buy or sell options or futures contracts or enter into swaps or other derivative securities in order to adjust its hedge position with
respect to the transactions contemplated by this Letter Agreement; 
  
 (ii) The Seller and its affiliates also may be active in the market for the Common Stock other than in connection with hedging activities in relation to the transactions contemplated by this Letter Agreement;

  

 15 

 (iii) The Seller shall make its own determination as to whether, when or in what manner
any hedging or market activities in the Company’s securities shall be conducted and shall do so in a manner that it deems appropriate to hedge its price and market risk with respect to the Daily Average Price and Reported VWAP; and 

 
 (iv) Any market activities of the Seller and its
affiliates with respect to the Common Stock may affect the market price and volatility of the Common Stock, as well as the Daily Average Price and Reported VWAP, each in a manner that may be adverse to the Company. 
  
 (b) Each of the Company and the Seller agrees that Non-Reliance as set forth
in Section 13.1 of the ISDA Definitions, Agreements and Acknowledgments Regarding Hedging Activities as set forth in Section 13.2 of the ISDA Definitions and Additional Acknowledgments as set forth in Section 13.4 of the ISDA Definitions shall be
deemed to be Applicable to the transactions contemplated by this Letter Agreement as if this Letter Agreement were a confirmation that was governed by, and incorporated, such Sections of the ISDA Definitions; provided that Section 13.2 of the
ISDA Definitions shall not be deemed to be Applicable in respect of any representation of the Seller in this Letter Agreement (including, for the avoidance of doubt, in any Supplemental Terms Notice) relating to the establishment of the
Seller’s Initial Hedge. 
  
 SECTION 14. Notices.

  
 Unless otherwise specified, notices under this contract may
be made by telephone, to be confirmed in writing to the address below. Changes to the notice information below must be made in writing. 
  

	 	(a)	If to the Company: 

  
 Laboratory Corporation of America Holdings 
 358 South Main Street 
 Burlington, North Carolina 27215 
 Attn: Bradford T. Smith 
 Telephone:
(336) 436-5050 
 Facsimile: (336) 227-9410 
  

	 	(b)	If to the Seller: 

  
 Bank of America, N.A. 
 Equity Derivatives
Group 
 c/o Banc of America Securities LLC 
 9 W. 57th Street 
 New York, NY 10019 
 Attn: Christopher Hutmaker 
 Telephone: (212)
583-8142 
 Facsimile: (212) 230-8343 
  

 16 

 SECTION 15. Designation of Affiliate for Transactions in Common Stock. 
  
 The Seller may designate any of its affiliates (the
“Designee”) to deliver or take delivery, as the case may be, and otherwise perform its obligations to deliver or take delivery of, as the case may be, any shares of Common Stock in respect of the transactions contemplated by this
Letter Agreement, and the Designee may assume such obligations and the obligations of the Seller under this Letter Agreement with respect to such shares of Common Stock. Such designation shall not relieve the Seller of any of its obligations
hereunder. Notwithstanding the previous sentence, if the Designee shall have performed the obligations of the Seller hereunder, then the Seller shall be discharged of its obligations to the Company to the extent of such performance. In addition, the
parties acknowledge and agree that every time that the Seller is described in this Letter Agreement as buying, selling or otherwise transacting with third parties in the Common Stock, such buying, selling or transacting may be conducted by the
Seller or one or more of its affiliates. 
  
 SECTION 16. Equity
Rights. 
  
 The Seller acknowledges and agrees that this
Letter Agreement is not intended to convey to it rights with respect to this transaction that are senior to the claims of common stockholders in the event of the Company’s bankruptcy. For the avoidance of doubt, the parties agree that the
preceding sentence shall not apply at any time other than during the Company’s bankruptcy to any claim arising as a result of a breach by the Company of any of its obligations under this Letter Agreement. For the avoidance of doubt, the parties
acknowledge that this Letter Agreement is not secured by any collateral that would otherwise secure the obligations of the Company herein under or pursuant to any other agreement. 
  
 SECTION 17. Supplemental Terms Notice. 
  
 The Seller represents and warrants to, and agrees with, the Company that the information contained in any Supplemental Terms
Notice shall be determined by the Seller in good faith and calculated in accordance with the terms set forth in this Letter Agreement. 
  
  

 17 

 Please confirm your agreement to the foregoing by signing and returning to us the enclosed duplicate of
this Letter Agreement. 
  

			
	 Very truly yours,

	
	 BANK OF AMERICA, N.A.

		
	 By:
	 	 /s/ Eric P. Hambleton

	 Name:
	 	Eric P. Hambleton
	 Title:
	 	Authorized Signatory

  
 Acknowledged and agreed to as of

 the date first above written, 
  

			
	 LABORATORY CORPORATION OF
AMERICA HOLDINGS

		
	 By:
	 	 /s/ Bradford T. Smith

	 Name:
	 	 Bradford T. Smith

	 Title:
	 	 Executive Vice President and Secretary

  
  

 18 

 APPENDIX A 
  

[Date] 
  
 Laboratory Corporation of America Holdings 
 358 South Main Street 

Burlington, North Carolina 27215 
  

	 	Re:	Enhanced Overnight Share Repurchase 

  
 Ladies and Gentlemen: 
  
 Reference is made to the Overnight Share Repurchase Letter Agreement between you and Bank of America, N.A. dated as of December 7, 2005 (the
“Agreement”). Capitalized terms used without definition in this letter have the definitions assigned to them in the Agreement. 
  
 In accordance with Section 4 of the Agreement, the Seller agrees that Company may purchase shares of Common Stock during the Averaging Period subject to
the following procedures: 
  
 (i) all such
purchases will be made by Banc of America Securities LLC (“BAS”) in accordance with Rule 10b-18(b) or otherwise in a manner that Company and BAS believe is in compliance with applicable requirements; 
  
 (ii) each purchase order Company places with BAS will be an
all or nothing order to purchase a minimum of 10,000 shares; 
  
 (iii) Company will pay to BAS a $0.03 per share commission for each share of Common Stock purchased; and 
  
 (iv) Company agrees that, in purchasing shares of Common Stock, BAS may purchase shares of Common Stock for the account of the Seller,
which is an affiliate of BAS, other than any single block of 10,000 or more shares of Common Stock, without your prior consent; you acknowledge that, because any orders you place pursuant to the above procedures will be all or nothing orders, other
orders to purchase Common Stock (including orders placed by the Seller or BAS) may reduce the number of shares of Common Stock available for purchase and may therefore impact your ability to obtain execution of any such all or nothing orders.

  
  

 We may terminate this letter agreement upon the effectiveness of any change in applicable law or
regulation that would cause the procedures set forth herein to impede our ability to execute appropriate trading transactions in relation to our obligations under the Agreement (including, without limitation, Section 3(a) of the Agreement) in a
manner consistent with applicable law and regulation. 
  
 Please
indicate your agreement to, and acknowledgment of, the above by signing and returning to us a copy of this letter. 
  

			
	 Very truly yours,

	
	 BANC OF AMERICA SECURITIES LLC

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

  
 Acknowledged and agreed to as of

 the date first above written, 
  

			
	 LABORATORY CORPORATION OF
AMERICA HOLDINGS

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

 APPENDIX B 
  

[Company Letterhead] 
  
 Bank of America, N.A. 
 c/o Banc of America Securities LLC 
 9 W. 57th Street 
 New York, New York 10019 
 Attn: Christopher Hutmaker 
  

	 	Re:	Enhanced Overnight Share Repurchase 

  
 Ladies and Gentlemen: 
  
 In connection with our entry into an Overnight Share Repurchase Letter Agreement dated as of December 7, 2005 (the “Agreement”), we
hereby represent that set forth below is the total number of shares of our common stock purchased by or for us or any of our affiliated purchasers in Rule 10b-18 purchases of blocks pursuant to the once-a-week block exception contained in Rule
10b-18(b)(4) (all defined in Rule 10b-18 under the Securities Exchange Act of 1934, as amended) during the four full calendar weeks immediately preceding the first day of the Averaging Period (as defined in the Agreement) and the week during which
the first day of the Averaging Period occurs: 
  

							
	 	  	Monday’s Date

	  	Friday’s Date

	  	Share
Number

	 Week 4:
	  	November 7, 2005	  	November 11, 2005	  	0
	 Week 3:
	  	November 14, 2005	  	November 18, 2005	  	0
	 Week 2:
	  	November 21, 2005	  	November 25, 2005	  	0
	 Week 1:
	  	November 28, 2005	  	December 2, 2005	  	0
	 Current Week:
	  	December 5, 2005	  	December 9, 2005	  	0

  
 We understand that you
will use this information in calculating trading volume for purposes of Rule 10b-18. 
  

			
	 Very truly yours,

	
	 LABORATORY CORPORATION OF
AMERICA HOLDINGS

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

 APPENDIX C 
  

[Form of Supplemental Terms Notice] 
  
 Bank of America, N.A. 
 9 West 57th
Street 
 New York, New York 10019 
  
 [date] 
  
 Laboratory Corporation of America Holdings 
 358 South Main Street 
 Burlington, North Carolina 
  
 Supplemental Terms Notice – Enhanced Overnight Share Repurchase 
  
 Ladies and Gentlemen: 
  
 Reference is made to the Overnight Share Repurchase Letter Agreement dated as of December 7, 2005 (the “Agreement”) between Laboratory
Corporation of America Holdings (the “Company”) and Bank of America, N.A. (the “Seller”). Capitalized terms used in this Supplemental Terms Notice and not otherwise defined shall have the meanings assigned to them
in the Agreement. 
  
 Please be advised that the Calculation Agent
has determined the following terms relating to the Agreement upon the completion of the Seller’s Initial Hedge: 
  

			
	 Cap Price:
	  	U.S. $[                    ] per share
		
	 Hedge Execution Price:
	  	U.S. $[                    ] per share
		
	 Premium:
	  	U.S. $[                    ]
		
	 Premium Payment Date:
	  	[                              ]

  

			
	 Very truly yours,

	
	 BANK OF AMERICA, N.A.

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

  

			
	 Receipt acknowledged,

	
	 LABORATORY CORPORATION OF
AMERICA HOLDINGS

		
	 By:
	 	  

	 Name:
	 	 
	 Title:Approval Letter dated as of December 1, 2005 by Omega Protein,Inc

 EXHIBIT 10.1 
  

					
	1.1(a)FV/AL/F	  	

	  	 UNITED STATES DEPARTMENT OF COMMERCE
 National Oceanic and Atmospheric Administration
 NATIONAL MARINE FISHERIES SERVICE
 Silver Spring, MD 20910

  
 December 1, 2005

  
 Omega Protein, Inc. 
 Attn: Robert W. Stockton 
 1717 St. James Place 
 Suite 550 
 Houston, TX 77056 
  

	
	Reference Case No. FE-G-017
	Omega Protein, Inc.

  
 Dear Mr. Stockton: 
  
 The Fisheries Finance Program has in
principle approved the financing application made by Omega Protein, Inc. (the “Company”). 
  
 Upon full compliance with this approval and agreement letter (the “Approval Letter”), and otherwise in accordance with this Approval Letter, Title XI of the Merchant Marine Act, 1936, 50 CFR part 255, and
the outstanding guidance and instructions of the Financial Services Division, the Company will issue a Promissory Note to the United States (the “Note”), and we will do all things necessary to effect this financing (the
“Transaction”). 
  
 (1) PURPOSE: 
  
 The purpose of the Transaction is to finance and/or refinance 80% of the depreciated actual
cost of the Company’s future projects. 
 Final approval for all such future projects requires individual approval and
an amendment to this Approval Letter (“the Project”). 
  
 (2)
NOTE: 
  
 (2.1) The Note shall, in form and substance,
be similar to our customary form of Promissory Note to the United States and shall involve the following amount and other basic terms. 
  

			
	(2.1.1) Amount:	  	Not to Exceed $16,442,000.00
		
	(2.1.2) Maturity:	  	Not to Exceed 15 years from inception.

			
	(2.1.3) Amortization':	  	Level debt.
		
	(2.1.4) Payments:	  	Quarterly.
		
	(2.1.5) Interest Rate:	  	To be determined by the U.S. Treasury rate for agency borrowing.

  
 (2.2) We shall direct
that the proceeds of the Note be paid, first, directly to the parties to whom the Company is indebted for the Project’s eligible cost and, second to the Company (as reimbursement of the Company’s funds previously expended for the
Project’s eligible cost) insofar as the amount of the Note exceeds the amount of the Company’s outstanding indebtedness for the Project’s eligible cost. 
  
 (3) SECURITY FOR THE NOTE: 
  
 (3.1) Security for the Note shall be such security agreements, undertakings, and other documents of whatsoever nature deemed by us, in our sole
discretion, necessary to accomplish the intent and purpose of the Approval Letter and otherwise protect our interest (collectively, the “Security Documents”). The Security Documents shall, in form and substance, be similar to our customary
form of security documents insofar as such customary form of Security Documents is, in our sole discretion, consistent with and appropriate for the Transaction 
  

(3.2) The Company and the other parties specified below shall, as additional security for the Note, be bound by and subject to the following special
requirements, special covenants, and all provisions pertaining to them. 
  
 (3.2.1) Special Requirements: 
  
 (3.2.1.1) The
Project shall be free and clear of all liens, except such liens as may otherwise be specifically permitted herein, and the Company shall, before Transaction closing, provide us whatever evidence thereof we may, in our sole discretion, require.

  
 (3.2.1.2) The Company shall own, free and clear of all
claims of whatsoever nature, except such claims as may otherwise be specifically permitted herein, the Project, and the Company shall, before Transaction closing, provide us whatever evidence thereof we may, in our sole discretion, require.

  

	1	A amortization schedule that will estimate the application of payments will be provided at Transaction closing. 

  

 2 

 (3.2.1.3) All pledges of all property shall also include such appropriate security agreements and U.C.C.
filings on all associated appurtenances and rights associated with such pledged property as are, in our sole discretion, necessary to fully realize the pledges intended and protect our interest. 
  
 (3.2.1.4) If, after application of the proceeds of the Note, there remains
any claim of whatsoever nature, except such claims as may otherwise be specifically permitted herein, against the Project, the Company shall immediately take whatever action is required to satisfy and discharge such claims. Any failure of the
Company to do so shall be an event of default, causing us to declare a security default, under all default rights specified in the Security Documents. 
  
 (3.2.1.5) The Company shall, regarding the ownership and operation of all Company property of whatsoever nature, cause the appropriate authorities to
provide us, before Transaction closing, with all evidence of proper title recordation and governmental permits, approvals, licenses, consents, permissions, clearances, or other evidence of compliance with governmental requirements of whatsoever
nature as we, in our sole discretion, may require to accomplish the intent and purpose of the Approval Letter and otherwise protect our interest. 
  
 (3.2.1.6) There shall, before Transaction closing, be no change in the Company’s financial position, performance, or prospects deemed by us, in our
sole discretion, to be materially adverse to our interest. 
  
 (3.2.1.7) The Company shall, before Transaction closing, provide us such evidence of its authority to enter into the Transaction as we, in our sole discretion, shall require. 
  
 (3.2.1.8) The Company shall, before Transaction closing, cause the appropriate parties to provide us with such evidence of
all other parties’ authority to enter into any portion of the Transaction as we, in our sole discretion, shall require. 
  

 3 

 (3.2.1.9) The Company shall, at Transaction closing and at the Company’s sole expense, cause
private counsel acceptable, in our sole discretion, to us to provide us with a legal opinion acceptable, in our sole discretion, to us that such documents executed in connection with the Transaction as we may, in our sole discretion, specify
constitute legal and valid obligations fully binding and enforceable against the Company or, as the case may be, against such other parties to whom they might apply. 
  
 (3.2.1.10) The Company shall, at Transaction closing, provide us a first security agreement and associated filings under
the U.C.C. (the “U.C.C. Security”) on all fisheries unloading, processing, and holding equipment and all equipment associated with, acquired or required for, or otherwise in any way whatsoever involved in any aspect whatsoever of owning or
operating a vessel (the “Equipment”) of whatsoever nature now or at any time in the future, together with all accessories, improvements, replacements, substitutions, or additions thereto, used for the Company’s fisheries operations on
the Project or on any other premises at any other site at which the Company now conducts, or in the future may conduct, its fisheries operations and regardless of the Equipment’s actual location at any given time2. The Equipment shall, at the Company’s cost and before Transaction closing, be inventoried (sufficiently to describe with
certainty in the U.C.C. Security) and valued by appraisers acceptable, in our sole discretion, to us. The Equipment shall include, but shall not be limited to: all fish unloading, transfer, and conveying equipment of whatsoever nature; all fish
processing equipment of whatsoever nature; all fish weighing equipment of whatsoever nature; all cooling, refrigerating, freezing, and other fish holding equipment (blast freezers, plate freezers, coolers, or other refrigeration equipment) of
whatsoever nature; all fish packaging equipment of whatsoever nature; all fish 
  

	2	Excluding only such first U.C.C. Securities to parties other than ourselves as may be necessary and appropriate to secure credit from such parties for the specific
purpose of purchasing specific equipment (the “Purchase-Money U.C.C. Securities”). In such cases: (a) we shall have second U.C.C. Securities on the Equipment purchased with the credit secured by the Purchase-Money U.C.C. Securities,
(b) the amount secured by the Purchase-Money U.C.C. Securities shall not exceed the specific purchase cost of the specific Equipment purchased, (c) the term of the credit secured by the Purchase-Money U.C.C. Securities (and, thus, the
duration of the Purchase-Money U.C.C. Securities) shall not exceed an ordinarily prudent commercial term, (d) no Equipment or other rights shall be secured by the Purchase-Money U.C.C. Securities other than the specific Equipment actually
purchased by the credit secured by the Purchase-Money U.C.C. Securities, and (e), upon full repayment of the credit secured by the Purchase-Money U.C.C. Securities, the Purchase-Money U.C.C. Securities shall be satisfied and our second U.C.C.
Securities shall have a first secured priority. 

  

 4 

 baskets, totes, tanks, tubs, and other fish holding equipment of whatsoever nature; all ice makers of
whatsoever nature; all hand and power tools of whatsoever nature; all engines of whatsoever nature; all navigational and other electronic equipment of whatsoever nature; all generators of whatsoever nature; all hoists and cranes of whatsoever
nature; all fuel and stores of whatsoever nature; all crew accommodations of whatsoever nature; all boats and other lifesaving equipment of whatsoever nature, and all other gear, tackle, machinery, and equipment of whatsoever nature associated with,
acquired or required for, or otherwise in any way whatsoever involved in any aspect whatsoever of owning or operating a vessel—all together will all associated equipment, machinery, parts, tools, or other items of whatsoever nature, and all
rights either to own or operate them (whether by lease or otherwise), and whether fixed or unfixed to the Project or any other premises whatsoever. The U.C.C. Security shall contain (a) provisions acceptable, in our sole discretion, to us to
enter upon any premises where the Equipment may be located and marshal, secure, protect, and do all other things necessary to preserve the Equipment immediately upon the Company’s default, but before any judicial action regarding such default,
of the Security Documents and (b) such other provisions as we deem, in our sole discretion, necessary to accomplish the intent and purpose of the Approval Letter and otherwise protect our interest. All other parties having a secured interest in
the Project or the Company’s other property shall agree to provisions acceptable, in our sole discretion, to us that (a) recognize our senior interest in, and sole rights to, the Equipment or the proceeds of the Equipment’s
liquidation and (b) agree not to interfere in any way with, but instead to cooperate in all reasonable ways with, our entering upon the Project or the Company’s other property and marshaling, securing, protecting, and doing all other
things necessary to preserve the Equipment. 
  
 (3.2.1.11)
Additional collateral for each Project financed will be identified in the subsequent amendment to this Approval Letter for each such Project. 
  
 (3.2.1.12) The Company shall, at Transaction closing, cause Omega Protein Corporation to provide us their unconditional corporate guarantee of the
Company’s repayment of the full principal and interest amount of the Note. 
  

 5 

 (3.2.2) Special Covenants: 
  
 (3.2.2.1) In addition to all covenants of whatsoever nature in our customary form of Security Documents3, the Company shall be bound by and subject to the following special covenants and all provisions pertaining to them:

  
 (3.2.2.1.1) The Company shall not without the prior written
consent of the Chief, Financial Services Division, National Marine Fisheries Service, which consent shall not unreasonably be withheld, take any of the following actions: 
  
 (3.2.2.1.1.1) Pay to any officer, partner, or other party any salary, commission, bonus, management fee, dividend, or other
consideration (however characterized) in excess of either reasonable industry standards or ordinary financial prudence for a company of the Company’s size and financial condition when such consideration is paid (and the burden of proving
reasonability shall be on the Company). 
  
 (3.2.2.1.1.2)
Purchase or redeem any shares of its own stock. 
  
 (3.2.2.1.1.3) Make any additional investment (excluding purchases regarding the routine and continuing maintenance and preservation of the Company’s present property [including the Project] and its productivity) in, or incur any
additional liability for, the purchase, acquisition, lease, or other use (however characterized) of any fixed property in connection with the Company’s present level of operations in any one fiscal year in excess of an aggregate of 5% of the
Company’s total assets. 
  
 (3.2.2.1.1.4) Start any new
business or acquire any other business, or the assets of any other business, whether by purchase, merger, consolidation, affiliation, or any other means (however 
  

	3	The Security Documents shall include the Note together with such security agreements, undertakings, and other documents of whatsoever nature deemed by us, in our
sole discretion, necessary to accomplish the intent and purpose of the Approval Letter and otherwise protect our interest (collectively, the “Security Documents”). 

  

 6 

 characterized) except as may otherwise be permitted herein, or sell, liquidate, dissolve, spin-off,
split-up or in any other way (however characterized) dispose of its own assets except as may be required in the normal course of operations reasonably necessary to carry on its day-to-day operation. 
  
 (3.2.2.1.1.5) Guarantee or become contingently liable in any way as surety,
endorser, creditor, co-maker, accommodation maker, or in any other way (however characterized) for the debt or obligation of any other party, except as may otherwise be permitted herein or required in the normal course of operations reasonably
necessary to carry on its day-to-day business. 
  
 (3.2.2.1.1.6)
By any means whatsoever, allow itself to be acquired by, or otherwise reorganized into (however characterized), any other company, unless the acquiring company or reorganized entity is acceptable to us and agrees to: (a) provide to us a 100%
unconditional guarantee of the repayment of all debt actually or contingently owed us, (b) be bound by these covenants, (c) be bound by such other covenants as we shall reasonably require to protect our interest, and (d) provide such
other assurances and security as we, in our sole discretion, may require. 
  
 (3.2.2.1.1.7) Establish any trust, retirement fund, or any other fund (however characterized) for the benefit of any principal or any party related to any principal, or transfer any funds, property, or other assets of
any kind (however characterized) into any such fund whether now or hereafter existing (and any such action shall be void and without effect insofar as our interests are concerned)4. 
  
 (3.2.2.1.1.8) Transfer any funds, property, or other assets (however characterized) to any party by way of gift or by any other means (however characterized) for any consideration less than payment by such party of
the full and fair market 
  

	4	This provision excludes contributions, not exceeding $2,000 per year per person, to any such party’s IRA, Keogh, or 401K account. Any contributions in excess of
$2,000 per year per person to any other retirement account, and any contributions in any amount to any trust or other fund of whatsoever kind, must be approved in advance and in writing by us. 

  

 7 

 value thereof (and any such action shall be void and without effect insofar as our interests are
concerned): provided, however, that reasonable transfers not significantly affecting the Company’s net worth, and not inconsistent with the Company’s obligation to protect us from loss by preserving its net worth, shall be exempted.

  
 (3.2.2.1.2) The Company shall (within 10 days of its first
knowledge thereof) give us notice of any pending litigation, business reverse, casualty, loss, or any other matter (however characterized) that materially diminishes: (a) its ability to service any debt actually or contingently owed us,
(b) its ability to perform any other duty or obligation owed us, (c) its ability to fully and faithfully perform any covenant with us, (d) the value of any property or other assets pledged to us, or (e) the net worths of the
parties against whom we have recourse. 
  
 (3.2.2.1.3) The
Company shall give us annually, at the end of each of its accounting or tax years: (a) the Company’s balance sheet at the end of each such year, (b) the Company’s income and expense statement for the preceding twelve months of
each of such years, (c) the Company’s Federal Income Tax Return for each of such years (all together with all supporting schedules). Independent certified public accountants acceptable, in our sole discretion to us, shall, according to
generally accepted accounting principles, compile the annual financial reports required under (a) through (c) hereof, and certify the accuracy of same. 
  
 (3.2.2.1.4) All annual financial reports required hereunder shall include a certification from the Company’s chief
executive officer that either (a) there has been no default under the Security Documents during the reporting period or (b) there has been a default or defaults under the Security Documents during the reporting period, in which latter case
the nature, extent, prospective consequences, and all other relevant details of such default or defaults shall be fully set forth in such certification. 
  
 (3.2.2.1.5) The Company shall deliver all required financial statements, notices, and returns or reports to our Southeast Regional Financial Services
Branch. The Company shall deliver all financial statements to 
  

 8 

 us as soon as possible, but in no event later than 90 days after the close of the accounting period to
which they relate. The Company shall deliver all tax returns to us within 15 days of their timely filing with the U.S. Internal Revenue Service. 
  
 (3.2.2.1.6) The Company shall permit us, or any representative selected by us, in such manner and at such times as we may, in our sole discretion,
reasonably require, to: (a) make inspections and audits of any books, records, papers, or other documents of whatsoever nature in the Company’s custody and control (or in any other entity’s custody or control) relating in any way to
the Company’s financial or business condition, (b) make extracts therefrom, and (c) make inspections and appraisals of any of the Company’s physical assets. The Company shall, within thirty days of our demand, pay us for the cost
of all such inspections, audits, or appraisals, and all such amounts disbursed by us for such purpose shall, until fully repaid by the Company, be: (a) added, payable upon our demand, to the Note, (b) earn interest at the same rate as the
other principal of the Note, and (c) be secured by the Security Documents. 
  
 (3.2.2.1.7) Should a limited fisheries access system be initiated at some future date, under which the Company is granted a transferable fishery conservation and management allocation (including, but not limited to,
allocations, permits, quotas, licenses, cage tags, or any other fisheries access restriction or right [however characterized] of whatsoever nature) affecting, necessary for, or in any other way (however characterized) associated with any of the
property included in or subject to the Security Documents, the Company agrees that it shall grant to us a full senior security interest in such allocation by whatsoever means deemed by us (in our sole discretion) to be appropriate (including, but
not limited to, the Company’s execution of security agreements and the filing of financing statements under the U.C.C.). Further, if the Company fails to do so, the Company agrees that we may (in our sole discretion) use the attorney-in-fact
provisions conferred upon us by the Security Documents to execute, deliver, and otherwise perfect whatever documents may be required to accomplish the grant to us of such a full security interest in such fisheries conservation and management
allocation. 
  

 9 

 (3.2.2.2) In addition to all existing covenants of whatsoever nature in any way associated with the
Security Documents, Omega Protein Corporation (the “Guaranteeing Company”), as additional security for the U.S. Note, hereby agrees to, and shall henceforth be bound by and subject to, the following special covenants and all provisions
pertaining to them: 
  
 (3.2.2.2.1) The Guaranteeing Company
shall not without the prior written consent of the Chief, Financial Services Division, National Marine Fisheries Service, which consent shall not unreasonably be withheld, take any of the following actions: 
  
 (3.2.2.3.1.1) Pay to any officer, partner, or other party any salary,
commission, bonus, management fee, dividend, or other consideration (however characterized) in excess of either reasonable industry standards or ordinary financial prudence for a company of the Guaranteeing Company’s size and financial
condition at the time that such consideration is paid (and the burden of proving reasonability shall be on the Guaranteeing Company). 
  
 (3.2.2.3.1.2) Purchase or redeem any shares of its own stock. 
  

(3.2.2.3.1.3) Make any additional investment (excluding purchases in connection with the routine and continuing maintenance and preservation of the
Guaranteeing Company’s present property and its productivity) in, or incur any additional liability for, the purchase, acquisition, lease, or other use (however characterized) of any fixed property: provided; however, that reasonable new
investment activity or additional liability not significantly affecting the Guaranteeing Company’s net worth, and not inconsistent with the Guaranteeing Company’s obligation to protect us from loss by preserving its net worth, shall be
exempted. 
  
 (3.2.2.3.1.4) Start any new business or acquire
any other business, or the assets of any other business, whether by purchase, merger, consolidation, affiliation, or any other means (however 
  

 10 

 characterized) except as may otherwise be permitted herein, or sell, liquidate, dissolve, spin-off,
split-up or in any other way (however characterized) dispose of its own assets except as may be required in the normal course of operations reasonably necessary to carry on its day-to-day operation. 
  
 (3.2.2.3.1.5) Guarantee or become contingently liable in any way as surety,
endorser, creditor, co-maker, accommodation maker, or in any other way (however characterized) for the debt or obligation of any other party, except as may otherwise be permitted herein or required in the normal course of operations reasonably
necessary to carry on its day-to-day business. 
  
 (3.2.2.3.1.6)
By any means whatsoever, allow itself to be acquired by, or otherwise reorganized into (however characterized), any other company, unless the acquiring company or reorganized entity is acceptable to us and agrees to: (a) provide to us an
absolute, unconditional guarantee of 100% of all debt actually or contingently owed us, (b) be bound by these covenants, (c) be bound by such other covenants as we shall reasonably require to protect our interest, and (d) provide such
other assurances and security as we (in our sole discretion) may require. 
  
 (3.2.2.3.1.7) Establish any trust, retirement fund, or any other fund (however characterized) for the benefit of any principal or any party related to any principal, or transfer any monies, property, or other assets
of any kind (however characterized) into any such fund whether now or hereafter existing (and any such action shall be void and without effect insofar as our interests are concerned)5. This provision excludes contributions not to exceed the amount set by current IRS regulations, to any parties IRA, Keogh, or 401K account. 
  
 (3.2.2.3.1.8) Transfer any monies, property, or other assets (however
characterized) to any party by 
  

	5	This provision excludes contributions, not exceeding $2,000 per year per person, to any such party’s IRA, Keogh, or 401K account. Any contributions in excess of
$2,000 per year per person to any other retirement account, and any contributions in any amount to any trust or other fund of whatsoever kind, must be approved in advance and in writing by us. 

  

 11 

 way of gift or by any other means (however characterized) for any consideration less than payment by
such party of the full and fair market value thereof (and any such action shall be void and without effect insofar as our interests are concerned): provided, however, that reasonable transfers not significantly affecting the Guaranteeing
Company’s net worth, and not inconsistent with the Guaranteeing Company’s obligation to protect us from loss by preserving its net worth, shall be exempted. 
  
 (3.2.2.3.2) The Guaranteeing Company shall give us immediate notice of any pending litigation, business reverse, casualty,
loss, or any other matter (however characterized) that diminishes: (a) its ability to service any debt actually or contingently owed us, (b) its ability to perform any other duty or obligation owed us, (c) its ability to fully and
faithfully perform any covenant with us, (d) the value of any property or other assets pledged to us, or (e) the net worth of the parties against whom we have recourse. 
  
 (3.2.2.3.3) The Guaranteeing Company shall give us annually, at the end of each of its accounting or tax years, a certified
correct copy of: (a) the Guaranteeing Company’s balance sheet at the end of each such year, (b) the Guaranteeing Company’s income and expense statement for the preceding twelve months of each of such years, and (c) the
Guaranteeing Company’s Federal Income Tax Return for each of such years (all together with all supporting schedules). The Guaranteeing Company shall also give us at any reasonable time any and all other financial statements, books, records,
schedules, or reports we may reasonably require from time-to-time. 
  
 (3.2.2.3.4) All annual financial reports required hereunder shall include a certification from the Company’s chief executive officer that either (a) there has been no default under the Security Documents during the reporting
period or (b) there has been a default or defaults under the Security Documents during the reporting period, in which latter case the nature, extent, prospective consequences, and all other relevant details of such default or defaults shall be
fully set forth in such certification. 
  

 12 

 (3.2.2.3.5) All required financial statements, notices, and returns or reports shall be delivered to our
Southeast Regional Financial Services Branch. All financial statements shall be delivered to us as soon as possible, but in no event later than 120 days after the close of the accounting period to which they relate. All tax returns shall be timely
filed and delivered to us within 15 days of their filing with the U.S. Internal Revenue Service. 
  
 (3.2.2.3.6) The Guaranteeing Company shall permit us, or any representative selected by us, in such manner and at such times as we may (in our sole
discretion) reasonably require, to: (a) make inspections and audits of any books, records, papers, or other documents of whatsoever nature in the Guaranteeing Company’s custody and control (or in any other entity’s custody or control)
relating in any way to the Guaranteeing Company’s financial or business condition, (b) make extracts therefrom, and (c) make inspections and appraisals of any of the Guaranteeing Company’s physical assets. The Guaranteeing
Company shall, within thirty days of our demand, pay us for the cost of all such inspections, audits, or appraisals, and all such amounts disbursed by us for such purpose shall, until fully repaid by the Guaranteeing Company, be: (a) added,
payable upon our demand, to the U.S. Note, (b) earn interest at the same rate as the other principal of the U.S. Note, and (c) be secured by the Security Documents. 
  
 (3.2.2.4) Any violation of any of these special covenants shall be an event of default, causing our declaration of a
security default, under all default rights specified in the Security Documents and cause, in our sole discretion, for immediate acceleration of the full unpaid amount of the Note, foreclosure under the Security Documents, and full pursuance under
all default rights specified in the Security Documents of all other remedies of every sort whatsoever for collecting the Note. 
  
 (3.2.2.5) Where these special covenants, or any portion of them, are specifically inconsistent with covenants in our customary form of Security
Documents, these special covenants shall to that extent (but to that extent only) supersede covenants in our customary form of Security Documents. Where these special covenants, or any portion of them, are not specifically inconsistent with
covenants 
  

 13 

 in our customary form of Security Documents, the covenants in our customary form of Security Documents
shall not be superseded by these special covenants and these special covenants shall be in addition to the covenants in our customary form of Security Documents. 
  
 (4) INSURANCE REQUIREMENTS: 
  
 Insurance requirements for each future Project will be listed in the amendment to this Approval Letter for each such Project and shall meet the standards
for the Fisheries Finance Program in effect at that time. 
  
 (5)
FEES,: 
  
 (5.1) Our application and commitment fee for the Transaction is $82,210.00. This fee was due and payable at the time you applied to us for this
financing. If this fee was not paid in full at the time of application for this financing, you must send your check now for the full amount due to our Regional Financial Services Branch at the address specified in (10) below. 
  
 (5.2) Pay all fees by certified or cashiers check made payable to U.S.
Department of Commerce/NOAA. All checks sent to us must bear the case number indicated by the reference designation immediately before the salutation portion of the Approval Letter. 
  
 (6) INSPECTIONS: 
  
 We may, in our sole discretion, cause inspectors (appraisers, surveyors, engineers, or architects) of our choice to inspect, before Transaction closing,
all Project and Equipment. 
  
 Although we shall choose these
inspectors, they shall work for us, and we shall initially pay them, you shall be responsible to reimburse us for their cost and hereby unconditionally promise to, within thirty days of our demand, pay for the cost of all such inspections. All
amounts disbursed by us for this purpose shall, if not fully repaid to us by the date the Transaction is closed, be: (a) added, payable upon our demand, to the Note, (b) earn interest at the same rate as the other principal of the Note,
and (c) be secured by the Security Documents. 
  
 We will
consult with you about the kind and cost of inspection services required. We shall endeavor to keep all inspections, 
  

 14 

 and all costs for them, as reasonable as possible. Nevertheless, the choice of inspectors and services
shall be ours, and failure of the inspection results to meet, for our sole purposes, our approval or the your failure to reimburse us for all inspection costs shall constitute, in our sole discretion, either, as the case may be, cause for withdrawal
of the Approval Letter or a security default under the Security Documents. 
  
 (7) PRE-CLOSING: 
  
 (7.1) Please let our
Regional Financial Services Branch at the address specified in (10) below know, at least 45 days in advance, the date you need the Transaction closed. We will need to verify or arrange many things, for example: 
  
 (7.1.1) The depreciated actual costs eligible for the Transaction.

  
 (7.1.2) The adequacy of all required insurance’s
(communicate about insurance matters directly with our Central Insurance Servicing Unit at the address specified in [10] below rather than our Regional Financial Services Branch). 
  
 (7.1.3) The absence of liens on property involved in the Transaction (other than those permitted herein). 
  
 (7.1.4) All closing documentation factors including the availability of your
private counsel (acceptable to us) where the Transaction involves real property, U.C.C. filings, or other unusually complicated factors. Where the Transaction involves real property mortgages or U.C.C. filings, your attorney will have
to prepare, and submit to us, before Transaction closing, for our approval, all closing documents involving the real estate or U.C.C. filings. 
  
 (7.1.5) Your possession of all necessary permits, licenses, approvals, and other clearances of whatsoever nature required to
do business and protect us against risk. 
  
 (7.1.6) No change in
any party’s financial or economic circumstances or prospects deemed by us, in our sole discretion, to be materially adverse to our interest. 
  
 (7.1.7) The availability of all parties at Transaction closing. 
  

 15 

 (7.1.8) The availability of all required documentation of good standing, authority to enter into the
Transaction, etc. 
  
 (7.1.9) The accomplishment of all other
matters or whatsoever nature that constitutes, in our sole discretion, conditions precedent to our willingness to close the Transaction. 
  
 (7.1.10) The time, date, and place of Transaction closing. 
  
 (7.2) Our attorneys will (with the assistance of your private counsel where the Transaction closing involves real estate mortgages or U.C.C. filings)
prepare the documents to close the Transaction. 
  
 (8) CLOSING:

  
 Our Regional Financial Services Branch will close the
Transaction. 
  
 We will not close the Transaction unless all
parties hereto have fully complied with all requirements of the Approval Letter and all subsequent Transaction closing instructions. 
  
 We will not close the Transaction if there has been any change in the financial or economic position, performance, prospects, or other circumstances of
any party to the Approval Letter deemed by us, in our sole discretion, to be materially adverse to our interest. 
  
 You must, at Transaction closing, provide funds for all required document filing, mortgage recordation, title transfer, or other fees of whatsoever nature
that may be required to perfect the closing documents and complete the closing. You must, at Transaction closing, to provide funds for any fees owed us. You must, at Transaction closing, provide funds to reimburse us for any inspection or other
expenses we may have incurred in your behalf. 
  
 (9) POST-CLOSING:

  
 Those proceeds of the Note will be transferred, by
electronic wire transfer if possible, to the parties indicated by the intent and purpose of the Approval Letter. Disbursement will, at our sole discretion, occur after all Transaction closing documents required by the Approval Letter have been fully
perfected (including transfer, recording, and filing where required) and all other Transaction closing requirements have been completed and approved by us. 
  

 16 

 (10) CONTACT WITH US: 
  
 Our Regional Financial Services Branch that will close the Transaction, and with which you shall communicate during the rest of the
financing’s life, is: 
  
 Financial Services Branch, F/MB52

 National Marine Fisheries Service 
 263 13th Avenue, S. 
 St. Petersburg, Florida 33701 
  
 Vox: (727) 824-5377 
 Fax: (727) 824-5380 
  
 You shall communicate
with our Regional Financial Services Branch on all matters except insurance. You shall communicate on all insurance matters directly with our Central Insurance Servicing Unit: 
  
 Insurance Servicing Unit 
 Financial Services Division, F/MB5 
 National Marine Fisheries Service 
 1315 East West Highway 
 Silver Spring,
Maryland 20910 
  
 Vox: (301) 713-2387 
 Fax: (301) 713-1306 
  
 You should contact both our Branch and our Central Insurance Unit as soon as all parties required to do so have signed the Approval Letter and you have returned the
Approval Letter to our Branch. We will all benefit by having as much time as possible to prepare for closing the Transaction. 
  
 The case number indicated by the reference designation immediately before the salutation portion of the Approval Letter is the official designation by which all matters
pertaining to the Transaction will, throughout its entire life, be referenced. It is important that you include this case number on all correspondence you send to us about the Transaction. It is very important that you include this
case number on all checks you send us for any reason, now or in the future, relating to the Transaction.  
  

 17 

 (11) SIGNING THE APPROVAL LETTER: 
  
 All parties listed in the signature section of the Approval Letter must sign the Approval Letter in the appropriate spaces
provided and return it (with original signatures) to our Branch. This evidences the acceptance of all such parties of the terms and conditions of the Approval Letter. Nothing can go forward until all such parties have signed the Approval Letter and
their original signatures thereon are in our possession. 
  
 (12)
GENERAL: 
  
 All parties signing the Approval Letter,
and any other parties who might rely on it, recognize, understand, and hereby agree that: 
  
 (12.1) The Chief, Financial Services Division, or his designee, may negotiate with any party to the Approval Letter, any creditor, or any other party whatsoever about: the Approval Letter, the liability of any party,
the collateral securing the Transaction, the Security Documents, or any other matter whatsoever affecting the Transaction. Any resulting amendment of the Approval Letter shall require the written agreement only of the parties whom we, in our sole
discretion, deem involved in the amendment. Any resulting change in the Approval Letter shall not be cause for damage, counterclaim, or set off by any of party hereto whatsoever. It is the sole responsibility of all parties to verify for themselves
the final conditions under which the Transaction is being closed. 
  
 (12.2) All parties must meet such other conditions as we may, in our sole discretion, reasonably deem necessary to accomplish the intent and purpose of the Approval Letter and otherwise protect our interest. 
  
 (12.3) The Approval Letter is the entire and exclusive agreement between the
parties hereto. This agreement may be amended only in writing signed by the parties we deem, in our sole discretion, to be involved in the amendment. All parties hereto forever waive all right to sue, or otherwise counterclaim against, the United
States Government based on any claim of past, present, or future oral agreement between the parties. 
  
 (12.4) The provisions of the Approval Letter are separable and, in the event any portion thereof is held to be void, invalid, non-binding, or otherwise
unenforceable, the remaining portion thereof shall remain fully valid, binding, and enforceable against all parties hereto. 
  

 18 

 (12.5) The exercise of any of our rights shall be at our sole discretion. Our failure at any time to
exercise any or all of our rights shall not constitute a waiver of any of those rights 
  
 (13) SIGNATURES: 
  
 (13.1) The parties
required to do so may sign the Approval Letter in any number of counterparts, and all such signed counterparts shall constitute one and the same Approval Letter. 
  
 (13.2) The undersigned hereby agree to, and shall henceforth be bound by and subject to, all provisions set forth in the
Approval Letter. 
  
 (13.3) FIRST PARTY: United States of
America, Acting by and through the Secretary of Commerce, National Oceanic and Atmospheric Administration, National Marine Fisheries Service: 
  

			
	By:	 	 /S/ Sandy White

	 	 	Sandy White
	 	 	Financial Assistance Specialist

  

					
	 	 	By:	 	 /S/ Michael L. Grable

	 	 	 	 	Michael L. Grable, Chief
	 	 	 	 	Financial Services Division
		
	 	 	(13.4) SECOND PARTY: Omega Protein, Inc.:

  

							
	 	 	By:	 	 /S/ Robert W. Stockton

	 	Date: December 6, 2005
	 	 	 	 	Vice President	 	 
				
	 	 	Attest:	 	 /S/ John D. Held

	 	Date: December 6, 2005
	 	 	 	 	Vice President	 	 
		
	 	 	(13.5) SECOND PARTY: Omega Protein Corporation
				
	 	 	By:	 	 /S/ John D. Held

	 	Date: December 6, 2005
	 	 	 	 	Executive Vice President	 	 
				
	 	 	Attest:	 	 /S/ Robert W. Stockton

	 	Date: December 6, 2005
	 	 	 	 	Executive Vice President	 	 

  

 19

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