Exhibit 10.5

EXECUTION COPY

FIRST PREFERRED FLEET MORTGAGE

on the United States flag vessels

 

ATCHAFALAYA BAY    G. P. FISHERMAN ATLANTIC BEACH    GRAND CHENIERE ATLANTIC
BREEZE    GRANDE BATTURE ATLANTIC COAST    GREAT WICOMICO ATLANTIC MIST   
GUSSIE J. FLYNN ATLANTIC SHORE    HELGE HOVLAND ATLANTIC VENTURE    ISLE
DERNIERE BEACHCOMBER    LANCASTER BULL DOG    MARSH ISLAND CARL BURTON   
MISSISSIPPI SOUND COASTAL HARVESTER    RACHEL BURTON COTE BLANCHE BAY   
SHEARWATER EARL J. CONRAD, JR.    SMITH ISLAND G. P. AMELIA    TERREBONNE BAY
G.P. ANNA    TIDELANDS G. P. CHAUVIN    TRINITY SHOAL

by

OMEGA PROTEIN, INC.

to

OMEGA MASTER VESSEL TRUST 2006

dated

October 19, 2006

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SYNOPSIS OF MORTGAGE

 

Names and Official

     

Numbers of Vessels:

   ATCHAFALAYA BAY    (O.N. 539603)    ATLANTIC BEACH    (O.N. 562679)   
ATLANTIC BREEZE    (O.N. 585456)    ATLANTIC COAST    (O.N. 581973)    ATLANTIC
MIST    (O.N. 532093)    ATLANTIC SHORE    (O.N. 552062)    ATLANTIC VENTURE   
(O.N. 587483)    BEACHCOMBER    (O.N. 288224)    BULL DOG    (O.N. 581304)   
CARL BURTON    (O.N. 298971)    COASTAL HARVESTER    (O.N. 588862)    COTE
BLANCHE BAY    (O.N. 509347)    EARL J. CONRAD, JR.    (O.N. 547733)    G. P.
AMELIA    (O.N. 943917)    G.P. ANNA    (O.N. 943908)    G. P. CHAUVIN   
(O.N. 944035)    G. P. FISHERMAN    (O.N. 650282)    GRAND CHENIERE   
(O.N. 590692)    GRANDE BATTURE    (O.N. 571537)    GREAT WICOMICO   
(O.N. 572545)    GUSSIE J. FLYNN    (O.N. 563509)    HELGE HOVLAND   
(O.N. 571186)    ISLE DERNIERE    (O.N. 618126)    LANCASTER    (O.N. 556177)   
MARSH ISLAND    (O.N. 532142)    MISSISSIPPI SOUND    (O.N. 563685)    RACHEL
BURTON    (O.N. 298819)    SHEARWATER    (O.N. 624092)    SMITH ISLAND   
(O.N. 563942)    TERREBONNE BAY    (O.N. 508200)    TIDELANDS    (O.N. 501955)
   TRINITY SHOAL    (O.N. 281152)

Type of Instrument:

   First Preferred Fleet Mortgage   

Date of Instrument:

   October 19, 2006    Name of Shipowner (Percentage of Vessels owned):    OMEGA
PROTEIN, INC. (100%)   

 

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Address of Shipowner:

   2101 CityWest Boulevard       Building 3, Suite 500       Houston, Texas
77042   

Name of Mortgagee:

   OMEGA MASTER VESSEL TRUST 2006   

Address of Mortgagee:

   c/o Wilmington Trust Company, as Trustee       Rodney Square North       1100
North Market Street       Wilmington, Delaware 19890-0001       Attention:
Corporate Trust Administration   

Total Amount of Mortgage:

   $65,000,000 (exclusive of interest, expenses and fees)   

 

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FIRST PREFERRED FLEET MORTGAGE

This FIRST PREFERRED FLEET MORTGAGE (this “Mortgage”) is made October 19, 2006
by OMEGA PROTEIN, INC., a Virginia corporation (hereinafter called the
“Shipowner”) with offices at 2101 CityWest Boulevard, Building 3, Suite 500,
Houston, Texas 77042, to OMEGA MASTER VESSEL TRUST 2006, a Delaware statutory
trust (the “Mortgagee”) with offices at c/o Wilmington Trust Company as Trustee,
Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001,
Attention: Corporate Trust Administration.

RECITALS

WHEREAS, the Shipowner is the sole owner of the whole of each of the following
vessels:

 

Vessel Name

   Official No.

ATCHAFALAYA BAY

   539603

ATLANTIC BREEZE

   585456

ATLANTIC MIST

   532093

ATLANTIC VENTURE

   587483

BULL DOG

   581304

COASTAL HARVESTER

   588862

EARL J. CONRAD, JR.

   547733

G.P. ANNA

   943908

G. P. FISHERMAN

   650282

GRANDE BATTURE

   571537

GUSSIE J. FLYNN

   563509

ISLE DERNIERE

   618126

MARSH ISLAND

   532142

RACHEL BURTON

   298819

SMITH ISLAND

   563942

TIDELANDS

   501955

ATLANTIC BEACH

   562679

ATLANTIC COAST

   581973

ATLANTIC SHORE

   552062

BEACHCOMBER

   288224

CARL BURTON

   298971

COTE BLANCHE BAY

   509347

G. P. AMELIA

   943917

G. P. CHAUVIN

   944035

GRAND CHENIERE

   590692

GREAT WICOMICO

   572545

HELGE HOVLAND

   571186

LANCASTER

   556177

MISSISSIPPI SOUND

   563685

SHEARWATER

   624092

TERREBONNE BAY

   508200

TRINITY SHOAL

   281152

each documented in the name of the Shipowner under the laws and flag of the
United States of America (each a “Vessel” and collectively the “Vessels”);

WHEREAS, pursuant to a Financing Agreement dated as of the date hereof among
Omega Protein Corporation, a Nevada corporation (“Omega”), the Shipowner, each
other subsidiary of Omega listed as a “Borrower” on the signature pages thereto,
if any (together with Omega and the Shipowner, the “Borrowers”), each subsidiary
of Omega listed as a “Guarantor” on the signature pages thereto, the financial
institutions from time to time party thereto (the “Lenders”), and Ableco Finance
LLC, as Collateral Agent and Administrative Agent (as amended from time to time
in accordance with its terms, called the “Financing Agreement”), the Lenders
have made available to the Borrowers a credit facility of up to $65,000,000, and
the form of Financing Agreement, without Schedules or Exhibits, is attached as
Schedule I hereto;

 

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WHEREAS, pursuant to the Master Vessel Trust Agreement dated as of the date
hereof, the Collateral Agent and Wilmington Trust Company formed the Mortgagee
for the purpose of holding various collateral, including this Mortgage, for the
benefit of the Collateral Agent; and

WHEREAS, the Shipowner, in order to secure the repayment of the amounts due
under the Financing Agreement and the other Loan Documents and the performance
and observance of and compliance with the covenants, terms and conditions
contained in the Financing Agreement, this Mortgage and the other Loan
Documents, has duly authorized the execution and delivery of this First
Preferred Fleet Mortgage under and pursuant to the United States Ship Mortgage
Act of 1920, as amended, recodified at 46 U.S.C. § 31301 et seq. (the “Ship
Mortgage Act”);

NOW THEREFORE, THIS MORTGAGE WITNESSETH (with defined terms used herein and not
otherwise defined used with the respective meanings ascribed thereto in the
Financing Agreement and the rules of interpretation set forth in Section 1.02
thereof applying hereto):

That in consideration of the premises and of the sums loaned and to be loaned as
above recited and of other good and valuable consideration, the receipt and
sufficiency whereof are hereby acknowledged, and in order to secure the payment
of amounts owed by the Loan Parties under the Financing Agreement and the other
Loan Documents in accordance with the terms thereof, and the payment of all such
other sums as may hereafter become secured by this Mortgage in accordance with
the terms hereof, and to secure the performance and observance by each Loan
Party of, and the compliance by each Loan Party with, all of the covenants,
terms and conditions contained herein and in the Financing Agreement and the
other Loan Documents, the Shipowner does by these presents grant, convey,
mortgage, pledge, assign, transfer, set over and confirm the whole of the
Vessels unto the Mortgagee, its successors and assigns, together with all of the
engines, machinery, masts, spars, rigging, boats, anchors, chains, cables,
tackle, apparel, fuel, furniture, fittings and equipment and all other
appurtenances to the Vessels appertaining or belonging, whether now owned or
hereafter acquired, whether on board or not, and all additions, improvements and
replacements hereafter made in or to the Vessels, or any part thereof, or in or
to the equipment and appurtenances aforesaid, all of which shall be deemed to be
included in the term “Vessels” as used in this Mortgage.

TO HAVE AND TO HOLD the same unto the Mortgagee, its successors and assigns,
forever, upon the terms herein set forth for the enforcement of the payment of
amounts owed by the Loan Parties under the Financing Agreement and the other
Loan Documents and to secure the performance and observance by each Loan Party
of, and compliance by each Loan Party with, the covenants, terms and conditions
in this Mortgage and in the Financing Agreement and the other Loan Documents
contained;

PROVIDED, ONLY, and the conditions of these presents are such, that if the
Shipowner or any other Loan Party shall pay or cause to be paid to the Mortgagee
the principal of the indebtedness aforesaid and interest thereon as and when the
same shall become due and payable in accordance with the terms of this Mortgage,
the Financing Agreement and the other Loan Documents and all other such sums as
may hereafter become secured by this Mortgage in

 

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accordance with the terms hereof, and the Shipowner and each other Loan Party
shall perform, observe and comply with all the covenants, terms and conditions
in the Financing Agreement, this Mortgage and the other Loan Documents,
expressed or implied, to be performed, then these presents and the rights
hereunder shall cease, determine and be void, otherwise to be and remain in full
force and effect.

IT IS HEREBY COVENANTED, DECLARED AND AGREED that the property above described
is to be held subject to the further covenants, conditions, provisions, terms
and uses hereinafter set forth.

ARTICLE I

COVENANTS OF THE SHIPOWNER

The Shipowner covenants and agrees with the Mortgagee as follows:

Section 1. The Shipowner shall pay the indebtedness evidenced as aforesaid and
interest thereon and the Shipowner shall observe, perform and comply with each
and every one of the covenants, terms and conditions herein and in the Financing
Agreement and the other Loan Documents, expressed or implied, on its part to be
observed, performed or complied with.

Section 2. The Shipowner was duly organized and is now validly existing as a
corporation under the laws of the Commonwealth of Virginia; it is now and shall
remain during the life of this Mortgage an “eligible owner” within the meaning
of 46 U.S.C. § 12103(b), and any and all successor statutes thereto, and any and
all regulations promulgated under any thereof, satisfying the ownership
requirements of 46 U.S.C. § 12113(c), and any and all successor statutes
thereto, and any and all regulations promulgated under any thereof, and
qualified under applicable law to engage in the U.S. Fisheries Trade; it is duly
authorized to mortgage the Vessels; and all corporate actions necessary and
required by law for the execution and delivery of this Mortgage have been duly
and effectively taken.

Section 3. The Shipowner lawfully holds title to and is lawfully possessed of
the Vessels free from any Lien whatsoever, or any commitment to make the Vessels
available for charter or sale or use by any Governmental Authority, other than
the Lien of this Mortgage and any other Permitted Liens. The Shipowner shall
warrant and defend the title to, and the lawful possession of, each of the
Vessels, and every part thereof, for the benefit of the Mortgagee against the
claims and demands of all Persons whomsoever.

Section 4. The Shipowner, at its expense, shall comply with and satisfy all the
provisions and requirements of the Ship Mortgage Act and the American Fisheries
Act of 1998, as amended (46 U.S.C. § 31322 et seq.), and any and all successor
statutes thereto, and any and all regulations thereunder, in order to establish
and maintain this Mortgage as a first preferred fleet mortgage thereunder upon
the Vessels and upon all renewals, improvements and replacements made in or to
the same.

Section 5. The Shipowner further covenants that it shall not cause or permit the
Vessels to be operated in any manner contrary to law and shall not engage in any
unlawful trade or

 

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violate any law or carry any cargo that will expose the Vessels to penalty,
forfeiture or capture, and shall not do, or suffer or permit to be done,
anything that can or may injuriously affect the documentation of any Vessel
under the laws and regulations of the United States and shall at all times keep
each of the Vessels duly documented thereunder.

Section 6. The Shipowner shall pay and discharge when due and payable, from time
to time, all taxes, assessments, governmental charges, fines and penalties
lawfully imposed on the Vessels or any income therefrom, unless the same are
being contested in good faith, adequate reserves have been established on the
books of the Shipowner with respect thereto and there exists no danger of arrest
or forfeiture of any Vessel by reason of the non-payment thereof.

Section 7. None of the Shipowner, any charterer, the Master of any of the
Vessels, or any other Person, has or shall have any right, power or authority to
create, incur or permit to be placed or imposed or continued upon the Vessels,
any Lien whatsoever other than the Lien of this Mortgage and other Permitted
Liens.

Section 8. The Shipowner shall place or cause to be placed, and at all times and
places shall retain or cause to be retained, a properly certified copy of this
Mortgage on board each of the Vessels with her papers and shall cause such
certified copy and such papers to be exhibited to any and all Persons having
business therewith that might give rise to any Lien thereon other than Liens for
crew’s wages and salvage, and to any representative of the Mortgagee; and shall
place or cause to be placed and keep prominently displayed or cause to be
prominently displayed in the chart room and in the Master’s cabin of each of
each Vessel a framed printed notice in plain type reading as follows:

“NOTICE OF MORTGAGE

This Vessel is documented in the name of OMEGA PROTEIN, INC. and is covered by a
FIRST PREFERRED FLEET MORTGAGE to OMEGA MASTER VESSEL TRUST 2006 under authority
of the United States Ship Mortgage Act of 1920, as amended, recodified at 46
U.S.C. § 31301 et seq., as amended. Under the terms of said Mortgage, none of
the Shipowner, any charterer, the Master of this Vessel or any other person has
any right, power or authority to create, incur or permit to be imposed upon this
Vessel any lien whatsoever other than for crew’s wages and salvage.”

Section 9. Except for Permitted Liens, the Shipowner shall not create or suffer
to be continued any Lien on any Vessel or any income therefrom and in due course
shall pay or cause to be paid or discharged or make adequate provision for the
payment or discharge of all claims or demands that, if not paid or discharged,
might result in the creation of such a Lien and shall cause the Vessel to be
released or discharged from each such Lien therefor.

Section 10. If any judicial action is commenced against any of the Vessels or if
any of the Vessels is otherwise attached, levied upon, or taken into custody or
detained by any proceeding in any court or tribunal or by any government or
other authority, the Shipowner shall promptly notify the Mortgagee or cause the
Mortgagee to be notified promptly in accordance with Section 33 hereof and shall
cause such Vessel to be released and all Liens thereon to be discharged

 

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other than the Lien of this Mortgage and any other Permitted Lien, and shall
promptly notify the Mortgagee or shall cause the Mortgagee to be notified
promptly thereof in the manner aforesaid.

Section 11. The Shipowner shall at all times and without cost or expense to the
Mortgagee maintain and preserve, or cause to be maintained and preserved, each
of the Vessels in good running order and repair, so that each of the Vessels
shall be, in so far as due diligence can make her so, tight, staunch, strong and
well and sufficiently tackled, apparelled, furnished, equipped and in every
respect seaworthy and in good operating condition. Each of the Vessels shall,
and the Shipowner covenants that it shall, at all times comply with all
applicable laws, treaties and conventions of the United States, and the rules
and regulations issued thereunder, and shall have on board as and when required
thereby valid certificates showing compliance therewith. Unless otherwise
required by applicable law, the Shipowner shall not make, or permit to be made,
any substantial change in the structure, type and speed of any of the Vessels or
change in any of the Vessels’ rigs, without first receiving the written approval
thereof by the Mortgagee.

Section 12. Subject to any applicable restrictions in the Financing Agreement,
the Shipowner shall at all times afford the Mortgagee or its authorized
representatives, at the risk and expense of the Shipowner, full and complete
access to each of the Vessels at any time (an in the absence of a continuing
Event of Default, upon reasonable prior notice) and from time to time during
normal business hours for the purpose of inspecting the same and her cargo and
papers and, at the request of the Mortgagee, the Shipowner shall deliver for
inspection copies of any and all contracts and documents relating to the
Vessels, whether on board or not.

Section 13. So long as this Mortgage shall remain outstanding, the Shipowner
shall not transfer or change the flag of any of the Vessels without the written
consent of the Mortgagee first had and obtained, and any such written consent to
any one transfer or change of flag shall not be construed to be a waiver of this
provision with respect to any subsequent proposed transfer or change of flag.

Section 14. Except as expressly permitted by the Financing Agreement, the
Shipowner shall not sell, mortgage, transfer, charter or transfer the management
of any Vessel without the written consent of the Mortgagee first had and
obtained, and any such written consent to any one such sale, mortgage, transfer,
charter or transfer of management shall not be construed to be a waiver of this
provision with respect to any subsequent proposed sale, mortgage, transfer,
charter or transfer of management. Any such sale, mortgage, transfer, charter or
transfer of the management of any Vessel shall be subject to the provisions of
this Mortgage and the Lien it creates.

Section 15. (a) The Shipowner shall, at its expense, when and so long as this
Mortgage shall be outstanding, insure the Vessels and keep each Vessel insured,
in lawful money of the United States, for an amount not less than the full
commercial value of such Vessel. No Vessel shall in any event be insured for an
amount less than the agreed valuation as set forth in the applicable marine and
war risk policies. Such insurance shall cover marine and war risk perils, on
hull and machinery, and shall be maintained in the broadest forms available in
the American or British insurance markets or such other markets as may be
satisfactory to the Mortgagee. No Vessel shall operate in or carry any cargoes
or proceed into any area then excluded by trading warranties under its marine or
war risk policies (including protection and indemnity) without

 

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obtaining any necessary additional coverage, satisfactory in form and substance,
and evidence of which shall be furnished, to the Mortgagee.

(b) The policy or policies of insurance shall be issued by responsible
underwriters acceptable to the Mortgagee, shall contain the conditions, terms,
stipulations and insuring covenants satisfactory to the Mortgagee in its
reasonable judgment and shall be kept in full force and effect by the Shipowner
so long as this Mortgage shall be outstanding. All such policies, binders, cover
notes and other interim insurance contracts shall be executed and issued in the
name of the Shipowner and shall, to the extent that the Mortgagee shall require,
provide that loss be payable to the Mortgagee for distribution by it to itself
and the Shipowner as their interests may appear and shall provide for at least
thirty days’ prior notice to be given the Mortgagee by the broker and/or
underwriters in the event of cancellation. The Mortgagee (and such other Persons
as the Mortgagee may designate from time to time) shall be named as co-assureds
on all such policies, cover notes and insurance contracts but without liability
of the Mortgagee or any such other Person for premiums or calls. All such cover
notes, and if requested by the Mortgagee at any time and from time to time all
such policies, binders and other interim insurance contracts, shall be deposited
with the Mortgagee. The Shipowner shall furnish or cause to be furnished to the
Mortgagee annually a detailed report signed by a firm or firms of marine
insurance brokers satisfactory to the Mortgagee as to the insurance maintained
in respect of the Vessels, as to their opinion that such insurances are at least
comparable to that which is customarily maintained for properties of a similar
character employed under similar conditions of operation by prudent companies
engaged in a similar business and as to compliance with the provisions of this
Section 15. In addition, the Shipowner shall maintain or cause to be maintained
protection and indemnity insurance and coverage that is carried and maintained
for properties of a similar character employed under similar conditions of
operation by prudent companies engaged in a similar business and in the maximum
available amount on commercially reasonable terms against pollution liability,
through underwriters or associations acceptable to the Mortgagee and in the
maximum amount available with respect to coverage other than pollution liability
that is carried and maintained for properties of a similar character employed
under similar conditions of operation by prudent companies engaged in a similar
business, provided, however, that war risk protection and indemnity insurance
shall be in an amount not less than the amount of insurance against total loss.
Such insurance policies shall provide for at least thirty days’ prior notice to
be given to the Mortgagee by the underwriters or association in the event of
cancellation or the failure of the Shipowner to pay any premium or call that
would suspend coverage under the policy or the payment of a claim thereunder.
The Shipowner shall furnish a copy of each insurance policy with respect to any
Vessel to the Mortgagee.

Unless otherwise required by the Mortgagee by notice to the underwriters,
although the following insurance is payable to the Mortgagee, any loss under any
insurance on the Vessels with respect to protection and indemnity risks may be
paid directly to the Shipowner to reimburse it for any loss, damage or expense
incurred by it and covered by such insurance or to the Person to whom any
liability covered by such insurance has been incurred. Any loss under any
insurance with respect to the Vessels involving any damage to any Vessel (other
than a loss under any insurance on the Vessels with respect to protection and
indemnity risks), shall be paid directly to the Mortgagee for application
pursuant to Section 27 hereof.

 

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(c) The Shipowner shall not declare or agree with the underwriters that any
Vessel is a constructive or compromised, agreed or arranged constructive total
loss without the prior written consent of the Mortgagee.

(d) The Shipowner shall comply with and satisfy all of the provisions of any
applicable law, regulation, proclamation or order concerning financial
responsibility for liabilities imposed on the Shipowner or any of the Vessels
with respect to pollution including, without limitation, the U.S. Water
Pollution Control Act, as amended by the Water Pollution Control Act Amendment
of 1972 and as it may be further amended, the Oil Pollution Act of 1990 as
amended from time to time, and the Hazardous Materials Transportation Act as
amended from time to time, and shall maintain all certificates or other evidence
of financial responsibility as may be required by any such law, regulation,
proclamation or order with respect to the trade in which any of the Vessels from
time to time is engaged and the cargoes carried by it.

Section 16. The Shipowner shall reimburse the Mortgagee on demand, with interest
at the highest rate of interest otherwise in effect under the Financing
Agreement (not including any Post-Default Rate then in effect) plus 2% per
annum, for any and all expenditures that the Mortgagee may from time to time
make, lay out or expend in providing such protection in respect of insurance,
discharge or purchase of Liens, taxes, dues, assessments, governmental charges,
fines and penalties lawfully imposed, repairs, attorneys’ fees and other matters
as the Shipowner is obligated herein to provide, but fails to provide. Such
obligation of the Shipowner to reimburse the Mortgagee shall be an additional
indebtedness due from the Shipowner, secured by this Mortgage, and shall be
payable by the Shipowner on demand. The Mortgagee, though privileged so to do,
shall be under no obligation to the Shipowner to make any such expenditures, nor
shall the making thereof relieve the Shipowner of any default in that respect.

ARTICLE II

EVENTS OF DEFAULT AND REMEDIES

Section 17. If an Event of Default shall occur and be continuing, then and in
each and every such case the Mortgagee shall have the right to:

(1) Exercise all the rights and remedies in foreclosure and otherwise given to
the Mortgagee by the provisions of applicable law, including, but not limited
to, the provisions of the Ship Mortgage Act;

(2) Bring suit at law, in equity or in admiralty, as the Mortgagee may be
advised, to recover judgment for any and all amounts due under Financing
Agreement, any Loan Document or otherwise hereunder, and collect the same out of
any and all property of the owner whether covered by this Mortgage or otherwise;

(3) To the extent permitted by, and subject to, applicable law (including,
without limitation, the American Fisheries Act of 1998 (46 U.S.C. § 31322 et
seq.), and the regulations promulgated pursuant thereto), take the Vessels, or
any of them, wherever the same may be, without legal process and without being
responsible for

 

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loss or damage; and the Shipowner or other Person in possession forthwith upon
demand of the Mortgagee shall surrender to the Mortgagee possession of the
Vessels, as demanded by the Mortgagee, and the Mortgagee may, without being
responsible for loss or damage, hold, lay up, lease, charter, operate or
otherwise use the Vessels, or any of them, 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 and charging all receipts from such use or from
the sale of the Vessels, or any of them, by court proceedings or pursuant to
Subsection (4) next following, and all costs, expenses, charges, damages or
losses by reason of such; and if at any time the Mortgagee shall avail itself of
the right herein given it to take the Vessels or any of them and shall take any
such Vessel, the Mortgagee shall have the right to dock such Vessel or Vessels
for a reasonable time at any dock, pier or other premises of the Shipowner
without charge, or to dock it or them at any other place at the cost and expense
of the Shipowner; and

(4) To the extent permitted by, and subject to, applicable law (including,
without limitation, the American Fisheries Act of 1998 (46 U.S.C. § 31322 et
seq.), and the regulations promulgated pursuant thereto), and without being
responsible for loss or damage, where it has acted reasonably and in good faith,
sell the Vessels or any of them at any place and at such time as the Mortgagee
may specify and in such manner as the Mortgagee may deem advisable free from any
claim by the Shipowner in admiralty, in equity, at law or by statute, after
first giving notice (in the case of a public sale) of the time and place of sale
with a general description of the property in the following manner:

 

  (i) By publishing such notice for five consecutive days in a daily newspaper
of general circulation published in New York City;

 

  (ii) If the place of sale should not be New York City, then also by
publication of a similar notice in a daily newspaper, if any, published at the
place of sale; and

 

  (iii) By sending a similar notice by telex or telecopier confirmed by
registered mail to the Shipowner at its address hereinafter set forth on or
before the day of first publication.

Section 18. Any sale of any Vessel made pursuant to this Mortgage, whether under
the power of sale hereby granted or any judicial proceedings, shall operate to
divest all right, title and interest of any nature whatsoever of the Shipowner
therein and thereto, and shall bar the Shipowner, its successors and assigns,
and all Persons claiming by, through or under them. No purchaser shall be bound
to inquire whether notice has been given, or whether any default has occurred,
or as to the propriety of the sale, or as to the application of the proceeds
thereof. In case of such sale, any Secured Party shall be entitled, for the
purpose of making settlement or payment for the property purchased to use and
apply the unpaid balance of any amount owed to such Secured Party pursuant to
the Financing Agreement or any other Loan Document in order that there may be
credited against the amount remaining due and unpaid thereon the sums payable
out of the net proceeds of such sale to such Secured Party after allowing for
the costs and expense of

 

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sale and other charges; and thereupon such purchaser shall be credited, on
account of such purchase price, with the net purchase price that shall have been
so credited. At such sale, any Secured Party may bid for and purchase such
property, and upon compliance with the terms of sale and to the extent permitted
by, and subject to, applicable law (including, without limitation, the American
Fisheries Act of 1998 (46 U.S.C. § 31322 et seq.) and the regulations
promulgated pursuant thereto) may hold, retain and dispose of such property
without further accountability therefor.

Section 19. The Mortgagee is hereby appointed attorney-in-fact of the Shipowner,
to execute and deliver to any purchaser aforesaid, and is hereby vested with
full power and authority to make, in the name and in behalf of the Shipowner,
good conveyance of the title to any Vessel so sold. In the event of a sale of
the Vessels or any of them, the Shipowner shall, if and when required by the
Mortgagee, execute such form of conveyance of such Vessels or Vessel as the
Mortgagee may direct or approve.

Section 20. The Mortgagee is hereby appointed attorney-in-fact of the Shipowner
to demand, collect, receive, compromise and sue for, in the name of the
Shipowner, so long as any Event of Default shall have occurred and be continuing
and so far as may be permitted by law, all freights, hire, earnings, issues,
revenues, income and profits of any of the Vessels, and all amounts due from
underwriters under any insurance thereon as payment of losses or as return
premiums or otherwise, salvage awards and recoveries, recoveries in general
average or otherwise, and all other sums due or to become due at the time of the
happening of the Event of Default in respect of any of the Vessels or in respect
of any insurance thereon from any Person whomsoever, and to make, give and
execute in the name of the Shipowner acquittances, receipts, releases or other
discharges for the same, whether under seal or otherwise, and to endorse and
accept in the name of the Shipowner all checks, notes, drafts, warrants,
agreements and all other instruments in writing with respect to the foregoing.

Section 21. Whenever any right to enter and take possession of any of the
Vessels accrues to the Mortgagee, the Mortgagee may require the Shipowner to
deliver, and the Shipowner shall on such demand, at its own cost and expense,
deliver such Vessel as demanded. If any legal proceedings shall be taken to
enforce any right under this Mortgage, the Mortgagee shall be entitled as a
matter of right to the appointment of a receiver of the Vessels and the
freights, hire, earnings, issues, revenues, income and profits due or to become
due arising from the operation thereof.

Section 22. The Shipowner hereby authorizes and empowers the Mortgagee or its
appointees or any of them, so long as any Event of Default shall have occurred
and be continuing, to appear in the name of the Shipowner, its successors and
assigns, in any court of any country or nation of the world where a suit is
pending against any of the Vessels because of or on account of any alleged Lien
against such Vessel from which such Vessel has not been released and to take
such proceedings as to the Mortgagee or its appointees or any of them may seem
proper towards the defense of such suit and the purchase or discharge of such
Lien, and all expenditures made or incurred by them or any of them for the
purpose of such defense, purchase or discharge shall be a debt due from the
Shipowner, its successors and assigns, to the Mortgagee, and shall be secured by
the Lien of this Mortgage in like manner and extent as if the amount and
description thereof were written herein.

 

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Section 23. [Intentionally Omitted.]

Section 24. Each and every power and remedy herein given to the Mortgagee shall
be cumulative and shall be in addition to every other power and remedy herein
given or now or hereafter existing at law, in equity, in admiralty or by
statute, and each and every power and remedy whether herein given or otherwise
existing may be exercised from time to time and as often and in such order as
may be deemed expedient by the Mortgagee, and the exercise or the beginning of
the exercise of any power or remedy shall not be construed to be a waiver of the
right to exercise at the same time or thereafter any other power or remedy. No
delay or omission by the Mortgagee or by any other Secured Party in the exercise
of any right or power or in the pursuance of any remedy accruing upon any
Default or Event of Default shall impair any such right, power or remedy or be
construed to be a waiver of any such Default or Event of Default or to be an
acquiescence thereof; nor shall the acceptance by the Mortgagee of any security
or of any payment of or on account of any amount payable pursuant to the
Financing Agreement or any other Loan Document maturing after any Default or
Event of Default or of any payment on account of any past Default, be construed
to be a waiver of any right to take advantage of any future Default or Event of
Default or of any past Default or Event of Default not completely cured thereby.

Section 25. If at any time after an Event of Default and prior to the actual
sale of any of the Vessels by the Mortgagee or prior to any foreclosure
proceedings, the Shipowner offers to cure completely all Events of Default and
to pay all out-of-pocket expenses, advances and damages to the Mortgagee arising
from such Events of Default, with interest payable pursuant to the Financing
Agreement and the other Loan Documents, then the Mortgagee may, but shall have
no obligation to, accept such offer and restore the Shipowner to its former
position, but such action shall not affect any subsequent Event of Default or
impair any rights consequent thereon.

Section 26. In case the Mortgagee shall have proceeded to enforce any right,
power or remedy under this Mortgage by foreclosure, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Mortgagee, then and in every such case the
Shipowner and the Mortgagee shall be restored to their respective former
positions and rights hereunder with respect to the property subject or intended
to be subject to this Mortgage, and all rights, remedies and powers of the
Mortgagee shall continue as if no such proceedings had been taken, and this
Mortgage shall remain in full force and effect.

Section 27. The proceeds of the sale of any of the Vessels or of any insurance
maintained on any of the Vessels and the net earnings of any charter operation
or other use thereof by the Mortgagee under any of the powers herein specified
pursuant to or under the terms of this Mortgage or in any proceedings hereunder,
the application of which has not elsewhere herein been specifically provided
for, shall be applied as follows:

FIRST: To the payment of all expenses and charges, including the expenses of any
sale, the expenses of any retaking, attorneys’ fees, court costs, and any other
expenses or advances made or incurred by the Mortgagee in the protection of its
rights or the pursuance of its remedies hereunder, and to provide adequate
indemnity against Liens claiming priority over or equality with the Lien of this
Mortgage;

 

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SECOND: To the Collateral Agent for application in accordance with the Financing
Agreement and the other Loan Documents; and

THIRD: To the payment of any surplus thereafter remaining to the Shipowner or to
whomsoever may be entitled thereto.

In the event that the proceeds and amounts referred to above received by the
Mortgagee are insufficient to pay in full the amounts specified in paragraphs
“FIRST” and “SECOND” above, the Mortgagee shall be entitled to collect the
balance from the Shipowner or from any other Person or entity liable therefor.

Section 28. So long as no Event of Default shall have occurred and be
continuing, the Shipowner (a) shall be suffered and permitted to retain actual
possession and use of the Vessels and (b) shall have the right, from time to
time, in its discretion, and without application to the Mortgagee, and without
obtaining a release thereof by the Mortgagee, but subject to the applicable
terms of the Financing Agreement, to dispose of, free from the Lien hereof, any
engines, machinery, bowsprits, masts, spars, rigging, boats, anchors, cables,
chains, tackle, apparel, furniture, fittings or equipment or any other
appurtenances to the Vessels that are no longer useful, necessary, profitable or
advantageous in the operation of the Vessels, first or simultaneously replacing
the same by new engines, machinery, bowsprits, masts, spars, rigging, boats,
anchors, chains, cables, tackle, apparel, furniture, fittings, equipment or
other appurtenances of substantially equal value to the Shipowner, which shall
forthwith become, automatically and without necessity of any action on the part
of any Person, subject to the Lien of this Mortgage as a first preferred fleet
mortgage thereon.

ARTICLE III

SUNDRY PROVISIONS

Section 29. The total amount of the direct or contingent obligations secured by
this Mortgage is $65,000,000 in principal amount (exclusive of interest,
expenses and fees). The date of maturity is October 19, 2011, the discharge
amount is the same as the total amount and there is no separate discharge amount
for each Vessel. It is not intended that this Mortgage shall include property
other than the Vessels, and it shall not include property other than the Vessels
as the term “vessel” is used in Subsection (c)(2) of Section 31322 of Title 46
United States Code, as amended. Notwithstanding the foregoing, for property
other than the Vessels, if any should be determined to be covered by this
Mortgage, the discharge amount is zero point zero one percent (0.01%) of the
total amount.

Section 30. All the covenants, promises, stipulations and agreements of the
Shipowner in this Mortgage contained shall bind the Shipowner and its successors
and assigns and shall inure to the benefit of the Mortgagee and its successors
and assigns.

Section 31. Wherever and whenever herein any right, power or authority is
granted or given to the Mortgagee, such right, power and authority may be
exercised in all cases by the Mortgagee or such agent or agents as it may
appoint, and the act or acts of such agent or agents when taken shall constitute
the act of the Mortgagee hereunder.

 

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Section 32. If any one or more of the provisions of this Mortgage should at any
time for any reason be declared invalid, void or otherwise inoperative by a
court of competent jurisdiction, such declaration or decision shall not affect
the validity of any other provision or provisions of this Mortgage or the
validity of this Mortgage as a whole.

Section 33. All notices and other communications provided for hereunder shall be
in writing and shall be mailed, telecopied or delivered, if to any party, at the
following address:

if to the Mortgagee, to it at the following address:

Omega Master Vessel Trust 2006

c/o Wilmington Trust Company, as Trustee

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890-0001

Attention: Corporate Trust Administration

Telephone: +1-302-636-6000

Telecopier: +1-302-636-4140

if to the Shipowner, to it at the following address:

Omega Protein, Inc.

2101 CityWest Boulevard

Building 3, Suite 500

Houston, Texas 77042

Attention: Robert W. Stockton

Telephone: +1-713-940-6184

Telecopier: +1-713-940-6122

or, as to each party, at such other address as shall be designated by such party
in a written notice to the other party complying as to delivery with the terms
of this Section 33. All such notices and other communications shall be
effective, (a) if mailed, when received or three Business Days after deposited
in the mails, whichever occurs first, (b) if telecopied, when transmitted and
confirmation received, or (c) if delivered, upon delivery.

[Signature page follows]

 

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IN WITNESS WHEREOF, the Shipowner has executed this Mortgage on the day and year
first above written.

 

OMEGA PROTEIN, INC.

By:

 

/s/ John D. Held_

 

Name:

 

John D. Held

 

Title:

 

Vice President