8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

Current Report Pursuant to Section 13 or 15(d) of

the Securities Act of 1934

Date of Report (Date of earliest event reported): December 6, 2005

Omega Protein Corporation

(Exact name of registrant as specified in its charter)

Nevada	001-14003	76-0562134
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

1717 St. James Place, Suite 550 Houston, Texas	77056
(Address of principal executive offices)	(Zip Code)

(713) 623-0060

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CRF 240.133-4(c))

Item 1.01 Entry Into a Material Definitive Agreement

On December 6, 2005, Omega Protein Corporation (the “Company”) and its wholly owned subsidiary, Omega Protein, Inc. (“OPI”), entered into an Approval Letter dated December 1, 2005 (“Approval Letter”) with the U.S. Department of Commerce, National Oceanic and Atmospheric Administration, National Marine Fisheries Service (“NMFS”).

In the Approval Letter, the NMFS has approved in principle OPI’s financing application under the NMFS Fisheries Finance Program and OPI is eligible to receive a loan of up to $16,442,000 from the NMFS under that program. Borrowings under the Approval Letter are expected to be used to finance and/or refinance fishing vessel refurbishments and capital expenditures relating to shore-side assets. The loan is expected to have a term not to exceed 15 years from inception and an interest rate to be determined by the U.S. Treasury. The loan will be secured by liens on OPI assets to be determined. Final approval for qualifying projects will require approval by the NMFS.

Borrowings under the Fisheries Finance Program are required to be evidenced by security agreements, undertakings and other required NMFS documents as necessary to accomplish the intent and purpose of the Approval Letter. The Company and OPI will be required to comply with customary NMFS covenants, as well as certain special covenants, set forth in the Approval Letter.

The closing of the loan described in the Approval Letter is expected to occur in the latter part of 2006.

The foregoing description of the Approval Letter is qualified in its entirety by reference to the Approval Letter, which is incorporated herein by reference and attached hereto as Exhibit 10.1.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

See Item 1.01 above which is incorporated by reference herein.

Item 9.01. Financial Statements and Exhibits

a. Financial Statements of Businesses Acquired

None.

b. Pro Forma Financial Information

None.

c. Shell Company Transactions

None.

d. Exhibits

10.1 Approval Letter dated as of December 1, 2005 and executed on December 6, 2005 by Omega Protein, Inc., Omega Protein Corporation and United States Department of Commerce, acting by National Oceanic and Atmospheric Administration, National Marine Fisheries Service

SIGNATURE

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

	Omega Protein Corporation
Dated: December 8, 2005.	/s/ John D. Held
	John D. Held
	Executive Vice President, General Counsel and Secretary

EX-10.1

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.

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(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.

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(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.

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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.

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(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”).

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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.

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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

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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.

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(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

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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.

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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.

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(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

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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,

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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.

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(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.

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(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.

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(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.

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(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

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