Document:

Title XI Financial Agreement

					
	 Case No.
	 	FF-G-011	 	 EXHIBIT 10.68

	 	 	

  
 TITLE XI FINANCIAL
AGREEMENT 
  
 THIS TITLE XI FINANCIAL AGREEMENT (hereinafter, the
“Financial Agreement”), dated December 29, 2003, is made and entered into by Omega Protein, Inc., (hereinafter, the “Borrower”), Omega Protein Corporation, (hereinafter, the “Guarantor”),1 and the UNITED STATES OF AMERICA acting by and through the Secretary of Commerce, (hereinafter, the “Government”),

  
 DEFINITIONS: All terms contained herein are defined in the Acknowledgment of
Definitions executed by all parties to this transaction. 
  
 WHEREAS, heretofore,
the Government, pursuant to the provisions of Title XI of the Merchant Marine Act, 1936, as amended, found at 46 USC § 1271 et seq., and 50 CFR 253, as amended by Public Law 104-297 on October 11, 1996, known as the Fisheries Finance Program
(FFP), made, entered into, and delivered certain agreements and covenants, as contained in an approval and agreement letter (hereinafter, the “Approval Letter”), dated October 1, 2003, and such Approval Letter has been accepted by
the Borrower and the Guarantor. The Approval Letter contemplates a loan from the Government to the Borrower, in the amount of $5,300,000.00 This transaction will be evidenced by the issuance of a Promissory Note to the United States of
America by the Borrower, in the amount of $5,300,000.00, (hereinafter, the “Promissory Note”) secured by the property listed in ARTICLES I and II, below; and 
  
 WHEREAS, the Borrower and Guarantor understand that the Government is unwilling to enter into the aforementioned transaction unless this
Financial Agreement and related documents are executed by the Borrower and Guarantor. For that reason, the Borrower and Guarantor have agreed to execute and deliver this Financial Agreement. 
  
 NOW THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the Borrower and Guarantor hereby agree to the following: 
  

	1	In this agreement, use of the singular includes the plural and vice versa. 

 ARTICLE I: COLLATERAL 
  
 The Collateral which the Borrower is giving to the Government in order to obtain this loan from the Government, includes all of the items
listed below: 
  
 1.    THE EQUIPMENT: The Borrower will
provide to the Government security interests, evidenced by UCC filings, in the full amount of the Promissory Note, on all of the property described below (hereinafter, the “Equipment”). 
  
 All fisheries unloading, processing holding and distribution 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 Borrower’s business on the properties which secure the Promissory Note and any
other debt to the Government, or on any other Borrower’s business premises at any other site at which the Borrower now conducts, or in the future may conduct, its operations and regardless of the Equipment’s actual location at any given
time. The Equipment shall include, but not be limited to: all forklifts, bobcats, cranes, pallet trucks, lift trucks, and other product or material movement equipment; all trailers, tanks, trucks, or other rolling stock; all fish unloading,
transfer, and conveying equipment, all fish processing and fish weighing equipment; all cooling, refrigerating, freezing, and other fish holding equipment (blast freezers, plate freezers, coolers, or other refrigeration equipment); all fish
packaging equipment; all fish baskets, totes, tanks, tubs, and other fish holding equipment; all ice makers; all hand and power tools; all inventory and product, subject to lien of credit line lender; and all office equipment—all together with
all associated equipment, machinery, parts, tools, or other items of whatsoever nature and whether fixed or unfixed to the aforementioned properties securing the Promissory Note. 
  
 THIS EXCLUDES ONLY SUCH FIRST UCC SECURITY INTERESTS TO THIRD PARTIES as may be necessary and appropriate to secure credit from such parties
for the specific purpose of purchasing specific equipment (hereinafter, the “Purchase-Money Equipment”). In such cases, the Borrower agrees to the following: 
  
 (a)    To give to the Government UCC security interests on the Purchase-Money Equipment second only to
the first interests pledged to the lenders of the purchase money (hereinafter, the “Purchase-Money UCC security interests”); and 
  

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 Article I, COLLATERAL (continued) 
  
 (b)    That the amount secured by the Purchase-Money UCC security interests shall not exceed the
specific purchase cost of said equipment; and 
  
 (c)    The term of the credit secured to buy the Purchase-Money Equipment (and likewise, the duration of the Purchase-Money UCC security interests) shall not exceed an ordinarily prudent commercial term; and 

 
 (d)    No other Equipment or rights shall be secured
by the Purchase-Money UCC security interests; and 
  
 (e)    Upon full repayment of the amounts secured by the Purchase-Money Equipment, as reflected in the Purchase-Money UCC security interests, these interests shall be satisfied and the Government’s second UCC
security interest will ascend to first priority. 
  
 THE EQUIPMENT SHALL BE
INVENTORIED sufficiently to describe with certainty in the security agreement and associated UCC filing. The inventory shall be valued by appraisers acceptable to the Government. The inventory and appraisals shall be at the Borrower’s cost and
paid before this loan is closed, unless this requirement is specifically waived by the Government. 
  
 THE UCC SECURITY AGREEMENT SHALL CONTAIN the following provisions: 
  
 (a)    That the Government may enter upon any premises where the Equipment may be located and marshal, secure, protect, and do all
things necessary to preserve the Equipment immediately upon the Borrower’s default, but before any judicial action regarding such default; and 
  
 (b)    Such other provisions as the Government deems necessary to accomplish the intent and purpose of the Approval Letter and
otherwise protect its interest; and 
  
 (c)    Omega Protein, Inc., and Omega Protein Corporation, agree that none of these corporations will enter into any transaction or agreement with any party which will result in that party having a secured interest in
the Equipment unless that party first enters into a written agreement, with provisions acceptable to the Government, that: 
  

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 Article I, COLLATERAL (continued) 
  
 (i)    Except for purchase money lien holders, recognize the Government’s senior interest in, and
sole rights to, the Equipment or proceeds of the Equipment’s liquidation; and 
  
 (ii)    Agree not to interfere in any way with, but instead to cooperate in all reasonable ways with, the Government entering upon any property owned or leased by the Borrower in order to marshal,
secure, protect, and do all things necessary to preserve the Equipment. 
  
 2.    THE REAL PROPERTY includes: 
  
 (a)    A Deed of Trust in the full amount of the FFP Debt, on such property as more fully described in Exhibit A, attached hereto, owned by Borrower, together with all improvements thereon which comprise the
Borrower’s fisheries processing facility in Reedville, Virginia. 
  
 3.    PREFERRED SHIP MORTGAGES: 
  
 (a)    A Preferred Ship Mortgage in the full amount of the FFP Debt, on the vessel TIGER POINT, O.N. 508606. 
  
 (b)    A Preferred Ship Mortgage in the full amount of the FFP Debt, on the vessel JOHN DEMPSTER, O.N. 547685. 
  
 (c)    A Preferred Ship Mortgage in the full amount of
the FFP Debt, on the vessel MERMENTAU, O.N. 932019. 
  
 (d)    A Preferred Ship Mortgage in the full amount of the FFP Debt, on the vessel KIMBERLEY, O.N. 517498. 
  
 (e)    A Preferred Ship Mortgage in the full amount of the FFP Debt, on the vessel BARATARIA BAY, O.N.508201. 
  
 (f)    A Preferred Ship Mortgage in the full amount of
the FFP Debt, on the vessel GULF ISLAND, O.N. 619983. 
  
 4.    THE GUARANTEE: An unconditional guarantee of repayment of the FFP Debt will be given to the Government by Omega Protein Corporation. 
  
  

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 ARTICLE II: ADDITIONAL COLLATERAL 
  
 1.    INDIVIDUAL TRANSFERABLE QUOTAS: Should a limited fisheries access system be initiated at some future date under
which the Borrower 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 the Collateral, the Borrower agrees to grant to the Government a full senior security interest in such
allocation by whatsoever means deemed by the Government to be appropriate (including, but not limited to, the Borrower’s execution of security agreements and the filing of financing statements under the UCC). Further, if the Borrower fails to
do so, the Borrower agrees that the Government may use, for the purpose of executing and otherwise perfecting whatever documents may be required to effect the grant to the Government of such a full security interest in such fisheries conservation
and management allocation, the attorney-in-fact authority conferred upon the Government by ARTICLE IX of this agreement. 
  
 2.    OTHER COLLATERAL: Any new, different, substitute or other collateral which may, from time to time, be provided by the Borrower or the Guarantor
to the Government, will be subject to all of the covenants and provisions of all of the documents executed in connection with this transaction, including, but not limited to the Deed of Trust, Security Agreement, this Financial Agreement, the
Promissory Note, the Approval Letter, and UCC security interests. 
  
 ARTICLE III: GOVERNMENT’S PRIOR WRITTEN CONSENT REQUIRED 
  
 Without the prior written consent of the Chief, Financial Services Division, National Marine Fisheries Service, which consent will not unreasonably be withheld, (1) The Borrower, the Principals, or the Guaranteeing Company may not take any
of the actions prohibited by the Approval Letter dated October 1, 2003; or prohibited by any other of the loan documents. 
  
 ARTICLE IV: BORROWER’S OBLIGATIONS AND COVENANTS 
  
 The Borrower shall be bound by and do, perform or discharge all of the following actions. 
  
 1.    NOTICES TO THE GOVERNMENT: within ten (10) days of its occurrence, Borrower and the Guarantor must give the
Government written notice of any of the following: 
  

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 Article IV, BORROWER’S OBLIGATIONS AND COVENANTS (continued) 
  
 (a)    Any pending litigation, business reverse,
casualty, loss, or any other matter which diminishes: 
  
 (i)    its ability to service any debt actually or contingently owed the Government; or 
  
 (ii)    its ability to perform any other duty or obligation owed the Government; or 
  
 (iii)    its ability to fully and faithfully perform any
covenant with the Government; or 
  
 (iv)    the value of any property or other assets pledged to the Government; or 
  
 (v)    the net worth of any party against whom the Government has recourse for this debt. 
  
 (b)    The institution of any suit against the Borrower
which demands $50,000 or more; or the institution of any suit demanding $50,000 or more against any other person or entity that may adversely affect the Government’s interest hereunder, in the Promissory Note or otherwise. 
  
 ARTICLE V: FINANCIAL REPORTING TO AND INSPECTIONS BY THE GOVERNMENT

  
 1.    BORROWER AGREES TO PROVIDE THE GOVERNMENT WITHIN
20 DAYS FOLLOWING THE END OF EACH QUARTER of its tax or accounting years, a certified correct copy of: 
  
 (a)    a balance sheet; and 
  
 (b)    an income and expense statement for the preceding twelve months; and 
  
 (c)    an aging report of all receivables outstanding;
and 
  
 (d)    an inventory report for all
inventories maintained at the end of each year. 
  
 2.    CERTIFICATION OF FINANCIAL INFORMATION: Borrower agrees that: 
  
 ANNUALLY:    At the end of each fiscal year, said Article V, l(a) through (d) will be compiled by independent certified public accountants who are acceptable to the Government. 
  

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 Article V, FINANCIAL REPORTING (continued) 
  
 ALL ANNUAL financial reports required hereunder shall include a certification from the Borrower’s Chief Financial Officer that either:

  
 (a)    There has been no default, as
provided by the security instruments, during the reporting period; or 
  
 (b)    There has been a default, as provided by said security instruments, during the reporting period. In this case the nature, extent, prospective consequences, and all other relevant details of such default shall be
fully set forth in such certification. 
  
 3.    INCOME TAX
RETURNS: All tax returns shall be timely filed2 and an executed copy of Borrower’s Federal Income Tax Return,
along with all supporting schedules, must be delivered to the Government within 15 days of its filing or issuance. Borrower agrees to execute a consent and waiver, valid so long as Borrower owes a debt to the Government, which allows the Internal
Revenue Service to release directly to the Government, Borrower’s Federal Income Tax Returns, whenever the Government requests same.3 
  
 4.    BORROWER TO DELIVER ALL
REQUIRED FINANCIAL STATEMENTS, notices, returns or reports to the Government’s Southeast Regional Financial Services Branch. All financial statements shall be signed and delivered within 90 days of the close of the fiscal or accounting year, or
such quarter in such year, to which they relate. 
  
 5.    METHOD OF BOOKKEEPING: Borrower will, at all times, keep proper books of account according to generally accepted accounting principles, including financial and operating statements that include schedules showing
all compensation paid by the Borrower. 
  
 6.    GOVERNMENT
INSPECTIONS: Permit the Government, or any representative selected by the Government, in such manner and at such times as the Government may require, to (a) make inspections and audits of any books, records, papers, or other documents4 of whatsoever nature in the custody and control of the Borrower, Guarantor, or any other entity, relating in any way to the
financial or business condition or prospects of the Borrower, or Guarantor, including the making of copies thereof and extracts therefrom, and 
  

	2	Timely filing shall include valid extensions filed with the Internal Revenue Service. 

	3	Borrower agrees to execute IRS Form Nos. 4506 and 8821 or any other form necessary to implement the provisions of 26 USC §6103(c). Failure to do so constitutes
an event of default. 

	4	Including but not limited to off-loading receipts, business transaction journals, etc. 

  

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 Article V, FINANCIAL REPORTING (continued) 
  
 (b)    make inspections and appraisals of any of the Borrower’s or Guarantor’s physical assets. 
  
 7.    BORROWER TO PAY THE COST OF ALL SUCH INSPECTIONS: The cost of all
such inspections, audits, or appraisals shall be initially paid by the Government, but the Borrower shall reimburse the Government for the full cost thereof within 30 days of the Government’s demand and all such amounts disbursed by the
Government for such purpose shall, until fully repaid by the Borrower, be added to the Borrower’s Promissory Note to the Government (payable on demand) and shall earn interest at the same rate as the other principal of the Borrower’s
Promissory Note and shall be secured by the security instruments securing the Borrower’s Promissory Note. 
  
 8.    GUARANTOR’S OBLIGATIONS: Paragraphs 1, 2, 3, 4, 5, and 6, above, of this ARTICLE V, apply to the Guarantor, with the only exception being in Paragraph 4, the Guarantor has 120 days to
deliver financial statements. Additionally, the Guarantor shall provide to the Government, at the end of each tax year, a certified correct copy of its Statement of Financial Condition, and if applicable its SEC-10K Report. 
  
 ARTICLE VI: VIRGINIA LAW TO GOVERN 
  
 To the extent not governed by the laws of the United States, all provisions of this Financial
Agreement shall be construed, given effect, and enforced according to the laws of the Commonwealth of Virginia. With respect to any claim or proceeding relating to this Financial Agreement, the Borrower and Guarantor hereby consent to and subject
themselves to the jurisdiction of the state and federal courts located in the Commonwealth of Virginia, and agree that the venue of any action or proceeding relating to this Financial Agreement shall lie exclusively in said state. The parties hereto
acknowledge and agree, however, that in the event that an action to foreclose a real property mortgage and security agreement or deed of trust and security agreement is brought, it will be brought pursuant to the laws of the state where the real
property is located and the parties hereto hereby consent to and subject themselves to the jurisdiction of the courts of said state. 
  
 ARTICLE VII: DEFAULT 
  
 1.    THE OCCURRENCE OF ANY OF THE FOLLOWING CONSTITUTES AN EVENT OF DEFAULT: 
  

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 Article VII, DEFAULT (continued) 
  

(a)    ANY FAILURE TO OBSERVE, PERFORM, COMPLY WITH AND DISCHARGE ALL OF THE COVENANTS, CONDITIONS, AND OBLIGATIONS WHICH ARE
IMPOSED ON: 
  
 (i)    BORROWER by the
Approval Letter, dated October 1, 2003, this Title XI Financial Agreement, the Promissory Note, dated December 29, 2003, the Deed of Trust dated December 29, 2003, Preferred Ship Mortgages dated December 29, 2003, and any other
agreement or document executed in connection with this Financial Agreement and the Promissory Note, concurrently or otherwise, inclusive of amendments thereto, in connection with this Financial Agreement, or subsequent amendment or agreement,
regardless of whether or not the Borrower shall be a party to said agreement or document, and such default shall continue for fifteen (15) days; or 
  
 (ii)    ANY GUARANTOR by any Guaranty Agreement, whether or not the Borrower is party to said agreement; or 
  
 (b) ANY FAILURE TO PAY OR MAKE PAYMENTS ON: 
  
 (i)    INTEREST ON THE PROMISSORY NOTE when and as the
same shall become due and payable as therein provided; or 
  
 (ii)    PRINCIPAL ON THE PROMISSORY NOTE when and as the same shall become due and payable, whether at maturity, by notice of acceleration, or otherwise; or 
  
 (c) FINANCIAL EVENTS: 
  
 (i)    Borrower makes a general assignment for the benefit of the Borrower’s creditors; or 
  
 (ii)    Borrower loses the right to do business, by
forfeiture or otherwise; or 
  
 (iii)    A
receiver or receivers of any kind whatsoever, whether appointed or not, in admiralty, bankruptcy law, common law, or equity proceedings, and whether temporary or permanent, shall be appointed for property of the Borrower; or 
  

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 Article VII, DEFAULT (continued) 
  

(iv)    PETITION OR OTHER PROCEEDING OR ACTION IN BANKRUPTCY, regarding the BORROWER, is filed by the BORROWER or by creditors of
the BORROWER; however, no proceeding or action in bankruptcy filed against BORROWER by its creditors shall constitute an event of default under the Financial Agreement unless such proceeding or action has not been dismissed within 60 days of filing.
ALL PARTIES TO THIS AGREEMENT ACKNOWLEDGE AND UNDERSTAND THAT IN THE EVENT THAT A PETITION IN BANKRUPTCY IS FILED BY ANY PARTY OR AN INVOLUNTARY BANKRUPTCY PETITION FILED BY A THIRD PARTY IS NOT DISMISSED WITHIN 60 DAYS OF FILING, THAT THE FOLLOWING
EVENT WILL OCCUR: 
  
 1.    THE GOVERNMENT
WILL IMMEDIATELY ACCELERATE THE ENTIRE AMOUNT OUTSTANDING AND DEMAND IMMEDIATE PAYMENT THEREOF; AND 
  
 2.    ANY VESSEL THAT SECURES, IN WHOLE OR IN PART, THE SUM OWED THE GOVERNMENT WILL RETURN TO PORT AND NOT DEPART UNLESS ORDERED BY
THE BANKRUPTCY COURT. 
  
 (d)    FAILURE TO
MAINTAIN ANY OF THE INSURANCE COVERAGE as outlined in Paragraph 4: Insurance Requirements, found on pages 14 and 15 of the Approval Letter. 
  
 (e)    A MISREPRESENTATION OR UNDISCLOSED FACT, deemed material by the Government, made or omitted in any application, agreement,
affidavit, or other document, submitted in connection with this transaction, on behalf of, or for the benefit of, or by the Borrower; or 
  
 (f)    INSTITUTION OF ANY SUIT AGAINST THE BORROWER or others deemed by the Government to affect adversely its interest hereunder, in
the Promissory Note or otherwise; 
  
 2.    UPON OCCURRENCE OF
AN EVENT OF DEFAULT, THE BORROWER AGREES, ACKNOWLEDGES AND CONSENTS TO the Government, within its authority or discretion, to take any or all of the following steps, measures or actions, including but not limited to: 
  
 (a)    Declare the Promissory Note to be due and payable
immediately and upon such declaration the entire principal of and interest on the Promissory Note, and any other sums owed to the Government, shall become and be immediately due and payable, and thereafter shall bear interest at eighteen percent
(18%) per annum unless such would violate applicable usury laws, if any, in which case, the maximum legal rate permitted by applicable laws 
  

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 Article VII, DEFAULT (continued) 
  

shall prevail; provided, however, that if the Borrower shall have removed and remedied each Event of Default within fifteen (15) days after the
occurrence thereof, then in every such case, the Government shall waive any such Event of Default; but no such waiver shall extend to nor affect any subsequent or other Event of Default nor impair any rights or remedies consequent thereon; and
provided, further, that if at any time after the expiration of fifteen (15) days after any Event of Default shall have occurred, all Events of Default shall have been remedied and removed and full performance made by the Borrower to the satisfaction
of the Government and all installments of principal and interest in arrears (including interest at the rate per annum, as aforesaid) and the reasonable charges and expenses, if any, of the Government, its agents and attorneys, shall have been paid
(including interest at the rate per annum, as aforesaid), then and in every such case the Government may, in its discretion, waive any such Event of Default; and provided, also, that no waiver hereunder shall extend to nor affect any subsequent or
other Event of Default nor impair any rights or remedies consequent thereon; 
  
 (b)    BRING SUIT IN COURT OF COMPETENT JURISDICTION, at the discretion of the Government, to obtain judgment for any and all amounts due under the Promissory Note, or otherwise hereunder, and
collect the same out of any and all collateral of the Borrower; and/or 
  
 (c)    FORECLOSE THE REAL ESTATE MORTGAGES AND SECURITY AGREEMENTS AND/OR PREFERRED SHIP MORTGAGE AND SELL any real and/or personal property which secures the FFP Debt; and/or in the case of a Vessel, retake the Vessel
without legal process wherever the same may be found, and the Borrower or other person in possession, forthwith upon demand of the Government, shall immediately surrender to the Government possession of the Vessel, and, without being responsible for
loss or damage, the Government may hold, lay-up, lease, charter, operate, or otherwise use the Vessel for such time and upon such terms as it may deem to be for its best advantage, accounting only for the net profits, if any, arising from such use
of the Vessel and charging against all receipts from the use of the Vessel, or from the sale thereof by court proceeding or pursuant to subsection (e) below, all costs, expenses, charges, damages, or losses by reason of such use; and if at any time
the Government shall avail itself of the right herein given it to retake the Vessel and shall retake it, the Government shall have the right to dock the Vessel for a reasonable time at any dock, pier, or other premises of the 
  

 11 

 Article VII, Default (continued) 
 Borrower without charge, or to dock it at any other place at the cost and expense of the Borrower; IT IS EXPRESSLY UNDERSTOOD AND AGREED TO BY THE BORROWER THAT SURRENDER OF THE VESSEL UNDER THIS SECTION MUST BE AND
WILL BE IMMEDIATE AND IN ACCORDANCE WITH THE DIRECTIONS OF THE GOVERNMENT. FAILURE OF THE BORROWER TO IMMEDIATELY COMPLY WITH THE GOVERNMENT’S DEMAND FOR SURRENDER OF THE VESSEL WILL CAUSE THE POSSESSION OF THE VESSEL BY THE BORROWER
(INCLUDING, BUT NOT LIMITED TO, POSSESSION AND CONTROL OF THE VESSEL BY A MASTER OR CREW MEMBER ON BOARD THE VESSEL) TO BE UNLAWFUL AND TO CONSTITUTE A CONVERSION OF THE VESSEL, ITS APPURTENANCES AND EQUIPMENT, THEREBY SUBJECTING THE BORROWER
(EXPRESSLY INCLUDING, IF APPLICABLE, ITS OFFICERS AND DIRECTORS) TO ALL FINES, PENALTIES AND ACTIONS WHICH THE GOVERNMENT DEEMS APPLICABLE AND APPROPRIATE. SHOULD THE BORROWER CONTINUE TO OPERATE, POSSESS OR CONTROL THE VESSEL CONTRARY TO THE
GOVERNMENT’S DIRECTIONS AND THE PROVISIONS HEREIN, THEN THE GOVERNMENT SHALL, IN ADDITION TO ANY OTHER RIGHTS AND REMEDIES AT LAW AND IN EQUITY, BE ENTITLED TO A TEMPORARY RESTRAINING ORDER AND/OR ORDER FOR INJUNCTIVE RELIEF NECESSARY TO GAIN
COMPLIANCE HEREWITH, IN ADDITION TO EXPRESSLY CONSENTING THAT THE INJURY AND DAMAGE RESULTING FROM BREACH HEREOF WOULD BE IMPOSSIBLE TO MEASURE MONETARILY, BORROWER EXPRESSLY WAIVES ANY DEFENSE BASED UPON AN ALLEGED EXISTENCE OF AN ADEQUATE REMEDY
AT LAW. 
  
 (d)    Foreclose this Mortgage
pursuant to the terms and provisions of the 46 USC, Chapter 313, or by other judicial process as may be provided in the statutes; and 
  
 (e)    In addition to any and all other rights, powers, and remedies elsewhere in this Mortgage or by law granted to and conferred
upon the Government, sell the Vessel upon such terms and conditions as it may deem to be for its best advantage, including the right to sell and dispose of the Vessel free from any claim of or by the Borrower, at public sale, by sealed bids or
otherwise, after first giving notice of the time and place of sale, with a general description of the property by first publishing notice of any such sale for ten (10) consecutive days, except Sundays, in some newspaper of general circulation at the
place designated for such sale, and by mailing notice of such sale to the Borrower at its last known address; such sale may be held at such place and at such time as the Government in such notice may have specified, or may be adjourned by the
Government from time to time by announcement at the time and place appointed for such sale or for such adjourned sale, and without further notice of publication and the Government may make any such sale at the time and place to which the same shall
be so adjourned; and any such sale may be conducted without bringing the Vessel to 
  

 12 

 Article VII, Default (continued) 
  

the place designated for such sale and in such manner as the Government may deem to be for its best advantage, and the Government may become the
purchaser at any such sale, and shall have the right to credit on the purchase price any or all sums of money due to the Government under the Promissory Note, or otherwise hereunder. THE BORROWER EXPRESSLY AGREES AND ACKNOWLEDGES THAT SALE OF THE
VESSEL PURSUANT TO THIS SECTION WILL NOT (NOTWITHSTANDING FEDERAL OR STATE LAW TO THE CONTRARY, IF ANY,) IMPAIR OR LIMIT THE GOVERNMENT’S LEGAL RIGHT TO COLLECT FROM THE BORROWER ANY DEFICIENCY REMAINING AFTER THE SALE. IF ANY SUCH FEDERAL OR
STATE LAWS OR LEGAL PRECEDENTS MAY BE CONSTRUED TO LIMIT THE GOVERNMENT’S RIGHTS TO COLLECTION OF SAID DEFICIENCY FROM THE BORROWER, THEN BORROWER HEREBY EXPRESSLY WAIVES, RELINQUISHES AND FOREVER GIVES UP THE RIGHT TO AVAIL ITSELF OF SUCH LAWS
AND/OR DEFENSES. 
  
 (d)    RETAKE AND/OR SELL
THE EQUIPMENT WITHOUT LEGAL PROCESS as provided by the Real Estate Mortgages, Security Agreements, and Preferred Ship Mortgage, or any other document which has been executed by or on behalf of the Borrower; and 
  
 ARTICLE VIII: TITLE XI FINANCIAL AGREEMENT GOVERNS; SEVERABILITY

  
 1.    To the extent that any of the terms and
conditions of this Financial Agreement are inconsistent or in contradiction with the terms and conditions of any other agreement between the Government and the Borrower, including but not limited to previously executed Title XI Financial Agreements,
then the terms of this Financial Agreement shall govern, otherwise, all such terms and conditions of such other agreements will continue with full force and effect. 
  
 2.    The unenforceability or invalidity of any provision(s) of this Title XI Financial Agreement shall not render any
other provision(s) herein unenforceable or invalid. 
  
 ARTICLE
IX: POWER OF ATTORNEY 
  
 Borrower hereby irrevocably appoints the Government
the true and lawful attorney of the Borrower, in its name and stead to execute any other document necessary to perfect the Government’s security interests regarding this transaction and/or all aspects of the FFP Debt. 
  
  

 13 

 ARTICLE X: ENVIRONMENTAL HAZARD INDEMNIFICATION 
  
 Borrower and Guarantor hereby agree to the following with respect to any environmental
hazards or contamination associated with the Collateral: 
  
 1.    At closing, Borrower must certify in writing that, to the best of its knowledge, there are currently no defects or environmental hazards on or about the Collateral. Notwithstanding this, at closing, Borrower and
Guarantor will execute a Certification and Indemnification Agreement Regarding Environmental Matters which provides that they shall, jointly and severally, be liable for any and all contamination, cleanup, and environmental actions against the
Collateral and that they are, jointly and severally, liable for all costs and claims associated with or resulting from any claim, cleanup, or lien imposed against any of the Collateral. 
  
 2.    That Borrower and Guarantor will hold the Government harmless from any claim or duty arising from environmental
defects or hazards associated with the Collateral. 
  
 In the event this loan is
not closed because of the discovery of such defects or environmental hazards previously unknown to Borrower, the Government will refund the commitment fee less all costs incurred by the Government in attempting to close. 
  
 IN WITNESS WHEREOF, the Borrower and the Guarantor have executed this Title XI Financial
Agreement. 
  

			
	 GOVERNMENT:

	
	 UNITED STATES OF AMERICA
 Acting by and through the Secretary of Commerce
 National Oceanic and Atmospheric Administration
 National Marine Fisheries Service
 Financial Services Division
  

		
	By:	 	 
	 	 	

		
	Title:	 	 Chief, Financial Services Branch Southeast Region

	 	 	

		
	Date:	 	 December 30, 2003

	 	 	

	 	 	 

  
  
  
  
  
  
  
  
  
  
  

 14 

									
	 	 	 	 	 BORROWER: OMEGA PROTEIN, INC.

	 Attest:
	 	 	 	 
					
	By:	 	 	 	 	 	 By:
	 	 
	 	 	
	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 

  
  

									
	 	 	 	 	 
					
	 Title:
	 	 Executive Vice President
	 	 	 	 Title:
	 	Vice President Administration
	 	 	
	 	 	 	 	 	

	 Chief Financial Officer
	 	 	 	 and Controller

	
	 	 	 	

	 and Secretary
	 	 	 	 	 	 
	
	 	 	 	 	 	 

  

									
	 	 	 	 	 
					
	Date:	 	 December 29, 2003
	 	 	 	Date:	 	 December 29, 2003

	 	 	
	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 

  
 (SEAL) 
  

									
			
	 	 	 	 	 GUARANTOR: OMEGA PROTEIN CORPORATION

	 Attest:
	 	 	 	 
					
	By:	 	 	 	 	 	By:	 	 
	 	 	
	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 

  

									
	 	 	 	 	 
					
	 Title:
	 	 Vice President
	 	 	 	 Title:
	 	 Executive Vice President

	 	 	
	 	 	 	 	 	

	 Administration and Controller
	 	 	 	Chief Financial Officer and
	
	 	 	 	

	 	 	 	 	Secretary
	 	 	 	 	

  

									
	 	 	 	 	 
					
	Date:	 	 December 29, 2003
	 	 	 	Date:	 	 December 29, 2003

	 	 	
	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 

  
 (SEAL) 
  

 15Guaranty Agreement

					
	 Case No.
	  	FF-G-011	  	Exhibit 10.69
	 	 	

  
 GUARANTY AGREEMENT

  
 RECITALS: THIS GUARANTY AGREEMENT, is made and entered into by Omega
Protein Corporation, 1717 St. James Place, Suite 550, Houston, Texas 77056 (hereinafter, the “Guarantor”), and the UNITED STATES OF AMERICA, acting by and through the Secretary of Commerce, National Oceanic and Atmospheric Administration,
National Marine Fisheries Service, Financial Services Division (hereinafter, the “Government”). 
  
 DEFINITIONS: All terms contained herein are defined in the Acknowledgment of Definitions executed by all parties to this transaction. 
  
 WHEREAS, in connection with the Government providing financing to the Borrower, the Borrower has executed and delivered to the Government
its promissory note (hereinafter, the “Note”) dated December 29, 2003, in the principal amount of $5,300,000.00 and has agreed to execute and deliver a certain Preferred Ship Mortgages, Deed of Trust and Security Agreement, UCC
Financing Statements (hereinafter, the “Loan Documents”) to the Government for the purpose of securing the payment of the principal of and interest on the Note and all other sums due the Government in accordance with its terms and the
terms contained in the Loan Documents. 
  
 WHEREAS, the Guarantor understands that
the Government is unwilling to enter into the aforementioned transaction, unless this Guaranty Agreement is executed by the Guarantor, therefore, in order to induce the Government to enter into the aforementioned transaction with the Borrower, the
Guarantor has agreed to execute and deliver to the Government an absolute and unconditional guaranty, (hereinafter, the “Guaranty”) of the above-referenced Note, thereby guaranteeing that all sums stated in the Note and all other sums of
any nature owed to the Government by the Borrower, shall be promptly paid in full when due. 
  
 WHEREAS, Omega Protein Corporation further represents to the Government that it is a corporation in good standing in the State of Nevada and that it will not allow or permit said status to change, except with the
express, written consent of the Government. 
  
 NOW THEREFORE, in consideration of
the premises and other good and valuable consideration, the receipt whereof is hereby acknowledged, the parties agree as follows: 
  
 1. The Guarantor unconditionally guarantees that all sums stated in, arising under the Note, including any and all amendments thereto, to be payable to the Government,
shall be promptly paid in full when due, in accordance with the provisions governing such payment. This Guaranty Agreement is unconditional and absolute and if for any reason such 
  
  

 1 

 sums, or any part thereof, shall not be paid promptly when due, the Guarantor will immediately pay the same to the
Government pursuant to the provisions governing such payment, regardless of any defenses or rights of set-off or counterclaims which the Borrower, Guarantor or any other party may have or assert, and regardless of whether the Government shall have
taken any steps to enforce any rights against the Borrower, the Guarantor or any other person to collect such sums, or any part thereof, and regardless of any other condition or contingency. The Guarantor also expressly agrees to pay the Government
all the costs and expenses of collecting such sums, or any part thereof, or of enforcing this Guaranty Agreement, expressly including, but not limited to, attorney’s fees. It is expressly understood by the Guarantor that collection expenses may
accrue rapidly and result in significant expenses for which the Guarantor agrees to be liable. It is further agreed to and understood by the Guarantor that “costs and expenses” of collection are deemed to include any and all costs,
including but not limited to, accelerated interest charges, attorney fees, and all other costs and expenses, which the Government may incur to collect sums due under the Note or hereunder or to protect and preserve collateral pledged in relation to
the obligation, regardless of whether said collateral was pledged by the Guarantor. The Guarantor agrees to be liable for and pay for said costs and expenses (including all interest charges thereon) which will continue to accrue until such time as
the Guarantor fully satisfies and discharges the obligation arising under this Guaranty Agreement. 
  
 2. The Guarantor unconditionally guarantees that the Borrower will promptly and punctually pay all other sums payable under the Note and the Loan Documents, including any amendments or substitutions therefor, and will
duly perform and observe each and every agreement, covenant, term and condition in such Note and Loan Documents, or amendments thereto, to be performed or observed by the Borrower, and upon the Borrower’s failure to do so, the Guarantor will
promptly pay such sums and duly perform and observe each such agreement, covenant, term and condition, or cause the same promptly to be performed and observed. 
  

3. The obligations, covenants, agreements and duties of the Guarantor under this Guaranty shall in no way be affected or impaired by reason of the happening from time
to time of any of the following with respect to the Note or the Loan Documents, including amendments or substitutions therefor, or any other document executed in connection therewith, although without notice to or the further consent of the
Guarantor: 
  
 a. the waiver by the Government, or its successors
or assigns, of the performance or observance by the Borrower, the Guarantor or any other party of any of the agreements, covenants, terms or conditions contained in the Note and the Loan Documents, or any other document executed in connection
therewith; 
  
  

 2 

 b. the extension, in whole or in part, of the time for payment by the Borrower, the Guarantor or any
other party to the obligation of any sums owing or payable under the Note, the Loan Documents or this Guaranty Agreement or of the time for performance by the Borrower, the Guarantor or any other party to the obligation of any other obligations
under or arising out of or on account of the Note, the Loan Documents any other document executed in connection therewith; 
  
 c. the modification or amendment (whether material or otherwise) of any of the obligations of the Borrower, the Guarantor or any other party to the
obligation as set forth in the Note, the Loan Documents or any other documents executed in connection therewith; 
  
 d. the doing or the omission of any of the acts referred to in the Note, the Loan Documents or any other document executed in connection therewith;

  
 e. any failure, omission, or delay of the Government to
enforce, assert, or exercise any right, power or remedy conferred on the Government in the Note, the Loan Documents or any other document or agreement executed in connection therewith, or any action on the part of the Borrower or the Government
granting indulgence or extension in any form whatsoever; and 
  
 f. the voluntary or involuntary liquidation, dissolution, sale of all or substantially all of the assets, marshalling of assets and liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition, or readjustment of, or other similar proceeding affecting the Borrower or any of its assets or any other party to the obligation; and 
  

g. the release of the Borrower, the Guarantor or any other party from the performance or observance of any of the agreements, covenants, terms or
conditions contained in the Note, the Loan Documents or any other document executed in connection therewith, by the operation of law; and 
  
 h. any Order of Judgment entered by a Bankruptcy Court which diminishes, discharges or declares any of the obligations or amounts owed under the Note and
Loan Documents to be paid or satisfied. The undersigned hereby waive any defense based upon any Bankruptcy Court order or judgment with respect to any action based upon this Guaranty Agreement, which is brought against the undersigned in Federal
District Court, or any other court of competent jurisdiction; and 
  
 i. the assumption and/or refinancing of the underlying indebtedness by a third party. 
  
  

 3 

 4. Notice of acceptance of this Guaranty Agreement and notice of any obligations or liabilities contracted or incurred by
the Borrower or any other party to the obligation are hereby waived by the Guarantor. 
  
 5. This Guaranty Agreement may not be modified or amended except by a written agreement executed by the Guarantor with the consent in writing of the Government. 
  
 6. This Guaranty Agreement may be assigned to any holder of the Note. 
  
 7. All agreements, covenants, terms and conditions in this Guaranty Agreement shall inure to the benefit of the Government and its
successors and assigns, and, without limitation of the generality of the foregoing, shall in particular inure to the benefit of any holder of the Note. 
  
 8. The signature of the Guarantor hereto is, in addition to and not in limitation of the foregoing, intended as and to have the effect of an endorsement of the Note by
the Guarantor, who hereby waives presentment, demand of payment, protest and notice of nonpayment of dishonor, and of protest of the Note and any and all other notices and demands whatsoever. 
  
 9. The terms of this Guaranty Agreement shall apply to the Note and all other loan documents
and shall bind the Guarantor to the same extent as though the Guarantor executed and delivered a separate instrument of guaranty with respect to each of such instruments and annexed the same thereto. 
  
 10. This Guaranty Agreement shall be binding upon the Guarantor and the Guarantor’s
heirs, executors, administrators, successors, assigns and all other legal representatives. 
  
 11. Community Property Rights: Each and every term and provision of this Agreement shall, to the extent necessary or required to subject community property rights, if any, in the collateral, to the terms hereof and
herein contained be read and interpreted to apply to the Guarantor. 
  
 12. The
Guarantor acknowledges and represents to the Government that it is a principal party of interest with respect to the past, present and future operation of the Borrower’s business and that the past, present and future financial success of the
Borrower’s business has, does and will directly, materially and substantially benefit the Guarantor. Accordingly, the Guarantor acknowledges and consents to any and all regulations and/or Financial Services Division requirements which require,
permit or authorize the Government to request that the Guarantor execute and deliver a guaranty of sums due under the Note. 
  
  

 4 

 13. All provisions of this Guaranty Agreement shall be construed, given effect, and enforced according to the laws of the
United States. With respect to any claim or proceeding relating to this Guaranty Agreement, the Guarantor hereby consents to and subjects itself to the jurisdiction of the federal court of competent jurisdiction of the State of Louisiana, and agrees
that the venue of any action or proceeding relating to this Guaranty Agreement shall lie exclusively in the federal court situated in the State of Louisiana, unless the Government has instituted proceedings where the collateral may be found and in
such case, the Guarantor consents to and subjects itself to the jurisdiction of the federal court which maintains jurisdiction over the collateral. 
  
 14. Prior written consent must be granted by the Government, consent of which will not be unnecessarily withheld, before the Guarantor shall split-up, spin-off, merge,
consolidate, transfer or allow transfer of its shares and/or assets as to effect a change in its controlling interest, management, and financial conditions. 
  
 15. If the Guarantor is a corporation, the Guaranty Agreement shall be binding upon its parent corporation and its subsidiaries. 
  
 16. Severability: The unenforceability or invalidity of any provision(s) of this Guaranty
Agreement shall not render any other provision(s) herein unenforceable or invalid. 
  
 IN WITNESS WHEREOF, the undersigned has executed and delivered this Guaranty Agreement. 
  

			
	 UNITED STATES OF AMERICA

	 Acting by and through the Secretary of Commerce

	 National Oceanic and Atmospheric Administration

	 National Marine Fisheries Service

	 Financial Services Division

		
	 By:
	 	 
	 	 	

		
	 Title:
	 	 Chief, Financial Services Branch, Southeast Region

	 	 	

		
	 Date:
	 	 December 30, 2003

	 	 	

  
  

 5 

					
	 	  	GUARANTOR:
	 	  	Omega Protein Corporation
			
	 Attest:
	  	By:	  	 
	 	  	 	  	

	 	  	 	  	Robert W. Stockton
	 By:
	  	 	  	 
	
	  	 	  	 
	 	  	Title:	  	Executive Vice President, Chief Financial Officer and Secretary
	 	  	 	  	

	 (SEAL)
	  	 	  	 
	 	  	Date:	  	December 29, 2003
	 	  	 	  	

  
  

 6 

 ACKNOWLEDGMENT 
  

			
	 STATE OF FLORIDA
	  	)
	 	  	)ss
	 COUNTY OF PINELLAS
	  	)

  
 On this the 30th day
of December 2003, Kell Freeman, Chief, Financial Services Branch, National Marine Fisheries Service, Southeast Region, who is the duly authorized representative of the Secretary of Commerce of the United States of America, acknowledged that he
executed the foregoing instrument as such representative of the Secretary of Commerce pursuant to the authority vested in him by the laws of the United States. He is personally known to me and did not take an oath. 
  

	
	

	 Notary Public

  
  

 7 

 ACKNOWLEDGMENT 
  

			
	 STATE OF Texas
	  	)
	 	  	)ss
	 COUNTY OF Harris
	  	)

  
 On this the 29th day
of December 2003, Robert W. Stockton, Executive Vice President, Chief Financial Officer and Secretary, who is the duly authorized representative of Omega Protein Corporation, acknowledged that he executed the foregoing instrument as such
representative of Omega Protein Corporation. He is personally known to me and did not take an oath. 
  

	
	

	 Notary Public

  
  

 8

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