Document:

<PAGE>

                                                                   EXHIBIT 10.57

Case No. FF-G-008
         --------

                   CERTIFICATION AND INDEMNIFICATION AGREEMENT
                         REGARDING ENVIRONMENTAL MATTERS

THIS INDEMNITY AGREEMENT is entered into this 19th day of October, 2001, between
Omega Protein, Inc., 835 B Pride Drive, Hammond, Louisiana 70401, (hereinafter,
the "Borrower"), Omega Protein Corporation, 1717 St. James Place, Suite 550,
Houston, Texas 77056, (hereinafter, the "Guarantor") and the United States of
America, acting by and through the Secretary of Commerce, National Oceanic and
Atmospheric Administration, National Marine Fisheries Service, Office of
Financial Services, Southeast Region, 9721 Executive Center Drive North, St.
Petersburg, Florida 33702, (hereinafter, the "Government"); and

RECITALS:

1.   The Borrower is the owner of certain real property, (hereinafter, the
     "Premises"), located in the Commonwealth of Virginia, which is more
     particularly described in Exhibit A, attached hereto and incorporated
     herein by this reference, and defined below.

2.   The Government has agreed to lend a certain sum to the Borrower
     (hereinafter, the "Loan") in consideration for which the Borrower has
     executed and delivered to the Government a certain Promissory Note payable
     to the Government (hereinafter, the "Note"), which Note is secured by,
     among other things, a certain mortgage and/or deed of trust, respecting the
     Premises (hereinafter, the "Mortgage"). This mortgage and/or deed of trust
     is more particularly described in Exhibit B, attached hereto and
     incorporated herein by this reference.

3.   As a condition to providing the Loan, the Government requires the Borrower
     and Guarantor to provide certain indemnities concerning Hazardous Materials
     or Contamination (both as hereinafter defined) affecting the Premises.

DEFINITIONS:

All terms contained herein are defined in the Acknowledgement of Definitions
executed by all parties to this transaction.

IN CONSIDERATION OF the issuance of certain Loans pursuant to the provisions of
Title XI of the Merchant Marine Act, 1936, as amended, found at 46 USC
Section.1271 et seq., and 50 CFR 253, as amended by Public Law 104-297 on
October 11, 1996, known as the Fisheries Finance Program (FFP), Borrower hereby
represents, warrants, covenants, acknowledges and agrees in favor of the
Government, on a continuing basis, as follows:

BORROWER'S REPRESENTATIONS AND WARRANTIES:

The Borrower hereby represents and warrants, to the best of its knowledge, in
favor of the Government, as follows:

                                       1
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                                                                   EXHIBIT 10.57

     1. The Premises, and its existing and prior uses, comply, and have at all
     times complied with, and neither the Borrower or any other individual or
     entity is in violation of, nor has violated, in connection with the
     ownership, use, maintenance or operation of the Premises or the conduct of
     the business related thereto (including manufacturing, importing,
     processing, using, distribution, discharging, storing, treating and
     disposing of any substance) any applicable federal, state, county or local
     statute, law, regulation, rule, ordinance, code, license and permit of any
     and all governmental authorities relating to environmental matters,
     including, but not limited to, the Clean Air Act, the Federal Water
     Pollution Control Act of 1972, the Comprehensive Environmental Response,
     Compensation and Liability Act of 1980, the Solid Waste Disposal Act, the
     Resource Conservation and Recovery Act and the Toxic Substances Control
     Act, and any amendments or extensions of the foregoing statutes, and all
     other applicable environmental requirements.

     2. The Borrower and/or any other individual or entity have operated the
     Premises and have at all times received, handled, used, stored, treated,
     shipped and disposed of all hazardous materials, substances, petroleum
     products and waste in strict compliance with all applicable environmental,
     health or safety statutes, ordinances, orders, rules, regulations or
     requirements, and have removed in compliance with all applicable
     environmental requirements from and off the Premises all hazardous
     materials, substances, petroleum products and waste.

     3. There are no statutes, orders, rules, regulations or agreements relating
     to environmental matters requiring any work, repairs, feasibility studies,
     remedial investigations, clean up costs, construction or capital
     expenditures, or any other response costs with respect to the Premises, nor
     have the Borrower or any other individual or entity received any notice of
     any of the same.

     4. No hazardous or toxic materials, substances, pollutants, contaminants or
     wastes have been released, spilled, leaked, poured, dumped, deposited,
     discharged or disposed of into the air, land or water at, on or from the
     Premises, nor have the Premises been used at any time by any person or
     entity as a landfill or a waste disposal site.

     5. No notices of any violation of any of the matters referred to in the
     preceding sections, above, relating to the Premises or its use have been
     received by the Borrower and the Guarantor and/or any other individual or
     entity, and there are no writs, injunctions, decrees, rulings, orders or
     judgments outstanding, no law suits, claims, proceedings, investigations,
     remedial investigations, feasibility studies, clean up costs or other
     response costs pending or threatened, relating to the ownership, use,
     maintenance or operations of the Premises, nor is there any basis for such
     law suits, claims, proceedings or investigations being instituted or filed.

     6. The Borrower and/or any other individual or entity will operate the
     Premises and shall at all times receive, handle, use, store, treat, ship
     and dispose of all hazardous materials, substances, petroleum products and
     waste in strict compliance with all

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                                                                   EXHIBIT 10.57

     applicable environmental, health or safety statutes, ordinances, orders,
     rules, regulations or requirements, and will remove in compliance with all
     applicable environmental requirements from and off the Premises all
     hazardous materials, substances, petroleum products and waste.

     7. The Borrower further covenants that it will promptly notify the
     Government of any fact or event which affects, alters or limits the
     representations and warranties made in the preceding sections, above, and
     that it will provide the Government upon demand with information or access
     to information relating to the Borrower's compliance with this Agreement.
     The Borrower further warrants that it has fully disclosed all actions, law
     suits, notices, citations or any other incident or condition that has ever
     existed on the Premises.

The foregoing representations and warranties shall survive the execution of this
Agreement and any closing occurring under any of the Loan Documents (defined
hereafter) and shall be of continuing effect.

INDEMNITY:

To the maximum extent permitted by law, the Borrower and the Guarantor hereby
agree to defend and indemnify the Government against and hold it harmless from
any and all losses, claims, liabilities, judgments, damages (including
exemplary, actual, compensatory and punitive), penalties, expenditures, costs
and legal or other expenses which the Government may suffer or incur as a direct
or indirect consequence of any of the following:

1.   The execution or performance of this Agreement or other loan documents,
     instruments or agreements now or hereafter existing between the Borrower
     and the Guarantor and the Government (together, the "Loan Documents");

2.   The exercise, enforcement, release, defense or forbearance by the
     Government of any of its rights, remedies, liens, interest or discretion
     under this Agreement or any of the other Loan Documents, against the
     Borrower and the Guarantor or any other person or entity, or in or to any
     property now or hereafter constituting collateral for or on account of any
     loans or obligations of the Borrower and the Guarantor;

3.   The fact that any representation, warranty, acknowledgment or other
     statement of fact by the Borrower and the Guarantor or any of the
     undersigned was untrue or incomplete at any time;

4.   The existence, for whatever reasons, of any contamination, including,
     without limitation, the presence of any hazardous or toxic waste, substance
     or material existing on, above, or under any of the Premises; or the fact
     that the Borrower and the Guarantor or any other individual or entity is or
     was responsible for the improper or unlawful production, handling, storage,
     transportation or disposition of any hazardous or toxic waste, substance or
     material;

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                                                                   EXHIBIT 10.57

5.   Any investigation, feasibility studies, monitoring, clean up, removal,
     restoration, remedial response or remedial work undertaken on or with
     respect to any of the Premises at any time hereafter, voluntarily or
     involuntarily, by the Government;

6.   The imposition or attachment of any statutory lien, including any arising
     under any environmental or land use matters.

The Government's equitable and implied rights of indemnity against the Borrower
and the Guarantor shall not be limited or impaired in any way by reason of the
explicit indemnities set forth in this Agreement. The Government's rights of
indemnity shall not be directly or indirectly limited, prejudiced, impaired or
eliminated in any way:

     i.   by any finding or allegation that the Government is directly or
          indirectly responsible under any theory of any kind for any act or
          omission of the Borrower and the Guarantor or any other individual or
          entity; or

     ii.  by any finding or allegation that the Government is or was an "owner"
          or "operator" of the Premises; or

     iii. by the kind, character or nature of any act or omission of the
          Government; except that the Borrower and the Guarantor shall not be
          obligated to pay any judgment which any court of competent
          jurisdiction may render against the Government upon an express finding
          that the Government personally and directly committed an intentional
          tort against the Plaintiff.

COVENANTS:

The Borrower shall, with respect to the Premises:

1.   Comply with, and require all tenants and subtenants, if any, to comply
     with, all Environmental Laws and obtain, comply with, and maintain, and
     require that all such tenants and subtenants obtain, comply with, and
     maintain, any and all licenses, approvals, registrations or permits
     required by Environmental Laws.

2.   Conduct and complete all investigations, studies, sampling and testing, all
     remedial, removal and other actions required under Environmental Laws and
     promptly comply with all lawful orders and directives of all Governmental
     Authorities respecting Environmental Laws.

3.   Defend, indemnify and hold harmless the Government, from and against any
     claims, demands, penalties, fines, clean-up expenses, liabilities,
     settlements, damages, costs and expenses of whatever kind or nature known
     or unknown, contingent or otherwise, arising out of, or in any way relating
     to the violation or noncompliance by the Borrower or any predecessor or
     successor of or with any Environmental Laws applicable to the Premises, or
     any orders, requirements or demands of Governmental Authorities related
     thereto, including, without limitation, attorney's and consultant's fees,
     investigation and laboratory fees, removal, remedial, and response costs,
     court costs and litigation expenses.

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                                                                   EXHIBIT 10.57

UNCONDITIONAL OBLIGATIONS:

The Borrower and the Guarantor hereby agree that their obligations, covenants
and agreements under this Agreement shall be irrevocable, absolute and
unconditional, and shall not be affected or impaired, notwithstanding, among
other things, any of the following, any defense on account of which is hereby
expressly waived by the Borrower and the Guarantor:

1.   The waiver, compromise, settlement, termination or other release of the
     performance or observance by the Borrower and the Guarantor, of any or all
     of the agreements, covenants, terms or conditions in favor of the
     Government contained herein or in any of the Loan Documents;

2.   The granting of one or more extensions of time renewals or other
     indulgence(s) to the Borrower, or by the Government heretofore, now or
     hereafter acquiring, releasing or in any way modifying any guaranty from
     any other person or persons or any security in whatever form for any or all
     of the Borrower's obligations to the Government, whether or not notice
     thereof shall have been or be given to the Borrower;

3.   Any failure, omission, delay or lack on the part of the Government to
     enforce, assert or exercise any right, power, remedy or claim conferred on
     the Government herein or in any of the Loan Documents or by applicable law,
     or the inability of the Government to enforce any provision of this
     Agreement or any of the Loan Documents for any reason, or any other act or
     omission on the part of the Government, including without limitation any
     failure to obtain, perfect or realize upon any security, rights,
     endorsements or guaranties which the Government may now or hereafter hold
     or be offered with respect to any of the Borrower's obligations to the
     Government;

4.   Any change in ownership of any corporation which has executed this
     agreement;

5.   The voluntary or involuntary liquidation, dissolution, sale of all or
     substantially all of the assets, marshalling of assets and liabilities,
     receivership, insolvency, bankruptcy, assignment for the benefit of
     creditors, reorganization or other similar proceeding affecting the
     Borrower, or any of its assets;

6.   Any fraudulent, illegal, improper or invalid acts heretofore or hereafter
     undertaken by the Borrower, or because of any failure of the Government to
     discover any such acts or irregularities;

7.   The invalidity or unenforceability of any of the Borrower's obligations to
     the Government;

8.   The modification or amendment (whether material or otherwise) of any term
     or condition of any of the Loan Documents heretofore or hereafter
     undertaken;

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                                                                   EXHIBIT 10.57

The Borrower and the Guarantor acknowledge and agree that the Government shall
have absolutely no responsibility to monitor the Borrower's compliance with
applicable laws, including without limitation environmental laws and
regulations, or to insure such compliance.

ADDITIONAL PROVISIONS:

1.   RELATIONSHIP OF THE PARTIES: The Government is not (and shall not be
     construed as) a partner, joint venturer, alter ego, manager, controlling
     person or other business associate or participant of any kind of the
     Borrower, nor an "owner" or "operator" for the Premises, nor a "facility"
     (as such terms are defined by applicable state and federal statutes) and
     the Government does not intend to assume any such status; and the
     Government is not and shall not be deemed responsible for (or a participant
     in) any acts, omissions or decisions of the Borrower.

2.   NOTICES AND REQUESTS: Any and all notices, elections, demands, or requests
     permitted or required to be made under this Agreement shall be in writing,
     signed by the party giving such notice, election, demand or request, and
     shall be delivered personally or sent by registered, certified, or Express
     United States mail, postage prepaid, or Federal Express or any similar
     service requiring a receipt, to the other party at the following address:

          Omega Protein, Inc.
          835 B Pride Drive
          Hammond, LA  70401

          U.S. Department of Commerce
          National Oceanic and Atmospheric Administration
          National Marine Fisheries Service
          Financial Services Branch, Southeast Region
          9721 Executive Center Drive North
          St. Petersburg, FL 33702

3.   GOVERNING LAW: Except to the extent that Federal Law controls, this
     Agreement shall be construed in all respects in accordance with and
     governed by the laws of the State in which the Premises are located.

4.   AMENDMENTS: No provision of this Agreement may be changed, waived,
     discharged or terminated orally, by telephone or by any other means except
     by an instrument in writing signed by the Government.

5.   SEVERABILITY: Wherever possible, each provision of this Agreement shall be
     interpreted in such a manner as to be effective and valid under applicable
     law, but if any provision of this Agreement shall be prohibited by,
     unenforceable or invalid under applicable law, such provision shall be
     ineffective to the extent of such prohibition, un-enforceability or
     invalidity, without invalidating the remainder of such provision or the
     remaining provisions of this Agreement.

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                                                                   EXHIBIT 10.57

6.   CONSTRUCTION: The singular form of any word used herein shall include the
     plural, and vice versa. The use herein of a word of any gender shall
     include each of the masculine, feminine, and neuter genders. The headings
     or titles of the several sections and paragraphs of this Agreement shall be
     solely for convenience of reference and shall not affect the meaning,
     construction or effect of the provisions hereof.

7.   BINDING EFFECT: Except as herein provided, this Agreement shall be binding
     upon the Borrower and the Guarantor, their successors and permitted
     assigns, and shall inure to the benefit of the Government, and its
     successor and assigns. Notwithstanding the foregoing, the Borrower, without
     the prior written consent of the Government in each instance, may not
     assign, transfer or set over to another, in whole or in part, all or any
     part of its benefits, rights, duties and obligations hereunder, including,
     but not limited to, performance of and compliance with the conditions
     hereof. Any reference to the Borrower shall include the Borrower's
     successors and assigns.

8.   SURVIVAL: The obligations set forth herein shall survive the payment of any
     other obligations of the Borrower to the Government and shall not terminate
     until this Agreement has been expressly canceled and terminated by the
     Government in writing.

9.   This agreement, supplements and reaffirms the Indemnity Agreement Regarding
     Environmental Matters executed by some of the parties on December 20, 1999.
     Where a provision in this agreement conflicts with a provision of said 1999
     agreement, the provisions of this agreement shall prevail.

IN WITNESS WHEREOF, the parties hereto have caused this agreement to be duly
executed and delivered to the Government on the 19th day of October, 2001.
                                                ----        -------------

ATTEST:                                      BORROWER: Omega Protein, Inc.

By:    /s/ Robert W.  Stockton               By:    /s/ Clark A. Haner
       ----------------------------------           ----------------------------

Title: Executive Vice President,             Title: Controller and
       ----------------------------------           ----------------------------
Chief Financial Officer & Secretary                 Assistant Treasurer
-----------------------------------------           ----------------------------

Date:  October 19, 2001                      Date:  October 19, 2001
       -----------------                            ----------------

(SEAL)

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                                                                   EXHIBIT 10.57

ATTEST:                                      GUARANTOR:Omega Protein Corporation

By:    /s/  Clark A. Haner                   By:    /s/  Robert W. Stockton
       ----------------------------------           ----------------------------

Title: Controller and Assistant Treasurer    Title: Executive Vice President,
       ----------------------------------           ----------------------------
                                             Chief Financial Officer & Secretary
                                             -----------------------------------

Date:  October 19, 2001                      Date:  October 19, 2001
       -----------------                            ----------------

(SEAL)<PAGE>

                                                                   EXHIBIT 10.58

Case No. FF-G-008

                             PREFERRED SHIP MORTGAGE
                         TO THE UNITED STATES OF AMERICA

                       ARTICLE I: CREATION OF ENCUMBRANCE

SECTION 1. PREFERRED SHIP MORTGAGE: THIS MORTGAGE, dated the 19th day of
                                                             -----------
October, 2001, by Omega Protein, Inc., 835 B Pride Drive, Hammond, Louisiana
-------------     ----------------------------------------------------------
70401, owning 100%, (the "Borrower"), to 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,
1315 East-West Highway, Silver Spring, Maryland 20910 (the "Government"),

     DEFINITIONS: All terms contained herein are defined in the Acknowledgment
of Definitions executed by all parties to this transaction.

     WITNESSETH:

SECTION 2. ENCUMBERED VESSEL: WHEREAS, The Borrower owns 100% of the fishing
vessel, more fully described below; and

SECTION 3. OBLIGATIONS SECURED: WHEREAS, The Borrower, pursuant to the
provisions of Title XI of the Merchant Marine Act, 1936, as amended, found at 46
USC Section. 1271 et seq., and 50 CFR 253, as amended by Public Law 104-297, on
October 11, 1996, known as the Fisheries Finance Program (FFP), has executed and
delivered to the Government its Promissory Note (the "Note") dated October 19,
                                                                   ----------
2001, in the principal amount of $1,900,000.00, a copy of which is attached
----                             -------------
hereto as Exhibit 1, and has agreed to execute and deliver this Preferred Ship
Mortgage (the "Mortgage") to the Government for the purpose of securing the
payment of the principal of and interest on the Note in accordance with its
terms and the terms of this Mortgage, as well as any future advances, and all
other sums owed the Government.

     WHEREAS, the Government has entered into an Approval and Agreement letter
(the "Approval Letter") dated May 29, 2001, and Security Agreement dated October
                              ------------                               -------
19, 2001, with the Borrower, and will execute other documents, including all
--------
Loan Documents.

     CONSIDERATION:

     NOW, THEREFORE, in consideration of the Government having agreed to enter
into the Approval Letter dated May 29, 2001, with the Borrower and for other
                               ------------
good and valuable consideration, receipt whereof is hereby acknowledged by the
Borrower, and in order to secure the payment of the principal of and interest on
the Note and all other sums which accrue according to the terms thereof and the
payment of all other sums that may hereafter become secured by this Mortgage in
accordance with the terms hereof and to secure the performance and observance of
and compliance with the covenants, terms and conditions herein and in the Note
contained, or contained in any other document executed by the Borrower, the
Borrower has granted, conveyed, mortgaged, pledged, assigned, transferred, set
over and confirmed unto the Government the whole of the vessel described as
follows:

                                    Pg. 1 of 18
                              -----
<PAGE>

SECTION 4. SECURITY AGREEMENT: THE VESSEL SUBJECT TO THIS MORTGAGE is that
certain oil screw vessel named RACCOON POINT, Official Number 532143, together
                               -------------
with all her accessories and appurtenances, including, but not limited to
accounts receivable, anchors, apparel, boats, boilers, cables, catch, chains,
charter hire, contract rights, contracts, electronics, engines, equipment,
fishing gear, freight, furniture, general intangibles, inventory, Individual
Transferable Quotas, licenses, machinery, masts, motors, nets, permits,
proceeds, product, related gear, rents or profits, rigging, sails, skiffs, spare
parts, spars, substitutions, supplies, tackle, hydraulics, safety equipment, and
parts and accessories affixed to or used in connection therewith, whether now
owned or hereafter acquired, whether on board or not, and all additions,
improvements, renewals, and replacements hereafter made in, on or to the said
vessel or any part thereof, and in, on, or to its equipment and appurtenances as
aforesaid (the "Vessel").

SECTION 5. FINANCING STATEMENT: Some of the items of property described herein
are goods that are or are to become accessories and appurtenances to the vessel
described herein, and it is intended that as to those goods, this mortgage shall
be effective as a financing statement. Information concerning the security
interest created by this instrument may be obtained from the Borrower or the
Government, at the addresses sent out in the first paragraph of this Preferred
Ship Mortgage.

     TO HAVE AND TO HOLD ALL and singular the above-mortgaged and described
property unto the Government and its successors and assigns, to its use and
benefit forever;

     PROVIDED ALWAYS, and the condition of these presents is such, that if the
Borrower, its successors or assigns shall pay, or cause to be paid, the
principal of and interest on the Note in accordance with the terms of the Note
and the Mortgage and shall pay any and all other sums that may hereinafter
become secured by this Mortgage in accordance with the terms hereof, and shall
keep, perform, and observe all and singular the covenants and promises in the
Note and in the Mortgage contained, expressed, or implied to be kept, performed,
and observed by or on the part of the Borrower, then this Mortgage and the
estate and rights hereby granted shall cease, determine, and be void; otherwise
to remain in full force and effect.

     The Government hereby covenants and agrees that the Vessel is to be held by
the Borrower subject to the further covenants, conditions, and uses hereinafter
set forth as follows:

                       ARTICLE II: BORROWER'S OBLIGATIONS

SECTION 1. CITIZENSHIP AND TITLE REQUIREMENTS: The Borrower (i) is and shall
continue to be a citizen of the United States as defined in section 2 of the
Shipping Act, 1916, as amended, for coastwise trade, and (ii) is entitled to own
and operate the Vessel under her marine document and shall maintain such marine
document in full force and effect. The Note and the Mortgage have been duly
executed and delivered, and the Note in the hands of the holder thereof is and
will be a valid and enforceable obligation of the Borrower in accordance with
its terms. The Borrower lawfully owns and is lawfully possessed of the whole of
the Vessel free from any lien whatsoever except the lien of this Mortgage, and
liens expressly permitted herein and other Preferred Ship Mortgages in favor of
the Government, and covenants that it will warrant and defend the title and
possession thereto and every part thereof for the benefit of the Government
against the claims and demands of all persons whomever.

SECTION 2. INSURANCE REQUIREMENTS:

     (a) The Borrower will, at all times and at its own expense, keep the Vessel
insured with responsible underwriters and through responsible brokers, all in
good standing and satisfactory to the Government, in an amount that fully and
adequately protects the Vessel and the Government's interest therein against all
marine

                                    Pg. 2 of 18
                              ------
<PAGE>

perils and disasters and all hazards, risks, and liabilities in any way arising
out of the ownership, operation, or maintenance of the Vessel, including but not
limited to insurance as follows:

          (i) While being operated, navigating hull insurance must be in an
          amount equal to the full commercial value of the Vessel. In no event
          may this be less than one hundred ten percent (110%) of the unpaid
          principal, at the time outstanding, of the Note. The policy valuation
          on the hull shall not exceed the aggregate amount insured by hull
          policies. The hull insurance shall be placed under the form of policy
          known as American Institute of Marine Underwriters form, or under such
          other form of policy as the Government may approve, insuring against
          the usual risks covered by such policies, including four-fourths
          running down clause, Inchmaree clause, and breach of warranty clause;
          and

          (ii) Protection and indemnity insurance under form of protection and
          indemnity policies approved by the Government and issued by marine
          insurance companies approved by the Government. The amount of
          protection and indemnity insurance shall be fixed by the Government;
          and

          (iii) When and while the Vessel is laid up, and in lieu of the
          aforesaid navigating hull insurance referred to in (i) of this
          Section, port risk insurance under forms of port risk policies
          approved by the Government.

     (b) The Borrower expressly covenants and agrees to keep the policies
renewed from time to time, to keep the same valid at all times for the amounts
aforesaid, and to keep the premiums thereon fully paid at all times. The
Borrower shall not do any act nor voluntarily suffer or permit any act to be
done whereby insurance is or may be suspended, impaired, or defeated, and shall
not suffer nor permit the Vessel to engage in any voyage or to carry any cargo
not permitted under the policy or policies of insurance in effect, unless and
until the Borrower shall first cover the Vessel in the amount herein provided
for, with insurance satisfactory to the Government for such voyage or for the
carriage of such cargo.

     (c) In the event the Borrower fails to procure any of the insurance,
satisfactory to the Government, or fails to perform any of the covenants and
agreements contained herein, the Government may, but shall be under no duty to,
procure such other or different insurance or coverage as it may deem advisable
with uncontrolled discretion in the Government as to the source, nature, form,
type, class, amount, and extent of such insurance or coverage; and all sums
expended or advanced by the Government in procuring such insurance shall be
secured by and shall be due and payable as provided in Article II, Section 2
hereof.

     (d) All insurance shall be taken out in the name of the Borrower and the
Government as their interest may appear and policies and certificates shall
provide that there shall be no recourse against the Government for payment of
premiums and shall further provide for at least 20 days prior written notice to
be given to the Government by the underwriters in the event of cancellation or
modification. All original policies, binders, certificates, and covenants and
all endorsements and riders thereto shall be delivered to the Government for
approval and custody.

     (e) Except as provided in (f) below, all insurance policies or certificates
shall provide that losses thereunder shall be payable to the Government. If no
Event of Default exists under this Mortgage, the Government may, in its
discretion, pay, from the proceeds of the insurance directly to the repairer,
the amount of any authorized repairs or if the Borrower shall have first fully
repaired the damage to the satisfaction of the Government and paid the cost
thereof, to the Borrower as reimbursement therefor. Any balance remaining from
the aforesaid insurance proceeds will be applied as directed by the Government.
If an Event of Default exists, the

                                    Pg. 3 of 18
                              ------
<PAGE>

Government shall retain such insurance and if such Event of Default is not cured
within fifteen (15) days of the occurrence thereof, apply the same in the manner
provided in Article II, Section 2 hereof.

     (f) Any loss under any insurance on the Vessel with respect to protection
and indemnity risks may be paid directly to the person to whom any liability,
covered by such insurance, has been incurred or to the Borrower to reimburse the
Borrower for any loss, damage, or expense incurred by the Borrower and covered
by such insurance; provided, that the underwriter shall have first received
evidence that the liability insured against has been discharged.

     (g) In the event of an actual or constructive total loss, or an agreed or
compromised total loss of or in case of requisition of title to the Vessel, all
amounts payable therefor shall, subject to Article II, Section 2 hereof, be paid
to the Government and shall be applied first, to the payment of the expenses of
the Government in collecting such payments, and second, as provided in Article
II, Section 2 hereof.

     (h) In the event that any claim or lien is asserted against the Vessel for
loss, damage, or expense which is covered by insurance hereunder, and it is
necessary for the Borrower to obtain a bond or supply other security to prevent
arrest of the Vessel or to release the Vessel from arrest on account of such
claim or lien, the Government, on request of the Borrower, may, in the sole
discretion of the Government, and upon notice to the Borrower, assign to any
person, firm, or corporation executing a surety or guarantee bond or other
agreements, to save or release the Vessel from such arrest, all right, title,
and interest of the Government in and to said insurance covering said loss,
damage, or expense, as collateral security to indemnify against liability under
said bond or other agreement.

SECTION 3. NO LIENS TO BE PLACED AGAINST THE VESSEL:

     (a) Neither the Borrower, any charterer, the Master of the Vessel, nor any
other person has or shall have any right, power, or authority to create, incur,
or permit to be placed, imposed, or continued upon the Vessel any lien
whatsoever other than the lien of this Mortgage or permitted liens as defined
herein.

     (b) Permitted Liens. "Permitted Liens" means liens or other charges or
encumbrances:

          (i) arising for damages out of tort covered by insurance except for
          any deductible amounts applicable thereto, for wages of a stevedore
          when employed directly by the owner, operator, master, ship's husband
          or agent of any Vessel, for wages of the crew of the Vessel, for
          general average, for salvage, including contract salvage, provided the
          same are paid immediately when due;

          (ii) in favor of any person furnishing repairs, supplies, towage, use
          of dry dock or marine railway, or other necessaries to a Vessel on the
          order of the Borrower, or of a person authorized by the Borrower,
          provided the same are paid immediately when due.

          (iii) imposed on the Vessel for taxes or governmental charges or
          levies, provided the same are paid immediately when due;

          (iv) incurred in the ordinary course of business of the Vessel not
          relating to money borrowed which (1) will be paid immediately when
          due, and (2) which, in the aggregate, at any time are not material to
          the operations or financial condition of the Borrower; and

          (v) arising by operation of law as a result of the modification of the
          Vessel, including mechanic's liens, provided the same are paid
          immediately when due;

                                    Pg. 4 of 18
                              ------
<PAGE>

          (vi) in favor of the United States of America, the United States
          Department of Commerce, National Oceanic and Atmospheric
          Administration, National Marine Fisheries Service, Financial Services
          Division;

     PROVIDED, HOWEVER, that with respect to the deductible amounts described in
clause (i) and liens or encumbrances of the type described in clauses (ii),
(iii) and (v) not arising from or incurred in the ordinary course of business of
the Borrower, the Borrower shall have set aside adequate reserves determined in
accordance with generally accepted accounting principles (GAAP), provided that
for such deductible amounts and liens or encumbrances which, in the aggregate,
exceed $25,000.00 USD, shall include only liens which are subordinate to or
which pursuant to applicable law cannot be subordinated by contract to the lien
of the security interest in the vessel granted to the Government.

     As used herein, the term "immediately when due" shall mean the time when,
according to applicable law, customary industry practices, or a prior course of
dealing or other agreement between the Borrower and the lienholder, the
lienholder expects payment to be made; provided that, if the Borrower desires to
contest an asserted lien, the Borrower may do so if the Borrower acts in good
faith and by appropriate proceedings and has set aside the reserves described
above.

SECTION 4. NOTICE OF MORTGAGE: The Borrower shall carry a properly certified
copy of this Mortgage with the Vessel's papers on board the Vessel, shall
exhibit the same on demand to any person having business with the Vessel, or to
any representative of the Government, and shall place and keep prominently
displayed in the pilot house, master's cabin, and engine room of the Vessel a
framed, printed or typewritten notice reading as follows:

     "NOTICE OF MORTGAGE: This Vessel is covered by a Preferred Ship Mortgage
     given to the United States of America, under authority of the Ship Mortgage
     Act, 1920, as amended. Under the terms of said Mortgage, neither the owner
     of this Vessel, any charterer, the Master of this Vessel, nor any other
     person has any right, power, or authority to create, incur, or permit to be
     imposed upon the Vessel any liens, maritime or otherwise, other than the
     lien of said Mortgage and liens for crew's wages, emergency safety repairs,
     or salvage."

SECTION 5: NOTICES TO THE GOVERNMENT:

     (a) OF ACTION AGAINST VESSEL: In the event that a libel is filed against
the Vessel, or if the Vessel shall be levied upon or taken into custody, or
detained by any proceeding in any court, or tribunal, the Borrower will, within
48 hours, notify the Government by telegram, telex, or facsimile and confirmed
by letter, and the Borrower will, within fifteen (15) days thereafter, cause the
Vessel to be discharged. Within three (3) days of its occurrence, the Borrower
will notify the Government of any claim that could result in a lien being placed
against the Vessel.

     (b) OF CASUALTIES OR DAMAGE TO THE VESSEL: Within 24 hours of the event,
the Borrower shall furnish the Government full information regarding any
casualties or other accidents or damage to the Vessel, including copies of any
supporting documents, i.e, accident reports, claims, etc.

     (c) OF ACTION AGAINST THE BORROWER OR GUARANTOR: Within three days of its
occurrence, the Borrower must give the Government written notice of any pending
litigation, business reverse, casualty, loss, or any other matter (however
characterized) that diminishes; (i) The Borrower's ability to service any debt
actually or contingently owed the Government, (ii) The Borrower's ability to
perform any other duty or

                                    Pg. 5 of 18
                              ------
<PAGE>

obligation owed to the Government, (iii) The Borrower's ability to fully and
faithfully perform any covenant with the Government, (iv) the value of any
property or other assets pledged to the Government, or (v) the net worth of any
party against whom the Government has recourse for this debt.

SECTION 6: MAINTENANCE AND INSPECTION COSTS:

     (a) VESSEL MAINTENANCE: At all times, at the Borrower's own cost and
expense, the Borrower will maintain and preserve the Vessel in as good
condition, working order and repair as on the date of this Mortgage, ordinary
wear and tear excepted; provided, however, if subsequent to the date of this
Mortgage, the Vessel is reconstructed or reconditioned, the Borrower will keep
the Vessel in as good condition, working order, and repair as the Vessel was on
the date said reconstruction or reconditioning was completed, ordinary wear and
tear excepted. In addition to the foregoing, the Borrower will keep the Vessel
in as good condition as will enable her to pass such inspection as may be
required by marine underwriters as a condition of their writing such insurance
in such amounts as are required under this Mortgage or as required by the United
States Coast Guard as a condition to certifying that the Vessel is seaworthy and
in compliance with all applicable safety and navigational requirements.

     (b) INSPECTION OF VESSEL: The Borrower shall afford the Government or its
authorized representatives full and complete access to the Vessel, in port or at
sea, at such times as the Government, in its sole discretion, may require, for
the purpose of inspecting or valuing the vessel, her cargo, log, and papers.

     (c) INSPECTION OF BORROWER'S FINANCIAL RECORDS: The Borrower agrees to
execute a consent and waiver, valid for the term of the mortgage, which allows
the Internal Revenue Service to release directly to the Government, Borrower's
Federal Income Tax Returns/1/, whenever the Government requests same.
Additionally, the Borrower shall permit the Government, or any representative
selected by it, in such manner and at such times as the Government, in its sole
discretion, requires, to make inspections and audits of any books, records,
off-loading receipts, fish-sale receipts, papers, or other documents of
whatsoever nature in the custody and control of the Borrower, or any other
individual or entity, relating in any way to the financial or business condition
of the Borrower or the operation or company. At the Government's request, these
statements, books, records, receipts or reports must be delivered to the
Southeast Region of the National Marine Fisheries Service, Financial Services
Branch, in St. Petersburg, Florida.

     (d) BORROWER TO PAY THE COST OF ALL SUCH INSPECTIONS, audits or appraisals,
provided for in Paragraphs 6(a), 6(b) and 6(c), immediately above, within 30
days of the Government's demand and all such amounts disbursed by the Government
for such purpose shall, until fully repaid by the Borrower, be added (payable
upon the Government's demand) to the Borrower's Note to the Government and shall
earn interest at the same rate as the other principal of the Borrower's
Promissory Note and shall be secured by the ship mortgage and other securities
which secure the Borrower's promissory note to the Government.

SECTION 7. FINANCIAL REPORTING TO THE GOVERNMENT:

     (a) The Borrower will, within 20 days after the close of each fiscal year,
and at such other times and in such form as the Government may prescribe,
furnish to the Government, the Borrower's financial and operating statements
including schedules showing all compensation paid by the Borrower;

     (b) The Borrower will, at all times, keep proper books of account in
accordance with generally accepted accounting principles and practice; and

----------
/1/ Borrower agrees to execute IRS Forms #4506 and 8821, thereby implementing
the provisions of 26 USC Section.6103(c).

                                    Pg. 6 of 18
                              ------
<PAGE>

     (c) The Borrower will permit the Government, at the Borrower's expense and
in such manner and at such time as the Government may require, to (i) make
inspections and audits of any books, records, and papers in the custody and
control of the Borrower or others, relating to the Borrower's financial or
business conditions, including making copies thereof, and extracts therefrom,
and (ii) make inspections and appraisals of any of the Borrower's assets.

SECTION 8. TAXES & FEES: The Borrower will pay and discharge when due and
payable, from time to time, all taxes, assessments, governmental charges, fines,
and penalties lawfully imposed on the Vessel.

SECTION 9. REIMBURSEMENT OF GOVERNMENT EXPENDITURES: The Borrower will reimburse
the Government for any and all expenditures which the Government may reasonably
elect to make from time to time to protect the security granted hereunder (in
the event of the Borrower's failure to do so), including, without limitation of
the foregoing, payment of taxes, repairs, insurance premiums, the discharge of
any lien, libel or seizure of the Vessel, and expenses incurred by the
Government in retaking the Vessel; and any such payment made by the Government
shall be for the account of the Borrower, and the making thereof by the
Government shall not cure the Borrower's default in that regard nor constitute a
waiver of any right or remedy granted to the Government hereunder, and all
reasonable sums so expended by the Government or any liability incurred by it
shall be immediately due and payable and shall be deemed to be an indebtedness
of the Borrower and secured by this Mortgage, and until paid shall bear interest
at the same rate as that provided in the Note.

SECTION 10: GOVERNMENT'S PRIOR WRITTEN CONSENT REQUIRED: The Borrower shall not,
without prior written consent of the Chief, Financial Services Division,
National Marine Fisheries Service, which consent will not unreasonably be
withheld, take any of the following actions:

     (a) sell, mortgage, transfer, nor charter the Vessel, and any such written
consent obtained from the Government to any one sale, mortgage, transfer, or
charter, shall not be construed to be a waiver of this provision with respect to
any subsequent proposed sale, mortgage, transfer, or charter. Any such sale,
mortgage, transfer, or charter of the Vessel shall be subject to the provisions
of this Mortgage and to the lien it creates.

     (b) 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 or operation of the Borrower's size and financial condition at the
time that such consideration is paid (and the burden of proving reasonableness
shall be on the Borrower).

     (c) Purchase or redeem any shares of the Borrower's or the Borrower's
company's own stock.

     (d) Exclusive of such fixed assets to be acquired with the proceeds of the
Note or any part thereof, or any fixed assets acquired prior to the date of this
Mortgage, make any additional investment (excluding purchases, etc., in
connection with the routine and continuing maintenance and preservation of the
Vessel and its productivity) in, or incur any additional liability for, the
purchase, acquisition, lease, or other use (however characterized) of any real
property, machinery, equipment, fixtures, or furniture, or fixed property in
connection with the Borrower's present level of operations in any one fiscal
year in excess of an aggregate of 5% of the Borrower's total assets.

     (e) 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 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.

                                    Pg. 7 of 18
                              ------
<PAGE>

     (f) The Borrower will not split-up, split-off, spin-off, merge,
consolidate, or transfer or allow transfer of its shares so as to effect a
change in its controlling interest or management.

     (g) 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, individual or
entity, except as may be permitted herein or required in the normal course of
operations reasonably necessary to carry on its day-to-day business.

     (h) By any means whatsoever, allow the company or operation to be acquired
by, or otherwise reorganized into (however characterized) any other company or
operation, unless the acquiring company, operation or reorganized entity is
acceptable to the Government, and said company, operation or reorganized entity
agrees to do the following: (i) provide to the Government a 100% unconditional
guarantee of all debt actually or contingently owed it; and (ii) be bound by
these covenants; and (iii) be bound by such other covenants as the Government
shall reasonably require to protect its interest; and (iv) provide such other
assurances and security as the Government, in its sole discretion, requires.

     (i) Make any distribution of the Borrower's assets for compensation
(including salaries, withdrawals, fees, bonuses, commissions, drawing accounts,
and other payments, whether directly or indirectly, in money or otherwise) for
services, or give any preferential treatment, make any advances, directly or
indirectly by way of loans, gifts, notes, or otherwise, to any employee or
Affiliate or increase the compensation of any person above that set forth in any
application or document submitted in connection with the Note. In the event an
Affiliate increases the compensation (including salaries, withdrawals, fees,
bonuses, commissions, drawing accounts, and other payments, whether directly or
indirectly, in money or otherwise) paid to the Borrower or any employee of the
Borrower, beyond that authorized or consented to by the Government, the
compensation payable to such person by the Borrower will be forthwith
correspondingly reduced and immediate notice thereof given to the Government by
the Borrower.

SECTION 11. COMPLIANCE WITH FEDERAL SHIP MORTGAGE ACT: The Borrower will comply
with and satisfy all the provisions of the Ship Mortgage Act, 1920, as amended,
46 USC, Chapter 313, et seq. in order to establish and maintain this Mortgage as
a Preferred Ship Mortgage upon the Vessel.

SECTION 12. OPERATING RESTRICTIONS:

     (a) DOCUMENTATION: The Borrower will keep the Vessel documented under the
laws of the United States and no transfer of port of hailing of the Vessel shall
be made without the prior written consent thereto of the Government.

     (b) LAWFUL OPERATION: The Borrower will not cause or permit the Vessel to
be operated in any manner contrary to law or contrary to any rules and
regulations which may from time to time be prescribed pursuant to law.

     (c) VESSEL SHALL NOT LEAVE UNITED STATES' WATERS: The Borrower will not
remove, attempt to remove, or allow the vessel to be moved beyond the limits of
the United States without the written consent of the Government. If said written
consent is obtained, the Borrower will execute certain documents and will not
abandon the Vessel in a foreign port. The Borrower will not engage in any
unlawful trade or violate any law or carry any cargo that will expose the Vessel
to penalty, forfeiture, or capture, and will not do, or suffer or permit to be
done, anything which can or may injuriously affect the documentation of the
Vessel under the laws and regulations of the United States.

                                    Pg. 8 of 18
                              ------
<PAGE>

     (d) Upon demand by the Government to the master of the Vessel or the
Borrower, the Borrower will return the vessel to the waters known as the
Exclusive Economic Zone (EEZ) of the United States and, if the Government so
demands, to a port of call chosen by the Government, thereby revoking any prior
consent extended by the Government with respect to operation of the Vessel
outside the Exclusive Economic Zone of the United States.

SECTION 13. PAYMENTS MUST BE TIMELY MADE AND TERMS OF THE MORTGAGE , NOTE AND
OTHER LOAN DOCUMENTS MUST BE MET: The Borrower will duly and punctually pay all
the principal of and interest on the Note and the Mortgage as herein and in the
Note and other loan documents provided, and will at all times keep, perform, and
observe all and singular the covenants, conditions, stipulations, promises, and
agreements in this Mortgage and in the Note expressed or implied on its part to
be kept, performed, and observed, and will duly punctually pay all sums that may
hereinafter become due hereunder.

                              ARTICLE III: DEFAULT

SECTION 1. The Borrower agrees that it will faithfully observe, perform, comply
with and discharge all of the covenants, conditions, and obligations which are
imposed on the Borrower by any other agreement or document executed in
connection with this Mortgage and the Note, concurrently or otherwise, and that
the Borrower's failure to do so shall constitute an Event of Default under this
Mortgage.

SECTION 2. The Borrower agrees that any material default under any guarantor
agreement, security agreements, Title XI financial agreements, or other loan
documents which may be executed in connection with this Mortgage or Note,
whether or not the Borrower is party to said agreement, shall constitute an
Event of Default under this Mortgage.

SECTION 3. The Borrower agrees that all reasonable attorney fees incurred by the
Government because of the Borrower's failure to perform or discharge its
obligations, as provided by this Mortgage, the Note, or any other document or
agreement executed in connection therewith, shall be deemed to be an
indebtedness of the Borrower and shall be secured by this Mortgage and shall be
due and payable and until paid, shall bear interest at the same rate as that
provided in the Note, and upon acceleration of the amounts owed under the Note,
shall bear interest at the accelerated rate of eighteen percent (18%) per annum,
unless limited by applicable state law.

SECTION 4. Each of the following events shall constitute an Event of Default:

     (a) default shall be made in the payment of the principal of the Note when
and as the same shall become due and payable, whether at maturity, by notice of
acceleration, or otherwise; or

     (b) default shall be made in the payment of any interest on the Note
(including any amendments thereto or substitution therefor), when and as the
same shall become due and payable as therein and herein provided; or

     (c) default shall be made in the due and punctual observance and
performance of any provision of Article I, hereof; or

     (d) the Borrower shall be dissolved or adjudged a bankrupt or shall make a
general assignment for the benefit of the Borrower's creditors, or shall lose
the right to do business by forfeiture or otherwise, or a receiver or receivers
of any kind whatsoever, whether appointed or not, in admiralty, bankruptcy,
common law, or equity proceedings, and whether temporary or permanent, shall be
appointed for the Vessel or for any other property of the Borrower; or a
petition for reorganization of, or other proceeding or action in reference to
the Borrower under any of the provisions of the Bankruptcy Act shall be filed by
the Borrower or by creditors of the Borrower; or if

                                    Pg. 9 of 18
                              ------
<PAGE>

reorganization of the Borrower under said Act is approved by the Court, whether
proposed by a creditor, stockholder, or any other person whomsoever; and

     THE BORROWER AND THE GUARANTOR BOTH UNDERSTAND THAT IF EITHER FILES
     BANKRUPTCY, THE BORROWER WILL LOSE THE VESSEL.

     THE BORROWER AND THE GUARANTOR EXPRESSLY AGREE TO, AND UNDERSTAND THAT IN
     THE EVENT OF BANKRUPTCY, THE VESSEL WHICH IS THE SECURITY FOR THIS
     PREFERRED SHIP MORTGAGE WILL NOT BE PERMITTED TO GO OUT TO SEA, AND WILL
     REMAIN IN PORT IN THE JURISDICTION OF THE COURT WHERE THE BANKRUPTCY
     PETITION IS FILED OR SUCH OTHER JURISDICTION WHERE THE BOAT MAY BE OR OTHER
     COLLATERAL MAY BE FOUND.

     (e) there shall be an actual or constructive total loss of the Vessel; or

     (f) default shall be made by the Borrower in the prompt and faithful
performance or observance of any other covenant, condition, or agreement by it
to be performed and observed, contained in this Mortgage, Note, or any other
loan documents and such default shall continue for fifteen (15) days; or

     (g) the making in any application, agreement, affidavit, or other document,
submitted in connection with the Note, of any misrepresentation, on behalf of,
or for the benefit of, the Borrower. Failure to disclose any material fact may
be deemed a misrepresentation; or

     (h) the institution of any suit against the Borrower or others deemed by
the Government to affect adversely its interest hereunder, in the Note or
otherwise; or

     (i) failure of any signator to any of the Loan Documents, to observe any of
the conditions contained in said Loan Documents, or any other document or
agreement executed (concurrently or otherwise), inclusive of amendments thereto,
in connection with this Mortgage, or subsequent mortgage, regardless of whether
or not the Borrower shall be a party to said agreement or document; or

     (j) impairment of any collateral including the vessel or which is given in
addition to the vessel which is the subject of this Preferred Ship Mortgage; or

     (k) the Borrower shall, without first obtaining written permission from the
Secretary, transfer, sell, assign, hypothecate, or alienate or attempt to
transfer, sell, assign, hypothecate or alienate any rights, licenses or permits
appurtenant to and/or necessary for the Vessel to engage in any commercial
fisheries; or

     (l) the Borrower shall, intentionally or through neglect, permit a material
diminution of the value of the Vessel and/or its appurtenances and equipment; or

SECTION 5. UPON OCCURRENCE OF AN EVENT OF DEFAULT THE GOVERNMENT, MAY IN ITS
DISCRETION:

     (a) Declare the Note to be due and payable immediately and upon such
declaration the entire principal of and interest on the Note shall become and be
immediately due and payable, and thereafter shall bear interest at eighteen
percent (18%) per annum unless such would violate the usury laws of the state
where this Mortgage and the Note are executed, in which case the maximum legal
rate of that state shall prevail; provided, however, that if the Borrower shall
have removed and remedied each Event of Default within fifteen (15) days after
the

                                    Pg. 10 of 18
                              ------
<PAGE>

occurrence thereof, then in every such case the Government shall waive any such
Event of Default; but no such waiver shall extend to nor affect any subsequent
or other Event of Default nor impair any rights or remedies consequent thereon;
and provided, further, that if at any time after the expiration of fifteen (15)
days after any Event of Default shall have occurred, all Events of Default shall
have been remedied and removed and full performance made by the Borrower to the
satisfaction of the Government and all installments of principal and interest in
arrears (including interest at the aforesaid rate) and the charges and expenses,
if any, of the Government, it agents and attorneys, shall have been paid, then
and in every such case the Government may waive any such Event of Default; and
provided, also, that no waiver hereunder shall extend to nor affect any
subsequent or other Event of Default nor impair any rights or remedies
consequent thereon;

     (b) Bring suit at law, in equity, or in admiralty, as it may be advised, to
receive judgment for any and all amounts due under the Note and other Loan
Documents, or otherwise hereunder, and collect the same out of any and all
property of the Borrower whether covered by this Mortgage or otherwise;

     (c) Retake the Vessel without legal process wherever the same may be found,
and the Borrower or other person in possession forthwith upon demand of the
Government shall immediately surrender to the Government possession of the
Vessel, and, without being responsible for loss or damage, the Government may
hold, lay-up, lease, charter, operate, or otherwise use the Vessel for such time
and upon such terms as it may deem to be for its best advantage, accounting only
for the net profits, if any, arising from such use of the Vessel and charging
against all receipts from the use of the Vessel, or from the sale thereof by
court proceeding or pursuant to subsection (e) following, all costs, expenses,
charges, damages, or losses by reason of such use; and if at any time the
Government shall avail itself of the right herein given it to retake the Vessel
and shall retake it, the Government shall have the right to dock the Vessel at
any dock, pier, or other premises of the Borrower without charge, or to dock it
at any other place at the cost and expense of the Borrower; IT IS EXPRESSLY
UNDERSTOOD AND AGREED TO BY THE BORROWER THAT SURRENDER OF THE VESSEL UNDER THIS
SECTION MUST BE AND WILL BE IMMEDIATE AND IN ACCORDANCE WITH THE DIRECTIONS OF
THE GOVERNMENT. FAILURE OF THE BORROWER TO IMMEDIATELY COMPLY WITH THE
GOVERNMENT'S DEMAND FOR SURRENDER OF THE VESSEL WILL CAUSE THE POSSESSION OF THE
VESSEL BY THE BORROWER (INCLUDING, BUT NOT LIMITED TO, POSSESSION AND CONTROL OF
THE VESSEL BY A MASTER OR CREW MEMBER ON BOARD THE VESSEL) TO BE UNLAWFUL AND TO
CONSTITUTE A CONVERSION OF THE VESSEL, ITS APPURTENANCES AND EQUIPMENT, THEREBY
SUBJECTING THE BORROWER (EXPRESSLY INCLUDING, IF APPLICABLE, ITS OFFICERS AND
DIRECTORS) TO ALL FINES, PENALTIES AND ACTIONS WHICH THE GOVERNMENT DEEMS
APPLICABLE AND APPROPRIATE. SHOULD THE BORROWER CONTINUE TO OPERATE, POSSESS OR
CONTROL THE VESSEL CONTRARY TO THE GOVERNMENT'S DIRECTIONS AND THE PROVISIONS
HEREIN, THEN THE GOVERNMENT SHALL, IN ADDITION TO ANY OTHER RIGHTS AND REMEDIES
AT LAW AND IN EQUITY, BE ENTITLED TO A TEMPORARY RESTRAINING ORDER AND/OR ORDER
FOR INJUNCTIVE RELIEF NECESSARY TO GAIN COMPLIANCE HEREWITH, IN ADDITION TO
EXPRESSLY CONSENTING THAT THE INJURY AND DAMAGE RESULTING FROM BREACH HEREOF
WOULD BE IMPOSSIBLE TO MEASURE MONETARILY, THE BORROWER EXPRESSLY WAIVES ANY
DEFENSE BASED UPON AN ALLEGED EXISTENCE OF AN ADEQUATE REMEDY AT LAW.

     (d) Foreclose this Mortgage pursuant to the terms and provisions of the
Ship Mortgage Act, 1920, as amended, 46 USC, Chapter 313, et seq., or by other
judicial process as may be provided in the Statutes; and

     (e) In addition to any and all other rights, powers, and remedies elsewhere
in this Mortgage or by law granted to and conferred upon the Government, sell
the Vessel upon such terms and conditions as it may deem to be for its best
advantage, including the right to sell and dispose of the Vessel free from any
claim of or by the Borrower, at public sale, by sealed bids or otherwise, after
first giving notice of the time and place of sale, with a general description of
the property by first publishing notice of any such sale for ten (10)
consecutive days,

                                    Pg. 11 of 18
                              ------
<PAGE>

except Sundays, in some newspaper of general circulation at the place designated
for such sale, and by mailing notice of such sale to the Borrower at his last
known address; such sale may be held at such place and at such time as the
Government in such notice may have specified, or may be adjourned by the
Government from time to time by announcement at the time and place appointed for
such sale or for such adjourned sale, and without further notice of publication
the Government may make any such sale at the time and place to which the same
shall be so adjourned; and any such sale may be conducted without bringing the
Vessel to the place designated for such sale and in such manner as the
Government may deem to be for its best advantage, and the Government may become
the purchaser at any such sale, and shall have the right to credit on the
purchase price any or all sums of money due to the Government under the Note,
any other Loan Documents, or otherwise hereunder. The Borrower expressly agrees
and acknowledges that sale of the Vessel pursuant to this section will not
(notwithstanding federal or state law to the contrary, if any,) impair or limit
the Government's legal right to collect from the Borrower any deficiency
remaining after the sale. If any such federal or state laws or legal precedents
may be construed to limit the Government's rights to collection of said
deficiency from the Borrower, then Borrower hereby expressly waives,
relinquishes and forever gives up the right to avail itself of such laws and/or
defenses.

     (f) the Borrower agrees, acknowledges and consents to and with the
authority of the Government, to take all steps, measures or actions which are
within the discretion or authority of the Government.

SECTION 6. Any sale of the Vessel made in pursuance of this Mortgage shall
operate to divest and forever bar the Borrower from any and all right, title,
and interest of any nature whatsoever of the Borrower therein and thereto. 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 proceeds thereof.

SECTION 7. The Borrower does hereby irrevocably appoint the Government the true
and lawful attorney of the Borrower, in its name and stead to make all necessary
transfers of the Vessel, and for that purpose it shall execute all necessary
instruments of assignment and transfer, the Borrower hereby ratifying and
confirming all that its said attorney shall lawfully do by virtue hereof.
Nevertheless, the Borrower shall, if so requested by the Government, ratify and
confirm such sale by executing and delivering to the purchaser of the Vessel
such proper bill of sale, conveyance, instrument of transfer, and release as may
be designated in such request.

SECTION 8. The Borrower hereby irrevocably appoints the Government the true and
lawful attorney of the Borrower so long as an Event of Default shall have
occurred and shall not have been waived in accordance with Section 2 hereof, in
the name of the Borrower, to demand, collect, receive, compromise, and sue for,
so far as may be permitted by law, all hire, earnings, issues, revenues, income,
and profits of the Vessel 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, any
right of action against the designer, builder, surveyor, or other material party
for any fault, negligence, or deficiency in design, construction or survey of
the Vessel, and all other sums, due or to become due, at or after the time of
the happening of any Event of Default, in respect of the Vessel or in respect of
any insurance thereon from any person whomsoever, and to make, give and execute
in the name of the Borrower, acquittances, receipts, releases, or other
discharges for the same, whether under seal or otherwise, and to endorse and
accept in the name of the Borrower all checks, notes, drafts, warrants,
agreements, and all other instruments in writing with respect to the foregoing.

SECTION 9. The Borrower covenants and agrees that so long as an Event of Default
shall have occurred and shall not have been waived in accordance with Section 2
hereof, the Government in any suit to enforce any of its rights, powers, or
remedies shall be entitled as a matter of right and not as a matter of
discretion (i) to the appointment of a receiver or receivers of the Vessel and
that any receiver so appointed shall have full right and power to use and
operate the Vessel, and (ii) to a decree ordering and directing the sale and
disposal of the Vessel,

                                    Pg. 12 of 18
                              ------
<PAGE>

and the Government may become the purchaser at said sale, and the Government
shall have the right to credit on the purchase price any and all sums of money
due to the Government under the Note, or otherwise hereunder.

SECTION 10.

     (a) In the event that the Vessel shall be arrested or detained by a marshal
or other officer of any court of law, equity, or admiralty jurisdiction in any
country or nation of the world or by any government or other authority and shall
not be released from arrest or detention within fifteen (15) days from the date
of arrest or detention, the Borrower does hereby authorize and empower the
Government in the name of the Borrower and does hereby irrevocably appoint the
Government and its successors and assigns the true and lawful attorney of the
Borrower, in its name and stead to apply for and receive possession of and to
take possession of the Vessel pursuant to the terms of this Mortgage and any
other documents executed by the Borrower, with all rights and powers that the
Borrower might have, possess, or exercise in any such event; and this power of
attorney shall be irrevocable and may be exercised not only by the Government
but also by an appointee or appointees, with full power of substitution, to the
same extent as if the said appointee or appointees had been named as one of the
attorneys above named by express designation.

     (b) The Borrower also authorizes and empowers the Government or the
Government's appointee or appointees, as the true and lawful attorney of the
Borrower, to appear in the name of the Borrower, or its successors or assigns,
in any court of any country or nation of the world where a suit is pending
against the Vessel because of or on account of any alleged lien against the
Vessel from which the Vessel has not been released and to take such proceedings
as to them or any of them as may seem proper towards the defense of such suit
and the discharge of such lien, and all expenditures made or incurred by them or
any of them for the purpose of such defense or discharge shall be a debt due
from the Borrower to the Government and payment thereof shall be secured by the
lien of this Mortgage and shall be due and payable and until paid, shall bear
interest at the same rate as that provided in the Note and upon acceleration of
the amounts owed under the Note, shall bear interest at the rate of eighteen
percent (18%) per annum.

SECTION 11.

     (a) The Borrower hereby expressly and irrevocably consents to the
jurisdiction of any court in any country whatsoever wherein the Vessel may at
any time be located for the foreclosure of this Mortgage, the sale of the
Vessel, or the enforcement of any other remedy or right hereunder, and hereby
expressly and irrevocably submits the person of the Borrower and the Vessel to
the jurisdiction of any such court in any country in any such action or
proceeding which is brought, in its sole discretion, by the Government.

     (b) To the extent not governed by the laws of the United States, this
Mortgage shall in all respects be governed by and construed in accordance with
the laws of the Commonwealth of Virginia. The Borrower and Guarantor irrevocably
submit to the non-exclusive jurisdiction of the state and federal courts
situated in the Commonwealth of Virginia in any proceeding relating to this
Mortgage and agrees that any process or summons in any such action may be served
by mailing to the Borrower a copy thereof. The Borrower and Guarantor consent to
and subject themselves itself to the jurisdiction of the federal court in the
jurisdiction where the Vessel is found.

SECTION 12.

     (a) Each and every power and remedy herein specifically given to the
Government or otherwise in this Mortgage shall be cumulative and shall be in
addition to every other power and remedy herein specifically given or now or
hereafter existing at law, in equity, admiralty, or by statute, and each and
every power and remedy whether specifically herein given or otherwise existing
may be exercised from time to time and as often and in

                                    Pg. 13 of 18
                              ------
<PAGE>

such order as may be deemed expedient by the Government, and 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 Government in the
exercise of any right or power or in the pursuance of any remedy occurring upon
any Event of Default shall impair any such right, power, or remedy or be
construed to be a waiver of any such Event of Default or to be any acquiescence
therein; nor shall the acceptance by the Government of any security or of any
payment of or on account of the Note maturing after any Event of Default or of
any payment on account of any past Event of Default be construed to be a waiver
of any right to take advantage of any future Event of Default or of any past
Event of Default not completely cured thereby.

     (b) The Government, in addition to such other rights or remedies it may
have, shall have the right, in its discretion, to take any and all action
authorized by Sections 1105(c) and 1105(e) of Title XI and, to the extent not in
express conflict with the action authorized by said Sections, or with this
Section, any and all action provided for in or authorized or permitted by or in
respect of this Mortgage, Note, Collateral or Security, and Policies of
Insurance (including all action provided for in or authorized or permitted by or
in respect of any or all said documents by the Government).

SECTION 13. In case the Government shall have proceeded to enforce any right,
power, or remedy under this Mortgage by foreclosure, entry, or otherwise, and
such proceedings shall have been discontinued or abandoned for any reason or
shall have been determined adversely to the Government, then and in every such
case the Borrower and the Government shall be restored to their 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 Government
shall continue as if no such proceedings had been taken.

SECTION 14. The proceeds of any sale of the Vessel (after paying or deducting,
in the case of sale, under any judicial proceedings, the fees, costs, and other
charges therein), and the net earnings from any management, charter, or other
use of the Vessel by the Government under any of the powers above specified, and
the proceeds of any claim for damages on account of the Vessel received by the
Government while exercising any such power, and the proceeds of any insurance on
the Vessel (subject to the provisions of this agreement) shall be applied as
follows:

     First: To the payment of all expenses and charges including the expenses of
any sale, counsel fees, the expenses of any taking of possession of the Vessel,
and any other expenses or advances made or incurred by the Government in the
protection of its rights or in the pursuance of its remedies hereunder and to
the payment of any damages sustained by the Government from the default or
defaults of the Borrower; and at the option of the Government to provide a fund
adequate in the opinion of the Government to furnish suitable indemnity against
liens claiming priority over this Mortgage;

     Second: To the payment of the amount then due and unpaid upon the Note for
principal and interest and other sums occurring thereunder, including, but not
limited to, costs and expenses of collection; and

     Third: To the payment of all other sums secured hereby, including fees,
whether due or not, and of all damages liquidated or otherwise hereunder; and

     Fourth: Any surplus then remaining shall belong and be paid or returned to
the Borrower or to whomever shall be lawfully entitled to receive the same.

                                    Pg. 14 of 18
                              ------
<PAGE>

     ARTICLE IV: POSSESSION AND USE OF VESSEL DURING TERM OF MORTGAGE

     Until an Event of Default hereunder shall happen, the Borrower (a) shall be
suffered and permitted to retain actual possession and use of the Vessel and (b)
subject to default, hereof, shall have the right, from time to time, in its
discretion, and without application to the Government, and without obtaining a
release thereof by the Government, to dispose of, free from the lien hereof, any
boilers, engines, machinery, bowsprits, masts, spars, sails, rigging, boats,
fishing gear, anchors, chains, tackle, apparel, furniture, fittings, equipment,
or any other appurtenances of the Vessel that are no longer useful, necessary,
profitable, or advantageous in the operation of the Vessel, first or
simultaneously replacing the same by new boilers, engines, machinery, bowsprits,
masts, spars, sails, rigging, boats, fishing gear, anchors, chains, tackle,
apparel, furniture, fittings, equipment, or any other appurtenances of
substantially equal value to the Borrower, which shall forthwith become subject
to the lien of this Mortgage.

               ARTICLE V: GENERAL TERMS AND CONDITIONS OF MORTGAGE

SECTION 1. MULTIPLE ORIGINALS: This Mortgage may be executed simultaneously in
any number of counterparts and all such counterparts executed and delivered each
as an original shall constitute but one and the same instrument.

SECTION 2. SEVERABILITY CLAUSE: In the event that this Mortgage, the Note, any
other loan documents, or any provisions hereof or thereof shall be deemed
invalid in whole or in part by reason of any present or future law of the United
States or any decision of any authoritative court, or if the documents at any
time held by the Government be deemed by the Government for any reason
insufficient to carry out the true intent and spirit of this Mortgage and the
Note, then, from time to time the Borrower will execute on its own behalf such
other and further assurances and documents as in the opinion of counsel for the
Government may be required more effectually to subject the Vessel to the payment
of the principal sum of the Note, together with interest thereon, as in the Note
and as herein provided, and in the performance of the terms and conditions of
the Note and this Mortgage. Upon failure of the Borrower to do so, the
Government may execute any and all such other and further assurances and
documents, for and in the name of the Borrower, and the Borrower hereby
irrevocably appoints the Government the agent attorney-in-fact of the Borrower
to do so. Any expenses of the Government in connection with the foregoing shall
be a debt due from the Borrower to the Government in payment thereof and shall
be secured by the lien of this Mortgage.

SECTION 3. MORTGAGE BINDING ON HEIRS, ETC.: All the covenants, promises,
stipulations, and agreements of the Borrower in this Mortgage shall bind the
Borrower, the Borrower's heirs, executors, administrators, successors, and
assigns. Whenever used, the singular number shall include the plural, the plural
the singular, and the use of any gender shall be applicable to all genders.

SECTION 4. NO WAIVER OF PREFERRED STATUS: Nothing in this Mortgage shall be
construed as a waiver of the preferred status of this Mortgage by the
Government. In the event that any provision of this Mortgage would, as a matter
of law, operate to waive the preferred status thereof, such provision for all
intents and purposes, shall be deemed eliminated therefrom as though such
provision had never been inserted herein.

SECTION 5. MORTGAGE CANNOT BE ALTERED OR WAIVED: This Mortgage may not be
amended or supplemented except in writing by the Borrower with the written
consent thereto of the Government. The provisions of this Mortgage may not be
waived except in writing by the Government.

SECTION 6. TERMINATION OF MORTGAGE: If the whole amount of the Note including
all amendments or substitutions, (principal and interest) shall be paid in
accordance with its terms and the terms of this Mortgage,

                                    Pg. 15 of 18
                              ------
<PAGE>

and all other sums that may have become secured by the lien of this Mortgage
shall be paid, then this Mortgage and the estate and rights hereunder shall
cease, terminate and be void; and the Government shall prepare and deliver to
Borrower proper instruments acknowledging satisfaction of and discharging this
Mortgage.

                                   ARTICLE VI

     For the purposes of this Mortgage, the total amount is ONE MILLION, NINE
                                                            -----------------
HUNDRED THOUSAND AND NO DOLLARS ($1,900,000.00) and interest and performance of
-------------------------------   ------------
mortgage covenants; the date of maturity is October 19, 2001, and the discharge
                                            ----------------
amount is the same as the total amount set out above plus any other sums due the
Government as provided by the provision of any Loan Documents.

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

                               BORROWER:  Omega Protein, Inc.

Attest                         By:  /s/  Clark A. Haner
                                    --------------------------------------------
                                    Clark A. Haner, Controller and
                                    Assistant Treasurer

By:  /s/ Robert W. Stockton
     -----------------------

(SEAL)                         GUARANTOR ACKNOWLEDGES AND AGREES

                               GUARANTOR:  Omega Protein Corporation

Attest                         By:  /s/ Robert W. Stockton
                                    --------------------------------------------
                                    Robert W. Stockton, Executive Vice President
                                    Chief Financial Officer and Secretary

By:  /s/ Clark A. Haner
     -----------------------

 (SEAL)

                                    Pg. 16 of 18
                              ------
<PAGE>

                                 ACKNOWLEDGMENT

STATE OF FLORIDA     )
                     )ss
COUNTY OF PINNELAS   )

     On the 19th day of October, 2001, before me personally appeared Clark A.
            ----        -------------                                -------
Haner, to me known or produced satisfactory identification, who being duly
-----
sworn, did depose and say that he is the Controller and Assistant Treasurer of
                                         ----------------------------------
Omega Protein, Inc., and that he signed his name to said Mortgage by like order,
-------------------
and the said Controller and Assistant Treasurer acknowledged to me that he
             ----------------------------------
executed said Mortgage as the Controller and Assistant Treasurer of said
                              ----------------------------------
corporation; and that the same is the free and voluntary act and deed of said
corporation and of himself as such Controller and Assistant Treasurer for the
                                   ----------------------------------
uses and purposes therein expressed.

                                                       -------------------
                                                       Notary Public

                                    Pg. 17 of 18
                              ------
<PAGE>

                                 ACKNOWLEDGMENT

STATE OF FLORIDA    )
                    )ss
COUNTY OF PINNELAS  )

     On the 19th day of October, 2001, before me personally appeared Robert W.
            ----        -------------                                --------
Stockton , to me known or produced satisfactory identification, who being duly
---------
sworn, did depose and say that he is the Executive Vice President, Chief
                                         -------------------------------
Financial Officer and Secretary of Omega Protein Corporation, and that he signed
-------------------------------    -------------------------
his name to said Mortgage by like order, and the said Executive Vice President,
                                                      ------------------------
Chief Financial Officer and Secretary acknowledged to me that he executed said
-------------------------------------
Mortgage as the Executive Vice President, Chief Financial Officer and Secretary
                ---------------------------------------------------------------
of said corporation; and that the same is the free and voluntary act and deed of
-------------------
said corporation and of himself as such Executive Vice President, Chief
                                        -------------------------------
Financial Officer and Secretary for the uses and purposes therein expressed.
-------------------------------

                                                       -------------------
                                                       Notary Public

                                    Pg. 17 of 18
                              ------
<PAGE>

Case No. FF-G-008

                             PREFERRED SHIP MORTGAGE
                         TO THE UNITED STATES OF AMERICA

                       ARTICLE I: CREATION OF ENCUMBRANCE

SECTION 1. PREFERRED SHIP MORTGAGE: THIS MORTGAGE, dated the 19th day of
                                                             ----
October, 2001, by Omega Protein, Inc., 835 B Pride Drive, Hammond, Louisiana
--------------    ----------------------------------------------------------
70401 owning 100%, (the "Borrower"), to 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,
1315 East-West Highway, Silver Spring, Maryland 20910 (the "Government"),

     DEFINITIONS: All terms contained herein are defined in the Acknowledgment
of Definitions executed by all parties to this transaction.

     WITNESSETH:

SECTION 2. ENCUMBERED VESSEL: WHEREAS, The Borrower owns 100% of the fishing
vessel, more fully described below; and

SECTION 3. OBLIGATIONS SECURED: WHEREAS, The Borrower, pursuant to the
provisions of Title XI of the Merchant Marine Act, 1936, as amended, found at 46
USC Section 1271 et seq., and 50 CFR 253, as amended by Public Law 104-297, on
October 11, 1996, known as the Fisheries Finance Program (FFP), has executed and
delivered to the Government its Promissory Note (the "Note") dated October 19,
                                                                   -----------
2001, in the principal amount of $1,900,000.00 , a copy of which is attached
-----                            ---------------
hereto as Exhibit 1, and has agreed to execute and deliver this Preferred Ship
Mortgage (the "Mortgage") to the Government for the purpose of securing the
payment of the principal of and interest on the Note in accordance with its
terms and the terms of this Mortgage, as well as any future advances, and all
other sums owed the Government.

     WHEREAS, the Government has entered into an Approval and Agreement letter
(the "Approval Letter") dated May 29, 2001, and Security Agreement dated October
                              -------------                              -------
19, 2001, with the Borrower, and will execute other documents, including all
---------
Loan Documents.

     CONSIDERATION:

     NOW, THEREFORE, in consideration of the Government having agreed to enter
into the Approval Letter dated May 29, 2001, with the Borrower and for other
                               -------------
good and valuable consideration, receipt whereof is hereby acknowledged by the
Borrower, and in order to secure the payment of the principal of and interest on
the Note and all other sums which accrue according to the terms thereof and the
payment of all other sums that may hereafter become secured by this Mortgage in
accordance with the terms hereof and to secure the performance and observance of
and compliance with the covenants, terms and conditions herein and in the Note
contained, or contained in any other document executed by the Borrower, the
Borrower has granted, conveyed, mortgaged, pledged, assigned, transferred, set
over and confirmed unto the Government the whole of the vessel described as
follows:

                                     Pg. 1 of 18 pages
                              ------
<PAGE>

SECTION 4. SECURITY AGREEMENT: THE VESSEL SUBJECT TO THIS MORTGAGE is that
certain oil screw vessel named SANDY POINT, Official Number 298617, together
                               -----------                  -------
with all her accessories and appurtenances, including, but not limited to
accounts receivable, anchors, apparel, boats, boilers, cables, catch, chains,
charter hire, contract rights, contracts, electronics, engines, equipment,
fishing gear, freight, furniture, general intangibles, inventory, Individual
Transferable Quotas, licenses, machinery, masts, motors, nets, permits,
proceeds, product, related gear, rents or profits, rigging, sails, skiffs, spare
parts, spars, substitutions, supplies, tackle, hydraulics, safety equipment, and
parts and accessories affixed to or used in connection therewith, whether now
owned or hereafter acquired, whether on board or not, and all additions,
improvements, renewals, and replacements hereafter made in, on or to the said
vessel or any part thereof, and in, on, or to its equipment and appurtenances as
aforesaid (the "Vessel").

SECTION 5. FINANCING STATEMENT: Some of the items of property described herein
are goods that are or are to become accessories and appurtenances to the vessel
described herein, and it is intended that as to those goods, this mortgage shall
be effective as a financing statement. Information concerning the security
interest created by this instrument may be obtained from the Borrower or the
Government, at the addresses sent out in the first paragraph of this Preferred
Ship Mortgage.

     TO HAVE AND TO HOLD ALL and singular the above-mortgaged and described
property unto the Government and its successors and assigns, to its use and
benefit forever;

     PROVIDED ALWAYS, and the condition of these presents is such, that if the
Borrower, its successors or assigns shall pay, or cause to be paid, the
principal of and interest on the Note in accordance with the terms of the Note
and the Mortgage and shall pay any and all other sums that may hereinafter
become secured by this Mortgage in accordance with the terms hereof, and shall
keep, perform, and observe all and singular the covenants and promises in the
Note and in the Mortgage contained, expressed, or implied to be kept, performed,
and observed by or on the part of the Borrower, then this Mortgage and the
estate and rights hereby granted shall cease, determine, and be void; otherwise
to remain in full force and effect.

     The Government hereby covenants and agrees that the Vessel is to be held by
the Borrower subject to the further covenants, conditions, and uses hereinafter
set forth as follows:

                       ARTICLE II: BORROWER'S OBLIGATIONS

SECTION 1. CITIZENSHIP AND TITLE REQUIREMENTS: The Borrower (i) is and shall
continue to be a citizen of the United States as defined in section 2 of the
Shipping Act, 1916, as amended, for coastwise trade, and (ii) is entitled to own
and operate the Vessel under her marine document and shall maintain such marine
document in full force and effect. The Note and the Mortgage have been duly
executed and delivered, and the Note in the hands of the holder thereof is and
will be a valid and enforceable obligation of the Borrower in accordance with
its terms. The Borrower lawfully owns and is lawfully possessed of the whole of
the Vessel free from any lien whatsoever except the lien of this Mortgage, and
liens expressly permitted herein and other Preferred Ship Mortgages in favor of
the Government, and covenants that it will warrant and defend the title and
possession thereto and every part thereof for the benefit of the Government
against the claims and demands of all persons whomever.

SECTION 2.  INSURANCE REQUIREMENTS:

     (a) The Borrower will, at all times and at its own expense, keep the Vessel
insured with responsible underwriters and through responsible brokers, all in
good standing and satisfactory to the Government, in an amount that fully and
adequately protects the Vessel and the Government's interest therein against all
marine

                                     Pg. 2 of 18 pages
                              ------
<PAGE>

perils and disasters and all hazards, risks, and liabilities in any way arising
out of the ownership, operation, or maintenance of the Vessel, including but not
limited to insurance as follows:

          (i) While being operated, navigating hull insurance must be in an
          amount equal to the full commercial value of the Vessel. In no event
          may this be less than one hundred ten percent (110%) of the unpaid
          principal, at the time outstanding, of the Note. The policy valuation
          on the hull shall not exceed the aggregate amount insured by hull
          policies. The hull insurance shall be placed under the form of policy
          known as American Institute of Marine Underwriters form, or under such
          other form of policy as the Government may approve, insuring against
          the usual risks covered by such policies, including four-fourths
          running down clause, Inchmaree clause, and breach of warranty clause;
          and

          (ii) Protection and indemnity insurance under form of protection and
          indemnity policies approved by the Government and issued by marine
          insurance companies approved by the Government. The amount of
          protection and indemnity insurance shall be fixed by the Government;
          and

          (iii) When and while the Vessel is laid up, and in lieu of the
          aforesaid navigating hull insurance referred to in (i) of this
          Section, port risk insurance under forms of port risk policies
          approved by the Government.

     (b) The Borrower expressly covenants and agrees to keep the policies
renewed from time to time, to keep the same valid at all times for the amounts
aforesaid, and to keep the premiums thereon fully paid at all times. The
Borrower shall not do any act nor voluntarily suffer or permit any act to be
done whereby insurance is or may be suspended, impaired, or defeated, and shall
not suffer nor permit the Vessel to engage in any voyage or to carry any cargo
not permitted under the policy or policies of insurance in effect, unless and
until the Borrower shall first cover the Vessel in the amount herein provided
for, with insurance satisfactory to the Government for such voyage or for the
carriage of such cargo.

     (c) In the event the Borrower fails to procure any of the insurance,
satisfactory to the Government, or fails to perform any of the covenants and
agreements contained herein, the Government may, but shall be under no duty to,
procure such other or different insurance or coverage as it may deem advisable
with uncontrolled discretion in the Government as to the source, nature, form,
type, class, amount, and extent of such insurance or coverage; and all sums
expended or advanced by the Government in procuring such insurance shall be
secured by and shall be due and payable as provided in Article II, Section 2
hereof.

     (d) All insurance shall be taken out in the name of the Borrower and the
Government as their interest may appear and policies and certificates shall
provide that there shall be no recourse against the Government for payment of
premiums and shall further provide for at least 20 days prior written notice to
be given to the Government by the underwriters in the event of cancellation or
modification. All original policies, binders, certificates, and covenants and
all endorsements and riders thereto shall be delivered to the Government for
approval and custody.

     (e) Except as provided in (f) below, all insurance policies or certificates
shall provide that losses thereunder shall be payable to the Government. If no
Event of Default exists under this Mortgage, the Government may, in its
discretion, pay, from the proceeds of the insurance directly to the repairer,
the amount of any authorized repairs or if the Borrower shall have first fully
repaired the damage to the satisfaction of the Government and paid the cost
thereof, to the Borrower as reimbursement therefor. Any balance remaining from
the aforesaid insurance proceeds will be applied as directed by the Government.
If an Event of Default exists, the

                                     Pg. 3 of 18 pages
                              ------
<PAGE>

Government shall retain such insurance and if such Event of Default is not cured
within fifteen (15) days of the occurrence thereof, apply the same in the manner
provided in Article II, Section 2 hereof.

     (f) Any loss under any insurance on the Vessel with respect to protection
and indemnity risks may be paid directly to the person to whom any liability,
covered by such insurance, has been incurred or to the Borrower to reimburse the
Borrower for any loss, damage, or expense incurred by the Borrower and covered
by such insurance; provided, that the underwriter shall have first received
evidence that the liability insured against has been discharged.

     (g) In the event of an actual or constructive total loss, or an agreed or
compromised total loss of or in case of requisition of title to the Vessel, all
amounts payable therefor shall, subject to Article II, Section 2 hereof, be paid
to the Government and shall be applied first, to the payment of the expenses of
the Government in collecting such payments, and second, as provided in Article
II, Section 2 hereof.

     (h) In the event that any claim or lien is asserted against the Vessel for
loss, damage, or expense which is covered by insurance hereunder, and it is
necessary for the Borrower to obtain a bond or supply other security to prevent
arrest of the Vessel or to release the Vessel from arrest on account of such
claim or lien, the Government, on request of the Borrower, may, in the sole
discretion of the Government, and upon notice to the Borrower, assign to any
person, firm, or corporation executing a surety or guarantee bond or other
agreements, to save or release the Vessel from such arrest, all right, title,
and interest of the Government in and to said insurance covering said loss,
damage, or expense, as collateral security to indemnify against liability under
said bond or other agreement.

SECTION 3. NO LIENS TO BE PLACED AGAINST THE VESSEL:

     (a) Neither the Borrower, any charterer, the Master of the Vessel, nor any
other person has or shall have any right, power, or authority to create, incur,
or permit to be placed, imposed, or continued upon the Vessel any lien
whatsoever other than the lien of this Mortgage or permitted liens as defined
herein.

     (b) Permitted Liens. "Permitted Liens" means liens or other charges or
encumbrances:

          (i) arising for damages out of tort covered by insurance except for
          any deductible amounts applicable thereto, for wages of a stevedore
          when employed directly by the owner, operator, master, ship's husband
          or agent of any Vessel, for wages of the crew of the Vessel, for
          general average, for salvage, including contract salvage, provided the
          same are paid immediately when due;

          (ii) in favor of any person furnishing repairs, supplies, towage, use
          of dry dock or marine railway, or other necessaries to a Vessel on the
          order of the Borrower, or of a person authorized by the Borrower,
          provided the same are paid immediately when due.

          (iii) imposed on the Vessel for taxes or governmental charges or
          levies, provided the same are paid immediately when due;

          (iv) incurred in the ordinary course of business of the Vessel not
          relating to money borrowed which (1) will be paid immediately when
          due, and (2) which, in the aggregate, at any time are not material to
          the operations or financial condition of the Borrower; and

          (v) arising by operation of law as a result of the modification of the
          Vessel, including mechanic's liens, provided the same are paid
          immediately when due;

                                     Pg. 4 of 18 pages
                              ------
<PAGE>

          (vi) in favor of the United States of America, the United States
          Department of Commerce, National Oceanic and Atmospheric
          Administration, National Marine Fisheries Service, Financial Services
          Division;

     PROVIDED, HOWEVER, that with respect to the deductible amounts described in
clause (i) and liens or encumbrances of the type described in clauses (ii),
(iii) and (v) not arising from or incurred in the ordinary course of business of
the Borrower, the Borrower shall have set aside adequate reserves determined in
accordance with generally accepted accounting principles (GAAP), provided that
for such deductible amounts and liens or encumbrances which, in the aggregate,
exceed $25,000.00 USD, shall include only liens which are subordinate to or
which pursuant to applicable law cannot be subordinated by contract to the lien
of the security interest in the vessel granted to the Government.

     As used herein, the term "immediately when due" shall mean the time when,
according to applicable law, customary industry practices, or a prior course of
dealing or other agreement between the Borrower and the lienholder, the
lienholder expects payment to be made; provided that, if the Borrower desires to
contest an asserted lien, the Borrower may do so if the Borrower acts in good
faith and by appropriate proceedings and has set aside the reserves described
above.

SECTION 4. NOTICE OF MORTGAGE: The Borrower shall carry a properly certified
copy of this Mortgage with the Vessel's papers on board the Vessel, shall
exhibit the same on demand to any person having business with the Vessel, or to
any representative of the Government, and shall place and keep prominently
displayed in the pilot house, master's cabin, and engine room of the Vessel a
framed, printed or typewritten notice reading as follows:

     "NOTICE OF MORTGAGE: This Vessel is covered by a Preferred Ship Mortgage
     given to the United States of America, under authority of the Ship Mortgage
     Act, 1920, as amended. Under the terms of said Mortgage, neither the owner
     of this Vessel, any charterer, the Master of this Vessel, nor any other
     person has any right, power, or authority to create, incur, or permit to be
     imposed upon the Vessel any liens, maritime or otherwise, other than the
     lien of said Mortgage and liens for crew's wages, emergency safety repairs,
     or salvage."

SECTION 5:  NOTICES TO THE GOVERNMENT:

     (a) OF ACTION AGAINST VESSEL: In the event that a libel is filed against
the Vessel, or if the Vessel shall be levied upon or taken into custody, or
detained by any proceeding in any court, or tribunal, the Borrower will, within
48 hours, notify the Government by telegram, telex, or facsimile and confirmed
by letter, and the Borrower will, within fifteen (15) days thereafter, cause the
Vessel to be discharged. Within three (3) days of its occurrence, the Borrower
will notify the Government of any claim that could result in a lien being placed
against the Vessel.

     (b) OF CASUALTIES OR DAMAGE TO THE VESSEL: Within 24 hours of the event,
the Borrower shall furnish the Government full information regarding any
casualties or other accidents or damage to the Vessel, including copies of any
supporting documents, i.e, accident reports, claims, etc.

     (c) OF ACTION AGAINST THE BORROWER OR GUARANTOR: Within three days of its
occurrence, the Borrower must give the Government written notice of any pending
litigation, business reverse, casualty, loss, or any other matter (however
characterized) that diminishes; (i) The Borrower's ability to service any debt
actually or contingently owed the Government, (ii) The Borrower's ability to
perform any other duty or

                                     Pg. 5 of 18 pages
                              ------
<PAGE>

obligation owed to the Government, (iii) The Borrower's ability to fully and
faithfully perform any covenant with the Government, (iv) the value of any
property or other assets pledged to the Government, or (v) the net worth of any
party against whom the Government has recourse for this debt.

SECTION 6: MAINTENANCE AND INSPECTION COSTS:

     (a) VESSEL MAINTENANCE: At all times, at the Borrower's own cost and
expense, the Borrower will maintain and preserve the Vessel in as good
condition, working order and repair as on the date of this Mortgage, ordinary
wear and tear excepted; provided, however, if subsequent to the date of this
Mortgage, the Vessel is reconstructed or reconditioned, the Borrower will keep
the Vessel in as good condition, working order, and repair as the Vessel was on
the date said reconstruction or reconditioning was completed, ordinary wear and
tear excepted. In addition to the foregoing, the Borrower will keep the Vessel
in as good condition as will enable her to pass such inspection as may be
required by marine underwriters as a condition of their writing such insurance
in such amounts as are required under this Mortgage or as required by the United
States Coast Guard as a condition to certifying that the Vessel is seaworthy and
in compliance with all applicable safety and navigational requirements.

     (b) INSPECTION OF VESSEL: The Borrower shall afford the Government or its
authorized representatives full and complete access to the Vessel, in port or at
sea, at such times as the Government, in its sole discretion, may require, for
the purpose of inspecting or valuing the vessel, her cargo, log, and papers.

     (c) INSPECTION OF BORROWER'S FINANCIAL RECORDS: The Borrower agrees to
execute a consent and waiver, valid for the term of the mortgage, which allows
the Internal Revenue Service to release directly to the Government, Borrower's
Federal Income Tax Returns/2/, whenever the Government requests same.
Additionally, the Borrower shall permit the Government, or any representative
selected by it, in such manner and at such times as the Government, in its sole
discretion, requires, to make inspections and audits of any books, records,
off-loading receipts, fish-sale receipts, papers, or other documents of
whatsoever nature in the custody and control of the Borrower, or any other
individual or entity, relating in any way to the financial or business condition
of the Borrower or the operation or company. At the Government's request, these
statements, books, records, receipts or reports must be delivered to the
Southeast Region of the National Marine Fisheries Service, Financial Services
Branch, in St. Petersburg, Florida.

     (d) BORROWER TO PAY THE COST OF ALL SUCH INSPECTIONS, audits or appraisals,
provided for in Paragraphs 6(a), 6(b) and 6(c), immediately above, within 30
days of the Government's demand and all such amounts disbursed by the Government
for such purpose shall, until fully repaid by the Borrower, be added (payable
upon the Government's demand) to the Borrower's Note to the Government and shall
earn interest at the same rate as the other principal of the Borrower's
Promissory Note and shall be secured by the ship mortgage and other securities
which secure the Borrower's promissory note to the Government.

SECTION 7.  FINANCIAL REPORTING TO THE GOVERNMENT:

     (a) The Borrower will, within 20 days after the close of each fiscal year,
and at such other times and in such form as the Government may prescribe,
furnish to the Government, the Borrower's financial and operating statements
including schedules showing all compensation paid by the Borrower;

     (b) The Borrower will, at all times, keep proper books of account in
accordance with generally accepted accounting principles and practice; and

----------
/1/ Borrower agrees to execute IRS Forms #4506 and 8821, thereby implementing
the provisions of 26 USC Section 6103(c).

                                     Pg. 6 of 18 pages
                              ------
<PAGE>

     (c) The Borrower will permit the Government, at the Borrower's expense and
in such manner and at such time as the Government may require, to (i) make
inspections and audits of any books, records, and papers in the custody and
control of the Borrower or others, relating to the Borrower's financial or
business conditions, including making copies thereof, and extracts therefrom,
and (ii) make inspections and appraisals of any of the Borrower's assets.

SECTION 8. TAXES & FEES: The Borrower will pay and discharge when due and
payable, from time to time, all taxes, assessments, governmental charges, fines,
and penalties lawfully imposed on the Vessel.

SECTION 9. REIMBURSEMENT OF GOVERNMENT EXPENDITURES: The Borrower will reimburse
the Government for any and all expenditures which the Government may reasonably
elect to make from time to time to protect the security granted hereunder (in
the event of the Borrower's failure to do so), including, without limitation of
the foregoing, payment of taxes, repairs, insurance premiums, the discharge of
any lien, libel or seizure of the Vessel, and expenses incurred by the
Government in retaking the Vessel; and any such payment made by the Government
shall be for the account of the Borrower, and the making thereof by the
Government shall not cure the Borrower's default in that regard nor constitute a
waiver of any right or remedy granted to the Government hereunder, and all
reasonable sums so expended by the Government or any liability incurred by it
shall be immediately due and payable and shall be deemed to be an indebtedness
of the Borrower and secured by this Mortgage, and until paid shall bear interest
at the same rate as that provided in the Note.

SECTION 10: GOVERNMENT'S PRIOR WRITTEN CONSENT REQUIRED: The Borrower shall not,
without prior written consent of the Chief, Financial Services Division,
National Marine Fisheries Service, which consent will not unreasonably be
withheld, take any of the following actions:

     (a) sell, mortgage, transfer, nor charter the Vessel, and any such written
consent obtained from the Government to any one sale, mortgage, transfer, or
charter, shall not be construed to be a waiver of this provision with respect to
any subsequent proposed sale, mortgage, transfer, or charter. Any such sale,
mortgage, transfer, or charter of the Vessel shall be subject to the provisions
of this Mortgage and to the lien it creates.

     (b) 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 or operation of the Borrower's size and financial condition at the
time that such consideration is paid (and the burden of proving reasonableness
shall be on the Borrower).

     (c) Purchase or redeem any shares of the Borrower's or the Borrower's
company's own stock.

     (d) Exclusive of such fixed assets to be acquired with the proceeds of the
Note or any part thereof, or any fixed assets acquired prior to the date of this
Mortgage, make any additional investment (excluding purchases, etc., in
connection with the routine and continuing maintenance and preservation of the
Vessel and its productivity) in, or incur any additional liability for, the
purchase, acquisition, lease, or other use (however characterized) of any real
property, machinery, equipment, fixtures, or furniture, or fixed property in
connection with the Borrower's present level of operations in any one fiscal
year in excess of an aggregate of 5% of the Borrower's total assets.

     (e) 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 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.

                                     Pg. 7 of 18 pages
                              ------
<PAGE>

     (f) The Borrower will not split-up, split-off, spin-off, merge,
consolidate, or transfer or allow transfer of its shares so as to effect a
change in its controlling interest or management.

     (g) 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, individual or
entity, except as may be permitted herein or required in the normal course of
operations reasonably necessary to carry on its day-to-day business.

     (h) By any means whatsoever, allow the company or operation to be acquired
by, or otherwise reorganized into (however characterized) any other company or
operation, unless the acquiring company, operation or reorganized entity is
acceptable to the Government, and said company, operation or reorganized entity
agrees to do the following: (i) provide to the Government a 100% unconditional
guarantee of all debt actually or contingently owed it; and (ii) be bound by
these covenants; and (iii) be bound by such other covenants as the Government
shall reasonably require to protect its interest; and (iv) provide such other
assurances and security as the Government, in its sole discretion, requires.

     (i) Make any distribution of the Borrower's assets for compensation
(including salaries, withdrawals, fees, bonuses, commissions, drawing accounts,
and other payments, whether directly or indirectly, in money or otherwise) for
services, or give any preferential treatment, make any advances, directly or
indirectly by way of loans, gifts, notes, or otherwise, to any employee or
Affiliate or increase the compensation of any person above that set forth in any
application or document submitted in connection with the Note. In the event an
Affiliate increases the compensation (including salaries, withdrawals, fees,
bonuses, commissions, drawing accounts, and other payments, whether directly or
indirectly, in money or otherwise) paid to the Borrower or any employee of the
Borrower, beyond that authorized or consented to by the Government, the
compensation payable to such person by the Borrower will be forthwith
correspondingly reduced and immediate notice thereof given to the Government by
the Borrower.

SECTION 11. COMPLIANCE WITH FEDERAL SHIP MORTGAGE ACT: The Borrower will comply
with and satisfy all the provisions of the Ship Mortgage Act, 1920, as amended,
46 USC, Chapter 313, et seq. in order to establish and maintain this Mortgage as
a Preferred Ship Mortgage upon the Vessel.

SECTION 12. OPERATING RESTRICTIONS:

     (a) DOCUMENTATION: The Borrower will keep the Vessel documented under the
laws of the United States and no transfer of port of hailing of the Vessel shall
be made without the prior written consent thereto of the Government.

     (b) LAWFUL OPERATION: The Borrower will not cause or permit the Vessel to
be operated in any manner contrary to law or contrary to any rules and
regulations which may from time to time be prescribed pursuant to law.

     (c) VESSEL SHALL NOT LEAVE UNITED STATES' WATERS: The Borrower will not
remove, attempt to remove, or allow the vessel to be moved beyond the limits of
the United States without the written consent of the Government. If said written
consent is obtained, the Borrower will execute certain documents and will not
abandon the Vessel in a foreign port. The Borrower will not engage in any
unlawful trade or violate any law or carry any cargo that will expose the Vessel
to penalty, forfeiture, or capture, and will not do, or suffer or permit to be
done, anything which can or may injuriously affect the documentation of the
Vessel under the laws and regulations of the United States.

                                     Pg. 8 of 18 pages
                              ------
<PAGE>

     (d) Upon demand by the Government to the master of the Vessel or the
Borrower, the Borrower will return the vessel to the waters known as the
Exclusive Economic Zone (EEZ) of the United States and, if the Government so
demands, to a port of call chosen by the Government, thereby revoking any prior
consent extended by the Government with respect to operation of the Vessel
outside the Exclusive Economic Zone of the United States.

SECTION 13. PAYMENTS MUST BE TIMELY MADE AND TERMS OF THE MORTGAGE , NOTE AND
OTHER LOAN DOCUMENTS MUST BE MET: The Borrower will duly and punctually pay all
the principal of and interest on the Note and the Mortgage as herein and in the
Note and other loan documents provided, and will at all times keep, perform, and
observe all and singular the covenants, conditions, stipulations, promises, and
agreements in this Mortgage and in the Note expressed or implied on its part to
be kept, performed, and observed, and will duly punctually pay all sums that may
hereinafter become due hereunder.

                              ARTICLE III: DEFAULT

SECTION 1. The Borrower agrees that it will faithfully observe, perform, comply
with and discharge all of the covenants, conditions, and obligations which are
imposed on the Borrower by any other agreement or document executed in
connection with this Mortgage and the Note, concurrently or otherwise, and that
the Borrower's failure to do so shall constitute an Event of Default under this
Mortgage.

SECTION 2. The Borrower agrees that any material default under any guarantor
agreement, security agreements, Title XI financial agreements, or other loan
documents which may be executed in connection with this Mortgage or Note,
whether or not the Borrower is party to said agreement, shall constitute an
Event of Default under this Mortgage.

SECTION 3. The Borrower agrees that all reasonable attorney fees incurred by the
Government because of the Borrower's failure to perform or discharge its
obligations, as provided by this Mortgage, the Note, or any other document or
agreement executed in connection therewith, shall be deemed to be an
indebtedness of the Borrower and shall be secured by this Mortgage and shall be
due and payable and until paid, shall bear interest at the same rate as that
provided in the Note, and upon acceleration of the amounts owed under the Note,
shall bear interest at the accelerated rate of eighteen percent (18%) per annum,
unless limited by applicable state law.

SECTION 4. Each of the following events shall constitute an Event of Default:

     (a) default shall be made in the payment of the principal of the Note when
and as the same shall become due and payable, whether at maturity, by notice of
acceleration, or otherwise; or

     (b) default shall be made in the payment of any interest on the Note
(including any amendments thereto or substitution therefor), when and as the
same shall become due and payable as therein and herein provided; or

     (c) default shall be made in the due and punctual observance and
performance of any provision of Article I, hereof; or

     (d) the Borrower shall be dissolved or adjudged a bankrupt or shall make a
general assignment for the benefit of the Borrower's creditors, or shall lose
the right to do business by forfeiture or otherwise, or a receiver or receivers
of any kind whatsoever, whether appointed or not, in admiralty, bankruptcy,
common law, or equity proceedings, and whether temporary or permanent, shall be
appointed for the Vessel or for any other property of the Borrower; or a
petition for reorganization of, or other proceeding or action in reference to
the Borrower under any of the provisions of the Bankruptcy Act shall be filed by
the Borrower or by creditors of the Borrower; or if

                                     Pg. 9 of 18 pages
                              ------
<PAGE>

reorganization of the Borrower under said Act is approved by the Court, whether
proposed by a creditor, stockholder, or any other person whomsoever; and

     THE BORROWER AND THE GUARANTOR BOTH UNDERSTAND THAT IF EITHER FILES
     BANKRUPTCY, THE BORROWER WILL LOSE THE VESSEL.

     THE BORROWER AND THE GUARANTOR EXPRESSLY AGREE TO, AND UNDERSTAND THAT IN
     THE EVENT OF BANKRUPTCY, THE VESSEL WHICH IS THE SECURITY FOR THIS
     PREFERRED SHIP MORTGAGE WILL NOT BE PERMITTED TO GO OUT TO SEA, AND WILL
     REMAIN IN PORT IN THE JURISDICTION OF THE COURT WHERE THE BANKRUPTCY
     PETITION IS FILED OR SUCH OTHER JURISDICTION WHERE THE BOAT MAY BE OR OTHER
     COLLATERAL MAY BE FOUND.

     (e) there shall be an actual or constructive total loss of the Vessel; or

     (f) default shall be made by the Borrower in the prompt and faithful
performance or observance of any other covenant, condition, or agreement by it
to be performed and observed, contained in this Mortgage, Note, or any other
loan documents and such default shall continue for fifteen (15) days; or

     (g) the making in any application, agreement, affidavit, or other document,
submitted in connection with the Note, of any misrepresentation, on behalf of,
or for the benefit of, the Borrower. Failure to disclose any material fact may
be deemed a misrepresentation; or

     (h) the institution of any suit against the Borrower or others deemed by
the Government to affect adversely its interest hereunder, in the Note or
otherwise; or

     (i) failure of any signator to any of the Loan Documents, to observe any of
the conditions contained in said Loan Documents, or any other document or
agreement executed (concurrently or otherwise), inclusive of amendments thereto,
in connection with this Mortgage, or subsequent mortgage, regardless of whether
or not the Borrower shall be a party to said agreement or document; or

     (j) impairment of any collateral including the vessel or which is given in
addition to the vessel which is the subject of this Preferred Ship Mortgage; or

     (k) the Borrower shall, without first obtaining written permission from the
Secretary, transfer, sell, assign, hypothecate, or alienate or attempt to
transfer, sell, assign, hypothecate or alienate any rights, licenses or permits
appurtenant to and/or necessary for the Vessel to engage in any commercial
fisheries; or

     (l) the Borrower shall, intentionally or through neglect, permit a material
diminution of the value of the Vessel and/or its appurtenances and equipment; or

SECTION 5. UPON OCCURRENCE OF AN EVENT OF DEFAULT THE GOVERNMENT, MAY IN ITS
DISCRETION:

     (a) Declare the Note to be due and payable immediately and upon such
declaration the entire principal of and interest on the Note shall become and be
immediately due and payable, and thereafter shall bear interest at eighteen
percent (18%) per annum unless such would violate the usury laws of the state
where this Mortgage and the Note are executed, in which case the maximum legal
rate of that state shall prevail; provided, however, that if the Borrower shall
have removed and remedied each Event of Default within fifteen (15) days after
the

                                     Pg. 10 of 18 pages
                              ------
<PAGE>

occurrence thereof, then in every such case the Government shall waive any such
Event of Default; but no such waiver shall extend to nor affect any subsequent
or other Event of Default nor impair any rights or remedies consequent thereon;
and provided, further, that if at any time after the expiration of fifteen (15)
days after any Event of Default shall have occurred, all Events of Default shall
have been remedied and removed and full performance made by the Borrower to the
satisfaction of the Government and all installments of principal and interest in
arrears (including interest at the aforesaid rate) and the charges and expenses,
if any, of the Government, it agents and attorneys, shall have been paid, then
and in every such case the Government may waive any such Event of Default; and
provided, also, that no waiver hereunder shall extend to nor affect any
subsequent or other Event of Default nor impair any rights or remedies
consequent thereon;

     (b) Bring suit at law, in equity, or in admiralty, as it may be advised, to
receive judgment for any and all amounts due under the Note and other Loan
Documents, or otherwise hereunder, and collect the same out of any and all
property of the Borrower whether covered by this Mortgage or otherwise;

     (c) Retake the Vessel without legal process wherever the same may be found,
and the Borrower or other person in possession forthwith upon demand of the
Government shall immediately surrender to the Government possession of the
Vessel, and, without being responsible for loss or damage, the Government may
hold, lay-up, lease, charter, operate, or otherwise use the Vessel for such time
and upon such terms as it may deem to be for its best advantage, accounting only
for the net profits, if any, arising from such use of the Vessel and charging
against all receipts from the use of the Vessel, or from the sale thereof by
court proceeding or pursuant to subsection (e) following, all costs, expenses,
charges, damages, or losses by reason of such use; and if at any time the
Government shall avail itself of the right herein given it to retake the Vessel
and shall retake it, the Government shall have the right to dock the Vessel at
any dock, pier, or other premises of the Borrower without charge, or to dock it
at any other place at the cost and expense of the Borrower; IT IS EXPRESSLY
UNDERSTOOD AND AGREED TO BY THE BORROWER THAT SURRENDER OF THE VESSEL UNDER THIS
SECTION MUST BE AND WILL BE IMMEDIATE AND IN ACCORDANCE WITH THE DIRECTIONS OF
THE GOVERNMENT. FAILURE OF THE BORROWER TO IMMEDIATELY COMPLY WITH THE
GOVERNMENT'S DEMAND FOR SURRENDER OF THE VESSEL WILL CAUSE THE POSSESSION OF THE
VESSEL BY THE BORROWER (INCLUDING, BUT NOT LIMITED TO, POSSESSION AND CONTROL OF
THE VESSEL BY A MASTER OR CREW MEMBER ON BOARD THE VESSEL) TO BE UNLAWFUL AND TO
CONSTITUTE A CONVERSION OF THE VESSEL, ITS APPURTENANCES AND EQUIPMENT, THEREBY
SUBJECTING THE BORROWER (EXPRESSLY INCLUDING, IF APPLICABLE, ITS OFFICERS AND
DIRECTORS) TO ALL FINES, PENALTIES AND ACTIONS WHICH THE GOVERNMENT DEEMS
APPLICABLE AND APPROPRIATE. SHOULD THE BORROWER CONTINUE TO OPERATE, POSSESS OR
CONTROL THE VESSEL CONTRARY TO THE GOVERNMENT'S DIRECTIONS AND THE PROVISIONS
HEREIN, THEN THE GOVERNMENT SHALL, IN ADDITION TO ANY OTHER RIGHTS AND REMEDIES
AT LAW AND IN EQUITY, BE ENTITLED TO A TEMPORARY RESTRAINING ORDER AND/OR ORDER
FOR INJUNCTIVE RELIEF NECESSARY TO GAIN COMPLIANCE HEREWITH, IN ADDITION TO
EXPRESSLY CONSENTING THAT THE INJURY AND DAMAGE RESULTING FROM BREACH HEREOF
WOULD BE IMPOSSIBLE TO MEASURE MONETARILY, THE BORROWER EXPRESSLY WAIVES ANY
DEFENSE BASED UPON AN ALLEGED EXISTENCE OF AN ADEQUATE REMEDY AT LAW.

     (d) Foreclose this Mortgage pursuant to the terms and provisions of the
Ship Mortgage Act, 1920, as amended, 46 USC, Chapter 313, et seq., or by other
judicial process as may be provided in the Statutes; and

     (e) In addition to any and all other rights, powers, and remedies elsewhere
in this Mortgage or by law granted to and conferred upon the Government, sell
the Vessel upon such terms and conditions as it may deem to be for its best
advantage, including the right to sell and dispose of the Vessel free from any
claim of or by the Borrower, at public sale, by sealed bids or otherwise, after
first giving notice of the time and place of sale, with a general description of
the property by first publishing notice of any such sale for ten (10)
consecutive days,

                                     Pg. 11 of 18 pages
                              ------
<PAGE>

except Sundays, in some newspaper of general circulation at the place designated
for such sale, and by mailing notice of such sale to the Borrower at his last
known address; such sale may be held at such place and at such time as the
Government in such notice may have specified, or may be adjourned by the
Government from time to time by announcement at the time and place appointed for
such sale or for such adjourned sale, and without further notice of publication
the Government may make any such sale at the time and place to which the same
shall be so adjourned; and any such sale may be conducted without bringing the
Vessel to the place designated for such sale and in such manner as the
Government may deem to be for its best advantage, and the Government may become
the purchaser at any such sale, and shall have the right to credit on the
purchase price any or all sums of money due to the Government under the Note,
any other Loan Documents, or otherwise hereunder. The Borrower expressly agrees
and acknowledges that sale of the Vessel pursuant to this section will not
(notwithstanding federal or state law to the contrary, if any,) impair or limit
the Government's legal right to collect from the Borrower any deficiency
remaining after the sale. If any such federal or state laws or legal precedents
may be construed to limit the Government's rights to collection of said
deficiency from the Borrower, then Borrower hereby expressly waives,
relinquishes and forever gives up the right to avail itself of such laws and/or
defenses.

     (f) the Borrower agrees, acknowledges and consents to and with the
authority of the Government, to take all steps, measures or actions which are
within the discretion or authority of the Government.

SECTION 6. Any sale of the Vessel made in pursuance of this Mortgage shall
operate to divest and forever bar the Borrower from any and all right, title,
and interest of any nature whatsoever of the Borrower therein and thereto. 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 proceeds thereof.

SECTION 7. The Borrower does hereby irrevocably appoint the Government the true
and lawful attorney of the Borrower, in its name and stead to make all necessary
transfers of the Vessel, and for that purpose it shall execute all necessary
instruments of assignment and transfer, the Borrower hereby ratifying and
confirming all that its said attorney shall lawfully do by virtue hereof.
Nevertheless, the Borrower shall, if so requested by the Government, ratify and
confirm such sale by executing and delivering to the purchaser of the Vessel
such proper bill of sale, conveyance, instrument of transfer, and release as may
be designated in such request.

SECTION 8. The Borrower hereby irrevocably appoints the Government the true and
lawful attorney of the Borrower so long as an Event of Default shall have
occurred and shall not have been waived in accordance with Section 2 hereof, in
the name of the Borrower, to demand, collect, receive, compromise, and sue for,
so far as may be permitted by law, all hire, earnings, issues, revenues, income,
and profits of the Vessel 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, any
right of action against the designer, builder, surveyor, or other material party
for any fault, negligence, or deficiency in design, construction or survey of
the Vessel, and all other sums, due or to become due, at or after the time of
the happening of any Event of Default, in respect of the Vessel or in respect of
any insurance thereon from any person whomsoever, and to make, give and execute
in the name of the Borrower, acquittances, receipts, releases, or other
discharges for the same, whether under seal or otherwise, and to endorse and
accept in the name of the Borrower all checks, notes, drafts, warrants,
agreements, and all other instruments in writing with respect to the foregoing.

SECTION 9. The Borrower covenants and agrees that so long as an Event of Default
shall have occurred and shall not have been waived in accordance with Section 2
hereof, the Government in any suit to enforce any of its rights, powers, or
remedies shall be entitled as a matter of right and not as a matter of
discretion (i) to the appointment of a receiver or receivers of the Vessel and
that any receiver so appointed shall have full right and power to use and
operate the Vessel, and (ii) to a decree ordering and directing the sale and
disposal of the Vessel

                                     Pg. 12 of 18 pages
                              ------
<PAGE>

and the Government may become the purchaser at said sale, and the Government
shall have the right to credit on the purchase price any and all sums of money
due to the Government under the Note, or otherwise hereunder.

SECTION 10.

     (a) In the event that the Vessel shall be arrested or detained by a marshal
or other officer of any court of law, equity, or admiralty jurisdiction in any
country or nation of the world or by any government or other authority and shall
not be released from arrest or detention within fifteen (15) days from the date
of arrest or detention, the Borrower does hereby authorize and empower the
Government in the name of the Borrower and does hereby irrevocably appoint the
Government and its successors and assigns the true and lawful attorney of the
Borrower, in its name and stead to apply for and receive possession of and to
take possession of the Vessel pursuant to the terms of this Mortgage and any
other documents executed by the Borrower, with all rights and powers that the
Borrower might have, possess, or exercise in any such event; and this power of
attorney shall be irrevocable and may be exercised not only by the Government
but also by an appointee or appointees, with full power of substitution, to the
same extent as if the said appointee or appointees had been named as one of the
attorneys above named by express designation.

     (b) The Borrower also authorizes and empowers the Government or the
Government's appointee or appointees, as the true and lawful attorney of the
Borrower, to appear in the name of the Borrower, or its successors or assigns,
in any court of any country or nation of the world where a suit is pending
against the Vessel because of or on account of any alleged lien against the
Vessel from which the Vessel has not been released and to take such proceedings
as to them or any of them as may seem proper towards the defense of such suit
and the discharge of such lien, and all expenditures made or incurred by them or
any of them for the purpose of such defense or discharge shall be a debt due
from the Borrower to the Government and payment thereof shall be secured by the
lien of this Mortgage and shall be due and payable and until paid, shall bear
interest at the same rate as that provided in the Note and upon acceleration of
the amounts owed under the Note, shall bear interest at the rate of eighteen
percent (18%) per annum.

SECTION 11.

     (a) The Borrower hereby expressly and irrevocably consents to the
jurisdiction of any court in any country whatsoever wherein the Vessel may at
any time be located for the foreclosure of this Mortgage, the sale of the
Vessel, or the enforcement of any other remedy or right hereunder, and hereby
expressly and irrevocably submits the person of the Borrower and the Vessel to
the jurisdiction of any such court in any country in any such action or
proceeding which is brought, in its sole discretion, by the Government.

     (b) To the extent not governed by the laws of the United States, this
Mortgage shall in all respects be governed by and construed in accordance with
the laws of the Commonwealth of Virginia. The Borrower and Guarantor irrevocably
submit to the non-exclusive jurisdiction of the state and federal courts
situated in the Commonwealth of Virginia in any proceeding relating to this
Mortgage and agrees that any process or summons in any such action may be served
by mailing to the Borrower a copy thereof. The Borrower and Guarantor consent to
and subject themselves itself to the jurisdiction of the federal court in the
jurisdiction where the Vessel is found.

SECTION 12.

     (a) Each and every power and remedy herein specifically given to the
Government or otherwise in this Mortgage shall be cumulative and shall be in
addition to every other power and remedy herein specifically given or now or
hereafter existing at law, in equity, admiralty, or by statute, and each and
every power and remedy whether specifically herein given or otherwise existing
may be exercised from time to time and as often and in

                                     Pg. 13 of 18 pages
                              ------
<PAGE>

such order as may be deemed expedient by the Government, and 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 Government in the
exercise of any right or power or in the pursuance of any remedy occurring upon
any Event of Default shall impair any such right, power, or remedy or be
construed to be a waiver of any such Event of Default or to be any acquiescence
therein; nor shall the acceptance by the Government of any security or of any
payment of or on account of the Note maturing after any Event of Default or of
any payment on account of any past Event of Default be construed to be a waiver
of any right to take advantage of any future Event of Default or of any past
Event of Default not completely cured thereby.

     (b) The Government, in addition to such other rights or remedies it may
have, shall have the right, in its discretion, to take any and all action
authorized by Sections 1105(c) and 1105(e) of Title XI and, to the extent not in
express conflict with the action authorized by said Sections, or with this
Section, any and all action provided for in or authorized or permitted by or in
respect of this Mortgage, Note, Collateral or Security, and Policies of
Insurance (including all action provided for in or authorized or permitted by or
in respect of any or all said documents by the Government).

SECTION 13. In case the Government shall have proceeded to enforce any right,
power, or remedy under this Mortgage by foreclosure, entry, or otherwise, and
such proceedings shall have been discontinued or abandoned for any reason or
shall have been determined adversely to the Government, then and in every such
case the Borrower and the Government shall be restored to their 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 Government
shall continue as if no such proceedings had been taken.

SECTION 14. The proceeds of any sale of the Vessel (after paying or deducting,
in the case of sale, under any judicial proceedings, the fees, costs, and other
charges therein), and the net earnings from any management, charter, or other
use of the Vessel by the Government under any of the powers above specified, and
the proceeds of any claim for damages on account of the Vessel received by the
Government while exercising any such power, and the proceeds of any insurance on
the Vessel (subject to the provisions of this agreement) shall be applied as
follows:

     First: To the payment of all expenses and charges including the expenses of
any sale, counsel fees, the expenses of any taking of possession of the Vessel,
and any other expenses or advances made or incurred by the Government in the
protection of its rights or in the pursuance of its remedies hereunder and to
the payment of any damages sustained by the Government from the default or
defaults of the Borrower; and at the option of the Government to provide a fund
adequate in the opinion of the Government to furnish suitable indemnity against
liens claiming priority over this Mortgage;

     Second: To the payment of the amount then due and unpaid upon the Note for
principal and interest and other sums occurring thereunder, including, but not
limited to, costs and expenses of collection; and

     Third: To the payment of all other sums secured hereby, including fees,
whether due or not, and of all damages liquidated or otherwise hereunder; and

     Fourth: Any surplus then remaining shall belong and be paid or returned to
the Borrower or to whomever shall be lawfully entitled to receive the same.

                                     Pg. 14 of 18 pages
                              ------
<PAGE>

        ARTICLE IV: POSSESSION AND USE OF VESSEL DURING TERM OF MORTGAGE

     Until an Event of Default hereunder shall happen, the Borrower (a) shall be
suffered and permitted to retain actual possession and use of the Vessel and (b)
subject to default, hereof, shall have the right, from time to time, in its
discretion, and without application to the Government, and without obtaining a
release thereof by the Government, to dispose of, free from the lien hereof, any
boilers, engines, machinery, bowsprits, masts, spars, sails, rigging, boats,
fishing gear, anchors, chains, tackle, apparel, furniture, fittings, equipment,
or any other appurtenances of the Vessel that are no longer useful, necessary,
profitable, or advantageous in the operation of the Vessel, first or
simultaneously replacing the same by new boilers, engines, machinery, bowsprits,
masts, spars, sails, rigging, boats, fishing gear, anchors, chains, tackle,
apparel, furniture, fittings, equipment, or any other appurtenances of
substantially equal value to the Borrower, which shall forthwith become subject
to the lien of this Mortgage.

               ARTICLE V: GENERAL TERMS AND CONDITIONS OF MORTGAGE

SECTION 1. MULTIPLE ORIGINALS: This Mortgage may be executed simultaneously in
any number of counterparts and all such counterparts executed and delivered each
as an original shall constitute but one and the same instrument.

SECTION 2. SEVERABILITY CLAUSE: In the event that this Mortgage, the Note, any
other loan documents, or any provisions hereof or thereof shall be deemed
invalid in whole or in part by reason of any present or future law of the United
States or any decision of any authoritative court, or if the documents at any
time held by the Government be deemed by the Government for any reason
insufficient to carry out the true intent and spirit of this Mortgage and the
Note, then, from time to time the Borrower will execute on its own behalf such
other and further assurances and documents as in the opinion of counsel for the
Government may be required more effectually to subject the Vessel to the payment
of the principal sum of the Note, together with interest thereon, as in the Note
and as herein provided, and in the performance of the terms and conditions of
the Note and this Mortgage. Upon failure of the Borrower to do so, the
Government may execute any and all such other and further assurances and
documents, for and in the name of the Borrower, and the Borrower hereby
irrevocably appoints the Government the agent attorney-in-fact of the Borrower
to do so. Any expenses of the Government in connection with the foregoing shall
be a debt due from the Borrower to the Government in payment thereof and shall
be secured by the lien of this Mortgage.

SECTION 3. MORTGAGE BINDING ON HEIRS, ETC.: All the covenants, promises,
stipulations, and agreements of the Borrower in this Mortgage shall bind the
Borrower, the Borrower's heirs, executors, administrators, successors, and
assigns. Whenever used, the singular number shall include the plural, the plural
the singular, and the use of any gender shall be applicable to all genders.

SECTION 4. NO WAIVER OF PREFERRED STATUS: Nothing in this Mortgage shall be
construed as a waiver of the preferred status of this Mortgage by the
Government. In the event that any provision of this Mortgage would, as a matter
of law, operate to waive the preferred status thereof, such provision for all
intents and purposes, shall be deemed eliminated therefrom as though such
provision had never been inserted herein.

SECTION 5. MORTGAGE CANNOT BE ALTERED OR WAIVED: This Mortgage may not be
amended or supplemented except in writing by the Borrower with the written
consent thereto of the Government. The provisions of this Mortgage may not be
waived except in writing by the Government.

SECTION 6. TERMINATION OF MORTGAGE: If the whole amount of the Note including
all amendments or substitutions, (principal and interest) shall be paid in
accordance with its terms and the terms of this Mortgage,

                                     Pg. 15 of 18 pages
                              ------
<PAGE>

and all other sums that may have become secured by the lien of this Mortgage
shall be paid, then this Mortgage and the estate and rights hereunder shall
cease, terminate and be void; and the Government shall prepare and deliver to
Borrower proper instruments acknowledging satisfaction of and discharging this
Mortgage.

                                   ARTICLE VI

     For the purposes of this Mortgage, the total amount is ONE MILLION, NINE
HUNDRED THOUSAND AND NO DOLLARS ($1,900,000.00) and interest and performance of
mortgage covenants; the date of maturity is , 2001, and the discharge amount is
the same as the total amount set out above plus any other sums due the
Government as provided by the provision of any Loan Documents.

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

                                BORROWER:  Omega Protein, Inc.

Attest                          By: /s/  Clark A. Haner
                                    ------------------------------
                                    Clark A. Haner, Controller and
                                    Assistant Treasurer

By:  /s/ Robert W. Stockton
     ----------------------

(SEAL)                          GUARANTOR ACKNOWLEDGES AND AGREES

                                GUARANTOR:  Omega Protein Corporation

Attest                          By: /s/ Robert W. Stockton
                                    --------------------------------------------
                                    Robert W. Stockton, Executive Vice President
                                    Chief Financial Officer and Secretary

By:  /s/ Clark A. Haner
     ----------------------

(SEAL)

                                     Pg. 16 of 18 pages
                              ------
<PAGE>

                                 ACKNOWLEDGMENT

STATE OF FLORIDA           )
                           )ss
COUNTY OF PINNELAS         )

     On the 19th day of October, 2001, before me personally appeared Clark A.
            ----        --------------                               --------
Haner, to me known or produced satisfactory identification, who being duly
------
sworn, did depose and say that he is the Controller and Assistant Treasurer of
                                         ----------------------------------
Omega Protein, Inc., and that he signed his name to said Mortgage by like order,
--------------------
and the said Controller and Assistant Treasurer acknowledged to me that he
             ----------------------------------
executed said Mortgage as the Controller and Assistant Treasurer of said
                              ----------------------------------
corporation; and that the same is the free and voluntary act and deed of said
corporation and of himself as such Controller and Assistant Treasurer for the
                                   ----------------------------------
uses and purposes therein expressed.

                                                 -------------------------------
                                                 Notary Public

                                     Pg. 17 of 18 pages
                              ------
<PAGE>

                                 ACKNOWLEDGMENT

STATE OF FLORIDA           )
                           )ss
COUNTY OF PINNELAS         )

         On the 19th day of October, 2001, before me personally appeared Robert
                ----        --------------                               ------
W. Stockton , to me known or produced satisfactory identification, who being
-------------
duly sworn, did depose and say that he is the Executive Vice President, Chief
                                              -------------------------------
Financial Officer and Secretary of Omega Protein Corporation, and that he signed
-------------------------------    --------------------------
his name to said Mortgage by like order, and the said Executive Vice President,
                                                      -------------------------
Chief Financial Officer and Secretary acknowledged to me that he executed said
-------------------------------------
Mortgage as the Executive Vice President, Chief Financial Officer and Secretary
                ---------------------------------------------------------------
of said corporation; and that the same is the free and voluntary act and deed of
said corporation and of himself as such Executive Vice President, Chief
                                        -------------------------------
Financial Officer and Secretary for the uses and purposes therein expressed.
-------------------------------

                                                 -------------------------------
                                                 Notary Public

                                     Pg. 18 of 18 pages
                              ------

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