Exhibit 10.3

MORTGAGE AND ASSIGNMENT OF LEASES

BE IT KNOWN, that on the 7th day of March, 2007,

BEFORE ME, the undersigned Notary Public, duly commissioned and qualified in and
for the County/Parish of                         , State of Louisiana, and in
the presence of the undersigned competent witnesses:

PERSONALLY CAME AND APPEARED:

Omega Protein, Inc. f/k/a Zapata Protein (USA), Inc., a Virginia Corporation
(hereinafter sometimes referred to as “Mortgagor”) appearing herein by and
through its authorized officer, duly authorized to act herein by resolutions by
its Board of Directors, a certified copy of which is attached hereto and made a
part hereof, marked as Exhibit “A”,

who declared unto me, Notary, that Mortgagor is justly and truly indebted unto
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 (“Mortgagee”) in the principal sum of SIX
MILLION THREE HUNDRED FORTY NINE THOUSAND AND 00/100 ($6,349,000.00) DOLLARS. To
evidence such indebtedness, Mortgagor has executed, under the date of these
presents, one certain promissory note (the “Note”) for the said sum of SIX
MILLION THREE HUNDRED FORTY NINE THOUSAND AND 00/100 ($6,349,000.00) DOLLARS
made payable to Mortgagee, due on March 6, 2022, and bearing interest at the
rate of six and 615/100 (6.615%) percent per annum from the date thereof until
paid (the “Note”).

Now, in order to secure i) the payment of the indebtedness evidenced by the
Note, together with all interest, attorneys’ fees and costs, and ii) the full
and punctual payment and performance of any and all amounts, liabilities and
obligations owing from time to time by the Mortgagor to the Mortgagee, or any
successor or transferee thereof, whether such amounts, liabilities or
obligations be liquidated or unliquidated, now existing or hereafter arising
(the “Indebtedness”) the Mortgagor does, by these presents, specifically
mortgage, affect and hypothecate unto and in favor of the Mortgagee and any
future holder of the Note, the following property (the “Mortgaged Properties”):

1.

The property described in Exhibit “B” attached hereto (the “Land”).

II.

All of the buildings, structures, improvements and other constructions, of every
kind and nature now or hereafter situated upon, affixed to or attached to the
Land, together with all component parts thereof.

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SUBJECT, however, to the condition that the Mortgagee shall not be liable in any
respect for the performance of any covenant or obligation of the Mortgagor in
respect of the Mortgaged Properties.

Should a limited fisheries access system be initiated at some future date under
which Mortgagor is granted a transferable fishery conservation and a 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 Mortgaged Properties
included in or subject to this Mortgage, Mortgagor agrees that it shall grant to
Secured Party (Secretary of Commerce) a full senior security interest in such
allocation by whatsoever means deemed by the Secured Party (in its sole
discretion) to be appropriate (including, but not limited to, the Mortgagor’s
execution of security agreements and the filing of financing statements under
the U.C.C.) Further, if the Mortgagor fails to do so, the Mortgagor agrees that
the Secured Party may (in its sole discretion) use, for the purpose of
executing, delivering, and otherwise perfecting whatever documents may be
required to perfect the grant to Secured Party of such a full security interest
in such fisheries conservation and management allocation, the attorney-in-fact
authority conferred upon the Secured Party by the Security Agreement.

As additional security for the payment of the Indebtedness up to the aggregate
amount of SIX MILLION THREE HUNDRED FORTY NINE THOUSAND AND 00/100
($6,349,000.00) DOLLARS ($6,349,000.00) DOLLARS at any one time outstanding,
Mortgagor hereby (a) pledges and assigns unto Mortgagee all of the Mortgagor’s
right, title and interest in and to all leases (“Leases”) presently or hereafter
granted and bearing against the Mortgaged Property, or any part thereof, and
(b) pledges, pawns and assigns unto Mortgagee all of the rentals, income,
profits or other sums (“Rents”) due or becoming due under the leases; provided,
however, Mortgagor is hereby granted a license to exercise all of the
Mortgagor’s rights under the Leases and to collect the Rentals so long as no
Event or Default hereunder shall have occurred or be continuing. If at any time
an Event of Default hereunder shall occur or continue, Mortgagee may, at
Mortgagee’s option, give written notice to all lessees under the leases of such
default by Mortgagor, thereby terminating the license hereby granted to
Mortgagor, and Mortgagee may enter upon and take possession of the leased
premises, and perform all acts necessary for the operation and the maintenance
of the said premises in the same manner and to the same extent that the
Mortgagor might reasonably so act, such entry or taking possession to be made by
actual entry or possession or by written notice served personally upon or sent
by certified mail to Mortgagor, and no further authorization shall be required.
In furtherance thereof and not by way of limitation, Mortgagee is specifically
empowered to demand, sue for, collect or receive all of the Rents which shall be
paid by the lessees under the Leases; and to exercise all of the rights and
privileges of Mortgagor under the Leases, including, but not limited to, the
right to fix or modify the amount of Rents. Mortgagor irrevocably consents that
all lessees under the Leases, upon demand and notice from Mortgagee and
Mortgagor’s default hereunder, shall be authorized to pay the Rents under the
Leases directly to Mortgagee without liability of said lessees for the
determination of the actual existence of any default by Mortgagor claimed by
mortgagee, said lessees being hereby expressly relieved of any and all duty,
liability, and obligation to Mortgagor in connection with any and all Rents so
paid. Mortgagee shall apply the net amount of the Rents collected after payment
of all proper costs and charges, as a credit against the indebtedness

 

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secured hereby. Mortgagor agrees to indemnify and hold Mortgagee harmless from
any and all liability, loss or damage which Mortgagee may incur under the leases
by reason of this pledge and assignment, and nothing herein contained shall be
construed to bind Mortgagee to the performance of any of the terms and
provisions contained in the Leases, or otherwise to impose any obligation on
Mortgagee. The pledge and assignment granted herein is made pursuant to the
provisions of La.R.S. 9:4401.

It shall be an Event of Default hereunder if Mortgagor fails or refuses to pay
any amounts due and owing under the Note or if any Event of Default (as defined
in any Loan Documents or other documents related to the Indebtedness) occurs.

And Mortgagor acknowledges the obligations secured hereby, whether now existing
or to arise hereafter, and confesses judgment thereon, if said obligations are
not paid at maturity, in favor of Mortgagee and does by these presents consent,
agree and stipulate that in the event the Note or any interest thereon not being
punctually paid the Note, at the option of Mortgagee, shall ipso facto mature
and become due and payable, anything therein contained to the contrary
notwithstanding, and it shall be lawful for, and the Mortgagor does hereby
authorize, Mortgagee without making a demand or putting Mortgagor in default, a
putting in default being expressly waived, to cause all and singular the
Mortgaged Properties to be seized and sold after due process of law, Mortgagor
waiving the benefit of any and all laws or parts of laws relative to the
appraisement of the property seized and sold under executory process or other
legal process, and consenting that the Mortgaged Properties be sold without
appraisement, either in its entirety or in lots or parcels, as Mortgagee may
determine, to the highest bidder for cash or on such terms as the plaintiff in
such proceedings may direct with Mortgagor being responsible for all
deficiencies and confesses judgment herein.

Mortgagor expressly authorizes and agrees that Mortgagee shall have the right to
appoint a keeper of the Mortgaged Property pursuant to the terms and provisions
of La.R.S. 9:5136.

Mortgagor hereby waives (a) the benefit of appraisement provided for in Articles
2332, 2336, 2723 and 2724 of the Louisiana Code of Civil Procedure and all other
laws concerning the same; (b) the demand and three (3) days notice of demand as
provided in Articles 2639 and 2721 of the Louisiana Code of Civil Procedures;
(c) the notice of seizure provided for in Articles 2293 and 2721 of the
Louisiana Code of Civil Procedure; and (d) the three (3) days delay provided for
in Articles 2331 and 2722 of the Louisiana Code of Civil Procedure; Mortgagor
expressly agrees to the immediate seizure of the Mortgaged Property in the event
the suit hereon; and Mortgage shall be entitled to all of the rights and
remedies provided for in R.S. 9:5352 et seq.; Mortgagor expressly agrees to and
confesses judgment to any deficiency and expressly waives the requirements,
benefits and delays contained in Articles 2771 and 2772 of the Louisiana Code of
Civil Procedure and all other laws concerning same.

The parties hereto waive the production of Mortgage, Conveyance, and Tax
Certificates and relieve and release me, Notary, from all responsibility and
liability in connection therewith.

 

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THUS DONE AND PASSED in multiple originals on the day, month and year first
above written, in the presence of the undersigned competent witnesses, who
hereunto sign their names with the said Appearers, and me, Notary, after reading
of the whole.

 

WITNESSES:

    OMEGA PROTEIN, INC.

/s/ John D. Held

    BY:   

/s/ Robert W. Stockton

Printed Name:

   

Name:

TITLE:

  

Robert W. Stockton

Vice President

/s/ Kelley O’Brien

      

Printed Name:

      

 

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EXHIBIT “B”

Mortgage and Assignment of Leases

16.453 Acre Tract

That certain tract or parcel of ground lying and being situated in the 7th Ward
of Vermillion Parish, Louisiana, in Section 86, Township 14 South, Range 3 East,
and described as beginning at a point where the north line of the property of
Andre Cessac and Lillie Mae Richard meets the west edge of Vermillion River;
thence running north 70º30’W, a distance of 996.2 feet, thence running south
19º30’W, a distance of 821.6 feet; thence running south 70º27’E a distance of
750 feet to the Vermillion River; thence running in a general northerly
direction along the meander line of said Vermillion River to the point of
beginning, said property being more fully shown on the plat of D.P. O’Brien,
Registered Surveyor, said plat attached to the Cash Deed recorded in COB 550,
Page 80, Instrument No. 174482, Vermillion Parish, Louisiana, said property
being shown on said plat as “Proposed Plant Site,” acquired by Seacoast
Products, Inc. (now Omega Protein, Inc.), pursuant to Cash Deed, dated
December 14, 1964, from Andre Cessac and Lillie Mae Richard, recorded COB 550,
Page 80, Instrument No. 174482, Vermillion Parish, Louisiana.

2.711 Acre Tract

A portion of the island situated in the Vermillion River in the central portion
of Section 86, Township 14 South, Range 3 East, at an approximate point where
the southwest corner of Section 79 and the northwest corner of Section 85 touch
the east line of Section 86, all in Township 14 South, Range 3 East, which said
property is shown on a plat of Noy O. Lewis, Registered Surveyor, dated May 7,
1966, and designated as Seacoast Product Company 2.711 acres, which plat is
attached to the Cash Deed recorded at COB 589, Page 168, Instrument No. 182096,
Vermillion Parish, Louisiana, acquired by Seacoast Products, Inc. pursuant to
Cash Deed dated May 16, 1966, from Andre Cessac and Lillie Mae Richard, recorded
COB 589, Page 168, Instrument No. 182096, Vermillion Parish, Louisiana.

 

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13.449 Acre Tract

That certain tract or parcel of ground lying and being situated in irregular
Section 86, Township 14 South, Range 3 East, 7th Ward of Vermillion Parish,
Louisiana, designated as Tract 1 of the plat of survey prepared by Joseph E.
Schexnaider, Registered Surveyor, dated August 20, 1996, which is attached to
the Credit Deed recorded at Conveyance Instrument No. 9614608, Vermillion
Parish, Louisiana, which property is bounded, now or formerly, on the north by
Andrew Road, on the east by Ivy Richard Tract 2, 9.279 acres, on the south by
Winnie Kibbe or assigns, and on the west by Ivy Richard, acquired by Zapata
Protein USA, Inc., pursuant to Credit Deed, dated December 9, 1996, from Ivy J.
Richard, Dola Domingues Richard and Lillie Mae Richard, recorded Conveyance
Instrument No. 9614608, Vermillion Parish, Louisiana.

9.279 Acre Tract

The Leasehold interest established pursuant to that certain Lease Agreement and
Option to Purchase, dated July 27, 2006, by Ivy Richard and Dola Richard, as
Lessors, to Omega Protein, Inc., as Lessee, recorded at Conveyance Instrument
No. 20610797, Vermillion Parish, Louisiana (the “9.279 Acre Lease”), affecting
the following described property:

That certain tract or parcel of land situated in irregular Section 86, Township
14 South, Range 3 East, 7th Ward of Vermillion Parish, State of Louisiana, being
more particularly described as follows:

Commencing at a point formed by the intersection of the center line of Louisiana
State Highway 333 and the northern right of way line of Andrew Road; thence
proceeding south 70º36’54”E along the northern right of way line of Andrew Road,
a distance of 2101.10 feet to a point; thence proceeding south 70º19’10”E along
the northern right of way line of Andrew Road, a distance of 1455.79 feet to a
point; thence proceeding south 19º30’00”W a distance of 62.64 feet to a point on
the southern right of way line of Andrew Road, being the point of the beginning;
thence continuing south 19º30’00”W a distance of 759.36 feet to a point; thence
proceeding north 54º49’00”W a distance of 60.81 feet to a point; thence
proceeding north 52º28’45”W a distance of 129 feet to a point; thence proceeding
north 43º37’12”W a distance of 540.10 feet to a point; thence proceeding north
23º59’28”E a distance of 460.09 feet to a point on the southern right of way
line of Andrew Road; thence proceeding north 70º30’46”E along the southern right
of way line of Andrew Road, a distance of 626.94 feet to the point of beginning;
being bounded on the north by Andrew Road, and on the south, east and west by
Omega Protein Corporation, all as per plat by Joseph E. Schexnaider, Registered
Professional Land Surveyor, dated August 20, 1996.

 

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6.83 Acre Tract

The Leasehold established pursuant to that certain Commercial Lease by Purvis
Theall and Ethlyn Cessac to Seacoast Products, Inc., dated November 10, 1970,
recorded in Conveyance Book 694, Page 392, Instrument No. 203106, as amended by
Amendment to Commercial Lease, dated August 3, 1972, recorded COB 735, Page 198,
Vermillion Parish, Louisiana (the “6.83 Acre Lease”), affecting the following
described property:

A tract of land situated in Section 86, Township 14 South, Range 3 East, in the
7th Ward of Vermillion Parish, Louisiana, and described as beginning at the
northeast corner of the property purchased by Seacoast Products, Inc. from Andre
Cessac, by Deed recorded in Volume 550, at Page 80, under Entry No. 174482 of
the Conveyance records of Vermillion Parish, Louisiana; thence running north
13º59’E along the west side of the Vermillion River, a distance of 237.1 feet;
thence running north 6º53’W along the west side of the Vermillion River, a
distance of 145.7 feet; thence running north 70º6’W a distance of 826.0 feet;
thence running south 3º20’W a distance of 369.7 feet to the north side of the
property of Seacoast Products, Inc.; thence running south 70º6’E a distance of
488.9 feet along the north side of the property of Seacoast Products, Inc.;
thence running south 68º07’E a distance of 322.3 feet along the north side of
the property of Seacoast Products, Inc. to the point of beginning; said property
being shown on the Plat of Survey by Noy O. Lewis, Registered Surveyor, dated
October 10, 1970, attached to the 6.83 Acre Lease.

1.774 Acre Tract

The Leasehold established pursuant to that certain Commercial Lease by Purvis
Theall and Ethlyn Cessac, as Lessor, and Seacoast Products, Inc., as Lessee,
dated August 1, 1972, recorded at COB 734, Page 631, Entry No. 211334,
Vermillion Parish, Louisiana (the “1.774 Acre Lease”), affecting the following
described property:

A tract of land situated in Section 86, Township 14 South, Range 3 East in the
7th Ward of Vermillion Parish, Louisiana, and described as beginning at the
northwest corner of the property leased by Seacoast Products, Inc. from Purvis
Theall and Ethlyn Cessac by Lease recorded in Volume 694, at Page 392, under
Entry No. 203106, of the Conveyance records of Vermillion Parish, Louisiana;
thence running south 69º06’E along the north side of the property leased by
Seacoast Products, Inc. by the Lease above set forth, a distance of 827.2 feet
to the Vermillion River; thence running north 4º24’W a distance of 103 feet;
thence running north 36º25’W a distance of 142.6 feet; thence running north
23º13’W a distance of 10.4 feet; thence running north 84º15’W a distance of
679.54 feet to the point of beginning, said property being shown on the Plat of
Survey of Joseph E. Schexnaider, Registered Surveyor, dated July 23, 1972, a
copy of which is attached to the 1.774 Acre Lease, as Tract E-1.

 

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